ACNC reporting fuels debate

The not-for-profit (NFP) sector will be watching the new government with keen interest, in particular to see what will happen to the recently formed Australian Charities and Not-for-profits Commission (ACNC), a critical component of the Gillard/Rudd government’s NFP reform agenda.

The not-for-profit (NFP) sector will be watching the new government with keen interest, in particular to see what will happen to the recently formed Australian Charities and Not-for-profits Commission (ACNC), a critical component of the Gillard/Rudd government’s NFP reform agenda.

The incoming Minister for Social Services, Kevin Andrews, is already on record confirming the Coalition’s plans to dismantle the ACNC, saying what has emerged “is another regulator, more red tape, and yet another level of bureaucratic control of the sector”.

There is widespread concern in the NFP sector about this approach, with many acknowledging that although the goals of the ACNC are yet to be met, they are nonetheless worthwhile and more should be done to ensure they can be met.

A recent survey conducted by Pro Bono Australia found that the ACNC was the most supported preference for the type of regulatory framework, while only a small proportion supported regulation by the Australian Tax Office as proposed by Minister Andrews.

However, there is no doubt that there are differing views in the sector about the ACNC, in particular among large religious institutions.

For example, a new report from UnitingCare Australia suggests the ACNC has created an additional layer of reporting that could have been avoided.

Organisations registered with the ACNC must complete a mandatory Annual Information Statement (AIS). However, in the report, UnitingCare notes: “Much of the information required in the AIS and future financial reports has already been provided to government, often several times in different formats, to evidence operational and financial compliance. While the ACNC continues its work to develop the mechanism of the ‘Charity Passport’ to share the information it collects on registered charities, it is simultaneously asking for duplicative reporting from the sector. A significant opportunity for the ACNC to reduce red tape from the beginning of its operations has been missed and the cost of doing so has fallen to the sector.”

The report, Increasing our impact: Reducing red tape for the not-for-profit sector (PDF), continues: “We believe that rather than ask registered organisations to provide and reconfigure information again for the ACNC it would have been prudent for the ACNC to first identify if it might use information already collected by governments and other regulators. In some instances, information held by the Australian Taxation Office was transferred to the ACNC to initiate registration of some charities and this example may usefully have been applied to other government agencies and departments which hold information on charities.”

However, others in the not-for-profit (NFP) sector have a different perspective on whether the ACNC has created a new level of bureaucracy.

David Crosbie, CEO of the Community Council for Australia (CCA), notes that there obviously has to be an initial information gathering process for the ACNC to perform its function.

“This does impose a requirement – albeit relatively small compared to the average government funding contract – on all charities to provide some information. It is fairly obvious, however, that this initial information will drive the ‘report once, use often’ approach of the ACNC, thereby significantly reducing ongoing red tape and compliance. There is a balance to be struck here. The more initial information we provide the ACNC, the more the ACNC will be able to use that information to reduce duplication and other regulatory imposts.

“The feedback I have received from CCA members is that, if anything, they would have liked to provide more information to the ACNC and to the public about their organisations. Like many in the sector, CCA members want to reduce as much red tape as possible and build public trust and confidence. If filling in a form once a year helps achieve that goal, it is a worthwhile activity.”

Similarly, Anne Robinson, a principal of Prolegis Lawyers, says: “The ACNC represents added bureaucracy only in the same way that the introduction of the Australian Securities and Investments Commission (ASIC) did and it is as fair a criticism as it would have been to stop the process of corporate law reform before each of the state Corporate Affairs Offices had been closed. The great progress in red-tape reduction which business has benefited from over the past decade or two has completely bypassed the [NFP] sector. Stopping the reforms when they are only halfway complete would be unfortunate.”

Crosbie adds: “In its first nine months of operation the ACNC has registered over 1,000 new charities, responded to over 30,000 requests for information, run more than 100 consultations across Australia, investigated over 200 complaints about charities and established the first ever national online database of all Australian charities. It has also struck agreements with at least two state governments, ASIC, the Office of the Registrar of Indigenous Corporations, the Independent Schools Commission and others to share, rather than duplicate, information.  New Commonwealth Grant Guidelines requiring all government agencies to use the ACNC data, rather than duplicate requests for information, have also been put in place. Given the ACNC has yet to fully populate its initial data collection, these are remarkable achievements already.”