Transcript

Matt:

Hello everyone, welcome to today’s webinar on Parents and Citizens Associations and the ACNC. My name is Matt and presenting with me today is Ella. Hello Ella.

Ella:

Hi Matt.

Matt:

We will take you through registration for Parents and Citizens Associations, or Parents and Friends as they’re sometimes called, with the ACNC, what that means and what you need to know in being registered.

Just before we do get into the content today, and we do have a lot to get through so we’ll try and get through it at a fairly quick pace, but just a couple of things to note. First, if you do have any troubles with the audio for the webinar you can try using your phone. I think once you sign up there’s an email which gives you instructions to use that audio through your phone. You can call the number and put in an access code and access the webinar that way.

Also, there is on the right hand side of your screen on the GoToWebinar navigation panel, there is a section there for questions. If you have any questions as we go through the webinar, feel free to just pop them in there, send it through and we have a couple of colleagues answering your questions as we go. That’s April and Chris. So if you do have any questions feel free to use that questions box on the right hand side of your screen in the GoToWebinar navigation panel and we’ll get to them as we go. We will answer each question directly to the person who asks the question, but if we feel like the answer may be useful for a broader audience, we may answer more widely. Of course, this wouldn’t show the person who asked the question or the question that they asked but we do have an option to show our answer more broadly. But that would only be in the case where we feel like the answer is fairly valuable for everyone; otherwise we’ll answer our questions just directly and privately.

We will have a Q&A session at the end of the formal presentation, so if you want to just sit back and listen and observe it for a while and then hold your questions until the end, that’s fine too. We’ll have some time at the end to ask some questions. And if we don’t get to your question today, never fear, we will send a follow-up email with all the relevant links and information in the coming days, and there will be a copy of this webinar published on our website and also on our YouTube channel. OK. With all the admin out of the way, let’s get started; let’s get into the content proper.

OK. There is a fair bit to get through today. First, we’ll cover why P&Cs are registered with the ACNC, a common question we hear here. How to check if a P&C is registered. The overview of the obligations to the ACNC, which I think will be a fairly popular section for most people here; this is one that we often get questions about. And, finally, what to do if a P&C, or if your P&C, has lost its charity registration. As I said, we do have a fair bit to get through so we’ll move at a fairly quick pace and if you do have any questions feel free to pop them into that question section and ask April and Chris who are standing by.

OK. At the beginning, let’s start at the very start. Ella, would you be able to give us a run through, give everyone in the audience a run through of what the ACNC is?

Ella:

So the ACNC stands for the Australian Charities and Not-for-Profits Commission and we are a government organisation and we are the independent regulator of charities. So we register organisations as charities, decide if they can be charities or not. We maintain a free online Charity Register which anyone, particularly the public, can use to look up charities. We monitor charities’ compliance and if there is non-compliance we can investigate them and manage that. We also provide lots of guidance, education like this webinar, and advice. And we’re also working really hard to reduce red tape for charities. So we know that a lot of charities have to submit reports to different government organisations and we are trying to reduce that duplicated reporting.

Matt :

So in amongst all that it probably hasn’t answered the question of why a P&C would be registered with the ACNC. Well one of the reasons is that most P&Cs were probably registered with the ATO many years ago for the purposes of charity tax concessions. The ACNC was established only a few years ago in 2012 and the ACNC received many of the details from the ATO, of the organisations that were registered with the ATO for charity tax concessions.

Ella:

So these charities that came over to us were then registered as charities and we now look after them. So some of the tax concessions that you probably had were income tax exemption and maybe some GST and fringe benefit tax concessions. You can actually look these tax concessions up on the Australian Business Register, or you can google ABN Lookup, put in your ABN or your name and find the tax concessions that you might have. We don’t list these tax concessions on our Register, so it’s just important to remember that.

Matt:

Yeah, so if you did want to find a tax concession specifically, it’s best to go to the Australian Business Register website. So that’s why a P&C would currently be registered with the ACNC. The short answer is that it was just transferred automatically from the ATO upon the establishment of the ACNC and that was because many P&Cs were registered with the ATO for tax concessions. But I hear you say a P&C is not a charity. We have mentioned the word charity a lot and I guess many of you would be still scratching your head. Why is a P&C considered a charity? Ella, can you give us a brief overview of this?

Ella:

So the legal definition of charity is probably wider than you might have thought about it previously. Generally, we think of organisations that might help the homeless or the sick and things like that. But the legal definition, as we administer it, is that an organisation is not-for-profit, has a charitable purpose that is for the public benefit. So if we think of P&Cs, they’re not-for-profit, so that means that any money they make goes back into furthering their purpose. They have a charitable purpose, which is usually advancing education. And lastly, it is for the public benefit because they work to benefit their general school and school community.

Matt:

And this is often the case with a lot of organisations that many people don’t think of ordinarily as being charities, if you went on the Charity Register on the ACNC website you would notice that there are organisations such as universities, surf lifesaving clubs, even hospitals are registered as charities too. So as Ella described, that broader legal definition is the reason why P&Cs fall into this category as well. Even though most of us wouldn’t necessarily think of a P&C as a charity, similar to a university or a surf lifesaving club and that sort of thing, it does fall within the legal definition. And that’s why many of the P&Cs that you’re involved with are registered.

OK. If you want to check to see if a P&C is registered the best way is to use the ACNC website and the Charity Register that’s available there. Ella, do you want to give us a quick overview of how someone may find a P&C registered and what part of the website they can use to do this?

