Pioneers of Australia 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The charity's Annual Information Statement current at the time of this review has since been superseded.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 [month/year], and come back to this one as needed.

This is a review, for donors, of the Australian charity Pioneers of Australia Inc (PoA).

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 giving decision.

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

Ministry response

Prior to publishing this review, on 10 August 2015, I sent my observations to the charity and invited them to suggest corrections, and submit comments for publication. On 17 August 2015 I received the following email response from Tim Macready, the Secretary:

Thanks for your email.  Rather than addressing every aspect, I’ve made some general comments that have come from the management team at Pioneers (as you have noted, my full-time role is with Christian Super; I am the Company Secretary for Pioneers). [1]

Pioneers of Australia is part of a ministry consortium of different organisations, including Pioneers Ministries Foundation you’ve alluded to. [2]

Looking it (sic) in isolation will give a very incomplete picture of the mission both in terms of a financial picture and in terms of directorship. [3]

A generalised review in relation to grants and office holders are not accurate due to the lack of understanding the (sic) broader organisational structure. [4]

It will appear as if each director is involved with separate organisations whereas in reality the boards of some of those organisations are the same people and they meet concurrently as a composite. [5]

We are also a part of Pioneers International which doesn’t necessitate consolidation, however the number of workers and where they serve need to be viewed in that context. [6]

Pioneers of Australia is not a deductible gift recipient. We do have a tax deductible fund within the Pioneers Ministries consortium. [7]

We believe we have submitted the governing documents and all necessary information on the different organisations to the ACNC. We are currently working with them on what is available online. [8]

We are doing our best in complying with all the regulatory and reporting requirements and are accountable to those authorities.  [9]

There are some qualitative judgments in the report that we don’t necessarily disagree with but it would be worth letting charities know what standard you’re hoping to hold them up to in this regard [10] [The numbering is my addition].

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.)
  • There is then a more detailed comment on the Financial Report.
  • Lastly, there is a section Membership of accountability organisations claimed.

Sources

CHARITY DETAILS

Legal Name

  • Easily confused with another charity Pioneers Ministries Foundation (PMF), a charity that has the same Address for Service, Street Address, Email, Responsible Persons, and lodged its Annual Information Statement 2014 (AIS 2014) on the same day.
    • The PoA website confirms that PMF is part and parcel of PoA, yet there is no mention of PMF in the Financial Report, let alone the expected consolidated accounts.
    • Conversely, there is no mention of PoA in the PMF accounts.
    • It is not possible to check the constitutions of the two charities because in neither case is the required ‘Governing document’ on the ACNC Register.
  • There are also three other charities with the same Address for Service, Street Address, Email, Responsible Persons, and who lodged their AIS 2014 on the same day: Action Partners Inc, Asia Pacific Christian Mission (Png) (sic) Inc, and South Pacific Partners Inc
    • The story of PoA on the website confirms that Action Partners is now part of PoA: “In 2001 the Australian and New Zealand Branches of SUM- Action Partners became part of Pioneers of Australia.”
      • Despite this, it is not mentioned in the PoA Financial Report, let alone consolidated with PoA.
    • The history page also tells us that the other two charities, Asia Pacific Christian Mission (Png) (sic) Inc, and South Pacific Partners Inc, are more than part of PoA – they are its predecessors:

Towards the end of 1997, after prayerful reflection and strategic planning, Asia Pacific Christian Mission and South Pacific Partners – SSEM combined to become Pioneers of Australia and Pioneers New Zealand. 

    • Despite this, neither are mentioned in the PoA Financial Report, let alone consolidated with PoA.
      • Conversely, there is no mention of PoA in the accounts of these three charities.
    • It is not possible to check the constitutions of the above three charities because in each case the required ‘Governing document’ is missing from the ACNC Register.
      • See paragraph [8] under Ministry Response (above)
  • Paragraphs [2] to [6] of the Ministry Response (above), give PoA management’s view on the legitimacy of reviewing the charity PoA.

Charity ABN

  • Tax deductibility: You cannot claim a tax deduction for a donation to PoA.
    • See paragraph [7] of the Ministry Response (see above)

Charity Address for Service

  • This email address belongs to a totally unrelated organisation. (Macready is the Chief Investment Officer at Christian Super).

