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Wednesday, 4 May 1994
Page: 265

(Question No. 1218)

Senator O'Chee asked the Minister representing the Minister for Aboriginal and Torres Strait Islander Affairs, upon notice, on 15 March 1994:

  (1) Has the QED Aboriginal and Torres Strait Islander Corporation for Legal Aid Services been the recipient of funding from the department or the Aboriginal and Torres Strait Islander Commission (ATSIC) during this, or any of the proceeding 3 financial years: if so, how much was received by the corporation in each of those years, and for what purpose.

  (2) Has the corporation since become insolvent and been placed under administration; if so, who is the liquidator or receiver, as is appropriate.

  (3) What audits or financial investigations have been conducted into the corporation by or on behalf of ATSIC or the department and what are the details of any such investigation.

  (4) What is the shortfall to creditors of the corporation.

  (5) Has any of the directors or senior managers of the corporation applied to ATSIC for the payment of termination benefits otherwise payable by the corporation.

  (6) Is it the case that directors and senior managers of the corporation are limited in the amount of termination and other benefits they are entitled to recover as ordinary unsecured creditors of the corporation by virtue of their being prescribed persons under the corporations law.

Senator Collins —The Aboriginal and Torres Strait Islander Commission has provided the following information in response to the honourable senator's question:

  (1) The QED Legal Service received ATSIC funding in the following financial years:

  1990/91—$672,391—operations costs

  1990/91—$3,045—computer training

  1990/91—$3,084—crime prevention forum

  1991/92—$419,536—operations costs

  (2) On 16 September 1993, by order of the Federal Court in Brisbane, the corporation was placed under the administration of appointed liquidators, Mr Ivor Worrell, of Worrell Whitehill, Chartered Accountants, Brisbane.

  (3) An independent auditor was commissioned by ATSIC early in 1992 to establish the financial status of the corporation. The investigation revealed that the organisation was in financial disarray, with no evidence of an effective accounting system. Major deficiencies were identified in respect of the 1990/91 records, upon which ATSIC decided to cease funding the legal service.

  (4) The shortfall to creditors is estimated at $130,000. This figure is subject to validation by the liquidator.

  (5) Three employees, the senior office manager, field officer and receptionist of the legal service, applied for ATSIC funding to the Townsville regional Council for the payment of termination entitlements and other benefits. ATSIC has declined to pay termination entitlements or other benefits to these persons.

  (6) The liquidator has stated:

  "Directors may claim termination and other benefits in full as unsecured creditors under the Priority Section of the Corporations Law—Section 556. They are only able to receive $2,000 in respect of wages and $1,500 in respect of remuneration pay in priority. The balance is then claimed as unsecured creditor. Senior Managers as per directors are also able to claim in full as per directors but with no priority restrictions."