“While there is a shared understanding of the benefits of Partnership Agreements, the benefits outlined in the Partnership Agreements and accompanying Benefits Schedule are not sufficiently detailed to effectively demonstrate the benefits that Partnership Agreements deliver to improve member outcomes.”

Cbus did not have clear metrics to determine whether that expenditure improved members’ financial outcomes or publish statements showing the expense was within the approved budget, according to the report, directly contradicting Cbus chair Wayne Swan who last week claimed the Deloitte review would “demonstrate [the partnership agreements with the CFMEU] are successful programs which deliver good value”.

Swan last week told a Senate committee Cbus’ partnership agreements with the CFMEU, which has been placed into administration, were “suspended, subject to the independent inquiries that are going on”.

The super fund also did not complete formal mid and end-of-year assessments reviewing whether the CFMEU had provided the services it was paid for, or ask the union for written annual reports, Deloitte noted.

A CFMEU delegate told Cbus it would promote Cbus on its Facebook page, but did not provide anything in writing backing up its claims. Meanwhile, a Cbus co-ordinator assessing a partnership agreement with the union assumed – without any evidence – the CFMEU had provided the services it was paid for, according to the review.

“While it is clear that the trustee has made decisions regarding the expenditures in scope of this Review, and that there are frameworks, processes, and tools to varying degrees of efficacy in place, there are deficiencies in governance and in operationalising the [Best Financial Interests Duty] requirements,” Deloitte said.

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“These deficiencies were such that there was insufficient information available to Deloitte to conclude whether the expenditure decisions were made for the sound and prudent management of the trustee’s business operations and achieved intended purpose and stated benefit.”

In a statement, Cbus said it had accepted all 26 recommendations by Deloitte in principle and would work with them to develop a plan addressing each one.

“Cbus acknowledges the seriousness and importance of the work required to strengthen the fund’s systems design, frameworks, policies, processes, governance and reporting as identified in the independent review to become a better, stronger fund for our members,” the fund said.

“Cbus has already begun this important work, including to develop improvements in the way the fund documents the value that industry partnership arrangements generate for the fund and our members. The independent review has also notably observed that industry partnership arrangements are an ‘important mechanism through which industry superannuation funds achieve brand awareness, retain members and ultimately grow membership’.”

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