Ella:

So you can go to our website, acnc.gov.au and click on that central green tab that says ‘Find a charity’. Now we recommend using the ABN to search but make sure you don’t have any spaces, that’s really the clearest way to search. You can use the name but our Register’s quite sensitive and it will only bring up a match if you put in the name exactly as we have it. So we strongly recommend you search using the ABN. You can also see next to that blue ‘Quick search’ tab, there’s one that says ‘Advanced search’. You could use this one to use more criteria, so maybe you want to search to see if there’s an organisation in your area or with a particular purpose such as advancing education or advancing health, so that’s where you can put in a little bit more information. But to look up your P&C you probably just need the quick search.

Matt:

And if you do a quick search, the sample that I’ve got here is just searched with the term P&C and as you can see it brings up quite a number of results. But this is what it would look like if you searched a charity on the Charity Register. There are a few details, most of them self-explanatory, you can see the ABN, the name of the charity, the location. The one on the right that we’ve got highlighted, Ella, do you want to just explain what this column means?

Ella:

So if it says ‘registered’ in that status column it means that the P&C is currently registered as a charity with us. If it says ‘voluntarily revoked’ it means that the organisation was formerly registered with us but they’ve asked to have their charity status revoked. If it just said ‘revoked’ it means that we’ve actually revoked the status of the charity and we’ll talk about that a little bit more later.

Matt:

And this just gives you a sort of surface level look. Once you click into one of these, once you click on the link of the names there, you’ll see the charity, or the P&C in this case, entry on the Charity Register which shows a few more details. The Charity Register shows some important details about the organisation. So a P&C’s page on the Charity Register would include its registration details, its contact details and even the list of responsible persons. It contains also links to a P&C’s annual reporting as well. So if a person wanted to find more information about a charity, or in this case a P&C in particular, they would find the page on the Charity Register and work through the details there. Ella, can you give us a quick overview of what we mean by responsible persons? Because this is a pretty important part of the Register.

Ella:

The responsible persons are all the people who are on a charity’s Board or committee of management and they all need to be listed on our Register. We just list their name and their title. So no personal details such as contact details, but we do have them all listed on that Register.

Matt:

We’ll go into responsible persons in a little bit more detail later on because I understand that there are a few different words for a management committee or a Board, or whatever it may be depending on the area that the P&C is located and the different rules around registration or any legislation that governs a P&C. So we’ll get into that a little bit later. Just one more point that we want to touch on with this slide is the middle one there, contact details. There a few different features of the contact details that we hold on the ACNC Charity Register. Again, pretty important for people in P&C’s to understand. So, Ella, I’ll throw to you again to explain specifically, what details are held on the Charity Register.

Ella:

So we’ll usually have the charity street address and if you’re a P&C that will probably the school that your P&C is for. We’d have a phone number and email address. But the most important one for both the charity and for us is what we call the Address For Service and that is either the key email or postal address where we send correspondence to the charity.

Matt:

Yeah, and it’s important to keep that one up-to-date. But similar to responsible persons, we will go into that in a little bit more detail later on. OK, this is probably the section that a lot of you really want to know more about, what does a registered P&C need to do? So you know that you’re registered with the ACNC, you know why, even though we all understand that a P&C is probably not ordinarily thought of as a charity as such. However, its registration with the ACNC brings about some obligations. We’ll go through one by one. The first one we’ve got listed there is submit the Annual Information Statement, and we often call that the AIS. Ella, can you briefly describe what this involves?

Ella:

So the AIS is an online form that every registered charity needs to submit to the ACNC every year. And it contains some information about what the organisation does and some financial information. P&Cs also need to notify us of any changes to their details. So it might be changes to their responsible persons, if they elect a new committee, or changes to their address and contact details. And they must keep these details up-to-date, that is an obligation. They also need to comply with the ACNC’s governance standards. Now these are just five minimum standards that probably if you’re running a P&C well you’re already going above and beyond to comply with, but it is important to be aware of them. And lastly you need to keep records, so these include both financial and operational records.

Matt:

Great. We will go into some of those in a little bit more detail later on as well but that outline’s pretty much what a P&C needs to know and do to remain registered with the ACNC. To do these things, to make changes to your details or to complete an Annual Information Statement and that sort of thing, we do offer an online Charity Portal which contains all the areas in which you can meet all your obligations. This is accessed from the ACNC’s homepage at the purple tab next to the blue tabs with the word ‘Portal’ written there. To log in to the Portal a P&C, all charities actually, the P&C will need to have its log in details which consists of a username and a password. Ella, would charities or P&Cs, would P&Cs have these details?

Ella:

The username is easy because that is the ABN and that never changes, so the username is the ABN with no spaces. Now if you don’t have a password on file or you’ve forgotten it, you can reset these details but it’s really important to keep the password somewhere where anyone who needs to do these sorts of updates for the P&C can access them.

Matt:

That’s a really important point. It’s probably worth reiterating because we’ve found that the natural turnover with management committee with P&Cs, which is often yearly, really means that details such as a log in for the ACNC’s Charity Portal gets lost in amongst the changeover. And then in some cases almost every year the new committee must call up the ACNC and figure out how they’re going to log into the Portal and be able to manage their details. So it’s one thing to note for your records and maybe your administration processes to make sure that the committee has always got access to the P&Cs ABN as the username and its password.

This is what the log in page for the Charity Portal looks like. It’s got a bit of information there and some Terms of Use and you have to accept the Terms of Use before you’re able to enter those log in details, the username and the password. And as Ella mentioned, because you can change the password or reset the password if you like, there is a spot down there below the log in section to reset your password.

We also have a video online to give a brief demonstration of logging in to the Charity Portal. So if you’re still a little bit nervous about what this involves or how to do it, you can have a look at the video which takes you through all the steps. We will include a link to that video in the email that goes out following this webinar too. OK. Once we’re logged in, this is what the Charity Portal looks like. And this is where you manage all your charity’s details. First, we have this section here. Ella, do you want to just give everyone an overview of what the alerts box means?

