GEO

State funding of sports federations should be reconsidered: an example of the Wrestling Federation

13 August, 2019

Zurab Datunashvili, a wrestler injured during the violent incident of 11 January 2019 taken place in Sports Palace, spoke about significant problems existing in the National Wrestling Federation. On 25 January, at a press conference Datunashvili and his associates talked about protectionism, financial violations and thousands of bonuses practiced in the Federation. Information disclosed by them reveals signs of corruption and mismanagement of funds, which, in addition to the prosecutor's office, the Ministry of Education, Science, Culture and Sports should also be interested in.

According to Datunashvili's story and the documents presented, it turns out that:

  • In December 2017 and January 2018, the Head of Administration of the Federation and one of the employees got bonuses of GEL 26,974 each, and Tamaz (Gega) Gegeshidze, the President received bonuses of GEL 40,000. These amounts are multiple times higher than other bonuses, which raises doubts about corruption.

  • During the last four years, the Federation has purchased lodging services of GEL 1,600,000 from the hotel of a sister of Leri Khabelov, the MP from the ruling Georgian Dream party and the Chairman of the Georgian National Olympic Committee.

  • Wrestlers usually give parts of their honorariums received after tournament achievements to their first and second coaches. Gegeshidze, the president of the Federation, exclusively decides who should be named the second coach.

Unlimited power of the President

After the appointment of Tamaz (Gega) Gegeshidze, the power of the Wrestling Federation President has actually become unlimited. The Presidium of the Federation is the only body that can limit and suspend the power of the President in between the sittings of the Assembly, the body that is summoned once in four years. 

In 2017, the charter of the Federation was amended, according to which the president appoints two thirds of the Presidium members. Before that, the Assembly of the Federation appointed all members of the Presidium. In addition, the introduced amendments raised a minimum number of votes of the Presidium members (from simple majority to two thirds) needed for the suspension of the president's authority. These changes made the Presidium heavily dependent on the president of the Federation. This raises serious questions about good governance of the Federation and creates risks of abuse of power.

State funding 

According to the letter received from the Ministry of Education, Science, Culture and Sport, this public institution does not have information on the bonuses distributed by the Federation. The Ministry explained the reason – the budgetary program on the development of sports only includes funds for salaries of the Federation employees and not for bonuses. The Ministry assumes that the Federation "might" give bonuses to its employees from prize money and awards it gets or from other sources of income such as sponsorship and grants. However, the Ministry does not possess such information.  

The main source of funding for the Wrestling Federation is the state program on the development of sports (see Graph N1). 

 

 

The purpose of this state program is not to fund the N(N)LE National Wrestling Federation, but to support the development of wrestling in Georgia. The Ministry allocates funds from the budget and sees this goal to be achieved by providing annual funding for the National Wrestling Federation.

N(N)LE National Wrestling Federation is a legal entity independent of the state. However, the Ministry is obliged to allocate budgetary funds to an organization that meets high standards and relevant criteria. Governance standards in the Federation require detailed research, but even official assessments of the Ministry reveal problems and ignorance of established standards of good governance.

Problems in good governance and corruption risks

Fighting corruption is a major challenge for sports organizations internationally. Good governance standards developed by international organizations emphasize the need to uphold the principles of transparency, democracy, internal accountability / control and public accountability.

Such standards are also set forth in Georgian legislation by the order of the Minister of Education, Science, Culture and Sport. One of the key criteria for recognition and funding of an organization is a good governance, which includes good internal management, effective organizational performance, quarterly and annual reports, etc.

Based on the above criteria, the Ministry of Sport and Youth Development in 2016 and the Ministry of Education, Science, Culture and Sport in 2016 developed an assessment tool - “the Score and their Percentage Distribution based on the Performance Evaluation of Sporting Organizations,” where sports federations' ratings and their funding are actually presented. The component of good governance is the most interesting for this research (see Table N1):

 

* The work of the Wrestling Federation was not assessed in 2017

In 2018, the National Wrestling Federation was ranked 25th among the 33 federations that received more than GEL 100,000 from the state budget (see Table N2), and took the last place among the 10 federations with GEL 1 million or more funding. Although the component of good governance has been deteriorating, the funding of the Wrestling Federation increased. Moreover, the funding of GEL 4,500,000 planned for 2018 was adjusted to GEL 5,600,000.

 

 

* Funding for 2017 amounted to GEL 4 321 000, a substantial increase was due to the mobilization of funds for hosting the 2018 World Chess Olympiad.

Recommendations

  •  The Prosecutor's Office should be interested in the ongoing processes in the Wrestling Federation. At this stage, it may be argued that funding for the N(N)LE National Wrestling Federation for the purposes of the state-sponsored wrestling development program involves high risks of inappropriate spending. Past transactions may contain signs of crime;

  •  The Ministry of Education, Science, Culture and Sport should review the funding decision of the National Wrestling Federation and find more effective ways to ensure the development of wrestling;

  •  An annual evaluation of the activities of sports federations by the Ministry should be mandatory. The evaluation document and assigned scores should determine whether a federation would receive state funding.

 

 [1] In addition, according to information received by the Liberal from the Federation in 2017, the technical manager of freestyle wrestling received more than GEL 40,000 GEL.

[2]Since 2019, the program has a new title: "Promoting and Development of Mass and High Performance Sports." Spending Institution: 2016-2017 – the Ministry of Sport and Youth Affairs; 2018 – the Ministry of Culture and Sport; 2019 – the Ministry of Education, Science, Culture and Sport.

[3] These are the documents on “the Score and their Percentage Distribution based on the Performance Evaluation of Sporting Organizations”, which are discussed in more detail below.

[4] Geeraert, A. (2018). National Sports Governance Observer. Indicators and instructions for assessing good governance in national sports federations. Aarhus: Play the Game / Danish Institute for Sports Studies.

[5]  The November 12, 2018 Order of the Minister on “Approving the Decisions of the Council of Recognition and Financing of Sports Organizations” 

[6]  The percentage shown in this graph is a share of the total funding of those federations that have received funding of GEL 100,000 or more from the budget. Funds of the Chess Federation are excluded, as the GEL 25 million received for hosting the 2018 International Chess Olympiad did not allow for a fair comparison.

[7]  During the year it increased till GEL 3,987,700

[8] During the year it increased till GEL 5,600,000