FOOTBALL clubs are leaving themselves exposed to fraud, research has found.
The University of Portsmouth worked with PFK accountants and business advisers on the research, which builds on a previous report that found football clubs in all leagues face an uncertain financial future.
The most recent Fraud in Football report 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.
Graham Brooks, fraud expert at the 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.’
Co-author Jim Gee, PKF’s director of counter fraud services, said the cost of fraud in football ‘could account for well over £100m’ a year.
‘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 six per cent of annual expenditure,’ he said.
He said the report echoes the Department for Culture, Media and Sports’ recent assessment that football’s ‘corporate governance structures look like they belong to another era’.
He said: ‘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.
‘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.’