“The con­cerns which you raised are blown out of pro­por­tion.”

This is a sum­ma­ry of the Nor­mal­i­sa­tion Com­mit­tee (NC), man­agers of the T&T Foot­ball As­so­ci­a­tion’s, (TTFA) re­sponse to con­cerns raised by Ke­iron Ed­wards, pres­i­dent of the East­ern Foot­ball As­so­ci­a­tion (EFA) on the TTFA’s au­dit­ed fi­nan­cial state­ment, which will go be­fore the mem­ber­ship for ap­proval from 8.30 am this morn­ing at the Home of Foot­ball in Bal­main, Cou­va.

Ed­wards called on the mem­ber­ship to not sign the ac­counts when it is pre­sent­ed at to­day’s an­nu­al gen­er­al meet­ings (AGM) based on the foot­ball as­so­ci­a­tion’s au­dit­ed ac­counts which was done by Aegis Busi­ness So­lu­tions, Char­tered Ac­coun­tants.

The EFA’s boss, in a let­ter to the TTFA/NC on Sat­ur­day, quot­ed from the Aegis’ re­port for the years end­ed De­cem­ber 31, 2020 and 31st De­cem­ber 2021, which stat­ed: “We were un­able to de­ter­mine whether any ad­just­ments might have been found nec­es­sary in re­spect of record­ed and un­record­ed plant and equip­ment. This was be­cause as­sets were not tagged and there was no prop­er record keep­ing of the fixed as­set reg­is­ter, which did not in­clude prop­er de­scrip­tions of as­sets.”

Ed­wards said that state­ment meant that the fig­ure stat­ed for fixed as­sets on the state­ment of fi­nan­cial po­si­tion of the au­dit­ed fi­nan­cial state­ment was in­cor­rect, and lat­er ques­tioned how the em­bat­tled foot­ball as­so­ci­a­tion was able to bal­ance their ac­counts.

Ed­wards al­so point­ed to five ar­eas of the au­dit­ed state­ment where there were oth­er con­cerns, such as Er­ro­neous Re­port­ing; Unau­tho­rised Re­moval of Fixed As­sets from the As­so­ci­a­tion; Pre­sen­ta­tion of Fi­nan­cial State­ment in an en­vi­ron­ment of bank­rupt­cy and in­sol­ven­cy pro­ceed­ings; Ne­glect­ed Dis­clo­sure Notes to the Fi­nan­cial State­ments; and In­creased Debt un­der the Nor­mal­i­sa­tion Com­mit­tee.

FI­FA $$$ de­pen­dent on ap­proval

Yes­ter­day, how­ev­er, Robert Hadad, chair­man of the NC, in a re­sponse told Ed­wards they had just stat­ed the cor­rect po­si­tion of the foot­ball as­so­ci­a­tion and re­mind­ed all that the au­dit­ed ac­counts need­ed to be ap­proved for FI­FA sub­ven­tions for the rest of this year and part of next year to be re­ceived.

“Their au­dit opin­ion specif­i­cal­ly ad­dress­es the de­fi­cien­cies in the sys­tems and in­ter­nal con­trols ap­plic­a­ble to plant and equip­ment, specif­i­cal­ly, the fur­ni­ture and fix­tures, giv­en the dif­fi­cul­ty they en­coun­tered in ver­i­fy­ing some of the as­sets in this cat­e­go­ry.

“Giv­en the fact that fur­ni­ture and fix­tures ac­count for 4.3 per cent of the as­sets on the bal­ance sheet as at that date, I be­lieve that the con­cerns which you raised are blown out of pro­por­tion. The ba­sis for the qual­i­fied opin­ion, in our hum­ble view, in no way shape or form sug­gests that there may be more er­ro­neous fig­ures on the state­ments of com­pre­hen­sive in­come or cash­flow.”

In a four-page doc­u­ment, Hadad sought to clear the air on the con­cerns raised by say­ing: “The au­dit opin­ion clear­ly states that ex­cept for the ef­fect of the above the ac­com­pa­ny­ing fi­nan­cial state­ments present fair­ly, in all ma­te­r­i­al re­spects, the fi­nan­cial po­si­tion of the TTFA as at De­cem­ber 31, 2020 and De­cem­ber 31, 2021, and its fi­nan­cial per­for­mance and cash­flows for the years then end­ed in ac­cor­dance with IFRS for SMEs.

