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HomeIssue 26CAAMA bosses "dismiss" grave concerns about finance

CAAMA bosses “dismiss” grave concerns about finance

By ERWIN CHLANDA

Allegations of theft heard in the Alice Springs Local Court are casting light on the operations of the mostly taxpayer funded Central Australian Aboriginal Media Association (CAAMA), said to be one of nation’s oldest Indigenous media companies.

A former senior employee is accused of stealing from CAAMA multi-media equipment worth more than $130,000 between November 2011 and June 2020.

During that period the ex-employee, Robert Steven Mitchell, is also alleged to have obtained by deception nearly $34,000, the court was told last week.

It will now decide whether Mr Mitchell must stand trial in the Supreme Court.

The offences coincided with massive financial losses and with a time when some 200 performers did not receive royalties they were owed.

Special administrators appointed by the Office of the Registrar of Indigenous Corporations (ORIC) were running the company between March 2020 and this month.

For more than three years prior to statutory administration the organisation’s CEO was Karl Hampton, a former Labor MLA. He had promoted Mr Mitchell, who had been with the company since 2011, to General Manager.

Mr Hampton (pictured with former NT Labor Chief Minister Paul Henderson, at left in the photo) is also a former CAAMA chairman. He left CAAMA when the administrators took over after being involved in the association for 13 years.

The alleged thefts came to light when staff were trying to locate equipment that had been bought but could not be traced to “jobs” where it was meant to be used.

Much of the evidence was contained in statutory declarations handed up to Judge Meredith Huntingford and not as yet available to the public.

But cross-examination, mostly by defence counsel John McBride (for Mr Mitchell) told much of the story.

Record Label Manager Laurel Jane May joined the company in February last year when Mr Mitchell was still the General Manager.

Ms May told the court she had brought to Mr Hampton’s attention that CAAMA appeared to have received no grant funding in December 2019 which was meant to cover until July 2020.

“I have been asking where the money was and how I was supposed to do my job to budget when there was no budget,” Ms May said.

And with respect to further funding “the financials weren’t right. There was something seriously wrong”.

One of the problems was paying the artists, the Aboriginal musicians “who are supposed to get royalty money from sales”.

Ms May also raised her concerns in a meeting with senior CAAMA staff including “Jennifer Howard who was the CEO at the time”.

There were purchases of equipment from a store in Germany, Ms May told the court.

Using internal codes “I had to find out where [each] piece of equipment was,” namely at what job.

Several items could not be found at jobs to which the items had been assigned.

“After I printed all the invoices off … point three [in one of her written statements] happened.

“I attempted log in again [but] the password had been changed.

“I emailed the organisation asking why the password had been changed, and they said Rob Mitchell has contacted them.”

McBRIDE: This is following his departure from the organisation?

MAY: Absolutely.

Mr McBride asked Ms May whether Mr Mitchell had acted without authority.

MAY: Absolutely. He should not have accessed the accounts. He no longer worked there.

McBRIDE: You were, and I take it, are still unaware whether he has any personal account with that music store in Germany.

MAY: I am not aware of any personal account. All those items that were … purchased on CAAMA credit cards. There was a company account with a supplier. If he [Mr Mitchell] has a personal account with a supplier that’s his business. But the items that were purchased on the CAAMA account were purchased with CAAMA credit cards.

McBRIDE: And paid for.

MAY: Paid for by CAAMA.

McBRIDE: And used variously – you don’t know.

MAY: Well, they were not in the jobs they were supposed to be at and then they were found at [Mr Mitchell’s] house.

Ms May said the police did the rest of the investigation.

She said she had raised her concerns with financial issues at a meeting attended by Mr Mitchell, by the Finance Manager, two other senior officers, “my cultural support Warren H Williams” and Jennifer Howard “who was the CEO at the time.

“I was gravely concerned about the financial situation.”

Her concerns were “dismissed,” Ms May told the court.

Mr McBride questioned Mr Hampton extensively about CAAMA management issues.

McBRIDE: You had an intimate knowledge of CAAMA Media … as chairman and as CEO for four years.

HAMPTON: Correct.

McBRIDE: What was the number of staff under your watch?

HAMPTON: I could say a figure but it might not be correct.

McBRIDE: A guesstimate, if you can?

HAMPTON: 39?

