Empart Inc, charity review

This is a review, for donors, of the Australian charity Empart Inc (Empart).   It is structured according to the charity’s entry on the ACNC[i] Register, and its purpose is to supply some information extra to what is there, information that may be helpful in your giving decision.

It is up to you to decide whether any or all of the information presented here is what you need in order to make that decision, and whether you should seek any other information, either from the charity itself or from other sources.

Ministry response

Prior to publishing this review, I sent, on 2 September 2015, my observations to the charity and invited them to comment.  On 26 September, Ian Lucas, Director – International Operations, after arranging an extension to the publication date, sent the following response:

Thank you for sending your draft review to us. 

As a Christian movement, we understand that we are accountable not only to our donors and partners, but also to God.

We recognise that our finances are gifts sent by loving people who have sacrificed to make their donations possible.

Our obligation, therefore is to operate with accountability, wisdom and integrity, responding to Gods (sic) leading as we focus on building His Kingdom.

We do not think however that it is appropriate for us to respond in detail to your draft report as it contains so many wrong assumptions and drawn conclusions, that we would need to correct, including your incorrect assumption that we have a legal connection with the organisations in Asia rather than partnership relationships with multiple organisations who share our vision, values, aims and objectives. 

We believe that our multiple accountability and governance processes including a strong experienced Board, Eldership, Advisory Council, Internal and External Audits, provide our current or prospective partners with sufficient confidence and trust in this (sic)

Reviewer’s response:

    1. I have changed my second reference to the relationship between Empart and EDF to be consistent with the first, i.e. ‘it appears that’.
    2. I cannot find any ‘assumptions’, only inferences based on evidence.
    3. I have checked my ‘conclusions’, and am happy that they are soundly based.
    4. However, if somebody were to show where I have erred, in either ‘assumptions’ or ‘conclusions’, I am happy to make the necessary change(s).
    5. Contrary to Ian’s assertion, I do not say that Empart has “a legal connection with the organisations in Asia rather than partnership”. See the last point under ‘Legal name’.

Organisation of this review

  1. This review is organised according to the headings in the register entry. This is how to use this section of the review:
    • For each heading in the register entry, first read the information under that heading.
    • Then check if that heading is included below. (Headings for which there is no comment are not included.)
  2. There is then a more detailed comment on the Financial Report.
  3. Lastly, there is a section Membership of accountability organisations claimed.

Sources

  • ACNC Register (including links)
  • Internet search on the names under Legal Name (see below).
  • Empart websites (see Website, below), and social media and LinkedIn on the right hand side here.
  • State government fundraising licence registers.
  • Comments, via email on 26 September, to my draft review.  See Ministry Response, above.
  • www.glassdoor.com

REGISTRATION DETAILS

Entity Subtype (‘charitable purposes’)

  • A primary sub-type consistent with sharing the Gospel.
  • And that is consistent with the purpose clause in the governing document:

The purpose for which the Association is established is to be an international interdenominational partnership of Christians whose mission is to follow Jesus Christ as Lord and Saviour to make Him known, to show the compassion of Christ to the poor and oppressed, to promote human transformation, to see justice for all and to bear witness to the good news of the Kingdom of God in India.

    • Note the restriction to India.
    • With an organisation that is required to model Jesus as Lord and Saviour to the poor and oppressed of India, it would be legitimate to question why the group of which it is part has $3.5 m in the bank in that country (see …Balance Sheet, below.)

CHARITY DETAILS

Legal name

  • Empart is a Victorian incorporated association.
  • Not to be confused with the charity Empart Development Fund Inc. (EDF)
    • Although a separate organisation, it is has the same address as Empart, and, with a swap of Peter Sypkes for Jennifer Chacko, the same Responsible Persons (see below). It would therefore appear to be controlled by Empart (or vice versa).
      • However, neither charity has produced consolidated statements.
    • EDF has recorded Empower Australia Overseas Aid Fund Inc under Other Name(s) on the Register.
      • This is a Victorian incorporated association (A0047253K), but it is not a charity. It doesn’t even have an ABN.
      • Plus an internet search gives only one result, a bank account name for giving to Empart (see Charity ABN, below).
      • Its governing document
        • Gives no objects or purposes.
        • Has ‘Empart Development Gift Fund’ in the table of contents (‘Index’) when the title in the body of the Rules is ‘Empower Australia Overseas Aid Gift Fund’.
    • EDF has submitted the governing document for the Overseas Aid Fund instead of its own.
  • It appears that Empart is a subsidiary of ‘Empart International’:

Empart is registered in each country according to the laws of the nation.  In each country, Empart is managed by a Board which is accountable to the Empart International Board.

  • The ‘International Director of Empart’ is Jossy Chacko, the Founder of Empart (see the right hand side of every main webpage, for example ‘Resources’).[ii]
  • Although “The Empart International coordinating office is located in Melbourne Australia’ – see the .pdf available here[iii] – Empart International is not registered in Australia.
    • Nor, according to a general internet search, anywhere else.
    • The only contact information I can find is this invitation to complete a contact form.
  • Besides the various Empart entities Jossy Chacko has his own ministry. It’s most likely the charity The Trustee for Jc (sic) Ministries – it has jenni.c@empart.org for its email address.
    • Due to lack of the required governing document and Responsible Persons on the Register, the connection cannot be checked.
      • The charity also has a prominent warning on the Register for being six months overdue with its AIS 2014.
  • It appears that Empart (or one of the other Empart entities) also has (owns or controls) two organisations in India for the receipt of overseas donations, CFI Charitable Trust and CFI Ministries. See What was earned, what was consumed…, below.
    • Is it this CFI Ministries, or this US one operating in India?

Charity ABN

  • Empart says here that you can get a tax deduction. But this is not through Empart – you can confirm this by clicking on the ABN number then checking down towards the bottom.
  • The tax deduction is through
    • EDF (mentioned incidentally at the bottom of the form).
      • The only problem is that EDF is also ‘Not entitled to receive tax deductible gifts’,
    • or Empower Australia Overseas Aid Fund Inc if you are giving for the ‘Nepal Earthquake’ campaign.
      • The only problem is that the Fund doesn’t even have an ABN.
      • There is a fund with a similar name – Empower Overseas Aid Gift and Relief Fund – but it belongs to a completely different charity (Empower Projects Limited).

Charity Street Address

  • Postal address, from the website: PO Box 980 Croydon VIC 3136

Phone

  • From the website: 1300 EMPART or 03 9723 9989

Website

ANNUAL REPORTING

  • AIS 2014:
    • This is the Annual Information Statement.
    • It includes basic financial information. If you think that’s all you need then you should note that
      • The financial statements are not general purpose financial statements as it says in the AIS 2014, but special purpose.
      • The breakup of Income does not match the financial statements.
      • Total expenses is overstated by $8,623.
      • Because of a different classification scheme the expenses cannot be checked against the financial statements.
      • Although Total assets is correct, there a number of mistakes within the asset lines.
      • $267,826 should be moved from Other non-current liabilities to Non-current loans.
  • Financial Report 2014:
    • This report can also be opened from within the AIS 2014, above.
    • The Financial Report wasn’t completed until nearly four months after the year end. It was then another four months before it was lodged on the Register. (This was one and half months after the final day for lodgement.)
    • The coverage of finances in this review is left until the section Latest financial report – detail, below.

ABOUT THE CHARITY

Date Established

  • Empart recounts its history on its website.
  • For the fuller version you can buy the book, written by the founder.
  • There are a few references on the internet to Empart previously being called Compassion for India. Here’s one.
    • From this it appears that the ‘CFI’ in the two current Indian Empart organisations – see What was earned, what was consumed, below – comes from the name Compassion for India.

Who the Charity Benefits

  • Vision, mission, and goals are half way down this website page. These are for all the Empart organisations combined, not Empart in Australia.
  • Vision
    • Empart exists to bring holistic transformation to individuals and communities in Asia.’
  • Goals
    • ‘Our primary goal is to see communities transformed among unreached people in Asia by the planting of 100,000 churches by 2030.’
  • Activities (What does Empart do?)
    • The ‘activities and outcomes’ reported by Empart in the AIS 2014 again are not for Empart in Australia, but for Empart globally:

Indigenous church planters, pastors and leaders are trained to have a holistic approach to ministry by providing social development programs that meet spiritual and practical needs.

THE HOW: Establish Education Centres and Schools Education Centres and Schools provide literacy and numeracy programs to disadvantaged children to break the cycle of illiteracy, poverty and despair. Under Indian law it is required that every child under the age of five attend school. In practice, this is impossible to enforce by the government, and many children work to help provide for their families.

Currently Empart has six Education Centres and sixteen Schools. The schools range from kindergarten to equivalent Year 10 Vocational Skills Training Program Empart’s vocational skill training is presently centred on the ‘Sew & Sow’ Project.

Currently there are 17 training venues, with 801 women having graduated, and a further 216 in training. Empart estimates that further 5,000-7,000 women will graduate over the next 15 years. The program provides a 6-month diploma course where poor women are taught to make traditional Indian clothes as well as embroidery and soft toys. At the end of the course, each woman is presented with a treadle or hand operated sewing machine (locally made) at a graduation service. With the ability to generate an income, these women gain dignity and status in the community, along with the security of knowing that they can provide nourishing food, a good education and (sic)

  • Impacts (How were people’s lives improved?)
    • Nothing specific, but see Outcomes above.

Size of Charity

  • 2013-14 ‘Revenue’ was $1.8 million, easily exceeding the $1 million threshold for the top size of charity.

Financial Year End

  • This means that the next financial report is due by 30 June 2016. Before that the financial information on the Register will be up to 18 months out-of-date.

WHERE THE CHARITY OPERATES

Operating State(s) [iv]

  • Empart operated in only the five largest states in the period covered by its AIS 2104.
  • Empart has a fundraising licence in only one – its home state – of the seven states that have a licensing regime[v].
  • As an association Empart is a registrable Australian body. If its disclosure here that it operates outside Victoria means that it is carrying on business outside Victoria, then it needs to register under Part 5B.2 of the i Corporations Act 2001. The lack of an ARBN shows that it has not so registered.

