https://www.righttoknow.org.au/request/au_historical_financial_irregula
".au Historical Financial Irregularities
Ron Andruff made this Freedom of Information request to
Department of Communications and the Arts
From: Ron Andruff
Delivered September 15, 2017
Dear Department of Communications and the Arts,
We hereby make a request under the Freedom of Information Act 1982 (Cth) ("Act") to access certain documents relating to .au Domain Administration Ltd ("auDA"), as more fully described below.
1. About auDA
auDA is the administrator of the Domain Name System in Australia endorsed by the Australian Government to administer the .au domain space. Clause 19.8 of auDA's constitution states that a "representative of the Commonwealth of Australia may attend any meeting of the Board of.. [auDA] as an observer". We understand that the Department of Communications and the Arts is currently an observer on the auDA board.
2. Background to the request
Historically, auDA's leadership was driven by CEO (Chris Disspain) and Chair (The Hon. Tony Staley AO), each of whose tenures lasted for more than 15 years. According to the Cameron Ralph Report 2016, which forms the best practice standard of auDA's corporate governance (accessible here -
https://www.auda.org.au/assets/Uploads/C... ), "While these long-standing relationships have had considerable strengths, they have also continued early patterns of fairly informal Board practices over a period of some 15 years" which, arguably, "have not kept pace with auDA's growth in scale and importance to the Australian community, nor with evolving good practice in governance and accountability". In light of this alleged lack of governance, accountability and transparency, the newly appointed CEO and management has taken initiatives in the past 12 months to introduce various organisational and administrative policies to reform auDA's governance framework.
As part of these initiatives, a forensic review of auDA's historical expense management practices was performed to ensure accountability on expenditure in general. According to slide six of the CEO presentation given at the Special General Meeting on 31 July 2017 (accessible here -
https://www.auda.org.au/assets/pdf/SGM/a... ), the Board of auDA ("Board") appointed PPB Advisory, which specialises in undertaking forensic investigations and investigating fraudulent activities, to conduct an independent forensic review of auDA's expense management in two phases ("PPB Review") as follows:
• Phase 1: travel and expenses review under instructions from Maddocks commencing in February 2016; and
• Phase 2: forensic investigation under instructions from Ashurst commencing in September 2016.
Slide seven of that presentation summarises the findings of the PPB Review as follows:
"The review of travel and expenses identified there was a lack of formal policies and procedures governing how travel and expenses were managed at auDA. There were high levels of expenditure on international travel and reimbursement arrangements with international bodies that lacked transparency, which should have warranted a more robust process;.. There was general a lack of formal procedures and supporting documentation."
It is our understanding that PPB Advisory has prepared a report (or potentially, a series of reports) in relation to the PPB Review ("PPB Report"). According to item 6 of the minutes of the Board meeting held on 10 October 2016 (accessible here -
https://www.auda.org.au/assets/auDA-Boar... ), the findings of the PPB Review were "based on staff interviews and included IT, Finance, Complaints Management, HR and Administration".
According to item 4(a) of the minutes of the Board meeting held on 13 February 2017 (accessible here -
https://www.auda.org.au/assets/Board/201... ), it appears that the final version of the PPB Report was considered as follows:
"4. Matters for decision
a. PPB Final Report
Peter Morris, Partner at PPB Advisory, provided an overview of Phase 1 and Phase 2 of the investigation to Directors.
Lawyers at Ashurst provided advice to the Board.
The Board agreed that the under-reporting of FBT [Fringe Benefit Tax] to the ATO [Australian Taxation Office] needs to be investigated further.
The Board note the findings and recommendations of the report. The Board note initial recommendations have been implemented. The Board instruct the CEO to continue to implement governance improvements."
Further, item 4(c) of the minutes of the Board meeting held on 24 April 2017 (accessible here -
https://www.auda.org.au/assets/Board/201... ) states that:
"The CFO advised the Board that PwC have been engaged to assist with the voluntary disclosure of under-reporting of FBT identified during the PPB investigation."
3. Requested documents
In light of the above, we request access to the following documents:
• a copy of the PPB Report;
• copies of any findings or reports relating to "the under-reporting of FBT to the ATO" as noted in item 4(a) of the minutes of the Board meeting held on 13 February 2017;
• internal meeting minutes or any other record (in any form) of matters discussed at in-camera discussions held during auDA's board meeting on 24 March 2016 relating to the termination of the ex-CEO Chris Disspain (excluding the board minutes dated 24 March 2016 which are published on the auDA website); and
• copies of any reports or other records relating to expenses incurred by the ex-CEO Chris Disspain during the period(s) the subject of the PPB Review and rational for extensive international travel and explanation of benefit to auDA and the Australian public in general,
(together, "Requested Documents").
In seeking disclosure of the Requested Documents, we note that there are a number of public interest considerations in favour of disclosure as follows:
• Promotion of the objects of the Act
There have been substantial public discussions within the general IT and internet domain community regarding the allegations of financial irregularities and the lack of corporate governance by the former auDA CEO, Chris Disspain, and management. Disclosure of the Requested Documents would be in line with the overall objectives of the Act, allowing inquiry into possible deficiencies in the conduct or administration of auDA, revealing any past improprieties and providing a clear background to what informed the overhaul of the auDA's management and its governance policies.
• Inform debate on a matter of public importance
Given the domain .au is used by millions of Australian businesses, organisations and individuals every day, auDA's corporate governance and transparency are a matter of public importance. It is vital for the public to understand why and what changes were made to auDA's governance structure and practices so that they can have confidence that auDA, the sole administrator of Australia's internet infrastructure, is stable and reliable. In particular, the PPB report would provide details as to the under-reporting of Fringe Benefits Tax, alongside other potential financial irregularities. It is in the public interest to disclose this document so that such information can be public knowledge, thus allowing for a greater public understanding and oversight of the management of a policy authority that has been formally endorsed by the Australian Government as the appropriate body to administer Australia's top level domain. Without disclosure of such pertinent information, the public is left in the dark as to how such an important national body has been managed.
• Increasing public scrutiny, discussion and review of decision-making by auDA
As acknowledged in the letter of endorsement provided by the Minister for Communications, Information Technology and the Arts, the internet naming system is a public resource in the sense that its functions must be administered in the public or common interest. As such, it would be in the public interest for the information that is contained within the Requested Documents to be within the public domain so that there is greater transparency on the processes associated with the governance of one of the key mediums of communication in Australia, the internet, and Australia's top level domain, .au.
We look forward to hearing from you and please let us know if you require further information or would like to discuss.
Yours faithfully,
Ron Andruff"
