Papanui RSA’s executive directed accountants to write down $256,647 from the amount the club owed its poppy trust after questions were raised about the debt, a review has found.
A Royal New Zealand Returned and Services Association (RNZRSA) review has described the Christchurch club’s accounting move as “misguided and unwarranted” and recommended the money be restored to the trust, with interest.
The finding sits at the centre of a wider review that identified “significant governance mistakes, failures and breaches of duty” as poppy money was used to support the RSA’s loss-making bar and canteen.
The inquiry began after the Herald revealed poppy money – intended for veteran welfare – was used for more than a decade to support the business of operating the club.
The review found no evidence of fraud or misappropriation, but it was scathing of the operation of the Papanui RSA and its poppy trust, finding the two were not kept separate, conflicts of interest were not managed, and the charity’s trustees “largely abdicated their responsibilities and duties” to the club’s executive.
The Papanui case comes amid wider pressure on the traditional RSA club model, with ageing and falling memberships, weaker bar takings and hospitality operations, and clubs sitting on valuable property while struggling to meet daily operating costs or engage with contemporary veterans.
RNZRSA board chairman Rhys Jones said New Zealanders donated to the Poppy Appeal on the understanding the money would be protected and used for veterans and their whānau.
“We must honour that trust through strong governance, clear accountability and careful stewardship of every dollar,” Jones said.
“The review identified serious shortcomings that must be addressed, but it also found these arose from a lack of knowledge, experience and understanding, not from deliberate wrongdoing.”
In releasing the report, the RNZRSA said it offered a chance to strengthen the way poppy funds were managed across the country.
Barry “BJ” Clark was president during part of the borrowing period before leaving in 2014 to lead the RNZRSA. He later returned to Papanui and oversaw the sale of its clubrooms. He has been approached for comment.
Clark previously told the Herald he was “not aware” of the borrowing of poppy funds. He added: “I can assure you every dollar that has been borrowed from the poppy fund will be repaid.”
He subsequently said the final $100,000 shown as owing to the poppy fund had been repaid from the proceeds of the clubroom sale.
The Herald previously reported that Papanui RSA owed more than $300,000 to its poppy fund and that the borrowing had continued for years.
The RNZRSA review goes further, finding that after questions were raised about the size of the debt, the RSA executive directed accountants to write down $256,647 from the amount owed to the trust.
The review found the write-down had the effect of improving the RSA’s own accounts, but it also cut the value of the money owing to the poppy trust. It was described as “misguided and unwarranted” and recommended the money be restored to the trust, with about $96,000 in interest.
The review said the trust’s bank account was sometimes used to pay RSA bills or top up the club’s trading account when there was not enough money in the club account.
“Providing cash flow for RSA operations meant that the loan no longer met the charitable purposes of the trust,” the review found.
The review found the debt began with an interest-free, unsecured loan for a building project around 2010, which it said could be justified at the time because the upgraded premises had a broader community purpose.
But it said the position changed as the loan was not repaid and the amount owed grew. By 2023, the RSA’s accounts showed it owed $312,904 to the trust.
It found the Papanui RSA recorded losses exceeding $1 million between 2015 and 2023. Having sold its clubrooms, it now had $1.3m.
The review also found the poppy trust’s position had been understated by the $256,647 write-down and calculated its accumulated fund should have stood at $426,419.
The review said the problem was not just the use of the money, but the way the RSA and the trust were governed.
It found the charitable trust did not operate at arm’s length from the RSA, with office holders sitting on both sides and conflicts not properly declared or managed.
The trust had not been meeting separately, did not have enough independent trustees, and its activities and finances were effectively managed by the RSA executive or welfare committee.
The review said that arrangement “negated the intended purpose” of having a separate trust to protect welfare money.
The review did not find veterans missed out on approved support, with no sign eligible applicants had been denied help.
But it found welfare payments accounted for only about 58% of net poppy receipts between 2009 and 2025 during a period in which the RSA increasingly relied on the trust account to support club operations.
A statement from Papanui RSA said the newly elected executive committee welcomed the review and that a thorough investigation was necessary to identify mistakes and guide improvements.
It said it had reviewed and updated its trust deed and appointed trustees from professional and community organisations “to ensure the Papanui RSA Poppy Trust is managed effectively and efficiently”.
Papanui RSA’s new president, Symon Dynes, said the $256,647 would be repaid in full with interest, restoring the poppy fund to where it should be.
The Herald previously reported former RNZRSA chairman Martyn Dunne had estimated in 2023 that about $100m in assets had been lost by struggling clubs across the country.
It also examined the Mount Maunganui RSA and Avondale RSA, both facing falling income while sitting on assets worth tens of millions of dollars.
David Fisher is based in Northland and has worked as a journalist for more than 30 years, winning multiple journalism awards, including being twice named Reporter of the Year and being selected as one of a small number of Wolfson Press Fellows to Wolfson College, Cambridge. He first joined the Herald in 2004.
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