FAI reveals liabilities of €55 million
Former chief executive John Delaney received severance package of €462,000
The board of the FAI has confirmed that former chief executive John Delaney received a severance package totalling €462,000 while also revealing overall liabilities of €55 million.
The potential liability to John Delaney had originally been €3 million, and at the end of last year it was €2.142 million, the FAI said at a press conference in Abbotstown today.
Furthermore, the accounts reveal that following an internal investigation “it was noted that certain expenses incurred during 2017 and 2016 by the then CEO were of a personal nature and these have been now disclosed as part of the director’s emoluments”.
Paul Cooke, the executive lead of the organisation, said the FAI had found additional payments to Delaney as it was reviewing previous years’ accounts. “What we found in there in addition to pension payments, loyalty bonuses, there were other payments that would have been paid on behalf of the former CEO, and items that should have been recognised as benefit in kind,” he said today.
The accounts show there was a tax settlement this year of €2.7 million.
Financial information published today shows startling adjustments to the accounts in previous years. In 2016, an original profit of €2.344 million was subject to adjustments of €2.278 million, leaving a surplus of just €66,000. In 2017, a profit of €2.8 million was subject to adjustments of €5.8 million, leaving a restated loss of €2.9 million.
The deficit for 2018 is €8.9 million. The accounts also reveal that there was a voluntary disclosure of underpaid employment taxes and VAT, plus interest and penalties, of €2,712,721 for the years 2015-2018.
The results also show that the association has bank loans of €28.2 million which are in “technical default” due to restated terms of the 2017 financial statements. The FAI is in negotiation with its banks regarding a refinancing of its debts, the organisation said today. The bank loans are now regarded as liabilities.
Donal Conway, the outgoing president of the FAI, said it was a “significant day for the FAI” with “very serious scrutiny and analysis done” of the organisation’s accounts.
The accounts reveal that the organisation has net liabilities at the end of 2018 of €55 million. Since then, the association has had negative cashflow, meaning the financial situation has worsened. The accounts note that “continuous financial support from Uefa” has enabled it to continue operating.
The auditors of the FAI, Deloitte, said it was “unable to obtain sufficient audit evidence to support the assumption that the company will continue as a going concern”. Such a note on the accounts of a company is unusual and raises an immediate concern over the financial viability of the FAI, which is currently being kept afloat by financial support from Uefa.
The accounts also reveal that the FAI is currently in discussions with its bankers to try to agree long-term funding that will enable it to meet its liabilities as they fall due.
The accounts show some of the findings of the investigations that are ongoing at the FAI. It shows that there were “a number of contracts and transactions where business justification was uncertain and sufficient approvals were not obtained”. There were also no procurement policies or procedures. The finance and audit committees were operating with no official terms of reference. There were no internal audit or compliance functions at the FAI, meaning “a key safety net was absent from the association’s structure”.
Cooke said the results being published today are a lot worse “than what I would have thought”.