Archived: Alphacrucis College Ltd, charity review

This is a charity review, a review for those with an interest in the Australian charity Alphacrucis College Ltd (AC).

It is structured according to the charity’s entry on the ACNC[i]Register, and its purpose is to supply some information extra to what is there, information that may be helpful in your decision about AC.

It is up to you to decide whether any or all of the information presented here is what you need in order to make that decision, and whether you should seek any other information, either from the charity itself or from other sources.

Ministry response

Prior to publishing this review, I sent my observations to the charity, on 28 January 2016, and invited them to comment. They initially said they’d submit some corrections, but then I heard nothing more from them.

Organisation of this review

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

Sources

• ACNC Register (including links)
• Google search on the charity’s name.
• AC website.
• AC on FaceBook, Twitter, iTunes, YouTube, and an RSS feed, all via the footer on the website. No buttons, but AC is also on Vimeo, Issuu and LinkedIn.
• State government fundraising licence registers.
• Australian Government tertiary education accrediting authority.
• Government register of training courses.
• Glassdoor reviews
• Hotcourses reviews.

REGISTRATION DETAILS

Entity Subtype

• The first subtype is consistent with sharing the Gospel.
  • Even so, AC has deductible gift recipient status (see Charity ABN, below).
• The constitution provides that ‘The principal purpose of the College is to provide education.’ [4.1]. Note: not Christian education.
• However, that education has to be provided ‘consistent with the following objects of the College’, the first of these being
  • To establish, operate, maintain and promote, as part of the mission of the Church, the College in accordance with the beliefs, traditions, practices and legislation of the Church…[4.1.1].
    • ‘the Church’ is defined as the Pentecostal church Assemblies of God in Australia (now Australian Christian Churches[ii]).

CHARITY DETAILS

Legal Name

• AC is a public company, a company limited by guarantee.
• Although the fact is not disclosed in the Financial Report, AC is a wholly-owned subsidiary of Assemblies of God in Australia.
  • Only the leaders of that movement can be members, and those members appoint seven of the nine elected members of the Council.
• It does not appear to have approval to omit ‘Ltd’ on the end of its name.
  • If this is the case, then it is not authorised to use the name ‘Alphacrucis College’, as it does on its website.
  • It can, however, use the name ‘Alphacrucis’ (see Other Name(s) below).

Other Name(s)

• ‘Alphacrucis’ should be here.
• It also trades under the (unregistered) name Macquarie Leadership College.
  • The logo for the College says in small print that it is a ‘partner’ of AC, but this is even more reason for it to have an ABN.

Charity ABN

• Tax deductibility: Despite the fact that AC is about advancing Christianity, you can claim a tax deduction for your donation.

Charity Street Address

• Postal address, from the website: PO Box 337, Parramatta NSW 2124

ANNUAL REPORTING

• AIS 2014
  • This is AC’s compulsory Annual Information Statement 2014 (AIS 2014).
  • It gives basic financial information. If you think that this is sufficient for you
    • ‘Grants and donations made…’ cannot be confirmed with the financial statements as it is not disclosed.
    • The second and third figures under ‘Assets’ have been reversed.
• Financial Report 2014
  • The report was signed three months after the year end.
  • It was then lodged one day after the six month deadline.
  • The coverage of finances in this review is left until the financial report proper (see Latest financial report – detail, below).

ABOUT THE CHARITY

• Statement of Faith
  • None found.
  • Their ‘What we believe’ is not a conventional statement of faith.
  • The constitution says that the doctrines of the AC are those ‘expressed from time to time in Article 5 of the United Constitution’. Via the definitions this is the constitution belonging to the Assemblies of God in Australia National Conference. You can read it here.
    • Speaking in tongues is an essential [section 4.13].

Date Established

• You may know AC as either Southern Cross College or Commonwealth Bible College.
• Here’s a brief history from the website.
• A whole book was published in 2013.

