CAAMA, Imparja reluctant bedfellows

2467 Imparja 670

 

By ERWIN CHLANDA

 

Imparja Television and Central Australian Aboriginal Media Association (CAAMA) have been ordered to consolidate their financial accounts.

 

CAAMA has a 68% ownership of Imparja.

 

A compliance notice by the Office of the Registrar of Aboriginal and Torres Strait Islander Corporations (ORIC) reports CAAMA to be in a parlous financial position and in breach of a string of legal requirements.

 

CAAMA was in the news in March when there were staff changes taking place in a process of the association’s “Aboriginalisation”.

 

Examiners appointed by ORIC say the financial consolidation with Imparja “has been a long on-going dispute” and that “there are some directors of [CAAMA] that are also directors of Imparja Television Pty Ltd”.

 

The notice says CAAMA’s auditor “considers that the accounts of Imparja Television Pty Ltd should be consolidated with [CAAMA] as it has control over Imparja Television Pty Ltd.

 

“The authorised officers of the solvency assessment also concluded that the financial accounts of Imparja Television Pty Ltd should be consolidated” with CAAMA, says the notice.

 

It quotes CAAMA’s auditor as saying that the association had been keen to make the move but had been unable to do so “due to their inability to obtain sufficient information from Imparja”.

 

“For the purpose of rectifying the financial and other irregularities” ORIC has now made a string of orders:-

 

• CAAMA and its directors “must obtain access to the financial accounts of Imparja Television Pty Ltd and prepare consolidated financial reports with Imparja Television Pty Ltd”.

 

• CAAMA must follow “each recommendation made to the directors … from the solvency assessment completed in May 2017”: CAAMA and CAAMA Productions had significant drops on income from 2016 to 2017: Productions income was $370,539 (down from $418,604); grants $1.9m down from $2.5m; radio income $136,961 (down from $382,298).

 

CAAMA made a loss of $337,228 in 2016 and $185,350 in 2017, with grants by far the major source of income in each year.

 

Employee costs are the largest expense item (as a proportion of total expenses) and increased from 57% for the year ended 30 June 2016 to 64% in the period ending 30 April 2017.

 

Contrary to the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI):-

 

• CAAMA’s register of members does not include the date on which the entry of each member’s name in the register was made.

 

• Does not maintain an up-to-date register of former members.

 

• Did not obtain signed consents, to act as directors of the corporation, from each of the current directors prior to their appointment.

 

• The minutes of all directors’ meetings held since July 1, 2014 were not signed by the chairperson of the meeting or the chairperson of the next meeting.

 

UPDATE 1:45pm

Imparja CEO Alistair Feehan says Imparja’s auditors have an “alternate viewpoint” which is that CAAMA has no controlling interest in Imparja because of the “nature of Imparja’s constitution”.

Mr Feehan says: “We operate under the Corporations Act not under ORIC.”

 

 

UPDATE August 12:

 

ORIC says the following in its Compliance Notice to CAAMA dated July 20:–

 

The examiners [appointed by ORIC] reported that …

 

• The corporation had financial difficulties and appeared to not be trading viably at the time of the examination.

 

• Its subsidiary CAAMA Productions Pty Ltd appeared to be a loss making subsidiary.

 

• The corporation had obtained an advanced payment of rent of $200,000 from a tenant occupying a building owned by the corporation through to 30 June 2017.

 

• The corporation had a substantial debt owed to the Australian Taxation Office (ATO) and was in a repayment plan with the ATO over a period of 18 months.

 

The authorised officers of the solvency assessment reported that they made adjustments to the management accounts of the group as at 30 April 2017. These adjustments were:

 

• Increase the provision for doubtful debts to account for $379,606 of debtors greater than 90 days the authorised officers considered unlikely to be collected.

 

• Reclassify the non-current liability owed to the ATO to a current liability.

 

• Remove a debt owed to CAAMA Productions Pty Ltd of $44,505 as this amount was also listed as a debtor.

