THE Rural Financial Counselling Service (RFCS) needs to be properly administered after an independent audit revealed that some counsellors were providing advice they were not qualified to give, according to Federal Shadow Minister for Agriculture and Fisheries Gavan O'Connor.
"It is absolutely essential that this service be properly administered to ensure that farmers and small businesses get the support they need and Australian taxpayers' interests are protected," Mr O'Connor said.
The first phase of the audit, carried out by Acumen Alliance, found most of the tasks carried out by the service did not have any formal review mechanisms, did not track expenditure to a grant budget and did not undertake any form of business planning, Mr O'Connor said.
It also found that financial and record keeping mechanisms were rudimentary.
The second phase of the audit looked at 22 counselling services, including in WA, and found that 50pc of services had incomplete client records.
In some cases the audit found counsellors who were placing themselves in a position where they may have been taking fee-paying clients before needy clients.
Mr O'Connor said the audit findings highlighted a lack of oversight by Federal Agriculture Minister Warren Truss.
"The findings of this audit make it clear there have been significant problems with the administration of this service," Mr O'Connor said.
In the 2004-05 budget the service was provided with $23.3 million for the next four years.
But Parliamentary Secretary for Agriculture, Fisheries and Forestry Judith Troeth denied there was a crisis within the RFCS.
Senator Troeth said the audit had found widespread problems, although it would be extended to cover all services in each state.
But she admitted it had highlighted problems with due diligence and risk management but more training was being provided to improve the skills of the management committees.
And she said in some cases farmers may not have received the best advice.
"But generally I'm happy that farmers who go to financial counsellors for advice are being given a range of options," Senator Troeth said.
"The farmers then need to decide which one to implement."