FFSL legitimacy at risk
The Football Federation of Sri Lanka (FFSL) is at the risk of losing its recognition as a legitimately appointed governing body by the FIFA if it fails to move forward with the Annual Congress or being placed under the authority of an Interim Committee.
The FFSL could not conduct its Annual Congress in 2016 after the most important Auditor General’s Report was delayed by months. Ending the delay the Auditor General’s Department released the Report on Financial Statement of the FFSL on September 26, 2016 under the reference number CAS/A/SFF/06/15/FA signed by the Auditor General, H.M. Gamini Wijesinghe.
Interestingly the 10-page Auditor General’s Report for 2015 points out at the lack of proper development of the sport as well as management failures of FFSL in addition to the grave financial misappropriates and apparent fraudulent transactions that have taken place over the years since 2006 to 2012. FFSL has distributed copies of the Auditor General’s Report into a booklet in all three languages to its 74 associate Leagues with the intention of calling its Annual Congress or the Annual General Meeting (AGM) for 2016 at 10.00am on April 22 at Ministry of Sports Auditorium in Torrington.
The Auditor General’s Report under 2.2.1 Transactions of Apparent Fraudulent Nature points out four incidents where the Auditor General states ‘these matters had not been dissolved up to date of this report’, after the clauses continues to remain in the report unanswered for years.
“The Italy Football Players Association had granted a sum of Euro 40,400 equivalent to Rs. 6,287,670 on January 8, 2008 for the purpose of develop the Play Ground at Kalutara and subsequently it was deposited in an official bank account maintained at the Standard Chartered Bank. Thereafter, then Chief Executive Officer (CEO) of the Federation had sent a letter to the Standard Chartered Bank to transfer this money to another private bank branch in Kollupitiya.
Accordingly, the Standard Chartered Bank transferred a sum of Rs. 6,287,670 to that private bank branch and it was confirmed in audit that the actual owner of this bank account is then Chairman of the Management Committee of the Federation. Therefore, it was ensured in audit that then Chairman of the Management Committee had defrauded the funds of Rs. 6,287,670 (Euro 40,400) granted by the Italy Football Players Association,” under section (a) the report states.
The report continues to state under (b) that “The Asian Football Federation had granted a sum of US$ 60,000 equivalent to Rs. 6,415,290 on May 12, 2008 for conducting the Asian Football Confederation President’s Cup first round qualifying matches. Subsequently it was deposited in an official bank account maintained at the Standard Chartered Bank. According to the audit examination carried out in this connection it was revealed that then CEO had advised the Director Finance on 14 May 2008 to transfer this money to a bank account number owned by a private Sports Club which is the host party of this tournament maintained at a private bank branch at Kotahena. However, this request had not been forwarded to the bank due to no bank account maintained by this Sports Club on such bank account number and at the same time he had issued a fraudulent advice to the Standard Chartered Bank asking to transfer a sum of Rs. 6,414,290 to the personal foreign currency bank account of then Chairman of the Management Committee maintained at the same private bank branch at Kollupitiya. Accordingly, the Standard Chartered Bank had transferred the above money to that account and it was confirmed in audit that no money had been received by the said Sports Club up to date.”
Under clause (c) of the report the Auditor General’s Report discloses of a much bigger transaction than the first two.
“A Private Limited Company had granted a sum of Rs. 10,000,000 on January 23, 2006 to the Federation for the construction of 20 Tsunami affected houses in Kalutara district. Out of this a sum of Rs. 5,000,000 had been transferred on February 2, 2006 to a bank account number maintained at a private bank on the request made by the Treasurer of the Help Sri Lanka Consortium on January 16, 2006 for the purpose of funding their ‘Educate a Child Project’. The then CEO of the Federation had informed on February 5, 2007 to then Director, Finance to pay the balance Rs. 5,000,000 in cash to then President of the Management Committee as enable him to handover such funds to the Treasurer of a private charity in charge of a Tsunami Project. Accordingly such funds had been handed over to the then Chairman of the Management Committee. However, he had fraudulently retained this money without being handed over to the said charity.”
“The Asian Football Federation had directly deposited sums aggregating US$ 200,000 during the year 2008 to the Federation bank account maintained at the Standard Chartered Bank, Colombo 1. Subsequently the Federation had transferred a sum of US$ 40,000 fraudulently to the personal bank account of then Chairman of the Management Committee maintained at a foreign bank branch, Colombo 3.
