WorldShare, charity review

This is a charity review, a review for those with an interest in the Australian charity WorldShare.

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

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 9 June 2016, and invited them to comment. This was their response:

Thank you for your email. WorldShare and its auditors will take your comments into account as we prepare our end of financial year reports and other publications. Thank you for your interest in our organisation.

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. This also applies to the information in the Financial Report.)
  • There is then a more detailed comment on the Financial Report.
  • Lastly, there is a section Membership of accountability organisations

Sources

  • ACNC Register (including links)
  • Google search on the charity’s name.
  • WorldShare website.
  • Facebook. LinkedIn. No other social media presence found.
  • State government fundraising licence registers.
  • No reviews yet on Glassdoor.

REGISTRATION DETAILS

Entity Subtype

  • The primary subtype is an ‘other’ category that doesn’t suggest that the Gospel is paramount– why not ‘Advancing religion’?
    • This would be consistent with the company’s objects in the constitution:
      • The Company is a religious institution whose values require the promotion of the Lord Jesus Christ to peoples throughout the world and their evangelisation on the basis of the principles of the Christian faith.

CHARITY DETAILS

Legal Name

  • WorldShare is a company limited by guarantee. It is permitted to omit ‘Limited/Ltd’ at the end of its name.

Other Name(s)

  • This not correct. WorldShare was formerly known as Christian Nationals’ Evangelism Council. CNEC Partners International is a current business name owned by WorldShare.

Charity ABN

  • Tax deductibility: No, you cannot claim a tax deduction for a donation to WorldShare.
    • However, you can to its fund, Christian Nationals Developing Countries Fund.

Charity Street Address

  • This is described on the website as the ‘Sydney office’, there also being a ‘Melbourne office’.
  • An alternative address is given on one of the fundraising registers: Suite 7, 5 Court Street, Box Hill 3128.
  • The postal address for donations, from the website: PO Box 711 Five Dock NSW 2046 Australia

Email

Phone

  • In addition, from one of the fundraising registers: 0430 606 178.

ANNUAL REPORTING

  • AIS 2015
    • This is WorldShare’s compulsory Annual Information Statement 2015 (AIS 2015).
    • It gives basic financial information. If you think that this might be sufficient for you
      • there is insufficient information in the Financial Report to verify ‘Employee expenses’.
        • Assuming that the six part-time employees work 50% of the time the six full-timers work, this total represents $86K per employee.
  • Financial Report 2015
    • The Report was signed two and a half months after the year end.
    • It was then lodged three months after that, eight days before the normal final date for lodgement.
    • The coverage of finances in this review is left until the financial report proper (see Latest financial report – detail, below). (Go straight there.)

ABOUT THE CHARITY

  • Statement of Faith
    • Half way down this page.
    • Also as clause 3 of the constitution.
    • WorldShare has also made its values explicit.

Date Established

Who the Charity Benefits

  • Vision
  • Mission
  • Activities (What did WorldShare do?)
    • In the AIS 2015:
      • WorldShare is connecting our supporters to overseas partners in resourcing, enabling and encouraging them to realise their visions in challenging places by bringing ongoing physical, social and spiritual transformation to their people.
        • This is identical to what’s in last year’s AIS 2014, so not a very helpful answer to what happened in 2015.
        • See the Annual Report instead.
  • Outcomes (What did WorldShare deliver?)
    • WorldShare did not respond to the request in the AIS for its outcomes.
    • Some anecdotal information is in the Ministry Reports.
    • And a comprehensive, if brief, coverage in the Annual Report.
  • Impact (How were people’s lives improved?)

Size of Charity

  • WorldShare is $1.92 m over the threshold for this size. There is no larger size.

Financial Year End

  • This means that the next financial report is due by 31 December 2016 – or 31 January if the ACNC give their usual extension (to all charities). Before that the financial information on the Register will be up to 18 months out-of-date.
    • You may therefore need to ask for more up-to-date information.

WHERE THE CHARITY OPERATES

Operating State(s)[1]

  • WorldShare has a fundraising licence in every state with a licensing regime.

Operates in (Countries)

  • This listing contains 13 more countries than are listed on the website (Indonesia is listed twice there.)

CHARITY’S DOCUMENT (SIC)

  • An Annual Report/Review can be lodged on the ACNC Register, but WorldShare hasn’t done this.
  • There is one on the website though.

RESPONSIBLE PERSONS

No. of Australian ‘responsible person’ positions[2]

Helen Allchurch                1

Joseph Bowes                     2

Stuart Harris                      2

Joanna Mansfield              1

Gerald Thomas                  1

  • This matches the list on the website.
    • Stuart Harris has had a new job since February 2016.
  • However, both lists are missing W Bird and I Hounslow compared to the list, as at 16 September 2015, in the Directors’ Report.
  • Under ‘Position’, are there not office-bearers other than the Chairperson?

(End of review of the ACNC Register information)

Latest financial report – detail[3]

  • Nowhere is WorldShare’s fund, Christian Nationals Developing Countries Fund, mentioned.
  • WorldShare’s claims, under Why WorldShare and elsewhere, about the level of their costs cannot be substantiated.
    • For instance, in the Annual Report, the CEO claims that ‘critical operating costs have been reduced from 9% to 8%’, yet their own figures in Note 13 to the financial statements shows that the change has been in the opposite direction – an increase from 8% to 9%.

The Directors’ Report – page 1 of the Financial Report

  • This is not required by the ACNC. (Nor is the Auditors (sic) Independence Declaration on page 3 of the Financial Report.)
  • ‘Directors’: two more than in the company’s other documents.
  • Principal Activity’: Not about 2015 particularly.
  • ‘Operating Results’, ‘Review of Operations’, and ‘Indemnification of…’: not required.
  • ‘Information of Directors’: not all have an answer to ‘title, qualifications, experience and expertise’.
  • The company secretary is not identified.
  • ‘Performance measures’ missing.

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

  • Cash $509K, including Note 11
    • This should be ‘Cash and cash equivalents’.
    • Note 11 is not a Note on this asset.
  • Investments $1.06K
    • Note 11 is not a Note on this asset.
    • The usual distinction between different kinds of investments is absent.
  • Receivables $101K, including Note 5
    • The note is for ‘Other Current Assets’, not ‘receivables’.
    • What are ‘accruals’ as an asset?
    • Debtors and Prepayments are normally separate assets.
  • Property, Plant and Equipment $130K, including Note 6
    • What is the distinction between ‘Equipment’ and ‘Electronic Equipment’?
    • The usual reconciliations of written down value are missing.
  • Payables $694K, including Note 7
    • What are ‘Distributable Funds?
  • Provisions $108K, including Note 8
    • What is the distinction between ‘Employee benefit accounts’ and ‘Employee Entitlement Provisions’?
    • The accounts say that there are no liabilities, including employee benefits, due beyond 12 months.
  • Accumulated Funds and Reserves $1.00 m
    • There is no breakup for this figure.

Movements in the net wealth of the charity – the Statement of Changes in Equity (page 5 of the Financial Report)

  • ‘Net Surplus/(Deficit)’ should be merely transferred from the income statement, not calculated in this statement.
  • ‘Other comprehensive income’ and ‘Total comprehensive income’ are missing.

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

  • The format of this statement has long been superseded. ‘Other comprehensive income’ should be shown.
  • The bottom line should have a direction to Note 3.
  • Revenue $2.92 m, including Note 2
    • The ‘Fundraising Information’ in Note 15 shows ‘Donations to Local Support Work’, yet all donations in the Income Statement are shown as for overseas.
    • Donations and gifts – overseas aid and development $2.34 m
      • Are these the donations to WorldShare’s fund, Christian Nationals Developing Countries Fund?
    • Except for splitting ‘Investment Income’, Note 2 adds nothing to the information in the income statement. (In fact, for the bulk of the revenue, it aggregates information in that statement.)
    • What is ‘Equity related income’?

