February 19, 1997



More than half a million dollars in ATSIC funds paid to Tangentyere Council for work in Aboriginal town lease areas in Alice Springs may be lost in a venture involving Territory Business Suppliers (TBS), which was closed down by its receiver and manager on February 6.
The Alice News has obtained the draft of a letter, dated November last year, from Tangentyere to ATSIC regional manager Richard Preece, in which Tangentyere says it is advising "with great regret" of a "serious irregularity" in the use of the funds. Mr Preece told the News that ATSIC had provided no funds specifically for the purchase of the shop, and is now investigating "the extent to which any of [ATSIC's] funds may be at risk as a result of the TBS collapse".
The draft document also refers to the role of local accountant and chairman of the Alice chamber of commerce, Jack Wolstencroft.
The leaked draft says, in part: "The irregularity is connected with the purchase of Territory Business Suppliers in October / November 1995 at a price of $444,397.
"In the 1994-95 year we received from your office [ATSIC] a grant of some $1.6m, followed by a further $223,000 in the following year for the same [Town Camps Capital Works] program."
It is understood that some of the ATSIC money was earmarked to buy materials for Tangentyere's 250 "work for the dole" CDEP employees.
The draft says: "Each of the grants was tied to an approved capital works ... program. "The method of accounting for such grants within Tangentyere has been that when funds are received from your office they are placed in a Trust Account in our name at the Westpac Bank.
"As the works proceed, each individual project is monitored by our architects, Tangentyere Design, and when they are completed, the funds expended through the Works Department are transferred from the Trust Account into our main operating Account.
"At the time the purchase of Territory Business Suppliers took place ... the then Assistant General Manager of Tangentyere Council, Mr Ron Lisson, had been discussing the matter of the purchase with our Auditor, Mr Jack Wolstencroft, and it is believed that advice on the purchase was offered by Wolstencroft."
Mr Lisson later became the manager of TBS. The News was unable to contact him, but ABC Radio reported last week that following legal advice, he would not make any comment.
The draft letter says: "Mr Lisson advised that the Westpac Bank had 'come to the party' with finance to purchase the business.
"It is unfortunate that very little in the way documentation had been committed to paper at this time, indeed there is even now no official file which outlines the details relating to the purchase of TBS [in November, 1995].
"What paperwork we have available is what has been pieced together since May of this year [1996].
"A shelf company was purchased by Tangentyere Council ... which would be the holding company for Territory Business Suppliers.
"The name of the shelf company is Coeburn Pty Ltd.
"There are 100 shares, and 99 of these are held by Tangentyere Council - the other being held in trust for Tangentyere by a holding company belonging to the Wolstencrofts [Jack and his wife, Sharon]," the leaked draft says.
"It later transpired that the arrangement agreed between Mr Lisson and the Westpac Bank was as follows:-
"The Westpac Bank issued a term loan in the name of Tangentyere Council in the amount of $500,000 for an initial period of two years, subject to review, every three months. "The bank transferred 'by authority' an amount of $600,000 from a Tangentyere trust account into an interest bearing deposit in our name, and are holding it as security against the loan.
"An overdraft limit of $100,000 was provided to Coeburn Pty Ltd, trading as Territory Business Suppliers, also secured by the $600,000 interest bearing deposit.
"A guarantee by Tangentyere Council was provided to the bank signed by Tangentyere president, Mr Eli Rubuntja, and by Mr Ron Lisson, the assistant general manager [of Tangentyere]," the draft says.
"Our first full realisation of these events was the receipt, in May 1996, of a bank statement from Westpac showing the $500,000 loan in Tangentyere's name. Our enquiries then led to what we are now aware of," the leaked draft says.
"In a nutshell the current situation is as follows:-
"An amount of $600,000 was transferred from a Tangentyere Council Trust Account which was ATSIC funding provided for the Town Camps Capital Works Program.
"Tangentyere Council has a $500,000 loan in its own name supporting a business of which it is the owner.