Operates in (Countries)

  • Nepal’, both here, and in the AIS 2014, matches neither
    • Where we work on the website, India, Nepal and Bhutan, or
    • The fact that they have ‘offices in seven countries’.
  • Even if the Register and AIS 2014 are about Empart, not the worldwide organisation, money is sent to India, not Nepal (and the Overseas Aid Fund is not registered, even with an ABN.
  • see Legal Name, above.
    • You can see the countries that have Empart websites above Chacko’s photo on every main webpage.

RESPONSIBLE PERSONS

No. of Australian charity governing body memberships

Kevin BAILEY                      12[vi] (including three duplicates)

Jan de BRUYN                     4 (two x Jan and two x Jan de, both duplicates)

Jossy CHACKO                       4 (including two duplicates)

Paul LAMBERT                    6 (including three duplicates)

Ian LUCAS                            4 (including one duplicate)

John SIKKEMA                    4 (including two duplicates)

Peter SYPKES                       2 (including one duplicate)

  • In having seven Committee members rather than six, Empart is contravening its governing document.
  • There is no Secretary identified. (The governing document provides that the Secretary is a member of the committee.)

 

(End of review of the ACNC Register information)

 

Latest financial report – detail

  • Even though it appears that Empart controls EDF (or vice versa), there is no mention of EDF in this report.

The auditor’s post-audit letter to the Committee – the front page of the Financial Report

  • An unusual, but illuminating inclusion.
  • You might wonder how, with gaps and lax procedures with so many of the items in the financial statements, the auditor could still give a clean audit opinion. The answer is here.

The auditor’s invoice – the second page of the Financial Report

  • Note that it is addressed not only to Empart but also to ‘Empart International’.
    • But there is no mention of Empart International in the Financial Report.
  • His work included ‘Preparation and review of annual report.’ The independence of the auditor is crucial to donor confidence, so the auditor can only legitimately do this work if two conditions are met: (a) it is ‘routine and mechanical in nature’, and (b) he reduces the self-review threat to an acceptable level [APES 110.290].

Committee’s Report (page 1 of the Financial Report)

  • The report is unsigned.
  • It appears that Ian Lucas (see Responsible Persons, below) has replaced the founder’s wife on the Committee since the date of this report.
  • The contents of this report are not specified in Empart’s enabling legislation, but they are less than industry expectations (for instance, this guide).
    • Missing are sections on officers, objectives (split between short-term and long-term), the strategy for achieving those objectives, and the performance measures used by Empart.

What was earned, what was consumed during the year – the Income Statement (page 2 of the Financial Report)

  • This statement uses a format that has been out-of-date for a while now.
    • The ordinary’ tag (and by implication, ‘extraordinary’) has been superseded.
    • An ‘Other comprehensive income’ section is needed. 
  • Revenue from ordinary activities $1.8 m (including Note 2)
    • The Note does not use the usual categories of revenue, and meanings are not given for the items presented in the Note.
    • Tax-deductible donations are sought on the Empart website, but given the low correspondence between the revenue items below, and the fact that EDF is a separate charity, it appears that EDF is using Empact’s website to receive donations.
  • Training Centres and Children’s Homes $177K (2013: $177K)
  • Church Planting $626K (2013:$614K)
  • Transformation Centres $138K (2013: $171K)
  • Other Sponsorship $33K (2013: 196K)
  • Partnerships $145K $2013: $155K)
    • Presumably all five items above are money from donors.
    • If so, the 16 donation options on the website have been collapsed into these five, but is not clear how.
  • Infrastructure $(zero) (2013: $47K)
    • This revenue, along with the first four above, has a corresponding item of expense (see below). However, ‘Partnerships’ doesn’t.
    • So you can compare, roughly, what came in to what went out.
  • Staff Support $8K
    • There is no explanation of this item.
  • Other Income $650K
    • At 37% of revenue, it is far too much to leave unexplained.
  • Employee benefits expense and missionary support $349K (2013: $475K)
    • What ‘missionary support’ adds to the standard term ‘employee benefits expense’ is not explained.
  • Training Centres and Children’s Homes $142K (2013: 137K)
  • Church Planting $511K (2013: $498k)
  • Transformation Centres $130K (2013: $143K)
  • Other Sponsorship $86K (2013: $326K)
    • As is the case for the equivalent revenue items, there is no explanation of the above four expenses.
    • Presumably it is the money sent to India. This is how that works:

Because of traditional hostility toward those who share the Gospel in this part of the world, Empart works through a local organization called Compassion for India (CFI). The CFI name is publicly identified with programs that support and enhance each local community through education, medical care and family services.  CFI is a necessary pseudonym. Operating under the radar, the public CFI identity helps protect church planting local leaders who are subject to persecution from political and religious interests threatened by the empowerment and conversion of the local people from a caste system that rejects social mobility and a religious monopoly that seeks to maintain fidelity and power, at any cost. [source].

  • From internet research I found (including here), that the money sent to India could have been received by one or more of the following Indian Empart (International?) organisations:
    • Compassion for India
    • CFI Ministries
    • CFI Charitable Trust
  • From a search here, we can see that Australian donors money was received by the last two of these: CFI Ministries in Chandigarh and CFI Charitable Trust in Orissa.
  • The returns submitted by these two organisations, when combined, show that the Australian dollars received in India in the year ended 31 March 2014 were for the following purposes:
    • $392K  Maintenance of priests/preachers/other religious functionaries[vii]                                             
    • $241K   Construction and maintenance of school/college                                                             
    • ‘$52K    Welfare of the aged/widows                                                                                                        
    • ‘$42K    Welfare/empowerment of women                                                                                                    
    • ‘$17K     Non-formal education projects/coaching classes                                                                             
    • ‘$17K     Grant of stipend/scholarship/assistance in cash and kind to poor/deserving children         
    • ‘$9K       Supply of free medicine, and medical aid, including hearing aids, visual aids, family pla (sic)
    • Total           $770
  • This is the third different listing of the use of Australian donors’ money, adding to the donation options on the website and the revenue and expense items above.
  • Matching the above list with what Empart shows as being sent – see Expenses above – is not possible because the Indian returns for the year ended 31 March 2015 have yet to be lodged.

Infrastructure Expense $(zero)

  • What is included in this item such that it went from $53K last year to zero this year?

Other expenses from ordinary activities $505k

  • At 29% of expenses this is far too large to be left unexplained.

Total expenses from ordinary activities $1.7 m

  • Without further explanation – there are no Notes – the expenses present as a mixture of the two permissible classifications.
  • The following expenses are not disclosed:
    • finance expenses
    • fundraising expenses
    • superannuation expense
    • administration exenses

Surplus (Deficit) from ordinary activities $52K (including Note 3)

  • The reason for zero depreciation is given in Note 1 (see below)
    • The auditor did not agree with this decision [The auditor’s post-audit ‘communication…’, above].

What’s left at the end of the year – the Balance Sheet (page 3 of Financial Report

  • Although he assessed that the going concern assumption was valid, the auditor was sufficiently concerned so as to include a warning in his post audit letter [The auditor’s post-audit ‘communication…’, above].
  • If a re-examination of the distinctions made between current and non-current items, for instance the loans, reduced the ratio of current assets to current liabilities, then this warning would become even more significant. 

Cash and cash equivalents $77K

  • This amount is very modest compared to the amount of cash that is held by the two Empart/Empart International organisations in India; at 31 March 2014 this was approximately $3.5 m.
  • There is no explanation for continuing to ask for donations in Australia when so much sits in a bank account.

Investments – Shares $3K

  • This is not a classification that is consistent with the Accounting Standards.
  • The auditor noted that the valuation was not current [The auditor’s post-audit ‘communication…’, above].

 Inventory $6K

  • The auditor noted that no stocktake had been performed [The auditor’s post-audit ‘communication…’, above].

Trade and other receivables $371K (including Note 4)

  • There is no explanation of either the nature of the ‘Business Debtors’, or why the amount is identical to last year.
  • There is no explanation of what is included in ‘Sundry Debtors’, why the balance is so large, or why it has increased so much this year.
  • There is no mention of the collectability of this $371K, i.e., impairment.

 Fixed assets $1.0 m (including Note 5)

  • Unless there is very good reason otherwise, the correct term is ‘Property, plant and equipment’.
  • The auditor couldn’t check this figure against the asset register because it was not up-to-date [The auditor’s post-audit ‘communication…’, above].
  • According to the auditor the valuation of the buildings is overdue by at least two years [The auditor’s post-audit ‘communication…’, above].
  • The motor vehicles should have been written out of the books this year.
  • The decrease in Office Equipment does not match what is shown in the Statements.
  • Contrary to the Accounting Standards, buildings have never been depreciated.

 Liabilities

  • Unless there is very good reason otherwise, the line items here should be
    • Trade and other payables
    • Provisions
    • Financial liabilities

Amounts Received in Advance $457K (including Note 6)

  • There is no explanation for why ‘Designated Giving’ is a liability.
  • There is no explanation of ‘Prepaid Income’.

Provision for Employee Entitlements $35K

  • The auditor noted that this amount did not match the payroll system amount [The auditor’s post-audit ‘communication…’, above].

Loans $453K (including Note 1(l)

  • The repayment terms are not disclosed.
  • The absence of a current liability for these loans implies that no repayments are due within the next twelve months. That is not a typical bank loan, and nor is it consistent with the reduction in the balance from last year.
  • The auditor noted that the account had not been reconciled, and interest paid was understated.

Private Loans $268K (including Note 1(l)

  • The repayment terms are not disclosed.
    • If repayable on demand then it should be classified as a current liability.
  • The auditor noted that the documentation for the loans was out-of-date [The auditor’s post-audit ‘communication…’, above].

Total Non Current (sic) Liabilities $721K

  • Empart says that no employee entitlements or other provisions are due beyond 12 months.

 Movements in the net wealth of the charity – the Statement of Changes in Equity – page 4 of the Financial Report

  • The Asset Revaluation Reserve has been omitted.
    • It appears that the ‘Transfers from reserve’ last year were from this reserve. That is not a permissible use of the Reserve.

