



ANTI-PAEDO ‘AUSSIE THUGS’ HOLD HOSTAGES IN BAR AS WHISTLEBLOWERS LEAK FINANCIAL REPORTS.





WATCHING THE DETECTIVES!







A paedophile hunting charity in Cambodia run by former Australian and British policemen is mired with allegations of financial irregularities and accusations of ‘behaviour like thugs.’



Picture: How a Chinese magazine presented SHISHA. The caption reads ‘If anyone can, Ayia can. Aiya’s actions attract attention. We believe she will Sisha every way she could. We wish her ​​good luck.

website ww.sisha.org



(Warning this is a long story. So you will have to scroll down a long way and wade through the financial minutiae which was necessary to include for our comment)



Following the dismissal of two employees, Sean Looney and Jeff Rodwell, the two former directors have been ‘whisteblowing’ about the Phnom Penh based charity SISHA.

A Flying Sporran Report

Both claim charity boss Steve Morrish, a former policeman in Victoria, Australia, ordered the transfer of cash raised in the United States earmarked for ‘scholarships in Cambodia’ to pay instead for his and other salaries. When the USA director of the charity Sean Looney refused he was summarily fired.

The second claims that Morrish was given well over US$100,000 in back-pay from cash ear marked for specific projects.

Morrish drives a state of the art Range Rover the bills for which he claims against SISHA accounts.

Peter Hogan, the British administrator of the English language Khmer 440 forum in the capital, was the first to set the ball rolling with a thread on his site critical of the activities of SISHA – South East Asia Investigations into Social and Humanitarian Activities – Much of the thread was dedicated to a theme

of ngos arresting other ngos.

It seemed to some that SISHA had adopted the role of policing foreigners in Phnom Penh – not hard to do as the Khmer Police seem pretty much in the dark as to who are the good guys and who are the bad guys in the foreign community.

But that thread had to be hidden from public view due to outside pressures. Then came the revelations in the last few days from SISHA’s own whistleblowers.

It is alleged much of Morrish’s back-pay totalling US$134,000 over two years was taken out of donations specifically to build a women’s shelter in Battambang, Cambodia. Documents are in the hands of this website.

A substantial sum, which is reported to have come from a donation made by Australian mining millionaires Gina Rinehart, was reported also to have gone on Morrish’s backdated salary as well as cash raised in the USA for a scholarship programme for young Cambodian women.

Gina Rinehart may not be concerned. The world’s fourth richest woman seems pretty keen on SISHA and Fairfax newspapers, of which he is a major stakeholder, has been giving the ngo favourable publicity.

But the sacked directors insist that cash was earmarked for SISHA’s ‘Crisis Support Centre’ which apparently as a result does not exist and is not likely to.

Steve Morrish

Further allegations, so far unsubstantiated, are made that Morrish, is being paid US$8000 a month, as opposed to US$5000 recorded in the books. In any case both figures top the earnings of editors of Bangkok English language newspaper editors and indicate he is taking a generous international as opposed to a local salary.

Morrish is also the managing director of IRME – International Risk Mitigation and Emergency Management – a Phnom Penh based company he has set up with a former Australian fire-fighter Paul Burford

As a result of exposure on the Khmer 440 forum, it is claimed, ‘twelve thugs’ from SISHA descended on the ‘Garage Bar’ in Phnom Penh, a bar used by members of the forum, and carried out a two hour lock-in demanding to know who was leaking the info and bad mouthing the charity.

Said Hogan: “We criticized him and his organisation on K440 and his response, as Director of an International NGO, was to put together a posse of 12 Aussie thugs and then illegally raid the bar where we drink and hold us hostage for an hour or two terrorizing some of us (“I’ll get your visa cancelled and have you thrown in jail “) and assaulting a friend of mine.”

Garage Bar – Phnom Penh

One of those apparently grabbed by the neck subsequently had a heart attack, but it would be difficult to prove any connection.

A complaint was later made to the Australian Embassy.

Just part time mind you

The complaint of bullying tactics by SISHA is not totally new.

SISHA has been attracting criticism from expats in the capital. The following appeared on a local blog Penh Pal after a raid on an orphanage carried out ostensibly by SISHA but with Cambodian police in March. The author quoted Morrish as being SISHA’s ‘attack dog’.

“Over the last few weeks, the controversial Cambodia-based but Australian-registered anti-trafficking organisation SISHA (South-east Asian Investigations into Social and Humanitarian Activities) that proclaims its goal to stop modern day slavery, firstly overreached itself and then appears to have exploded in an orgy of hubris and crass stupidity.



“It all started well for SISHA when it was reported in Australia’s Fairfax Press that SISHA had led a raid on the Love in Action orphanage in Phnom Penh in March run by a 72-year-old former Queensland woman, Ruth Golder. SISHA eagerly told the credulous Australian journalists that the orphanage was well known for abuses of its charges and in fact, was a front for child trafficking. It was we were told, representative of many unlicensed shelters in Cambodia.





Ruth Golder with children at the ‘Love In Action’ orphanage in Phnom Penh



At first, this appeared to be a coup for SISHA.





SISHA issuing press releases with Cambodian Police. But no charges so far.

Still you might be worried about donating.



“Unfortunately for SHISHA, this story soon started to unravel when the government agencies that reportedly accompanied SISHA on the so-called raid started to distance themselves from SISHA’s narrative, claiming instead that that they had been invited by representatives of children’s shelter to intervene because Love in Action had been experiencing temporary financial difficulties.



“Some analysts suggested that the authorities here were less than pleased that the Fairfax story made it appear the SISHA had some sort of leading role in policing in the Kingdom, a narrative that SISHA appears to have been keen to foster.



“SHISHA is something of a novelty in the non-profit sector. At the senior level, it is staffed by a number of out of work policemen, principally from Australia and the UK. Over five or so years, it has developed into a freelance transnational investigative organisation, initially focussed on sex trafficking and child prostitution, it has since expanded into targeting labour trafficking as well as gender-based domestic violence, with ambitions to spread its influence against the region.



“While headquartered in an upmarket mansion in Cambodia’s capital’s tony BKK1 district, it claims to also have offices in Australia, the US and Thailand, as well as to have conducted investigations in Malaysia, the Philippines and Myanmar.



