Brindabella Christian College will improve its financial management and governance structure as part of an agreement with the federal Education Minister.
On the fourth day of a public hearing in the Administrative Appeals Tribunal, legal representatives from Brindabella Christian Education Limited, the charity which operates the school, and lawyers representing the minister reached an agreement after a long-running dispute.
In 2021, a delegate for the minister decided the charity was not fit and proper to be an approved authority to operate a school, citing concerns over conflicts of interest and financial viability.
It imposed conditions on the school requiring it to have an independent professional review its financial management and for the governance structure to also be reviewed.
Details of the agreement are not yet public, but the school is expected to take steps to improve its governance and financial management which will be monitored by the federal Education Department.
Board chair Greg Zwajgenberg said: "The school is awaiting completion of the arrangement with the AAT and will make a statement at that moment in time."
Adero Law principal Rory Markam, who is supporting an association called Community for Constitutional Reform at Brindabella Christian College, said this agreement only resolved a narrow issue of how the board should move forward.
He said most parents would be concerned that there was still no evidence the school remains financially viable, no commitment to deal with poor decision-making in the past and that financial records are not up to date.
"All those three factors would be a deep, dark cloud over the ongoing administration of the school and any parent would have to seriously consider whether the school has the culture to change," Mr Markham said.
Financial risks 'high'
The tribunal heard the school had a substantial tax debt of up to $4.8 million at the beginning of 2023 and several auditors had raised concerns over its financial viability.
Statement of facts and contentions revealed the unaudited 2021 accounts showed the school made a loss of $2.1 million despite growth in enrolment numbers. This followed a $3 million loss in 2020.
Audited accounts for 2021 have not been published and the 2020 accounts were only publicly available on Monday following the first day of the tribunal hearing.
A report from Canberra firm McGrath Nicol published on April 19 last year found the charity was almost at the limit of the amount of money available under its loan with NAB, with only $856 left to be drawn down at October 2021.
Auditor Saward Dawson raised concerns that the school was at 'high risk' because of unpaid tax and the need to find a new funding partner for the school. The firm created a road map for the school to follow in early 2022 to address these issues.
The school's bank engaged KPMG in January 2022 to conduct an investigative accountant review.
The school's lawyer Tom Brennan said the school accepted they were on notice for financial management and that in the past they were not as fit and proper as they should have been.
He said the school was already taking steps to improve the situation after KPMG and Saward Dawson reviews.
Conflicts of interest
The tribunal heard of a number of potential conflicts of interest involving board members and other key management personnel that had not been disclosed in audited reports or board meeting minutes.
One of the three directors, Alyn Doig, is also a director of Life UC Limited, a Pentecostal church which is also the landlord for the school's Charnwood campus.
The school has had dealings with several companies that are owned by the board chair Greg Zwajgenberg and paid for his traffic infringement.
The school appointed Brendan Major as chief financial officer on June 11, a day after his company MIT Services was engaged to provide IT equipment and services to the school.
Mr Brennan said the school would be improving the size and diversity of the board, which currently has three directors.
Mr Markham said in his view it would be almost impossible to achieve the appropriate level of transparency with the current board structure in place.
"In this instance, without moving towards a community elected board the risk is that you have the same issues around transparency and poor decision making that was the subject of the Commonwealth concerns, when they obviously founded a view that there was a fitness for position issue," he said.
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