THE FAI is on course to lose out on more than €1.4m this year after Sport Ireland opted to suspend its grants amid concerns it did not obey state funding rules.
Sport Ireland - which is responsible for administering taxpayers' money to sporting bodies - has moved to "suspend and withhold future funding" amid concerns over a €100,000 payment made by the former chief executive John Delaney to the organisation in April 2017.
The payment - labelled a "bridging loan" to address a cash-flow issue by the organisation - was not mentioned to Sport Ireland, nor was any 'deterioration' in the FAI's finances, as is legally required.
The decision by the statutory body heaps further pressure on the FAI, which will send a delegation of senior officials, including president Donal Conway and Mr Delaney, to meet an Oireachtas committee today.
In his opening statement to the committee, which was seen by the Herald, Mr Conway will highlight the fact that, despite being obliged to, the organisation did not relay "certain circumstances [which] arose in April 2017" to Sport Ireland.
Mr Conway is to commit the organisation to set up new processes to ensure that the FAI is "fully compliant" with the clause that stipulates organisations must report any deterioration in their finances.
He will add: "All other clauses within the terms and conditions are met. We have also invited Sport Ireland to satisfy itself on this matter by meeting our colleagues."
Sport Ireland has already paid out half of an estimated €2.9m funding to the FAI this year and said it will consider lifting the suspension of the funding when all ongoing reviews into the FAI are complete.
Two reviews have been triggered following the news of the €100,000 loan; Mazars has been contracted by the FAI to carry out a review and Grant Thornton is also on site reviewing the FAI's ledgers and records.
Last night the FAI expressed its disappointment at the funding suspension, which Mr Conway said is "crucial to the development of an inclusive approach to football in Ireland".
He said the organisation is keen to restore confidence and he is "fully confident" that the FAI would be able to satisfy Sport Ireland on governance and finance issues.
In a private memo, staff have been told it is "business as usual" despite the funding blow.
Mr Conway and interim chief executive Rea Walshe told employees that the board is confident of repairing the relationship with the statutory body.
Mr Conway and Ms Walshe sent a co-signed email to FAI staff after the decision became public knowledge.
"In light of today's news regarding Sport Ireland funding, we would like to assure you that it is business as usual for you and for the Football Association of Ireland," the memo said.
"As you will know, we have already received 50pc of our funding for 2019 from Sport Ireland and this decision is to suspend and withhold payment of the remaining 50pc while the FAI takes steps to reassure Sport Ireland in the areas of compliance and governance.
"This has no immediate impact on the funding or activities of the association as the next tranche of funding is not due for some months."
The senior officials moved to reassure staff that they had a productive meeting last Friday with Sport Ireland.
For its part, Sport Ireland said the decision will be reviewed at each of its future board meetings and noted the FAI had taken "positive steps".
Sport Minister Shane Ross did not comment last night but TDs sitting on the Oireachtas Transport, Tourism and Sport Committee highlighted their concerns at the latest developments.Unwillingness
Fine Gael TD Noel Rock - who previously called for suspension of the FAI's state funding - said the move was "appropriate".
He said the funding suspension was necessary given what he called the "unwillingness and inability of the FAI to be forthright with Sport Ireland".
Members of the organisation will also face questions on what the board knew about the six-figure loan in 2017. Previous statements said "the board has been kept fully informed".
In his statement, Mr Conway says the organisation has "advised Sport Ireland that recent public comments made by the FAI did not accurately reflect the board's level of awareness".