An internal auditor's report has found wholesale abuses at the organisation, which has 14,000 members and receives pounds 580,000 a year in grants from the Sports Council.
Iain Sproat, the Sports Minister, has now put the BCF on notice that its grants could be withdrawn unless it reforms its finances, and has implied that the federation, which organises major cycling events around the country, could find itself barred from receiving National Lottery cash for individual projects.
Tomorrow, following what was described as "a full and frank" meeting between Sports Council and BCF officials, an accountant will start reviewing the organisation's affairs.
The meeting and Mr Sproat's remarks, made to MPs at the Commons, arise from a crisis which has been festering at the federation behind the scenes. In public at least, professional cycling is riding high: in Graeme Obree, Chris Boardman and Yvonne McGregor, Britain has three of the world's top cyclists, and, in the new Manchester Velodrome, one of its best tracks. In private, the ruling body has been hit by scandal.
The auditors, who were sent in by the Sports Council on government orders, found that:
the Velodrome might be the sport's jewel in the crown, but it will lose money this year;
accounts were not drawn up properly, making projections and forecasts difficult;
financial controls were inadequate;
the 10-man board was riven with internal conflict;
board members had become involved in running operational matters, something they are technically not supposed to.
The report exposed potential conflicts of interest between leading cycling companies and some members of the federation board. One director's company had a contract to supply clothing to the national team. Another ran a company that designed and printed the federation's art-work. A third was a major shareholder in a promotion company which organised cycling races for the BCF.
Nicholas Winterton, the Tory MP for Macclesfield, said of the federation: "I believe that those who have been administering it are guilty of maladministration, neglect and abuse of their position."
Jon Trickett, Labour MP for Hemsworth, said the audit "reveals a grave state of affairs in relation to the manner in which the federation has been and is being managed".
Mr Sproat said it "revealed that financial accountability and control are not as strong as they should be for an organisation with responsibility for spending public - or membership - funds". It was time, he said, for the federation "to get its house in order and make a fresh start".
The crisis began late last year when Tony Doyle, twice a world champion, was elected BCF president. Mr Doyle, who saw himself as the "people's choice", was chosen after grassroots complaints that the leadership was not doing enough to promote the sport. Mr Doyle ran on a ticket calling for greater transparency from the board and increased accountability to the membership.
An acrimonious campaign saw him defeat the long-time incumbent, Ian Emmerson. The battle continued after the appointment of Mr Doyle, a colourful, forceful character. Within three weeks he was fighting an attempt to oust him because of an alleged failure to declare a commercial interest: he was a consultant to Sport for Television, which wanted to promote the world championships held in Manchester last summer.
For his part, Mr Doyle had alerted the Sports Council to the way the federation was being run. A full-scale war erupted, with writs flying between Mr Doyle and the board. Finally, the minister ordered in the auditors.
At the BCF annual meeting this month, the Sports Council provided copies of the auditor's report to the board. The federation membership voted to remove the whole board and appoint an "emergency management committee" in its place. The committee later held a meeting with council officials.
A measure of the seriousness of the crisis is that, last Sunday, senior Sports Council officials met the committee again, this time for 10 hours, to thrash out its future direction. A BCF spokesman said yesterday that the meeting had agreed on the need for "a wholesale turn-round in the way the federation was being run".Reuse content