Poor governance, nepotism in HSU: report

24 Jul 2012, 6:25 am   -   Source: AAP
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Federal Workplace Relations Minister Bill Shorten said the HSU East branch was not a reflection of the trade union movement across Australia. (AAP)

Federal Workplace Relations Minister Bill Shorten said the HSU East branch was not a reflection of the trade union movement across Australia. (AAP)

A report into the disgraced HSU East branch has shown excessive claims on credit cards, misuse of union funds, levels of nepotism and poor governance.

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A report into the disgraced Health Services Union (HSU) East branch has shown excessive claims on credit cards, misuse of union funds, levels of nepotism, and poor governance within the body representing lowly paid workers in the health sector.

The final report by Ian Temby QC and accountant Dennis Robertson, leaked comprehensively on Monday, found HSU East policies for obtaining goods and services involved few or no competitive tenders, much to the detriment of the workers.

Also, it found the governance of the union's operations and decisions were inadequate.

Federal Workplace Relations Minister Bill Shorten said the HSU East branch was not a reflection of the trade union movement across Australia.

"The vast majority of Australian trade unions, trade unionists, people representing trade unions, work very hard and their conduct is exemplary," he told ABC television on Monday.

"I don't think a few rotten apples should be allowed to describe the whole labour movement in Australia."

Former HSU East national general secretary Michael Williamson's final salary was around $395,000 a year, a 25 per cent increase on the previous year.

Twelve HSU East officials were paid at least $130,000 in the year to September 2011.

Mr Williamson also gained from his one-third share of United Edge, which provided information and technology services to the union.

United Edge received payments from HSU East of $4,689,816.12 in total between April 22, 2008 and September 30, 2011, according to the accounting records for the union.

The IT company invoiced monthly recurring payments of $96,488 as at June 2011, which Mr Temby said appeared "very high".

It also paid no rent even though it was located in the HSU's offices in central Sydney until January 2012, while the company won the IT contract without the calling of any tenders.

The union's supplier for printing, promotional goods and clothing, Access Focus, benefited from poor, "very inadequate" procurement practices.

Access Focus supplied many goods, such as business cards, water bottles, beanies and membership books, at rates between 100 and 300 per cent more than industry prices.

Mr Temby said the union had no idea if it was receiving value for money.

"This is, to say the least, unsatisfactory," he said.

There were no guidelines for the use of union credit cards or expense reimbursements, Mr Temby said.

Spending on union credit cards currently on issue to officers averaged more than $600,000 a year over the past four years.

And union credit cards used to obtain discount shopping gift cards for sale to members averaged bills of more than $1.1 million annually for the four years.

Union officials had no requirement to document why money was spent on expenses such as entertainment, travel, taxis, accommodation, flowers, sundry purchases and so on, Mr Temby said.

"In Robertson's 40 years of auditing practice, he has seen few systems with such a lack of formalised controls," he said.

Kathy Jackson, HSU executive president, was noted in the report as the main source of the allegations against Mr Williamson and former union official and now suspended Labor MP Craig Thomson.

The report said Mr Williamson's son, Christopher, used a union property for his own purposes, while the wife of the union boss, Julieanne Williamson, was reported to be on its payroll.

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