Shock report into Congress health service


An investigation into the Alice Springs based health organisation Central Australian Aboriginal Congress, which is understood to have an annual budget of around $40m, has found there may be a string of serious flaws in its financial accountability and governance.
The organisation’s principal funding body, the Federal Department of Health and Ageing, called a meeting with Congress members last night to answer their “questions, queries and concerns”.
The Alice Springs News Online sought to attend this meeting but was excluded. However, the News has obtained a letter from the department’s Assistant Secretary Garry Fisk to Congress chairperson Helen Kantawarra, dated  April 23, 2012, which we understand is far more comprehensive in relation to the members’ “questions, queries and concerns” than was the meeting.
An audit commissioned by the department suggests that “in excess of $2m” could potentially be recovered from Congress, says Mr Fisk.
He outlines apparent irregularities with the charging of a 20% administration fee for each project; transfers of funds between projects; the use of a corporate credit card by CEO Stephanie Bell (pictured); unauthorised overseas travel and the failure to return unspent project funds to the department.
Mr Fisk also raises questions about the dealings of Congress with the Central Land Council-controlled Centrecorp and the purpose of large funds invested in a Centrecorp related entity.
Recent changes to the Congress constitution are also of concern, “having a direct impact on the extent to which the organisation might be considered community controlled”.
Mr Fisk describes as a “major concern” the “amounts deducted from the grants for each project as an administrative fee [which] makes it difficult to identify how these funds are used”.
It is a “breach of the funding agreement” to use interest earned for projects other than the one for which the funds were allocated. If the interest is not used for the specific funded project it is repayable to the department.
Using the interest for other purposes makes it difficult to identify, with respect to each project, “all of its income and expenditure”.
The letter deals with occasions where project funds not expended – an amount of $146,000 is identified – were  transferred to the “Core Services budget” instead of being “reallocated back to the relevant projects to be treated as a surplus … and repaid to the Department”.
Mr Fisk says “it is not possible to ensure that the funds … are not being used for expenses specifically excluded in the funding agreement, such as sitting fees, overseas travel or legal expenses, meaning that there may be additional amounts recoverable by the Department”.
Use of a corporate credit card for personal transactions
The letter deals in detail with a corporate credit card in the name of Ms Bell apparently used for “what appear to be non-business purposes”.
“This is a serious matter, particularly if the funds involved were grant funds,” says Mr Fisk.
He says Ms Bell has “acknowledged the problem” and repaid some amounts but “this does not necessarily mitigate the liability involved in the initial misuse of the card”.
The most recent “inappropriate use” of the credit card was in June 2011, “after Congress had introduced a specific policy prohibiting the use of corporate credit cards for personal reasons”.
There were “inconsistencies” in the repayment: the amounts due were recorded as a staff loan which was “a direct breach of the funding agreement,” no interest was charged, Congress apparently failed to take direct action against Ms Bell and the credit limit on the card was not brought in line with Congress policy.
Mr Fisk asks to be advised in detail on what further action Congress is considering in relation to this breach of policy, including reasons and copies of minutes from any board meetings where the matter was discussed.
Value and purpose of investments
Mr Fisk queries a “financial interest” by Congress which transferred $1m to CAAH Nominees in 2005 “but has valued the interest in this entity at only $1000”.
He says the department “is interested in both the current value of Congress’s investment as well as the source of the funds that were transferred in 2005.
“In particular we would be concerned if this funding was transferred from the Core Services budget,” he says and he asks about “the purpose of this investment”.
A Performance Audit of Centrecorp Aboriginal Investment Corporation Pty Ltd by the Office of Evaluation and Audit (Indigenous Programs) in November 2008 describes CAAH Nominees Pty Ltd as “the trustee of a charitable trust associated with the CAAC [Congress].
“Centrecorp hold one share (0.01%) in CAAH Nominees Pty Ltd.”
Says Mr Fisk: “Congress holds two of the seven shares on issue in Centrecorp, a company which [the auditors] understand to hold extensive investments in a range of businesses.
“Again no value is recorded in Congress’s financial accounts against the investment in Centrecorp except for the initial share purchase of $2.
“The rights associated with Congress’s investment in Centrecorp were not clear” to the auditors and Mr Fisk asks for advice in this regard. He notes that the auditors have indicated that a senior Congress staff member “is reported as being a shareholder in Centrecorp and that this was not disclosed in the Congress Conflict of Interest register.”
Among the demands in the letter is an explanation of a transfer of $1.5m to department programs from Core Services “as a result of an earlier misallocation of program expenses”.
