Operational Procedure: Monitoring powers

This Operational Procedure is issued under the authority of the Assistant Commissioner Charity Services and should be read together with the ACNC Policy Framework, which sets out the scope, context and definitions common to our policies.

Procedure

1. This Operational Procedure sets out when and how the ACNC will use its monitoring powers under Division 75 of the ACNC Act. It should be read together with the ACNC’s regulatory approach statement and the Commissioner’s Policy Statement on Compliance and Enforcement.

Legal context

2. The ACNC may need to enter premises to monitor the compliance of a charity with its obligations under the ACNC Act. Under section 75-15, ACNC officers can enter premises and exercise the ‘monitoring powers’ to determine whether a charity has complied, or is complying with, a ‘provision subject to monitoring’, or whether ‘information subject to monitoring’ is correct. The ACNC can enter only with the consent of the occupier of the premises or under a monitoring warrant.
3. Under sections 75-20, 75-25 and 75-30, the 'monitoring powers' that can be exercised on the premises are the powers to:
   • search the premises and anything on the premises
   • examine or observe activities conducted on the premises
   • inspect, examine, measure, or test any thing on the premises
   • take photos or videos or other recordings of the premises or any thing on the premises
   • inspect, take extracts from, or copy, documents on the premises
   • sample any thing on the premises
   • take onto the premises equipment and materials for the purpose of exercising these powers
   • operate electronic equipment on the premises, including using associated storage devices on the premises and to produce documents, and
   • secure evidence found on the premises for 24 hours (or, if authorised by a magistrate or Federal Circuit Court Judge, for a longer period). Please see ‘Legal requirements’ below for securing such evidence.
4. Under section 75-40 the ACNC may ask questions of the occupier (or, in the case of a monitoring warrant, require anyone on the premises to answer questions) and ask them to produce documents (or in the case of a monitoring warrant, require them to produce documents) in relation to the operation of a provision subject to monitoring or the information subject to monitoring. In the case of a monitoring warrant, if the person does not comply with the requirement to answer questions or produce documents, the person commits an offence under section 75-40(6) the ACNC Act.
5. The powers are given to the Commissioner and can be delegated by the Commissioner to a member of the Commissioner’s staff who is an SES employee. The Commissioner and the Commissioner’s delegate may authorise other ACNC staff to exercise the powers.

Definitions

6. A ‘provisions subject to monitoring’ is defined in section 75-5 to mean:
   • a section of the ACNC Act or legislative instrument under the Act that creates an offence (such as a failure to keep records under section 55-5)
   • a section of the ACNC Act or legislative instrument under the Act if non-compliance gives rise to an administrative penalty (such as a duty to notify the ACNC under section 65-5)
   • a section of the ACNC Act creating a condition that must be complied with to be entitled to registration or which, if not complied with, can lead to revocation of a charity’s registration (such as the requirement that it is not-for-profit), and
   • a section of the Crimes Act 1914 (Cth) or the Criminal Code (Cth) that creates an offence to the extent that it relates to the ACNC Act or a legislative instrument under the ACNC Act (such as giving the Commissioner false or misleading information).
7. Information subject to monitoring is defined in section 75-10 to mean information given in compliance or purported compliance with the ACNC Act and legislative instruments under the Act, or a provision of the Crimes Act 1914 (Cth) or the Criminal Code (Cth) to the extent that the provision relates to the ACNC Act or a legislative instrument under the ACNC Act. Information is also subject to monitoring if a charity has given the Commissioner the information to include on the Register.
8. 'Premises' is defined broadly under section 300-5 of the ACNC Act to include:
   • a structure, building, vehicle, vessel or aircraft, or part thereof
   • a place (whether or not enclosed or built on), or part thereof.
9. The premises need not be those of the charity, but must be linked to the charity.

Use of powers

10. Powers must not be misused or used irresponsibly.

When is the use of monitoring powers appropriate?

11. The ACNC will carefully consider the most appropriate method of gathering information and evidence, consistent with the ACNC's regulatory approach and Commissioner’s Policy Statement on Compliance and Enforcement. In exercising his/her monitoring powers, the Commissioner will have regard to the matters outlined in section 15-10 of the ACNC Act, including the principles of regulatory necessity, reflecting risk and proportionate regulation.
12. Before exercising monitoring powers the ACNC will consider all the relevant sources of information and whether access to a charity's or another entity’s premises is necessary.
13. The ACNC will consider whether the use of monitoring powers can be justified, given:
    • the nature and likelihood of the potential non-compliance
    • the evidence or information required
    • whether that evidence or information can only be obtained through accessing the premises of the charity or another entity
    • the risk that evidence or information may be destroyed
    • time and cost implications, and
    • the ACNC's previous interaction with the charity.

