Strict conditions imposed on Brindabella Christian College finances, governance

Brindabella Christian College must meet a raft of strict conditions on their governance, finances and reporting, according to an agreement with the Commonwealth Education Minister reached in the Administrative Appeals Tribunal (AAT). The agreement has been approved for public release by the AAT.

The school appealed a 2021 finding by a delegate for the Minister that Brindabella Christian Education Limited was not a “fit and proper person” to operate the school, which receives more than $10 million per annum in public funding.

Evidence tendered at the appeal revealed that BCEL owes close to $5 million to the Australian Tax Office. The existence of outstanding Fringe Benefits Tax payments to the ATO were also disclosed in the agreement.

Among the conditions are that the BCEL board, which had shrunk to three members, must expand to five and should include two women and a current parent. Board members must be appointed on the basis of skills related to operating a school.

The Board must also carry out a survey of staff and students and will be bound to consider the results.

The agreement requires BCEL to appoint appropriately qualified accounts and finance team members and ensure accounting systems include monthly reporting and forecasting broken down by business and campus.

This means costs for the primary and secondary campuses, early learning centre and school cafe all need to be apportioned correctly, recorded accurately and released transparently. BCEL must also reconcile and forecast government funding accurately.

Repayment plans for the ATO debt must be agreed and Brindabella must now report directly to the Education Minister within 14 days if any repayments are missed. BCEL must also meet quarterly reporting obligations directly to the Minister and these reports must be signed by an independent external auditor.

The conditions include a particular focus on the junior school at Charnwood and its future. BCEL must query the break-even assumptions in its accounting to determine the junior school’s viability by 30 September.

Overdue 2021 financial statements, including Business Activity Statements, must be lodged by 1 May, and outstanding Fringe Benefits Tax must also be paid, along with staff superannuation.

It’s understood the National Australia Bank has made a new offer to BCEL after advising its loan facility would not be renewed in 2021. Since then, the bank has only provided short-term extensions to enable the College to refinance. An independent business review from KPMG commissioned by the NAB in 2022 suggested no clear indication the bank debt of more than $11 million could be serviced in the short term.

The Education Minister’s submission to the AAT had also noted doubts over BCEL’s solvency and operation as a going concern. Commonwealth-appointed auditors BellchambersBarrett said, “There has been continuing diminution in BCELs financial viability and increasing deficiency of current assets compared to current liabilities” since 2016.

BCEL was required to provide the Minister with proof of ongoing loan arrangements with NAB by 6 April and must show by 1 May that loans have been reclassified as non-current liabilities – that is, that they are no longer subject to month-to-month approval from the bank.

Former staff, parents and students say the terms of the agreement are largely welcome.

“This is very tight oversight and it goes on for two years,” said Jodie Jayatilaka, whose children previously attended Brindabella Christian College.

“I’d hope the school is transparent about who the new board members are very quickly. They need to disclose to the community who these directors are and what skills they bring.

“I’m glad the AAT is being transparent. They’ve given us the conditions and that’s encouraging in itself because we can see how the minister will oversight BCEL’s operations and hold management accountable.

“But the test will be, does Brindabella deliver? That’s the million-dollar question, and only time will tell.”

Ms Jayatilaka told Region that adherence to conditions had been an issue in the past with BCEL.

“If they don’t comply [with the agreement], what are the consequences? Another notification? Another appeal in the AAT? How will anyone ensure that BCEL adheres to these conditions? Without a change in directors, there won’t be any change”.

BCEL board chair Greg Zwagjenberg was invited to respond last week but declined to comment.