“As Steve Morrish, its founder and executive director, has said, it “fills a critical gap” as an intermediary “facilitating the identification and rescue of those being exploited, as well as finding and prosecuting perpetrators” working “hand-in-hand with the police to build their capacity and provide them with the resources to get the job done.”



“In fact, some have likened it to the NGO equivalent of Blackwater, the private security contractor that played a key if controversial role in the early days of the Iraq War.”

Rose bar menu – not the opinion of this site

The author remarked that Morrish was a frequenter of the ‘Rose Bar’ – a bar very familiar to international correspondents in the red light area of Street 104. He could of course justifiably claim he was networking and there is no suggestion that he was buying out girls.

Meanwhile Ruth Golder, the Australian (Queensland) director of the ‘Love in Action’ orphanage appears to have been cleared of all allegations, a result which has yet to be reported in the Australian press.

SISHA claims to have close relations with the Australian Federal Police and Britain’s Serious Organised Crime Agency. But those relationships have undergone some strain.

SISHA complained when British journalist Andrew Drummond, of this website, tracked down convicted British sex offender David Fletcher and caught him on a rubbish dump in Phnom Penh where he was running a charity for children. They said Drummond had destroyed a long term enquiry.

Fletcher was however arrested in Thailand and his extradition to Cambodia, where he has been jailed for ten years in his absence for child sexual offences in Phnom Penh, has been approved.

SISHA have not yet responded specifically to these allegations listed below. But they have put out a blanket denial of any financial impropriety.

The following complaints are unedited and SISHA has been invited to comment.

THE COMPLAINTS:





Sean Looney, former SISHA USA director who refused to transfer funds on Morrish’s order

Dear SISHA USA Board of Directors,



I am emailing to communicate a few important points.



First, in the forwarded separate email below please find a detailed account of SISHA’s requests to SISHA USA for the transfer of a significant amount of money from SISHA USA’s Hope Scholarship project account to SISHA, to cover SISHA’s July payroll and other administrative costs. My reasons for denying the requests are detailed in the separate email below sent to Steve.



Second, soon after sending the separate email below, detailing why I was unwilling to transfer funds, I engaged with Director Morrish over Skype chat. At which time he terminated my employment with SISHA USA. Below is a verbatim cut and paste from Skype:

[8/5/13 1:15:11 PM] Sean Looney: Steve, I have Sabol in my office

[8/5/13 1:15:29 PM] Sean Looney: I have told her the same thing each time she has made the request on your behalf.

[8/5/13 1:15:34 PM] Sean Looney: I have sent you a long email detailing why this is

[8/5/13 1:16:09 PM] Sean Looney: it is a black and white issue, there is no gray area and no wiggle room

[8/5/13 1:16:52 PM] Steve Morrish: Sean. I dont care what you have sent me. Allan and I have aporoved this. Do it!

[8/5/13 1:17:04 PM] Sean Looney: you are not a quorum

[8/5/13 1:17:13 PM] Sean Looney: the other two board members were not informed

[8/5/13 1:17:56 PM] Sean Looney: plus you couldn’t vote on it anyway, it is a conflict of interest

[8/5/13 1:18:23 PM] Steve Morrish: Sean. If you dont do it. Pack your drsk and leave.

[8/5/13 1:18:42 PM] Sean Looney: I understand that, and I expected it

[8/5/13 1:18:59 PM] Sean Looney: but the money cannot be tranferred

[8/5/13 1:19:05 PM] Sean Looney: what you are asking me to do it not legal

[8/5/13 1:20:03 PM] Steve Morrish: Ok. You are fired sean. You are not privy to board material. I am tbe president of sisha usa and allan and I jave approved.

[8/5/13 1:20:54 PM] Sean Looney: As the ex dir I am entitled to all board material and entitled to a vote on all board measures

[8/5/13 1:21:00 PM] Sean Looney: you are not a quorum

[8/5/13 1:21:11 PM] Sean Looney: you cannot approve a resolution without a quorum

[8/5/13 1:21:16 PM] Sean Looney: so say the bi-laws

[8/5/13 1:21:28 PM] Steve Morrish: No you are not. You are interim exec director and I just fired you.

[8/5/13 1:21:43 PM] Sean Looney: okay

[8/5/13 1:22:49 PM] Steve Morrish: I will get sabol to pay the money we owe you and you ate finished immediately. Thanks

[8/5/13 1:23:06 PM] Sean Looney: what you are doing is wrong Steve

[8/5/13 1:23:54 PM] Sean Looney: I hope someday there is a reckoning for all the similarly shady stuff you have done, and all of the vulnerable people your financial mismanagement has taken money from

[8/5/13 1:24:16 PM] Steve Morrish: No more to say sean. Goodbye.

[8/5/13 1:24:21 PM] Sean Looney: I will clear out my desk

[8/5/13 1:24:28 PM] Steve Morrish: Thank you

Third, after my termination SISHA’s Controller, under direction from Director Morrish, removed funds from SISHA USA’s accounts. It is my belief that this act is unlawful in the United States. For the agent of a foreign owned and operated corporate body to knowingly and willingly remove funds from an American corporate body without approval from the Executive Director or the Board of Directors, particularly when those funds are being diverted from their original purpose.



Additionally, if the board had approved a diversion of funds, from the previously intended use, the agents of the organization would be indemnified but the board would be taking on the legal and financial risk. Although the board can divert money from its intended use, intended use defined by the board resolutions accepting the projects and SISHA US. As yearly and project budgets explicitly directing funding for those projects, American bodies operating in foreign spaces, particularly with 501(c)(3) status, are subject to regulatory restrictions on money flows. I am also clear on the financial obligations of the board in the US but by diverting funding SISHA USA takes on financial liabilities, which unlike some other countries, is the full responsibility of the Board of Directors.



