ACNC to Impose Financial Penalties on Charities

The charity regulator has sent notices for the first time to 13 Australian charities warning they face significant fines for failing to submit their latest financial statements.

The Australian Charities and Not-for-profits Commission (ACNC) said the charities, which are all described as large organisations, have 10 business days to submit their outstanding Annual Information Statements and annual audited financial reports to avoid penalties of up to $4,260 per charity.

A spokesperson for the ACNC told Pro Bono Australia News the regulator could not disclose the names of the large charities that had failed to provide their audited financial statements however he confirmed some of them were well known to the public.

He said the charities receiving the penalty warnings had met their obligations previously, but were now significantly overdue with their most recent Annual Information Statement and annual audited financial reports.

ACNC commissioner Susan Pascoe AM said subdivision 175-C of the ACNC Act gave the ACNC the ability to issue penalties.

“We have not used these powers since the ACNC was established in December 2012,” Pascoe said.

“This was an appropriate stance through the first three and a half years of the ACNC as registered charities familiarised themselves with their obligations.

“However, registered charities have now been required to submit the 2013, 2014 and 2015 Annual Information Statements, so lack of awareness is no longer a reasonable excuse.”

She said the recipients of the warning notices were all large charities with annual revenues of $1 million or more and most were approaching being one year overdue, with each of the charities having been contacted multiple times by email and phone.

“It is disappointing that despite multiple reminders via email and phone calls that these large charities have still not submitted their outstanding reports. Non-compliant charities can have a significant impact on public trust and confidence and damage the reputation of the entire sector,” she said.

“Nearly 90 per cent of charities have filed their 2015 Annual Information Statements. We will continue to be fair, yet firm, when it comes to charities that fail to meet their obligations.”

Under the ACNC charter charities can be liable to a maximum penalty of five times the initial penalty based on the number of days that pass from the due date until the date the document is lodged.

Also this week, another two organisations lost their charity status, Australian Bunker And Military Museum Pty Ltd and The Trustee For The Afg Charities Trust.

The ACNC said these revocations followed compliance investigations into the activities and operations of the respective charities. They will all lose access to the Commonwealth charity tax concessions that they were previously endorsed (by the Australian Taxation Office) to receive.

“The ACNC has now revoked the charity status of 25 organisations following compliance activity, and a further 14,000 have had their status revoked or were removed from the Charity Register since December 2012, largely through the ‘double defaulter’ process or because there was no evidence that they were still operating,” Pascoe said.

In August alone 533 charities that the ACNC described as “double defaulters” for failing to provide Australian Information Statements for two consecutive years, had their charity status revoked.