Charities have different obligations for record-keeping. The record-keeping obligations depend on your charity’s size, complexity, activities, how it spends or receives money, and whether it has extra obligations from state regulators.
Important:
- the ACNC obligations replace requirements that used to apply under the Corporations Act for ASIC-registered charities (such as companies limited by guarantee)
- The record-keeping obligations below relate only to requirements under the ACNC Act. Charities may have additional record-keeping requirements under other legislation such as legislation relating to health records or privacy
- If you are unsure about which financial or operational records your charity should keep, seek professional advice.
ACNC record-keeping obligations
Your charity:
- must keep certain written financial and operational records
- can keep the records in any format you choose , as long as they are easy to find (including in electronic form)
- can develop its own system or process
- must keep the records for seven years
- must keep records in English, or in a form that can be easily translated to English
- is not required to provide the records to the ACNC unless asked.
If your charity operates overseas it is required to obtain and keep records relating to its overseas activities.
When your charity keeps good records of how it is run, this can help you:
- show it is continuing to be run as a not-for-profit and working towards its charitable purposes (and so should remain eligible to be registered as a charity)
- understand whether your charity is in good financial health
- assess whether the right kinds of decisions are being made (operational and financial)
- communicate about your charity’s activities and finances
- prepare reports to meet your reporting obligations to the ACNC, other government regulators, donors/funders and members (if relevant), and
- otherwise show that your charity meets its obligations under the ACNC Act, tax and other relevant laws.
Meeting ACNC and other obligations
Good record-keeping also helps your charity meet ACNC obligations, including:
- ACNC Governance Standards 1, 2 and 5.
- ACNC External Conduct Standard 2
Your charity may also need to report to other government regulators with their own record-keeping requirements, including the Australian Taxation Office (ATO). If you are following the ACNC record-keeping requirements it is likely that you are meeting most of your obligations to the ATO.
Under the ACNC Act, your charity must keep two types of records:
- financial records, and
- operational records.
Financial records
These must:
- correctly record and explain how your charity spends or receives its money or other assets (transactions)
- correctly record and explain your charity’s financial position and performance, and
- allow for true and fair financial statements to be prepared and audited or reviewed, if required.
Even if your charity does not need to submit financial reports to the ACNC (because it is a small or a Basic Religious Charity), your charity still needs to keep financial records that meet these requirements. The ACNC Act or the ACNC Commissioner could require your charity to prepare financial statements.
Operational records
These are any other documents about your charity's operations. You must keep operational records that show how your charity:
- is entitled to be registered as a charity and as its subtype
- meets its obligations under ACNC Act, and
- meets its obligations under tax law.
Charities can keep the records in any format that suits, as long as they are:
- in writing
- readily accessible (easy to find), and
- in English, or in a form that can be easily translated to English.
Charities can keep records on paper or on their computer (in electronic form).
To make sure you can provide records if asked, you should back up your computer, and you can also print out a paper record of any important documents. This is because things can go wrong – files can go missing, computers can break or be stolen. When you back your computer up, keep your back-up in a different and secure place to your computer, for example, at a different location.
Your charity will have its own systems and processes for keeping paper records. Paper records will include the records you have printed from your computer and other paper records, for example, original receipts and letters you receive in the mail.
Points to remember when keeping paper records
- Organise the paper records into files, boxes, folders or envelopes that allow the records to be found easily
- Separate the different paper records into categories (bank statements, communication, bills, receipts), and
- Separate these records according to your charity’s reporting period (for example, financial year 1 July to 30 June).
After seven years (and if your charity has no record-keeping obligations to other regulators), your charity can destroy the records it has kept for ACNC purposes.
But before you destroy records, check your charity’s records policy and other legal obligations - for example, privacy requirements - to make sure you are doing so appropriately.
Your charity record keeping responsibilities don’t change if you are working from home or remotely.
You still need to:
- make and keep copies of operational and financial records
- keep records safe, ensuring no unauthorised access to records, nor unauthorised or illegal disposal of records
- comply with your charity’s record-keeping policies and procedures.
But with staff or volunteers working remotely, there may be increased or additional risks to charity records. These might include:
- records not being properly retained
- problems with controlling duplicates or versions of records
- some staff being unable to access required records if they are on someone else's personal device or storage
- improper backing-up of records.
In addition, information security risks may arise from:
- people using private networks and devices or public networks, or where other family members are also working from home
- employees or volunteers using their own computer systems and not having sufficient and up to date security software/operating systems
- an inability to control access to records - particularly those that are confidential or sensitive
- using unsecured or unsafe meeting platforms or other cloud platforms.
Your charity should set clear expectations and processes about how records are created, managed and maintained when working from home or remotely.
This is particularly important for those unable to access official business systems and unable to capture records as they normally would.
General issues your charity should consider include:
- the records you need to capture and retain, and how you charity will do so
- the records that need to be accessed by others
- charity processes or procedures that may need to change or be updated - for example your charity's record-keeping policy - or where workarounds may be needed
- if any information security requirements also impact on how staff mange and access records
- the management of charity records in private accounts if you can’t use your organisation's computer system or accounts.
More specific actions you can take include:
- assessing each employee and volunteer’s home computer systems and security to determine risk levels. You may need to supply staff with computer equipment for use at home to ensure information security
- checking with your finance officer, accountant or auditor to see if they have any specific information or record keeping needs
- working out if there might be new types of records your charity needs to capture, like recorded teleconferences, or chats.
And ensure charity records are transferred into official record-keeping or business systems when you return to your normal workplace.
If you work with overseas partners, review the relevant information on our COVID-19 Compliance page.
And the Office of the Australian Information Commissioner has privacy-related guidance and advice on managing the collection, use and disclosure of personal information by staff working from home.