Prison Fellowship Australia: charity review

Mini-charity review of Prison Fellowship Australia (PFA),

The previous review is used as a base, with comment only if the situation has changed or extra information would be helpful.

an organisation that invites the public to donate to it, and that is connected, through a director, John Peberdy, to the organisation that is planning to accredit ‘Christian organisations against a set of standards of good governance, financial oversight, and fundraising ethics.’

2018 review: it has now been running since 16 November 2017. So far it has accredited 10 organisations.

(Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

To see the situation last year, read this review.

Is it responsive to feedback?

  • I sent a draft of the review on 5 April 2017. They did not respond.
  • 2018 review: They did not respond to the draft.

Is it registered?

  • Yes, as a charity.
  • PFA is a public company, a company limited by guarantee.
    • It is entitled to omit ‘Limited/’Ltd’ from the end of its name.
  • It operates, per the ACNC Register, in all eight states of Australia. It has offices in six states. It also fundraises via the internet. However, it has a fundraising licence in only two of the seven states that have a licensing regime[1].
    • 2018 review: PFA has registration in five of the six states that have a licensing regime. There is no explanation for the lack of a licence in Victoria.

What does PFA do?

  • ‘Across Australia there are over 1000 volunteer men and women visiting prisoners, running programs in prisons, organising camps and providing Christmas presents for prisoners’ children, supporting ex- prisoners when they are released, playing sports, running in-prison Bible studies, and providing many other services.’ [https://prisonfellowship.org.au/prison-fellowship-australia/].
  • 2018 review: For their programs, see here.

Do they share the Gospel?

  • The PFA mission is ‘To share the Gospel of Jesus Christ with prisoners, ex-offenders, and their families.’
  • 2018 review: How does this fit with being a public benevolent institution (PBI), an organisation that offers donors a tax deduction?

What impact are they having?

  • Nothing systematic found.
    • The website has only two references to impact.
  • 2018 review: A Google search gives a number of individual stories of impact.

What do they spend outside the costs directly incurred in delivering the above impact, that is, on administration?

  • The expenses are not classified to allow this calculation.

Can you get a tax deduction?

  • It says so on their ABN record, but there is no mention of it on their website.

Is their online giving secure?

  • If security is mentioned it is after you have entered your personal information.

What choices do you have in how your donation is used?

  • Prison Visiting’
  • ‘Angel Tree’
  • ‘The Prisoners (sic) Journey’
  • ‘Sycamore Tree Project’
  • ‘SLAM’
  • ‘Change On The Inside’
  • ‘Camp for Kids’
  • ‘Darwin’
  • ‘Where Most Needed
  • 2018 review:
    • all the above except ‘Prison Visiting’ is now ‘Visiting in Prison’, ‘Where Most Needed’ has become ‘General Ministry’, ‘Darwin’ has been dropped, and ‘Chainbreakers’ has been added.
    • There is no information in the Financial Report showing the use of donations for these purposes.

Is their reporting up-to-date?

  • Yes (six months after their year-end).

Does their reporting comply with the regulator’s requirements?

  • Annual Information Statement 2015 (AIS 2015): No
    • The description of activities is not particularly about 2015.
    • No outcomes are reported.
    • Their business name is missing.
  • 2018 review: AIS 2017: No
    • The description of activities is identical to that provided in 2015, except updated in the reduction in the number of volunteers.
    • No outcomes are reported.
  • Financial Report 2015: No.
    • The directors have again adopted the lower standard special purpose financial statements.
      • It stretches credulity to suggest, as the PFA directors do, that an organisation with $1.70 m turnover, 15 employees, 1075 volunteers, and that has offices in six states[2], had ‘no users who are dependent on general purpose financial statements’.
    • 2018 review: The directors have not changed their mind.
    • Note 1 first says that the financial statements cover PFA ‘as an individual entity’ then, two paragraphs later, says that ‘the report covers (PFA) as a consolidated entity, made up by the following entities:
      • Prison Fellowship Queensland
      • Prison Fellowship National (sic) Territory
      • Prison Fellowship Western Australia
      • Prison Fellowship New South Wales
      • Prison Fellowship Tasmania
      • Prison Fellowship South Australia
      • Prison Fellowship National Office
      • Prison Fellowship Victoria
        • All these entities have an ABN except for ‘National Office’.
        • Four of them are in the former name of PFA, Prison Fellowship of Australia (emphasis added).
    • 2018 review: PFA say that the report ‘covers Prison Fellowship Australia as an aggregated entity…made up of the following entities [as above[2]]
    • Consolidation fits with the fact that the Articles of Association [clause 60A], require ‘Each State Council’ to produce “a balance sheet and profit and loss account’ for their AGM.
    • 2018 review: now ‘aggregation’.
    • But
      • There is no mention of Councils on the PFA website.
      • There are seven state entities above but only six ‘State contacts’.

What financial situation was shown in that Report?

  • A 16% decline in revenue was more than compensated for by a 37% reduction in ‘Employee benefits expense’. This helped to turn a negative 3% return on revenue into a positive 4%.
  • 2018 review: A 2% increase in revenue was swamped by a 30% increase in ‘Employee benefits expense’. This was the principal reason why the deficit increased by 690%.
    • Remaining equity is only 1.3 times the last deficit.
  • The ratio of current assets to current liabilities was increased significantly (from 1.9 to 2.8).
  • 2018 review: The ratio declined significantly, from to 4.0 to 2.0.
  • Long-term financial structure appears sound.
  • 2018 review: long-term liabilities now marginally exceed long-term assets.

What did the auditor say about the last financial statements?

  • Although he gave a ‘clean’ opinion, the auditor, Matthew Hung of rdl.accountants,
    • agreed with the directors’ decision that there are no users (present or prospective) who are dependent on general purpose financial statements (see ‘Financial Report’, above), and
    • 2018 review: Matthew Hung, CA, of rdl.accountants.
    • left in the accounts the confusion over the connection between PFA and its state bodies.
    • 2018 review: The connection between the PFA and its state bodies is clearer. But the need for ABNs for the councils is still not explained.

If a charity, is their page on the ACNC Register complete?

  • Almost – their business name is missing.
    • The governing document is still missing the Memorandum of Association though.

Who are the people controlling the organisation?

