Senior directors of the Queensland branch of the RSL have been receiving thousands of dollars a year to cover expenses without having to account for the money.
And the branch has offered to pay $321,000 in back taxes as part of an overhaul of its financial processes, according to the branch's chief executive.
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RSL reform push grows
A shake-up of the RSL's leadership looms as questions emerge about financial management. David Wroe explains.
The revelations come as RSL Queensland also faced a bullying claim before the Fair Work Commission by one of its directors.
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.
Now, the chief executive of RSL Queensland, Luke Traini, told Fairfax Media that there had been a "deep, wide and rigorous review of the league's processes" that had sparked a voluntary disclosure to the Australian Tax Office of a calculated fringe benefits tax debt of $321,000 over the past five years by the state's 14-member voluntary board and about 150 paid employees.
The overhaul was prompted by a review by accounting firm BDO that warned the RSL that lump sums of money being paid to its directors to cover out-of-pocket expenses might be considered income by the tax office because it was not being properly accounted for.
BDO documents sighted by Fairfax Media – and which Mr Traini confirmed – show the branch president, Stewart Cameron, receives $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.
Until financial reforms kicked in in June, they – or their predecessors in the roles – did not necessarily have to account for how the money was spent by providing receipts.
"Board members are not required to substantiate monies spent (ie provision of receipts) to RSL Queensland," the document states, referring to the system before June.
It adds: "Board members are not required to pay any money back to RSL Qld at the end of the month for monies not spent on RSL Qld related matters."
The BDO report from September 2015 also notes the directors receive 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 acknowledged the accountability had not been as rigourous in the past as it should have been.
There might have been some chinks in the process
"The history was what it was. But we are really confident about our tax position now," he said.
"I could not say hand on heart that every single receipt was brought back to us. There might have been some chinks in the process."
Mr Traini took over as chief executive in June 2015. Mr Cameron assumed the role of president around the same time.
The BDO reports state the directors spent about 30 to 40 hours a month on RSL duties but Mr Traini said this had been inaccurate and was more like 30 to 50 hours per week.
"We don't believe that when they're working effectively a full time job on a voluntary basis they should be out of pocket for their expenses as well," he said.
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.
Mr Traini confirmed that the RSL board had a mediation hearing with Mr Ryan this week in front of the Fair Work Commission.
Mr Traini said he could not divulge the outcome of that mediation.