RSL NSW President Update: 17 May 2018
Fellow members of the League,
For the past year, RSL NSW has been working with the ACNC, as well as other state and federal regulators, the NSW Police, and our members to identify and rectify the problems within our complex and important institution. Enormous progress towards repairing the RSL has been made, but there is much more to be done. We welcome announcements within the last 48 hours by the federal charities regulator and the NSW State government to implement measures which will make RSL NSW more accountable to our members, the public, and the veterans and their families who rely on us.
The changes announced this week will help ensure that what happened in this league in the last 10 years can never happen again. These changes will also provide RSL NSW with an opportunity to make a clean break from the ineptitude, cronyism, and leadership failures of recent years. RSL NSW’s absolute focus now must be on our charitable mission – making sure veterans and their families are respected, supported and remembered.
These directed changes will impact every member of the League. State Council will need to work through the impact of the changes with member delegates at our Annual State Congress to be held in Albury next week.
1. Federal Regulatory Changes – The Australian Charities and Not-for-Profit Commission (ACNC)
The ACNC’s investigation, which started in 2016, was prompted by concerns relating to the misuse of charitable funds as highlighted in the Bergin Inquiry. It focused on RSL NSW’s governance in relation to financial management and conflicts of interest, particularly the actions of former State Councils. This week the ACNC issued an Enforceable Undertaking to RSL NSW which mandates certain actions to be taken by our charity in order to ensure good governance. While this Undertaking directly impacts State Branch, it does have implications for sub-Branches. The ACNC Enforceable Undertaking summary is attached for your reference. Many of the actions detailed in the Undertaking have already been implemented and RSL NSW is cooperating fully with the ACNC. Failure to comply with the Enforceable Undertaking would risk losing RSL NSW’s charitable status. The ACNC’s Deputy Commissioner will address delegates on these issues at the Annual State Congress next week.
2. NSW State Legislative and Regulatory Changes – Amendments to the RSL NSW Act
RSL NSW acknowledges the commitment of both the NSW government and opposition to fix issues identified within the League. Today the NSW Minister for Veterans Affairs, David Elliot, announced legislative changes to the RSL NSW Act. The State Government intends these changes will strengthen the governance of RSL NSW and ensure it is accountable to members and the public. The RSL NSW Act of the NSW Parliament incorporates RSL NSW as a statutory corporation, enabling it to exist as a legal entity. The State Government changes to the RSL NSW Act will:
- Introduce a representative voting system allowing every member to have one vote for RSL NSW leaders. This will replace the current system whereby leaders are elected by an electoral college system of sub-Branches
- Clarify that the leadership of RSL NSW is vested in a board of directors, rather than a State Council, and prescribe the duties of those directors
- Reduce the size of the board (from 14 currently) to a minimum of three and maximum of ten directors in accordance with modern practice
- Establish positions for at least one and up to two independent directors on the RSL NSW board to strengthen corporate governance
- Mandate that board directors must disclose any financial and personal interests to reduce the risk of conflicts of interest issues arising
- Enable and regulate appropriate, independently determined remuneration of directors so that RSL NSW can attract the best possible leaders
- Require RSL NSW to table an annual report to the NSW Parliament to maximise transparency and accountability
These directed changes are a seismic shift to the way RSL NSW has operated for decades and will 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. 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 of the state government and opposition will address RSL NSW delegates at State Congress next week.
State Council understands members will have many questions about these changes. We are seeking to confirm the detail you need and will re-arrange the schedule for State Congress to enable more time for questions to be asked of State Council and answered. We have a large number of members attending next week’s Congress and look forward to welcoming you for what will be an important meeting.
Background Information – Federal Government Charity Regulator
The ACNC investigation into RSL NSW commenced in 2016. The investigation was prompted by concerns that RSL NSW former State President, Don Rowe, had misused charitable funds. Furthermore, the ACNC held concerns that several members of the RSL NSW’s State Council (RSL NSW’s governing body) were receiving consultancy payments from an entity controlled by RSL NSW, RSL LifeCare Limited, which placed them in a conflict of interest. The ACNC’s investigation focussed on RSL NSW’s governance in relation to financial management and conflicts of interest.
When the Bergin Inquiry commenced in August 2017, the ACNC undertook to await the outcome of the Bergin Inquiry before finalising its investigation.
In February 2018 the Bergin Report was released.
In November 2017, RSL NSW proposed to the ACNC that it would be prepared to offer to enter an Enforceable Undertaking to address the ACNC concerns and in March 2018, following the conclusion of the Bergin Inquiry, RSL NSW proposed a form of undertakings for the ACNC’s consideration. The ACNC has accepted RSL NSW’s undertakings.
ACNC’s role as Australia’s charity regulator and RSL NSW
RSL NSW has been registered as a charity with The Australian Charities and Not-for-profits Commission (ACNC) since 3 December 2012 when the ACNC commenced. ACNC is the independent federal regulator of charities. RSL NSW’s registration with the ACNC gives the organisation our charitable status and allows us to access Commonwealth charity tax concessions and benefits through the Australian Taxation Office.
RSL NSW is registered with the ACNC under the charitable category of advancing social or public welfare. This is referred to as the charity subtype and the objects of RSL NSW are listed with the ACNC as promoting the interests and welfare of current and former Australian Defence Force members and their families and provides assistance and other relevant services.
All charities registered with ACNC must meet the governance standards under the ACNC Act to remain registered with the ACNC. Revocation of charity status removes an organisation’s entitlement to access Commonwealth charity tax concessions.
An Enforceable Undertaking is an offer made by a Charity to the ACNC that the Charity will undertake certain steps to ensure that it addresses issues of concern. If the ACNC accepts the Charity’s offer, the Undertaking is signed by both parties and commit the charity to carrying out the agreed steps.