Members voted to adopt the Darwin Basketball Association financial statements for the previous two years under the threat the association could not continue to trade if they did not and because the Northern Territory government was withholding sport voucher money as punishment for breaching the Associations Act by late production of approved statements.

At its annual general meeting yesterday, members were told the DBA lost about $670,000 across 2022 and 2023, with auditors warning that in both years there was doubt the association could continue to trade.

The financials were passed with the caveats that the board would meet with club presidents within seven days to provide more detailed financial information from the past two years, and that the board would meet within a month to discuss the association’s current financial situation.

In its auditor’s report for both years PRK Merit warned that because of reported net current liabilities, there was significant doubt about the association’s ability to continue as a going concern.

At the end of last year the association had reported net current liabilities of $707,476, following a figure of $340,801 in the year before.

Among those liabilities was $116,000 owed to the Australian Tax Office, including GST and PAYG tax, about $20,000 owed in superannuation and $6,000 on loan to DBA from its chairman Gary Shipway. The reason for the loan was neither disclosed nor discussed at the meeting.

The financial statements revealed that the association had written off $231,000 in loans to and bad debts owed by the in-limbo Darwin Salties.

The meeting was held on one of the association’s courts and was punctuated by anger and frustration from the floor, and even some bemusement to the board’s answers, or non-answers, to questions.

While the financial statements circulated as printed copies, DBA chief executive officer Kerri Savage implored the about 100 assembled members to adopt them or lose the association that runs all club basketball competitions in Darwin.

She said this was because the Northern Territory government was withholding about $100,000 in sports voucher reimbursements until the statements were adopted by members, which would then mean the DBA was compliant with financial reporting requirements.

The vouchers are given out by the government for sports, recreation and cultural uses, and in this case used by parents to pay their kids’ basketball registration fees.

“It is imperative that these financials go through. At the moment everyone knows we’re non-compliant [with the Associations Act]. Which means we get no access to sports vouchers etcetera,” Ms Savage said.

“We have $100,000 sitting there. We just can’t continue unless we get the money that is due to us. I am not saying you have to pass this without question but the more it keeps getting delayed over time….it is imperative to the sport of basketball that we get financials lodged.”

Mr Shipway told the meeting if members did not adopt the financial statements parents would have to pay for their children’s basketball registrations themselves.

“These sports vouchers stop parents having to pay $100 out of their own pocket. Right?” Mr Shipway said.

“With those sports vouchers, if we don’t get this compliance done, those sports vouchers, we will not be able to get them, [which] means every parent who has a child playing in this association, and is relying on that sports voucher, will have to find a $100 out of their own pocket. This is about preventing that happening.”

Mr Shipway denied an assertion it was an attempt to scare people into adopting the financials, when it was a penalty that the association had caused to be imposed on itself.

Despite the threat of the association not being able to pay its way without the $100,000, Mr Shipway said the association was “in the black” and the voucher money would be enough to fund the association for the rest of the year.

A group of presidents – not all clubs were represented at the meeting – asked for a brief adjournment while they discussed the issue before returning to vote to adopt the financial statements but with caveats about further financial details and meetings. The board is not obliged to adhere to its promise to have the meetings.

There had been calls from the floor not to accept the financial statements, with some saying the worst that would happen would be an administrator would be appointed by the Northern Territory government until a new association could be formed.

The DBA financial year ends on December 31 each year. The association did not hold an annual meeting in 2022 and it was forced to postpone its 2023 meeting on May 26 when it could not produce audited financial statements. It must hold an AGM and consider those documents within five months of the end of the financial year.

The board had promised to hold the meeting within 30 days, but it took 119 days to actually hold the meeting, and the association only provided the financial statements to members on Saturday, the night before the AGM.

Members from the floor argued that the association constitution required that the financial statements be presented to members 14 days before the meeting but Ms Savage said Licensing NT said the association was only required to take “all reasonable steps” to do so, which she said the association had done.

The latest AGM came in the wake of the NT Independent revealing on Thursday that Matt Nason, after only ten months in the role, had left as general manager of the troubled NBL1 North team the Darwin Salties – which is jointly owned by the DBA and Basketball NT – which was followed on Friday by the Facebook announcement that the Salties had left the league and had no home for 2025.

Nason was also the CEO of Basketball NT, the governing body for basketball in the Northern Territory. He told the NT Independent he felt it was “just time to leave”.

The finances of the Salties

In May the solvency of the Salties came into question after the release of a draft 2024 financial statement, which was given to the NT Independent by an NT basketball insider. The financial situation it disclosed was despite DBA and BNT being given roughly $1.25 million for the team by the NT Government in less than two-and-a-half years.

The Salties did not become a separate legal entity until November 23, 2023, making the DBA responsible for its financial statements for the team’s first two years of operation.

While presenting the DBA financials fulfilled the associations obligations under the Associations Act, albeit up to more than 15 months late, some members were angry that the Salties finances for 2022 and 2023 were not presented.

The financial statements for 2024 will be prepared by the Salties. No information about the Salties’ current financial status was provided at the meeting, with Mr Shipway only saying that the team was under review.

In press releases in 2022 and 2023 the former Northern Territory Labor government announced it had given the association $100,000 to upgrade seating in the grandstand of the arena where the Salties played, and $400,000 to the association, purportedly to support the growth and expansion of the Salties men’s and women’s teams.

However, the draft 2024 Salties financial statements showed the government had secretly given the club another $280,000 without having seen audited financial statements.

The 2024 profit and loss statement showed the club made a $128,000 profit at April 30 (which included the $280,000 from the government), but were $130,000 in the red with debts versus creditors, and were owed $90,000 as of May 22, but actually owed $219,000.

In addition, forecast expenditure versus revenue was minus $60,000 with highly optimistic anticipated revenue of $462,000 and expenses of about $525,000. These figures, however, included revenue to the end of 2024 and expenditure only until the end of August.