Sport Ireland will tell an Oireachtas committee on Wednesday that the FAI has not sufficiently explained the circumstances of a €100,000 loan given by John Delaney to the organisation in 2017.
An opening statement to the committee from John Treacy, the chief executive of Sport Ireland, reveals that the FAI responded to a letter from the organisation which was sent after the loan was revealed in recent weeks.
“However, the contents of the FAI letter did not sufficiently explain the circumstances of this loan and its repayment, nor fully address the matter of compliance with Sport Ireland’s Terms and Conditions of Grant Approval.”
Under these conditions, the FAI was obliged to notify Sport Ireland in writing of any material deterioration in its financial position, or any other matter which could jeopardise the its overall financial viability.
Sport Ireland has again written to the FAI “re-seeking clarification on the circumstances of this loan”.
“More detail was also requested by Sport Ireland in order to assess compliance with the terms and conditions of grant approval. Sport Ireland also sought re-confirmation that all state funding provided to the FAI has been spent for the purposes intended and in accordance with approved submissions”.
The FAI is yet to reply to the second letter, Mr Treacy will tell the committee.
Sport Ireland will also flag that it was not told in advance about the "structural changes" at the FAI which centred on John Delaney's resignation as chief executive and re-assignment as executive vice-president and the appointment of Rea Walshe as interim chief executive. It was not consulted in the preparation of a report on governance by Jonathan Hall & Associates which informed the changes, and has not yet received a copy of the report.
Mr Treacy’s opening statement also reveals that Sport Ireland last year raised questions with the FAI about their 2017 liquidity position. This was brought about after the FAI introduced a €1.3 million bank overdraft facility, and an increase in its net debt position in 2017.
Responding to the query, the FAI’s director of finance told Sport Ireland that the organisations net current liabilities position “is a common annual position” driven by deferred income from grants, sponsorship and commercial agreements being released over the lifetime of the agreements.
He said that the “the overdraft position at Dec 2017 was within our overdraft facility with our banking partners and was a matter of timing rather than a liquidity concern - the balance has been in credit for the majority of 2018 to date”.
Sport Ireland will also tell the committee that it is satisfied that “effective control mechanisms and frameworks are in place with regard to our investment in the FAI”. “Sport Ireland is satisfied that our funding invested in the FAI is fully accounted for and expended on the purpose for which it is intended”.
The organisation’s grants to the FAI have been audited three times, which it says provided it with “the highest level of assurance that all funding is fully accounted for and expended for the purposes in which it was intended and that the Terms and Conditions of funding are being complied with”.
