Independent analysis of community radio accounts, draws serious questions

The activist group Friends of 4CCR, set up to reform and instill openness at Cairns Community radio 89.1 FM, has commissioned an independent auditor to analyse the Cairns Community Broadcasters Incorporated annual statement of accounts, which were reluctantly tabled at the AGM on 13th September 2010.

Chairman of the Friends, Ross Parisi says there are now serious questions that demand an open and honest declaration to the public from community radio president, Rodney Coutts.

The Cairns community radio have been subject to nine Federal ACMA investigations in the last 12 months, and it is believed at least two more are being considered.

"I am unsure whether Mr Coutts is tabling all communications to the committee that I have had with him or whether, as is likely, he is withholding critical letters from the Management Committee," Ross Parisi says. "I have therefore sent this independent report to all of his committee directly. hey need to understand that the Friends of 4CCR will not be retreating from this mission until a satisfactory solution is found which is in the public interest."

"The report shows there are many serious concerns," Parisi says. "Our investigation shows a disturbing and increasingly perilous financial position. It is our belief that if no decisive intervention takes place, it is highly probable that Cairns community radio may become insolvent during the course of the current financial year."

The ACMA requested substantial infrastructure improvements to the station's Mt Yarrabah transmitter site - expected to cost as much as $300,000 - much of what was saved up over many years. However, the new first-term president, has been on a $163,000 spending spree. Little of what has been spent in the last 12 months, is identifiable in the annual accounts, presented at the AGM.

"Mr Rodney Coutts' management committee is therefore requested as a matter of urgency to table for inspection a detailed management accounts for the last two financial years."

"I have also asked the committee to provide the minutes for the last two years," Ross Parisi says. "The ACMA ordered the community radio to publish all committee minutes on it's website in December last year, and nearly 10 months on, have failed to do this, among a number of other measures."

"The committee should also make public any contracts or documents between members of the committee with particular reference to Rodney Coutts, Mimelle Alvero, Peter Ricketts and Diane Jensen."

"We put on notice that failure to comply to these requirements, will cause this matter to be referred to the MP for Leichhardt, Hon Warren Entsch, and Cairns MP Desley Boyle, and also the ACMA, and Office of Fair Trading," Ross Parisi warns the community radio committee. "We will not rule out more serious action that could involve the Police."

"I've been told that the accounts are still with Jessups, the station's auditors, however the AGM has been and gone, so why are they there and can't be accessed?" Ross Parisi asks.

At the AGM two weeks ago, when many members question the financial report, especially the unexplained $110,000 "other activities", a offer was made for anyone to come into the station to see the full details. However this stalling tactic was something the former Arona-controlled committee engaged in, and no more details were ever provided. Coutts is up to the same games. He can run (or waddle) but he can't hide.

Former community radio secretary Donn Corcoran, who has a background in government regulation and community associations, says that even though Rod Coutts has offered access to the expenditure report, he may not provide it.

"We are still seeking the management committee minutes. Each member of the station has the right of access to the minutes through the constitution and the law requires that committees comply with their constitutions," Donn Corcoran says.

Corcoran says that if they defy this legal requirement, then members have the right under the Act to take them to court.

"The 'Agreed Measures' - the actions agreed between the station and the ACMA in December 2009 - require that the station publish its minutes on its website," Donn Corcoran says. "So far this has not happened, although the final report on action is not required until 1 December 2010. The term 'crude delaying tactics' might be appropriate here."

"I am inclined to agree that the financial position probably results from incompetence and mismanagement rather than direct illegality."

Ross Parisi says he has intentionally withheld the name of the Friends' Auditor for fear of any retribution by Mr Coutts and the management committee.

Here's the Friends of 4CCR report on the 2010 Financial Statement accounts:

• From the figures supplied, we can only draw attention to the movement in Revenue and Expense items between 2009 and 2010, as well as commenting on some Balance Sheet items.
  
  Revenue Items:
  1) Increase of $17,782 in Campaign income.
  2) Decrease of $12,859 in Rent Received
  3) Increase of $9692 in Electricity Received (NIL in 2009) (refer 11) below)
  4) Increase of $4,602 in Sponsorship (NIL in 2009)
  
  Expense Items:
  5) Increase of $17,365 in Administration Fees
  6) Increase of $2,996 in Depreciation
  7) Decrease of $4,217 in Employee Benefits
  8) Decrease of $4,103 in Office Expenses
  9) Increase of $4,898 in Rent Expenses
  10) Increase of $21,866 in Repairs & Maintenance
  11) Increase of $7,849 in Utilities Expense (but refer 3) above)
  12) Increase of $98,452 in Other Expenses from Ordinary Activities
  
  COMMENTS:
• (a) By far the most significant movement is 12) above, but there is no information in the annual accounts regarding the nature of this expense. Alone it equates to the deficit for 2010 year, and if the expense is ongoing it would impact adversely on the viability of the association.
  
  (b) Overall (excluding the increase of $98,452 in other Expenses from Ordinary Activities), net operating income has declined from $64,810 in 2009 year to $3,047 in 2010 year. Access to detailed management accounts would provide more insight into business income and expenses.
  
  (c) Increases in operating income at 1) and 4) of $22,384 are partly offset by the net effect of expense items 5), 7) and 8) (net $9,045)
  
  (d) Rental income at 2) has decreased by $12,859 while Rental expense at 9) has increased by $4,898.
  
  (e) Electricity Received at 2) is $9,692 (NIL in prior year) but is offset by increase in Utilities Expense of $7,849.
  
  (f) In the Balance Sheet, the Cash at Bank – Grant Account has increased by $139,230 (Grants Received $82,874 - ?) Is there any contingent liability regarding the spending of grants?
  
  (g) Trade Receivables in the Balance Sheet are shown as $58,620 ($7,149 at 30/06/09). This is a very high figure in relation to the operating revenues shown at Note 2. What does it relate to, and is there any likelihood of non-recovery of all or part of the amount?
  
  (h) Trade Creditors in the Balance Sheet are $42,351 ($1,733 at 30/06/09). Once again this is very high. Does it relate to the large amount in Other Expenses from Ordinary Activities in the Income Statement?