The Royal Commission begins
Amid the flurry of excitement and nervousness following the announcement of the Royal Commission into Institutional Responses to Child Sexual Abuse, it is important to consider the terms of reference the Royal Commission has been given as this will establish the parameters within which the inquiry will be conducted and give an indication as to what lines of questioning will be conducted.
As promised by the Government, the terms of reference do set wide reaching parameters within which the Royal Commission is to be conducted and has tasked the inquiry with the balancing act of hearing evidence of personal experiences from victims on the one hand and turning that into establishing problems on a systemic level. While there is obviously a difficulty in gathering evidence of past occurrences (some of which may be over fifty years ago) to determine the current deficiencies in the law, one of the issues which the inquiry has been charged to determine is:
- what institutions and governments should do to address, or alleviate the impact of, past and future child sexual abuse and related matters in institutional contexts, including, in particular, in ensuring justice for
It is this element which will more than likely give the Royal Commission the greatest power to effect change as it is asks what should be done not only about the past, but also the future.
Now that the Australian Charities and Not for Profit Commission (ACNC) has been in operation since 6 December 2012, the ACNC is writing to all charities to have them confirm their details. If you have any concerns about how to respond, ACNC officers are eager to assist, and the website is helpful. The aim will be to correct any errors transferred from the ATO site (e.g. names of responsible officers, Australian Business Numbers, registered addresses). There is also the choice to opt-out from registration, but that will make you ineligible for tax concessions and other benefits.
We have also successfully assisted with the registration of a new charity on the ACNC register and report the process was quite efficient.
The next stage in the review of charities deals with governance standards with which most charities will need to comply (basic religious charities are exempt). A current Governance Regime Discussion Paper circulated for comment before 15 February 2013 covers 6 main areas which are:
- Nature and purpose of a charity.
- Accountability to members.
- Compliance with Australian Law.
- Financial reporting.
- Suitability of "entities" who act as directors, board members, councillors etc.
- Responsibilities of "entities" who act as directors, board members, councillors etc.
The governance standards are proposed to commence on 1 July 2013. All charities will have 18 months from that date to make any changes to their governance standards and 4 years to change any of their governing rules.
FINANCIAL REPORTING REGIMES
Simultaneously with the issue of the Governance Regime Discussion Paper, the government also released a discussion paper on the type of Financial Reporting expected of Charities. Submissions are also called for by 15 February 2013. Please click here for discussion paper.
The 3 tiers distinguish between those required to report, and those excused:
Small - revenue less than $250,000, no financial report
Medium - revenue between $250,000 and $1m, financial report required, but need not be audited, just reviewed
Large - revenue over $1m, full audited financial report required.
What standard of reporting is required?
A "reporting entity" must prepare a general purpose financial report (GPFR) which gives a "true and fair view" and is defined to be an entity upon which users rely for information on the accounts to make decisions about the allocation of resources, and can be a single entity or a group.
If a charity does not identify as a reporting entity, then special purpose accounts (SPFR) are sufficient. Indicia of whether a charity should classify itself as "a reporting entity" are:
- Economic/Political significance of a charity
- Financial characters eg size, amount of debt, number of employees, government grants or resources allocated
If you are a "reporting entity", your financial statements, must include
- An opinion on insolvency
- A statement that the financial statements and notes satisfy the ACNC Act
There are some exceptions to applying accounting standards where an entity is doing joint and collective reporting, where the ACN Commissioner requests more information, during a transitional period for entities using non 30 June end of year periods, and until 2015 for entities providing reports to government, especially schools.
GOVERNANCE AND REPORTING DUPLICATION IMPACT ASSESSMENT
The government has issued a third discussion paper (calling for submissions by 21 February, 2013), which seeks to ascertain:
- Whether there is sufficient evidence of duplication for state based charities (now that they must observe the governance regime and report to ACNC), to warrant action by the Commonwealth to eliminate the duplication
- The cost impact of the duplication
The paper does not consider duplication arising from different fund raising regimes across the states, nor, methods of incorporation which differ from state to state. The paper raises direct questions on whether the proposed governance standards impose any duplication of charities on standards they are obliged to observe under their state legislation, and likewise, in respect of their annual and financial reporting. The paper poses options which might be chosen to address the duplication, and these include the following:
- Retaining existing arrangements(*see quote from the paper below)
- Sharing regulatory functions
- Changing commonwealth legislation to adopt a common approach
- Changing state legislation to reduce duplication
- Harmonising charities' compliance burden
- Carving out charities' compliance burden
- Referral of powers from states to the Commonwealth
The paper also contains detailed analysis of how each option will impact, including costings.
* "Retaining existing arrangements will result in
regulatory duplication in relation to the governance standards and
to reporting requirements for some entities. In relation to
governance standards duplication may arise under Standards 5 and 6
for incorporated associations and cooperatives that are charities.
In relation to reporting, duplication may arise for incorporated
associations and cooperatives. There will be less duplication for
(revenue less than $250,000 per year) as they are not required to lodge an Annual Financial Report. Small entities make up 78% of all registered charities. The reporting obligations on medium (revenue > $250,000 and < $1m) and large entities (revenue > $1m) will result in some duplication where those entities will have to report to both their State or Territory regulator and the ACNC.
There will be no duplication for unincorporated associations, charitable trusts or other bodies because they are not currently subject to statutory requirements by the States or Territories."
This legislation has been deferred until 1 July 2014, notwithstanding that it was intended to begin operating from 1 July 2011. It seems the ATO is not sure what type of income it is trying to tax.
DEFINITION OF CHARITY
The statutory definition is expected for public consultation shortly.
THE GOOD NEWS
- Jetstar has announced its latest round of Flying Start Programme Grants with a whopping $30,000 contribution to Clown Doctors New Zealand. The charity uses laughter as a tool to battle against sickness and works to put a smile on the faces of many sick kids throughout New Zealand. The timing of the grant could not have come at a better time for the Not-for-profit with Clown Doctors New Zealand CEO, Dr Thomas Petchener saying that without the grant "we would not be able to provide and facilitate the world class training in Medical Clowning for all our 24 Clown Doctors from around New Zealand". A three day medical clowning training clinic will be held in Auckland later this month, with plenty of laughter and smiles sure to be in abundance.
- Upwards of 80 cyclists from the charity 25000 spins will undertake a gruelling 190km bike ride along the Great Ocean Road to raise money in the unending fight against world poverty. 25000 spins is looking to raise over $120,000 and will give the money to the Adventist Development and Relief Agency, whose goal is providing funds that go toward individual and community development and disaster relief. The riders will wind their way around the varied terrain along the coast of Victoria and will pass some of Australia's most famous monuments along the way.
- The thought of trolling through old clothes is a situation that most of us try hard to avoid but the members of Sunshine Coast Fusion will be welcoming it with open arms as they held a clothing swap on Staurday 9th February, with all money raised going toward a group of teenagers who will undertaking a Pilgrimage to Uluru. The charity has run the pilgrimage for the past 10 years and has been a once in a life time experience for the group of 12 – 17 year olds to learn about Indigenous culture and practices. The Pilgrimage will make its way through New South Wales and South Australia before finishing in Alice Springs and Uluru. Youth Work Co-ordinator Laurianne Ellicott says the trip has been an eye opening experience of all participants and that "we've had parents have their kids come back and they're completely different".
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.