Checks and Balances The NSCA Story
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nsca.org.au 1800 655 510 Consulting Auditing Training Membership Events Checks and Balances The NSCA Story August 2012
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Checks and Balances The NSCA Story. August 2012. Walking In. $600K Loss YTD (Consolidated) Business Unit $300K of that loss Three employed resources Reputational issues Culture issues. History. How it got to this. The Reckoning. 1988 after 3 years of qualified audit reports - PowerPoint PPT Presentation
Transcript of Checks and Balances The NSCA Story
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