CAAMA runs 12 remote studios of RIBS – Remote Indigenous Broadcasting Services – broadcasting in local languages, as well as a narrowcast service. Money comes from the former Department of Prime Minister and Cabinet (now the National Indigenous Australians Agency). Mr McBride asked for a ball park figure of receipts from the department.

HAMPTON: Look, again, I can’t give you an accurate figure.

McBRIDE: In millions?

HAMPTON: Maybe a million? 1.5 million a year [plus] Australia Council of the Arts, they funded CAAMA Music. Majority of that was for funding positions.

McBRIDE: To summarise, the majority was government funded?

HAMPTON: Correct.

McBRIDE: As CEO did you endeavour to source any other income?

HAMPTON: Yeh. Absolutely. I pursued philanthropic organisations to provide in-kind type of services, smaller grants through CBF … Community Benefit Foundation … CBAA Community Broadcasting Australia … smaller funding through NT Government agencies, Community Benefit Fund funded small one-off type projects. Then obviously there was funding through festivals, holding events.

Mr Hampton said bringing in money was urgent “because when I got into CAAMA there were some financial issues already”.

Mr Hampton (pictured) said in reply to a question from Mr McBride that “division heads” (about seven persons) made the decisions about money earning projects and not all details of decisions “filtered up” to him: “The board would also have a share in the decision making.”

McBRIDE: Would you be able to put a percentage of the funding that came from government and government related sources, taxpayer sources as opposed to self generated ones?

HAMPTON: Would that be over a three year period … I don’t quite understand what you are trying …

McBRIDE: Would 90% of your income be derived from government?

HAMPTON: Probably 80%, I’d say.

McBRIDE: Did you analyse that as the CEO? To see how more income could be generated?

HAMPTON: With my division heads and CFI I would.

McBRIDE: [You] promoted Mr Mitchell to General Manager.

HAMPTON: Correct.

McBRIDE: You obviously thought of him very well at that time?

HAMPTON: Correct.

McBRIDE: With a corresponding increase in salary and salary package?

HAMPTON: Correct.

McBRIDE: You were the person where the buck stopped?

HAMPTON: Correct.

McBRIDE: If there was anything that was looking a bit unusual in terms of either a request for an account to be paid or an acquittal of an invoice, it would come to you.

HAMPTON: Correct.

Mr McBride asked how much the corporation was in debt at the end of Mr Hampton’s term as the CEO and when the special administrator was appointed.

HAMPTON: Again, that’s a year and a half ago. Given the seriousness of the question I would not want to put an exact figure on it.

He said the figure would be available to the public. There were debts before his time, including royalties to artists.

Mr McBride put to Mr Hampton that at the time of ORIC’s intervention CAAMA had been receiving about $4.1m in revenue of which 63% was direct grant funding.

In 2019/20, when Mr Hampton was CEO, CAAMA had accumulated a financial loss of $1m. Do you disagree what I have just read to you?

HAMPTON: Correct.

McBRIDE: It wasn’t a steady ship?

HAMPTON: Correct … The three years I was there [as the CEO] we had our audits done. The last audit did return a small profit for the organisation … The grant turnover was significant … There has been no growth in the Aboriginal media sector in the last 20 years through grants. Those grants have not grown. The challenges of delivering media to remote communities is significant and has been increasing every year to keep up with technology and the geographical locations of those studios, as well as staff wages and awards.

Asked whether anything had raised alarms about Mr Mitchell’s purchasing, Mr Hampton gave the acquisition of a drum set as an example.

He had disallowed the purchase but “he believed” it had gone ahead anyway.

Was that the only time?

“Smaller red flags” were around “but it was really difficult with the inventory system asset register keeping track of depreciation and lots of smaller [purchases]”.

He had called Mr Mitchell in on several occasions to query purchases.

McBRIDE: Nothing got through the system by way of expenditure or income without going through the organisation’s financial division and you.

HAMPTON: Correct.

PHOTO at top: CAAMA promotional video on YouTube.

 

UPDATE 10.45am

Ms May has contacted the Alice Springs News. She pointed out that she meant to say the meeting at which she expressed concern about finances, Jennifer Howard attended as the chair of the board, not the CEO. Ms May says she was nervous when giving evidence, and she will update the court.

1 COMMENT

  1. Every business (funded by taxpayers) must have their books examined annually and cease operation if unprofitable.

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