Small Charities Library - Reporting for small charities

Registered charities must submit an Annual Information Statement (AIS). The Annual Information Statement asks questions about your charity, its activities, basic financial information, staff and volunteers, and other information to help us understand the charity sector and reduce its overall reporting burden.

Charities must complete and submit an Annual Information Statement for every reporting period.

Some specific types of charity are exempt from submitting some or all of their Annual Information Statement:

• Aboriginal and Torres Strait Islander corporations are regulated by the Office of the Registrar of Indigenous Corporations (ORIC). Charities that are registered with ORIC need to report to ORIC directly, and do not need to complete an Annual Information Statement for the ACNC.
• Basic Religious Charities are a specific type of religious charity that meets six specific criteria. Basic Religious Charities are not required to answer financial questions in the Annual Information Statement, but they still need to complete the other mandatory questions and submit their Annual Information Statement.
• Non-government schools submit a Financial Questionnaire to the Department of Education. Because of this, they can choose not to answer the financial questions in the Annual Information Statement. The Department of Education will pass on the financial information to the ACNC.

The Annual Information Statement is due six months after the end of the charity’s reporting period. If your charity uses a traditional financial year reporting period (1 July to 30 June), its Annual Information Statement will be due by 31 December.

Each year, medium and large charities are required to submit an annual financial report with their Annual Information Statement. Small charities are not compelled to submit a financial report, but they can voluntarily submit one.

Small charities still need to complete the financial questions in the Annual Information Statement, which includes information about the charity's income and expenses, and assets and liabilities. Small charities can choose to use either cash or accrual accounting when they report this financial information.

The main difference between cash and accrual accounting is the timing of when revenue and expenses are recognised in a charity’s financial records.

Cash accounting records revenue when money is received and expenses when money is paid out, while accrual accounting records revenue when it is earned and expenses when they are incurred.

A charity’s board or committee members (their Responsible People) must have a level of financial literacy that will enable them to make informed decisions about their charity’s finances.

Sometimes this can be a challenge for smaller charities. Responsible People might be volunteers with limited financial literacy or experience, for example, or they might face time challenges and competing priorities in their everyday lives.

Even so, ACNC Governance Standard 5 spells out a number of duties Responsible People have, including the need to ensure that the charity's finances are manage responsibly.

Responsible People cannot make informed decisions about their charity’s finances without an understanding of the concepts that relate to them. At the very least, they should be able to determine whether their charity is solvent and how decisions they make will impact on their charity’s financial health.

We have a guide available about managing charity money to help board members understand charity finances and help them meet reporting obligations.

The National Standard Chart of Accounts (NSCOA) is a free accounting tool for charities and not-for-profits which can be downloaded from the ACNC website. It includes a standardised list of financial account categories and a comprehensive data dictionary designed for use by organisations in their accounting systems.

All Australian governments (Commonwealth, state and territory) have agreed to accept the NSCOA when requesting information from not-for-profits.