Audit slams Indy-based USA Diving on finances, conflicts of interest

INDIANAPOLIS – USA Diving is losing too much money and lacks proper controls over finances and conflicts of interest, according to a recent audit by the U.S. Olympic and Paralympic Committee.

USA Diving is headquartered in Indianapolis, which has a long association with the national governing body. In 2020, the diving Olympic Trials will be here for the seventh time. Also, five divers from Central Indiana — David Boudia, Thomas Finchum, Mary Beth Dunnichay, Steele Johnson, Sarah Bacon — have won world or Olympic medals since 2007.

Last October, Lee Johnson left USA Diving after less than 18 months as CEO. Acting CEO is Jack Perkins, former treasurer of USA Diving. In February, the USOPC threatened to decertify the organization if it did not make specified changes.

USA Diving was given an audit rating of 66. In the scoring system, perfect is 0 and an average NGB is 27. The report did not include instances of individual wrongdoing but focused on the organization’s inadequacies.

Michele Mitchell is chair of USA Diving’s board of directors. In a statement to IndyStar, she said:

“The Board of Directors and the Acting CEO of USA Diving have been working diligently with the USOPC to rectify the identified deficiencies within the organization. As is noted in the report, USA Diving has already completed many of the recommendations outlined, with any remaining items targeted for implementation this fall. USA Diving would like to thank the USOPC for their assistance as we put in place the procedures and protocols necessary to ensure a strong future for our sport.”

Out of 18 categories, the audit summary rated nine as high risk in governance, finance or due process and seven as medium risk.

The audit said USA Diving’s financial condition is worsening, citing net losses for three of the past five years. Continuing “operating losses and depletion of cash reserves calls into question the financial capability” of USA Diving, the audit said.

The audit recommended USA Diving adopt a formal process for reviewing conflicts of interest involving staff and board of directors. Out of 19 staff and board members who submitted conflict of interest forms, 16 had potential or actual conflicts that were not disclosed, the audit said.

The audit also said the director of finance has too much control over cash receipts and disbursement. Lack of controls “provides an opportunity for unidentified errors or misappropriation of funds and manipulation of the accounting system to conceal the missing funds,” the audit said.

USA Diving was charged with failing to provide fair notice or hearings for members facing disciplinary action. The audit acknowledged that starting in 2019, the organization began following its bylaws on due process.

Contact IndyStar reporter David Woods at david.woods@indystar.com or call 317-444-6195. Follow him on Twitter: @DavidWoods007.