Transcript ACNC community presentation

Australian Charities & Notfor-profits Commission
Presentation – CFECFW Melbourne
8 March 2013
Presented by
Jon Reid, Director, Reporting and Red
Tape Reduction
Overview of Topics
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Introduction to the ACNC
Key activities of the ACNC
Obligations of charities to the ACNC
ACNC Reporting Framework
Reduction Initiatives
Education and compliance
Comments and questions
What is the Australian Charities and
Not-for-profits Commission?
The ACNC is the independent national regulator of charities.
• Established on 3 December 2012
• 56,608 registered charities.
The ACNC:
• registers organisations as charities
• helps charities understand and meet their obligations
through information, guidance, advice and other
support
• maintains the ACNC Register
• works with governments and government agencies
across jurisdictions to develop a simplified reporting
framework.
ACNC object 1:
Maintain, protect and enhance public trust and
confidence in the Australian not-for-profit sector.
ACNC object 2:
Support and sustain a robust, vibrant, independent
and innovative Australian not-for-profit sector.
ACNC object 3:
Promote the reduction of unnecessary regulatory
obligations on the sector.
ACNC object 3.
Promote the reduction of unnecessary
regulatory obligations on the sector.
• ACNC Reporting and Red Tape Reduction Directorate
• ACNC Chair Reducing Regulatory NFP Duplication
Working Party with the DPC
• Data Standardisation – adoption of the National
Standard Chart of Accounts (NSCOA) and alignment with
Standard Business Reporting (SBR)
• Charity Passport – progressively implemented from July
2014 - ACNC collect data from registration and AIS and
provide to authorised Comm’th agencies = key element of
report-once, use often.
The ACNC Register
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free, online, public register of ACNC registered
charities at acnc.gov.au.
Initial information on the ACNC Register includes the
charity’s:
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legal name
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Australian Business Number (ABN), which links to
their record on ABN Lookup. This record includes
basic information such as the types of tax
concessions your organisation receives and whether
it has the deductible gift recipient (DGR) status
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state or territory of registration.
– continued…
The ACNC Register
In future, the ACNC Register will also list:
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business address and contact details
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the type of charity it is registered as
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registration date
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responsible person details (including names and positions)
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a copy of the governing rules
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the annual information statements provided to the ACNC,
including financial reports and audit reports if the charity is
medium or large and therefore required to provide these
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enforcement action taken by the ACNC (such as warnings,
directions, or removal of director)
ACNC Mailout
Staged mailout to 56,000 charities previously
registered with the ATO
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Commencing 29 January 2013
Form to capture information from you in one interaction
The form is also available online as a fillable pdf
Information we receive will help us update the ACNC
Register
• Please call us if you do not receive the letter by
mid-March 2013
Obligations to the ACNC
Obligations vary depending on the charity’s size
• Small charities do not need to provide as much
information as medium or large charities.
A charities size is determined by its annual
revenue
• small – annual revenue less than $250 000
• medium – annual revenue between $250 000
and $1 million
• large – annual revenue is $1 million or more.
Obligations to the ACNC continued
To maintain ACNC registration, all registered
charities need to:
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notify us of certain changes, such as:
– service address, legal name, governing body
members, governing rules
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keep records
– financial records, operational records
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report to us each year
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meet governance and external conduct
standards from 1 July 2013.
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Some exemptions for basic religious charities and
non-government schools.
