The Power of Funding Reviews: Why International Sports Governing Bodies Should Review Funding Given to Local Federations

In an era where transparency, accountability and impact are no longer optional, the role of international sports governing bodies in ensuring responsible use of funds has never been more critical. Billions in development grants, competition support, and infrastructure funding flow annually from global sports bodies to local federations across the world. Governing bodies often do not have a clear view of how their funding is used, which can harm their reputation and prevent funding objectives from being fully achieved.

In this context, regular reviews of how funding is used at the local level should not just be a formality, they must be a strategic imperative.

The Funding Integrity Challenge

International sports governing bodies invest heavily in growing their sports globally. Their contributions are vital: they enable grassroots programs, facilitate athlete or team development, support national competitions, and help fund essential infrastructure.

But with this investment comes a challenge: the greater the funding, the greater the risk of mismanagement, misuse, or underperformance if there is insufficient financial oversight.

Cases of poor financial governance or outright corruption within local sports federations can happen. These incidents do more than waste money — they erode trust, compromise athlete or team welfare, and undermine the credibility of the sport itself.

Importance of Reviews

Financial reviews by independent reviewers, are not merely bureaucratic exercises - they are essential tools to ensure transparency, accountability, and optimal use of resources. Unlike internal audits or federations’ self-reporting, external reviewers have no vested interest, enhancing credibility and reducing the risk of conflicts of interest. The key benefits include:

Transparency: Independent reviewers can verify that funds were spent as intended and are in line with the funding objectives, helping to build trust with stakeholders.
Fraud Detection: Reviews help uncover misuse, embezzlement, or financial mismanagement that may otherwise go unnoticed. By keeping a close eye on how funds are used, governing bodies can prevent issues before they arise, safeguarding the reputation of the sport.
Governance Improvement: Review findings often highlight weaknesses in processes, enabling federations to strengthen their controls and compliance.
Funder Confidence: For international sports governing bodies, or other funders, the external reviews demonstrate responsible stewardship, encouraging ongoing or increased funding. This oversight ensures that money is directed towards initiatives that truly benefit athletes or teams and sport as a whole.
Public Trust: Transparency and accountability build confidence among athletes, sponsors, fans, and the broader community.

As one of the leading international sports governing bodies, FIFA conducts annual central reviews of all member associations and confederations receiving funding through the FIFA Forward Programme. These reviews are performed by independent auditors to ensure compliance and effective use of funds. The annual reviews promote transparency and accountability and are a key component of FIFA’s commitment towards good governance.

The Power of Reviews in Practice

Acting as independent reviewer, BDO conducted a comprehensive financial review of development funds allocated by an international sports governing body to a local sports federation. These funds were intended to support grassroots talent identification and training programmes aimed at nurturing young talent and improving access to sport at the community level.

Our review covered a three-year funding cycle and included an analysis of financial records, procurement documentation, and interviews with key federation staff. The objective was to assess whether the funds were being used in alignment with the intended programme objectives and regulations and in accordance with good financial governance practices.

Key Findings:

Misallocation of Funds: A significant portion of the allocated funds—over 40%—was directed towards administrative expenses, including high consultancy fees, office refurbishments, and travel costs unrelated to the core grassroots programmes. This diverted resources away from direct talent development and community outreach activities.
Lack of Financial Controls: We identified weak internal controls and a lack of clear financial policies within the federation. Several disbursements lacked proper supporting documentation, and financial reports submitted to the governing body were inconsistent and incomplete.
Unaccounted Expenditure: Due to poor record-keeping and limited oversight, approximately 15% of the total funds could not be reliably accounted for. This raised concerns about potential misuse and highlighted a serious gap in financial transparency.

Recommendations and Remediation:

Following the financial review, we provided a set of targeted recommendations, including:

Implementing stricter budgetary controls with predefined spending caps for administrative costs.
Establishing clearer financial reporting templates and requiring monthly reconciliations.
Introducing an approval process for all expenditures above specific thresholds.
Providing tailored financial management training to federation staff responsible for budgeting and reporting.
Implementing regular, independent financial reviews and spot checks.

Outcomes:

Within 12 months of implementing the recommendations:

The federation significantly reduced administrative overheads, allowing a higher proportion of funding to be directed to talent scouting, coaching clinics, and training camps.
Financial reporting became more timely and transparent, with quarterly reports aligned to international standards.
Targeted training improved staff understanding of financial accountability and compliance.
Trust between the international governing body and the local federation was notably restored, leading to continued funding and deeper collaboration on programme expansion.

This case underscores the importance of robust financial governance in ensuring development funds are used effectively, delivering real impact at the grassroots level, and enhancing the credibility of both the local federation and the governing body.

Why This Matters Now

The world of sports is evolving. Fans, sponsors, and governments are demanding higher ethical standards. Athletes are more vocal about governance issues. And digital media ensures that lapses are global news within hours of coming to light.

It is no longer sufficient for international sports governing bodies to act as gatekeepers of funding. They must become guardians of integrity and impact. The future of global sport depends not just on how much money is invested, but how effectively it is managed at every level.

By embedding a culture of accountability, transparency, and regular review, international sports governing bodies can ensure that the spirit of sport — fairness, competition, and community — is not only preserved, but strengthened for the future.

By Sandrine Woo