Sent to ABC Radio National's Background Briefing, Mon 07-may-2012 via their contact page.
Some editing [and comments].
It isn't on the breath taking scale of the HSU drama, but here's a documented tale of 20 years of rorting the system.
You absolutely know that if there's one, then there's more... [But how can we find those?]
You'd think a largish organisation who's Patrons were Dick Smith and Phillip Adams would have a high degree of integrity, but the opposite is the case...
Their website proudly proclaims "We have 4000 members", yet their 2011 Association Return says 16 (sixteen).
Ask one of the rank-and-file and you'll hear "you become a member by subscribing to the magazine", only you don't...
Why is this so?? Apparently that's not a question Sceptics ask...
There wouldn't appear to be much money at stake, barely $150,000/year, but "Wait, there's more".
The "inner circle" control a Foundation that started at ~$1.5M in 1996 and has had further bequests added since.
Then you have the internecine wars, the trusty sidekick who not only gets shafted but sued.
The Treasurer who's 'a Treasure' but who suddenly is not there, but stays on for another 6 years as Public Officer.
How could they get away without submitted Annual Returns for 10 years?
Especially just after they had been flagged as being tardy (3 years late).
Clearly the NSW Associations Registrar stopped doing their job in all aspects after 2000 - the Act stipulates that any Association that doesn't file returns are deregistered after 3 years... Not the 10 years that was allowed. [Note: I found the Registry hard-working, informed and efficient. Governments traditionally strip 'resources' from these minor agencies. The story should be about why the Registry was eviscerated, not anything else.]
The Registry [who administer the Act and know it rules inside-out. The Story is about problems with the Act, not the people in the office] sees no problem with not having a means for people to apply for membership,
nor do they consider selling the majority of magazine subscriptions to non-members to be "Commercial Activity", nor do they think that publishing a misleading and deceptive webpage for the last 10 years [How to Join? just subscribe] is wrong.
When the Association registration was cancelled and not re-instated for the better part of a year, what did they [the notional Association] do?
Kept trading without a word to subscribers in the magazine.
I've yet to find out what the ATO thinks of people quoting and possibly using an ABN for a non-existent entity. [Update: have checked with ATO. Deregistered Companies and Associations can maintain active ABN's. As long as Name+ABN are correct and GST is remitted, "it's all good" for them. Fair Trading and ASIC may have a different position...]
They still fielded Credit Card payments, which implies Bank Accounts, and they still paid their sole employee his $60,000 that year...
Is this fraud? I've no idea... [but am checking into it]
But the Registry are (very) nice, helpful people working very hard to respond to their constant workload.
There's a failure up the management chain that has allowed this on-going bad behaviour.
But what the heck.
We started as a Convict Settlement, it's to be expected that a little gaming the system would happen and if it doesn't hurt anyone, why try to prevent it, let alone catch it?