Wednesday 21 August 2019

Shane Ross reveals entire FAI board to step down, while auditors say 'proper accounting records not kept'

  • Sport Ireland to carry out full audit on FAI
  • Shane Ross wants FAI EGM before July to establish new board
  • Deloitte filed notice to CRO stating that 'proper accounting records' were not kept
  • John Treacy says he believes John Delaney is still on the FAI payroll
Former chief executive John Delaney (centre) and Donal Conway ahead of Oireachtas hearing
Former chief executive John Delaney (centre) and Donal Conway ahead of Oireachtas hearing

Donal O'Donovan, Daniel McDonnell and Ger Keville

THE FAI's own auditors have notified authorities of potential failures in the company's accounts - and the sports minister has revealed that the entire board of the football association is to step down.

The FAI has been in the eye of a political storm since it emerged that ex-chief executive John Delaney provided it with a bridging loan in April 2017 to prevent it exceeding its €1.5 million bank overdraft.

Mr Delaney has insisted he acted in the best interests of the game when he loaned the organisation €100,000.

Deloitte have filed a notice to the Company Registration Office stating that "proper accounting records" were not kept at the Football Association Of Ireland.

Auditors Deloitte took the unusual and fairly dramatic step of reporting the failure by the company to keep proper accounting records on Friday, April 12, using a standard form.

Failure to maintain proper books is regarded as a Category 2 offence under the Companies act – and is potentially a criminal offence. In extreme cases offences can result in fines of up to €50,000 and up to five years in prison.

The filing said the FAI had contravened Sections 281 and 282 of the Companies Act 2014 – the specific rules setting out how a company must maintain adequate accounting records.

As auditors Deloitte had signed off on the FAI's most recent accounts, but that filing makes clear auditors relied on information provided by the directors and that the directors themselves are responsible for the preparation of the financial statements.

Sport Ireland agreed to a full audit of the FAI last night.

Meanwhile, FAI President Donal Conway has said in a letter to Minister Shane Ross that the entire FAI board will step down.

The FAI wrote to Mr Ross this morning to say they would be taking 'decisive action'. Mr Ross wants an EGM called before the next scheduled AGM of the Association in July and wants to "facilitate a transition to a new board by way of transparent elections".

"The existing board will step down to allow for a new board to be constituted in the best interests of football," said Minister Ross.

"There will be no further funding until we have received credible answers. I will be closely monitoring developments on corporate governance and the conditions that no new capital payments will be made by my department to the FAI until I am satisfied with the new measures."

The current board is made up of President Donal Conway, Vice President Noel Fitzroy, Mick Hanley, Jim McConnell, Eamon Naughton, Paraic Treanor, John Earley and Niamh O'Donoghue.

When asked whether the FAI board should resign immediately, Minister Ross said that a 'vacuum' would be created that would delay FAI reforms.

"It's imperative they step down and, now we have a commitment they will step down which they will be held to," he said.

"What we have is a commitment. If you want them to step down today which I would like, and it was in my initial statement, and it is my desire, but - as John Treacy said - if they step down today and we had to put a board in place - it would take some time and there would be a vacuum and it would take time to apply government reforms. I want it to happen as quickly as possible before the EGM."

Honorary Secretary Michael Cody and Honorary Treasurer Eddie Murray resigned from their roles yesterday and John Delaney is no longer a board member since he changed from CEO to Executive Vice President.

Ross added the new FAI board should have a wider base, "include representatives of players, male and female, supporters, leagues." And Ross called for a "stakeholders forum" for all facets of the game to come together and shape a future.

John Treacy also told the Oireachtas Committee that be understands John Delaney is still being paid by the FAI while investigations are ongoing.

When Sport Ireland chairman Kieran Mulvey was asked about John Delaney's position within in the FAI he said:

"My understanding - from my experience in employment law - there is a term that an individual is on gardening leave and I assume that's where Mr Delaney is. I'm not party to the deal and I'm always conscious of interfering as a third party contract. Where there is a question raised an individual's performance, they are put on gardening leave while that investigation takes place."

Adrian Horan of the Institute of Public Administration will chair a review of governance at the FAI and Sport Ireland say audit of FAI will be "as extensive as they need it to be".

John Treacy added that the Mazars review, commissioned bu the FAI, will be a full investigation of what's come into the public domain.

"We will bear in mind the outcome of Mazars Report when conducting our own audit," said Mr Treacy.

Mr Ross envisages that the FAI will get their house in order to qualify for future funding.

"They can make applications but it's when they drawdown," said Minister Ross.

"That's when the crucial period would be. I wouldn't discourage them from making applications at all. I anticipate if they take the necessary urgent measures, they will not be penalised in any way.

"There will be applications tomorrow. Then, there will be allocations. Then there will be a drawdown. It's a three stage process. I don't anticipate that by the time we get to drawdown, we'd have the problems you anticipating."

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