Where the cash came from and went to – the Statement of Cash Flows (page 5 of the Financial Report)

Receipts from debtors $1.7 m

  • With ‘debtors being the result of sales on credit, ‘debtors’ is meant to be ‘customers’ – or better still, ‘donors’.

Interest Received $23K

  • With an average bank balance of only $153K during the year, some of which would have been earning very little interest, how was so much interest earned?

Amounts written back equity $22K in 2013

  • This is the same amount that is shown as ‘Transfers from reserve’ in the Statement of Changes in Equity (above). It is not a cash transfer, so why is it in the Statement of Cash Flows?

Essential information to go with the figures – the Notes to the Financial Statements – page 6 of the financial report

Note 1: Statement of Significant Accounting Policies

  • The directors say the company is a ‘not a reporting entity’. But they don’t say why.
    • They are in effect saying that anybody who is interested in this company has the power to contact the company and request a report tailored to their particular needs.
    • The result of the decision is that the accounts don’t comply with the Australian Accounting Standards, and can disclose considerably less than that required for a general purpose report, a report designed for those people who are dependent on the charity’s report for the information they need.
    • You can compare the directors’ decision to this advice from the ACNC:
    • If people use and rely on your charity’s financial statements to help them make decisions (for example, about how to spend money) then your charity is most likely a reporting entity.
    • Although not clear from this, the directors should also consider prospective users.
  • The directors say that the report is ‘prepared on a cash basis’, but then present accrual based reports. There is a big difference.
  • (b) Fixed assets
    • The first statement (cost) is contradicted by the second (historical fair value).
    • The Board’s decision to suspend depreciation is not consistent with AASB 116, one of the Standards they say they followed.
      • The usual policy note on reviewing the factors in depreciation (e.g. residual value) is missing.
    • The auditor has accepted this statement, yet doesn’t talk about it when writing about depreciation in the management letter (see above).
    • There is no information on the board’s asset derecognition policy
    • Depreciation rates are disclosed even though there is no depreciation.
  • (c) Leases
    • A comprehensive note, yet there is no evidence that Empart has either kind of leases.
  • (d) Unearned Revenue
    • There is no such item in the Balance Sheet.
    • The first sentence is not an explanation of unearned revenue.
      • There are no ‘events’ shown under revenue.
      • There is no “administrative levy” shown under revenue.
        • There is no information in the report suggesting that Empart does the administration for any other entity.
  • (f) Revenue
    • The types here don’t match the dollars shown in the Income Statement.
  • (j) Financial Assets
    • The practice doesn’t match the policy described here.
  • (k) Investments
    • This is referring to the same item in the Balance Sheet as Note (j).
    • It appears that the policy has not been followed.
  • (l) Loans
    • Missing information:
      • The interest rates
      • Repayment arrangements
      • Split between interest-free and interest bearing.
  • Missing policy Notes:
    • Cash and cash equivalents
    • Trade and other payables
    • Employee beneftis
    • Contingent liabilities
    • Commitments
    • New and revised standards…
    • Current versus non-current classification
    • Trade and other receivables
    • Fair value measurement
    • New accounting standards
    • Critical accounting judgments and estimates
  • Incomplete Notes
    • No reconciliation for ‘fixed assets’

Where the board members put their name behind the report – the Statement by Members of the Committee – page 11 of the Financial Report

  • The Statement is unsigned.
  • The Statement does not match that shown in Schedule 1 to the Associations Incorporations Reform Regulations 2012.

An independent opinion on the financial statements – the Independent Auditor’s Report (the last page of the Financial Report)

  • The Report does not make the statement required by section 99(4) (b) of the enabling legislation.

Membership of accountability organisations claimed

  • Missions Interlink. Although they say that their membership list is not publicly available I came across this one on the internet. It shows Empart as a member as at 3 August 2015.

 

(End of review)

 

[i] Australian Charities and Not-for-profits Commission, Australia’s national regulator of charities.

[ii] This Chacko used to work for ‘CFI Ministries’. The same CFI Ministries that is an Empart organisation? Any relation?

[iii] Presumably the same address as on the Register.

[iv] This is how the ACNC explains ‘operating locations’ in their application guide: ‘You need to give details about where in Australia your organisation conducts (or plans to conduct) its activities.’

[v] It had one in NSW, but it expired 23 April 2015.

[vi] Because of the possibility of two (or more) directors having the same name on the register of responsible persons, it is not possible to be definitive about the number of directorships held. MD says that three of these belong to another John Arnold.

[vii] Translated at the rate given by this service for the day that the return says the money was received, then rounded.

Familyvoice Australia Inc, charity review

This is a review, for donors, of the Australian charity Familyvoice Australia Inc (FV).

It is structured according to the charity’s entry on the ACNC[i]Register, and its purpose is to supply some information extra to what is there, information that may be helpful in your giving decision.

It is up to you to decide whether any or all of the information presented here is what you need in order to make that decision, and whether you should seek any other information, either from the charity itself or from other sources.

Ministry response

Prior to publishing this review, I sent my observations to the charity, on 11 September 2015, and invited them to comment. Although the National Director, Dr David Phillips, acknowledged the email, neither comments nor a request for an extension of the publication date were received by that date.

Organisation of this review

  • The first part of this review is organised according to the headings in the register entry. This is how to use this section of the review:
      1. For each heading in the register entry, first read the information under that heading.
      2. Then check if that heading is included below. (Headings for which there is no comment are not included.)
  • There is then a more detailed comment on the Financial Report.
  • Lastly, there is a section Membership of accountability organisations claimed.

Sources

  • ACNC Register (including links)
  • Google search on the charity’s names (see Charity Details, below).
  • FV website.   And social media sites – see bottom right hand here. (Not on LinkedIn.)
  • State government fundraising licence registers.
  • www.glassdoor.comEntity Subtype

REGISTRATION DETAILS

  • The second is a type consistent with sharing the Gospel.
  • However, although the governing document indeed provides that FV’s objects ‘are to advance the Christian faith in Australia’, sharing the Gospel as a specific method is not included as in the list of methods for bringing this about [clause 3].

CHARITY DETAILS

Legal Name

  • This name is slightly (but for searching, often influentially so), different from where it is recorded elsewhere:
    • FV governing document, FV website and Facebook page, and ASIC’s register: ‘FamilyVoice…’, with no space.
    • FV Independent Audit Report (see below), Notes to and forming part of the financial statements (see below), and ABN register: ‘Family Voice…’, with a space.
    • Just to confuse things further, the ABN register records that the name was changed, presumably by FV, from the first one above to the second on 25 October 2014.
    • The National Library of Australia records that FV is known by both names.
    • Who’s right?
  • FV is a South Australian incorporated association.
    • Because of the size of its revenue, it is a ‘prescribed association’. This affects its reporting obligations.
  • It began life as the well-known The Festival of Light (see Date Established below).

Other Name(s)

  • Missing are the four business names:

Charity ABN

  • Tax deductibility: You cannot claim a tax deduction for a donation to FV.

Charity Street Address

  • No separate postal address on the website.

Email

  • Blank. From the website: same as the Charity Address for Service, above.

Phone

Website

  • Blank. Try www.fava.org.au.

ANNUAL REPORTING

  • AIS 2014
    • This is FV’s compulsory Annual Information Statement 2014 (AIS 2014).
    • It gives basic financial information.
      • If you think that this is sufficient for you then you should note that
        • The financial statements are not general purpose financial statements as stated here, but special purpose statements.
        • Although the deficit is the same as that in the Financial Report (see below), four of the other six figures in the Income Statement are not.
  • Financial Report 2014
    • Because there is no word at all from the directors in the Financial Report, we don’t know when they approved, if indeed they did, the Report.
    • The Profit & Loss is dated 7 July 2015, and auditor signed on 21 August 2014, so the Report was completed less than two months after the year end. However, it was not lodged on the ACNC Register for another four+ months, a week after the six months normally allowed for lodgement.
    • The coverage of finances in this review is left until the financial report proper (below).

ABOUT THE CHARITY

Date Established

  • According to the facts tendered by FV in a recent court case, the beginning was in 1972, not 1976.
  • Read the FV story in David Phillips’ book “Courage In A Hostile World – the story of Family Voice Australia[ii].

Who the Charity Benefits

  • Statement of Faith
    • See the second last heading here.
      • This is the same as the one in the governing document (and to which potential members have to subscribe).
  • Vision
      • None found via a site search.
      • From Description of charity’s activities and outcomes in the AIS 2014:Our vision is to see strong families at the heart of a healthy society, where marriage is honoured, human life is respected, families can flourish, Australia’s Christian heritage is valued, and fundamental freedoms are enjoyed.
      • There’s a slightly different one on page 17 of the Annual Report (see Charity’s Document (sic), below:We seek to honour God’s name and advance His kingdom. We promote God’s wise ways for a healthy society where marriage is honoured, human life is respected, families can flourish and fundamental freedoms are enjoyed.
  • Mission
    • Here. (FamilyVoice Australia is a Christian Ministry to our nation, promoting true family values in the light of the wisdom of God.)
  • Activities (What did FV do?)
    • Unfortunately this is all FV says in its AIS 2014: “FamilyVoice is a national Christian voice – promoting true family values for the benefit of all Australians.”
    • However, there is much information on activities on the website.
    • And also sprinkled throughout the Annual Report, including a list of ‘Submissions and Briefing Papers’ on page 15.
  • Outcomes (What did FV deliver?)
    • Unfortunately in the AIS 2014, in response to the request to describe activities and outcomes, there are only activities (see above).
    • There are three outcomes described on page 6 of the Annual Report.
  • Impact (How were people’s lives improved?)
    • Nothing found

Financial Year End

  • This means that the next financial report is due by 31 December 2015. Before that the financial information on the Register will be up to 18 months out-of-date.

WHERE THE CHARITY OPERATES

Operating State(s)[iii]

  • FV doesn’t have a licence to fundraise in any of the seven states that have a licensing regime.

Size of Charity

  • ‘Medium’ charities have revenue of $999,999 or less. Even excluding the ‘Invest>Fund’, for some reason reported separately, and looking at only last year, FV’s revenue easily exceeds $999,999. It should therefore be classified as a Large charity.

