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Shalom House

This is a review for those thinking of getting involved with Shalom House, particularly those who will have to pay them money.

The website shows the possible involvement:

  1. As somebody who needs help overcoming an addiction[1]
  2. As a ‘supporter
    1. There are also two requests for donations for Shalom House on GoFundMe.
      1. One by the founder for $85K to make a documentary, and
      2. One by a Jake Britten for $5K to ‘keep Shalom alive’.
    2. Shalom House have previously said (on Facebook) that they don’t want your money, so either that wasn’t true or they’ve changed their practice:

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  1. As a customer of, or supplier to, one of their businesses.

Look into Shalom House and you will soon find the 2017 ABC story, so you might want to start there.

The addiction program

Start with this background.

On this page it says ‘founded on Christian Principles’ (sic), but they make no secret of the fact that there’s much more to the ‘Christian’ aspect than that. Here’s the founder, Peter Lyndon-James:

I hate religion with a passion, but I am a Christian and I say ‘how do I communicate what I know to be true without pushing religion down someone’s throat?’ But all my fellows ask Christ into their heart within the first two days; every one of my fellows is full on for God. I’ve got six fellows studying at one Bible College, and two at another Bible College. We go to three church services on every weekend because we are all different.

The program described[2]. More here.

Get a feel for it by looking at their Facebook page.

They have done enough so that somebody else wanted to duplicate, with permission, the program. Betel Australia Ltd in Victoria.

The ‘right’ way?

Addiction studies expert Dr Stephen Bright from ECU says no:

He “said there was little evidence hard-line confrontational approaches, such as boot camp-style rehab and interventions, were effective.

“They may even be harmful to some people,” he said.

“The drug treatment field moved away from these types of interventions more than 30 years ago because we realised they just don’t work.”

Drug expert Nicole Lee says it’s an approach that’s outdated:

Dr Lee said research (albeit limited) showed confrontational, shaming approaches to drug treatment often backfired.

“We have been rapidly moving away from these types of approaches since at least the 1980s and very few mainstream residential treatments would have any remnants of this type of approach.

“It was based on the idea that people needed to hit rock bottom, but we know this is not the case now.

“People sometimes recover from drug use problems despite these types of treatments not because of them.’’

An independent review site gives this advice for choosing a rehabilitation facility.

You can read more criticisms here.

The claims

Under the heading “SHALOM HOUSE IS FUNDED BY EX-ADDICTS”

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  • Under the heading ‘- What is Your Method For Detox?’:

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Cost

See here.

This FAQ answer encapsulates the approach of the program:

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Evidence?

  • There’s nothing systematic on the website about the effectiveness of the program. No statistics – see the Facebook post above. No mention of evaluations, internal or independent.
  • Nothing found on the internet either.
  • An expert said that the lack of data was a concern:

After Breaking Good aired on the ABC Dr Lee said personal experience was an important part of understanding the effects and outcomes of treatment but treatment providers needed to document basic outcomes, which accredited publicly funded service providers had to document every three months.

She was concerned there was no data to show what the relapse rates were from the Shalom House program.

  • Testimonies:
    • There are three stories on the website, under ‘Testimonies’.
    • There’s another testimony on this review site. (The reviews are written by consumers.)
  • There are links to two far less flattering stories here.
  • In 2015 WA Today recorded Lydon-James as saying

He “doesn’t record stats or anything” but he recalls that in the three years Shalom House has been running, only a few people have left the house without completing the program. There is no waiting list, but the house is always full.

  • In 2017 what he said to Eternity News gave a drop-out rate considerably higher than this:

Over four years we’ve had 128 through the programme and only 13 have completed the programme, but that’s 100 per cent success rate because every person that’s completed the programme is rock solid, not falling back.

  • Yanchep News Online reported Dr Nicole Lee, ‘a practicing psychologist and has worked in the alcohol and drug and mental health fields for more than 25 years’, as being concerned about the lack of data on relapse rates.
  • In June 2019, Perth Now reported that the completion rate was 12%:

Community News investigation last month revealed that only about 49 residents have officially “graduated” from the Swan Valley facility since it started in 2012 – a completion rate of 12 per cent based on an estimated 400 people who had been in the program.

  • In 2018Edith Cowan University researchers offered to undertake a free assessment of the five-stage program, and Mr Lyndon-James announced publicly that it was happening, but ECU has confirmed to Community News that Shalom House has yet to take up the offer.” If this later went ahead, we could find no public record of the results.

Where’s your money go?

Shalom House are quite willing to tell you:

But they have had to produce a report showing where the money went, so you might look at that first.

‘Two independent external audit reports’

‘Shalom House’ is a registered charity, West Australian Shalom Group Inc[3]. It therefore has ongoing obligations to the ACNC, including annual reporting[4].

But as it doesn’t have ‘Shalom House’ registered as a business name (another charity has). It is therefore not trading legally.

It also doesn’t have a fundraising licence in other than its home state. That may be illegal too.

