A house, a perk and a multimillion-dollar student organisation

The latest revelations in the long-running SUSF saga

Photo of the cottage described in article with a "For Rent" sign reading "6 bedrooms / 3 bathrooms / $490 per week)

On the Western half of the Camperdown campus, tucked away from student throngs on Eastern Avenue, there is a 90-year old cottage with an unassuming red brick veneer. It sits at the top of Grose Farm Lane, a pedestrian walkway from Western Avenue to the Charles Perkins Centre. Nestled in the trees, The Cottage has a vantage of the University Oval and on cosy afternoons, sunlight filters down the lane onto its two-metre-high, black aluminium fencing.

On the University’s online campus map, The Cottage is simply called “The Sydney University Sport Cottage (Residence) D10”.

For the past 22 years, The Cottage has been home to Bruce Ross. Between 1991 and 2017, Ross served as the President of Sydney University Sport and Fitness (SUSF). After his term ended, he stayed in The Cottage. He continues to reside in it today.

In 2015, Honi Soit Editor Alexi Polden reported that The Cottage had been leased to Ross in an arrangement which saw Ross pay around $316 a week, and $16,461 per year. The arrangement was listed in SUSF’s 2014 Financial Statement with the property a source of SUSF income under the entry “Grounds”. Polden reported that The Cottage boasts 6 bedrooms and 3 bathrooms along with convenient proximity to cafes, transport options and the Sydney CBD.

At the time, both Ross and SUSF Executive Director Robert Smithies joined the Uni in refusing to comment on questions surrounding the lease.

SUSF’s latest financial documents submitted to the Australian Charities and Not-for-profits Commission in mid-2018 make no explicit mention of the lease’s value although income derived from it may well fall within “other income.”

As part of an ongoing investigation, Honi can now confirm that Ross continues to lease The Cottage at below-market rates in 2019. Documents seen by Honi suggest that Ross currently pays a total of $25,319 per annum with weekly costs of around $487. Honi can reveal that Ross’ lease is currently in a holding over status as SUSF enters negotiations with the Uni’s Campus and Infrastructure Services for a lease extension.

SUSF oversees various properties and engages in certain commercial lease agreements occasionally as a co-licensor with the Uni. The Cottage, however, appears to be the only residential lease agreement in place.

The rental cost of the The Cottage was determined through a rental review conducted in 2016 and subsequent ‘independent market advice’ in 2019. Whilst it remains unclear who requested the 2019 market advice, Honi understands that advice suggested that the ‘market had not moved since 2016.’ The rental value did increase commensurate to inflation per the occupation agreement according to SUSF’s 2017 Financial Report.

Usually, a rental review will involve a comparison of the relevant property with similar properties in the area. Reviews are generally conducted at least every two years by landlords, often marking the end of a fixed-term lease. In SUSF’s 2019 Tenant Register, no mention is made of a rental review being conducted prior to 2016. SUSF President James Flynn told Honi “I cannot recall a rental review on the cottage being brought to the attention of the Management Committee during the three years I have served as a member, nor to me in my capacity as President.”

According to the Tenants’ Union of New South Wales, the median rental price for 4+ bedroom house in  Camperdown in 2018 was $1,200. It is unclear what method led the independent reviewer to a final figure of $487, or 40% of the market rate. However, even where one reviewer did arrive at a price considerably lower than market averages, questions should be raised over the number of opinions SUSF sought.

A SUSF spokesperson told Honi that the rate was made on the basis of the property’s “several problems,” including, “SUSF’s use of part of the property for its own storage purposes, serious disruption caused by the extensive capital works program” and “multiple power shutdowns and water shutdowns.”  

Honi reached out to SUSF’s Executive Director, Robert Smithies and Bruce Ross, for comment on the rental review process. No comment was received in time for publication.

A University spokesperson refused to comment on whether the University was aware of rental reviews conducted of the property from 1993 to 2016.

The below-market rate may not be the only perk attached to The Cottage. A University spokesperson confirmed that the The Cottage’s phone lines are provided by ICT, and that it would be possible to access university wifi from The Cottage if the resident holds a valid Unikey as a staff member, student, contractor or affiliate.

The University Senate may have conferred affiliate status to Ross when he was made an Honorary Fellow in 2003.

Had SUSF charged Ross the median market rate for the property over the last three years, they would have pocketed an additional $150,000 in income. If this pattern of paying below market-rates had spanned across the entirety of  Ross’ tenancy period from 1993, that figure would be close to $1,000,000. The impact of potentially lost revenue is significant. SUSF ran a $163,494 deficit a year after the rental review was conducted.

Clause 84 of the SUSF Constitution requires the Management Committee to engage a person who is accountable for the proper financial management of the organisation. In light of SUSF’s deficits in 2015 and 2017, it is unclear whether this person considered generating substantial rental income from The Cottage.

