Christian Revival Crusade National Council, charity review

This is a charity review, a review, for supporters and potential supporters, of the Australian charity Christian Revival Crusade National Council (CRC).

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 seek any other information, either from the charity itself or from other sources.

Ministry response

Prior to publishing this review, on 19 November 2015, I sent my observations to the charity and invited them to comment. On 24 November I received the following response by email from Peter Gillard, National Administrator:

I have checked out the information you have provided and there is nothing there incorrect.

As CRC Churches International Australia Inc. doesn’t solicit donations from the general public, and is supported wholly by its members and churches, I doubt anyone would be checking us out to see if we were a safe organisation to donate to.

That being said, as everything you have included is freely available online, there are no problems with you publishing.

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 Charity Details (below).
  • CRC websites: www.crcchurches.org and one for its missions operation.
  • No social media links from the Churches site; not sure about the connection of CRC to this Facebook page. The Facebook on the Missions site leads to, without any obvious reason, the page for Jesse Szalay. CRC is not on LinkedIn.
  • State government fundraising licence registers.
  • www.glassdoor.com.au

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 National Council exists to represent the CRC in Australia in the promotion of Jesus Christ….

CHARITY DETAILS

Legal name

  • The link from the ABN (Charity ABN, below), tells us that CRC is likely an incorporated association.
  • This is confirmed by the Constitution (see Charity’s Document (sic), below) that CRC has lodged with the ACNC.
  • However, there is no association registered in CRC’s name. The name is actually CRC Churches International Australia Incorporated. And that’s the name on the constitution.
  • It appears, therefore, that the charity is registered in the wrong name.

Other Names(s)

  • CRC Missions International is one of CRC’s trading names. As CRC Missions International is operating under that name, CRC needs to register it as a business name.
  • CRC Training College is a not the business name that CRC has registered for its CRC College of Ministry.
  • CRC Churches International Australia is, with the addition of ‘Incorporated’, is another of CRC’s trading names.

Charity ABN

  • Tax deductibility: You cannot claim a tax deduction for a donation to CRC (or any of the other entities mentioned above.)

Charity Street Address

  • This is the address of the Christian Family Centre church.
  • No postal address on the website.

Phone

  • Blank. From the website: (08) 8356 6999

Website

ANNUAL REPORTING

  • AIS 2014:
    • This is the Annual Information Statement.
    • It includes basic financial information. But because you have access to the 2014-15 accounts (see below), it is out-of-date.
  • Financial Report 2014:
    • This National Update 2013-14 is more than a financial report, more like an annual report. It has been superseded by the 2014-2015 Annual Update, available from the right-hand side of any website page footer.
    • The Financial Report is unsigned and undated, but presumably was completed sometime before the auditor signed on 21 August 2014, two months after year end. It was then another three and a half months before it was lodged on the Register.
    • The coverage of finances in this review is left until the section Latest financial report – detail, below.

ABOUT THE CHARITY

Date Established

  • CRC is planning to publish its history on its website.

Who the Charity Benefits

  • Vision
  • Mission
  • Activities (What does CRC do?
    • In the absence of an up-to-date AIS, see the 2014-2015 Annual Update, available from the right-hand side of any website page footer.
  • Outcomes (What was delivered?)
    • In the absence of an up-to-date AIS, see the 2014-2015 Annual Update.
  • Impacts (How were people’s lives improved?)
    • In the absence of an up-to-date AIS, see the 2014-2015 Annual Update.

Size of Charity

If the revenue in the three statements included in the 2014-2015 Annual Update (see Latest financial report – detail, below) are summed, CRC has revenue exceeding the $1 million threshold for the top size of charity.

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) [ii]

  • Both the CRC Missions Office and CRC Training are run from Victoria, Generations – Children is run from NSW, and CRC has four State Councils that cover all eight states. However, CRC doesn’t have a fundraising licence in any of the seven states having a licensing regime.
  • As an association CRC is a registrable Australian body. If its disclosure here that it operates in all eight states means that it is carrying on business outside South Australia, then it needs to register under Part 5B.2 of the Corporations Act 2001. The lack of an ARBN shows that it has not registered.

Charity’s Document (sic)

  • This is the constitution for CRC Churches International Australia Incorporated, not CRC.

RESPONSIBLE PERSONS

No. of Australian charity governing body memberships

Mike Cronin                            1[iii]

Greg Jones                               5

Ian Miller                               17

Trevor Murphy                       5

Bruce Sharman                       8

Vasilis Vasilakis                      1

Hans Voortman                      2

David Wright                        22

Matthew Wyatt                       3

 

(End of review of the ACNC Register information)

 

Latest financial report – detail

  • The report that is lodged as a Financial Report – the National Update 2013-2014 – does not contain a financial report for CRC. Instead there are three separate financial reports, one each for CRC Churches International Australia Inc., CRC Missions International, and CRC College of Ministry. CRC Churches International Australia Inc is the correct legal name for CRC, and the other two are departments of CRC.
  • Even if it were valid to submit separate reports, all three reports:
    • Have no Notes to the accounts
    • An income statement in a well out-of-date format.
    • No statement of changes in equity
    • No statement of cash flows
    • Have either no audit report or a deficient audit report.
    • No Directors’ Declaration.
  • The next year’s annual report has similar issues.

Membership of accountability organisations claimed

  • Membership by CRC Missions International of Missions Interlink, here.
    • Although they say that their membership list is not publicly available I stumbled across this one on the internet. It shows CRC Missions International was 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 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.

Katoomba Christian Convention Ltd, charity review

This is a charity review, a review, for supporters and potential supporters, of the Australian charity Katoomba Christian Convention Ltd (KCC).

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 4 November 2015, and invited them to comment. No response was received by the time of publication, on 27 November 2015.

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).
  • KCC website, the one for its business name, and separate ones for its six conventions: NextGen, BASECAMP, KEC KYCK, ENGAGE, and OneLove, all available from the top of the Home page.
  • Social media sites are not shown on the website, but KCC is on Facebook. Plus LinkedIn.
  • State government fundraising licence registers.
  • www.glassdoor.com

REGISTRATION DETAILS

Entity Subtype

  • A type consistent with sharing the Gospel.
  • The first object in the company’s Memorandum of Association[ii]– see Charity’s Document (sic), below – is

To take all such means as thought desirable for promulgating and spreading the gospel of the Lord Jesus Christ…’

  • KCC also uses its site to run camps for schoolchildren. However, even though they involve character development, these camps are not based on Biblical values, let alone used as vehicles for sharing the Gospel. They therefore do not readily fit with KCC’s mission or its charity subtype (above).

CHARITY DETAILS

Other Name(s)

  • Their other business name, BLUE MOUNTAINS ED, is missing.

Charity ABN

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

Charity Address for Service

  • Although I did not get a response to my invitation sent to this address, I know that it was a current address in mid-October.

Charity Street Address

  • The postal address, from the website, is PO Box 156 Burwood NSW 1805.

Phone

  • Blank.   From the website, 1300 737 140.

Website

E-mail

  • Although I did not get a response to my invitation sent to this address, I know that it was a current address in mid-October.

ANNUAL REPORTING

  • AIS 2014
    • This is KCC’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.
        • ‘Other Income’, is not Other Income but interest.
        • Because they are not shown in the audited statements, it is not possible to verify ‘Employee expenses’, ‘Grant…for use in Australia’, and ‘Grant…for use outside Australia’.
  • Financial Report 2014
    • Because both the Directors’ Report and the Directors’ Declaration are undated, we don’t know when the accounts were approved. Presumably it was some date prior to when the auditor signed on 10 April 2015. In this case the accounts were completed up to three months+ after the year end.
    • How was the report lodged with the ACNC 7 days before the auditor signed?
    • The coverage of finances in this review is left until the financial report proper (Latest financial report – detail, below).

ABOUT THE CHARITY

  • Statement of Faith
    • There isn’t one on the website.
    • There is a statement of doctrines in the Memorandum of Association (see Entity Subtype, above).
      • Less common for this day and age is the provision in the Memorandum that an applicant for membership must subscribe to this statement of doctrines.
        • Even more uncommon now is that ‘any member ceasing to hold all the said doctrine or neglecting, failing or refusing to sign at any time or from time to time on the request of the Council an acknowledgement in writing that he subscribe to the said doctrines shall ipso facto [by that very fact or act] cease to be a member.’

Who the Charity Benefits

  • Vision
    • None found. (There is no search function to confirm.)
  • Mission
    • None found.
  • Activities (What did KCC do?
    • From Description of charity’s activities and outcomes in the AIS 2014:

Organising 8 Christian conventions during the year and provide (sic) hospitality and accommodation facilities in Katoomba for schools and other groups. In 2014 we donated $73,611 to other mission organisations.

        • This donation is not quite as generous as is implied here: the entire amount was received as ‘Specific Purpose Donations – Third Parties’, so all they were doing was handing on what they were obliged to hand on.
  • Outcomes (What did KCC deliver?)
    • Unfortunately in the AIS 2014, in response to the request to describe activities and outcomes, there are only activities (see above).
  • Impact (How were people’s lives improved?)
    • Nothing found

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]

  • Although there is no invitation to donate on the website, KCC did receive $446K in donations. However, it doesn’t have a licence to fundraise in its operating state.

