The Directors of the FAI admit that ‘material uncertainty’ still hangs over the future of the cash-strapped association after the release of the 2020 accounts.
ith the FAI already reeling from the impact of a turbulent decade – the circular to members details the voluntary disclosure of underpaid taxes to the Revenue Commissioners – Covid-19 added a fresh headache arriving just after the agreement of what was effectively a rescue package thrashed out with the help of government, Bank of Ireland and UEFA.
They received €13.2 in Covid relief funding from the state and also availed of a $5m loan from FIFA as the pandemic placed further strain on the perilous financial position created by the mistakes of the John Delaney era.
At the end of 2020, bank and other borrowings stand at €62.4m, a rise from €42.9m.
Net current liabilities fell from €69.7m to €13m because of the reclassification of a loan from Bank of Ireland to a non-current liability.
Nevertheless, the phrasing of the accompanying directors report is stark, pointing out that Covid had made it difficult to plan with certainty in the future with question marks still hanging over the scale of stadium reopenings amongst other issues.
“The Directors appreciate that due to the ongoing public health crisis, and the impact this is having both globally and within Ireland, together with the inherent difficulties in predicting future cash inflows and expenditure, there remains a material uncertainty in respect of going concern for the foreseeable future,” read the FAI missive.
Independent auditors Grant Thornton assert that the FAI is effectively reliant on the support of its banking partners and parent bodies.
Their contribution included the key section that “The financial statements have been prepared on a going concern basis which assumes that the Association will continue in operational existence for the foreseeable future.
“The validity of this assumption as stated in the Directors’ report and note 1.2 in the financial statements depends on the continued support of the Association’s bankers and various other supporting bodies and the Association’s ability to maintain a sustainable operating performance in the future.”
Ultimately, the figures detail the straightforward impact of the pandemic on the Association’s finances.
Match income fell from €8.1m (2019) to a figure in the region of €300,000 (2020). Income from technical development courses dropped from €6.7m to €4m.
The €13.2m in Covid relief funding was a vital source of support with €8.2m included in the 2020 turnover of €43m.
Sport Ireland’s increased grant contribution (a rise from €1.4m to €5.8m) was also an essential source of support.
Sponsorship income fell from €7.6m to €5.8m with the Association still engaged in the hunt for a new title sponsor after the departure of Three.
While the outside support allowed the FAI to return a surplus of €1.6m for the year, the aforementioned net current liabilities of €13m and €62.44m in bank and other borrowings paint a much less flattering picture.
But the FAI remains saddled with the consequences of the regime that ruled the roost in the decade leading up to the pandemic.
The accounts confirm that the FAI made ‘unprompted, prompted and voluntary disclosures to the Revenue Commissioners’ after an external professional services firm was engaged to exist with a full review of affairs under this heading.
“During 2019 and 2020, the Association was subject to a Revenue audit,” said the relevant section in the notes to the financial statements.
“This has resulted in the Association making voluntary disclosures of underpaid employment taxes and VAT, and consequent interest and penalties to the Irish Revenue Commissioners, estimated at €3,481,386 across the years 2015, 2016, 2017, 2018 and 2019.
“These potential liabilities have yet to be accepted by the Revenue authorities. The amounts provided are best estimates of the Directors based on the facts presented and after consultations with a professional services firm.”
It is noted that the FAI remain under investigation by the Office of Director of Corporate Enforcement.
FAI Chairperson Roy Barrett said in a statement that: “COVID-19 presented a real financial challenge to the Association in 2020.
“Thanks to the ongoing and welcome support from Government and Sport Ireland we were able to manage our finances in a positive way in 2020, across all levels of our game.
“Together with the support provided to us by FIFA and UEFA and the strict and careful management of our variable costs as we came to terms with the impact of the pandemic, we met this financial challenge head on with our operating costs €5.7m lower in 2020 compared to 2019. We are moving to a better place and can look forward to a brighter financial future.”
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