Charity Regulator Airs Frustrations in Annual Report

In the face of an uncertain future, the Australian charity regulator has delivered its second Annual Report to Federal Parliament citing its work to free charities from unnecessary reporting burdens as one of its significant achievements.

But among the list of achievements, the ACNC says the sustained instability over its future as it faces abolition has had impacts on staffing, on the sector, and on its capacity to give full effect to the objectives in the ACNC Act.

“Despite the confusion and frustration this policy of uncertainty generates for charities, the ACNC will continue to implement its Act as we are legally required to do,” ACNC Commissioner Susan Pascoe AM said in the annual report.

“The ACNC has lived in a climate of uncertainty since its inception, and this is likely to continue until Parliament votes on the ACNC Repeal Bills.

“We have given priority to finalising the Charity Register and the information technology platform for the Charity Portal, to achieving what red tape reduction initiatives we can, and to working with charities to continuously improve governance practice in the sector.

“Without a national regulator and a Charity Register, the sector will operate in a regulatory regime that the business community would never tolerate, and that six major parliamentary and independent inquiries over the last two decades have shown to be wholly inadequate.

“During the reporting period the ACNC has played a catalytic role in driving further opportunities to reduce red tape across Government by setting up sub-sector working parties and forums.

“With uncertainty regarding the ACNC’s future, the work of these groups was disbanded,” Pascoe said.

“However, other foundational work has been pursued. In December a red tape reduction forum involving government, sector, professional advisers and academics yielded 17 recommendations for red tape reduction grouped into five themes: national approach; risk; outcomes; funding agreements and reporting; and sector capacity.

“It is hoped that the ground-breaking work of the ACNC in furtherance of its red tape reduction object will not be lost due to policy uncertainty.”

In March, the Australian Charities and Not-for-profits Commission (Repeal) (No. 1) Bill 2014 (Cth) was introduced in the House of Representatives. A subsequent Senate Economics Legislation Committee inquiry into the Repeal Bill was held with the Government majority report supporting the repeal, with dissenting reports from Labor and the Greens parties.

A second Bill is proposed which will detail the ACNC’s replacement and transition arrangements.

“Until this Bill is passed and enacted, the ACNC is empowered and required to carry out its functions,” Pascoe said.

“As Commissioner, I am ensuring the ACNC plans for two possible futures – one where the ACNC Repeal Bill is supported by both houses of Parliament and the regulatory functions return to the Australian Taxation Office and Australian Securities Investment Commission, and the other where the Bill is not supported and the ACNC continues as an effective national charity regulator.

“The Charity Register is a valuable asset for the community, providing the public with a freely available resource on charities. Over the coming year, the ACNC will continue to prioritise finalising the Charity Register so that all Australians can find information about registered charities with confidence, and certainty about the integrity of the information.

“The year will also see the next step in providing greater transparency and accountability of charities with the 2014 Annual Information Statements collecting financial and governance information about charities’ operations, which will also be accessible via the Charity Register.

“The information technology platform for the Charity Portal will be finalised, introducing additional functionality to assist charities in being sustainable. We will continue to work across the sector and with government agencies to achieve regulatory and reporting simplification, such as those that can be delivered through the Charity Passport, and acceptance of financial reports filed with other reporting agencies.”

Pascoe said the sector’s acceptance of the ACNC was demonstrated with more than 40,000 or 80 per cent, of required charities submitting their 2013 Annual Information Statement to the ACNC on time, despite the climate of uncertainty.  

“This was the first time charities were required to report to the regulator and represents a very high level of compliance for the first year of a charity regulator.

“In addition, 25,000 governing documents and 7000 financial reports were voluntarily submitted and published by charities during the year.”

Pascoe said with more than 3.6 million views to the acnc.gov.au website, and more than 300,000 views of the Charity Register, it was clear the public was hungry for online information about charities.

“The ACNC has worked hard over this year to refine our ‘report once, use often’ approach and respond to the sector that has been calling for effective regulation and reporting for more than two decades,” she said.

“Looking forward, I have used my discretion as Commissioner and have agreed to accept charities’ financial reports submitted to State and Territory regulators in place of ACNC annual financial reports for the 2014 reporting period."

Greens Senator Rachel Siewert responded to the report’s tabling in Parliament saying it highlighted the value of the Australian Charities and Not-for-profits Commission.

“One of the things (the Government) accuses the ACNC of is increasing red tape. We know that charities and Not for Profits in particular are very concerned about the red tape that they have faced around their reporting for the various grants and other things that they do.

“The Minister uses red tape as an excuse to get rid of the ACNC, when it has clearly now been demonstrated that they do not generate red tape and, in fact, help reduce red tape. The red tape that they are creating, that 0.1 per cent, helps them reduce other red tape. The reporting that they do as part of that 0.1 per cent also helps them to do their necessary acquittals.

“The ACNC plays a very important role. The Government should get over their fixation with getting rid of it, keep it, move on and give certainty to that agency and certainty to the charities and Not for Profit sector,” Siewert said.

The ACNC 2013-14 Annual Report is available online here.