The FIA has moved to dismiss suggestions two F1 teams may have exceeded the cost cap during the 2022 season as “unfounded”.
Introduced for 2021, the cost cap is a way to keep a lid on the otherwise endless spending from top teams and close the gap between the haves and the have-nots.
A byproduct has been that the value of teams has skyrocketed as the business of F1 becomes, at least on the surface, profitable.
It is all underpinned by the cost cap and the FIA’s ability to enforce it.
Last year, Red Bull was found to have overspent the cap by £1.864 million – something it disputed but ultimately accepted.
The squad was fined and had its wind tunnel allowance Aerodynamic Testing Restriction (ATR) reduced by 10 percent.
Red Bull was not alone in breaching the regulations, with Aston Martin and Williams fined for procedural errors in their submissions.
Much of that came to light last October as the FIA struggled to work through the mountain of accounts needed to police the cap effectively.
That situation has been improved with the financial department at the governing body being expanded under Federico Lodi.
While audits are now faster, it remains a lengthy and complicated process, the outcome of which is not expected until at least the end of the month.
However, according to a report by respected German journalist Michael Schmidt for Auto Motor und Sport, two teams could face further probes.
While those two teams aren’t named, it is suggested that using affiliate companies to park key staff, among other practices, is at the crux of the matter.
A statement from the FIA obtained by Speedcafe saw the governing body dismiss the concern.
“The auditing fieldwork is still ongoing and is scheduled to conclude in the upcoming weeks, after which there will be a period required for the finalisation of the review,” it stated.
“There is not, and has never been, a specific deadline for certification, and any suggestions of delays to this process or potential breaches are completely unfounded – the CCA will formally communicate its findings according to the procedure set out in the Financial Regulations.
“The timeframe is intentionally not fixed in order not to prejudice the robustness and the effectiveness of the review.”
Under the cost cap, teams have retained senior staff by shunting them to peripheral businesses where they primarily work on other projects while contributing a small portion of their working week to F1.
Only the F1 component of their role falls under the cost cap, meaning teams can retain staff within the cap while those individuals continue to be well-remunerated.
Another suggestion is companies are set up so that they become external to the F1 operation before supplying components at a reduced price.
By doing this, Schmidt suggests the development costs can be attributed to the ‘external’ company and, if the component doesn’t prove a step forward, is not included in the F1 cap.
Changes have been made under a Technical Directive to stamp out the abuse of such practices. Still, it highlights the difficulty the FIA has in policing the nominal $135 million limit (though with additional allowances and calendar, it’s effectively $153 million this year).
Another loophole not covered by the TD is the flow of information from affiliated road car development.
More than one team has a road car development programme running alongside its F1 team, developing extremely high-end track day cars.
F1 heavily inspires these with their development wholly unregulated by the FIA, given they are, theoretically, a separate business.
The question now being asked is whether that development is following the lead of F1, which would be without issue, or if it is the other way around.
For those competing in the World Endurance Championship, there are regulations that govern that. However, that does not apply to all teams.
Should that be a loophole being exploited, the FIA must both crack down on it and close it off quickly.
Much of F1’s success and integrity at present hinges on the cost cap, making any breaches or loopholes a significant concern.
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