Former Katungul CEO cops $1.2m penalty
Feb. 5, 2014,
IN A ground-breaking decision, the Federal Court in Sydney on Wednesday ordered Damien Matcham, the former CEO of the Katungul Aboriginal Corporation Community and Medical Services, to pay over $1.2million in fines and compensation.
Mr Matcham was also banned from being involved in the management of any Aboriginal and Torres Strait Islander corporation for 15 years.
The proceedings in the Federal Court were brought by the Registrar of Indigenous Corporations, Anthony Beven.
Justice Jacobson ordered Mr Matcham:
• pay compensation of $705,905.07 to Katungul;
• pay a pecuniary penalty of $500,000 to the Commonwealth;
• be disqualified from managing an Aboriginal and Torres Strait Islander corporation for a period of 15 years; and
• pay the Registrar’s legal costs in the matter.
In an earlier judgment, on September 11, 2013, Justice Jacobson found Mr Matcham had not exercised due care and diligence, had not acted in good faith in the best interests of Katungul, and had improperly used his position as the CEO of Katungul.
In handing down his decision on Wednesday, Justice Jacobson said, “The seriousness of Mr Matcham’s behaviour, the abuse of trust which it involved and the absence of any real contrition or appreciation of his wrongdoing, all point toward a lengthy period of disqualification.”
“Katungul’s funds were deliberately misused by Mr Matcham to confer benefits on himself to the detriment of Katungul’s charitable objectives,” Justice Jacobson said.
Mr Matcham was found to have paid unauthorised bonus and time in lieu payments to himself of more than $515,000 from 2008 to 2011.
He also received unauthorised payments for excess superannuation, recreation leave and other non-salary payments.
Mr Matcham incurred personal expenses on Katungul’s credit card and signed a mortgage over a Katungul property to secure a $200,000 bank overdraft for the corporation.
“This is a significant decision and the scale of the orders is unprecedented in the Aboriginal and Torres Strait Islander corporate sector,” Mr Beven said.
“This should send a very clear message that there are serious consequences for corporation officers that fail to meet the standards expected of them.”
Former Katungul health service CEO Damien Matcham fined over embezzlement
5th Feb 2014
The former chief executive of an Aboriginal healthcare service has been ordered to pay $1.2 million for embezzling from the organisation.
Damien Matcham awarded himself unauthorised bonuses while working at the Katungul Aboriginal Community Corporation, which provides health care to Indigenous people in New South Wales.
At one point he claimed pay for working more than 24 hours a day.
The Federal Court ordered Matcham pay $705,905 in compensation to the organisation, pay the Commonwealth $500,000, and also pay legal costs.
Matcham has also been disqualified from managing Aboriginal and Torres Strait Islander corporations for 15 years.
“It is plain that Mr Matcham abused his position of trust by obtaining payments of large amounts to which he was not entitled and which were obtained for his personal use,” the written judgment said.
“His breaches of trust were committed over a period of four years in circumstances which demonstrate that he should have been aware that he was not entitled to the payments.”
The Registrar of Indigenous Corporations, Anthony Bevan, says it is the worst case of individual embezzlement from an Aboriginal corporation he has seen.
“Katungul was in a situation where it had $2,400 to its name and it had gone from multi-million-dollar organisation to having $2,400 to its name, and it was on the verge of insolvency,” he said.
“In our submissions to the court that was largely due to the actions of Mr Matcham.”
Katungul future resolved
By Vesna Andric
Sept. 18, 2013
FORMER chief executive officer of the Katungul Aboriginal Health Service, Damien Matcham, has admitted misappropriating more than $700,000 from the service between June 2007 and February 2012.
On Wednesday, September 11 at the Sydney Federal Court Justice Jacobson made 25 declarations of contraventions against Mr Matcham, which included unauthorised payments for bonuses, time in lieu, superannuation, recreation leave and life insurance, in excess of $700,000.
Justice Jacobson declared that Mr Matcham had not acted in good faith and in the best interests of the corporation and had improperly used his position as CEO to gain a personal advantage and cause detriment to Katungul.
Mr Matcham admitted his guilt last week after initially defending his position.
The penalties for Mr Matcham’s actions will be considered during court proceedings in November.
The Registrar of Indigenous Corporations, Mr Anthony Beven, is seeking orders to see Mr Matcham fined and forced to pay compensation to Katungul, as well as being banned from managing companies and Aboriginal or Torres Strait Islander corporations.
“He agreed to a statement of facts in which he admitted that his conduct breached the CATSI Act,” Mr Beven said.
“He should repay all of the money back to Katungul with interest. Even if he repays one dollar, that’s one dollar that will go back to those who need it for medical treatment,” Mr Beven said.
Maximum fines for each contravention are $200,000, with 25 declarations made Mr Matcham stands to face a considerable fine.
Whether the funds will be recouped is yet to be seen.
“He’s defended the proceedings all the way up until last week, so it has been a very expensive process for him and for us,” Mr Beven said.
Mr Matcham did not respond to requests for comment from the Narooma News.
Mr Beven said the court action sent a clear message. “There are serious consequences if CEOs misuse their position,” he said.
Staff that discovered the financial losses, including former and current directors of Katungul, were praised and thanked for their work in restoring Katungul’s integrity.
