NSW OLGR Investigation
BackgroundDuring 2009 and 2010, a number of concerns about the fundraising activities of the AVN were raised with the NSW Office of Liquor, Gaming & Racing (OLGR). Some of these concerns related to fundraising without an authority and not applying funds to the purpose under which they were raised. For a period of nearly two years the AVN was soliciting and accepting donations from the public of New South Wales without an authority to fundraise. The image below was obtained 14 May 2009 and shows that the AVN's authority to fundraise had expired back in July 2007.
image obtained 14 May 2009 showing AVSN's expired licence to fundraise
The AVN renewed their fundraising authority, effective 2 June 2009, only after it was publicised that they were operating without one. A current NSW Online Licence Check shows that the AVN's fundraising licence is in effect from 5 July 2002 until 16 April 2014. NSW OLGR acknowledge that this information is unintentionally misleading as it fails to show that the AVN was operating without a fundraising authority between 5 July 2007 and 1 June 2009.
The InvestigationAs a result of their audit, the NSW OLGR reported that they had detected a number of breaches of charity fundraising laws, including:
- fundraising without an authority
- unauthorised expenditure
- failure to keep proper records of income and expenditure
NSW OLGR did not detect any evidence of offences under the Crimes Act 1900, but they did identify possible breaches of the Charitable Trusts Act 1993 which were referred to the Department of Justice and Attorney General.
Some examples of these breaches include the following:
- Fighting Fund to support a homeless family - This appeal raised $11,810. None of the funds were spent on this purpose.
- Bounty Bag Program - Appeals for this program ran for a number of years. No funds raised were spent on this purpose and the organisers of the Bounty Bag Program confirmed that the AVN had never sought permission to use their program and, if they had been approached, they would have denied the AVN's request.
- Vaccination Testing - Appeals to raise funds to test vaccines had run for a number of years. No funds raised had been spent on this purpose.
Please refer to the following table for the schedule of breaches:
Schedule of Breaches - Charitable Fundraising Act 1991
Australian Vaccination Network Inc (AVN) - CI/2009/005476
|Section||Summary of requirement||Breach particulars|
|9(1)||A person who conducts a fundraising appeal is guilty of an
offence unless the person:
(a) is the holder of an authority authorising the person to conduct the appeal, or
(b) is a member of an organisation, or an employee or agent of a person or organisation, that holds such an authority and is authorised, by the person or organisation that holds the authority, to conduct the appeal, or
(c) is authorised under section 9(3) to conduct the appeal without an authority.
Maximum penalty $5,500.00 fine
|AVN conducted fundraising appeals during the period 5 July
2007 to 1 June 2009 without holding an authority to fundraise.
Notably during this period AVN was advised twice in writing by Communities NSW that fundraising without an authority to fundraise was unlawful.
|9(2)||A person who conducts a fundraising appeal in contravention
of any condition attached to an authority authorising the appeal is guilty of
Maximum penalty $5,500.00 fine.
|AVN has breached various authority conditions whilst holder of an authority to fundraise during the period 2 June 2009 to 24 February 2010 as detailed in the attached separate schedule.|
|20(7)||A person conducting a fundraising appeal, or any member of
the governing body of an organisation on whose behalf such an appeal is
(a) by act or omission is in any way directly or indirectly concerned in or party to a contravention of this section, or
(b) aids, abets, counsels or procures a contravention,
is guilty of an offence.
Maximum penalty of $5,500.00 fine or six months imprisonment or both
|Section 20 (6) of the Act requires proceeds of appeals to be
banked without deduction. Section 20 only applies to holders of authorities
to fundraise. AVN held an authority to fundraise for the period 2 June 2009
to 24 February 2010.
There is evidence all money received from fundraising appeals was not immediately banked into AVN's bank account before deductions. For example part of funds collected from occasional donations made at seminars was retained for petty cash. Accordingly there is evidence of a breach of section 20(6) of the Act.
|22(3)||A person or organisation that contravenes this section is
guilty of an offence. In the case of an unincorporated organisation, every
trustee or other person who, at the time of the offence, was a member of the
governing body of the organisation is guilty of an offence.
Maximum penalty of $5,500.00 fine
|Section 22 of the Act requires certain records of expenditure
and income in relation to each appeal.
AVN did not include all particulars in its records as required by the regulations. See breaches of clauses 10 (a) and (b) in attached separate Schedule.
|48||(1) A person is not prohibited (despite any law to the
contrary) from holding office or acting as a member of the governing body of
a non-profit organisation having as one of its objects a charitable purpose
merely because the person receives any remuneration or benefit from the
(a) the Minister, by order published in the Gazette, has declared that this section applies to that office, or
(b) the Minister has given prior approval of a person who receives any such remuneration or benefit holding that office or acting in that capacity, or
(c) the person concerned holds that office or acts in that capacity by virtue of his or her office as a minister of religion or a member of a religious order.