Size of Charity

  • With a revenue of $4.1 m, KCC easily qualifies in the largest of the ACNC three size categories (‘Large’).

CHARITY’S DOCUMENT (SIC)

  • There is no Annual Report/Review available on the ACNC Register.
  • Neither is one available on the KCC website.

RESPONSIBLE PERSONS

No. of Australian charity directorships[iv]

Vikki Napier                                       1

Peter Moore                                       20

Steve Williams                                   2

Michael Lin                                         2

Archie Poulos                                     3

David Luxford                                    1

Jonathan Dykes                                  2

Bruce Bailey                                        1

Anthony Petterson                             1

Phil Wheeler                                       1

  • ‘Position’
    • The Directors’ Report shows that KCC has a Secretary, Treasurer, two Vice Chairmen, and a Chairman. All but the Chairman are missing under ‘Position’ on the Register. (The governing document provides for only one Vice Chairman, so maybe the Report is in error.)
  • The website doesn’t list the board members.

(End of review of the ACNC Register information)

Latest financial report – detail

  • KCC has not explained why it has chosen to present a ‘special purpose financial report’ rather than general purpose financial statements. See Essential information…, below.

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

  • This statement uses a format that has been out-of-date for a while now.
    • An ‘Other comprehensive income’ section is needed. 
  • There are no Notes.
  • Income $4.1 m
    • The sale of goods from the shop are neither shown nor is obvious in which line item they are included
  • Annual Conventions $1.34 m
  • Special Events $1.04 m
  • Accommodation $1.21 m
    • These three revenue items match, in name, three expenses items. See below for the net result.
  • Expenses $3.8 m
    • There are no Notes.
    • The classification of expenses is a mixture of the two permitted by the Accounting Standards.
    • The following expenses are not disclosed:
      • fundraising expenses
      • superannuation expense
      • administration expenses
      • cost of sales
      • employee benefits
      • depreciation
  • Annual Conventions $833K
  • Special Events $963K
  • Accommodation $1.09 m
    • These three expenses match, in name, three revenue items. However, because of the inclusion of a fourth expense, ‘Office Overhead’ ($855K), and the lack of Notes explaining the calculation of these four expenses, we cannot safely draw any conclusions about the profitability of these different areas of KCC activity.

 Movements in the net wealth of the charity – the Statement of Change (sic) in Equity – 2nd page of the Financial Report

  • There is no explanation for the $200K ‘Funds expended from reserve’.

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

  • Current Assets
    • This classification is not consistent with the Accounting Standards.
    • Where’s the stock of items sold on the internet?
  • Cash at bank $1.2 m
    • As acknowledged in the policy Note, this is more than just bank accounts. The correct title is ‘Cash and cash equivalents’.
    • There is no breakup given, so we can’t assess the reasonableness of the figure.
  • Debtors $62K
    • What is sold on credit?
    • Why such a large increase on last year?
    • Is any of doubtful collectability?
  • Prepayments $110K
    • Why such a large decrease over last year?
  • Non Current Assets $8.2 m
    • This classification is not consistent with the Accounting Standards.
    • There is no table in the Notes showing the changes to these assets.
  • Freehold property $7.0m (including Note 3)
    • This is more properly called ‘land’.
    • If the land has been revalued, where is the Asset Revaluation Reserve?
  • 169 Cliff Drive $599K
    • Why is this land valued differently from the other land?
  • Property Development – at cost $1.2 m
    • There is no explanation of this item.
    • If land has been developed, why is the development included under land?
    • Why, if this is the cost of the development, has the figure declined from last year?
  • Convention buildings $780K
    • The significant increase over last year is not explained.
  • Current Liabilities
    • This classification is not consistent with the Accounting Standards.
  • Housing Loan $372K
    • For whose house is this?
    • Why has the balance increased
  • Provision for Training $6K (unchanged from last year)
    • How is this legitimately a provision? To whom is it owed?
  • Next Gen International Fund $2K ($11K last year)
  • KYCK Subsidy $15K
    • Why are these two liabilities? To whom are they owed?
    • If they are owed why are they not included in Accounts Payable or Sundry Creditors?
  • Retained Equity $8.6 m
    • The Note number given here doesn’t exist.
    • There is no breakup of this item.
      • As the land has been revalued, presumably one of the components is an Asset Revaluation Reserve?

Where the cash came from and went to – the Cash Flow statement (4th page of the Financial Report)

  • Donations should be separate.
  • Loan increase/(decrease) $2K
    • Why is this included under ‘operating activities’?
  • There is neither a reconciliation to the surplus, nor a reconciliation to the balance sheet.

Essential information to go with the figures – the Notes to the Financial Statements – 5th page 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.
      • An important disclosure that is omitted, most likely because of this decision, is about related parties. For instance, there is no disclosure of the fact that one of the directors, Steve Williams, owns the business that has a large contract to supply AV and technical services to the KCC conferences.
    • 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 ‘has been prepared in accordance with Accounting Standards…unless Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial reporting containing relevant and reliable information…’. This doesn’t make sense.
    • The report does not comply with all the Standards.
    • If the directors are saying that they comply with a subset of the Standards, they need to specify that subset.
  • The governing legislation is the ACNC Act, not the Corporations Act.
  • Missing Notes:
    • New and revised standards…
    • Current versus non-current classification
    • Trade and other receivables
    • Trade and other payables
    • Fair value measurement
    • Contingent liabilities
    • Commitments
  • Incomplete Notes:
    • Revenue: an explanation of ‘internal’ versus ‘third party’ donations and Fees in Advance is missing.
    • Critical accounting judgments and estimates
      • Estimation of useful life?
      • Employee benefits?
    • Non-current assets: a reconciliation

Directors’ Report (12th page of the Financial Report)

  • This report is not required by the ACNC.
  • The contents of this report are not in accord with industry expectations (for instance, this guide).
    • Missing are the qualifications, experience, and offices of the directors, the company’s objectives (split between short-term and long-term), the strategy for achieving those objectives, and the performance measures used by KCC.
  • The report is undated.

Where the board members put their name behind the report – the Directors’ Declaration – 14th page of the Financial Report

  • The directors state that the financial statements comply with the Accounting Standards. They don’t.
  • The Statement is undated.
  • The reference should be to the ACNC Act, not the Corporations Act.

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

  • He has omitted two of the four financial statements from his coverage.
  • The requirements come from the ACNC Act, not the Corporations Act.
  • He omits any reference to the fact that he has audited a special purpose report until the incidental reference in the final paragraph.
  • This is a ‘clean’ opinion.  Read here and here to draw the right conclusions from this.

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] One of two documents that were long ago replaced by a constitution in corporations law.

[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.

The Shane Warne Foundation, charity review

This is a charity review, a review, for supporters and potential supporters, of the Australian charity The Shane Warne Foundation (TSWF).

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 help you assess this charity.

You should note that, in order to properly assess the operation that is described on the TSWF website, it would be advisable to also assess the other fund mentioned, The Shane Warne Necessitous Circumstances Fund. Unfortunately, at the time of this review, there was no record of this charity on the ACNC Register.

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).
  • TSWF website. (And in case it goes offline again, I have saved each webpage.)
  • TSWF on FaceBook, and Twitter.
  • State government fundraising licence registers.
  • www.glassdoor.com

CHARITY DETAILS

Legal Name

  • The ABN record (see Charity ABN, below) says that the name of the entity is actually ‘The Trustee for the shane warne foundation’ (sic). So TSWF is a trust.
  • More particularly, again from the ABN record, it is a ‘Discretionary Services Management Trust’, a trust whereThe main source of income of the discretionary trust is from service activities, management activities or both.”
    • This does not fit what TSWF does.
  • From the trust deed (see Charity’s Document (sic), below), the trustee, unless it has changed since, is The Shane Warne Foundation Pty Ltd, a proprietary (private) company.
  • The other fund, the ‘necessitous circumstances fund’, is actually a separate charity, not a part of TSWF. Although it can’t be confirmed at the moment – for some reason the record is not on the ACNC Register – the connection is very likely that they have the same trustee.

Other Name(s)

  • Apart from the two names above (The Trustee for …, and The Shane Warne Foundation), the charity may be called The Shane Warne Foundation Pty Ltd as trustee for The Shane Warne Foundation.

Charity ABN

  • Tax deductibility: You can claim a tax deduction for a donation to TSWF.
  • GST: The Foundation is not registered for GST. Why not?

Charity Address for Service

Charity Street Address

  • The postal address, from the website, is PO Box 2305, North Brighton, VIC, 3186
  • The address with Consumer Affairs Victoria for the fundraiser The Shane Warne Foundation Pty Ltd is 119 Were Street, BRIGHTON 3168.

Email

Phone

  • Blank. Try, from the website, (03) 9553 8847.
  • The phone number with Consumer Affairs Victoria for the fundraiser The Shane Warne Foundation Pty Ltd is 03 9642 3223.