  • The nine people shown here on the website.
  • Who are also shown under ‘Responsible Persons’ on the ACNC Register:
  • There are 14 directorships recorded for the name ‘John Peberdy’, and 11 for ‘Peter Hall’. And the register only covers charities, not all not-for-profits, and no for-profit organisations. Therefore, if after eliminating the charities that don’t belong to the PFA director, you are left with their total being more than a handful, it would be legitimate for you to question whether their ability to discharge his fiduciary responsibilities is threatened.
  • 2018 review: Since the revamp of the ACNC website, it is no longer possible to search the register of responsible persons.

To whom is PFA accountable?

  • To the ACNC.
  • And, as a company, to ASIC.

 

 

  1. The licence in NSW is in the name Prison Fellowship of Australia, a NSW entity. The licence in Queensland is in the name Prison Fellowship of Australia Queensland Council; 2018 review: ‘Prison Fellowship of Australia’ is the old name of PFA; the introduction to the Notes to the Financial Statements says that ‘Prison Fellowship Queensland’ and ‘Prison Fellowship Queensland are divisions of PFA. the law in this area is not straightforward – is an internet invitation ‘fundraising’ for instance? – and advice varies, so check with the charity before drawing any conclusions.
  2. Except for the correction of the spelling mistake.

 

MAF Australia: charity review

Two more organisations were recently accredited by the CMA Standards Council[1]. This is a review of one of them, MAF Australia.

An ABN search shows that it ‘is registered with the Australian Charities and Not-for-profits Commission (ACNC)’.

The ACNC, in their Factsheet: Making sure your donation gets to where it needs to, gives “some steps to consider to help make sure your donation is going where it is intended.”

  1. Check the organisation’s name.
  2. Ask for identification from anyone seeking a donation.
  3. Be careful of online requests for donations.
  4. No tax deduction doesn’t mean the charity is not a legitimate one.
  5. Find out more about how the charity says it uses donations.

Here’s the results for MAF Australia:

1: The ACNC Register shows two charities that use the name ‘MAF Australia’:

A bit confusing.

Names in brackets are the names that a charity says are its ‘Other Name(s)’. In this case, the name MAF Australia cannot in any way belong formally to MAF Assist. But MAF Assist is controlled by MAF Australia, and doesn’t have its own website, so there’s obviously a strong connection. And a Google site search of MAF Australia’s site shows why MAF Australia might be another name by which MAF Assist is known:

2. NA

3. MAF Australia’s ‘Donate’ page – not the other pages – ‘begins with ‘https’ and…there is a closed padlock symbol next to the website’s URL in the address bar” on that page.  Although security is not mentioned on the page, this should be a secure way to give to MAF Australia.

4. ABN Lookup says that you cannot get a tax deduction for a donation to MAF Australia. However, its website collects for its subsidiaries too, and, as we saw above, you can get a deduction for a donation to MAF Assist.

5.  The audited account of how the donations are used is the Financial Report 2017 on the ACNC Register. Within that there are two statements that give information on how the donations were used. Most donors think in terms of cash, so if that’s you, you might turn first to the Consolidated Statement of Cash Flows…[2]. This shows that just two items accounted for 100% of the cash outflows for ‘operating activities’:

There is no information given on who received the ‘distribution payments’[3]. And the other statement on how donations were used is no more helpful:

And this from an organisation held up as a leading light in transparency and accountability. End of review[4]

 

 

  1. Their mission is to ‘help build faith and trust in Christian organisations’, including by allowing organisations who are compliant with a set of standards, created by them, to display their seal of approval.
  2. ‘Consolidated’ means that the figures of one or more other entities are included because MAF Australia has control over them. Note 15 shows that this is two entities:
  3. Apart from $15K for the purchase of ‘property, plant and equipment and intangibles’, the remaining cash, $1.66 m, is shown as a financing activity, ‘Increase’(decrease) in other payables’. This is the Note on that item:The applicable Accounting Standard [AASB 107, paragraph 6] defines ‘Financing activities’ as ‘activities that result in changes in the size and composition of the contributed equity and borrowings of the entity.’ A gift (whether done while the person was alive – inter vivos – or through their last will and testament, does neither of these things. It is just a donation like any other.

    Second, why has the change been included as a cash flow? The cash was received in 2016, and the change in classification of the gift in 2017, apart from the minor part of the gift that had to be returned, did not involve the payment of cash.

  4. I sent the charity a draft of this review. Like last year, they didn’t respond.

PeaceWise: charity review

This is a review[1] of PeaceWise, one of the 10 organisations that have been accredited with the CMA Standards Council[2].

From its entry in the Council’s ‘Give Confidently’ directory, it is likely a charity:

The Australian charities regulator, the ACNC, in their Factsheet: Making sure your donation gets to where it needs to, gives “some steps to consider to help make sure your donation is going where it is intended.”

  1. Check the organisation’s name.
  2. Ask for identification from anyone seeking a donation.
  3. Be careful of online requests for donations.
  4. No tax deduction doesn’t mean the charity is not a legitimate one.
  5. Find out more about how the charity says it uses donations.

Here are the answers for PeaceWise:

  1. There is a charity that has put PeaceWise on the charities Register as a name by which it is known by:

By the ABN we can confirm that Peacewise Ltd is the charity that is allowed to use the CMA Standards Council seal[3].

Because it has neither registered PeaceWise as a business name, nor changed its constitution to prohibit the payment of directors’ fees, PeaceWise Limited is still not permitted to trade without ‘Ltd’/’Limited’ on the end of its name.

2. NA

3. PeaceWise’s ‘Donate’ pagebegins with ‘https’ and…there is a closed padlock symbol next to the website’s URL in the address bar”. A secure way to give to PeaceWise. (The page has a ‘Comodo Secure’ icon, but there is no link.)

4. The ABN record says that no tax deduction is available for a donation to PeaceWise. PeaceWise is nevertheless a legitimate charity.

5.  The audited account of how the donations are used is the Financial Report 2017 on the ACNC Register. Within that there are two statements that give information on how the donations were used. Most donors think in terms of cash, so if that’s you, you might turn first to the Statement of Cash Flows. What you might now know though, is that you first should turn to the Notes to the accounts (Notes to the Financial Statements in this case) to check out the ‘Basis of preparation’.

