ACNC Annual Report 2018-19

I am proud to present the Australian Charities and Not-for-profits Commission (ACNC) Annual Report for 2018–19, a year of significant achievement for the Commission.

Our dedicated staff have worked hard throughout the year to achieve our priorities as set out in our 2018–19 Corporate Plan, while also delivering major projects to improve the overall experience for charities and donors who interact with us.

I thank every member of our team for their commitment to the ACNC, the charity sector and its stakeholders. The expertise, drive and professionalism of every staff member is critical to our success as a regulator.

I am pleased to share some of our major achievements in 2018–19, and provide insight into the progress towards the Commission’s future goals.

The most significant visible achievement of the Commission in 2018–19 was the launch of the revitalised ACNC website, Charity Register and Charity Portal in October 2018. This was the culmination of a long-term project to upgrade our IT systems. Many charities are already seeing the benefits, with further enhancements expected to occur in the year ahead.

Our team worked hard to maintain services and support charities to navigate the new systems. Despite some initial challenges, the improved website and services have been welcomed by the sector. We will continue to improve our online services and cement our standing as a digital-first regulator.

A key focus for 2018–19 was improving the availability and visibility of data on Australia’s charity sector. We collect valuable information about Australia’s 57,000 registered charities — including data on charity purposes, activities, beneficiaries and program locations. The Charity Register now features more detail about charities at a glance, including information about their activities and a financial overview. This is the first phase of a larger improvement project to make the Charity Register a more valuable resource for charities, the public who support them and researchers with an interest in the contribution made by the sector to the Australian community and economy.

The second phase of our project is to improve the accessibility and search function of the Charity Register. We are exploring solutions that will enable users to search the Register not only by a charity’s name and location, but by the programs it runs — so people can find charities working on a particular cause in a specific location.

In 2018–19, we streamlined the Australian Charities Report, our annual analysis of the charity sector in Australia. The new report is more succinct and reader-friendly, and provides highlights from Annual Information Statement data. We still provide an opportunity for those interested to delve deeper by publishing the full data set on our website and at data.gov.au.

Projects to enhance the visibility and accessibility of charity data will continue to be a focus for us in the year ahead. In December 2018, we published Measures in support of the not-for-profit sector, a literature review to provide insight into the four attributes mentioned in the second object of the ACNC Act. Consultation is also underway to seek feedback on a series of proposed data metrics relating to the ACNC’s second object — to support and sustain a robust, vibrant, independent and innovative Australian not-for-profit sector. We plan to publish information that helps assess the health of the sector, and how that health changes over time as part of future Australian Charities Reports.

A charity’s ability to manage its affairs effectively is crucial to its overall performance. Throughout the year, we have been working to improve the resources available to help charities with their governance.

We published the Small Charities Library, a collection of tailored guidance for Australia’s small and extra-small charities on topics including governance, staff and volunteer management and tax concessions. Last year also saw the publication of a self-evaluation tool, which helps charities assess if they are meeting their ACNC obligations and identify issues that may prevent them from doing so.

On a personal note, a significant highlight of 2018–19 was meeting with many charities across Australia — in both regional and metropolitan locations. Meeting with charity staff and volunteers, hearing about the valuable programs they deliver and the support they provide to communities across Australia is truly inspiring. Thank you to those charities that have welcomed me for a chat. I look forward to meeting with many more charities in the coming years.

I would like to take the opportunity to again thank our dedicated team at the ACNC, and the support of the wider Australian charity sector.

I hope you find this report to be an engaging review of the ACNC’s performance in 2018–19.

THE HON DR GARY JOHNS
Commissioner
Australian Charities and Not-for-profits Commission

In 2018-19, the Advisory Board continued to enjoy engaging with the not-for-profit sector throughout the year.

It is always encouraging to consistently hear positive feedback and support for the ACNC from charities and sector representatives we meet.

Specifically, the Board has heard positive feedback from the sector on the new website and online experience since the systems upgrade in October 2018 was completed. This was a large-scale project that resulted in improvements to user experience when dealing with the ACNC online. I congratulate all staff involved in achieving this significant result.

This year the ACNC continued to develop resources to empower charities to improve their governance, with the publication of a range of online tools including checklists, webinars, toolkits and templates. The ACNC also published numerous guides and factsheets, with a particular focus on providing small charities with accessible, plain language content that they can use to improve their governance systems and processes. Thank you to everyone involved in developing these resources. I trust that charities will find them useful.

In 2018–19, the Commission worked with the Northern Territory government which has implemented changes to reduce the unnecessary administrative burden on charities registered as incorporated associations in that state.

The Northern Territory joins Tasmania, South Australia, Victoria, the Australian Capital Territory and New South Wales who have also harmonised reporting requirements for incorporated associations. Incorporated associations in those states and territories that are also registered charities can now report once to the ACNC and we share that information with the State Governments on their behalf using the Charity Passport. I congratulate everyone involved in reducing the regulatory burden for Northern Territory-based incorporated associations that are also registered charities.

I am pleased with the work the ACNC has been doing to assist the public to better understand the work of the not-for-profit sector and to improve transparency and accountability of the sector by enhancing information provided on the website. This work, and the public consultation for it, demonstrates the ACNC’s commitment to the regulatory framework as set out in the Act. I look forward to seeing the results of the consultation and the insights any new measures provide into the health of the sector.

In 2018–19, the Hon Dr Gary Johns completed his first full year as Commissioner of the ACNC. I would like to thank him for his contribution and commitment to working with the sector and ensuring the ACNC continues to be a world-class regulator.

On a personal level, it has been rewarding to work with Dr Johns on some of the ACNC’s key projects. His commitment to improving access to information and data on the charity sector will make a valuable contribution to the entire not-for-profit sector.

The project to further enhance the Charity Register to better enable people to find charities by the type of work that they do will be a landmark in transparency and will help improve visibility for many charities.

The Board and I have enjoyed a productive working relationship with Dr Johns and we look forward to this continuing in 2019–20.

Thanks to the board

Thank you to my fellow Board members for another productive year. It has been a pleasure to work with a team of such passionate and skilled individuals to support the work of the ACNC. Our members’ ongoing dedication, enthusiasm and expertise are a great asset to the ACNC.

This year we farewelled Professor David Gilchrist, after the conclusion of his term, and Ms Heather Allen, who stepped down due to personal circumstances. We also farewelled two ex-officio members, who were appointed to the Board based on the specific office they held. Both Mr Dale Webster and Ms Cindy Bravos moved out of their specific offices and therefore ceased their terms on the Board.

Thank you to all our departing members for your commitment and contribution throughout your time on the Advisory Board.

In 2018–19 the term of Dr Martin Laverty was renewed for a further 18 months. I look forward to continuing to work closely with Martin in the year ahead.

TONY STUART
Chair
ACNC Advisory Board

The ACNC is the national regulator of charities. We are responsible for administering the ACNC Act.

The ACNC was established by the ACNC Act which has the following three objects:

• to maintain, protect and enhance public trust and confidence in the Australian not-for-profit sector
• to support and sustain a robust, vibrant, independent and innovative Australian not-for-profit sector
• to promote the reduction of unnecessary regulatory obligations on the Australian not-for-profit sector.

Although the ACNC Act refers to not-for-profits and the not-for-profit sector, the ACNC currently only regulates registered charities — those that meet the definition of charity as set out in the Charities Act 2013 (Cth) (the Charities Act).

We determine whether an organisation meets the legal definition of charity and is entitled to registration as a charity. Our guidance and support helps charities to understand and meet their obligations.

When charities fail to meet their obligations and act in ways that pose a serious risk to public trust and confidence, we investigate and act. Our actions, which are consistent with our regulatory approach, aim to ensure charities are well governed and that charitable funds are used for their intended purposes.

We maintain the ACNC Charity Register — an online, searchable register of information about charities. The Charity Register, which publishes information about charities’ governance, activities, operations and finances, helps charities to be transparent, and the public to find information about charities. We use the information we collect about charities to provide an overview of the charity landscape and report on emerging trends in the sector through the annual Australian Charities Report and Charity Compliance Report.

We work with state and territory governments, and other Commonwealth government agencies, to reduce unnecessary regulatory obligations for charities. Our aim is to harmonise and simplify reporting for charities — so they can report once to government and the information they report is shared with other government agencies using the ACNC Charity Passport.

OUR VISION, MISSION AND VALUES

We strive to be a world leader in charity regulation. We believe in good governance, honest respectful relations and transparent administration. Our Corporate Plan 2018–19 outlines our vision, values and strategic priorities for the year.

Our vision is ‘charities that inspire confidence and respect’. Our values are: fairness, accountability, independence, integrity and respect. These values underpin the way we perform our work and align with the Australian Public Service values.

Figure 2.1: The vision, values, mission and Corporate Priorities of the ACNC

THE HON DR GARY JOHNS

COMMISSIONER

December 2017 – present

The Hon Dr Gary Johns took up the role of Commissioner following a long and varied career in public service and policy advice, including as the author or editor of eight books on public policy. He was an inaugural board member of Volunteers Australia, a member of the Prime Minister’s Business Community Partnership, and on the committee to design the Redress Scheme for survivors of institutional child sexual abuse.

Gary was a member of the House of Representatives from 1987–1996 and served variously as Parliamentary Secretary to the Deputy Prime Minister, Parliamentary Secretary to the Treasurer, and Special Minister of State and Assistant Minister for Industrial Relations. He served as an Associate Commissioner of the Commonwealth Productivity Commission from 2002–2004.

He received the Centenary Medal in 2001 and the Fulbright Professional Award in Australian–United States Alliance Studies in 2002, which was served at Georgetown University, Washington DC.

He was Senior Fellow at the Institute of Public Affairs, senior consultant with ACIL Tasman, Associate Professor, Australian Catholic University, and Visiting Fellow at QUT Business School.

CATHERINE WILLIS

ACTING ASSISTANT COMMISSIONER, GENERAL COUNSEL

March 2019 – present

Catherine Willis recently joined the ACNC on a temporary transfer from her role in dispute prevention and resolution with the Australian Taxation Office.

Since she joined the ATO in 2010 she has worked across a range of advice, compliance and dispute resolution matters, engaging with large market clients, private groups and small businesses.

Prior to joining the ATO she was a Special Counsel at a national law firm. She holds a Master of Laws from the University of Melbourne and a Graduate Diploma of Education (Secondary) from Monash University.

MURRAY BAIRD

ASSISTANT COMMISSIONER, GENERAL COUNSEL

December 2012 – April 2019

Murray Baird was a member of the ACNC Executive team from the Commission’s establishment. Before joining the public sector, he was a senior partner at Moores Legal, where he led the not-for-profit team.

