Football Association of Ireland’s Annual Report 2017/18; John Delaney; Vanessa Foran

Ridiculous.

That was my first impression of the FAI Annual Report (year ending 2017).

It’s a healthy 137 pages, and shares news and updates from all their activities, from U-15 Internationals, to Child Welfare to the Defence Forces. It’s glossy, shiny, and loud, like the Green Army on tour, only on paper.

While it might be nice to flick through, most of that update stuff can be easily shared via the internet.

The Financial Statements you’ve all heard about start with the Financial Overview on page 93. and are  completed by page 120, so there isn’t too much distraction from the fixtures and action shots. On a side note, I have never seen such small print in an annual report – I had to go to 130%.

The top line: Turnover – what is interesting is that they had a trading surplus of €2,758,063.00. This is very nice, given the size and obvious limitations of their market; and even nicer is that it sits on top of a previous year surplus of €2,344,291.00.

Both figures accumulating into reserves of €22,323,111.00 (page 104), which definitely drives the questions – why is the League of Ireland prize pot so small and why were they so miserable stumping up for our women’s sides?

A big red flag for me is their Short-Term Creditors – less than 12 months – which is basic day-to-day working capital. Cash, and the cost of it. Year end 2017 introduces a current account Bank Overdraft – €1,363,107.00.

This is a movement from a cash on hand balance at year end 2016 of €937,447.00 to a cash crunch position, and that swing is not explained sufficiently in the promised note 11; cash and cash equivalents.

This €2.3-ish million run happened over a very short period and demonstrates some really poor financial control; and this information was only extracted from the notes, not from the balance sheet.

So, it might be worth looking into the minutes of meetings during the period to see if there were any comments on the month-on-month management accounts to board. That’s where these loans to and from the FAI might be found.

Also interesting is the role, or more accurately, roles, of Deloitte.

Their fees are up from €102,772.00 to €134,554.00; this might not sound like a lot of money but it’s a 24 per cent increase and contains €26,180 for other assurance services – which is worth exploring because also in the €134,554.00 is €44,285 for fees other than audit.

So what other services do we think Deloitte are providing (and if it’s any help, it’s not tax and it’s not internal audit.)

Another thing that doesn’t seem healthy or efficient is that there seems to be loads and loads of personnel rowing in an out of the FAI at strategic level. There is a board of management of 11, which includes John Delaney, and a national council of 58, along with circa 180 staff members around the country.

But, for the life of me, I can’t find the list of directors of the company.

There is a Hon. Treasurer Eddie Murray; and an audit committee; maybe someone credentialed might be in a position to ask for the minutes of this audit committee too, because they would be the principle liaison with Deloitte.

Worth a mention, the old reliable here, is that John Delaney’s salary is the only one itemised; and that doesn’t make sense to me; in Related Party Transactions? If he’s a director, it is in Directors Emoluments €360,000 (and that’s what’s there.)

So did the FAI loan or borrow €360,000 from a Related Party?

Officers Emoluments are recorded as €70,000; naturally these wouldn’t be day-to-day expenses claimed from  staff attending meetings and events as these would naturally be charged to overheads. Again, these are items within the monthly reports to board, which is where most of the intrigue could be unravelled.

I would love to explore the relationship Deloitte have with the FAI and an FAI “Donor” a bit more, o if anyone is available for some digging and drilling, please do reach out.

Also, if someone can explain the software licencing to me – as in what software licensing they have acquired – as it seems very extravagant to me.

Additionally, it’s worth noting that of the total income for the year that was 2017; 12.5% of it came from grants. So sometimes it’s worth noting that for the large part of the year, they were doing something right.

Vanessa Foran is a principal at Recovery Partners.

Previously: For The Last Time, It Was A BRIDGING Loan

Rollingnews

UPDATE:

18 thoughts on “Back Of The Net

  1. eoin

    Fair play Vanessa.

    The directors of Cumann Peile na hEireann CLG (that’s the formal company name) are

    John Delaney (51)
    Michael Cody (79)
    Jim Mcconnell (74)
    Eddie Murray (79)
    Paraic Treanor (67)
    Daniel Conway (64)
    Eamon Martin Naughton (55)
    John Earley (63)
    Michael Hanley (76)
    Niamh O’Donoghue (57)
    Noel Fitzroy (67)

    Seems to me the only director who is also a director of an unrelated company is John Delaney himself who runs a loss-making furniture business, Gerfurn, in ……. Tipperary!

    I think it would be unfair to call them a shower of (white, male) old codgers without any other commercial experience, but I’ve seen more experienced boards in my time.

    Reply
    1. Giggidygoo

      John Delaney is also a director of AUL-FAI Limited. Athletic Union League
      Michael Cody used to be a director of AUL-FAI
      Michael Cody is a director of New Stadium Designated Activity Company as is also John Gerard Delaney.
      That company has €4.2m in cash (2017 figure). It’s value is over €300m, so must be the Aviva Stadium?

      Reply
      1. eoin

        Yes, that’s all true but I would say those companies are related to the FAI. If you were seeking some experience outside the FAI gene pool, it seems to be totally lacking (except for John Delaney who runs a loss-making furniture business in Tipperary).