Who the Charity Benefits

• Vision
• Mission
  • Our mission is to serve as a leading centre of Christian thought and action providing an excellent education to equip Christian leaders to change the world
  • Other bible colleges have a similar mission. Here’s how AC think that they are different.
• Activities (What did AC do?)
  • AC did not respond to the request in the AIS 2014 for a description of its activities in 2014.
• Outcomes (What did AC deliver?)
  • AC did not respond to the request in the AIS 2014 for a description of its outcomes in 2014.
  • None found on the website.
• Impact (How were people’s lives improved?)
  • Nothing found.

Size of Charity

• With a revenue of $8.48 m, AC easily qualifies in the largest of the ACNC three size categories (‘Large’).

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.
  • You may therefore need to request more up-to-date information.

WHERE THE CHARITY OPERATES

Operating State(s)[iii]

• The operating locations on the website do not include Victoria.
• Elsewhere AC says that it operates all over Australia.
• AC calls for donations on its website.
• It does not hold a fundraising licence in any of the seven that have a licencing regime.
  • It is likely exempt in Victoria, South Australia, and the ACT. The need for a licence in the other four states depends on whether those states think that AC, by calling for donations publicly, are ‘fundraising’ in their State.

CHARITY’S DOCUMENT (SIC)

• Although the constitution is available on the Register, its page, and that for the constitution of the Academic Board, is “currently under construction.”
• There is no Annual Report/Review available on the ACNC Register.
• Nor on the AC website.
  • They intend for there to be an annual report, but I couldn’t find one, and none shows up under a search of the site.

RESPONSIBLE PERSONS

No. of Australian ‘responsible person’ positions[iv]

Mark Burgess                          8

Shane Clifton                           1

Gregorio Cortese                     1

Stephan Crouch                       1

Stephen Fogarty                      1

Craig Hall                                  3

Scott Haslem                             3

Jonathan MacPherson           11

Michael Murphy                     11

Neil Ormerod                           2

Stuart Piggin                            2

Meylie Wylie                            1

• The list on the website also includes the constitutional (section 18.1) basis of them being on the Council; for instance Craig Hall is a person ‘external to the College’ and ‘having financial expertise’, who is ‘elected by the Members’.
• Going by the same list, it appears that three of the Councillors have been registered incorrectly: Crouch is ‘Stephen’, MacPherson is ‘James’, and Wylie is ‘Meylia’.
• Compared to the situation at 26 March 2015 (the Directors (sic) Report), Crouch and MacPherson have replaced Larissa De Michiel and Rodney Plummer.

(End of review of the ACNC Register information)

Latest financial report – detail

Directors’ Report (page 1 of the Financial Report)

• No such report is required by the ACNC.
• Meetings of directors: the Council also has four committees.
• It is normal to disclose the name of the Company Secretary.
• AC has 43 members, unchanged from last year.
• AC operates two DGR funds: Southern Cross College Building Fund and Southern Cross Library. There is no mention of them in the Report.

The Auditors (sic) Independence Declaration (page 6 of the Financial Report

• The ACNC does not require this to be lodged.

What was earned, what was consumed during the year – the Statement of Profit or Loss and Other Comprehensive Income (page 7 of the Financial Report)

• ‘Other comprehensive income’ is missing.
• Why are the two write-offs any less part of ‘operations’ than all the other expenses?
• Revenue $8.48 m (including Note 2)
  • Neither ‘Donations and fundraising income’ nor ‘Interest income’ are normally considered ‘sales’.
  • It is not possible to see how much was raised under each of the five donation options on the website:
    • Sponsor a cover
    • The AC Scholarship Fund
    • AC’s James Wallace Memorial Library
      • How does this relate to the Southern Cross Library DGR fund (see above)?
    • AC general fund
    • University Vision fund
      • Also, if the same fund, on Gofundraise.