Ella:

So the alerts box will tell you if you have anything outstanding. So for example, if one of your Annual Information Statements is overdue, it’ll say ‘alert, the AIS is overdue’. Or it might say that you might need to provide us with a governing document, or something else. You can see that on this picture we’ve got, it just says responsible persons, there are records for three responsible persons. Now for charities up-to-date with everything, this is what it will see. So that alert doesn’t go away, it just tells you how many responsible persons you do have listed with us.

Matt:

So if yours looks like this one, you’re probably up-to-date with everything, it isn’t showing you any alerts for the stuff that you haven’t done yet. All it is showing you is the number of people you’ve got listed as responsible persons. Which remains in the alerts because it may be that three responsible persons isn’t actually the number of your organisation’s responsible persons and it’s an alert to show you that you need to update them with the rest of them. But in some cases, three is exactly what’s needed.

OK on the left hand side, this is, those green links there, ‘Submit Annual Information Statement’, ‘Charity change details’, and ‘Change responsible persons’, that’s the spot where you’re likely to manage most of your regular obligations to the ACNC. ‘Submit the Annual Information Statement’ is exactly as it suggests, that’s the button that takes you to the online annual form where you fill in and complete your statement there. The second one, ‘Change charity details’, is the link that allows you to change things such as your address, your contact details, maybe a phone number, your email address, that sort of thing. And the third one, ‘Change responsible persons’, again as it suggests, this is the place where you would make changes to the list of responsible persons. So this would be actually a fairly common thing that P&Cs would go to given that many change their responsible persons, sometimes almost entirely, every year. How about the blue links underneath that, Ella?

Ella:

So first we’ve got ‘View charity entry on ACNC Register’ and that link will take you to that public Register we mentioned and show the sort of basic details about the charity or the P&C. The next one, ‘Ask ACNC for advice’, that’ll give you the contact details for our Advice team. I’m from that team so you might even get me at the end of the phone. We’ve got ‘Apply to withhold information’ where charities can apply to withhold certain information from the public Register. You can ‘Print a copy of your charity certificate’ in case you need to show it at maybe a fundraiser, or something like that. You can also change the password, so you use this one if you’ve logged in with maybe a password we’ve given you and then you want to change it to something that you’re more likely to remember. And lastly, we’ve got ‘Request a different reporting period’ and we will go into that with more detail because it’s quite relevant to P&Cs.

Matt:

Just before we do move on, Ella’s point about changing the password, that’s probably a good one for P&Cs again given that the nature of a P&Cs committee is that it changes so often, changing the password is maybe a place where people are likely to go. So make sure a new committee knows about this page, knows where they can change a password for the incoming committee.

Alright, we’ve mentioned briefly the Annual Information Statement. As the name suggests, it’s something you do once a year and it’s a requirement for all registered charities. We’ll often refer to it as the AIS. You may see some guidance on our website as the AIS and the URL’s down there in the bottom of this slide have the forward slash AIS there as well. So we often refer to it as the AIS and it is something that registered charities, which includes P&Cs that are registered, need to complete. It’s an online form, so it’s not something that we send out, it’s not a paper form that you need to request from us. It’s an online form contained entirely within the ACNC website.

Ella, do you want to just take us through some of the details of the AIS? Because I think a lot of people involved in P&Cs are a little bit wary about the details that it asks for and whether or not they even know some of the answers to the questions. Can you just give us an overview of what an AIS consists of?

Ella:

So we ask you questions about your activities. So these might be things like school events, fetes and fundraising events. And if you run a canteen or out of school hours care it would involve those things as well but it could also include planning. It’s very unlikely that any organisation that operates would have no activities. So you really just need to think about anything that the P&C does. We ask questions about the beneficiaries. That’s who the organisation was set up to help or work for. And in your situation, it’s probably going to be the children at the school. We ask some financial questions, so things like revenue, possible donations, expenses, assets, and so on. We also ask if the P&C has all of its details up-to-date with the ACNC. And lastly, if a P&C is medium or large, so that is if it has over $250,000 in annual revenue, it will need to provide us with a financial statement, and that’s in addition to the Annual Information Statement.

Matt:

OK. There’s probably a lot to take in, particularly if you haven’t done this before or you’re new to a P&C and that sort of thing. So you would say, Ella, that most people on a P&C would know the answers to most of the questions in the AIS, it’d just be the financial section that you would say that people may need to get some clarification or ask some help with?

Ella:

That’s right. When you sit down to do this AIS, you’ll definitely need to have your financial statements with you. But most of the other questions, anyone who’s involved in the P&C or on the Board should be able to answer them.

Matt:

And that last point there, it may sound confusing to a few people. So you mentioned that it’s in addition, and the slide suggests that it’s in addition to completing the AIS. That means that if the P&C has revenue that puts them into the medium or large category, they also have to attach a financial report, not just answer the question about finances in the AIS.

Ella:

The financial section will actually ask for a report to be attached, so it just means attaching the document when you submit the AIS.

Matt:

Right, OK. But that’s not for all, right?

Ella:

No, not for P&Cs that have revenue of less than $250,000, they’re considered small.

Matt:

I would hazard a guess that many P&C’s probably fit into the small category, but of course you never know and there may be some that fit medium or large. But as Ella mentioned, small charities do not need to submit a financial report in addition to answering the financial questions within the AIS. Of course they can, but it’s not a requirement. Actually some organisations that are small do so even though they’re not required to just because it’s a demonstration of a commitment to transparency and it’s good governance and good practice. So, if you want to, if you’re there and you’re completing the financial questions within the AIS and you want to attach a financial report because you’ve got it handy, you may as well. It’s something that many organisations still do. Ella, how about for medium and large charities?

