Examinations

The Registrar's power to commence an examination of the books of a corporation is a regulatory power unique to the CATSI Act. The main objectives of an examination are to:

  • assess whether the corporation is being governed in accordance with the CATSI Act and its rule book 
  • identify whether there are any irregularities in the affairs of the corporation 
  • check that a corporation is keeping proper financial records and has relevant procedures and policies in place 
  • check that the directors and officers of the corporation are meeting their responsibilities 
  • check whether the corporation is managing conflicts of interest and related party benefits appropriately 
  • report any fraud or misuse of corporation resources 
  • assess the financial health of a corporation including its financial viability and solvency.

Corporations are legally required to cooperate with the examination and give relevant documents to the examiner, meaning corporations cannot restrict or prevent access to their books. An authorised examination by the Registrar or the Registrar’s delegate is not a reviewable decision under the CATSI Act.

A corporation may be examined for a number of reasons, including:

  • Rolling program (or routine) examinations - these are generally corporations selected where there are no known issues. They may be selected based on their size, industry sector, examination history or other considerations relevant to the Registrar’s regulatory posture. 
  • Targeted examinations - where the Registrar becomes aware that a corporation:
    • may be experiencing governance, operating and/or financial challenges
    • has failed to meet their annual reporting requirements.

An examination is at the discretion of the Registrar or the Registrar’s delegate.

The notice of examination is recorded on the corporation’s details on the public Register of Aboriginal and Torres Strait Islander Corporations, on ORIC’s website.

Possible outcomes

The three most common outcomes from an examination are: 

  • An examination outcome letter - this letter will highlight the corporation’s compliance with the CATSI Act and their rule book, and identify any minor issues that were identified in the examination. The outcome letter may suggest areas for improvement to the corporation. 
  • A compliance notice - this notice requires the corporation to rectify breaches of the CATSI Act or rule book; and/or irregularities in the affairs of the corporation. The corporation will be required to demonstrate to the Registrar that it has addressed the matters in the compliance notice. While a compliance notice sets out issues to be rectified it is an indication that the Registrar is confident that the corporation has the ability to rectify the breaches and should be given the opportunity to do so.
  • A show cause notice  - this is where the examination has identified more serious breaches and where there may be grounds for the appointment of a special administrator. This notice invites the corporation to explain why it should not be placed under special administration. After the corporation responds to the notice, the Registrar and/or their delegate will review the response provided and decide whether the corporation should be placed under special administration. 
  • The appointment of a Special Administrator – this is where the breaches are serious, there are serious risks and the corporation has not been able to demonstrate that it should be given an opportunity to rectify the issues.

A corporation’s entry on the public Register of Aboriginal and Torres Strait Islander Corporations is the most appropriate place for members to check if their corporation is being examined and whether further action is being taken.

The Registrar considers the individual circumstances of corporations and therefore, may consider other regulatory action following an examination where appropriate. 

Self-examination

Examinations help corporations to understand their governance and financial management standards and inform a culture of continuous improvement. 

You can also check your own corporate governance and financial management standards with the healthy corporation checklist.

Watch the CATSI Conversation about examinations

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