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Audit report sheds light on potential financial irregularities in African football

Image credit: CAF

The unveiling of details of a forensic audit report into the Confederation of African Football (CAF) produced by professional services group PwC has opened fresh concerns over financial irregularities in the governance of the game across the continent.

The latest developments come after Fifa, world football’s governing body, recently declared that its clean-up mission at CAF was complete. In September, PwC was selected to support the substantial reform process for CAF being overseen by Fifa.

In July, Fifa signed a protocol agreement with CAF to outline a road map for the two organisations to support the latter’s reform process. Fifa this month stated that the six-month mission agreed between itself and CAF to help accelerate the implementation of the reform process had been completed with the delivery of a set of findings, recommendations and proposals.

Fifa added that, as agreed at the beginning of the mission, a forensic audit report produced by PwC was presented. Details of the report were not disclosed at the time, but have now been reported by multiple media outlets. The Associated Press news agency is one of the outlets to have gained access to the report, stating that it details “possible abuse of power” and “potential fraudulent adjustments” in accounting records that are “unreliable and not trustworthy”.

The PwC report assesses the period spanning 2015 to 2019, a time during which long-running CAF president Issa Hayatou was ousted by current incumbent Ahmad Ahmad. Madagascan official Ahmad was elected as the new president in March 2017, but is currently the subject of an ongoing ethics investigation that predates the audit.

According to AP, the joint CAF/Fifa Reform taskforce has urged due diligence checks on payments from Fifa and CAF to the 54 member associations on the continent.

PwC found $4.6m from 14 payments had “no or insufficient supporting documentation to determine the beneficiary, purpose, and benefit for CAF”. The report said the purpose of the payment, ultimate beneficiary or evidence the cash had been received could not be determined in some cases.

A further $3.6m amounting to 21 payments was “considered unusual or deemed higher risk”, with only five payments of $1.6m in total deemed to have had “sufficient documentation” and been used for the purpose intended.

The PwC report read: “Based upon the procedures performed and documents reviewed, several red flags, potential elements of mismanagement and possible abuse of power were found in key areas of finance and operations of CAF. Given the serious nature of certain findings and red flags identified from the preliminary due-diligence, we cannot rule out the possibility of potential irregularities.”

The Reform Taskforce is also said to have recommended that payments be investigated relating to the now terminated agreement between CAF and the Lagardère Sports agency. In December, the International Chamber of Commerce (ICC) rejected Lagardère Sports’ application for interim emergency measures in the agency’s dispute with CAF over the cancellation of their 12-year global media and sponsorship rights contract.

In its report, PwC also flagged up its concern over a large number of cash payments which had “little or no audit trail to verify if the cash has been spent legitimately or not”.

Responding to the reports, CAF yesterday (Sunday) said its ExCo will meet on Friday to “validate” the 2020-21 roadmap including recommendations made by the CAF/Fifa Reform taskforce. CAF added in a statement: “More than 30 years of an outdated and patriarchal management at CAF have resulted in important shortcomings at all levels of operations.

“The Executive Committee’s commitment for a new chapter based on international best practices motivated its decision to launch a comprehensive audit of CAF operations, during its meeting on April 11, 2019. Additionally, it was the Executive Committee which requested a six-month partnership with Fifa to accelerate the reforms it had initiated.

“Several sweeping governance and operational measures have already been implemented before and during the six-month partnership with Fifa. CAF will persevere on this path to ensure that we achieve the highest international standards.

“Also, we need to set the right level of expectations. It would not be realistic to pretend that those structural changes can all take place in a matter of weeks. Rather, the Executive Committee is fully committed to achieving this ambition during its tenure.”