Self-audits are one of several compliance initiatives introduced by the ACNC in the 2020-21 financial year. By implementing the new program of self-audits, the ACNC has helped charities find and fix issues with governance. Along with other new compliance review work, the initiative allowed the ACNC to engage with 50 per cent more charities on compliance matters than in the previous year.
In the initial roll-out of the self-audit program, 28 charities were asked to complete a self-audit and the results provided useful insights.
ACNC Commissioner the Hon Dr Gary Johns said 75 per cent of the charities provided a satisfactory response.
“This is encouraging and highlights what we have seen over the years - charities, by and large, are run very well. Additionally, five of the 28 charities identified a plan to improve their governance,” he said.
The self-audits also revealed that governance in 25 per cent of the charities was not up to standard.
"Of course, there are going to be charities that need to improve on certain aspects. And this is the point of our new self-audit program. We want charities to be able to identify the gaps in their governance processes, know where they must improve and how."
Of the charities that needed to improve, one found issues that came from rapid growth over 12 months. The charity had grown from small to large, but had not upgraded its governance to suit the more complex requirements on a larger charity.
"That charity really benefitted from the self-audit,” Dr Johns said. "Its leaders saw it as an opportunity to look at their charity and figure out where they had issues. The self-audit allowed them to identify issues clearly."
As part of their response, they developed a detailed action plan.
"It is actually a real success story, to be honest," Dr Johns said. "The charity didn't shy away from the issues it identified and worked hard to fix them. It appreciated the opportunity to work with the ACNC to ensure it was meeting its obligations."
The charity acknowledged that addressing the gaps would ensure donor confidence into the future, as well as build broader community trust and confidence.
"People in charities know their organisational structure well and are often best placed to examine processes. This allows us to more efficiently target certain charities and work on any specific issues they may find," he continued.
The ACNC will continue the self-audit program, but charities are urged to proactively assess their governance by using our self-evaluation tool.