THE Department of Justice will work with the Barengi Gadjin Land Council Aboriginal Corporation board to help fix its governance and financial problems.
The Office of the Registrar of Indigenous Corporations gave notice of examination of the land council in July.
It released its findings last week.
The registrar suspects on reasonable grounds that the corporation might not have complied with provisions in its constitution.
It also alleged there were financial and other irregularities in the corporation’s affairs.
The report alleged the directors might not be regularly monitoring the land council’s financial position and performance.
It said former chief executive Jim Golden-Brown might have established a number of subsidiary companies and trusts with the approval of the directors of the corporation.
These companies and trusts include Barengi Gadjin Pty Ltd, Barengi Gadjin Land, Water and Heritage Management Pty Ltd, Wimmera-Mallee Museum Pty Ltd, River People Tours Pty Ltd, Barengi Gadjin Holding Trust, Barengi Gadjin Land, Water and Heritage Management Trust, Wimmera-Mallee Museum Trust and River People Tours Trust.
“The person who was corporation chief executive between February 2011 and May 2013 may have used a substantial amount from a grant of about $800,000, which was provided to the corporation by the Department of Justice to construct a museum, to establish and operate these entities without the knowledge or approval of the directors of the corporation,” the report said.
“The corporation’s external accountants and another consultancy firm may have encouraged the person to establish these subsidiary companies and trusts.
“At the time of the examination, the person was still registered as the sole director of the subsidiary companies.”
The registrar said the corporation could become insolvent if the Department of Justice were to take action to recover the money that was used to establish and operate the subsidiaries and trusts.
The examination found the corporation directors at the time the subsidiaries and trusts were established either knew or should have known the chief executive had misused the Department of Justice funding.
A Department of Justice spokesman said it was working with the current land council board to help fix its governance and financial problems.
“The new board of Barengi Gadjin Land Council Aboriginal Corporation has taken steps to rectify the breaches,” he said.
“The corporation is responsible for representing the interests of all its traditional owner group members and the corporation will continue to be independently assessed.”
The corporation must fix the suspected instances of non-compliance with its rule book by January 17 next year.
The corporation must fix the suspected financial irregularities and other irregularities in the affairs of the corporation by the same date.
By January 31, the corporation must confirm to the registrar that its financial accounts for the 2013-14 financial year are up to date.
Barengi Gadjin appointed Jim Golden-Brown as chief executive in May 2011, allowing the land council to be fully operational again after a tumultuous 12 months.
In June 2010, three Barengi Gadjin Horsham staff were sacked on the spot and escorted from the building by police.
Bendigo Bank froze the council’s accounts during the ordeal and the council moved offices.
Mr Golden-Brown resigned in May this year.