"Evidence recently obtained shows that the 'business' is far from healthy and, according to consultants Sims Lockwood, commissioned by the Westpac Bank, requires an injection of capital funds to keep it afloat, or assistance by the introduction of an equity partner or partners.
"A further review ... commissioned by Coeburn Pty Ltd draws the same conclusions. "It suggests that an immediate injection of $200,000 is required to keep the company afloat.
"The [second] report indicates that TBS is losing in excess of $30,000 per month and needs to increase its sales by approximately 30 per cent just to break even.
"Tangentyere obviously cannot assist in the provision of funds as it relies entirely on Government funding for its survival.
"Under the circumstances indicated above Tangentyere would have no intention of providing further funds, even if they were available, as this would be a case of throwing good money after bad.
"Tangentyere is seeking legal opinion on its position in this matter as there are several issues which require clarification.
"These include whether the security over the $600,000 taken by Westpac Bank is valid in that it was and is grant money intended for a specific purpose, i.e. the capital works program.
"The bank has as its customers many ATSIC funded organisations and should be well aware that such monies are not available to be used as the bank sees fit.
"This is particularly so when an account is called 'Trust Account', even if it is not a trust in the strictest sense of the word."
A spokesperson for Westpac says: "The bank has in no way knowingly acted improperly.
"If there are any unresolved issues we are happy to investigate them."
The draft says further: "Legal opinion is also required in relation to the actions of our auditor, Mr Jack Wolstencroft, certainly in the early stages of the purchase of TBS.
"It appears that on the day of settlement on the purchase of TBS, settlement on Mr Wolstencroft's purchase of the building occupied by TBS occurred.
"It also appears that the settlement was contingent upon the purchase of TBS."
Mr Wolstencroft told the News that despite his and his wife's multiple roles in the deal, there had been no conflict of interest.
He was - at various times - a financial advisor to Tangentyere, as well as its auditor.
According to Mr Preece, the audit of Tangentyere for the 1995-96 fiscal year was conducted by Mr Wolstencroft and did not point up any deficiencies relating to Tangentyere's TBS deals.
The holding company, Coeburn Pty Ltd, lists Mr Wolstencroft's accountancy practice as its registered office.
He and his wife are minority share holders in Coeburn. They told the News that they have an interest in the company which bought the building in Gregory Terrace where TBS was trading.
The purchase of the building by the Wolstencroft company coincided with Tangentyere's acquisition of TBS.
Mrs Wolstencroft was last week still listed as a director of Coeburn Pty Ltd (together with Mr Lisson and Tangentyere general manager Geoff Shaw) although she says she resigned in September last year over concerns of "how the business was being run". She says TBS still owes her and her husband $50,000 in rent.
Mr Wolstencroft told the News: "We were not the landlords at the time of acting as advisors to Tangentyere.
"Our advice was for Tangentyere to purchase the building at the time of their purchase of TBS.
"They did not wish to do so at that time and asked whether we would arrange a 'friendly buyer'.
"We offered to buy the building," says Mr Wolstencroft, "and let it to TBS at a lower than market rental with an option for them to purchase the building.
"This was accepted and agreed to."
Mr Wolstencroft says the rental value had been estimated by a licensed valuer at $180 per year per square metre, but TBS had been charged a rental 10 per cent lower, initially for 1000 square metres, and later, for an area somewhat more than half of that.
Mr and Mrs Wolstencroft were not available to answer further questions from the News.
Mr Shaw did not respond to requests for comment.
The present remaining value of TBS is unknown.
Westpac, despite several requests from the News, would neither confirm nor deny whether it is foreclosing on a mortgage.
There appears to be no further effort to salvage the company: A notice on the locked door of the TBS premises announces the "total disposal" of equipment, stock and motor vehicles by auction next week.
"The business was advertised in Territory and interstate papers in early January," says the Westpac spokesperson. "There were a number of expressions of interest but no-one went beyond that."
Mr Preece says a special investigation commissioned by ATSIC had not revealed any criminal conduct.