Murray has acted in several leading cases in the field of charity law, and served on the boards of public and private companies and charities.

The ACNC has six directorates, each of which plays a crucial role in helping us achieve the objects on the ACNC Act.

ADVICE SERVICES, EDUCATION AND PUBLIC AFFAIRS

Our Advice Services team provides information to charities and members of the public about a wide range of topics related to charities and the charity sector. The team responds to written and phone enquiries about obligations and legislation affecting charities, and helps customers navigate the ACNC website, Charity Register and Charity Portal. Advice Services also reviews and processes forms submitted by charities, and undertakes data integrity projects to ensure the Charity Register has correct and up-to-date information.

Our Education and Public Affairs team delivers guidance and resources for charities to help them meet their obligations to the ACNC. The team is also responsible for promoting the ACNC and educating the public about Australia’s charity sector.

The team manages the development and publication of resources, as well as maintaining our website and social media channels. The team is also responsible for media relations, government relations, corporate communications and internal communications.

COMPLIANCE

Our Compliance team works across the whole of government to address risks that pose a threat to trust and confidence in the charity sector. The team uses analytics and intelligence to identify trends and emerging risks in the sector and investigate allegations of non-compliance by charities. The team takes proportionate action to ensure charities address non-compliance and protect themselves from abuse or mismanagement. This includes providing regulatory advice, compliance agreements or giving directions. When investigations find that a charity has been involved in serious or deliberate non-compliance, the charity’s registration with the ACNC may be revoked.

INFORMATION TECHNOLOGY

Our Information Technology (IT) team manages the end-to-end implementation, maintenance and support of IT services, platforms and solutions.

The team manages system configuration and architecture, information governance as well as providing data to support operations and help inform strategic decisions. It also provides technical delivery and management of data exchange activities with other government agencies.

LEGAL AND POLICY

Our Legal and Policy team advises the Commissioner and our staff on the interpretation and application of ACNC legislation and the Charities Act, as well as our obligations under legislation that applies to Commonwealth government entities. The team also manages responses to applications for reviews of and appeals from administrative decisions and any other legal proceedings involving the ACNC.

The team ensures the ACNC is aware of, and responsive to, changes in the broader regulatory environment, and manages obligations under the Freedom of Information Act 1982 (Cth) (FOI Act) and the Privacy Act 1988 (Cth) (Privacy Act). It also prepares submissions to parliamentary inquiries and consultative bodies.

REPORTING, RED TAPE REDUCTION AND CORPORATE SERVICES

Our Reporting and Red Tape Reduction team manages the ACNC Charity Passport, which is an online data transfer tool that allows other government agencies to easily share ACNC data. This helps to reduce red tape for charities and align regulatory obligations. The team also oversees the design and data integrity of the Annual Information Statement and administers various reporting obligations set out in ACNC legislation.

Our Corporate Services team is committed to the development and maintenance of a high performing workforce that can effectively deliver the priorities set out in our corporate plan while managing organisational risks. The team works collaboratively to increase efficiency and innovation through the human resource, governance and financial functions of the agency.

REGISTRATION

Our Registration team is responsible for assessing charity registration applications, and adding information about newly registered charities to the Charity Register. The team also assesses requests from charities to have information withheld from the Charity Register, new charity subtypes added to their registration, and processes requests by charities to voluntarily revoke their registration. The team has an important role to help streamline the Commonwealth charity tax concession process by collecting and passing on information required by the Australian Taxation Office on behalf of charities.

The ACNC Advisory Board consists of charity sector leaders and experts in charity law, taxation, accounting and policy, as well as state government officials.

The Board provides advice to the Commissioner on issues, acts as a sounding board for new ideas and provides valuable insights into the Australian charity sector.

The Board comprises up to eight general members and a Chair, as well as ex-officio members. The general members are appointed by the Treasurer for a term of up to three years and are experts in their respective fields from the charity sector. The ex-officio members are appointed by virtue of being the holder of a specified office.

In 2018–19 the Board met four times. The meetings were held in Brisbane on 16–17 August 2018, Melbourne on 29 November 2018, Launceston on 21–22 February 2019 and again in Melbourne on 24 May 2019.

ADVISORY BOARD MEMBER CHANGES

In 2018–19 there were no new appointments to the Board. However, in April 2019, Dr Martin Laverty was reappointed for a further 18-month period. In May 2019, Professor David Gilchrist’s term ended, and in June 2019, Ms Heather Allen resigned.

In 2018–19, ex-officio Advisory Board members Mr Dale Webster and Ms Cindy Bravos moved on from their respective roles and, consequently, ceased to be members.

GENERAL MEMBERS

TONY STUART

Tony Stuart is the Chair of the ACNC Advisory Board and a member of the Prime Minister’s Community Business Partnership. He is the Chief Executive Officer of UNICEF Australia and Director of the Starlight Children’s Foundation. Previously Tony was the Group Chief Executive Officer of National Roads and Motorists’ Association. He is a Fellow of the Australian Institute of Company Directors and a Fellow of the Australian Institute of Management.

DR MARTIN LAVERTY

Dr Martin Laverty is the Deputy Chair of the ACNC Advisory Board. Dr Laverty is the Chief Executive Officer of the Royal Flying Doctor Service of Australia. He is a Director of the National Disability Insurance Scheme, a Director of Health Direct, Chair of the Australian Government General Aviation Advisory Group, Convener of the Institute of the Sisters of Mercy Future Governance Working Party, and an Adjunct Professor at University of Western Australia’s Not-for-profits Initiative.

DR SUSAN ALBERTI

Dr Susan Alberti AC is one of Australia’s pre-eminent philanthropists and the founder and Chair of the Susan Alberti Medical Research Foundation. Dr Alberti was the leading force behind the establishment of the Australian Football League’s women’s competition, AFLW. Dr Alberti has been awarded the Officer of the Order of Australia, the Companion of the Order of Australia and was named 2017 Melbournian of the Year and 2018 Victorian of the Year.

PETER HOGAN

Peter Hogan is a Chartered Accountant with over 50 years’ experience. Peter began his career at the Australian Taxation Office before moving into the private sector and becoming a corporate tax partner of PricewaterhouseCoopers. Peter is currently the Chair of Carbon Energy Ltd and a director of OneAll International Ltd. Peter is also the Deputy Chair of Villa Maria Catholic Homes Ltd and a former Board Chair of St Bernard’s College, Essendon.

DAVID PIGOTT

David Pigott has held a number of executive roles at Mission Australia, including his current position of Executive, Policy and Corporate Affairs. He has served as an adviser to federal and state governments and as private secretary to the NSW Premier. David is a member of both the Reserve Bank of Australia Payments Consultation Group and the NSW Ministerial Advisory Council on Ageing. David is also the Chair of the Ella Centre.

HEATHER WATSON

Heather Watson is a specialist charity lawyer with experience across the not-for-profit sector. She holds a number of non-executive appointments in the charity sector including Chair of Uniting in NSW and ACT, Epic Good Foundation, and Community Services Industry Alliance Reform Council. She holds directorships with Uniting Victoria and Tasmania, and Australian Regional and Remote Community Services, as well as serving with other government institutions and advisory boards.

EX-OFFICIO MEMBER

DINI SOULIO

Dini Soulio is the Commissioner of Consumer Affairs and Liquor and Gambling with Consumer & Business Services (CBS) in South Australia. CBS has a broad portfolio which includes charities regulation. Dini’s background is as a solicitor in private practice, working in the areas of insurance, workers compensation and criminal law. He has also held senior regulatory roles with Customs and ASIC.

The ACNC Commissioner is an independent statutory officer with responsibility for overseeing the National Regulatory Framework for charities as set out in the ACNC Act.

The ACNC’s purpose, deliverables and key performance indicators are published in our 2018–19 Corporate Plan.

Our Corporate Priorities for 2018–19 were:

• Priority 1: To maintain, protect and enhance public trust and confidence in the Australian not-for-profit sector
• Priority 2: To support and sustain a robust, vibrant, independent and innovative Australian not-for-profit sector
• Priority 3: To promote the reduction of unnecessary regulatory obligations on the Australian not-for-profit sector.

The ACNC’s 2018–19 Corporate Goals, which are critical elements in achieving our priorities, were:

• The Charity Register contains only charities that are entitled to be registered
• Registered charities meet their obligations under the ACNC Act and the Charities Act
• The ACNC is a best-practice charity regulator
• Education materials are developed in response to issues identified through stakeholder engagement and information gathered through the registration process, advice services, reporting and compliance
• Information on the Charity Register is accurate and accessible, increasing transparency and informing policy
• Reporting obligations for charities are simplified and streamlined.

OUR OUTCOME AND PROGRAM

Although the ACNC operates independently, we are included in the Australian Taxation Office’s program structure and are one of the programs that delivers the Australian Taxation Office’s outcome.

The Australian Taxation Office’s outcome statement is:

Confidence in the administration of aspects of Australia’s taxation and superannuation systems through helping people understand their rights and obligations, improving ease of compliance and access to benefits, and managing non-compliance with the law.

As Program 1.4 of the Australian Taxation Office’s program structure, our deliverables and performance indicators, which are used to assess and monitor our performance, are published in the Treasury Portfolio Budget Statements. These deliverables and performance indicators are the same as the Corporate Goals and Priorities outlined in our Corporate Plan.

In line with the Commonwealth Government’s enhanced performance framework, our performance measurement and reporting processes were assessed against the requirements of government entities under the Public Governance, Performance and Accountability Act 2013 (Cth) (the PGPA Act). In addition, each of the Corporate Goals has performance criteria according to which the ACNC was assessed. The performance criteria for each goal is included in the assessment tables in the body of this report. Our performance for each criterion is graded as described in Table 3.1.

