'Governance failures' in RSL NSW: watchdog

Dominica Sanda

An investigation has uncovered governance failures at the highest levels of the NSW RSL and its aged care arm.

The Australian Charities and Not-for-profits Commission has ordered RSL NSW and RSL LifeCare to undertake several measures to rectify their shortcomings or face being deregistered.

The regulator, which has been investigating since 2016, identified the misuse of charity funds by former NSW RSL president Don Rowe, the failure to properly investigate or report the misuse of funds and misleading statements regarding Mr Rowe's resignation.

It found RSL LifeCare's directors had approved and received their own pay while the charity's funds were used to pay for directors and staff to attend functions linked to the Liberal Party.

ACNC assistant commissioner David Locke said the charities had acknowledged their failings.

"Governance failures occurred at the highest levels," Mr Locke said in a statement on Wednesday.

"Both charities must now demonstrate improved governance to remain registered."

They must provide quarterly compliance reports to the regulator for 12 months and then provide annual reports for two years after that, Mr Locke said.

RSL NSW has committed to implementing 15 measures including a new accounting system, making councillors' expenditure public on the RSL NSW website and getting councillors to complete a course with the Australian Institute of Company Directors.

RSL LifeCare has committed to four measures relating to board remuneration and risk management.

"RSL NSW and RSL LifeCare must now demonstrate improved governance and accountability to regain trust, and to ensure our veterans and their families are getting the best possible support and care," Mr Locke said.

The ACNC provided evidence during last year's public inquiry into RSL NSW which was led by former NSW Supreme Court judge Patricia Bergin SC.

The inquiry's report, which was released in February, made 29 recommendations including that Mr Rowe be referred to police and 13 others be referred to the Australian Securities and Investments Commission and the ACNC.

The inquiry found former president Mr Rowe used his RSL credit card between 2009 and 2014 to pay for his mortgage, family phone bills, flights and meals.

He also paid for his daughter to stay at an RSL-owned hotel in Sydney's CBD for three nights and allowed his son to stay there rent-free for seven years. In total he spent $465,000.