Ireland’s football association facing accounting concerns
25 Apr 2019
The Football Association of Ireland (FAI), which has become mired in controversy over a €100,000 (£86,000) loan made by its chief executive to the association, has announced its entire board has resigned after its auditor, Deloitte, raised concerns about its accounting records
25 Apr 2019
The move followed a filing made by Deloitte to the Irish Companies Registration Office (CRO) in which the firm stated that the FAI was contravening parts 281 and 282 of the Companies Act 2014.
Part 281 states that companies are obligated to keep adequate accounting records, while 282 sets out the basic requirements for accounting records.
Contravention of these is a potentially criminal offence, and could result in fines of up to €50,000 and up to five years in prison.
Shane Ross, minister for transport, tourism and sport Shane Ross, revealed the whole FAI board of was stepping down in an update to an Irish parliamentary committee which has been investigating potential issues with financial governance at the FAI.
On St Patrick’s Day, 17 March, news broke about an undeclared loan of €100,000 to the FAI by its then CEO, John Delaney, in April 2017. This was subsequently described as a ‘bridging loan’ to address a cashflow issue by the organisation, but was not notified to the governing body Sport Ireland, nor was any ‘deterioration’ in the FAI's finances as is required under funding rules.
Sport Ireland went on to suspend around €1.4m to the FAI amid concerns it did not obey state funding rules.
In his update, Ross said: ‘The decision of the board of Sport Ireland to withhold and suspend funding to the FAI was an extraordinary moment for Irish sport.
‘I don’t have to remind the committee of the scale and reach of the FAI. This is an organisation with over 200 employees, with an annual turnover of close to €60m. But this is also an organisation with several thousand clubs, the National Governing Body for the most popular participation team sport in Ireland.’
Ross described the response by the FAI executive so far to growing concerns about its governance as ‘hugely disappointing’.
‘Yesterday’s announcement that the former CEO had voluntarily stepped aside pending an “independent” investigation fell far short of expectations.
‘While it is the case that due process is hugely important, you will not be surprised to hear me say that I have become increasingly concerned with these developments.
‘Here we have a clear case of the FAI admitting that they failed to abide by the conditions for receipt of State funding. We have had a shambolic appearance by the FAI at this committee last week at which even the most basic questions, for whatever reasons, went unanswered.
‘Concerns remain around a financial transaction, basic levels of corporate governance, the creation of the new executive vice president role, issues of a substantial nature being considered by the Office of the Director of Corporate Enforcement and other developments that would suggest that all is not well.’
However, Ross said he welcomed the latest development in what he called ‘a highly fluid’ situation, which will see Mazars brought in to conduct a further review.
‘I am pleased that the FAI will work with Mazars to overhaul the association’s governance. I think it is well known that I have great difficulty with organisations conducting internal reviews and investigations, so I welcome the invitation by the FAI to Sport Ireland to input to the terms of reference of the Mazars exercise,’ Ross said.