Clause 20 bars office bearers, including the President, from receiving “any remuneration.” If remuneration includes heavily subsidised rental, then it would seem Ross’ tenancy arrangement during his presidential term, was unconstitutional.

Regardless, the fact that SUSF has entered into any rental arrangement with members of its Management Committee lends itself to possible conflicting interests.

For example, SUSF’s Executive Director, the only paid office-bearer of the organisation, is appointed by The Management Committee of which the President is a member. It is feasibly in their personal interest to curry favour with the President and theoretically support a pre-existing beneficial rental agreement.

Such structural problems also apply to SUSF’s three trustees, who are also appointed by the Management Committee. Trustees hold office “at the pleasure of the Management Committee” and have the power to enter into contracts on behalf of SUSF, with the Committee’s prior approval. This leads to a possible situation where a trustee, acting on behalf of SUSF, may negotiate the terms of a rental contract with a person who is partially responsible for their appointment.

Honi makes no claim that office bearers, the executive director, or the trustees have acted in an illegal or improper manner.

A SUSF spokesperson denied that Smithies was involved in the review process and emphasised that SUSF’s accounts are externally audited on an annual basis and that rental reviews are conducted periodically.

Consideration should also be given to USyd’s role in SUSF’s governance. USyd apportions over $5,000,000 of student money to SUSF and employs both the executive director and financial manager. The appointment of the former requires approval from the Vice-Chancellor. Yet, a Uni spokesperson told Honi that the Uni “had no involvement with the property, which is managed by SUSF.”

USyd ought to exercise oversight over the financial management of SUSF as a body formed through a resolution of the University Senate.

SUSF is a perfect example of where USyd can foreseeably improve student wellbeing outcomes, for example, by further subsidising membership costs. As it stands, SUSF remains an institution characterised by opaque governance that is relatively inaccessible to most students.

The problem with The Cottage isn’t merely that it’s occupied by a former president under favourable circumstances. Rather, it is symptomatic of SUSF’s constitutional shortcomings and more damningly, the University’s negligent attitude towards providing real improvements in student amenities.

SUSF Background

Sydney University Sport and Fitness (SUSF) administers USyd’s sporting clubs, organises sporting events on campus, and provides facilities, scholarships, and programs to student athletes, including the Elite Athletes Program. SUSF is a registered charity with more than 200 employees and more than 500 volunteers as of 2017. It consistently tops more than $10,000,000 in financial income annually. In 2017, it held net financial assets valued at $28,000,000. As a partially self-funded entity, SUSF currently charges USyd students $50 for annual membership. The bulk of SUSF’s funding is derived from every student’s Student Services and Amenities Fee contribution, with SUSF receiving the biggest slice annually, including $5,000,000 in 2018.

Key players: Robert Smithies     

Robert Smithies has been SUSF’s Executive Director since 2008 and holds responsibility for the organisation’s day-to-day operation. In that capacity, he sits at the top of every reporting line at SUSF, according to its 2018 Organisational Chart. Smithies also sits on the University’s Student Consultative Committee and the SUSF Management Committee which dictates the high-level strategy and operations of the organisation. In 2016, evidence before the NSW Civil and Administrative Tribunal revealed that Smithies was on the University’s payroll alongside Aleksandra Pozder, SUSF’s Finance Manager. The same year saw allegations made that Smithies was subject to a conflict of interest as a representative of SUSF and an employee of the University.

Key players: Bruce Ross

Bruce Ross was President of SUSF between 1991 and 2017. At an annual University Blues Awards night in 2016, Robert Smithies said Ross would be remembered for his relationships with people, particularly with athletes and coaches, many of whom Ross mentored and guided over the years. Ross has previously fallen under the spotlight on matters beyond his residence in The Cottage. An extensive investigation in 2015 found Ross was operating his business, Bruce Ross Consulting, out of The Cottage, and that he was the director of MyoQuip Pty Ltd, a company which provided equipment to SUSF. Ross denied allegations that a conflict of interest arose out of any of these relationships.

A history of controversy

SUSF has had no shortage of drama in recent times. When Bruce Ross’ quarter-century leadership of SUSF ended in 2017, the heir apparent was former USU Board Director and Liberal party staffer, James Flynn, who came into the role on the back of a significant campaign promising college students “free gym memberships”. In 2018, Honi reported that internal divisions within SUSF had been sparked by animosity between Flynn and Smithies on the question of incorporating SUSF which, if advanced, would have compromised Smithies’ role as Executive Director. Honi is yet to verify the fact that conflict between two senior figures of SUSF may have led the University to outsource an independent investigation into SUSF in 2018. In late-2018, SUSF retained an independent consultant to review its governance structures and investigate the possibility of incorporation.