ACNC Annual Report 2014–15

Section 1 - Commissioner's review

The Commissioner and the Chair of the ACNC Advisory Board reflect on the highlights of 2014–15, and set our direction for the year ahead.

In this section:

 

Commissioner's review

Portrait image of Susan pascoe AM

The 2014–15 year saw the ACNC strengthen its standing as Australia's national charity regulator.

I am proud of the achievements of ACNC staff during the year. Our oversight has contributed to maintaining trust and confidence in Australia’s charities, supporting their sustainability, and helping to reduce red-tape.

Reducing red-tape

Infographic - 10 million in annual deregulation savings

Consistent with the government's deregulation agenda, we made concerted efforts to regain momentum in building our 'report once, use often'; framework, contributing $10 million to the Government's annual deregulation savings during the 2014 period.

These substantial savings came from a range of initiatives, including the acceptance of financial reports submitted to state or territory regulators for the 2014 Annual Information Statement. This was highlighted as a key saving of $5.9 million in the Treasury Portfolio Annual Report on Deregulation.

We commissioned research on the red tape reduction through the Ernst and Young Red Tape Report 2014  to inform our approach to reducing the administrative burden on charities. We also consulted with highly regulated sub-sectors such as non-government schools and hospitals to discuss their concerns with a view to introduce more streamlined reporting arrangements .

We worked to reinvigorate relationships with state and territory regulators to explore ways to harmonise reporting, and this work is ongoing. This includes cooperation with the states and territories to identify ways to reduce reporting requirements, share information and collaborate on compliance investigations

Taking compliance action

Infographic - 9,000 revoked/removed from charity Register

While the vast majority of registered charities do the right thing and meet their obligations, we received 810 concerns about charities in 2014–15, two thirds of which originated from members of the public. We take all complaints seriously and assess them to see if further investigation is required.

In most cases we work with the charity in question to help them resolve the issues that have been raised. However during 2014–15 we investigated 238 registered charities and, as a result, revoked the status of ten.

We are limited by secrecy provisions in the ACNC Act from informing complainants and the general public of the action taken during investigations. To address this constraint and provide information and advice to the public, we analysed the compliance work done over two years and published the Charity Compliance Report – December 2012–December 2014 and Beyond  in May 2015. The report analyses our compliance activity during our first two years of operation, focusing on the common issues raised and providing case studies to illustrate the ACNC's approach. This work helps maintain trust and confidence in charities.

Building the Charity Register

Major strides were made during 2014–15 to build the Charity Register, Australia's free, searchable, database of registered charities. As stories come to light of scams claiming to be charities, it is important that people can quickly search a free database to check if the person collecting donations represents a real registered charity.

Financial reporting was required for the first time in the 2014–15 reporting year. As part of the 2014 Annual Information Statement over 37 200 registered charities provided financial information by the due date of 30 June 2015. While this is a substantial increase from the 9 000 registered charities that voluntarily provided financial information in 2013–14, it is not a full census. The ACNC will continue to work with straggling charities who do not meet their obligations on time to update the Charity Register.

As part of our warrant to provide the public with an accurate Charity Register, we reviewed a sample of 2014 Annual Information Statements, with a particular focus on financial errors. The purpose was to provide accurate information on the Charity Register and to identify common reporting errors to help educate charities. This audit identified billions of dollars in transcription errors. It required a massive exercise to contact those charities which had entered inaccurate data and get them to correct it. While this exercise diverted staff from other activities, the ACNC is committed to maintaining an accurate and up-to-date register.

In 2014–15 we also 'cleaned up'; the Charity Register by revoking the status of 5 500 'double defaulter'; charities – those that failed to meet their reporting obligations for two consecutive years. The double defaulter project took the total number of charities revoked or removed from the Charity Register to 9 000, further enhancing the integrity of the information available to the public see Charity register.

Digital by default

The ACNC has had the advantage of being established as Australia's first national charity regulator in a digital era, and in 2014–15, the ACNC continued to be a 'digital by default' agency.

The paper-based list of 56 553 registered charities transferred to the ACNC is now a fully digitised system and can be searched by the public on a desktop or mobile device. In 2014–15, the Charity Register received 432 000 views, a substantial increase on 2013–14.

Our engagement with charities online also grew. Our website, which houses guidance and education resources, received over 4 million views in 2014–15, approximately half-a-million more than last year.

The Charity Portal, the secure system that charities use to meet their obligations to the ACNC, received 3 million sessions, twice as many 2013–14. These sessions included lodgements of Annual Information Statements, which are now almost entirely (98%) submitted online.

The ACNC will continue to implement and improve online engagement and transaction systems in 2015–16 to support registered charities and the public.

Engaging with the sector

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We aim to be an approachable regulator and are committed to providing registered charities with guidance and support that assists them to understand and comply with the ACNC Act. Maintaining regular and open communication with charities is fundamental to this. As a new regulator we made a substantial effort to reach out to charities. In the first half of 2014–15, we invited charities to attend 36 'Ask ACNC'; sessions in 32 locations around Australia (page 62). These sessions were an opportunity for the ACNC to engage with Australia's registered charities face-to-face, to help them understand our role as the charity regulator and their reporting obligations under the ACNC Act.

We also continued regular meetings with our Sector Users Group and Professional Users Group (page 63). The groups meet with the ACNC three times a year and have been invaluable in providing us with insights into the experiences of charities. The expert advice they provided has been instrumental in the development of three new Commissioner's Interpretation Statements.

