FAI accuses auditors Deloitte of ‘breach of contract’ in lawsuit

THE Football Association of Ireland (FAI) has accused its former auditors of “breach of contract” in a lawsuit being taken in the High Court.

Deloitte resigned as external auditors in January, just days after audit partner Richard Howard said the firm had been “misled” by former FAI directors. The accountancy firm last year reported the embattled association to corporate authorities for failing to keep proper accounting records, which is potentially a criminal offence. The move followed controversy over a €100,000 bridging loan from former chief executive John Delaney to the association.

But the audit work done by Deloitte is now set to come under scrutiny as part of a legal action initiated by the FAI on Monday.

The full extent of the association’s claims against Deloitte have yet to be revealed.

However, the Irish Independent has established the FAI is alleging “breach of contract” by Deloitte. The firm audited the association for 23 years.

A spokesman for the FAI declined to comment.

In a statement, Deloitte said it would not be commenting on the case but stood over the quality of its audits.

Deloitte came in for repeated criticism from delegates at the FAI’s annual general meeting last December.

The meeting followed revelations earlier that month that the FAI had net liabilities of more than €55m and that Deloitte was unable to guarantee the association could continue as a going concern.

Accounts for 2016 and 2017 also had to be restated, with significant adjustments.

An original profit of €2.3m recorded for 2016 was reduced by €2.27m, leaving a surplus of €66,000. Accounts for 2017 had originally recorded a profit of €2.8m, but restated accounts showed there was actually a loss of €2.9m.

Deloitte had approved all yearly accounts up to 2017, but in April last year it lodged a H4 complaint under the Companies Act. The firm claimed the FAI failed to keep proper records after details emerged of a €100,000 bridging loan given by Mr Delaney to the association in April 2017.

The sum, which was repaid two months later, was concealed from most of the board and Deloitte, and omitted from annual accounts.

In a statement yesterday, Deloitte said: “We would reiterate our position, that we take our statutory obligations as auditors very seriously and have acted accordingly, including reporting to the relevant authorities in accordance with our professional and legal obligations where necessary.

“We have a robust audit process that is in line with those obligations.”