Transcript

Matt Crichton:

Hello everybody, good afternoon, welcome to today’s webinar, the topic of which is Completing your 2016 Annual Information Statement. My name is Matt Crichton, I’m an Education Officer here at the ACNC and with me today is my colleague, April. Hello April.

April Kitchenham:

Hi everyone.

Matt Crichton:

We’re going to take you through the 2016 Annual Information Statement and we hope you get a lot out of it and be able to complete your statement confidently after having watched the webinar. A few tips before we do start, though. If you have any difficulties with the sound on your computer, just try calling the phone number listed in the GoToWebinar control panel, you can use the phone number to listen to the audio rather than your computer if you’re having troubles. Also, we have a couple of colleagues answering questions throughout the webinar, text questions that is, as they come through. So if you have any questions, you can type them at any time throughout the webinar and our colleagues will be able to help you out. We have Zane, Chris and Maggie answering your questions today.

Also at the end, if you wanted to hold off on your questions until we do finish the formal presentation, we will have a Q&A session. So hang around after the formal presentation, and we will be able to field some questions. April and I will be able to field some questions and if you have any that you want to ask after we’ve done the formal presentation, something that we didn’t cover throughout the presentation, feel free to hold off till then and then ask the questions.

And if there are any other questions, any questions that we can’t answer today, for example, if there are a flood of questions coming through or there are some questions that are a little bit tricky or a little bit specific to a charity, don’t worry, we will be able to get back to you either via email directly. Or the follow-up email that will go out after this webinar will contain useful information and links that may answer your question.

And finally, a recording of this webinar and all the slides from the presentation and the links that we’ve used and referred to throughout will be published on our website within a few days and included in a link in the email that we send to all the attendees.

If you have any suggestions for our webinar programme, we’re always looking to improve them. So at the end of the webinar, if you want to complete the survey that pops up in your system, then please do so and let us know if there’s anything that we could improve on or any suggestions that you have. We always look forward to hearing what people have to say about our webinars.

OK, having gone through the admin stuff we can get into the presentation now. Let’s have a look at what we’ll cover today. I’ll pass you over to April.

April Kitchenham:

So today we’re going to look at the Annual Information Statement. We’ll explain what that is and what a charity needs to report in the Annual Information Statement. We’ll go over when the Annual Information Statement is due, we’ll discuss how to submit the AIS and give you an idea of what to have on hand to complete the AIS. We’ll also go through an overview of each section of the AIS and also have a little chat about what action the ACNC can take if a charity fails to submit its AIS.

So first off, what is the AIS and what information does it ask for? For those of you who may not be familiar with the AIS, it’s basically an annual form that asks questions about a charity’s operations and finances. There’ll be some questions in there about your charity’s activities, its beneficiaries, staff and volunteers. Colloquially we’ll refer to it as the AIS rather than saying Annual Information Statement, which can be a bit of a mouthful. There are some financial questions as well. Some charities must submit a financial report or statement. So depending on your charity size, you may have a requirement to submit a financial report with the Annual Information Statement. Medium or large sized charities will need to submit an either audited or reviewed financial statement with the AIS. While for small charities, this obligation is voluntary, so you don’t need to submit a financial report, but you can do so if you wish.

So it is a mandatory reporting obligation for all charities to submit the Annual Information Statement, with one exception being charities registered with ORIC, so that’s Aboriginal and Torres Strait Islander corporations that are regulated by the Office of the Registrar of Indigenous Corporations (ORIC).

Matt Crichton:

Great, thanks April. We’ll get into some more of the details about the specifics regarding different sized charities a little bit later on. But that gives us a pretty good overview of basically what the AIS is.

The AIS is due at different times for different charities. This depends on a charity’s own reporting period, that’s the period to which a charity records all its finances and how it reports its details internally. Many charities will do this like other organisations really, to the financial year, from beginning of July until the end of June. But there are some charities, actually quite a significant number, who choose to report on a calendar year basis. And then aside from that there are also a smaller number of charities that have varying reporting periods throughout the year.

The due date of the AIS is within six months of the end of a charity’s reporting period. So although charities may have different reporting periods and may report internally different to each other, the due date to report in the Annual Information Statement is consistent across all of them, that being within six months of the end of the charity’s reporting period. The two most common deadlines for an Annual Information Statement are 31st of December… I’ll just get into that extension in a second, but for the time being the 31st of December for charities that report to a regular financial year, that’s the July to June period, six months after the end of their reporting period being 31st of December. And the other common deadline for the Annual Information Statement is the 30th of June, and that would be for charities that use a calendar year reporting period, that is that they finish their internal reporting at the 31st of December year end, and in which case six months following that the AIS is due at the end of June.

