The Australian Charities and Not-for-profits Commission (ACNC) has released information on its regulatory approach, with a warning that not-for-profit groups will be punished for sloppy record keeping, poor governance and acting outside their charitable parameters.
The ACNC says the three main situations that would result in official reprimands are:
ACNC Commissioner Susan Pascoe warned that willful wrongdoing from a not-for-profit group would result in the commission using its regulatory powers.
“It’s important that as the charity regulator we set the ground rules so charities and the community understand what constitutes good governance practice and effective financial management,” Ms Pascoe said.
“The ACNC begins from a presumption that charities act honestly and prudently. However, we will take decisive action when a charity acts dishonestly and puts public trust and confidence at risk,” she said.
Ms Pascoe said a proportionate approach would be taken when addressing issues, meaning the regulator would take the minimum required action.
“If a lesser option does not resolve the issue, we will take progressively stronger action until the issue is resolved,” Ms Pascoe said.
“In most cases we will give the people involved a chance to explain why the issue occurred. We will consider their explanation seriously before we decide if we need to use our formal powers,” she said.
Source: Australian Charities and Not-for-profits Commission Statement: Regulatory Approach
Options available to the ACNC for addressing issues include informal assistance and advice, letters, warnings, directing a charity to do something, suspending or removing a member of a charity’s governing body, and revocation of charity registration.
ACNC director of policy and education Sue Woodward described the regulators approach as “fair but firm”.
“It will play an important role in helping to maintain public confidence in registered charities,” she said.
More than 250 people provided feedback during a consultation on the ACNC’s regulatory approach that involved an online survey, written submissions and a phone-in day. Hundreds more provided feedback during a series of national community presentations, the ACNC says.
There are roughly 57,000 charities registered with the ACNC. However, the vast majority of Australia’s estimated 600,000 not-for-profit organisations operate outside of the regulator’s jurisdiction (though are generally subject to other state and national rules).
The Federal Opposition has pledged to dissolve the regulator and turn it into a small educative and training body if it wins office in September.
Visit acnc.gov.au to view the ACNC’s regulatory approach in full or to download a summary of the consultation results and contributions.
