By Rob Starr, Content Manager, Big4.com
On 1 November 2012 legislation was passed by the Australian parliament to set up the new charities and Not for Profit (NFP) national regulator – The Australian Charities and Not for Profit Commission (ACNC).
Charities should consider the following practical implications of the proposed principles of reform:
- Is there a structured financial reporting framework which encompasses governance, social accountability and stakeholder engagement?
- Do existing governance structures support operational efficiency?
- Is the Board receiving the right information to be able to act strategically and plan for these reforms?
- What are the relevant performance indicators and are they consistent with stakeholder needs?
- Is the appropriate level of disclosure being made to key stakeholders including donors?
- Can the organisation efficiently and accurately collect and analyse data which donors require to make informed decisions?
- Does the organisation have the required IT capabilities and skilled personnel to ensure transparent reporting is achieved?
- Does the organisation understand the risks that exist with performance reporting: reputation, resources, assurances, striking a balance between strengths and weaknesses?
Gaile Pearce, Deloitte Private Partner, believes that charities need to start preparing themselves for what is expected to be significant reform in the sector.
“Charities will be required to report financial information from years ending June 2014, with comparative information to June 2013. Organisations cannot afford to wait until June 2014 to consider the impact of these reforms on their day to day operations, which will include their capacity to attract donations,” she said.