Archived: ACCESS Ministries review

This is a review, for donors, of the Australian charity The Council For Christian Education in Schools (ACCESS Ministries). Status with the ACNC[i]

• Registered. See their ACNC Register entry here.

Organisation of this review:

1. This review is organised according to the headings in the register entry. This is how to use this section of the review:
   • For each heading in the register entry, first read the information under that heading.
   • Then check if that heading is included below. (Headings for which there is no comment are not included.)
2. There is then a more detailed comment on the Financial Report.

Sources:

• ACNC Register (and its links)
• Annual Report/Review (Not available on the website, but can be requested; it was sent immediately.)
• Google search on Access Ministries and ’The Council For Christian Education in Schools’
• Access Ministries website, and on LinkedIn. They are not on Facebook.
• Email response, on 24.06.2015, from Paul de Mare CFO, to an invitation to them to comment on my observations[ii] in preparation for this post.
• www.glassdoor.com.au – no reviews

Ministry Response

Thank you for your observations. They have revealed to us areas for improvement, particularly in the superfluous bits of information that should not form part of the report, the typo that should not have occurred and areas where more information may be appropriate [Paul de Mare, CFO, by email 24.06.2015].

CHARITY DETAILS Legal name

• Even though the name is absent ‘Ltd’, the organisation is a company limited by guarantee, with permission to omit the Ltd.
• The name was changed from CCES (presumably Council for Christian Education in Schools).

Other Name(s)

• This is both a trading name and a business name.

• In addition, they have three other business names: Access Ministries Training Institute, Access Publishing International, and Religion in Life.

Charity ABN You can claim a tax deduction for a gift to this charity. Charity Street Address

• The website has the same street address but then HAWTHORN EAST VIC 3123.
• Postal address, from their website: ACCESS ministries, GPO Box 5124, MELBOURNE VIC 3001

ANNUAL REPORTING Basic financial information is shown in the Annual Information Statement 2014, but I leave my coverage of finances until the financial report proper (below). CHARITY’S DOCUMENTS Document Type: Financial Report This report can be opened either from here or from within the Annual Information Statement 2014 under Annual Reporting (above). ABOUT THE CHARITY Who the Charity Benefits

• A summary of what they do for these people is described in their Annual Information Statement 2014 under Annual Reporting, above.
  • There is an expansion in the Directors’ Report, below.
  • Even more information is in the Annual Review 2014 (available by request).

Outcomes

• ‘Activities and outcomes’ are called for in the Annual Information Statement 2014 but the response only has activities.
• A description of the how they went with these activities is given under Review of Operations in the Directors’ Report, below.

Size of Charity 2014 ‘Sales revenue’’ was $12.6 m, far surpassing the $1 m threshold for the top size of charity. Financial Year End This means that the next financial report is due by 30 June 2016. Before that the financial information on the Register will be up to 18 months out-of-date. Where the Charity Operates Operating State(s) They also sell religious educational material throughout Australia (Annual Information Statement 2014). *They don’t hold the necessary Victorian fundraising licence. RESPONSIBLE PERSONS The Constitution requires a minimum of 10 directors. But they have only nine listed, both here and in the Directors’ Report, below.   Latest financial report – detail Directors’ Report Ignore the disclosures on dividends and options. Neither are permitted by law. Minor disclosures missing:

• Only one trading name is mentioned. None of the business names are mentioned.
• Most directors represent a church. This information is not included.
• The holder of the mandatory office of Secretary is not identified.
• The cost of the ‘Indemnification of Officers’ is not disclosed.

Although there’s nothing under ‘likely developments’ because they say that disclosing them is ‘likely to result in unreasonable prejudice to the entity’, the Annual Review 2014 (available by request) is more helpful:

While the core activities of ACCESS ministries will remain, evolving as they respond to a rapidly changing world, new opportunities to serve are opening up. While it may be too early to be specific, the Board has approved plans to investigate some exciting prospective ventures.

As we have seen Chaplaincy change in focus over recent years more towards Primary school over Secondary, we see the need to expand services beyond the traditional “Prep to year 12” model (page 03).

We are actively reducing costs and seeking productivity improvements in the immediate term while also making plans for a new model of future financial strength and sustainability (page 05).