Table 3.1: Criterion result grading

PRIORITY 1: TO MAINTAIN, PROTECT AND ENHANCE PUBLIC TRUST AND CONFIDENCE IN THE AUSTRALIAN NOT-FOR-PROFIT SECTOR

Corporate goal 1.1: The Charity Register contains only charities that are entitled to be registered

Corporate goal 1.2: Registered charities meet their obligations under the ACNC Act and the Charities Act

Corporate goal 1.3: The ACNC is a best-practice charity regulator

Corporate goal 1.4: Information on the Charity Register is accurate and accessible, increasing transparency and informing policy

PRIORITY 2: TO SUPPORT AND SUSTAIN A ROBUST, VIBRANT, INDEPENDENT AND INNOVATIVE AUSTRALIAN NOT-FOR-PROFIT SECTOR

Corporate goal 2.1: Education materials are developed in response to issues identified through stakeholder engagement and information gathered through the registration process, advice services, reporting and compliance

Corporate goal 2.2: Information on the Charity Register is accurate and accessible, increasing transparency and informing policy

PRIORITY 3: TO PROMOTE THE REDUCTION OF UNNECESSARY REGULATORY OBLIGATIONS ON THE AUSTRALIAN NOT-FOR-PROFIT SECTOR

Corporate goal 3.1: To reduce the administrative burden on charities

We are committed to providing high quality services to the public and to the charities we regulate. Our service standards, outlined below, are guided by our core values of fairness, accountability, independence, integrity and respect.

WHEN YOU CONTACT US

Our IT systems upgrade in October 2018 had a significant effect on our ability to meet our service standards for responding to phone calls and written enquiries due to a spike in customer demand seeking assistance with logging into and navigating the new Charity Portal. We met or exceeded the service standards for general enquiries in July, August and September 2018. However, we failed to meet the standards for the remainder of 2018–19.

To deal with the significant increase in customer demand we implemented a range of initiatives (outlined on pages 41–42) that helped us respond to as many queries as possible.

WHEN YOU DO BUSINESS WITH US

We aim to ensure that the registration process is customer friendly and efficient. This year we processed 97% of applications within 15 days of receiving all the information required to make a decision.

Most customers found the registration process to be a positive experience with 96% expressing satisfaction with the quality of our service.

Customers can complete most of our forms online using the Charity Portal, which minimises the need to manually process forms. We did not meet our service standard for manually processing forms because during peak periods we prioritised responding to phone and email enquiries.

Between July and October 2018, we met our service standard by manually processing 84% of forms within seven days. However, after the transition to the new IT system, the form processing rate dropped to 53%^* as resources were diverted to assisting customers access the new Charity Portal.

WHEN YOU REPORT A CONCERN TO US

We work hard to be a transparent regulator with good governance practices, a positive culture and a focus on customer service. If we fail to live up to these ideals, we encourage people to let us know. In accordance with our policy ‘Complaints and compliments about the ACNC’, we are committed to resolving complaints about our service as quickly as possible.

We did not receive any formal complaints requiring escalation in 2018–19.

WHEN YOUR CHARITY IS UNDER REVIEW

We take concerns about registered charities seriously. We apply our proportionate regulatory approach when assessing and investigating concerns about charities. In 2018–19, we received 2,323 concerns about charities, a 24% increase on the previous year.

Although we did not meet the service standards for finalising investigations in 2018–19, our result improved and was closer to meeting the standards than in previous years.

WHEN YOU REQUEST INFORMATION WE HOLD

We receive formal requests for information made under the FOI Act and the Privacy Act, as well as from general enquiries. We are committed to responding to all of these requests within the prescribed service standards. In 2018–19, we met our service standard of 100% for all information requests.

ACNC.GOV.AU

Our website is central to our communication with registered charities and the public. It is a crucial source of information, advice and guidance about important issues for charities, as well as insights into Australia’s charity sector. It is also the access point for the ACNC Charity Register and ACNC Charity Portal.

In October 2018, we launched our revitalised website — designed to simplify and streamline the information available, as well as improve functionality, speed and reliability. The new design is modern and more accessible to a wider range of users. Importantly, it is now mobile and tablet-responsive, improving the user experience.

Our new website introduced an improved search function which allows visitors to find information of interest with ease. In addition to providing an effective search system, the updated website has an A-to-Z list of topics and easy access to popular resources and new content.

We are still working towards complete compliance with the Web Content Accessibility Guidelines Version 2 (WCAG2.0) — however, the new website has allowed for significant improvements. For example, new policies and procedures are now available as HTML content for the first time, complying with WCAG2.0, and there have been significant improvements to the navigation and mobile versions of the site. Work is continuing to deliver further accessibility and readability of the website.

Most popular pages on acnc.gov.au in 2018-19:

• Search the ACNC Charity Register
• ACNC Homepage
• ACNC Charity Portal
• For Charities
• Contact Us

The Charity Register is the most popular page on our website, with 968,815 searches in 2018–19 — an increase of 25% on the previous year — and nearly 2 million page views. The updates to our website increased the speed of the Charity Register, while enhancing the presentation of data to make it more visual and to provide more information with fewer clicks. The redesigned listings for each charity includes information about activities, beneficiaries and financial status at the forefront. The interactive presentation allows donors to see key information at a glance, and improved navigation and layout to explore further.

In addition to launching the new website and Charity Register, we implemented a range of improvements to the ACNC Charity Portal — providing a faster, modernised resource for charities.

One of the major improvements to the Charity Portal is providing user accounts for individuals. Previously, user accounts were limited to one for each charity. This meant that people within a single charity had to share login details to manage their charity, and people representing multiple charities had to juggle multiple accounts to manage their charities. Now every user can manage the obligations of their one or more charities from a single account. This has made using the Charity Portal to manage charity obligations more efficient and user friendly.

COMMUNICATING WITH CHARITIES AND THE CHARITY SECTOR

The ACNC Commissioner writes a column each fortnight, issued to more than 11,000 subscribers, which provides an update on news from the ACNC and the wider charity sector. A total of 25 Commissioner’s Columns were published in 2018–19.

In addition to the fortnightly Commissioner’s Columns, all charities receive a newsletter, ACNC Quarterly, that includes information about reporting requirements, legislative changes and other matters that may affect not-for-profit organisations. Three issues of ACNC Quarterly were published and distributed in 2018–19.

Our active social media presence continued in 2018–19, with improved engagement on Twitter, Facebook and LinkedIn. We use these channels to share charity news and events, resources and reminders. Engagement continues to grow, with our Twitter follower count reaching 10,287.

To highlight more about Australia’s registered charities, we started publishing a feature article called ‘Getting to Know’. Each article contains an interview with a registered charity about its work, its challenges and its rewards. A total of 14 Getting to Know articles were published on our homepage in 2018–19, and featured charities from a range of sectors and locations across the country. For more information or to read the stories, visit acnc.gov.au/GettingToKnow.

ENGAGING WITH THE SECTOR

We are committed to meaningful engagement with the not-for-profit sector. We receive many requests to attend meetings and to present at events. We try to accommodate as many requests as practicable and to engage with people in rural areas, as well as in the capital cities. In 2018–19, our Commissioner or Assistant Commissioner participated in 104 stakeholder meetings — including meetings with charities, sector representatives and peak bodies — and 56 speaking engagements, including conferences, forums and roundtable discussions. Of the 160 events, 16 were in regional or rural areas.

Highlights:

• 25 Commissioner's Columns published
• 14 'Getting to Know' articles published
• 10,287 Twitter followers
• 104 stakeholder meetings
• 56 speaking engagements

SECTOR AND PROFESSIONAL USER GROUPS

We have two established consultative groups that meet throughout the year: the ACNC Sector Users Group and the ACNC Professional Users Group. In 2018–19, we convened three meetings of both groups.

The Sector Users Group comprises representatives from peak bodies in the charity sector, ACNC representatives and invited representatives of government agencies that interact with the charity sector.

The Professional Users Group comprises professional advisers, legal and financial officers of charities, ACNC representatives and invited representatives of government agencies that interact with the charity sector.

Both groups provide perspectives on issues in the sector, feedback on matters of procedure, policy, strategy, performance and the ACNC’s regulatory approach.

MEDIA ENQUIRIES

In 2018–19, we published a total of 49 news articles on the ACNC website to provide updates on developments within the ACNC and to highlight key issues and changes within the charity sector. In addition, we responded to a total of 256 enquiries from journalists and media personnel, resulting in 3,217 media mentions.

Our media mentions represented an equivalent advertising value of over $30 million.

Stories that attracted the most interest included the activities of drought charities Rural Aid and Aussie Helpers, the ACNC’s compliance processes, figures from the Australian Charities Report 2017 and the findings from the Charity Compliance Report 2018.

In May 2019, we published our media policy, which sets out how we manage and respond to requests for information from members of the press. The policy outlines our commitment to engage with the media (within the legislative limitations of the ACNC Act) and make ourselves available to comment on issues concerning the charity sector.

INTERNATIONAL CHARITY REGULATOR ENGAGEMENT

We have a strong network with overseas charity regulators and we continue to learn from other regulators and share our experience of charity regulation with our counterparts overseas. We continue to host the biannual teleconference with charity regulators from England & Wales, Scotland, Ireland, New Zealand, Canada, United States and Singapore.

We attended two major summits on preventing and responding to sexual exploitation, abuse and harassment in the aid sector in London in October 2018, the International Safeguarding Summit and Putting People First, and Tackling Sexual Exploitation and Abuse and Sexual Harassment in the Aid Sector. These events highlighted the trial of initiatives to combat the issues, including a new Interpol system to improve background checks on staff working in the aid and development sector and a new scheme for disclosure of misconduct across the not-for-profit sector.

We participated in and presented at two regulator forums in Wellington, New Zealand, in April 2019. The first was a forum with New Zealand’s charity regulator, Charity Services, to consider the similarities and differences of the regulatory frameworks in Australia and New Zealand. The second was at the Charity Law Association of Australia and New Zealand Conference where discussions focused on issues in the charity and NFP sector, as well as the review of the New Zealand charities legislation.

We attended the International Charity Regulators Conference in New York and the Muttart Foundation Consultation on Charity Law in Canada in October and November 2018 to strengthen the Communities of Practice between Charity Regulators in common law countries and to understand approaches to critical issues in charity law and regulation.

ENQUIRIES FROM CHARITIES AND THE PUBLIC

We hear directly from charities and the public via phone, email, our new online enquiry form on the website and through the Charity Portal.

Most enquiries we received in 2018–19 were about accessing the new Charity Portal and completing the Annual Information Statement. We also received a lot of enquiries about charity law and governance — such as questions about starting a charity, changing a charity subtype, winding-up or merging a charity, and what charities can and cannot do.

In 2018-19 we received:

• 40,214 phone calls
• On average, calls were answered within 7 minutes
• 13,656 emails
• 1,553 paper letters or forms
• 43 faxes
• 6,962 online forms

PHONE CALLS

In 2018–19, our Advice Services team responded to 40,214 phone calls, compared with 31,809 in 2017–18. On average, calls in 2018–19 were answered within 7 minutes, compared to 38 seconds in the previous year.

The average number of calls per month in 2018–19 was 3,351. The previous year, the average number of calls per month was 2,650. The busiest month in 2018–19 was March 2019 in which we answered 4,806 calls.

