Global Interaction Inc, charity review

The charity's Annual Information Statement current at the time of this review has since been superseded.  Please start with the updated review published in November 2016, and come back to this one as needed.

This is a charity review, a review for those with an interest in the Australian charity Global Interaction Inc (GI).

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

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 April 2016, and invited them to comment. The Partnerships and Communications Manager replied the next day to say that ‘We would appreciate the chance to formally respond to your review prior to publishing this content as we feel assumptions have been made in your findings. The next board meeting is in a couple of months.’ On being told that I was not prepared to wait that long, but was keen to learn of these ‘assumptions’, she replied that she had ‘spoken with the board chair and they will be willing to discuss it in their next meeting and provide a response in June.

If you are using this review after June, and I haven’t incorporated their comments, please email me.

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:
    • For each heading in the register entry, first read the information under that heading.
    • Then check if that heading is included below. (Headings for which there is no comment are not included. 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.
  • GI website.
  • Not on FaceBook or LinkedIn.
  • State government fundraising licence registers.
  • No reviews yet on Glassdoor.

REGISTRATION DETAILS

Entity Subtype

  • A subtype consistent with sharing the Gospel.
  • The prime object in the constitution is all about evangelism:
    • To fulfil the commission of the Lord Jesus Christ to preach the Gospel to all people by all available means so as to establish among peoples churches which will evangelise their own and other people from their own resources in Jesus Christ.

CHARITY DETAILS

Legal Name

Charity ABN

  • You are not entitled to a tax deduction for a donation to GI.
    • This does not match the information in the Giving FAQ section of the website:
      • IS MY DONATION TAX-DEDUCTIBLE?

This depends on which cross-cultural worker or project you support. Contact the cross-cultural worker or Global Interaction for more detailed information.

Charity Street Address

  • Postal address, from the website: PO Box 3085, Auburn VIC 3123

Phone

  • From the website: 03 9819 4944.

Website

ANNUAL REPORTING

  • AIS 2014
    • This is GI’s compulsory Annual Information Statement 2014 (AIS 2014).
    • It gives basic financial information. If you think that this might be sufficient for you
      • 7K has been omitted from ‘Other Income’.
      • ‘Employee expenses’ are not zero, but $2.2m.
      • This is, according to elsewhere in the AIS, for 75 full-time and 9 part-time employees.
      • Should the $728K ‘Cross-cultural support’ and the $2.38 m ‘Cross-cultural missions’ be included instead of the zero for ‘Grants and donations made…’?
    • These figures come from financial statements that do not comply with all the Australian Accounting Standards – see below.
  • Financial Report 2014
    • The report was signed three months after the year end.
    • It was then lodged three months after that, on the last day allowed.
    • 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
    • None found on the website.
    • There isn’t a statement of faith in the constitution.

Date Established

  • There’s a history on the website.
  • You can go deeper here (or at least up to 2012)
  • Here’s the historical resources up to 2012.

Who the Charity Benefits

  • Vision and Mission
  • Activities (What did GI do?)
    • From the Description of charity’s activities and outcomes in the AIS 2014:
      • Activities have supported the sending of Cross Cultural Workers Overseas (sic).
        • Not particularly about 2014.
    • There is a Global Interaction Guide 2016, but you have to ask for it.
    • The 2014 (or later) Annual Report is not on the website.
  • Outcomes (What did GI deliver?)
    • GI did not respond to the request in the AIS 2014 for a description of its outcomes.
    • Nothing systematic found on the website.
    • You will find some anecdotal evidence under Resources.
    • The 2014 (or later) Annual Report is not on the website.
  • Impact (How were people’s lives improved?)
    • Nothing systematic found.
    • You will find some anecdotal evidence under Resources.
    • The 2014 (or later) Annual Report is not on the website.

Size of Charity

  • With a revenue of $4.69 m, GI easily exceeds the $1 m threshold for ‘Large’.

Financial Year End

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

WHERE THE CHARITY OPERATES

Operating State(s)[ii]

  • Given that it operates interstate, GI, as a registrable Australian body, needs an ARBN. It doesn’t have one.
  • Why is the ACT missing from this list? All eight states are included under ‘Our Teams’.
  • Should ‘operating states’ be restricted to the five that have a State Director?
  • Whatever the answer, GI doesn’t have a fundraising licence in any of the seven states that have a licensing regime.
  • GI calls for donations on its website.  Have they considered whether this gives rise to the need for a fundraising licence?

CHARITY’S DOCUMENT (SIC)

  • There is no Annual Report/Review available on the ACNC Register.
  • There is a section for annual reports on the website, but the last one is 2013.
    • However, on opening this report, one finds only two pages, one the cover page for Global Interaction Guide 2015, the other a report by the Treasurer for the 2013 year (showing $8.51 m ‘expenditure’).