Now just quickly touching on that extension that we’ve referenced there. The Commissioner at the ACNC has granted an extension in the past few years for those charities that do report to a regular financial year and are due to submit by 31st of December because the ACNC does close for a period over the Christmas and New Year, that week between Christmas and New Year. And it being a fairly busy time for many charities it was taking away a fairly significant chance for them to be able to contact the ACNC, ask any questions or even write to us to clarify any points. So as a sort of gesture of goodwill and grace, there’s an extension to those charities to be able to submit their AIS up until the 31st of January.

If your charity, or the charity that you represent, is listed with a particular reporting period that isn’t accurate, it’s either no longer accurate because there’s been a change or never reported on that period, you will need to notify the ACNC, and you can do that within the charity portal. So the same spot that you manage other charity details on the ACNC website, you can log in and make a notification that the reporting period for the charity is different to that which is currently held.

April Kitchenham:

Thanks Matt. So we’ve just gone over reporting periods and due dates. So what do you do if you’re not too sure of what your reporting period may be or when your Annual Information Statement is due? What we’d recommend in that case is just jump onto the ACNC website and going to the Register. You can pop in your ABN and then that will bring up your Register listing and on that page there, that will tell you what your reporting period is. So that will tell us if you’re a normal financial year lodger or a calendar year lodger, and then you can review that information and if it isn’t accurate, as Matt mentioned, you can jump in the Portal and notify us of that correct reporting period. So there’s a little screen grab there that [indicating to presentation slide], that’s a little box that will display on your Register listing and that will actually tell you when your due date for your reporting requirements are. So it’ll tell you the due date, the document that’s required, which is your Annual Information Statement, and also a financial report as well if need be. It’ll tell you whether or not that’s been received, and if it has been received it’ll tell you the date that we received it. So there’s some links on the screen there to get to the Register that we’re talking about and also some more information about reporting due dates. If you still want to find out a little bit more about that, jumping on those pages on the website is a good place to start.

Matt Crichton:

If our explanation of the reporting due dates wasn’t very clear, that link there at acnc.gov.au/reportingduedates goes through it in a little bit more detail, with even some diagrams to explain it.

Submitting the AIS is pretty simple. As April mentioned at the beginning, it’s an online form. We often hear some queries from people representing charities or working in charities who are wondering why we haven’t sent the form yet, or where they can pick the form up from, those sorts of queries. It’s an online form and it’s contained within the ACNC website. So as you can see on the screen here [indicating to presentation slide], you log in to the ACNC Charity Portal, and that’s the place in which you can manage all your charity’s details, and you submit the Annual Information Statement from within the Charity Portal. Two ways you can access it, the one that we’ve got on the screen at the moment is the path from the ACNC homepage. So if you go to the ACNC homepage at acnc.gov.au, you’ll see a couple of purple links to the Portal that will take you through to the place to log in to the Charity Portal. But otherwise if you want to skip this step, you can go straight to the Portal with the address listed on the screen there, on the bottom left hand corner, which is charity.acnc.gov.au.

April Kitchenham:

So once you’ve done those steps, you’re taken to the Charity Portal log in page and you’ll see something that looks like the pictures on your screen there [indicating to presentation slide]. So what you’ll need to do, is you’ll first off need to accept the Terms of Use. There’s a little radio button that sometimes is easily missed, so you’ll just need to click that little button there and then you’ll be prompted to log in. You’ll then be asked for your charity’s user name, which is always your ABN, so that will never change, and you’ll need to type that in with no spaces between the numbers. And you’ll also be asked for your unique password. If you don’t have your password available, if there’s been some changes within the staff or responsible people and that password has been lost along the way, that’s no big deal, you can use the password reset function that’s available on that same page there. You just need to click on the link, answer a few questions and we can get you a new password in no time. And then you just pop in those details and then click that sign-in button and you’ll then be taken to the Portal.

Matt Crichton:

From within the Portal you will see a link on the top left hand corner that says submit Annual Information Statement. Pretty self-explanatory, just click on that link and that’ll take you through to the form, the online form, and you can put in all your answers in there. While we’re on this page actually, there are other pieces of handy information within the Portal if you’re not too familiar with it, if you haven’t really had a chance to log in here and have a look at what you can do. But on the main section there you can see some alerts, although my little red arrow is covering the word alert but that’s what it says there [indicating to presentation slide]. It’ll tell you if you’re missing any details or if there are some things you have to attend to. And also on the left hand side that navigation shows you all the different bits of charity management that you can do from within the Charity Portal, such as changing details and changing responsible persons and that sort of thing.

