Is your charity complying?
A guide to the ACNC’s regulatory approach and self-assessment compliance test are the latest tools available from the regulator. Its aim is to help charities stay on track. Your charity and ACNC Compliance helps to demystify the role of the ACNC’s compliance team when investigating concerns it receives about charities.
Your charity and ACNC Compliance explains that there is a defined process concerning how and when investigations and reviews are to be conducted, when charities may be notified, and what information can be shared or disclosed. It also provides advice on actions charities should take if they find that they are not meeting their obligations.
The compliance test is quick and easy to do, allowing charities to make periodic checks. It has five simple questions, and ‘no’ and ‘not sure’ answers to any of them should alert an organisation to investigate further or take remedial action.
Use the questions to assess how well your charity is meeting its obligations, and whether it is taking the right steps to comply with the ACNC Act.
1. Is your charity working towards its charitable purpose? A purpose is the reason your charity was set up – its mission. Charities and their responsible persons (such as board, committee members and trustees) must work toward this charitable purpose, make information about this purpose available to the public, and be able to show how it is trying to achieve this purpose.
2. Is your charity using its profits and assets only for its charitable purpose? A charity must use its profits and assets only to try to achieve its charitable purpose and cannot use them for any other purpose. Consider how you can demonstrate this clearly, for example, through keeping appropriate written records to record correctly your operations.
3. Is your charity meeting its reporting obligations? Every charity must lodge an Annual Information Statement (AIS). For the 2014 AIS, most medium and large charities must also lodge annual financial reports. If your charity has made a material error in its AIS or financial report, you must correct it as soon as possible. Every charity must notify the ACNC of changes to its name, address for service, responsible persons and governing documents, as well as if it has significantly contravened the ACNC Act and may no longer be entitled to registration. You should also notify the ACNC if you believe your charity has made a false or misleading statement to the commission.
4. Is your charity meeting its record-keeping obligations? Every charity must keep written records that correctly record and explain its operations, transactions and financial position and performance. In most cases charities must retain these records for seven years.
5. Is your charity meeting all five governance standards, showing it has met minimum requirements for governance? Apart from ‘basic religious charities’, all charities must meet governance standards under the ACNC Act and ACNC Regulations before applying to register and to maintain registration. These standards set out a principles-based, minimum standard of governance and are designed to help promote public trust and confidence in charities.