By Andrew Warshaw
October 27 – Fraud could account for more than £100 million ($160 million/€114 million) each year across the four English professional leagues and top Scottish league according to a new report.
A joint survey by PKF accountants and business advisers and the University of Portsmouth has warned that clubs are ill prepared to counter fraud, with most having no plan in place to tackle the issue.
Ticket sales, merchandising, payroll and agents’ fees were identified as problem areas for clubs by the Fraud in Football survey.
“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 per cent of annual expenditure,” said Jim Gee, PKF’s director of counter fraud services and one of the authors of the report.
“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.”
The report discovered that less than a quarter of clubs had their own internal audit function to keep track of revenues and costs.
“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,” Gee added.
To compile the report, 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.
The latest survey comes a month after another PKF report, which showed British clubs were battening down the hatches in anticipation of UEFA’s financial fair play rules, with 60 per cent of them aiming to implement a more closely aligned “wages to turnover ratio” compared to just 15 per cent last year.
Graham Brooks, another co-author of the latest 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.”
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