April Kitchenham:

So once you’re logged in and you’ve started that Annual Information Statement, some information to have on hand that will make the process a lot easier for you is just on the slide on the screen there [indicating to presentation slide]. So of course, you’ll first off need your user name and password. Another handy resource to have is the 2016 Annual Information Statement Guide. That actually highlights each question of the AIS and gives you some tips on how to answer those questions or explain those questions if you’re not too sure what it’s asking for. Having your annual report and any project reports on hand might help you describe your activities later on in the AIS. Pay as you go payment summaries might be handy as well, just to help answer the questions about your staff and volunteers and employees, things like that. Any funder, donor, or grant acquittal reports would be useful as well. And, of course, those financial documents, and they could include your balance sheet statements, or statement of financial position and your statement of profit and loss and other comprehensive income for the reporting period. So they’re just some things that will help make completing the Annual Information Statement a lot easier for you, saving you from having to jump in and out, that will help you get it all done, out of the way.

I guess some other tips on completing the AIS is, if you don’t understand a question, you can click on the little purple question mark next to each question, that will bring up some more details about that particular question. That’s just for use in conjunction with the guide there.

Matt Crichton:

Thanks April. And just to clarify, this isn’t a comprehensive list. I mean, every charity does have its own situation which affects the info that it needs to put into an Annual Information Statement, so this is a broad guide, I guess, to give you an idea of the sort of information that will help you fill in the Annual Information Statement. There may be some things you don’t need in that list and there may be some other things you do need, but that’s a broad base to start from.

The guide that April mentioned is found on the ACNC website at the address that you can see on the bottom of the screen there [indicating to presentation slide], acnc.gov.au/2016AIS. This is pretty handy because it provides you also with a link to get into the Portal, so that’s one handy piece of information there. But also it’s got the guide and also a checklist and a worksheet with which you can draft your answers if you wanted to do that before completing the form proper. So this is a good page to begin with, or at least bookmark, acnc.gov.au./2016AIS. If you’ve forgotten the URL you could find it from the homepage here underneath the Manage My Charity tab. If you hover over that it will bring up the dropdown menu and the fourth point, Report Annually, within that, there’s another menu, a sub-menu which has actually a lot of guidance to help you with the 2016 Annual Information Statement. But within there you’ll be able to find the guidance for different sized charities.

April Kitchenham:

So now we’ll have a look at each section of the AIS and just briefly go through what each section details. So first off is Section A: Charity Information. This section is fairly straightforward, it just asks you to confirm the basic information about your charity. So that’s your name, your contact information and your size. And if you’ve completed previous AIS’s online, so the 2013 and 2014 and 2015 one, for example, a lot of these answers here will be pre-filled for you from those previous submissions, so it’ll make everything just that little bit more easier. You’ll just need to confirm it or you can, of course, change it if required. But most of those answers will be pre-filled for you.

One important thing to note about this particular section is it does ask you to confirm your contact address and your Address for Service. Your Address for Service is the contact address that we use to send formal documents to or notifications to, so it is important to have that Address for Service current and up-to-date. We do send reminder notices out to let people know that their due date is coming up and that does go to the Address for Service. So when people say to us that they’ve missed their deadline, it’s often because they didn’t receive those reminders because their Address for Service was out of date. So we would encourage you to confirm that Address for Service once you’re in the Annual Information Statement, which is different to the contact address. The contact address is just the address that the public will use to contact you, whereas the Address for Service is the address that we will send formal documents to.

Matt Crichton:

It’s a good one to point out, and I guess a rule of thumb, is think of the Address for Service as the really important one for your dealings with the ACNC. Anything that we have to send you, whether it be a reminder or a formal notification of something, it will always go to the Address for Service. And the first step is often an email address. So if you have an email address that is generic, such as info@charity.com, or administration@charity.com, whatever it may be, it may even be an employee’s email address, but whatever it may be, that’s the one that we’re going to go to first. So think of the Address for Service as the special one that you need to make sure is up-to-date.

April Kitchenham:

You might also want to check your junk folders, sometimes our emails do get quarantined to your junk folder. So just have a look in there for any of our emails and make sure we’re on your approved contacts list just to avoid missing out on any of that important notifications.

Matt Crichton:

We’ll get into some more of the charity specific information of the AIS now. Section B asks about activities. It goes through a range of charities activities and it’s important to point out that activities can be financial or non-financial. It’s not only some of the things that you traditionally associate with a charity, working in the community, running soup kitchens or running events and that sort of thing. It does cover a range of activities, which would go from simple administration in the back office right through to running really difficult complex programmes in overseas countries. The purpose of this question is to identify inactive charities. So if you’re unsure about whether the charity that you’re filling the AIS for has conducted any activity, select “yes”. The likelihood is that they have conducted activities because those activities maybe, as I said, something as simple as administration or, in the case of something like a local church, running services on a Sunday would constitute an activity. So don’t get caught up in this idea that activities must be these grand programmes that are operating in the way that we often traditionally think of charities as doing. It’s even the simple things that your charity was established to do.

