Transcript

Moderator – April Kitchenham:

Hello everyone, and welcome to our webinar version of the Basic Financial Training presented at the recent ‘Ask ACNC’ information sessions. If you weren’t able to get to one of the ‘Ask ACNC’ sessions in person, we thought this webinar would be a great chance for everyone to hear the presentation.

Today’s webinar is a continuation of the ‘Ask ACNC’ webinar session we held a couple of weeks ago, where Assistant Commissioner David Locke gave an update on the work of the ACNC. This video is currently available on our website.

My name is April Kitchenham, and I’ll be moderating today’s session. Presenting today is Mel Yates who is the ACNC’s Reporting and Red Tape Reduction Director.

Welcome Mel.

Mel Yates:

Hi April. Hi everyone.

Moderator – April Kitchenham:

Before I hand over to Mel, just a few housekeeping notes we’ll just go through first. If you have any difficulties with the sound on your computer, try calling the phone number listed.

We’re also joined today by our colleagues Maggie and John, who will be answering questions throughout the presentation. So if you’d like to ask a question you can do so at any time in the Go to Webinar Panel, which should appear on the right hand side of your screen. So can use the chat or question box to ask a question at any time. We welcome any questions, so please don’t be shy.

We will answer your questions directly and privately, but if we think the answers would be useful for everyone, we can also respond in a way that allows everyone to see the question and answer, but of course not who asked the question. So please let us know if you would prefer that your question remain private. After Mel finishes the formal presentation this afternoon, we’ll have an interactive Q&A where we will answer a lot of those questions submitted throughout the presentation. We do suggest that you keep your questions general, rather than very specific, or in a way that identifies your charity. If you do have any specific questions relating to your charity, or any issues that you need assistance with, it’s probably best that you send our Advice team an email, or give us a call so we can give you a more tailored response to your question, as today’s session will be very general.

A recording of this webinar and the transcript and slides will be available on our website within a few days, and we will send a follow up email to all the attendees today after the webinar with some useful links and information from the session. So there’s no need to try and frantically write down everything you see on the slides in front of you, or try to write down those website addresses, as we will send you the email with all the information in there.

Finally, we value any feedback and suggestions to help improve our webinars in the future, so please pass on your suggestions in the survey at the end of this session.
So that’s it from me for the moment. I’m going to hand you over to Mel and he’s going to kick off the formal presentation.

Mel Yates:

Thank you, April. Good afternoon, everyone. Today we are going to cover some foundational things, just to ensure a charity’s financial obligations are being met, and your charity is not exposed to any fraud, or any risk of theft, and just to make sure that as board members, or people who are involved in making decisions on behalf of your charity, you are meeting your obligations.

So we’ll start off with obligations. Now the way that you determine your charity’s size is based on revenue - that is annual revenue. There are three different sizes. Small charities are those with annual revenue of less than $250,000. Medium charities are those with revenue of $250,000 or more, up to $1 million. Then once you reach that $1 million mark, you are considered a large charity. Now I just want to reinforce that I am talking about the ACNC framework, so if you are an organisation that has reporting obligations to a state or a territory, they may be different. This webinar will focus on the ACNC requirements.

Now what is revenue? Revenue is the part of income that is created from the sale of goods or services that is associated with the ordinary operations of your charity. This is easiest to explain by way of example. So I’ll give you some examples of what revenue includes. Grants, whether they’re from government, a foundation, a private grant, or a grant from any other source. Donations, or if you’re a religious organisation you may receive tithes. If you provide services and you charge a fee for those services, that is considered revenue. If your charity sells anything, and that could be second hand goods, it could be at a market or a fete, all of those sales are revenue. Any fundraising or sponsorship is also revenue. If you have any investments, or you have any cash in a bank account that is earning interest, that is also revenue. Royalties and licence fees are other examples of revenue.

So it’s quite a broad definition of revenue, so I guess an example of what isn’t revenue would also be helpful. If your charity sells a piece of land that it owns, that it no longer requires, because the land can be used by another organisation and your charity doesn’t need it, if you sold that piece of land and you received money for the sale of that piece of land, that wouldn’t usually be considered revenue because your charity is not in the business of selling land. Because that’s an unusual type of transaction which is not ordinary in nature, that wouldn’t be considered to be revenue.