Ella:

So a medium charity that fits into that category of having revenue between $250,000 but less than $1 million needs to submit a reviewed or audited financial report. And if you want to find out about the requirements for those, you can check on our website. Large charities need to submit an audited financial report. So that’s organisations with revenue of over $1 million.

Matt:

OK. Again, so they’re the thresholds, it’s at $250,000 you tick over into medium. And then medium holds until you hit $1 million annual revenue, and if you’re seeing more than $1 million annual revenue you’d be considered a large charity. That last point there I think is important to mention, Ella, can you just take us over that?

Ella:

So we know that some P&Cs, even if they’re small by ACNC standards, actually do need to submit a financial statement either to maybe a government organisation or maybe a peak body. If that’s the case, you still need to do that, we’re just saying you don’t need to give it to the ACNC, but as Matt mentioned, you can if you want to.

Matt:

Excellent. OK. The due date for an AIS is variable and it depends on some of the features of the organisation. Not all organisations will have exactly the same due date, although the due date does run consistently with that principal up the top there. So the AIS must be submitted within six months of the end of the charity’s reporting period. The diagram shows you there, so if your reporting period starts you could substitute, instead of that zero, substitute any date. You’ve got a years’ worth of reporting, you’ve got six months following the end of it to submit your AIS. Doesn’t mean you have to wait until six months, or the last day to submit it, as it says there. You’ve got any time within that period to submit your AIS. And in fact we actually recommend getting on to it as early as possible rather than waiting until the last minute. For many P&Cs I’d imagine there’d be a similar reporting period. Is that right, Ella?

Ella:

Yeah, so we’ve noticed that most P&Cs operate on a calendar year and that’s generally to match the school year, so that’s from the first of January to the 31st of December. That means that their AIS. would be due by the 30th of June. However, we have noticed that quite a few seem to have the wrong reporting period listed with us. Now that could be because the data we got from the Tax Office was wrong, but we also set the default to a standard financial year, which is June to July, and if a P&C has never updated that then we don’t necessarily know what their reporting period should be. But you can change it.

Matt:

Yeah, that’s a really important point. We’ve found a lot of organisations are lumped in as organisations that have a financial year reporting period but actually they report on a calendar, year so their due dates are wrong and they’re sort of reporting on the wrong timeframes and that sort of thing. So it’s important to know what your reporting period is and then follow the due dates accordingly. If it is wrong, what can a charity, or in this case of course a P&C, I often to refer to charity but I mean P&C in this particular case, what can a P&C do to rectify that?

Ella:

So as we said before, when you log in to the Charity Portal, down at the bottom of the left there’s that tab, ‘Request a different reporting period’, if you go in there you can tell us what your reporting period should be and why, for example to match the school year. And then our reporting team will approve that one, contact you and let you know that it’s been updated and that will then of course update the due date which will be within six months within the end of that correct financial year.

Matt:

That’s the important thing to remember. Your AIS is due within six months of the end of your P&C’s reporting period. And for most P&Cs, this is likely to be due within six months of December, which is most commonly the end of the reporting period for a P&C which would be June. If you wanted some more information or help figuring this aspect out, we’ve got some particular guidance on our website. You can see the URL listed there, acnc.gov.au/reportingduedates. Put that in, there’s a really useful helpful guidance there that explains it in more detail. Also don’t go rushing for a piece of paper and pen now to write down all these URL’s, we will send out an email following this webinar, within a day or two which has a list of the links and the information that we refer to.

OK, before Ella did mention there’s an obligation for P&Cs as registered charities to notify the ACNC of particular changes. And this is a really important thing. Again I feel like I’ve said this a lot of times but it’s true. The nature of a P&C given that many of the people involved change almost yearly, it’s really important that a P&C’s processes includes notifying the ACNC of changes. So earlier in the webinar we mentioned that there were certain changes. Ella, can you take us through the changes that a P&C must notify the ACNC of?

Ella:

So if the P&C changes its name then you do need to tell us. One of the really important ones is the second point about the Address For Service. Now the Address For Service is the address (most usually an email address), to which the ACNC will send the P&C all correspondence and particular reminders. We’ve also said before that a P&C needs to keep its responsible persons up-to-date, so that’s the committee or Board members. And finally its governing document, now that is a word that we use at the ACNC, so you might know it as your constitution or your rules, or Rules of Association, or something like that.

Matt:

And it’s important that the committee or the Board or the responsible persons as they’re referred to by the ACNC, know about the obligation to notify of these changes and then also know how to do it, and that’s back to the Charity Portal that we showed you earlier, knowing where to click and what to do. It’s really important to focus on this part because we’ve found that this is one of the problems that many P&Cs have gotten into is an out of date Address For Service which has led to other problems down the line, ultimately even to P&C’s losing their registration as a charity. So we really want to reiterate the importance of the Address For Service. First, Ella, can you explain what are we talking about when we say the Address For Service, or the AFS?

Ella:

So this is the address that the ACNC will always use to contact the organisation. And as I said, it’s usually that we send reminders but it could be any other information we need to get to you. It’s generally an email address and we definitely prefer that. It’s obviously much quicker than the post and we can also see if the email bounces back or maybe doesn’t work.

Matt:

Just on that Ella, sorry to interrupt, but you mention email address, is it important to have a particular person’s email address, for example the President of the P&C or that sort of thing, or should it be anyone in particular?

Ella:

It doesn’t have to be. In fact we actually recommend that it’s more of a generic email address. So just like the example we have there, examplepandc@gmail.com and that’s because the President, or a particular individual, will probably leave and then you won’t have access to their emails and can miss out on some really important information. So the best thing to do is to set up a generic email address and a Gmail one is free, and that way everyone can access it but of course you need to make sure that everyone does have the log on details to that generic P&C email address.

