Merry Christmas to Peter Wilson. When it was suggested that Peter Wilson should be independent of the old board so that we can have a fresh start Peter responded with "That's your issue". Summary of the meeting here: viewtopic.php?f=23&t=594
A good summary of where we are up to by Joe Aston of the AFR, linked to from here: viewtopic.php?f=5&p=4137#p4137
If you are new to this website read the story so far: viewtopic.php?t=321#p1793
Check out some of the AFR articles, too many to list and check out some of the ABC reports: http://www.afr.com/business/accounting/ ... 215-h055ej http://www.afr.com/business/accounting/ ... 211-h02x1d http://www.abc.net.au/news/programs/the ... s,/8626662
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Week that was 12th May 2017

A weekly round up of the issues and progress
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Brett Stevenson
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Week that was 12th May 2017

Post by Brett Stevenson » Fri May 12, 2017 1:13 am

Hi all,
A quick update (for you to read anyway), it took a little longer to write.
Nine headings, and shouldn’t take you too long to get a handle on the latest.
The overall message is, let's get out there publicly and move away from the anonymity.
I’ll go through and correct all the typos tomorrow some time. Best to get it out there now.
I’ll send by email and MailChimp Friday (at a more reasonable hour).
Have a read of my previous two weekly updates on the website for more info.

Why should I get involved?

I would suggest that the five issues I mentioned in my last weekly update are a good place to start to ‘get a handle’ on what is going on at CPA Australia.
They being
1. The self promotion of Alex Malley rather than CPA Australia, the profession and the members.

2. The minimum though compliant disclosure mentality of the CPA board for an organisation that should be setting the standards.

3. The scandalous level of remuneration to the board and the senior executives.

4. The weak and poor corporate governance regime at CPA Australia which has enabled these issues to arise.

5. The culture of intimidation and bullying that permeates the CPA Australia organisation esp. from the leadership and Head Office.

There are lost of other issues (small influential group in leadership positions for a long period of time, questionable expenditure on NBL and Tennis sponsorships and international travel, poor strategic decisions for CPA Australia’s future, alleged unethical matters from Macquarie University days for Alex Malley prior to becoming President then CEO and whether appropriate due diligence's were done at the time etc) but the above five will provide a starting point.

It matters not whether you are in public practice or not, or where you live geographically, or what your membership status is (FCPA, CPA, Associate), or what your demographic peculiarities are.
All that matters is that you are a member of CPA Australia and/or of the accounting profession (let's be realistic here what is happening at CPA Australia is also impacting the image of the whole profession).
If you want to see the profession and the membership trashed (as I believe it now is) then do nothing. Stay disinterested and don't speak out publicly on these issues.

But if you want to reverse the trend then I reckon you (and I) need to stand up and speak publicly on these matters (not anonymously) so that we really are heard and recognised.


Scandalous remuneration being paid to Alex Malley our CEO (possibly $3 million)

The equation is pretty simple. $5,508,000 for 15 Key Management Personnel in 2016.
We know the 12 directors have not received their maximum remuneration of $1,700,000.
How do I know that? Because the board told us that in the 16 page memo of 16th March 2017.
However we shall know exactly when they get around to sending out the full disclosure I have requested and they have to provide (s202B).

So that leaves at a minimum for the three executives (Malley, Awty and Hughes) the balance of $3,800,000.
That's the minimum.
If the board only received $1,400,000 (my best guess) then theses three amigos shared a booty of $4,100,000 for the year.
If you don't recognise the SCANDAL in that then I think you possibly need to hit yourself to see if you are alive.

Word on the street is that the split up is $550,000 for Hughes and Awty, and you can work out the balance to Alex Malley.
Yes, that’s right, $3,000,000.
No wonder the board are hiding for cover.
No wonder the board will not provide full disclosure of executive remuneration.
The directors of CPA Australia rightly deserve all the criticism that is coming their way over this.

