Rural — 01 March 2017
ABC News: Jane Bardon

Photo: ABC News, Jane Bardon.

The Northern Territory Police are investigating allegations hundreds of thousands of dollars has been misappropriated from one of the Territory’s most important alcohol rehabilitation programs.

Two NT Government reports and an internal investigation have found this has contributed to throwing the Barkly Region Alcohol and Drug Abuse Advisory Group (BRADAAG) service in Tennant Creek into a crisis in which remote Indigenous children and adults have received unsafe and substandard services.

Now the community association is shutting its youth rehabilitation service, which has been providing residential drug and alcohol services to children and teenagers.

It is a major blow in the remote town — 1,000 kilometres from Darwin — which is riven by alcohol and substance abuse.

The three government-commissioned and internal reports are alleging BRADAAG’s former chief executive Stewart Naylor has misappropriated hundreds of thousands of dollars.

Former NT Labor government MP Elliot McAdam was brought in by BRADAAG to investigate, when Mr Naylor left in September, citing ill health, after nine years in charge.

“The money could be anything between $500,000-$600,000 over a three-year period, bearing in mind that Stewart Naylor was in the job for about nine years, so we don’t really know precisely what the misappropriation, or alleged misappropriation might be,” Mr McAdam said.

Mr McAdam was brought in as BRADAAG’s interim chief executive for three months.

He found in the last three years Mr Naylor claimed almost $500,000 in overtime, which was not part of his contract.

In addition, Mr McAdam found there was $39,000 in travel allowance above Mr Naylor’s yearly allowance for the last financial year.

He is alleging Mr Naylor clocked up “apparently excessive personal” spending on items including Darwin hotels and furniture shops on the organisation’s credit card.

Mr McAdam’s investigation also found an average of $30,000 in annual rent for 13 houses was not accounted for.

Some of the houses, which were meant to be used for clients transitioning out of rehabilitation, had been rented to staff.

Mr McAdam’s investigation only looked at the accounts over the last three years of Mr Naylor’s tenure.

“BRADAAG were potentially defrauded of, it could well be millions of dollars,” he said.

Majority of staff unqualified: report

In October 2016, the NT Health Department commissioned the first of two reports, a governance report on BRADAAG from WilliamsonBarwick, which made the same findings as Mr McAdam.

It found: “The Association is dysfunctional in terms of … governance practices … and proper utilisation of public monies provided by the NT Government and Commonwealth.”

The report said there were “numerous breaches of the Associations Act … which expose the association to significant risk of fraud and misappropriation of government monies”, including “not accounting for cash rental income … not using 13 rental properties for the purpose they were intended, [for transitional accommodation for clients] … and paying its former chief executive … over double [his] contracted salary”.

Elliot McAdam

Photo: Former NT Labor government MP Elliot McAdam was brought in by BRADAAG to investigate. (ABC News: Jane Bardon)

“You’ve got taxpayers out there who are probably wondering why are we putting all this money into services if there’s no real oversight,” Mr McAdam said.

In October 2016, the Health Department also commissioned its second report on BRADAAG’s clinical services delivery from Silver Sands Consulting.

That report found a majority BRADAAG’s staff were unqualified and received little training.

It found premises were substandard, the food provided to patients was too little in portion size and not nutritious.

The report found the safety of staff and clients with self-harming behaviour was inadequate.

“[Alleged] financial mismanagement has created a situation where staff have inadequate resources to provide quality programs, particularly to enable recreational, fitness and social goals to be met,” Silver Sands Consulting found.

“The lack of funding to purchase adequate resources for clients can be directly linked to … the alleged financial mismanagement.”

The report also criticised the oversight of BRADAAG by both the federal and NT governments, saying while they had apparently checked it was meeting key performance indicator targets, “they should have carried out quality assurance visits over recent years to ensure that appropriate and effective services were being provided to clients”.

Naylor ‘could not comment’ allegations

“This is an organisation, a very well respected organisation that’s basically gone off the rails over a long period of time and people sitting back and not caring,” Mr McAdam said.

“It seems to be indicative of how the bureaucracy respond to organisations outside the major regional centres.”

He reported the alleged misappropriation to the NT Police Major Fraud Squad in October. Police are still investigating.

When the ABC put the allegations to Mr Naylor he did not want to comment.

His lawyer said he could not comment because he had not had the allegations put to him by either the NT Government or the Police.

BRADAAG has now decided to close its youth treatment services as a result of the crisis surrounding the organisation.

Mr McAdam wants all of BRADAAG’s accounts during Mr Naylor’s nine-year tenure examined.

“That’s why its very critical that the Department of Health or the Prime Minister and Cabinet fund a forensic audit,” he said.

In response to the forensic audit request, so far the NT Government has only committed to “working with and supporting BRADAAG to address the range of operational service delivery issues identified by the review”.

Mr McAdam is calling on the NT and federal governments to support the organisation to recover from the crisis, and renew its services, which he says are essential for the town.

“BRADAAG was considered to be and still is one of the best alcohol and drug programs in the Northern Territory,” he said.

“Over the last two to three years it has lost direction in terms of that service, but it is so vitally required in the community.

PM&C investigation to start

NT Health Minister Natasha Fyles said significant efforts were made to save BRADAAG’s youth service from closure.

“The Department of Health worked with the service, offering recommendations and support for improvement in December 2016, but a review this year revealed growing concerns.

“My office wrote to the Central Australian Health Service to explore options for keeping the service going, but that wasn’t immediately possible.”

The Department of Prime Minister and Cabinet has responded by saying it takes the allegations seriously.

“In addition to current oversight through the Central Australian region, the matter is under assessment and a departmental review will shortly commence to establish any misuse of Commonwealth funds.”

This peice was originally published on ‘ABC News’ February 27, 2017.

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