Bust FSG has $25m debt
DISGRACED Gold Coast disability service provider FSG (Freedom, Social Justice, Growth) Australia has been put into liquidation, owing more than $25 million to creditors.
Despite receiving up to $60 million a year of taxpayers’ money before its collapse, the government-funded organisation owes about $9 million to 900 staff.
Creditors unanimously voted to liquidate FSG on Friday. It entered voluntary administration on June 30.
John Park, the lead administrator for FTI Consulting, said liquidation was a good option as it meant FSG staff would receive their entitlements and redundancies through a government scheme.
The board of directors, including embattled former CEO Vicki Batten, would not be entitled to the same guarantee.
“The creditors unanimously voted to liquidate the company, … which is a good outcome because that allows the former employees to access the FEG (Fair Entitlements Guarantee) scheme with respect to the unpaid entitlements,” Mr Park said. “The FEG scheme is to cover normal employees, not the board of directors.”
The FEG scheme is a federal safety net for employees who lose their job due to liquidation or bankruptcy.
While the scheme is good for former staff, it means taxpayers face another FSG bill.
Liquidators will now begin the sale of FSG assets, including IT equipment, company vehicles and the $20 million property empire the not-forprofit amassed.
FSG, which blamed the NDIS and a lack of support from the State Government for its collapse after 30 years, recorded losses of $1 million, $2.29 million and $5.225 million in the 2015-2017 financial years.
It offered disability, child, homeless and aged-care services to vulnerable clients from Brisbane to Ballina. More than half of the charity’s annual funding came from the Department of Communities, Disability Services and Seniors.
The department’s directorgeneral Clare O’Connor last week said stricter measures would be introduced to statefunded NGOs.
These include declaring financial wages as percentage of total income, operating profit, cash assets and current interest-bearing liabilities.
The department is also in the process of assessing 256 similar service providers it funds.
Ms O’Connor said the department only became aware of FSG’s dire financial situation after Westpac Bank withdrew its line of credit, forcing FSG to request $10 million from the Government.
A department spokesman said an investigation into FSG was also being conducted “to ensure Queenslanders can have confidence in how taxpayer dollars are being spent”.