ACNC Taskforce Investigates How to Deal with Non-Compliant Charities

Australia’s interim charity regulator, the ACNC Taskforce has commissioned a paper exploring good regulatory practice and how the regulator might might deal with non-compliant charities.

The Taskforce has commissioned Professor Valerie Braithwaite from the Australian National University to write the paper and consider both how the new regulator can support the sector and how it might deal with non-compliant charities.

Susan Pascoe, Interim Commissioner ACNC Implementation Taskforce says the paper will assist the ACNC in its approach to consultation with the sector, once the legislation to create the ACNC is passed.  

“I know there is concern within the Not for Profit sector in relation to the regulatory and compliance approach the Australian Charities and Not-for-profits Commission (ACNC) will adopt upon its establishment on 1 October 2012.

“I want to reassure everyone the ACNC will focus on delivering a regulatory approach that works for the majority of the sector who generally strive to 'do the right thing' and, not the minority who may be identified as seriously non-compliant,” Pascoe said in a statement on the Taskforce website.

“It is likely that few charities will need to move from the first two levels of support and assistance from the regulator. However, there will be times when the ACNC has to deal with seriously non-compliant charities and individuals.  

“In these instances the ACNC will move to ensure compliance and, if required, use sanctions so the community is protected from serious non-compliance or illegal activity.   

Pascoe says there was a clear view expressed in consultations that the overwhelming majority of well conducted charities did not want their reputation, or that of the sector, tainted by the negligence or wrongdoing of a few.

She says the ACNC will engage actively with key stakeholders on its proposed regulatory approach to ensure it recognises and respects the nature of the sector, meets the intention of government in creating the ACNC, and achieves its goal of being a firm but fair regulator.

“The sector and the Australian community is right to expect the ACNC will maintain, protect and promote public trust in the sector and be an effective regulator, working with those who need support and appropriately addressing those who choose not to comply,” she said.

The ACNC Taskforce says it is keen to adopt a Regulatory Pyramid of Support and Compliance for the sector which starts with education and support moves upward through compliance activity and sanctions including:

• Education and Support – Good guidance materials, advice services, education, capacity building, supporting sector initiatives such as forums, and excellence awards

• Assisted Compliance – Monitoring activities, letters, phone calls and site visits to discuss compliance concerns and actions to ensure compliance

• Proactive Compliance – Investigations, responding to serious complaints/alleged breaches, use of compulsory powers to gather information

• Graduated and proportionate sanctions – imposing proportionate and appropriate sanctions, for example: warning, directions, enforceable undertakings and injunctions

• Suspension or de-registration – reserved for serious non-compliance or illegal activity.

The ACNC Taskforce says it will discuss these ideas with the sector during consultation on its regulatory approach, taking into consideration the development of the ACNC legislation.