ANNUAL REPORTING

  • AIS 2014
    • This is TSWF’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
        • General purpose financial statements were prepared, not special purpose.
        • None of the figures in the ‘Expenses/Payments’ match those in the Financial Report:
          • Grants were $50K, not $100K
          • ‘Employee expenses’ were $151K, not $133K
          • The deficit was $136K, not $186K.
  • Financial Report 2014
    • The report is unsigned but it should have been signed before the auditor signed on 21 January 2015, well over six months after the year end.
    • It was then lodged one month after that.
    • The coverage of finances in this review is left until the financial report proper (Latest financial report – detail, below).

ABOUT THE CHARITY

Date Established

Who the Charity Benefits

  • Vision
    • None found.
  • Mission
    • None found.
  • Activities (What did TSWF do?)
    • From Description of charity’s activities and outcomes in the AIS 2014:
      • They (sic) raise funds to help ‘enrich the lives of seriously ill and underprivileged children and teenagers in Australia’. They achieve this by supporting a diverse cross section of charities and individual families that work ‘hands on’ within these areas. Unlike most charities, The Shane Warne Foundation is an umbrella organisation. We try to alleviate the constant burden of fund raising for these incredible charities, individuals and families, who so effectively handle the day to day (sic) needs of these brave children.
        • This is largely a copy of ‘Who we help’ on the website.
  • Outcomes (What did TSWF deliver?)
    • Unfortunately, even though AIS 2014 asks for a Description of charity’s activities and outcomes, only an activity – fundraising – is given.
    • There is very little information on the website about outcomes.
  • Impact (How were people’s lives improved?)
    • There is very little information on the website about impacts – certainly nothing systematic.

Size of Charity

  • With a revenue of $465K, TSWF easily qualifies in the middle category of the ACNC’s three size categories (‘Medium’).

Financial Year End

  • This means that, normally, the next financial report would be due by 31 December March 2015. However, the ACNC has graciously given all charities an extra two months. This means that before that the financial information on the Register will be up to 20 months out-of-date.

WHERE THE CHARITY OPERATES

Operating State(s)[ii]

  • Although it says here that it only operates in Victoria, by having a fundraising licence in six of the seven states[iii] in which there is a licensing regime, it acknowledges that its reach is Australia-wide.
    • But it has no licence in South Australia.

CHARITY’S DOCUMENT (sic)

  • TSWF is a public ancillary trust. But this is a trust deed for a private ancillary trust, not a public one:

The Trust Fund is intended to operate as a prescribed private fund for the purpose of item 2 of the table in section 30-15 of the Act.

  • Although the Foundation has been registered with the ACNC since its inception in 2012, the trust deed was lodged three days after this story broke.
  • There is no Annual Report/Review available on the ACNC Register.
  • Nor on the website.

RESPONSIBLE PERSONS

No. of Australian charity directorships[iv]

Anne Peacock                                1

Shane Warne                                 1

Glen Robbins                                 1

Andrew Bassat                               1

  • The website also shows David Evans and Eddie McGuire as directors. Which listing is correct?
  • The trust deed provides that at least one of these directors be a ‘Responsible Person’.
    • This is not the same as a responsible person under the ACNC Act.
    • Not only this, but a public ancillary fund requires three of them for the Foundation (or four if the other two people are still directors):
      • At all times, a majority of the individuals involved in the decision-making of the fund must be individuals with a degree of responsibility to the Australian community as a whole [paragraph 14].
        • A Note to the paragraph says that these individuals
          • would generally include: school principals, judges, religious practitioners, solicitors, doctors and other professional persons, mayors, councillors, town clerks and members of parliament. Generally, individuals who are accepted as having a degree of responsibility to the community as a whole are known to a broad section of the community because they perform a public function or they belong to a professional body (such as the Institute of Chartered Accountants, State Law Societies and Medical Registration Boards) which has a professional code of ethics and rules of conduct. Individuals who have received formal recognition from the Government for their services to the community (for example, an Order of Australia award) will also usually have the requisite degree of responsibility.
        • Do three of the directors meet the definition?[v]
  • Warne should be shown as ‘Chairman’, not director. 

 

(End of review of the ACNC Register information)

 

Latest financial report – detail

What was earned, what was consumed during the year – the Statement of Comprehensive Income (page 1 of the Financial Report)

  • The line item ‘Other Comprehensive Income’ is missing.
  • There are no Notes to explain the material items.
    • There is, however, a statement included in the Financial Report that is not required, an Unaudited Profit and Loss Statement, that allows one to calculate the composition of the line items.

Where the money came from

  • Revenue $453K
    • The AIS 2014 (see Annual Reporting, above) says that this is all ‘Donations and bequests’.
    • This doesn’t agree with what is shown in the Unaudited Profit and Loss Statement:
        • Sponsorship $64K
            • Presumably this is where sponsorship by italktravel (and others?) is included.
        • Donations $110K
            • There is a prominent invitation to donate at the top of each webpage.
        • Fundraising $279K
            • The Unaudited Profit and Loss Statement discloses that Fundraising Expenses totalled $281K, meaning that fundraising cost $2K more than it raised.

Where the money went to (reordered by size)

    • The inclusion of fundraising expenses as a line item makes this listing of expenses, contrary to the Australian Accounting Standards, a mixed classification.
    • Administration expense, another item often of interest to donors, is not shown.
    • Superannuation expense is not disclosed in the audited statement.
  • Fund raising (sic) expenses $281K
    • The entry on the Victorian fundraisers register for ‘Commercial fundraisers working with the principal fundraiser’ is ‘Red Hot Concepts’ at Crown Casino’s address. There is no such business registered in Australia (although there is one in Nigeria.)
    • From the Unaudited Profit and Loss Statement, there are three expenses that form 86% of the expenses:
      • Catering/Food and Beverages $96K
      • Venue $65K
      • Partnership Agreements $55K
      • Audio Visual $26K
    • Given TSWF’s way of raising the bulk of its money, the first two and the fourth are expected. But the third?
      • The ‘event partners’ are shown here. Add ‘1:Face Watch’ as a result of a site search. Why did these organisations need to be paid $55K?
  • Employee benefits expenses $151K
    • From the Unaudited Profit and Loss Statement:
      • Salaries & Wages $133K
      • Staff Related Costs – Other $2K
      • Superannuation Contributions $12K
      • Workcover $3K
  • Just the first item is shown as ‘Employee expenses’ in the AIS 2014.
  • Distribution to beneficiaries $50K
    • Unfortunately the Unaudited Profit and Loss Statement (see below) stops at ‘Profit before distribution to beneficiaries’, and there is no further information elsewhere in the Financial Report, so the usual identification of trust beneficiaries is absent.
    • The trust deed includes The Shane Warne Necessitous Circumstances Fund in the public charities that it intended to support.
      • This other Fund is also shown as a beneficiary on the company’s Victorian fundraiser registration.
  • Rent and occupancy expenses $48K
    • ‘Telephone’ $4K has been included in this item (Unaudited Profit and Loss Statement).
  • Other expenses $32K
    • From the Unaudited Profit and Loss Statement the largest of the expenses not listed separately here is ‘Consultancy’ $10K. What consulting was required?
  • Legal and Professional Fees $29K
    • Given that TSWF has been running for many years, why the need for $29K professional advice outside the $8K paid to accountants and auditors?
  • Auditor’s remuneration $6K
    • A 10% increase over last year to KPMG.

The net result for the year

  • Comprehensive income for the year ($136K)
    • Compared to a $494K surplus the previous year

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

  • Cash and cash equivalents $312K (no Note
    • There is no Note to explain the composition of this total.
    • Nor an explanation for why, on a turnover of $465K, a charity needs to hold this much cash. (At least it is $167K less than last year.)
  • Trade and other receivables $122K (including Note 2)
    • What is sold on credit so that trade debtors owe $113K?
    • What is the other company that is related to TSWF? There isn’t one disclosed under ‘Related Party Disclosures’ (Note 5).
  • Property, Plant and Equipment $6K
    • There is no reconciliation of written down values.
  • Other creditors $33K (no Note)
    • What are these?
    • The line item should be ‘Trade and other payables’?  It would then match Note 1.
  • Employee benefits $8K (including Note 4)
    • Superannuation liabilities $3K
      • Why have over three months of compulsory superannuation contributions yet to be paid to the funds?
      • Why is this included in ‘Employee benefits’? This is not consistent with Note 1.

Movements in the net wealth of the charity – the Statement of Changes in Equity (page 3 of the Financial Report)

  • The ‘Balance at 30 June 2013’ does not match that in the Statement of Financial Position.
  • For last year, what is described as ‘Comprehensive loss for the year’ is actually a gain.
  • For this year, what is described as ‘Comprehensive gain for the year’ is actually a loss.

Where the cash came from and went to – the Statement of Cash Flows (page 4 of the Financial Report)

  • Cash flows from operating activities
  • Cash receipts $535K
    • Receipts for what?
    • $50K was the amount of the beneficiary expense, but $100K was paid in cash. Where’s the difference?
  • Net cash (used in) operating activities
    • The addition, for both years, is incorrect.
    • When the subsequent totals are adjusted, the cash figures no longer match those in the Statement of Financial Position.
  • Cash Flows from financing activities
    • These should be changes in contributed equity and borrowings. Why then are ‘intercompany receivables’ and ‘other current assets’ included here?
  • Decrease / (Increase) of net intercompany receivables ($101K)
    • The only mention of intercompany receivables in the Statement of Financial Position is under ‘Trade and other receivables’. How then is there a ‘net’ position?
    • How does this $101K increase relate to the increase of $1K in ‘Intercompany Receivable’?

