Missions Interlink, charity review (superseded)

There is a later review of this charity.  See 'Australian Evangelical Alliance Inc (Missions Interlink).

This is a review, for donors, potential donors, members, and potential members of the Australian charity Australian Evangelical Alliance Incorporated (Missions Interlink (MI)).

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 MI.

It is up to you to decide whether any or all of the information presented here is what you need in order to make your decision, and whether you need to seek any other information, either from the charity itself or from other sources.

Ministry response

Prior to publishing this review, I sent, on 30 July 2015, my observations to the charity and invited them to comment. Pam Thyer, the National Director, emailed a few comments on 12 August.

Organisation of this review:

  1. This review is organised according to the headings in the register entry. This is how to use this section of the review:
    • For each heading in the register entry, first read the information under that heading.
    • Then check if that heading is included below. (Headings for which there is no comment are not included.)
  2. There is then a more detailed comment on the Financial Report.
  3. Lastly, for members and potential members, there is a review of what that membership means.

Sources:

CHARITY DETAILS

Legal Name

  • MI is a Victorian incorporated association.
  • Not to be confused with the charity with almost the same name, registration of which has been ‘voluntarily revoked’.
  • There are also two other charities with ‘Evangelical Alliance’ in their name: Ea (sic) Foundation and The Trustee for Evangelical Alliance Foundation Trust Fund. To add to the confusion, these two charities have the name of the other one as their ‘Other Names(s)’.

Other Name(s)

  • There are also two other charities with ‘Missions Interlink’ in their name – Missions Interlink NSW and Missions Interlink Victoria. The first is registered, the second marked ‘Voluntarily revoked’.
    • Missions Interlink NSW is a State branch of MI. There is no explanation of why the Victorian branch deregistered, or why the other State branches are not registered. (Or, alternatively, why NSW is still registered.)

Charity ABN

  • Tax deductibility: No tax deduction can be claimed for a donation to MI.

Charity Street Address

  • Postal address: PO Box 175, Box Hill VIC 3128

Email

ANNUAL REPORTING

  • Basic financial information is shown in the AIS 2014. If you think that’s all you might need (or want[ii]) then you should note that, in the Financial Report,
    • They did receive $13K of grants, but apparently not from the government.
    • Grants made were not zero, but $5K.
  • The coverage of finances in this review is left until the financial report proper (below).

ABOUT THE CHARITY

Who the Charity Benefits

Mission/vision – 2/3rd the way down the page

Activities (What does MI do?)

  • From the AIS 2014’s Description of charity’s activities and outcomes:

It linked, equipped, served, and represented organisations and churches across Australia to help them engage together in effective cross-cultural and global mission.

Outcomes (What was delivered?)

  • Unfortunately in the AIS 2014, in response to the request to describe outcomes, nothing is given.
  • There’s no Annual Report/Review, nor an offer to send one, on the website. MI confirmed that it is available in the log-in section of the website.

Impacts (How are people’s lives improved?)

  • None found

Size of Charity

  • 2013-14 ‘Revenue’ was $277K, just exceeding the $250K threshold for the middle size of charity.

Financial Year End

  • This means that the next financial report is due by 31 December 2016. Before that the financial information on the Register will be up to 18 months out-of-date.

WHERE THE CHARITY OPERATES

Operating State(s) [iii]

  • With only four offices outside Victoria, it is not clear why all states are listed here.
  • MI has the required Registered Australian Body registration[iv] (ARBN 056 007 820).
  • Although it has branches all around Australia, I was told that ‘MI does not solicit donations from the public.’ This matches the lack of fundraising licences.

CHARITY’S DOCUMENT (sic)

Financial Report

  • This report can be opened either from here or from within AIS 2014 under Annual Reporting (above).
  • The Financial Report was completed three and a half months from their year-end, and put on the ACNC Register three weeks later. This was still well within the six month period normally allowed.
  • The ACNC allows charities to put their Annual Report or similar on the Register. MI has not taken advantage of this. (What it calls an annual report here, is actually the Financial Report (see below). Nor is there one on their website or an invitation to request one – unless it’s in the area restricted to members and associates.

RESPONSIBLE PERSONS

  • To see all a director’s positions in Australia, search here.

