Should the ESFNA Solicit Leadership from the Community?

By LJD

The
organization is significantly advancing in some areas, and it is keeping its
status quo in others. To illustrate, the ESFNA heard one of the
public calls to honor Judge Birtukan Mideksa for her contribution to bring
democratic system of government in Ethiopia. And it extended
its invitation on April 21, 2011 to pay her homage at its July 2011 28th
anniversary in Atlanta, GA – which triggered its bankroller, Sheikh Al Amoudi
collaborator of the TPLF/EPRDF, to
cut ties with it.  Though pretext for
terminating the sponsorship was an email a board member of the ESFNA, Getachew
Tesfaye, sent to his colloquies stating “it is what our leaders did to reverse
the selection and the relentless effort by the PR office to maintain the status
quo.  The leadership is convinced that
money will cure all. I disagree. My preference would be to return back this
blood money.”

Since the
ESFNA association with Al Amoudi ended and, by extension, the TPLF/EPRDF, the
Federation has held two of its most successful soccer tournaments under the
leadership of its President Getachew Tesfaye, a Nuclear Physicist, in which tens
of thousands of Ethiopians across the globe congregated at Loos Stadium in
Addison, TX in 2012 and at Byrd Stadium in College Park, Maryland in 2013 –
even though the Federation remains non-transparent.

Some of
the highlights of the weeklong events at the stadiums were the surge in the
Ethiopians pride in their traditional clothing and display of patriotism in their
flag. For instance, they flashed the stadiums with their untampered red, green and
yellow flag “which stands as a symbol for Ethiopia which resolutely defended
itself from Italian colonization at the Battle of Adwa.” Also the patriotic
display of passion for the flag was exhibited in their clothing. They proudly
rocked their flag dresses, skirts, pants, t-shirts, bandanas, tattoos, etc.
Nobody guessed the Ethiopian flag would be so fashionable, particularly those
who tampered with it. 

For making
the ESFNA 29^th and 30^th anniversary quite extraordinary,
viva la the ESFNA fans, the media of the Ethiopian Diaspora and the Federation!!!

The Federation’s Organizational
Behavior

“Organizational
behavior is a field of study that investigates the impact that individuals,
groups and structures have on behavior within an organization for the purpose
of applying such knowledge towards improving an organization’s effectiveness”, according
to Wikipedia.

After the
first year in office, most of the ESFNA EC members tragically fail to harness
the full trust and collaboration of the Federation’s soccer clubs. For example,
most Federation’s board members allege that the current president has not been
able to inspire, to motivate and to unify the soccer clubs during his first
term. As a result, team spirit between the board and the EC hit a new low at the
30^th anniversary.

To prove
their point: For the soccer players, there was no physician and medical kit
during the 2013 games, due to lack of coordination among the EC. Volunteers who
were assigned by the host team to help the EC during the tournament failed to
show up thereof members of the EC blatantly violated the bylaws, which is a
violation of fiduciary duty, by breaching internal control procedures under the
watchful eyes of the board and the public – which was a hard blow to the
individual’s reputation. Those board members who were observing the incident
did not attempt to rectify – which was a blow to the Federation.  

Obviously,
the federation has been lacking leadership and/or ethical and moral standards
which set the tone for trust, teamwork, respect for self and others with the
soccer clubs. Between the federation board and the EC there have been a chronic
interpersonal conflict that requires an analysis of how they have been working
(organizational behavior analysis). The Federation’s board might consider reaching
out to the community volunteers or paid expertise to get their organizational behavior
analyzed.

Concerning Transparency

For years,
while showing solidarity with the Federation – its fans have been diligently encouraging
it to run its business transparently – without successes. Though it has been
in business for 30+ years, it has not yet developed systems, controls and
standard procedures that would help its soccer clubs to effectively govern, monitor
and manage the actions and activities of the EC. 

Moreover,
the EC has never made the organization financial records readily accessible to
its board, let alone to the public. If lucky, a board member might obtain a
copy of the Federation financial records after dealing with many unreturned telephone
calls and email exchanges. The general public who has a desire to be informed
about the finances of the Federation has to find its old tax returns, which are
cumbersome for inexperienced eyes, on other company websites that are
specializing in reporting on U.S. nonprofit companies such as GuideStar
USA, Inc.