Who can exercise monitoring powers?

14. Subsection 75-95(1) of the ACNC Act states that ‘the Commissioner must issue an identity card to an ACNC officer who the Commissioner considers is likely to exercise powers and functions under this Division’.
15. ACNC officers issued with an official identity card can exercise monitoring powers and functions. An ACNC officer must carry his/her identity card at all times when exercising monitoring powers.

How will the ACNC exercise monitoring powers?

16. In most cases, monitoring activities will be conducted with the consent of the occupier.
17. ACNC officers will only consider seeking a monitoring warrant as part of an investigation where there are reasonable grounds to believe that access to the premises is essential to determine whether a provision subject to monitoring has been, or is being complied with, or information subject to monitoring is correct. In some circumstances, it may also be necessary to apply for a monitoring warrant at the request of the charity that is the subject of the ACNC’s inquiry.

Operating electronic equipment

18. Under section 75-25, ACNC officers can operate electronic equipment on the premises only if:
    • they believe on reasonable grounds that it will not damage the equipment, and
    • there are reasonable grounds to suspect that the equipment or storage device contains data relevant to determining whether a charity has been, or is, complying with provisions subject to monitoring or that information subject to monitoring is correct (relevant data). Reasonable grounds require facts sufficient to induce a reasonable person to have this suspicion. This is an objective test. The question is not whether the relevant officer thinks they have reasonable grounds.
19. These provisions are designed to ensure that ACNC officers only access relevant information and to protect the privacy of charities or other entities and their employees.
20. If the ACNC finds relevant data by using electronic equipment or associated storage devices, the ACNC can operate the electronic equipment on the premises to:
    • convert the data into documentary form (i.e. print documents) and remove the documents from the premises
    • transfer the data to a storage device (such as a disk or tape) that is either:
      • brought by the officer to the premises; or
      • on the premises and the use for which that purpose has been agreed in writing by the occupier of the premises,
    and remove the storage device from the premises.
21. It is important to note the powers to print documents and transfer data are only available if relevant data is found. ACNC officers must make an effort to determine the relevance of documents before printing or copying them. The ACNC officers will:
    • conduct a keyword or directory title search of the documents at the premises
    • only print or copy documents which appear to be relevant based on that search
    • give the occupier or their representative a copy of the documents that ACNC has printed or copied
    • give the occupier or their representative an opportunity to claim legal professional privilege

If the ACNC reasonably suspects that evidence is held in a digital format, the ACNC may use the services of a digital forensic specialist under the terms of the ACNC's Memorandum of Understanding with the Australian Taxation Office or another agency.

22. Under section 75-70:
    • the owner of any electronic equipment damaged
    • the user of any damaged data recorded on the electronic equipment
    • the user of any damaged/corrupted programs associated with the use of the electronic equipment or data

is entitled to reasonable compensation from the Commonwealth if the damage/corruption occurs as a result of the ACNC operating the equipment; and insufficient care was exercised in selecting the individual who was to operate the equipment; or insufficient care was exercised by the individual operating the equipment

Assistance

23. Under section 75-35, the ACNC may be assisted by other individuals when exercising monitoring powers if that assistance is ‘necessary and reasonable’.

Entering premises with consent of occupier

24. Entry to premises with the consent of the occupier relies upon the cooperation of the occupier. Before obtaining the consent of the occupier, the ACNC officer must inform the occupier that the occupier may refuse consent. There is no offence if an occupier refuses to consent to ACNC officers entering the premises, answer questions or provide resources to an ACNC officer.
25. ACNC officers must abide by the terms of the consent at all times. If an occupier indicates at any stage that consent has been withdrawn, all ACNC officers (and any persons assisting) must immediately leave the premises.

Entering premises under a monitoring warrant

26. ACNC officers may exercise monitoring powers under a monitoring warrant. A monitoring warrant may be sought if an occupier has refused to allow an ACNC officer to enter the premises or there is reason to believe that, if requested, consent would not be given.
27. A monitoring warrant should only be used if it is needed to secure evidence that cannot be obtained through information gathering powers or any other means. In some circumstances, it may be requested by the charity that is the subject of the ACNC’s inquiry.