Tangentyere's 1995-96 annual report, just released, gives no income and expenditure details usually provided in such reports.
However, a chapter on the "finance department" says: "1995/96 has proved to be a very difficult year ... due to the lack of adequately qualified staff in the first half of the year and the increasing demands of funding bodies for more accountability."
Tangentyere received a total of $5.5m from ATSIC during 1995-96, according to ATSIC.
Tangentyere also has several other funding sources.
The receiver manager was appointed upon request of the Coeburn directors, according to the Westpac spokesperson: "Coeburn Pty Ltd directors held a meeting on December 12, 1996, and resolved to request Westpac to appoint a receiver - manager," she says.



A special meeting was called last week by the Alice Springs committee of ASSPA (Aboriginal Students' Support Parent Awareness) to express a number of concerns about Aboriginal education to staff at Centralian College.
It is understood that in the last two years only one Aboriginal student from the college has graduated from Year 12 .
About 10 Aboriginal parents and students attended, as well as three College staff, the Shadow Minister for Education Peter Toyne, Education Department representative Noel Coutts, and a college Aboriginal Liaison Officer.
Ms Deborah Maidment, deputy director of IAD, chaired the meeting as a parent of a student repeating Year 12 this year at Centralian College.
Ms Maidment says: "There were concerns about the counselling of Aboriginal students, who don't appear to be informed correctly about what type of subjects they should be undertaking to successfully complete their HSC.
"Therefore some students are actually completing what we thought was Year 12 twice. College staff pointed out to us that there were no years 11 and 12, instead students had to gain a certain number of points to get their HSC."
The problem facing Aboriginal parents is the retention rate for their children over 18 is very low, and the committee feels "something has to be done about that."
"We were concerned if students were being misinformed about subjects, then they're not going to complete their HSC, have to repeat, and by that time they're going to be 18, and just drop out," says Ms Maidment.
College staff at the meeting disputed the figure of only one Aboriginal student graduating in the last two years, saying they thought there had been five or seven, but the Aboriginal Liaison Officer at the meeting corrected them, verifying that there had in fact been only one.
Ms Maidment says she put it, unchallenged, to college representatives at the meeting "that there were about 50 Aboriginal students there in 1995, over 60 in 1996, and only one passed, and then only after repeating the second year."
However Education Dept figures released to the Alice Springs News show that there was a total of 39 Aboriginal students in Years 11 and 12 in the last two years at Centralian College.
Kenny Laughton who has a son studying at Centralian told the meeting: "If our students say they want to be scientists, they don't want to get to Year 12 and then discover they must study subjects X,Y, and Z or they can't become a scientist. We want you to tell them that straight up."
Ms Maidment says she understood "from other sources that Centralian College had not applied for further funding of an Aboriginal Liaison Officer's position."
When she expressed concern about this, saying how vital this kind of support is for Aboriginal students, College staff protested that a funding submission had been made. However the NT Education Dept representative at the meeting said no such application had been received.
Commenting on the absence from the meeting of the College Executive Director, Ms Maidment told the meeting: "I am disappointed that the overall head of this college could not come to a meeting to discuss this issue which we see as so important, given that our Aboriginal students are still not getting through Year 12."
The meeting was told the College Executive Director "had to attend another meeting." Had the parents' group known this in advance, they say they "would have rescheduled our meeting at a more convenient time, so the director could attend."
The College Director says she was interstate on the night in question and had not received an invitation to the meeting.
IAD in Alice Springs offers higher education course pathways with its partnership through Latrobe University, but as yet there is no pool of Aboriginal students to take up this opportunity.
Ms Maidment says "this is because we can't get these students through Year 12."
This year the ASPA committee intends to go more often into the schools and undertake career counselling with Aboriginal students to find out what individual choices are.
"We'll ask them: 'If IAD was to offer you university courses later, what sort of courses what you like to do?' That way we can start early in the students' preparation.
Many of these Aboriginal kids are really good achievers, and we know that if they weren't messed around by the system then they could most probably get through.