        Reply
    2. V for Frilly

      Thanks Eoin
      that’s the 11 at the Top Table so

      I must admit to being very unimpressed that these directors were not introduced, or even identified, within the report itself.

      And something else that’s ticked me off is how the Financial Statements are presented in this document; plastered and hindered with all levels of shading, decorative backgrounds, bullets and logos.

      It’s all very unhelpful to the user, and probably should get them and Deloittes a slap on the wrist.

      Overall lads
      The Report, for me, is all about what’s not said; It raises far more questions than it answers.
      (But could be just me.)

      That’s all not meant to be aggressive or deliberately overly critical
      I do think the FAI seem to be very active with a very wide range of outputs.
      At an operational level they do appear to be delivering value for money.
      It’s these governance, transparency and control issues that are annoying me.
      V

      Reply
      1. eoin

        Vanessa, the issue I’d see with this business is the very large chunk of debt (€40m odd) with €6m repayable in 2018 and 2019. While the FAI is marginally profitable, 2018 and 2019 won’t be bumper revenue years. Also, the biggest asset is the €60m intangible asset, mostly “stadium contributions”, wat dat? Without that asset, the balance sheet is very shaky.

        I don’t know how to make a value for money assessment of what the FAI does or what value we get from all the taxpayer grants. There doesn’t appear to be any shortage of complaints about the FAI’s measly funding of certain groups.

        Reply
        1. V for Frilly

          Tis
          But I’d be more focused on the short term liquidity there Eoin
          Maybe that’s the Financial Controller in me

          The Balance Sheet doesn’t flag anything much in the line entry for liabilities <12 mths (2% year on year movement)
          But if you go to note 12 (pg 115)
          Look at their trade creditors …. Big drop
          Like 25% level
          Clearly this is the reason for this new overdraft

          It tells me that creditors/ suppliers are not giving them credit
          And that's just for starters.

          Reply
  2. Panty Christ

    Mazars audit Sports Ireland who deploy funds to FAI, surely mazars would have a role in ensuring funds once granted by sports Ireland were used properly?

    Reply
    1. V for Frilly

      How Grants are treated and recorded in the accounts of a receiving entity all comes under its own Accounting Standard and reporting rules; so in one way it’s a non issue.
      Unless they have breached the conditions of the Grant –
      like, is it being used for the purposes in which it was awarded kinda stuff?

      These Grants and their compulsory conditions would be treated as possible liabilities anyway, so would definitely be checked over by both Internal and external auditors.

      Although, as ye can see by the reserves, the FAI can tell the Sports Council and PAC to back off anyway

      But could the Sports Council risk losing the role and contribution the FAI make every day throughout the country.
      Politicians would definitely get it locally if Soccer camps, clubs and schools coaching all got pulled

      12.5% of total FAI Revenue in 2017 came from taxpayers ( 19% in 2016)
      So they may not be too afraid of putting the squeeze on Tracey and the PAC

      Reply
  3. rotide

    Software licencing could be any number of things, but I’m sure ProZone (or whatever the fai use) isn’t cheap.

    So the FAI were actually in a cash strapped position in 2017? Maybe JD’s loan was actually just that, a loan.

    Reply
  4. DaithiG

    Sorry to hijack this thread but why hasn’t BS given tribute to Laura Brennan who passed away today?

    A true Irish hero.

    Reply
  5. V for Frilly

    Rather than clog up the Sunday Papers threads, I think this is the better venue for a few questions

    Deloittes: their management letter (s) to the board would have flagged the breeches transactions present
    So have Deloittes issues any statements re their External Audit engagement and other Assurance Engagements

    Also, I’m hearing the FAI have cancelled meetings to discuss their Governance weaknesses a number of times
    What does their Treasurer and Audit Committee have to say about that?
    At the VERY LEAST it is the clearest signal we’ve gotten that Governance, Transparency, and Independent Oversight isn’t getting the attention they deserve from the Board and Officers of the FAI
    Not their external Auditors

    Reply
    1. eoin

      Given the calibre of Deloitte, it would be shocking if they were given full answers to queries about CEO loans and benefits in kind given to the CEO, and then didn’t disclose those matters in the notes. Deloitte is responsible for the accounts AND the notes, and it looks to me like note 20 (related party transactions) and note 6 (expenses including CEO emoluments) are significantly incomplete.

      I think Deloitte will have challenged the €100,000 alleged loan. What explanation were they given. I think Deloitte will have asked the FAI to confirm the CEO’s rewards including any benefits in kind, typically a motor, private health, pension, but that’s where they would have uncovered the €3,000 a month accommodation.

      Deloitte aren’t due to sign off the 2018 accounts until June 2019, and they’re refusing to comment on the current shenanigans, so maybe best to submit a complaint to CARB about the accuracy of the accounts to which they’ve given a clean bill of health.

      Reply
      1. V for Frilly

        Ah now c’mon Eoin
        If not you
        There’s plenty an FC here had Big 4 Auditors engaged
        And the only people they’d have scouring the trail balances, bank recs, minutes etc were trainees

        What are the chances one of these Challenged any of those significant matters
        Assuming they even recognised them

        And remember everyone
        A principal item signed off in any Unqualified Audit report is confirmation that the external auditors were given access to and provided explanations to any query they raised

        V

        Reply

Leave a Reply

Your e-mail address will not be published. Required fields are marked *