Essential information to go with the figures – the Notes to the Financial Statements (page 5 of the Financial Report)

  • 1   Statement of Significant Accounting Policies
    • The directors show confusion: they say that the trust ‘is not a reporting entity’ yet present the financial statements applicable to one?[vi].
    • The audit report confirms that the trust is a reporting entity.
    • Interpretations, as well as the Australian Accounting Standards, were followed?
    • The disclosure about early adoption of Standards is incomplete.
    • A number of the policies that are normally included in Note 1 are absent:
      • Critical accounting judgements, estimates and assumptions
      • Impairment of non-financial assets
      • Fair value measurement
      • Goods and services tax (GST) and similar taxes
      • Financial instruments
      • Contingent liabilities
  • Property, Plant and Equipment
    • The trust doesn’t have any leasehold improvements.
    • The policy on depreciation does not match the assets held.
    • The derecognition policy, gains and losses policy, and the useful life of the Office Furniture & Equipment is missing.
  • Revenue
    • Actually ‘Revenue recognition’.
    • ‘Donations’ policy omits the recognition policy.
    • Why is interest not accrued?
    • The policy for sales revenue (events, fundraising and sponsorships) is not disclosed.
    • There is no ‘Prepaid income’ in the Statement of Financial Position.
  • Employee Benefits
    • The policy on superannuation payments is missing.
  • 5 Related Party Disclosures
    • Which director benefited from the rent paid?
    • There is no disclosure of
      • Receivables from and payables to related parties
      • Loans to/from related parties
  • 6
    • This is ‘Events after the reporting period’
  • Missing Notes:
    • Financial instruments
    • Contingent liabilities
    • Reconciliation of surplus to net cash from operating activities

Directors’ Declaration (page 9 of the Financial Report)

  • The directors show the same confusion between reporting entities and non-reporting entities as they show in Note 1 (see above).
  • The redaction on the signatures of those making the declaration, Shane Warne and Ann Peacock, is presumably as a result of a request by TSWF to the ACNC.
  • The declaration is undated.

An independent opinion on the financial statements – the Independent Audit Report (the tenth page of the Financial Report)

  • This is a ‘clean’ opinion by Dean Waters of KPMG.  Read here and here to draw the right conclusions from this.

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] 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] Three are in the name of the company, three in the name of the Foundation.

[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.

[v] The Guidelines overrule what is in the trust deed:

“Responsible Person” means an individual who is not an Associate, officer or employee of the Founder and who:

  • Performs a significant public function;
  • Is a member of a professional body having a code of ethics or rules of conduct;
  • Is officially charged with spiritual functions by a religious institution;
  • Is a director of a company whose shares are listed on the Australian Stock Exchange;
  • Has received formal recognition from government for services to the community; or
  • Is approved as a Responsible Person by the Commissioner, and who, unless the Commissioner otherwise agrees, is not an Associate of the Founder, a Trustee or a Donor or the directors or members of the board or other controlling committee of the Trustee other than:
    • In a professional capacity;
    • As a member of the board or other controlling committee of the Trustee; or
    • As a member of the Trustee.

[vi] Because, as a licensed fundraiser in Victoria, TSWF is required to submit ‘a copy of (its) financial statements’ to Consumer Affairs, it qualifies for ‘Transitional reporting arrangements’ with the ACNC.

This means that, for the 2014 year, whatever is required by Consumer Affairs is acceptable to the ACNC. As Consumer Affairs has no particular requirements, it is reasonable to expect TSWF to adopt what is generally accepted. This is financial statements that comply with the Australian Accounting Standards.

The trust deed requires ‘a financial statement showing the financial position of the Trust Fund at the end of that Accounting Period.’ Since the audit that is also required has to be done by a registered company auditor, and it is highly likely that they are members of one of the professional accounting bodies, the ‘financial statement’ should comply with the Australian Accounting Standards. This means that the statements – for there are four – will be either general purpose financial statements or special purpose financial statements.

 

Voice of The Martyrs Limited, charity review

This is a charity review, a review for supporters, and potential supporters, of the Australian charity Voice of The Martyrs Limited (VOM).

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 3 November 2015, and invited them to comment.  No response was received by the time of publication, on 15 November 2015.

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 that section:
    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).
  • VOM website. Social media at the top of each web page. Not officially on LinkedIn?
  • State government fundraising licence registers.
  • www.glassdoor.com.au

REGISTRATION DETAILS

Entity Subtype

  • The first of these is a type consistent with sharing the Gospel.
  • The company’s primary objects in its governing document (see Charity’s Document (sic)), flow from Hebrews 13:3: Remember those that are in bonds as bound with them.

CHARITY DETAILS

Legal Name

  • VOM is a public company, a company limited by guarantee.

Other Name(s)

  • The trading name ‘The Voice of The Martyrs should be here.
    • This registration allows the company to omit ‘Ltd’ on the end of its name.

Charity ABN

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

Charity Address for Service

  • I have no reasons to believe that this address is invalid.

Charity Street Address

  • Postal address, from the website: PO Box 250 LAWSON NSW 2783

Email

  • I have no reasons to believe that this address is invalid.
  • From the website, there’s a separate email for Youth: info@thirteenthree.org.au

Phone

  • Or, from the website, 02 4759 7000

ANNUAL REPORTING

  • AIS 2014
    • This is VOM’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’, but special purpose.
      • Because they are not shown in the audited statements, it is not possible to verify any of the line items in the Income Statement other than ‘Employee expenses’.
  • Financial Report 2014
    • The report was signed just under four months after the year end.
    • It was then lodged one month after that.
    • The coverage of finances in this review is left until the financial report proper (Latest financial report – in detail, below).

ABOUT THE CHARITY

Date Established

  • The VOM (Australia) ‘story’ on the website says 1969.
  • So does the broader VOM ‘history’.

Who the Charity Benefits

  • Vision
    • None found.
  • Mission
    • None found.
  • Activities (What did VOM do?
    • Description of charity’s activities and outcomes in the AIS 2014:

The principal activity during the financial year was to be the ‘voice in Australia’ for the Christian Martyrs in restricted nations. We were able to raise prayer and financial support for the Christian church that is under persecution in many countries where their Christian faith is challenged. We were able to identify and co-ordinate projects of encouragement in keeping with our constitution for the persecuted Church and assisted in equipping the Churches and bring aid to the families of those martyred for their faith.

  • Outcomes (What did VOM deliver?)
    • See Activities, above.
  • Impact (How were people’s lives improved?)
    • Nothing formal or systematic found.

Size of Charity

  • With a revenue of $2.37 m, VOM qualifies in the largest of the ACNC three size categories (‘Large’).

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)[ii]

  • Although operating in all states, and calling for donations on its website, VOM doesn’t have a licence to fundraise in any of the seven states that have a licensing regime.  It is exempt in NSW.

Operates in (Countries)

  • Not to be confused with where VOM has ‘international offices’.
  • If you believe that what’s going on in the VOM headquarters is relevant to your decision in Australia, then you can read about the sad case of the former Executive Director, the treatment of the founder’s son when he spoke up, and a separate issue, the connection to Catholicism.

CHARITY’S DOCUMENT (SIC)

  • There is no Annual Report/Review available on the ACNC Register.
  • Nor on the website.

RESPONSIBLE PERSONS

No. of Australian charity directorships[iii]

Mervyn Knight                            2

Jeffrey Konemann                      1

Ronald McNair                           3

Robert Paino                               1

Mark Ulbricht                             2

John Wilson                               29

  • The website does not mention the board.
  • All six of these men are also on the board of Aid Distribution International Inc. (see Latest financial report – in detail, below).

 

(End of review of the ACNC Register information)

Latest financial report – detail

  • This company raised $2.37 m to support persecuted Christians overseas. However, nowhere are we told where the $1.66 m remaining after ‘employee benefits expense’, ‘depreciation expense’ and ‘changes in inventories’ went, how it got there, and on what it was spent.
  • From what is shown on the register of responsible persons, we can discover that $1.42 m went to another Australian charity, an association called Aid Distribution International Inc. However, all we can tell from their accounts is that $1.42 m went to ‘Payments to Beneficiaries’[iv].
    • There is no mention of Aid Distribution International Inc. in any of the VOM materials.
  • VOM has not explained why it presents a financial report that complies with a much lower standard of disclosure than one would have thought would be required – see Essential information…, below.