 Expenses: what was consumed

• The following expenses are not disclosed:
  • Fundraising
  • Administration
  • Superannuation expense
• Employee benefits expense $4.55
  • Based on the number of employees shown in AIS 2014, and assuming that the part-timers averaged 50% of full-time, and the casuals 10%, this figure represents an average annual benefit of $73K.
• Advertising and promotions expense $$299K
  • How much of this was for fundraising?
• Course accreditation and development expense $286K
  • See ‘Write-off of capitalised course accreditation costs’ in ‘Non-operating items’
• Course delivery and other academic expenses $300K
  • This expense, and the previous one, appear to be more a classification by function than by the nature of the expense like the others. This is contrary to AASB 101.

Essential information to go with the figures – the Notes to the Financial Statements (page 11 of the Financial Report)

• 1. Summary of Significant Accounting Policies
  • AC does not identify its subsidiaries until Note 15. They are the New Zealand companies Alphacrucis Ltd & Alphacrucis International College Ltd.
  • AC does not say why their subsidiaries have ‘not been consolidated’. It is because they are exempt under the applicable Australian Accounting Standard (paragraph 4 of AASB 10). They qualify, in part, because they are themselves a wholly-owned subsidiary of Assemblies of God in Australia, and that organisation makes its financial statements publicly available. Find them here.
  • Missing information:
    • Functional and presentation currency
  • Since the directors have not said that they have the power to amend the financial statements after issue, we can assume that they don’t.
  • (a) Revenue
    • The Note covers only $19K of the $4.8 m revenue.
    • There is no revenue from the sale of goods.
  • (h) Goods and Services Tax (GST)
    • GST on commitments and contingencies is not mentioned.
  • (j) Critical accounting estimates and judgments
    • Key estimates – course accreditation costs: Why aren’t the ‘future cash flows associated with the academic operations’ not part of the ‘cash flows from operations relating to the property at 30 Cowper Street’? Isn’t that where a major part of those ‘academic operations’ occurs?
    • ‘Capitalisation’ does not usually result in a current asset.
      • How does this current asset ($790K) turn into an expense?
      • Why is this expenditure classified as an ‘Other Asset’ rather than an intanglible?
        • And then amortised.
    • Estimating the useful lives of depreciable assets and calculating employee benefits don’t qualify here?
  • Missing policy Notes
    • New, revised or amending Accounting Standards and Interpretations adopted
    • Income tax
    • Current and non-current classification
    • Trade and other receivables
    • Impairment of non-financial assets
    • Trade and other payables
    • Employee beneftis
    • Fair value measuremen
• 8 (a) Revaluation of property, plant and equipment
  • The land and buildings have not been valued in accordance with the revaluation policy.
• 12   Reserves
  • ‘Realised’ should be ‘unrealised’.
• 15   Related Parties
  • No investment in the subsidiaries is shown in the accounts.
  • Any transactions with
    • the Chairman’s organisation Leaderscape?
    • Other Council members and their ministries/organisations?
    • the ministry of two of the staff, Global Training Ministries?
    • ACCI?
• Missing Note: Contingent liabilities
  • Don’t tuition fees have to be repaid under certain conditions?

An independent opinion on the financial statements – the Independent Audit Report…(page 29 of the Financial Report)

• The reference should be to the ACNC legislation, not the Corporations Act.
• This is a ‘clean’ opinion.  Read here and here to draw the right conclusions from this.

Membership of accountability organisations claimed

• None claimed, including where its other memberships are listed. AC is, however, a member of Missions Interlink.

(End of review)

[i] Australian Charities and Not-for-profits Commission, Australia’s national regulator of charities.

[ii] It has two charity registrations in the same name, one an incorporated body, one not, but both exempt from reporting.

[iii] This is how the ACNC explains ‘operating locations’ in their application guide: ‘You need to give details about where in Australia your organisation conducts (or plans to conduct) its activities.’

[iv] Because of the possibility of two (or more) directors having the same name on the register of responsible persons, it is not possible to be definitive about the number of directorships held.