Mr. John Treacy:

I thank the Chairman. I am joined by Mr. Kieran Mulvey, Mr. Aidan Horan and Mr. Paul McDermott, as the Chairman said. Mr. Horan will make an opening statement on the work of the governance review group and its report, which was furnished to members of the committee on 21 June, in advance of its publication.

Sport Ireland has attended meetings of this committee on two occasions in recent months. Matters pertaining to governance in the FAI were discussed at length. Today I will give Sport Ireland's perspective on the recent developments towards reform and examine the next steps in regard to the adoption of the reform proposals and, ultimately, the conditions by which restoration of Sport Ireland funding may take place.

The board of Sport Ireland welcomes the report of the governance review group. The report provides a clear and comprehensive pathway for the fundamental reform of governance within the FAI, and a pathway for the FAI to emerge from its current difficulties. The report is a significant piece of work and draws on the expertise and experience of the various group members, particularly in the areas of corporate governance, financial management, change management and football administration.

The report is detailed and explicit in its recommendations. It gives serious consideration to the input of many stakeholders, as well the outputs from the football stakeholders' forum, hosted by the Minister, Deputy Ross, and the Minister of State, Deputy Griffin, and attended by the Chairman of this committee and some of its members.

What is clear from the discussion at that forum and the large number of submissions received from members of the public and the football community is that a palpable appetite for change exists. Indeed, the recommendations in the report have been widely welcomed and the commentary following publication has been overwhelmingly positive.

While Sport Ireland is a key funder of the FAI, it is important to acknowledge the significant roles played by international partners UEFA and FIFA from a governance and funding perspective. It is therefore welcome that the group consulted both UEFA and FIFA as part of this process and benchmarked its proposals against the principles and regulations of both, as well as those of other international football federations. In this regard, Sport Ireland was pleased to hear that the outcome of the group's work has been endorsed by UEFA and FIFA. This is an important development and sends a clear message to stakeholders at all levels of the game, from grassroots to professional, that these recommendation need to be implemented in the best interest of the game.

The report clearly and appropriately identifies the collective responsibility of the new board of the FAI in leading and directing the organisation's activities. It will be up to the new board of the FAI to show leadership in the implementation of these critical, yet achievable, recommendations. It is the view of the Sport Ireland that the timely implementation of these reforms is essential to the restoration of public trust and confidence in the FAI.

A new outlook is necessary if real change and reform are to be realised. We now have a timely opportunity to commence the process of change. The urgency arises from the need to provide the public, football community and stakeholders with assurance that there is determination in the FAI to enact necessary reforms. The adoption and implementation of the recommendations of the review is only a starting point; the actions and steps that will follow will take time.

While the report has been widely welcomed, one challenge facing the board of the FAI is reassuring all its constituents that the 78 recommendations included in the report of the governance review group are in the best interests of the organisation and the game of football in Ireland.

There have been media reports in recent weeks on some reservations expressed by some affiliates of the FAI regarding the proposed composition of the new board. It is natural for reluctance to change and reform to exist among some groups in any change process. We respect the autonomy of such groups but it is vital that they reflect on the current situation, as well as the implications and practicalities of the recommended committee structure and where their respective inputs and expertise are best suited. One aspect worth highlighting is the establishment of the new football management committee. This is essentially the new football board for the FAI and will oversee the business of football. The football management committee will be the forum where all matters pertaining the game of football at all levels will be discussed.

It is also important to note that the governance review group report recommends appointing an interim board for a period of one year. The board must show leadership. Its role in this regard is clearly outlined in the report and the skill sets required by members of the board to carry out its role and ensure the future successful governance and management of the FAI are detailed.

These include, among others, skill sets in the areas of law, governance, finance, and risk management. The report further states: "The necessity for the presence of these skills and experience on the Board is reflective of the requirement on the part of the Board to oversee the management and strategic development of a significant organisation."

Sport Ireland notes that the FAI has been conducting roadshows around the country to discuss the recommendations with key constituents. This is welcomed. It is hoped that these discussions will lead to a better understanding of the proposals and the reason these changes need to happen.

The board of Sport Ireland views the adoption of the recommendations of the report by the FAI as absolutely essential. As part of the implementation of the governance review group report recommendations, the FAI will establish an implementation oversight group which will review the recommendations in conjunction with the FAI's rulebook and constitution. The first task for this group will be to draw up an action plan, with associated timelines. The FAI has invited Sport Ireland to appoint two representatives to the oversight group. Sport Ireland has nominated Mr. Joe O’Leary, who was a member of the governance review group and who is an experienced consultant, business psychologist and facilitator; and Mr. Angelo McNeive. Both representatives will bring substantial expertise to the table and have the range of skills required for the group. The FAI has welcomed these additions.

As a joint commissioner of the governance review group report and as the statutory agency with responsibility for the development of sport, Sport Ireland will pay close attention to the work of the implementation group and will seek periodic updates on its progress as part of an ongoing liaison process with the audit and risk committee of the board of Sport Ireland.

As the committee will be aware, in May of this year, Sport Ireland appointed KOSI Corporation Limited to carry out an extensive independent audit of the FAI. The KOSI audit, which commenced in late May, is an exercise commissioned entirely independently of the association and will address the key issues Sport Ireland requires to be examined. The KOSI team comprises senior auditors, including a forensic accountant. The audit is independently assessing the expenditure of Sport Ireland grant funding in accordance with the FAI’s approved submissions. It is also examining in detail the FAI's wider financial administration and internal control environment, which includes assessing the FAI's fitness to handle public funds.

