Ten Years of Underperformance – Update

Over the past month I was too busy to deal with much more entertaining things than documenting the mismanagement and slow motion crash of the IOF. But now I have some time to continue with this gruesome task.

The Council had a meeting on 13-14 October. The published minutes (#186 here) provide additional information and data on the Council attitude to IOF finances.

The Council minute looks like a good old Soviet party communique: all good news, as long as you do not scratch the surface. It reinforces the feeling that the IOF leadership considers finances as their little internal business members should not get involved in.

The 19 page long minutes do not even mention the IOF – Letter to members July 2017 sent by the IOF President after the last Council meeting. The one that was carefully sent after the Presidents’ Conference regarding financial issues and the major revision of the budget. It was a “no event” that the IOF leadership apparently prefer to forget about and erase it from publicly documented history.

The key message of the minutes that revenues are up and expected to rise, while costs are largely under control. The funny bit is that the additional costs mentioned (regional event medals, higher overseas event advising costs, SEA for the World Games) are ones that should have been known when the 2017 budget was prepared. The fact that IOF Leadership uses them as an excuse for higher costs just underlines the feeling that the 2017 budget submitted to the General Assembly for approval was – mildly speaking – not thought through.

Yet, with all the improvements 2017 is still expected to show only a small positive result estimated at around €9,000 (85% below the €66,000 budget), and the updated forecast for 2018 was €30,000, that is over 80% lower than the €169,000 presented to the General Assembly. As expected, the GA approved original budget numbers were carefully not mentioned in the Council minutes.

Now it is official that Council expects to underperform their own budget by a 10 year combined gap of over €500,000 as a result of not meeting their own targets in any year since 2009.

IOF Net income vs budget - update

It is also interesting to zoom in the (2016-18) budgets presented to the General Assembly 2016. The gap between Council promises and delivered results has exploded.

This chart shows all the great financial promises made by the leadership to the General Assembly and the expected outcome.

IOF Net income vs budget - 2016-18

€302,000 was the expected combined surplus of these 3 years as presented to GA. Yet, the expectation of the Council is a total loss of €25,000, despite various cost cutting measures. If you look at the 2016 GA minutes, it looks almost comical to read that “LAT requested information about how the planned surplus in the budget was to be used”. Clearly, member federations were led to believe by the Council that a new era of plenty has arrived.

It should really make member federations think whether the budgets promising the riches as presented by Leho in August 2016 were grounded in reality, or was the whole budget presentation just a pie in the sky thinking to ensure a smooth General Assembly. I heard private comments after the GA meeting that some members were annoyed by DEN and LAT for taking a disputatious stance with the IOF leadership, while the apparently (based also on the large budget surplus expected!) everything was in good hands.

One may suspect that questions around ethics of the process may be asked when plans and reality diverge to this extent for no good reason. Will any of the member federations have the guts to raise those questions?

Also, one may naïvely think that the elections at the next General Assembly in 2018 would take care of management anomalies of this type. Unlikely, I am afraid. Based on the data I could find, including oral history of the early years, in the 56 year long history of the IOF only one(!) of the 28 or so presidential elections were contested. In 27 or so presidential elections there was only one single candidate. It is a democratic track record better than in North Korea, but nowhere near the competitiveness of elections in Russia or Turkey. Council nominations also get a seat with 80% to 100% likelihood with few exceptions.

No wonder, that the IOF Leadership acts as if they could get away with almost everything, as if there would be no alternative to them. Next time we look deeper into that topic, a key factor to any change in the management of the IOF.