By John Fallon
The embattled Football Association of Ireland have been invited to an emergency meeting with Sports Minister Shane Ross on Wednesday.
Late last night, after Ross pledged to restore Government funding through a third party, the invitation for peace talks was tabled by Fergus O’Dowd, chair of the Oireachtas committee on transport, tourism, and sport.
The FAI development officers had just received some belated relief from Ross.
Back in April, due to due to corporate governance concerns, Ross called a halt to state aid but in the past week started to funnel part of the annual €2.9m grant through trusted third parties.
After engaging financial services provider BDO to direct €200,000 into the budget of the Ireland women’s international team, cash earmarked for the wages of 54 full-time coaches will be similarly dispensed.
Wages of the development officers are paid out through a combination of funding from state agency Sport Ireland and local authorities.
That should allay fears over job security ahead of a meeting today between employee representatives and FAI executive lead Paul Cooke.
Siptu, who represent most of technical department, last night welcomed the intervention by Ross.
Meanwhile, current liabilities at the Football Association of Ireland have soared beyond €65m.
The shock that Paul Cooke predicted would be caused by Friday’s publication of accounts has not been eased with auditors Deloitte casting doubt over its ability to continue as a going concern.
Separately, ongoing investigations into the FAI’s financial affairs have stepped up a notch with news of the Criminal Assets Bureau (CAB) becoming involved. They will work on the case alongside the Garda National Economic Crime Bureau.
Board members of the FAI, past and some of the current directors, have been interviewed as part of the probe by by the state’s watchdog, the Office of Director of Corporate Enforcement. Breaches of the Companies Act can be subject to prosecution.
Accounts until the end of 2018 showed the FAI with current liabilities of €62.4m but that figure has risen through ‘significant’ losses during this most turbulent of year for Irish football. Staff are braced for a raft of redundanies in early 2020.
Deloitte, which audited and signed off accounts without issue until controversy erupted in March, posted a cutting report in the latest version.
Their caution had pushed back publication of the accounts from Thursday to Friday, coupled with a further two-hour delay on the day.
They stated there was “not sufficient evidence that the company will be able to meet its liabilities as they fall due”.
The auditors added that they were unable to determine whether adequate accounting records had been kept.
This concern, in particular arising from the undisclosed €100,000 loan given by Delaney to his employers in 2017, prompted Deloitte to lodge a H4 complaint in April.
They added: “Net current liabilities at the end of 2018 were €55m and the company have incurred significant losses since that date. They will require additional financing to meet liabilities falling due in the foreseeable future.”
That is certainly the case as the FAI tackle a cashflow crisis on top of their mounting debt pile.
Cooke confirmed that Uefa had agreed to provide advances on money due in future years. The European governing body distribute around €10m per year to member associations from a centralised television deal but the FAI have drawn down €6.5m in advance. They will be charged interest between 3-4% up to next June.
Early drawdowns were a familiar pattern of finance during the John Delaney era.
Sport Ireland acceded to these requests for grants four years in a row and last year a frontloaded payment of €7m was received under the renewal of Aviva’s naming rights deal for the Lansdowne Road stadium.
These transactions have triggered alarming cashflow fluctuations.
For instance, in 2016 the FAI planned a new kit deal with Sports Direct that netted premature income of €6.5m. The only problem was incumbent Toplion enjoyed a first refusal on the renewal and the deal fell asunder. Mike Ashley wants his money back and is being repaid in €100,000-per-month instalments.
“That deal was the most disappointing part,” new board member Richard Shakespeare said.
“They were booking an income stream in one year but selling the FAI’s future.
As far as I am aware, it wasn’t legal. We have to unwind that in the restated accounts. Therefore, that debt amount is effectively doubled in the accounts.
Shakespeare was one of six directors elected in July to join reelected members Donal Conway and John Earley. The FAI still await the four new independent directors to complete the 12-person board.
In their report accompanying the accounts, some startling revelations arose .
They conclude no procurement policies or procedures were in place and that the absence of internal audit and compliance functions meant a key safety feature was absent.
That’s especially concerning given these official minutes produced from the 2018 AGM in Cork: “Chairperson of our audit committee Frances Smith outlined how they were a sub-committee of the finance committee.
“They meet auditors in advance of the audit and meet again after, independent of the honorary treasurer, finance team and CEO. This gives the independence required.
“She thanked Deloitte, the FAI finance team and fellow audit committee members. Finally, Frances recommended the signing-off of the accounts.”
Those were the accounts omitting the €100,000 loan Delaney gave to his employers. They’ve recently had to be adjusted by €5.6m.