During 2014–15 we continued to work with the sector to identify and resolve issues affecting registered charities. A common theme raised in 2014–15 was the impact of the now out-of-date registered charity information on the ASIC Register. While ASIC continues to register and wind up charitable companies (such as companies limited by guarantee), these entities now report to the ACNC and their up-to-date data is on the ACNC Charity Register. The lack of alignment between the ACNC and the ASIC Registers is causing significant difficulties for registered charities, particularly when accessing financial services. We have brought this to ASIC's attention and will continue to work with them on a resolution. A summary of the queries we have received from registered charities about this issue is available see Public trust and confidence

Adding value to charity data

The data we collect from charities has uncovered a wealth of information about the sector. To maximise the value of this information for the sector, it has been analysed and made available in formats such as the 2013 Charities Report and supplementary sub-sector reports (page 65). These provide the sector, community, researchers and policy-makers with an unprecedented insight into a sector that contributes billions of dollars to the Australian economy.

Commissioner's Interpretation Statements

The ACNC has built considerable experience in applying the law, having made numerous registration decisions.

Following wide-range consultation, during the 2014–15 year we published Commissioner's Interpretation Statements on:

  • The Hunger Project case
  • Provision of housing by charities
  • Health Promotion Charities

These statements reflect our current understanding of the law on charity and are binding on ACNC staff. You can find more detail on the Commissioner’s Interpretation Statements .

Service standards

We strive to exceed expectations and our service standards are set accordingly. However, unlike 2013–14, in 2014–15 we did not meet all our service standards. This was due to unexpectedly high volumes of work around the lodgement of the Annual Information Statements, delays in filling staff vacancies and an increase in complexity of compliance cases. While the effort and professionalism of the ACNC’s staff is unquestionable, our results against the service standards are disappointing. We will endeavour to improve our performance against these measures in 2015–16. See Service standards  for further explanation.

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The year ahead

Looking ahead, our priorities are to continue our efforts to reduce red tape for charities and continue to build public confidence in the sector.

Key focus areas for 2015–16 include:

  • further enhancing the Charity Register through better search functionality
  • continuing to work with state and territory government agencies to achieve regulatory and reporting harmonisation and simplification
  • ensuring charities meet their reporting obligations
  • continuing to respond to concerns raised about charities
  • providing the sector with analysis of the data we collect.

Thanks to staff, the Advisory Board and the sector

The gains that we’ve made as an organisation during the 2014–15 year would not have been possible without the dedicated staff at the ACNC. We pride ourselves on being a responsive regulator which knows and respects the sector it regulates and provides timely and useful services and advice. I would like to thank each member of the ACNC team for displaying professionalism, perseverance and commitment during ongoing uncertainty.

Thanks also to the ACNC Advisory Board for their informed and expert advice that helps guide the ACNC. In particular I would like to thank the Advisory Board Chair, Robert Fitzgerald AM, for his continued leadership.

And to all registered charities and NFP sector peak bodies – thank you for your unrelenting passion about the various causes you support. It is my privilege to be able to work with such selfless and dedicated people.

Susan Pascoe AM signature
Susan Pascoe AM
ACNC Commissioner

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Advisory Board Chair's review

Image of Robert Fitzgerald AM

It is indeed pleasing to acknowledge the ACNC's achievements during the past financial year and welcome the increased level of certainty over its future as indicated by the Government and Parliament in recent times. We trust that all uncertainty may be removed to allow the ACNC to meet its full potential.

In 2014–15 the ACNC Advisory Board met four times. The Board meetings, and sessions with invited sector representatives the day prior, were held in Hobart, Perth and twice in Melbourne.

During the sessions with sector representatives and more generally, Board members received unsolicited feedback from across Australia praising the ACNC, particularly the areas within the organisation that work directly with the public and the sector.

The support of the charity sector has remained strong even in the face of considerable uncertainty. It is very evident that the sector broadly endorses and understands the role of the ACNC and the benefits it can provide, including the increased transparency and connection with the public through the Charity Register. This is evidenced by the compliance rate for the 2013 Annual Information Statement of 99% and high levels of co-operation generally.

This is my third submission in an ACNC Annual Report and the developments each year have been substantial. In my first entry I spoke about the establishment of the ACNC and what the Board hoped to achieve. In the second year my focus was on the introduction of new or improved services for charities and the public, such as the Charity Portal and the Charity Register. In 2013–14 I also noted the impact of the continued uncertainty surrounding the future of the ACNC.

In February 2015 I was pleased to note comments made by the Minister for Social Services, The Hon Scott Morrison MP, which indicate that the Government have no immediate plans to progress the repeal of the ACNC Act. In June 2015 I was also heartened to see the Australian Senate pass a motion to withdraw the ACNC Repeal Bill which was carried unopposed. I thank the Parliamentary Members and Senators for their support.

In 2014–15 the ACNC truly emerged from its establishment phase and made significant progress toward achieving the Objects of the ACNC Act.

This included:

  • Building an accurate and up-to-date Charity Register.
  • Undertaking firm but fair compliance action.
  • Analysing and sharing information gathered from charities.
  • Reigniting work to reduce red tape for charities.

During this year the Advisory Board had a particular focus on:

  • Reporting harmonisation with state and territory regulators.
  • Transitional arrangements for highly regulated sub-sectors.
  • Charity reporting to the ACNC and cleaning up of the Charity Register.
  • Sub-sector specific guidance needs.
  • The future strategic direction of the ACNC.

While significant progress has been made, this work is ongoing and is not without further challenges.

On behalf of the Advisory Board, I would like to thank the talented and dedicated group of staff at the ACNC, led so effectively by Commissioner Susan Pascoe. Their continued efforts are greatly appreciated. I also thank all those who have willingly cooperated in so many ways with the ACNC through consultations, advisory groups, sector forums and government inquiries.

We look forward to the ACNC not only surviving but further developing as an effective regulator contributing to the community’s confidence in charitable endeavour in Australia.

Robert Fitzgerald AM

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