Most people aren’t aware of it, but one of the tricks to reading the abridged annual reports of a community service organisation or charity is turn straight to the back of the report and have a quick Captain Cook at the Auditor’s Statement.
There one should pay particular attention to any qualifications to the audit report that are expressed by the person or company checking the books, because these people in suits with calculators in their hands are members of the world’s second most conservative profession – that of High Court Judge being the first – and unless they are way out there on the perimeter and addicted to ice, they won’t lie or conceal material facts about the finances they’ve just cast their eye over, because it’s not in their DNA.
I applied this method to the Bravehearts books just last week as matter of coincidence, and what I found surprised me, because the discovery was that there are between 1.5 and 2 million dollars in donations being received by Bravehearts each year that the organisation is neither account to anyone for nor explain.
The only thing the finance folk at the organisation need to do is write down a number – any number, but preferably the correct one – and the auditor will simply take the figure as read without any examination whatsoever and then declare correct weight on the financials for the year, with qualifications.
Up to 2 million dollars a year in kindly given cash, and all that management need by way of records or transaction reports or receipts is ……nothing. A big fat zero. The Bravehearts Treasurer simply has to write a number down and sign on the line to say that the figure is true and then that’s it, end of section. We believe your word. It’s only nearly 2 million bucks, what possible reason might you have to lie?
Um, 2 million of them.
You would have to be f*cking kidding wouldn’t you?
Now we are not suggesting for a second that anyone is skimming, but by geez and by jingo if they wanted to, and were that way inclined, they’d have a damned easy run at it wouldn’t they? Just imagine if a dodger like Peter Foster twigged to the deal and talked his way into the Bravehearts Treasurer’s role: he could write down any damned number he liked – knowing Foster the lower the number is, the fonder of it he would be – and those numerals penned on the page would be taken as gospel by the organisation’s placid auditors, even if were only 10 percent of the true donations figure, with Foster having pocketed the 90c in the dollar change.
Once more I wish to stress that I am not for a moment suggesting that this is actually occurring at Bravehearts, or has ever occurred, but what I am saying that such an absence of accountability requirements for such large sums of cash it bloody well could.
What I don’t understand is why Bravehearts have done nothing to address the issue, and why both the Charities Commission and the Auditors are prepared to let the unaccounted donation figure slide through unchecked year after year, for the auditors qualification appears in the reports as early as 2013 and our suspicion is that it is likely to appear in reports from years before that too.
No doubt we would be able to confirm or dismiss our suspicions if only Bravehearts weren’t burying all the annual reports from previous years, for fear that they might or do contain the names of the pedophile Paul Wilson and/or that of his ever-loving and ever abuse-denying wife Robyn Lincoln listed as board members or advisory experts or authors or anything at all silly like that.
The couple do not exist anymore and we cannot see them because we have closed our eyes.
We shall not talk about them. Ever.
All trace if them has been removed from our website and is gone. They are now un-people, and we shall cover everything up.
That was a dream sequence by the way, just in case you’re an uptight bugger like Sparky Simpson from the ETU and don’t get satire. There will be more on that particular story later, much more, but for now lets stay focused on the issue of the donations.
The auditing firm states its belief that due to the nature of the revenue source (the donations) established controls over receipting the money collected is limited, and that they were unable to review or verify the amount declared in donations. All they can do, year upon year, is say we told them so but we trust Bravehearts to do the right thing.
I personally don’t trust any person or institution. Being abused as a kid makes you cynical about such things – about everything in fact – but even a wide-eyed innocent would be asking this question:
Why is it not possible to provide accurate and up to date receipts for donations made to Bravehearts when the vast majority of the donated funds are forwarded from the donor’s bank account, workplace (via a giving program) or credit card by electronic transfer directly to the accounts of the organisation.
With a modern accounting system such as that employed at Bravehearts it would be a very simple exercise to undertake, and if the 10 or so percent of money given is in cash that might spoil these neat accounts, well the simple answer is that they can be accounted for separately. Receipting 90 odd percent of the payments creates far more accountability than not doing so just because 1 buck in 10 arrives to be banked in cash.
Yet Bravehearts have done absolutely nothing to address the issue, and huge amounts of donations that total up to somewhere in the vicinity of $1.5 million continue to wash around the organisation without being line recorded in the books.
This issue needs to be addressed immediately, and an explanation provided about why it has not been to date despite being raised repeatedly as a qualification to the financial reports year after year. As Hetty herself points out, the organisation is no longer dealing in peppercorns: these are seriously big bucks.
And the receipt of seriously big bucks requires that the amounts coming in are clearly and transparently recorded, easily inspected and that the accounts are printed in the annual reports.
What so hard about that?