What you need to know about the report.

The five-year review was tabled in Parliament on Wednesday, nine months after it was announced.

The Strengthening for Purpose: Australian Charities and Not-for-Profits Commission (ACNC) Legislation Review 2018 has been released.

The report received oversight from a panel featuring Patrick McClure AO as chair, along with Dr Matthew Turnour, Greg Hammond, and Sue McCluskey (the Panel).

The final report provides a broad 30 recommendations around more red tape reduction, some proposed changes to regulation for the sector, changes to ACNC advisory board functions as well as contrasting greater accountability to the public.

CSIA CEO Belinda Drew said the sector issues raised in the CSIA submission to the Review have been largely acknowledged in the report.

“We value how the implementation of the Australian Charities and Not for profits Commission Act 2012 (the Act) has enhanced public trust and confidence in charities.

“We took the time to make a submission that raised three main points around this support, the reduction of red tape and refraining from expanding the Act’s objects to include a role for the regulatory body.

“The review presents some interesting findings that the community services industry should familiarise themselves with,” Ms Drew said.

What you need to know

The CSIA submission stated it didn’t support the expansion of the Act’s objects, the Panel agreed with this as well. They found that the current objects of the Act were satisfactory for the operations of ACNC and no further changes were recommended.

The Review did make a few findings about the functions of the ACNC, including aligning the functions and duties of the ACNC to the current objects in the Act.

The current functions in education and research were recognised as being highly valuable and “should continue as a priority”.

Also significantly the Panel recommended that the powers of the ACNC be amended to remove their ability to replace responsible persons of a registered entity, and be replaced with the Commissioner, making it consistent to the powers of all regulators.

However, the Act has provision for an Advisory Board to the ACNC.

The review panel found that an interface between the Board, the Minister and the wider industry be established. This will be beneficial to ensuring industry voices have direct access to the Advisory Board.

Some positive changes for the industry will be the Panel’s recommendations to alter current revenue thresholds and minimum reporting requirement for registered entities. This included recommending that revenue thresholds be increased to less than $1 million for small charities, from $1 million to less than $5 million for medium charities and $5 million or more for large charities.

The report highlighted the following correlating shifts in reporting for charities. The Report says: “These include:

  • small registered entities continue to provide an AIS (including basic financial information) and have the option to provide either a simplified balance sheet or a statement of resources;
  • medium registered entities continue to provide an AIS to the ACNC and reviewed or audited annual financial statements; and
  • large registered entities continue to provide an AIS to the ACNC and audited annual financial statements.”

If these reporting recommendations are adopted there will be further implications for the concept of Basic Religious Charity – a status that offers charities a lower level of regulatory oversight. The Panel indicated that if changes to the financial reporting requirements outlined above are adopted, then all current Basic Religious Charity exemptions should be reviewed.

Another core area that was examined by the Panel was the management of fundraising. The panel indicated that the Commonwealth had an opportunity to further address the reduction of red tape by working collaboratively with all jurisdictions to align fundraising laws.

Also recommended was the Government’s development of a mandatory code of conduct and amendments to the Australian Consumer Law to ensure its application to fundraising activities.

Ms Drew said that CSIA will be watching for the Government’s response to the Review report.