Our busiest ever day of phone calls occurred on Friday 29 March 2019, when we answered 833 calls. The previous record of answering 709 calls occurred on 31 March 2014.

The increase in calls can be attributed to issues with the new Charity Portal. In March 2019, the new system’s first peak submission period, the Charity Portal experienced system slowness and outages. In addition, many charities sought assistance setting up their new individual login accounts. This resulted in an unprecedented volume of calls and an increased wait times for customers to get through on the phone. It also increased the average duration of each call.

WRITTEN ENQUIRIES

We received 22,214 pieces of written correspondence in 2018–19. Of this total, 11,830 became written enquiry ‘cases’ requiring a response from our Advice Services team. In 2018–19, we resolved 11,987 written enquiry cases, 4,604 more than in 2017–18.

Table 4.1: Written enquiries

* The number of cases resolved exceeds the number of cases created, because some cases created in the previous year were resolved in the next year.

QUALITY ASSURANCE OF CALLS AND EMAILS

We undertook quality assurance checks throughout the year that involved reviewing staff responses to phone calls and written enquiries to monitor and improve the quality of our responses to customers’ enquiries. Responses are evaluated according to four criteria: integrity, correctness, timeless and customer service. In 2018–19, we achieved an average score of 80%.

ABORIGINAL LIAISON

Our Aboriginal Liaison Officers had a busy year providing support and advice on Aboriginal liaison to our staff and external agencies, as well as support to Indigenous charities. They responded to a range of enquiries for which consultation with an Aboriginal Liaison Officer was requested.

During NAIDOC Week they ran activities for staff and participated in the Whole of Government NAIDOC Event.

Additionally, we worked closely with the Office of the Registrar of Indigenous Organisations (ORIC) to facilitate the exchange of data between the two agencies, reducing the reporting burden for ORIC-registered charities.

In the image above, Caitlin, Marion and Louis display a collage of photographs taken by ACNC staff to celebrate NAIDOC Week.

This year, we completed a significant transformation of our IT systems and services.

The phased program began in early 2018, and the first phase was deployed in October 2018.

The first phase:

• updated our website design and layout, making information more accessible and user friendly
• improved the design, search, accessibility and responsiveness of the Charity Register
• introduced a new Charity Portal with a suite of online forms and individual user accounts
• implemented a new integrated customer relationship management system to streamline our internal operations
• updated online forms with data verification features and deployed the 2018 Annual Information Statement.

The second phase, finalised in June 2019, focused on further improvements, including:

• speed, stability and the functionality of the Charity Portal, making tasks quicker and easier for users
• case management capabilities to streamline work processes for our staff.

This project was completed within the $3 million allocated funding and sets a firm foundation for the ACNC's digital strategy over the next five years.

HELPING CHARITIES NAVIGATE THE NEW SYSTEM

The IT system upgrade brought many improvements to our website, the Charity Portal and the Charity Register, as well as efficiencies and improvements to many of our internal systems and processes. We anticipated that the transition to the new system may be difficult for charities that had become accustomed to using the previous version of the Charity Portal, so we implemented a number of initiatives in an attempt to make the transition easier.

In October 2018, ahead of the launch of the upgraded website, Charity Portal, Charity Register and 2018 Annual Information Statement, the Commissioner announced an extension to the due date for the 2018 Annual Information Statement. This gave charities that were required to submit the 2018 Annual Information Statement between 31 December and 28 February until 31 March 2019 to do so. The additional time gave charities a chance to log in and get familiar with the system ahead of the due date and it acknowledged the delayed availability of the 2018 Annual Information Statement.

In addition, we:

• encouraged charities to set up their new logins for the Charity Portal as soon as possible
• encouraged charities to complete their Annual Information Statements early
• had extensive training to ensure our staff were comfortable and familiar with the new system
• recruited four additional staff and extended the employment end dates for six non-ongoing staff in our Advice Services team.

As the 31 March due date approached, it became clear that the load on the system was causing issues which we worked to fix promptly as they arose. However, the issues still resulted in an unprecedented volume of calls and emails.

We anticipated that the transition to the new system may be difficult for charities that had become accustomed to using the previous version of the Charity Portal, so we implemented a number of initiatives in an attempt to make the transition easier.

We also implemented the following demand management strategies to attempt to respond to as many requests for assistance as possible:

• Between 21 and 29 March, we opened the phone line for an extra hour each day, until 6pm
• We introduced a second phone queue to streamline calls about Charity Portal access
• We used targeted in-queue recorded messages for customers waiting to speak with us
• We used social media and the Commissioner’s Column to advise people of the quietest times to call us for assistance
• We updated the relevant guidance on our website so that the solutions to common user problems could be found without having to call or email us
• For charities due to submit the 2018 Annual Information Statement by 31 March 2019, we extended the due date further to 7 April 2019
• We adjusted our staff schedules to prioritise answering phone calls
• We worked overtime on weekends to respond to emails.

The measures we took to get charities logged in to the system early, combined with the steps above, helped result in a 70% on-time submission rate for the 2018 Annual Information Statement. Given the circumstances, this is a good result.

We take customer feedback seriously.

Complaints and compliments from our customers identify gaps and shortfalls in our service and contribute to our culture of continuous improvement. Our corporate policy Complaints and Compliments about the ACNC outlines our approach to feedback and is available on our website.

In 2018–19, we received 212 compliments and 1,019 reports of negative feedback.

Most of the positive feedback we received was about a positive customer service experience.

“Thank you very, very much (Marion) for your clear and helpful answers. You are obviously the right person for the job you are doing. I am so relieved to get those things sorted out!”

“I’m extremely satisfied with the new portal to lodge our AIS. I’ve gone from not wanting to even consider lodging the form because of how slow and frustrating the portal was, to looking forward to lodging it. Thankyou also must go to the patient fellow you have answering my call, he stayed on the phone while I began to access the portal and guided me through the first stage of login where I had to enter a new password, till I gained access. I have now managed to get the records for the charity that I volunteer for up to date, and look forward to updating the next AIS in a few months time.”

“Spoke with Mat, he was really helpful and friendly and patient. I had trouble using the Portal and removing Responsible Persons.”

“You are a good man, when you go home tonight to your wife or your mother you tell them you did a good thing, you helped a 90-year-old.”

“Thank you for your guidance during my time as secretary for the [charity], I am forever grateful. May God bless ACNC.”

"I spoke to several of your officers in the process of completing the report, and found them extraordinarily friendly and helpful - an excellent example of good public service in the best sense."

The next most common compliment was about our educational resources, including webinars and the website. Customers also regularly reported that we are easier to work with than other regulators.

After attending our webinar on the Australian Charities Report 2017, one participant emailed us to say:

“An excellent presentation and very enlightening.”

Most of the negative feedback we received was about difficulty accessing and navigating the new Charity Portal or other website connectivity problems. Immediately following the IT system upgrade, the average number of complaints per month more than doubled (from 49 to 110).

“Trying to resubmit AIS, getting pretty tired of this super-slow and disfunctional site.”

“Very slow. Waited for 45 minutes to get in to the Portal.”

“Not good enough for a gov agency.”

“I have just lodged an Annual Statement. The slowness of your server is completely unacceptable with load times of 5min + per screen. Load times on the weekend were equally slow. It is an entirely unjustifiable imposition on my time.”

“This is too complicated for tiny little organisations. This may be great for other charities like [large charity name]. We are a tiny little group, nobody draws a salary, and we do this for the goodwill and benefit of Australia.”

Many of these customers reported feeling better after speaking with us, and thanked us for our patience, empathy and helpful advice.

Other negative feedback was about us not investigating a particular charity concern, or not doing enough to make charities accountable. There was also feedback and suggestions on how to better present and ask some of the questions in the 2018 Annual Information Statement.

SMALL CHARITIES LIBRARY

Nearly two-thirds of Australia’s 57,000 registered charities are small, with annual revenue of $250,000 or less — and just over half of these charities are extra small, with annual revenue of $50,000 or less. Many of these organisations do not have the resources of their larger counterparts and rely heavily on the knowledge and goodwill of volunteers. To assist, we developed the Small Charities Library — a collection of factsheets, guides and templates, specifically tailored to the needs of small charities. These resources aim to provide Australia’s smaller charities with information, advice and tools they can use to help them manage their organisation, run effective meetings and ensure they understand and meet their obligations to the ACNC and other regulators.

We will continue to add new resources to the library, which is available at acnc.gov.au/smallcharitieslibrary.

EXTERNAL CONDUCT STANDARDS

Regulations to introduce the External Conduct Standards were tabled in Parliament in late 2018. From July 2019, charities that have operations overseas or work with third parties overseas must comply with the External Conduct Standards.

The External Conduct Standards are principles-based standards of governance for overseas operations. They are intended to promote transparency and provide confidence that the resources a charity sends overseas, or the services it provides overseas, reach the intended beneficiaries and are used only for charitable purposes. The Standards also seek to protect vulnerable people overseas.

We have developed guidance to assist charities to understand their obligations under the External Conduct Standards and will host a webinar on the topic. Our staff have undergone extensive training on the new requirements and are ready to assist charities that have queries about the Standards.

GOVERNANCE TOOLKIT

Throughout 2018–19 we worked collaboratively with Deloitte to develop a suite of resources designed to help charities manage risks in four key areas: safeguarding people, financial abuse, cybersecurity and working with partners. Named the ‘Governance Toolkit’, became available for charities in August 2019.

REGISTRATION PROCESS

We assess charity registration applications against the requirements of the ACNC Act, the Charities Act, the Charities (Consequential Amendments and Transitional Provisions) Act 2013 (Cth) and common law to determine eligibility for registration. When we do not have enough information in an application to determine eligibility, we request further information from the applicant.

We analyse a wide variety of applications. These range from relatively straightforward applications from schools, churches, private ancillary funds and parents and citizens associations to complex applications that challenge the traditional concept of charity.

The charity sector is highly innovative, and we receive applications for organisations with novel approaches to solving big social issues. These organisations sometimes challenge the legal boundaries of charity law.

All newly registered charities receive helpful information about managing their obligations as a charity and can download a registration certificate from the Charity Portal. They may also be eligible to display the ACNC Charity Tick of Registration

In 2018–19, we received 97% of charity registration applications through the online application form in the Charity Portal. The application form is supported by guidance to help applicants understand the process and our requirements to become a registered charity.