Now we’re going to just take you into the AIS now to have a look at this section of the form. So just bear with me a moment, we’re going to have a look here [indicating to the screen]. You can see here, Section B: Activities. The first thing to point out is it asks about your main activities for the 2016 reporting period, as you can see here. This is important because it’s the thing that we’re asking charities to focus on, even though there may be incidental ancillary activities that the charity also does. We’re looking for the main activity at this part. As the form says there, it is unlikely that any charity would need to select more than four main activities, but you can select a couple of other activities as listed there. Again, it’s important to stress that you should only select the activities that really are a primary part of your charity’s work.

In some cases, it may be difficult to distil your main activities into a handy category as presented here, and some people feel the need to go right down here to the bottom and click “other” because they feel that some of the categories we’ve presented don’t quite fit perfectly to the thing that they think they’re doing. It probably is worth taking the time to just think about your main activities and the main purpose of those activities and try and categorise them according to one of the broader categories there. We understand that of course it may not be the absolute perfect 100% fit in every case but we’re looking for a broad distillation of what you do into one of these categories.

It will ask about your operating locations, which is fairly straight forward. Importantly, it asks you to include operations or programmes undertaken as well as providing funding or other support. So, again, it’s not simply where you have programmes on the ground.

Question 11 is a chance for you to describe more about your charity’s activities, whereas the previous question maybe a broad overview and broad categories about what your charity does. This is where you can put some narrative around the charity’s activities.

Moving on, question 13 is about the beneficiaries. Again, we’ve noticed some troubles with many organisations not really knowing how they should answer this question. It’s important to think again about the main target of your activities. So rather than thinking of all the types of people that may possibly be helped by your organisation’s activities, we’re thinking about who does your charity target with their activities. In many cases it’s going to be general. There are a lot of organisations doing a lot of work that really doesn’t target a specific group in any way. In that case, click “general” rather than clicking the box just for every single category that you can find there. The specific ones are more aimed at the charities that really do run a specific programme or operations, or anything, activities, a community centre, that sort of thing, which is aimed at a particular type of beneficiary group. As you can see here, we’ve got them listed into a range of different categories. Now it really is important to try and take the time to think about whether or not your organisation does operate for a specific beneficiary group, or does it really provide activities that the general community probably is more an accurate reflection of the beneficiaries? In which case, selecting “general” is probably more appropriate.

Alright, we’ll go back to the presentation now for a moment and I’ll pass you back to April to take us onto Section C.

April Kitchenham:

Excellent, thank you. So Section C: Human Resources, is about the people who work or volunteer for your charity. So this question will ask you to put down a number for your employees, so that’s full-time and part-time, and your volunteers. So just to clarify, full-time employees are those people who work 35 hours or more per week while part-timers are those who work less than 35 hours per week. And your volunteers, they can be regular or irregular. These people may have just volunteered once for an hour or they may have volunteered every day. Each charity will be different. And volunteers can include unpaid board members and committee members as well, so that’s important to keep in mind. If you’re not sure of the exact numbers of your volunteers, just estimate to the best of your ability. So this is where your annual reports, your organisational chart or your Pay As You Go payment summaries might help in answering this particular question here.

Matt Crichton:

Section D is a pretty big one, it’s one that we receive a few queries about too. This is the finances of a charity. The questions in this section are mandatory except for a couple of types of charities, including non-government schools. The reason for that is that we have an agreement with the Department of Education and Training to use the same information effectively that’s submitted to them in another reporting requirement. And the other group that this is not mandatory for is basic religious charities. I might just quickly go over a basic religious charity because it’s worth pointing out, we do get a few questions about this. This is a specific type of charity that meets criteria to be granted this type. It’s a category of charity that is just for ACNC purposes. It’s not supposed to describe your organisation as being (1) basic, and (2) religious. It’s a specific criteria that is set up by the ACNC for ACNC reporting purposes.

Question Seven in the Annual Information Statement will take you through the criteria to be recognised as a basic religious charity. If you do not meet all of those points, then your charity will not be considered a basic religious charity and in which case, Section D, the finance questions are mandatory. It’s worth pointing out that only a really tiny minority actually fit this category, even though there are a lot of religious organisations and a lot of them consider themselves basic in many ways, many of them fall down on the criteria for different reasons. So it’s worth noting that this is a really tiny minority that actually fit this category.

The questions within Section D depend on the size of a charity. There is more information required of medium and large charities than what’s required of small charities. So depending on what you’ve answered as the size of your charity earlier on in the AIS, these questions will change slightly.

We’re just going to take you into the form again to have a look at this section . So we’re going into the finance section of the AIS. That was the human resources, which is very short. Let’s go onto the next page for Section D: Finances [indicating to the screen].

OK. We’re not going to go through this in detail because, of course, all the answers will be specific to your organisation or the charity that you represent, but we’re just going to give you a quick look of what the AIS asks. It asks about whether you’ve used cash or accrual accounting for the 2016 reporting period. It asks for a summary of the income statement and some figures that you have to put in there. And you have to upload a signed financial report and relevant audit or review report for the 2016 reporting period, if it’s required of your organisation. Once you’ve completed these sections you can move onto the next section of the AIS.

