In Network Australia Inc, charity review

This is a charity review, a review for those with an interest in the Australian charity In Network Australia Inc[i] (IN).

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

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 7 March 2016, and invited them to comment. They decided not to submit a comment 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 claimed.

Sources

  • ACNC Register (including links)
  • Google search on the charity’s name.
  • IN website.
  • Not on FaceBook or LinkedIn.
  • State government fundraising licence registers.
  • No reviews on Glassdoor yet.

REGISTRATION DETAILS

Entity Subtype

  • A subtype consistent with sharing the Gospel.
  • And the Statement of Purposes in the constitution is all about sharing the Gospel.
  • Which is supported by an explanation on the About-Us page of the website:
    • What sets IN Network apart from many similar organisations is that our mission actively promotes spreading the good news and bringing people to God. If tax deductibility is not a consideration for you and you are moved to help us reach people in God’s name with His word, we would welcome your financial and/or prayerful support. Remember the words of Jesus in the parable of the lost coin – “In the same way, I tell you, the angels of God rejoice over one sinner who repents.” Luke 15: 10.

CHARITY DETAILS

Legal Name

  • IN is a Victorian incorporated association (No. A0043144Y).

Other Name(s)

  • The trading name International Needs is missing here.
  • This is the first indication that IN is much more than is indicated by its Register entry. A search to see that whether the business name International Needs is available (a trading name doesn’t allow one to do business under that name), shows that the name belongs to a charity, a charity with the same Charity Address for Service, Charity Street Address, Email, and Phone as IN.
    • The connection is given on the IN website:
      • “For information on child sponsorship and sustainable development projects in Africa and Southeast Asia, please see the International Needs Web Site.”
        • International Needs is a ‘Large’ charity.
    • There is actually a third charity controlled by IN, The Trustee for International Needs Overseas Assistance and Development Fund. This one is ‘Small’.
    • IN acknowledges on its Home page that the three organisations are part of the same enterprise:
      • Australia is the only supply line country in the International Needs Network that is obliged to separate its ministry and development activities because monetary gifts to ministry are largely not tax-deductible here.
    • So why doesn’t IN show a consolidated financial picture (see below)?

Charity ABN

  • No tax deduction is claimable for a donation to IN (as they repeatedly point out on their website).

Charity Address for Service

  • Note that this is the same address as for International Needs.

Charity Street Address

  • Postal address, from the website: PO Box 121, Mitcham VIC 3132.
  • Note that this is the same address as for International Needs.

Email

  • Note that this is the same address as for International Needs.
  • Another address, from last year’s Annual Report: info@innetwork.org.au.

Phone

  • Note that this is the same number as for International Needs.
  • The website has two other numbers: 1300 731 550 and 03 9877 7177.

ANNUAL REPORTING

  • AIS 2015
    • This is IN’s compulsory Annual Information Statement 2015 (AIS 2015).
    • It gives basic financial information. If you think that this might be sufficient for you there’s no differences to the financial statements. (The other half of the enterprise, International Needs, is not included in the figures though.)
  • Financial Report 2015
    • The report was signed three months after the year end.
    • It was then lodged two months after that.
    • 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
    • None on the website.
    • In the constitution: see Appendix 5.

Date Established

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

Who the Charity Benefits

  • Vision
    • “IN Network seeks to glorify God and win people to Jesus Christ.”
  • Mission
    • “IN Network in Australia connects Australians with its network of national partners in evangelism, discipleship and community development.”
  • Activities (What did IN do?)
    • From the Description of charity’s activities and outcomes in the AIS 2015:
      • IN Network Australia Inc. connects Australians with its network of national partners to bring evangelism, discipleship and community development to developing countries.
        • Nothing particularly about 2015.
    • There’s a fuller description of what IN does on its website.
  • Outcomes (What did IN deliver?)
    • IN did not respond to the request in the AIS 2015 for a description of its outcomes.
  • Impact (How were people’s lives improved?)
    • Nothing found.

Size of Charity

  • If there were a size smaller than ‘Small’, IN would no doubt qualify.
  • Remember, though that there is another part of the IN enterprise consisting of a ‘Large’ and another ‘Small’ charity.

Financial Year End

  • This means that the next financial report is due by 31 December 2016 (or 31 January 2017 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 need to ask for more up-to-date information.

WHERE THE CHARITY OPERATES

Operating State(s)[iii]

  • Given that it operates interstate, ECM, as a registrable Australian body, needs an ARBN. It doesn’t have one.
  • IN calls for donations on its website.
    • It holds a fundraising licence in only two of these states[iv]. Seven have a licensing regime.
      • Apart from exemptions, whether it needs such a licence in the other six states that have a licensing regime depends on whether those states think that CH, by calling for donations publicly, is ‘fundraising’ in their territory.

