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USOPC Issues Scathing Audit Of USA Diving

USA Diving lacked basic financial controls, ignored conflicts of interest among its board members and staff, and did not provide due process to members facing discipline, according to a scathing audit published by the USOPC this month. The review of the Indianapolis-based NGB's activities in ’17-18 found extensive problems in the most basic aspects of fraud prevention and ethical governance. In a scoring system where 0 is perfect and 27 is the average score of peer governing bodies, USA Diving scored a 66, with high- or-medium risk problems found in 15 out of 18 categories. While USA Diving has been the subject of close USOPC scrutiny for months, the audit sheds new light on the full scope of its disfunction. The USOPC in February threatened to decertify the organization -- effectively the death penalty -- if it did not make several changes, including replacing Board Chair Michele Mitchell, who is still in her position. Mitchell in a statement said the board and acting CEO Jack Perkins have been “working diligently with the USOPC to rectify the identified deficiencies.” “As noted in the report, USA Diving has already completed many of the recommendations outlined, with any remaining items targeted for implementation this fall.” Some of the findings:

*Auditors examined 26 staff members and board members’ conflicts of interest paperwork. Nine did not complete any conflict disclosure form; 16 failed to disclose an actual or potential conflict that auditors discovered in a simple online search. None of the forms were reviewed by staff, and there was no process to review the CEO’s conflicts.

*In the time period, USA Diving gave its finance director total control over cash receipts and disbursement, making it difficult to spot errors or malfeasance. There was no requirement that the CEO sign off on large expenses, and the organization does not regularly review financial records.

*USA Diving took a cavalier approach to due process for members facing disciplinary action. Three times in the audit period, members were suspended before a hearing. One time, someone was not given the evidence against them.

*Three times in the period, the NGB begun disciplinary proceedings without giving the target fair notice. In one case, one respondent waited 2.5 months; in two other cases, attorneys had to formally demand notice before their clients were officially notified.

*The board’s audit and finance committee met four times in '18 but did little that is expected of most board financial panels, such as reviewing financial reports, audited statements or approve external auditors. They instead discussed compensation and marketing.

*When the board changed the body’s annual membership expiration date from Dec. 31 to Aug. 31 in '18, the shift led caused a “one to four month gap” in which people authorized to deal with athletes lacked a current background check.

*During the audit, “it was unclear as to whether the acting CEO’s (Jack Perkins) expenses were being reviewed or audited."

NO SPECIFIC WRONGDOINGS MENTIONED: A USOPC spokesperson declined to elaborate on the audit. The report did not cite any specific acts of wrongdoing, rather focusing on organizational deficiencies. But the USOPC’s scrutiny has touched on several high-profile issues: Mitchell applied for the CEO position and never recused herself during the search in ’17; a one-off bonus to board member Sean McCarthy to cover expenses that management said were illegitimate; and a change in membership fee income disbursement that benefited local clubs, where several members have financial interests.

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