Sport Ireland suspends funding to FAI amid continuing fallout over Delaney loan

John Delaney claimed that his €100,000 loan to the FAI in April was merely to address a short-term cashflow issue

Sport Ireland is suspending funding to the Football Association of Ireland amid further fallout over a loan given to the governing body by its former chief executive John Delaney.

Delaney and other FAI officials will appear before an Irish parliamentary committee hearing on Wednesday.

However, Sport Ireland has acted in advance of that by announcing its suspension of the €2.9m annual funding.

This follows an FAI admission that Sport Ireland rules had been breached.

FAI president Donal Conway is among five officials from the football governing body due to appear before Wednesday's parliamentary committee hearing.

His opening statement is expected to include an admission that the FAI's failure to notify Sport Ireland of Delaney's €100,000 loan to the governing body was a breach of state funding rules.

Delaney moved to new FAI role last month

News of the €100,000 loan, given by Delaney to the FAI in April 2017 but later repaid, emerged last month and the then FAI chief executive left his position at the end of March, as he stepped into a newly created association role of executive vice-president.

Tuesday's Sport Ireland statement said its board had decided to "suspend and withhold future funding to the FAI in accordance with clause 1.1 of Sport Ireland's terms and conditions of grant approval".

"The decision was taken in light of an acknowledgement by the FAI in its written opening statement to the Joint Oireachtas Committee on Transport, Tourism and Sport tomorrow that in 2017 the FAI did not comply with clause 4.3 of Sport Ireland's terms and conditions of grant approval."

The Sport Ireland statement said it "noted some positive steps taken by the FAI in recent days", adding that the football governing body has already been paid 50% of its 2019 funding.

"The board of Sport Ireland will consider the reinstatement of funding once all ongoing reports commissioned by the FAI have been completed and the recommendations adopted, and the board of Sport Ireland is satisfied that all necessary processes and controls are in place to ensure the FAI's ongoing compliance with the terms and conditions of grant approval.

Sport Ireland chief executive John Treacy last week said the FAI's initial explanation of the circumstances of the loan "fell far short"

"Sport Ireland will continue to provide non-financial assistance and guidance to the FAI, which may be helpful in advancing matters," concluded the statement.

In response, FAI president Conway said that it was "unfortunate Sport Ireland now feel compelled to take this action in the wake of recent events".

"The €2.7m funding Sport Ireland provides annually to the FAI is crucial to the development of an inclusive approach to football in Ireland," added the FAI official.

"As indicated at its meeting with Sport Ireland last Friday and in recent correspondence, the association is keen to restore trust and confidence and rebuild the relationship with Sport Ireland as soon as possible.

"The association has committed to take all appropriate steps in this regard.

"I am fully confident that through the processes now in place, we will be in a position to satisfy Sport Ireland in relation to both governance and financial issues and ensure that the 50% balance of funding due for 2019 is restored at the appropriate time."

Last week, Sport Ireland chief executive John Treacy told the Irish Parliamentary Committee that the FAI's explanation for Delaney's loan "fell far short" of what was required.

'FAI governance under scrutiny' - analysis

BBC Northern Ireland Dublin correspondent Shane Harrison:

The FAI has been at the centre of attention for off-the-field activities for nearly a month after the revelation it had attempted to stop the Sunday Times from publicising that John Delaney had lent the association €100,000 to cover what it called a short-term cash flow problem.

The loan didn't appear in the FAI's audited accounts thereby raising a lot of questions about the association's corporate governance and unease among supporters who threw tennis balls onto the pitch in the recent match against Georgia as a protest.

Sport Ireland last week at the parliamentary committee on transport, sport and tourism repeated that they weren't aware of that shortfall - and as the body that gives taxpayers money to the major sporting organisations - legally it should have been.

The FAI's appearance at the same committee on Wednesday is now keenly awaited.

We know that in its opening statement the FAI will admit to not complying and say that some recent FAI statements about the loan did not accurately reflect the board's knowledge of what was going on. That is certain to lead to further questions.