‘Bloated’ CA ANZ blasted over $90m payroll bill

Two long-time CA ANZ members are taking the body to task over its financial accounts and have pointed a finger at a $90 million wage bill from a staff count of 1,300 as members gather virtually for this year’s AGM.

Jason Andrew of SBO Financial and David Boyar of ChangeGPS posted a “Financial and Strategic Teardown” of CA ANZ on social media that runs a fine-tooth comb through its annual report, highlighting systemic revenue problems and “head honchos” numbering more than three dozen.

Mr Andrew, who had already drawn attention to the body’s $13 million loss on $147 million revenue in an earlier LinkedIn post, said the organisation had an enviable business model with recurring revenue from 136,000 members paying fees, and low capital requirements along with pricing and brand power.

But it was losing money.

“The bottom line is the organisation is bleeding cash,” he said. “Spending is going up whilst new membership revenue is plateauing.”

“I understand that as a member body, making a profit – or ‘surplus’, in the incorporated association lingo – is not the purpose of CA ANZ.”

“But just because it’s a ‘not-for-profit’ doesn’t mean it should be a bloated ‘for-loss’ enterprise, either.”

He zoomed in on the payroll bill of $90 million, representing more than 60 per cent of revenue, as cause for concern.

“Like most services businesses, payroll is the largest expense for CA ANZ. I expected it to be large, but I was surprised by the sheer quantum,” he said.

A gender breakdown in the annual report revealed total employees to be around 1,300, with about 750 of those believed to be seasonal academics assisting with tutoring and programs.

“If you exclude those folks, the FTE staff employed by CA ANZ is 550,” he said.

“I don’t know about you, but that’s a lot of people to administer a membership organisation – especially when the only correspondence I get as a member are automated emails from a clunky Salesforce website that Deloitte was paid eight figures to build back in 2017, and costs $10 million a year to maintain via ‘technology costs’.”

He singled out the size of the senior executive team as exceptional for a membership body.

“It’s also worth noting CA ANZ employs 25 general managers. This excludes the 12 folks in the executive team. If you include them, there are close to 40 head honchos in the organisation!”

“I can count on one hand the amount of GMs in a lot of businesses with comparable – or higher – turnover and complexity. Aren’t you curious what these folks spend their time ‘managing’?

“If it’s to benefit members, I don’t see it.”

Mr Andrew also pointed to a decline in the share of expenditure that went on member support services, which went from 19 per cent of revenue in FY19 to 14 per cent in FY23, against CA ANZ’s strategy goal of delivering a “world-class member experience”.

“Yep, the strategy looks great. The problem is that CA ANZ’s customers don’t think they’re getting good service.”

“Buried inside pages of apparent detail is the KPI that shows how members really feel. Member engagement is down 4 per cent, proving their disappointment.”

He also called out CA ANZ’s second strategic pillar of “Brand and reputation”.

“You know PwC haven’t behaved well,” he said, referring to the Treasury tax plans scandal. “What you might not know is that under their royal charter, it’s CA ANZ’s job as a regulator to make sure they do.”

“So, you’ll forgive me for completely ignoring everything after ‘CA ANZ upholds the profession’s reputation by …’

“The CA brand is in trouble.”

“The financial system is reliant on the trust PwC and their big peers create by putting their logos on audit certificates and their quality tax advice. A conflict of interest, if ever I’ve heard one.”

He urged CA ANZ to return to its “grass roots”.

“Get rid of one of the many general managers and hire an account manager and community manager for nearly the same price. Start listening to the members, learning from their experience, and acting on their advice. Go back to the people and barely touch the budget.”

The extensive post, signed by Mr Andrew and Mr Boyar, concluded with recommendations that CA ANZ conduct a cost-benefit analysis and ROI measurement of projects, review the “echo chamber” of the executive team and limit their terms, and engage with the members, especially those catering to small business.

And it recognised that members all needed to be active, too.

“The 2023 CA ANZ AGM will be held this Friday October 20. Use this opportunity to engage with the organisation by registering and participating.

“Keeping a member body accountable to the members is important – we all have a role to play in that.”

A CA ANZ spokesperson said that its permanent headcount was stable year-on-year and there were a “significant number” of casuals engaged for education and exam marking.

“Employee costs increased by 4 per cent year-on-year, which is largely due to standard remuneration increases,” the spokesperson said.