HOW TO BREAK THE INTEGRITY OF GOVERNANCE IN QUEENSLAND’S INDEPENDENT SCHOOLS SECTOR

WE LOST THIS ROUND DARRYL - BUT THAT DOESN’T MEAN WE WERE WRONG - IN FACT, WE’VE ONLY JUST BEGUN….

Please grab a coffee and stay with us on this – because we have a lot of valuable information to impart and update you on!

LETTERS PATENT APPLICATION - UPDATE

The Attorney General has recently handed down her decision on Beyond PMSA’s application to recall and cancel the PMSA’s Letters Patent, and we can report that the Attorney General has decided not to exercise her discretion to do so. In our view, this is a very disappointing outcome for the future of all PMSA Schools.

We are assessing our options, but we don’t accept that the PMSA’s submissions in response were appropriately tested by the Attorney General’s Department or their advisers.

YOUR CALL IS IMPORTANT TO US AND YOU HAVE PROGRESSED IN THE QUEUE….

Curiously, the Attorney-Generals’ Decision Notice was only provided to Beyond PMSA AFTER it was delivered to the PMSA. Ours apparently got lost in the mail (seriously), and it arrived before any of the expected follow-up on the alternative governance model that Beyond PMSA was requested by the Office of Fair Trading to prepare.

The alternative governance model request (which was complied with at considerable cost in terms of time and effort by Beyond PMSA) was a side process that we expected would have been more fully facilitated prior to a final decision being made on Letters Patent. A process within which everyone could come together to develop a workable solution to our shared problem. It could have been a process which held the potential to develop broader community support for an improved PMSA reform agenda. It could have put many issues to rest. Frustratingly, that aspect of our supplementary submission was not responded to – either by the PMSA, the Office of Fair Trading or the Attorney General. Instead, a blind decision, based largely on paper submissions, was simply handed down. A “box” was ticked, and a precious opportunity was squandered to bureaucratic process.

Some might think it inappropriate to criticise the Attorney-General’s decision. We do not. After all, if history has taught us anything, governments and politicians don’t always get things right do they?? So yes, we think that a 2 page response to over 400 pages of factual submissions, legal argument and reasonable commercial alternatives ought to be questioned.

Not even our request to explore a “by-arrangement” audit by the Auditor-General was considered or responded to by the Attorney-General. And we offered to pay for it ! We would have thought that any decision based on an analysis of opposing evidence ought to have an independent component of assessment like this involved – if for no other reason than to justify the basis for the decision. Clearly the quality of the un-audited and extremely brief statements by the PMSA about the financial position of PMSA Schools were held in such high esteem than there was no value placed the need for the application of additional rigour on this point?

So many similar issues were seemingly not addressed.

A SYMPTOM OF A BROKEN INDEPENDENT SCHOOLS SECTOR

So where does this leave us – and all of you? Well, placing our opinion on the quality of the opposing legal arguments aside (and the basis upon which (we believe) they were apparently accepted), what this decision represents to us is an inevitable outcome.

It’s sad but true. In 21st Century Queensland, it seems that organisations must be shown to not only be operating under extremely poor stewardship, but to have been driven completely off the cliff without a parachute before anyone will consider stepping up to take action. The decision is (in our respectful view) a woeful validation of a regulatory oversight regime in the Queensland independent schools sector that is badly broken.

WHERE IS THE RIGOUR IN THE PROCESS?

In our view, the decision is an uncourageous side-step that has “fallen” for arguments founded on a series of wholly un-substantiated and imagined “fears” about the consequences of change as the primary reason for maintaining the status quo.

The decision, in part, clearly accepted legal arguments about the implications of a change to the basis of the PMSA’s incorporation that were founded upon uncertainty rather than fact. It seems to us that no one bothered to do the hard work to test the legal and practical foundations of the “imagined” consequences which were creatively dreamt up by the PMSA and their advisers to protect their beloved Letters Patent. No-one except Beyond PMSA that is.

