Olympics: Rio committee accused of dodgy accounting

View of the construction site of the TransOlimpica highway, the Bus Rapid Transit (BRT) line system that will link the Olympic zones between Barra da Tijuca and Deodoro neighborhoods, near the Olympic park in Rio de Janeiro, Brazil, on April 8, 2016.
View of the construction site of the TransOlimpica highway, the Bus Rapid Transit (BRT) line system that will link the Olympic zones between Barra da Tijuca and Deodoro neighborhoods, near the Olympic park in Rio de Janeiro, Brazil, on April 8, 2016. PHOTO: AFP

RIO DE JANEIRO (AFP) - The Rio de Janeiro Olympics organising committee used questionable "accounting manoeuvres" to avoid ending 2015 in the red, a Brazilian news report said Friday (June 3).

The committee, known as Rio 2016, postponed and then reduced a US$41.4 million (S$56.2 million) payment it owed the Brazilian Olympic Committee in order to avoid taking a loss for the year, newspaper Folha de Sao Paulo reported.

By kicking the marketing-rights payment down the road, Rio 2016 was able to close out the year US$4.8 million in the black instead of US$36.6 million in the red, the paper said, printing an excerpt of the organising committee's books.

Organisers then changed how they calculated the rights fees owed to the national Olympic committee, reducing the amount due by more than 60 per cent, to US$15.9 million.

Rio 2016 responded that its accounts were subjected to internal and external audits and complied with the terms set out in the city's bid for the Olympics, which open on Aug 5.

"Rio 2016 remains committed to guaranteeing the Rio 2016 Games are organised without public resources and thus without burdening taxpayers," it said.

The organising committee did not respond specifically to the report of irregular accounting manoeuvres, and did not answer AFP's requests for comment on the issue.

Rio 2016 and the Brazilian Olympic Committee are headed by the same person, Carlos Nuzman, a lawyer and former Olympic volleyball player.

Rio, which has an Olympic budget of roughly US$9.5 billion, is largely on track with preparations for the Games - though some major transport projects are running behind and the clean-up of its picturesque but polluted bay was dramatically scaled back.

Folha said the accounting practice allegedly used by Rio 2016 is legal and common in the private sector, citing an economist.

Ironically, it is similar to the accounting manoeuvres for which the Senate has opened an impeachment trial against suspended president Dilma Rousseff, accused of hiding the depth of the government's budget deficit.