Fourth, my recommendation to SISHA USA board members would be to resign immediately. This instance of financial mismanagement, the subversion of legal restriction, and the disregard for SISHA USAs organizational governance policies, say nothing of unethical expenditure and behavior in the charitable sector, is not aberrant behavior at SISHA. My position as Executive Director is protected as per the board bi-laws and is such that I serve at the pleasure of the board, but I do not intend to fight my dismissal, thou it does demonstrate his de facto control over both organizations. Director Morrish will continue to run both organizations and this behavior will continue. He will likely put in another SISHA USA Exec Director but he will be the de facto director of SISHA USA which as the Executive Director of SISHA violates Massachusetts corporate law and 501(c)(3) compliance with the IRS, which require, amongst other things, SISHA USA to be managed autonomously and be financially independence from any affiliated foreign company. All money sent from SISHA USA to a foreign body must be sent on a project basis with strict parameters on what the money can be used for, as well as strict accounting reporting requirements of how the money was spent. Doing other than this also violates part of FinCen’s money laundering and terrorist financing regulations, which are also represented in the IRS’s 501(c)(3) and Massachusetts non-profit regulations.



Fifth and finally, Mr. Morrish is effectively running something akin to a not for profit Ponzi scheme, he continues to misrepresent the companies financial liabilities, continues to raise money and divert if from its intended and restricted purposes to fill financial liabilities arising from financial mismanagement, high overhead, and exorbitant travel costs, say nothing of the missing money and highly questionable expenses SISHA pays on his behalf. SISHA claimed a 302,000 USD financial liability at the end of the fiscal year (June 2013) [as per the SISHA June Board Report]but this amount does not include the more than 150,000 dollars it will cost to run Hope and Camkids through their project periods of June 2014, or the more than 450,000 USD SISHA received to build the yet unbuild Crisis Support Center.



SISHA received 230,000 USD at the end of June 2013 to manage the programs, SISHA USA received 128,000 USD to run Hope and Camkids till December. SISHA’s diversion of another 30,000 USD means there is now less than 10,000 USD in the the Hope scholarship fund, which will run out of money in the middle of next month, as we are slated to bring 4 new girls to Phnom Penh. There is a ubiquitous culture of intentional misreporting to donors, intentionally significantly inflating budget line items and diverting monthly variances outside of the project, and misrepresenting this expenditure to the donors, such as USAID, the Wen Foundation, and Hancock Prospecting. I don’t want to be the one that answers to Gina Rinehart when she asks about her missing 650,000 dollars (120,000 of which has now gone through SISHA USA) and the disposition of the programs and the building that money was supposed to fund, for which SISHA still owes almost all services.



The situation is untenable, the wheels are coming off, and the fall is near.



I made my decision because there was no gray area, acquiescence to Director Morrish’s bullying would implicate me in Director Morrish’s pattern of unethical and illegal behavior. His behavior underscores SISHA USA’s lack of autonomy and Director Morrish’s illegal and highly unethical practices.



The legal and financial risk to you as board members is unlikely to be worth the CV bump, the organization is not doing good work it purports, and the board of SISHA USA has now been demonstrated to play little role in the organization’s governance, while taking on all of it’s risk.



It was a pleasure serving at the pleasure of this board, I wish you all the best in the future.



Until our paths cross again,



Sean Looney, formerly, director of SISHA





SISHA -Who are we?







Letter to the Board

The Financial Practices of SISHA

Prepared and Written by:

Jeff Rodwell

I have written this in-depth report in order to better inform the Board about the exact financial and

managerial practices of Mr. Morrish. The money that has come in for EMY, Camkids, and the Crisis

Support Center has been depleted in the process of paying for services, salaries, rent, travel, and Mr.

Morrish’s back pay. None of this was explicitly intended by the donor and these practices have left theorganization fundamentally unable to fulfill its financial obligations to donors, beneficiaries, and staff.



Mr. Morrish’s management practices have led to money being taken directly from orphans, young

women, victims of rape, and victims of exploitation in order to pay for these expenses. Mr. Morrish’s

salary liabilities were paid for directly from funds intended for these beneficiary groups, outside of any line items in the budgets.



The organization is illiquid in the long-term. The story of how this financial catastrophe happened is

outlined in detail in this report. I intend to show that it is inevitable that the organization will collapse in the near future, absent a massive, unrestricted donation. I have included calculations and explanations or the methodology that I used to try to gain a fair estimate of real financial obligations that SISHA has.



The accounting practices used by SISHA to produce monthly balance sheets and income statements aredesigned to omit key financial obligations. This has allowed the organization to appear more financially healthy than it really is.



I understand that in the short-term the organization can technically remain liquid. But I hope that my

analysis demonstrates that within two months the organization will be technically illiquid. The only

reason that SISHA is not technically illiquid at this point is because SISHA is prepared to either take loans from Mr. Morrish or to steal funds from SISHA USA’s EMY and Camkids accounts in order to pay current liabilities.



The amount of money that is estimated to fulfill obligations for the Crisis Support Center, EMY, Camkids, rent, and salaries through the end of the financial year (June 2014) is $955,845. This indicates that SISHA would need to raise close to a million dollars in funds before any money could be spent on operations.



Since SISHA’s mission statement and outward public relations campaign emphasize the importance of operations, this should really illustrate the depths of SISHA’s financial problems. The only way to

continue functioning financially would be to willfully not fulfill SISHA’s obligations to donors and

beneficiaries, and to continue placing economic burden on Khmer staff and their families.



All of the information used to write this report comes from documents from my work in the programs

department. Since I was tasked with improving programs at SISHA, I had to understand the finances

first. Through this process I have learned all of the information presented below.



Access to all of the financial and Board documents is given to every single employee of SISHA and the information is all publicly available within the organization. It may be that this was not the intention of Mr. Morrish.



However, no policy or mechanisms exist for restricting access to any of these documents. These

documents were critical to doing my work for the programs department and they have given me

knowledge that is considered private for the organization. This is why I am disclosing it to the Board and following the whistleblower policy. I have no intention for this information to become public.

I have no ill-will for Mr. Morrish or the Board, but I feel a strong moral obligation to make sure that the truth behind the functioning of SISHA’s finances is brought to light within the organization. It is also critical that all donors understand exactly how their money has been spent, or how it would be spent ifthey were to donate in the future.





SISHA’s whistleblower policy





I am submitting this to the Board under SISHA’s whistleblower policy. It is up to the Board to decide how to proceed with matters. Procedure states that I should go to the Director of the Board with complaints, and if I feel that this is inadequate that I should go to the entire Board as well. This is the option that I choose to take.



