NSW Misuse of SSAF Funding?

[James Dylan]

So... Association “X” is located on a QLD university campus, ‘Incorporated’ under NSW Association Incorporation Act 2009 (NSW) and has 3 full-time employees who are not students or university staff members. X gains their ‘income’ or funding from the Student Services Amenities Fee (SSAF) of the host University, as per the Higher Education Support Act 2009 (Cth) (HESA), by promoting itself as a student association.

First Question - Has X breached section 40 of the Association Incorporation Act 2009 (NSW)?

S. 40 = An association must not conduct its affairs (including its affairs as trustee of any trust) so as to provide pecuniary gain for its members

However, the definition of “Pecuniary Gain” as per s5 of the same Act, does mention something about “ss(2) ... an organisation does not provide pecuniary gain for its members ... [if] (d) members of the organisation derive pecuniary gain from the organisation by way of bona fide payment of remuneration”.

Now, HESA states that the SSAF money is meant to go towards providing services for students (food, drinks etc). X advertises as a student service, and thus, obtains funding from the University by way of SSAF funding to provide a salary (of approximately $60,000 p/a) to three staff members of the association.

Is the appropriation of SSAF funds considered “bonda fide payment of remuneration”? Or is the appropriation a misuse of SSAF funding? If so, who is at fault; X, or the University that provides X with the money?

 

[Rod]

Reads like a homework question.

 

[James Dylan]

Reads like a homework question.

It's not. It's actually a real scenario. Admittedly, it sounds like a homework question because i am a law student. So all my writing develops a certain style.

 

[Rob Legat - SBPL]

The answer comes down to:
(a) Whether the payments to the employees are for the carrying on of duties directly relevant to the provision of student services in accordance with the objects of the association; and
(b) Whether the objects of the association cover such activities.

Association objects tend to be broad in general, and it is probably safe to assume that (b) will be covered. For the sake of completeness, you should check this anyway - assumption being a dangerous thing.

As for (a), this is probably capable of being determined by objective observation. Do the staff members work in a capacity which provides (or supports the provision of) student services? If so, it's probably the case that the payment of the funds is not a misuse.

In any case, my experience is that government agencies are often loathe to interfere in incorporated associations unless there is an obvious rort going on, members are severely disadvantaged, and the members themselves are in uproar.

Unless there's some other circumstance which you haven't stated, I don't see a problem here.

 

[James Dylan]

Thank you Mr. Legat

Appreciate it.