Now these are the key obligations for all charities [indicating to presentation slide], so they fall into three broad categories. Every charity must keep records. The records must document and explain all of the financial transactions, as well as the operations of the charity. Secondly, charities are required to complete an information statement every year, it’s called the Annual Information Statement, and that includes financial as well as non-financial questions.

There’s also the requirement to meet governance standards. There are five ACNC governance standards. The first is that your charity must continue your charitable purpose, maintaining a not-for-profit nature. The second governance standard is that you must be accountable to members if you are a membership organisation. The third governance standard is compliance with Australian laws. That’s really focusing on the serious spectrum, things like terrorism financing or money laundering. The ACNC is not too fazed about directors getting a speeding fine or a parking ticket. The fourth governance standard is suitability of board members and responsible persons. A charity must take reasonable steps to make sure that their board members are not disqualified from managing a corporation. The fifth governance standard relates to the duties of board members and responsible persons. There’s a whole range of those duties that charities must take reasonable steps to ensure that all of their responsible persons are meeting.

We’ll move on to record keeping now. There are two arms to record keeping. On the left of the slide are operational records. They record and explain what your charity has done. Examples of those may be minutes of meetings, and they will document decisions that have been taken by the charity, and they will document who has made those decisions, who was present at meetings, etc. Financial records, on the right of the slide, document all of the financial transactions that your charity has undertaken, and they will really explain what your charity has done in terms of receiving funds, and also expending funds. So an example of a financial record could be a bank statement, which would detail all of the money that’s come into the organisation, all of the money that has gone out of the organisation, amounts, who the other party was, as well as dates.

Now depending on the nature and the size of your charity, will depend on the records that you need to keep. You are in the best position to know what would be appropriate for your particular charity. You need to actually decide as a charity what records you are going to keep, to make sure that they document both the operational as well as the financial aspects of your organisation. Now a few key points about record keeping. You must keep both elements, operational and financial records. You can choose the format of the records that you keep, as long as they are easy to find, so electronic or paper records are both fine. You need to develop your own system or process to keep records. Records must be kept for seven years, and records must be kept in English, or in a way that allows them to be translated into English.

So these are some of the financial responsibilities of a responsible person [indicating to presentation slide], these really relate to governance standards four and five. Basically, a board operates on a collective nature. So even though a board is made up of multiple people, when a decision is taken by the board, that decision is reflected by everyone’s actions. So as single directors, you are in fact part of decisions that are made by the board, so it’s very important that you have an understanding of what decisions you’re taking, and what they mean for your registered charity. For example, if you’re deciding about spending some money, spending some charitable funds, then when the decision is made by the board, that decision is reflected and is taken to be made by all of the board members that made that decision. So it’s really important that you have a basic level of financial literacy in order to make informed decisions.

Some of the key duties that you have as a board member is that you need to make sure you are meeting the governance standards, those five governance standards that I touched on a little earlier. Some of the other duties that you have include making sure that the financial affairs of the charity are managed in a responsible way. You also have an obligation to make sure that your charity has funds at any point in time to pay any bills that may be due and payable. So if your charity is engaging a contractor, or is using electricity, or has a phone account, all of those things will result in charges being payable by the charity. When those bills are due, your charity must ensure that it has cash in the bank to be able to pay those bills. That’s solvency. You must have the ability to pay your bills when they are due.

You also have to declare to the ACNC as part of the Annual Information Statement that all of the financial information that has been submitted is correct, and that the financials provide a true and fair view of the charity’s operations. That includes the charity’s performance, and the charity’s financial position. So in order to be able to provide that declaration, all board members must understand the decisions that have been taken over the course of the reporting period, and what those decisions mean.

This is some information which outlines the Annual Information Statement, as well as the financial reports [indicating to presentation slide]. The Annual Information Statement has to be completed by all charities, irrespective of size. There are some minor exceptions, and they relate to Indigenous corporations which are regulated by ORIC. We get that information from ORIC, so it’s up to those organisations as to whether they want to complete an Annual Information Statement or not.

