Where the Safa millions went

The "dirty campaign" in South African soccer escalated this week as new details emerged about how the local game lost out on millions in World Cup money meant for development.

Amid open warfare between the South African Football Association and the country's Olympic committee, Sascoc, suspicions deepened that soccer bosses had dipped into World Cup cash to keep Safa afloat.

In the wake of Sascoc putting pressure on the government for an investigation of Safa, the soccer body's CEO, Dennis Mumble, hit back.

"We are in the midst of a dirty campaign for elections coming up in September," he told the Sunday Times.

"It's easy to smear people with wild allegations - but where is the proof?"

Part of that proof may lie in the KPMG audited financial statements of Safa for the year to June 2012.

An analysis of these figures by the Sunday Times confirmed that Safa made a loss of R54.5-million for the year. Safa burned cash at a time when big-ticket sponsors Absa and Castle Lager had slashed their sponsorships.

The accounts suggest that Safa will struggle to pay its bills this year, unless it can lure more sponsors. Last year, Safa spent R27.5-million, which left it with only R2.9-million in cash in the bank - but its salary bill alone last year was R17.1-million.

The accounts confirm that Safa received R113-million in the past two years from the "Fifa World Cup legacy fund" for the development of football - but insiders said this was partly splurged on buying 27 Mercedes-Benzes and other luxuries.

The money was transferred to Safa from the World Cup local organising committee's surplus operating budget and is distinct from the R450-million that Safa received from Fifa as part of the World Cup legacy fund.

Fifa placed that R450-million in a trust that has invested the money with Absa, Nedbank and Investec - and has since generated R31-million in interest. Of this, R56-million has so far been set aside to soccer development projects.

Mumble admitted to the Sunday Times this week that R8-million of the World Cup cash had been used to buy the Mercedes-Benzes for Safa's executives in 2011 - even though this was not budgeted for.

Mumble said only executives "with extra responsibilities that took them to the regions" were allocated Mercedes-Benzes to "make them more mobile".

Justifying money Safa spent on buses, he said there was a great need for transport in the regions because "South Africa lacks public transport, especially in the rural areas".

Safa president Kirsten Nema-tandani defended Safa's decision to buy Mercedes-Benzes rather than cheaper cars because the carmaker was a sponsor. "We needed to support the brands that support us," he said.

He admitted that Safa had spent money it should not have on various items, but insisted that wasteful expenditure had been cut. "We used to have about 23 committees, but we've cut them down to eight. We used to have 230 members, but now we're down to 80 members."

Although the accounts reflect that Safa received R39.9-million in "World Cup legacy" revenue last year and R72-million the previous year, Safa bosses said only a small part of that was cash and the rest was assets.

Robin Petersen, Safa's former CEO, said these assets included Hyundai buses, X-ray equipment and fencing donated by Fifa after the World Cup.

"You can't pay bills from assets; you can't pay teams using assets," he said.

Petersen admitted that Safa had "serious challenges" in terms of its cash flow, mainly because its two main sponsors - Absa and Castle Lager - had cut their sponsorship from R110-million to R60-million, but said these were being dealt with.

The KPMG financials reflect that Safa spent R107-million on football development in the past two years. But many, including Sascoc president Gideon Sam, dispute this figure and want a precise account of how this money was spent. In a letter to Sports Minister Fikile Mbalula, Sam says: "No comprehensive breakdown is recorded as to how this development took place."

Mumble rejected allegations that this money was misspent on buying patronage in the 52 regions that Safa services - bribing members to support the factional battle for control of Safa by giving them fake jobs, perks and bonuses.

"It's easy to say that, but we cannot give grants to individuals. It goes to the structure in that region that must give an account of how that money was used. They must give us audited financial statements at the end of the year, and if they fail to do so they won't qualify for a grant the following year."

The Safa bosses also rejected the suggestion that the body was bankrupt, stressing that KPMG regarded it as a going concern whose financial state would improve as a result of cost-cutting.

They also said Sascoc's approaches to Mbalula were orchestrated by a rival faction jostling for position ahead of Safa's leadership election in September. They said this faction, supported by Sascoc bosses Sam and Mubarak Mohamed, used Safa's financial position to portray an organisation in chaos.

Another Safa executive, speaking anonymously, said: "These guys [Sascoc] want to paint Safa as a mess so they can ride in as a white knight."

Mumble directly accused Sascoc of seeking to manipulate the upcoming election for leadership of the soccer body. "We gave [Sascoc] our financial statements in September - why are they raising this now?"

Sascoc's "clear bias" against Safa was instigated by former Safa executive and current Sascoc board member Mubarak, who lost in a Safa election in 2009, he said.

In response to Sam's call for an inquiry, Mumble said: "We have never resisted an inquiry - we resisted downright interference in Safa's affairs."

Mubarak said: "I have committed myself to Danny Jordan on the phone on numerous occasions that I have no interest in coming back to Safa. They must stop finding scapegoats but solve all the problems that Safa is facing."