We will just quickly have a look at some of the details about the finances and the information required in the financial report now. But first, we’ll just show the sizes.

April Kitchenham:

So Matt touched on the different reporting requirements there and that how much financial information you provide depends on your size. Here is how we break down those sizes. So, a small charity is a charity whose annual revenue is less than $250,000, while a medium charity is one with annual revenue of $250,000 or more but less than $1 million. And large charities are those charities with revenue of $1 million or more. We do have some more links there [indicating to presentation slide], that go into charity size in a bit more detail and also some more information on basic religious charities, which Matt touched on just before.

So some of you might be asking, what is revenue? So just in simple terms, revenue is the part of income created from the sale of goods or services or any other use of capital or assets associated with the ordinary operations of your charity. So just as some examples, things that can be included as revenue are grants from government or foundations or private or any other sources, any donations or bequests received, any sale of goods or even interest earned on investments or dividends. Revenue is usually shown as the top line items in your income or profit and loss statements, and the Australian Accounting Standards AASB118 and AASB1004 provide some more technical accounting detail on how revenue works. So there’s a link there to that information [indicating to presentation slide].

Matt Crichton:

Although a lot of organisations or a lot of people representing charities may have a few more questions about revenue and on the real technical tricky bits about what fits in the definition or not, it’s probably beyond the scope of this webinar. We do have webinars dedicated more to the financial reporting of charities as well, which you can find on our website. There are recordings of previous webinars and we will continue to run those sorts of webinars in the future. But for the moment, for the purpose of this webinar, we probably don’t have the time to go into the details about calculating revenue for every charity. But if you’re unsure, it is worth having a read through the information in the guide and on the website, which we will provide links to, about this, and including that third point that April mentioned there, the Australian Accounting Standards Board guidance on calculating revenue.

There is one other handy tool that you can use, which isn’t one of ours, it’s from a website accountingforgood.com.au. They have an ACNC charity size calculator. The URL is down near the bottom of the screen, accountingforgood.com.au/acnc-calculator [indicating to presentation slide]. If you fill in those sections according to the categories that they’ve presented there and then hit “submit”, it’ll give you an idea of the size of your organisation. We understand a lot of organisations readily know their size and they’re tiny and they’re not getting anywhere near $250,000 so they know they’re going to be small, and others are huge and they know they’re well over threshold and they will be large for a long time. This is probably more for the organisations that feel like that they may, depending on some of the finances, they may tip over into one other category, it’s worth having a look at this tool online.

As I showed you, in the Annual Information Statement itself there is a question there that requires you to upload a financial report. The information required within a financial report is listed on the screen here [indicating to presentation slide]. And this is for charities with no transitional reporting arrangements. That means the charities that don’t have a particular arrangement set up because of the type of charity they are, such as the non-government schools who can report via the Department of Education and Training. So this is for the bulk of charities really, and for those that fit into either the medium or large category.

Again, it’s not mandatory for small charities but maybe a good idea. A lot of small charities still have these financial statements prepared for their own purposes; they’re not doing it for the purposes of reporting to the ACNC. They have them there ready to go and they figure that it may be a good measure of openness and transparency to also include a financial report in the Annual Information Statement, which then is viewable on the ACNC charity website. So although it’s not mandatory, it is often considered a good step in transparency and open good governance really. So if you’re representing a small charity, it may be worth including a financial report.

Within the financial report that you do upload to the Annual Information Statement, they must include a few details and they’re listed on the screen here [indicating to presentation slide]. So it’s got to have a statement of profit or loss, and other comprehensive income. The financial report will include changes in equity, cash flows and notes to the financial statements. There must be a responsible person’s declaration about the statements in the notes, signed and dated. And a reviewer’s report or an auditor’s report, which is signed and dated. The distinction there between medium and large is that medium charities can choose to have their report either reviewed or audited, whereas large charities must submit their fully audited financial report.

If this brief overview isn’t quite enough to answer your questions then I do recommend having a look at the guidance at acnc.gov.au/financialstatements. That does provide more detail about all of these features and it’s probably worth having a look if you’re a little bit confused. Or otherwise, give us a call on 13 22 62 and we may be able to help you through the specifics of your organisation’s details. Similarly, if you want to send an email with some of the features of your organisation to get some advice, then send us an email, advice@acncn.gov.au.

