The new head coach of British Bobsleigh, Lee Johnston, who was promoted to the position just over a fortnight ago, was formally disciplined and warned as to his future conduct after making derogatory remarks about black drivers in 2013, the Guardian can reveal.

Johnston, a 12-times British champion who went to the Winter Olympics in 1998, 2002 and 2006 before becoming a coach, was accused of saying to a member of the squad, Toby Olubi, “I knew you would be late because you are black”, and later in the same training session, on 4 July 2013, “Black drivers do not make good bobsleigh drivers.”

The Guardian can also reveal that the racism allegations are among a raft of complaints about British Bobsleigh over financial mismanagement – including spending £500,000 on a mothballed sled – a staff exodus and concerns about athlete welfare over a number of years.

Johnston’s exchange was reported by another black athlete Henry Nwume, to the then chairman of the governing body, Sir Andrew Ridgway, in an email in March 2014, as well as to a performance manager at UK Sport.

Although a number of people who have worked alongside Johnston have told the Guardian they do not believe that he is racist they do accept that the Royal Marine makes inappropriate remarks and his comments to Olubi were deeply wrong.

In a statement the British Bobsleigh and Skeleton Association said: “A complaint was made against a member of staff in 2014 relating to an incident that was alleged to have taken place in 2013 and this matter was formally investigated and dealt with appropriately at the time.”

When the Guardian asked UK Sport how it responded when it was made aware of specific and racist comments made by Johnston, a spokesman replied: “UK Sport was aware of this allegation at the time and sought assurances that it was being dealt with appropriately by the BBSA as the employer.”

It did not answer a further question about whether it agreed that being formally disciplined and warned as to his future conduct was an adequate response.

Regardless of the BBSA’s and UK Sport’s stance, the decision to promote Johnston to lead a squad in which the majority of athletes are black or mixed race will raise questions for both governing bodies. There are also echoes with the case of Mark Sampson, the former manager of the England Women’s football team, who was accused of behaving inappropriately after he allegedly told one of his players, Eni Aluko, to make sure her Nigerian relatives did not bring the Ebola virus to a game at Wembley.

The Guardian understands that Johnston retains the support of many of the squad. Crucially he was also not seen as a central figure in the longstanding problems in the BBSA, which have included claims of bullying, sexism, financial mismanagement and inappropriate behaviour that went unchecked for years. According to one current member of the squad, some of the problems “were worse than what went on in British Cycling”.

The organisation, which is getting £5m of taxpayers’ money to help it prepare for the Winter Olympics, has undergone a significant staff clearout in the past month as UK Sport seeks to tackle its problems. However several current and previous members of staff have told the Guardian the problems that plagued the organisation were considerably worse than have been publicly admitted by UK Sport, which funds and scrutinises most Olympic sports. They include:

• The BBSA spent over £500,000 on a hugely-hyped McLaren-designed bobsleigh which it believed could bring it to Olympic success – yet the sled was barely used because it is considered by riders to be sub-standard.

• While officially three members of staff have left the organisation in the past month, staff have told us the true figure is double that with Lauren Farrow, the performance manager, and the ice coach Fabienne Mayer also going as the organisation looks to reduce costs.

• Some at the BBSA link the departure of the performance director Gary Anderson, who left on health grounds, and the head coach, Dominik Scherrer, to the longstanding “culture of fear” inside the BBSA – and say the mood is much better now.

• Many also had concerns for athlete welfare that they say were ignored. One told us: “How many times I have seen girls cry in the last year? I can’t count. It’s been so many.” Another insider said their team once finished a race at 6pm in Austria and were put in a car and told to drive through the night back to the UK, where they arrived at 9am the next day.

• Another athlete also expressed their concern about the lack of transparency in a formal letter – alleging that coaches had prevented athletes from seeing their times and weights in a final evaluation before the Sochi Winter Olympics, despite multiple requests to do so. “As this data was used for final selection our ability to understand and challenge the selection decisions was compromised,” they said.