And here they are:
Tyrone Carlin (Chairman, and Deputy V-C at Sydney University who has promised them he will only work one day a week at CPA even though the role was based on 3 to 4 days work per week),
Graeme Wade (also Chairman of the NBL to which we have just given $756,000 in sponsorship but of course its a commercial arms length transaction with no conflict of interest??),
Richard Petty and Kerry Ryan (10 year plus veterans on the board, along with Graeme Wade, with almost monopolistic seats on the all powerful Nominations and Remunerations Committee),
Richard Alston ( I would have thought his parliamentary experience would have warned him of the red flags on the remuneration),
David Spong (one presumes Ericsson Australia show a little more restraint on their salaries),
Jennifer Lang (well CBA might be feeling the pinch a bit now, so perhaps some fresh insights will be shared on the board on remuneration),
Michele Dolin (I would have thought her experiences with excessive remuneration with the WA Gov’t Employee Superannuation Fund GESB would have made her more wary. Perhaps not),
Martin Hourigan (I would have thought the Just Group - Solomon Lew - would be a little more cautious with remuneration of staff. But again, perhaps not),
Sharon Portelli and Deborah Ong (with their public accounting experience I would have assumed a touch more realism),
Jim Dickson (how this was able to get past his radar surprises me. But there you go).

I look forward to them explaining this above outrageous remuneration levels for the three executives.
Do you think they might come on to the front foot and actually ‘come clean’ and fully disclose what these three executives individually received?
Their refusal to do so by provides a clear picture of the sobering and sad plight of CPA Australia.
It is a disgrace.

And to think that the CEO of CAANZ recently disclosed his salary at $600,000, and thought he was being amply rewarded.

Wow, we at CPA Australia are being taken for a ride, and to think we aren’t prepared to speak publicly abut this.
The media and public will be onto this and rightly asking what were you doing at CPA Australia.
Recall Australia Post?

As one member said to me recently 'it is legal theft on a grand scale’.
And we want to brand ourselves as CPA’s in the public domain with this sort of leadership.


What can I do?

a. Take a bit of interest to know what the issues are
Raed my last Weekly Update where I provided a rough summary of five key issues which need addressing.
Refer to our website for more detailed information- cpamembers.org

b. Come out from your anonymity. If the CPA designation is worth anything then surely members need to be able speak publicly on these issues.
I can appreciate the link between the bullying and intimidation, and members silence, but really is that an adequate excuse.
We would tell our children that the best way to deal with bullies in the schoolyard is to stand up to them.
Bullies in reality are wimps, and the only antidote is to stand strongly against them.
I hardly think the CPA designation is worth much if we are not prepared to stand up and ‘defend it’ in the midst of such blatant abuses.

c. Communicate with other members.
If you buy the line from Head Office that you need to speak with them first then I reckon you might as well go and buy a ticket on the lemming express.
Are we independent professionals or are we just censored lackeys mindlessly following the instructions from Southbank?
Ask yourself Do I feel uncomfortable with the self promotion of Alex Malley?
I suggest 90% would say yes.
I suggest you then 'dig a bit deeper' as I have done (ignoring Graeme Wades contention that you are the odd one out to ask such questions) and you will be amazed what lies beneath the surface.

d. Refer any members or other interested persons to our website to be updated, and sign up to our mailing list either directly to me (bstevenson100@gmail.com) or via MailChimp http://eepurl.com/cNpQ05

e. Ask questions of your directors, divisional councillors, committee members, representatives councillors, discussion group leaders.
Put a bit of pressure on these people. You may have trouble finding them as the CPA Australia board have decided to take down their names and contact details from the website.
If you call Head Office they will only answer questions if you provide your name and membership number (and expect a follow up call from Jeff Hughes or Graeme Wade to say these issues are just those of a rogue member.
But you can tell yourself you are smarter than that. George Orwell told us a lot about such guys and their approach to leadership.

f. Check it out for yourself.
You don’t need to believe or agree with what I say but you can at least check it out.
What I am saying has not made the AFR, The Australian, the ABC, and other media for no reason.


The Naked CEO

I feel ashamed to admit it but I bought a copy after having tried to obtain a copy from the local Armidale library, and the UNE library, but they didn’t have.
It's a shocker. I don't know how else to describe it.
I have since gone back and congratulated the librarians for having great discernment in their purchases of library books.
But I shall leave it for others to provide a more detailed review.
What I wanted to know was a few basic questions for the CPA board in relation to this book given the obvious conflict of interest if we purchased the book’s rights and are promoting it when Alex Malley is our CEO.

a. Did we pay Alex Malley anything for the book? If so, how much?

b. Is it true that the book was ghost-written? And was that ‘ghost writer’ a CPA employee while writing it?
The obvious link and follow up question between a. and b. hardly needs stating.

c. How much have we spent marketing and promoting the book?

d. And on the other side of the ledger how much revenue have we received from its sales?

e. Why is the book being heavily promoted without the CPA logo in sight on the cover or promotional material?