April Kitchenham:

So just on the financial information, it is important to get this particular section right. We do check the information submitted in the Annual Information Statement, including the financial information. And upon reviewing some of the figures in the 2015 Annual Information Statements, we did notice that there were some common errors that we have picked up. Hopefully this won’t be too much of an issue going forward, particularly with the auto calculation that we’ve introduced, but just a few things to keep in mind to avoid falling into this particular pothole here is just displayed on your screen there [indicating to presentation slide]. So we do encourage you to know your charity size and the financial report that’s required of your size, use that calculator for working out your revenue, and the guidance we’ve mentioned previously. Self-assess as a basic religious charity correctly. Look at the criteria and figure out whether or not you meet those criteria and if not, do provide us with the financial information required of you. Check your figures, so check that the financial information you enter in the form matches the figures in your financial statement or in your ledgers, if that’s something you still use. And don’t forget to include everything that we require in the financial report, so don’t forget that responsible person’s declaration, for example, we do need that complete financial report otherwise you may get a call from us asking for that missing information.

So some further resources there to avoid falling in the financial errors pothole is that top ten reporting tips URL we’ve got there and the 2015 AIS errors page as well [indicating to presentation slide]. So just stressing again the importance of getting this particular section right.

Matt Crichton:

And in many cases the errors were nothing more than even silly typos or forgetting to put in a figure in one section of the Annual Information Statement. So it’s something as simple as that is picked up, that sort of thing.

Forgetting a zero, forgetting to fill in two sections of the AIS finance questions which then affected your total income, and that sort thing, which does get picked up and then charities are notified that there’s an error in their Annual Information Statement. They will have to log in and resubmit, or correct the error and resubmit it. So it’s worth taking the time now just to make sure that you got it right so you don’t get caught up in this errors, as April described, the pothole later on. It’s worth taking the time. So check and check again before submitting. It’s not worth having to do it again simply because you forgot to include one figure, or left off a couple of zeroes and that sort of thing. Just make sure that you’ve got the figures right.

The guidance on the website to help you through is split up into size specific information. So if you’re representing a small charity, go to the guidance for small charities. Similarly, for medium and large, that way you’re not going to run foul of the requirements and forget to submit something that you’re required to submit. Make sure you’ve got your size right, you’re reading the right guidance and you know the things that you have submit so that you’re not caught up later on. We don’t want you to have to keep coming back to fill this in. Filling it in once correctly is more than enough, I think, for most organisations.

Also, I did touch on the need to notify whether or not the organisation uses cash or accrual accounting earlier. It’s one of the first questions in the financial section. A lot of organisations will know this, a lot of people representing organisations will know this. I’m sure if you use an accountant this probably won’t be a big issue, but if you’re doing your own, it’s the first time, you’re not quite sure, have a look at the guidance there, it explains in more detail the difference between the two accounting styles and what they involve. Again, it’s probably beyond the scope of this webinar to go into the technical accounting details of cash and accrual accounting, so we will leave that. But if you have a question, feel free to email or call us for the details regarding your particular organisation.

It also asks whether or not the charity has produced special or general financial statements. It’s again, worth having a look through there if you’re unsure. Your accountant will probably know, but if you’re not using an accountant, have a look through that guidance. And also, the need to have a financial report reviewed or audited and the differences there. With this one, if you’re a large charity, you don’t have a choice, so there’s not really much you can do, it must be audited. And if you’re small, it doesn’t need to be but this is probably more so for the medium charities, they have a choice between a review and an audit and they can weigh up the differences and whether or not it’s worth it for their organisation to undertake a full audit. If it’s just for ACNC purposes, or not sure, that’ll be something for you to decide with the board, and using that guidance is probably a good way to get your head around the requirements there.

April Kitchenham:

So along with your requirement to submit an Annual Information Statement and any financial reports along with that, you may also have an obligation to submit to other regulators. Some other regulators there will often depend on your legal structure, so if you’re a company you may have obligations to ASIC, if you’re an incorporated association you may have obligations to your state regulator, such as Fair Trading or Consumer and Business Affairs, for example. It’s important to keep in mind that unless you are notified otherwise, your obligation to submit the AIS to the ACNC is in addition to any obligations you may have to any other regulators. While we are working to streamline those reporting obligations, at the moment just be mindful that you do need to keep up those other obligations as well.

But in saying that, we do have transitional reporting arrangements in place. So, for example, we mentioned ORIC a little bit earlier, so rather than submitting both to ORIC and the ACNC, if you’re registered with ORIC, just continue reporting to ORIC and that will satisfy your reporting requirements to the ACNC. Matt mentioned non-government schools before, so if you’re a non-government school and you submit your financial questionnaire to the Department of Education and Training, the ACNC will accept that financial questionnaire as meeting your financial reporting requirements to the ACNC for 2016.

So that’s just something to keep in mind. Often people say, ‘but I’ve sent this to you already and I paid the fee’. No, that’s something you would have submitted to your state regulator, the AIS is something you submit to us separately and that is, of course, free of charge.