Expenses

  • Employee benefits expense is not disclosed. (But see Annual Reporting, above.)
  • Overseas projects – Funds to overseas $1.79 m
    • WorldShare’s claim that ‘92% of your donations will go directly to benefit each overseas partnership’, but this figure is only 63% of donations received for overseas. Why the huge difference?
    • According to the (unaudited) Detailed Income Statement, this figure is overstated by the $8K for ‘Short Term Team costs’.
    • In their statement to the SA fundraising authority, WorldShare claim that $1.84 m was distributed.
  • Overseas projects – Other project costs $285K
    • This represents 10% of donations. (All donations in the Income Statement are for overseas.)
  • Fundraising costs – Public $593K
    • This represents 21% of donations.
  • Administration $252K
    • WorldShare claim that ‘critical operating costs’ are 8%’. Even defining these costs only as ‘Administration’, the figure is 9%.
    • WorldShare themselves calculate it as 9% in the Notes 15.

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

  • The usual general information is missing:
    • The type of company (individual versus group, not-for-profit versus profit, public versus private).
    • An identification of the functional and presentation currency.
    • The date the statements were authorised for issue, and whether the directors have the power to amend them.
  • 1 Statements of Accounting Policies
    • It is not true that a charitable organisation cannot ‘derive profits or losses’.
    • Depreciation and Amortisation of Plant and Equipment
      • Plant and equipment is not amortised, intangibles are.
      • The useful lives are not disclosed.
      • Nor is the policy on the review of depreciation factors.
    • Employee Entitlements
      • There is no distinction between short-term and long-term benefits.
      • The policy on superannuation contributions is missing.
    • Cash Flows
      • This should be ‘Cash and cash equivalents’.
      • It should cover the balance sheet as well.
    • Revenue Recognition
      • There is no policy for ‘Equity related income’.
    • Policy Notes normally included but not in these accounts:
      • New, revised or amending Accounting Standards and Interpretations adopted
      • Current and non-current classification
      • Trade and other payables
      • Trade and other receivables
      • Property, plant and equipment
      • GST and similar taxes
      • New Accounting Standards and Interpretations not yet mandatory or early adopted
  • 13 Related Party Information
    • There is no statement about ‘Transactions with related parties’, ‘Receivable from and payable to related parties’, and ‘Loans to/from related parties’.
  • Notes included, but not required
    • Taxation (already covered in Note 1)
    • Members’ Guarantees (already covered in the Directors’ Report)
    • Segment Reporting
  • Notes normally included, but not in these accounts:
    • Critical accounting judgements, estimates and assumptions
    • Commitments (even if there aren’t any)
    • Events after the reporting period

Another income statement – the Detailed Income Statement (page 12 of the Financial Report

  • This is not audited.
  • Why is it included?

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

  • This report is a ‘clean’ opinion. So that you don’t take more comfort from this than is reasonable, read here and here.
  • The auditor has allowed, without warning the reader, the inclusion of a statement that is not included in the scope of his audit.

Membership of accountability organisations claimed

(End of review)

 

 

  1. 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.’
  2. 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.
  3. I use the Pinnacle Financial Statements, respected in the profession as providing a very sound basis for producing compliant financial reports. To this I add an assessment of materiality (both quantitative and qualitative), where the users being considered are donors.

The Archbishop of Sydney’s Overseas Relief And Aid Fund, charity review

This is a charity review, a review for those with an interest in the Australian charity The Archbishop of Sydney’s Overseas Relief And Aid Fund (ASORAF).

It is structured according to the charity’s entry on the ACNC[1]Register and its purpose is to supply some information extra to what is there, information that may be helpful in your 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 16 April 2016, and invited them to comment. Their responses that remain relevant are included throughout the review.

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. This also applies to the information in the Financial Report.)
  • 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 name
  • The website belonging to Anglican Aid (see Legal Name, below).
  • Not on social media, or LinkedIn.
  • State government fundraising licence registers.
  • No reviews yet on Glass Door.

REGISTRATION DETAILS

Entity Subtype

  • Notice the absence of ‘Advancing religion’.
  • The ‘Purpose’ of the Fund in its Rules (see Charity’s Document (sic), below) also makes no mention of sharing the Gospel:
    • The purpose of the Fund is to carry out development and/or relief work in accordance with the Guidelines, solely for the relief of people in Declared Developing Countries.

CHARITY DETAILS

Legal Name

  • ASORAF is an unincorporated body, a trust fund, that was established by the Archbishop of Sydney in 1971.
  • Not to be confused with the Archbishop’s other four charities:
    • The Archbishop Of (sic) Sydney’s Anglican Aid
    • The Archbishop Of (sic) Sydneys (sic) Overseas Ministry Fund
    • Archbishop Of (sic) Sydney’s Discretionary Trust
    • Archbishop of Sydney’s New Churches for New Communities Public Ancillary Fund
      • ASORAF’s comment: Neither the Archbishop of Sydney’s Discretionary Trust or The Archbishop of Sydney’s New Churches for Communities Public Ancillary Fund have any relationship with Anglican Aid, OSORAF or OSOMF apart from having the Archbishop of Sydney’s name in their Title
      • The first, trading under the unregistered name Anglican Aid, is ASORAF’s trustee.
      • Anglican Aid is reportedly[2] also the trustee of the second charity.
        • Given that Anglican Aid runs its own operations and its trusteeships from the one office, reports on them in its Annual Report as its ‘three funds’, and all three charities have the same directors, one wonders why
          • they don’t present consolidated financial statements, especially as the canon law governing their financial reporting requires a ‘charities group status report’ for Synod using the criterion for consolidation that is in the Australian Accounting Standards, and
          • they don’t take advantage of the ACNC Act’s group reporting provisions, thus simplifying their reporting requirements to the ACNC (both Annual Information Statement and Financial Report).
      • The third charity has one responsible person, the Archbishop. He controls the income, the Archbishop-in-Council the capital.
      • The last charity has a company trustee, itself a charity, NCNC Funds Limited. It has three directors, but they sit at the will of the single member, the Archbishop.

Other Name(s)

  • This name is not a registered business name. Nor is ‘Anglican Aid’. ASORAF can therefore only legally trade under its full name.

Charity ABN

  • Tax deductibility: Yes, you can claim a tax deduction for a donation to ASORAF.

Charity Street Address

  • No postal address separate to that of its trustee (from its website): PO Box Q190, QVB Post Office NSW 1230

ANNUAL REPORTING

  • AIS 2015
    • An Annual Information Statement 2015 (AIS 2015) has been submitted. Why has Anglican Aid, the trustee, not taken advantage of the group reporting provisions of the ACNC Act?
      • This would also negate the need for a Financial Report (see next).
        • ASORAF’s comment: Anglican Aid reporting is done internally to the Synod of the Diocese and requires the production of separate financial reports for each fund. Prior to the establishment of Anglican Aid this is how we have reported publicly as well. We will review whether group reporting should be undertaken for 2015/16.
    • It gives basic financial information. If you think that this is all that you might need, all the figures agree with the financial statements.
  • Financial Report 2015
    • The Report was signed two months after year end, and lodged four months after that, days before the expiry of the period normally allowed by the ACNC. (The 21/04/2016 date reflects the fact that an updated Report was lodged.)
    • The coverage of finances in this review is left until the financial report proper (see Latest financial report – detail, below). Go straight there.

ABOUT THE CHARITY

  • Statement of Faith
    • There is no statement of faith in the governing document (see Charity’s Document (sic), below).
    • Nor on the trustee’s website.
      • ASORAF’s comment: See https://anglicanaid.org.au/about and click the Ordinance hyperlink and see 9 (2). Whilst not listed separately on the website, Anglican Aid operates as a Christian organisation which is public about its Christian approach to development and ministry.

Date Established

  • The only history on the trustee’s website has the date much earlier (lower down here):
    • In 1971, Archbishop Sir Marcus Loane took Sydney’s eyes from the suffering in our suburbs to needs overseas. To those affected by war, poverty, disease, injustice and natural disaster. The Archbishop’s Overseas Relief and Aid Fund (ORAF) was established.