CHARITY’S DOCUMENT (SIC)

  • There is no Annual Report/Review available on the ACNC Register.
  • One is available under Publication/Report on the website, but not to the public – you’ll need to register (which means giving your contacts details, thereby being added to their mailing list).

RESPONSIBLE PERSONS

No. of Australian charity directorships

Neil FEARIS                                     1

Charles NEWINGTON                    1

David PHILLIPS                              14 (see footnote iv)

Philip SMITH                                   5

Frank STOOTMAN                          2

Stuart ROBINSON                           5

Harry PAIN                                       2

Kym GOLDING                                3

Peter DOWNIE                                2[iv]

  • ‘Position’
    • In the Annual Report, David Phillips is described as the ‘National President’. There is no such position in the governing document.
      • His position on the register is ‘Director’.
      • FV has, consistent with the governing document, a Chairperson. It is unusual to have both a President and a Chairperson.
    • The governing document provides that there must be a Secretary. If this person is a member of the Board, his or her ‘Position’ on the Register should be ‘Secretary’.
    • The document also provides that there may be a Treasurer. If there is one, and he or she is a member of the Board, ‘Position’ should read ‘Treasurer’.
  • Neither the website nor the Annual Report even lists the board members.

 

(End of review of the ACNC Register information)

 

Latest financial report – detail

  • FV is required by its enabling legislation to prepare accounts that ‘present fairly’ its results and its position. These accounts don’t.
  • Generally accepted accounting principles require FV to present a complete set of financial statements. FV hasn’t, omitting two statements.
  • Generally accepted accounting principles require FV to present one set of financial statements. FV presents two, one for its ‘Invest>Fund’ and another for the rest of its activities.
    • There is no record, either on the FV website, or externally, of such a fund.
    • There is no explanation in the Notes to the accounts for such a split.
  • FV has not explained why it has chosen to present a ‘special purpose financial report’ rather than general purpose financial statements.
  • The Notes to the accounts fall far short of those necessary to explain the financial statements and the Committee’s choices leading to what is (and isn’t) presented.
  • In Note 1 to the accounts, FV says that its accounting policies have been chosen ‘to fulfil the Board’s financial reporting requirements under the constitution’. The constitution requires ‘proper financial records to be kept’ and financial administration ‘conducted in accordance with generally accepted accounting principles’. The FV accounts are not consistent with these requirements.
  • FV is required to attach to the accounts a certificate by the Committee. No such certificate is attached.

An independent opinion on the financial statements: the Independent Audit Report (first page of the Financial Report)

  • The auditor, being a CPA, is required to comply with the Australian Auditing Standards when reporting. He hasn’t.
    • He doesn’t mention that he audited a special purpose financial report. (It is not only the accounting requirements that differ between the two types of reports.)
    • According to his report, he has not audited the Notes to the accounts.
    • He has given an incomplete statement of the responsibility of the Committee.
    • He has given an incomplete and inaccurate description of his responsibility.
    • He includes language that was superseded in 2006.
    • He disclaims responsibility for assessing the Committee’s choice of accounting policies, yet this should be part of his audit procedures.
    • He omits the required ‘Emphasis of Matter’ paragraph.

Membership of accountability organisations claimed

  • None claimed.

 

(End of review)

 

[i] Australian Charities and Not-for-profits Commission, Australia’s national regulator of charities.

[ii] Here’s a review.  (The book confirms 1972 as the founding year.)

[iii] This is how the ACNC explains ‘operating locations’ in their application guide: ‘You need to give details about where in Australia your organisation conducts (or plans to conduct) its activities.’

[iv] Because of the possibility of two (or more) directors having the same name on the register of responsible persons, it is not possible to be definitive about the number of directorships held.

Anglican Board of Mission, charity review

This is a review, for donors and potential donors, of the Australian charity Anglican Board of Mission – Australia Limited (ABM).

It is structured according to the charity’s entry on the ACNC[i] Register, and its purpose is to supply some information extra to what is there, information that may be helpful in your decision about ABM.

It is up to you to decide whether any or all of the information presented here is what you need in order to make your decision, and whether you need to seek any other information, either from the charity itself or from other sources.

Ministry response

Prior to publishing this review, I sent, on 20 August 2015, my observations to the charity and invited them to comment. On 7 September, the Executive Officer, Edwin Porter, sent his comments. Because it appeared that he may have misunderstood some of my observations, and to ensure that he understood that his comments would be published as those of ABM, I responded to what he had said and offered him the opportunity to make changes. He said that, although he didn’t “necessarily agree with some of [my] conclusions”, he would ‘”leave things as they are.”

Organisation of this review:

  1. This review is organised according to the headings in the register entry. This is how to use this section of the review:
    • For each heading in the register entry, first read the information under that heading.
    • Then check if that heading is included below. (Headings for which there is no comment are not included.)
  2. There is then a more detailed comment on the Financial Report.
  3. Lastly, there is a section Membership of accountability organisations claimed.

Sources:

  • The ACNC Register entry (including links)
  • The ABM website, and social media (right hand side here). Not on LinkedIn.
  • Internet search on the names under Charity Details below.
  • State government fundraising licence registers.
  • Email response from the Executive Officer, Edwin Porter (see Ministry Response, above).
  • Glassdoor  (reviews ‘To help people everywhere find jobs and companies they love’)

REGISTRATION DETAILS

Entity Subtype

  • The second of the two subtypes is consistent with sharing the Gospel.

CHARITY DETAILS

Legal Name

  • Not to be confused with the two charities with the name ‘Anglican Board of Mission’ but with the addition of ‘Auxiliary’ +. (See here, and here.)
  • ABM is a public company, a company limited by guarantee.
    • It has two members, the Anglican Church of Australia and the Primate of that Church, without the possibility of any change to this membership (see Charity’s Document, below).
  • The Financial Report (see below) is for a group of entities. However, there is no explanation for excluding Anglican Australia Disaster Relief Fund, a fund for which ABM is the trustee and which shares the same thirteen directors.
    • ABM response: “The Anglican Australian Disaster Relief Fund is an entity that has never operated.”

Charity ABN

  • Tax deductibility:  According to the ABN record, a tax deduction can be claimed for a donation to ABM, and also to the public ancillary fund operated by ABM, The Australian Board of Missions Aboriginal Missions Special Purpose Trust Fund.
    • ABM response: “A tax deduction can only be claimed for donations to the Anglican Trust Fund for Development and the Aboriginal PAF above. Donations for evangelism and other church work are not deductible.” 

Charity Street Address

  • Postal address, from the website: Locked Bag Q4005 Queen Victoria Building NSW 1230

ANNUAL REPORTING

  • AIS 2014
    • Basic financial information[ii] is shown in this document, the Annual Information Statement.
  • Financial Report 2014.
    • This report can be opened either from here or from within AIS 2014.
    • The Financial Report was completed four months from their year-end[iii], and put on the ACNC Register three months later. This was one month over the period normally allowed.
      • ABM response: “The deadline for that year’s reports was 31 January which is clearly stated on the ACNC website next to the date lodged. I can assure you that we were not overdue.”
        • Reviewer comment: 31 January was a generous concession by the ACNC because of its newness, not the normal due date.
    • The coverage of finances in this review is left until the financial report proper (below).

ABOUT THE CHARITY

Who the Charity Benefits

  • Vision
    • From the Annual Report:

ABM wants to see people everywhere experience the wholeness of life God offers in Jesus Christ, and supports our Partners as they participate in God’s mission.

  • Mission
    • See ‘Purpose’ here.
    • ABM says that all its work is grounded in the Anglican Communion’s Five Marks of Mission.
    • The defining objective of the company, according to its governing document (see Charity’s Document, below), is ‘To lead, encourage and serve the Church in Christ’s mission in the world by” (a list of five methods).  ‘Mission’ is not defined, but only the fourth method could be fairly described as a non-church activity.
      • ABM response: “ABM is the national mission agency of the Anglican Church of Australia working with overseas and Aboriginal and Torres Strait Islander people and communities. We have a holistic view of God’s mission. We work with Anglican Church partners and others to see lives empowered and transformed spiritually, materially and socially. We help the Anglican Church and the wider community realise and respond to the invitation for all to be a part of God’s hope for the world.”

        Non-church activity

Ted I don’t agree with your assertion here that only the fourth mark of mission is a non-church activity. In terms of our Community Development work which I assume you would define as non-church, then mark 3, “Stand in solidarity with the poor and needy” and mark 5 “Protect, care for and renew life on our planet” are also certainly central drivers of our programs. Standing in solidarity but not doing anything is not really standing at all, as James says in 2;15.”

Reviewer comment: It appears that ABM has mixed my two dot points – I was not referring to the marks of mission.

  • Activities (What did ABM do?)
    • The AIS 2014’s Description of charity’s activities and outcomes:

ABM’s activities in educating and stimulating the Church in the responsibility of mission enabled funds to be raised to allow ABM to engage in and provide assistance to sustainable development activities, activities for the relief and eradication of poverty and emergency relief operated under the auspices of the Anglican Communion or in partnership with such Churches.

    • From the website, ABM has three main programs: Church to Church, Community Development, and Reconciliation.  You can see a description here.
    • A country by country naming of the ‘programs and projects’ within each of these programs can be seen on pages 10-11 of the Annual Report.
  • Outcomes (What did ABM deliver?)
    • Unfortunately in the AIS 2014, in response to the request to describe outcomes, nothing is given.
    • A description of achievements in the Anglicans in Development programs (presumably the Community Development Program above) is given on pages 12-17 of the Annual Report.
    • The ‘Church to Church Missioner’ reports on that Program on page 21 of the Report, and the Reconciliation Coordinator reports on page 20.
  • Impact (How were people’s lives improved?)
    • No information available
    • The Programs Director, in the Annual Report (page 9), reports that
      • This year we have also continued to work on measuring our Effectiveness (sic).  We have conducted a number of inquiries at community level, getting valuable feedback from our primary stakeholders as to how our programs have impacted on them.  And we continue to survey our partners to ensure we are providing the best possible support, and to enable them to tell us about areas of the partnership that can be improved.
        • ABM response: “On pages 6 & 7 of the Annual Report we have set out a snapshot of some of ABM’s achievements during the previous 12 months. I think that these are a good indication of ABM’s impact in a variety of communities worldwide.”
          • Reviewer comment: In charity evaluation, achievements are not necessarily impacts. The Programs Director implicitly acknowledges this by describing some of ABM’s efforts at measuring effectiveness.

