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Appendix Page 96

Canterbury Rowing
Association Incorporated
Charities Services Investigation
Svetlana Malivuk

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14 March 2017

 Appendix Page 97

Table of Contents
Executive Summary ................................................................................................... 2

2.

Charity Background ................................................................................................... 2

3.

Initiation ................................................................................................................... 3

4.

Issues & Investigation Purpose .................................................................................. 3

5.

Analysis ..................................................................................................................... 4

6.

Conclusion ................................................................................................................ 7

7.

Recommendations ..................................................................................................... 8

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1.

 Appendix Page 98

Investigation
Registration Number
Date Assigned
Date Completed
Investigator

Canterbury Rowing Association Incorporated
CC32482
5 May 2016
13 March 2017
Svetlana Malivuk

Executive Summary

1.1.

Canterbury Rowing Association Incorporated (the Society) was registered as a charitable
entity since 30 June 2008. In April 2014 Charities Services was made aware by one of the
Society’s members that one of the Society’s officers, Trevor Hinkley, was disqualified from
being an officer under the Charities Act 2005 (the Act) due to being convicted of a crime
involving dishonesty. After Charities Services contacted the Society advising them that Mr
Hinkley was no longer qualified to remain as one of the Society’s officers, the Society had
lodged a waiver application which was reviewed and declined by Charities Services.

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1.

s9(2)(a)
On 11 April 2016 Charities Services received another complaint from
claiming that around $2,500 had gone missing from one of the
Society’s accounts whilst 2014/2015 accounts were being finalised. At the Society’s general
meeting of 8 March 2016 it was resolved that the matter will be referred to the Police.
s9(2)(a) was concerned about Mr Hinkley’s potential involvement in this matter and his
s9(2)(a)
sudden retirement from the Society.
was also concerned that the Society would
not refer the matter to the Police even though they said they would.

1.3.

Charities Services contacted the Society in order to determine the extent of Mr Hinkley’s
involvement with the Society following his disqualification under the Act and found that the
Society had allowed Mr Hinkley access to the Society’s funds which has in turn allowed him to
misappropriate the Society’s funds. In the course of the investigation the Society had also
breached their obligations under section 51 of the Act.

1.4.

As a result of the above findings, Charities Services issued the Society with a Warning Notice
under section 54 of the Act. The Society has complied with all the requirements under the
Warning Notice by the due date and remains qualified as a charitable entity under the Act.

2.

Charity Background

2.1

The Society was incorporated as an incorporated society on 8 September 1981 and had
registered as a charitable entity on 30 June 2008.

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1.2.

The main purpose of the Society is to foster and promote the sport of rowing in Canterbury.
Charities Services had not undertaken any monitorings or investigations of the Society until it
was made aware in April of 2014 that one of the Society’s officers, Mr Hinkley, was convicted
on a charge of theft by a person in a special relationship which disqualified him from being an
officer of a charitable entity under section 16(2)(c) of the Act.

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2.2

1

s9(2)(a)

 Appendix Page 99

Charities Services contacted the Society and made them aware of the above. In response, the
Society filed a waiver request in August 2014 seeking for Mr Hinkley to remain an officer of
the Society. This was declined by Charities Services on 4 September 2014.

3.

Initiation

3.1

s9(2)(a)
On 11 April 2016 Charities Services received a complaint
, expressing
concerns regarding recent misappropriation of funds by Mr
s9(2)(a)
Hinkley and the Society’s handling of this.
also advised that the members of the
Society were advised that Mr Hinkley had retired from his position at the Society around that
same time.

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2.3

3.2

In addition to the above, s9(2)(a)
also expressed concerns that the Society’s officers may
not have referred the matter to the Police as they said they would in their meeting of 8 March
2016.

3.3

Due to Charities Services’ concerns that the Society may have allowed a disqualified officer to
act as an officer of a charitable entity and have access to the Society’s funds, Charities Services
opened an investigation into the operation of the Society and assigned the same to Svetlana
Malivuk on 5 May 2016.

4.

Issues & Investigation Purpose

4.1

The following issues were identified at the onset of the investigation:

(a)

(b)

As a result of the above issues identified, the purpose of the investigation as to determine
whether:
(a) any serious wrongdoing had occurred by the Society’s officers allowing Mr Hinkley to
misappropriate money out of the Society’s accounts;
(b) what steps the Society has taken in order to rectify Mr Hinkley’s misappropriation of the
Society’s money;
(c)
whether there are any other government agencies that may need to be involved with
the investigation, such as the New Zealand Police; and
(d) any other issues uncovered during the course of the investigation that would constitute
serious wrongdoing as defined under the Act.

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4.2

It needs to be identified as to what Mr Hinkley’s role was at the Society since his
disqualification in order to determine whether he was acting in a capacity as an officer
of the Society; and
From the information received from the complainant it appeared that the Society’s
officers have not informed the Police of the misappropriation of money by Mr Hinkley
which is contrary to what was decided at the general meeting of 8 March 2016 during
which the officers of the Society informed everyone of the misappropriation.

