The draft 2013 Annual Information Statement and 2014 Annual Information Statement Consultation Paper have been released.

Charities will need to answer questions not usually required under their existing reporting obligations. The information provided by a charity in the Annual Information Statement will be used to determine the charity’s entitlement to registration as a charity with the ACNC, their compliance with the ACNC Act and ongoing eligibility to receive tax concessions.

Charities will need to take care completing the Annual Information Statement.

The Australian Charities and Not-for-profits Commission (ACNC) have released:

  • the draft 2013 Annual Information Statement (AIS);
  • a step by step guide to the draft 2013 AIS; and
  • the 2014 AIS Draft Consultation Paper.

The draft 2013 AIS and the step by step guide can be accessed here and the 2014 AIS Draft Consultation Paper can be accessed here.

The AIS will mean charities will be reporting to the ACNC information which is additional to their existing reporting obligations to ASIC or relevant State or Territory body.

Charities will need to be prepared to answer the questions in the AIS in a way which accurately reflects that charity’s activities. The information in the AIS will be used to determine the charity’s entitlement to registration as a charity with the ACNC, their compliance with the ACNC Act and ongoing eligibility to receive tax concessions.

Charities will need to take care completing the AIS.

The 2013 AIS – What is required?

Your charity needs to be prepared to report more information in the 2013 AIS than it ordinarily did prior to the ACNC. For example, in the 2013 AIS, charities must answer questions on:

  • whether the charity has conducted any activities in the last financial year;
  • what were the charity’s activities in the financial year;
  • description of how the charity pursued its charitable purposes in the last financial year; and
  • who was helped by the charity’s activities in the last financial year.

Although the time for lodgement by charities of the 2013 AIS is some time away (due within 6 months of the end of the charity’s 2013 reporting period), the draft 2013 AIS has been released now to give charities an opportunity to preview the form and prepare before the final 2013 AIS is released.

The 2013 AIS does not require charities to submit financial information. However the 2014 AIS and future AISs will require both financial and non-financial information. The 2014 AIS is additional to the obligation of medium and large charities to submit annual financial reports for the 2014 reporting period onwards. Basic religious charities will not be required to provide financial information in the AIS.

The 2014 AIS – What is required?

The draft consultation paper envisages that small charities will have to complete a different AIS to medium and large charities.

Small charities (annual revenue less than $250,000)

Although a small charity may not be required to submit an annual financial report, they will still be required to provide some limited financial information.

Proposed information to be requested by the ACNC include:

  1. whether cash or accrual accounting was used;
  2. whether business activities were conducted;
  3. total income and breakdown of income;
  4. total expenses and breakdown of expenses;
  5. grants and donations within and outside Australia and
  6. total assets and liabilities.

Medium and large charities

Medium and large charities will be required to provide additional information relating to:

  1. preparation of general purpose or special purpose financial statements;
  2. whether audit or review report was modified and how so;
  3. related party transactions and
  4. whether any business activities were conducted.

We suspect that a charity’s responses, particularly to the question regarding the charity’s business activities, will be carefully scrutinised once there is movement on the Federal Government’s controversial NFP tax reforms. Those reforms have been delayed until 1 July 2014 and include the proposed reforms regarding unrelated commercial activities conducted by charities. Gadens Lawyers can assist your charity to review its activities pending the implementation of the tax reforms.

Public consultation on the 2014 AIS closes at 5 pm on 26 April 2013.

AIS means charities will be reporting more information 

As already evident, the ACNC’s AIS will require charities to report more information compared to their existing reporting obligations. For example, charities which are companies limited by guarantee will notice that the AIS requires a lot more information than the Annual Review conducted by ASIC. Charities which are incorporated associations will also notice that the annual return which they may be required to submit in their State or Territory does not cover the non-financial information required by the ACNC’s AIS.

Given the additional reporting obligations on charities as the ACNC becomes more established, the Charity Passport ‘report once, use often’ objective of the ACNC and its achievement will become increasingly important. A lot more work is required in this area. To date, only the ACT and SA have agreed to harmonise their reporting requirements with ACNC requirements. That still leaves 8 other States and Territories to go.  

From 1 June 2013, the revised Commonwealth Grant Guidelines require that departments must not seek information from grant applicants and recipients that has been provided to the ACNC.