Do you provide or give things to, receive things from, or have oversight of, or review, of the PeaceWise? Perhaps you intend to donate or are one of the donors who together gave $122K last year [Financial Report 2017]? Perhaps you are one of the suppliers who shared in the $415K of payments? [Financial Report 2017], or one of their 10 volunteers [AIS 2017][4]. If so, can you ring PeaceWise’s office and request that they prepare financial statements that answer the question or questions you have about the charity? I very much doubt it. You are therefore ‘potentially interested in the information provided in general purpose reports[5].

You are therefore in the wrong place – I only have access to the published accounts of PeaceWise, and the directors[6], with the agreement of the auditor, have again produced special purpose financial statements, a decision[7] that implies[8] that you don’t exist:

Quite apart from the very questionable application of the Accounting Standards, a special purpose report cannot, by definition, satisfy the CMA Standards Council’s Principle 8, ‘Transparency and Accountability’:

End of review[9].

 

 

  1. For the previous review, see here.
  2. It achieved this by meeting the Council’s ‘Principles and Standards of Responsible Stewardship’, and therefore is able to be promoted as a ‘high quality organisation’.
  3. The name on the ACNC Register is incorrect. It is ‘PeaceWise Ltd’, not ‘Peacewise Ltd’. From prior correspondence, I know that PeaceWise is very careful about its name.
  4. All this spread over operations throughout Australia and overseas in New Zealand [ACNC Register].
  5. From Objective of General Purpose Financial Reporting (SAC2), www.aasb.gov.au:
  6. The people shown here. Probably without the Secretary and the Minute Secretary though. After that adjustment, the this matches the ‘Responsible Persons’ on the ACNC Register:

  7. Last year they said they would review this decision, so if they did as they said they would, then this is a considered, not a careless, decision.
  8. They have again omitted to say why they have made this decision.
  9. I sent a draft of this review to the charity. This was their response: ‘Thank you for your email. We have noted your view of PeaceWise. Please, note that Geoff Bateman resigned from the PeaceWise Board. ‘

 

The Council for Christian Education in Schools: charity review

Two more organisations were recently accredited by the CMA Standards Council[1]. This is a review of one of them, The Council for Christian Education in Schools[2].

With a name like this, it’s most likely a charity.

The Australian charities regulator, the ACNC, in their Factsheet: Making sure your donation gets to where it needs to, gives “some steps to consider to help make sure your donation is going where it is intended.”

  1. Check the organisation’s name.
  2. Ask for identification from anyone seeking a donation.
  3. Be careful of online requests for donations.
  4. No tax deduction doesn’t mean the charity is not a legitimate one.
  5. Find out more about how the charity says it uses donations.

Here’s the results for The Council for Christian Education in Schools (The Council):

1: A search of the Register of charities shows that The Council is a registered charity:

The names in brackets are the names that The Council has said are its ‘Other Name(s)’. The CMA Standards Council says that they trade only under the first two:

Both are registered business names. (There are two others that they have omitted from the list on the Register: Access Ministries Training Institute and Link Up Market[3]).

2. NA

3. ACCESS Ministries web address begins with ‘https’, and there is a ‘closed padlock symbol next to the website’s URL in the address bar”. Likewise for Korus Connect. For each of them, then, a secure way to give. (Neither site mentions security on the giving page though.)

4. ABN Lookup says that you can get a tax deduction for a donation to The Council. However, such a tax deduction is not mentioned in the giving process on either website.

5.  The audited account of how the donations are used is the Financial Report 2017 on the ACNC Register. Within that there are two statements that give information on how the donations were used. Most donors think in terms of cash, so if that’s you, you might turn first to the Statement of Cash Flows. What you might not know though, is that you first should turn to the Notes to the accounts (Notes to the Financial Statements in this case) to check out the ‘Basis of preparation’.

Do you provide or give things to, receive things from, or have oversight of, or review, The Council or one of its arms? Perhaps you are one of the 247 employees or 550 volunteers [AIS 2017], or one of the people who contributed to the $9.87 m of revenue [Financial Report 2017]. If so, can you ring The Council’s office and request that they prepare financial statements that answer the question or questions you have about the charity? I very much doubt it. You are therefore ‘potentially interested in the information provided in general purpose reports[4].

You are therefore in the wrong place – I only have access to the published accounts of The Council[5], and its directors[6], with the agreement of its auditors[7], under the ‘Basis of preparation’, say that you don’t exist[8]. End of review[9].

(And this from an organisation held up as a standard-setter ‘in terms of impeccable corporate behaviour’, a leading light in transparency and accountability.)

 

 

  1. Their mission is to ‘help build faith and trust in Christian organisations’, including by allowing organisations who are compliant with a set of standards, created by them, to display theie seal of approval.
  2. To see the situation last year, read this review.
  3. And Korus Connect is duplicated.
  4. From Objective of General Purpose Financial Reporting (SAC2), www.aasb.gov.au:
  5. The title of Financial Report 2017 says that The Council trades only as Access Ministries. Is this because Korus Connect is a later addition?
  6. Not shown on the website, but from the Register (under ‘Responsible Persons’):

    Stephen Dickins

    Karina Gurbin

    James Hall

    John Peberdy

    Peter Rawlings

    Jorg Selhorst

    Paul Turnbull

    John Peberdy is a director of the company responsible for the CMA Standards Council, Christian Ministry Advancement Ltd.

  7. Grant Thornton, with M A Cunningham signing.
  8. I sent The Council a draft of this review. Like the last two years, they…did not respond.

 

Arrow Leadership: charity review

This is a review of the organisation that has a website in the name Arrow Leadership[1].

Arrow Leadership has an online invitation to give. Its tagline is ‘Led more by Jesus. Lead more like Jesus. Lead more to Jesus’, so it’s most likely a charity.

The Australian charities regulator, the ACNC, in their Factsheet: Making sure your donation gets to where it needs to, gives “some steps to consider to help make sure your donation is going where it is intended.”

  1. Check the organisation’s name.
  2. Ask for identification from anyone seeking a donation.
  3. Be careful of online requests for donations.
  4. No tax deduction doesn’t mean the charity is not a legitimate one.
  5. Find out more about how the charity says it uses donations.

Here are the answers for Arrow Leadership:

  1. There is no charity of that name mentioned on the register of charities[2]:

One expects that Arrow Leadership is the first one, Arrow Leadership Australia Limited, trading under an abbreviation of its name. A search for ‘ABN’ on its site confirms this.