The PMSA screamed that the sky would fall in, but we exposed all of those arguments for what they were – and we responded to every single imagined uncertainty that they thrust forward. Disappointingly, it seems that if you do nothing more than make an argument that something “might happen” then that’s good enough? Where is the rigour in that?? As a consequence, the Attorney-General’s decision keeps a material problem on the table not just for PMSA schools, but for all independent schools in Queensland.

Rest assured that we will continue to follow-up to demand a more detailed justification for the decision and the rigour behind it. More commentary will be delivered in future blogs – including a disclosure and analysis of the full Notice of Decision. That one will make for interesting reading, we assure you.

And we haven’t ruled out re-lodging our Application at a later date if we don’t observe material turn-around in the fortunes and trajectory of PMSA Schools. To take that option off the table in the current circumstances would be irresponsible. After all, the PMSA’s confidence in the success of their chosen pathway must be tested and held to account. (Let us not forget that there is a State election looming in October next year and that there is considerable irony in the fact that many stakeholders, and at least one of our schools, reside in the current Education Minister’s electorate).

THE PMSA CLAIMED THAT THEY ARE UNDER “ACTIVE” REGULATION – AND THE ATTORNEY-GENERAL BOUGHT IT…?

Over the last several years there has been a significant increase in the number of governance scandals at independent schools across Queensland. The so called “regulators” of the independent schools sector are seemingly powerless to properly investigate and resolve these issues. At best, they under-resourced. At worst (and we hope not) – they are indifferent.

Both the ACNC and the Non State Schools Accreditation Board (NSSAB) have been “missing in action” as dozens of school communities across this State are demanding steps be taken to resolve poor governance practices and behaviours. The problem is broad but seems heightened in educational organisations which are older and more archaic in their structure.

In their submission to the Attorney-General, the PMSA (via their lawyers) proudly quoted the example of an intervention by the ACNC in a case in New South Wales pertaining to an organisation called “Street Swags”. Using that case as an example, the PMSA argued that the ACNC “has a range of formal powers it can use, including warnings, directions, removing responsible persons, enforceable undertakings and revocation”.

They applauded the fact that the “Street Swags” case was a very clear and positive example of regulatory intervention in a broken organisation. Clearly, that case appeared to be the only (and best) example that the PMSA could dredge up. Sadly for everyone concerned, we easily despatched both their example and their argument as irrelevant to our present circumstances.

How? Well it’s frighteningly simple to understand – if you try (and actually read the context and outcome of the “Street Swags inquiry before you quote it). The “active interest” of the ACNC in the “Street Swags” case:

1. ONLY arose after FRAUD charges were laid by the police against a member of that organisation; and

2. ONLY occurred WITH the cooperation of the organisation itself to bring the issue to the attention of the ACNC in the first place.

Yes, you heard that right – the organisation itself had to approach the ACNC and ASK it to intervene. In our case, that would be like asking the PMSA to report on itself or its employees wouldn’t it? Now that would be novel !

By highlighting the glaring inadequacies of the PMSA’s use of the “Street Swags” case as an example of how its own organisation is being “actively regulated”, we invited the Attorney-General to comment upon whether the PMSA were correct in effectively submitting that a breach of fiduciary duties is required to meet a “criminal standard” before the ACNC (or indeed any regulator) will take a more active interest. That’s a logical question given the example used isn’t it? After all, how many other examples of active ACNC interventions have been on the public record lately? Yet again, the Attorney-General did not address this aspect of our Submissions in Response at all in the Letters Patent decision.

WHERE IS THE ACNC ?

Beyond PMSA submitted to the Attorney-General (and we still strongly believe) that the ACNC is effectively an “educator” of the charities sector and does not regard its function as a “regulator” -even through it does have some limited regulatory powers. Further, the ACNC does not assess what information is already available about an entity and it does not audit or have any active level of oversight over what charities decide to disclose on their register. This can mean that mistakes are not corrected.

