Worcester Warriors' former auditors reprimanded

Worcester Warriors' former auditors have been "severely reprimanded" for failing to adequately disclose the rugby club's troubled finances, in the years before it went into administration.

Warriors were thrown out of the English Premiership in 2022 for failing to pay their debts. The club has since returned to competitive rugby under new ownership.

Accountants Bishop Fleming have now been fined £124,250 by the Institute of Chartered Accountants in England and Wales (ICAEW), for failing to meet industry standards.

The ICAEW also said Bishop Fleming failed to report financial risks in the club's accounts, including loans the club had received.

As well as a financial fine and a formal reprimand, the ICAEW's conduct committee also ordered Warriors' former auditors to pay costs of £26,885.

The decision was made at a meeting last month, after an investigation into club transactions between 2018 and 2022.

While the ICAEW's written judgement does not name the companies audited or those Warriors dealt with; the dates of the firms' audits tally with publicly available information such as accounts filed with Companies House and reports by the club's administrators.

In a written judgement, the ICAEW said Bishop Fleming had:

• Failed to disclose the financial implications of a loan company "A" (WRFC Trading Limited) took on during the Covid pandemic. According to Warriors' administrators, the club first received a loan of £11.49m from the Department for Culture, Media and Sport in June 2021, which used Warriors' assets as security.
• Judged Warriors' a "concern" (that it could continue in business for at least a year) despite seeing "materially inconsistent" evidence.
• Failed to obtain sufficient evidence regarding the waiver of a loan made by the club – WRFC Trading Limited – to company "B" (its parent company Worcester Sport Limited). .
• Failed to adequately disclose the details of a transaction with company "C" in 2019. While again the company is not named, the administrators report states the club received £12.5m in March 2019 from the private equity firm CVC.

Bishop Fleming did not respond to a request for comment, but the ICAEW states they agreed with the financial penalties.

The investigation into Warriors' auditors may revive interest in the club's 2022 collapse, under previous directors Colin Goldring and Jason Whittingham.

At the time, Warriors' directors blamed the economic impact of the Covid-19 pandemic for the club's cashflow problems, with the cancellation of sporting and non-sporting events during lockdowns.

The full extent of the club's debts were only revealed after it went into administration.

As well as owing the government £16.1m for its Covid Sports Survival loan and resulting interest, administrators Begbies Traynor said the club owed £2.1m in unpaid taxes to HM Revenue and Customs.

Hundreds of suppliers, businesses, banks and ticket holders were also together owed more than £5.8m. The club's payroll arm, WRFC Players Ltd, also owed £6.8m at the time of being wound up.

In February, the club's new ownership said it was close to finalising payments to its rugby creditors.

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