The information statement includes financial and non-financial information. The financial information includes some parts of the balance sheet and the income statement. That is a requirement for charities which are a medium and a large size. They have a requirement to produce financial statements. Small charities don’t have to produce financial statements, but they still need to provide some of the data that relates to balance sheet items, as well as income statement items.

A financial report is a requirement for medium and large charities. It consists of the financial statements, of which there is four of those (which are listed in the green box in the middle on the right hand side). That includes a balance sheet, everything that your charity owns, and everything your charity owes. There is an income statement which talks about the profit or loss that the charity has made. The cash flow statement, that only relates to cash which has been received by the charity, and cash which has been expended by the charity, so it’s only talking about cash. The statement of changes in equity is really talking about any changes to assets within the charity, or any reserves that the charity has available to it. So those four statements make up the financial statements.

When you combine the notes to the financial statements, they spell out a bit of a story. They provide a commentary as to some of the policies that have been adopted by the charity. They will include information about some of the decisions that have been made that have had an impact on the financial statements. The notes bring the financial statements, which are only a collection of numbers, to life. There’s also the responsible persons declaration, which I just talked about, that must be completed by the board. If you are a medium or a large charity, there is also a requirement to have a review done, or an audit. A review is a minimum requirement for a medium charity, and an audit is the minimum requirement for a large charity. Now the key to all of this, down the bottom of the slide [indicating to presentation slide], is that you must have adequate records in order to create the financial statements, and complete all of the reporting which needs to be completed.

Now a little bit of information about what type of financial statements need to be produced for medium and large charities [indicating to presentation slide]. Now as I said, a small charity can choose to produce financial statements, but that is an optional activity, they don’t have to provide those. In Australia we have a reporting framework that requires every organisation to identify whether they are considered to be a reporting entity. If you are a reporting entity then you will have users who rely on that financial information to make decisions. So if there are people who rely on your financial statements to make financial decisions, then you will be a reporting entity, and you will have to produce general purpose financial statements. If your organisation does not have users who rely on your financial statements in order to make decisions, then you are not considered a reporting entity and you are able to prepare special purpose financial statements.

The difference between general purpose and special purpose statements is really the number of Accounting Standards which need to be adopted. General purpose financial statements must meet all Australian Accounting Standards. Special purpose financial statements have to meet the minimum requirements of the Accounting Standards, which are listed there in that table on the right hand side [indicating to presentation slide], AASB 101, 107, 108, 1031, 1048, and 1054. So really, the difference between a general purpose statement and a special purpose statement is the complexity and the number of accounting standards which need to be complied with. Down the bottom of that slide, there’s also an optional regime which general purpose financial statements can adopt, and that’s known as the reduced disclosure regime, or RDR. And that basically streamlines a lot of the information which is included in Accounting Standards, so that makes the financial statements a bit easier to prepare, a bit quicker, and will also result in those being easier to review or audit.

Now in terms of some additional information about financial statements [indicating to presentation slide], so again small charities don’t have to prepare financial statements, but if they do they can prepare special purpose if they don’t have users reliant on the information in those financial statements, or they can prepare general purpose statements and adopt the reduced disclosure regime. Medium and large charities must prepare financial statements, which have to be provided to the ACNC as part of the Annual Information Statement. There are two types of accounting which can be adopted. A small charity can use accrual or cash accounting, whereas a medium and a large charity must adopt accrual accounting.

The difference between accrual accounting and cash accounting is the timing of when transactions are recorded. Under a cash accounting system, it is only when cash is received into the bank account, or when cash leaves the bank account, when the financial transaction is recorded. If money is paid into the bank account, that is reflected when the money is received. Under accrual accounting, adjustments are made where transactions have not yet taken place. So for example, if your charity receives a utility bill for telephone, electricity, or gas, that usually relates to usage and charges which have already occurred.

So when you receive that bill, it usually states that you owe an amount of money relating to charges and services that have already been provided, and it’ll usually have a due date in advance by a couple of weeks. So when you receive that bill, your charity owes an amount of money. Now under cash accounting you only reflect that transaction when that bill is actually paid.

Under accrual accounting, when you receive the bill you know that amount of money is owing to the utility provider. So even though you haven’t actually paid that bill, it is an amount that is owing, so that would be reflected in your financials as an amount that is currently payable by the charity, even though it has not actually been paid yet.