I want all members of the Board to be able to have access to an open, honest, and accurate account of how Mr. Morrish had conducted business in SISHA. Board members are then free to compare their own knowledge and experience with what is written in this document to determine the appropriate course of action that they will take.





Glossary of Terms





EMY – The Hope Scholarship fund which provides funds for disadvantaged young girls to receive

university education

Camkids – Funding for 3 orphanages

Crisis Support Center – Funding intended to build a support center for female rape victims in

Battambang



Structure of the report



Mr. Morrish’s Back Pay



I first begin with the story of Mr. Morrish’s back pay. This is important in elucidating two main points

about the functioning of the organization. First, that program funds are constantly diverted away from how budgets have outlined their intended use. The technical explanation that is given is that it is done through internal loans from the programs to SISHA, however, this is never made clear to donors and there have been no attempts to repay these loans. Second, the financial and accounting practices of the organization have created a situation where SISHA cannot meet its fundamental obligations for programs or operations.



The evidenced priority for the use of funds in the organization has been that SISHA places the highest

priority on salaries and Mr. Morrish’s back pay, followed by rent and expansion into Thailand, ultimately placing programs and operations at the bottom of the list. This prioritization scheme is never made explicit to donors or through public relations. Most people reading SISHA publications would presume that SISHA’s top priority is operations, followed by programs.





The Art of Accounting



This section details exactly how all of the money for EMY, Camkids, and the Crisis Support Center have been used. This section also details how the accounting was conducted in order to provide Board members with an accurate explanation of how money was diverted away from budgeted allocations. I understand that the Board was aware that these practices were occurring, but I want to make sure that the Board has complete understanding of how the money was diverted, in case Board members possess an alternative interpretation of what they believed SISHA was doing at the time.





4.0 Estimations of True Liabilities



The next section attempts to calculate expected liabilities for SISHA until the end of the financial year.



This includes rent, salaries, EMY, Camkids, and Crisis Support Center obligations. This does not include operations costs, as historically they have always been put aside to meet other obligations first.



This section demonstrates the reality that SISHA cannot possibly afford to meet all of its obligations.

I hope that this document demonstrates the severity of the situation that SISHA is facing so that

corrective actions can be taken quickly.





Mr. Morrish’s Back Pay





This section is written with the intention of bringing to light the history of Mr. Morrish’s back pay. The purpose of tracking this flow of funds is to use the example of Mr. Morrish’s back pay to show how money from donors was generally treated by the organization. I also wish to demonstrate that for more than two years Mr. Morrish continued to accrue a large debt for SISHA in order to cash in at some future date when a large donation came in. The highest accrued value for Mr. Morrish’s back pay was $134,793.07, which was paid off with funds from the Crisis Support Center, Camkids, and the Hope Scholarship (EMY) during the second half of 2012.



What essentially occurred was that SISHA’s accrued liabilities to Mr. Morrish were transferred to the

programs themselves. In essence, SISHA’s inability to pay Mr. Morrish’s salary over the course of time was resolved by taking money directly out of programs for orphans, young girls, and victims of

exploitation. The personal liability that Mr. Morrish had was transferred directly to victims of human

trafficking, exploitation, orphans, and young women.





Key Points

• 16.6% of all the money donated for Camkids, EMY, and the Crisis Support Center between

6/27/2012 and 12/28/2012 went directly to repaying Mr. Morrish’s back pay. The total sum of

money donated for these programs was $812,718.33. The total amount of money that Mr.

Morrish received was $134,793.54

• The highest recorded amount of back pay was $134,793.54. This represents roughly 27 months,

or 2 years and three months of back pay, assuming a salary of $5,000 a month. The highest

recorded amount of back pay represents the largest amount of accounted back pay that Mr.

Morrish had at any time. It also occurred right before the large donation for the Crisis Support

Center.



• 19.6% of the Crisis Support Center funds donated on 6/27/2012 went directly to repaying Mr.

Morrish’s back pay



• 17.1% of EMY funds donated on 12/10/2012 went directly to repaying Mr. Morrish’s back pay



• 10.3% of Camkids funds donated on 12/24/2012 went directly to repaying Mr. Morrish’s back

pay



• 0.05% of the Crisis Support Center money has been spent on items related to the development

of the Crisis Support Center. It should be noted that the lack of a detailed ledger between July

2012 and November 2012 could account for why this number is so low. It is possible that some

extra money was spent in that time period. However, nothing substantive has been done on the

Crisis Support Center and it is likely that very little additional spending has occurred.





A brief history of the accrual of debt



Below is a table outlining historical non-current liabilities derived from the yearly audited income

statements for SISHA. Since perfect financial accounting has not occurred at SISHA, I have tried to build an accurate story to the best of my ability using the available data to understand how salary payment for Mr. Morrish occurred. This demonstrates that the organization continued to accrue huge liabilities for his pay over the course of four years. Ultimately this liability ended with Mr. Morrish being fully paid on December 28th, 2012.



It is important to note that not all of the long term liabilities listed constitutes Mr. Morrish’s back pay.



Determining what the level was at the end of each financial year would require access to the ledgers

from those years. However, it is likely that the numbers for long-term liabilities represented a significant majority of long-term debt for the organization.



Year Long Term Liabilities (Non-Current)

Dec 28th, 2012 $0

June 2012 $101,191

June 2011 $154,624

June 2010 $115,078

June 2009 $0 (Trade and other Payables $69,535)

June 2008 $0



The earliest detailed record of his payments in the general ledger begins on July 31, 2011. The SISHA

Internal Transfers account begins with a $107,327.76 outstanding balance for Mr. Morrish’s repayment carried over from the 2010-2011 financial year. The remaining $45,000 of the non-current liabilities were money owed to Dean, Demetra, Team Co. Ltd., Mr. Tom, Eric, Mrs. Laine, and two more loans from Mr. Morrish. The total amount of money owed to Mr. Morrish in the account on that day was $112,331.76. This means that roughly 75% of non-current liabilities were owed to Mr. Morrish.



