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Red Cross apologises for adding to suffering of Bali victims by perceived mismanagement of funds; father of Bali bombing victim criticises Red Cross.

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Friday 8 August 2003

Red Cross apologises for adding to suffering of Bali victims by perceived mismanagement of funds; father of Bali bombing victim criticises Red Cross

MA RK COLVIN: For three months, the Australian Red Cross has been criticised by victims of the Bali bombing for its handling of almost $15 million in donations to its assistance fund. 


Today, an independent audit cleared the Red Cross of any allegation of incompetence, fraud, or misusing the funds. But it also found that the Red Cross failed to communicate with the public about how it was managing their money. 


Ben Knight reports. 


BEN KNIGHT: In the wave of outrage and sympathy that followed the bombings, $13.5 million was raised by the Red Cross in just four weeks. In May this year, the total stood at 14.8 million dollars. But it was also in May this year that the first concerns were raised about how the Red Cross had managed the fund. 


Complaints about delays in providing prosthetic limbs led to more questions and criticism. Why had so little of the total, less than a third, been handed out? Why was it not all going directly to the victims? 


Why were there inconsistencies in deciding who should get help? Why was so much being spent on administration, rather than where it was needed? And most of all, why wasn't the Red Cross doing what it promised the Australian people it would? 


Back in May, the Red Cross tried to respond, but with little success. So, five days after the first critics spoke, the organisation commissioned Price Waterhouse Coopers to audit the Bali assistance fund, and the Red Cross's management of it. Today, that report was delivered. And on the whole, it tells a story the Red Cross was happy to hear.  


But national Vice Chairman, Brian Ward, conceded there had been mistakes. 


BRIAN WARD: If we have added to the sufferings of Bali victims, we are extremely upset and we regret that, but on balance I think we will be judged in the fullness of time of being a compassionate organisation that lived up to its compassionate mandate. 


We certainly believe that's what we've done and I think that one of the difficulties with this whole issue is that the wonderful work that we've done and the wonderful support that we've provided, sometimes gets pushed to one side and I hope that that is not true and I hope that if it is true it's not a lasting thing, because I know we've helped a lot of people. 


BEN KNIGHT: The report found that there was no fraud, no misuse of funds, and that the staff and their systems worked remarkably well under enormous pressure. The speed at which it all happened, the desire of a whole nation to contribute, and the demands of the media, created a situation which would have stretched the resources of any organisation. 


The report found that criticism of the Red Cross for not funding prosthetic limbs was unfounded, because it was the Government's responsibility. But the report also talked about the benefit of hindsight, mostly about how the Red Cross communicated with the public. 


For example, four days after the bombing, the Red Cross issued a media release promising that 90 per cent of the money would be spent on direct assistance to the victims.  


The report found that when read out of context this could have been misleading. And from then on the Red Cross didn't fully explain to the public how it was spending their money. 


That includes the decision to use some of the funds for disaster planning the Darwin Hospital, and for research into spray-on skin project, was - however worthy - not in strict accordance with the stated objective of helping Australian victims and their families. 


One of those was Barry Hugenin, whose daughter Lynley was badly burned in the attack. He was there for today's announcement. 


BRIAN HUGENIN: I felt it was fairly soft. I'm pretty pleased to hear that nothing in the way of fraud or mismanagement of the funds came out of the report, but I think it failed to answer quite a number of questions and the sorts of questions being the fact that there's only $5.4 million so far gone to victims, out of $14.8 million, that's just over a third and it's ten months on, and my feeling is that that's a little slow. 


MARK COLVIN: Barry Hugenin, father of Bali bombing victim Lynley Hugenin.