But although it is permitted to trade without ‘Limited/Ltd’ at the end of its name, because it still hasn’t registered a business name, it isn’t legally allowed to trade without ‘Australia’[3].

The second charity above with ‘Arrow Leadership’ in its name, The Trustee for Arrow Leadership – International Development, is a charity controlled by Arrow Leadership Australia Limited. It was established in October 2017, but there is no mention of the fund in the Financial Report for the year ended 31 December 2017. And there is no explanation of the fund on the website even though donations are requested:

2. NA

3. Arrow Leadership’s ‘Donate’ page – not the other pages – ‘begins with ‘https’ and…there is a closed padlock symbol next to the website’s URL in the address bar” on that page. Although security is not mentioned on the page, this should be a secure way to give to Arrow Leadership.

4. The ABN record says that no tax deduction is available for a donation to Arrow Leadership. This is contradicted on the website, where it says that you can get a tax deduction for a donation to a fund that is presumably part of Arrow Leadership, The Brian Coombs Sponsorship Fund. The reconciliation is that Arrow Leadership is collecting for a third party, The Annabel Charitable Foundation Ltd, and presumably the money comes back to Arrow Leadership[4]:

5.   The audited account of how the donations are used is the Financial Report 2017 on the ACNC Register. Within that there are two statements that give information on how the donations were used. Most donors think in terms of cash, so if that’s you, you might turn first to the Statement of Cash Flows. What you might now know though, is that you first should turn to the Notes to the accounts (Notes to the Financial Statements in this case) to check out the ‘Basis of preparation’.

Do you provide or give things to, receive things from, or have oversight of, or review, either or both of the Arrow Leadership charities? Perhaps you intend to donate or are one of the donors who together gave $649K last year [Financial Report 2017]? Perhaps you are one of the 580 in the Arrow Community [Annual Review 2017, 15], or one of their 40 volunteers [AIS 2017]. Perhaps you are one of the ‘suppliers and employees’ who shared in $1.10 m of cash payments?[5] If so, can you ring Arrow Leadership’s office and request that they prepare financial statements that answer the question or questions you have about the charity? I very much doubt it. You are therefore ‘potentially interested in the information provided in general purpose reports[6].

You are therefore in the wrong place – I only have access to the published accounts of Arrow Leadership, and the directors[7] under the ‘Basis of preparation’, say that you don’t exist[8]. End of review[9].

 

  1. For the previous review, see here.
  2. This is not a good start for an organisation that is accredited with the CMA Standards Council. Arrow is a Foundation Partner. At the announcement of the Foundation Partners, Steve Kerr, the Executive Director of CMASC, said “Foundation Partner status is tangible recognition and reward for their efforts – these are high quality organisations.”
  3. https://asic.gov.au/for-business/your-business/small-business/compliance-for-small-business/small-business-knowing-your-legal-requirements-business-names/
  4. It is arguable that their representations are contrary to Standard 9.1 of the CMA Standards Council’s standards.
  5. Annual Report 2017, from the website.
  6. From Objective of General Purpose Financial Reporting (SAC2), www.aasb.gov.au:
    • Mina Ames
    • John Beckett
    • Christopher Edwards
    • Diann Feldman
    • Liam Glover (an Arrow executive)
    • Keith Hanslow
    • Timothy Hawkes
    • Adam Lowe
    • Timothy Morris-Smith
    • There are 167 charities with an Adam Lowe as a board member, and 16 with a Christopher Edwards. But the register only covers charities, not all not-for-profits, and of course doesn’t include for-profit organisations. Therefore, if after eliminating the charities for which Arrow’s Adam Lowe is not a director, and likewise for Christopher Edwards, you are left with the total being more than a handful, it would be legitimate for you to question whether their ability to discharge their fiduciary responsibilities is threatened.The people shown here, and on the ACNC Register (under ‘Responsible Persons’):
  7. The opening statement in the Notes to the Financial Statements:
  8. I sent a draft of this review to Arrow Leadership. They…did not respond.

 

SU Qld: charity review

This is a review of SU Qld, a charity that seeks donations online, and has been accredited as a ‘high quality organisation’ with the CMA Standards Council.  (See here for last year’s review.)

The Australian charities regulator, the ACNC, in their Factsheet: Making sure your donation gets to where it needs to, gives “some steps to consider to help make sure your donation is going where it is intended.”

  1. Check the organisation’s name.
  2. Ask for identification from anyone seeking a donation.
  3. Be careful of online requests for donations.
  4. No tax deduction doesn’t mean the charity is not a legitimate one.
  5. Find out more about how the charity says it uses donations.

Here are the answers for SU Qld:

1.   It is a registered charity via its legal name, Scripture Union Queensland:

2.   NA

3.   SU Qld’sweb address begins with ‘https’ and…there is a closed padlock symbol next to the website’s URL in the address bar”. A secure way to give to SU Qld.

Although they say, below the fold on the ‘Donate’ page, that ‘Your credit card details are never stored with us. They are sent straight to our payment processor over a highly secure connection,’ the name of the provider is not given.

Ministry comment: ‘SU QLD has a well developed risk management approach and is very aware of cyber security threats. As such we are cautious about divulging this type of information. The closed padlock icon indicates the accepted assurance of TLS protocol ( i.e.”bank-level”  security).’

4.   SU Qld does offer a tax deduction.

The ABN record, by showing that SU Qld is a deductible gift recipient both in its own right, and also only ‘in relation to a fund, authority or institution it operates’, Scripture Union Queensland Schools Ministry Fund, suggests that all donations will be tax-deductible. SU Qld gives not explain why this is not the case when you come to give online:

Ministry comment: ‘SU QLD operate a DGR fund under item 1.’

5.   The audited account of how the donations are used is the Financial Report 2017 on the ACNC Register. Within that there are two statements that give information on how the donations were used. Most donors think in terms of cash, so if that’s you, you might turn first to the Consolidated Statement of Cash Flows[1]. Unfortunately, SU Qld has exercised its right to use (the less common) indirect method of disclosing cash flows from operating activities. This means that there is no direct read of where the cash went.

The other statement that talks about flows during the period, the Consolidated Statement of Comprehensive Income, shows what resources were consumed during the period (the cash may be paid out later).

