Embed Size (px)
Citation preview
nsca.org.au
1800 655 510Consulting Auditing Training Membership Events
Checks and BalancesThe NSCA Story
August 2012
nsca.org.au
1800 655 510
Walking In
Page Number 2
• $600K Loss YTD (Consolidated)
• Business Unit $300K of that loss
• Three employed resources
• Reputational issues
• Culture issues
nsca.org.au
1800 655 510
History
Page Number 3
Established 1927
Purpose: Promote Safety Awareness particularly in Industrial Safety
Activities: Industrial safety, Road safety, Sea safety, insurance, trade unions, city councils, federal departments
Make Up: Non-Government / Not-for-profit
Registration: Company Limited by Guarantee
Exception: To omit ‘Limited’ from name
http://www.catchme.net.au/synopsis.html (Trailer 2)
nsca.org.au
1800 655 510
How it got to this
Page Number 4
nsca.org.au
1800 655 510
The Reckoning
Page Number 5
• 1988 after 3 years of qualified audit reports
• Board never knew qualified
• Major Trade Debtors and ‘Containerized Safety Equipment’
• Hopelessly insolvent
• Banks - $300M in unrecoverable loans
http://www.catchme.net.au/synopsis.html (Trailer 3)
nsca.org.au
1800 655 510
John Fredrich
Page Number 6
• Not- Australian
• No record of entry into Australia
• No Birth certificate
• Wanted in Germany for embezzlement
• Security clearance to every Australian Defence site
http://www.catchme.net.au/synopsis.html (Trailer 1)
nsca.org.au
1800 655 510
Aftermath
Page Number 7
nsca.org.au
1800 655 510
How could this happen
Page Number 8
• 4x issues impacting companies limited by guarantee
– Halo Effect
– Precedential cloning
– Statutory rigor mortis
– Inappropriate models of regulation
nsca.org.au
1800 655 510
Halo Effect
Page Number 9
• NFPs – very nature of what they do
• Ideals of society – Compassion, Sympathy etc (Good Fundraisers)
• Can cause organisations to get lapse (27 Banks) **
• Reduced need for customary caution
• Spread to regulators and policy makers
• Not for personal gain
nsca.org.au
1800 655 510
Precedential Cloning
Page Number 10
• Meticulous transfer of British law into Australia
• No context considered
• The Companies Act 1863
• 1863 adoption in Queensland States
• Allowed for ‘Limited’ to be omitted
• Opened ability for other states to adopt
nsca.org.au
1800 655 510
Statutory Rigor Mortis
Page Number 11
• Law and reform enters suspended animation
– Judicial – demonstrated by definition of charity
– Statutory – underdevelopment of company limited by guarantee
• Fear within Australia of antagonizing NFP/Charity (Halo)
nsca.org.au
1800 655 510
Poor Models of Regulation
Page Number 12
• For-profit regulation inappropriate for NFP
• Limited buying power
• Regulator focus on large companies
• Halo affect
nsca.org.au
1800 655 510
Industry Reform
Page Number 13
• Australian Charities & Not-for-profit Commission
– Regulate Charity/NFP sector more closely
– Annual Reporting
– Assist entities to meet their obligations
– Educate, Guide and monitor compliance
– Enforce where necessary
nsca.org.au
1800 655 510
What can you do?
Page Number 14
• Conduct a stress test
– Ask for Annual Accounts
– Ask questions and creditors
– Analyse Cashflow
– Determine level of borrowings and ability to repay
– How are sales and production trending
All available in the annual report
MONITOR
nsca.org.au
1800 655 510
Walking In
Page Number 15
• $600K Loss YTD
• Business Unit $300K of that loss
• Three employed resources
• Reputational issues
• Culture issues
