The ACT government is not making sure the compulsory "community contributions" from clubs are actually used to benefit the community, the ACT auditor-general has found.
Auditor Maxine Cooper said clubs were not providing enough information to assess how some of the money was being spent and whether it was eligible under law to be considered a"community contribution", and making it difficult "to understand the exact nature of the expenditure and the community contribution claimed".
She highlighted examples such as clubs claiming for "fuel for mini buses" as a sport contribution, or "Wine Club community support", without further explanation.
"There are questions regarding the value and benefit of some claims," Dr Cooper reported. "Types of community contributions that are questionable include expenditure associated with: the operation of professional and semi‐professional sporting teams (including salaries and wages of coaching and ancillary staff, airline lounge memberships for team members and team transport and consumables); and the maintenance and upkeep of sporting infrastructure."
Canberra's clubs, which control the city's 4723 poker machines, must by law give at least 8 per cent of profits from gambling to community groups (profits after tax and 24 per cent running costs). In 2016-17, clubs made $168 million from poker machines and gave $11.9 million in community contributions.
The biggest clubs are associated with sports teams, including the Vikings (just under $2 million in contributions), Eastlake ($1.7 million), and the Raiders ($1.4 million), or with the Labor Party and union movement (Labor's clubs gave 1.1 million and the CFMEU-linked Tradies $1 million). The Southern Cross Club is also among the city's biggest ($1.4 million in contributions).
The auditor found that the vast majority of contributions goes to sport, with clubs making claims for supporting their own teams and maintaining their own facilities.
"While some of this expenditure related to support for junior‐based sporting teams, including the provision of uniforms and equipment, it is also apparent that considerable expenditure related to semi‐professional sporting teams was also claimed under this category, including salaries and wages of coaching and ancillary staff and airline lounge memberships for sporting team members," she found.
The auditor has not named clubs, but refers to "Club A", which claimed $2 million as community contributions in 2016-17, of which $1.7 million went to sport. Of that, $664,000 was unspecified "sports donations" to the single senior sports team associated with the club and $361,000 for the club's private sports ground, including rates, maintenance, vehicle costs, wages and salaries, security and insurance.
"Club B" claimed $1.7 million in community contributions in 2016-17, $1.5 million of which was for sport, including $243 for presentation-night balloons, $700 as a mobile phone allowance for a staff member; $1705 for the season launch, $727 for entertainment at team function.
Dr Cooper chose 10 clubs at random for an in-depth check of their claims over three years, finding that of the $5.7 million claimed, $1.2 million went to a recipient and purpose that was not clear.
She pointed to inadequate explanations of where the money was being spent, with clubs simply recording suppliers names, such as "BP Express" and "Bunnings", or reporting spending the money on "coaching salaries", "support Staff’, social dance’ or ‘Wine Club". Even where contributions went to a community group, it wasn't clear what benefit was coming from the money, with clubs listing vague purposes such as "community support", "drinks", "car" or "van fuel".
Dr Cooper said the definition of community contribution depended on interpretation and "can encompass a very broad scope, giving clubs "considerable flexibility in how they interpret community".
An analysis by consultants Reilly Associates said while the community did benefit substantially from the scheme, the monetary benefits effectively redistributed money from one section of the community - gamblers losing on the pokies - to another.
In the five years to 2015-16, the number of claims knocked back by the commission fell markedly. In 2011-12 the commission refused to approve $413,300 in claims from clubs; in 2015-17, it refused $84,200.
Since 2013‐14, the government had reduced the number of checks of clubs' records. Until 2014-15 half of the community contributions were checked. In 2014-15, that fell to 20 per cent, and in 2015-16 it fell again to 10 per cent.
At the end of 2014, the government decided to wrap the Gambling and Racing Commission into Access Canberra, with the chief operating officer of Access Canberra also chief executive of the commission, Dr Cooper said this presented a risk of conflict of interest since Access Canberra provided services to the commission.