We submitted that the ACNC adopts a “report once use often” approach. What this means is that it does not separately assess the reports that an entity like the PMSA submits and does not generally challenge issues such as whether the relevant entity is a “reporting entity” or not. This is because it expects the primary regulator (in most cases the Australian Securities and Investments Commission (ASIC) or the Office of Fair Trading, as applicable) to have already done so. Is this raising alarm bells for anyone out there? Neither of the two latter organisations have any real power to pull the PMSA into line.

Many of you will recall that you wrote to the ACNC to ask it to investigate the PMSA. Little was done. If you were lucky, we hear that you received a thank you letter, but very little more.

AND WHERE HAS THE NON-STATE SCHOOLS ACCREDITATION BOARD GONE?

As for NSSAB, it is an arm of the State Government that has responsibility for assessing eligibility for accreditation and government funding requirements. They claim to have a function of monitoring whether the governing bodies of accredited schools are suitable to continue to be a school's governing body. They also claim the function of monitoring whether the governing bodies of non-State schools that are eligible for government funding for the schools, continue to meet government funding eligibility criteria. That should be the strong-arm to pull everything into line shouldn’t it? Especially given the material sums that private schools pocket in precious taxpayer funds every year.

The truth is that pathway to the door of NSSAB regarding community dissatisfaction with the PMSA was hard and unproductive. Beyond PMSA tried, as did many of you. They gave the PMSA a glowing report card, stepped back and then faded into the corner behind a blanket. Yet again, those who complained, and were lucky, got a polite “thank you for your interest letter”, nothing more.

THE INTEGRITY SURROUNDING SCHOOL GOVERNANCE IN QUEENSLAND HAS BEEN UNDERMINED

In short, that is what brought us all to the door of the Attorney General. There is a fundamental problem with the system of regulatory oversight in the independent schools sector when there is no active “primary regulator” - as in the case of organisations operating under Letters Patent like the PMSA. There is a dark, lightless abyss in the regulatory ecosystem within which Letters Patent organisations operate.

And so, if the PMSA’s submission on the effectiveness of their own regulatory oversight has been accepted by the Attorney-General (and it seems that it has been), then there can be absolutely no confidence given to any stakeholder within the independent schools sector in Queensland that these expensive educational institutions operate under anything approaching the type of “detailed supervision” that is claimed. If you extend the issue further by taking “accountability” out of the equation (due to the existence Letters Patent) then the risks compound to a level that ought to be alarming.

This equation, and its potential to have materially adverse effects on stakeholders and schools is SIMPLE. Were that not the case, then groups like Beyond PMSA would not exist. Disaffected and concerned school communities like those of PMSA Schools, Kimberley College and Hillcrest Christian College (…the list goes on) would not keep feeding an increasing large number of embarrassing news articles on governance failings. That ought to be of concern to the Government. It is not.

Recognising and solving this problem should be high on the agenda for any government that sees value in having a strong and productive independent schools sector. It is not.

To be successful, the independent schools sector has to deliver confidence to their customers that their “governance house” is in order. Where that does not occur, then confidence and trust can only exist if adequate regulatory protections are place.

But no one in Queensland has a firm hand on the regulatory wheel. The Attorney-General’s 2 page notice of decision has, in our humble opinion, completely validated our arguments about the absence of appropriate regulatory oversight. Its ‘Lord of the Flies’ out there in school governance land dear friends – and none of you look like having the Conch shell passed to you any time soon. In fact stakeholders seem to be consigned to the fate of the poor pig !

THE PMSA’S CONTINUING DILEMMA – AND WHY THE 2017 COUNCILLORS MUST ALL GO

But despite all of this, the decision on Letters Patent should not give comfort to the PMSA or the Churches. If it does, then many cerebral components of the current debate have been wasted. No, if anyone in the PMSA thinks its ok to continually describe the PMSA’s current governance structure as “contemporary” then they should take a long hard look at the advice that they have received on that front - and their own role in designing that facade. It is a marketing phrase that does not fool anyone. It does not fix the underlying stench of the organisation, and regardless of the paper shuffling that has gone on it will never fix the fundamental and irrecoverable trust issues and commercial hurdles that will continue to challenge it.

