Sport Ireland could halt FAI funding over loan controversy

Sport Ireland could halt FAI funding over loan controversy
John Treacy

Latest: Sport Ireland has confirmed they could cease or suspend funding to the FAI amid concerns over a controversial loan.

Sport Ireland’s chief executive John Treacy told an Oireachtas committee today that his organisation had no knowledge of a “bridging loan” to the FAI by former chief executive John Delaney of €100,000 or that the FAI were paying Mr Delaney’s rent.

Last month, Mr Delaney, who has now officially resigned from the FAI board just two weeks after quitting as chief executive, confirmed he gave the association a €100,000 loan to help it through a short-term cash flow problem, that has since been repaid.

Sport Ireland, which provides €2.7m a year for a number of programmes within the FAI, also noted it had only received a letter from the FAI about the matter on the morning of the committee meeting. The letter said the FAI is currently conducting a review and will not be able to provide Sport Ireland with further detail on the loan until the review has been completed.

“The letter does not provide any explanation, the board of the FAI has not provided any legitimate reason why it cannot provide any explanation,” Mr Treacy said.

“We still await any explanation. We will ask for the terms of reference and ask for assurance that we will be consulted as part of that review and a full final report will be submitted.”

Sport Ireland chairman Kieran Mulvey said their organisation would need to be “reassured everything is OK”, before any further funding is given.

Mr Treacy also told the committee he found it strange that the chief executive of the FAI had a larger salary than Taoiseach Leo Varadkar.

The committee heard that cash flow is an issue for FAI, a fact which would be well known within sport.

Do you find it credible that an organisation like the FAI would be in such a dire financial situation that it would have to resort to getting loan from their CEO's personal bank account?

“We gave the FAI 50% of their funding for this year, and a second payment of the 25% at the end of March, so we have no idea why the loan was given or why they needed it,” Mr Treacy added.

“We know they have debts at the Aviva (Stadium) and are meeting those requirements, so we know its not easy either.”

The FAI drew down funding early every year from 2016 to 2019, the committee heard.

Fine Gael’s Noel Rock noted that this would highlight cash flow issues in the organisation.

Mr Treacy replied: “Yes, we know they’re carrying large debt, but again, the sustainability of the organisation is still moving forward and debt has decreased.

“The concern is to maintain programmes the best we can, we provide funding on a staggered basis to protect the funding we give to them, there is checks and balances there.”

Sport Ireland chief executive John Treacy (left) and chairman Kieran Mulvey arrive at Leinster House (Brian Lawless/PA)
Sport Ireland chief executive John Treacy (left) and chairman Kieran Mulvey arrive at Leinster House (Brian Lawless/PA)

Sinn Féin’s Imelda Munster asked if Sport Ireland’s auditing process was lacking or insufficient.

“We are satisfied in the audits we’ve undertaken, and satisfied that the investment by government in FAI is good value for money and gets good return,” Mr Treacy said.

“We will be auditing the FAI again in 2019.”

Ms Munster queried if this situation has arisen with the GAA or IRFU.

“They say it’s a bridging loan, do you find it credible that an organisation like the FAI would be in such a dire financial situation that it would have to resort to getting loan from their CEO’s personal bank account?”

Mr Treacy replied: “We find it extraordinary, to be honest. That’s why we’ve asked the questions we’ve asked, we’re waiting for an answer.

“Generally, if an organisation – and we’ve had experience of this down the years – if they’re in financial trouble they come in and talk to us, and we work with organisations to oversee and make sure they meet their cash flow issue. A lot are tight on funding, that’s how it goes. There’s dialogue and we support the organisations.

Mr Treacy was asked repeatedly if he had confidence in the FAI board, and dodged the question a number of times, before being told: “It’s a yes or no question.”

He replied: “Well, I’m not saying yes.”

Former chief executive of the FAI John Delaney (Niall Carson/PA)
Former chief executive of the FAI John Delaney (Niall Carson/PA)

The Sport Ireland representatives were asked what sanctions could be imposed on the FAI if it is found they have acting inappropriately.

“To be honest, we’d like to see what the outcome of your own hearing next Wednesday is with FAI and we’ll make an assessment then on that basis,” Mr Mulvey said.

“On Tuesday, we’ll take stock. We will have to be reassured everything is OK, before any further funding is given.”

Senator Frank Feighan asked if the FAI is a “symptom of a ‘Goodfellas club’ around the world” referencing Uefa and Fifa.

“I think it would be well known that Fifa would not be leading lights in that particular area, or international boxing organisations,” Mr Treacy replied.

