Call for finances probe as Brindabella Christian College tax debt revealed to be $8 million

The Brindabella Christian College reform group is calling for a forensic accounting audit of the school’s finances after revelations that the school’s debt to the Australian Taxation Office has blown out to $8 million.

Court documents say the school’s operator, Brindabella Christian Education Limited, owes $8,001,259.96 as of 6 January, comprising employees’ unpaid pay-as-you-go tax instalments, penalties and interest.

The ATO applied to the Federal Court on 18 February to wind up BCEL and appoint a liquidator after the school failed to pay the debt within 21 days. The ATO is also seeking costs. A hearing is set for 26 March.

Late yesterday ACT Education Minister Yvette Berry issued an unspecified show cause notice to BCEL, which has two weeks to respond. But she reassured the community that cancelling the school’s registration was not being contemplated.

Ms Berry had been weighing action against the school since late last year when it responded to her demand that it show proof of its governance compliance and financial viability.

The federal Education Department has also been investigating BCC for more than four years.

The tax debt has almost doubled in the past two years, from $4.8 million in January 2023 when the school was paying $37,000 a month in interest.

ReformBCC said it was glad to see that BCEL would now face a publicly accountable process, and it would lobby for a forensic accounting audit to be done as part of the ATO action.

It was advised that it would cost about $100,000 and called on the ATO or the ACT Government to fund it.

“We want to see the board’s affairs and finances investigated and an explanation for where the money’s gone,” Reform BCC said.

ReformBCC said interest charges were probably now close to $60,000 per month excluding penalties and fines.

“That is the equivalent of annual school fees for 48 students* diverted directly to ATO interest payments instead of to the care and education of our children and fully resourcing BCC staff,” it said.

“Our community demands transparency, accountability and action. The Education Ministers, both Federal and Territory, must stop shielding those responsible and stand up for the families, staff, and students who deserve better.”

ReformBCC called on the regulators, including the Australian Charities Not-for-profits Commission, to work together to establish interim arrangements for effective management and governance that can keep the school trading and support its transition to an enduring, stable governing body.

It said that last month, the board, in what appears to be a last-minute attempt to protect itself, amended the constitution to indemnify directors against being held personally liable for legal costs incurred defending actions and appealing decisions.

Since 2020, BCEL, by its own admission, has racked up $2.6 million in legal costs, and about $2 million in 2023 and 2024 alone.

ReformBCC said the new constitution was dated 31 January, which means it was approved and filed during the ATO’s 21-day payment period.

Another change to the constitution negates conflicts of interest where a board director enters into a contract with their own company. If they fail to disclose the deal to the board, that contract is not voided.

ReformBCC has written to the ACNC and the federal Education Minister, Jason Claire, urging them to investigate.

“You can’t constitutionalise out of the Corporations Act, so you can’t go and write yourself out of your director duties and obligations,” Reform BCC said.

It said the school community was devastated and frustrated about the situation, but it has been difficult to gauge feelings within the school given the board dissolved the Parents and Friends Association in 2019 when it opposed a change in school hours, and parents agree not to say anything against the school when they sign enrolment documents under threat of their children being excluded.

ReformBCC said parents generally did not want their children’s education disrupted or to be identified by the board for fear of retribution.

*The K-12 school raised its fees this year and parents now pay from $10,000 to $15,000 a year, depending on the year.