Since the Federation’s
inception, a year has hardly
passed without the soccer clubs alleging that the Federation’s resources were mismanaged
by those who were entrusted with duties – the EC. This vicious cycle of allegation
of misappropriation of funds by the EC has been heartbreaking and embarrassing
for its fans resulting in negative publicity for the Federation. It makes one
wonder why the soccer clubs have not been able to place controls and standard
procedures to help them safeguard the Federation resources.  For instance, some board members are calling for
an inquiry into unacceptable practices at the 2013 venue in Maryland. They
allege that key components of risk management, prevention and detection internal
control procedures were compromised in a violation of the organization’s bylaws.

The Federation Mission vs. Culture

Although
the leaders of the ESFNA soccer clubs lack basic communication skills and argue
chronically, they sit
around a table to plan their next annual soccer tournament to use it as a means
to bring Ethiopians together. For most of them, drawing Ethiopians together is a
matter of life and death, perhaps more important.

The
culture of the Federation does not appear to
mirror its mission – “Bringing Ethiopians Together” –because its culture of
mistrust remains unchanged even though the organization’s reach evolved over the
years. For example, the board and the EC appear they are deliberately ignoring
their fiduciary responsibilities to establish and maintain the financial
transparency of the organization.

While there
is a term limit for the ESFNA EC, there is not term limit for its board. The EC
carries on the tradition to keep the board at arm’s length about its actions
and activities. It remains highly secretive about the business dealing it makes
on behalf of the Federation. It continues to give the impression that
individual performance is more important than teamwork. It persistently
violates the bylaws and performs multiple unassigned roles in a highly
compromising position – resulting in a negative public image. The public’s
perception is that the ESFNA is corrupt and that the Federation lacks
integrity.

The board and
the EC ignorance and/or lack of awareness about their fiduciary duties, the EC
alleged secretive and individualistic conduct, the Federation’s weak
organizational and internal control systems, etc. continues to be the root
causes of the Federation’s internal problems such as: contempt, mistrust, lack
of leadership, etc.

Will the Federation
be Cash Strapped?

It is alleged that the ESFNA board members have never
reviewed the organization’s tax return, Form 990, prior to filing. If so, the
board might have failed its fiduciary responsibility, duty of care, which
requires a board member to read and review the financial and to ask questions
about the content. If a board member does not have financial background, this
task is daunting.

 I analyzed the Federation
tax returns for a period of six years, which I obtained from free services of GuideStar. And I
noted that the Federation had $154,437 in its bank account as of December 31,
2011. I also noted its expenses were disproportionately higher than its revenues,
for six consecutive years.

To illustrate, from 2006 to 20011, it held six tournaments in five states.
And it reported $83,500 average loss per year. Given that the Federation
reported $83,500 average loss per year for a six year period from 2006 to 2011,
it might not be able to foot its bills in the near future unless its board puts a lid on expenses. Detailed income and loss analysis are as
follows:

It
reported profit from two of its venues: $99,402 (6%) profit of $1,648,000 revenue
from the Washington, DC tournament in 2008 and $85,859 (20%) profit of $419,825
revenue from the San Jose, California tournament in 2010.

It
reported a $64,521 loss from its Los
Angeles venue in 2006, a $50,115 loss from its Dallas venue in 2007, a $117,200
loss from its Chicago venue in 2009 and a $102,164 loss from its Atlanta venue
in 2011.

Disproportionately Higher Expenses
than Incomes

The Federation’s
soccer players and the board members have to pay for their own travel expenses
when they participate in the Federation tournament and meetings. The only
expense the Federation covers for the soccer players are for insurance and up
to four hotel rooms per team; four to six players have to sleep in one room for
seven days. Whereas it is
alleged that the ESFNA’s previous ECs used to stay in an individual suite, and
drove luxury rental cars ($8,293 in Washington, DC in 2008 and $6,297 in San
Jose, CA in 2010) paid by the Federation.