Expenses totaled $30.19 m. $21.30 m (71%) of this was ‘Chaplaincy expenses’. There is no explanation of what this figure includes. While we might be expected to know what a ‘chaplain’ is, we can’t be expected to know what expenses[2]result from having these people, nor the relationship between these expenses and the other major expenses (‘Administration’, ‘Ministry’, and ‘Marketing’).

The second largest expense was ‘Ministry expenses’, $4.06 m, for another 13% of the total. There is no explanation of this term, or what the figure includes. The whole entity, SU Qld, is a ‘ministry’, so the term conveys little or any information.

That’s little or no explanation of the destination of 84% of the expenses. End of review.

Ministry comment: ‘We have reviewed both the format and content of our financial reports with our auditors and are satisfied that we report as required under the accounting standards. Detailed information is also available freely on our website that describes all the activities (eg: camping and training, aka ministries) and chaplaincy programs of SU QLD and how we use the donations we receive from our supporters. The School chaplaincy snapshot, Annual report and Impact statements are three such sources. 

https://www.suqld.org.au/about/making-every-dollar-count/

https://www.suqld.org.au/services/chaplaincy/snapshot-2018/

Reviewer response: When assessing a true and fair view, words published outside the Financial Report cannot compensate for the lack of words inside. See AASB 101, paragraph 112 (www.aasb.gov.au).

 

  1. ‘Consolidated’ means that the figures of one or more other entities are included because SU Qld has control over them. The Notes to the accounts show that it is just one entity:

2.   Because ‘Christian’ charities often have workers who are not paid wages, there is no guarantee that the people working for SU Qld receive a wage.

Ministry comment: ‘We of course do pay our staff and chaplains (see Note 3 of our financial statements). Most of our chaplaincy expenses relate to wages and associated oncosts as we serve over 850 schools in Queensland (see snapshot for further information). We are also blessed, as are many charities, with hundreds of faithful volunteers who support our ministries, including camping and chaplaincy in particular.’

 

Gateway Baptist Church: charity review

This is a charity review of Gateway Baptist Church (Gateway), an organisation that seeks donations online, is a ‘Associated Organisation’ of Missions Interlink, and is accredited with the CMA Standards Council (a founding member).

The Australian charities regulator, the ACNC, in their Factsheet: Making sure your donation gets to where it needs to, gives “some steps to consider to help make sure your donation is going where it is intended.”

  1. Check the organisation’s name.
  2. Ask for identification from anyone seeking a donation.
  3. Be careful of online requests for donations.
  4. No tax deduction doesn’t mean the charity is not a legitimate one.
  5. Find out more about how the charity says it uses donations.

Here’s the results for Gateway:

1: A search of the Register of charities shows two charities with that exact name, and another with ‘Ltd’ at the end:

The one we are looking for, from its website, has Queensland phone numbers. So that leaves just one, in Mansfield. But the ABN at the bottom of each webpage belongs to Gateway Baptist Church Ltd in Mackenzie. It appears that Gateway is using the name without ‘Ltd’, something it is allowed to do under certain conditions.

The Register shows that both charities in postcode 4156 are controlled by the same people. That’s confusing – to which one does your donation go? Whose accounts should you review?

Unfortunately, the giving page makes no distinction between the two. End of review?

2. NA

3. Gateway’s web address does not begin with ‘https’, and there is no ‘closed padlock symbol next to the website’s URL in the address bar”. This is not a secure way to give to Gateway. End of review?

4. It is a legitimate charity (or two), even though its ABN record confirms that, as a church, it does not have deductible gift recipient status.

Why, then, do two of the six giving options offer, without explanation, a tax deduction? And with one of them to a charity with no obvious connection to Gateway, Bloom Asia Ltd? End of review?

  1. The accounts for the Gateway that is said to own the website, Gateway Baptist Church, are not consolidated accounts. That is, they do not include the figures for the other Gateway. The directors don’t say why. They also don’t say why they have changed from general purpose to special purpose financial statements. They are saying, in effect, that all Gateway’s stakeholders, both present and prospective, can get Gateway to prepare a financial report tailored to their needs. For a charity with revenue of $5.97 m, 50 employees, and 996 volunteers (AIS 2017), this is ludicrous.

And all this from an organisation held up as a standard-setter ‘in terms of impeccable corporate behaviour’, a leading light in transparency and accountability. End of review[1].

 

 

  1. I sent the website Gateway a draft of this review. Like the last two years, they…did not respond.

 

Mt Tamborine Conference Centre: charity review

This is a charity review of Mt Tamborine Conference Centre (MTC), an organisation that seeks donations online, and was recently one of the first to be been accredited by the CMA Standards Council (CMASC).

The Australian charities regulator, the ACNC, in their Factsheet: Making sure your donation gets to where it needs to, gives “some steps to consider to help make sure your donation is going where it is intended.”

  1. Check the organisation’s name
  2. Ask for identification from anyone seeking a donation.
  3. Be careful of online requests for donations.
  4. No tax deduction doesn’t mean the charity is not a legitimate one.
  5. Find out more about how the charity says it uses donations.

Here are the answers for MTC:

1: There is no ABN is the name Mt Tamborine Conference Centre. Only via an ASIC search, and then via a business name, does one find that the ABN, and therefore the registered charity, is in the name Mount Tamborine Convention. (That charity holds the business name that is closest to the name on the website and in the CMA Standards Council’s ‘Partner Directory’.)

2. NA

3. MTC’s “web address begins with ‘https’ and…there is a closed padlock symbol next to the website’s URL in the address bar”. A secure way to give to MTC.

4. No tax deduction is possible. But we have seen above that MTC is a legitimate charity.

5. Last year, I reported that MTC included in its Annual Report ‘Financial Reports’ that fell far short of the what is required by the Accounting Standards, and that those reports included a report, by Rod Wallbridge FCA, of an audit that similarly short of what is required by the Auditing Standards. This meant that the financial statements did not comply with Principle 6 of the CMA Standards Council’s ‘Nine Principles of Ministry Accountability’. One year on, and nothing’s changed.

One would expect more from an organisation being held up as a shining light of governance, transparency, and accountability by a ‘Christian’ accrediting body. End of review[1].

 

 

  1. I sent them a draft of this review. Like last year, they…did not respond.

 

Far East Broadcasting Co (Australia): charity review

This is a charity review of Far East Broadcasting Co (Australia) (FEBC), an organisation that seeks donations online[1]. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

To see the situation last year, read this review.

