Adhering to ACNC's governance standards - Quarter 3

The ACNC’s governance standards are core principles dealing with how a charity should be run.

Charities must meet the standards to be -- and remain -- registered. The principles do not apply to basic religious charities.

They require charities to remain charitable, operate lawfully, and be run in an accountable and responsible way. They help to maintain public trust in charities’ work.

The principles are high-level, imprecise rules, and charities must determine what they need to do to comply with them.

Standard
 Explanation
1 Purposes and not-for-profit nature
 A charity must be not-for-profit and work towards its charitable purpose.
 
It must be able to demonstrate this and provide information to the public about its purposes.
2 Accountability to members
 A charity that has members must take reasonable steps to be accountable to its members and provide them with adequate opportunities to raise concerns about how the charity is governed.
3 Compliance with Australian laws
 A charity must not commit a serious offence (such as fraud) under any Australian law or breach a law that may result in a penalty of sixty penalty units or more. From 1 July the value of a penalty unit is $330.
4 Suitability of responsible people
 A charity must take reasonable steps to:
  • Be satisfied that its responsible people (such as board or committee members or trustees) are not disqualified from managing a corporation under the Corporations Act 2001 or disqualified from being a responsible person of a registered charity by the ACNC commissioner, and
  • Remove any responsible person who does not meet these requirements.
5 Duties of responsible people
 A charity must take reasonable steps to make sure that its responsible people are subject to, understand, and carry out the duties set out in standard 5.
6 Maintaining and enhancing public trust and confidence in the Australian not-for-profit sector
 A charity must take reasonable steps to become a participating non-government institution if the charity is, or is likely to be, identified as being involved in the abuse of a person either:
  • In an application for redress made under section 19 of the National Redress Scheme for Institutional Child Sexual Abuse Act 2018, or
  • In information given in response to a request from the National Redress Scheme Operator (secretary of the Department of Social Services) under section 24 or 25 of the Redress Act.

 
An ACNC self-evaluation tool aims to help charities assess if they are meeting their obligations. It also helps to identify issues that might prevent them from doing so.

It poses questions and prompts charities to describe both the practical steps they are taking to meet their obligations and to list relevant policies and procedures.

A charity that conducts activities overseas – including sending funds overseas from Australia – must also comply with external-conduct and governance standards.

Four external-conduct standards cover certain aspects of a charity’s overseas operations.

Standard
 Explanation
1 Activities and control of resources (including funds)
 The way a charity manages its activities overseas and how it is required to control the finances and other resources it uses overseas.
2 Annual review of overseas activities and record-keeping
 The requirements for a charity to obtain and keep sufficient records of its overseas activities.
3 Anti-fraud and anti-corruption
 The requirements for a charity to have processes and procedures that work to combat fraud and corruption in its overseas operations.
4 Protection of vulnerable individuals
 The requirement for a charity to protect the vulnerable people that it works with when conducting its overseas operations.


An ACNC self-evaluation tool for charities operating overseas aims to help charities assess if they are meeting their obligations and identify issues that might prevent them from doing so.

The tool poses questions and prompts charities to describe the practical steps they are taking to meet their obligations.



General Advice Warning
The information provided in this article is for general information purposes only and is not intended to and does not constitute formal taxation, financial or accounting advice. McConachie Stedman does not give any guarantee, warranty or make any representation that the information is fit for a particular purpose. As such, you should not make any investment or other financial decision in reliance upon the information set out in this correspondence and should seek professional advice on the financial, legal and taxation implications before making any such decisions.