Charity Street Address

  • The postal address, from the website: PO Box 200 BLACKBURN VIC 3130

Phone

  • Blank.   From the website: 1800 78 78 89

Website

  • Blank. Try http://www.pioneers.org.au/Welcome.aspx

ANNUAL REPORTING

  • The AIS 2014 is blank where the type of financial statements prepared should be shown. The answer is ‘special purpose financial statements’.
  • There is no Annual Report/Review available on the ACNC Register, nor on the website.
  • Basic financial information is shown in the AIS 2014. If you decide that this is sufficient for you then you should note that,
    • ‘All other revenue’ is, except for $35K, ‘Grants’ (a source not explained in the Financial Report); and
    • ‘Other Income’ is not zero but $35K.
  • Note, though, that the information in both places does not include the four charities that appear to be controlled by PoA.
  • The coverage of finances in this review is left until the financial report proper (below).

ABOUT THE CHARITY

Who the Charity Benefits

Vision

  • None found

Mission

  • None found

Activities (What does PoA do?)

  • From the AIS 2014: “Employ, train and facilitate workers in Australia and overseas.”
  • This is the website’s explanation of what PoA does:Pioneers partners with local churches in sending Aussie believers around the globe, seeking to glorify God amongst unreached peoples.”

Outcomes (What was delivered?)

  • Unfortunately in the AIS 2014, in response to the request to describe activities and outcomes, there are only activities (see above).
  • If outcomes are defined as missionaries in place, the outcome isover 1800 long term members serving overseas in 188 teams in at least 80 countries”.
    • Surely all Pioneer, not just PoA?

Impacts (How were people’s lives improved?)

  • None found.

Size of Charity

  • With revenue of $1.5 m, PoA comfortably exceeds the qualification for the ACNC’s top size of charity ($1 m).

Financial Year End

  • This means that the next financial report is due by 31 December 2015. Before that the financial information on the Register will be up to 18 months out-of-date.

WHERE THE CHARITY OPERATES

Operating State(s)[ii]

  • There is no evidence of offices other than the one in Victoria (see above), so presumably the listing here reflects the fact that PoA fundraises all over Australia.
  • If PoA is carrying on business interstate the law requires it to have an Australian Registered Body Number (ARBN).  PoA does not have an ARBN.
  • PoA holds no fundraising licences.

Operates in (Countries)

  • The absence of any names here does not match either the AIS 2014 when it says that PoA beneficiaries are ‘Communities overseas’, or the website when it says that PoA has ‘over 1800 long term members serving overseas’.

CHARITY’S DOCUMENTS

  • The ACNC requires a constitution or similar to be lodged. There is no such document on PoA’s record.

Financial Report

  • This report is not within the AIS 2014 as usual, so can only be opened from this section.
  • The Report was completed four months after the year end. It wasn’t lodged until two months later, two days before the normal last day for lodgement.
  • The Report does not include any information about the other four charities controlled by PoA.

RESPONSIBLE PERSONS

  • To see all a director’s positions on Australian charities, search here.

No. of Australian ‘responsible person’ positions:

Graham CONWAY                             6[iii]

Ian FRYER                                           6

Malcolm GILL                                     5

James GOW                                          5

Jessica GROZSEK                              5

Patrick LOK                                        8 (yes, eight)

Timothy MACREADY                      6

Timothy MEYERS                             6

Timothy SILBERMAN                      5

Judith SIMCOE-FITZMAURICE     7

  • All ten responsible persons are also a responsible person for PMF and the three charities discussed under Legal Name above.
  • It would be surprising if none of these people held a named office in the association, but this can’t be checked because the required ‘Governing document’ is missing from the ACNC Register.
    • See paragraph [1] under Ministry Response, above.

(End of review of the ACNC Register information)

 

Latest financial report – detail

Where the committee members report to the members on the year – the Committee’s Report (page 1 of the Financial Report)

  • It is not clear from the contents of this report how the committee members decided what to include. It contains far less information than most experts recommend.