These adjustments were immediately transferred to the Other Loans account at the beginning of the

new financial year. The back pay for Mr. Morrish was classified under Other Loans until 12/31/2011

when they were moved to the Loans from Directors account. This may have been done simply to make the accounts more clear, but the important point about the two accounts is that in both instances the back pay for Mr. Morrish was classified as a loan, not accounts payable. There is no document which explains why it was classified as a loan instead of accounts payable. My assumption is that there was an accounting advantage due to accounts payable being a short-term liability, while Loans from Directors would be a long-term liability. This changes the organization’s outward appearance of liquidity (affecting the current ratio) for donors and allows the liability to carry over year to year until receiving payment.



Over the next four months the Other Loans account accrued another $24,704. This comprised of four

months of unpaid wages at $5,000 a month. The remaining $4,704 came from an adjustment labeled

“liabilities of Steve Morrish from SISHA Cambodia”. Mr. Morrish was also paid $1,300 on 10/17/2011.



Then on 12/31/2011 the entire $131,027.76 remaining balance was transferred to the Loans from

Directors account.



Between 12/31/2011 and 5/10/2012 the Loans from Directors account accrued $26,379 from $20,000 inback pay and $6,379 from the purchase of a vehicle on 1/8/2011. It is not clear what vehicle this is or where that money came from. It was during the month of May 2012 that the back pay reached its

highest point of $134,793.54.



During this period there was also $19,630 in payments including $17,500 in salary payments and $2,130 in repayment for insurance for Shouly. Shouly is the name of Mr. Morrish’s wife.



The basic accounting practice during this time period was that SISHA would incur a $5,000 liability at the end of each month and proceed to pay Mr. Morrish on the 2nd of each new month. No explicit

explanation is given for why this was done. This could have been done in order to prevent double

payment in the same month as a way of lessening the impact on salary obligations month to month.

2.2 The big donation finally arrives.



On 6/27/2012, $440,499.02 came in for the Crisis Support Center. This was immediately placed in the

Crisis Support Center account and then transferred to the Donations – General account. The Crisis

Support Center account was closed out the day that it opened. There is no direct evidence for why this occurred. I assume that the reason for this was that the entire donation was intended to fund the Crisis Support Center, but by placing it in the Donations – General account, SISHA would be able to

immediately use the money in an unrestricted fashion.

This donation began the process by which Mr. Morrish began to receive compensation for his large

accrued back pay. The day before the donation came in, SISHA paid Mr. Morrish $3,450 of salary.



The following Monday June 29th, Mr. Morrish received $1,355.15 for his Range Rover’s car insurance as well as $20,000 in back pay. The total amount paid back to Mr. Morrish from the Crisis Support Center money over the period of 06/26/2012 through 06/29/2012 was $24,805.15.



Technically the $3,450 salary payment that occurred on the 26th came in before the money for the Crisis Support Center arrived at SISHA. This money is being included as money taken from the Crisis Support Center budget to compensate for Mr. Morrish’s back pay because it is assumed that Mr. Morrish knew the large donation was coming the next day.



On July 1, 2012 a new financial year began. There exist no general ledgers describing how money was spent for the month of July, however, balance sheets and income statements do exist. According to the balance sheet dated on July 31, 2012, the amount of money that Mr. Morrish was due had dropped from $103,988.44 at the end of June to $42,334.07 at the end of July. This implies that $61,654.37 had been paid to Mr. Morrish during this month. Given the tendency to pay Mr. Morrish on the 2nd of the month, it is likely to assume that some date around July 2nd, Mr. Morrish received the money. This would mean that within a week of getting the $450,000 from the Crisis Support Center, Mr. Morrish had been paid $86,459.52. Of the $440,499.02 that came in for the Crisis Support Center, 19.6% had already been spent on compensating Mr. Morrish for his back pay.



There is no evidence from the budgets which indicates that the donor was aware that $86,459.52 would go towards paying Mr. Morrish’s back pay. This was likely justified as an internal loan from the Crisis Support Center project to SISHA, however, this was never put in any budgets and it is unlikely that the donor even implicitly agreed to the use of 19.6% of her donation for Mr. Morrish’s back pay.



The remaining $42,334.07 of back pay



There were two big donations which occurred in December 2012. A donation for the EMY project of

$58,547.50 was made on 12/10/2012. On 12/13/2012 Mr. Morrish was paid $10,000 in back pay out of funds that had been intended for EMY. This represents 17.1% of the total funds intended for the project.



On 12/24/2012, $313,721.81 was donated with the intention of funding Camkids. The accounting does not denote it as an AUD donation. All of the other accounting entries surrounding it indicate that the entries are in USD, so I assume that this money is as well. On 12/28/2012, Mr. Morrish was then compensated for the remainder of his back pay with this money. The total amount that he was paid was $32,344.07. This means that 10.3% of the money intended for funding Camkids was instead diverted to paying back pay for Mr. Morrish.





The Art of Accounting

Common accounting practice when receiving money ahead of the delivery of services or goods is to

place a concurrent liability for these expected services in the ledger, balance sheet, and income

statement in the form of deferred income. This practice was not adhered to by SISHA’s financial team

when the Crisis Support Center money came in and no explicit answer is ever given as to why no

corresponding liability was added.



It can be argued that it is unethical to sign a budget and receive money for future services while placing no financial responsibility in your books for fulfilling these obligations. There may be a technical explanation for why the Crisis Support Center did not require a liability, while EMY and Camkids did, but it is not obvious. The point is that by not adding a liability and placing all of the funds in the Donations – General account, Mr. Morrish was able to divert all of the funds away from the Crisis Support Center.





3.1 The Crisis Support Center, 6/27/2012, $440,449.02

The Crisis Support Center has not been built. There is no land, no building, no staff, and certainly no

services being provided. The only accounting entries that are available to staff indicate that spending so far on the Crisis Support Center is $235 which was incurred on 3/21/2013 for taxis, hotels, and food for three days in Battambang. There may have been some costs that occurred during July 2012 and November 2012, when general ledgers were not available. However, the obvious point is that virtually none of the $440,449.02 has been spent on anything related to the Crisis Support Center as evidenced by the complete lack of any building, staff, or work being done on the project.