Who the Charity Benefits

  • Vision and Mission
    • None found.
  • Activities (What did ASORAF do?)
    • From the Description of charity’s activities and outcomes in the AIS 2015:
      • The fund worked with partners in over 15 countries. Activities included emergency relief activities and longer term development activities. The activities included over 35 individual projects. Emergency activities provided relief to minorities fleeing IS in Iraq and Syrian refugees in Egypt. In Nepal medical aid and temporary housing was provided for people affected by the earthquakes. In Vanuatu, funds were sent to assist in provision of water and emergency building materials for communities affected by the cyclone. Funds were distributed to support a Liberian hospital providing care and treatment for people affected by ebola. A grant to Pakistan was made for floods in Punjab which provided water and food. Housing in the Philippines was provided for people on Leyte Island impacted by the 2013 Cyclone Haiyan. Agricultural activities in South Sudan were supported to provide food for people affected by the civil conflict in that country. Emergency grants were made to churches in Pakistan and Kenya to provide emergency relief for communities affected by terrorism.
  • Outcomes (What did ASORAF deliver?)
    • From the Description of charity’s activities and outcomes in the AIS 2015:
      • Development activities have achieved the following outcomes: Reduced infant mortality from Malaria education and treatment in Aru, DRC and from water borne diseases in Ethiopia through a WASH program; Provided educational resources including buildings for children who would otherwise not receive educational opportunities in Sierra Leone, Indonesia, Tanzania, Zambia, Zimbabwe, Pakistan and India; Improv
  • Impact (How were people’s lives improved?)
    • Nothing systematic found.

Financial Year End

  • This means that the next financial report is due by 31 December 2015 (or 31 January if the ACNC is generous again.)
  • Before that the financial information on the Register will be up to 18 months out-of-date.
    • You may therefore want to seek more up-to-date information.

WHERE THE CHARITY OPERATES

Operating State(s)[3]

  • ASORAF is exempt from the fundraising licence requirements in this state.
  • However, it raises funds all over Australia, so probably has to comply with the fundraising legislation elsewhere. It is possible that it is exempt in Victoria, but what about in the other six states that have a fundraising regime?

Size of Charity

  • With a revenue of $3.52 m (up dramatically from $2.32 m last year), ASORAF easily qualifies in this, the largest of the ACNC three size categories.

CHARITY’S DOCUMENT (SIC)

  • Why is the governing document for ‘ASORAF ‘Rules’, whereas the one for the other fund for which Anglican Aid is the trustee is a deed?
    • ASORAF’s comment: The Rules were developed on legal advice in 2014 following legal advice that best practice according to ATO law required specific rules outlining how the fund was to operate given it has DGR status. The OMF as a non DGR trust requires no rules.
  • There is no Annual Report/Review available on the ACNC Register.
  • There is an Annual Report on the trustee’s website, but it is for the group, not just ASORAF.
    • ASORAF’s comment: Anglican Aid produces one printed report, reporting on all activities in a printed document to provide information to supporters.

RESPONSIBLE PERSONS

No. of Australian charity directorships[4]

David Dennis               This function was not working at the time of publication Brett Hall

Douglas Marr

John Menear

Emma Penzo

Peter Rogers

Robert Stewart

Peter Tasker

Keith Walker

  • A listing that matches the one on the trustee’s website.
  • No reason was found for the ‘Positions’ to vary between ‘Board Member’, ‘Director’, and ‘Other’.

(End of review of the ACNC Register information)

Latest financial report – detail[5]

  • ASORAF produces special purpose financial statements rather than those requiring full compliance with the Australian Accounting Standards. It does this because the directors believe that ‘the Fund is not publicly accountable, nor (sic) reporting entity’. However, whether or it is ‘publicly accountable’ is not directly relevant to the choice. And not being a ‘reporting entity’ means that they have no users or potential users who depend on general purpose statements to make decisions about ASORAF, which, given that they are a multi-million dollar Australia-wide charity with thousands of donors, is not credible.

What was earned, what was consumed during the year – the Statement of Profit or Loss and Other Comprehensive Income (page 3 of the Financial Report)

Revenue

  • Donations $2.97 m, including Note 3
    • The amount in the Note does not match the amount in the Statement.
    • This represents, together with ‘Bequest Income’ (below), 99% of income.
    • There is insufficient detail to compare the revenue with the giving options on the website.
  • Bequest Income $501K
    • Is this bequests received or the income on past bequests?
      • ASORAF’s comment: This was the aggregate of Bequests actually received during the financial year – One large bequest in particular boosted this figure
  • Revenue from Ordinary Activities
    • The distinction between ordinary and extraordinary has been long gone from the Accounting Standards.
    • A different description is used in the Statement of Changes in Distributable Funds and Reserves.

Expenses

  • Grants Paid $2.12 m, including Notes 4 and 5
    • Note 4 Donations Received and Grants Paid $2.11m
      • Why ‘Donations Received’?
        • ASORAF’s comment: Correct – should be Grants Paid from Designated Purpose Donations
      • There must be a way of classifying the information in this very long list to make the information more useful? By size? By country?
        • ASORAF’s comment: The list is made on a roiling chronological basis – we will consider splitting into relevant country
  • Fund Management Services and other Operating Expenses $531K, including Note 7
    • For those expenses that are not disbursements by the trustee, how is it that the figures are so precise?
      • ASORAF’s comment: Prior to the beginning of the financial year, the Board sets a budget for the three funds. The expense allocation is a percentage based on the projected income of that fund as a percentage of the income of the three funds- in the year under review OSORF’s percentage was 75% of the total expenses of the three Funds. OSORAF also incurred additional expenses such as Bank fees and Audit costs. On reflection, we should have called the allocated expenses “Fund Management Fee” rather than splitting costs for expenses (personnel, fundraising, etc
    • How does the trustee decide how much to charge?
    • Personnel Costs $249K (Note 7)
      • Assuming that part-timers work 50% of full-time hours, and based on the number of employees disclosed elsewhere in the AIS, this represents $83K per employee.
        • ASORAF’s comments: (1) Anglican Aid employs all staff (EFT 5) and charges each fund a percentage as determined annually according to the budget. (2) Personnel  Costs are for 6 six staff for “group”, two of whom work full time – rest part time – 4,3 or 2 days PW – costs include superannuation expenses, workers comp etc – OSORAF effectively paid 75% of total Personnel costs
          • Reviewer’s response: Neither of these explanations match the number of employees disclosed in the AIS 2015.
    • Fundraising Costs – Public $110K (Note 7)
      • Why ‘public’?
        • ASORAF’s comment: Yes, sound strange, but needs to comply with ACFID designations
          • Reviewer’s response: Whatever the cause, there is nothing preventing ASORAF from including an explanation of the terms (and their source, if they like).
    • Forward Exchange Contract Premium $25K (Note 7)
      • There is no explanation anywhere for the need for this.
        • ASORAF’s comment: This was actually a refund of a deposit paid for a forward exchange contract which was met during the year
      • Why is it negative? And why put revenue under expenses?
    • Program Support Costs $86K (Note 7)
      • What’s included in this?
        • ASORAF’s comment: These costs include costs of personnel visiting overseas partners, and the (assessed) direct personnel costs in monitoring projects from our Sydney Office. We have only begun to split these costs in this way to bring us somewhat into line (albeit more modestly) with similar bodies. We have shown this line separately in the notes, but as part of total Management and operating costs on which our cost to income or cost to grants paid (as a percentage) may be assessed
      • This is a departure from the classification by nature for the other expenses.
    • Missing disclosures:
      • Administration. Note 1(e) equates the $531K of this item with ‘Administration Expenses’. But ‘administration’ doesn’t normally include, for instance, fundraising expense.
        • ASORAF’s comment: Noted – we apportion Fundraising expenses incurred by the group in same percentage as other costs are allocated – again on the basis of the percentage of budgeted income between Funds
      • Superannuation expense
    • There are no ‘Fund management service fees’ in the list, as implied in the note.