Now in terms of review or audit requirements, just a reminder, small charities don’t have any requirement for a review or an audit, whereas medium charities have to have a review done as a minimum, and large charities must have an audit undertaken of their financial statements.

So these are some common errors that we see within the ACNC [indicating to presentation slide]. Now a lot of these common errors are actually going to be fixed as part of the 2016 Annual Information Statement, and that is because automatic calculation has been included in the AIS for 2016. So the totals will be calculated depending on the figures that are input that make up those totals. So incorrect totals really will be fixed with a lot of rounding errors. Just a reminder that when you do enter figures into the Annual Information Statement, decimal places are not required; only whole numbers. If you do need to put a negative figure in, then please include a negative sign where possible, particularly for previous years’ Annual Information Statements (without auto-calculation functionality). As I said, the 2016 AIS includes automatic calculation of totals.

There has been an issue in relation to other comprehensive income, and I’ll touch on that when we get to the end of the webinar and there’s an opportunity for questions. Some of the more complex errors relate to inclusion of comprehensive income in the financial elements of the Annual Information Statement which doesn’t need to be provided in the net surplus or deficit figure. And if you’re a consolidating entity there are some issues that we see where people provide the consolidated financial figures in the Annual Information Statement, when they really only need to report on registered charity operations.

So these are some tips in terms of getting your reporting right first go, and that will avoid the need for the ACNC to come back to you and confirm the information that’s been provided, and it will also avoid the ACNC having to seek additional information from you [indicating to presentation slide]. So one of the biggest issues is around charity size – the size of your charity determines your reporting obligations, so if the charity’s size is incorrectly selected at the start, this will cause ongoing issues for your charity. Depending on the users of your financial information, do you need to prepare general purpose financial statements, or are special purpose financial statements adequate for your charity? Basic religious charities have restrictions on the activities that they can undertake. So if you self-assess as a basic religious charity it’s important that you know the requirements associated with that.

Please check to make sure that all of the financial information that you provide is actually correct. Remember, when you do provide your financial statements, and you upload those to the ACNC, make sure you’re providing the correct documents, that they are in fact your financial statements, which include a review or an audit report which has been signed, depending on your requirements. Occasionally we do get charities submitting some mistaken documents. We’ve had things like recipes, shopping lists, and all those sorts of things. So because they go up on your Register page, it’s really important that you do actually provide the correct document.

In terms of managing your charity’s finances, one of the things that the ACNC has carriage of is the National Standard Chart of Accounts. Now that is a data entry tool and a dictionary that can be used by not-for-profit organisations. It’s a consistent way to treat transactions within your organisation. So this is an optional system for financial record-keeping that your charity may be able to use. You can download the National Standard Chart of Accounts from the ACNC website. It’s free of charge, it can be downloaded in Excel format, and if you don’t have a suitable financial record-keeping system, this could be the solution that meets the needs for your charity.

In terms of some tips and some things that your charity may want to consider, just to make sure that you’re not exposed, these are some conversation starters that we would like you to take back to your boards. At your next meeting, have a think about whether you need to change anything within your charity so that you have adequate control of your financial resources. One of the common things that comes up is if you use a cheque book - it’s a very good system to adopt two signatures that are required to sign every cheque. That just introduces a bit of a safeguard, to make sure that one person is not making decisions without the knowledge of someone else. Now it’s very important that if you do require two people to sign a cheque, then make sure that you’re using that system the way it is designed to be used. Don’t pre-sign cheques, so that if the cheque book is lost, or the cheque book gets stolen, that someone can access funds from the bank account.

Budgets are not a requirement of the financial statements; however, they are a really good tool to help with planning. A budget will set out what is expected to happen over the course of a reporting period by that charity, and can be really good for board members, to give them an understanding of what is expected to happen. They’re also a really good way to track performance. Now like anything, sometimes in life unexpected things occur, so even though you may plan and set a budget, it doesn’t necessarily mean that you will actually follow that budget to the dollar. Something might happen, there might be a need for additional expenditure, or your charity might be lucky enough to be successful in getting a government grant that you weren’t expecting to get. So all of those things will change what your charity does, but a budget can be updated. It can be treated like a living document and can be revised as new information comes to light.