Matt:

And I guess the importance of even knowing about this. If a member of the responsible persons doesn’t even know that there’s an email address listed with ACNC as the Address For Service then they’re not going to need to ask about it or not even going to check it. So it’s important that the committee that’s in charge, the responsible persons that’s in charge of your P&C knows about an Address For Service and the importance of keeping it up-to-date. And you make changes to this, again, in the Charity Portal at that green link there, ‘Change charity details’. Now the other thing that requires I think a little bit of clarification or explanation is that that’s the responsible persons and, Ella, the responsible persons we’ve got here are the committee or Board members but this may be referred to with different phrases or different terms in different areas, that’s right isn’t it?

Ella:

Yeah, it really depends on the way your organisation is set up, maybe which states you’re operating in. So I suppose a definition of responsible person would be the people who probably sit on the Board and meet regularly and who make decisions about the direction of the charity, and they’re probably going to be voting on decisions. So you might use words like office bearers, or committee or Board members, but you might use words like Treasurer, President, Secretary, and so on.

Matt:

It’s one of these tricky things for certain organisations because there’s maybe not a clear distinction between, say, an executive office bearer and the members, and there are a few terms that get people a little bit confused. Generally, as Ella pointed out, it is the group of people that collectively are responsible for the decisions made by the P&C and responsible for the direction of the P&C. If you really are confused about who fits into this category and who doesn’t based on your particular organisation’s set up, then it’s probably best to give us a call. You can call our Advice team on 13 22 62 and they’ll be able to talk you through the specifics of your organisation and who is most likely to be considered a responsible person. And these are listed on the Charity Register, aren’t they?

Ella:

They are and the important thing to remember is that they all need to be listed. So if your organisation has five responsible persons, then all five need to be listed there, not just the one contact person.

Matt:

And although the form asks you to provide some details about the responsible person when you list them for the organisation, we don’t publish any personal details. The only details that are published on the Charity Register are the name of the person and the position that they hold within the organisation.

So a bit of an overview there. If you’re going to take away a really shorthand, not to try and figure out what you have to remember, this picture might help out. The Annual Information Statement there in the middle, that annual online form that all charities must submit, the contact details including that important Address For Service needs to be up-to-date, and the responsible persons. And I think this is particularly apt for P&C given the regular change in a committee. So these three things you really have to keep at the forefront of your mind.

Earlier on, Ella, you did mention something that sounds pretty scary and sounds like something that’s going to involve a lot of work. It’s the ACNC’s governance standards. Can you give us a brief overview of what this means, what are governance standards and what do P&Cs have to do?

Ella:

So our governance standards are set of five minimum standards that all charities need to meet. But as I said, if you’re running your P&C well, you’re working in the best interest of it, you’re probably meeting them. But I will go through them in a little bit more detail. So number one, purposes are not-for-profit nature, you’ve got to maintain the P&C as being a not-for-profit. So that means any money you’re making is going back in to furthering its purpose, which in your situation is probably furthering education in a school. If you have members, you do need to be accountable to them, so you need to give them ample opportunity to ask questions, maybe to raise concerns, to see the finances of the organisation.

Matt:

And that one… are there any prescriptive rules about that? So accountability is important and so the basic description is providing a chance for people to raise concern. Does it have to be in a particular meeting or at a particular time?

Ella:

It doesn’t actually have to be. Your particular constitution might set out these things and then you do need to comply with it. But otherwise you just need to be making sure that it’s reasonable and you are giving people the opportunity.

Matt:

How about the third one?

Ella:

So then we’ve got compliance with Australian laws. That means that charities must not commit a serious offence, so that could be something like fraud, under any Australian law or breach a law that may result in a penalty of 60 penalty units. Now that sounds pretty serious but I’m sure the majority of P&Cs are absolutely doing the right thing and making sure that they are not breaching any laws.

Matt:

And that one might’ve sounded a little bit difficult to follow too, but if you wanted some more detail on that standard in particular, again it’s likely that most of you, if not all of you, are complying with Australian laws. If you wanted to find out some more details about that, have a look at the detailed guidance on the website at acnc.gov.au/governancestandards. That URL is listed there at the bottom of the slide. How about the fourth one, Ella?

Ella:

So that’s about the suitability of the responsible persons. We don’t actually require that people, you know, that they’re a lawyer or a teacher or something like that, it’s really just saying that a responsible person cannot be disqualified from managing a corporation under the Corporations Act. Now that sounds really serious but there’s an easy way to check. You can go onto a website called ASIC Connect, you can just Google that, and you can actually search the name of a person and if they have been disqualified their name will come up. And if it doesn’t come up, they’re OK. Now the ACNC does also have the ability to disqualify people. We haven’t done this yet, so you can rest assured there’s no-one on that list yet, but there could be in the future.

Matt:

And if a charity does find someone disqualified, what should they do?

Ella:

You’ve actually got to make sure that you take reasonable steps to remove that person who has been disqualified.

Matt:

OK, so make sure that you’ve taken the reasonable steps to do it, OK. The fifth one there, duties of responsible persons. So we’ve been speaking about the importance of responsible persons and knowing what they have to do for the P&C’s registration with the ACNC. What is the standard required for a P&C?

Ella:

This just means that the responsible persons need to make sure that they really are acting in the best interests of the organisation and that they know what’s going on, they know what the financial situation is, they know what the organisation is doing and they’ve got a real duty of care to make sure that they’re really working in the best interests of the organisation, and looking after their beneficiaries.

