Sport Ireland (SI) chief John Treacy has warned the FAI that they must adopt proposed reform measures to have state funding restored, while also revealing the terms of sports grants have changed in the wake of the crisis at the organisation.
Sport Ireland suspended €2.9m in annual funding to the Football Association of Ireland in April after it emerged that then chief executive John Delaney had given a €100,000 'bridging loan' to the cash-strapped association in 2017.
Under grant rules, Sport Ireland should have been informed.
The statutory authority was instrumental in setting up the Governance Review Group that has proposed 78 recommendations relating to governance, leadership, accountability and transparency at the FAI.
An FAI EGM is set to take place on Saturday, where the proposals will be voted on, ahead of the AGM in Dunboyne on 27 July.
Current president Donal Conway has been nominated unopposed to continue in his role, with the Governance Review Group recommending that two existing board members should remain in situ for a 12-month period.
Treacy added that the results and recommendations of a financial audit by KOSI and a "serious" investigation by the Office of the Director of Corporate Enforcement into alleged failure to keep proper accounts would also have an impact on the restoration of a funding.
"The Board of Sport Ireland views the adoption of the recommendations of the report by the FAI as absolutely essential," Treacy will tell the Oireachtas Joint Committee On Transport Tourism and Sport tomorrow.
"The report provides a clear and comprehensive pathway for the fundamental reform of governance within the Football Association of Ireland, and a pathway for the FAI to emerge from its current difficulties.
"It will be up to the new Board of the FAI to show leadership in the implementation of these critical, yet achievable, recommendations."
"It is the view of the Sport Ireland that the timely implementation of these reforms is essential to the restoration of public trust and confidence in the FAI.
"While the report has been widely welcomed, one challenge facing the Board of the FAI is reassuring all of its constituents that the 78 recommendations included in the report of the Governance Review Group are in the best interests of the organisation and the game of football here in Ireland.
"It is natural for reluctance to change and reform to exist among some groups when bringing about any change process. We respect the autonomy of such groups however, it is of vital importance that they
reflect on the current situation, as well as the implications and practicalities of the recommended
committee structure and where their respective input and expertise are best suited."
A one-year interim board is expected to be elected ahead of further possible reforms at the 2020 AGM around the areas of membership, the organisation's constitution and the composition and role of Council.
Governance Review Group chair Aidan Horan said: "Many of the recommendations relating to corporate governance, third parties and the Board role can be implemented speedily and do not require rule
"What is required, however, is a fundamental change in approach, culture and attitude as to how good governance is operated within the Association."
In the wake of the FAI crisis, Sport Ireland has also updated the terms and conditions of their grants to the various sporting bodies around the country.
A key change is that they will now demand the right to fully audit and inspect any recipient body, with unhindered access to information.
A failure to comply with an audit or investigation would lead to grant suspension or even refund.
Sport Ireland will also require independent verification that the body is compliant with the code of good practice for community, voluntary and charitable organisations.
In addition, SI will demand details of the full remuneration package of a body's chief executive or equivalent position.
That will mean the salaries of GAA Director General Tom Ryan and the IRFU's chief executive Philip Browne, along with their FAI counterpart will be disclosed to Sport Ireland, if not publically.