 Appendix Page 100

5.

Analysis

5.1

In order to determine whether serious wrongdoing had taken place in relation to the issues
identified above, Charities Services had liaised with the complainant and reviewed documents
forwarded to us by s9(2) analysed the Society’s bank statements, liaised with the New Zealand
(a)
Police (the Police) and requested certain documents and information from the Society.

5.2

Investigation findings are outlined in detail below.

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Trevor Hinkley’s involvement with the Society following his disqualification
5.3 In response to Charities Services’ request for information under section 51 of the Act, Paul
Curgenven, the Treasurer of the Society, has advised that Mr Hinkley was appointed as a
Safety Officer of the Society following his disqualification. He further advised that this
position is outside both the Society’s committee and the executive.
5.4

The Society’s rules document at clause 9 provides that the Society’s officers are to be
comprised of a Patron, a President, three Vice Presidents, a Secretary, a Treasurer and an
Auditor.

5.5

Charities Services is therefore satisfied that Mr Hinkley’s appointment as a Safety Officer
within the Society would not make him an officer of the Society as defined under the Act and
the Society has not therefore breached the Act by allowing a disqualified officer have effective
control of the Society.

5.6

Charities Services is however concerned that as part of Mr Hinkley’s role within the Society, he
had access to the Society’s funds and was able to misappropriate the same. This is discussed
in further detail below.

Misappropriation of the Society’s funds by Mr Hinkley
5.7 As part of the investigation, Charities Services requested bank statements from the Society’s
bank as well as copies of bank statements with transactions relating to the misappropriated
funds from the Society.

The first request for information that was sent to the Society was responded to by Mr
Curgenven, a Treasurer of the Society, who provided a very comprehensive response to
Charities Services’ enquiries including clearly marked bank statements showing what money
from the account was misappropriated by Mr Hinkley. Mr Curgenven also advised that these
transactions were all “miscoded in the [Society’s] 2014/2015 accounts as to disguise them”.

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5.8

These statements showed that a total of $4,526.55 was miscoded by Mr Hinkley and that out
of that $1,628 was repaid. Even though this is not a very significant amount, Charities Services
is concerned that Mr Hinkley was able to misappropriate this amount of money between
March 2014 to April 2015 without anyone noticing. The amount of money misappropriated
before Mr Hinkley’s disqualification is $1,594.59 and the rest, $2,931.96 was misappropriated
after Mr Hinkley was disqualified.

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5.9

 Appendix Page 101

5.10 Mr Curgenven also advised that the matter was referred to the Police and provided us with a
file number.

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5.11 On 25 August 2016 Charities Services got in touch with Ross Tarawhiti of the Police who
advised that the investigation has not been completed due to Society’s officers not providing
him with the requested statements he needed. In addition to this Mr Tarawhiti advised that
the Society’s practices in relation to the bank card given to Mr Hinkley were not as they should
be and that they have no systems in place relating authorities on cards. Mr Tarawhiti also
advised that Mr Hinkley is not in a health condition to be prosecuted.
5.12 After reviewing the information received from Mr Curgenven and our telephone conversation
with Mr Tarawhiti of the Police, Charities Services sent an additional request for information
under section 51 of the Act seeking further information on Mr Hinkley’s access to the Society’s
bank accounts, the Society’s management of the same as well as the Society’s management of
its bank account access generally.
5.13 The Society claimed in its response that they were unaware of Mr Hinkley’s access to the
Society’s funds.
5.14 Charities Services does not accept this claim for two reasons:
a.

Since Mr Hinkley’s disqualification under the Act the account to which he had access
s9(2)(a)
to had a number of deposits made from entities such as
. In the normal course of business,
Charities Services would expect the Society to know when they are receiving funds
and would check their accounts to confirm the same. In addition to this, a number of
credit transfers were also made into the account since Mr Hinkley’s disqualification.

b.

Mr Curgenven advised Charities Services on 4 July 2016, in the Society’s response to
the first request for information sent to the Society under section 51 of the Act, that
the transactions Mr Hinkley was involved in were ‘miscoded in the [Society’s]
2014/2015 accounts as to disguise them.’ This statement indicates that the Society
was aware that Mr Hinkley had access to the Society’s funds and that his spending was
recorded in the Society’s accounts (even though the same was miscoded).

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5.15 As a result of the above, Charities Services considers that the Society has purposefully allowed
Mr Hinkley to have access to the Society’s funds after they were clearly advised in Charities
Services’ letter of 15 July 2014 that he is to be removed from any position where he is
required to account for money or be a signatory to any purchasing on behalf of the Society.

5.16 Charities Services therefore further considers that as a result of this, the Society and its
officers may have engaged in serious wrongdoing under the Act by allowing Mr Hinkley to
have access to the Society’s funds as well as failing to monitor his access.

 Appendix Page 102

5.17 Charities Services however accepts that the misappropriation of the Society’s funds by Mr
Hinkley was referred to the Police once it was discovered that these funds were miscoded.
5.18 It was therefore determined that the appropriate course of action is to issue a warning notice
to the Society under section 54 of the Act for the Society’s involvement in potential serious
wrongdoing for the reasons stated above.