Although
the ESFNA does not cover travel expenses of its board and soccer players, it
has been claiming on its tax returns that it spent about $1.4 million – 62% of
its revenue for a period of five years – for travel, conferences, and meetings;
to illustrate,

In 2011,
72% of the $292.042 revenue, which is $211,370, was claimed as travel expense.

In 2010,
38% of the $419.825 revenue, which is $158,521, was claimed as travel expense.

In 2009, 50%
of the $354,235 revenue, which is $178,431, was claimed as travel expense.

In 2008,
travel expenses were not claimed out of the $1,648,000 revenue. However, players
related other expenses of $182,820 were claimed. By the way, the profit margin
of the $1,648,000 revenue was only 6% since the related expenses were $1,548,598.

In 2007,
57% of the $491,591 revenue, which is $278,858, was claimed as travel,
conferences, conventions, and meetings expenses.

In 2006,
83% of the $660,168 revenue, which is $546,582, was travel, conferences,
conventions, and meetings expenses.

The
federation general and administrative expenses of 2006 and 2007 also appear
disproportionate to revenue; to illustrate:

In 2006,
16% of the $660,168 revenue, which is $106,732, was claimed as general &
administrative expenses.

In 2007,
26% of the $419.825 revenue, which is $128,102, was claimed as general &
administrative expenses.

In 2008, 0.49%
of the $1,648,000 revenue, which is $8,009, was claimed as general &
administrative expenses.

In 2009, 0.50%
of the $354,235 revenue, which is $1,788, was claimed as general &
administrative expenses.

In 2010
and 2011 general & administrative expense claim was not made.

Depending on the 2013 & 2012
profit margins and some unknowns the Federation could be in a stronger
financial position than ever:
To illustrate, eyeballing the public turnout of 2013 in College Park Maryland
and comparing it with the Washington, DC actual tickets sales revenue of $850K
of 2008 the tickets sales revenue percentage change might be exponential.  Also eyeballing the public turnout of 2012 in
Addison, TX and comparing it with the Dallas, Texas actual tickets sales
revenue of $128K of 2007 the tickets sales revenue percentage change might be
exponential. If these estimates are roughly correct, the Federation could be in
a better financial position than ever.

In summary: The Federation is an institution
which belongs to its players and, therefore, to Ethiopians. As witnessed in
Maryland in 2013 and in Texas in 2012, the Federation’s reach has been increasing
exponentially although its leadership, organizational behavior, culture,
controls, standard procedures and finances have not developed in proportion
with its reaches. Most of its fans, those who have been engaged in its leadership
for decades, might not have the proper experiences to lead, to manage, and to
nourish it rightly. To solve its problems, the Federation is in need of your
and its players fair share contribution of wisdom, knowledge, leadership,
experiences and skills, so get to know your local team and its leadership to assess
their situation and to make recommendations for changes as necessary and, by
extension, the Federation’s; furthermore,

Given the
potential of the Federation and the love the Ethiopian Diaspora is pouring into
it to garner its financial support for its future, the soccer clubs (board) and
the EC should be judged by what they did not do which is knowing the history of
the sheer number of corruption allegation against the previous ECs – bluntly
ignoring the call of their supporters to be transparent.

The
formula to stop the vicious cycle of allegations of misappropriation of funds
and to garner financial support for the future without crying Uncle Sheikh Al
Amoudi is: transparency, collaboration, outsourcing events management and
accounting functions, reaching out to the community to get volunteer or paid
expertise (those who can help to analyze the organization behavior, establish
financial transparency and create standard work procedures to improve the
quality and accountability of the board and the EC.)

The
Federation’s expenses, including travel, conferences, meetings, legal,
Ethiopian day, printing and publications, general and administrative, office
expenses, etc. appear disproportionately higher than revenue. To control
resources, the board might consider obtaining detail analyses of expenses quarterly.

The board
of directors might consider to request and review quarterly balance sheet and
income statements, at least.

To install
public confidence, without incurring additional cost – I encourage timely
information about the Federation activities such as: annual reports, financial
statements, tax returns, bylaws, etc. to be publicly available on the
organization’s website to all who desire to be informed about the Federation’s operations.

—
The writer
can be reached at [email protected]