Whistleblower: years of financial irregularities beset Anglican Diocese of Melbourne

Lavish renovations on the “Bishopscourt” estate, a series of unregistered trusts and other financial irregularities present the new Archbishop of the Church of England with a series of worldly challenges. Stephanie Tran And Michael West report.

The new Archbishop of Melbourne, the Right Reverend Dr. When Ric Thorpe delivers his first sermon in St Paul’s Cathedral, he is unlikely to start with a commentary on the famous Bible passage Mark 12:41.

This is the parable that Jesus told his disciples about the poor woman who gave the two little coins she had into the Temple offerings.

Anglican parishioners in Melbourne have concerns about the management of Church finances. An investigation by Michael West Media It revealed details about long-running governance failures, including overbudget renovations of the $40 million Bishopscourt mansion in East Melbourne and dozens of unregistered trusts that could expose the Diocese to millions in potential tax liabilities.

The revelations came at a time when the finances of established churches in Australia were declining; It is unlikely to please parishioners who share some of their earnings in offering plates on Sunday.

“A vanity project”

According to documents obtained by MWM, former Anglican Archbishop of Melbourne Philip Freier wanted to host the Archbishop of Canterbury in Bishopscourt when he came to visit Australia in 2022.

The Bishopscourt Trust Management Committee (BTMC) contracted Virtue Construction to renovate the 1850s bluestone mansion, rather than relocating it to a hotel at less expense to the Diocese. But things didn’t go as planned, and documents show costs rose from $190,000 to $350,000.

An informant familiar with church finances described them as a “vanity project”, claiming the works were unnecessary and carried out without proper permits. The whistleblower also alleges that the construction contract was split in half to avoid BTMC’s $200,000 financial delegation limit and that the Archdiocese did not properly manage potential conflicts of interest.

The church denies archdiocesan conflict

“As a resident of Bishopscourt, the Archbishop had a conflict of interest in relation to any material improvements or expenditure at Bishopscourt… The works in question included the refurbishment of a bathroom and bedroom in his flat.”

The diocese strongly disputes these allegations. A spokesperson said in a statement:

“Whilst there is a residence for the Archbishop at Bishopscourt, the major construction and cost of these renovations have resulted from improving community facilities and accommodation for visitors to the Diocese.

“While the Archbishop of Canterbury visited Bishopscourt, no major renewals took place prior to that visit and there was no division of contracts as suggested in your question.”

Internal documents reviewed by MWM confirm that the Bishopscourt trust was not registered with the ACNC at the time. They also note that the construction contract was drawn up in two parts, but the Diocese denies this was done to exceed the financial limit.

Anglican Archbishop Philip Freier is leaving

A model of governance concern

The whistleblower claims the Bishopscourt project is just one example of wider systemic problems.

He claims that when he joined the Trust Corporation in late 2019, he encountered too few documents, incomplete records and incomplete trust deeds, and that these concerns went unaddressed for years.

“There were no records distributed. There were no trust deeds. There were no financial statements for any of the trusts. There were no details of who the signatories were to any of the accounts.”

“As I investigated more issues, I became aware that mismanagement was hiding a number of legal compliance issues.”

The diocese has approximately 300 foundations. Documents he saw MWM It shows that 30 trusts in the top 20 per cent of trusts by value (48 trusts) are not registered with the ACNC.

The whistleblower claims that while not illegal per se, the Diocese mistakenly treated these foundations as exempt from income taxes, which could subject the Church to significant tax liabilities.

He described the Church’s response to the concerns as “very defensive” and compared it to the initial response to the Church’s handling of child sexual abuse allegations.

“The initial reaction was a denial of the problem and an attempt to belittle and belittle it.”

Church begins to clean up its act

After years of internal complaints, the Diocese began taking steps to resolve compliance issues.

Earlier this month the Diocese decided to register all unregistered trusts with a corpus of over $100,000 by the end of next year.

“With a lot of effort, we managed to get a ruling in November that any unregistered trust worth over $100,000 would be registered by the end of next year,” the whistleblower said.

A Diocesan spokesperson responded as follows regarding the steps the Diocese is taking to ensure they comply with ATO and ACNC requirements:

“Melbourne Anglican Trust Corporation (MATC) is the authority that administers the diocese’s trusts and has been carrying out a project for over two years to review the ATO and ACNC’s compliance requirements. Trustee law is a complex area that we have been working on with the ACNC and ATO.”

For new Archbishop Ric Thorpe, these legacy governance issues pose a formidable challenge as he steps into office.

“Transparency needs to be adhered to. These issues need to be acknowledged and addressed so that the new Archbishop has the opportunity to start with as clean a slate as possible.”