Size of Charity

  • 2013-14 ‘Revenue’ was $5.4 m, far exceeding the $1.0 m threshold for the largest of the ACNC’s three categories (‘Large’).

Financial Year End

  • This means that the next financial report is due by 31 December 2015.   Before that the financial information on the Register will be up to 18 months out-of-date. 
    • ABM response: Practically speaking this is the normal situation as once the year closes accounts have to be prepared, audited and approved and all of that takes time.”
      • Reviewer comment: It is an alert to donors that they may need to seek more up-to-date information.

WHERE THE CHARITY OPERATES

Operating State(s)[iv]

  • You can see who is ‘operating’ in each of these states here.
    • Not to be confused with the representatives shown on the Board here.
  • ABM does not have a fundraising licence in any of the seven states that have a licensing regime.

CHARITY’S DOCUMENT (sic)

  • The ACNC allows charities to put their Annual Report or similar on the Register.  ABM has not taken advantage of this.
    • ABM response: Our Annual Statutory Reports for 2013 and 2014 are linked on our front ACNC page as requested by the ACNC. I’m not sure if you can add further reports but even if you can, I think that it may be confusing to people. Having two reports in different formats may well hinder rather than help, see the next answer.”
      • Reviewer comment: What ABM  call ‘Annual Statutory Reports’ are called ‘Financial Report’ by the ACNC. I think most users could distinguish between an Annual Report/Review and the Financial Report, especially as the first would be under Charity’s Document whereas the second would be under Annual Reporting.
    • The Annual Report is, however, available on the website.
      • ABM response: “This report is in a format specifically for ACFID and focusses specifically on the overseas aid part of ABM. I feel that our Statutory Accounts which are the detailed report for the whole organisation are the most applicable for the ACNC.”
        • Reviewer comment: The Financial Reports section may be, but the rest has fairly standard inclusions for an annual report. Anyway, ABM’s Financial Reports are clearly marked as being in the format required by ACFID.
  • Governing document
    • This is unsigned.
    • The director representing the Diocese of Tasmania, a position required by the governing document, is not identified in the list of directors on the website.
      • ABM response: “The incumbent resigned early this year due to other work commitments and a replacement is in progress.”
    • The President of the company is listed under ‘Our Board’ on the website, yet he is not a member of the Board.

RESPONSIBLE PERSONS

  • To see all a director’s positions in Australia, search here.

No. of Australian charity directorships[v]

Stephen HARRISON                     5

John ROUNDHILL                        2

Emma RIGGS                                3

John DEANE                                  3

Garry WEATHERILL                   3

Ian MORGAN                                3

Gregory THOMPSON                 12 (see footnote v)

David BATTRICK                          5

Martin DREVIKOVSKY                4

Claire DUFFY                                 2

Sarah MACNEIL                            9 (see footnote v)

Debra SAFFREY-COLLINS          1 (2 when ‘Saffrey Collins’ is included)

Beverly DYKES                              1 (2 when the name is spelt as it is on the website)

  • ABM response: “Ted I would advise against publishing this information as it is certainly incorrect. The ACNC makes no allowance for discrete names, that is, all the John Smiths come out as John Smith even though there may be many of them. For example, you quote the ACNC listing John Deane with 3 Directorships but I can confirm that John has nothing to do with the “Australian Computer Museum Society” for which the ACNC attributes a Directorship. There is clearly more than one John Deane in Australia who is a Director. The same is the case for Gregory Thompson who you claim 12 Directorships for but I can confirm our Greg Thompson only has 3. You will find this is the case in fact for any name you choose.”
    • Reviewer comment: This is the information that is on the public record. It is as submitted by charities to, and accepted by, the ACNC for publication. What I give here is what any Register user will duplicate if they do the search that they are invited to do by the ACNC. Even though donors are entitled to rely,  following the ACNC’s heavy promotion of the wisdom of using the Register in their research before giving, on the information that they find, I carefully point out that this result cannot be relied on. The problem would be minimised, perhaps eliminated, if charities submitted the full name.
  • ABM’s governing document requires that, until the top unit of the Church approves otherwise, ABM have fourteen directors. There are only thirteen.
    • From the website listing of board members, it appears that approval has been given for a representative from Tasmania to be no longer required.
      • ABM response: “As I mention above the situation is simply that the incumbent resigned suddenly and it takes time to identify and approve the replacement.”
    • The ‘Positions’ match neither the ‘Special responsibilities’ in the Directors’ Report, nor those shown on the website.
      • ABM response: Not really sure what you are saying here Ted. Our Directors don’t have any position on the board other than Member or perhaps Chair in the case of the Chair. The Special Responsibility referred to in the Statutory Accounts simply indicates that the member is also a member of another governance committee.”
        • Reviewer comment: There is a Deputy Chair in the Report, which implies a Chair. There’s a Chair and a Deputy Chair on the website.

 

(End of review of the ACNC Register information)

 

Latest financial report – detail

Where the directors put their name to the report – the Directors’ Report (page 3 of the Financial Report)

  • The required description of the performance measures used by ABM is missing.
  • ‘Information on directors’
    • Weatherhill is also the Chair of the Board.
    • The directors representing the Provinces of the Church and the Diocese of Tasmania (a governing document requirement) are not identified.
    • It is not obvious which director meets the governing document requirement for one director to have ‘expertise in Community Development programmes’.
  • ‘Members’ guarantee’:
    • The maximum guarantee per member is $10 [governing document], not $20.
    • A total guarantee of $240 doesn’t match the fact that there are only two members.

What was earned, what was consumed during the year – the Consolidated Statement of Profit or Loss and Other Comprehensive Income (page 11 of the Financial Report)

  • The item ‘Other comprehensive income for the year…’ is missing.
  • The format used in the Annual Report is more helpful.

Revenue from continuing operations $5.4 m (including Note 5)

  • It is not possible to reconcile ‘Gifts and Donations’ to the donation possibilities on the website.
  • Tax deductible donations are not distinguished from those that weren’t.

 Total Expenditure $4.8 m

  • This is a classification that mixes the nature of the expense with its function.
  • Expenses not disclosed:
    • Employee benefits expense
      • In June ABM had 18 full time and 10 part time employees.
    • Superannuation expense
    • Cost of goods sold
    • Fundraising expenses
    • Administration expenses

Program Expenditure $3.5 m

  • This is 72% of Total Expenditure, yet there is no Note explaining its composition.

Operating Expenses $1.9 m

  • This is 39% of Total Expenditure, yet there is no Note explaining its composition.
  • All the Total Expenditure here is normally from ‘operations’, so the use of this term is confusing.

Funds returned to DFAT $2K

  • This atypical item needs an explanation.

What’s left at the end of the year – the Consolidated Statement of Financial Position (page 12 of the Financial Report)

  • Goods were sold but there are no inventories.
    • ABM response: “Goods sold in the past have principally been a small volume of promotional Christmas Cards which come and go within the financial year.
  • There is no explanation for why cash and investments totalling $12.0 m are held in a charity that is constantly asking for donations.
    • ABM response: “As we have discussed above, ABM is a multifaceted organisation that has a long history. As can be readily ascertained from the Financial Statements our reserves are divided into a number of categories and many have restrictions on use.”
      • Reviewer’s comment: 1.  Reserves total $9.3 m, well under the $12.0 m I comment on. No restrictions are described in the Report.  3.  The mere existence of reserves divided into a number of categories doesn’t say anything about their availability for spending.
    • ABM response (part 2): Designated Reserves $3m. These are the program reserves that are given by donors for specific programs. From the P&L you can also see that our expenditure on programs was a similar number. It is vital for us to maintain a reserve for our programs as it is always possible for governments to change funding (as we have seen) or donors to change giving habits which then impacts on program expenditure. It is prudent and responsible to ensure that an organisation has sufficient program reserves so that should funding stop then the program can be wound down properly without causing damage to those recipients involved.”
      • Reviewer comment: Yes, they are designated, but that doesn’t mean that they need to be reserves. That’s your decision, the decision to keep rather than spend. And then you made a decision about how much to keep. How you made those two decisions is very relevant to a wise donor. Neither of these things are explained in the report.
    • ABM response (part 3):Bequest Reserves $5m. These are donations received over the last 100 years that have been given with a specific purpose in mind and which cannot be used for programs in any regular manner. Bequest funds tend to be inflexible and specific and given largely on the understanding that only the income earned is available for use with the capital balance preserved.”
      • Reviewer comment: To a reader, bequest doesn’t automatically mean that it can’t be spent. Again, therefore, an explanation is very useful – especially as $4.6 m of the $5.3 m are ‘General Bequests’, a title that in no way should automatically lead to the presumption that they are capital that can’t be spent.
    • ABM response: (part 4) The remainder of our reserves are to provide stability and certainty for the organisation going forward with the intention that investment income earned assists greatly to offset admin costs.”
      • Reviewer comment: The only other reserve is the $635K Asset Revaluation Reserve, a reserve that has nothing to do with money from donors (directly anyway).

Essential information to go with the figures: Notes to Financial Statements (page 15 of the Financial Report)

  • 1  Summary of significant Accounting Policies
    • Missing Notes:
      • New mandatory Accounting Standards and Interpretations adopted
      • Current and non-current classification
      • Fair value measurement
    • Is it correct that the estimation of the useful lives of assets, the impairment to non-financial assets, and the amount of employee benefits were not critical estimates?

An independent opinion on the financial statements: the Independent auditor’s report (page 29 of the Financial Report)

  • This is a ‘clean’ opinion.  Read here and here to draw the right conclusions from this.