If this book is the rip-roaring success the annual reports convey, why does the board not fully disclose the black and white evidence to substantiate those claims?
In other words it seems to me that all the revenue, publicity and goodwill is going to our CEO while CPA Australia is left carrying the can with little left to show for it at the end of the day.
Did the 2014 board consider the conflict of interest, and the financial aspects of their decision?
These are they so perhaps members could ask them
Still there on the board: Tyrone Carlin, Graeme Wade, Richard Petty, Kerry Ryan, David Spong, Deborah Ong, Jim Dickson, Richard Alston, Michele Dolin
No longer on the board: Peter Dowling, Tim Ebbeck, Penny Egan


Bullying and Intimidation

I would like to spend more time on this in one of my future weekly updates.
Let me briefly encourage members to stand up and take them on.
Speak out publicly, don't hide behind anonymity.
Think of what you teach your children about bullying at school and then heed your own advice.
It has become so bad that one member quite wisely said CPA Australia’s slogan should be revised to say
Be heard but don’t be recognised.
Social media may be quick and easy and convenient but let’s not hide behind its anonymity.
Lets get out there and take them on in the public domain.
What are we projecting to the watching world when very few are prepared to speak publicly on these important issues.
If we do not come out and speak publicly about the scandalous remuneration for starters we will be treated with derision I suggest by the public.
We should be setting a high bar but keep crawling under a rock to shelter from the storms ahead.
I say let's get out there and get stuck into them.


ABC update


Well, there are no promises on when the ABC coverage on this matter will be, but it is all ready to go.
The Budget and Clive Palmer were pretty hard news items to compete with this week.
If I have any notice I shall try to notify you but whenever it hits it will hopefully be on the 7pm TV news and the various news items around that (TV and radio).


Letter to the Board

I have written to the board in relation to three matters, and shall wait for their response before ‘going more public’ on the matters.
The three matters to which I refer are
1. I asked them if the email addresses of members was on the Members Register and was redacted from the copy sent to me?

2. I have asked them for an apology (to be sent to all members as well as me) for their intimidatory and bullying letter sent to all members on 1st May 2017.
All the media journalists (as well as members) who have seen the letter have been astounded that CPA Australia leadership would put their signature to it.

3. I asked the directors to individually review and reconsider their positions on some of the major issues that have been raised.
Board solidarity is not a virtue with some of these matters I would suggest.


Change to the Corporations Act - the CPA amendment (what a disgrace)

This is really just a bit of advance warning that we are going to push for a change to the Corporations Act to level the playing field in relation to the Members Register.
Most likely a Private Members Bill to add electronic addresses to s.169(1) such that the Members Register will require three things

1. Members name and address
2. Date joined
3. Members electronic address

This section of the Act was amended recently with what I call the 'Tweed amendments’ to prevent improper use of the Members Register. And rightly so.

But this amendment we are pushing, 'the CPA amendment’, is to improve the section to provide a level playing field in relation to access to the Register.
Both the major political parties, and I suspect the minor parties and Independents will support it because we have seen how the exclusion of the email address of members at CPA Australia has created a very uneven playing field.
CPA Australia were able to send out a letter to all members (by email) on 1st May at minimal cost just days after providing me with the register which would have cost me over $160,000 to do the same (by ordinary mail).

Remember this is not an issue of privacy or distrusting who the register goes to.
The law is very very clear that the Register can only be used for proper and not improper purposes. It is a criminal offence to break this law.

What is at issue is amply demonstrated with these current CPA Australia issues.
Members are trying to communicate with the members about major issues that impact on their membership rights, partly due to the complicit and weak board leadership, yet for us to do so will break the bank ($160,000 for one letter) while for CPA Australia it costs virtually nothing, all because they will not provide the email addresses on the Members Register.

This is a change that is desperately needed to bring the legislation into the 21st century.

