/ 22 January 2010

Safa’s shock cash crisis

The South African Football Association (Safa) has run out of cash, paralysing the administration of the country’s number one sport. A senior official, who refused to be named, told the Mail & Guardian that Safa is nearly R10-million in the red, contradicting former chief executive Raymond Hack’s assurances that he left its books in a healthy state.

Hack is on record as saying that the association is far from broke. He presented a glowing picture of the sport’s finances when he delivered the annual report last September, reporting a R32-million profit.

However, Safa’s bank accounts, which the M&G saw this week, show that the association is heavily overdrawn, with a negative balance of more than R7,4-million.

Other Safa records indicate that the association owes suppliers a further R7-million.

But a senior Safa official said the situation was bleaker than even these figures indicate.

‘We are close to R10-million in the red, excluding what we need to pay our suppliers,” he said. ‘It’s becoming increasingly difficult to run the sport smoothly in the country. The majority of our regions have not received their grants, which has paralysed the game in these affected areas.”

Safa awards each of its 52 regions a R250 000 grant, enabling it to meet its administrative costs.

A letter written by the Safa Waterberg region to the association’s head office and leaked to the M&G, paints a gloomy picture of the financial crisis in the regions.

‘We were promised that the grant will be paid by December 2009 but we are still waiting today. We are facing eviction from the office due to non-payment of rent,” the letter says.

‘The other frustration is that phones have been suspended and our staff members are owed their salaries as well.”

A dejected worker from the Waterberg office told the M&G: ‘Our phone bill is only R3 500 and our rent R2 280 — it’s embarrassing that a country that’s hosting the World Cup in a few months can’t pay such bills.

‘What makes matters worse is that we have families to feed and there’s no assurance that we’ll get our January salary.”

The Safa vice-president responsible for finance, Mandla Mazibuko, confirmed that Hack had left the association’s account in deficit, but would not specify the figure.

‘The issue of the overdraft is true and was left by Hack. He cannot deny this overdraft. Please ask the new Safa CEO [Leslie Sedibe] for the exact figure,” said Mazibuko.

Sedibe, appointed this month, refused to shed light on the magnitude of the problem he has inherited. ‘It’s really too early for me to comment because I’m still going through the books,” he said.

On the plight of the regions, ­Mazibuko said those that were not paid had failed to meet certain
set criteria.

‘They must submit an audited financial statement, show minutes of their AGM, produce a constitution, bank account and tax invoice before money can be advanced to them,” he said.

The Waterberg employee insisted the region ‘has everything in order” and was promised payment by the Safa head office in December.

Speaking by telephone from Angola, where he is attending the Africa Cup of Nations, Hack dismissed the allegations that he left the organisation in a financial mess as ‘absolute nonsense”.

‘When I delivered the annual general report in September which showed a profit of about R32-million, there was not a single objection. Why now, when I’ve left office? People mustn’t play games here,” he said.

Hack denied that the Safa account was overdrawn by more than R7-million. He also argued that, even if the association was currently in the red, this did not mean it was broke.

‘The SABC alone owes Safa almost R27-million. ‘Even if we had a worst-case scenario of owing the bank R3-million, which I doubt very much, Safa’s books would still indicate a healthy balance of R24-million.

‘I am reliably informed that the SABC will pay Sedibe this week, which should sort out any financial problems.

‘What people need to know is that Safa’s cash flow is determined by what comes in from sponsors and specific contracts. It does not constitute a financial crisis if these are not paid up,” said Hack.

In a release on Safa’s website in August, former Safa president Molefi Oliphant ‘congratulated the finance committee on a job well done in ensuring good governance”. He wrote that ‘the association has stabilised financially because of the vigilance exercised by the finance committee”.

In the same release Premier Soccer League chairperson Irvin Khoza also applauded the finance committee, saying he had given Oliphant a R7-million cheque for Safa’s development programmes ‘as a sign of confidence in the financial management processes at Safa”.

The M&G‘s senior Safa source pointed out that it is pointless to talk about ‘money that is out there”.

‘Things on the ground clearly show that Safa has no money. We are busy looking for ways to ensure people get paid this month-end.

‘Even workers here in our Safa headquarters might not receive their salaries if we don’t find a solution in the next couple of days,” he said.

Mazibuko insisted Safa could pay its employees.

‘I am in a finance committee and I can assure you that workers will be paid. Queries have only been raised at CEO level, whereby Sedibe has asked Hack to clarify a few issues concerning our books.”