REGISTRATION OUTCOMES

Charities registered

We received 3,350 new charity applications in 2018–19. We received a further 690 requests from applicants re-applying for registration, usually because their initial application was incomplete. Of the new charity applications, 2,625 (78%) resulted in the organisation being registered as a charity. Of the remaining applications, 16 were refused for not meeting eligibility requirements, 214 were refused for not supplying sufficient information for us to make a decision, 757 applications were withdrawn and 581 applications were closed because they were incomplete. At the end of the 2018–19 financial year, 274 applications remained in progress.

Registration refusals and withdrawals

We refused 230 charity registration applications in 2018–19. We refused 93% of these because the applicant did not provide enough information for us to determine whether the organisation met the eligibility requirements. In these situations, we make two attempts to obtain the required information before refusing the application.

The remaining refusals were because the organisations did not meet the eligibility requirements.

In 2018–19, 757 applications to register as a charity were withdrawn. This is more than in 2017–18. Often applicants withdrew their applications after we identified non-charitable purposes in their organisation and explained how the law related to the organisation’s purpose. Other applicants withdrew their applications while their organisation redrafted the governing documents, or while they resolved complex issues that were a barrier to registration.

Many applicants that withdrew an application or had it refused re-applied after they resolved the issues that had prevented their organisation’s registration.

Highlights:

• 3,350 new charity applications
• 78% resulted in the organisation being registered

Table 4.2: Charity registrations

VOLUNTARY REVOCATIONS

Every year, some charities choose to wind up their operations, merge with other charities or decide that they do not want to retain their ACNC registration.

In 2018–19, we received 856 applications from charities requesting to have their registration voluntarily revoked, down from 1,041 in the previous year.

IT ENHANCEMENTS IMPROVE REGISTRATION PROCESS

The new online charity registration application form was released in October 2018 as part of the IT system upgrade. The new form is more user friendly, easier to understand and customised to suit the applicant’s circumstances. It improves the registration application process by pre-filling certain data and ensuring applicants complete mandatory questions that are relevant to their specific circumstances.

It also makes the process of re-applying easier by enabling applicants, in certain circumstances, to use their original application form to reapply by updating the form to provide the necessary information for reconsideration.

OBJECTIONS TO REGISTRATION DECISIONS

If we refuse to register an organisation as a charity, or a charity with a particular subtype, the applicant can object to the decision. Objections are independently reviewed.

In 2018–19, we received 16 review requests relating to our decisions to refuse to register an organisation as a charity, or to register a charity with a particular subtype. This is a decrease from 19 in the previous year.

INFORMATION WITHHELD FROM THE CHARITY REGISTER

In limited circumstances, we may withhold publication of a charity’s information from the Charity Register. The Commissioner has discretion to withhold information if the adverse effect of publishing it outweighs the public interest in publishing it.

Table 4.3 shows the breakdown of requests we have received to have information withheld from the Charity Register.

CHARITY SUBTYPES

When we register an organisation as a charity, we also register it with one or more charity ‘subtypes’. These subtypes are categories that reflect the charity’s charitable purpose, for example ‘advancing education’ or ‘advancing health’. In 2018–19, we received 370 applications from charities to change their subtype or add another one.

DGR REFORM

On 5 December 2017, the Government announced reform of the administration and oversight of organisations with Deductible Gift Recipient (DGR) endorsement. The changes are designed to strengthen governance arrangements, reduce administrative complexity and ensure continued trust and confidence in the sector.

The reforms, initially planned for 1 July 2019, are now due to commence on 1 July 2020. They will require all non-government organisations with DGR endorsement to be registered charities (unless specifically exempted). The reforms will also result in the transfer of four DGR registers to the ACNC: the Register of Environment Organisations, the Register of Cultural Organisations, the Overseas Aid Gift Deduction Scheme, and the Register of Harm Prevention Charities. We expect to commence work on the deferred measures in 2019–20.

SATISFACTION AT A NEW HIGH

This year we achieved our highest result for customer satisfaction with the registration process: 96% of customers expressed overall satisfaction with the quality of our service.

Additionally, we processed 97% of all our registration applications within 15 days of receiving all the information required to make a decision.

Table 4.3: Requests to have information withheld from publication on the Charity Register

Reviewing and investigating concerns about charities is a key component of our work to maintain and enhance public trust and confidence in the sector.

In 2018–19, we received 2,323 concerns about charities, an increase of 24% on the previous year. In total, 1,544 of the concerns raised were within our jurisdiction, an increase of 116% on the 716 concerns that were in jurisdiction in 2017–18. The total figure includes more than 500 concerns relating to several charities, which partly accounts for the overall increase in concerns.

Of the concerns we received, 34% were out of our jurisdiction and 66% progressed to an assessment.

Assessments and investigations are not only initiated through concerns we receive from the public. An assessment, and a subsequent investigation, may begin in response to issues identified through the media or through information we hold, such as data from charities’ Annual Information Statements.

Prior to commencing an investigation, we conduct a risk assessment, which includes a review of the information we have available. The risk assessment helps us understand the significance, likelihood and consequence of the issues raised, and this enables us to decide the most appropriate response.

In 2018–19, we completed 107 risk assessments. Of these, 33% of cases proceeded to an investigation, while 67% resulted in us providing regulatory guidance or no further action required.

In March 2019, we implemented a new process for addressing concerns. All concerns deemed to be in our jurisdiction are now initially considered by our Compliance team. Previously, our Advice Services team would review the concern before passing it to the Compliance team for assessment. The Advice Services team now only responds to concerns that are out of our jurisdiction.

Table 4.4: Source of charity concerns (in jurisdiction)

Table 4.5: Types of concerns (in jurisdiction)

In 2018–19, we assessed 325 concerns of non-compliance associated with 277 charities. The charities subject to compliance cases controlled $5.3 billion of charitable assets.

We finalised 100 investigations in 2018–19, a slight decrease from the previous year, but we also focused some resources on delivering appropriate outcomes for the many concerns deemed to be lower risk. These included tailored regulatory advice for charities or guided self-evaluations to help charities resolve issues of non-compliance independently. This approach allowed us to achieve better outcomes for a broader range of concerns.

In line with our regulatory approach, our response to non-compliance is proportionate. If a charity’s non-compliance is significant, but we decide that its Responsible Persons are willing and able to correct matters, our response may involve a compliance agreement or an enforceable undertaking. These are effectively action plans for the charity, and we monitor the charity’s progress to ensure they implement what is required in the plan. In 2018–19, we issued a combined total of 28 compliance agreements, enforceable undertakings and directions.

When we identify that a charity is unwilling or unable to address serious wrongdoing, we use our regulatory powers to address the wrongdoing or revoke the charity’s registration. In 2018–19, we revoked the registration of 12 charities following investigations.

We are committed to helping genuine charities get back on track after they encounter compliance issues. When charities are at risk of breaching ACNC legislation, we often provide them with targeted regulatory advice, which reminds them of their obligations and our expectations and may include suggested changes to prevent future non-compliance. In 2018–19, we provided 52 charities with regulatory advice and instructed 51 charities to evaluate their compliance using our self-evaluation tool.

We analyse the data we hold about charities, and we work with other regulators and law enforcement agencies to identify risk and prevent harms. This year, 16% of the cases considered by our Compliance team came about through our intelligence work. We continue to build our expertise in this area with a dedicated intelligence analyst and a stronger focus on a data and intelligence-led compliance.

Due to the IT systems upgrade, we did not issue any penalties in 2018–19. We also did not carry out the ‘double defaulter’ process to revoke the registration of charities that did not submit an Annual Information Statement for two consecutive years. Although we did not carry out this process in 2018-19, you can see when a charity has not completed their Annual Information Statements by looking at their listing on the ACNC Charity Register. Additionally, we completed the double defaulter process in September 2019.

Table 4.6 Compliance activity and enforcement

REGULATORY ACTIVITY AND ENFORCEMENT ACTION IN 2018–19

• 100 investigations finalised
• 12 charity registrations revoked following investigation
• 2 charities issued with a direction
• 25 charities entered into compliance agreements
• 2,323 concerns about charities received
• 52 charities received regulatory advice
• 35 notices served on charities and third parties
• 107 risk assessments completed
• 51 charities instructed to undertake a self-evaluation

COMPLIANCE OUTREACH

In 2018–19, we established a dedicated outreach function to support early engagement with charities at higher risk of non-compliance and help them stay on track.

Our activities through the outreach function included:

• targeted email campaigns providing guidance to address specific risk areas
• tailored training packages based on lessons learned through our investigations
• reviews of charity education and guidance resources that relate to our investigations.

FINANCIAL ACTION TASKFORCE

Australia is a member of the Financial Action Taskforce (FATF). The FATF is a global inter-governmental body that has developed a series of recommendations to set standards and promote the effective implementation of legal, regulatory and operational measures to combat money laundering, terrorist financing and other related threats to international financial systems.

The FATF monitors the progress of its members in implementing necessary risk identification and mitigation strategies. Following Australia’s upgraded compliance with recommendation 8 (which relates specifically to the not-for-profit sector) from non-compliant to largely compliant in June 2018, we have been working with the Department of Home Affairs as a member of a whole-of-government working group in preparation for the 5-year review that will take place in late 2019.

POLITICAL ADVOCACY

In response to the 2019 federal election, we fast-tracked concerns relating to political advocacy raised during the election period. We promptly contacted charities once we became aware of concerns and provided advice on how their political advocacy may affect their charitable status.

We also updated the political advocacy guidance on our website to include a set of questions a charity should consider prior to attending an event organised by a political party or a fundraising event for a political party or candidate for office.

SAFEGUARDING PEOPLE

All charities must ensure they take adequate steps to protect people from harm. This is not limited to the charities that work with children, vulnerable adults or in the international aid and development sector. Protecting people and safeguarding responsibilities should be a governance priority for all charities. This includes working to ensure that no harm comes to staff, volunteers, beneficiaries and anyone that interacts with the charity.

In its final report in December 2017, the Royal Commission into Institutional Responses to Child Sexual Abuse set out ten standards for making institutions in Australia safe for children. We have been actively engaged as a member of the Implementation Advisory Group to oversee the application of the National Principles for Child Safe Organisations and are a current member of the Child Safe Sectors Leadership Group hosted by the National Office for Child Safety. The National Principles aim to create environments that protect the safety and wellbeing of children and young adults across all types of organisations. To support this work, we have coordinated engagement with charity sector representatives and sought feedback from a range of registered charities.

