Flaws in a Covid-19 hardship fund for sporting organisations saw wealthy clubs secure cash they did not need, a Stormont report has found.
The Assembly’s Public Accounts Committee (PAC) investigation found that the Sports Sustainability Fund (SSF) did not adhere to best practice.
The Department for Communities and Sport NI were involved in rolling out the scheme, which was designed to help sporting bodies weather the loss of income caused by the pandemic.
It paid out £23 million (€27 million) in grants.
The PAC report comes after the NI Audit Office last year raised concerns about how the fund was administered.
Auditors criticised the failure to take applicants’ bank balances and reserves into account when allocating money.
High level of reserves
Auditor General Kieran Donnelly’s report last June highlighted how the largest grant of £1.5 million was paid to Royal County Down Golf Club, which had a “very significant bank balance and a high level of reserves”.
The SSF was one of a number of schemes delivered by Stormont departments to help various sectors deal with the financial implications of the pandemic.
Of the £23 million allocated, £5.1 million was distributed across 22 sport governing bodies, including £1.5 million to Ulster GAA, £1.7 million to the IFA, £1.5 million to the IRFU and £400,000 to 19 other sporting governing bodies.
Some £17.9 million was distributed across 430 sports clubs.
The grant awards were calculated by comparing the income and expenditure for the Covid-19 year with the average income and expenditure for the previous three years.
However, there was no requirement in the scheme to consider the reserves or bank balances held by applicants and whether the losses incurred by the organisations would lead to the imminent risk of closure.
The PAC has made 10 recommendations aimed at preventing a repeat of the errors.
'Alarmed'
Chairman of the committee William Humphrey said: “As a committee, we were surprised that the department and Sport NI appeared to hand out monies to organisations that could have survived without funding or with much less funding.”
The PAC report found that, due to the need to devise the scheme quickly, several flaws went unchallenged.
It said the scheme allowed organisations to quantify their losses during Covid-19 without significant investigation or challenge.
“We found that the objectives of the SSF, to ensure that organisations across a range of sports would survive, were certainly admirable,” Mr Humphrey said.
“However, the department and Sport NI did not devise a set of assessment criteria that they could apply to the applications they received.
“This flawed approach meant that some large and very profitable organisations, such as golf clubs, were awarded monies that might have been better spent on smaller, more financially precarious groups.”
He added: “We were surprised that the department and Sport NI believed that it was acceptable and value for money to award public funds to clubs and organisations that ensured they achieved the same profit as they had in previous years.
“In a year where many organisations were struggling financially, providing taxpayers’ money to support the profits of sports clubs is something that should not have happened.
“What is even more concerning is that neither the department nor Sport NI appeared to realise that this underwriting of profit would be the result of the way in which the scheme was designed.
“In our evidence session, large grants to financially secure golf clubs were justified by helping to maintain the region’s position as a world number one golf destination.
“We were alarmed at this interpretation of the scheme, since it was not designed as a tourism support scheme but rather a scheme to enable sporting organisations to weather the pandemic.
“The committee understands that the SSF was developed quickly in response to the problems created by the pandemic and the scheme, as instituted, had significant flaws.
“We believe that it is crucial that all government departments learn from this and, if such programme is required in the future, that more attention is paid to ensuring a fairer distribution of funds.”
'Inevitable'
Responding to the report, a Department for Communities spokesman said: “The PAC report recognises that the Sports Sustainability Fund was developed and delivered at pace in very challenging circumstances.
“There is no doubt that had more time been available, some of the issues outlined in the report could have been addressed more fully. As with all elements of the emergency response, it is inevitable that there will be lessons to be learned – the findings of the initial NIAO report into the scheme have already been taken on board by the department.”
The spokesman said the sporting sector played a key community service role throughout the pandemic, including provision of support to vulnerable people through the distribution of food parcels and delivering medial prescriptions while also providing activities to get people active.
“The societal and economic value of sport is well documented and understood,” he added.
“The funding aimed to help sustain the sports sector to withstand the impacts of Covid-19, ensuring the sector could recommence activities when the time was right.
“It was critical to ensure that communities, clubs and participants, of all abilities, could get back to enjoying being active and reaping the physical, mental and societal benefits that are derived from sport.”