What’s left at the end of the year – the Statement of Financial Position (page 4 of the Financial Report

  • Cash and Cash Equivalents $2.38 m, including Note 8
    • Why is it necessary to hold this level of donations unspent? ($1.86 m is ‘available for distribution (Note 11).
      • ASORAF’s comment: The moneys carried forward
        • Could relate to designated donations which are held by us in trust for the projects to which they have been given – at the end of the financial year $845,063 was held for such donations included significant sums received just prior to the end of the financial year and paid out in next financial year. In addition, funds are not just “shovelled” out. We hold recipients accountable for moneys they receive or are offered and require budgets, programs and regular reports. Funds are often paid in tranches
        • OSORF takes the foreign exchange risk as it is believed that our overseas partners budgets are too small – most of our payments are in USD which has fallen from $1.1 5 years ago to just over $0.70. Our projects are usually on a three year basis and we build in a buffer to cover foreign exchange risk
        • As many of our projects are on a three year commitment, we retain funds to cover the fluctuation in donations that may aris
        • Some funds held represent bequests which are averaged over 5 years to iron out lumps such as the $501,450 received in year under review against $192,696 in previous year
    • There is no policy Note for foreign currency balances and transactions. Where, for instance, are they held?
      • ASORAF’s comment: Noted – they are held in trust by our foreign currency provider, Compass Global Markets
    • Clarity would be aided by separating the first two sentences under the figures.
  • Bequest Program Reserve $615K, including Note 12(a)
    • What is the relationship between this ‘Policy Statement’ and the governing document on the Register?
      • ASORAF’s comment: The policy statement is included in Policy and Procedures Manual as approved / amended by the Board from time to time
    • How does action consistent with ‘to maintain and develop the work of the Fund’ differ from the regular work of handing donations on?
      • ASORAF’s comment: The work of the fund may change over time – the 5 year average allows funds to be used evenly for work undertaken in the future as well as the current year
    • This Note implies that bequests are always received free of instructions. Is this the case?
      • ASORAF’s comment: Yes, bequests name the fund but have never named a project or use to the writers knowledge
  • Fair Value Reserve $34K, including Note 17
    • Wrong Note number.
    • But Note 12, the one on the reserves, doesn’t include this reserve. Nor the Foreign Currency Translation (Reserve)
      • ASORAF’s comment:  Agree – we should add next year

Where the cash came from and went to – the Statement of Cash Flows (page 6 of the Financial Report)

  • Donations $2.97 m: given the recognition policy, how is it that the cash received is identical, both years, to the revenue earned?
  • Bequests by way of direct income $218K:
    • What does this mean?
      • ASORAF’s comment: This is an incorrect figure – should be the bequest income received during the year – $501,450 – this will flow on to Payments in respect to Operating Activities
  • If accrual accounting is used,
    • why is interest received identical to interest revenue?
      • ASORAF’s comment: Agree – we have used actual interest received and not that accrued at 30 June – with low interest rates – around 2% and most deposits 3/6 months, income is not overly significant, but will take on board
    • is it correct that grant payments totalling $2.12 m to multiple recipients were identical to the same grants as expenses?

Essential information to go with the figures – the Notes to the Financial Statements – page 7 of the financial report

  • 1 Summary of Significant Accounting Policies Adopted in the Preparation of the Financial Report
    • (a) Reporting Entity
      • Missing information:
        • ‘as an individual entity’
        • The date the accounts were authorised for issue.
          • ASORAF’s comment: signed and dated on page 17
      • The directors do not say why they think that ASORAF is not a reporting entity.
        • ASORAF’s comment: Noted – will expand next year
      • Do the directors realise that they are effectively saying that all those people who have donated the $3.47 m, and all those people who might donate in the future, are able to require ASORAF to produce a financial report to suit their particular information needs?
        • ASORAF’s comment: No, I don’t think they are saying that – para 3 of (a) set out who accounts are specifically prepared for
          • Reviewer’s response: ‘Effectively saying’: the implication comes clearly from ASORAF saying that there are no users, present or prospective, who are dependent on general purpose financial statements. Preparing the accounts for the Synod does not mean that ASORAF can ignore other users.
      • It is the requirements of the ACNC Act that determine the reporting.
      • Critical accounting estimates:
        • Do they mean ‘IFRS’? If so, don’t their financial statements follow the Australian Standards, not the International ones?
          • ASORAF’s comment: Will clarify for next year
        • It is common for critical estimates to be involved in employee benefits. This is not the case for ASORAF?
          • ASORAF’s comment: Will consider for next year
    • (b) Statement of Compliance: what are ‘classification aspects?
      • ASORAF’s comment: Will consider for next year
    • (c) Cash and Cash Equivalents:  up to what length for the term deposits?
      • ASORAF’s comment: usually 3 or 6 months
    • (d) Revenue Recognition: what about bequest income and interest?
      • ASORAF’s comment: Will clarify for next year
    • (e) Administration Expenses:
      • There are no ‘Fund Management Services’ separately shown.
      • Does the basis for apportionment vary from item to item?
        • ASORAF’s comment: No, apart from direct expenses (Fund Bank Fees, audit etc, all costs are apportioned at % determined by the board at the beginning of each financial year (subject to review if fund income differs substantially to that budgeted for)
    • (g) Goods and Services Tax (GST): cash flows and commitments and contingencies are missing.
      • ASORAF’s comment: Note – Effectively all income is GST free and GST on certain purchases paid by Anglican Aid – the Fund Management Fee is net of GST – Non Reportable
    • Missing policy Notes:
      • Current and non-current classification
        • ASORAF’s comment: There are no non current Assets or Liabilities
          • Reviewer’s response: The distinction is still relevant.
      • Trade and other receivables
        • ASORAF’s comment: Only Trade and other receivables would be between Funds
          • Reviewer’s response: The funds are separate legal entities.
      • Trade and other payables
        • ASORAF’s comment: Only between Funds if any – usually previous months donations deposited to incorrect account or Fund Management Fee to be paid
      • Property, plant and equipment. (It is unusual not to have any.)
        • ASORAF’s comment: There is none for OSORAF
      • Employee benefits
        • ASORAF’s comment: There is none for OSORAF
          • Reviewer’s response: The AIS 2015 reports that there are six employees.
      • Fair value measurement
        • ASORAF’s comment: Noted
  • Adoption of New and Revised Accounting Standards
    • How has the impact been assessed as immaterial when the evaluation hasn’t been completed?
      • ASORAF’s comment: Noted – New / Revised accounting standards and implications are discussed with our auditors at the time accounts are assessed and enables us (in year under review) to make such statement
    • There is no Note 2.
  • 15 Related Parties
    • Don’t the rules give control of the fund to the Management Committee, whose membership is drawn from Anglican Aid, not the Archbishop?
      • ASORAF’s comment: Yes, we need to clarify next year
    • If the Archbishop is in control, then aren’t all the other entities that he controls also related parties?
      • ASORAF’s comment: I guess the buck stops with him, but where does it really stop – every diocesan organisation, parish, school….. Anglican Aid and OSORAF and OSOMF are considered stand alone by the Synod of the Anglican Church and the Diocesan Secretariat
    • Isn’t some of what Anglican Aid charges an allocation of a larger figure, not just the reimbursement of expenses?
      • ASORAF’s comment: No, it is an allocation of expenses only passed on a percentage determined by the Board – Anglican Aid does not seek to “make a profit”
    • The dollars don’t match those in Note 7.
      • ASORAF’s comment: Note 7 includes “other Operating Expenses such as Bank fees, audit costs and some program support costs paid separately by OSORAF

Where the directors put their name to the report – the Members’ Declaration (page 17 of the Financial Report).

  • This declaration doesn’t comply with the ACNC’s requirements.
    • ASORAF’s comment: Noted – we will review for next year

Membership of accountability organisations claimed

  • In Anglican Aid’s website footer: ‘ACFID Member’ and the Missions Interlink (MI) ‘Accredited Member’ logo.
    • The MI membership is in the name Anglican Aid Overseas Ministry Fund, which is not ASORAF (nor the name of any of the other of the Archbishop’s charities).
      • ASORAF’s comment: For (name) to consider next year’s reports and web page
    • The ACFID membership is in the name Anglican Aid. Is this in their own right, as trustee for one of the trusts, or both?
      • ASORAF’s comments: (1) Membership is on behalf of the ORAF only. Previously it was ORAF which is not an entity and was changed to Anglican Aid some years ago; (2) For (name) to consider (for) next year’s reports and web page

(End of review)

 

 

  1. Australian Charities and Not-for-profits Commission, Australia’s national regulator of charities.
  2. I say reportedly because its trust deed says that Anglicare is the trustee. It must have changed.
  3. 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.’
  4. 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.
  5. I use the Pinnacle Financial Statements, respected in the profession as providing a very sound basis for producing compliant financial reports. To this I add an assessment of materiality (both quantitative and qualitative), where the users being considered are donors.

