In 2013 ESA annual financial statements showed a discrepancy of $49,000. An honest mistake or system error.      

Why did it take 24 months to fix?  One member, an ex Bank Manager, picked up on the figures, approached Board members, and when that failed, let members know. The following year the Auditor was unable to reconcile the figures & cited a number of failings of procedure. So bad was the management of ESA finances that the Auditor reported the organisation to the Regulator.

 

Extract from Auditor’s report:

“During the course of our review, and subsequent to issuing of our audit report for the year, we encountered a number of financial internal control and management issues which in our opinion were quite unusual and required attention. These observations included:

• Failure to detect a significant accounting error in the financial records which led to an audit qualification for the year ended 30 June 204.

• Failure to correct the same error in the financial records for in excess of two years, despite also being advised in detail about the matter by the auditor.

• Presentation of incomplete 205 records for audit prior to all year end accounting procedures being finalized

• Willingness by the management committee (the Board) to disregard n audit recommendation in respect of doubtful debt recognition, leading to an audit qualification for the year ended 30 June 1015.

• Request made to the auditor to complete construction of the 2015 financial statements which would have contravened professional independence requirements of the auditor.

• Contact made with the auditor by ESA members seeking financial and other information represented as not being made available by the Board.

• Apparent lack of Board control over quarterly GST reporting and payment matters.

• Representations by the Board indicating they did not approve of auditor contact with members.

• Use of statements made by the auditor to support discussions between the Board and ESA members undertaken via social media.

 

Details of our findings have been advised as part of our normal annual management letter report issued to the Board. We have attached to this letter an extract of that report detailing our main findings.

 

The nature of the audit findings, in particular the bullet points noted above, and direct contact with board members and officers of the association, has lead us to form an opinion that there are deficiencies relating to information in respect of the activities of ESA. We believe that some information may not be adequately communicated to the members, and that internal control problems may not be properly dealt with by bringing those matters to the attention of the Board. We therefore feel obligated to lodge this notification in accordance with Section 37(4) of the Associations Incorporation Act.”

 

Section 37(4) of the Associations Incorporations Act reads:

(4) if, in the course of performing his or her duties, an Auditor of a prescribed association is satisfied that –

(a)           it is likely that there has been a contravention of, or failure to comply with, a provision of this Act or a rule of the association; or

(b)          there is a deficiency in relation to the accounts or information in respect of the activities of the association that, in the auditor’s opinion, will not be adequately dealt with by bringing the matter to the notice of the committee of the association,

     the auditor must immediately report the matter to the Commission by notice in writing.

 

This is what is bringing the organisation into disrepute – not people speaking out. 

 

​This is an organisation

• That ran an election where not all members received ballot papers

• Where no questions were allowed at an AGM

• Where motions submitted were disallowed

• where Affiliate clubs were denied a vote as per their constitutional right

• where finances, even membership statistics, are kept secret.

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And the problems continue - 3 years down the track and we still have an organisation that shuts down members, pays lip service to transparency, has a strategic plan with no timelines or ability to measure outcomes. 

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​Legal fees in 16-17 were a staggering $66k. perhaps they could learn to work with members not against them.

Under “What we have achieved”  in 16-17 report – a new financial system – certainly needed., but an efficient operating system is not an ‘achievement’, it is an essential item.

The loss doubled from last year from $17k to $35k, the Discipline committees contributed $12k profit, so the operational loss is actually $47k.

Peter Oborn’s "fine" is presumably in Receivables so this amount is inflated by $10k – making the actual loss $57k? 

Cash reserves down $94k,  Equity down $50k. Wages are 77% of membership income.

 

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Good Governance is about transparency, valuing members, recognizing conflict of interest.

 

• The wall of silence surrounding committees and board creates ill feeling, shows a lack of willingness for transparency & has a negative impact on volunteering.

• The treatment of members points to a culture where the organisation has lost sight of the fact that the sport is underpinned by volunteers and that volunteers need to be valued.

• ​We acknowledge Board positions are voluntary and much time is given by Board members, as by all committee members, clubs and officials. They are all good, well-meaning people and we all share a common cause to see Equestrian sports grow. But we have an expectation & right to good governance that is within the guidelines set out in the Associations Inc Act, ORS, Sport SA and ASC.