Are they responsive to feedback?

  • I sent them a draft of this review. They…did not respond[2].

Is FEBC registered?

  • As a charity, yes.
    • FEBC reports as part of an ACNC reporting group (the Group). The other members of the group are FEBC Overseas Fund (the Fund), and FEBC Relief Limited (Relief).
      • There’s another company with ‘FEBC’ in its name, FEBC Custodian Limited. Note 17 in the Financial Report (see below) says that this company ‘was established solely to act as trustee for the FEBC Overseas Aid Fund’. It has not been included in the Group[3].
  • FEBC is a public company, a company limited by guarantee.
    • It is permitted to omit ‘Ltd/Limited’ from its name.
  • FEBC holds the business name FEBC Australia, the name it trades under.
  • FEBC is a fundraising vehicle that operates, the ACNC Register says, in all eight states. It also has an internet invitation to donate. It is exempt from registering to fundraise in New South Wales, and has a licence in Queensland and Victoria. No explanation was found for why there is no licence in South Australia or Western Australia[4].
  • The Fund:
    • A public ancillary fund[5].
    • No business names held.
    • Operates, the ACNC Register says, in all eight states. And asks for donations online. But has a fundraising licence only in South Australia[6].
  • Relief:
    • Is a public company, a company limited by guarantee;.
      • It is permitted to omit ‘Ltd/Limited’ from its name.
    • No business names held.
    • Operates, the ACNC Register says, in all eight states, and asks for donations online.
      • But has a fundraising licence only in South Australia, Victoria and Western.[7]

What does FEBC do?

  • ‘About Us’ on the website is not about FEBC, but the international FEBC organisation generally.
  • Here’s what FEBC did in 2017 (from the AIS 2017):
    • In the last financial year, FEBC Australia had (sic) worked hard to effectively communicate needs, relay stories, share prayer points and write up project submissions to raise financial support for overseas projects… (The remainder of their description is about the worldwide FEBC ministry rather than Australian activities.)
  • FEBC operates overseas. The ACNC says that it is in 14 countries, the Annual Report (page 16) 16.
    • The 16 countries are the countries that received ‘Disbursements To Projects and Field…’. Whether this money is sent direct to these countries or via FEBC International or an FEBC office overseas is not disclosed.
  • The Fund: Other than a mention in two superseded Annual Reports, there is no reference to the Fund on the website.
  • Relief: See here.

Do they share the Gospel[8]?

  • No.
    • But they raise money for others that do.
  • The Fund: Not disclosed.
  • Relief: Not disclosed – although with tax deductibility, I doubt it.

What impact are they having?

  • Some anecdotal reports in the Annual Report 2016-2017, and on the website, but nothing systematic.
  • This comment in the Annual Report implies that each radio is heard by 25.12 people:

  • And the statement implies that every listener is changed.
  • The impact is not specified though. Similarly, with the statistic on the ‘Ways to Give’ page:

  • The Fund: No information found.
  • Relief: No information found.

What do they spend outside the costs directly incurred in delivering the above impact, that is, on administration?

  • If we define ‘International Programs’ expense as the expenses that are direct to delivery of the impact, ‘administration’ is 28%.
  • The Fund: Not separately shown.
  • Relief: Not separately shown.

Do they pay their directors?

  • Note 17 to the accounts says that ‘No director received any remuneration’.

Can you get a tax deduction?

  • Not to FEBC, but you can if you donate to Relief.
    • How this fits with their mission – Our goal is to communicate the Good News among the nations by media to inspire people to follow Jesus Christ – is not explained.
  • The Fund: Yes (a public ancillary fund that must give to a deductible gift recipient organisation).
  • Relief: Yes

Is their online giving secure?

  • They have a https URL preceded by a green padlock, so yes.
  • The Fund: as for FEBC
  • Relief: as for FEBC

Where were your (net) donations sent?

  • There is a bar chart in the Annual Report 2016-2017 showing the percentage sent to each of 16 countries, but there is no information in the Financial Report 2017.

Is their reporting up-to-date?

  • Yes (lodged five months after their year-end – a month later than last year).
    • But if you are considering a large donation, I would ask for more up-to-date financial information – the accounts are for a year that finished nine months ago.
  • The Fund: doesn’t report separately
  • Relief: doesn’t report separately

Does their reporting comply with the regulator’s requirements?

  • Group AIS 2017: No
    • Most of what is under ‘activities’ is about the FEBC organisation overseas.
    • No outcomes are reported.
    • The list of countries is one sort of that for FEBC.
    • ‘Other income’ does not match the same item in the financial statements.
  • Group Financial Report 2017: Above the minimum, yes, but not anywhere near ‘the utmost integrity’ [footnote viii]. Like last year
    • There is no explanation for
      • the inclusion of a second income statement, Income Statement for ACFID purposes, especially when FEBC is not a member of the ACFID (Australian Council for International Development); and
      • the relationship between the two statements.
    • Statement of Income and Other Comprehensive Income
      • There is no explanation for
        • Revenue, and
        • The item that comprises 77% of expenses, ‘Other expenses…’
    • Income Statement for ACFID purposes
      • There is no explanation of the terms used.
      • A note says that ‘Direct and indirect costs have been allocated using an activity based absorption costing approach.’, but no explanation of this approach is given.
      • The Annual Report (page 13) says that their ‘activity based (sic) absorption costing approach’ includes ‘Showing details of FEBC Australia’s international programs either by program or by country’. There is no such disclosure in the Financial Report.
    • Balance Sheet
      • There is no explanation for how a Group of this size was able to operate an office without any ‘Furniture, Fittings and Office Equipment’?
      • The treatment of ‘Financial Assets’ does not appear to be compliant with the Accounting Standards.
        • There is a ‘Change in Fair Value of Financial Assets’ included in profit or loss.
      • ‘Land and Buildings’ consist of two properties in Caringbah.
        • How was the combined cost only $93K?
        • Should one be classified as investment property?
  • The Fund: doesn’t report separately
  • Relief: doesn’t report separately

What financial situation was shown by that Report?