The only groups that I can see opposing this would be corporate boards that are afraid to be held accountable to their members. In CPA Australia’s case mainly because of our lack of full disclosure.

What a disgraceful legacy - an amendment tot he Corporations Act (the CPA amendment) because of our failure or unwillingness/refusal to provide email addresses in the Members Register, and all to prevent level communication with the members on proper and important issues.
If the current leadership do not support or advocate for this change they should resign in disgrace. It is bad enough that it is our own poor behaviour which provides the catalyst for the action in the first place.

More to come on this matter. And I will do a rough summary of the rationale for why these sections are in the Corporations Act in the first place.
But I can say we already have some pretty weighty support from both government and corporate Australia.


Fighting Fund

Just providing advance warning that we are planning to establish a fighting fund.
We will open a separate bank account, so it can be audited, and I will not be involved in handling or managing it.
I want to keep as far away as possible from it.
But it will be necessary with the main priorities at this stage being
a. to build a more professional social media framework to communicate with members, (and get their email addresses)
b. to move the change to the Corporations Act (see above) along
c. a couple of other initiatives which shall be disclosed when the fund is launched

This is really just to let you know we are in for the long haul on this because change needs to occur at CPA Australia if it is going to be restored to being our pre-eminent professional association which serves the needs of the profession and the members.
How far we have strayed.

Cheers

Brett


Brett Stevenson CPA BComm MDiv
bstevenson100@gmail.com

deaneus
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Re: Week that was 12th May 2017

Post by deaneus » Fri May 12, 2017 8:35 am

Fighting Fund?

I'm in.

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nakedadmin
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Re: Week that was 12th May 2017

Post by nakedadmin » Fri May 12, 2017 10:39 am

Being anonymous has limited us in some ways. Like the Open letter to CPAA that I wrote in response to CPAA's email. That may have been published if people had put their name to it. And there were people who were prepared to do that but it was a bit rushed and so we decided not do ask a small number of small fries to do it.

Perhaps we could come up with a statement on behalf of this group and have a large number of members sign it off. Then release it to the media.

There are several suggestions of bullying and intimidation on this website. I think there are good reasons for people (myself included) to keep their identity private. In a recent submission to Treasury on whistle blowing CPAA actually supported protections for anonymous whistle blowers. https://www.cpaaustralia.com.au/~/media ... lia-review

One only has to look at some of the comments that Brett has received. Even on this website!

So yes we do need a brave group of CPAs to take the lead on this. And apparently there are some high profile CPAs that support us. I think it's their job to take the lead rather than expect some small fries to go into the front line for them.
The Naked Webmaster

BK722
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Re: Week that was 12th May 2017

Post by BK722 » Fri May 12, 2017 3:55 pm

"The only thing necessary for the triumph of evil is for good men to do nothing.”

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Brett Stevenson
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Re: Week that was 12th May 2017

Post by Brett Stevenson » Mon May 15, 2017 5:35 am

Read page 2 in today's Australian.
Alex Malleys $11 million property portfolio.
It speaks for itself.
Meanwhile the board remains silent.
CPA Australia is becoming a case study of leadership failure in real time.
Try to name all the individual directors. They need to be individually held to account.
Let me start with a few, and see if you can add the others.
Tyrone Carlin (CPA chairman, who is also Dep. V-C at Sydney University, also colleague of Alex Malley from Macquarie University days along with Richard Petty. Yes, those were the days when Alex Malley was allegedly asked to resign from the university for unethical practices and the becomes President then CEO of CPA Australia).
Richard Petty (11 Year board veteran at CPA, and still there. For most of that time being Chair of the all powerful nominations and remuneration committee which determines Alex Malleys salary. Involved with the MGSM. How come Macquarie University staff keep Being involved in the CPA leadership?)
Graeme Wade. Another long serving board member (same length of time exactly as Richard Petty, actually took over from him as chair of the all powerful nominations and remuneration committee which sets Alex Malleys salary. Whoops I've already told you that. Graeme also happens to be Chairman of the National Basketball League (NBL) to which CPAA decided to provide a $756,000 gift/sponsorship in a commercial arms length transaction with no conflict of interest concerns because of the importance of the NBL to the accounting profession. Oh yes, everything is just going swimmingly at CPA Australia with the leadership.
See if you can add to the list of directors.