Because of Shalom House’s size, ‘Large’, it must submit audited financial statements.

One audit, once a year. There is nothing on Shalom House’s website that explains a second audit report.

An auditor gives an opinion on the financial statements. Here are the possibilities[5]:

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For the most recent Shalom House audit, available on the ACNC Register (but not on Shalom House’s website), the result was ‘red’ – a qualified opinion. But not just one qualification, but two:

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What the first one says is that the auditor was not able to verify that the transactions in the account that held the residents’ money belonged to that account rather than another. The account held 44% of the charity’s bank and cash balances.

What the second one says is that Shalom House was not able to provide sufficient paperwork to support ‘a significant portion’ of the $1.86 million ‘’Employee Benefits’. These benefits were 56% of the total ‘expenditure’.

Note that the trust account qualification arose first in 2017, three years ago. And the second qualification is not new either. As both qualifications are avoidable, this says that the directors of Shalom House were either unwilling or incapable of making the necessary changes.

‘True and fair view’?

The directors signed a declaration that

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For this to be correct, they must have selected the right kind of financial statements. The choice was between special purpose and general purpose. The requirements for the former are less onerous than for general purpose. Consolidating any subsidiaries and reporting related parties and their transactions are the two major omissions.

They say in their AIS 2020 that had no related party transactions, but don’t one or more of the directors have a relationship with one or more of these business supporters?

Shalom House directors chose special purpose statements.

The auditor’s view

The auditor, an unreadable signature on behalf of Ernst & Young, agreed with the directors’ decision.

Given the advice of their professional body[6], Chartered Accountants of Australia and New Zealand, that special purpose should be ‘the exception rather than the rule’, this is surprising:

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Special purpose statements are only the correct choice only when there are no users who are dependent on the other kind for their information. And this is only the case if they can ring the Shalom House office and command the preparation of statements tailored to their needs. With 116 employees and 40 volunteers [AIS 2020], $3.6 million revenue, including $715K in donations from hundreds of supporters, $107K in government grants, and deductible gift recipient status (and Public Benevolent Institution (PBI)), this is highly unlikely.

So, no ‘true and fair view’.

If you don’t think that the special purpose statements decision is enough to make the directors’ declaration false, it is not the only issue:

  • There is no single figure for several of the income items and for most of the expenses. This is because the directors have separated ‘Shalom Works’, ‘Shalom Labour Works’, and Shalom House.
  • There is no explanation of the relationship between these three entities. (There’s also ‘Shalom Digital’.)
  • A long-outdated format for the Income Statement, resulting in, among other things, the omission of ‘comprehensive income’ and an incorrect Statement of Changes in Equity.
  • The directors do not explain their inaction on the two internal control deficiencies that have resulted in repeated audit qualifications.
  • Some Notes are missing.
  • The directors do not disclose for whom they hold the $299K trust monies, nor the terms of the trust.
  • The unexplained inclusion of what is normally a liability, ‘Amex Credit Card’ $21K, as an asset.
  • A mixed classification for ‘expenditure’.
  • No description of the $1.36 million property, including the basis of the valuation.
  • The terms of the $477K loan from ANZ are not disclosed.

Given all the above, perhaps an adverse opinion (see above, red) by the auditor might have been more appropriate?

Who’s responsible?

From Note 11 [Financial Report 2020], these are the people responsible for the financial statements:

Michael Price

Peter Lyndon-James

Amanda Lyndon-James

Stephen Wilkinson

Geoffrey Walker

Craig Dorrington

Simon O’Sullivan

The website shows the same seven people as the current Board. The ACNC Register has only five directors (including a couple) – Walker and O’Sullivan have either resigned from the Board or the website is out-of-date.

Where the money went

If you are still prepared to consider supporting Shalom House, here’s what the Financial Report 2020 says about where the money went (with last year in the second column):

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Notes 3 to 7 [Financial Report 2020] give the detail.

The ‘Employee Benefits’ represent an average annual salary of $39K per full-time employee [AIS 2020]. Note, however, that ‘Employee Benefits’ are under-reported (see above).

Charity response

To supplement what you learn from the above, you might want to take them up on this offer:

We sent Shalom House a draft of this review. There’s no invitation to give feedback, and nothing specifically about complaints; nevertheless, given the above, we would expect a response.

They did not respond.

 

 

  1. You may be somebody who wants to help the addicted person. There is a limit to that though:
  2. If a person, however, believes that a lie is true, then that lie becomes their truth.Do they use Transformational Prayer Ministry (or similar)? Start here if you want to find out about that.
  3. West Australian Shalom Group Inc. has ‘Shalom House’ as a ‘Also known as’ name on the ACNC Register.

  4. The information about the charity’ programs and activities is minimal on both the ACNC Register and in their AIS 2020.
  5. Attachment 2, G10, www.auasb.gov.au. Accessed 3 July 2021.
  6. Enhancing Not-for-Profit Annual and Financial Reporting, March 2013, accessed from their website March 2020.

 

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