INFORMATION REFERRED TO OTHER GOVERNMENT AGENCIES

Under subdivision 150-C (section 150-40) of the ACNC Act, the ACNC may disclose protected information to an Australian government agency if:

• the ACNC is satisfied the information will enable or assist the agency to perform or exercise any of the functions or powers of the agency
• the disclosure is for the purposes of enabling or assisting the agency to perform or exercise any of its functions or powers, and
• the disclosure is reasonably necessary to promote the objects of this Act.

In 2018–19, we made 114 referrals to other government agencies where our staff considered there may be possible action under the legislation of the other agency.

MEMORANDA OF UNDERSTANDING

We have memoranda of understanding (MOUs) with other agencies to more formally articulate cooperation with information sharing and intelligence, including:

• The Australian Taxation Office (ATO)
• The Australian Securities and Investments Commission (ASIC)
• The Office of the Registrar of Indigenous Corporations (ORIC)
• The Australian Business Register (ABR)
• The Department of Prime Minister and Cabinet (PM&C)

We are committed to making the data we collect about charities freely and readily available.

Each year charities are required to submit an Annual Information Statement (except those also registered with the Office of the Registrar of Indigenous Corporations). This Statement collects details of a charity’s activities, beneficiaries, and finances. Medium and large charities are required to provide reviewed or audited annual financial reports with their Annual Information Statements.

The data from the Annual Information Statements is used to populate the Charity Register, ensuring that it contains up-to-date information on charities. We also share this data through research reports, the Charity Passport and by making it available at data.gov.au.

THE ANNUAL INFORMATION STATEMENT

The Annual Information Statement is due for each charity six months after the end of its reporting period. It is completed and submitted online via the Charity Portal, but can also be submitted on paper, or via special processes designed for submitting in bulk or as part of an agreed reporting group.

The 2018 Annual Information Statement was made available to charities in October 2018. This was later in the year than the release date of the 2017 Annual Information Statement due to our IT system upgrade.

The 2018 Annual Information Statement, which almost all charities completed online, contained improvements to functionality and the user experience. These included:

• Better data validation, which helped charities detect and prevent errors before submission
• Changes to the flow of the questions, which improved the user experience
• Additional data validation to prevent charities from incorrectly reporting as a Basic Religious Charity
• Extra guidance for questions about staffing, including an inbuilt calculator to help charities work out their full-time equivalent (FTE) staff numbers.

As at 30 June 2019, 70% of charities had submitted their 2018 Annual Information Statement on time. The implementation of our new IT system may have affected the number of on-time submissions.

Table 4.7: Annual Information Statement and annual financial report submissions

* In previous years, submissions for Group Annual Information Statements were counted by the number of individual member charities in the reporting groups. However, from 2018–19, each Group Annual Information Statement is counted as one submission, regardless of how many individual charity members the group contains.

GROUP REPORTING

We are committed to reducing the administrative burden for charities. Allowing charities to report as a group in certain circumstances helps achieve this. Group reporting is when a group of registered charities submit one single Group Annual Information Statement and one combined financial report (if applicable).

We assess all requests to report as a group, ensuring that it does not compromise transparency or our ability to assess compliance. For reporting periods ending in 2019, additional conditions were imposed on groups, requiring adequate disclosures in the combined annual financial report as a way of improving transparency.

A combined sum exceeding $19 billion in total revenue and almost $40 billion in total assets was reported by ACNC groups. As such, we began reviewing all Group Annual Information Statements and combined annual financial reports in 2018–19 to ensure accuracy of the data that was submitted.

As at 30 June 2019, there were 280 approved reporting groups comprising 1,334 registered charities, an increase on the previous year’s figure of 267 groups comprising 1,283 charities.

BULK REPORTING

We have a process to accept submissions of the Annual Information Statement in bulk for ten or more charities. This allows representatives of multiple charities to submit their Annual Information Statements using a single form. The bulk submission process saves thousands of charities time and money and we continue to allocate considerable resources to improve it.

In 2018–19, we focused on streamlining the approach to ensure charities that submit their Annual Information Statements in this way remain compliant with their reporting obligations. We also implemented a secured channel to make the bulk submission of financial reports easier.

As at 30 June 2019, there were 86 representatives who submitted Annual Information Statements in bulk for a combined 7,008 charities.

DATA INTEGRITY CHECKS

Inaccurate information on the Charity Register could lead to a decrease in public trust and confidence in charities, and we have a range of measures to help ensure the integrity of the data that is published to the Charity Register.

In January 2019, we finalised our data integrity checks for the 2017 Annual Information Statement. We contacted 747 charities that had made errors, which resulted in over $20.7 billion in total revenue, $670 million in total assets and 51,484 full-time employee figures being corrected on the Charity Register. Improvements to each edition of the Annual Information Statement have led to charities making fewer errors in their financial information, allowing us to increase the number of annual financial reports we review. Our reviews of annual financial reports consider the accuracy of the financial information, the quality of information disclosed and the overall compliance with the requirements of the ACNC Act, and compliance with Australian Accounting Standards.

In previous years, we commenced our analysis of financial information and contacted charities about errors before the end of the financial year, which meant that we were generally limited to charities with reporting periods ending between 30 June to 31 October. To enable a more comprehensive review of financial information covering the full reporting year, the results of our data integrity checks covering the 2018 reporting period will be reported in 2019–20.

747 charities were contacted about errors. This resulted in:

• $20.7 billion in total revenue
• $670 million in total assets
• 51,484 full-time employee figures corrected on the Charity Register.

DATA.GOV.AU

The Australian Government’s data-sharing website, data.gov.au, provides an easy way to find, access and reuse public datasets from government. The main purpose of the site is to encourage access and use of public data. In 2018–19 we uploaded data from 2017 Annual Information Statements to data.gov.au.

The ACNC has nine datasets at data.gov.au. The ACNC registered charities dataset is the most popular ACNC dataset, and the sixth most viewed dataset of all at data.gov.au, with more than 50,000 views.

CONNECTING CHARITIES AND DONORS THROUGH ACNC DATA

We are in the early stages of developing an enhanced search of charity data on our website that will help connect donors, charities and volunteers.

The project will commence procurement and delivery in 2019–20. From the 2020 Annual Information Statement, charities will be able to report on their main programs, rather than only their main activities. Donors and volunteers will be able to search for programs that match their interests.

AUSTRALIAN CHARITIES REPORT 2017

The Australian Charities Report 2017 was launched in May 2019. This is the fifth edition of our annual research report using data from charities. We redesigned this edition of the report to make it more succinct and easier to read and understand. The report analyses information we receive directly from charities with a summary of key facts and figures, including total income and expenses of charities, where they operate, who they help and what they do.

For the second consecutive year, charities reported an increase in combined revenue. This edition of the report showed a total of $146 billion, up from $143 billion in the previous year. The increase is largely attributable to an increase in government funding of $7 billion.

The report showed that Australians remain generous with nearly $10 billion donated or bequeathed in 2017. This is supported by a significant increase in the number of volunteers from a reported 2.9 million in 2016 to 3.3 million in 2017.

The Australian Charities Report and interactive data is available on our website at acnc.gov.au/charitiesreport.

ACNC COMPLIANCE REPORT 2018

We publish a Compliance Report annually. The report outlines our compliance activities, describes the nature of the concerns we identified, offers illustrative case studies and gives an insight into our focus for the year ahead.

The 2018 Compliance Report included a case study on Guide Dogs Victoria to show the issues that a large well-established charity can face. It also outlined our focus for the year ahead, which included proactive investigations into charities considered at risk of private benefit and an outreach program for charities working with children and vulnerable adults

Reducing unnecessary regulation on the charity sector is a key focus for us, and one of the three objects of the ACNC Act.

STATE AND TERRITORY PROGRESS

In 2018–19, we continued to work with Commonwealth, state and territory regulators to reduce the administrative burden on charities through agreements and streamlined reporting arrangements.

Our ‘report-once, use often’ approach is enabled by the Charity Passport — an online tool that allows government agencies to access charity data directly from the ACNC. Sharing data across government reduces the need for charities to provide the same information multiple times to different government departments which may help reduce administrative costs for charities.

As at 30 June 2019, there were 72 active accounts for the Charity Passport across 20 government agencies.

Streamlined reporting arrangements for registered charities that are incorporated associations in Victoria and New South Wales commenced in 2018–19. This allowed approximately 9,000 charities to avoid duplicated reporting by requiring that they only submit an Annual Information Statement and annual financial report (if required) to the ACNC. Rather than these charities reporting again to their state regulator, we securely share the data with Consumer Affairs Victoria and New South Wales Fair Trading.

In June 2019, we announced a new streamlined reporting option that will benefit charities in the Northern Territory. From 1 July 2019, charities registered with both the ACNC and Licensing NT will no longer need to submit an annual return to both agencies. They will only have to report annually once to the ACNC.

We continue to work closely with other state and territory regulators to implement further initiatives to reduce unnecessary regulation for charities in 2019–20.

Sharing data across government reduces the need for charities to provide the same information multiple times to different government departments, which may help reduce administrative costs for charities.

Tables 4.8 and 4.9 set out our progress with each state and territory government relating to legal structure and fundraising.

Table 4.8: Red tape reduction — legal structure

Table 4.9: Red tape reduction — fundraising

* Charities must notify their intention to fundraise in SA, but do not apply for a licence.

DATA-SHARING ARRANGEMENTS

We share information with other government agencies:

• We share details of charity registrations and revocations of charity registration with the Australian Taxation Office, Australian Business Register.
• We share data, including reporting information for incorporated associations in South Australia, Tasmania, the Australian Capital Territory, Victoria and New South Wales, with the relevant state and territory regulator.
• We share reporting information about charitable fundraisers in South Australia with Consumer and Business Services.
• We share changes to the registration status of charities that are incorporated companies with the Australian Securities and Investments Commission
• The Office of Registrar of Indigenous Corporations (ORIC) shares data, including reporting information and notifications of certain changes to charities, with us.

TRANSITIONAL ARRANGEMENTS

Since the establishment of the ACNC, charities required to provide financial reports to state, territory or Commonwealth regulators have been allowed to submit the same financial report to us. This reduces the reporting burden on charities that are required to report to multiple government agencies — an important part of our approach to reduce unnecessary regulation. This arrangement will remain for the 2019 reporting period.

WORKING WITH THE DEPARTMENT OF EDUCATION

With support from the Commonwealth Department of Education, we continue to streamline reporting for non-government schools that are registered charities. This arrangement minimises duplicated reporting for schools and ensures their information is available on the Charity Register.

On the Charity Register, we publish the annual financial reports that charities provide to the Department of Education. We also use the information captured in the Department of Education’s Financial Questionnaire to populate the financial data in the Annual Information Statement. This saves non-government schools significant time and resources, while ensuring this economically significant part of the charity sector is transparent and accountable.