Time and time again, we have said that it is a “commercial” problem that we are ultimately trying to fix for this organisation - not one of structure – but the two go hand in hand where the PMSA is concerned. The PMSA’s need for structural redesign is fundamental to fixing organisational trust. Like the PMSA and the Churches, the Attorney General failed to grasp the subtlety of this issue when considering why a change to incorporation would improve governance practices. The decision was “two dimensional” on this point. The implications are so much broader than the narrow legal lense that is continually being applied to all of this.

Sadly, 2020 is shaping up to be another year of embarrassment for the PMSA. Whatever its outcome, the pending court case involving Mr Hiley can only form another unwanted dark cloud over our schools along its winding and inevitable track back to the PMSA’s own door.

Yes, the past performance of this Board is an albatross that will hang around several willingly oblivious necks for decades to come. If the PMSA and the Churches truly want to be rid of this stench once and for all and truly have clear air to get on with their work, then the remaining 2017 Councillors who were there to preside over the massive failure of governance (Greg Adsett, Jim Demack, Greg Skelton and Ann Bennett) must finally do the right thing by these schools and resign immediately. The days of “well meaning” amateur school Boards should be well and truly over. There can be no confidence in the delivery of fresh perspective whilst they all remain to sooth their own pride.

And to be clear, there is nowhere for the future performance of the PMSA under its current Board to be hidden either. The spotlight has been turned on. There are so many people still watching. We have received lots of unsettled feedback that there are significant numbers of people who are continuing to weigh their decision to give over trust. Sadly, many of those are former “lifers” – families who have been loyally rusted on to our schools for generations. (The low hanging fruit that take a lot to offend and who easily forgive). That‘s telling.

PMSA School fees have increased, squeaky service levels and “bold” unfunded infrastructure plans are under scrutiny, all while the non-inclusive additional “levies” keep piling up. St Margarets and other competing schools now have considerable waiting lists we hear, and many other schools are still gleefully counting the enrolment dollars that the PMSA has gifted them. We have to stop the leakage while we still have time.

Yes, there is still so much that can be lost from continuing on this current trajectory. The pressure is well and truly now at the feet of the PMSA to turn their self-inflicted disaster around. History will judge the members of this current Board and their ability rapidly claw back the pathway to improved student retention and profitability – all while maintaining this continuing shackle around the throat of our Schools. Our newer Board members at least deserve the opportunity to try and deliver that, free from the shadows of the past.

“COURAGE IS JUST FEAR HOLDING ON A MINUTE LONGER”

As it presently stands, the decision by the Attorney-General on the future of the PMSA’s Letters Patent has well and truly broken the integrity of governance in Queensland’s independent schools sector. In boxing parlance, it is a “TKO” decision that has called the fight far too early. Everyone, especially our politicians, should be ready for the continuing fallout that is set to continue from the dangerous precedent that this decision delivers.

So if anyone thinks that Beyond PMSA has given up on its demands and future plans to secure the complete dismantling of the PMSA’s treasured Letters Patent – you won’t be having a very merry Christmas at all. Beyond PMSA sees its role now as expanding, not contracting. Increasing in intensity, not reducing in effort.

We will continue to focus our efforts on fixing the governance of PMSA schools but will now also broaden our efforts to advocate for the entire system of governance for independent schools to be comprehensively fixed. We will advocate for someone to finally step up and stop passing the buck.

Yes, despite our continuing fears, there is still much to do. We must remember that “courage is just fear holding on a minute longer”, and although we are all at one minute past midnight, Beyond PMSA is still holding on for the good of our schools.

That is why we are “resourcing up” with a refreshed team to continue the fight for better governance in the New Year - with increased intensity and resolve.

Finally, we would like to welcome our many new helpers who have stepped forward to join the cause and continue the campaign in 2020 !

We will NEVER go away until this job is done.

Thank you for your continuing support.

Beyond PMSA