  • The surplus as a percentage of income declined slightly, from less than one half a per cent positive to the same figure but negative.
  • Working capital (current assets less current liabilities) is strongly positive.
  • With minimal non-current liabilities, longer term financial structure appears sound.
  • The Fund: doesn’t report separately
  • Relief: doesn’t report separately

What did the auditor say about the last financial statements?

  • The auditor, Lawrence R Green FCA, of Shedden & Green Partners, issued a ‘clean’ opinion.
    • To take the right amount of comfort from a ‘clean opinion’, please read here and here.
    • His report misnames two of the reports and includes a reference to an Act that FEBC is not required to comply with.
  • The Fund: not separately audited
  • Relief: not separately audited

If a charity, is their information on the ACNC Register complete?

  • Group: No
    • Overseas is not mentioned under ‘Who the Group Benefits’.
    • The number of countries is one short of the number shown by FEBC.
  • FEBC: No
    • Overseas is not mentioned under ‘Who the Charity Benefits’.
    • Did FEBC operate in all 14 countries listed under ‘Operates in (Countries)?
    • ‘Phone’ and ‘Website’ are blank, but the ACNC says that they are not compulsory.
  • The Fund: ‘General community in Australia’ is not correct for ‘Who the Charity Benefits’. (‘Phone’ and ‘Website’ are blank, but the ACNC says that these are not compulsory.)
  • Relief: ‘Size of Charity’ is blank. (‘Email’ and ‘Website’ are blank, but the ACNC they are not compulsory.)

What choices do you have in how your donation is used?

  • Quite a few, presented a little confusingly.
  • Under the ‘Donate’ button in the main menu, other than being able to write in the name of a tax-deductible project, there is only one.
  • But to ‘donate’ is not the only way to give. Under ‘Get involved’/ ‘Ways to Give’ in the main menu, there are these three options:
    • ‘Give a radio’
      • Why is there a box to write the name of a tax-deducible project?
    • ‘Give to a project’
      • 12 projects (one of which is a radio, which is also a gift (see below), and a separate option (see above).
    • ‘Give a gift’
      • “The page you are looking for is no longer here, or never existed in the first place (bummer).”
  • The Fund: Not distinguished from FEBC (above).
  • Relief: Not distinguished from FEBC (above).

Who are the people controlling the organisation?

  • Not shown on the website, but the ACNC Register shows them (under ‘Responsible Persons’):
  • Six board meetings were held during the year. Peter Elliott attended four, Vanessa Hall only three.
  • There are 11 directorships on the ACNC Register in the name ‘David McDonald’. And the register only covers charities, not all not-for-profits, and of course no for-profit organisations.  Therefore, if after eliminating the charities for which FEBC’s David McDonald is not a director, you are left with the total being more than a handful or so, it would be legitimate for you to question whether his ability to discharge his fiduciary responsibilities is threatened.
  • The board is accountable to the members. They were 47 members at year-end (unchanged from last year).
  • The Fund: Elliott, Keegan, McDonald and Tant above.
  • Relief: the same four as The Fund

To whom are FEBC accountable?

  • The following five logos and one button appear at the bottom of the About Us page on the website:

    • The ‘FIA’ is Fundraising Institute Australia. Members must comply with its fundraising standards. FIA membership confirmed.
    • FEBC International is ‘an interdenominational radio network ministry, which brings the love of God to the world by broadcasting the gospel of Jesus Christ.’[10] Organisationally it is also a company in Singapore that provides services to the national organisations, including FEBC. There doesn’t appear to be any accountability involved.
    • Global Development Group is a charity, an “Australian-founded non-government overseas humanitarian development organisation”. FEBC is not accountable to it.
    • Missions Interlink has an accountability regime.
      • For one opinion on the strength of this accountability, see the section Activities in this review.
    • The last logo is ACNC’s ‘Charity Tick’.  It is used to show that FEBC is registered.  Rightly so, because it would be unwise to give to a charity that is unregistered.
    • Beyond registration, the ‘tick’ only means that the charity’s AIS is not overdue, and that no compliance action has been take against it.
    • The ‘FEBC Policies, Terms & Conditions’, leading as it does to a policy on feedback/complaints, shows that FEBC believes that it is accountable to its stakeholders.
  • Elsewhere, FEBC displays a seal issued by the CMA Standards Council:

[11]

  • One of the FEBC board members, Vanessa Hall, is the Chair of this Council (‘CMA Standards Panel’ on her profile), the body that accredited FEBC.
  • The Fund: Not separately identified.
  • Relief: Not separately identified.

 

 

  1. Although the button is called ‘Donate’, maybe it will change to ‘Support us’:I think they mean ‘name recognition’, not ‘name acquisition’.
  2. Last year, when sent a draft of this review, they responded quickly. However, they did not want to either suggest corrections or submit comments for publication.
  3. Whether this is because it was not included in the application to the ACNC, or whether the ACNC refused the request, is not known.
  4. No search of Tasmanian licences was possible.
  5. The ABN record incorrectly records (a) the ‘Entity name’ as The Trustee for FEBC Overseas Fund’ (the trustee is FEBC Custodian Limited), (b) the ‘Entity type’ as ‘Discretionary investment trust’.
  6. No search of Tasmanian licences was possible.
  7. No search of Tasmanian licences was possible.
  8. Good living and social concern are important [to the cause of evangelism], but they are not uniquely Christian graces…I’ve met a lot of fine Hindus, Muslims and atheists. Just living the life is not going to bring someone to Christ. There is much more to it than that. We must help people, certainly, but we must also share with them why we are motivated to do so. We must stand against injustice, poverty and need, but we must at the same time point to the One who brings justice and who can meet the deepest need. Until they know our reasons, how can they come to know our Lord?” [Dan Armstrong, the Fifth Gospel: The Gospel According to You, Anzea Books, pp. 13-14.
  9. His description for FEBC is ‘Civil Rights and Social Action’.
  10. FEBC Annual Report 2016-17, page 3.
  11. This ‘passing grade’ does not, as is claimed in the Annual Report 2016-2017, show ‘clearly that FEBC carries out tremendous work across the world, bringing hope, changing lives, with utmost integrity’. There’s nothing in the accreditation about impact, nor enough to warrant claiming that level of integrity.

 

Christian Ministry Advancement Ltd: charity review

This is a charity review of Christian Ministry Advancement Ltd (CMA), an organisation that seeks donations online. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

CMA is also the organisation that is, via the CMA Standards Council, giving a seal of approval to Christian organisations who meet[1]a set of standards of good governance, financial oversight, and fundraising ethics.”[2]

For the previous review, see here.