In 2018–19, 1,535 non-government schools participated in this measure to reduce unnecessary regulation.

WORKING WITH THE AUSTRALIAN ACCOUNTING STANDARDS BOARD

We continue to work with the Australian Accounting Standards Board (AASB) and Australian Auditing and Assurance Standards Board on their projects to improve financial reporting and assurance requirements for charities. We work to ensure that requirements are proportionate, fit for purpose, meet the needs of users and minimise the regulatory burden on charities.

In 2018–19, we provided comments to one consultation paper and one exposure draft issued by the AASB:

• ITC 39 — Applying the IASB’s Revised Conceptual Framework and Solving the Reporting Entity and Special Purpose Financial Statement Problems.
• ED 286 — Amendments to Australian Accounting Standard — Right-of-Use Assets of Not-for-profit Entities.

GRANT REFORM

Grants are a significant source of revenue for many charities, but they can create obligations for management, acquittal and reporting. We have been actively involved in an Australian Government grants reform project, led by the Department of Finance, to reduce the obligations that come with government grants. The reform project has developed a suite of templates that make it easier for charities apply for and manage government grants. This is supported by the Australian Government’s grants information system, GrantConnect, launched in 2017.

SUBMISSIONS TO REVIEWS AND INQUIRIES

Part of our work to reduce unnecessary regulatory obligations for charities involves making submissions to government inquiries, reviews and consultations that affect the not-for-profit sector.

FUNDRAISING REGULATION

In August 2018, we made a submission to the Select Committee on Charity Fundraising in the 21st Century. Our submission identified the primary issues as significant regulatory duplication, and the lack of a national approach. We noted that the current state-based regulatory regimes do not adequately address online fundraising.

MODERNISING BUSINESS REGISTERS

In August 2018, we made a submission to the Treasury Consultation on Modernising Business Registers. Our submission noted that this reform could present opportunities for greater alignment between the ASIC business registers and the ACNC Charity Register. We noted that access to the information on the Charity Register is free, and this should be taken into account in considering charges to access information on the registers. We also noted that the introduction of a Director Identification Number would have implications for charities and the ACNC and suggested that Treasury consult with us on these issues.

AUSTRALIAN BUSINESS NUMBER SYSTEM

In August 2018, we made a submission to the Treasury Consultation on Designing a Modern Australian Business Number System. We noted that an entity must have an ABN to be entitled to registration as a charity, and removing a registered charity’s ABN would mean that it was no longer entitled to registration. We expressed our view that requiring periodic renewal of ABNs would impose a regulatory burden on charities and was not justified. We noted that requiring regular renewal of the ABN may deter small entities from applying for registration and urged Treasury to consider an exemption for small charities from this requirement and any associated fees.

AMENDMENTS TO THE TAXATION ADMINISTRATION ACT 2001 (QLD)

In September 2018, we made a submission to the Economics and Governance Committee on amendments to the Taxation Administration Act 2001 (Qld) contained in the Revenue and Other Legislation Amendment Bill 2018. The amendments related to the provisions required in an institution’s constitution for it to be registered as a charitable institution. We noted that the new requirements would impose a burden on charities and if they remained as set out in the bill, the transition period should be longer than 6 months to allow charities sufficient time to make the necessary changes.

PREVENTING SEXUAL EXPLOITATION, ABUSE AND HARASSMENT (PSEAH)

In January 2019, we made a submission to the Department of Foreign Affairs and Trade’s PSEAH consultation. The submission noted that External Conduct Standards for registered charities were expected to come into effect in the second half of 2019. We noted that External Conduct Standard 1 and Standard 4 were particularly relevant to charity governance in the area of sexual abuse and exploitation. We also noted that we are actively involved in addressing the risks associated with sexual exploitation, abuse and harassment in the not-for-profit sector, both within and outside Australia, and that we provide a range of resources to charities to assist them to meet the ACNC’s Governance Standards and the External Conduct Standards.

ASIC INDUSTRY FUNDING MODEL AND REGISTRY SEARCH FEES

In February 2019, we made a submission to the Treasury Consultation on the ASIC Industry Funding Model and Registry Search Fees. We expressed strong support for a reduction in prescribed fee for an application to ASIC by an auditor of a company to resign. We noted that this would benefit registered charities that are required by the Corporations Act to appoint an auditor.

STRENGTHENING OUR BUSINESS

ACNC LEGISLATIVE REVIEW

The final report from the mandated five-year review of the ACNC’s legislation was tabled in Parliament and published on the Treasury website in August 2018.

Strengthening for Purpose: Australian Charities and Not-for-profits Commission Legislative Review 2018, produced by review panel chair Mr Patrick McClure AO and review panel members Ms Sue McCluskey, Dr Matthew Turnour and Mr Greg Hammond OAM, makes 30 recommendations to strengthen our legislative framework.

The recommendations focus on issues of our objects, functions and powers, the overall regulatory framework, and red tape reduction for charities.

The ACNC welcomes the report and its recommendations, and looks forward to a response from the Government.

INFORMATION GOVERNANCE FRAMEWORK

In 2018–19 we commenced work to implement our Information Governance Framework. The objective of this project is to implement systems, tools, and processes that meet information management standards and our business requirements.

This project will deliver:

• our Information Management Strategy and Information Management Policy to identify information management systems, practices, capabilities, strengths and weaknesses
• definitions and processes for our mandatory external information management reporting requirements
• a Records Authority, to define the legal disposal and retention requirements of our ‘core function’ information.

MEASURES IN SUPPORT OF THE NOT-FOR-PROFIT SECTOR

In late 2018, we commissioned a literature review to provide insight into the attributes stated in the second object of the ACNC Act: “robust, vibrant, independent and innovative”.

We plan to publish information that helps assess the four attributes and changes over time in future editions of the Australian Charities Report. Our public consultation on the proposed measures closed in July 2019.

UPDATES TO POLICIES AND PROCEDURES

All ACNC policy documents are scheduled for review once every two years, ensuring the documents reflect the ACNC’s current practices and procedures. Throughout 2018–19, we reviewed a number of our policies and procedures and updated them where required.

We also improved our process for reviewing and updating our policy documents to ensure that this occurs in accordance with the review schedule.

One new policy, Corporate Policy on media, was written and published in 2018–19.

Our Regulatory Approach Statement was also reviewed and we invited the Professional Users Group and the Sector Users Group to provide comments on the proposed changes. The updated Statement was published in December 2018.

We revised the Commissioner’s Interpretation Statement on Health Promotion Charity in view of the AAT’s reasons for decision in Waubra Foundation and Commissioner of Australian Charities v. Not-for-profits Commission [2017] AATA 2424 (4 December 2017). We invited the Professional Users Group to comment on the proposed revisions, and we are finalising the updated Interpretation Statement in the light of the comments we received.

Policies reviewed in 2018–19:

• CPS2012/01 Registration
• CPS2012/08 Substituted Accounting Periods
• CPS2013/06 Advice, guidance and education
• CPS2013/08 Accepting other government reports
• CPS2014/01 Applying to keep charity size
• CPS2016/01 Recognising third party standards
• CPS2017/01 ACNC’s approach to internal disputes within charities
• CPS2017/04 Financial reporting scaffolding
• CP2012/05 Complaints and compliments about the ACNC
• CP2012/06 Delegation, authorisation and signing
• CP2012/07 Linking to external online resources
• CP2013/02 Use of social media
• CP2014/02 ACNC Privacy Policy
• CP2016/01 ACNC Expectations of customer behaviour

New policies:

CP2019/01 Media

* CPS refers to a Commissioners Policy Statement and CP is a Corporate Policy.

OPERATIONAL PROCEDURES

We published a new operational procedure about the provision of bulk ACNC data disclosures to other government agencies under certain scenarios.

INTERNAL DISPUTE PROCESS

Internal disputes between Responsible Persons, or between Responsible Persons and members of the charity, can be distressing for individuals and disruptive to the running of the charity. The ACNC does not get involved with the internal workings of a charity. However, we have updated our internal dispute process so we can provide clearer guidelines for charities and earlier intervention from our Compliance team when a dispute affects the governance of the charity.

External scrutiny allows people who are dissatisfied with the outcome of an internal review of an ACNC decision or complaint about our service to escalate their concerns. Most administrative decisions we make are subject to review.

Initially, we conduct an internal review of a decision following an ‘objection’ being submitted by the charity affected by the decision. Our internal reviews are conducted by a different individual to the one who made the original decision. An internal review decision is known as an ‘objection decision’ under the ACNC Act.

ADMINISTRATIVE APPEALS TRIBUNAL DECISION

If a charity or its Responsible Person is dissatisfied with the ACNC’s objection decision, they can apply for a review by the Administrative Appeals Tribunal (AAT). In 2018–19, three applications were made to the AAT for review of a decision. Those applications are proceeding.

COURT APPEAL

If a charity or its Responsible Person is dissatisfied with an AAT decision, they can apply for further review by the Federal Court on questions of law. A charity or its Responsible Person can also appeal objection decisions directly to the Federal Court. In 2018–19, the ACNC was not subject to any court appeals.

SENATE ESTIMATES

We appeared with Treasury before three Senate Estimates hearings of the Senate Standing Committee on Economics and responded to 26 questions on notice.

FREEDOM OF INFORMATION REQUESTS

In 2018–19, we received 16 requests for documents under the FOI Act. Within this period, 20 requests were finalised, including five requests that had been made in 2017–18.

Table 4.10: FOI outcomes

Under Part II of the FOI Act, the ACNC is required to publish information as part of the Information Publication Scheme (IPS). Each agency must display on its website a plan showing the information it publishes in accordance with the IPS requirements. This information about the ACNC is available at acnc.gov.au/IPS.

THE COMMISSIONER

The ACNC Commissioner is a statutory office holder. The Hon Dr Gary Johns was appointed Commissioner of the ACNC on 1 December 2017 for a five-year term. The ACNC Act (Part 5-2) provides for the establishment of the Commissioner’s position, functions and powers, including terms and conditions of appointment.

INTERNAL GOVERNANCE AND RISK MANAGEMENT

Our governance framework provides for effective governance and risk management, informed decision making, and professional performance accountability. Our internal governance practices and structures ensure we meet the principles and requirements of the Public Governance, Performance and Accountability Act 2013 (PGPA Act).

Our Commissioner sets the direction and priorities of the agency, and produces a Corporate Plan and annual performance statements. These are outlined in this report on pages 20–27.

Risk management is built into our practices as an essential component of sound management and good corporate governance.

