Regulator Reaches Governance Agreement with Embattled RSL SA

The national regulator has entered into a compliance agreement with the new board of the Returned Services League (RSL) South Australia following an investigation into the charity’s operations which uncovered “serious governance and financial management concerns”.

The Australian Charities and Not-for-profits Commission (ACNC) investigation, which began in early 2017, found that RSL SA failed to ensure its board:

• took reasonable steps to ensure it did not allow the charity to operate while insolvent;
• acted in good faith and in the best interests of the charity;
• disclosed perceived, or actual, conflicts of interest;
• managed the charity’s financial affairs responsibly; and
• notified the ACNC of changes as required under the ACNC Act.

The RSL SA was placed into administration in April 2017 after a number of board resignations and investigations into the state of its finances.

ACNC assistant commissioner David Locke said the ACNC’s investigation into RSL SA “uncovered major governance and financial management concerns”.

“As the charity regulator, our priority is to ensure that charities are well-run and accountable, both to their members and the public,” Locke said.

Locke said the new president Bronson Horan and his board had acknowledged that the charity “failed to comply with the ACNC Act and governance standards”.

“By entering into this compliance agreement, RSL SA’s new board have formalised their commitment to resolving the concerns raised by the ACNC,” he said.

The compliance agreement requires the charity to:

• produce strategic planning, business planning and budgeting documents covering the short, medium and longer term;
• appoint board members external to RSL SA with specialist skills and experience to help the charity’s compliance and business practices;
• provide better training and induction for board members;
• maintain a Conflict of Interest Register and Property and Asset Register, as well as establish policies covering conflicts of interest, fraud prevention and allowances for those on the board; and
• report to the ACNC in a timely and appropriate manner.

Locke said that RSL SA had 12 months to complete all actions outlined in the agreement.

“This compliance agreement sets out the ACNC’s concerns, the action we expect RSL SA to take, and the timeframe,” Locke said.

“The onus is now on the charity’s board to ensure that the conditions of the compliance agreement are met.

“The ACNC will be monitoring the board’s compliance through monthly progress reports, and were there to be any failure to comply we would consider taking further enforcement action.

“If the ACNC were to take further regulatory action, this could include revocation of charity status, which would strip the charity of its entitlement to Commonwealth charity tax concessions.”

A list of all ACNC compliance decisions can be found here.