Is it responsive to feedback?

  • CMA provides a forum for Christian leaders to receive feedback, but there’s no invitation to submit feedback on itself.
  • Principle 8.7 of the CMA Standards Council’s ‘Nine Principles of Ministry Accountability’, compulsory for its ‘accredited partners’, says that

    • But CMA doesn’t appear to have such a mechanism itself.
  • CMA has much on its website about accountability for Christian leaders and ‘Christian’ organisations, but nothing about its own accountability.
  • I sent them a draft of this review. Like last year, they…did not respond.

Is it registered?

  • But the one that it uses most, ‘CMA’ is not registered. (And ASIC says that it is not available.)
  • CMA is a member of the EA Foundation ‘family’, an affiliate.
  • CMA is a public company, a company limited by guarantee.
    • It appears to have the provisions in its constitution to enable it to omit ‘Ltd/Limited’ at the end of its name.
  • The ACNC Register says that CMS operates throughout Australia, ‘Grants and donations’ is easily its largest source of revenue, and it seeks donations via its website. It doesn’t explain why it has no fundraising licences.

What does CMA do?

Do they share the Gospel[3] [2]

No. It’s not part of their mission.

What impact are they having?

  • Nothing systematic found.

What do they spend outside the costs directly incurred in delivering the above impact, that is, on administration?

  • The expenses are not classified to allow this calculation.

Do they pay their directors?

  • This is not permitted by the constitution.
  • There is insufficient disclosure to say.

Can you get a tax deduction?

  • No

Is their online giving secure?

  • Yes

What choices do you have in how your (online) donation is used?

  • None

Where were your (net) donations sent?

  • The AIS 2017 reports that CMS did not make any grants or give any donations.

Is their reporting up-to-date?

  • Yes (six months after their year-end, on the last day they were due, and 10 days later than last year).

Does their reporting comply with the regulator’s requirements?

  • Annual Information Statement 2017 (AIS 2017): N0
    • ‘Revenue from providing goods or services’ is incorrect.
    • Outcomes’ are not reported.
    • One business name and ‘CMA’ are still missing
  • Financial Report 2017: No
    • The directors say that ‘there are no users dependent on general purpose financial statements’, implying that any of CMA’s stakeholders, both present and prospective, who require financial information to make a decision, are able to command the preparation of statements tailored to their needs. With a professional management, operations in all states, hundreds of subscribers, others who attend events who are not subscribers, a public invitation to donate, and a high-profile initiative to give a seal of approval to Christian organisations that meet a set of standards, this is implausible[4].
    • With a significant deficit for the year, negative working capital and the value of software ($26K) now being greater than the remaining equity ($22K), one would expect a comment on threat to the going concern assumption.

What financial situation was shown in that Report?

  • The surplus as a percentage of revenue declined from 4% to negative 10%.
    • The increase in revenue (5%) was not enough to compensate for the increase in ‘Employee benefits expense, 15%, and the loss made on ‘Events’.
  • There are no non-current liabilities, so how did the ‘’Finance costs’ arise?
    • And where are they in the Statement of Cash Flows?
  • Working capital (current assets less current liabilities) has dropped sufficiently this year that it is now negative.
  • There are no long-term liabilities. Even so, equity is now only $22K.

What did the auditor say about the last financial statements?

  • The auditor, Peter Shields, for Saward Dawson[5] Chartered Accountants, issued a ‘clean’ opinion[6].
    • To do this he had to agree with the directors that there are no users, past or prospective, who are dependent on the type of accounts that are produced when users are not able to command the preparation of statements tailored to their needs.
    • He made no comment on the directors’ silence on the going concern assumption.

If a charity, is their page on the ACNC Register complete/correct?

  • Not quite – two names for the organisation are missing.

Who are the people controlling the organisation?

  • Which does not match the ‘Responsible Persons’ on the ACNC Register:
    • Jame Lewis
    • Karen Naylor
    • Cheryl Osment
    • Robert Rawson
    • Stephen Slade
    • John Peberdy
      • There are 11 directorships (down from 14 last year) recorded for the name ‘John Peberdy’. And the register only covers charities, not all not-for-profits, and no for-profit organisations. Therefore, if after eliminating the charities for which John is not a director, you are left with his total being more than a handful, it would be legitimate for you to question whether his ability to discharge his fiduciary responsibilities is threatened.
    • The directors are accountable to the members. But there are only five members, and as it is likely that some or all of the directors are members, there’s no accountability there.

To whom is CMA accountable?

  • To the ACNC as a charity, and still for some things, to ASIC as a company.

 

 

 

  1. Although it is not, as it says here, in pilot mode any longer.
  2. Here are the first nine organisations accredited. See www.tedsherwood.com for a review of all bar the last one.
  3. Good living and social concern are important [to the cause of evangelism], but they are not uniquely Christian graces…I’ve met a lot of fine Hindus, Muslims and atheists. Just living the life is not going to bring someone to Christ. There is much more to it than that. We must help people, certainly, but we must also share with them why we are motivated to do so. We must stand against injustice, poverty and need, but we must at the same time point to the One who brings justice and who can meet the deepest need. Until they know our reasons, how can they come to know our Lord? [Dan Armstrong, the Fifth Gospel: The Gospel According to You, Anzea Books, pp. 13-14.
  4. Remembering that this is an organisation that has a department that is setting the standards for the accountability and transparency of Christian charities,
    • The figures for ‘Trade and other payables’ and ‘Other liabilities’, without explanation, do not match the figures for those items reported last year.
    • Comprehensive income is not shown in the Statement of Changes in Equity.
    • The expenses are a mixed classification.
    • Two lines plus interest is not a helpful disclosure of ‘Cash flows from operating activities’.
    • The description ‘Plant and equipment’ is not helpful as a description of ‘Property, plant and equipment’.
    • 7% of expenses in ‘Other expenses’ is perhaps too large to be unexplained.
    • The audit fee is still undisclosed.

  5. Although far from an uncommon practice, I have always wondered about the appropriateness of featuring the logo of the auditor on the cover of a report that belongs to the charity.
  6. To take the right amount of comfort from a ‘clean opinion’, please read here and here.