$10m Poser Baffles Finance Chief
Sydney Morning Herald
Friday February 22, 2002
The chief financial officer of the failed NSW Grains Board agreed yesterday that the accounts for 1998 and 1999 appeared to mis-state the true position. But John Fitzgerald could offer the Independent Commission Against Corruption no explanation how this had occurred.
In relation to the 1998 accounts, Assistant Commissioner Nigel Cotman, SC, put to Mr Fitzgerald that that there could only be two explanations for changes to the accounts after balance date.
``Did you concern yourself to inquire which of the two situations you were looking at: a cooking of the books or an adjustment of a set of books which were wildly out of line with reality?" Mr Cotman asked.
``I can't recall," Mr Fitzgerald replied.
Last week ICAC heard from finance manager Greg Broadfoot, who reported directly to Mr Fitzgerald, that he had created bookkeeping entries in 1998 which were ``a fiction or a fabrication" on instruction from Mr Fitzgerald and the managing director, Graham Lawrence.
Mr Cotman is inquiring into the conduct of officers of the statutory grain-marketer, which collapsed in 2000 with a deficiency now estimated at $160 million.
In relation to the 1999 accounts, Mr Fitzgerald did not disagree when Mr Cotman said: ``Effectively [the Grains Board] is overstating its income by about $10 million." Asked by counsel assisting, Kevin Connor, how this could have occurred, Mr Fitzgerald replied: ``Absolutely no idea."
The directors transferred $2.7 million from the grain-growers' account to the Grains Board's own trading revenue, allowing it to report a $2.5 million profit for the year to August 31, 1999.
Mr Fitzgerald agreed he prepared a paper for the directors dated August 23, 1999, which estimated the growers' account contained a surplus. Mr Broadfoot said last week by his calculation it contained a $5.5 million deficit.
After taking Mr Fitzgerald through Mr Broadfoot's working papers, Mr Connor said: ``It's absolutely plain there is no surplus of $2.7 million." Mr Fitzgerald replied: ``It certainly looks like it in these papers; that's correct, yes."
Mr Fitzgerald said repeatedly yesterday that in preparing his own estimates of the money in growers' accounts and in preparing reports for the directors, he had relied on information from the finance, marketing and operations divisions.
Asked by Mr Connor if the presentation of accurate financial statements wasn't ``critically important", Mr Fitzgerald replied: ``Absolutely important, and I had the very best fellow I could have working on it at that moment in Greg Broadfoot. I could not sit beside him and do his job for him. I didn't know how to do it. I had never done a set of financial statements in my life."
On Wednesday Mr Fitzgerald said he had a diploma in accounting from Monash University and was a certified practising accountant. He had joined the Grains Board from the Australian Wheat Board and before that was with Australia Post.
In those jobs, most of his work was in running computer systems.
His eight years at the Wheat Board included only six months' direct experience with financial accounting and administering grain-trading accounts on behalf of growers.
The hearing continues.
© 2002 Sydney Morning Herald
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