CHARITY’S DOCUMENT (SIC)

  • There is no Annual Report/Review available on the ACNC Register.
  • The one that is on the website us out-of-date

RESPONSIBLE PERSONS

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

Ian Curtis                 This function was not working at the time of publication

Richard Lim

Ian Neil

Lum Patrick

William Murcutt

Belinda Knight

Daryl Crowden

  • Is the Daryl Crowden this one?
  • Compared with the list in the Directors’ Report, the above list is two less and has only four of the same names.
  • To comply with the constitution, there should be a Chairperson, Vice-Chairperson, and Treasurer in addition to the Secretary under ‘Position’.
  • There is no mention of the board on the website.
  • All bar Ian Curtis are also directors of International Needs.
  • There are no responsible persons shown on The Trustee For International Needs Overseas Assistance and Development’s register entry.

(End of review of the ACNC Register information)

Latest financial report – detail

  • There is not a single mention of the other two charities. Their existence completely alters the picture of the enterprise that is controlled from 196 Rocks Road. Why don’t IN’s accounts show a consolidated picture?
  • The directors’ belief that IN is not a ‘reporting entity’, a choice that allows them to make less than a full disclosure about IN’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. Do the directors realise they are saying this?
  • These two things are a serious challenge to the directors’ claim that the accounts show a ‘true and fair view’.
  • One of the four compulsory financial statements is missing: the Statement of Cash Flows.

Directors’ Report (page 2 of the Financial Report)

  • No such report is required by the ACNC.
  • Missing sections:
    • Objectives (short-term and long-term)
    • Strategy for achieving the objectives
    • Performance measures
  • Directors: the Treasurer and Secretary are not identified.
  • Sections not required: all those included except
    • Directors, and
    • Principal Activities

What was earned, what was consumed during the year – the Income Statement (page 4 of the Financial Report)

  • The Net Surplus (Deficit) should be the figure before the transfer to reserves, not after.
  • The section ‘Other Comprehensive Income’ is missing.

Revenue

  • General Funds $22K: This described the destination, not the source, of the funds.
  • Fundraising for Projects (including Note 5): 69% of this was for ‘Mission Trips’.

Expenses

  • Ministry Expenses $22K: Given that the organisation is referred to as ‘the Ministry’ (Directors’ Report), the destination of this 53% of total expenses is unidentified.
  • Project Outlays $22K (including Note 5): 60% of what was raised for the ‘mission trip’ to the Philippines was not spent on this trip.
  • Provision – Annual leave $(negative): This doesn’t match the Note. Nor does Long Service Leave expense.
  • Contrary to the Accounting Standards, the expenses are a mixed classification.
  • The following expenses are not disclosed (or their absence explained):
    • Depreciation
    • Superannuation
    • Employee benefits
    • Administration
    • Fundraising

Essential information to go with the figures – the Notes to and forming part of the Financial Statements (page 7 of the Financial Report)

  • 1   Summary of Significant Accounting Policies
      • The directors give no reason for their decision to say that IN is not a reporting entity.
      • There is no mention of the ACNC Act.
      • There is no listing of the Accounting Standards that have been followed.
      • (b) Provision for Employee Entitlements: short-term entitlements should be distinguished from long-term entitlements.
    • (g) Accounts Receivable and Other Debtors: If donations are recognised when IN receives control of them (Note 1(d)), how can there be any donor receivables?
    • Missing policy Notes
      • New, revised or amending Accounting Standards and Interpretations adopted
      • Current and non-current classification
      • Property, plant and equipment (it is unusual to operate without any)
      • New Accounting Standards and Interpretations not yet mandatory or early adopted
  • Missing Notes
    • Critical accounting judgements, estimates and assumptions
    • Events after the reporting period
    • Remuneration of auditors
    • Contingent liabilities
    • Commitments

Where the directors put their name to the Report – the Statement by Directors (page 9 of the Financial Report)

  • The financial reporting framework should be identified.
  • There is no reference to the ACNC Act.

An independent opinion on the financial statements – the Independent Auditor’s Report… (page 4 of the Financial Report)

  • The absence of a cash flow statement is not mentioned.
  • This is a ‘clean’ opinion.  Read here and here to draw the right conclusions from this.

Membership of accountability organisations claimed

  • Although its membership of Missions Interlink is not claimed on the website, it is in the Annual Report (or at least was in last year’s, the latest one)[vi].
    • International Needs, and its Fund, have no such accountability though.

 

(End of review)

[i] ‘In’ : a transcription error by the ACNC?

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

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

[iv] It has one in NSW, but it expired in 2006.

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

[vi] There is no difference between an ‘accredited member’ and a ‘member’ though.

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