Matt Crichton:

Section E of the AIS is pretty simple actually. It just asks whether or not particular details about the charity are up-to-date. That will be the governing document, which is often called a constitution or rules or articles of association. It’s the formal document that outlines how your charity is set up and its processes and that sort of thing. It’ll ask whether or not the list of responsible persons are up-to-date. This is important to keep up-to-date, it’s displayed on the ACNC Charity Register, the names and the positions only that is, it doesn’t contain any personal details about the people that run the charity, but it does list who is considered a responsible person. Most organisations will refer to these people as the board or the committee, depending on the structure that they take. But in short, that’s the group of people that are responsible for making the formal decisions of the organisation. And it’ll ask you whether or the not the charity sub-types are up-to-date. This is the type of charity that the organisation is registered with the ACNC. In some cases it may not be up-to-date and it may need changing and it’s worth having a look at that. You can find all of the details of these particular categories on the ACNC Charity Register, so it’s worth having a look at those details as well. When you’re using the Charity Register too have a look at the reporting that you’ve done previously and the due dates, just have a glance at the governing document, the responsible persons and the charity sub-type just to make sure that they’re accurate as well.

April Kitchenham:

Section AF is a new section just introduced in the 2016 Annual Information Statement. It’s only for ancillary funds though, so it probably won’t apply to many of you out there, and if that’s the case this section won’t actually appear for you when you complete your Annual Information Statement. But just to go over it briefly, this section is only for ancillary funds and completing this section of the AIS replaces the requirement to lodge a separate ATO Ancillary Fund Return for 2016. So the information in this particular section is not for publication and will simply be forwarded on to the ATO, and that’s just part of our efforts to streamline reporting.

Matt Crichton:

Excellent, thanks. We’re almost at the end of the AIS now, so the last thing you have to do is the Declaration, which just asks for confirmation that all the information that you provided is true and correct and asks you to tick a box and click “submit” to finish it off. Just make sure that you check the answers again. I want to reiterate the errors problems that we’ve encountered in previous years and charities being caught up, needing to go back in and correct errors that they’ve made in the Annual Information Statement. So it really is worth just having a quick look at the information, particularly in the financial section, to make sure it’s correct before you do sign this declaration and click “submit”. Just double check the figures are right, even something as simple as that is worth taking the time to do.

And it’s probably a funny thing, that many charities get caught up with at this point, having done the entire form, getting all the way to the end and then forgetting to click “submit” at the end of the declaration. Don’t forget to click “submit”, it’s a separate little button. You might have scroll down, depending on your browser window and depending on what you can see in the size of the window, but it may be worth having a look around that screen, scrolling down just to make sure that you’re not going to miss the submit button. A lot of people have hit save at that point and they think that’s it, they’ve done it. And then a few months later they get a notification from us saying that their Annual Information Statement is overdue, they haven’t reported, thinking that they had, and it was just a case that they forgot to hit the submit button. So after you’ve declared that everything is true and correct, don’t forget the submit button.

April Kitchenham:

And you will get a Confirmation of Submission notification on your screen and an email as well, so that’s a good way to be sure that you did submit the form correctly.

Matt Crichton:

And just quickly, because we are pushing our hour mark and I’m sure you’re all tired and hungry and want some lunch, but we’re going to just quickly have a look at some of the consequences of failing to submit an AIS.

April Kitchenham:

So because the Annual Information Statement is a legal obligation there are, of course, consequences in not complying with that requirement. So a couple of things may happen. So if you don’t submit your Annual Information Statement and take no action at all to try and do so, the ACNC can issue penalty notices. So if we find that the charity is deliberately not meeting its obligation to report, you may get some sort of penalty notice. We will also publish a statement on the ACNC Charity Register stating that the charity has yet to submit its Annual Information Statement and it is now a considerable amount overdue. So what I mean there is a red mark will display on your charity’s Register entry indicating that the Annual Information Statement is six months or more late. So with the increase in uptake in the Charity Register and the public and donors and funders and grant makers using the Charity Register to look at charity’s details, having this particular notification on your record might be detrimental for you. So we do encourage you get that Annual Information Statement submitted within that due date to avoid this red mark displaying on your record. It will, of course, go away once it’s submitted, but until that point you may get some sort of red mark on your listing.

Matt Crichton:

And as April mentioned, there are some penalties. While we’re not in the habit of just dishing out penalties whenever we can, this is in the very extreme cases and sort of a last resort almost, there is the provision to penalise financially where the failure to submit warrants as much. We won’t go through this in detail, you can have a look at the table later in the email that follows up with this slide if you like.

April Kitchenham:

So just quickly, I guess the worst case scenario that you’d put yourself at risk at in not submitting the Annual Information Statement is becoming a double defaulter charity. So what that is, if a charity does not submit an AIS for two years, the ACNC will work towards revoking its registration as a charity, and this will of course result in the loss of your charity tax concessions. When that happens we do display a list of these double defaulter charities on the ACNC website and you can see the link there [indicating to presentation slide]. So maybe have a look at that list, see if there’s any charities in your area that you know of that might have had their registration revoked but are still operating. If that’s the case, get them to contact us as soon as possible because we can get them back on the Register, there will be some work involved and we will ask for that missing information. But a double defaulter is not a position you want to be in.

