In 2014–15 ORIC completed 59 examinations.
An examination reviews a corporation’s books and records and makes an assessment of the corporation’s governance standards. It includes checks that:
- the corporation is being run properly according to its rule book and the CATSI Act
- the corporation is managing its finances properly with proper records, procedures and policies
- the directors, officers and employees are performing their duties appropriately
- any material personal interests and benefits to related parties are being managed appropriately.
Examining a corporation’s books contributes to the intent of the CATSI Act as a special measure to advance and protect the interests of Aboriginal and Torres Strait Islander people and their respective cultures. Examinations are useful for early detection of issues in a corporation. They are also equally effective at revealing corporations that are running well as those that are experiencing financial or governance difficulties.
The Registrar conducts a rolling program of examinations to assess the corporate governance and financial health of a corporation. Some examinations undertaken by the Registrar are in response to potential governance issues raised about a corporation.
For more information see ORIC’s policy statement PS-25: Examinations available on the ORIC website.
This financial year the Registrar completed 59 examinations as set out in table 7.
|Location by state/territory||Number of corporations|
|Australian Capital Territory||0|
|New South Wales||6|
The examination program for this financial year covered corporations with the following activities:
|Main activities of corporations||Number of examinations|
|Health and aged care services||15|
|Registered native title bodies corporate (RNTBCs)||5|
|Other native title||4|
|Art and cultural centres||3|
|Employment and training||3|
|Native title representative bodies||2|
|Heritage, culture and language||2|
|Education and schools||1|
|Legal services—community or family violence||0|
Outcomes of examinations
The outcomes of the 59 examinations conducted over 2014–15:
- 16 corporations (27 per cent) were found to be operating well and required no further action. They were each sent a management letter.
- 33 corporations (56 per cent) were required to rectify less serious matters which were settled through the issue of a compliance notice under section 439-20 of the CATSI Act.
- 10 corporations (17 per cent) had serious findings and were issued with a ‘show cause notice’ under section 487-10 of the CATSI Act. These corporations were required to explain why they should not be placed under special administration.
|Show cause notices||7||9||1||7||10|
 Compliance notices provide direction for corporations on how to improve their standards of corporate governance and financial management after an examination is done.
Compliance notices are made available in the public Register of Aboriginal and Torres Strait Islander Corporations. They provide valuable information to a corporation’s members and other stakeholders (such as funding agencies and creditors) about the standards of corporate governance and financial management in a corporation at a given point in time.
- 2 special administrations continued from the previous year.
- 10 special administrations were started.
- 7 special administrations were completed.
- 5 special administrations were still in progress as at 30 June 2015.
Special administrations enable the Registrar to provide early and proactive assistance to corporations when they experience financial or governance difficulties. They allow the Registrar to appoint an independent, suitably qualified person (the special administrator) to work with a corporation to fix its internal problems and restore it to good health. Once this is achieved, the special administrator returns control of the corporation to its members.
In all cases the special administrator works in the best interests of the corporation and its members. Special administrations are quite different to receiverships, liquidations or voluntary administrations as defined under the Corporations Act 2001, which are usually driven by the interests of creditors.
The grounds for special administrations are broad. They are not restricted to insolvency or the inability to pay a debt. Section 487-5(1) of the CATSI Act outlines the grounds on which the Registrar can determine to place a corporation under special administration.
Five of the 10 new special administrations (or 50 per cent) in 2014–15 were started after the directors wrote to the Registrar asking for assistance.
Before it is placed under special administration, a corporation is accorded a period of natural justice. Through a ‘show cause’ procedure it’s asked why it should not be put into special administration. The time the corporation takes to respond depends on its particular circumstances but the Registrar usually allows at least 14 days.
The aim of every special administration is to achieve one or both of the following:
- restore good operational order to the corporation—usually after a corporation has not complied with a provision of the CATSI Act or its rule book, has experienced financial difficulties or there has been a dispute
- restructure the corporation—usually after the directors or members have asked the Registrar to intervene to review governance or organisational structures.
Special administration is unique to the CATSI Act. It is a special measure that acknowledges the role and circumstances of Aboriginal and Torres Strait Islander corporations.
Seven special administrations ended during 2014–15. Three were completed within six months in line with ORIC’s key performance indicator. Successful business turnaround was achieved in five corporations (71.4 per cent) and they were handed back to members’ control.
|Date appointed||ICN||Corporation | Special administrator(s)||Date ended or due date | Outcome|
|17 Jul 2014||4709||Githabul Nation Aboriginal Corporation RNTBC||27 Feb 2015|
|Peter McQuoid||Handed back to members’ control|
|4 Aug 2014||624||Dubbo Koorie Housing Aboriginal Corporation||30 Jan 2015|
|Peter Saunders||Handed back to members’ control|
|15 Sept 2014||7877||Nauiyu Nambiyu Aboriginal Corporation||1 May 2015|
|Austin Taylor and Stuart Reid||Handed back to members’ control|
|24 Nov 2014||532||Minimbah Pre-school, Primary School Aboriginal Corporation||27 May 2015|
|Brian Woods||Handed back to members’ control|
|23 Dec 2014||248||Aboriginal Corporation for Sporting and Recreational Activities||23 Jun 2015|
|Frank Lo Pilato and Tony Grieves||Liquidator appointed|
|16 Feb 2015||7355||Pika Wiya Health Service Aboriginal Corporation||19 Aug 2015|
|Jack James and Paula Cowan||In progress|
|3 Mar 2015||3789||Mamu Aboriginal Corporation RNTBC||30 Sept 2015|
|Gerry Mier and Tony Jonsson||In progress|
|6 Mar 2015||500||Murchison Region Aboriginal Corporation||3 Sept 2015|
|Andrew West and Kehsai Tesfa||In progress|
|9 Mar 2015||1061||Mungoorbada Aboriginal Corporation||10 Sept 2015|
|Austin Taylor and Stuart Reid||In progress|
|8 Apr 2015||7573||Thamarrurr Regional Authority Aboriginal Corporation||7 Oct 2015|
|Austin Taylor and Stuart Reid||In progress|
|Date appointed||ICN||Corporation |
|Date ended or due date |
|18 Dec 2013||2379||Southside Housing Aboriginal Corporation||23 Jan 2015|
Frank Lo Pilato and
|Assets transferred to another body and corporation deregistered|
|28 Jan 2014||3630||
Bunurong Land Council (Aboriginal Corporation)
18 Jul 2014
|Handed back to members’ control|
Case study: Restructure helps shore up corporation in the Daly River
On 8 May 2013 Nauiyu Nambiyu Inc., now Nauiyu Nambiyu Aboriginal Corporation (NNAC), transferred its registration from the Northern Territory’s Associations Act to the CATSI Act. This turned out to be a very good move for the corporation located at Nauiyu, also known as Daly River, in the Northern Territory.
Just over a year later, NNAC’s directors acknowledged a range of operational and financial problems and placed a call for help to the Registrar. On 15 September 2014 NNAC was placed under special administration.
As special administration is only available under the CATSI Act, this iconic corporation may have seen a very different outcome without access to this regulatory assistance.
The special administrators worked with the corporation’s members through a complex process to turn the corporation around.
The special administrators also needed to address misinformation and misunderstanding about the corporation within the community and with the corporation’s stakeholders. NNAC’s story is an example of how damaging a lack of transparency can be to a corporation’s reputation.
NNAC was handed back to its members at the beginning of May 2015.