Level two check – comparing the financial information
Approximately 1,100 charities reported income, assets, liabilities or expenses of over $30 million in their 2015 AIS.
Because of the sizes of these charities, their errors have a greater effect on the integrity of the ACNC’s data, and on public trust and confidence in the charity sector. Some of these charities are household names.
These charities were subjected to a check which involved the ACNC comparing the financial information in the charity’s 2015 AIS with the information in its annual financial report.
About 30 per cent of the 1,100 charities made an error. The most common was a calculation error.
Of the errors that could only be identified through an analysis of the annual financial report, the top three were:
1 While the ACNC allows charities to provide consolidated annual financial reports where appropriate, the financial information in a charity’s 2015 AIS must relate only to that registered charity (unless it is a parent charity).
- provision of consolidated financial information instead of financial information for the registered charity1
- inclusion of other comprehensive income items, and
- misclassification of trust distributions made from equity/funds to beneficiaries as an expense item of grants and donations.