THE much-loved Phillip Island Community and Learning Centre (PICAL) called crisis talks in their Cowes’ offices this morning to discuss pressing financial concerns.
The community-based organisation, established in 1980, which lists the Bass Coast Shire Council as one of its major donors, has Bass Coast Shire Councillor and candidate in the upcoming Island Ward election, David Rooks as its Centre Manager.
He was appointed as the centre manager in July 2023.
It is understood that the shire was made aware of PICAL's difficulties prior to today's meeting but it is not known if sensitivities around Cr Rooks' re-election bid impacted the timing of the announcement that followed.
However, with the start to voting in the election only days away, PICAL has announced that historic debts will force the organisation “to cease to exist as a legal entity” if a resolution to that effect is endorsed at a meeting in November.
PICAL offers a wide range of community learning and engagement opportunities but among its most well-regarded services are the PICAL Pantry, providing hundreds of meals weekly to the disadvantaged, and PICAL Community Garden in Settlement Road.
What will happen to these important services is unknown.
Key among the issues is that "due to the incorrect classification of certain roles, which led to some individuals being paid on an incorrect pay scale" a large debt has accrued in the form of staff wages and entitlements. It has variously been reported that debt could amount to between $250,000 and $500,000.
Graeme Turner, President PICAL Committee of Management issued the following statement today:
It is with profound regret that the Committee of Management of Phillip Island Community and Learning Inc. (PICAL) announces its current financial position. Unfortunately, estimated historic debts far exceed PICAL's financial reserves or its ability to raise the necessary funds within a reasonable timeframe, rendering PICAL technically insolvent.
We are fully aware of the impact this will have on PICAL’s dedicated staff, clients, volunteers, and the many community members who rely on our services. PICAL, as an Incorporated Association, is required to call a Special General Meeting to move a motion to wind up the organisation on 14th November 2024.
During this time, the Committee of Management will work diligently with PICAL's funding agencies (DFFH and Services Australia), Neighbourhood Houses Gippsland, Jordan Crugnale MP State Member for Bass and the Bass Coast Shire Council to explore every avenue to preserve as many of PICAL’s vital services as possible for our community.
PICAL would like to emphasise it is both illegal and against the responsibilities of the Commitee of Management to continue trading when we cannot meet, or demonstrate the ability to meet, our debts. Despite our best efforts to resolve this historic issue, we are compelled by law to make this incredibly difficult decision.
This historic debt originated over 10 years ago due to the incorrect classification of certain roles, which led to some individuals being paid on an incorrect pay scale. At the time, Enterprise Agreements were quite generic and open to interpretation, which contributed to the error that persisted, undetected, over the years. This has led to a significant debt that PICAL is unable to pay. It is important to note that this was an administrative inaccuracy and not the result of management, misappropriation or fraudulent behaviour by anyone involved with PICAL. While there are no current demands for payment, these historic debts are so significant that they far exceed PICAL's financial reserves or capacity to repay, thus making PICAL technically insolvent.
After careful consideration and comprehensive legal and financial consultations, the Committee of Management has concluded that the only responsible course of action will be to make the decision to wind up. This will result in PICAL ceasing to exist as a legal entity if the resolution on 14th November to wind up is approved.
Notice of a Special General Meeting for Phillip Island Community and Learning Inc. will be issued to members on 4th October. This meeting will also provide an opportunity to discuss this issue, possible options and any resolutions that need to be tabled. While this is a challenging time for PICAL, all existing services will continue to support our community as they have done in the past for now and for as long as we are permitted, with a focus of supporting continuity moving forward. We will provide more information to all concerned as soon as we are able. Graeme Turner President PICAL Commi4ee of Management.
Statement from Bass Coast Shire CEO Greg Box, today:
Bass Coast Shire Council has been notified by the Phillip Island Community and Learning Centre (PICAL) that it is facing serious financial difficulties after recently discovering an historic staff underpayment issue.
The not-for-profit organisation has been an integral part of the fabric of Bass Coast for decades and it provides essential services for many vulnerable members of our community, including emergency food relief. Demand for their services, largely delivered by community volunteers, has risen during the cost-of-living crisis.
Finding a solution to this issue is a priority for Council to ensure vulnerable members of our community continue to be supported. Council has already held urgent discussions with PICAL management and local Bass Coast MP Jordan Crugnale who has briefed the State Government. We will explore all options to ensure these important and much needed services continue to be delivered.
PICAL management has confirmed to Council that it will continue to provide services while these talks continue.
Council currently provides a discounted lease arrangement to PICAL at Warley Avenue, Cowes and Blue Gum Reserve. Council has this year provided grants to help PICAL better service the community by funding the purchase four accessible gardens beds to grow food to be distributed to the community, a new cash register system, training and small facility upgrades.