Directors’ Report (page 1 of the Financial Report)

  • The ACNC does not require this report.
  • The following sections, normally included, are missing:
    • Objectives, short-term and long-term
    • Strategy for achieving the objectives
    • Performance measures
    • Contributions on winding up
  • ‘Directors’ qualifications, experience and special responsibilities’ omits their qualifications.
  • The following sections, included by VOM, are not required:
    • Operating results
    • Dividends paid or recommended
    • Review of operations
    • Environment regulation
    • Value of assets
    • Significant changes in state of affairs
    • Auditor
    • Directors’ and auditors’ indemnification
    • Members’ funds
    • Directors’ benefits
    • Likely developments and expected result of operations

Auditor’s Independence Declaration…(page 5 of the Financial Report)

  • The ACNC does not require this report.

What was earned, what was consumed during the year – the Income Statement (page 6 of the Financial Report)

  • This statement uses a format that has been out-of-date for a while now.
    • An ‘Other comprehensive income’ section is needed.

What was earned:

  • Revenues from ordinary activities $2.37 m (including Note 2)
    • This implies that revenue can also arise from extraordinary activities, a distinction that has long since gone from the Accounting Standards.
      • Besides, revenue is itself defined in the Standards as inflows that arise from ordinary activities.
  • Profit on sale of non-current asset
    • This is not revenue.
  • Bookshop Sales $31K
    • If ‘Cost of sales’ in Note 3 is the cost of the sales of the 152 items in the Shop, then Gross Profit was less than $1K.   And the shop made a net loss.
  • Interest received $52K
    • This should be ‘revenue’, not received. (See the Cash Flow Statement.)
  • Support and Donations (including Bequests) $2.28 m
    • This comprises 96% of revenue, yet there is no further information given.
      • We cannot therefore, for instance, see how much was raised for each of the nine (9) different funds to which one can give on the website.
  • Interest revenue from: other persons $52K
    • As opposed to?

What was consumed in the course of earning the revenue (see above)

  • This is, contrary to the Accounting Standards, a mixed classification of expenses.
  • The following expenses are not disclosed:
      • Fundraising
      • Administration
      • Superannuation
      • Finance costs
  • Changes in inventories of finished goods $30K (including Note 3)
    • The amount does not match the change that is shown in the balance sheet ($1K).
  • Employee benefits expense $670K
    • Assuming that the four part-time employees (AIS 2014) average half time, this expense represents average benefits of $74K p.a.
  • Other expenses from ordinary activities $1.66 m
    • Although this is 69% of expenses, there is no Note giving the breakup, or even the material items.
    • Presumably one of these material items is the amount sent overseas in fulfilment of the charity’s mission.

What’s left at the end of the year – the Balance Sheet (page 7 of the Financial Report)

  • Cash $1.47 m
    • No explanation is given for holding this much cash.
    • As acknowledged in the Notes, this can include more than just cash.
    • The correct title is ‘Cash and cash equivalents’.
  • Receivables $40K (including Note 10)
    • Why is a deposit with ‘Progressive Mortgage Co. Ltd’ a short-term receivable?
    • The usual title is ‘Trade and other receivables’.
  • Inventories $52K
    • The change over last year does not agree with the amount shown in the Income Statement (above)
  • Property, plant and equipment $1.01 m (including Note 11)
    • How did buildings that are recorded at cost go down by $90K?
    • Note 1 says that buildings are shown at fair value, not cost.
    • No furniture and fittings, office equipment, or motor vehicle are shown.
    • There is no reconciliation of the movement in the accounts.
  • Provisions $221K (including Note 12)
    • Are there no non-current employee benefits?
    • “Retirement Fund’
      • There is nothing in Note 1 about this.
      • Why is it classified as current?
      • Why has the amount not increased this year?

Movements in the net wealth of the charity – the Statement of Changes in Equity (page 8 of the Financial Report)

  • No such statement, which is compulsory, has been included.

Where the cash came from and went to – the Statement of Cash Flows (page 9 of the Financial Report)

  • One of the two required reconciliations is missing.

Essential information to go with the figures – the Notes To The Financial Statements… (page 10 of the Financial Report)

  • Note 1: Statement of Significant Accounting Policies
    • The directors say the report ‘is a special purpose financial report’, but give no indication that this was a choice that they made. Any reasoning for this selection is therefore absent.
    • 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.

    • It is the ACNC Act to which they should refer, not the Corporations Act.
    • Contrary to what the directors say, the report does not comply with the Australian Accounting Standards.
    • Contrary to what the directors say, it is highly unlikely that an Australian not-for-profit is able to comply with the International Financial Reporting Standards.
  • Missing Notes
    • New, revised or amending Accounting Standards and Interpretations adopted
    • Current and non-current classification
    • Trade and other receivables
    • Impairment of non-financial assets
    • Trade and other payables
    • Fair value measurement
    • New Accounting Standards and Interpretations not yet mandatory or early adopted
    • Critical accounting judgements, estimates and assumptions
    • Events after the reporting period
  • Incomplete Notes
    • Inventories: not described.
    • Employee benefits: No description of what they are, including short-term versus long-term, defined contribution superannuation plans.
    • GST: how cash flows are treated has been omitted.
  • Note 4: Members’ Guarantee
    • Note that the company has only six members (members, not directors).
  • Note 5: Remuneration and Retirement Benefits $147K
    • Two VOM directors are paid directors’ fees.
      • This is unusual for a charity such as this.
      • It is also contrary to their constitution.
      • The reason for not paying the Executive Director (the CEO), either this year or last year, is not disclosed.

Where the board members put their name behind the report – the Directors’ Declaration (page 17 of the Financial Report)

  • The legislation cited should be the ACNC Act, not the Corporations Act.

An independent opinion on the financial statements – the Independent Audit Report (page 18 of the Financial Report)

  • The auditor says that he audited the ‘statement of changes in equity’, but there isn’t one in the Financial Report.
  • The legislation cited should be the ACNC Act, not the Corporations Act.
  • The auditor repeats, twice, the directors’ incorrect assertion of compliance with International Financial Reporting Standards.
  • The required Emphasis of Matter paragraph is missing.
  • This is a ‘clean’ opinion.  Read here and here to draw the right conclusions from this.

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] 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] Despite its turnover, well above the limit for registration, this charity is not registered for GST.

Wycliffe Bible Translators Australia, charity review

This is a charity review, a review, for donors, of the Australian charity Wycliffe Bible Translators Australia (WBT).

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 30 October 2015, and invited them to comment. They did not respond by the time I published the review two weeks later, on 13 November.

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 that section:
    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).
  • WBT website. WBT on Facebook (the only social media site, here). Not on LinkedIn.
  • State government fundraising licence registers.
  • www.glassdoor.com.au

REGISTRATION DETAILS

Entity Subtype

  • The first of these is a type consistent with sharing the Gospel.
  • The company’s primary object is similarly consistent, and similarly indirect:

The objects for which the Association is formed are to promote the translation of the Holy Scriptures into vernacular languages…[Memorandum of Association, clause 3.(2), see Charity’s Document (sic), below.]

CHARITY DETAILS

Legal Name

  • Not to be confused with the charity Maf Australia Wycliffe Bible Translators, a joint venture between WBT and another charity, Maf Australia, to own and run Tree Tops Lodge in Cairns.
  • WBT is a public company, a company limited by guarantee.
  • It is permitted to omit ‘Ltd’ on the end of its name.

Other Name(s)

  • This is not a registered business name.

Charity ABN

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

Charity Address for Service

  • I didn’t get a response, but I have no reason to think that this address is invalid.

Charity Street Address

  • No postal address on the website.

Email

  • See Charity Address for Service, above.

ANNUAL REPORTING

  • AIS 2014
    • This is WBT’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
        • Because they are not shown in the audited statements, it is not possible to verify any of the line items in the Income Statement.
  • Financial Report 2014
    • The report was signed four months after the year end.
    • It was then lodged over two months after that, a day before the due date.
    • The coverage of finances in this review is left until the financial report proper (Latest financial report – in detail, below).

ABOUT THE CHARITY

Who the Charity Benefits

  • Statement of Faith
    • There is a very brief one under ‘Beliefs and Values’ on the website:

We believe in the one true God, his Word to us in the Bible, and his concern for the whole world; (sic) every person, from every language group.”

    • There is a longer one – a Doctrinal Statement – in the Memorandum of Association:         

This Association is evangelical and inter-denominational and the work of the Association shall be carried out in strict compliance with the Doctrinal Basis of the Association as follows:The divine inspiration and consequent authority of the whole canonical Scriptures.         

The fall of man, his consequent moral depravity and his need of regeneration.         

The doctrine of justification by faith.         

The eternal life of the saved and the eternal punishment of the lost.

The resurrection of the body, both in the case of the just and the unjust.

The atonement through the substitutionary death of Christ.

 The doctrine of the Trinity.

To see disciples of Jesus from the minority language groups of the world growing through the Scriptures being available to them in their own heart language.

  • Mission
    • None found.
  • Activities (What did WBT do?)
    • From Description of charity’s activities and outcomes in the AIS 2014:

In 2014 more language communities have had some Scriptures published in their language through the direct involvement of WBTA members. Australian translation consultants, trainers and program managers have made valuable contributions to the success of over 100 local translation teams globally. These local translations teams are often working in multi-language clusters with strong training components. Some Scripture publications were digitally released for phone applications, in audio, and downloadable from the internet. More people were recruited and trained to provide training and logistical support to partner organisations in Australia and other countries. The vision and goals of the organisation were promoted among the Australian Christian community.

