One of the Northern Territory’s most important alcohol treatment programs has been placed under special administration by the Indigenous corporations watchdog, ORIC.
ORIC said the directors of the community-run Barkly Region Alcohol and Drug Abuse Advisory Group (BRADAAG) asked for the organisation to be placed under the control of an administrator to make sure its Tennant Creek sobering-up shelter, counselling, outreach and education services remained open.
The move has followed two NT Health Department reports, and an internal report, alleging misappropriation of at least $500,000 of funds meant for client services by the corporation’s former chief executive Stewart Naylor between 2014 and 2016.
Mr Naylor has declined to respond to ABC questions about the allegations.
ORIC’s Anthony Beven said the six months’ special administration was intended to help the corporation demonstrate to the Federal and Northern Territory Governments, which are funding it, that it had better governance systems in place.
In 2015-16 BRADAAG received $3.4 million in grants from both governments.
“It’s not just showing the funding bodies that they need to support the organisation and have confidence, it’s about delivering a good service,” Mr Beven said.
“It’s also about proving to the members and the clients of the organisation, or clients just won’t come to the service.
Anthony Beven said the special administration is intended to help the corporation demonstrate that it has better governance systems in place. (Supplied)
He said BRADAAG’s directors, members and staff asked ORIC to put it into special administration because they needed help to reform the corporation.
“One of the roles of the special administrator will be to review and look into any allegations of financial misappropriation or inappropriate conduct by any former staff or directors [and], if there is evidence of that, to ensure that action is taken,” Mr Beven said.
He said he did not think BRADAAG was at risk of closing down.
“This isn’t about an organisation which is on the verge of collapse,” he said.
“The directors said they were getting on with business, but they just felt they didn’t have the internal resources and skills and experience to make the changes that were needed.”
A ‘significant’ risk of fraud
Special administrator Peter McQuoid carried out one of the two Health Department-commissioned reports into BRADAAG.
Last year a Government report found financial mismanagement had created a situation where staff had inadequate resources to provide quality programs. (ABC News: Jane Bardon)
The report from consultant WilliamsonBarwick found BRADAAG was “dysfunctional in terms of … governance practices … and proper utilisation of public monies provided by the NT Government and commonwealth”.
The report said there were “numerous breaches of the associations act … which expose the association to significant risk of fraud and misappropriation of government monies”, including “not accounting for cash rental income … not using 13 rental properties for the purpose they were intended, for transitional accommodation for clients … and paying its former chief executive … over double [his] contracted salary”.
The second Health Department report, carried out by Silver Sands Consulting, found BRADAAG staff had little training and premises were substandard.
“[Alleged] financial mismanagement has created a situation where staff have inadequate resources to provide quality programs, particularly to enable recreational, fitness and social goals to be met,” the report added.
‘No probability’ of service closing
Mr McQuoid has just concluded acting as the special administrator for the Central Australian Aboriginal Alcohol Programmes Unit (CAAAPU) in Alice Springs.
“They [CAAAPU] had very similar issues and he did a very good job in turning that organisation around,” Mr Beven said.
Mr McQuoid said he was confident BRADAAG would continue operating.
“There is absolutely no probability of it not continuing,” he said.
“Both the Northern Territory Government and the Department of Prime Minister and Cabinet have both said that they are supporting BRADAAG through this process.”
“My role is to introduce some systems and procedures to enable the corporation to report appropriately and deliver the services required.”
The NT Police fraud squad said an investigation it launched into the misappropriation allegations late last year was continuing and “expected to take some time due to the complexity of the issues”.
Mr McQuoid said he would attempt to make sure any misappropriated funds were recovered if possible.
“I will be speaking with the fraud squad to see where they are at with their investigation, but quite clearly if there is a possibility of recovering funds we’ll have a look at it.”