LGBTI Funding: Shaky Alliance Topples

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“Help! There’s a train coming!” (Damsel in Distress 1 : Steve Damron)

The LGBTI Health Alliance stands on the brink of collapse: the Dept. of Health will not provide core funding, nor fund most of their programs. “The the Alliance’s application contained insufficient detail regarding its proposed activities, risk mitigation and budget,” said the Dept.

 First, some background:

The changes to the commonwealth funding model – an end to secretariat/core funding, and a switch in emphasis to project-based funding – were first flagged by Wayne Swan and Julia Gillard. Those plans received broad bipartisan support.

Planning for this change was already well advanced by the time Abbott took office, and the rollout has been underway since. The ascension of Malcolm Turnbull has made no difference. Some organisations were given transitional funding to help them make the change. And for approximately the last two years, everyone has known that the ‘big bang’, so to speak, would be the end of June this year.

Question: During this period, what has the Alliance done to seek core funding from other non-governmental sources, and from whom? What success have they had?

The objective of the commonwealth changes is to ensure that core secretariat funding for peak bodies is sourced from the subsidiary bodies within the same sector, i.e., member organisations, rather than the commonwealth.

How much of the required core funding have they been able to source from their member organisations?

Given that everyone has known for at least two years that the government planned to spend less on core funding and more on project funding, you have to wonder why the Alliance reportedly asked the Commonwealth for more than double their previous core funding.

And given that cuts in funding were clearly inevitable, it is hard to understand why expenses were substantially greater in 2015 than in 2014. Surely this was a time to be cutting, rather than increasing, expenditure.

The Profit & Loss Statement (page 21) – see below for comments.

LGBTIP&L

  • Accounting and Auditing costs trebled
  • Advertising almost doubled
  • Meeting costs doubled
  • Insurance costs trebled
  • Printing & Stationary costs more than doubled
  • Subcontracting fees were up 70%
  • Salaries rose 25%
  • Super contributions rose 40%
  • Domestic travel costs were two and a half times the previous year

That’s not all. In September, according to three separate sources to whom I spoke, CEO Rebecca Reynolds was absent in Canada for several weeks on an Alliance-funded trip at a cost of approximately $20k.

Questions: What was the purpose of this extended trip? Was the $20k reimbursed to the CEO from secretariat funding or from project funding, e.g., aged care, mental health etc.? Was this a trip on Alliance business? If not, what arrangements are in place for the CEO to repay all, or the relevant portion, of these monies?

Late last year a consultant was hired and flown around the country, presumably to try to persuade member organisations to step up and help replace the lost funding, also at considerable cost.

The bulk of the Alliance’s Financial Statement is certified by the auditors, DFK Laurence Varney, as “a true and fair view of the Alliance’s financial position as at 30 June 2015”. But, the Profit & Loss Account is treated differently.

It is not included in the main document, but presented after the above auditors endorsement, and comes with a strong disclaimer

A second signed document from the auditors attached to the P&L explains they are refusing to give any “warranty of accuracy or reliability in respect of the data provided.” The auditors will not “undertake responsibility in any way whatsoever…. In respect of such data, including any errors of [sic] omissions therein howsoever caused.”

LGBTIDisclaimer

Sources close to the Alliance intimated that this might be because the Alliance wished to save on auditors fees, and not pay the $1,000 or so additional fee that would be required, and I can well understand they might be a bit cash-strapped, after already paying three times the previous accounting and auditing fees, plus handing their CEO $20,000.

I showed the financial statements, and the auditor’s disclaimer, to two practising qualified accountants. Both agreed that this was not the sort of statement they would like to see attached to any organisations audit. Said one:

You would do anything to remove it. If you could, that is. You would not want that on your financials.

Said the second:

Normally when you see such a qualification it means that the organisation was unable to provide adequate documentation to support the accounts, though of course that’s not to say that was the situation here. However, it’s hard to think of an alternative explanation.

A similar disclaimer was attached to the 2014 financial statement. Whatever was necessary to get an unqualified audit statement, the Alliance was clearly either unwilling, or unable, to undertake it. Perhaps 12 months was not enough time to implement the necessary changes.

I had a number of other questions I wished to put to CEO Rebecca Reynolds, but at the time of writing she has not been able to find the time to speak to me. If I had, in addition to the questions above, I would have also asked the following:

Which community organisations receive funding under the auspices of the Alliance?

How many of your board directors, and who, are also part of community organisations that directly profit from Alliance auspiced funding?

Are board members who personally profit from work the Alliance is funding required to make a pecuniary interest declaration at each board meeting., e.g. I note that Dani Wright Toussaint is employed under the MindOut program to deliver training via webinar.

What is Alliance policy and procedure governing the advertisement of staff vacancies, and the selection of staff? Can you point me to the advertisements online and in the press that were placed prior to the appointment of staff by the current CEO?

It is now confirmed that all Alliance funding is ending June 30, except for QLife, “Australia’s first nationally-oriented counselling and referral service for LGBTI people. QLife provides nation-wide, early intervention, peer supported telephone and web based services to diverse people of all ages.”

The 2nd rejection letter from the Department of Health, which comes after a review of the initial rejection, and a period of consultation states:

“As previously discussed the grant process was oversubscribed and very competitive and many applications were unsuccessful. Compared to the successful applications, the Alliance’s application contained insufficient detail regarding its proposed activities, risk mitigation and budget”

It is hard, if not impossible, to see the Alliance recover from this blow, or if a replacement is even needed.

Update: the following statement has just been released by the Alliance

Dear Members of the Alliance –

After a lengthy process of engaging with the Department of Health, the Alliance learnt late yesterday afternoon that it was not successful in its application for ongoing funding within the Department’s Peak Health and Advisory Body program.

This decision is a disappointing one for the only National Health organisation working across the LGBTI health sector, as the grant enabled a far greater cohesion of issues across a diverse range of policy areas where we would otherwise be working in only those projects that we are funded to deliver. It enabled members to engage in a national policy space where they would not have otherwise been able to and it is of deep concern that we now need to look at a reduction in our ability to engage on issues that are not part of funded projects.

The Alliance made a commitment to ensure that all staff roles would be continued at their current level to the end of the 15-16 Financial Year with the view and advice from the Department and the Health Minister that other funding opportunities would be established in 2016 as a part of the consolidation of Health’s Flexible Funds. The Alliance and its team will continue to work on seeking new funding sources to continue its important work in the national policy health space.

I thank you for your ongoing commitment to working for the health and wellbeing of LGBTI people throughout Australia.


Rebecca Reynolds
Executive Director

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About the author

Veteran gay writer and speaker, Doug was one of the founders of the UKs pioneering GLBTI newspaper Gay News (1972) , and of the second, Gay Week, and is a former Features Editor of Him International. He presented news and current affairs on JOY 94.9 FM Melbourne for more than ten years.

“Doug is revered, feared and reviled in equal quantities, at times dividing people with his journalistic wrath. Yet there is no doubt this grandpa-esque bear keeps everyone abreast of anything and everything LGBT across the globe.” (Daniel Witthaus, “Beyond Priscilla”, Clouds of Magellan, Melbourne, 2014)