SIXFIELDS AUDIT REPORT: Northampton Town given '˜too much money too soon' in loan deal, auditors state
Loan money continued to be paid to Northampton Town despite 'warning signs' that work on the new stadium was not proceeding as planned, the audit report has stated.
The report released today by Price Waterhouse Cooper has investigated the handling of the failed £10.25 million to Northampton Town.
In a section of the report on financial controls, the auditors state that the borough council initially wanted to loan payouts to start once the stadium work was complete, but “the football club wanted all the money up front”.
“Without the money up front the football club were unwilling to invest in the development of the land and as a result the council took a view that the money should be provided,” the report stated.
The drawdown agreement was drawn up after compromises between both parties over timings of the payments to the club.
But the report says “too large a proportion of the funds were drawdown at too early a stage in the project”.
It adds: “The physical progress of the stadium development should have provided a warning sign that the development was not progressing at the rate expected or in line with the funds provided. In spite of this the Council continued to permit drawdowns on the loan agreement since the Football Club were in compliance with the Facility Agreement terms.”
The fact this happened “indicated the terms were not robust enough to challenge physical progress”, the report states.
The report also highlighted that when it was revealed a year into the project that the planned conference and banqueting facility would no longer be included, no evidence was available to show that the structure, and amount, of the loan and the payouts were subsequently changed.