Now a budget can be a really, really good tool to provide to all of the board on a regular basis, to make sure that they have a current picture of what is expected to happen in terms of financials within the organisation. And along with the other financial statements, it’s really critical that board members receive reports in a timely fashion, and they receive them on a regular basis, so that they are able to make decisions in the best interests of the charity that are furthering the charitable purpose for which your charity was set up.

So financial delegations, they’re a way of limiting the expenditure which can be undertaken by particular people within the charity. So you might want to set up a dollar limit, so that nobody can approve anything above a particular dollar amount. Or you might have a particular type of expenditure which is sensitive, or poses a risk for your organisation, so you might decide, for example, that all volunteer reimbursements have to be approved by one particular person, and that avoids any issues occurring where a volunteer can be paid for the same expenses twice, for example. So you might decide that you want to give one particular board member the delegation to approve volunteer expenses, and then once that particular board member has approved those expenses, then they provide that to the treasurer, and the treasurer gets someone else to countersign those expenses, and then the volunteer can be reimbursed.

In terms of security, the safest place for cash is always in a bank account. However, sometimes a charity will need to have money on hand. If you do need to have cash on hand, then make sure you keep that cash safe. If you keep the cash in an ice cream container on top of the bench, anyone can access that ice cream container, so have a think about installing a lock on one of the cupboards so that the cash can be stored in a locked cupboard. Then make sure that the keys are limited to people who have a need to access that cash, because if you get keys cut for everyone there’s no point having a system in place to keep that cash safe in the first place.

One of the most important things is also making sure that you review this on a regular basis. So all of these things may be something which could be added to your standing agenda for the board meetings, so that the board can think about whether any of these things need to be thought about, or whether they need to be considered in light of any changes within your organisations.

Now we hear occasionally that a charity cannot make a surplus. It’s actually really good if a charity does make a surplus, because that allows the surplus to be used by the charity to keep doing what it is doing. So it’s a really good practice for a charity to aim to make a surplus. It doesn’t mean that you’ll make a surplus all of the time, but it’s a really good goal to have, and over the longer term a charity should be trying to make a surplus most of the time.

Reserves are another thing that come up from time to time, and occasionally we hear that it’s not OK for a charity to keep money aside. Now again, it’s actually really good if a charity can keep money aside for a rainy day, because sometimes there are extreme weather events, or something could happen whereby a charity is exposed, or has to draw on funds quickly without advance notice. Now if a charity doesn’t have any money set aside, how would a charity respond to a flood, an earthquake, a storm, a fire, all of those things? So if you’re providing services or goods to people in the community and suddenly there is a big need for the services or the goods you’re providing, having some money in reserve can be a really good way to manage that.

Now this is an example of some of the reporting which may be produced by your charity [indicating to presentation slide]. It’s just an example. It depends on what is appropriate for your charity, and depending on the size of your charity, this may be far too much. But if you’re a large charity then this would be something that you might want to consider as good practice, so at each board meeting, providing an overview of all of the accounts and the current financial position, including anything significant that the board needs to know about.

Budgets, as I said earlier, are a really good tool in terms of tracking performance, and if there is any variance to what you expected to happen, it’s really important that you understand why there was a variance; what was the reason for that? A cash report is critical because a board making decisions about spending funds must make sure that there actually is cash available to spend, because you don’t want your charity to be in the situation where it is insolvent. Some charities have items of capital, so if you have any capital expenditure that you need to make sure is kept in working condition, then you might want to have a capital expenditure report. This will detail how you’re going to replace any items of capital which may need to be replaced, such as vehicles, buildings, those sorts of things.

And you might also want to have a think about any other reports that are required by the board. That could be anything that may be risky or high profile within your organisation. The board might determine that it would like to see regular reports about that particular thing. Again, the key thing here is making sure that the reporting is relevant and fit for purpose, and appropriate for your charity.

Now these are some notes that the board might want to have a think about in terms of the information that is provided to board members [indicating to presentation slide]. These came from the Chartered Accountants of Australia and New Zealand. If you can answer all of these questions with the information that you receive, or that the board receives, then you’re probably in a really good situation. But if you can’t answer some of these questions, that may indicate that you need to refresh the reporting that is given to the board, and you might want to try to fill in any gaps which may be present in the reporting which you currently prepare.