Church Missionary Society Western Australia Inc, charity review

This is a charity review, a review for those with an interest in the Australian charity Church Missionary Society Western Australia Inc (CMS-WA).

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

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 10 June 2016, and invited them to comment. This was their response:

Thank you for your email of 11th (sic) June 2016.  We appreciate the considerable research you have undertaken to inform your readers.  Whilst we do not agree with a number of your observations, please be assured that your email will be brought to the attention of the Branch Committee and if necessary, our records, with relevant public authorities reviewed for completeness.

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. This also applies to the information in the Financial Report.)
  • There is then a more detailed comment on the Financial Report.
  • Lastly, there is a section Membership of accountability organisations.

Sources

  • ACNC Register (including links)
  • Google search on the charity’s name.
  • CMS-WA’s share of a website.
  • Facebook. No other social media.
  • Not on LinkedIn.
  • State government fundraising licence registers.
  • No reviews on Glassdoor.

REGISTRATION DETAILS

Entity Subtype

  • This selection has been overdue since 30 June 2015.
  • ‘Advancing religion’ would seem to be the right selection according to the constitution:
    • The objects of the Branch are to carry out the principles and objects of CMS-A [The Church Missionary Society – Australia Limited] within the State of Western Australia, namely to work for the coming of God’s Kingdom through the proclamation of the Gospel of Christ throughout the world in fellowship with local churches…

CHARITY DETAILS

Legal Name

  • CMS-WA is a Western Australian incorporated association (A0750136M).
  • It is a mission agency of the Anglican Church (see page 27 here).

Other Name(s)

  • No business names are held, so CMS-WA should always be using its full name.

Charity ABN

  • Tax deductibility: No, you cannot claim a tax deduction for a donation to CMS-WA.
    • How, then, has it received $45K of ‘Tax deductible donations’ (see below)?

Charity Street Address

  • Christian Conventions of WA Inc also have this as their address. Canon Raymond Arthur (see Responsible Persons, below) is a responsible person (the Chairperson) of that charity as well.
  • No postal address on the website.

Website

  • Not one of its own, but a page on Church Missionary Society – Australia’s site.

ANNUAL REPORTING

  • AIS 2015
    • This is CMS-WA’s compulsory Annual Information Statement 2014 (AIS 2015).
    • It gives basic financial information. If you think that this might be sufficient for you
      • The statements are not general purpose financial statements, as claimed here, but the ones requiring less disclosure, special purpose financial statements.
      • ‘Employee expenses’ appears to include the $5K ‘Book-keeping fee’.
      • ‘Total expenses’ is overstated by $1K.
  • Financial Report 2015
    • There is nothing in this report to say when the Committee approved the accounts (or even if they did), but the auditor signed his report on 23 October 2015, four months after year end.
    • It was then lodged three months after that, four days before the (extended) deadline.
    • The coverage of finances in this review is left until the financial report proper (see Latest financial report – detail, below). (Go straight there.)

ABOUT THE CHARITY

  • Statement of Faith
    • Nothing on the website. But as a branch of CMS-A, it is required to ‘carry out the principles and objects of CMS-A’, so that charity’s statement would apply.
      • CMS-A doesn’t have a conventional statement of faith on its website, but there is a short statement of what they believe under ‘Our Foundations’.
    • The Apostles Creed is included as Appendix 1 to the CMS-WA’s constitution as a ‘statement of faith’.

Date Established

  • The books and records were donated to the J S Battye Library of West Australian History in 1984.
  • I expect that CMS-WA is mentioned in the history on the CMS-A website, and in this book.

Who the Charity Benefits

  • Vision & Mission
    • Nothing separate to CMS-A.
  • Activities (What did CMS-WA do?)
    • In the AIS 2015:
      • CMS workers have continued to serve as co-labourers with over 100 international partners, including churches, schools, universities and Christian organisations, in more than 35 countries around the world. Our partners are involved in ministries that fit with our gospel vision and purpose. Our partners have welcomed CMS workers into their programs and ministries to share the lasting hope of Jesus Christ with people. We have continued to encourage people to get involved in cross-cultural mission through our six branches across Australia. The CMS-Australia office, based in Sydney, works for and on behalf of the branches to train cross-cultural workers, place them with international partners and provide pastoral care for them. CMS is a deductible gift recipient for provision of overseas aid in several countries, for aboriginal work in North Australia and in support of St Andrews Hall, the CMS training college in Victoria.
        • Apart from substituting ‘WA’ for ‘six branches across Australia’, this is identical to what appeared in CMS-A’s AIS for last year. So nothing specific about either CMS-WA’s activities, or 2015’s activities, as requested.
    • Current activities are described on the webpage.
  • Outcomes (What did CMS-WA deliver?)
    • CMS-WA did not respond to the request in the AIS for its outcomes.
    • Nothing found.
    • I’m sure there would be some anecdotal information under ‘Resources’ in the main menu of CMS-A’s site.
  • Impact (How were people’s lives improved?)
    • Nothing found.
    • Perhaps there’s some anecdotal information under ‘Resources’ in the main menu of CMS-A’s site.

Size of Charity

  • CMS-WA is less than 100K over the threshold for this size, so well short of the next one (the largest).

Financial Year End

  • This means that the next financial report is due by 31 December 2016 – or 31 January if the ACNC again gives its (generous) extension (to all charities). Before that the financial information on the Register will be up to 18 months out-of-date.
    • You may therefore need to ask for more up-to-date information.

WHERE THE CHARITY OPERATES

Operating State(s)[1]

  • From its website, it is not clear how CMS-WA raised its $316K of donations, but it doesn’t have a fundraising licence in WA.
    • Nor in any of the other six states that have a licensing regime.
  • CMS-WA doesn’t have a request for donations on its webpage.

Operates in (Countries)

  • For this to be blank, presumably any missionaries recruited in WA belong to CMS-A.

CHARITY’S DOCUMENT (SIC)

  • An Annual Report/Review can be lodged on the ACNC Register, but CMS-WA hasn’t done this.
  • Nor is there one on the website. (Nor one elsewhere on the website.)

RESPONSIBLE PERSONS

No. of Australian ‘responsible person’ positions[2]

Canon Raymond Arthur     This function was still not working

Carol Dolan

Naomi Flavell

Bradley Galvin

Khim Harris

Gregory Heath

Caitlin Healy

Matthew Lovell

Stephen Pivetta

Peter Schendzielorz

  • The directors are not shown on the website.
  • Under ‘Position’: the constitution also requires a deputy Chairperson.

(End of review of the ACNC Register information)

Latest financial report – detail[3]

  • This report did not get a ‘clean’ audit opinion. In fact, it is arguable that it should have got an even stronger indictment of its quality than the auditor gave it.
    • The auditor does not have the professional registration that is required to do this audit.
  • The report is missing two of the four compulsory financial statements.
  • The directors believe that a special purpose financial report is acceptable. This choice allows them to make less than a full disclosure about CMS-WA’s finances and operations, and is implicitly a statement that any current or prospective user is able to command the preparation of a financial report tailored to their needs. Do the directors realise they are saying this?
  • The report does not explain the relationship between CMS-WA and CMS-A, something that is integral to understanding the accounts.
  • The majority of the required Notes are missing.

Where the directors put their name to the report – the Statement by the Branch Committee (page 2 of the Financial Report)

  • This is unsigned. (Have the accounts even been approved?)