RESPONSIBLE PERSONS

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

Andrew Streets      This function was not working at the time of publication

  • The Board should be listed, not the Director of Corporate Services.
    • ‘Position’ will need to show who is the Treasurer, Chairperson, and Vice Chairperson.
  • The Board has more than the number, seven, allowed by the constitution [clause 4.2].  Amended 16.11.16
  • It appears that, compared to the situation at 27 March 2015 (the Financial Report), Looi, Hickey, and Saunders have been replaced by Murray Crabb, Beth Jackson, and David Moyes.

(End of review of the ACNC Register information)

Latest financial report – detail

Board Report (page 2 of the Financial Report)

  • No such report is required by the ACNC.
  • All bar one of the required sections are missing.
  • Five sections are included that are not required.

What was earned, what was consumed during the year – the Statement of Profit or Loss and Other Comprehensive Income (page 4 of the Financial Report)

  • ‘Management fee’, $927K, as revenue: what are they managing?
  • ‘Income from bequests’, $222K:
    • Some interest – a separate item under revenue – and some dividends?
    • Incoming bequests are included in ‘Donations’?
  • ‘Governance & administration’ expense, $1.23 m: How does this differ, if it does, from the item expected for charities, ‘Administration expense’?
  • Why no explanation for the $563K write-off, especially as the loan was to a related party?
    • The loan was only $155K. Where is the other $408K?
  • The direction to Note 2 is missing.
    • Why are the benefits to ‘outback Australia missionaries’ excluded?
    • Where are they included?
  • The following expenses are not disclosed:
    • Superannuation
    • Fundraising
    • Depreciation
  • Missing policy Notes:
    • New, revised or amending Accounting Standards and Interpretations adopted
    • Current and non-current assets
    • Trade and other receivables
    • Trade and other payables.
    • Fair value measurement
    • New Accounting Standards and Interpretations not yet mandatory or early adopted

What’s left at the end of the period – the Statement of Financial Position (page 5 of the Financial Report)

  • ‘Other long term provisions’ $532K, including Note 10: these are all employee benefits, not ‘other’.
  • Property, Plant & Equipment $7.21 m, including Note 7:
    • How old are the valuations? When was the last professional valuation?
    • The reconciliations of written down value are missing.
  • Short term borrowings $558K last year, including Note 9: there is no explanation of this ‘Lend & Send Fund’, and how it went from this balance to zero.

Movements in the net wealth of the charity – the Statement of Changes in Equity and Funds (page 6 of the Financial Report)

  • Other than the line ‘Transfers to/from reserves’, the descriptions should match those in the Statement of Profit or Loss and Other Comprehensive Income.

Where the cash came from and went to – the Statement of Cashflows (page 7 of the Financial Report)

  • The policy Note for revenue says that donations are recognised on receipt. Why then is there a different amount here than in the Statement of Profit or Loss and Other Comprehensive Income?
  • The ‘Loan repaid/(advanced)’ $135K should be under financing activities.
  • Note 13: why is the movement in the ‘Lend and Send (sic) Fund’ under operating activities?

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

  • 1. Statement of significant accounting policies
    • The directors do not explain why they think that GI is not a reporting entity.
      • This decision means that a multi-million-dollar receiver of donations from the public, with offices in five states, multiple missionaries all over the world, and representing the missional interests of the Baptist denomination, can produce financial statements that are less than fully compliant with the Australian Accounting Standards.
      • Do the directors realise that they are saying that anybody who has an interest in GI can request a financial report tailored to their specific needs?
    • The directors do not say which Accounting Standards they complied with.
    • Relatively minor omissions/mistakes:
      • a. Income Tax: the exemption comes from the registration with the ACNC.
      • b. Property, Plant and Equipment: no depreciation rates or policies on (1) derecognition and (2) review of the depreciation factors.
      • c.   Employee Benefits: no disclosure of the policy on superannuation expense.
      • e. Revenue: no policy on the ‘Management fee’.
      • f. Leases: there are no leases
  • 15. Related Parties: but what is the relationship?
  • Missing Notes
    • Critical accounting judgements, estimates and assumptions
    • Contingent liabilities
    • Commitments
    • Events after the reporting period

An independent opinion on the financial statements – the Independent Audit Report to the Members (page 15 of the Financial Report)

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

Membership of accountability organisations claimed

  • Two claimed, via logos, here.
    • ‘CMA Governance’ orange, the highest of four levels. Confirmed (but with a slight mistake in the name).
      • Judge for yourself their compliance in those areas covered by this review.
    • Missions Interlink ‘Accredited Member’. Confirmed.

(End of review)

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

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

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