(2) An approval under this section is subject to any conditions imposed by the Minister when giving the approval.
(3) An approval under this section is to be in writing. Applications for such approvals must be addressed in writing to the Minister by the organisation concerned.
(4) For the purposes of this section, every body, organisation or office referred to in section 7 (1) is taken to be a non-profit organisation having among its objects one or more charitable purposes.
|AVN has not obtained written prior approval before
remunerating Ms Dorey.
It is noted that a written application for approval was received from AVN in May 2010 and is pending the final result of the inquiry.
|9(5)(c)||An expense is not a lawful and proper expense:
(b) if is not supported by documentary evidence or is not otherwise verifiable as being properly incurred, or
(c) In the case of an expense paid or incurred by an organisation that is an authorised fundraiser, it was not properly authorised.
|There is evidence of expenses not being appropriately authorised by the governing body of AVN in the minutes of meetings post 2 June 2009 whilst it held an authority to fundraise.|
|10||For the purposes of section 22 (2) (b) of the Act, the
following particulars are to be included in relation to each fundraising
(a) particulars of all items of gross income received or receivable,
(b) particulars of all items of expenditure incurred (including the application or disposition of any income obtained from the appeal),
(c) particulars of the transactions to which the particulars in paragraph (a) or (b) relate.
Note. Accordingly, particulars of all invoices, receipts, vouchers and other documents of prime entry relating to each fundraising appeal, and such working papers and other documents as are necessary to explain the methods and calculations by which accounts relating to the appeal are made up, must be included in the records kept under section 22 of the Act.
|Income and expenditure records do not show particulars of all items of income and expenditure associated with an appeal. Fundraising and non-fundraising income is not distinguished in AVN accounts.|
The NSW Office of Liquor, Gaming and Racing attached the following conditions to the authority granted under the Charitable Fundraising Act 1991 to the AVN for the period 2 June 2009 until 1 June 2011.
Schedule of Breaches - Conditions attached to an authority granted
under Charitable Fundraising Act 1991
Australian Vaccination Network Inc - CI/2009/005476
|Condition||Summary of requirement||Breach particulars|
|CONDITIONS APPLYING TO AUTHORITY TO FUNDRAISE CFN 11694 IN FORCE FROM 2/6/2009 UNTIL 1/6/2011|
|1||Proper and effective controls must be exercised by an authorised fundraiser over the conduct of all fundraising appeals, including accountability for the gross income and all articles obtained from any appeal and expenditure incurred.||Proper and effective controls were not exercised over the conduct of all
fundraising appeals, including accountability for gross income and
expenditure incurred, including but not limited to as examples:
|3(1)||An authorised fundraiser must, in relation to each
fundraising appeal it conducts, maintain such books of account and records as
are necessary to correctly record and explain its transactions, financial
position and financial performance, including the following documents:
(a) a cash book for each account (including any passbook account) held with a bank, building society or credit union, or with any other institution, or institution of a class, prescribed under section 20 (6) of the Act, into which the gross income obtained from any fundraising appeal is deposited or invested.
(b) a register of assets,
(c) a register recording details of receipt books or computerised receipt stationery,
(d) a register recording details of tickets or computerised ticket stationery,
(e) a petty cash book (if petty cash is used).
|AVN failed to maintain the following records:
|6(1)||The annual financial accounts (also known as financial
reports) of an authorised fundraiser that is an organisation must contain:
(a) an income statement (also known as a statement of financial performance, a statement of income and expenditure or a profit and loss statement) that summarises the income and expenditure of each fundraising appeal conducted during the financial year, and
(b) a balance sheet (also known as a statement of financial position) that summarises all assets and liabilities resulting from the conduct of fundraising appeals as at the end of the financial year.
|The financial accounts of the organisation for the financial
year ending 31 December 2009 did not include:
|6(3)||The annual financial accounts fo an authorised fundraiser
that is an organisation are to include a declaration by the president or
principal officer or some other responsible member of the governing body of
the organisation stating whether, in his or her opinion:
(a) the statement of financial performance gives a true and fair view of all income and expenditure of the organisation with respect to fundraising appeals, and
(b) the statement of financial position gives a true and fair view of the state of affairs of the organisation with respect to fundraising appeals conducted by the organisation, and
(c) the provisions of the Act, the regulations under the Act and the conditions attached to the authority have been complied with by the organisation, and
(d) the internal controls exercised by the organisation are appropriate and effective in accounting for all income received and applied by the organisation from any of its fundraising appeals.
|The financial accounts of the organisation for the financial year ending 31 December 2009 did not include the required statement.|
|6(5)||The annual financial accounts of an authorised fundraiser that is an organisation, after being audited in accordance with the provisions of section 24 of the Act or otherwise according to law, are to be submitted to an annual general meeting of the membership of the organisation within 6 months after the conclusion of the financial year.||The financial accounts of the organisation for the financial year ending 31 December 2009 were not submitted to an AGM of AVN by 30 June 2010. These financial accounts were not available until 31 May 2010.|
|13||If the authorised fundraiser is an organisation, all payments
made in connection with:
(a) any expenditure involved with the conduct of a fundraising appeal, and
(b) any disposition of funds and profits resulting from a fundraising appeal,
must be properly authorised by or on behalf of the organisation.