An independent opinion on the financial statements – the Independent Audit Report… (page 3 of the Financial Report)

  • This auditor, Jeffrey T. Byerley, because he is not a ‘registered company auditor’, is not qualified to do this audit.
  • This report is a not a ‘clean’ opinion, but a qualified opinion. (Read here to draw the right conclusions from this).
    • He says that CMS-WA ‘has determined that it is impracticable to establish control over the collection of gifts and donations prior to entry into its financial records’. So for 92% of the revenue, CMS-WA cannot be sure that what is reported is actually all that was given by donors. Why not? Other charities can do it.
  • With this size gap in the audit procedures, it could be argued that CMS-WA got off lightly – an adverse opinion may well have been more appropriate.
  • He has also omitted the obligatory ‘Emphasis of Matter’ paragraph.
  • And allowed CMS-WA to submit a Report that is missing two of the four required financial statements.

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

  • Cash and cash equivalents $433K, including Note 2
    • Debtors $9K
      • This is neither cash nor a cash equivalent, but a separate asset.
      • Nothing is sold on credit, so why debtors?
      • Why such a large increase over last year?
      • Has the collectability of this money been considered?
    • CMS House Account
      • There is no explanation of this item.
    • Legacy Endowment Account
      • There is no explanation of this item.
    • Even without Debtors, the total represents 15 months of revenue.
  • Property, plant & equivalent (sic) $631K, including Note 3
    • I think they meant ‘equipment’, not ‘equivalent’.
    • Woodvale House $631K
      • Why is this held?
      • If rented (to Canon Raymond Arthur?), where is the rent under Income?
      • Is a valuation planned?
      • Why is the building not depreciated (an Accounting Standard requirement)?
  • Provisions, including Note 5
    • No long service leave?
  • Reserves $829K: there is no breakup of this amount.

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

  • This is a long-outdated format for this statement. It is missing an ‘Other comprehensive income’ section, and it is revenue that has to be disclosed, not income.
  • General missionary support $238K
    • Where is the ‘specific’ support?
    • If missionaries are being supported, why is the Register blank under Operates in (Countries)?
  • Tax deductible donations $45K
    • There is no explanation for the presence of this item when donations to CMS-WA are not tax deductible.
  • Two disclosures that it is reasonable for you to see are administration expenses and fundraising expenses. Neither are disclosed here.
  • Funds remitted to CMS-Aust $193K
    • There is no explanation for this item.
    • It represents 56% of revenue.
  • Events expenses $7K
    • Deducting this from ‘Mission Events and Projects’ income leaves less than 2K. Were the events worth the effort?
  • Staffing expenses
    • This represents 23% of expenses, 20% of revenue, and 22% of donations and bequests.

Essential information to go with the figures – the Notes to and forming part of the financial statements (page 6 of the Financial Report)

  • Note 1: Summary of Significant Accounting Policies
    • The directors don’t say why they think that CMS-WA is not a reporting entity.
      • The implication is that they think that all those currently involved with CMS-WA, plus all those who might become involved as a result of CMS-WA’s promotions and website, can get a financial report tailored to their particular needs.
    • Missing:
      • The type of entity (individual, not-for-profit), functional and presentation currency,
      • Date the accounts were authorised for issue.
      • Which Accounting Standards they complied with.
    • (b) Plant & Equipment
      • CMS-WA also has property.
      • Missing: impairment as part of the valuation, the useful lives adopted, policies on the review of the depreciation factors and derecognition.
    • (c) Employee Benefits
      • What are the benefits?
      • Page heading duplicated.
    • (d) Goods and services tax
      • Missing: policies on receivables and payables, cash flows, and commitments and contingencies.
    • (e) Revenue
      • The policy on legacies is not consistent with the Accounting Standards.
      • The policy on interest is not consistent with the accruals basis.
      • There haven’t been any grants for at least two years.
    • (g) Critical Accounting Estimates and Judgments
      • The most important input is not mentioned: prediction of the future.
    • Missing policy Notes:
      • New, revised or amending Accounting Standards and Interpretations adopted
      • Current and non-current classification
      • Impairment of non-financial assets
      • Trade and other payables
      • Fair value measurement
      • New Accounting Standards and Interpretations not yet mandatory or early adopted
  • Notes normally included, even if the amounts are zero, but missing here:
    • Remuneration of auditors
    • Contingent liabilities
    • Commitments

Membership of accountability organisations claimed

(End of review)

 

 

  1. 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.’
  2. 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.
  3. I use the Pinnacle Financial Statements, respected in the profession as providing a very sound basis for producing compliant financial reports. To this I add an assessment of materiality (both quantitative and qualitative), where the users being considered are donors.

The Christian charity Praxeis: a review

This is a charity review, a review for those with an interest in the Australian charity Praxeis.

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

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 6 June 2016, and invited them to comment. They did not respond.

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. This also applies to the information in the Financial Report.)
  • There is then a more detailed comment on the Financial Report.
  • Lastly, there is a section Membership of accountability organisations

Sources

  • ACNC Register (including links)
  • Google search on the charity’s name.
  • Praxeis website.
  • Facebook. No other social media presence found, including LinkedIn.
  • State government fundraising licence registers.
  • No reviews yet on Glassdoor.

REGISTRATION DETAILS

Entity Subtype

  • A subtype consistent with sharing the Gospel.
  • Sharing the Gospel is integral to the objects in the constitution:
    • The Company has been established to pursue the mission of the Church in making disciples of Jesus Christ under His headship and following his leadership and teachings…

CHARITY DETAILS

Legal Name

  • Praxeis is a company limited by guarantee. It is permitted to omit ‘Limited/Ltd’ at the end of its name.

Other Name(s)

  • No business names are held, so Praxeis must operate only under its legal name.

Charity ABN

  • Tax deductibility: No, you cannot claim a tax deduction for a donation to Praxeis.

Charity Street Address

  • This is the address of Crossway Baptist Church. That church describes Praxeis as ‘a mission arm of Crossway’ (see Related Parties, later.)
  • No postal address on the website.

Email

  • There is an alternative on the website: connect@praxeis.org.au.

Phone

Website

  • From the Google search: www.praxeis.org.au.

ANNUAL REPORTING

  • AIS 2015
    • This is Praxeis’s compulsory Annual Information Statement 2015 (AIS 2015).
    • It gives basic financial information. If you think that this might be sufficient for you
      • The statements are not general purpose financial statements, as stated here, but those where the assumption is that anybody interested in the charity can request a financial report tailored to their individual needs.
  • Financial Report 2015
    • The Report was signed three months after the year end.
    • It was then lodged four months after that, right on the last day permissible (and that was after a generous extension by the ACNC).
    • The coverage of finances in this review is left until the financial report proper (see Latest financial report – detail, below). (Go straight there.)

ABOUT THE CHARITY

  • Statement of Faith
    • Nothing on the website.
    • But in the constitution, as Schedule 1 (Charity’s Document (sic), below).

Date Established

  • No history found, either on the website or on the internet.

Who the Charity Benefits

  • Vision and Mission
    • Some of the ‘hubs’ have their own vision as well.
  • Activities (What did Praxeis do?)
    • In the AIS 2015:
      • The principal activities of the company during the financial year were sharing the Christian message of Jesus Christ in order to make disciples of Jesus Christ, training Christians to plant churches throughout Australia and the world, assisting the leaders of planted churches to run and grow the church and providing ongoing ministry training, mentoring and support for church ministers and leaders.
        • The lack of specifics means that we can’t tell whether this is particularly about 2015. (And the AIS 2014 is, without explanation, blank, so can’t be checked.)
  • Outcomes (What did Praxeis deliver?)
    • Praxeis did not respond to the request in the AIS for its outcomes.
    • Nothing systematic found.
  • Impact (How were people’s lives improved?)
    • Nothing systematic found.

Size of Charity

  • Praxeis is $219K short of the threshold for the next size, the largest (‘Large’)

Financial Year End

  • This means that the next financial report is due by 31 December 2016 – or 31 January if the ACNC give their usual extension (to all charities). Before that the financial information on the Register will be up to 18 months out-of-date.
    • You may therefore need to ask for more up-to-date information.

WHERE THE CHARITY OPERATES

Operating State(s)[1]

  • Praxeis has a fundraising licence in none of these five states. Nor in the two others that have a licensing regime.
  • Praxeis has a general appeal for donations under ‘Give’ in its main menu, and a specific request under one of the ‘hubs’.
    • Apart from exemptions, whether it needs a licence depends on whether it is ‘fundraising’ in those states in which it operates, and whether those states, and the others, think that Praxeis, by calling for donations publicly, is ‘fundraising’ in their territory.