  • Outcomes (What did WBT deliver?)
  • Impact (How were people’s lives improved?)
    • Nothing formal or systematic found.
    • A few are given in the Corporate Report, but this covers mid-2013 to mid-2015, i.e. more than the financial year.

Size of Charity

  • With a revenue of $1.71 m, WBT qualifies in the largest of the ACNC three size categories (‘Large’).

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)[ii]

  • Although operating in all states, and calling for donations on its website, WBT has a licence to fundraise only in Victoria. Six other states have a licensing regime.

CHARITY’S DOCUMENT (SIC)

  • There is no Annual Report/Review available on the ACNC Register.
  • Nor on the website. There is, however, a Biennial Corporate Report under Resources/Publications.

RESPONSIBLE PERSONS

No. of Australian charity directorships[iii]

Malcolm Barker                         2

Philip Bignall                              1

Fai-Peng Chen                            1

Graydon Colville                        2

Richard Earley                            1

Ann Eckert                                   2

David Grayden                            1

Cindy McGarvie                          3

Titus Phua                                    1

Geoffrey Shepherd                     6

Kathryn Snook                            1

Darrell Thatcher                        3

Timothy Wilson                         15 (11 after duplicates are ignored)

Ross Wilkerson                          3

  • The website lists the board members towards the bottom here.
    • It appears that the list has yet to be updated for the last changes to the Board.

 

(End of review of the ACNC Register information)

 

Latest financial report – detail

  • Figures for a significant joint venture are included but there is no description of the venture, nor is the accounting policy for the venture given.
  • There are also significant related party relationships that are not described, including one with a member and possibly one with a director.

Directors’ Report (page 1 of the Financial Report)

  • The ACNC does not require this report.
  • For some of the directors their current job/business is missing.
  • The term ‘Executive Member’ for Wilkerson matches his position in the Directors’ Report, but not his title as ‘Non-Executive Director’ in the same report. Plus there is no Executive or Executive Committee mentioned anywhere else.
  • The Constitutional Review Committee (and the Executive Committee if there is one) has been omitted from the ‘Meetings of Directors’.
  • The liability under the guarantee – company limited by guarantee – implies that there are (or were) 266 members.
  • The Auditor’s Independence Declaration is in the Financial Report, not the Directors’ Report as stated.

What was earned, what was consumed during the year – the Statement of Comprehensive Income (page 5 of the Financial Report)

What was earned:

  • Revenues from ordinary activities $1.71 m
    • This implies that revenue can also arise from extraordinary activities, a distinction that has long since gone from the Accounting Standards.
    • Besides, revenue is itself defined in the Standards as inflows that arise from ordinary activities.
    • No donations are shown.
    • The revenue from the shop is neither shown nor is obvious in which line item it is included.
    • WBT has seventeen (17) donation options on its website: three for ‘members’, thirteen ‘projects’, and ‘bequests’. However, for only one, the last, is it possible to see under Revenue what was received.
  • Operating income $828K
    • There is no Note explaining this item.
    • For a charity that translates the Bible, what is ‘operating income’ as opposed to the other items in the list (other than interest, dividends, and gain on sale of assets)?
    • Note 1 says that this figure includes 10% of legacies.
  • Interest income $169K
    • This represents approximately 4.4% p.a. on estimated average interest-bearing deposits/investments.
  • Legacies $109K
    • Note that this figure is understated by 41.5%. 10% has been transferred to ‘Operating income’, and then 10% and 25% of the balance is transferred to ‘Tithe income’ and the ‘Program income’ respectively.
  • Program income $300K
    • There is no Note explaining this item.
    • Note that this figure includes 25% of all legacies received.
  • Rental income $261K (last year $338K)
    • There is no Note explaining this item.
    • There are no corresponding investment properties in the balance sheet.
    • Why the 23% decline in this income?
  • Tithe Income $32,115
    • There is no Note explaining this item.
    • WBT is not a church, so why is it getting, other than the 10% taken from legacies (see above), tithes?

What was consumed in the course of earning the revenue (see above):

  • Expenses from ordinary activities $1.84 m
    • This is, contrary to the Accounting Standards, a mixed classification of expenses.
    • The following expenses are not disclosed:
      • Fundraising
      • Administration
      • Employee benefits
      • Superannuation
      • Cost of sales
      • Finance costs
  • Operating expenses $893K
    • This means that a $64K loss was made on ‘operating’ – however defined (see above).
  • Program expenses $327K
    • This means that a $27K loss was made on ‘programs’ – however defined (see above).
  • Rental expenses $271K
    • This means that a $10K loss was made on ‘rental’ activities – however defined (see above).
  • Tithe expense $25K
    • This means that a $7K profit was made on ‘tithes’– however defined (see above).
  • Joint Venture loss $4K
    • There is no note describing a joint venture, or the accounting policy for that joint venture.

What’s left at the end of the year – the Balance Sheet (page 6 of the Financial Report

  • Cash Assets $411K (including Note 3)
    • As acknowledged in the Notes, this can include more than just cash.
    • The correct title is ‘Cash and cash equivalents’.
    • Why is $11K cash held outside bank accounts?
    • ‘Ready Investment Acct – USA’ $4K overdrawn
      • The policy for currency translation is not disclosed.
      • How can an investment account be overdrawn?
  • Other Financial Assets $350K (including Note 4)
    • Note the $150K increase even though there was an operating loss for the year.
    • For what are they saving? (These term deposits are for longer than three months.)
  • Receivables $120K, current (including Note 5)
    • The largest part, $102K, is unexplained.
    • Is any of the total doubtful?
    • Note 15 tells us that ‘Amounts due from related entities’ is owed by Summer Institute of Linguistics Australia. However, it also shows that WBT owes the same charity $47K.
      • There is no disclosure of how the two companies are related.
  • Inventories $30K (including Note 6)
    • From the description for the three items, WBT are producing books, using copies and gas as raw materials. This needs an explanation.
  • Receivables (non-current) $692K (including Note 8)
    • Why is WBT making loans to the company’s members?
      • What are the terms?
    • Why did WBT make a loan to ‘Word Investments’?
      • What are the terms?
      • Why no reduction in the amount in 2014?
      • Why is no part of the loan, including the $1.03 m below, classified as current?
    • Is the ‘Snook 2nd mortgage Cairns’ a loan to the board member with the same name (or related)?
      • Under whose authority was this made?
      • What are the terms?
    • Is any of the total doubtful?
  • Other Financial Assets $2.44 m (including Note 9)
    • Why is the $1.03 m loan to ‘Word Investments’ classified differently from the loan to the same organisation under Receivables?
      • What are the terms?
      • Why did it increase by $130K in 2014?
    • What are the $1.25 m of ‘Mortgages RMBL Mortgages’?
      • What are the terms?
    • Is any of the total doubtful?
  • Interest in Joint Venture $2.21 m
    • This is 22% of assets, yet there is no Note.
    • How is it valued?
    • Where can we see the joint venture’s accounts?
  • Property, Plant & Equipment $3.79 m (including Note 10)
    • What land cost $12K?
    • There is no reconciliation for last year?
    • The valuation basis for buildings is not stated.
  • Accounts payable and other payables $751K, current (including Note 11)
    • ‘Amounts owed to members’ ($697K) should be classified as borrowings.
    • Why is WBT borrowing from the company’s members?
  • Accounts payable and other payables $229K, non-current (including Note 12)
    • ‘Amounts owed to related entities’: what entities, and why?
  • Reserves $7.63 m (including Note 13)
    • Property, plant and equipment is carried at cost. Why would there be anything in an Asset Revaluation Reserve?
    • Even if WBT were revaluing land and buildings, why would the amount in the Reserve be identical to the total of Property, plant and equipment on the balance sheet?
    • What is ‘Equity in Joint Venture’?
    • What is the accounting policy for shares that produces a Revaluation Reserve?
      • How does this fit with generally accepted accounting principles?
    • Why would the balance be $108K when the total in the balance sheet is $111K?
    • What is the distinction between ‘Internal’ and ‘External’ reserves?

Movements in the net wealth of the charity – the Statement of Changes in Equity – page 7 of the Financial Report

  • Revaluation – joint venture
  • Revaluation – shares
    • These don’t match ‘Other comprehensive income’

Where the cash came from and went to – the Statement of Cash Flows (page 8 of the Financial Report)

  • Donations should be separate.
  • Where are the dividends on the shares?