“You should note that the NC in­her­it­ed these de­fi­cien­cies in the in­ter­nal con­trols over the plant and equip­ment and have been work­ing to strength­en them. Some of the items re­ferred to by the au­di­tors re­lat­ed to pur­chas­es made pri­or to 2017, while oth­ers were not clear­ly de­scribed. How­ev­er, we are pleased to re­port that the ma­jor­i­ty of the fur­ni­ture and equip­ment at the HOF has now been tagged and our Fixed As­set reg­is­ter has been up­dat­ed.

There are a few items which are still not ac­count­ed for and the ac­count­ing staff will be mak­ing rec­om­men­da­tions to write off if these are not re­solved. They have ad­vised that the val­ue of these items will be quite im­ma­te­r­i­al and will be be­low the to­tal val­ue of fur­ni­ture and fix­tures, which as not­ed above rep­re­sent 4.3 per cent of the TTFA’s to­tal as­sets as at De­cem­ber 31, 2021. Once re­solved, the up­dat­ed Fixed As­set reg­is­ter with the cor­re­spond­ing as­set tags will be shared with the NC.

Hadad de­nies theft or fraud re­gard­ing TTFA Fixed As­sets

“We would al­so like to make it very clear that there is no ev­i­dence to sug­gest ‘... a ma­te­r­i­al amount of theft or fraud re­gard­ing the Fixed As­sets in the TTFA’.”

Bugged by cir­cu­lat­ing opin­ions that the NC has per­formed poor­ly for the three-year pe­ri­od it has been in charge of lo­cal foot­ball, Hadad in his let­ter al­so made it clear: “The NC has not ap­point­ed an in­ter­nal au­dit com­mit­tee. This will be in­clud­ed in the new gov­er­nance struc­ture. How­ev­er, we have been work­ing close­ly with the FI­FA Fi­nan­cial Gov­er­nance team, which scru­ti­nis­es all our ex­pen­di­ture and in­sists that all re­ports are sub­mit­ted be­fore dis­burs­ing funds.

A FI­FA Cen­tral Au­dit team al­so vis­it­ed in Ju­ly 2022 to au­dit the TTFA’s use of FI­FA funds and did not raise any con­cerns. In fact they ad­vised that since 2020 we had put sig­nif­i­cant con­trols in place and we con­tin­ue to work on im­prov­ing the con­trol en­vi­ron­ment. There­fore, we would ap­pre­ci­ate if you, Mr. Ed­wards, could sup­ply ev­i­dence to sup­port your as­ser­tion that the NC has failed to ac­count for the fund­ing giv­en to the TTFA by FI­FA and the GORTT.”

In the area of ‘Go­ing Con­cern’- Hadad ex­plained that the au­di­tors were right that a ma­te­r­i­al un­cer­tain­ty ex­ists that may cast sig­nif­i­cant doubt on the TTFA’s abil­i­ty to con­tin­ue as a go­ing con­cern, and he not­ed fur­ther that that un­cer­tain­ty is de­pen­dent on the out­come of the Bank­rupt­cy and In­sol­ven­cy Act (BIA) process, which is cur­rent­ly work­ing its way through T&T’s le­gal sys­tem.

“If the pro­pos­al is ap­proved all cred­i­tors will be paid some por­tion of the amounts due to them and the TTFA will be in a po­si­tion to con­tin­ue serv­ing the foot­ball com­mu­ni­ty in T&T, free of debt. If not, the TTFA will be wound up and cred­i­tors will re­ceive much less than they have been promised un­der the BIA.”

Hadad al­so re­mind­ed Ed­wards of the fol­low­ing:

Dis­clo­sures in the

fi­nan­cial state­ments

As stat­ed in their au­dit opin­ion, the TTFA’s fi­nan­cial state­ments are pre­pared in ac­cor­dance with In­ter­na­tion­al Fi­nan­cial Re­port­ing Stan­dard for Small and Medi­um-sized En­ti­ties (IFRS for SMEs). This is a fi­nan­cial re­port­ing frame­work ap­plied by en­ti­ties that are not pub­licly trad­ed and pub­lish gen­er­al pur­pose fi­nan­cial state­ments for ex­ter­nal users.

The stan­dard is de­signed and tai­lored to the needs of Small and Medi­um-sized En­ti­ties to en­sure these en­ti­ties are ef­fec­tive­ly able to com­ply with the in­ter­na­tion­al re­port­ing frame­work guide­lines with­out sig­nif­i­cant­ly af­fect­ing their bot­tom-line. The main dif­fer­ence be­tween full IFRS and IFRS for SMEs is the sim­pli­fied na­ture of IFRS for SMEs as some top­ics in full IFRS are omit­ted and some ac­count­ing pol­i­cy op­tions are not al­lowed. Al­so, many of the recog­ni­tion and mea­sure­ment prin­ci­ples in full IFRS have been sim­pli­fied, and sub­stan­tial­ly few­er dis­clo­sures are re­quired.