Membership of accountability organisations claimed

 

(End of review)

 

 

[i] Australian Charities and Not-for-profits Commission, Australia’s national regulator of charities.

[ii] Those who wrote the rules for the financial statements say that, as a user, you ‘are assumed to have a reasonable knowledge of business and economic activities and accounting and a willingness to study the information with reasonable diligence’ [Framework for the Preparation and Presentation of Financial Statements, www.aasb.gov.au, paragraph 25].

[iii] Although authorised by the directors on 19 September 2014, they didn’t sign until 28 October 2014.  (The auditor had, unusually, signed the day before.)

[iv] This is how the ACNC explains ‘operating locations’ in their application guide: ‘You need to give details about where in Australia your organisation conducts (or plans to conduct) its activities.’

[v] Because of the possibility of two (or more) directors having the same name on the register of responsible persons, it is not possible to be definitive about the number of directorships held.

 

The Bible League, charity review

This is a review, for donors, of the Australian charity The Bible League Incorporated (BL).

It is structured according to the charity’s entry on the ACNC[i] Register, and its purpose is to supply some information extra to what is there, information that may be helpful in your giving decision.

It is up to you to decide whether any or all of the information presented here is what you need in order to make that decision, and whether you should seek any other information, either from the charity itself or from other sources.

Ministry response

Prior to publishing this review, I sent my observations to BL, on 22 July 2015, and invited them to comment. Two days later I was told that they would like to respond, and then the next day that X from the Board would be ‘following up on this’. Upon enquiring, on 2 September 2015, whether they still intended to comment, X told me that “We do not think it is appropriate to respond as there are too many conceptual errors that we would need to correct and we are comfortable with the present authentication avenues that we report to.

Organisation of this review

  • The first part of this review is organised according to the headings in the register entry. This is how to use this section of the review:
      1. For each heading in the register entry, first read the information under that heading.
      2. Then check if that heading is included below. (Headings for which there is no comment are not included.)
  • There is then a more detailed comment on the Financial Report.
  • Lastly, there is a section Membership of accountability organisations claimed.

Sources

  • ACNC Register (including links)
  • Google search on the charity’s names (see Charity Details, below).
  • BL website.   And social media sites – see the top right hand side of any website page.
  • State government fundraising licence registers.
  • www.glassdoor.com
  • GreatNonprofits (for the US organisation)
  • Guidestar (for the US organisation)
  • The NZ register of charities (for the NZ organisation)

REGISTRATION DETAILS

Entity Subtype

  • A type consistent with sharing the Gospel.
  • And with the Primary Objects in BL’s governing document.  Here’s the first:
    • To present the Gospel of the Lord Jesus Christ through the placement of Scriptures to churches and to individuals and to homes without Bibles.

CHARITY DETAILS

Legal Name

  • BL is a NSW incorporated association.
  • Not to be confused with Bible League International (APAC) Pty Ltd, a wholly owned subsidiary of the Bible League International Inc in the US.
    • This charity has a separate office in NSW.
    • It received $2.1 m from the parent company in 2014, which was, apart from a little interest income, its entire income.
      • It then had $964K of expenses to disburse $857K of ‘Grant expenses’.
        • These ‘Grant expenses’ were for ‘Bible placements’ [Annual Information Statement 2014 (AIS 2014)].
    • It is not clear why, given that BL is affiliated/associated with Bible League International, there is a need for a separate Australia operation to receive money from the US. Or a separate office.
      • If an association wants to trade under a name other than its legal name, it must register that name; the Act under which BL is incorporated requires BL to use its full name on all documents. BL does not own a business name.
  • BL is using a number of variations of its legal name on its website. For instance, at the bottom of BL’s newsletter, Planting God’s Word:
    • The author of the newsletter is ‘CEO Bible League Australia and New Zealand’
    • The description of the ministry is ‘Bible League International’
    • The contact address is for ‘Bible League Australia’
    • The FaceBook site is ‘Bible League A&NZ’
  • The BL NZ website says that Bible League Australia and BiblesinAction (NZ) (the old name for Bible League New Zealand) merged on 1 September 2012.
    • Although Bible League New Zealand has its own set of web pages (see the top right hand side of the website, it is a separate registered charity in New Zealand (Bible League International New Zealand).

Charity ABN

  • Tax deductibility: You cannot claim a tax deduction for a donation to BL.
  • The entity type on ABN Lookup (the link from the ABN) is incorrect: BL is incorporated.

Charity Street Address

  • The postal address, from the website: PO Box 714 Penrith NSW 2751 Australia

Phone

  • Blank.   From the website: 1800 800 937

Website

  • Blank. Try www.bibleleague.com.au.   Make sure that ‘Australia’, not ‘New Zealand’ is selected in the top right hand corner.

ANNUAL REPORTING

  • AIS 2014
    • This includes basic financial information.
  • Financial Report 2014
    • This report can also be opened from within the AIS 2014, above.
    • Although the Financial Report was completed within a month of the year end, it was not put on the ACNC Register for another three and a half months. (This was still well within the six month period normally allowed.)
    • The coverage of finances in this review is left until Latest financial report – detail (below).

ABOUT THE CHARITY

  • Statement of Faith
    • Here.
    • This is the same as the Statement in the governing document.

Who the Charity Benefits

  • Vision
    • None found
  • Mission
    • Here. (For all intents and purposes, the same as that of the US organisation.)
  • Activities (What does BL do?)
    • From the AIS 2014: “Fundraising through marketing to supply bibles.”
    • Unfortunately About Us/Bible League Ministry on the website stops short of describing what BL does; however, by reading the material elsewhere on the website it is possible to get a reasonably clear picture of both BL’s fundraising activities and how the money that is sent overseas is used.
    • For the US organisation, see the Guidestar report here
  • Outcomes (What was delivered?)
    • Unfortunately in the AIS 2014, in response to the request to describe activities and outcomes, there are only activities (see above).
    • Here’s the website assessment of the worldwide results in 2013.
  • Impact (How are people’s lives improved?)
    • Nothing found
    • This was Bible League International’s response to Guidestar’s question ‘How do you know that you are making progress?’

Bible League International has a robust process for measuring the impact of our work. Annually, we track the number and scope of Scriptures and Scripture materials provided, the number of trainers trained, and the number of individuals who have participated in Bible studies, literacy classes, or church planting courses using Bible league materials or programs.

Size of Charity

  • There is no need to adjust the 2013-14 ‘Revenue’, $2.7 m, to allow for the fact that the Financial Report is for 13 months, to see that BL easily qualifies for the top size of charity ($1 m).

Financial Year End

  • This means that the next financial report is due by 31 March 2016. Before that the financial information on the Register will be up to 18 months out-of-date.

WHERE THE CHARITY OPERATES

Operating State(s)[ii]

  • Although we are not told what offices BL has outside NSW, one in each state is unlikely, so this listing is presumably in recognition that it fundraises in all states.
  • BL holds a fundraising licence in five of the seven states that have a licensing regime; there is no explanation in the Report or on the website why no licence is held in the other two (South Australia and Western Australia).
  • As an association BL is a registrable Australian body. As it is carrying on business interstate (at a minimum in Queensland), the law[iv] requires it to have an Australian Registered Body Number (ARBN). BL doesn’t have an ARBN.

Operates in (Countries)

  • If indeed BL and BL NZ are one organisation (see above), then New Zealand should be listed here.
  • So should the country or countries to which the donations are sent.

CHARITY’S DOCUMENT (SIC)

  • There is no Annual Report/Review available on the ACNC Register, nor is one offered on, or by invitation from, the website.

RESPONSIBLE PERSONS

                                                 No. of Australian charity directorships[iii]

Arie BAALBERGEN                                        3

Donald DE VRIES                                           1

Blayne HERR                                                  1

Peter KNIGHT                                                 4

David MORRIS                                              10

Dirk REITSMA                                                3

Gregory TAYLOR                                           5

Jarrod THOMPSON                                       1

 

  • BL New Zealand: There is 100% correspondence between the Australian and New Zealand boards.
    • This suggests that there should be a report that shows the combined organisation.
  • Bible League International (APAC) Pty Ltd:  No directors are on either the Australian or New Zealand boards

 

(End of review of the ACNC Register information)

 

Latest financial report – detail

  • Given that the NZ and Australian Partners of Bible League International are run by the same people, and are represented by email as the one organisation, an explanation for why consolidated statements are not presented is needed.
  • Some pages are included in the page numbering, others not.

Cover page

  • The Bible League International logo is owned by The Bible League in the US, not BL.

Committee’s (the second page of the Financial Report)

  • No Directors’ Report is required by the ACNC.  The inclusion here of such a report is therefore a bonus.
    • If the intention was to voluntarily offer a typical ‘good practice’‘ Directors’ Report, then
      • this one is missing the following information: officers, objectives, the strategy for achieving the objectives, and the performance measures used;
      • ‘Subsequent Events’ should be in the Notes to Financial Statements (below); and
      • The ‘principal activity’ of raising money has been omitted.
    • Since the date of this report, 31 October 2014, Steven Rockwell and Malcolm Armstrong have left the board and David Morris has joined (see Responsible Persons, above).