So these are some red flags, or some things that we would see as potential problems for charities [indicating to presentation slide]. If a charity doesn’t have any reserves, so it lurches forward, spends all of its money so the bank account is emptied, and then it relies on getting a government grant or a donation in order to be able to pay the next round of bills, that would indicate a sustainability issue. So reserves can be a really good way to bolster and support your operations. Making sure that you have insurance for all of the items that your organisation needs is critical. If you rely on credit, again, that can indicate that there may be a sustainability problem within your charity, so you want to make sure that your charity is not reliant on credit or borrowing all of the time.

Making sure that the board has all of the information it needs to make sound decisions in the best interest of the charity is really critical. If your charity is reliant on one single form of funding, what would happen if that form of funding suddenly stopped, or it wasn’t available anymore? So having a think about what your charity could do to try to grow other forms of funding may be really critical to the long term viability of your organisation. And the same with membership organisations, if you face a declining membership, then how are you going to continue to provide all of the goods and services that you currently provide? You may need to make some tough decisions if you’ve got a shrinking revenue base.

So making sure that you’ve got sound financial controls and policies in place within your charity is a really critical aspect of your role as a board member, and you need to make sure that your charity is using the funds that it has available for its charitable purpose, and they are being used in a sensible, sustainable way. Now records are really critical, as I established earlier, in order to provide all of the reporting and produce the financial statements which your charity may need to prepare.

It’s really important, too, that if you see something that concerns you, so you see an early warning sign, then if you don’t do anything about it, the problem will probably only get worse. So please remember that other people may have also identified a problem, and there are other people who can help you fix that problem. If you do identify any issue within your organisation, it’s always good practice to raise it with the board, and have a discussion at the board level about solutions and what the charity can do to fix the issue.

It’s really important that you keep engaged in the process if you do identify any concerns. So even if you do see that something’s wrong, then stay involved, ask questions, and if you’re in doubt about anything keep asking until you get your question answered.

So these are some links which will be circulated to you that have got some of the key references which we’ve talked about today [indicating to presentation slide]. So the ACNC website has a lot of resources and a lot of information available to help you and your charities make sure that you are discharging all of your responsibilities as board members, and also making sure that the financial affairs of your charity are managed responsibly and sustainably.

And that’s just some information about keeping in touch with the ACNC [indicating to presentation slide]. So we have the Commissioner’s Column and regular email updates, there’s also the web guidance, which I’ve touched on. There are webinars. An example of this is what we’re doing now. We have podcasts, and we have video content. Or if you would like to contact the ACNC by phone, 13 ACNC, between 9 a.m. and 6 p.m. Australian Eastern Standard Time. And that’s the email address, advice@acnc.gov.au [indicating to presentation slide].

So I’ll finish there, and I’ll hand back to April. Thanks, April.

Moderator – April Kitchenham:

That was excellent. Thank you, Mel. So we’ve still got a bit of time left, so we’ll open it up to questions. We’ve had some great questions come through already, so thank you to everyone who’s put forward their questions. We’ll try to get to as many of them as possible.

First off, we’ve got a question you sort of touched on earlier in the presentation, we’ve had someone who tried to put in some negative figures in other comprehensive income in the Annual Information Statement, and they had an issue where the form wasn’t permitting this.

Mel Yates:

Yeah. So we do have a system limitation in the 2016 Annual Information Statement where negative other comprehensive income figures cannot be entered. But we have fixed this in the 2017 Annual Information Statement, but unfortunately for 2016 it is a known issue. Now other comprehensive income in the 2016 information statement is not compulsory. So what we’re asking charities to do is if other comprehensive income is material, so whether it’s equal to or greater than 10% of the charity’s gross income, then we would say to include it as a note in the activities. So in question 11, which is the charity activity description, include a note, for example a revaluation loss of dollars, “XX dollars as a negative other comprehensive amount cannot be entered in the financial information section, hence I’m disclosing it here.”