I do not know the intentions of the donor, but I do assume that there was an expectation that a Crisis

Support Center would be built. I also assume that the donor did not intend for 99.95% of her donation to go to things unrelated to the Crisis Support Center itself.



What allowed this to occur was the accounting practice of not adding a corresponding current liability (or non-current liability) along with the revenue that the donation provided. The fact that, as outlined above, the money that was received for the Crisis Support Center was immediately taken out of theCrisis Support Center account and placed into the Donations – General account demonstrates the lack of seriousness with which relevant parties took the intentions of the donor or the plan laid out in thebudget.



If SISHA had taken care to add a deferred income liability for the Crisis Support Center’s

expected costs, then the financial reckoning for the organization would have come much earlier.



This short-sighted fear drove behavior that ultimately led to virtually all of the money being used on

expenses not related to the Crisis Support Center itself. There was strong incentive to treat the money as an unrestricted donation in order to meet immediate obligations of rent, salaries, and operations expenses.



A cynic could argue that the Mr. Morrish made the decision to label the money as an unrestricted donation because he knew that SISHA was finally financially able to pay his back pay. This question can only be answered by Mr. Morrish himself, but clearly the accounting practices which were used created a situation where the money could be completely funneled away from the intended program towards other financial obligations of SISHA.



The most troubling is that by the end of November 2012, SISHA was again coming close to illiquidity.

This means that the money for the Crisis Support Center had already been drained to the point where it was an unrecoverable project. The money for EMY and Camkids came in time to delay a financial

catastrophe and allowed the poor financial management practices to continue.

In order to deal with the fact that all of the Crisis Support Center money was gone, SISHA had attempted to partner with another NGO that would agree to build the Crisis Support Center using their own funds, while SISHA would staff and operate the center. However, the other organization was tipped off about SISHA’s financial situation and pulled out of the deal. The situation reached a crisis point in July 2013 when Mr. Morrish began dreaming up a scheme of a $10 million dollar project for 24 Crisis Support Centers around Cambodia. I assume that the attraction for such a large-scale project was to cover up the fact that all of the money for the first Crisis Support Center had already been squandered.



3.2 EMY and Camkids, 12/13/2012 and 12/24/2012, $58,547.50 and $313,721.81, Total: $372,269.31

The total amount of money that came in related to these two programs was $372,269.31. Unlike with

the Crisis Support Center, deferred income was in fact added to liabilities for the organization. The total amount of deferred income for both programs on 12/31/2012 was $336,905.80. This left roughly

$35,363.51 in extra money that was not counted as deferred income.



This created a problem for SISHA as it meant that they could not freely take the money as if it were an unrestricted donation as they had for the Crisis Support Center. What was done to get around this was to take out internal loans from these two programs to pay for current liabilities of salaries, rent, and the expansion to Thailand. These loans were explicitly meant to be repaid, as evidenced by internal documentation. However, this was never done. The internal liabilities continued to mount and still exist to this day. This is a driving force behind, as will be explained later, why these programs will not be able to fulfill their intended obligations through the funding period prepaid for by the donor.



This was one of the reasons cited by the CFO in his resignation letter to the Board of SISHA on April 8,2013.



The money from these programs ended the liabilities that SISHA had towards Mr. Morrish’s back pay.

However, it created an enormous gap in funding that meant that SISHA would be unable to fulfill its

remaining obligations in the long-term.





The river dries up, June 2013

The financial management practices from the previous year began to prevent SISHA from performing

core operations. The cessation of operations began at the beginning of April. By the beginning of June, SISHA was unable to pay salaries. By June 25th, 2013, SISHA was left with only $1,568 in its accounts. All of the money for the Crisis Support Center had been gone since December, 2012 and the EMY and Camkids money had completely run out. In fact, the accounts for both programs only had $100 in them, despite the fact that the total amount that was given was $372,269.31. Within 6 months all of the money from Camkids and EMY had been drained, even though the Camkids program had already been given funds intended to last until January 2014 and EMY had been funded until October, 2013. The Camkids program had run out of funds six months early and the EMY program had run out of funds three months early.

Being unable to pay salaries, support any programs, or perform operations meant that SISHA was on the brink of collapse. The collapse was prevented by a large donation on 6/26/2013.



3.4 The last tranche for EMY and Camkids, 6/26/2013, $258,476AUD, $236,505.54USD (0.915 rate)

It is not clear why SISHA received money for these two programs early. It may be that Mr. Morrish had convinced the donor to give funds at the end of the financial year (which always ends in June for SISHA). This would allow the donation to be counted at the end of the 2012-2013 year, rather than into the new financial year. I suspect that there was an incentive beyond the need to pay staff and rent. This donation would create positive equity at the end of the year for the financial statements, which would allow SISHA to appear more financially healthy than it really was. Otherwise, equity would have ended the year negative.



On 6/26/2013, the donation came in for $258,476AUD ($236,505USD) to fund EMY and Camkids. The payment was for covering Camkids from January – June 2014 and to cover EMY from October 2013 –

June 2014. These funds were adequate if they were managed properly. The organization was desperate for funds, so once again, the stage was set for borrowing from these programs.



However, the structure of the organization and personnel had changed. Due to technicalities in

Australian DGR regulations, the EMY and Camkids programs could not be funded through a DGR

account, so the programs were given to a separate corporate entity called SISHA USA. This was a

completely separate NGO that took control of the EMY and Camkids programs. The budget that had

been approved by the donor and SISHA Cambodia was prepared by staff members who were no longer with the organization. The budget was created with inflated values which were intended to provide space for SISHA Cambodia to take extra money from the programs in order to fund its operations. The SISHA USA staff, including myself, had prepared a new budget, absent the various forms of budget inflation that was common in the organization. This was due to the moral obligation we felt to present funds and their uses in a transparent and fair manner. By having the different budgets, SISHA Cambodia would keep the difference between what SISHA USA requested to run the projects and what SISHA Cambodia was able to get from the donor.



This was done because SISHA USA did not want to participate in purposefully inflated budgets, nor in trying to take money from the programs to fund outside expenditures. Since SISHA Cambodia had been the organization which recieved the money directly from the donor, SISHA USA had to submit its own uninflated budget to SISHA Cambodia in order to receive funds for EMY and Camkids. After this, SISHA Cambodia agreed to send the money to SISHA USA and the ethical liability for this purposeful misrepresentation of budgets remained with SISHA Cambodia.



