By Allan Barber
The Registrar of Incorporated Societies, Neville Harris, has given the NZ Meat Workers Union (NZWMU) a deadline of 12 October to provide consolidated accounts for the 2011 financial year.
The union has been given more time to provide similar details for the previous five years which cover the period since the national union took over the branches which were previously Incorporated Societies in their own right.
Legally NZMWU is obliged to post its annual accounts by the end of April for the preceding 12 month period and these accounts should consolidate the annual balance sheets and profit and loss statements for the Canterbury, Otago/Southland, Wanganui and Aotearoa branches.
However since 2006 the parent union has merely included the net capitation or member subscriptions transferred by the branches to the national union in its annual accounts without reporting total subscriptions, expenses, assets and liabilities.
The only accounts I could trace before 2006 were those of the Aotearoa branch, separately registered as an incorporated society which reported annually to the Registrar of Incorporated Societies.
In its last annual report before it disbanded and joined NZMWU as a branch of the main union, it reported total contributions of $1.26 million, expenses of $1.2 million and total assets of just under $1.2 million including term deposits of $961,000.
In 2010 NZMWU reported equivalent figures of $712k capitation fees, $656k expenses and total assets of $1.026 million. Aotearoa branch alone contributed capitation fees of $271.4k, compared with the 2005 figure of $1.26 million, although it is understood the membership pre-merger comprised more than just meat workers.
In November last year I asked the national union and its auditor about this large discrepancy and met a brick wall. I then wrote letters to the Registrar of Incorporated Societies and the Institute of Chartered Accountants asking why the NZMWU was allowed to misreport its total financial accounts.
The official legal position was obtained from the Ministry of Economic Development which administers the annual reporting by incorporated societies to the Registrar in accordance with the 1908 Incorporated Societies Act. The annual filing must be accompanied by a signed certificate which certifies the approval of the annual financial statement by members of the society at a general meeting.
These statements do not have to be audited. However the members must have the opportunity to view and question them and may also elect not to approve the statements, if they are deficient or fail to disclose relevant information.
Where a society has unregistered branches as part of its structure, each branch must supply full financial details for inclusion in the statement submitted to the Registrar. This procedure must follow the rules of the society at all times. But it was in following this procedure where there were serious gaps in NZMWU’s practice.
After following this matter up in the New Year with the Companies Office, I received an assurance that the Registrar would require the posting of correctly consolidated accounts.
However in contrast the Institute was unimpressed by my persistence, told me the matter had been discussed by its Professional Conduct Committee which found nothing amiss with the auditing of the accounts and considered the matter closed.
So nearly a year after my first enquiry to the Registrar, providing the NZWMU complies with the request to provide correctly prepared accounts for the 2011 year by 12 October, it will be possible to see the actual state of the union’s finances including all branches. It will correct what appears to have been deliberate obfuscation of the NZMWU’s actual financial position.
Another area of doubt concerns the NZMWU’s justification for actually being a union at all, because this requires that it must be an incorporated society, which by definition must have a minimum of 15 members. It claims that it doesn’t have any members which all belong to the branches. However the branches are no longer registered as incorporated societies, hence the justification for not reporting to the Registrar.
When I started this investigation, Graham Cooke, now President of the NZMWU, accused me of talking a load of hogs..t and plotting the demise of unions in collaboration with my former colleagues at AFFCO more than fifteen years ago. To which I replied that I had nothing against a union’s right to represent its members, but I was also strongly of the opinion a union, like any other incorporated society which charges fees to its members in return for provision of services or facilities, has an obligation to comply with all its legal obligations.
It finally looks as though I will get my wish.
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Allan Barber is a commentator on agribusiness, especially the meat industry, and lives in the Matakana Wine Country where he runs a boutique B&B with his wife. You can contact him by email at allan@barberstrategic.co.nz or read his blog here »
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