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Brett Stevenson
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Re: Week that was 12th May 2017

Post by Brett Stevenson » Mon May 15, 2017 7:58 am

Let's look at another CPA Australia director and see if we can see the irony when we see Alex Malleys secretive salary 'of no small amount' (possibly in the $3 million 'no small amount' range).
Here is a quote from Perth Now
Michele Dolin
Super fund head sacked over pay rise
PerthNow
May 18, 2011 9:09am
THE head of WA's government employee superannuation fund, GESB, has been sacked.
The Australian reports that Michele Dolin, who has been GESB's chief executive since 2003, is one of the country’s best-paid public servants and is on a salary package of $535,000.

Her salary, which has been labelled “excessive” by Treasurer Troy Buswell, was put under the spotlight in 2008 when she was given a $160,000 pay rise while GESB posted a negative 11.4 per cent return.

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Brett Stevenson
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Re: Week that was 12th May 2017

Post by Brett Stevenson » Mon May 15, 2017 8:23 am

Oh, I forgot to mention CPA Australia Advice (fully owned subsidiary established by CPAA with an interest free $5.5 million loan to date and based on member take-up may well be never repaid) also pays more remuneration to.. wait for it... you guessed it...
Alex Malley (plus the two other CPAA executives Awty and Hughes), and directors Tyrone Carlin, Richard Petty, Graeme Wade and Michelle Dolin.
Wow.

Aren't these the same people mentioned above?
And no report of revenue or expenses in the annual report.
You could almost call this an income statement equivalent of the 'off balance sheet' items made so famous by Enron. An 'off profit and loss statement' if ever I saw one.

Accountability
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Re: Week that was 12th May 2017

Post by Accountability » Mon May 15, 2017 2:47 pm

How did you find this out?

Obviously we’ve all been keen to know where the $5.594M has been spent last year with this subsidiary....in the form of seeing the accounts and how much ‘consultancy’ was paid.

My company is a holder of an AFSL licence - any company holding a AFSL licence must lodge annual accounts and audit reports using forms FS70 and FS71. CPA Australia Advice has an AFSL licence was granted 15 April 2016.

Therefore their accounts were due at the latest 30 April 2017 (if they are also a Dec balancer)

I’ve queried ASIC as to why this company hasn’t lodged accounts.
They haven’t divulged other than to say they don’t reveal if a company has lodged an extension request, but it would seem that CPA Australia Advice wouldn’t qualify. So maybe they have just chosen not to lodge yet? Unusual for a member organisation.

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Stomper
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Re: Week that was 12th May 2017

Post by Stomper » Mon May 15, 2017 4:22 pm

Meanwhile at another member based organisation.......

NSW RSL to undergo institution's largest-ever probe into fraud allegations

http://www.abc.net.au/news/2017-05-15/n ... ns/8525418

FCA
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Re: Week that was 12th May 2017

Post by FCA » Tue May 16, 2017 11:30 am

What is it with these member organisations when it comes to fraud? The unions are a perfect case in point.....

I guess its a matter of greed when the spending of other peoples monies are not properly held to account in a transparent fashion.....

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The Nude CPA
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Re: Week that was 12th May 2017

Post by The Nude CPA » Tue May 16, 2017 2:50 pm

Accountability wrote:
Mon May 15, 2017 2:47 pm
My company is a holder of an AFSL licence - any company holding a AFSL licence must lodge annual accounts and audit reports using forms FS70 and FS71. CPA Australia Advice has an AFSL licence was granted 15 April 2016.

Therefore their accounts were due at the latest 30 April 2017 (if they are also a Dec balancer)
Well pointed out and very worth following up with.

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Re: Week that was 12th May 2017

Post by nakedadmin » Tue May 16, 2017 3:55 pm

Is it possible to FOI the accounts from ASIC?

Also I don't understand this loan to CPAA Advice wouldn't it be eliminated on consolidation? May be it still needed disclosing in the notes. CPAA Advice only got licensed in about June 2016 so I'd imagine that most of that $5m was spent in just 6 months. Surely they can see the writing on the wall if they are going to lose closer to $10m in 2017 that's probably about 140 average wages and CPA Australia has about 400 staff in total so how much are they paying themselves.
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