What was earned, what was consumed during the year – the Statement of Financial Performance (the page numbered ‘Page 1’ of the Financial Report)

  • There doesn’t seem to be any good reason for BL to use a title for this report that differs from the two mentioned in the applicable Accounting Standard:  The Statement of Profit or Loss and Other Comprehensive Income or The Statement of Comprehensive Income.
  • The required ‘Other comprehensive income’ section is absent. (The Statement appears to be using a format that is considerably out-of-date.)
  • Revenues from ordinary activities $2.7 m (including Note 2)
    • Revenue is, by definition, from the ordinary activities of the charity[iv].
    • Based on what’s offered on the website, there is only one option for your money – ‘Plant bibles’. There is no option to match the revenue category ‘Mission Support’.
    • There was apparently no revenue from bequests over the last 25 months.
  • Total expenses (not shown, but from the zero surplus, the same as the revenue)
    • Administration expenses are not identified.
      • If administration expenses are all expenses other than ‘Direct Fund Raising Expenditure’ and ‘Distribution of Funds Raised’, then they total $941K (35% of total expenses).
  • Direct Fund Raising Expenditure $309K
    • This is 11% of total expenses.
    • There is no Note explaining the meaning of ‘fund raising’.
      • From Note 10 it appears that BL defines it as all expenses.  That is, none is ‘Administration’ (see above).
        • This makes it 46% of revenue.
  • Distribution of Funds Raised $1.5 m
    • For the destination of these funds you have to go to the unaudited report on page 11.   Here it shows a split between ‘The Bible League Australia’ and ‘The Bible League USA’. (The second introduces another name for the US organisation.)
      • There is no explanation why, in addition to keeping 46% of donations, there is a need to distribute a further $42K to Australia.
  • Employment Expenses $745K
    • This represents 28% of total expenses.
    • In February this year BL had 7 full time, 1 part-time and 2 casual employees [AIS 2014]. 
      • Compared to 12 at year end [‘Provisions’ Note].
  • Note 3
    • Inventories are held yet there is no Cost of Sales shown. 
    • No superannuation expense shown.
    • No finance expenses.
  • Profit from ordinary activities…$ zero
    • It is unusual, especially without explanation, for an accrual basis result to be zero.
    • It is also unusual for a charity to describe the result as profit or loss.
  • Total changes in equity of the association
    • The surplus or deficit is not the only thing that can change equity.

What’s left at the end of the year – Statement of Financial Position (the page numbered ‘Page 2’ of the Financial Report)

  • Cash assets $263K (including Note 7)
    • The current term is ‘cash and cash equivalents’
  • Property, plant and equipment (including Note 12)
    • The movement table is absent, without explanation, comparative figures.
  • Liabilities
    • It is not obvious why BL has different line items than those in the applicable Accounting Standard:  Trade and other payables, Provisions, and Financial liabilities
  • Current Tax Liabilities $negative
    • This is an asset, not a liability
  • Supporter’s loans unsecured $70K (including Note 18)
    • Because one would expect that such loans would be repayable on demand, one would expect to see them classified as Current Liabilities.
  • Restricted funds $255K (including Note 6)
    • Note: there is no way on the website for a donor to designate their donation, so presumably these came via another channel.

Statement of Changes in Equity

  • One is required but is not included.

Essential information to go with the figures:  the Notes to Financial Statements (the page after the one number ‘Page 4’  of the Financial Report)

  • Note 1 Statement of Significant Accounting Policies
    • The disclosure in a special purpose report can be considerably less than that required for a general purpose report, a report designed for those people who are dependent on the charity’s report for the information they need. So this confusion is significant. The statement (by the directors) that the report ‘is a general purpose financial report’ is contradicted by the auditor. He says that it is a special purpose report.
    • There is no explanation why, if Bible League International New Zealand is run by BL, the two organisations are not consolidated.
    • The Associations Incorporation Act does not have ‘authoritative pronouncements’ in the same way as the Accounting Standards do, as it says here.
    • There is no disclosure of the ‘presentation currency’.
    • Property/Plant and equipment
      • Contrary to the Note, BL only has one class of property.
      • The ‘cost basis’ should be described.
      • Missing are the policies on derecognition, and depreciation (method and rates).
    • Employee Benefits:  presumably these are more than just super, the only one mentioned here..
    • Inventories:  There is no mention of impairment.
    • Cash:  The correct title is ‘Cash and cash equivalents’.
    • Goods and Services Tax (GST):  There’s no policy on GST and cash flows.
    • Restricted Funds:
      • Note that this is a self-imposed designation, not one by donors.
      • ‘Administrative levy’?
    • Distribution of Funds Raised
      • Contrary to the comment here, there is nothing in Committee’s Report (see above) about fundraising.
      • Note the aim of restricting fundraising expenses to 30% of donations.
        • It was 46% last year (see above).
    • Investments:  Despite the Note, BL doesn’t have any.
  • Missing Notes:
    • The relationship between the different Bible Leagues entities
    • Fair value measurement
    • New and revised Standards
    • Accounting Standards issued but not yet effective
    • Critical accounting judgements and estimates
    • Revenue recognition
    • Current and non-current distinction
    • Trade and Other Receivables
    • Impairment testing
    • Trade and other payables
    • Financial instruments
    • Key management personnel
    • Contingent liabilities
    • Commitments
    • Related party transactions

An independent opinion on the financial statements: Independent Auditor’s Report (four pages before the page numbered ‘Page 11’ of the Financial Report)

  • The auditor said that the report he audited is a special purpose financial report. This contradicts what the directors say in Note 1. It makes quite a difference to what’s included.
  • To have not considered the appropriateness of the director’s selection of accounting policies is contrary to the Australian Auditing Standards [Auditor’s Responsibility paragraph]
  • This is a ‘clean’ opinion. Read here and here to draw the right conclusions from this.
  • The auditor’s last paragraph, a warning that the financial report was prepared for the state regulator, does not fit with the fact that it is a general purpose report, and that it will be lodged on a register accessible via the internet.

Auditor’s Independence Declaration…(two pages before the page numbered ‘Page 11’ in the Financial Report)

  • The legislation referenced should be that for the ACNC, not the Corporations Act.

Certificate by Members of the Committee (one page before the page numbered ‘Page 11’ of the Financial Report)

  • BL’s incorporating legislation does not require this certificate. (It appears to have been dropped in the 2009 Act.)
  • BL’s governing document requires the certificate that used to be required before the Act was amended in 2009.
  • (b) is missing a date.
  • (c) There is no resolution attached.

Membership of accountability organisations claimed

  • On the website, we learn that ‘Bible League Australia is a member of Missions Interlink and an Organisational Member of the Fundraising Institute of Australia (FIA)’.
    • Although Missions Interlink say that their membership list is not publicly available I stumbled across this one on the internet. It shows ‘Bible League Australia’ as a member as at 3 August 2015.
  • The membership list of the FIA does not confirm BL’s claim of membership; there is, however a membership in the name of Bible League International. (Another reason for clarifying the relationship – see above.)

 

 

(End of review)

 

 

 

[i] Australian Charities and Not-for-profits Commission, Australia’s national regulator of charities.

[ii] This is how the ACNC explains ‘operating locations’ in their application guide: ‘You need to give details about where in Australia your organisation conducts (or plans to conduct) its activities.

[iii] Because of the possibility of two (or more) directors having the same name on the register of responsible persons, it is not possible to be definitive about the number of directorships held.

[iv] There used to be an ordinary-extraordinary distinction in the Profit and Loss Statement.

Open Doors Australia Inc, charity review

This is a review, for donors, of the Australian charity Open Door Australia Inc (ODA). It is structured according to the charity’s entry on the ACNC[i] Register, and its purpose is to supply some information extra to what is there, information that may be helpful in your giving decision.

It is up to you to decide whether any or all of the information presented here is what you need in order to make that decision, and whether you should seek any other information, either from the charity itself or from other sources.

Ministry response

Prior to publishing this review, I sent, on 28 July 2015, my observations to the charity and invited them to suggest corrections, and submit comments for publication. The email was sent to the Charity Address for Service[ii].  I have not received a response.

Organisation of this review

  • The first part of this review is organised according to the headings in the register entry. This is how to use this section of the review:
      1. For each heading in the register entry, first read the information under that heading.
      2. Then check if that heading is included below. (Headings for which there is no comment are not included.)
  • There is then a more detailed comment on the Financial Report.
  • Lastly, there is a section Membership of accountability organisations claimed.

Sources

  • ACNC Register (including links)
  • Google search on the charity’s names (see Legal Name, below).
  • ODA website, and social media at the bottom here. Not on LinkedIn.
  • State government fundraising licence registers.
  • www.glassdoor.com
  • GreatNonprofits (for the US and international organisations)
  • Guidestar (for the US and international organisations)
  • Charity Navigator (for the US and international organisations)
  • ECFA (for the US organisation)

REGISTRATION DETAILS

Entity Subtype (‘charitable purposes’)

  • A primary sub-type consistent with sharing the Gospel.
  • And consistent with the purpose clause in the governing document:

ODA is organised and shall continue to be operated exclusively for Christian purposes. Compelled by the love of Jesus Christ and His commandment to go into all the world and preach the Gospel to every creature, the aims, intents and purposes of ODA are to meet the needs of the Suffering and threatened Chruch worldwide as requested and to edify and encourage the Church in the free world to become involved with the Suffering Cjhurch and by doing so “awaken and strengthen what remains” (Rev.3:2). These aims, intents and purposes shall remain foremost as the goals of ODA.

CHARITY DETAILS

Legal Name

Charity ABN

  • Tax deductibility: You cannot claim a tax deduction for a donation to ODA.

Charity Street Address

  • The postal address, from the website: PO Box 6237 Frenchs Forest, NSW 2086
  • There’s also a Queensland office: Queensland Baptists 53 Prospect Road Gaythorne QLD 4051

Phone

    • Blank. From the website: (02) 9451 2999

Website

ANNUAL REPORTING

  • AIS 2014:
    • This is the Annual Information Statement (AIS 2014).
    • It includes basic financial information. If you think that’s all you need then you should note that
      • The AIS 2014 says that Transitional statements were submitted in the Financial Report, when actually they were special purpose statements.
      • The classification of expenses is not the same as that used in the Financial Report.
  • Financial Report 2014:
    • This report can also be opened from within the AIS 2014, above.
    • The Financial Report wasn’t completed until nearly five months after the year end. It was then another month before it was lodged on the Register. (This was only half a month before the final day for lodgement.)
    • The coverage of finances in this review is left until the section Latest financial report – detail, below.

ABOUT THE CHARITY

  • Statement of Faith
    • None found on the website.
    • This probably reflects their lack of denominational affiliation:

Does Open Doors belong to any particular denomination?

No, Open Doors is a totally interdenominational organisation and is therefore not restricted in who we help. If people are Christian and they are persecuted, we help them. We define Christian as anyone who professes the name of Jesus.

      • However, there is a statement of faith in their governing document, the Apostolic Creed (more commonly Apostle’s Creed), with ‘the holy catholic church’ changed to ‘the holy Christian church’. This is a creed used in the Roman Catholic, Anglican, and many Protestant churches, but not officially recognized in the Eastern Orthodox churches.

