A year to the day ‘ish, since the last Broadsheet kickabout
This is a bit that didn’t make it past the gaffer;
It needs a new Strategic Plan, and a new Leadership team, and I would be more helpful when I get to consider Years ending 2020 and 2021, when we have an opportunity to see what the FAI can really achieve if it is run properly and is taken care of in the manner any organisation tasked with flying the Irish Flag should.
The purpose of re-entering it up front now is because the first half of your YE 2019 FAI Annual here on Broadsheet will focus more on the Governance & Assurance Year the FAI had, so I might as well pick up the pieces of last year’s.
My basis then was an already revised set of statements and by now we are well into extra time with even more injury time to be added with another 2018; restatement on the restatement.
For any year end review to be any use at all, you have to start with an opening balance that is safe, and with a relevant or peer comparison ie 2017. Both these financial years have now been through the hands of Deloittes, Mazars and now Grant Thornton (Audit.)
For so many numbers of reasons, these restatements must be done. But I will introduce you to just one, how do you measure your performance without knowing where your starting line is?
I am not going to ignore the restatement just by passing it – the full background is presented sensibly, and in fairness to Grant Thornton, in a clear and efficiently enough to get through it on a phone screen (pg44.)
You will see there the adjustments go back beyond 2018 and 2017. Now this would normally be a very touchy trigger for me, especially as there was a well got, resourced and togged out firm originally engaged to take care of the FAI’s financial statements. This might make you want to wonder but why bother, you don’t get to play the same match twice.
Besides, what is probably now a very mundane chore for the new Board and Management, the costs of the old FAI have to be charged into those historic accounts. How else can they measure their own progress with the organisation. More importantly, how will you and I know they are getting it right?
That is what the FAI today need to focus on. Their next five years, not the last five.
Of the 164 recommendations within the Governance Review Group Report, 65 that tackled the more ingrained culturally embedded dugouts were already closed off by YE2019, namely around Board Composition and Board Officer Roles. (pgs 4 & 5 btw)
Speaking from experience, these legacy rumps are the hardest to change. Particularly for the better. Note to all volunteer organisations – If your rules are not protecting and enhancing your reputation, get them scorched from your rule book, then come up with better replacements.
Which if you take a tighter look at last year’s Annual Review – Governance and Strategy – well the complete lack of any presence of Governance and Strategy was where it all went wrong.
That was where it was always wrong, they could have been bringing hundreds of millions in through their doors. It was not all about generating enough money to stay solvent. (Now you see why I reinstated that first paragraph.)
All that time, year in year out, for decades in fact, being allowed the impression they were in the cosy cradle of signatures from their former external Auditors is all the more disappointing. But only playing forward …..
Today the FAI is such a very different organisation. In just one year of facing facts, facing truth and cleaning house, no matter how uncomfortable they made the residents of that former Board, they got it done. And that’s something.
Now where these 164 came from might be a question; were they from the KOSI Audit that Sport Ireland commissioned, or GT’s Forensic Audit, or Mazars redoing of the previous year-ends that Deloittes finally entered their own doubts over, or a blend of them all.
One way or another that was one hell of a taxi meter running between all these professional billable-hour firms since many of them were obvious, and replications from other well run Volunteer led organisations. Ahem
But for what it’s worth, as a professional courtesy, I am inclined to think there was a strong influence from the Grant Thornton Forensic Investigation myself, only because I know how they work, and I know the type of Report their engagement produces.
One way or another, no matter the architects, the Board obviously adopted the report and pursued its recommendations without lingering. But it does present an opportunity to flag the importance of Independence at Governance and Assurance levels, and since the external Auditors are now Grant Thornton themselves, for everyone’s sake, lets keep it to one engagement at a time. Just saying.
One of the more remarkable things the 2019 Annual is in the opening pages – in the Chair’s opening line. The will to turn it around could not get any more protruding than that. But for doubters, again jog straight up to pg 6, Governance.
This time last year, there was chanting from too many seats in the stands calling for the FAI to be shut down. The Irish Times claimed death’s door and only the big brilliant Government could save it.
I advocated then, that the FAI was worth saving. And I still do.
But it was not just all the Government.