Essential information to go with the figures – the Notes To The Financial Statements… – page 9 of the financial report

  • Note 1: Summary 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.
    • Missing Notes
      • Commitments
      • Events after the reporting period
      • Employee benefits
    • Revenue recognition
      • Sales revenue has been omitted.
      • What is the purpose of transferring some of the legacies to other revenue items?
    • Cash and cash equivalents
      • This term does not match what is shown in the Balance Sheet.
    • Trade and other receivables
      • This term does not match what is shown in the Balance Sheet.
    • Investments in other financial assets
      • There are no assets called ‘Held-to-maturity investments’ in the Balance Sheet.
    • Impairment of non-financial assets
      • There are no ‘goodwill and other intangible assets’ in the Balance Sheet.
    • Trade and other payables
      • This term does not match what is shown in the Balance Sheet.
    • Borrowings
      • There are no liabilities in the balance sheet called ‘Borrowings.
    • Finance costs
      • No interest is shown in the financial statements.
    • Provisions
      • There are no provisions in the Balance Sheet.
    • Critical accounting judgments, estimates and assumptions
      • There is no Provision for impairment of receivables in the Balance Sheet.
      • There is no Provision for impairment of inventories in the Balance Sheet.
  • Note 14 – Contingent Liabilities
    • How is it that a member of the company has a share in a ‘property’ on WBT’s land?
      • Presumably it is a share in the building only?
      • Do they pay rent?
      • Where is WBT’s share shown in the accounts?

Where the board members put their name behind the report – the Directors’ Declaration – page 20 of the Financial Report

  • The strong connection between WBT and Summer Institute of Linguistics (see above) is shown by the fact that the directors say here that the statements were prepared for ‘the members of Summer Institute of Linguistics Australia’ rather than for WBT members.

An independent opinion on the financial statements – the Independent Auditor’s Report (page 22 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

  • Not claimed on the website itself, but some of its publications mention that it is a member of Missions Interlink, for instance on page 4 of this one. Confirmed on this list.

(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.

Prison Fellowship Australia, charity review

This is a review, for donors, of the Australian charity Prison Fellowship Australia (PFA).

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 30 October 2015, and invited them to comment. On 8 November 2015 the Board, via the Secretary, replied by letter:

 We acknowledge your recent correspondence dated 30 October. The Board is satisfied with the adequacy of its existing audit procedures and of the current reporting obligations to the ACNC. Although incomplete, your preliminary observations will be referred to the Board’s Finance and Audit Committee for consideration in future reviews and recommend action on any items that are considered relevant.

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).
  • PFA website. PFA social media sites, at the bottom here, and PFA Victoria on Facebook. Plus PFA on LinkedIn.
  • State government fundraising licence registers.
  • www.glassdoor.com

REGISTRATION DETAILS

Entity Subtype

  • The first of these is a type consistent with sharing the Gospel.
  • The company’s objects cannot be checked because when PFA submitted their governing document they omitted to include their Memorandum of Association.

CHARITY DETAILS

Legal Name

  • Not to be confused with another charity, Prison Fellowship of Australia Inc WA.  From their AIS 2013, this appears to be PFA’s Western Australian branch. However, from the WA register of associations the organisation is no longer registered, which most likely explains why much of the information that should be on the ACNC Register is missing.
    • There is no mention of this charity in the PFA material.
  • PFA is a public company, a company limited by guarantee.
  • It is permitted to omit ‘Ltd’ on the end of its name.

Other Name(s)

  • Their two business names – The Way Mentoring Project and Heavenly Tarts – should be listed here.
    • The third, Wornout Boutique, although listed on the company’s ABN record, is, according to ASIC, deregistered.
  • There are a number of other names that PFA uses for its programs. None are registered. Whether or not they should be depends on whether they are ‘carrying on business’ under the name. And

Generally, if you are entitled to an ABN based upon the nature of your activities…you will be carrying on a business for the purposes of the Business Names Registration Act[ii].

  • PFA, according to its Annual Report (see Charity’s Document (sic), below), has three shops, Second Chances Furniture and Second Chances Op Shop in SA, and Op Shop in Victoria.
    • None are registered business names.
    • Only the Victorian one is included under PFA’s ‘Social enterprises’ on their website.
    • Perhaps this is because the two in SA are not owned by PFA, but by a SA incorporated association, Second Chances SA Inc.
      • This association owns the name Second Chances Op Shop, but neither of the names under which it is trading.
    • Neither website suggests any formal connection between the two organisations.
      • However, a director of PFA, Timothy Minahan, is the Chairman of the association, and PFA’s Patron, Lynn Arnold is Justice Advocate for both organisations[iii].
    • PFA’s description, in the Annual Report, of the SA shops as their shops implies that the association is controlled by it. Even though the association existed only for the last two weeks of the PFA year, the relationship should be disclosed, and consolidated financial statements at least mentioned.

Charity ABN

  • Tax deductibility: You can claim a tax deduction for a donation to PFA. (And for Second Chances SA Inc.)

Charity Street Address

  • The postal address, from the website, is PO Box 525, Toongabbie, NSW 2146.

ANNUAL REPORTING

  • AIS 2014
    • This is PFA’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
      • Because they are not shown in the audited statements, it is not possible to verify ‘Donations and bequests’, Employee expenses’, ‘Interest’, and ‘Grant…for use in Australia’.
  • Financial Report 2014
    • The report was signed three and a half months after the year end.
    • It was then lodged over two months after that.
    • The coverage of finances in this review is left until the financial report proper (Latest financial report – detail, below).

ABOUT THE CHARITY

Who the Charity Benefits

  • Statement of Faith
    • There isn’t one on the website.
    • From the Articles of Association, we know that there is one in the Memorandum of Association, but this document has been omitted when lodging the governing document with the ACNC.
    • Less common for this day and age is the provision in the Articles that the original members had to accept this Statement of Faith.
      • However, there is no explicit requirement that applicants since then have to do the same.

To share the gospel of Jesus Christ with prisoners and their families.

Our vision is for all those who have been involved in or affected by crime to know the redemptive power and transforming love that is revealed in the gospel of Jesus Christ, to be reconciled with God and others, and to experience lasting transformation.

    • This does not match the vision given in the AIS 2014 :  “The vision of PFA is to be the most effective national prison ministry.”
      • The Annual Report – see Charity’s Document (sic), below – tells us that the vision, mission and values were changed in 2013-14, so perhaps this is the old one.
    • The vision on the website also doesn’t match the NSW/ACT branch’s vision:

To be a reconciling community of restoration for all those involved in and affected by crime, thereby proclaiming and demonstrating the redemptive power and transforming love of Jesus Christ for all people.

    • Nor that of the Northern Territory branch.
    • The other four branches don’t have an explicit vision.

To build relationships with those who do not know Jesus Christ, so that we can share His gospel with them, and to disciple those who know Him.

We do so for prisoners, ex-prisoners, their families and others affected by crime.

We work within society and with governments, to maintain a fair and just criminal justice system and to promote the principles and practice of restorative justice.

We encourage and assist Christian churches and other Christian organisations to participate as partners in our ministry.

    • Note: Donors can still get a tax deduction even though PFA is all about sharing the gospel.
    • This mission doesn’t match that of the NSW/ACT branch:

To exhort and serve the Body of Christ in prisons and in the community in its ministry to inmates, ex-inmates, victims and their families; and in its advancement of biblical standards of justice in the criminal justice system.

    • Nor that of Tasmania:Transforming the lives of inmates and their families through the Gospel of Jesus Christ.”
    • SA has the same mission as the one on the website, while the other four states don’t have an explicit mission
  • Activities (What did PFA do?)
    • From Description of charity’s activities and outcomes in the AIS 2014:

The impact in each PFA State has varied according to the opportunities presented and the volunteers available. These avenues include, personal mentoring, in-prison life skill programs and spiritual ministry through chapel and Bible Study. As a Public Benevolent Institution the work of PFA has included support for families and children’s camps. Angel Tree has provided Christmas presents for the children of prisoners. For prisoners we provide post-release support including accommodation, visitation, and employment. PFA is a national volunteer movement with over 1,300 volunteers with some paid leadership in each State. The vision of PFA is to be the most effective national prison ministry.

    • More detailed information is available from the State sites.
  • Outcomes (What did PFA deliver?)
    • Unfortunately in the AIS 2014, in response to the request to describe activities and outcomes, there are only activities (see above).
    • However, the results for five measures are given in the Directors’ Report (see below):

Art from Inside artwork                                   205

Prisoner’s children on Camp for Kids           285

No. of Sycamore Tree Projects held                 11

Angel Tree gifts                                                   7,743

Active volunteers                                                1,300

  • Impact (How were people’s lives improved?)
    • There are a few anecdotal accounts in the Annual Report, but nothing systematic either there or on the website.

Financial Year End

  • This means that the next financial report is due by 31 July 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]

  • Even though PFA is active in all states, and each of those states calls for donations on their website, it doesn’t have a licence to fundraise in four of the seven states where one might be required[v].

Size of Charity

  • With a revenue of $2.0 m, PFA easily qualifies in the largest of the ACNC three size categories (‘Large’).

CHARITY’S DOCUMENT (SIC)

  • There is no Annual Report/Review available on the ACNC Register.
  • But it is available on the PFA website – half way down here.

RESPONSIBLE PERSONS

No. of Australian charity directorships[vi]

Peter Hall                                                 13

Daryl Myatt                                              1

Vera Ou-Young                                       1

David Shaw                                             10

Michael Wood                                         6

John Peberdy                                          11

Steven Nicholson                                   1

Timothy Minahan                                  1

David Cormack                                       1

  • The website lists the board members at the bottom here.
  • The Articles of Association require one Deputy Chair, not two.
  • Comparing the website listing to the Register, the Secretary, Finance Officer and another Deputy Chair should be identified on the Register under ‘Position’.
  • Each of the seven State Councils is required by the Articles of Association to prepare a balance sheet and profit and loss statement for presentation to their AGM. We are not told the relationship between those financial statements and the ones prepared by PFA.