Application for a warrant

28. The ACNC will apply to a magistrate or Federal Circuit Court Judge (Judge) for a monitoring warrant in the state or territory where the premises subject to the warrant application are located.
29. As a monitoring warrant will be issued by a magistrate or Judge in his or her personal capacity, the warrant application must satisfy the magistrate or Judge that it is necessary for one or more ACNC officers to have access to the premises to determine whether a charity has complied, or is complying with, a provision subject to monitoring, or whether information subject to monitoring is correct.
30. The warrant must contain the following information:
    • a description of the premises
    • that the warrant is issued under section 75-85 of the ACNC Act
    • the purpose(s) for issuing the warrant
    • one or more ACNC officers is authorised to enter the premises and exercise monitoring powers
    • whether entry is authorised at any time or during specified times of the day
    • the day on which the warrant ceases to be in force (that date must not be more than one month after the issue of the warrant).

Entry and conduct

31. When an ACNC officer arrives at the premises, the ACNC officer must:
    • advise the occupier (or the occupier’s representative) that they are authorised to enter the premises under a monitoring warrant
    • allow a reasonable time for any person inside to provide access
    • present his or her identification card for inspection
    • provide a copy of the monitoring warrant
    • inform the occupier or their representative of the rights and responsibilities of the occupier during the execution of the warrant (see below), and
    • provide a Notice to Occupier document informing them of their rights and responsibilities and any other relevant attachments.
32. However, an ACNC officer does not need to do these things if the officer believes on reasonable grounds that immediate entry is required, to ensure the safety of a person or that the effective execution of the warrant is not frustrated (for example, if it was apparent that an occupier was deliberately destroying potential evidence).
33. In that case, the requirements must be followed as soon as practicable upon entering the premises by showing the ACNC officer's identity card, and providing the occupier with a copy of the monitoring warrant and Notice to Occupier outlining the rights and responsibilities of the occupier or representative during the execution of a monitoring warrant.

Occupier's rights and responsibilities

34. The occupier (and any of their representatives) must be advised of their rights and responsibilities as soon as practicable during the execution of a monitoring warrant.
35. Under section 75-75, the occupier can observe the ACNC officers as long as the occupier does not impede the ACNC officers' exercise of monitoring powers. This does not prevent ACNC officers from being in more than one room simultaneously. The occupier may choose which officer to observe at any time as long as the occupier does not interfere with the execution of the warrant.
36. The occupier (or their representative) must also provide ACNC officers executing the monitoring warrant with all reasonable facilities and assistance for the effective exercise of their powers. A failure to do so is an offence under section 75-80, which attracts 20 penalty units. This would also apply to an occupier who tries to destroy evidence. An ACNC officer cannot restrain a person from destroying evidence, but should advise them that they may be committing an offence. The ACNC officers may require facilities and assistance to:
    • access a computer including login codes, passwords and software manuals
    • access to locked safes including keys
    • remove the encryption, provide the password or operate the computer

The occupier or representative may prefer to operate their computer, work together with the ACNC officers to enter passwords and assist officers to locate the information.

Incriminating questions and conduct

37. If an ACNC officer enters the premises under a monitoring warrant and asks a person on the premises to answer a question or produce a document, that person must comply even if it might incriminate the person or expose the person to a penalty.
38. However, incriminating information provided by the person cannot be used against them in a criminal prosecution or proceedings to impose a civil penalty, other than in Commonwealth criminal proceedings for giving false or misleading information or documents, obstructing Commonwealth public officials, or proceedings for non-compliance with section 75-40(3).
39. ACNC officers should tell people this when asking them to answer questions or produce documents. The relevant provisions should also be set out in the Notice to Occupier document.
40. ACNC officers should also re-state the provisions in any situation where a person is clearly reluctant to provide information unless afforded the protections offered by these provisions.

Securing evidence

Legal requirements

41. ACNC officers do not have any seizure powers. Instead, under section 75-30, ACNC officers can ‘secure’ items found at the premises for up to 24 hours if an ACNC officer believes on reasonable grounds that:
    • the items are going to be used for, or are evidence of, a breach of a provision subject to monitoring, or
    • a provision subject to monitoring has been contravened with respect to the items.