Operates in (Countries)

  • This listing matches the information under ‘Hubs’ on the main menu.

CHARITY’S DOCUMENT (SIC)

  • An Annual Report/Review can be lodged on the ACNC Register, but Praxeis hasn’t done this.
  • Nor is there one on the website.

RESPONSIBLE PERSONS

No. of Australian ‘responsible person’ positions[2]

James Hall             This function was still not working at the time of publication

Francis Hoe

Xiaoyue, Jiang

David Lawton

Brett Mitchell

Dale Stephenson

  • Two of these directors are also directors of Crossway Baptist Church, a related party.
  • Unless Jiang, the Secretary, is a member of the board, he should not be included on the Register.
  • The makeup of the board has not changed since 5 October 2015 (assuming changes have been notified to the ACNC).
  • The directors are not shown on the website.

(End of review of the ACNC Register information)

Latest financial report – detail[3]

  • The directors’ belief that ‘a special purpose financial report’ is acceptable, a choice that allows them to make less than a full disclosure about Praxeis’s finances and operations, is implicitly a statement that any user is able to command the preparation of a financial report tailored to their needs. That’s all the people who they speak to around Australia and all the donors and potential donors who read the website material. Do the directors realise they are saying this?
  • The relationship between Praxeis and Crossway Baptist Church is close, and Praxeis acknowledges that the church is a related party, but the nature of the relationship is not identified.

The Directors’ Report (page 1 of the Financial Report)

  • This is not required by the ACNC. (Nor is the Auditors (sic) Independence Declaration on page 5 of the Financial Report.)
  • Strategy for achieving the objectives: These don’t fit with the objectives very well.
  • Performance measures: this is too generic to be of any help to the reader.
  • Members (sic) guarantee: This, in combination with the constitution, says that the six current directors are the only members of the company. Is this correct?
  • Information on directors:
    • ‘Special responsibilities’: these should not include roles outside the company.
    • The strong connection with Crossway Baptist church is confirmed in the Financial Report.
  • ‘Company secretary’ is normally a separate section.

What was earned, what was consumed during the year – the Statement of Income & Expenditure and Other Comprehensive Income (page 6 of the Financial Report)

  • Note 3 should be against ‘Surplus for the year’.
    • Two of the three expenses in Note 3 are already disclosed in the body of the report, and the third, audit, should be the subject of a separate Note later on.
  • Revenue increased this year by 17%; however Employee benefits expense increased by 40%.

Revenue

  • Revenue $780K, including Note 2
    • Presumably ‘General Donations’ means those given without designation, but this is only 2% of revenue. The meaning of the other donation line items is not explained.
      • $150K out of $780K revenue is too large for ‘Other’. Especially as it is not a one-off – even more was received last year.
    • ‘In-kind Rental Income’ is not explained. What is rented out?
    • Note 1 (i) reports that some of the cash given to ‘ministry staff’ may not have made it into the company’s bank account.

Expenses

  • This list mixes the two permissible classifications of expenses.
  • Two disclosures that you might want, administration expenses and fundraising expenses, are not disclosed.
  • Employee benefits expense $565K
    • If part-timers averaged 50%, and the one casual 10%, of full-time hours, this total represents average benefits of $45K p.a.
    • This is 82% of expenses.
    • The next largest expense, Ministry expense, is only 9% of total expenses.
  • Ministry expense $62K
    • The whole charity is a ministry, so what is this item?
  • Gifts and donation expense $6K
    • Presumably this represents donations made by Praxeis to others.
    • It represents less than one per cent of revenue.

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

  • Cash on hand $218K, including Note 4
    • This should be ‘Cash and cash equivalents’.
  • Other financial assets $281K, including Note 5
    • The combination of these term deposits and ‘cash on hand’ represents seven months of revenue.
    • Why is it necessary to have investments with a maturity longer than three months?
    • The inclusion of the three month term deposit is contrary to the policy for Cash on hand (Note 1 (d)).
  • Other assets $16K, including Note 7
    • Given the level of investments and the size of the charity, this seems a large amount. And it is over three times as large as last year.
  • Provisions $17K (current), $34K (non-current), including Note 9
    • The Note just repeats was is in the statement. What are these provisions? Employee benefits? (Those don’t appear to be anywhere elsewhere in the statement.)
  • Other liabilities $49K, including Note 10
    • As this money is owed to employees, why is it not included with employee benefits?
    • Why would $22K of staff benefits be payable to another charity?

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

  • 1 Summary of Significant Accounting Policies
    • (a) Basis of preparation
      • Is it really the case that all those currently involved with Praxeis, plus all those who might become involved as a result of Praxeis’s promotions and website, can get a financial report tailored to their particular needs? (This is the implication of not producing general purpose financial statements.)
      • Better practice is to list the Accounting Standards complied with.
      • Missing:
        • functional and presentation currency,
        • registered office and principal place of business
    • (b) Plant and Equipment
      • There is only one class.
      • Depreciation, for this method, is more helpfully expressed as a number of years.
    • (e) Employee benefits
      • There is no distinction between short-term and long-term benefits.
    • Policy Notes normally included but not in these accounts:
      • New, revised or amending Accounting Standards and Interpretations adopted
      • Current and non-current classification
      • Trade and other payables
      • New Accounting Standards and Interpretations not yet mandatory or early adopted
  • 11 Reserves
    • A restricted / unrestricted split would be helpful.
    • There is no explanation of ‘the Telegul ministry’ or ‘the Genesis Foundation’, or why they should be separate reserves.
    • Staff Support Reserve $136K: As the employees will eventually leave, why is this amount not a liability?
  • 12 Contingent Liabilities
    • These amounts do not meet the definition of a contingent liability.
  • 13 Related Parties
    • The nature of the relationship with Crossway Baptist Church is not identified.
      • Praxeis is, according to the church itself, a ‘mission arm’ of the church.
      • Two of the six directors are directors of the church, another was a pastor there for 11 years, and a fourth is a pastor of Crossway North Baptist Church.
      • Does all this mean that the church, according to the Accounting Standards, controls Praxeis (and should therefore consolidate it with its own accounts)?
  • Notes normally included, but not in these accounts:
    • Critical accounting judgements, estimates and assumptions
    • Commitments (even if there aren’t any)
    • Events after the reporting period

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

  • This report is a ‘clean’ opinion (read here and here to draw the right conclusions from this).
  • Completeness of Income: this unusual inclusion is called an ‘emphasis of matter’ paragraph. It means that the auditor thought that this matter is ‘of such importance that it is fundamental to users’ understanding of the financial report’ [AAS 706, paragraph 4, www.auasb.gov.au]. Note well the content.

Membership of accountability organisations claimed

(End of review)

 

 

  1. 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.’
  2. 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.
  3. I use the Pinnacle Financial Statements, respected in the profession as providing a very sound basis for producing compliant financial reports. To this I add an assessment of materiality (both quantitative and qualitative), where the users being considered are donors.

One Mission Society Australia Inc, charity review

This is a charity review, a review for those with an interest in the Australian charity One Mission Society Australia Inc (OMS).

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

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 6 June 2016, and invited them to comment. They responded, but chose to submit neither corrections nor comments for publication.

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. This also applies to the information in the Financial Report.)
  • There is then a more detailed comment on the Financial Report.
  • Lastly, there is a section Membership of accountability organisations

Sources

  • ACNC Register (including links)
  • Google search on the charity’s name.
  • OMS website.
  • Facebook, and Instagram. (The other button in the webpage footer, YouTube, is not for OMS, but the international organisation. Same for LinkedIn.)
  • State government fundraising licence registers.
  • The reviews of One Mission Society on Glassdoor are not on OMS, but the US organisation.

REGISTRATION DETAILS

Entity Subtype

  • A subtype consistent with sharing the Gospel.
  • The constitution doesn’t specify which religion is to be advanced:
    • The purposes of the association are – To promote missionary interests and work in the State of Victoria, other states of Australia and foreign lands through any or all of the following activities…

CHARITY DETAILS

Legal Name

  • OMS is a Victorian incorporated association (A0029551N).
  • It changed its name from OMS International Aust Inc three years ago.

