Two of the country’s largest drought charities are being examined by the national charity watchdog following a Fairfax investigation.
Australians have donated tens of millions of dollars in recent months to help farmers as they face the worst drought in decades.
Now the Australian Charities and Not-for-profits Commission has sought assurances from Aussie Helpers and Rural Aid - the charity behind the popular Buy a Bale Campaign - that donations are going to those in need.
“We have contacted two charities who are coordinating drought relief efforts to ensure donated goods and funds are being managed appropriately,” ACNC Commissioner Gary Johns said.
“ACNC staff have visited the operations of the charities and we are working with them to understand their work and confirm they have procedures and practices in place to manage the large number of donations they have received.”
The watchdog receives financial accounts from charities each year and has the power to revoke their registrations, denying them tax concessions.
A Herald investigation in August found that Aussie Helpers, run by Queensland couple Brian and Nerida Egan, had retained large cash reserves from year to year.
Of the $14 million Aussie Helpers received over a five-year period, $6 million had been spent or donated, according to accounts provided to the ACNC and the Herald.
Mr Egan, a veteran of the defence forces, said in 2015 that farmers were “on death row” but Aussie Helpers booked yearly operating surpluses of up to $2.6 million in the five years up to 2016-2017.
“We don’t just use money because we’ve got it,” he said in August. “You don’t know what’s going to happen tomorrow, or the next year or the next year or the next year.”
Mr and Mrs Egan said they had never received money from the charity but a board decision allows them to live in a five-bedroom house in Charleville in central Queensland, owned in the charity's name.
Mr Egan said a home with a pool purchased near Bundaberg had been intended as a holiday destination but too few farmers could afford to leave their properties, leading them to sell it.
Shortly after the August story, Aussie Helpers announced it would donate $2 million in prepaid Visa cards to 500 families “struggling to survive in the worst drought in memory”.
Another charity, Rural Aid, has received millions of dollars this year from the public and major corporate partners such as Qantas and Woolworths.
The charity had come under pressure for its spending on staff. In 2016-2017, Rural Aid spent $354,000 on wages and received $951,000 in donations.
Of that, $110,000 went to chief executive Charles Alder. Mr Alder also owns a private company, Charity Hub Pty Ltd, which he said provided office space to Rural Aid at a market rate.
“We certainly don’t overpay ourselves, that’s for sure,” Mr Alder said in August, claiming the 2016-2017 figure would not be representative.
Another company run by Mr Alder, The Give Back Campaign, went into liquidation in 2016 owing $29,000.
Mr Alder said on Monday the ACNC had visited his charity’s Brisbane office for a “full and frank conversation” that did not involve opening their financial accounts.
“They certainly learned a lot and had a greater understanding of what we do and how we do it,” he said.
A report in The Australian in October said Agriculture Minister David Littleproud had personally received “documentary evidence” alleging misuse of drought donations, which he had referred to authorities.
The ACNC said secrecy provisions prevented it from commenting in detail on its work with the drought relief efforts.
But the commissioner Mr Johns said “both charities have fully cooperated” with the ongoing enquiries.
Aussie Helpers and the Special Envoy for Drought Assistance and Recovery, Barnaby Joyce, have been contacted for comment.