(End of review of the ACNC Register information)

Latest financial report – detail

Directors’ Report (page 1 of the Financial Report)

  • No such report is required by the ACNC.
  • The listing of responsibilities is incomplete here; use the website instead.

Auditor’s Independence Declaration…(page 6 of the Financial Report)

  • There is no requirement for this declaration.

What was earned, what was consumed during the year – the Statement of Profit or Loss and Other Comprehensive Income (page 7 of the Financial Report)

  • Revenue $2.03 m (including Note 2)
    • Both donations and bequests are sought on the website. The amount received is not disclosed.
      • From the AIS 2014 they totalled $1.10 m.
      • With the government grants of $406K, this leaves 26% undisclosed.
  • Expenses (including Note 2)
    • Administration expense, $484K, is 24% of revenue.
    • There is no explanation of how expenses are classified between ‘administration’ and ‘service provision’.
    • The following expenses are not disclosed:
      • fundraising expenses
      • superannuation expense
      • cost of sales
    • It is employee expenses that should be shown, not ‘Employee provisions’.
      • From the AIS 2014, they were $987K.
      • Based on the number of employees shown in their AIS 2014, and assuming that all 12 part-time employees work 2/3rds time, this represents an average expense per employee of $82K.
    • Presumably the audit fee is comparatively high due to the need to audit the branches?
    • Rental expense is for offices?
      • Why the 50% increase?

What’s left at the end of the year – the Statement of Financial Position (page 8 of the Financial Report

  • Cash on hand $607K (including Note 3)
    • ‘Notes and coin’ is the more usual definition of ‘cash on hand’.
    • This should be ‘Cash and cash equivalents’.
    • According to the governing document, State Councils have their own bank accounts. Presumably they are included in this figure.
    • State Councils are required to invest bequests made by ‘persons living within the state’, within that state. However there are no investments in the PFA accounts.
  • Accounts Receivable and other debtors $25K (including Note 4)
    • What is sold on credit?
    • Are any of these amounts of doubtful collectability?
  • Inventories on hand $8K (including Note 5)
    • Why are these not valued at net realisable value?
  • Plant and equipment $105K (including Note 7)
    • There is no reconciliation of written down values.

Essential information to go with the figures – the Notes to the Financial Statements – page 11 of the financial report

Note 1: Statement of Significant Accounting Policies

  • The directors say the company is ‘not a reporting entity’ because ‘there are no users dependent on general purpose financial statements’.
    • 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.

  • Missing Notes:
    • Fair value measurement
    • Contingent liabilities
    • Commitments
  • Incomplete Notes
    • Critical accounting judgments and estimates
      • Estimation of useful life?
      • Employee benefits?
    • Non-current assets: a reconciliation

An independent opinion on the financial statements – the Independent Auditor’s Report (the last two pages 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

  • None claimed.
    • The US organisation is a Charter Member of the Evangelical Council for Financial Accountability (ECFA).
    • The International Organisation is a Member of the ECFA.

(End of review)

 

 

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

[ii] ASIC Regulatory Guide 235, www.asic.gov.au

[iii] Timothy mentions both organisations in his LinkedIn profile, Lynn doesn’t.

[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] A licence is held in Queensland, but it is in the name of the Queensland Council of PFA.

[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.

International Teams Ministries Australia Inc, charity review

This is a review, for donors, of the Australian charity International Teams Ministries Australia Inc (IT).

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 24 October 2015, and invited them to comment by 3 November. The Chief Finance Officer, in reply to my follow up on 29 October (also sent to the auditor),  said that ‘We have passed this onto our board for consideration’. Nothing further was received by the time of publication on 5 November.

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).
  • IT website, including Sydney Refugee Team and their Facebook page.
  • IT social media sites, half way down here. Not on LinkedIn.
  • Ride for Refugees website, and social media at the bottom here.
  • State government fundraising licence registers.
  • www.glassdoor.com.au

REGISTRATION DETAILS

Entity Subtype

  • A type consistent with sharing the Gospel comes second to ‘social or public welfare’.
  • The company’s objects don’t mention religion.

CHARITY DETAILS

Legal Name

  • Not to be confused with International Teams Ministries Australia Incorporated as the operator of a PBI. This is a charity automatically created by the ACNC which doesn’t have to, as yet, report separately.
    • It has the fund that is approved for tax deductions (INTERNATIONAL TEAMS AUSTRALIA SYDNEY REFUGEE TEAM).
    • Its Other Name(s) is Sydney Refugee Team, but this is not a registered business name.
  • IT is an incorporated association, incorporated under NSW legislation.

Other Name(s)

  • Ride for Refugees Australia is missing.
  • Neither International Teams nor ITeams are registered business names.

Charity ABN

  • Tax deductibility: You cannot claim a tax deduction for a donation to IT, but you can to the charity controlled by IT (see Legal Name, above).

Charity Street Address

  • Postal address on the website: PO Box 1123, Baulkham Hills NSW 1755.

ANNUAL REPORTING

  • AIS 2014
    • This is IT ’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
        • Because they are not shown in the financial statements, it is not possible to verify any of the Income Statement items.
        • Both the income and the expenses are understated by $3K.
  • Financial Report 2014
    • The report was signed three and a half months after the year end.
    • It was then lodged over two months after that.
    • The coverage of finances in this review is left until the financial report proper (Latest financial report – detail, below).

ABOUT THE CHARITY

Who the Charity Benefits

  • Vision
    • “Lives and communities transformed by the power of God.” Read the explanation here.
  • Mission
    • “Helping churches help the poor and oppressed.” Read the explanation here:
  • Activities (What did IT do?)
    • From Description of charity’s activities and outcomes in the AIS 2014:
      • We support and develop refugee, end-slavery (sic) and evangelism programs in conjunction with churches overseas and in Australia.
  • Outcomes (What did IT deliver?)
    • Unfortunately in the AIS 2014, in response to the request to describe activities and outcomes, there are only activities (see above).
  • Impact (How were people’s lives improved?)
    • None found.

Size of Charity

  • This year’s revenue, $902K, is under $1m, so the Medium classification is correct. However, last year IT qualified in the largest of the ACNC three size categories (‘Large’).

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)[ii]

  • Only in NSW has IT a licence to fundraise. Both the other two states in which it says it operates have a licensing regime.
  • IT operates interstate as an association, but does not have an Australian Registered Body Number.

Operates in (Countries)

  • According to the ‘Give’ page on the website, Romania is missing from this list.
    • And Christmas Island is part of Australia.
  • No Australians are shown to be in Cambodia or Greece on the map on the website.

CHARITY’S DOCUMENT (SIC)

  • There is no Annual Report/Review available on the ACNC Register.
  • Nor on the website.

RESPONSIBLE PERSONS

No. of Australian charity directorships[iii])

Danelle McLeay                2 (the other being ‘the operator of a PBI’ (see above))

  • This is very incomplete listing.       See here for the names that are missing.
  • Danelle McLeay is not on the website list. (The Public Officer is not necessarily a ‘responsible person’.)
  • IT is one short of the minimum number of directors required by its constitution.
  • It is also short a Deputy Chairman.

 

(End of review of the ACNC Register information)

 

Latest financial report – detail

  • The cover implies that IT and Sydney Refugee Team are separate organisations. However, not only is there no organisation with the name Sydney Refugee Team, but it’s not a registered business name.
  • The directors say that this is a ‘general purpose financial report’ but the accountant who compiled the financial statements says that they are ‘special purpose financial statements’. And then says in her audit report that they are general purpose statements.
  • Even though the auditor says that that it is included, and she audited it, the report is missing the ‘Statement of Cash Flows’.
  • Although the information is included at the bottom of the profit and loss statement, and the statement is said to have been audited, there is no separate ‘Statement of Changes in Equity’.
  • Potential confusion is caused by the inclusion of three statements that are not required.
    • Although these three statements are not audited they are interspersed with the audited statements and are not marked that they are unaudited.
  • All of this is despite the fact that the financial statements were compiled by a professional accounting firm, Parramatta Accountants & Tax Agents.
  • IT have included a Compilation Report in the report even though the ACNC doesn’t require one.
    • The fact that one was prepared shows that, if the firm was following the profession’s standards, the statements were prepared by the same person who audited them.
    • Accountants have to be very careful with independence when doing this.
    • The Compilation Report is unsigned.
  • There are three statements or reports by the Committee included in the Report. All three are unsigned.
  • The audit report, by Michele Glossop, is
    • Unsigned
    • dated seven days before the date of the Director’s Declaration.
  • The balance sheet doesn’t have any Notes explaining the figures.
  • The profit and loss statement
    • is in a long-outdated format, and
    • there are no Notes explaining the figures.
  • The Notes to the Financial Statements contain only one Note.

Membership of accountability organisations claimed

  • Missions Interlink. Assuming that this document is still up-to-date, membership is confirmed.

(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.