Other Name(s)

  • No business names are held, yet OMS uses other names.
    • For instance on its page on GiveNow, there are no less than four: OneMission, OMS, One Mission Society,  and One Mission Society Australia.

Charity ABN

  • Tax deductibility: No, you cannot claim a tax deduction for a donation to OMS.
    • Although the ABN record for OMS Overseas Aid Fund still shows the fund as a charity, and one that allows a tax deduction for your donation, the registration of this fund was voluntarily revoked nearly three years ago.

Charity Address for Service

  • This address works.

Charity Street Address

  • Not the same as the one on the website: 44 Dublin Road, Ringwood East, Vic 3135.
  • Postal address, from the website: PO Box 897, RINGWOOD, VIC 3134.

Email

  • This address works.
    • There is an alternative on the website: info@oasaus.org.

Phone

  • From the website: 03 9870 8559.

Website

ANNUAL REPORTING

  • AIS 2014
    • This is OMS’s compulsory Annual Information Statement 2014 (AIS 2014).
    • It gives basic financial information. If you think that this might be sufficient for you then there is just one small mistake: ‘Total revenue’ is $461K (the same as ‘Total Gross Income’).
  • Financial Report 2014
    • The Report was signed two months after the year end.
    • It was then lodged three and a half months after that.
    • The coverage of finances in this review is left until the financial report proper (see Latest financial report – detail, below).

ABOUT THE CHARITY

  • Statement of Faith
    • Only available as part of an application process.
    • But can be seen between clause 8 and 9 in the constitution.

Date Established

  • No history found, either on the website or on the internet.

Who the Charity Benefits

  • Vision
    • Be a part of One Mission Society’s vision to reach one billion people in ten years, one person at a time. 
  • Mission
    • None found.
  • Activities (What did OMS do?)
    • In the AIS 2014:
      • Undertook activities to recruit Australia (sic) people into domestic and overseas missionary roles. These roles include evangelistic, educational and community development and help roles. Managed human and financial resources to be used in these various charitable purposes.
        • The lack of specifics means that we can’t tell whether this is particularly about 2014.
    • Current activities are described under ‘Projects’ and ‘Ministries’ in the main menu.
  • Outcomes (What did OMS deliver?)
    • OMS did not respond to the request in the AIS for its outcomes.
    • Nothing systematic found.
  • Impact (How were people’s lives improved?)
    • Nothing systematic found.

Size of Charity

  • OMS is well over the threshold for this size, but well short of the next one (the largest).

Financial Year End

  • This means that the next financial report is due by 30 September 2016. Before that the financial information on the Register will be up to 18 months out-of-date.
    • You may therefore need to ask for more up-to-date information.

WHERE THE CHARITY OPERATES

Operating State(s)[1]

  • OMS has a fundraising licence in only two of these three states, missing one for its home state.
    • However, the Qld one is in its old name.
  • OMS has ‘Donate’ in its main menu.
  • It also seeks donations– under its old name – on GiveNow.
    • It has a fundraising licence in only one of the other four states have a licencing regime. Apart from exemptions, whether it needs a licence depends on whether those states think that OMS, by calling for donations publicly, is ‘fundraising’ in their territory.
  • Given that it operates interstate, there is a strong argument that OMS, as a registrable Australian body, needs an ARBN. It doesn’t have one.

Operates in (Countries)

  • There are another nine countries mentioned under ‘Our Team’ in the main menu. What are they not included here?

CHARITY’S DOCUMENT (SIC

  • An Annual Report/Review can be lodged on the ACNC Register, but OMS hasn’t done this.
  • Nor is there one on the website.

RESPONSIBLE PERSONS

No. of Australian ‘responsible person’ positions[2]

Alan Baker                   This function was not working at the time of publication

Bernard Blumel

Ian Bongers

Janice Kelly

Nigel Lau

Mark Lo

Mark Lo

Sharon Rodrick

Lynden Trickey

  • ”Mark Lo’ is duplicated.
  • The directors are not shown on the website.
  • Under ‘Position’
    • The constitution requires a Vice-President, a Secretary, and a Treasurer in addition to a chairperson (which should be ‘President’).
    • What is the difference between ‘Director’ and ‘Board member’?

(End of review of the ACNC Register information)

Latest financial report – detail[3]

  • The directors’ belief that ‘a special purpose financial report’ is acceptable, a choice that allows them to make less than a full disclosure about OMS’s finances and operations, is implicitly a statement that any user is able to command the preparation of a financial report tailored to their needs. That’s all the people who they speak to around Australia and all the donors and potential donors who read the website material. Do the directors realise they are saying this?

The Committee members’ report (the first page of the Financial Report)

  • Three of the usual sections are missing.
  • What is included under ‘Performance measures’ is not what is meant by this term.

Contents  (the second page of the Financial Report)

  • The Report is not paginated, so this page is of little use.

What was earned, what was consumed during the year – the Statement of profit or loss and other comprehensive income (the third page of the Financial Report)

Revenue

  • Administration income $30K
    • There is no explanation for this atypical item. (It is new this year.)
    • Nor is there a recognition policy for this item.
  • Designated donations – mission $289K
  • Designated donations – project $130K
    • What is the difference between these two?
    • Is ‘mission’ meant to be ‘missionaries’, thereby matching the donation options on the website?

Expenses

  • This list mixes the two permissible classifications of expenses.
  • Two disclosures that donors often expect to see are administration expenses and fundraising expenses. Neither are disclosed here.
  • Employee benefits expense $237K
    • If part-timers averaged 50% of full-time hours, this total represents average benefits of $47K p.a.
    • This is 51% of expenses.
      • The next largest expense, Ministry expense, is only 12% of total expenses.
  • Ministry expense $59K
    • The whole charity is a ministry, so what is this item?
  • Gifts and donations $16K
    • This giving is 3% of revenue.

What’s left at the end of the year – the Statement of financial position (the fourth page of the Financial Report)

  • Cash and cash equivalents $167K, including Note 5
  • Hold-to-maturity investments $109K, including Note 7
    • These two, combined, represent over seven months of revenue.
    • Why is it necessary to have investments with a maturity longer than three months?
  • Property, plant and equipment $1K, including Note 8
    • Why are there two ‘Accumulated depreciation’ lines?

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

  • Transfers to/from reserves’ are not Transactions with members in their capacity as members.

Where the cash came from and where it went – the Statement of cash flows (sic) (the sixth page of the Financial Report

  • OMS receipts do not come from ‘customers’.
  • With the accrual basis being used, why is ‘Interest received’, the cash figure, the same as interest revenue, the accrual figure?

Essential information to go with the figures – the Notes to the financial statements (the seventh page of the Financial Report)

  • Note 2. Significant accounting policies
    • Basis of preparation
      • Is it really the case that all those currently involved with OMS, plus all those who might become involved as a result of OMS’s promotions and website, can get a financial report tailored to their particular needs? (This is the implication of not producing general purpose financial statements.)
    • Historical cost convention: OMS doesn’t have any of these assets.
    • Revenue recognition
      • OMS doesn’t sell any goods.
      • The revenue is from ‘administration’ services, not ‘computer maintenance fees’.
    • Property, plant and equipment
      • With only one type of plant and equipment, and with the estimation of useful lives being a ‘critical’ estimate, (Note 3), one would have thought that OMS could be more precise than ‘5-8’ years.
      • OMS has neither of the assets mentioned in the second last paragraph.
  • Note normally included, even if the amounts are zero, but missing here:
    • Remuneration of auditors
    • Contingent liabilities
    • Commitments

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

  • This report is a ‘clean’ opinion (read here and here to draw the right conclusions from this).
  • One change to the template was missed – ‘Note 1’, in two places, should be ‘Note 2’.

Membership of accountability organisations claimed

(End of review)

 

 

  1. 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.’
  2. 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.
  3. I use the Pinnacle Financial Statements, respected in the profession as providing a very sound basis for producing compliant financial reports. To this I add an assessment of materiality (both quantitative and qualitative), where the users being considered are donors.