RSL Victoria has admitted it was inappropriate to partly gift a corporate car worth $37,000 to its former president, the ABC can reveal.
Details of the gift emerged on Wednesday, as sub-branch officials were briefed on an investigation currently being undertaken by the Australian Charities and Not-for-Profits Commission (ACNC).
The car, a Holden Statesman, was driven by Major General David McLachlan (retired) during his tenure.
When he retired last year, RSL Victoria paid for almost half of the car's value. He contributed the remaining portion.
Current state president, Dr Rob Webster, said it was established practice for state presidents to take their corporate car with them when they retired.
He said the money used to pay for the car came out of the organisation's commercial revenue stream, which it had not realised was considered charitable money.
But when the ACNC told them this was an inappropriate use of this money, "we spoke to General McLachlan and he wrote us a cheque".
General McLachlan told the ABC he also had not realised money from the commercial arm was considered charitable money, and repaid it immediately when asked to do so.
However, he defended the sentiment behind the gift.
"When you think of the contribution that was made by myself over 15 years, and the hours that were put in which were mostly unpaid … and it was seen by the people that made the offer for the gifting to be an appropriate recognition for what I had done."
Charity regulator called in to investigate
RSL Victoria called in the charity regulator to examine its operations and governance after scandals in other state RSLs.
The Victorian branch, which manages $54 million in assets, signed a compliance agreement with the ACNC last week in an attempt to fix the problems.
The compliance agreement with the charity regulator forces the Victorian branch to take action in five areas:
- Create new policy for financial management;
- Review the honorarium system;
- Review decision-making frameworks;
- The state executive must undertake governance training;
- Provide full disclosure of the compliance agreement to the state conference.
Dr Webster said the investigation had revealed the organisation's financial controls had not been what they should have been.
"And in the last fifteen months, we've been working on getting that right," he said.
As the ABC revealed on Wednesday, the ACNC has found RSL Victoria failed to meet three key charity governance standards, including around financial management.
Presidents told not to discuss investigation
Last week, in a letter to sub-branch presidents about the investigation, Dr Webster asked them not to speak publicly about the "highly sensitive" matter.
"[The investigation] has the potential to impact on the reputation of the League in Victoria if broadcast widely and as such I appreciate your discretion in your handling of this information," Dr Webster wrote.
However, Dr Webster told the ABC he believed the branch did not have the same "systemic issues" that had plagued other states, because Victoria does not have the same large revenue streams as Queensland and NSW.
"I'm very confident to say the Victorian branch doesn't have those issues identified in other states," he said.
RSL Victoria took in $7.6 million in its general account in 2017, and $8.2 million in its Patriotic Fund.
Separately to the ACNC investigation, Dr Webster said a forensic accountant was also called in to examine loans made from the state branch to about 30 local sub-branches over the past decade.
"We had some concerns there was not a good paper trail in the documentation of loans."
It uncovered that interest was sometimes being paid into the wrong account, which has now been rectified.
Other state branches under scrutiny
RSL state branches across Australia have been rocked by governance scandals, with former NSW RSL state president Don Rowe admitting to spending $475,000 on a corporate credit card using allowances to pay off a mortgage and buying mobile phones for his family.
An independent investigation found Mr Rowe operated with "sheer ineptitude and cronyism" which damaged the integrity of the organisation.
State RSL branches in Queensland and New South Wales were found by the ACNC to have "significant governance failures".
RSL Queensland could not account for how $400,000 in charitable funds were spent, and RSL SA has also entered into a voluntary compliance agreement with the ACNC to address governance issues.