When the money finally arrived to SISHA Cambodia, they did not give the full amount of money that

SISHA USA required to run the programs through their mandated time periods. Out of the $174,948 that was required to run the two programs, SISHA Cambodia only gave $128,099.23 to SISHA USA. SISHA Cambodia was able to keep the difference of $46,848.77. On top of this SISHA Cambodia kept a “service fee” of $61,557.54, for a total of $108,406.31. SISHA Cambodia retained 45.8% of the money that was sent by the donor. All of that money was soon gone.

This is particularly troubling not only because this guaranteed that EMY and Camkids would run out ofmoney seven to eight months before their project period ended, but also because it was far larger of a gap than had been agreed-upon by both parties as well as the Board. Mr. Morrish had told the Board that only $58,000 dollars would be taken out of this tranche for SISHA Cambodia, yet $108,406.31 had been taken.



In response to the coming financial crunch, Mr. Morrish forced Camkids to accept a new lower amount of $12,000 a month instead of the agreed-upon $14,424. This was done without informing the donor and Camkids were told to accept the new monthly payment without any reasonable explanation. Mr. Morrish claimed that it had something to do with the Australian currency, but this is obviously not true as all the money was already in US dollars anyway. Mr. Morrish explicitly said that the money was in USD in a board memo, where he was also describing a $58,000 service fee that SISHA Cambodia would be receiving from the $236,505. The budget does not have any line item describing the service fee, so it is not clear how Mr. Morrish came to the conclusion that SISHA Cambodia was entitled to it





How the last tranche was spent



Between 6/26/2013 and 7/3/2013, there were a series of transfers of the entire $258,476AUD in

packages of $50,000AUD at a time to the local SISHA Cambodia account. On 6/28/2013, $33,309.69USD was withdrawn in cash. The largest ticket items that were paid for by this withdrawal were: $14,800 to repay Mr. Morrish for the money he had loaned to SISHA throughout the month of June, $13,000 to pay Cambodian salaries for June, $3,500 to pay the remaining SISHA Thailand salaries from June, and $557.76 to pay Mr. Morrish’s credit card bill.



On 7/1/2013, $33,196.84 was spent on the remaining payroll liabilities from June. This brought the total amount of money that went to salaries from the new tranche to $46,196.84. This means that 19.5% of the money donated had gone to pay salaries within four days of receiving the money.



On 7/2/2013, $1,160 was spent on operations and $6,840 was spent on rent for the months of July and August. Curiously, $12,100 was taken out to be put into one of SISHA’s ICBC accounts, and was

subsequently returned on 7/8/2013 when that account was closed. There is no indication why this

transfer occurred.



On 7/3/2013, $1000 was taken out to pay for electricity.



On 7/3/2013, $71,900 was sent to SISHA USA for funding Camkids. Also, $13,338.85 was paid for

insurance for ex-pat staff.



On 7/8/2013, $55,411.82 was sent to SISHA USA for funding EMY. The following day, $12,039 was sent to SISHA Thailand to cover rent, salaries, and furniture purchases. From then until the end of the month there was another $5,000 of spending related to things like fundraising, operations, and taxes.



Within 9 business days, SISHA Cambodia was broke, even though it had received $258,476AUD. Roughly $108,406.31 had been spent by the end of the month, while the remainder was transferred to SISHA USA.

The confrontation

The acute financial situation of SISHA by the end of July was readily apparent to anyone working there. For the first time ever, the Khmer staff was not paid. SISHA Cambodia had completely run out of money and no new donors were coming forward to help. The ethical issue that now faced Mr. Morrish was that there was still some money left in SISHA USA’s Camkids and EMY accounts.



Since SISHA USA had made it clear to SISHA Cambodia that it would not allow any money from its

programs to be diverted, the stage was set for a confrontation. SISHA Cambodia was facing a $28,706 payroll obligation that it was unable to fulfill without taking money from the EMY or Camkids accounts.



The Executive Director of SISHA USA made it adamantly clear that he would not support taking money from these accounts and continually informed Mr. Morrish that taking the funds was against US law and would require a Board resolution. Mr. Morrish then replied that he had received Board approval to take the money. The SISHA USA Executive Director then contacted to Board members and found that Mr. Morrish had been purposefully misrepresenting the truth. Only one of the Board members had been contacted. Mr. Morrish was caught lying about getting Board approval in order to try to take money from the EMY account. It is important to note that SISHA USA is a completely independent organization from SISHA Cambodia.



After several days, the confrontation came to a close when Mr. Morrish decided to fire the Executive

Director of SISHA USA. The Executive Director of SISHA USA tried very hard to protect the EMY money from being taken by Mr. Morrish. Current knowledge of events points to Mr. Morrish loaning the money to SISHA to pay salaries, instead of taking the money from the EMY account. I assume this was done because Mr. Morrish knew that he would be personally liable for stealing the money if he had gone through with it on his own.



Certainly what occurred was highly unethical. Mr. Morrish had blown most of the $130,376.77 that

SISHA Cambodia received within only one week. When he was unable to find funds to pay salaries at the end of the month, he decided that taking the money which had been explicitly intended for young

female scholarship recipients was the course of action that he wished to take. He may have not taken

that road, but it was only after significant resistance from the former Executive Director of SISHA USA.

I find it impossible to believe that the SISHA Cambodia Board or the donor for EMY and Camkids would have approved taking money from this program in order to pay salaries in an organization that is financially illiquid.



If SISHA Cambodia continues to control these accounts at the end of August, there will at some point be the incentive to take money from the EMY or Camkids accounts. This could happen if there is not

significant resistance to this behavior internally.





Where the money went

As of August 7, 2013, the estimated amount of money spent coming from EMY, Camkids, and the Crisis Support Center is $942,718.33.

Program Funds already spent

Crisis Support Center $440,449.02

EMY & Camkids Dec 2012 $372,269.31

EMY & Camkids June 2013 $130,000 (estimation)



The amount of money spent for the EMY & Camkids funds from June 2013 is only an estimate. This is

due to the fact that the funds are still being used. The amount of money spent is not less than $130,000 dollars though, as demonstrated above. Obviously some of the EMY & Camkids funds have actually gone to cover their program costs, but a large amount has also been diverted.