Matt:

And again, this may be of interest to some of you to find more information about this requirement to meet governance standards, but it’s probably worth having a look through the detailed guidance on the website there at acnc.gov.au/governancestandards. It sets out each one really clearly and provides some details under each of those five standards. And also we do have a recording of a webinar that was tailored specifically at meeting the governance standards on our website too, so if you go to acnc.gov.au/webinars and you look through the 2016 list of webinars, you’ll see a recording of the webinar that we did looking at this issue specifically.

The other thing you mentioned earlier, Ella, was keeping records. So that’s another obligation that charities and P&C’s as charities have to the ACNC.

Ella:

That’s right. We said that you need to keep financial and operational records, but how detailed these are will probably depend on how big your organisation is and how complex its activities are. So if you’re a big one and you’ve got a canteen and a uniform shop then your records will probably be far more detailed than a little P&C that has maybe $2,000 in revenue every year. So records could be financial statements, but they could also be things like minutes from your meetings or minutes from a decision to spend money on a certain project, or something like that.

Matt:

And the second point there is really important. It doesn’t require you to do anything because we would assume that a well-run organisation and a well-run P&C will be keeping financial records and operational records anyway. So the ACNC doesn’t require a P&C to do anything extra to meet the obligation to keep records, it doesn’t require the P&C to show the ACNC that it’s doing this. But if asked, the P&C should be able to produce these financial records and operational records. For more on this specifically, I’d suggest going to the guidance on our website, acnc.gov.au/recordkeeping. There’s lots of good information about the types of records, how they can be kept, for how long they need to be kept, and what constitutes a financial record and an operational record there.

OK, some P&Cs may be in the unfortunate circumstance of having seen this on their Charity Register entry. What does this mean, Ella?

Ella:

So the most likely reason this has happened is that a P&C has not submitted their AIS for two years. So generally it’s two years in a row but it could be two non-consecutive years. And you can see in this example this particular one didn’t submit the 2014 or the 2015 AIS. If that’s the case and you want to re-register with the ACNC, you can contact us and we can definitely advise you over the phone. But I can just briefly go through what would be required. So you’ll need to submit every outstanding AIS that you’ve missed, at the moment because we’ve been around for four years that could be up to four, but it could be less if you’ve submitted some. You would also need to make sure that everything else is up-to-date. So make sure that those responsible persons are up-to-date as of right now, as in who’s on your Board right now. Make sure that the contact details are up-to-date. Make sure that we have a copy of your constitution on file. Once you’ve done all that, we will need you to send us a form to apply to re-register the charity, and we can send that to you if you get in touch with us and tell us that you do want to re-register. So it is a little bit of work, definitely best to avoid this if you possibly can, but it’s definitely possible to re-register a P&C.

Matt:

OK, so that’s good news. If you do find on this your Charity Register and you don’t want it to be there because you want to be registered, then there is a way to get back on the Charity Register and have the green tick of registration rather than that big ugly red cross.

That brings us to this point which is a common question we hear from people involved with P&Cs. Do they even have to be registered? How about the requirement to register, Ella, is that something that P&Cs must follow?

Ella:

The short answer is no, it’s completely voluntary and you do not need to be registered with us. That being said, if you want those charity tax concessions, for example not having to pay any income tax on the money that you raise or earn, then yes, you do need to be registered with the ACNC. If you’re currently deregistered or maybe you’re thinking it’s too much hassle, I don’t want to be registered, definitely talk to us, but you might also want to talk to the Tax Office and see if you deregistered with the ACNC would you have to possibly pay income tax and submit a tax return. So definitely important to be clear on that before you decide to deregister. But if you’re currently registered and you want to deregister, that is also possible, you’ll just need to think about those tax implications.

Matt:

OK, so you don’t have to be registered but the knock-on effect of deregistering would be that you may find yourself with some tax obligations, tax liabilities, that’s right, isn’t it? That’s the short answer.

Ella:

Yeah, that’s exactly right. So we’ve got the ATO non-profit line down the bottom, the number. And they can tell you, if you explain your situation to them, they can tell you if you would be liable for tax or not.

Matt:

OK. And this then becomes a discussion for the P&C responsible persons. We are not here to tell you that you must be registered as a charity. It’s up to an organisation to decide the best course for themselves. And in some cases this may be, for whatever reason, all organisations are different, but this may be that deregistering is the best decision for a P&C. We would urge you to be aware of all the implications that deregistering has and that’s where a discussion with the Tax Office or going through their guidance would be a really good idea first. If you have a look at our website, acnc.gov.au/taxconcessions, that provides an overview of the common tax concessions that charities have, and the requirements that you register with the ACNC in order to get the tax concessions, an explanation of that. But the ATO has some more detailed guidance about, I guess, the technical tax side of things and you can get some good information at that URL at the bottom there, or give them a call on 1300 130 248.

Again, no need to rush off and try and scribble down these URL’s and internet addresses, we can just put these in the email that goes out to you following the broadcast of our webinar.

Alright, that’s the formal presentation done. We tried to get through that at a pretty quick pace and I know there’s a lot to take in so I’d imagine there will be a few questions for people out there. If you have any questions, I know we have been answering them as we go, but if you’ve got any questions, send them through now and we will try and get to them. If we can’t get to your question, we can get in contact with you later via email, or maybe… if it’s too specific about your particular circumstances, it may be worth just giving us a call on 13 22 62 and we’ll be able to talk you through whatever questions you have about your organisation.

But first, Ella, we do have a question that is actually on the last slide that we just had about the obligation to be registered. Someone wants to know whether or not it will affect their income tax if they deregister. Is that one of the tax concessions that an organisation will lose or no longer have access to if they deregister with the ACNC?