No. of Australian directorships[v]

John ANDERSON                                 28 (see the above footnote)

Borneman, BARRY                                  1 (3 if the name is around the wrong way)

Heather COLEMAN                                6

Geoffrey COLTON                                   2

Glenda De JAGER                                   5 (but two are duplicates)

Richard DICKINS                                    2 (including the Ea (sic) Foundation)

Judith KAY                                                3 (including Missions Interlink NSW)

  • This is not the only body of people involved in directing MI. There is also the National Leadership Team (NLT).
  • The website shows that there is considerable overlap in the membership of the two bodies.
    • All the directors except John Anderson are also on the NLT.
    • Supplemented by the following people:

Ian Lucas, Empart

Omar Djoeandy, SIM

Simon Longden, Pioneers

Rev Dr Darrell Jackson, Morling College (NSW)

Ken Ridge, MI WA Representative (OMF)

  • This is how the website describes the relationship between the AEA Board and the NLT: Regulations (clause 18.1).The Missions Interlink National Leadership Team (NLT), is comprised of elected members and representatives from state networks, and is responsible for the management  of Missions Interlink and the appointment of the National Director. The governance of Missions Interlink is the responsibility of the Australian Evangelical Alliance Inc (AEA) board , which is elected from the NLT.”
    • This way of operating appears to be contrary to MI’s own Regulations and its Rules (see the section Charity’s Documents on the Register). In order,
      • The NLT can also have up to three ‘co-opted persons, with specific skills’.
      • It is the Board of MI who are required to manage the affairs of MI, not the NLT.
      • The Regulations make no distinction between ‘management’ and ‘governance’ of MI, as is suggested here. It’s all governance, with the management, hopefully, delegated to the National Director.
      • The NLT provides only recommendations [Regulations, clause 1.
      • The National Director should be appointed by the Board, not by the NLT.
      • It is the members of MI who elect the directors of MI, not the NLT. (Although it is true that, except for the people who were members when the Rules were adopted, a member must be a ‘serving member of the NLT, so I can see how the confusion arose.)

(End of review of the ACNC Register information)

Latest financial report – detail

  • One of the State branches is registered as a charity, reporting separately to the ACNC.
    • We are not told whether the finances of this charity, and the finances of the other State branches, are included in the MI Financial Report.
    • The Regulations (a document subsidiary to the constitution), provide that the branches “operate under guidelines approved by the NLT”.
    • If these branches are financially separate to MI, rather than integrated, then the accounts should be consolidated accounts rather than for MI separately as they are now.
  • There is nothing in this Report to tell the reader that this organisation runs the only public accountability regime for Christian charities in Australia:

Member use of the Missions Interlink logo implies high standards of governance and financial accountability, giving the Christian public assurance of their integrity[http://www.missionsinterlink.org.au/about].

Contents (page 0 of the Financial Report)

  • Both the ‘Statement by Members of the Board’ and the ‘Certificate by Members of the Board’ refer to the same document, a document on page 7. (Therefore the Auditors (sic) Report is on page 8.

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

  • Donations $43K
    • There is no explanation why, for “a membership-based organisation”, donations should be such a large proportion of the revenue.
    • There is no request for donations on the website.
      • MI comment: “MI does not solicit donations from the public. Many member organisations provide a donation alongside their membership fees and other supporters of the ministry make donations.”
  • Grants $13K
    • We know, from the AIS 2014 that these grants are not from the government, but it is not apparent from the website why MI would receive a grant.
  • Transition Training $52K
    • The meaning of this item is not explained.
      • Presumably it’s one of the three types here, but where are the other two?
    • Nor is there an explanation for why it has gone from zero last year to $52K this year.
  • Gross Income for the Year
    • This term confuses the usual ‘Gross profit’ and ‘Revenue’
  • Total Cost of Activities $95K
    • This section is largely a classification of expenses by function, whereas the next section is almost entirely a classification by nature.
    • Inventory purchases are shown, but not the change in inventories.

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

  • Investments $31K
    • The policy note does not explain (a) the nature of these investments, (b) why MI holds investments and (c) why they liquidated such a large proportion this year.
  • Plant & Equipment $13K
    • The usual breakup is absent
  • Deferred Income $15K
    • The revenue policy note does not explain the source of this liability, nor why there wasn’t any last year
  • Special Reserves $84K
    • There is no policy note explaining the segregation of profits in this way .

How the net wealth has changed – the Statement of Changes in Equity (page 3 of the Financial Report)

  • The reserves are called ‘Special’ in the Statement of Financial Position, but ‘General’ here.
  • There is no explanation for the movement in the reserve.

