Check Against Delivery
Thank you Chairman, I am joined today by Minister of State Brendan Griffin who will also give an opening statement. I am also joined by my officials Ken Spratt, Assistant Secretary General and Peter Hogan, Principal Officer, from the Sports Division.
I would like to apologise that it was not possible to share a copy of this Opening Statement with the Committee earlier than this morning. I received responses to queries yesterday afternoon from UEFA, the Attorney General and Sport Ireland and so this statement was only finalised late last night.
Chairman, it is deeply disappointing to be once again before this Committee discussing the need for major reform of the Football Association of Ireland. It was last March, on St. Patrick’s Day, that we first read in the Sunday Times about a most irregular financial transaction, the 2017 loan of €100,000 by the former Chief Executive. This was prompted by a financial crisis in the FAI – the association was looking at a situation where it could not settle its creditors. One of the largest sporting bodies in the State, the National Governing Body for football in Ireland found itself without funds to pay for its day-to-day operations.
The Board of Sport Ireland had no choice but to suspend funding to the FAI for this breach of funding conditions. Minister Griffin and I confirmed that no funding from my Department’s Sports Capital Programme would be provided until the corporate governance and financial control issues had been resolved to our satisfaction. I regret that that position
remains unchanged today, notwithstanding the good efforts of Sport Ireland, the IPA and the professional firms advising the FAI through this process.
There followed a distressing drip-feed of stories in the national media outlining years of poor corporate governance, poor financial management and a complete lack of proper oversight or key controls. This culminated in the disastrous appearance before this committee last April when the former Chief Executive appeared but chose not to respond to the important questions tabled by the Committee members. The members of the FAI Board who appeared that day did nothing to restore our confidence and, following that meeting, it was clear that there was a need for a robust independent review of all financial matters as well as the governance structure of the FAI. I am dismayed that the FAI have decided not to appear here today.
At the time, I made it clear that there was a need for a total clear-out of the FAI Board- a complete break from the past. In respect of the appointment of an interim Chief Executive, I also stated explicitly that it was not in the FAI’s interests to appoint anyone associated with the old regime. I was rebuffed in both cases, firstly by the appointment of Noel Mooney as the interim CEO and then by the decision of the President Donal Conway and John Earley to stand for re-election to the Board last July. I understand that both have now finally decided to step down, and that Mr Earley has already resigned.
The Governance Review Group carried out a serious review of the weaknesses in the FAI’s governance, which have led directly to this crisis. The Group made many recommendations, which were all accepted by the FAI. As the Committee will be aware, one of the most important recommendations was to appoint an independent Chair and three other independent directors.
It is a source of great and ongoing frustration to me that, five months later, these independent directors have not yet been appointed. I have not received a satisfactory explanation as to why this has not yet been completed. This should have been one of the first things the FAI did, in order to start the process of restoring trust in the association. Instead, we find ourselves approaching the end of the year, still waiting for these vital appointments.
I have been advised that the appointments will take place in the very near future. I would like to reiterate that filling the posts of the independent Chair and the independent directors must be the number one priority for the FAI. Thereafter, the FAI should move without delay to launch a robust, competitive process to recruit a new independent chief executive.
Chairman, I would like to turn now to the KOSI Audit and its final report received by Sport Ireland at the end of last month. I must state at the outset that I am restricted in what I can say about the KOSI report. That report is with An Garda Síochána and the Office of the Director of Corporate Enforcement. Transparency is crucial when it comes to tackling difficulties like those before the FAI. On foot of requests from this Committee for either the report in full or even possibly a redacted version, I have again taken legal advice from my Department’s Legal Advisor and also from the Attorney General. They have insisted that it would be unlawful for me to furnish the Committee with a copy of the report. I have also consulted with An Garda Síochána who have advised me that matters outlined in the KOSI Report are central to their investigations and those of the ODCE, and that to make the report public at this time could have serious implications for any criminal proceedings subsequently brought by the DPP. While I would very much like to share the report, it was
clear from the reply from An Garda Síochána that even a heavily redacted copy could undermine their work.