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5.19 This warning notice was issued to the Society on 22 December 2012 and required the Society
to implement a policy that is to be formally adopted by the Society’s officers that will address
how the Society’s accounts are to be controlled and monitored. Charities Services advised the
Society that this policy should address how expenses are to be claimed by the Society’s
officers, employees and volunteers and requested a copy of the policy together with the
meeting minutes showing that the policy was adopted by the Society’s officers. It was further
requested that these documents were to be forwarded to Charities Services.
5.20 On 23 December 2016, the complainant, s9(2)(a) , advised Charities Services that s9( was
2)
informed that the money Mr Hinkley allegedly stole was repaid ‘last week’. This however
does not change Charities Services’ outcome for the investigation due to the fact that the
Society’s officers have allowed the misappropriation of money to occur, especially after Mr
Hinkley’s disqualification.
5.21 On 26 January 2017, four days before the Society’s response was due, the Society forwarded
Charities Services a copy of the requested documentation. The newly adopted policy was
reviewed and it should be noted that it meets the requirements outlined in the warning
notice.

Other issues
5.22 When it comes to the Society’s responses to Charities Services’ requests for information under
section 51 of the Act, Mr Curgenven has, on behalf of the Society, adequately complied with
the Society’s requirements under the Act.
5.23 When it comes to the second request for information under section 51 of the Act which was
issued to the Society on 12 September 2016, the Society has breached its requirements under
the Act by failing to respond to this notice within the given timeframe outlined in the notice.

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5.24 Charities Services was advised by Mr Curgenven, after the Society was granted an extension to
provide their response to the second request for information by 18 October 2016, that the
new President of the Society, Justin Wall, will provide a response to the same.

5.25 In addition to failing to respond to the second request for information by the extended
timeframe requested by Mr Curgenven, Mr Wall was not forthcoming with the information
requested. In his initial response to the second request for information which was only
received on 4 November 2016 , Mr Wall provided very limited information and answered
specific questions with phrases such as:
a.
“He has resigned for personal reasons. He neither jumped nor was he pushed.”

 Appendix Page 103

b.

“I am not sure what you mean”

5.26 Charities Services considers that by providing very vague and inadequate answers, the Society
has breached its obligations under section 51 of the Act. As a result of this, Charities Services
Investigations Manager, Dave Sayers, called Mr Wall on 23 November 2016 and explained the
consequences of failing to adequately respond to a request for information – one of which is
deregistration of the Society from the Charities Register.

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5.27 Following this conversation Mr Wall provided a more adequate response on 24 November
2016. However, even this response did not satisfy the requirements under section 51 of the
Act. This was because when Charities Services issues section 51 notices to registered
charities, these notices are issued to charities as a whole. Mr Wall has however responded to
question 8 of the request for information that the Society’s treasurer will need to answer our
question. By not organising an adequate response with the Society’s treasurer and not
providing the same with their response, the Society has failed to comply with its requirements
under the Act.
5.28 The warning notice issued to the Society on 22 December 2016 therefore included a warning
regarding the Society’s obligations under section 51 of the Act and the fact that the second
request for information has not satisfied these obligations. Answer to the unanswered
question was also requested.
5.29 On 9 January 2017 Mr Curgenven provided Charities Services with a satisfactory response to
the unanswered question in the second request for information under section 51 of the Act.

Conclusion

6.1

As it is evident from the above, Charities Services has determined during the course of the
investigation that even though Mr Hinkley has not acted as an officer of the Society, as
defined under the Act, the Society has breached the requirements of the Act by allowing Mr
Hinkley to access one of the Society’s bank accounts after his disqualification. Further to this,
it is clear due to the fact that Mr Hinkley was able to misappropriate the money from one of
the Society’s accounts that his access was not monitored and he was left on his own accord
use the money as he sees fit in his new role with the Society.

6.2

Charities Services is not satisfied with the Society’s claim that they were unaware of Mr
Hinkley’s access for the reasons outlined above and therefore consider that a warning notice
issued under section 54 of the Act was an appropriate course of action in this situation.

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6.

Further to the above, the Society has also breached its requirements under section 51 of the
Act by not answering the request for information within a given timeframe and by providing
inadequate answers. Charities Services considers that including this breach in the warning
notice under section 54 of the Act is also an appropriate course of action.

6.4

As further noted above, the Society has fully complied with its requirements under the
warning notice and the investigation can therefore be closed.

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6.3

 Appendix Page 104

6.5

s6(c)

A letter is
therefore to be sent to the Society advising them that the investigation is closed but that if we
do receive any new information in the future, the Society may again be investigated.

Recommendations

7.1

As already noted above, the investigation is to be closed as the Society has complied with all
of the requirements of the warning notice issued to them under section 54 of the Act.

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7.

In addition, a letter is to be sent to the Society advising them of the above and letting them
know that they may be investigated in the future if new information is received.

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7.2