A spokesman for Cbus said it had sought to continually improve the process for the evaluation and monitoring of its partnerships since the report was published in 2015.
KPMG was originally engaged by Cbus to investigate payments to sponsoring organisations from 2008 to 2014 but it was unable to access records for 2008 and 2009. It was also unable to hold discussions with Ms Butera about the state of the fund’s records.
The KPMG report identifies a pattern of poor record keeping, bookkeeping discrepancies and a lack of oversight over the sponsorship function over almost a decade.
The report finds dozens of discrepancies between the amounts approved and the amounts paid. KPMG states repeatedly it is unable to reconcile the payments and cannot verify accounts provided to it. It is also unable to verify the existence of a committee supposedly established for the purpose.
“KPMG has not sighted documents to evidence functioning of a monitoring committee and no person from Workplace Distribution could provide any information about this committee,” the report states.
Separate to the $7 million in payments to unions were another $1.9 million in payments to related parties including a $13,656 payment to a CFMEU slush fund, $86,272 in payments to a not-for-profit with no supporting documents, and $67,320 in payments to the Canberra Tradesman Union supported by an unsigned rental agreement.
KPMG flagged the $13,656 payment to an entity known as Building Industry 2000 Plus Limited made on September 28, 2013 in the report but said it was unable to comment on whether the payment was authorised because no documentation could be found.
Building Industry 2000 Plus Limited was identified by the trade union royal commission as a vehicle used by the CFMEU to store funds raised from events including its annual grand final breakfast, golf days and other fundraising activities.
KPMG also identified four payments totalling $86,272 paid to OzHelp, a not-for-profit organisation dedicated to mental health awareness. OzHelp’s deputy chairman is the CFMEU’s ACT president, Jason Jennings.
KPMG said it was not only unable to establish the nature and purpose of these payments because of a lack of supporting information but was also unable to determine whether they had been approved.
“Cbus may consider further examination of this matter once the requisite documentation is made available,” the report says in relation to a $20,000 payment made to OzHelp Tasmania in June 2013.
A follow-up report dated June 2016 contains plans to strengthen the processes around the payments and schedules meetings with stakeholders to take place over the following year including the CFMEU’s Victorian state secretary, John Setka.
Stapled to the follow-up report is a slide deck produced by an inner-city advertising agency that features the phrase “The spirit of the agreements is more important than the detail” superimposed over a picture of an antelope with two birds on its back.
The KPMG report was released by the Hayne royal commission in the last week of December and wasreferred to by counsel assisting the royal commission Michael Hodge, QC, in remarks made at the beginning of the superannuation hearings.
Mr Hodge said the payments would not be explored by the royal commission in detail, but it was vital that any payments made by super funds were in the best interests of its members and free of any conflicts of interest.
He noted that the revised process implemented in 2017 by Cbus was not perfect but was a vast improvement over the previous regime.
“Our review suggests that although some of the assessment is necessarily subjective, and it is not clear whether the model is rigorously applied in all instances, the model provides a considered framework,” Mr Hodge said at the beginning of the royal commission’s superannuation hearings.
Cbus noted Mr Hodge’s description of its revised process as a “considered framework” and said independent reports such as the KPMG report were an important part of the review process.