On 3 December 2012 the Australian Charities and Not-for-profits Commission (ACNC) became the new independent national regulator of charities. There are three objects in the Australian Charities and Not-for-profits Act 2012 (ACNC Act):
(a) to maintain, protect and enhance public trust and confidence in the Australian not-for-profit sector; and
(b) to support and sustain a robust, vibrant, independent and innovative Australian not-for-profit sector; and
(c) to promote the reduction of unnecessary regulatory obligations on the Australian not-for-profit sector.
Registered charities will be required to report annually to the ACNC. Much of this information will be published on the ACNC Register (to promote public trust and confidence) and provided to government agencies (to reduce regulatory and reporting obligations on charities). Every effort has been made to balance the task of collecting sufficient information to enable the ACNC to maintain public trust and confidence with its commitment to red tape reduction.
For reporting periods (financial years) ending 30 June 2013 and onwards, all registered charities will have an obligation to submit an Annual Information Statement (AIS) to the ACNC within six months of the end of their reporting period. The ACNC does not charge fees for charities to submit reports to us.
In relation to financial information in the AIS, we have been careful only to request information that we will use for our assessment activities, as required by the ACNC Act. Our assessment activities will ensure that we take a risk-based approach to compliance and that we provide education and assistance to the right charities at the right time.
The ACNC will become the first credible source of information on all Australian registered charities. We plan to publish regular sector snapshots using AIS data. This will provide new insights into the contribution that registered charities make within Australia and internationally.
Government agencies will be able to access the AIS information and other information held by the ACNC through a ‘Charity Passport’. The Charity Passport will be used by the ACNC as a way of reducing reporting duplication for charities. It is a collection of information that government agencies recognise as accurate and use for identification and data exchange. Asking charities to record financial information in our AIS is the only way the ACNC will be able to deliver on the Charity Passport initiative, which will reduce reporting duplication for charities.
One of the first examples of how this will benefit registered charities involves Commonwealth grants. From 1 June 2013, the revised Commonwealth Grant Guidelines state that departments must not seek information from grant applicants and grant recipients that is collected by other Commonwealth entities and is available to agency staff. In particular, departments must not request information provided to the ACNC. In addition, if a charity provides the ACNC with an independently audited financial statement, then a department should not require a financial acquittal, unless it has assessed the granting activity as higher risk.
The ACNC Commissioner can approve a different AIS for different sizes of charities. In 2014, the ACNC will not ask small charities to provide as much information as medium and large registered charities. The ACNC Act classifies small, medium and large charities based on their annual revenue:
• small – annual revenue less than $250 000
• medium – annual revenue of $250 000 or more and less than $1 million
• large – annual revenue of $1 million or more.
If a charity fits within the definition of a ‘basic religious charity’ (as defined in the ACNC Act) it is not required to provide annual financial reports. It must complete the same AIS as all other charities in 2013, but will not be required to answer financial questions in 2014 or future years.