6th November 2016. WIA Reform Group – News Letter Number 28

WIA President comes clean: finances are a mess. 

WIARG vindicated.

Members call for President to resign.

 

In the WIA National News this week, the WIA’s President provides the first honest assessment of the WIA’s financial situation in over one year.

Congratulations to the new Treasurer and Assistant Treasurer for having the strength of character to force this report into the public arena.

New Treasurer Chris Hendry VK3PAT and Assistant Jeff Tubbenhauer VK5IU commenced their roles just 2 short weeks ago.

Since the beginning of the year, it now appears that, based on the latest Treasurer’s report, the President of the WIA has issued many misleading statements.

Everything the WIA Reform Group has been reporting is now officially confirmed by the President. 

Please bear with us as we recount some history and justify member’s calls for the President’s immediate resignation.

In the WIA National News of 5th November, the WIA President reports:

 “Unfortunately, getting the accounting up-to-date will be both a challenge and a time consuming exercise… We now have many hours work reviewing all transactions to discover past errors.
This will take two to three months.  Producing an accurate Profit and Loss and
Balance sheet to the Board will take some time
….  There are many operational issues to tackle and to solve these issues a strategic review is recommended”   (a full transcript of the News Broadcast is attached at the end of this newsletter)

This statement is just a few short weeks after the President penned the following for AR Magazine:

“At the time of writing, the WIA’s accounts are in the process of being brought up to date, and simplified, by an external team of MYOB specialists. By the time this Comment is published, I expect the accounts will be up to date and we will be well on the way to having a new WIA Treasurer”.  (November AR Magazine)

WIA Members should consider the following:

Former Treasurer John Longayroux confirms that financial records and MYOB were accurate and up-to-date when he resigned in August 2015.

Between September 2015 and January 2016, the WIA paid Trainsafe (Director Fred Swainston’s company) $2,060 per week to manage the National Office and oversee the day-to-day operation, including financial management, accounting and to undertake an “office improvement exercise”.  The WIA was also paying an accountant to assist during this period.

Why then was the 2015 Annual Report peppered with errors, as unanswered questions at the AGM illustrated?

ACMA Financial Reporting contained material errors.  When questioned about these at the AGM, neither the Chairman nor the Acting Treasurer was able to offer an explanation.  To this day, no adequate response has been provided.

Between January and February 2016 Chris Chapman was the Treasurer. He resigned after six weeks citing “ethical and professional concerns”.   He reported very similar problems to those contained in today’s WIA News report.  Why did the Board not take action in February?

Between March and June the WIA employed a professional accountant to act as Treasurer.  How much did the WIA pay for this service, and why were the accounts and financial processes not repaired during his engagement?

Since the end of June, the WIA has operated without a Treasurer.  Finally, in mid-October, two very capable gentlemen have taken on the role;  Chris Hendry VK3PAT and Assistant Jeff Tubbenhauer VK5IU.

In recent weeks (4-6 weeks?) the WIA has appointed external book-keepers to bring the books up-to-date; at an estimated cost of $12,000-$15,000 to members.  Why have these “specialists” not brought the books up-to-date as reported by the President in the Amateur Radio Magazine?

The President also reports that “Over the few months following his appointment, Fred made many significant improvements in the office operations, including increasing security, controlling access and documenting processes and procedures. He wrote over 30 new office procedures in that time.” (November AR Magazine)

However, the President reports this week on the National News that “sub-systems such as the online bookshop, and MEMNET do not integrate easily with the MYOB Accounting software. Many of the transactions relating to these sub-systems have been incorrectly entered into the accounting software. Chris (Hendry) has found that the bookshop inventory is incorrectly valued in the Accounts and that debtors, that is people who owe us money, are too high and more importantly may not have been reconciled correctly.”
The President’s latest News Broadcast appears at odds with his comments in AR Magazine where he states “Fred made many significant improvements in the office operations…. documenting processes and procedures.”

Why then, are the financial records in such a mess?  Why doesn’t the membership system and bookshop provide correct data to the accounting system?

Former Treasurer Chris Chapman advised the board of very similar issues that the President reports today.

However, in the April issue of AR, the President reported that he visited the National Office in February following Mr Chapman’s resignation:

“We spent several hours analysing the accounting system and the financial records and determined that the WIA did not appear to have any major accounting issues. Accounting processes and record keeping has been very much improved in the last few months, and major problems with the WIA’s upcoming annual financial review are not anticipated”

 The President went on to say: “Meantime, the WIA office underwent a top-to-bottom review to reflect the wishes of members, and to better face an environment of regulatory change for spectrum users and the prospect of some further government outsourcing. The end result includes emphasis on customer service, delivery of member services, office function streamlining, banking and finances.”