I will insist that most of the heavy lifting has come from within the FAI itself. A whole new board with a vastly different emphasis on its composition has proved that.
Remember this is a Volunteer type board, which is a very hard thing for experienced Directors to empathise with and understand. It takes years, if not decades to develop an orderly organisation that functions with a Volunteer type governance. Because Volunteer directors all have different motivations for being there, and it takes time, planning and patience to synchronise all those motives into one strategy.
When it came to it, the bailout that is, the Government were just a part. Their lenders, Bank of Ireland, who by their very operational nature do not take risks, were very quick to step in, and so did UEFA with a five bar interest free loan. (pg 23 Going Concern.)
For people in my game, that level of support and endorsement is not nothing. It speaks to the potential of the Organisation. Not its past. It should also highlight the level of trust this new Board can command.
Further proof that the FAI was worth working with, and I did back this up last year, was that the FAI has an ability to earn significant income for itself, when it can.
For instance, given the reputation it owned when they opened 2019, its sponsorship income only dipped 5% (€7.6m from €8m.)
For this review I’ll opt to discuss Income deliberately, because I think it is unfair, as well as meaningless for future comparisons on the FAIs progress on how it runs itself. But only until all the back office functions are running as they should be. There is a whole lot of operational day-to-day restructuring still to do. So, let’s let them get on with it for now.
But there is something else you can tell from just using their Income value – is how their activity measures up against their rivals/ competitors. In this case the GAA and Rugby. A flyby observation will tell you the FAI just is several divisions below our other national sporting brands.
Of course that may level off in 2020 and the year of the COVID-19. So that’s the ould’ GAA excuse in early. But there will be no 2019 Annual Report that doesn’t have Covid-19 as a post balance sheet event.
Yet I would have to say this, that FAI have the advantage this year of new streaming fees from wider platforms. Soccer was always had a natural fan base that didn’t object to subscription fees and pay-per-view arrangements to follow their chosen sport/ team, something that the GAA itself has always struggled with.
Likewise, Rugby has never had the Club structure that promised a fan base that naturally regenerated within its own grounds.
Leaving all that aside, what was in front of the FAI when this year started was the one time opportunity they will never get again, a second chance, and the opening to make a fresh faced clean hands appeal to big ticket sponsors; the FAI were not in a position to market themselves to anyone this time last year.
As for going concern, since I have flagged it here and on the Telly over the recent months, it is now firmly confirmed and signed off, and without qualification.
But there is a Grant Thornton warning, albeit subtle and throughout, a very typical Grant Thornton fingerprint actually; there remains material uncertainty- another GAAesque getting the excuses in early maybe, but it is their signature, a function of professional practice I take very seriously myself.
So consider this signed; The FAI has better days ahead, it is still all to play for in the second half.
On a final note on yer man. Consider this everyone; Page 32 Employees: The Staffing complement went from 200 to 199 over the year that was 2019. (.5%) Costs to the P&L went from € 13,241,183 to € 9,926,896. That’s 30% of a drop or a saving if you like.
Consider that again. A half of a percent in head count represented 30% of their costs to the organisation. How’s that for a Value for Money comparison.
Finally, I would like to congratulate Grant Thornton. The report Grant Thornton delivered to the Board of the FAI last weekend was exceptional, and a template on how to produce financial statements. It was clear, understandable, and business like. It focused entirely on the business of the FAI and not on the personalities it engaged, there was not one ounce of spin or flash or PR. So take note RTÉ.
Before ye get the knives out lads. I can promise ye there will be one department in GTs that will be laughing at that, while another one will be spitting feathers and probably a few bots out too. Neither are the Audit Dept. And for the record, in my own history of Financial Control and other Governance roles I have never actually worked with Grant Thornton’s External Auditors.
Two more disclosures that relate to Conflict of Interest. I do know the former Interim CEO Gary Owens in a personal and private capacity, but I have not had any engagement with him since he stepped into the FAI.
Likewise with Niall Quinn; our previous association was entirely linked with my role in my own Credit Union, and his role with his former school boy club Manortown United, and limited entirely to that relationship.
All that’s left to say is: Hon Ireland.
Vanessa Foran is a principal at Recovery Partners.