RSL Charities Face Reform and Compliance Action

The New South Wales government has announced it will take action to reform RSL NSW, as the Australian Charities and Not-for-profits Commission takes compliance action against RSL NSW and RSL LifeCare.

The RSL in New South Wales has been plagued by scandal in recent years, with a NSW state government inquiry revealing that former NSW RSL president Don Rowe spent $465,376 on his RSL credit card between 2009 and 2014.

The ACNC has been conducting its own investigation into the RSL NSW and RSL LifeCare since 2016.

On Tuesday, ACNC assistant commissioner David Locke announced that the regulator had entered into enforceable undertakings with both charities to address significant governance failures.

“Over the last nine months we have made public statements regarding compliance action against registered charities under the RSL umbrella,” Locke said.

“[This] announcement of enforceable undertakings with both RSL NSW and RSL LifeCare follows lengthy, in-depth, investigations into the activities and operations of the two charities.

“We commenced our investigations into these charities in 2016, and they remained open to ensure the findings of the NSW State government’s Bergin Inquiry were taken into account.”

Locke confirmed that the investigations into both charities highlighted significant governance issues.

“Governance failures occurred at the highest levels of these charities,” he said.

“We have presented our concerns to the charities, and have worked with them to set out the measures we feel they must take. To their credit, both charities have cooperated fully with the ACNC and have acknowledged their failings.

“However, both charities must now demonstrate improved governance to remain registered with the ACNC. These enforceable undertakings outline exactly what RSL NSW and RSL LifeCare need to do, and by when.”

As well as noting the misuse of charity funds by Rowe, the ACNC’s investigation also identified issues regarding the charity’s former state council’s failure to properly investigate the misuse of funds or to report the allegations to police.

The former state council’s misleading statements regarding the circumstances of Rowe’s resignation were also highlighted as a concern.

As part of the enforceable undertaking, RSL NSW has committed to 15 measures in order to improve their governance, transparency, and financial management.

The ACNC’s investigation into RSL LifeCare uncovered issues regarding the charity’s directors approving and receiving remuneration and allowances, which were in breach of their obligations to the charity.

The charity’s funds were also found to have been used to pay for directors and staff to attend Liberal Party-linked functions, “without consideration as to whether attendance was compatible with RSL LifeCare’s charitable purposes”.

The ACNC also uncovered non-compliance with the charity’s fundraising authority under the NSW state Fundraising Act.

RSL LifeCare board chairman Andrew Condon, said the charity had been working intensely on improving its governance and had already rectified many of the weaknesses identified in the investigation.

“The organisation has worked cooperatively with the ACNC in prioritising further actions. These are contained in the enforceable undertakings within the ACNC report. RSL LifeCare accepts these undertakings,” Condon said.

“Most of the required actions have been completed and we are now entering the monitoring and reporting phase that is required by ACNC. The initial report is expected for completion within 60 days, as a small number of policies require further review or development.

“The board has complete confidence that the company will now maintain the required standard.”

During the three-year enforceable undertakings period, RSL NSW and RSL LifeCare must provide quarterly reports to the ACNC on their agreement compliance during the first 12 months, and then provide annual reports for the remaining two years.

This ACNC compliance action comes as the NSW Veterans Affairs Minister David Elliott proposed legislative action to reform the NSW RSL.

This cabinet-backed proposal would ensure the direct election of the board of directors by members rather than sub-branches, require the charity to table its annual report to the NSW Parliament, and would also allow directors to be paid.

RSL NSW President James Brown said these directed changes were a seismic shift to the way the charity has operated for decades and would require constitutional changes to be approved by RSL NSW members.

“These issues will be worked through with members at next week’s state congress and any constitutional change will be dependent on approval by members,” Brown said.

“The change to representative voting, practically, will take some time to implement.

“RSL NSW’s state council supports changes to the RSL NSW Act to make the league more transparent and accountable, and to ensure the governance failures of the recent past cannot be allowed to happen again.”

Representatives from the NSW government and opposition will address RSL NSW delegates at their state congress next week.