 What was earned, what was consumed during the year – the Statement of Profit or Loss (including applicable Notes) Fundraising costs are not separately disclosed. Sales Revenue $12.6 m

• This not all sales revenue – Note 2 shows that only 7% comes from sales.
• $6.3 m (50%) comes from governments as a grant, the balance principally from ‘contributions’, fundraising and donations.
• ‘Contributions – Council Member’ is not explained – although from the Statement of Cash Flows (see below) we can see that it is a donation rather than something more compulsory.
• The relationship between the various items under ‘Other revenue’ in Note 2 and the invitations to donate on the website is not obvious.
  • Although it is under ‘Other revenue’, 30% of total revenue ($3.8 m) comes from ‘Chaplaincy contributions’.  The nature of this revenue is not explained anywhere, but presumably it results from this website invitation.
  • Another item under ‘Other revenue’, ‘Fundraising & donations’, providing another 8% ($1.0 m) of total revenue, presumably includes the other donation invitation on the website, something called ‘SRI Partnerships’.
    • We learn from the Annual Review 2014 (page 17) that the SRI program, despite the statement there that “we have the responsibility of stewardship of all funds and we have to run sustainably in order for the program to continue”, has been cross-subsidised by other programs for many years.
  • *Although the Annual Review 2014 (page 17) announces a new fund, the Grace Fund, there is no mention of it on the website. (The absence of a search function increases the chance that I am mistaken.)

Employee benefits expense $10.5 m

• This item is 84% of expenses, but there is no Note giving a breakdown.
• Finance costs are not shown.

Gains and losses – the Statement of Comprehensive Income

• The organisation held $1.2 m worth of shares in listed companies at the beginning of the year (see below). The change in value over the year caused a reduction in comprehensive income of $22K.

What’s left at the end of the year – Statement of Financial Position (including applicable Notes) Cash and cash equivalents $1.5 m

• There is no explanation for holding this amount in cash.

Inventories $287K

• No explanation is given for non-standard valuation method.

Financial Assets $1.2 m

• No explanation is given for the holding of a long-term investment in shares (a risky asset), especially as much as $1.2 m.

Provisions – employee benefits $493K Current, $194K Non-Current

• 44% of the liabilities are in ‘Provisions- employee benefits’ yet the Notes are absent the usual breakdown.

Essential information to go with the figures: Notes to the Financial Statements Note 1: Summary of Significant Accounting Policies

• There is no support for the directors’ decision that “the entity is not a reporting entity”, and that general purpose financial statements are therefore not required. If there any donors who look at the ministry’s financial statements, then, going on the ACNC’s advice, the director’s decision is highly suspect:

If people use and rely on your charity’s financial statements to help them make decisions (for example, about how to spend money) then your charity is most likely a reporting entity.

Even if the directors argue that nobody currently uses the statements, this doesn’t matter: the law actually requires them to consider whether potential users exist. And they definitely do.

• The statements are said to have been prepared without reference to two of the required Accounting Standards, AASB 1031 and AASB 1048.
• Note (o): there is a conflict between the statement that these contributions are recognized “on the date of receipt”, and the notion of ‘contributions in arrears’. And see the next point.

• Note (p) discloses that

Funds held by local Chaplaincy committees are not shown in the entity’s assets, nor is the income and expenditure of the committees consolidated into the parent entity. Any funds held by the committees would come to the entity if a committee ceased to exist. There were 64 committees at 31 December 2014 with net assets totaling $3,399,322 (2013: $3,387,045).

So, despite acknowledging, twice above, and on the website, that these committees are an integral part of the organization, both the directors and the auditor are happy to leave them out of the accounts. And without any explanation. With net assets that are 1.75 times those that are shown for the entire organization, this is a major omission.

• Note (u): this is lacking the required detail.

Other Notes

• The group of people included in ‘key management personnel’ are not identified.
• The entity is a charity yet spent $15K with its auditor on ‘taxation services’.
• Even though there are representatives of twelve denominations on the board, and some of these have their own business, there were no related party transactions.

• There is no ‘Member’s Guarantee’ Note.

Directors’ Declaration This is where the directors sign that it is consistent with the law that special purpose financial statements are appropriate and that it is OK to leave out the finances of its Committees. Independent Auditor’s Report  This is where the auditor says that they are OK with the directors’ choice of special purpose financial statements, and OK with the omission of the finances of the Committees. I’ll leave you to decide how much confidence you put in the rest of their report.   (End of review)   [i] Australian Charities and Not-for-profits Commission, Australia’s national regulator of charities. [ii] Except for those marked with * at the beginning.