In response, the UK Sport chief executive, Liz Nicholl, told the Guardian it was working closely with the new management to drive up standards. “It has been very disappointing that the governing body has found itself in this situation so close to a Games,” she said. “When UK Sport makes a four-year investment in a sport, it is aimed at enabling decisions on support for athletes to be made on the basis of performance potential and not affordability.

“We will be working even more closely with the new leadership team at the BBSA to monitor its financial management while continuing our work with bobsleigh and across the high-performance system to drive up standards of leadership, governance and culture.”

Some, however, believe UK Sport should have acted with more speed. The Guardian revealed during the summer that the BBSA had warned athletes they could lose their chance of competing at the Winter Olympics if they dared to speak publicly about issues such as bullying, sexism and racism. As one squad member put it: “Bullying is normal in bobsleigh, but no one will say anything. It reminds me of a battered wife or bruised child situation because people are terrified. No one will stand up and say ‘this is out of order’ because we are scared of being sent home, getting our funding cut and not making the Olympics.”

Athletes were also threatened with legal action if they talked publicly about an affair between a selector and a squad member in the run-up to the 2014 Games in Sochi.

There was also widespread anger among many staff last month when the BBSA decided to cut financial backing for its only women’s crew while continuing to fund all three men’s British bobsleigh teams. It led to the women’s No1 driver, Mica McNeill, calling for the body to be held accountable for its “mismanagement” following a £50,000 overspend after she was forced to start an online funding campaign to keep her Olympic dream alive.

The Guardian can also reveal that many of the BBSA’s financial troubles come from investing a significant chunk of its budget on a partnership with McLaren to create what it believed would be the fastest bobsleigh in the world. But instead of leading Britain’s four-man team to Winter Olympics gold the sled has been barely used, and according to one source is now gathering dust in Germany.

Another insider, with extensive knowledge of the project, admitted: “We thought we could build a sled in less than a year, test it, and it would be good enough for gold – but it was a long way from that.” A third source admitted it was a “calculated risk that had gone wrong”.

The embarrassment began when those working on the £500,000-plus sled found it was too small to fit the whole four-man team and had to be re-engineered. Things did not get any better as it performed below expectations in competition. That meant it was not used at the 2014 Winter Olympics despite breathless reports at the time suggesting it would be a game-changer for the squad. The Guardian understands that other cheaper sleds, which cost it tens of thousands of pounds, are not being used either having not performed up to standard either.

When this was put to the BBSA it did not dispute any of the Guardian’s reporting. Instead it said: “Research and development [R&D] forms an important part of the quest to improve and resources have been spent in this area during this cycle. R&D does not stand still and we are continually aiming to give our athletes the best possible equipment. We have been involved in developments with Singer during this cycle and will be using the Singer 16 sled for competition this season. We have not had a working relationship with McLaren in this cycle.”

These revelations will raise more concerns about UK Sport’s lack of openness when it comes to the problems within the individual sports it funds and supposedly oversees. They also come just months after the chief executive, Nicholl, insisted that the widely reported problems in British Cycling were a one-off, and that “99% of this system is working really, really well”.

At least the departure of Anderson and Scherrer has significantly improved the mood among the remaining staff and athletes. Many of them were left bewildered and at the end of their tether earlier this year having written privately to the former British Bobsleigh chief executive, Richard Parker, to “share concerns over the behaviour of senior performance and management staff” – only to be told no disciplinary action would be taken following an internal review because no “formal complaints” were made.

UK Sport was finally prompted to act only recently, pushed by the reports from the Guardian and BBC. Its new head of sports integrity, John Donnelly, has been working behind the scenes to resolve the BBSA’s cultural problems. UK Sport has denied bearing any responsibility for the cultural and financial mistakes that were made by British Bobsleigh although a spokesman said it would “make sure” any lessons were learned.