 

• The corporation [CAAMA] and CAAMA Productions Pty Ltd are on a repayment plan with the ATO. As at the date of the solvency assessment, the corporation was in arrears to the ATO of $272,265 and CAAMA Productions Pty Ltd $17,791.

 

• The current repayment plan requires the corporation to pay $5,000 on the 5th of each month from June to October 2017 and $247,265 is payable on 5 November 2017. The corporation does not classify the debt to the ATO as a current liability as it intends to have negotiations with the ATO to seek an arrangement for a further repayment plan for the amount due in November 2017.

 

• The group had negative working capital of $132,579 as at 30 April 2017. After adjusting for the matters referred to above, the negative working capital position deteriorated further to $591,375.

 

Subsequent to the fieldwork of the solvency assessment, the authorised officers were advised the corporation had received a further six months’ rent in advance (approximately $228,000) from its tenants occupying one of its buildings.

 

The corporation has confirmed with the Registrar’s delegate that the ATO has agreed to a revised repayment plan over a two-year period from 5 July 2017 to 5 June 2019.

 

Under the revised repayment plan, the corporation must pay $13,026.11 per month to the ATO. The corporation has advised that it has reclassified its debt to the ATO in its balance sheet ($156,312 has been reclassified as a current liability and $103,259 as a non-current liability). The corporation advised that CAAMA Productions Pty Ltd will pay its outstanding debt to the ATO within three months.

 

A review of the solvency assessment report indicated that:

 

• The group’s current liabilities exceeded its current assets as at 30 June 2016 and 30 April 2017.

 

• The group’s total assets is greater than its total liabilities due to the non-current assets of the corporation however, there is uncertainty as to how quickly the corporation could realise these assets.

 

• The corporation advised the solvency of the corporation is a cyclical event in line with the release of funding every six months.

 

 

 

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3 Comments (starting with the most recent)

NB: If you want to reply to a previous comment, start your comment with this notation: @n where n is the number of the comment you want to reply to.
  1. Paul Parker
    Posted August 17, 2017 at 8:17 am

    Re: Ralph Posted August 9, 2017 at 4:51 pm
    Why do Aboriginal / Indigenous Corporate bodies require greater standards of accountability than other corporate entities ?
    IMHO the Commonwealths Aboriginal / Indigenous entities exist to protect positions, reputations, and control, of Ministers and governments not purported beneficiaries.
    Racism includes application of different standards to businesses where directors, shareholders, or beneficiaries, are qualified by racial identification.
    Government financial assistance, even contracting, benefits many businesses under the Corporations Act.
    While the majority of businesses in Australia are small, they make up around 97% of all businesses, with around 60% businesses failing in first three years.
    The Australian Bureau of Statistics report into corporate insolvencies for 2011-2012 found 44% of businesses suffered poor strategic management, 40% inadequate cash flow or high cash use, and 33% suffered from trading losses.
    Directors and employees, from smallest to largest corporations, subject to judicial accountability for corporate negligence.
    Many successful in business advise trying to understand why they were failing, or they failed, is what enabled them to succeed later.
    The need is to encourage those in business to seek and obtain advice from others sooner without racist measuring.

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  2. Jaque
    Posted August 9, 2017 at 5:40 pm

    Imparja is a big waste of money, retransmission site only, the executive suite there gets a pretty penny for overseeing not much. No new Aboriginal content, no regional focus. I rekon close it down.
    CAAMA is only as good as the people employed there, can’t say much for the current CEO having worked with him in the past.

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  3. Ralph
    Posted August 9, 2017 at 4:51 pm

    Imparja operates under the Corporations Act not under ORIC.
    CATSI, as policed by ORIC, makes organisations far more accountable than the old Corporations Act.
    What is surprising here is that Government funders have not insisted that Imparja operates under CATSI in order to safeguard the use of taxpayer dollars.
    This appears to be a major oversight that should be remedied immediately.

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