Charity Concerns on the Rise, ACNC Says
Wednesday, 7th March 2018 at 2:09 pm
Concerns about Australian charities rose by 42 per cent in 2017, according to a new report from the national charity regulator.
The Australian Charities and Not-for-profits Commission released The Charity Compliance Report 2017 on Tuesday, which noted that 1,695 concerns were raised about charities in 2017, compared to 1,192 complaints in 2016.
The number of charity concerns has increased each year since the national regulator was established in December 2012, and ACNC commissioner Dr Gary Johns said the increase was likely due to growing awareness of the ACNC and media coverage of charity misconduct.
“As awareness of the ACNC has grown over the last five years, we have seen a steady increase in the number of concerns raised about the activities and operations of charities,” Johns said.
“Members of the public remain a valuable source of information, as they contributed 23 per cent of the concerns that our compliance team assessed in 2017.
“And while concerns have increased, it is important to note that the majority of Australia’s registered charities do the right thing, and deliver significant public benefit to our community in a wide range of areas.”
In 2017, 202 charities were investigated, with 82 of these investigations finalised.
As a result, 26 charities lost their charity registration, while a further 16 charities entered into compliance agreements with the ACNC.
The most common types of concerns related to “governance breaches, fraud, lack of transparency, and mismanagement, including breaching the charity’s own governing document”.
Johns said poor governance was a common theme of the ACNC’s investigations.
“Due to the secrecy provisions in the ACNC Act, we’re unable to provide much detail regarding the findings of our investigations,” Johns said.
“The most common issues we identified related to poor financial controls, inadequate due-diligence, and a failure by charities’ responsible persons to act in the best interests of the charity.
“These issues, in addition to fraud, terrorism, harm to beneficiaries and disqualifying purposes, will be areas of focus for the ACNC in 2018.”
The report said that the ACNC will also focus on early intervention in 2018.
“In 2018, the ACNC compliance team will establish a dedicated outreach function to engage early with charities that we believe may be at an increased risk of misuse,” the report said.
“This may include charities operating in high-risk countries, or charities working with particularly vulnerable beneficiaries or children.
“The purpose of the outreach function will be to educate and guide charities on best practice governance, including partner due diligence and monitoring, and sound financial practices to ensure funds are only applied for intended purposes.”
In the report’s foreword, Johns discussed the limitations imposed by the commission’s secrecy and privacy provisions, and noted that the ACNC “raised this as an issue we feel needs to be addressed” in their submission to the five-year ACNC review.
“We would like the ability to disclose information where it is in the public interest – for example, confirming if an investigation has commenced, disclosing action the ACNC took in relation to a registered charity, and publishing why we decided to revoke a charity’s registration,” Johns said.