It dampens your confidence if you know that you have to go back and repeat Year 12."



On the question of truancy rates and possible links to crime, opinions from Alice's secondary schools are as diverse as if the schools were located at different ends of the country.
Principal Don Zoellner of Alice Springs High School (ASHS), a junior secondary school, believes "absenteeism in the Territory generally, and particularly in Alice Springs is too high."
He says absenteeism at ASHS runs at about 10 per cent.
Pointing out that not all non-attendance is truancy, he estimates the real truancy rate at his school is more like one per cent.
However there are no "hard" figures kept to distinguish truancy from other reasons for non-attendance.
At Sadadeen Senior Secondary, now combined with the old Alice TAFE and known as Centralian College, Council President Fred Hockley has a different view.
Mr Hockley says he sees no connection between senior secondary school non-attendance and juvenile crime, a view not shared by either the Minister for Education, Shadow Minister for Education, other education professionals, or the police (See last week's News).
Centralian College refuses to release its absentee figures.
Det. Snr. Sergeant Don Fry, officer in charge of Alice CIB, says while police don't keep figures on this, it is his personal observation that "non-achievers at school whether through low ability or truancy, contribute significantly to juvenile crime" - a pattern which is also being identified in several overseas studies.
Police are careful to make the point that most crime, including the juvenile variety, is committed at night outside of school hours, but still the relationship between non-attendance at school and juvenile offenders appears to exist.
Mr Fry also says it's important to differentiate between students "wagging school as an experiment in life, and those who are hard core" while remembering too that not all minor crime is committed by youngsters.
In Mr Fry's 15 years' experience with Territory police he has found "the vast majority of juvenile offenders are still good kids."
"What they lack is direction, support, and the discipline to get on and do the right things.
"If the home environment is not right for kids, then they're not going to achieve, or go to school," says Mr Fry.
He is concerned about the groups of juveniles, "mostly regulars, totalling between 20 or 30 and up to 50 in number, roaming the streets of Alice Springs at night until three or four o'clock in the morning and committing offences."
Lorraine Braham MLA for Braitling, with a lifelong career in education from classroom teacher through to superintendent, also acknowledges a link between school absenteeism and juvenile crime.
She suggests that one of the things the schools could do is make sure that "free or study periods fall towards the end of the day."
"If these periods are scheduled say at 11 am, then you probably lose the kid for the rest of the day," says Mrs Braham.
A check with the schools shows that some have already introduced this idea.
Mrs Braham also comments that "the reason some bush communities, such as Harts Range, have such a high attendance and successful record in education is because the community as a whole there holds a positive opinion about the necessity and value of education.
"If a school kid is seen wandering about during school hours at Harts Range, any member of the community is likely to take the child back to the school."
St Philip's College principal Chris Tudor says: "We don't have a truancy problem. Absentees are followed up through a phone call to the parents on the day, and students know that."
Mr Tudor says he "could not comment as to whether truancy is linked to crime in the town."
Nor does the school have a problem with Aboriginal absenteeism, he says.
"It is compulsory for our Aboriginal students to attend, just like everyone else, and this is the case."
Again, attendance rates at St Philip's are not available.
It's a similar story at OLSH; Principal Brother Paul Gilchrist says students are "encouraged to attend, and stay at school."
"There is a concern when children don't attend because then they have time on their hands which can lead to problems," he says.
Declining to reveal attendance figures, Br Gilchrist would say only that "attendance rates at OLSH are quite good."
School Council President at Anzac Hill High, Bruce Simmons, says attendance rates there are, "disappointing, but probably no different to those at other Alice Springs schools."
There is a problem, and it is a great concern that a number of children are not coming to school. I don't know the reasons why; there's been very little research into this problem," he says.
On the question of truancy/juvenile crime links, Mr Simmons feels "if kids are not at school, they've excluded themselves from the mainstream, so there are obviously anti-social feelings and rebelliousness."
The frustrations of people like the Shadow Minister for Education, Peter Toyne, attempting to get at reliable statistics are understandable.

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