SPASA Queensland selling office to keep warranty scheme afloat

Lawyers have been called in, the Newstead property is for sale and NSPI has been mothballed following the discovery of discrepancies in SPASA Queensland’s accounts.

At issue is more than a million dollars paid out of SPASA’s Benefits Trust to the loss-making training body, the National Swimming Pool Institute (NSPI) Australia over a period of seven years.

The SPASA Benefits Trust holds the funds for the Watertight scheme, which is intended to cover defects in work or to enable the completion of an eligible swimming pool in the event a builder dies or the building company is wound up.

SPASA has engaged McKays solicitors to act on their behalf and look into the discrepancies in the accounts, including the movement of money out of the Watertight trust. They have also engaged an independent forensic accountant.

Recently appointed SPASA CEO Adrian Hart says they have concluded their research internally and the forensic accountant will provide a report to their solicitors relating to the discrepancies. Then the report will be given to the external auditor and to the former CEO of SPASA, David Close.

The solicitors have said that at this stage there is no evidence to indicate that any person has attempted to steal funds or personally benefited from these transactions. However, investigations are ongoing and the final situation will only be known once the former CEO, external accountant and external auditors have been presented with a full brief of the relevant transactions and asked to explain their understanding of them.

In light of this they have contacted Close with the aim of getting his explanation of the transactions. Close has engaged his own solicitors and at the time of writing discussions are continuing.

SPASA Queensland is the trustee of the SPASA Benefits Trust, run by a management committee comprising the SPASA Queensland President, Vice President, Secretary and Treasurer.

“I’m unaware that the President, Vice-President or Treasurer had any active hands-on role on a day-to-day basis regarding the finances and running of Watertight or the NSPI,” says Hart.

Hart will provide more information once the consultation processes have been completed between the solicitors and the other parties.

Watertight still operating as usual

Hart says that warranties offered by SPASA are not at risk and that consumers who have used SPASA members will continue to have their claims processed.

The trust loaned nearly $500,000 to SPASA to buy the Newstead office and once the property is sold that money will be returned to the trust.

“I am confident any Watertight claims can be met,” says Hart. “It’s business as usual for Watertight. We’re going to put a substantial amount of money back into the trust account, which would cover any liabilities we can foresee.”

The sale of the Newstead property should generate more than $1.6 million but SPASA must use some of that money to extinguish the existing mortgage.

The property is listed for sale at $1,688,000 (+ GST). Interested parties can contact SPASA.

“We expect an acceptable offer within a couple of weeks,” says Hart. “It is a two-storey office building in a near-city Brisbane suburb – a desirable location with trendy James Street nearby, easy access to the city and the airport. It has almost 400m2 of office space on 405m2 of land including space for up to 12 cars.”

SPASA is also selling two vehicles so it can extinguish lease arrangements.

“We’ve taken a slash and burn approach to any excess costs and that’s just a prudent thing to do,” he says.

NSPI in abeyance

NSPI has lost all its staff and SPASA is now in the process of “mothballing” the RTO.

“With the departure of key staff, we’ve taken a short term strategic decision to mothball the operations,” says Hart. “This will give us time to assess once we’ve moved to a new location and consider what’s best for the future.”

The staff members have accepted similar roles with other RTOs.

“We’d spent a lot of time over several months to acquire student subsidies and we’d almost finalised the mining program,” says Hart. “All of which was designed to help NSPI operate as an ongoing viable entity, but we’re now at stage where that won’t be happening at the moment.”

SPASA Queensland also finds itself in a situation where it has to pay out employee entitlements for several staff members who are leaving or have left the organisation. However, adequate provision for the entitlements has not been made, compounding the difficult financial situation.

Hart says he wants to make it clear that SPASA was acting on behalf of its members by established a licensing pathway and training program when it set up NSPI years ago, and if that hadn’t happened there wouldn’t be a licensing outcome.

“Also, it is a little annoying that while in the middle of trying to manage an issue on behalf of the Association, someone passed information to the media,” he says.  “Fortunately, we’re far enough along the line of our investigations that it hasn’t caused any harm and we’re proceeding with our strategy. I don’t believe it was someone on the management committee, but was probably someone with good intentions outside the committee.”

Hart believes the organisation will survive.

“We’re consolidating as a necessary step,” he says. “Once we get over this current financial difficulty which will be resolved with the sale of the building, we’ll be able to continue to provide support for the members and benefits for the consumers who use them.”

He says that generally, the members have shown support for SPASA to continue, and that he personally has a commitment to see the Association through these issues.

“Then it will be up to the members to decide the structure of the organisation moving forward.”

SPLASH! will provide more information as it becomes available.