Committee Finds Sports Sustainability Fund of £23 million Did Not Adhere to Best Practice
Session: Session currently unavailable
Date: 25 February 2022
Reference: PAC 05/21/22
The Northern Ireland Assembly Public Accounts Committee (PAC) has published a report, entitled Sports Sustainability Fund. The report looks at how the Department for Communities (the Department), along with Sport NI administered funds to help local sports organisations weather the effects of the COVID-19 pandemic.
The Committee looked at the way that funds were allocated across the entire sports sector, as well as the apparent lack of assessment criteria as part of the allocation of monies.
Chairman of the Committee, William Humphrey MBE MLA 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 Report found that, because of the need to devise a support scheme quickly, a number of flaws in how the Sport Sustainability Fund (SSF) operated went without challenge. This was particularly evident in the way that the scheme allowed organisations to quantify their losses during COVID-19 without significant investigation or challenge. The Committee felt that the way monies were apportioned was largely determined by the amount available from the Executive, rather than based on a detailed assessment of need.
Chairman Humphrey commented: “We found that the objectives of the SSF, to ensure that organisations across a range of sports would survive, were certainly admirable. 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.”
One of the scheme’s provisions that concerned the Committee was that the SSF’s business case concluded that the best way to award funding was on the basis of ‘net losses’ incurred by the organisations. This meant that monies were given on the difference between the club’s profit for an average of the three years prior to COVID-19 and the profits in the COVID-19 year.
Chairman Humphrey said: “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.
Chairman Humphrey concluded: “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.”
The Committee’s recommendations from the Report are:
The Committee recommends that Departments put arrangements in place to include a role for someone independent of the process to act as a `critical friend’ and carry out a review of grant schemes such as this at a formative stage. This would include the need to objectively challenge the content of the Business Case and to consider whether the grant application process adequately reflects the Business Case requirements.
Where it is not possible to carry out full checks before a payment is made, such as where estimates are used, it is recommended that Departments should incorporate appropriate post payment checks. Acceptance of self-declared estimates as the basis for grant claims without any form of checking against actual outturns increases the risk of fraud through the manipulation of the figures presented.
The Committee recommends that when developing a Business Case, particularly at speed, that sufficient time is given to determining what the overriding objectives of the scheme are; ensuring they are clear and understood by all parties; and then clearly evidencing how the scheme objectives have been translated into clear, measurable assessment criteria.
A lot of intelligence should have been generated by DfC and Sport NI through their consultation with sporting organisations. However, this was not collated in a way in which decisions could be made and justified. The Committee recommends DfC and Sport NI, review the mechanisms which were in place during the pandemic to communicate with interested parties so that they would be in a better position to respond quickly to any requirement for information for any future scheme.
In future schemes it is recommended that Sport NI take into consideration the capacity and capability of different sports clubs and organisations in applying for funding and amend its approach accordingly.
The Committee recommends that any future schemes should have some degree of modelling carried out to help identify potential unintended outcomes and anomalies. The business case should also have considered whether funding should have been targeted towards specific sports and whether the amount of funding available to individual clubs or sectors should have been capped.
The Committee recommends that for future schemes Departments should test and model the application process to ensure they have a full understanding of possible outcomes and their impact. The Committee considers it to be unacceptable to use taxpayers’ money to underwrite the profits or surpluses of any organisations. In this case the funding should have been limited to the minimum needed to meet the scheme objectives and should not have provided any funding which took organisations beyond a break even position in the COVID-19 year.
The Committee also recommends that future schemes should consider if the level of individual grants should be capped. This will help ensure that unacceptably large payments are not made and funding available is more widely spread.
It is recommended that in future all witnesses take care to ensure they have given their evidence as openly, accurately and candidly as possible.
The Committee recommends that future COVID-19 support schemes take into account the reserves and cash balances that an organisation already has before providing additional funding.
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