The ACNC issued a Direction to RMLA on 7 December 2018. The ACNC subsequently revoked the Direction on 27 November 2019 and acknowledged that RMLA has complied with the requirements of that Direction, including undergoing a forensic audit in accordance with the Direction.
The ACNC’s direction has provided a salutary lesson to RMLA and the forensic audit highlighted a number of deficiencies. The most significant findings of the forensic audit have now been addressed; however, the report will continue to be used as a guide to the Board in ensuring it continues to focus on governance improvements.
RMLA experienced a period of rapid growth between 2015 and 2018 with the number of academies increasing from 12 to 43 and employees from 39 to 137. During this period the main focus of the Board and Executive was on operational matters and maintaining and strengthening its governance was regrettably not prioritised.
RMLA acknowledges that its governance did not meet the standards expected of a charity. RMLA acknowledges that its record-keeping, policies and procedures, financial management, risk management and board oversight were deficient during the growth period. With the benefit of review and reflection, RMLA appreciates that it did not meet the governance standards required of a registered charity in the use of credit and debit cards. This resulted in the overpayment of funds to a related entity which have now been recouped; and fraudulent activity through a store purchase card by an outside party which was detected in 2017. Issues related to these payments were not detected or mitigated in a timely manner. In addition, a lack of formal records meant the Charity was unable to demonstrate that it conducted due diligence in relation to some of its related entity financial transactions.
The forensic audit report indicates that the accounting policies and methodologies adopted by the Charity in preparing its financial statements for the period audited were, in all material respects in accordance with Australian Accounting Standards. The audit also identified issues that resulted in the need for adjustments to the accounts that were made by the Charity during the audit process.
During the course of the ACNC investigation, RMLA responded to the matters of concern raised by the ACNC and also engaged additional non-executive directors to refresh the Board. New directors who have been appointed bring with them strong skills and experience to guide RMLA in best practice and to overcome past non-compliances. A majority of previous RMLA Directors have resigned from the Board of RMLA as part of a planned Board renewal process.
The new Board is committed to working on improvements to the Charity’s governance in order to ensure that best practice in this area is achieved. As part of this initiative, it has engaged, and is working with, an independent governance professional to review the Charity’s board governance and ensure that the Charity is fully compliant with the ACNC Governance Standards.
The Board of RMLA is looking forward to expanding the work of the Charity in the future and ensuring that it meets the expectations of all its stakeholders.