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

  • Receipts from Clients $249
    • ‘Clients’?
  • Interest Received $5K
    • Why is this the same as interest revenue?
    • Why is it the same as last year
  • Decrease…in Investments $51K
    • No profit or loss on sale is shown in the accounts

Essential information[vi] to go with the figures: the Notes to and forming part of the Accounts (page 5 of the Financial Report)

  • 1 Statement of significant accounting policies
    • The directors don’t say why, for a professionally-managed organisation with over 160 organisational members, and one that is promoting membership publicly, they can conclude that all current and prospective users of financial statements have the capacity to command the preparation of financial statements tailored to their needs.
      • This decision meant that MI could produce financial statements that did not need to comply with all the Australian Accounting Standards, and therefore produce statements that the Australian standard setters have deemed not suitable for those people who rely on MI’s financial statements as their major source of financial information.
      • An example of the information that you might not get as a consequence is the relationship that MI has with the organisation with which it is affiliated.
      • The directors do not say how they chose the accounting policies they use.
  • 1(a)  Fixed Assets
    • This is not a current term.
  • 1(b)  Revenue
    • This does not match the major sources of revenue for the charity
  • Missing Notes
    • New, revised or amending Accounting Standards and Interpretations adopted
    • Current and non-current classification
    • Trade and other receivables
    • Property, plant & equipment
    • Impairment of non-financial assets
    • Trade and other payables
    • Fair value measurement
    • New Accounting Standards and Interpretations not yet mandatory or early adopted
    • Critical accounting judgements, estimates and assumptions
    • Remuneration of auditors
    • Contingent liabilities
    • Commitments
    • Events after reporting period

An independent opinion on the financial statements : the Independent Auditor’s Report (page 8 of the Financial Report)

  • The auditor, in accepting the engagement, has assessed the directors’ decision that MI is not a ‘reporting entity’, and agreed with it. That is, they also think that MI doesn’t have any users (either existing or prospective) who are dependent on a general purpose report (that is, a report prepared for those who are not in a position to require MI to produce a report tailored to their needs).
  • This is a ‘clean’ opinion. Read here and here to draw the right conclusions from this.

 What membership means

  • Why join?
    • You start by being an Associate. The features are under ‘Associates’ here.
    • Then, if you want, you can become a Member. The features are under ‘Members’ here.
    • The first feature, the certification, has the following benefit:
      • Member use of the Missions Interlink logo implies high standards of governance and financial accountability, giving the Christian public assurance of their integrity[http://www.missionsinterlink.org.au/about].
    • This is currently the only such certification or rating for Christian organisations in Australia.
    • However the value of the logo is significantly reduced by the fact that
      • the membership list is not available to the public;
      • there is no requirement for associates and members to make some of the defining documents required by the Standards Statement available on their website; and
      • there is the following disclaimer at the end of the Standards Statement:
        • This publication reflects the Standards which Missions Interlink believes the community should expect of its Associates. Missions Interlink endeavours to ensure that its Associates maintain the high standards set out in this document. However, no person should assume that by reason of Associate of Missions interlink status, an Associate in fact attains the standards Mission Interlink practices.
      • It is therefore the second feature of being a Member that is arguably far more valuable: these exemptions are not handed out anymore and can save a lot of tax.
  • So are you qualified?

MI Associates that are incorporated within Australia and accept and adhere to the Missions Interlink Accreditation Standards are eligible to apply to become Members of Missions Interlink.

                     You can read these extra standards here.

  • How do you stay a member
    • For both Associates and Members:
      • Pay the annual membership fee, based on the number of staff and your donation income, ranging from $264 to $1496 (Associates), or $429 to $1,826 (Members).
      • Sign a declaration that, in summary, says that you still qualify.
      • Survive any complaint that is made against you.
    • For Members:
      • On request, ‘provide MI with evidence of compliance with the MI Standards Statement and these Member Accreditation Standards’ [Member Accreditation Standards, above].
    • There does not appear to be any systematic process of compliance checking. 

 

(End of review)

 

 

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

[ii] Those who wrote the rules for the financial statements say that, as a user, you ‘are assumed to have a reasonable knowledge of business and economic activities and accounting and a willingness to study the information with reasonable diligence’ [Framework for the Preparation and Presentation of Financial Statements, www.aasb.gov.au, paragraph 25].

[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] Required because it operates outside its home state.

[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] Accounting Standard AASB 101 provides that ‘The Notes shall:

present information about the basis of preparation of the financial statements and the specific accounting policies used in accordance with paragraphs 117-124;

disclose the information required by Australian Accounting Standards that is not presented elsewhere in the financial statements; and

provide information that is not presented elsewhere in the financial statements, but is relevant to an understanding of any of them [paragraph 112].

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