Our Enterprise Risk Management Framework and guidelines were reviewed in 2019 and are based on the ATO Enterprise Risk Management Framework. They align with the ATO’s Risk Management Policy (CEI 2015/03/01).

The ACNC is made up of six directorates as well as the Executive. Each directorate has quality assurance processes and records its activities through business reporting obligations. Our Management Committee met seven times in 2018–19. The meetings were held monthly until February 2019 and held quarterly thereafter.

Our Audit and Risk Committee met four times in 2018–19. We also attend the ATO Audit and Risk Committee meeting and we were represented on five occasions in 2018–19.

The ACNC is not a Commonwealth entity for the purposes of the Commonwealth Resources Management Framework and the Public Governance, Performance and Accountability Act 2013 (PGPA Act). The Commissioner of Taxation is the Accountable Authority for the ACNC. The Australian Taxation Office (ATO) includes information regarding fraud prevention as required by section 10 of the Public Governance, Performance and Accountability Rule 2014 in its annual report.

ECOLOGICALLY SUSTAINABLE DEVELOPMENT AND ENVIRONMENT PERFORMANCE

The ACNC’s facilities and some of our assets are provided by the ATO under various agreements. We adopt the ATO’s environmental policies and its environmental performance is included in its annual report.

FINANCIAL MANAGEMENT

For the purposes of the PGPA Act, the ACNC is listed as a program of the ATO. Division 125 of the ACNC Act established an ACNC Special Account, which is an appropriation mechanism that sets aside an amount within the Consolidated Revenue Fund to be expended for the purposes of the ACNC Act. The balance of the Special Account does not lapse at the end of the annual appropriation period.

The ACNC Special Account is administered in accordance with the Department of Finance guidelines.

The ATO assists us by providing financial and taxation management services through a memorandum of understanding.

We manage our financial affairs within the Department of Finance guidelines and ATO protocols.

Our 2018–19 budget was $16.2 million. This consisted of a core appropriation of $14.3 million, Litigation appropriation of $1 million and Deductible Gift Recipient Reform appropriation of $0.9 million. In addition to our operating budget, we reallocated $1.66 million in capital funding from the 2017–18 financial year. We were not provided additional capital funding in 2018–19.

Our operating expenditure for 2018–19 was $14.86 million. Our capital expenditure for 2018-19 was $1.66 million. Table 4.11 sets out our expenditure by cost centres. The ATO prepares annual financial statements in accordance with subsection 43(4) of the PGPA Act, which includes the ACNC’s financial information.

Table 4.11: Direct expenditure by cost centre, 2018–19

COMPLIANCE REPORTING

We did not have any spending breaches in the 2018–19 financial year.

ASSET MANAGEMENT

We have our own appropriation which provides financial transparency. Our assets are managed in accordance with the ATO’s policies and are reported in its financial statements.

PURCHASING AND CONSULTANCIES

We make decisions regarding our budget planning independently of the ATO. The goods and services required to support our operations are purchased using the ATO’s procurement policies and processes, in line with the requirements of the PGPA Act. This includes consultancies, contractors, travel, information technology, legal and advertising. Procurement details are included in the ATO’s annual report. All contracts provide for the Auditor-General to have access to the contractor’s premises.

In 2018–19, we entered into six new consultancy contracts involving a total actual expenditure of $181,785. The main category for consultant expenditure was 'specialist business advice in various fields’. The value of contracts and consultancies is available on the AusTender website. Further details on other procurement are included in the ATO’s annual report. All of our contracts provide for the Auditor-General to have access to the contractor’s premises.

PROCUREMENT INITIATIVES TO SUPPORT SMALL BUSINESS

We support small business participation in the Commonwealth Government procurement market.

We ensure that procurements are communicated in clear language and presented in an accessible format, and do not unfairly discriminate against Small and Medium Enterprises (SME). We recognise the importance of ensuring that small businesses are paid on time. We use electronic systems and corporate credit cards to facilitate timely payment to suppliers.

The results of the Survey of Australian Government Payments to Small Business are available on the Treasury’s website. SME participation statistics are available on the Department of Finance’s website.

GRANTS

We did not award any grants in the 2018–19 financial year.

ADVERTISING

We did not conduct any advertising campaigns in the 2018–19 financial year.

We are a national regulator that operates primarily from one location in Melbourne.

We are proud of our diverse workforce, its expertise and contribution to the Commission helps us deliver quality service to the charitable sector and the Australian public.

In response to the 2018 employee census survey feedback, the Human Resource team continued to support and develop staff through learning and development opportunities, run both internally and through external providers.

We recognise the importance of staff wellbeing. We offer flexible work arrangements and mental health awareness strategies and programs for our employees. In November 2018, the ATO released its first Mental Health strategy. The strategy was introduced to improve our approach to mental health prevention and strengthen our early intervention and rehabilitation activities.

The strategy aims to uplift the capability of our managers, leaders and human resources staff in responding to mental health concerns and promoting positive mental health practices. Our Human Resources team undertook accreditation in mental health awareness in December 2018 and, following this, all ACNC managers and team leaders were invited to attend training on employee mental health.

In December 2018, we reviewed our flexible work arrangement policy and instructions. We also promoted these arrangements to encourage the uptake of flexible work arrangements across the agency.

In line with our corporate priorities for 2018–19, we reviewed all current staff job profiles and refreshed the core capabilities attached to these positions. This initiative will form part of a workforce review and succession plan for the next three years.

ACNC STAFF

As at 30 June 2019 the ACNC full time equivalent (FTE) staff number was 95.11

Table 4.12: ACNC staff — full time equivalent by directorate

Table 4.13: Staff — total headcount, classification level and gender — as at 30 June 2019

Table 4.14: Staff — total, part time and full time — as at 30 June 2019

DIVERSITY AND INCLUSION

We recognise that one of our greatest assets is the diversity our staff bring to the organisation. By embracing our differences, we support everyone to realise their full potential.

Building an inclusive workplace promotes improved productivity, greater creativity and innovation, higher employee wellbeing and engagement, and reduced employee turnover. It is also important that we reflect the community we regulate.

We strive to be a leader in diversity and inclusion in the Australian Public Service. This commitment is represented by all our employees, and collectively we are ethical, respectful and supportive.

We have programs to support an inclusive work environment, which includes a focus on:

• Aboriginal and Torres Strait Islander peoples
• people living with disability
• women
• people from culturally and linguistically diverse backgrounds
• lesbian, gay, bisexual, transgender and intersex people, and
• mature-aged people.

Additionally, our managers and employees are encouraged to report bullying, harassment and discrimination, and are confident in their ability to identify and report inappropriate behaviour when they witness it.

INDIGENOUS STAFF

We use and support the ATO’s Reconciliation Action Plan 2018–20, which includes activities to improve opportunities to empower Aboriginal and Torres Strait Islander staff and suppliers. Our activities also included supporting NAIDOC week and offering cultural awareness training.

We aim to maintain a minimum of two Aboriginal Liaison Officer positions and endeavour to achieve Aboriginal and Torres Strait Islander staffing levels that reflect the proportion of registered charities that are ATSI-controlled (approximately 5%), as stated in our Aboriginal and Torres Strait Islander Communities Engagement Strategy Action Plan.

As at 30 June 2019, we have three ongoing staff members that identify as Indigenous Australians.

Through Indigenous cultural awareness training and our ATSI Communities Engagement Strategy we have maintained our ability to deliver a tailored service to this community and reinforced a workplace culture that understands and values the contribution of Indigenous Australians.

STAFF WITH A DISABILITY

We are committed to building a disability confident culture through developing the right attitudes, behaviours, systems and knowledge to support the inclusion of all current and prospective employees with disability. We use and support the ATO’s Diversity and Inclusion Plan 2017–19.

SEPARATION AND RECRUITMENT

In 2018–19, our staff retention rate was 92.1%. This is an increase on the 2017–18 rate of 77%.

TRAINING

In 2018–19 we provided our staff with a range of targeted training courses.

Table 4.15 outlines the learning and development programs that ACNC staff participated in over the financial year.

Additionally, our Advice Services team has a rigorous training program that includes a comprehensive induction training program and monthly professional development. In 2018–19, the training included sessions on charity governance, our legislation, our compliance powers, and changes to legislation that affect charities — such as the new External Conduct Standards and whistleblower protection.

Table 4.15: 2018–19 learning and development programs

REWARD AND RECOGNITION

Our reward and recognition program is part of the performance review cycle. The program is intended to positively influence employees by highlighting exceptional performance. Several informal awards are also available to recognise employee contributions throughout the year.

These include 'employee of the moment' recognition and 'thank you' cards.

We reviewed the reward and recognition program to ensure it continues to meet its intent. A set of recommendations on how to improve the program was endorsed and will be included in the next program launch in August 2019.

ENTERPRISE AGREEMENT

The ACNC operates under the Australian Taxation Office Enterprise Agreement 2017, which complies with the APS-bargaining framework. It aims to promote efficiency and effectiveness, to contribute to achieving the organisations policy and program outcomes, and to enhance the quality of employees’ work-life balance. The terms, conditions and outcomes of these arrangements are provided in the ATO’s annual report.

Table 4.16: The salary ranges available for ACNC employees by classification level at 30 June 2019

EXECUTIVE REMUNERATION

The ACNC Commissioner’s remuneration is determined by the Remuneration Tribunal.

The PGPA Rule about executive remuneration has been amended to improve the transparency of Commonwealth executive remuneration arrangements in annual reports. For the purposes of the PGPA Act, the ACNC is listed as a program of the ATO. However, the ACNC Commissioner is not included in the ATO’s annual report. For completeness of information and greater transparency, the ACNC Commissioner’s salary for 2018–19 was $316,490. Other ACNC Executive remuneration arrangements adhere to the ATO’s Senior Executive Service guidelines and are set out in its annual report.

ACNC ADVISORY BOARD MEMBER REMUNERATION

The ACNC’s Advisory Board members are appointed by the Treasurer, and remuneration is determined by the Remuneration Tribunal. Further information can be found on the Australian Government Remuneration Tribunal website at remtribunal.gov.au.

The list below sets out requirements for non-corporate Commonwealth entities to include in their annual reports for the 2018–19 reporting period. Page references for where the requirements are located in this report are provided for ease of reader access.

*Note: the page reference is for the PDF version of our Annual Report, which you can download from this page.

* Note: this figure includes Approved forms manually processed by our Reporting and Red Tape Reduction team, as well as forms manually processed by our Advice Services team. In previous years, we have only reported on the forms processed by our Advice Services team.