|AVN's governing body did not properly authorise expenditure involved in the conduct of appeals and the disposition of funds resulting from appeals.|
|14(2)||A person conducting or participating in a fundraising appeal must use his or best endeavours, at all times, to answer honestly any question directed to the person in relation to the purpose of the appeal or the details of the appeal, or to arrange to find answers to questions that he or she is unable to answer. In particular, if it is requested, information is to be given as to how the gross income and any articles obtained from the appeal will be distributed and on the other matters referred to in sub-paragrapsh (3)(a) and (4).||AVN failed to respond to an email dated 10 November 2009 and addressed to Ms Dorey requesting information as to details of AVN appeals.|
|18||If the authorised fundraiser is an organisation:
(a) it must be administered in relation to its fundraising activities by a governing body of not fewer than 3 persons, and
(b) all business transacted by the governing body in relation to its fundraising actitivies must be properly recorded in the organisation's minutes.
|The minutes of AVN meetings do not reflect all business conducted by the governing body in relation ot its fundraising activities.|
|20||If the authorised fundraiser is an organisation, it must
(a) a register of pecuniary interests, and
(b) a mechanism for dealing with any conflicts of interest that may occur involving a member of the governing body or an office-holder or employee of the organisation.
|AVN did not keep a pecuniary interest register or have in
place a mechanism for dealing with conflicts of interests.
Potential for conflict re advertising in the AVN magazine by Fountain of Beauty and AVN remuneration to Ms Dorey should have been noted in the register.
|22||The authorised fundraiser must provide a mechanism that will properly and effectively deal with complaints made by members of the public and grievances from employees in relation to its fundraising activities.||It is noted that during the investigation of the first August 2009 complaint into AVN, a formal finding was made of a breach of Condition 22. Since then AVN has put in place a complaint mechanism.|
Revocation of Authority to FundraiseAfter the NSW Health Care Complaints Commission published a public health warning against the AVN (refer NSW HCCC Investigation), the NSW Office of Liquor, Gaming and Racing made the decision to revoke the AVN's authority to fundraise. On 14 October 2010 the New South Wales Government Gazette included a special supplement advising that the responsible Minister for the purposes of the Charitable Fundraising Act 1991 had revoked the AVN's authority to fundraise on the following grounds:
- fundraising appeals have not been conducted in good faith for charitable purposes.
- fundraising appeals have been improperly administered.
- it is in the public interest.
From the NSW OLGR Charitable fundraising - Latest news :
Revocation of Australian Vaccination Network's Authority to Fundraise
Minister for Gaming and Racing, the Hon Kevin Greene MP, has revoked the fundraising authority formerly held by the Australian Vaccination Network Inc (AVN).
An investigation by the Office of Liquor, Gaming and Racing, a division of Communities NSW, found that AVN had breached charitable fundraising laws and potentially misled the public.
The revocation, which took effect on Wednesday 20 October 2010, means that AVN is no longer licensed to conduct fundraising appeals in NSW and is not entitled to accept donations from members of the public via any method of collection including face-to-face and online appeals. AVN is not prevented from receiving donations from its members as this is not considered fundraising for the purposes of the charitable fundraising legislation.
The OLGR investigation also took into account the findings of the Health Care Complaints Commission (HCCC) which established that the website operated by AVN provided information that was solely anti-vaccination as well as information that was incorrect and misleading.
The HCCC has published a public warning stating that AVN's failure to post a disclaimer on its website may result in members of the public making improperly informed decisions about whether or not to vaccinate posing a potential risk to public health and safety.
The revocation by the Minister is subject to an appeal lodged by AVN in the Administrative Decisions Tribunal and is listed before the Tribunal on 10 December, 2010
The revocation of their fundraising authority meant that the AVN was no longer allowed to:
- conduct fundraising appeals,
- solicit donations from non-members,
- accept new members
The Appeal and Final OutcomeThe AVN announced in their newsletter dated 20 October 2010 Update on the OLGR decision that they had filed an appeal against this ruling as well as an application for a stay of the decision with the Administrative Decisions Tribunal.
This process was delayed by the AVN's legal challenge against the NSW Health Care Complaints Commission (HCCC). On 24 February 2012 the NSW Supreme Court handed down its ruling on the HCCC legal challenge, which resulted in the retraction of the public health warning against the AVN.
On 16 April 2012 the NSW OLGR reinstated the AVN's authority to fundraise, allowing the AVSN to solicit and accept donations from non-members and to accept new members.
Posted: 18 Nov 2012