Who the Charity Benefits

  • Vision
    • None for Australia specifically
    • For the worldwide organisation, here.
  • Mission
    • None for Australia specifically
    • For the worldwide organisation, here.
  • Activities
    • In the AIS 2014 ODA repeats the Mission, above.
    • The website’s explanation of what ODA does is for the worldwide organisation, not specifically Australia.
    • In the Impact Report (above), there is a description of what ODA does:

In Australia, our aim is to educate and mobilise Christians in Australia to pray, learn and take action on behalf of persecuted Christians around the world

  • Outcomes
    • Unfortunately in the AIS 2014, in response to the request to describe activities and outcomes, there are only activities (see above).
    • In the first half of the Impact Report (see above), we learn of the result of donor dollars in Australia:
      • …Our events, speaker tours and presence at conferences enabled us to engage with many new supporters, and strengthen our presence and partnerships with churches and Christian networks around Australia.
      • In 2014 we witnessed an unprecedented response from the Australian church following a steep rise in violence in Syria, Iraq and Nigeria by Islamic extremists against Christians in those countries. We saw thousands of new supporters join us in the ministry throughout this period, many as a response to our Prayer for Iraq Day.
    • In the second half, there is a summary of OD’s actions globally: ‘3,164,375 Bibles and other literature distributed’ etc.
    • Neither Open Doors USA or Open Doors International have submitted an impact report to Guidestar. (One of the questions answered in this is ‘How do you know that you are making progress?’
  • Impacts
    • None found.

Size of Charity

  • With revenue of $5.0 m, ODA far exceeds the qualification for the top size of charity ($1 m).

Financial Year End

  • This means that the next financial report is due by 30 June 2016. Before that the financial information on the Register will be up to 18 months out-of-date.

WHERE THE CHARITY OPERATES

  • Operating State(s)[iii]
    • There is no evidence of offices other than the ones in NSW and Queensland (see above), so presumably the listing here reflects the fact that ODA fundraises all over Australia.
    • ODA doesn’t hold fundraising licences in any of the seven states that have a licensing regime. It is, from 1 September 2015, exempt in NSW.
    • As an association ODA is a registrable Australian body. As it is carrying on business interstate (at a minimum in Queensland), the law[iv] requires it to have an Australian Registered Body Number (ARBN). ODA doesn’t have an ARBN.

CHARITY’S DOCUMENT

  • There is no Annual Report/Review available on the ACNC Register.
    • The website has a separate section ‘Impact Report’. This appears, both from the content and the URL, to be ODA’s annual report/review. For 2014 the usual full report has been replaced by a one page Summary.

RESPONSIBLE PERSONS

No. of Australian directorships

Mark BENNETT                                            6[v]

Robert GUY                                                    1

Darryn KENEALLY                                      6

Ken PRIDMORE                                            1

Robert REEVE                                               9

Ken SINCLAIR                                              1

  • The ‘Australian Director’ is ex-officio a member of the Board [the governing document]. The Register entry is therefore missing Mike Gore (here and here.).
  • The governing document requires the following Office-Bearers: Chairman, Deputy-Chairman, Secretary, and Treasurer. The ACNC record does not reflect this.

 

(End of review of the ACNC Register information)

 

Latest financial report – detail

  • There is no report by the committee, a usual inclusion.

Where the directors put their name behind the accounts – the Statement by Members of the Board (page 1 of the Financial Report)

  • Their decision that ODA is not a ‘reporting entity’ is a critical one for what goes in the financial statements, but they give no reasoning.

An independent opinion on the financial statements: Independent Auditor’s Report (page 2 of the Financial Report)

  • The auditor has assessed the directors’ decision that ODA is not a ‘reporting entity’, and agreed with it; that is, that ODA doesn’t have any users (either existing or prospective) who are dependent on a general purpose report (that is, a report prepared for those who are not in a position to required ODA to produce a report tailored to their needs.)
  • It is not clear why the auditor took the unusual step of highlighting the foreign current translation policy.
  • The Report does not include the statement about compliance with the Open Doors International Audit Manual required by the governing document.
  • This is a ‘clean’ opinion. Read here and here to draw the right conclusions from this.

What’s left at the end of the year – the Balance Sheet (page 4 of the Financial Report)

  • Cash and cash equivalent (sic) $459K (including Note 2)
    • There is no explanation why this amount of cash is needed.
    • A term deposit doesn’t fit with the stated policy for ‘cash and cash equivalent’ – or at least not without explanation
  • Receivable from ODI Affiliate $3K
    • The directors’ selection of special purpose rather than general purpose financial statements means that, unless they think that it is needed in order to show a true and fair view, disclosure about related parties (and there dealings with ODA) is not required.
      • The Board appoints and removes the Australian Director ‘in consultation with the CEO of Open Doors International [the governing document].
      • Directors’ fees cannot be paid (the governing document).
  • Plant and equipment $67K (including Note 4)
    • Due to the movements in the assets not being shown, we cannot see the reason for the 30% reduction.
  • Trade and other payables $116K (including Note 5)
    • Super contributions are normally payable to the employee’s super fund, not to the employee.
    • Presumably the remainder of this $56K is also not due to the employee.
  • Provisions $118K (including Note 6)
    • No non-current employee benefits?
  • Fund Balance Reconciliation
    • This is, without explanation, a non-standard inclusion in a balance sheet.
    • There is no explanation of the ‘expendible’ versus non-expendable distinction.
    • There is no explanation of the restricted versus unrestricted distinction.

What was earned, what was consumed during the year – the Income Statement and Changes in Fund Balance (page 6 of the Financial Report)

  • The required ‘Other comprehensive income’ section is absent. (The Statement appears to be using a format that is considerably out-of-date.)
  • Contributions and bequests $5.0 m
      • It is not possible to see how much was given in each of the four donation options.
  •  Books and tapes, net of cost $73K
    • Presumably ‘net of cost’ means that this is the gross profit from sales. If so this understates revenue.
    • It also means that the required disclosure of cost of sales is missing.
  • Expenses $4.9 m
    • The classification mixes the nature of the expenses with their function.
  • Support – other regions $2.7 m
    • Presumably ‘other regions’ means overseas.
    • This is 54% of expenses, yet there is no Note.
    • There is no explanation of to whom this money was sent or how ODA ensured that is spent for the purposes it was given.
  • Literature distribution $135K
  • Training $124K
    • Presumably, since ‘Administration’ is shown separately, these items only includes direct costs.
  • Awareness & Motivation of the Free Church $658K
  • Social Economic Support $116K
  • Research & Advocacy $112K
  • Fund raising (sic) $685K
    • There is no Note (or Notes) to explain the composition of these items.
  • Administration $405K
    • In June 2015 ODA had 14 full-time, eight part-time, and two casual employees.)
    • ‘Employee expenses’, from the AIS 2014, were $1.3K.  Why then is ‘Administration’ only $405K?
  •  Net loss on foreign currency transaction $7K
    • There is no Note to explain the composition of this item.
  • Missing information:
    • Employee benefits expense
    • Depreciation and amortisation expense

How the wealth of the charity has changed – Statement of Changes in Equity – page of the Financial Report

  • This statement is missing.

Essential information to go with the figures: the Notes to Financial Statements (page 8 of the Financial Report)

Note 1. Statement of Accounting Policies

  • a) Basis of Preparation
    • The directors say the company is ‘not a reporting entity’, but they give no reason for this important decision.
    • They are in effect saying that anybody who is interested in this company has the power to contact the company and request a report tailored to their particular needs.
    • The result of the decision is that the accounts don’t comply with the Australian Accounting Standards, and can disclose considerably less than that required for a general purpose report, a report designed for those people who are dependent on the charity’s report for the information they need.
      • The directors do not say which Accounting Standards they did comply with.
    • You can compare the directors’ decision to this advice from the ACNC: If people use and rely on your charity’s financial statements to help them make decisions (for example, about how to spend money) then your charity is most likely a reporting entity.
    • Although not clear from this, the directors should also consider prospective users.
    • The directors appeared to have, contrary to the Accounting Standards, accounted for some items using accrual accounting, and others using cash accounting.
  • h)   Foreign currency translations
    • No reason is given for the inclusion of this Note.
  •  Missing Notes (in addition to the ones mentioned above)
    • New and revised Standards
    • Accounting Standards issue but not yet effective
    • Employee benefits
    • Current and non-current classification
    • Impairment testing
    • Significant management judgements
    • Trade and Other Receivables
    • Impairment of non-financial assets
    • Remuneration of auditors
    • Events after the reporting date
    • Reconciliation of surplus
    • Fair value measurement
    • Commitments
    • Contingent liabilities
  • Incomplete Notes (in addition to the ones already mentioned)
    • Property, plant and equipment

Membership of accountability organisations claimed

  • None claimed.
  • This FAQ says that they rely principally on their auditor:

How is Open Doors Australia held accountable financially?

Open Doors is a registered ministry under the Department of Fair Trading. Our annual budget is approved by a Board of Trustees as well as the leadership of Open Doors International (our Parent Body). Our accounts are also audited annually by an independant firm and our audit reports and financial statements are published and available on request.

  • However, this does not mention the ACNC, a body that exerts at least some accountability on charities.
  • More significantly though, for a Christian organisation, it does not mention Missions Interlink.
    • Although they say that their membership list is not publicly available I stumbled across this one on the internet. It shows ODA as a member as at 3 August 2015.
  • Open Doors USA is a Charter Member of the ECFA, and the Canadian organisation is a CCC Certified Charity.

(End of review)

 

 

 

[i] Australian Charities and Not-for-profits Commission, Australia’s national regulator of charities.

[ii] Which is also the prime contact address on the website.

[iii] This is how the ACNC explains ‘operating locations’ in their application guide: ‘You need to give details about where in Australia your organisation conducts (or plans to conduct) its activities.

[iv] Part 5B.2 of the Corporations Act 2001

[v] Because of the possibility of two (or more) directors having the same name on the register of responsible persons, it is not possible to be definitive about the number of directorships held.