Estimations of True Liabilities

It is impossible to calculate the true liabilities of SISHA, so I will lay out a framework under which to

estimate them. The time period used will be from Aug 1, 2013 until June 31, 2014, the end of the

financial year and the furthest agreed-upon liability stemming from past donor funding. I will not add

the payroll liability from July that was repaid on August 5, 2013 and assume that was resolved in July, 2013 for the sake of getting a more accurate estimation of future liabilities.



The liabilities that will be considered are: full realization of Camkids, EMY, and Crisis Support Center obligations, estimated salaries for each month for all employees, and rent for the Cambodia and Thailand offices. This will not include travel, operations, legal, aftercare, or other variable expenses. I understand that technically organizations do not commonly include future salary or rent payments as a liability, however, I have decided to include them only to illustrate the point that liability for poor financial management practices is consistently placed on program beneficiaries as well as staff members. This is an attempt to determine an acceptable estimation of the minimum amount of money needed for the organization in order to fulfill its obligations to donors, beneficiaries, and staff. This demonstrates that if SISHA wants to do anything other than fulfill the obligations in these five categories, the amount of support to any one of them must drop in order to compensate.



As outlined above, this is exactly what has happened in the past. In order to cover rent and salaries,

money from EMY, Camkids, and the Crisis Support Center has been diverted. It is important to include the liabilities for all of these programs in this estimation because the obligation to the donor and beneficiaries still exists, regardless of SISHA’s immediate financial needs.

Item Monthly estimated cost

Full calculation of liabilities until June 2014 (11 months)

EMY Variable, due to an increase in the number of girls in the program $145,287

EMY Notes This value comes from SISHA USA’s calculation of estimated costs,

absent budget inflation done by SISHA Cambodia

Camkids $12,000 $132,000

Camkids Notes The agreed-upon value was actually $14,424 a month, but Mr.

Morrish unilaterally decided to lower payments

Crisis Support Center Never calculated internally $323,258

Crisis Support Center Notes The calculation comes from internal documents (Phase 1, 3 months,

$11,315; Phase 2, 9 months $311,943; Phase 3, 2 years, $370,778).

Since nothing has been done yet, the calculation is assuming that the

project begins in August and goes through the first two phases.

Salaries $25,000 $275,000

Salaries Notes *See paragraph below. Note that in this calculation Mr Morrish’s

salary is between 20-32% of total salaries. Mr. Ron Dunne accounts

for 22% of SISHA’s salaries in this scenario as well.

Rent SISHA Cambodia: $3,800 / month

SISHA Thailand: $3,500 / month

$41,800 for Cambodia

$38,500 for Thailand

$80,300 total

Rent Notes This is from rent for SISHA Thailand and SISHA Cambodia

Total estimated liabilities until

June 2014 not including

operations, legal, or aftercare

$955,845

Calculating salaries is a difficult task. This calculation only includes the salaries of Mr. Morrish and the head of SISHA Thailand. This calculation assumes that the Khmer staff will remain at SISHA and no new Western employees will be hired.



I have chosen $25,000 per month in salaries as an estimation of actual salaries over the next 11 months.



This accounts for Ron Dunne ($5,500) and Mr. Morrish ($5,000). However, it is widely believed that



Mr. Morrish earns $8,000 a month, though this is in no way evident in any of the accounting books. Every single entry related to Mr. Morrish’s pay has always been $5,000, so it must be assumed that this is his real salary. It is worth mentioning that there is a wide-spread belief in the organization that his compensation is $8,000 a month.



This estimation does not include any money for operations, the core of what SISHA does. It does not

include general expenses like stationery, travel, per diem, electricity, fuel, insurance, repairs, visas or

anything else like that. In order to function, SISHA would need significantly more unrestricted funds

than calculated above. If SISHA were to get $1,000,000 in restricted funds, the financial crunch would remain the same, unless SISHA again diverts intended funds from where the donor expected them to go to fill past obligations. This reality underscores the fundamental inability financially of SISHA to function as an organization in the future.



Clearly there can be debate about the methodology used to calculate these estimated liabilities as well as some technical discussion over whether or not salaries should be considered a liability, but these points are meaningless. The story that is told through this estimation is that the beneficiaries of SISHA’s programs as well as SISHA’s staff are always the ones who carry the burden of unsustainable financial management practices.

Credits: Khmer 440

COMMENT

Oh dear me. All the staff at SHISHA I am sure have the right intentions. But who are the cops involved.

Detective ****** constables? When dealing with serious issues like child sexual abuse you need police with some ranking and responsibility. These are very delicate matters. No matter that these police had eight or ten years experience! Not even a Detective Sgt!

Aussie newspapers as in the UK are nationalistic. That’s why these guys get a lot of Oz press – Aussie heroes. It may be about time the Australian press took stock and printed more than PR handouts rather than embarking on massive cost cutting ventures. But alas the foreign correspondents are few and far between.

There is a real Aussie hero however who runs the Cambodian Childrens Fund. He did not give up policing in Australia for a bigger salary. He gave up Hollywood for a lower one. I guess people in Phnom Penh know.

People running ngos in far flung places need to be now more careful than ever. They have a tendency to exaggerate and dramatise to solicit donations. Not that of course Cambodia does not have major problems in the areas SISHA deals with.

Recently we put the spotlight on the Australian charity ‘The Grey Man’ which was caught out conducting what to all intents and purposes a fake rescue of allegedly trafficked children.



We are not claiming SISHA does this. But clearly the ngo has outgrown its abilities.

These places are now easily accessible, claims are much more easy to scrutinise. So apparently is expenditure.

I know Cambodia well enough to read behind the lines. I know about what can be done and what cannot.

Very little fits in with either UK Law or Australian particularly about payment to Government officials. Of course it happens. It has to. But I would be happier if there were high ranking serving or even retired police involved. This is not reflection on the Australian Federal Police or British SOCA for that matter. They quietly get on with their own work. Its just ********** common sense.

The pub lock-in was outrageous let alone the seemingly cavalier attitude to accounting.