Ella:

Yeah that’s right. So being registered with the ACNC means a charity does not have to pay any income tax, so income tax would be paid on maybe money that you raise at a fundraiser, or money that the canteen might make. And if you deregister, you do lose that concession. As we were saying before, you can talk to the Tax Office because sometimes some not-for-profits do get some leeway there or some tax concessions, but it’s definitely something you need to sort of really consider because you won’t have those charity tax concessions anymore.

Matt:

Yeah, the charity tax concessions are tied to registration with the ACNC. So registration with the ACNC as a charity sort of gives a P&C access to charity tax concessions that they’re probably unlikely to have otherwise. But whether or not this has a disastrous effect on your charity or not will depend on the organisation. Some may be able to deregister, lose their charity tax concessions and not feel any effects of it because of the nature of their organisation and their size and their revenue and that sort of thing. Others it may be really important to keep these charity tax concessions. It all depends on the organisation’s particular details.

One more, Ella. Back to the Annual Information Statement. So it’s due within six months and there’s a lot of questions that people have to answer. Someone’s asked about activities. They said that their organisation, really small and it’s a small school and they just don’t really do anything, there’s no fete, there’s no school fundraisers that they’ve done in the past year or so. What does that mean for their activities? Because you did say it’s unlikely that a P&C’s not going to have any activities. What did you mean by that?

Ella:

Well I would ask the question, if I was the person filling this out, I would say to myself, what did we actually do over this year? And I know that sounds really basic and simple but if you can write a list of all the things you did, even if it is just having a meeting maybe with the Board or something, that is still an activity. So just have a think, is there anything that you might’ve done to do with the P&C and the school and that would be some of your activities.

Matt:

So it is as simple as having meetings and discussing things and planning and that sort of thing, isn’t it? It doesn’t have to be fundraisers and school fetes or fairs or anything like that.

Ella:

It could’ve been that you sent an email out to the parents or something like that. It could be something really simple.

Matt:

So that question in the AIS is more geared towards the actual things that the people in the P&C did on behalf of the P&C, not necessarily the special charity like things that you may have done?

OK. Another questions that’s come through and this is pretty common. Actually there’s probably a short answer but we’ll go through because a few people have asked it, is does the ACNC have any jurisdiction over the tax concessions that charities are given? I think there’s a little bit of confusion there between the ATO and the ACNC. What would you tell people about that?

Ella:

Look it is confusing because charity registration is closely linked to tax concessions but we don’t make the decision on tax concessions. So if we say yes you’re a charity, you meet our criteria of being a charity, then the Tax Office will grant you tax concessions that go with being a charity. So I think that’s why people get confused. But as I said, we don’t actually make the decisions around tax concessions, which means you do need to go to the Tax Office for any specific queries about the actual tax concessions themselves.

Matt:

And that leads us onto another question. We’ve had a few organisations, or people representing P&Cs ask about DGR status, that’s deductible gift recipient status. That one is a particular type of tax concession. Can you give us a brief overview of what that means, Ella?

Ella:

So DGR stands for deductible gift recipient. It’s a special status that not all charities get. So it’s only about 40% of our registered charities get the status. And it means that if someone donates to that charity, then it’s tax deductible for them. Now P&Cs in general don’t get this status.

Matt:

So there’s no particular category that a P&C automatically falls into to be able to get this status, which again we will reiterate is conferred upon an organisation by the Tax Office, not the ACNC.

Ella:

That’s exactly right. So, yes, they might be registered as a charity but they don’t qualify, usually, for this DGR status. However, sometimes they have a fund which does qualify. Some of you might have a school building fund. Now that means that donations that go into the account connected to that fund, they are tax deductible for the donor. Now it’s important to keep in mind that the school building fund can only be used for the acquisition, construction and maintenance of a building at the school. So that money can’t be used for anything else.

Matt:

But again it’s worth clarifying some of these details with the ATO if you have some questions about the way in which your organisation has come across this particular tax concession or if there’s a chance to apply for it, or something like that, because the ACNC does not confer any tax concessions upon the organisation, it’s the registration with the ACNC as a charity that means that an organisation is likely to have access to charity tax concessions as offered by the ATO. And it is administered by the A.T.O.

OK, there’s a few more questions coming through. We’ve got quite a few today which is actually good news because it means that a lot of people have a lot of questions about running a P&C and registration with the ACNC. OK, how about the question about… let’s get to one that we’re getting a few common questions about. OK, if the responsible persons of a Board are not following their constitution. What recourse does a P&C have if the responsible persons are not following the constitution? It sounds like a pretty serious thing and, of course, as we mentioned in the presentation that there’s a responsibility for organisations to follow their constitution, follow their rules and act in the best interest of the charity. This can be reported to the ACNC to look into because it is a requirement that charities follow what’s laid out in their rules and if an organisation isn’t doing that, the ACNC can look into the situation and see if there are any actions that may be taken. There’s a form on the ACNC’s website at acnc.gov.au/forms that a P&C, or the responsible persons of a P&C can fill in to sort of self-identify that this is happening and be proactive about attacking such a governance issue and get the ACNC to have a look at the facts of the matter and whether or not there is any further action that the ACNC can take.

Our compliance approach is that we take a graduated approach. So in the first instance we’d look at the facts and provide the organisation with some education and guidance and point them in the right direction and suggest the ways in which they should be following their constitution. And following that, if there are any further breaches of the ACNC Act, of course the ACNC has more powers it can reach. But in the first instance it’s likely that we would look at the facts of the case and provide some education and guidance for the organisation. So it is self-assessing and notifying the ACNC of any instances of poor governance, such as this.

Ella, another question about deregistration. If an organisation deregistered and wants to register again, say, a couple of years later, is there a particular timeframe within which they must do this?