How­ev­er, de­spite this, it should be not­ed that de­pre­ci­a­tion rates and im­pair­ment have been cap­tured in note 2(d) and we do not be­lieve that the oth­er notes are rel­e­vant since in­ven­to­ry, em­ploy­ee ben­e­fits, sev­er­ance, fi­nan­cial risk man­age­ment and fair val­ue are not ap­plic­a­ble to the TTFA. The lat­ter two are more rel­e­vant to fi­nan­cial in­sti­tu­tions and larg­er pub­licly trad­ed en­ti­ties.

Debt un­der the Nor­mal­iza­tion Com­mit­tee

Loans and bor­row­ings have ac­tu­al­ly de­clined un­der the NC. Falling by 30.77% from $4.03 mil­lion in 2019 to $2.79 mil­lion in 2021.

How­ev­er, Ac­counts Payable in­creased by 10.88% over the same pe­ri­od, from $44.11 mil­lion in 2019 to $48.91 mil­lion in 2021. Of this, in­ter­est payable in­creased by 63.57%, from $519,829 in 2019 to $850,278 in 2021. This rep­re­sents in­ter­est due on the GORTT and CON­CA­CAF loans for which no in­ter­est has ever been paid. There­fore, each year we ac­crue for the in­ter­est payable for that year. The in­ter­est on the CON­CA­CAF loan must be paid in 2025/26 af­ter the fi­nal prin­ci­pal pay­ment is made, as per the agreed amor­ti­za­tion loan sched­ule. There­fore, we can ex­pect this line item to con­tin­ue to in­crease go­ing for­ward.

Oth­er payables and ac­cru­als have re­mained fair­ly con­sis­tent around the $29 to $30 mil­lion mark. How­ev­er, what has been in­creas­ing are amounts due to the GORTT for statu­to­ry de­duc­tions like in­come tax, na­tion­al in­sur­ance and health sur­charge and the in­ter­est and penal­ties due on these. The NC in­her­it­ed a sit­u­a­tion where de­duc­tions were made, but not re­mit­ted to the statu­to­ry au­thor­i­ties. In fact the TTFA was nev­er reg­is­tered with the Board of In­land Rev­enue or the Na­tion­al In­sur­ance Board and we found no ev­i­dence of re­mit­tances be­ing made with re­spect to statu­to­ry de­duc­tions. There­fore each year, as in­ter­est and penal­ties rise, these fig­ures con­tin­ue to in­crease and as at De­cem­ber 31, 2021 this fig­ure to­talled $9,080,751. We are now in the process of reg­u­lar­iz­ing this sit­u­a­tion.

State­ment of

com­pre­hen­sive in­come

Rev­enue has de­clined by $24.12 mil­lion, or 62.5% from 2019 to 2020. As the pan­dem­ic shut down ac­tiv­i­ty, grants de­clined by $13.44 mil­lion or 51.4%. Sale of rights, ap­pear­ance fees, and the write back of statute barred li­a­bil­i­ties, which ac­count­ed for $9.17 mil­lion, dis­ap­peared. And spon­sor­ship fell by 55.9%, from $2.47 mil­lion to $1.09 mil­lion. Thank­ful­ly, grants were back up to $20.5 mil­lion in 2021, as foot­ballers re­turned to com­pe­ti­tion, al­beit un­der con­strained cir­cum­stances with the sup­port of the FI­FA Covid Sol­i­dar­i­ty Grants.

To­tal op­er­at­ing ex­pens­es al­so de­clined from $35.78 mil­lion in 2019 to $15.41 mil­lion in 2020, be­fore in­creas­ing to $25.04 mil­lion in 2021. The in­crease from 2020 to 2021 was pri­mar­i­ly due to de­pre­ci­a­tion on the Home of Foot­ball, match fees, over­seas trav­el and pro­fes­sion­al and le­gal fees. The tech­ni­cal pro­fes­sion­al fees were earned by the coach­ing staff and the ad­min­is­tra­tive pro­fes­sion­al and le­gal fees were pri­mar­i­ly in­curred for the Bank­rupt­cy and In­sol­ven­cy process, con­sult­ing and pay­roll ser­vices. De­tails can be pro­vid­ed to the Mem­ber­ship on re­quest.

The NC there­fore re­jects your as­ser­tions that it con­tin­ues to adopt an os­ten­ta­tious ap­proach to man­age­ment of the TTFA. In fact we have been quite pru­dent and have en­sured that we did not in­cur any debts that we could not ser­vice.