Setting Pines record straight

The Pines is a not-for profit organisation that exists to provide quality care for our elderly.

We depend on fee income from our residents, when they can afford it, and from government when they cannot. We keep our fee income low through the generosity of our benefactors, large and small.

Our board of directors, our treasurer and our bookkeeper are all unpaid volunteers who give their time quietly and willingly. In the case of our treasurer and bookkeeper, the time donated is considerable.

We are concerned that misunderstandings about the response from our board to the financial irregularities that have recently been uncovered may damage the reputation of The Pines to the detriment of our elderly residents.

We are not a secretive organisation and believe in transparency and honesty. This posting seeks to address the inaccuracies and misunderstandings in the comments posted on a local website and gives such information as we feel comfortable will not prejudice any criminal prosecution. Our board has certainly not sought to protect our former manager. Indeed, as a board we feel betrayed and angry that financial irregularities may prejudice our future fundraising abilities and support in the community. For that reason, we are determined that all missing funds are recovered, that we provide all possible assistance to the police and that we disclose what has occurred to the extent possible.

This is what we are able to say at this stage:

Apparent financial irregularities were noticed last month when our former manager was on leave in the UK at which point we immediately engaged a forensic accountant;

The irregularities initially uncovered were queried in email exchanges with the former manager. We were not satisfied with her answers;

An emergency board meeting was convened on 17th April, at which it was decided to terminate the former manager, take all steps to recover the missing funds, continue with the forensic investigation and produce a report for the police. Any suggestion of a “cover-up” is unfounded;

The former manager was terminated on 17th April;

The advice we received from our forensic accountants was that the usual protocol was to file a formal complaint with the Financial Crimes Unit of the Police on the conclusion of the forensic investigation with evidence from that investigation accompanying that complaint ;

Although our forensic accountants have been working continuously on their review since the first irregularities came to light their review is still ongoing. This involves a review of many transactions over a number of years. We determined not to wait until the conclusion of the review to contact the police. Accordingly, the police were contacted by us on 10th May and sent a preliminary written report on the same day. This was a week before the CNS article appeared. The inference that the police were contacted as a result of this website is incorrect;

It will be for the police and not the Board of The Pines to determine whether to proceed with a criminal prosecution and, if necessary, extradition. We will provide the police with whatever assistance they require.;

It is for the Board of The Pines, however, to seek recovery of any missing sums and this we are doing as a priority. We are confident that we can do so without litigating but are prepared to do so if necessary. We do not have a final figure as our forensic review is still continuing. Suffice it to say the sums identified so far are material and the final figure will be disclosed when available;

To address the conflict of interest allegations, I can confirm that I retired as a partner of Maples and Calder in 2009. Maples’ role is to ensure that we recover the sums identified as missing. There is no conflict in their performance of that role and my position as a retired partner of that firm. Maples has also generously agreed to undertake their work on a pro-bono basis, thus saving us many thousands of dollars of legal fees. Similarly our former manager’s husband was employed by KPMG until 1990. To suggest that an organisation of KPMG’s standing would improperly undertake a forensic review to protect the spouse of an employee who left 23 years ago is, quite simply, silly. Again, we are indebted to KPMG for undertaking considerable forensic work on our behalf, again entirely pro-bono, saving us many tens of thousands of dollars;

We have asked KPMG to provide us with assistance in updating our financial controls and protocols to protect us better going forward;

We do hope The Pines will continue to enjoy the support of the local community;

We will issue additional press releases as and when we are able to release further information.

Julian Reddyhough

Chairman, The Pines

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