Street Swags Enters Voluntary Agreement With ACNC Over Finances

After the controversial founder of Street Swags resigned over alleged funds mismanagement earlier this year, the organisation has voluntarily agreed to work with the charity regulator to get back on track.

The award-winning Queensland charity entered into a voluntarily undertaking with the Australian Charities and Not-for-profits Commission (ACNC) on Thursday, after an investigation found a lack of financial controls and conflict of interest policies.

Street Swags, which provides lightweight and waterproof sleeping bags for the homeless, has agreed to address these concerns.

In May, Jean Madden, who started Street Swags in 2005, resigned from her roles as managing director and director of the board.

The former Queensland Young Australian of the Year allegedly gave her partner a half-a-million dollar contract and spent $170,000 of the charity’s money.

Street Swags director Paul Daly said the board was pleased to work with the ACNC in meeting its governance requirements.

A voluntary undertaking is an agreement between the ACNC and a charity to implement a number of measures in order to comply with its obligations under the ACNC Act and Regulation.

“We have no concerns about it, in fact we welcome the ACNC’s involvement,” Daly told Pro Bono Australia News.

“There’s no concerns from the boards point of view.”

He said he hoped that the announcement would reverse any damage to Street Swags’ reputation following the controversy with Madden.

“I think it will give people comfort that Street Swags is staying true to its charter in terms of what it does in the community,” he said.

“So from that perspective we’re happy for [the announcement]… it will give… our donor and supporters and volunteers the comfort and security that funds are being used for what they were intended.”

ACNC assistant commissioner David Locke said a voluntary undertaking was appropriate when a charity had fully cooperated with an ACNC investigation and had made obvious attempts to comply with their regulations.

“Where appropriate the ACNC works with charities to address concerns and to ensure charities understand and comply with their obligations,” Locke said.

“Our investigation found a lack of financial controls and conflict of interest policies.

“Street Swags has fully cooperated with our investigation. By entering this voluntary undertaking, Street Swags has made a commitment to increased accountability and transparency within the charity.”

According to the voluntary undertaking, Street Swags has until 24 February 2017 to implement both financial controls and procedures for managing conflicts of interest, as well as produce a 12-month strategy.

Daly said he was “extremely confident” that the charity could meet the ACNC’s requirements.

“We’ve already taken steps to meet those anyway, as part of our review that we undertook internally. So we can’t see any reason that we would fall short,” he said.

“In fact I think we will be, as part of this process, we’ll actually be in a far better position than we’ve ever been in before.

“I can’t see any reason that we or the ACNC will have any concerns, we’re working cooperatively in meeting those requirements.”

He said getting the charity back on track had been “a difficult road”.

“We have a responsibility to not only our donors… but to all charitable organisations that we pursue any wrongdoing, so we’ve got to go through that process, which distracts us from our core activity, which is supporting the homeless,” he said.

“But in saying that we’ve distributed more swags in the last couple of months than the middle of last year, so we’re out there actively doing our job each day.”

Locke said the the ACNC would continue to monitor Street Swags’ activities closely.

“If the conditions of this voluntary undertaking are breached, the ACNC will take further action,” he said.

“The ACNC has a range of formal powers it can use, including warnings, directions, removing responsible persons, enforceable undertakings and revocation.”

Madden is facing civil action over the handling of the charity’s money. Street Swags is required to provide the ACNC with any related court decisions or findings relating to the matter.

In July, Madden was also charged by Queensland Police over an alleged attack on the organisation’s website and emails.