GPDA post - financial transparency
okay something I wanted to talk about (because I work in finance and have first hand experience with a sports association) is the lack of transparency regarding the fines. this will probably get long so I'll put it under the cut.
so first of all let's start with how these associations work. they are a non-profit organization, therefore all the money they make should be put back into the association - meaning the owners cannot pay dividends. associations keep themselves afloat by receiving subsidies, by selling marketing and broadcast rights, and from fines and membership fees being paid. generally speaking these associations don't make profit, because they have more expenses than income.
the only financial report I could find of the FIA is the consolidated one which combines the French and the Swiss FIA results (though it does not really go in depth with the notes, and afaik, associations are required to publish their full financial statements publicly, but it might be different under Swiss law, under which the FIA is). the statements are audited, which, in theory, should make sure that everything in the books is accounted for, as for the 2022 and 2023 financial years the auditor issued an unqualified opinion, which means that they've found everything in compliance with the Swiss laws. I find it interesting that it's under Swiss law, but not surprising, considering what kinda money is being kept in Swiss banks. anyway.
fun fact: in 2021 and 2022, the financial result was a staggering 31.2 million EUR and a 15.2 million EUR loss, respectively. compared to that, in 2023 they achieved a 7.1 million EUR income. just based on a quick look, it's not because the operations turned profitable (they just got less loss-making), but because financial results and non-operating results got better. interestingly, non-operating management expenses decreased by 15 million EUR, which is pretty significant imo considering that's what they made in loss the previous year.
now onto the fines. fines should be accounted for between other income, however, other income is just one line on the income statement and I haven't found any breakdown, and I likely won't unless I somehow find the full financial statement and not whatever there's posted on the site. regardless, sadly, if these fines do get paid to members, there is absolutely no way to tell unless it's something extraordinarily obvious. one way I can see these being paid, and even these would be a red flag to me, is through subcontracting or consultancy fees, especially the latter. with these there is not really a good way to tell whether there's been actually a service behind them. auditors should be able to flag these, however I live in a country where there is definitely money being passed through sport associations and they get audited as well, so these might get overlooked, likely intentionally.
sports in general, and from what I've seen motorsports especially are a way to get money from one place to another without being too blatant. the accounting itself can get super messy, if it's paid in cash then it's even harder to trace, even if there's an invoice to go with it, if it's vague enough then the tax and financial authorities cannot find fault in it, and afaik you can make a contractual deal with the Swiss tax authorities regarding taxes (now idk if that applies to associations and companies as well or just to individual people).
in conclusion, I'm glad they called the lack of transparency out because it does damage not only the integrity, but also the reputation of the sport, and if there's any foul play that comes to light later on, it will be a very, very bad look on the FIA.