Consequently, I am not in a position to share the report with the Committee today and I hope that I will be able to furnish it at some point in the future, when the investigations currently underway are concluded. I can confirm, and I am somewhat relieved to confirm, to the Committee that the KOSI auditors found that state funding given to the FAI was expended for the purposes it was given. This was of course one of the key questions we were seeking the auditors to answer. The Committee were also clear in their desire that the audit would be forensic in nature and I am pleased to be able to assure Members that the KOSI audit team pursued a forensic approach in their assessment of the FAI compliance with the terms and conditions for Sport Ireland grant funding.
The second key question for KOSI was an assessment of whether the association could demonstrate its fitness to handle public funds. The Committee will be aware that, following consideration of the KOSI Audit on 27 November last, the Board of Sport Ireland decided against restoring funding to the FAI. While I have been advised that to share the full details of the KOSI auditors’ findings would be unlawful, I can confirm that their opinion is that the FAI is not fit to handle public funds. They acknowledge that some steps have been taken to address shortcomings, but there is a steep mountain to climb before we can reinstate funding to the FAI.
In the interim, we have been looking at all options to continue our support for those who really matter, the clubs, players and coaches at the heart of Irish grassroots soccer. Firstly, through Sport Ireland, we have developed a scheme to support the players on the Women’s National Team. Sport Ireland has engaged BDO to deliver funding and other support to the
players with assurance that no public funds will be disbursed directly or indirectly to the FAI. This arrangement will enable us to continue to support the players as they seek to clinch qualification for the Women’s EURO 2020, while assuring taxpayers that funding will be safeguarded.
I am pleased to be able to reveal to the Committee today that Sport Ireland has put together a similar scheme to deliver support for the youth field sports programme which has been the primary vehicle for public funding for the development of soccer. This funding will ensure continued support for 60 development officers throughout the country and the programmes that they deliver. This scheme will begin next month, and if necessary will deliver funding of €2.3million to the development officers through 2020. There has been no break in these programmes, notwithstanding the suspension of Sport Ireland funding, and we can confirm today that there will be no break in these programmes.
Mr Treacy will be able to provide more detail to the Committee about this funding scheme. I would like to confirm at the outset that not one euro of this funding will go to the FAI. Not a single cent will go to the FAI – either directly or indirectly – until we are fully satisfied that all weaknesses in governance and financial control have been fully addressed. The funding will be channelled through a payroll processing company who will make payments directly to the development officers themselves. The payroll processing company will also ensure the payment of deducted taxes, PRSI and expenses as appropriate.
The development officers play a vital role in supporting clubs throughout the country. The last thing I would want to do is to disrupt their important work. Grassroots football must not suffer because of the mistakes of those at the top of the greasy pole.
Chairman, as Members of this Committee will be aware, Minister Griffin and I met on Monday evening with members of the FAI Board, a delegation led by the Vice President and Executive Lead Paul Cooke, along with their financial advisers from Grant Thornton.
As I have stated, the FAI delegation accepted;
- the need for a full changeover of the Board, and for
- the urgent appointment of the independent Chair and Directors, and for
- the appointment of an independent Chief Executive without undue delay.
The FAI delegation presented the stark reality of the association’s financial crisis, and outlined their proposed business plan to overcome these very considerable challenges.
Minister Griffin and I made it clear to the FAI that we cannot and will not provide them with tax payers’ money. The KOSI Report makes it clear that the association is not in a fit state to receive public funds and we must respect that.
We did however tell them we would meet with UEFA to discuss the FAI’s financial challenges. Officials in my Department are in contact with UEFA with a view to arranging a meeting as early as possible.
Chairman, before concluding I would like to say that Brendan Griffin and I empathise with the employees of the FAI who are facing an uncertain future. The staff at the FAI have endured pay freezes and more over the past ten years, and have been shocked to learn about the previously undisclosed pay agreements with the former Chief Executive. They are not the ones who have caused this problem and deserve recognition, not victimhood, for their service. Minister Griffin and I will be meeting with SIPTU and the employees’
representatives later this evening to hear their concerns and I would like to assure them that we will continue to engage with them over the challenging days to come.
I will now hand over to my colleague, Minister of State with responsibility for Tourism and Sport, Brendan Griffin.
Thank you.