Timeline for reporting
Financial reporting; governance
standards and external conduct
standards Regulations expected
to come into effect under the
ACNC Act
ACNC Act received royal
assent and ACNC
commences operation as
Australian charities
regulator
Registered charities have
6 months from July 2014
to provide first full
annual information
statement (including
financial report) to the
ACNC
Registered charities have 6
months from July 2013 to
submit a basic annual
information statement (nonfinancial information) to the
ACNC
First financial reporting year
3 Dec 2012
March 2013
July 2013
New statutory
definition of a charity
expected to be
introduced into
Commonwealth law
October 2013
January 2014
March 2014
July 2014
Transitional Annual Information Statement
(TAIS) 2012-2013
• All registered charities have to submit an AIS
• Legislative requirements:
– Recognised Assessment Activity
– Objects of the ACNC Act:
• The AIS will be brief and it will cover information that
charities already know, such as:
– how the charity works towards its charitable purpose
– the number of volunteers and paid staff
– the type of people who benefit from the charity
• We will pre-populate the AIS and first AIS due six months
after the 2012–13 reporting period
• There are penalties for not filing the TAIS or for
deliberately providing misleading information
2013-2014 AIS
• Due for lodgement by 31 December 2014
(unless a SAP applicable)
• Will include financial and non-financial
information – Proportional to charity size
• Aligned to National Standard Chart of
Accounts (NSCOA) and Standard Business
Reporting (SBR)
• Consultation with government and the sector
to be undertaken
Proposed standards for financial reports
• Reporting framework is proportional
– Small charities/BRCs are exempt from financial
reports
– Medium charities must prepare a financial report
which can be reviewed rather than audited
– Large charities must prepare an audited financial
report
• Medium and large entities will generally need
to apply accounting standards
Transitional arrangements
• Commissioner may accept statements and financial
reports lodged with other Government agencies as
meeting the reporting requirements of an AIS or an
annual financial report (subject to conditions)
• Financial reports given under the Schools
Assistance Act 2008 must be treated by the ACNC
as an annual financial report (AIS still required
unless above general transition applies)
Progress in red tape reduction
• Streamlined Reporting Working Groups across C’wlth
(eg DEEWR, ISCA, ACARA, NCEC for non-govt schools)
• Commonwealth Grant Guidelines have been
amended to improve and simplify interactions around
grants between the Government and the sector
• Working with other regulators (eg ASIC and ORIC) to
remove or minimise duplication
• Collaborating with State and Territory government
agencies to minimise duplicated regulatory obligations
wherever possible (eg SA)
• Annual Report to Parliament to map progress in
achieving meaningful red-tape reduction for charities.
NSCOA & SBR
• QUT developed NSCOA in 2002
• COAG agreed to an implementation plan for
adoption of NSCOA for NFPs by July 2010
where possible
• SBR Involves Commonwealth/State/Territory
governments, software developers and service
providers (accountants/book keepers)*
• “Common reporting language based on
international standards and best practice”
• Aimed at “removing unnecessary and duplicated
information from government forms”
*Source: www.sbr.gov.au
Proposed governance standards
• Standards will be principles-based and specify the
outcome that charities need to achieve rather than the
process
• Proposed standards:
– 1. Purposes and not-for-profit nature of a charity;
– 2. Accountability to members;
– 3. Compliance with Australian laws;
– 4. Responsible management of financial affairs;
– 5. Suitability of responsible entities; and
– 6. Duties of responsible entities (including
‘protections’)
Compliance - When and how we will act
Act based on risks and evidence
• Begin by assuming honesty
• Use least coercive powers to address concerns
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Options include:
• advice, education, support
• no-action letters
• referrals – collaborating with other regulators
• administrative penalties
• warnings
• directions
• enforceable undertakings
• injunctions
• suspension/removal
• revocation
Regulatory pyramid of compliance and support
Examples: Misuse of charity for
serious criminal purposes (including
financing terrorist activities) or
significant private benefit
Examples: Entry into financial
transactions that risk insolvency;
Involvement in illegal activity; Private
benefit obtained by a board member.
Examples: Evidence of excess
financial benefit to owners;
evidence of tax evasion.
Examples: Repeated failure to
lodge documents on time;
innocent mistake as to how many
board members are needed to
make a decision.
Examples: Forgetting to
lodge a statement or report;
making a minor mistake in a
financial report; common
mistakes or
misunderstandings.
Factors to consider
• Type of problem
• What/who at risk
• Likelihood and
frequency
• Potential impact
• Risk profile
• Behaviour of those
responsible
What other factors
should we consider?
What do you see as
the key risks to
public trust and
confidence that we
should focus on?
Finding out more: www.acnc.gov.au
Providing you with access to information is a priority for us
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