The President states: “ Over about a five-month period, Fred was successful in making the Office more efficient and responsive to members. He established improved, written procedures for enquiries and the general office workflow, introduced new office security measures, and caught up with the accounting entries. The Office now works much better from a customer service and business systems perspective” (Amateur Radio Magazine, April 2016)

In February the then Treasurer advised the Board that accounting entries were in error and not up-to-date.

The President also advised: “The WIA’s professional accountant, Murray Leadbetter, has agreed to act as an independent paid Treasurer for as long as required, and was appointed by the Board at the 1 March teleconference.” (Amateur Radio Magazine, April 2016)

An inspection of Board Meeting Minutes indicates that this paid Treasurer presented no financial reports, nor did he attend any Board Meetings.

Keep in mind that the then Treasurer Chris Chapman alerted the Board (in February) to a number of financial issues that are very similar to those reported in the News Broadcast today.  Yet in the April issue of AR, the President advised members:  “Are there any serious issues concerning the WIA’s finances and accounting practices?  On all the information currently available, no.”

Then in the September issue of Amateur Radio Magazine we have the infamous “bucket economics”.  It’s now clear why the President resorted to “bucket economics”.  The accounting system MYOB and associated business processes are a mess and will take another 2-3 months to rectify. For those who missed that update, follow this link  to Bucket Economics.

We also note that the new Treasurer has enforced some financial discipline at long last – three quotes are required for expenditure over $1000.  Further, all unbudgeted expenditure over $1000 must be approved by the Board.

What message does this send…and why has it taken so long for these standard business measures to be put in place?

Has the Board used our National Journal and Broadcast as a tool for propaganda and misinformation, whilst stifling alternative viewpoints?

Alternative viewpoints clearly vindicated by the latest Treasurer’s report…

Poor financial management inevitably leads to poor financial outcomes.  Whilst it’s not official, our assessment of what we can derive from various sources suggests the WIA will make an operating loss of between $70,000-$100,000 for 2016.  But no-one knows for sure; not even the Board.

Remember, four previous Treasurers have all made public statements concerning the ethics and professionalism of this Board.

Serving Director Andrew Smith alerted members earlier this year (August) when he reported “The WIA has had no budget since 2014, currently we have no treasurer and our financial reporting is in disarray”.  Both Andrew Smith and Paul Simmonds have publicly aired serious concerns with the Board’s performance.

In a report of a recent visit with Dick Smith by WIA Directors, Dick comments on the corporate failure of DSE….. “dumb management blunders, such as expansion beyond belief, buying too much inventory, wrong product choices”…  is there a parallel lesson for our WIA? 5,000 Foundation Licence Manuals  – 10-12 years of stock – being one possible example.  Accounting records containing errors and not being up-to-date being another….

Ultimately, the President sets the tone and culture for an organisation.  He or she leads by example and either permits, or discourages certain behaviour.

The President must resign immediately and allow a new and capable leader to repair the considerable damage done.

 

 

 

WIA News Broadcast.  5th November 2016

(our emphasis)

WIA Treasurer and Assistant Treasurer report after their first week.

At the Tuesday night Board meeting the WIA’s new Treasurer, Chris Hendry VK3PAT and Assistant Treasurer Jeff Tubbenhauer VK5IU gave an outline of the financial and operational position of the WIA. Both Chris and Jeff have significant corporate experience to tackle the accounting and operational systems of the WIA.

Chris has had a week in the office and reviewing the WIA’s accounting records.

Clearly, the WIA is solvent and it can pay its current liabilities such GST,
Employee PAYG and Employee Superannuation as they fall due.

Unfortunately, getting the accounting up-to-date will be both a challenge and a time consuming exercise. The sub-systems such as the online bookshop, and MEMNET do not integrate easily with the MYOB Accounting software. Many of the transactions relating to these sub-systems have been incorrectly entered into
the accounting software.

Chris has found that the bookshop inventory is incorrectly valued in the Accounts and that debtors, that is people who owe us money, are too high and more importantly may not have been reconciled correctly.

We now have many hours work reviewing all transactions to discover past errors.
This will take two to three months.

Producing an accurate Profit and Loss and Balance sheet to the Board will take some time. Once we are satisfied that the accounts are accurate our goal is to have a reconciled set of financials provided to the board monthly. In addition, the Treasurers are developing an operating budget for 2017 for approval by the Board. A budget compliance report will be submitted to the Board each month.

Processes have already been put into place to make sure that all expenses are scrutinized. For any proposed expenditures over $1,000 competitive quotes must be sought and approved by the Treasurer. All unbudgeted expenditure over $1,000 must be approved by the Board.

Members can be assured that the issues are not life threatening but there are significant challenges to maintaining our revenue streams and providing member benefits.

The board has created a new volunteer charter which will be distributed shortly. There are many operational issues to tackle and to solve these issues a strategic review is recommended.   (WIA PRESIDENT VK2ASD)