What was earned, what was consumed during the year – the Statement of Profit or Loss and Other Comprehensive Income (page 2 of the Financial Report)

  • The revenue categories do not match the giving options on the website.
  • Grants $1.5 m
    • There is no explanation in the report why almost the entire income of a missionary sending organisation would come from grants
  • Other income $35K
    • There is no explanation for this income that was derived from other than the ordinary activities of the charity.
    • Why, for both years, has the accrual amount (for Interest Received too) been identical to the cash received
  • Expenses
    • The classification appears to be a mixture of ‘by function’ and ‘by nature’.
    • Fundraising expenses are not disclosed.
  • Employment & Ministry $918K
    • There is no explanation of this non-standard term.
    • PoA had six full-time, 18 part-time, and no casual employees in June 2014.
      • This total, 24, means that there has been a big increase in staff since then; there are 30 photos under Our Team on the website.
      • 32 employees is the total given under About on the website.
  • Mobilisation $53K
    • There is no explanation of this non-standard term.
  • Administration $376K
    • Is the total for administration this figure plus the PI Levy plus some of Mobilisation?
  • PI Levy $143K
    • There is no explanation of where this money was sent and how it was spent.
  • Missing information
    • Employee benefits expense
    • Depreciation and amortisation expense
    • Superannuation expense

What’s left at the end of the year – the Statement of Financial Position (page 3 of the Financial Report)

  • There is no explanation for how a $1.5 m charity can operate without any property, plant or equipment.
  • There are neither motor vehicles nor a lease for one.

Trade and Other Receivables $182K

  • There is no explanation of this item.

Provisions $98K and 44K

  • There is no explanation of this item.

How the wealth of the charity has changed – Statement of Changes in Equity (page 4 of the Financial Report)

  • This statement is missing the line ‘Other comprehensive income for the year, net of tax’.

Essential information to go with the figures: the Notes to Financial Statements (page 5 of the Financial Report)

  • Note 1. Summary of Significant Accounting Policies

Special purpose financial statements

    • The directors say the company is ‘not a reporting entity’, but they give no reason for this important decision.
    • They are in effect saying that anybody who is interested in this company has the power to contact the company and request a report tailored to their particular needs.
    • The result of the decision is that the accounts don’t comply with the Australian Accounting Standards, and can disclose considerably less than that required for a general purpose report, a report designed for those people who are dependent on the charity’s report for the information they need.
    • You can compare the directors’ decision to this advice from the ACNC:                  If people use and rely on your charity’s financial statements to help them make decisions (for example, about how to spend money) then your charity is most likely a reporting entity. 
  • Although not clear from this, the directors should also consider prospective users.

Which Accounting Standards?

  • The directors do not say which Accounting Standards they did comply with.
  • a.    Employee benefits
    • No distinction is made between short-term and long-term benefits.
    • Defined contribution superannuation plans are not mentioned.
  • Missing Notes (in addition to the ones mentioned above)
    • New, revised or amending Accounting Standards and Interpretations adopted
    • Current and non-current classification
    • Trade and Other Receivables
    • Impairment of non-financial assets
    • Trade and other payables
    • Critical accounting judgements, estimates and assumptions
    • Fair value measurement
    • Provisions
    • Trade and other payables
    • Remuneration of auditors
    • Events after the reporting date
    • Commitments
    • Contingent liabilities

Where the committee members put their name to the report – the Statement by Members of the Committee (page 9 of the Financial Report)

  • Although nothing material is missing, the Statement doesn’t quite match the form required under the Act.

An independent opinion on the financial statements: Independent Auditor’s Report (page 10 of the Financial Report)

  • The auditor has assessed the directors’ decision that PoA is not a ‘reporting entity’ and agreed with it. That is, they agree that PoA 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 required PoA to produce a report tailored to their needs).
  • This is a ‘clean’ opinion. Read here and here to draw the right conclusions from this.
  • The auditor has not completely tailored his first paragraph for this client, leaving two of the statements with the wrong title.

Membership of accountability organisations claimed

  • None claimed.
  • The US organisation is a member of the Evangelical Council for Financial Accountability (ECFA).

 

(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.

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