This audit will include, but is not limited to, assessment of the compliance of the FAI with the terms and conditions set out by Sport Ireland in respect of the award of grants between 2015 and 2018; a consideration of good practice requirements and expected financial controls and of how the FAI matches up against these requirements; an assessment of the financial control framework within the FAI and the FAI’s fitness to handle public funds; an assessment on the FAI’s overall financial and cash position and its overdraft facilities to meet its financial obligations; an assessment of the existence and effectiveness of the FAI’s financial policies and procedures pertaining to current practices within the FAI; and the undertaking of reviews, to include sample testing. It is anticipated that KOSI will deliver its report in September, in accordance with the original timeline. As the committee has requested, the audit will be detailed and extremely well done. It is essential.

At its meeting on 9 April of this year, the board of Sport Ireland decided to suspend and withhold future funding to the FAI in accordance with clause 1.1 of its terms and conditions of grant approval. This suspension and withholding of funding remains in place, and the board of Sport Ireland continues to review this decision at each of its meetings. The board feels a number of factors are of particular relevance to the restoration of public funding. These include, but are not limited to: the adoption of the recommendations of the governance review group, the establishment of new governance structures, and the completion of the KOSI audit and adoption of recommendations.

As in previous years, the FAI financial statements for 2018 will also be presented to Sport Ireland. Sport Ireland’s financial controller will analyse the financial statements submitted by the FAI and highlight any concerns, potential risks or questions that may arise. We expect the FAI to address any queries or concerns arising from that analysis. Sport Ireland is aware of an ongoing investigation into matters relating to the association by the Office of the Director of Corporate Enforcement, ODCE. Sport Ireland understands that the ODCE investigation is serious and will be very substantial.

The board of Sport Ireland will continue to monitor these matters as they develop and progress. A decision to restore funding will only be considered when the structures, controls and governance arrangements are in place within the FAI. The board must also be satisfied that the FAI is equipped to ensure ongoing compliance with the terms and conditions of grant approval.

Sport Ireland places a high premium on good governance and encourages high standards in governance from all funded bodies. As a development agency, it is our aim to provide leadership in this area while empowering sport organisations to take responsibility for their own governance and to meet the challenges they face. Sport Ireland has reflected on the FAI issues, listened to the comments of members of this committee, and discussed matters with the Department of Transport, Tourism and Sport. Since Sport Ireland’s attendance at this committee on 3 April, there have been a number of significant and pertinent changes in our oversight relationship with funded bodies and the supports provided to those bodies. At its meetings on 28 May and 4 July, the board of Sport Ireland approved revised terms and conditions of grant approval for all Sport Ireland-funded organisations to come into effect for 2020 funding.

A key amendment to the terms and conditions is the strengthening of the audit clause to explicitly confer full audit, inspection and investigative rights on Sport Ireland for every funded body. The right to audit, inspect, and investigate may also extend to any matter of concern to Sport Ireland in respect of the organisation rather than just the use an organisation makes of Sport Ireland grant funding. Other key amendments include making it an explicit condition of funding that Sport Ireland appointed auditors are entitled to request and receive all the information and explanations they require for the proper performance of their job; making it a condition of funding for all national governing bodies of sport and local sports partnerships that they must provide details of the full remuneration packages for their chief executives to Sport Ireland; and requiring that Sport Ireland be provided with independent verification that each organisation is fully compliant with the code of practice for good governance of community, voluntary and charitable organisations in Ireland by the end of 2021. Failure to co-operate fully with any audit, inspection, or investigation on a timely basis will entitle Sport Ireland to suspend or withhold grant funding or to claim repayment of any grants previously advanced.

The board of Sport Ireland is satisfied that these measures are appropriate and necessary in light of the recent learnings from the FAI situation. We are confident that the additions will further strengthen Sport Ireland's authority in respect of overseeing public funds. Good governance does not just live on paper; it is mutually dependent on behaviours and attitudes. While formal terms and conditions play an important role in safeguarding public funding, they have a limited role in promoting and embedding good governance within organisations. This is why Sport Ireland takes a multifaceted approach to ensuring that good governance is prevalent throughout the sector. This includes encouragement and training and education to complement the outlined terms and conditions.

The Government’s national sports policy, published in July 2018, tasks Sport Ireland with overseeing a process whereby all national governing bodies for sport and local sports partnerships adopt the code by the end of 2021. Since we last attended a meeting of this committee, Sport Ireland has adopted the governance code for the community and voluntary sector as a governance code for sport. This follows the decision of the governance code working group to retire the code. Based on previous meetings, the committee will be aware of the numerous training and development opportunities and interventions available to funded organisations through Sport Ireland’s organisational development and change unit. This unit has been tasked with stepping up its output in building the capacity and enhancing the volunteer leadership capability of the sporting sector through strengthening governance, enhanced training and development of boards. The FAI will hold an extraordinary general meeting, EGM, on 20 July to facilitate the implementation of the first phase of the governance review group report's recommendations prior to the annual general meeting, AGM, which will take place on Saturday, 27 July.

The recommendations in the report of the governance review group outline a pathway, which will secure the sustainable future of Irish football.

Sport Ireland respects the independence and autonomy of all funded organisations, including the FAI, and the right of their membership to make decisions on leadership and governance structures. What is required now is reflection and determined action for the betterment of football across Ireland.

That is the FAI piece. Will I continue with the other matter?