‘JOG ON?’ – WILL THE PMSA ALLOW THE AUDITOR-GENERAL TO REVIEW ITS BOOKS?

BEYOND PMSA’S SUPPLEMENTARY LETTERS PATENT APPLICATION HAS BEEN LODGED

On 28 February 2019, Beyond PMSA lodged a Supplementary Letters Patent Application with the Office of Fair Trading (Queensland). We encourage anyone who is interested to read the full detail set out in the Supplementary Application be clicking on the following LINK: [Beyond PMSA Supplementary Application]

WHY ARE WE MAKING ANOTHER APPLICATION?

So why did we lodge a ANOTHER application? Well, it was basically at the request of the Office of Fair Trading who, after speaking with the PMSA and their legal advisers (sorry - organisational improvement advisers), felt that the PMSA needed our application to be recast in a more simplistic structure to make it easier for the PMSA (and presumably at least one of the Churches) to frame their legal “objection”.

To cut a long story short, we have obliged. But in updating and simplifying the structure of our claims in the Supplementary Application, we have done something a bit “different” this time around.

The PMSA continues to paint a picture of “robust” health for PMSA Schools. But there are serious challenges facing our Schools as a result of the destruction that was wreaked upon them by the PMSA in 2017 and which continued into 2018 via the organisational response that followed. We believe that there are serious underlying problems that are NOT being acknowledged. Left unchecked, they will get worse. Our Supplementary Application directly challenges the PMSA’s ability to fix those problems by pursuing its flawed program of governance reform.

LETTERS PATENT IS THE LEGAL EQUIVALENT OF TELLING US ALL TO ‘JOG ON’ !

As most of you already know, by operating under Letters Patent, the PMSA has available to it the “convenience” of claiming that any allegations of failure that are levelled against it have no merit because they are unsubstantiated by evidence. They believe that they can do this because they are in possession of all of the information relating to the operation of our Schools and they are entitled to withhold it. Letters Patent is basically the legal equivalent of being able to tell everyone to “jog-on” ! And so far, they have.

Our Application sets out claims about serious issues affecting our Schools. Whilst we would love for them to be disproved, they are genuinely held concerns founded on the genuine market observations of many in the community. The Minister needs to be able to assess those claims and the PMSA’s counter-submissions objectively. If the Minister simply accepts the PMSA’s assurances and the information and interpreted data that they “choose” to disclose, then we think that would be akin to “picking a winner”. In our opinion, doing so would be perilous when serious issues of “trust” underpin our Application.

So, when the PMSA is the ONLY entity which has possession of the information that is necessary to either prove or disprove the claims, should the PMSA be able to tell the Minister to “jog on” as well? We think not.

Apart from being a direct affront to the authority of the Minister and the Crown, we think that it would be contrary to the public interest, and totally contrary to the principles of natural justice. These claims must be properly and objectively investigated, and the Minister must be given the proper tools to do so. Rolling out the tired claim that the PMSA meets existing compliance standards simply won’t cut it. Meeting only bare minimum compliance obligations isn’t a badge they should wear with “pride”, and it doesn’t lessen community concerns. The opposite is true.

WE HAVE NEITHER THE TIME NOR THE CRAYONS TO EXPLAIN THIS, BUT…

So how should we all get around this evidentiary “blockage”? Well it sounds a bit complicated, but it’s actually quite simple. We think that the most reasonable and responsible way of solving this problem is for Beyond PMSA:

to ask the Office of Fair Trading…

to ask the Attorney – General…

to ask the Auditor – General…

to then ask the PMSA,

if the Auditor - General can undertake what is called a “by-arrangement” audit of a non-public sector entity. Simple! And that’s precisely what our Supplementary Application asks of the Minister.

Our request would be for the Auditor - General to undertake an audit of (RAW) enrolment and tuition fee revenue data across all PMSA Schools from the first quarter of 2016 to the first quarter of 2019. Why? Well, because understanding the “true” enrolment and revenue position of PMSA Schools against a baseline is critical to determining the health of our Schools, the effectiveness of the PMSA’s organisational response over the last 18 months, and the likelihood of the PMSA being able to quickly turn things around with its current “plan”.

The Minister (and in fact the Office of Fair Trading itself) has the ability to make this request of the Auditor – General under section 36 of the Auditor General Act 2009 (Qld). Confidentiality of the data and resultant report prepared by the Auditor-General can be contained to the Minister and the Office of Fair Trading, and Beyond PMSA would commit to making an upfront payment to the Auditor-General as security for the costs of carrying out of this important undertaking. (Essentially, we would agree to pay for the costs of the audit if the results do NOT materially align with the claims and concerns in our Supplementary Application). Sounds reasonable right?

COULD THIS BE A DEAD ALBATROSS WAITING FOR A WILLING NECK ?

So what is the catch?

Well, the process requires the PMSA to “agree” to the audit. Whoa - that will never happen we hear you say? Well you may be right, but lets look at the consequences of that decision.

If the PMSA refuses to consent to the audit on the reasonable terms proposed, then we believe that strong grounds would exist for the Minister to cast material doubt on the integrity of all of the PMSA’s counter-submissions to our Application. Our entire Application centres around issues of “trust”, so how else can the PMSA demonstrate that they are operating as a responsible and trustworthy organisation under the privileges granted to them via their Letters Patent?

If they don’t agree to the independent audit proposal, then frankly, the Minister and the entire community ought to be entitled to assume that there is a BIG problem affecting PMSA Schools. The issue would hang around the PMSA’s neck like a dead albatross, and the associated effect of the PMSA’s decision on the reputation of PMSA Schools would be grossly unfair. Their own credibility and their duty to ensure the future success of PMSA Schools demands that they agree. It won’t cost them a cent, if they’re right.

A MUCH BETTER PATHWAY?

In the end, it makes absolutely no difference whether the PMSA truly believes that it is “on a winner” with its current reform trajectory. The problem for the PMSA is that after 18 months, the market still doesn’t believe the “sales pitch” for the governance “product” on offer, and if the Auditor-General’s analysis doesn’t support the picture of robust health being bandied by the PMSA, then the problem just gets bigger, and bigger…. A significant change of direction on the pathway to recovery has to occur.

And, just to demonstrate that we’re not all about criticism and negativity, we decided to complete some of the PMSA’s homework for them too ! For those of you who are interested in how good things could be under a really “good” corporate governance structure, as part of our Supplementary Application we have also submitted a very detailed Proposal for a new model entitled:

“A Transition to a Future State Governance Model for the Presbyterian and Methodist Schools Association”.

Our proposed model makes complete sense structurally, commercially and from a Group risk perspective. It would allow the PMSA’s talented new CEO to (finally) be equipped with a structure that will allow her to do the job she was brought on to do – (which we’re sure would take a load off her plate). It also has the added benefit of not changing ownership or altering the ability of the Churches to deliver their Christian missions.

We will be providing a more easily digestible summary of this new model in an upcoming presentation soon.

Thank you for your continuing strong support.

Oh, and by the way - We are not Going Away:

NEVER…

EVER…