Ella:

There’s actually not. An organisation can apply to re-register at any time. What would make the difference is if they want to have their tax concessions backdated to when we deregistered them, then they would need to do all of those outstanding Annual Information Statements. If, however, it had been a couple of years but they didn’t want those tax concessions backdated, then it’s probably less work. But, no, it’s like we say, ‘no, you’re not allowed to register anymore’.

Matt:

You’re not blacklisted, there’s not a black mark and you’re not banned from the club forever. You can do what you’re required to do and get back on track. Someone’s a little bit confused about… well not confused, they’re just questioning what’s so important about the Address For Service. What do we usually send to that address?

Ella:

So the most important thing we send are reminders that the Annual Information Statement will soon be due and that if it’s not submitted by the due date, we’ll send reminders again to say this is overdue. So often if an organisation doesn’t get those, they might forget to submit the Annual Information Statement and there is a risk of a penalty if it’s late or, as we said, if you don’t submit two, you can have the registration revoked. So it’s just so important that we can send correspondence to an email address where someone’s going to be receiving them.

Matt:

A question about searching for a charity on the Register. If someone searches for their charity and they can’t find it, does that mean that they’re not registered?

Ella:

So if they search using the ABN, and there are no spaces, it means that they’re probably not registered. There can be, in some circumstances, that the organisation’s actually withheld. If you think you’re registered, you’re pretty certain that you are but you can’t find your organisation, you can give us a call and we might be able to help you further over the phone.

Matt:

OK, so, yeah, it could be the case, not necessarily… it’s pretty rare that you’d be registered and not the Register. But search the ABN, search the name, if you’re not… it could be the case that you are not registered. And just on that, not all P&Cs are registered as charities, and this may be for a variety of reasons. It could be to do with tax concessions and an organisation not needing to be registered. Not all P&Cs are registered.

OK, we’re sort of coming towards the end of our hour now. I know there are a few questions that we still haven’t gotten to, so we will get through a couple more but then if we don’t get to your question in particular, we will be able to get in touch with you via email or it might be useful to give our Advice Services team a call on 13 22 62 because they’ll be able to help you with specifics, they can chat you through whatever issues you’ve got with your particular P&C. And, Ella, as far as I understand it, there’s no waiting time to call us.

Ella:

No, we’re actually not that busy at the moment so you should be able to get through pretty much straight away.

Matt:

No waiting time. I know that when people say, ‘give us a call’ and it’s a government department they expect to be on hold for a fair while, but not with the ACNC, you can get through… at the moment if you were to call you’d get through straight away.

OK, one more question. OK, on it’s on responsible persons. Is there any particular test that a P&C should have to allow, I guess is the right word, a person to be a responsible person for their P&C? Is there any particular requirement that the ACNC has? Any hurdles that people must jump before they’re allowed to be a responsible person?

Ella:

It’s definitely not that complicated. The only one we have, as I mentioned before, is checking the ASIC Banned and Disqualified Register and as long as that person isn’t on there, it’s fine. You may have criteria in your constitution, although that’s pretty unusual. So otherwise, no, there are no skills or qualifications that someone needs to have.

Matt:

And of course we recommend that if it’s possible you’d have some people… if there are particular skills on offer, then that’s a good thing for the P&C and for the governance of the organisation. So you wouldn’t require that of anyone but it’s also a good thing to have people with a variety of skills to be able to share and contribute to the good governance of the P&C.

Ella:

It’s definitely useful to have someone with a bit of financial knowledge on the Board so that they can do the accounts and, you know, they’ve just got a good understanding of your financial situation.

Matt:

Of course. Alright, well that one probably takes us over the hour mark now and it’s time to wrap up the webinar. So if we haven’t gotten to your question just yet, we will be online for another 15 or 20 minutes or so to be able to answer some questions via text that is. So you can still keep asking questions if you’d like to. Also we will send out a follow-up email with links to particularly useful relevant information for people involved in P&C’s, and that we’ll have a link to the recording of this broadcast, so if you wanted to share the webinar with other people, people in your P&C networks, then please do so.

OK, if you want to stay in touch with the ACNC, we’re pretty active on social media so if you follow us on Twitter or Facebook you’ll find lots of updates and news from the ACNC there. Also, if you wanted some tailored guidance for your particular P&C then, as we mentioned, I do highly recommend giving us a call and speaking directly to one of our Advice Services team members. They’ll be able to take you through the issues that you’re facing. But the website is also full of useful handy guidance on a range of topics, including the popular ones that we see coming through in the questions at the moment with access to tax concessions and DGR status, and the like. Also, sign up for our email updates and you’ll get regular updates from the Commissioner in her Commissioner’s Column.

Thank you everyone for attending today’s webinar. We hope it was useful and we know that P&Cs have had a few issues trying to keep their registration with the ACNC up-to-date largely because of the confusion about being registered as a charity and it’s not the first thing that many people when joining a P&C think of is how they’re going to manage their charity registration. So we do really appreciate you taking the time to sit through the webinar with us today and we hope it’s been useful.

Thank you, Ella.

Ella:

Thanks very much, Matt, and thank you everyone for attending.

Matt:

We will send a follow-up email to all who registered in the coming days or so and the recording of this webinar will be published on our website and on our YouTube page at the same time. If you want to register for any upcoming webinars, you can do so on our website at acnc.gov.au/webinars and any other questions, comments, or feedback about the webinar programme in particular, please send through to education@acnc.gov.au. But if you wanted to send some questions about your P&C and its registration with the ACNC and all the requirements that you need to meet, don’t send it to that email address, that’s a different one. If you wanted to ask about your P&C and its registration with the ACNC please send your questions to advice@acnc.gov.au.

OK, thanks everyone. We really appreciate you taking the time to join our webinar and we hope it was really useful. We’ll see you next time. Thanks.

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