Matt Crichton:

Excellent. And there is some more information on the website as we’ve alluded to throughout the webinar. We will include these links in the follow-up email that goes out to all who registered so don’t go rushing for a pen and trying to jot down all these URL’s right now, you’ll get them in an email and you’ll be able to click straight on them. There may be a lot to take in for a lot of people who are doing this for the first time but it’s worth having a look through some of the guidance because it will help you through the AIS.

Also, if you wanted to stay in touch with some of our education materials and news from the ACNC, get online, sign up for our email updates, you’ll get the Commissioner’s Column and other notifications via email. We do have regular webinars and other guidance that covers various aspects of charity management and issues facing the charity sector. You can always call our Advice team who are very friendly, very educated and knowledgeable and happy to help you with all your issues regarding your organisation on 13 ACNC, so that’s 13 22 62, or if you prefer email you can do so at advice@acnc.gov.au.

Thank you for joining us today. Thank you for giving up your lunch break, I’d imagine for a lot of people, to have a listen to this, and we hope that it was useful.

We do have a couple of questions actually. We’ve got a couple of minutes so we’ve got a couple of questions that we may go through for the benefit of everyone because they are a couple of good questions that are worth touching on. I’ll ask you, April, we had someone from a charity ask about the process for correcting a mistake. So they submitted it but then upon chatting to someone else at the charity, or the charity board, they realised that they’d made a mistake. And I’ve heard about this happening a little bit with the financial details, but what is the process for that?

April Kitchenham:

So you can amend a submitted Annual Information Statement. What you will need to do though is send us an email. So contact us at advice@acnc.gov.au, just put it in writing that you need to amend the Annual Information Statement, indicate which year you’re wanting to resubmit and of course pop your ABN details in there so we can identify you, and we can certainly arrange for your Annual Information Statement to become available for you to amend and resubmit.

Matt Crichton:

Another question that may be of use for everyone is about the finances. So someone’s mentioned they can’t put a negative figure in the “other comprehensive income” section, so the section that asks for “other comprehensive income”, it won’t accept a negative figure, but that’s what they want to put in. What should they do?

April Kitchenham:

There is an issue with this year’s form that prevents negative figures being put in. So as a work around to that, because we will correct it in future AIS’s, but in the meantime, simply put a zero in that field and then just as a note, in Question 11, where it says ‘describe how your charity’s activities and outcomes helped achieve your charity’s purpose’, put the correct figure in there and just a little note saying that you couldn’t put it in that particular question in the AIS and that way we can identify that you were affected by this particular issue.

Matt Crichton:

OK, actually we’ll include that in the follow-up email the answer to this one because it may affect other organisations or people representing other charities as well. And we’ve probably got time for one more. Early on the form asks, and it’s a mandatory field, it asks for an email address for the Address for Service. Someone’s asked what to do if they don’t have one, they don’t have a generic charity email address to put in as an Address for Service and they prefer to have their Address for Service listed as a physical location. What should they put in the email address field?

April Kitchenham:

I suppose if it’s not possible to create a generic info@gmail.com, for example, what you can do as a work around, just pop in the advice@acnc.gov.au email address and then just let us know that you’ve just popped that in because you don’t have a generic email address for your charity to use, and then we can remove that for you and we will use that physical address, or that postal address, as the way to contact you.

Matt Crichton:

We might put this in the follow-up email as well as an idea to do. But as April did mention, creating a free email just may be beneficial. So beyond just receiving ACNC communications, which is one benefit, but beyond that having a generic email address may help you manage some of the charity operations. If someone leaves the organisation and with their departure goes a lot of knowledge and information stored in their personal email address, it may be worth using a generic email account to deal with this sort of administration and management. So having an email address such as charityadministration@gmail.com, or informationformycharity@gmail.com, something generic to use is probably not a bad idea just for general administrative management and governance.

Alright, we’ve ticked over past one o’clock and I think the questions, we’ve answered most of them. If you do have any other questions, feel free to pop them in the chat window of the question box there in the navigation. We will hang around for a few minutes to answer any that come through late, otherwise we’ll provide some information in the follow-up email that goes out. And of course if later on you realise you forgot to ask a question that you really wanted to ask, just give us a call, we’re all happy to provide any advice or information that we can later on. So we’ll end it there. Thank you everyone for your participation. Thanks April.

April Kitchenham:

Thank you and thank you everyone.

Matt Crichton:

And thanks also to our colleagues, Zane, Chris and Maggie for answering all your questions throughout. We really appreciate your attendance and filling in the survey and if you have any suggestions, feel free to email us at education@acnc.gov.au. We love to hear feedback, even if it is negative, not too negative though, but send it through and we’ll be happy to read through it. Thanks again, we look forward to more webinars in the New Year.