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FIA Single-Seater Financial Regulations Director Federico Lodi explains how the governing organization intends to provide a “quick outcome” to their cost cap auditing process.
In October of 2022, more than 10 months after the 2021 season came to a close, the FIA announced that Red Bull had been found to be in breach of the 2021 budget cap.
This caused many to criticise the FIA for taking so long to perform an audit of the teams’ 2021 spending, making the whole process extremely awkward, especially since at that point the 2022 season was coming to a close.
The matter was made even worse, because the team in question was leading the championship and completely dominating the season.
Well, the FIA’s Single-Seater Financial Regulations Director Federico Lodi says the governing organization has taken certain steps to prevent this from happening again.
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“It’s clear that there is an interest from the stakeholders to have a quick outcome,” Lodi said.
“We have strengthened the department, and now we have 10 full-time employees working on Formula 1 financial regulation. This is a significant increase over last year, when it was just four.”
Lodi ten explained it is difficult to make the auditing process extremely speedy, because it requires a lot of cooperation from the teams.
“There are many variables that need to be taken into account. First, there are the findings themselves – what we identify and what we need to dig into further.
“On top of that, we also have to take into account the fact that we do the review with the support of the team, and obviously, the finance department of the team is also busy with running its business – they may also have a reporting commitment to their shareholders for example.
“So, while we need to work as quickly as possible, for us the most important thing is not to undermine the robustness of the process.”
Lodi also thinks that the process will be sped up when teams become more accustomed to it.
“The more everyone becomes accustomed to the regulation, the more you become accustomed to the process, the more we are structured, and clearly the time will be reduced.
“We have to be realistic, because I don’t think that it will be feasible to finalise the review after one month or 45 days.
“It also depends on the findings, because if you need to open a formal investigation, it takes time. There are lawyers involved, advisory boards, so the process is a long one.
“But we have a clear target in mind to do it quicker,” Lodi concluded.
