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Four NFPs Lose Charity Status Over ‘Mismanagement’


20 June 2016 at 3:33 pm
Lina Caneva
The charity regulator has revoked the charity status of four organisations following an investigation into what it described as “serious circumstances of mismanagement”.

Lina Caneva | 20 June 2016 at 3:33 pm


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Four NFPs Lose Charity Status Over ‘Mismanagement’
20 June 2016 at 3:33 pm

 

The charity regulator has revoked the charity status of four organisations following an investigation into what it described as “serious circumstances of mismanagement”.

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The Newcastle Night Angels Homeless Care Incorporated, St Andrews Children Neighbourhood Centre Inc, Balranald Aboriginal Health Service Incorporated and Xin Yi Dai Inc will all lose access to Commonwealth charity tax concessions.

It follows inquiries by the Australian Charities and Not-for-profits Commission (ACNC) going back to 2013.

Xin Yi Dai Inc, which began operating in November 1999, was operating as the Melbourne Senior Secondary College.

It was endorsed by the ATO to operate a fund with DGR status. The organisation had also been endorsed to access Commonwealth charity tax concessions GST concessions, the FBT rebate, and income tax exemption.

Its 2013 annual report showed it received almost $500,000 in state and federal grants and received almost $900,000 in overseas student fees.

However, the school was forced to close in July 2015 after an investigation by the Victorian Regulation and Qualifications Authority over its alleged handling of the education of foreign students and financial management issues.

Media reports at the time said a financial viability assessment by auditing firm Grant Thornton found there was “ineffective financial management” at the school.

The ACNC has backdated the revocation to 2013.

According to the Australian Business Register (ABR) Newcastle Night Angels Homeless Care Incorporated has been operating since 2013 and is based in New South Wales.

It was endorsed by the ATO as a deductible gift recipient, and was also endorsed to access the following Commonwealth tax concessions as a public benevolent institution income tax exemption. 

The ACNC has said its charity status will be revoked effective 17 May 2016.

However charity president and founder Samantha Banks told Pro Bono Australia News that she was still operating.

“We went for a DGR and now that has happened I have just got to pay tax, I don’t get tax concessions, i’m still in operation but as an incorporation,” Banks said.

“I didn’t even have to register with them [the ACNC] when I opened my charity, it was the accountant that said if you want tax concessions you will have to register with the ACNC.

“It is just a setback… We were going for bigger grants from the federal government… when you go for the big money from the government that’s when all the paperwork comes in.

“I said I don’t have time for all this paperwork, I have got a homeless thing I run every night… I work in towns from 9pm until about 1.30am and then I come out to Maitland and I am looking after a man and his dog in a car that’s homeless… it just doesn’t stop.”

Banks set the charity up after her homeless brother Tony was murdered on the streets of Sydney more than 10 years ago.

She said she would carry on helping the homeless.

“There is no way in the world I am ever going to stop looking after these people, I went out last night in the pouring rain, like I do every night…there is no one else out there of a night time,” Banks said.

“I’ve been doing it for quite a long time, I used to go from North Richmond to Manly on a train, with clothes, food to look after the homeless and that was in 2003, I’ve been doing it since 2003.

“…I’m in great demand of a night time.

“The homeless were all really upset last night because they had heard a rumour, ‘are you closing down?’ Well no I’m not.”

St Andrews Children Neighbourhood Centre Inc has been operating since 2000 and was based in New South Wales.

The neighbourhood centre is described as assisting children under the age of 13. It had been endorsed by the ATO to access Commonwealth charity tax concessions GST concessions, the FBT rebate, and income tax exemption.

Balranald Aboriginal Health Service Incorporated has been operating since 2001 operating health and outreach services based in New South Wales.

It was endorsed by the ATO as a DGR, and was also endorsed to access the Commonwealth tax concessions as a public benevolent institution including GST concessions, FBT exemption and income tax exemption.

Its last report to the ACNC showed it employed one full-time staff member and two casual employees with revenue of less than $250,000.

The organisation’s telephone number has been disconnected. The ACNC has also backdated the revocation to 2013.

The ACNC said the charities have 60 days to object to the ACNC’s revocation decisions, in which case they will be reviewed internally.

Commissioner Susan Pascoe AM said the ACNC’s approach to compliance activity was proportionate.

“Our compliance activity starts with education and guidance,” Pascoe said.

“However, we are committed to maintaining and protecting public trust and confidence in the sector.

“When we find serious circumstances of mismanagement or deliberate breaches of the ACNC Act we will revoke charity status, which removes access to Commonwealth charity tax concessions.

“The overwhelming majority of people running charities do the right thing for the benefit of the community. However, since the establishment of the ACNC we have found a small group that are not willing to meet their obligations and in some cases, are purposely using a charity as a vehicle for private benefit.”

The ACNC said it was prevented from disclosing further details due to secrecy provisions in the ACNC Act. However, the ACNC will publish instances in which it uses its formal powers, including revocation, on the charity register.

Since December 2012, every charity registered with the ACNC has had to meet certain obligations and responsibilities under the ACNC Act.

“I encourage members of the public to raise any concerns with the ACNC. Concerns can be raised by calling 13 ACNC or by visiting acnc.gov.au/raiseaconcern,” Pascoe said.


Lina Caneva  |  Editor  |  @ProBonoNews

Lina Caneva has been a journalist for more than 35 years. She was the editor of Pro Bono Australia News from when it was founded in 2000 until 2018.




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