The president of the Queensland branch of the RSL told colleagues there was "no obligation" to report official advice that urged the veterans association to dramatically tighten its accounting of expenses and benefits.
In a letter seen by Fairfax Media, president Stewart Cameron wrote to other board members that he would be "ruthless in looking after the team" in the wake of a financial audit and there would "be no reporting".
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A shake-up of the RSL's leadership looms as questions emerge about financial management. David Wroe explains.
He then urged board colleagues to "please delete the email" after reading and not discuss its contents.
The correspondence related to advice by accounting firm BDO that the 14-member board had to start providing receipts for more than $11,000 a month they were paid between them to cover out-of-pocket expenses
Fairfax Media reported this week that the NSW branch of the veterans' organisation is preparing to launch a forensic audit of its senior leadership's spending for the past seven years.
Mr Cameron said in his correspondence that "some may be worried" by a briefing by the league's finance officers about the BDO audit.
"I just want you to know that there is no obligation by BDO to report: they act under instruction," Mr Cameron wrote.
He also indicated he had been angry with one of his own staff who had briefed the board on the BDO audit, saying that the staff member's "attitude, tone and style" in the briefing would have been a sackable offence in the military. Mr Cameron is a retired RAAF Air Commodore.
He concluded the letter by saying: "I don't trust some staff."
BDO warned the RSL that lump sums of unaccounted-for money being paid to its directors to cover out-of-pocket expenses might be considered income by the tax office, making the board members employees rather than volunteers.
That audit revealed the Queensland branch owed the Australian Taxation Office $321,000 in fringe benefits tax, which the branch has since made as a voluntary disclosure to the ATO.
The chief executive of RSL Queensland, Luke Traini, confirmed the letter was genuine and told Fairfax Media it had been "poorly worded". He said board members had been concerned the BDO advice and the tax implications would set a precedent for the many volunteers who work across the RSL Queensland.
There might have been some chinks in the process
"They are passionate about the role of those volunteers but at no point were those passionate debates really going to affect our statutory obligations to the ATO," he said.
The branch has since overhauled its financial processes, he said. He acknowledged the accountability had not been as rigourous in the past as it should have been.
BDO documents sighted by Fairfax Media – and which Mr Traini confirmed – showed as branch president, Mr Cameron has received $1600 a month to cover his out of pocket expenses. Deputy president John Strachan receives $1300 a month, vice president Ewan Cameron $1000 a month and other board members $700 a month.
The BDO report from September 2015 also notes the directors received from the RSL vehicles, mobile phones and laptops, Qantas and Virgin airport lounge memberships and credit cards with limits of $5000 or $2000. Mr Traini said these cars were used for work purposes, though they might be taken home when needed.
Mr Traini took over as chief executive in June 2015. Mr Cameron assumed the role of president around the same time.
Meanwhile, oe of the directors, Peter Ryan, has lodged a bullying claim against the board. The board has issued a "show cause" notice asking him to explain why he should not be suspended. Both issues were discussed this week at a Fair Work mediation.