Off The Ball has seen correspondence between Sport Ireland and the Joint Committee on Transport, Tourism and Sport that explains why funding was suspended to the FAI and lays out the terms and conditions for its resumption – including a possible audit of the FAI’s governance and financial control.
The opening statement to the committee notes that ‘not only were Sport Ireland not notified of a material deterioration in the FAI’s financial position in 2017, it appears that the Board of the FAI was similarly not notified.’ In this case, Sport Ireland believe that the situation ‘is concerning from an internal financial control and general governance perspective.’
In the opening address, Chairman Kieran Mulvey and CEO John Treacy outline that it was the revelation by the FAI - to the same committee - that their practices did not comply with Sport Ireland terms and conditions that led to the suspension of funding.
With regard to the FAI’s committee hearing last week, Sport Ireland note that they ‘had an expectation that the FAI would engage with this Committee in an open and transparent manner on all relevant issues.’ When this exchange was not conducted ‘as directly and straightforwardly as possible’ – noting that the FAI’s appearance was ‘very disappointing.’
Outlining a timeline of communication between the FAI and Sport Ireland, Treacy and Mulvey explain that a meeting was arranged the day of April 5th, where Sport Ireland agreed to the following action items with the FAI:
The outcome of Grant Thornton’s ongoing internal review of the Association’s books will be provided to Sport Ireland.
- The Terms of Reference for the review by Mazars will be provided to Sport Ireland, once they are finalised.
- Sport Ireland will be consulted by Mazars as part of their review process.
- Mazars’ full and final report will be provided to us in a timely manner.
- The review by consultant Jonathan Hall & Associates will be provided to Sport Ireland.
- The FAI will discuss the composition of their new Governance review group with Sport Ireland.
Suspension of FAI funding and the terms of resumption
Sport Ireland state that the suspension of funding to the FAI was usually ‘an intervention of last resort’ but that it was done to ensure security and accountability for €2.9m in public funding.
Treacy and Mulvey reiterate that the decision was taken because the FAI outlined in their written opening statement to the same Committee that their actions had led to Clause 4.3 of Sport Ireland’s Terms and Conditions of Grant Approval, not being met – where the clause states:
“In addition each organisation undertakes to notify Sport Ireland in writing without delay in the event of any material deterioration in its financial position or of any other matter which may jeopardise the organisation’s overall financial viability and/or its ability to comply with its commitments in the Approved Submission, and thereafter to provide Sport Ireland with such information and documentation as Sport Ireland may request in connection with the relevant matter and any steps being taken to rectify it.”
Treacy and Mulvey state that they may also call for an audit into the FAI after the Mazars and Grant Thornton reviews – commissioned by the FAI themselves – do not satisfy Sport Ireland.
This audit will be, in Sport Ireland’s own words:
"As broad and extensive as necessary to satisfy Sport Ireland that the FAI is compliant with our Terms and Conditions of Grant Approval, including that its internal financial controls and management, as well as its general governance, are of sufficient standard in order to restore funding."
The statement lays out the following conditions for ‘restoration’ of public funding
- An audit of the sporting body’s governance and financial control.
- The establishment of a liaison process with the sporting body to closely monitor, verify and support (as appropriate) the NGB’s implementation of the audit recommendations to verify compliance with the Terms and Conditions of Grant Approval.
- The liaison process is overseen by Sport Ireland’s Audit & Risk Committee, with periodic updates and recommendations made to the Board.
- Grant Funding is withheld until sufficient progress has been made on implementing the audit recommendations, and governance and financial control issues have been progressed.
- Once progress is made on implementing the audit recommendations, and assurance is received of the effectiveness of governance and financial control, staggered payments are generally made to the NGB in question.