The Australian Charities and Not-for-Profits Commission (ACNC) has welcomed the Commonwealth Government’s announcement of $2.9 million in the Federal Budget to conduct risk reviews of charities.

The funding, which will roll out over three years, will enable the ACNC to undertake field-based compliance reviews to assess risk in the sector, intervene with charities before significant issues arise, and where possible and appropriate, provide assurance to the public to maintain confidence in the sector.

In 2020-21 this will amount to $0.474 million for the ACNC Review Program to implement reviews where charities are at risk of failing to meet the Governance Standards.

This will strengthen assurance that charities have appropriate governance structures in place and use their income for charitable purposes, including when responding to natural disasters.

Acting Commissioner Anna Longley said it was a positive move that supported the ACNC to better support the sector consistent with its preferred regulatory approach to provide guidance to help charities comply with their obligations.

“We intend to conduct reviews of charities based on risks and issues that we identify through our engagement with the sector, compliance work and intelligence analysis. How we select each cohort will depend upon the risks that we seek to address,” Ms Longley said.

“In future we may decide to produce educational resources for the sector to improve governance more broadly. We may also undertake further compliance activity if significant issues are identified.”