Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Wednesday, 29 June 1994
Page: 2274

Senator MacGIBBON (12.46 p.m.) —In conjunction with my colleague Senator Ian Macdonald, I wish to raise in the Senate today the collapse of the Brisbane Tribal Council. The collapse of that body raises a number of questions in relation to the administration and accountability of public funds, matters which are the concern of this parliament and of the state parliament. My concerns have their origin in the report of the receivers for the Brisbane Tribal Council, which was lodged at the Supreme Court in Queensland in October last year.

  The Brisbane Tribal Council was incorporated on 12 August 1977 after some years of operation as an unlisted public company limited by guarantee. Its objectives were, broadly, to provide accommodation for needy Aboriginals and Islanders; to assist Aboriginals and Islanders in welfare claims; to collect data and research into the housing problems of Aboriginals and Islanders; to bring before the public problems encountered by these groups to promote understanding of their problems; and to conduct training courses for volunteers to carry out the objectives of the company.

  The sole source of funding for the council came from the federal and state governments and exceeded $1 million per year. It managed and controlled a number of business entities, including the Gwandalan Community Correction Centre, funded by the Queensland Corrective Services Commission, which paid the Brisbane Tribal Council a management fee of $398,000 per annum for this service; DBW Lodge, a youth bail hostel funded by ATSIC, the initial funding for which was somewhere between $600,000 and $750,000; Georgina, an aged persons hostel funded by ATSIC and Health, Housing and Community Services. The Purga Mission, a 35-hectare property outside Ipswich, was also owned by the council. Additionally, it operated a secretariat at 39 Lytton Road, East Brisbane.

  Last year the secretary of the council, conscious of her fiduciary duties, placed the company in the hands of the receiver as it was no longer solvent. The receivers were Deloitte Touche Tohmatsu. In their report they noted many problems, including an excessive use of cash cheques, poor bookkeeping and an accounting deficiency of over $600,000. The receiver was obviously concerned about the operations of the council, but made it perfectly clear that it was not within his brief to pursue the matter. He stated:

In order to determine whether the funds provided by the funding bodies have been misappropriated a detailed investigation would be necessary.

The receiver laid down time frames and areas for further investigation. Many months have now passed since that report was put down.

  Why have the recommended further investigations not been carried out by either ATSIC's Office of Evaluation and Audit or any other internal audit mechanism? Why has the government allowed the insolvency of this ATSIC- and HHACS-funded body to pass without comment or investigation? Why has the government not insisted that ATSIC's role in making grants without requiring proper accountability or acquittal be investigated? Initial inquiries suggest that hundreds of thousands of dollars have been misappropriated over the years, yet ATSIC and the other federal and state government departments have done nothing. In fact, it could be suggested that ATSIC may have helped cover the trail. It has ignored offers of a full and complete re-audit of the BTC books for over five years.

  Grant money was spent on florists, on hire cars for prisoners and supervisors, on funerals, on court fines and on improvements at the home of BTC coordinator, Mr Don Davidson. Grant money was used to give loans to individuals, including a $10,000 loan given to Mr Davidson in the form of a cash cheque drawn from an ATSIC grant account. Mr Don Davidson was one of the founders of the Brisbane Tribal Council. He appeared to have complete control. The directors and employees were almost entirely family members. Most of the problems seem to have occurred in the last five or six years. Mr Davidson died last year after a long and debilitating illness. His eyesight was failing to the extent that he could no longer see the cheques he was signing. In fact, at one stage Mr Davidson wrote to ATSIC claiming he was signing, and had signed, cheques under protest and requested ATSIC assistance with this. Apparently nothing was done.

  The receiver's reports showed that the accounting records were not properly maintained so as to enable true and fair accounts to be prepared. No general ledger was maintained. It would appear that this was a longstanding deficiency as final accounts were prepared by the auditors, Ken and Don Hayward, chartered accountants, in prior years on a spreadsheet basis from the cashbooks.

  In bringing the accounts up to date, the receiver found that a number of large value cash cheques had been written which had no supporting vouchers or documentation—page 32, paragraph 9.3—and indicated that a detailed investigation would be necessary to determine whether funds provided by funding bodies had been misapplied. There can be no question that the receiver was concerned that opportunities existed for fraud but was unable to pursue and resolve the matter because his terms of appointment restrained him.

  Two examples can be quoted: in November 1992 the Commonwealth Department of Health and Community Services provided a grant of approximately $885,000 for the tribal council to purchase and refurbish the Georgina Aged Persons Hostel. The council was permitted to excise and dispose of an unrequired portion of that property and subsequently sold that portion for $138,000. The cash book shows a payment into a fixed deposit account of $100,000 which remains unaccounted for. The receiver's report also lists unsecured creditors. This includes an overpayment of $62,000 from the Queensland Corrective Services Commission for management fees. Why was that paid in advance?

  One of the people involved as a recipient of moneys from the Brisbane Tribal Council was Mr Sugar Ray Robinson. He is an ATSIC commissioner and chairman of the National Aboriginal and Islander Legal Service. Through an active involvement in the affairs of the Brisbane Tribal Council and now as an ATSIC commissioner, Mr Robinson has a fundamental conflict of interest. He must stand aside as an ATSIC commissioner until such time as an independent inquiry has been completed into the Brisbane Tribal Council.

  The role of the auditors, Ken and Don Hayward, chartered accountants, must also be examined. Were the audits conducted in a manner which allowed the auditors to claim accurately that the expenditure of public funds was properly accounted for? Apparently no audit was ever qualified, despite the poor standard of bookkeeping. This is a matter that requires investigation by an independent body such as the Australian Securities Commission. ATSIC itself had both an obligation and the capacity to audit the tribal council. It failed to do so.

  I have no wish to pursue any member in relation to the Brisbane Tribal Council but I am concerned, and I am sure everyone in this parliament is concerned, that public moneys are properly accounted for and that public funds are spent for the purpose for which parliament appropriated them. There is so much vagueness about where the funds of the Brisbane Tribal Council went that there must be an independent inquiry at the highest level.

  I have therefore written to the Auditor-General asking him to undertake an audit of the Brisbane Tribal Council from 1988 to 1994, paying particular reference to the following: first, any improprieties in the administration of funds granted to the Brisbane Tribal Council and associated bodies during the years 1988 to 1994; second, the adequacy of arrangements within ATSIC and its predecessors during the period 1988 to 1994 to account for and acquit accurately funds received by the Brisbane Tribal Council and associated bodies, and the part played by the Office of Evaluation and Audit in ATSIC; third, the adequacy of arrangements within the Department of Health, Housing and Community Services during the period 1988 to 1994 to account for and acquit accurately funds received by the Brisbane Tribal Council and associated bodies; fourth, the adequacy of auditing procedures carried out by Ken and Don Hayward, chartered accountants, into the Brisbane Tribal Council from 1988 to 1992; fifth, whether any person or persons intervened to prevent the proper audit of the accounts of the Brisbane Tribal Council after the company was placed in the hands of the receiver; and, sixth, to ensure that all the points raised by the receiver as being worthy of further investigation are thoroughly investigated.

  I have been researching this matter since May this year. I have in the chamber with me three very voluminous files of the records of the Brisbane Tribal Council. I would have no hesitation in supporting my claim that there needs to be an independent, high-level inquiry into the affairs of the Brisbane Tribal Council.