Football Federation Audit reveals fraudulent transactions

An audit report for the year 2015 has highlighted a number of fraudulent transactions amounting to millions of rupees received by local football administrators during 2006 to 2011 for various activities related to football.

The report signed by the Auditor General Gamini Wijesinghe has abstained from naming the culprits involved in the scam running into millions of rupees intended for the development of football in the country. The report has been circulated among the football membership along with the Annual Report for the year 2016 of the Football Federation of Sri Lanka.

The audit has found a litany of discrepancies in the handling of funds received from the Italian Footballers’association in 2008, the money received to host the Asian President’s Cup matches in 2008, the money received to host the South Asian Football Championships in 2008 and the funds received from a private company for a tsunami housing project in 2006.

According to the document, the former CEO using false documents with forged signatures allegedly gave instructions to the Standard Chartered Bank to transfer 40,400 euros received by the FFSL to a private account of the Management Committee chairman.

“The Italy Football Players’ Association had granted a sum of € 40,400 equivalent to Rs.6,287,670 on 08 January 2008 for the purpose of developing the play-ground at Kalutara and subsequently it was deposited in an official bank account maintained at the Standard Chartered Bank. Thereafter, the 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 at Kollupitiya. Accordingly, Standard Chartered Bank had transferred a sum of Rs. 6,287,670 to that private bank branch and it was confirmed in the audit that the actual owner of this bank account is the then Chairman of the Management Committee of the Federation,” the report stated.

“Therefore, it was ensured in the audit that the then Chairman of the Management Committee had defrauded the funds of Rs. 6,287,670 (€ 40,400) granted by the Italy Football Players Association.

The audit also observes that the CEO has allegedly transferred $ 59,900 ( Rs. 6,415,290) to a private account of the Management Committee Chairman in 2008.

“According to the audit examination carried out in this connection it was revealed that the then CEO had advised the Director Finance on 14 May 2008 to transfer this money to a bank account 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 there no bank account maintained by this Sports Club on such account number and at the same time he had issued a fraudulent advice to the Standard Chartered Bank asking them to transfer a sum of Rs.6,415,290 to the personal foreign currency bank account of the 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 the audit that no money had been received by the said Sports Club up to date,” the report added.

The report also questioned as to how US$ 40,000 out of US$ 200,000 received from the Asian Football Confederation had been transferred to the private account of the Management Committee Chairman.

“The Asian Football Federation had directly deposited sums aggregating to US$ 200,000 during the year 2008 to the Federation bank account …… subsequently the Federation had transferred a sum of US$ 40,000 fraudulently to the personal bank account the of then Chairman of the Management Committee maintained at a foreign bank branch, Colombo 3,” the report added.

The report also questioned as to why the CEO obtained a loan of Rs. 6 million from the Chairman of the Management Committee without Executive Committee approval when there were sufficient funds available in the Federation account.

“.…. the CEO of the Federation had obtained a sum of Rs. 6,000,000 as a loan from the then Chairman of the Management Committee on 20 June 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. In the meantime the 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.

Meanwhile, the audit has also found that the Chairman of the Management Committee has fraudulently obtained Rs. 5 million from a donation of Rs 10 million by a private company to a charity to build 20 houses in Kalutara.

“The then CEO of the Federation had directed the then Director, Finance on 05 February to pay the balance of Rs.5,000,000 in cash to the then President of the Management Committee to enable him to hand over 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 handing it over to the said charity,” the report further stated.

The report also states that the Football Federation of Sri Lanka have failed in their duty to follow Government Procurement Guidelines in obtaining goods and services worth over Rs. 35 million during the 2015 financial year.

It also says the FFSL has granted over Rs. 18 million to football leagues and clubs without obtaining any work or financial proposals.

“It was observed that some of the Football Leagues and Clubs had not fully utilized the funds provided for the intended purposes and no follow-up action had been carried out to ensure that the funds provided had been utilized for the intended purposes,” the report adds.