 New report reveals football clubs are poorly protected against fraud
26 October 2011: Football clubs are ill prepared to counter fraud, according to a report by PKF Accountants & business advisers and the University of Portsmouth.
‘Fraud in Football’ expands on the results of ‘Open to Attack’, PKF’s annual survey of football club finance directors that was launched last month.
‘Fraud in Football’ finds that a low percentage of football clubs have a plan to tackle fraud - the majority do not have the processes or staff in place to identify the risks of fraud, or to deal with the problem of fraud within and against the club. Ticket sales, merchandising, payroll and agents’ fees are among the areas where clubs at all levels are currently at risk of fraud.
Jim Gee, PKF’s Director of Counter Fraud services and one of the authors of the report, comments: “The results should give rise to serious concern since it is surely right to expect all clubs, regardless of their league, to protect themselves against a problem that on average costs businesses almost 6% of annual expenditure. The cost of fraud in football could account for well over £100 million per annum across all of the professional leagues."
“Our findings also chime with the Department for Culture, Media and Sports’ recent assessment that football’s ‘corporate governance structures look like they belong to another era’. We discovered that fewer than a quarter of clubs had their own internal audit function to keep track of revenues and costs – something that would be seen as wholly unacceptable in almost any other industry in the UK."
“Reducing the cost of fraud in football is an important issue as it affects the financial health and stability of not just the clubs themselves but, in many cases, the communities that live around them."
“Regardless of their league, if football clubs want to provide the best deal for their fans then they need to review the current practice and ensure that they are properly protected against fraud.”
Graham Brooks, a Course Leader at University of Portsmouth and co-author of the report, said: “Football clubs should seriously consider the cost of fraud and the impact of this on their ability to fulfil their ambitions on the pitch. By failing to counter fraud effectively, clubs are undermining their chances of success, diminishing the quality of the entertainment they provide, and charging fans more than they would otherwise need to.”
‘Fraud in Football’ has been written by Jim Gee, Graham Brooks and Dr Mark Button.
Ends
For further information, please contact: Andy Konieczko, 020 7065 0537, andrew.konieczko@uk.pkf.com
Notes to Editors:
1. ‘Fraud in Football’ is based on the findings of PKF’s 2011 survey of football club finance directors. For this survey, PKF’s Football Industry Group commissioned an independent research company in April and May 2011 to undertake structured telephone interviews with finance directors of football clubs. A total of 41 telephone interviews or online surveys were completed with finance directors in the English Premier League, Football League Championship, Football Leagues One and Two, and Scottish Premier League.
2. PKF (UK) LLP is a leading firm of accountants and business advisers with more than 1,500 partners and staff operating in 23 offices in the UK mainland firm, incorporating a wholly-owned financial planning company and associated offshore practices. The firm specialises in advising growing and entrepreneurial/owner-managed businesses, AIM and fully listed companies, and also has extensive experience in the public and not-for-profit sectors. Principal services include assurance and advisory; taxation; consultancy; corporate recovery and insolvency; corporate finance and forensic. The firm has particular expertise in advising sectors such as hotels and leisure; mining and resource; public sector; real estate and construction; professional practices; not-for-profit; and medical. The firm’s web site is www.pkf.co.uk
3. PKF (UK) LLP also offers financial services through its FSA authorised company, PKF Financial Planning Limited. PKF (Isle of Man) LLC is a limited liability company registered in the Isle of Man. PKF (Channel Islands) Limited is incorporated in Guernsey.
4. PKF (UK) LLP is a member firm of the PKF International Limited (PKFI) network of legally independent member firms. The PKFI member firms have around 2,200 partners and more than 21,000 staff in around 125 countries.
|