“There’s a long way to go in international sport for some organisations.

“Corporate governance in the sports sector in Ireland is far superior than in other countries, and I mean that in all sincerity,” he added.

Representatives from the FAI are due to appear before the committee next Wednesday.

Earlier (5:37pm): John Treacy disappointed by timing and content of FAI letter

Sport Ireland's chief executive John Treacy has confirmed his organisation had no knowledge of a "bridging loan" to the FAI by former chief executive John Delaney or that the FAI were paying Mr Delaney's rent.

Sport Ireland received a letter this morning from the FAI saying they are currently conducting a review and will not be able to provide his organisation with further detail until the review has been completed.

Mr Tracey says he is disappointed by the timing and the content of the letter, and will be informing the FAI as such in a reply.

"The letter does not provide any explanation, the board of the FAI has not provided any legitimate reason why it cannot provide any explanation," Mr Treacy said.

"We still await any explanation, we will ask for the terms of reference and ask for assurance that we will be consulted as part of that review and a full final report will be submitted."

"We're aware cash flow is an issue for them, and that would be well known within sport," Mr Treacy said in reply to Catherine Murphy of the Social Democrats who queried what, if any, idea Sport Ireland had about the loan.

"We gave the FAI 50% funding this year, and a second payment of the 25% at the end of March, so we have no idea why the loan was given or why they needed it.

"We have an investment that we put into the FAI and it's a sustained investment over a period of time, taxpayer money goes into it, so the viability of those programmes is critically important to us.

"We know they have debts at the Aviva (Stadium) and are meeting those requirements, so we know it's not easy either."

John Delaney
John Delaney

The FAI drew down funding early every year from 2016 to 2019, the committee heard.

Fine Gael’s Noel Rock noted that this would highlight cash flow issues in the organisation.

Mr Treacy replied: “Yes, we know they’re carrying large debt, but again, the sustainability of the organisation is still moving forward and debt has decreased.

“It is a concern – what we do is monitor on an ongoing basis.

“The concern is to maintain programmes the best we can, we provide funding on a staggered basis to protect the funding we give to them. There is checks and balances there.”

Sinn Féin’s Imelda Munster asked if Sport Ireland’s auditing process was lacking or insufficient.

Mr Treacy replied: “Every year the FAI auditors give us a letter saying the money was expended for the purposes for which it was given, then we use three different auditors to audit the FAI.

“They have all come back basically saying the money was expended for the purposes for which it was given. We are satisfied in the audits we’ve undertaken, and satisfied that the investment by government in FAI is good value for money and get good return.

“We have also verified that our terms and conditions were met.

“We’re now in a position of asking the FAI, in relation to the terms and conditions, the circumstances of the loan, and we’re acting now.

“We will be auditing the FAI again in 2019.”

Ms Munster said: “I take it this situation hasn’t arisen with the GAA or IRFU?

“They say it’s a bridging loan, do you find it credible that an organisation like the FAI would be in such a dire financial situation that it would have to resort to getting loan from their CEO’s personal bank account?

Mr Treacy replied: “We find it extraordinary, to be honest. That’s why we’ve asked the questions we’ve asked. We’re waiting for an answer.

“Generally, if an organisation – and we’ve had experience of this down the years – if they’re in financial trouble they come in and talk to us, could be a timing issue, or dues that are due a month after and we work with organisations to oversee and make sure they meet their cash flow issue. A lot are tight on funding, that’s how it goes – there’s dialogue and we support the organisations and they continue and prosper.

“There is dialogue, but there was no dialogue round this.”

Mr Treacy was asked repeatedly if he had confidence in the FAI board, and dodged the question a number of times, before being told: “It’s a yes or no question.”

He replied: “Well, I’m not saying yes.”

Senator Frank Feighan asked if the FAI is a “symptom of a ‘Goodfellas club’ around the world”, referencing Uefa and Fifa.

“Some international sports have good corporate governance, rugby would be one,” Mr Treacy replied.

“I think it would be well known that Fifa would not be leading lights in that particular area, or international boxing organisations.

“I was at an international workshop for one of these organisations and they were talking about an ethics committee and you would’ve thought that someone had raised something terrible.

“There’s a long way to go in international sport for some organisations.

“Corporate governance in the sports sector in Ireland is far superior than in other countries, and I mean that in all sincerity, so while we’re talking about corporate governance here today, and rightly highlighting it, we take it extremely seriously and that’s a good thing.”

- PA

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