“When they became aware that money that was to be used to improve the health of their community was being diverted to one person they notified my office. They also provided invaluable support during the Federal Court proceedings,” Mr Beven said.
“This is a good outcome and it is pleasing to see that truth and justice have prevailed for Katungul and its members and clients,” he said.
Katungul is a multimillion dollar not-for-profit corporation that provides essential primary and secondary health services to Aboriginal and Torres Strait Islander people living on the far south coast of NSW from Batemans Bay to the Victorian border.
Since the losses were exposed Katungul has restored its services and is now in a strong financial position. It has expanded its range and types of health services.
Now operating with new CEO Jon Rogers, who was appointed in August 2012, Katungul is restoring trust and rebuilding itself as a holistic service providing numerous support services.
“It’s about trust and the real story here is about the healing that’s happening,” Mr Rogers said.
Among some of the changes is a significant increase in services.
“We have doubled the number of GP clinics,” Mr Rogers said.
Time line of events
September 2011 – Katungul CEO Damien Matcham takes leave.
September 2011 – Government agencies instigate audit after receiving complaints from employees, elders and board members.
October 2011 – The Registrar of Indigenous Corporations, Mr Anthony Beven starts examination of the corporation.
December 2011 – Katungul placed under special administration following discovery of misappropriation of funds.
January 2012 – Mr Beven starts Federal Court proceedings against Mr Matcham obtaining orders freezing bank accounts and property.
February 2012 – Mr Matcham’s contract as CEO of Katungul is terminated.
August 2012 – New CEO Jon Rogers appointed
October 2012 – Community control is returned to Katungul.
September 2013 – Mr Matcham faces Sydney Federal Court and admits misappropriation of funds totalling $700,000
Katungul CEO faces civil proceedings
The Registrar of Indigenous Corporations, Mr Anthony Beven, today announced that he has commenced further proceedings in the Federal Court in Sydney against Mr Damien Matcham, the former CEO of Katungul Aboriginal Corporation Community and Medical Services (Katungul). The proceedings relate to alleged contraventions of civil penalty provisions in the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act).
Katungul is based in Narooma, NSW and operates medical centres in Narooma and Bega for Aboriginal and Torres Strait Islander people on the far south coast.
The proceedings against Mr Matcham follow an investigation by the Registrar into several ‘bonus’ and other payments made to Mr Matcham totalling more than $500 000. Mr Matcham also signed a mortgage on behalf of the corporation to secure a $200 000 bank overdraft.
The Registrar has asked the Federal Court for a number of orders against Mr Matcham.
The Registrar is seeking declarations from the court that Mr Matcham had contravened his duties as an officer of Katungul. The Registrar is also seeking a pecuniary penalty of up to $200 000, compensation orders and an order disqualifying Mr Matcham from managing Aboriginal and Torres Strait Islander corporations.
‘Katungul is a not-for-profit community-controlled health service. The moneys that Mr Matcham received should have been used to provide health services to the Aboriginal people on the far south coast,’ Mr Beven said. ‘The priority for officers of corporations must always be the interests of their members and clients. I will take action, such as the current proceedings, where this does not occur.’
The proceedings have been listed for directions on Friday, 3 August 2012. Freezing orders against the property of Mr Matcham have been extended to that date.
The corporation was placed under special administration on 12 December 2011 after an examination revealed poor corporate governance and weak financial management.
For more information please see the Registrar’s media releases of 25 January 2012 (ORIC MR1112-19), 3 February 2012 (ORIC MR1112-21) and 8 June 2012 (ORICMR1112-39).
Christa de Jager
(02) 6146 4737
29 June 2012
Ref: ORIC MR1112-44
Katungal may be forced to close
By JOSH GIDNEY
April 6, 2011, 4:15 a.m.
FACING CLOSURE: Drug and alcohol worker Graham White, mental health nurse Jim Pearson, medical receptionist Jeanie Parsons, senior Aboriginal health worker Aunty Norma Parsons and registered nurse Nicole Peiti fear the days of the Katungal clinic at Moruya are numbered.
Katungal Aboriginal Corporation and Community and Medical Services will hold a community meeting at Moruya Showground tomorrow in a desperate bid to prevent its closure.
Katungal CEO Damien Matcham is blaming a broken promise made by the Department of Health and Ageing Office of Aboriginal and Torres Strait Islander Health for the economic woes which may see them close the Moruya clinic and transfer staff to their Narooma clinic.
“Katungal was promised recurrent funding for staffing and operational costs for the Moruya clinic, but it is now 2011 and it hasn’t been provided,” he said.
“We only ever ended up receiving one-off funding for lease costs for 12 months and four computers. Someone is getting rich with the money provided by the department, but it is not us.
“All the talk about closing the gap is just spin and talk,” he said of the Federal Government’s program aimed at reducing the gap between the life expectancies of indigenous and non-indigenous Australians.
There are Katungal Clinics in Moruya, Narooma and Bega, and Mr Matcham says he has had to take funding from the Narooma clinic to keep the Moruya clinic going.
He is now turning to the community for help.
“We are asking the community for their support to keep the Moruya clinic open,” Mr Matcham said.
“If we don’t get support and the required funding, we will have no choice but to close the clinic.”
The community meeting and barbecue will be held at Moruya Showground from 12.30pm to 2.30pm tomorrow.