No evidence of funds abuse in HSI audit
However, the audit, conducted by Deloitte did highlight significant deficiencies in terms of governance and financial administration/control processes.
The audit was initiated by the Irish Sports Council in February of last year at the behest of the Public Accounts Committee, which received correspondence from Thomas Duggan of Millstreet in relation to grants. In its findings, Deloitte said “no matters or evidence came to our attention during the course of this review which would corroborate the stakeholder’s opinion there had been an abuse or a misuse of public funds by HSI”.
HSI chairman Pat Wall welcomed the findings of the audit — published following a request by the Irish Examiner — saying it had stated “no matters of a significant nature relating to financial policies and procedures” came to the attention of the auditors.
Nevertheless, the audit highlights areas of concern in terms of governance, not least that “HSI’s finances have reached a critical juncture”. It classified its “recommendations as significant, important and procedural” in terms of importance. Under the heading significant, there were two recommendations in terms of governance. Under the heading important, there were no less than six recommendations in terms of governance, and two regarding financial adminstration/control processes. Under the heading ‘procedural’, there were three recommendations in terms of financial administration/control processes.
The report recommends that HSI’s financial resources require strengthening, pointing out “the company’s audited accounts at 31 December 2014 disclose that current liabilities exceed current assets”. Wall said: “As a result, the board of HSI has now decided we should build up a reserve fund of approximately 10% of our income over the next four years. We have budgeted accordingly in 2016 and this has, inevitably, resulted in some cut-backs to our normal range of activities.” He also said, as was recommended by Deloitte, “a formal risk register is also now in place and we have made changes to the allocation process for international hosting grants and breeding grants.
“Important” priority recommendations in the auditor’s report included the size and composition of the 19-strong HSI board “should be reviewed having regard to the fact the board is affiliates-based and not competency-based”. Deloitte said “seven board members may be considered normal for boards or equivalent committees”.
It also said “governance processes can be improved”, recommending that a “board effectiveness review should be carried out”.
The Millstreet assertion that “an abuse and a misuse of public funds by HSI” had occurred is “among a list of key complaints it made which were relevant to the scope of the audit”, including:
No clear and transparent procedures operated by HSI in relation to the allocation of international hosting event grants or breeding financial supports.
Public awareness measures, such as advertising and calls for expressions of interest resulting in a competitive process did not take place for the international hosting event grants.
Funds have been distributed without any clarity.
An appeals process does not operate in relation to grant awards.
Tax clearance certificates are not required as a pre-condition to the allocation of funds and financial supports to equestrian organisations.
Delays occurred in HSI making grant allocations to Millstreet due to a pending mediation process between Showjumping Ireland and Millstreet which is related to an ongoing commercial dispute between Showjumping Ireland and Millstreet.
In 2015, HSI distributed €77,550 in international hosting grants.
To see the report: horsesportireland.ie/wp-content/uploads/2014/01/Deloitte-Report.pdf
