Kalumburu Aboriginal Corporation, which services a small community in a remote part of Western Australia's north Kimberley coast, has been placed in administration by the federal watchdog.
An examination by the Office of the Registrar of Indigenous Corporations found "a number of serious and systemic governance concerns" at the corporation, including limited procedures to guide financial management, failure to provide minutes for 13 directors' meetings since July 2022, and failure to hold AGMs and lodge audited financial statements.
Major funding bodies had recently raised concerns about the performance and reporting obligations of KAC falling short.
KAC is funded to deliver community services, including a youth program, aged care home support, school liaison, Centrelink support, a community resource centre and accommodation.
It also has two wholly-owned subsidiaries, which operate the community store and a pastoral lease.
KAC had previously stated its commitment to protect natural and cultural heritage aspects of the area on the north Kimberley coast, while developing enterprise and opportunity for the approximate 500 residents that live in WA's most remote and isolated community.
In January 2024, KAC chief executive Madeline Gallagher-Dann was forced to address governance concerns after confirming reports her partner, daughter, and her daughter's partner were employed by the corporation in Commonwealth-funded youth worker roles in 2023.
Ms Gallagher-Dann had become CEO after a push from community leaders for a well-qualified local Indigenous candidate who could improve the long-term fortunes of the isolated community.
The Ngarinyin woman said she discovered shortly after starting in the role in late 2021 that staffing was unstable.
"At one stage we had about 60 people on our books and only 17 to 20 were turning up consistently," she told the ABC last January.
"You want to give everyone the opportunity regardless of who they are, family members or not. But if they're not willing to do the job and they don't turn up then you have to make those rational decisions."
The Commonwealth's National Indigenous Australians Agency (NIAA), which funds KAC's youth worker roles, said at the time it was monitoring the corporation and community with concern and support while authorities investigated.
The NIAA, Australia's leading Indigenous funding organisation that allocates billions of dollars in federal money each year to corporations such as KAC, was recently warned by former Indigenous Affairs minister Linda Burney and the Australian National Audit Office for several serious reporting shortfalls.
ORIC registrar Trisha Stroud appointed a Cairns-based administration firm to examine the corporation's finances and rule book until September 19, which said community services would continue on a "business as usual" basis.
The corporation on January 15 was issued a show cause notice by ORIC on why it should not be placed under special administration after an initial examination of its books.
Following an extended show cause period, ORIC considered the corporation's response inadequate and did not address non-compliance issues raised in the notice. Grant Thornton Australia special administrators Cameron Crichton and Matthew Mullen confirmed KAC board positions had been vacated.