Moderator – April Kitchenham:

Excellent. That clarifies that. Thank you, Mel. We’ve got another question here, I guess there’s still a bit of confusion about who to report to in regards to reporting to ASIC versus the ACNC.

Mel Yates:

OK. Sure.

Moderator – April Kitchenham:

For example if you’re a public company limited by guarantee that’s registered with ASIC and the ACNC, do they need to send financial reports to ASIC and to the ACNC?

Mel Yates:

No. So, the reporting of financial information when the ACNC was created switched off the requirement to report to ASIC. So any charities which are a public company limited by guarantee, they need to provide the financial information to the ACNC as part of their Annual Information Statement, but they no longer need to provide anything to ASIC. The only interaction that a company limited by guarantee, which is a charity, needs to have with ASIC is when that public company which is limited by guarantee is wound up, so all of the reporting is only to the ACNC.

Moderator – April Kitchenham:

I see. Excellent. Thank you. Similar to that, we’ve got another question here just about reporting to other regulators as well. For example, if they’re incorporated at the state level, and are registered with the ACNC, do they or can they submit the same report to, Fair Trading for example, to the ACNC?

Mel Yates:

Really good question, April. That’s a really good question. So at the moment we are operating within transitional arrangements, so if you have a reporting obligation to a state or territory, Department of Fair Trading for example, then the ACNC will accept the same financial report which you currently submitted to that state or territory government department. Over time that will change, but for the time being, the ACNC will accept financial reports which have been prepared for state or territory governments, like the Department of Fair Trading, or the equivalent thereof.

Moderator – April Kitchenham:

Excellent. Thank you. Just another question that’s come through just now, we’ve got a question that’s asking does the ACNC pass on details to the ATO and the ABR, or do they still need to separately submit that information with those other government agencies?

Mel Yates:

OK. So in terms of the ATO, there has been a change in the 2016 Annual Information Statement for ancillary fund returns. We’re actually streamlining the reporting requirements so that if you are an ancillary fund and you previously provided a return to the ATO, that has been incorporated into the 2016 Annual Information Statement process, so you won’t need to complete that reporting. We do pass on the ancillary fund information to the ATO. In terms of the ABR, we don’t pass on information to the ABR, but in terms of the information which is displayed on the ABR, it should align where possible to the ACNC Register.

So I think there might have been an issue with the sound, but I’ll just answer that question from the start. So the question was asked, can we prepare special purpose financial statements using the reduced disclosure regime, and the answer is no. So special purpose financial statements need to comply with the six minimum Accounting Standards and general purpose financial statements you can adopt the reduced disclosure regime only when you prepare general purpose financial statements. General purpose financial statements have to comply with all applicable Accounting Standards, but some of those Accounting Standards have reference to some disclosures which aren’t required under reduced disclosure regime. So they’re two separate things.

Moderator – April Kitchenham:

Thank you, Mel. We might wrap that up. We lost a bit of time there with the sound drop out. I do apologise. Hopefully we’ve answered most of your questions today, but if there’s anything we’ve missed do feel free to email us or call us and we can certainly answer any of your questions on a one on one basis there.
So that does bring us to the end of the presentation today. Thank you to everyone for taking the time out of your busy day to join us, and thank you for all your questions. We do hope this has been useful and helped to further your understanding of the reporting obligations for charities. We’ll hang around for a few more minutes online to answer any questions via the online chat and question box, so if you have any last minute questions feel free to pop them through. We’ll hang around for a little bit longer.

Alternatively, like I mentioned, do feel free to email us at advice@acnc.gov.au or you can call us on 13 22 62 and speak to one of our friendly staff. As we mentioned, the recording and transcripts of the webinar, and previous webinars, are available on our website, and we’ll send you a follow up email with all the links and there’ll be information in there as well. Just before you go, we are always looking to improve our education products, so we would appreciate it if you took the time to let us know what you thought of today’s session.

And if you have any additional comments or questions about the webinar, you can get in touch with the ACNC Education team directly at education@acnc.gov.au. Otherwise that’s it from Mel and me. Thank you again, Mel.

Mel Yates:

Pleasure. Thanks, April.

Moderator – April Kitchenham:

And thank you to Maggie and John for helping us answer all your questions today. We’ll see you next time. Goodbye.

Transcript
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