This applies regardless of how the ACNC officer has entered the premises (i.e. with consent of the occupier or under a monitoring warrant). Reasonable grounds require facts sufficient to induce a reasonable person to have this belief. This is an objective test. The question is not whether the relevant officer thinks they have reasonable grounds.

42. To secure the items, the ACNC officer must also suspect on reasonable grounds that:
    • this action is needed to prevent the items from being concealed, lost or destroyed before a warrant can be obtained, and
    • the circumstances are serious and urgent.

Reasonable grounds require facts sufficient to induce a reasonable person to have this suspicion.

43. ACNC officers must tell the occupier that they intend to secure an item for a period of up to 24 hours. The ACNC officer should give the occupier an ACNC Securing Property Receipt for items secured.

Procedure

44. If an ACNC officer finds adverse material during a search that does not directly relate to ACNC legislation or regulation, the ACNC officer may report this to another agency with seizure powers subject to the secrecy provisions of the ACNC Act. Please see the Operational Procedure – Protected ACNC Information.
45. If an item needs to be secured because of the way it is being used (such as the inappropriate use of cash or equipment), the ACNC officer may contact the lawful owner or person responsible for the property and tell that person the reasons for securing the item. Where appropriate, the ACNC officer may release the item into the custody of that person. For example, in the case of a volunteer found to be using a charity's assets exclusively for his or her personal benefit, the ACNC officer may secure the assets and notify the CEO of the charity, requesting that the assets be removed from the premises and held by the CEO.

Extension

46. If an ACNC officer enters the premises under a monitoring warrant and asks a person on the premises to answer a question or produce a document, that person must comply even if it might incriminate the person or expose the person to a penalty.
47. However, incriminating information provided by the person cannot be used against them in a criminal prosecution or proceedings to impose a civil penalty, other than in Commonwealth criminal proceedings for giving false or misleading information or documents, obstructing Commonwealth public officials, or proceedings for non-compliance with section 75-40(3).
48. ACNC officers should tell people this when asking them to answer questions or produce documents. The relevant provisions should also be set out in the Notice to Occupier document.
49. ACNC officers should also re-state the provisions in any situation where a person is clearly reluctant to provide information unless afforded the protections offered by these provisions.

Electronic equipment

50. ACNC officers have a separate power under section 75-65 to secure electronic equipment on the premises to enable expert assistance to operate the equipment. The ACNC officer must suspect on reasonable grounds that:
    • there is relevant data on the premises;
    • the relevant data may be accessed by operating the equipment;
    • expert assistance is required to operate the equipment; and
    • the relevant data may be destroyed, altered or interfered with if the ACNC officer does not take action.
51. This power may be used where data is encrypted or a password-protected electronic device is located and expert assistance is required to bypass security. The ACNC officer may need to wait for a forensic computer specialist to arrive. The ACNC officer must give notice to the occupier or their representative of the officer’s intention to secure the equipment and the fact that the equipment may be secured for up to 24 hours.
52. 'Relevant data' is defined to mean information relevant to determining compliance with a provision subject to monitoring, or that information subject to monitoring is correct.
53. Electronic equipment can be secured by ‘locking it up, placing a guard or any other means’. This does not allow electronic equipment to be removed.
54. The equipment may be secured until it has been operated by the expert, or for a maximum of 24 hours. However, the ACNC officer may apply to a magistrate or a Federal Circuit Court Judge for an extension of the 24-hour period if the ACNC officer suspects on reasonable grounds that the equipment needs to be secured for longer than that period. Before making the application, the ACNC officer must give notice to the occupier or their representative of the officer’s intention to apply for an extension. The occupier or representative is entitled to be heard in relation to that application. The magistrate or Judge may issue the extension if he/she is satisfied that it is necessary to do so in order to prevent the destruction, alteration or interference with the relevant data.
55. The owner of the equipment, or user of the data or programs, has a right to compensation from the Commonwealth if the equipment is damaged (or the data or programs are corrupted) by the forensic computer specialist and subject to the conditions outlined in paragraph 22 above.

References

Australian Charities and Not-for-profits Commission Act 2012 (Cth), Division 75

ACNC's regulatory approach

ACNC Policy Framework

Operational Procedure - Information gathering powers

ACNC's Memorandum of Understanding with the Australian Taxation Office

Commissioner’s Policy Statement: Compliance and Enforcement

Crimes Act 1914 (Cth)

Criminal Code (Cth)