Tax Office moves to wind up Brindabella Christian College

Brindabella Christian College is facing a new battle to survive, with the Tax Office moving to have the school’s governing body wound up over millions of dollars owing in staff pay-as-you-go contributions.

Tuesday’s application in the Federal Court against Brindabella Christian Education Ltd comes as ACT Education Minister Yvette Berry waits on one final piece of information before she takes regulatory action against the Lyneham-based private school over ongoing governance and financial issues.

An almost $5 million tax debt was revealed in a 2023 Administrative Appeals Tribunal hearing in which BCEL was appealing against a previous ruling in the AAT that it was not a “fit and proper person” to manage the school under the Australian Education Act 2013, following a Federal Education Department investigation.

A lawyer for the Federal Education Minister revealed a payment plan for the school had been created with the ATO on 19 January 2022, when its debts were just over $3 million, but it had only stuck with that until May.

By March 2023 the amount owing had grown to $4.8 million.

According to the school’s last submitted financial statement for the year ended 31 December 2022, lodged on 28 September 2023, it owed the Tax Office $5,099,754.

The Tax Office application is listed for hearing by web conference on 26 March.

Ms Berry said the ACT Government was aware of Federal Court action being taken by the ATO.

She said the government was not a party to this action but would monitor the matter for any potential impacts on the ACT community.

On Tuesday, Ms Berry said she hoped to make a decision on whether or not she would take action against the school this week but was waiting on some final advice.

The Brindabella Christian College reform group said the ATO action affirmed the need for change in the governance of the school and a thorough investigation of the affairs of the board.

“We’re hopeful for the appointment of an administrator to keep the school operating and our concern is still for the parents, staff and students through all of this,” ReformBCC said.

“We’d like to reassure the community this is a mechanism providing an opportunity for a positive change at a governance level and not necessarily doom for the school operations.”

Comment was sought from the board chair, Greg Zwajgenberg, but he did not respond in time.

The school has been facing a multitude of governance and financial issues, and last September, Ms Berry called on the board to provide proof of the school’s financial viability and governance standards or face regulatory action.

The school provided information to the Minister late last year and she has been taking advice and considering what to do since then.

The registrar and Registration Standards Advisory Board has also been weighing BCEL’s response and liaising with the Australian Government, which provides $10 million a year in funding.

Before Christmas, unionised staff called on all board members of the private Lyneham-based school to resign as dozens of their colleagues voted with their feet.

In a letter to the board, staff said the school had habitually failed to meet its financial obligations and that Mr Zwajgenberg’s leadership style was driving staff away from the school and alienating the school community.

The school has regularly failed to pay staff super on time, prompting action by the Independent Education Union in the Fair Work Commission.

In November, Federal Education Department officials told Senate estimates the school remained non-compliant and had failed to provide its audited financial statements for the 2023 financial year by the due date.

At that point, the school had not complied with all of the conditions laid down by the Administrative Appeals Tribunal in April 2023 as part of a settlement with the department.

BCEL still has not provided overdue financial reports and annual statements to the Australian Charities and Not-for-Profits Commission or posted financial documents, including grant details for 2020, 2021 and 2023, on the MySchool website.

The 2022 financial statement showed loans with NAB of $11,216,840 and an overdraft of $26,057. In July 2023, the Company signed a new loan agreement with NAB for three NAB Business Markets Loans with a total limit of $10,995,013. This expired in September 2024.

The 2022 Annual Information Statement shows a million-dollar deficit, and the school had total liabilities of $27 million, including current ones of almost $21 million.

The Federal Education Department has been investigating the school’s operations for more than four years.