Attached to the letter is a list of “other findings”:-
• Changes in the constitution in May 2011 “effectively mean that members of the organisation now have no ability to vote on new directors,” casting doubt on whether the organisation is “community controlled”. The letter asks if these changes were approved by the members and whether they “are consistent with the legislative requirements imposed by the NT Associations Act”.
• A sample check of expenses found that 10% were inadequately documented or transacted.
• Directors and non-directors have been paid sitting fees “which is specifically prohibited”.
• The board approved payments of bonuses to all full time staff in December 2011. There is no provision for such bonuses in either staff employment contracts or the funding agreements.
• “Possible breaches” in relation to the payment of traffic fines and overseas travel.
• Overseas travel expenses apparently not approved by the department included $31,688 for a five member traveling party: “We also understand that the purchase order for this travel, which involved the CEO [Ms Bell] was approved by the CEO.”
• There seemed to be “limited controls in place regarding the use of motor vehicles and the allocation and use of phones and IT equipment”.
• In the purchase and disposal of assets, issues raised were failure to obtain a reasonable number of quotes; poor documentation; failure to advise the department; transfer of assets between projects.
John Elferink (MLA for Port Darwin, CL, at left) raised the Alice Springs News Online report in this morning’s NT Estimate hearings.
The Territory pays about $6m a year to Congress, including $2m for the Safe and Sober campaign.
He asked Health Department officials about the acquittal process: “They defended their process but could not describe it,” says Mr Elferink. “I would be disappointed if the acquittal process were just tick and flick.”
His questions were taken on notice.
Dear Mr Chlanda
In response to your article posted online today at 11:00am:
On Monday 18 June 2012, a meeting between the Board of Directors of Central Australian Aboriginal Congress Inc. and its major funding body, the Commonwealth Department of Health and Ageing (DOHA), was held in Alice Springs.
The meeting was at the request of DOHA, in order to address queries raised during routine auditing undertaken earlier this year.
The contents of the letter obtained by your sources are a matter for DOHA to respond to. The Board of Directors and DOHA have been working in agreement to address the queries raised by the Department.
The following measures have been mutually agreed upon by Congress’ Board and the Department representatives:
• That it is ‘business as usual’ for all Congress services
• That additional support will be put into place through a funds consultant, who will act as an extra level of approval in the administering of Commonwealth funds to program and service delivery
• That an independent organisational review will commence, with support provided at the implementation stage to ensure maximum effectiveness
• That a financial review will also take place as a part of this process
• That there is no concern about the way funding has been used within the organisation at the service delivery level
• That any queries about processes relating to the Board of Directors be raised with the NT Department of Justice, under which Congress is incorporated
These measures have been put into place in order to ensure that as a deliverer of primary health care services, Congress is able to continue to provide these critical services to Aboriginal people across Central Australia.
As a large organisation, additional support at a governance level is welcome to ensure that excellence in service delivery is maintained.
Central Australian Aboriginal Congress is a community-controlled health organisation based in Alice Springs, providing services across Central Australia. In 2010-2011, Congress has provided almost 10,000 unique clients with more than 90,000 episodes of care. Along with primary health and wellbeing services located in Alice Springs, Congress also provides auspiced health services to five regional Central Australian communities – Utju (Areyonga), Santa Teresa, Amoonguna, Mutitjulu and Hermannsberg (Ntaria)
Helen Kantawara
President, Central Australian Aboriginal Congress Inc
UPDATE 14:00 CST June 20, 2012
We asked the NT Department of Justice:-
The auditors say that the changes in May 2011 effectively mean that members cannot vote on new directors. Is that so? If so, is the department satisfied that the changes were approved by the members?
Are the changes consistent with the NT Associations Act?
Micheil Brodie, Executive Director, Licensing, Regulation and Alcohol Strategy replied: “These matters were brought to the Department’s attention in late May.
“The Department is enquiring into the matters raised in accordance with the legislation.
”We will not be making any further comment as enquiries are proceeding.”


  1. I believe it’s imperative that the Administrator being appointed over the next 3 months seeks to include interviews with former (and current) employees so that the process is indeed transparent and open. This will ensure that a clear, open and transparent picture evolves, especially in relation to where practices and protocols are concerned.

  2. Erwin, was it you who informed Alice Springs people about the Sydney Olympic games paid trip for Congress heavies? What amount was that again?


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