From top: John Delaney; Accountant and FAI VP Paul Cooke (left) and FAI President Donal Conway at the Football Association of Ireland Annual accounts publication for 2018 last Monday where it was disclosed that the organistaion has current liabilities of more than 55M Euro; Vanessa Foran
Before Kick Off, allow me revise my own FAI Year in Review from earlier this year.
I realised as I was running the rule over the 2018 accounts, that I had no choice but to go back into the now Revised 2017 year to try and establish the real financial story from its corrected opening position.
In the same month the flamboyancy of the original Report of 2017 was making its splash , its Financial content was already ordered (by ODCE) to be Revised.
I get that, it’s not uncommon and the report did flag the loan from a Director. But within a month again, April 2019 – Deloitte’s admitted (and what I had already warned) “proper accounts and records had not been kept.”
Also subsequent to the Balance Sheet date and before March 2019; a mighty Revenue Audit that caught VAT and what I consider to be the scummiest of all employer behaviours – underpayment of Employer Taxes. The expression used is “significant underpayment.”
Yet further down into the report (detailed fully on page 38 (ii)) we find the still only estimated charge is €2,712,721.00, and the payroll taxes are attached to the former CEO’s PPS number, so at least they weren’t deducting the canteen staffs payroll and spending it on birthday parties.
And page 3 lives up to its reputation – it also reveals a number of cracks in the Governance structure, such as no Internal Audit, no Procurement Policy, and the one that takes my breath away “There was no policy or standard protocol regarding business cases, options appraisal or business justifications.”
In other words, the Board, the Council and the Staff could use the FAI’s cash to buy, pay, spend, acquire, promise, guarantee and dispose without any control mechanisms and safeguards, like purchase orders or even a tender procedure.
This would explain why their former CEO’s additional payroll benefits (see pg 38 (i) but have a stiff drink first) were never documented or fully costed or even approved.
By page 4 is what I suspected here all along, yet big pockets Deloitte’s signed off anyway “… it was noted that not all relevant audit information had been provided to the Association’s statutory auditor.”
And for how many years did Deloitte’s provide the assurance of their External Audit opinion, and the other Assurance Services to the Stakeholders of the FAI? Answers on the back of a beermat.
Note this: the Board nor its elected Treasurer or its Finance Department or its External Auditors noticed John Delaney was costing an additional € 428,571 per year since 2014 and NOBODY thought to budget for it until 2022.
And yet it was all there, in front of the senior Management, the Auditors and the Directors. Even today, look at what the FAI think the function of Governance is.
You’d want to be a Siberian Nomad to not be aware of the decades of messing at the top of the FAI, but John Delaney’s employment contract rolling out like this, apparently agreed and signed off without the Board having anything to do with it, is for me anyway, when the Board officially lost control of the organisation.
The established scatty environment already embedded in the FAI allowed his ego to prosper when he joined, so it was only a matter of time before the Board would be answering to a man that dictated his own terms.
It never made sense to me, and I may have commented here or there about doubting John Delaney’s claims that he would be paid likewise in the private sector, it’s sad that nobody really challenged that until it came to this point.
John Delaney brought few skills to and had no capacity to enhance the organisation. His appointment was flawed from the start. And people knew that then; yet here we are.
Whatever happens next between all the external investigations, from Revenue, to CAB, to the next Audit team, the very fact that he held posts that required both the very best of Fitness and Probity standards from himself, it also required he, along with his Chair, had oversight of the Fitness and Probity regime; yet he still allowed his real cost to his employer be under reported by €428,571 a year.
But John Delaney’s finally finalised total renumeration cost is not what has the FAI in the trouble it is in today; it was his incompetence to run a high-profile multi-activity and very publicly enfranchised organisation.
He got away with year on year failures, by pandering and promises, back-pats and unhampered power building. A blind eye was cast by more than just the Board, but it is the Board that is responsible.
They failed to protect the organisation, they failed to ensure the growth and prosperity of the organisation; and they failed the primary duty of a Director, that of Independence and being Free from Influence.
They abandoned stewardship of the governing body of a sport that contributes to the identity of millions of Irish everywhere.
They were supposed to be the curators of Irish Soccer for their terms of office, yet they humiliated it by not giving it the respect and attention the FAI deserved from its Directors; they mutilated its reputation – and treated it like roadkill.
The Directors over the years they allowed John Delaney to run the organisation into insolvency, may well think they should have been able to trust the endorsement of their External Auditors, with their annual nothing-to-see-here Audit Opinions. Wrong.
They, and I can respect the role of a Volunteer Director as I walk in those shoes, so I take no pleasure in this, they – those directors should be rightly ashamed of themselves.
For reasons I’ll not disclose, I do sincerely believe that Donal Conway is a man who held the interests of the organisation and the grassroots of Irish Soccer dearly, yet he cannot deny he allowed himself to be influenced and persuaded.
I regret this has happened to a man whose volunteerism and passion for the game he himself nurtured in so many young players will not be the legacy he deserves.
Yet despite all the above, and all around the media, and all the lads liking each other on twitter, I would not be as pessimistic about the FAI’s future and its recovery as everyone else seems to be.
I am of the view that it can trade its way out, it has a unique market and they have it all to themselves; they are still capable of earning over 45 million a year just even at a standstill, and they do get so much right outside it’s Blanchardstown Headquarters.
Therefore, I would propose an order seeking to put them into Administration but then, I’m not sure an Independent Board and an Administrator can be secured.
There are too many moving parts, conflicts and personalities in this story; Shane Ross, the Sports Council especially its Chair-for-Hire Mulvey, even John Delaney and UEFA themselves, the Players past present pro, semi-pro or the now pundits, the Fans, the Volunteers, the Clubs the Leagues the Sponsors and the Employees.
Nor can I ignore the reach of Deloitte’s and the Mainstream Media, or the goo-goo eyes of Politicians of every rank and file.
Before I go, if you are wondering why I haven’t gone into the 2018 accounts for ye; well I just didn’t bother. But at least the opening balances are presented with some confidence.
The year was hit with some exceptional one-off charges, such as the costs of the various investigations and John Delaney’s payroll costs, and you’ll see all these including his severance again in 2019.
I am also mindful that its future will be in the hands of a different CEO who will be allowed build their own team, and a Board that will be ideally experienced Independent Directors who will not be recruited from within.
Running the Governing Body of Irish Soccer is an important responsibility, so let’s make sure we get the best people to do it.
The FAI let us down, but they will always have the Irish Support,.
They just need to deserve it.
Vanessa Foran is a principal at Recovery Partners.