Australian Charities and Not-for-profits Commission
|
In January 2011, the Government released a consultation paper seeking comments on the role and scope of national NFP regulation and the functions and form of a national regulator. The report that has now been released details how the Government intends to implement a national NFP regulator. The report is wide ranging and makes numerous recommendations on the scope and operations of the NFP regulator. Most submissions on the consultation paper were supportive of a national regulator, with significant agreement on the goals of harmonisation and simplification, particularly in relation to reporting requirements. All NFP entities, not just charities, will be subject to the new reforms. It also appears all entities will be subject to some level of reporting to the regulator. Some of the recommendations in the report include the following: |
|
Scope
 |
The NFP regulator should, as far as possible, be responsible for regulating all NFPs. |
|
Entities that are currently regulated by ASIC should be brought within the regulatory framework as soon as new reporting and governance frameworks are implemented. |
|
The Federal Government should seek the cooperation of the states and territories where it is necessary to implement its reforms, including the areas of incorporated associations and charitable trusts. |
Registration
|
The NFP regulator should determine the NFP status of entities. Initial focus should be on determining the status of charities and PBIs and then gradually extend to include all other NFP entities. |
|
Entities should have their status determined by the regulator on a voluntary basis. However a NFP entity will need to be registered and regulated by the NFP regulator to access any government support. |
Definition of Charity
The definition of charity should be based on the 2001 Charities Definition Inquiry but take into account the recommendations of the 2010 Senate Inquiry and recent decisions, such as Aid/Watch. (A standard definition of charity across all Government and state legislation would be beneficial. However it remains to be seen what that definition will be. It is certainly possible that the Government will seek to restrict the current definition of charity which is largely based on common law.)
Reporting
|
A “report once use often” approach should be adopted, overcoming the need for NFPs to comply with the varied reporting requirements of different government departments and grant providers. |
|
The regulator should be responsible for the Standard Chart of Accounts and should harmonise reporting requirements between Commonwealth, state, territory and local governments. |
|
Each entity should provide information for reporting purposes but the content should be proportional to the size of entities, risk factors and level of sector and government assistance. Small entities should be required to provide no more than a “post card” of information. |
Information Portal
The regulator should establish and maintain a public information portal for registered entities. Details on the portal could include information on sphere of operation, income and expenditure, financial history, contact details, governing documents, annual reports, trustee’s reports and summary information returns.
Funding
The Government should consider whether to collect a “supervisory co-contribution” from NFP entities to fund the national regulator.
Published : 1 July 2011