Susan Pascoe, Our Commissioner

Ask ACNC

Our series of 26 free information sessions for charities, Ask ACNC, began in earnest this week. Our first stop was Mount Gambier in South Australia, followed by the capital Adelaide. It was a pleasure to meet with so many hard-working people from the not-for-profit sector in South Australia – thank you all for coming.

Ask ACNC sessions are an opportunity for the ACNC, as the national charity regulator, to help charities better understand their obligations. However just as importantly, Ask ACNC is an opportunity for charities to let us know about the issues they’re facing.

To that end, we are also holding consultation sessions alongside Ask ACNC in many cities. The purpose is to seek feedback about the 2017 Annual Information Statement, which for the vast majority of registered charities will be due by 31 December 2017, or 30 June 2018.

Your input is vital and will help the ACNC improve the Annual Information Statement in a way that still allows for the necessary data to be collected.

All charities and sector stakeholders can participate in the consultation by visiting acnc.gov.au/2017aisconsultation.

Next up is Geelong on Friday. My colleague David Locke, Assistant Commissioner of Charity Services will then take over, hosting Ask ACNC in Wodonga and Melbourne next week.

For all the Ask ACNC dates and to register, please visit acnc.gov.au/askacnc.

Penalties for charities

As regular readers of this column will recall, I have previously foreshadowed that the ACNC may issue penalties to charities that fail to submit Annual Information Statements.

Subdivision 175-C of the ACNC Act gives the ACNC the ability to issue penalties, however we have not used these powers since the ACNC was established in December 2012. This was an appropriate stance through the first three and a half years of the ACNC as registered charities familiarised themselves with their obligations.

However, registered charities have now been required to submit the 2013, 2014 and 2015 Annual Information Statements, so lack of awareness is no longer a reasonable excuse.

Earlier this week we issued 13 penalty warning notices. The recipients are all large charities (annual revenue of $1 million or more) and most are approaching one year overdue. We have contacted each of these charities multiple times by email and phone.

The charities have 10 business days to submit their outstanding Annual Information Statements and annual financial reports to avoid penalties of up to $4,260 per charity.

It is disappointing that despite multiple reminders via email and phone calls that these large charities have still not submitted their outstanding reports. Non-compliant charities can have a significant impact on public trust and confidence and damage the reputation of the entire sector. Nearly 90% of charities have filed their 2015 Annual Information Statements. If you know of anyone who has still not done so, I encourage you to urge them to comply now as a matter of urgency. Further penalty notices will be issued against other charities that fail to report.

We will continue to be fair, yet firm, when it comes to charities that fail to meet their obligations.

More information about penalties can be found at acnc.gov.au/penalties.

New guidance on administration costs

Last week the ACNC published a significant piece of guidance to help charities and the public understand the ACNC’s view on charities and administration costs.

The set of frequently asked questions (FAQs), Charities and administration costs, discusses the common issues that are raised with the ACNC – many of which originate from concerns raised by members of the public.

It is important to note that there are no laws or regulations that specifically set out the amount charities can spend on the expenses that would be considered administration. There’s also significant ambiguity when it comes to what exactly an administration cost is.

For example if a registered charity provides meals to homeless people, would the electricity it takes to power a kitchen (to prepare the meals) and the petrol it takes to power a vehicle (for delivery) be considered administration costs?

This is certainly a complex issue and can make it difficult to assess if a charity is being run efficiently and effectively.

We have published this guidance to help the public and donors understand what administration costs are, why they are necessary, and when they may be unreasonable and therefore warrant scrutiny from the ACNC.

FAQs: Charities and administration costs can be accessed at acnc.gov.au/admincosts.

Compliance revocations

Last week the ACNC announced the revocation of two organisations:

Earlier this week, another two organisations lost their charity status:

These revocations followed compliance investigations into the activities and operations of the respective charities.

They will all lose access to the Commonwealth charity tax concessions that they were previously endorsed (by the Australian Taxation Office) to receive.

The ACNC has now revoked the charity status of 25 organisations following compliance activity, and a further 14,000 have had their status revoked or were removed from the Charity Register since December 2012, largely through the ‘double defaulter’ process or because there was no evidence that they were still operating.

We will continue to investigate concerns about charities and revoke the status of those charities where there are serious breaches of the ACNC Act and/or Governance Standards, or where charities fail to report to the ACNC, to ensure that the public have access to an accurate and up to date register of charities.

You can find the Charity Register at acnc.gov.au/findacharity, and you can find more information about our compliance activity at acnc.gov.au/compliancedecisions.

Good wishes
Susan Pascoe AM

Contact us

Our phone number is 13 ACNC (13 22 62) or you can email us at advice@acnc.gov.au.
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