On June 6, 2008 then CEO of the Federation had withdrawn a sum of Rs. 3,217,500 equivalent to US$ 30,000 from the Federation bank account. Out of this sums of Rs. 1,337,151 and Rs. 526,250 equivalent to US$ 17,467 had been handed over to the Federation on June 19, 2008 and on July 22, 2008 respectively and the balance US$ 12,533 equivalent to Rs. 1,337,035 had not been handed over to the Federation up to date of this report.
Further, then CEO of the Federation had obtained a sum of Rs. 6,000,000 as a loan from then Chairman of the Management Committee on June 20, 2008 without the approval of the Executive Committee to meet the expenses of the South Asian Football Games (SAFF Games) even though there were sufficient funds available in the Federation bank accounts. At the meantime then CEO of the Federation had transferred an amount of US$ 60,000 from the Federation bank account to a personal bank account of then Chairman of the Management Committee via fake bank advice for settlement of the above loan,” the report reads.
The booklet printed and distributed by FFSL to its 74 Leagues include the Notice Convening the Congress, the Minutes of the last Congress held May 23, 2015, the Minutes of the Special General Meeting held on July 2, 2016, the Auditor General’s Report for 2015 in all three languages, the Annual Audited Financial Statements for 2015 and the List of delegates entitled to attend the Congress.
However if the FFSL proceeds with the Annual Congress as planned and scheduled this will be the very first occasion since 2011 that an Auditor General’s Report will be tabled and read. The FFSL has conducted its Annual Congresses since 2012 but a Writ Application obtained by a faction supporting a former top football official prevented the Auditor General’s Report from being read.
In addition to the debated clauses that prevented the FFSL Annual Congress from tabling the Auditor General’s Report, the latest observations added have critisised the manner the game was governed overall, in particular during the year 2015. Under section 2.2.3 the report says that FFSL lacked evidence for audit.
“Even I have continuously mentioned in my previous audit reports, a fixed assets register had not been maintained by the Federation and the physical verification reports for several years were not made available for audit as supporting documents to verifying the completeness, ownership, existence and value of the fixed assets shown in the financial statements. Therefore, the carrying value of the fixed assets totalling Rs. 251,243,332 shown as at end of the year under review could not be relied upon in audit,” the report states under 2.2.3 (a).
The report also underlines that FFSL has bypassed recommendations made under Financial Regulation 756 on Annual Board of Survey Report of stores relating to all departments of the Federation, Public Accounts Circular No.432 of April 24, 2008 by purchasing airline tickets from private institutions instead of SriLankan Airlines and Mihin Air through BOC Travels or Peoples’ Travels and the National Procurement Agency Circular No.8 of 25 January 2006 by not carrying our pre-preparation activities such as environmental impact assessment and social impact assessment before commencing construction of the Football Training Centre at Kelaniya.
“As I highlighted in my previous years audit reports, the Federation should have an approved cadre highlighting the cadre requirements of each Division consolidated in the form of a Human Resource Budget and Organisational Chart. However, the Federation does not have an approved cadre and an organization chart since its inception,” the report stated under 4.1.1.
The planned Annual Congress too comes after a delay of seven months as present FFSL officials failed to promptly act to take necessary steps to fix a date soon after they received the Auditor General’s Report on September 26, 2016. Had they acted accordingly, the FFSL could have distributed the booklet within 40 days after receiving the report and called in for a date for the Annual Congress before the end of year 2016.
The FFSL is currently one of the hot topics in the sports field of Sri Lanka with the deadline for Annual General Meetings or Elections ending on March 31. The race for the upcoming election has already created competition among big names for the top spot. In addition it has resulted in friends in becoming foes and different camps for campaigning. Eventually the FFSL gets the opportunity to hold its Annual Congress for 2016 with the debate on Auditor General’s Report beginning from April 6. After the intended Annual Congress on April 22, the FFSL plans to conduct its Annual Congress included with the elections on July 1, to elect office bearers for the period of 2017-2019. Unless an unavoidable situation prevents FFSL from proceeding with its stipulated plan to complete the 2016 Annual Congress and move forward with the Annual Election Congress on July 1, the Ministry of Sports may have to intervene in extending the term of the present office bearers to continue until an election date is decided. If not the Ministry of Sports may appoint an Interim Committee, which may result the FFSL from being blacklisted by FIFA.