Archived: City Bible Forum Incorporated: mini-charity review for donors

Mini charity review of City Bible Forum Incorporated (CBF), as an organisation that seeks donations online. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

Are they responsive to feedback?

• When sent a draft of this review, they did not respond^[1].

Is CBF registered?

• As a charity, yes.
• Other registrations:
  • As a NSW incorporated association (Y2770511)^[2].
  • As an Australian Registered Body (ARBN: 105 231 089), allowing it to trade interstate.
  • The website says that CBF has offices in all states except ACT, Tasmania and the Northern Territory. Canberra, i.e. the ACT, is in the drop-down menu, and although it shows Sydney as its office, it is listed on the ACNC Register.
    • Apart from the fundraising via the internet (see above), do any of these offices fundraise? All the states in which it operates have a licensing regime for fundraisers: it is exempt in NSW, but is not licensed in the other five^[3].
  • CBF does not have any name registered other than its legal name (above). Therefore, it must, under its enabling legislation (section 41(1)),
    • ‘not issue any letter, statement, invoice, notice, publication, order for goods or services or receipt in connection with its activities unless the association’s name appears in legible characters on the document.’
    • It is arguable that, nowadays, this includes at least some of what is published on CBF’s social and other media pages, pages that are in the name City Bible Forum.

What does CBF do?

• Generally: what they describe here.
• More specifically: the activities here. (Less than this is said in the Annual Information Statement (AIS) 2015).

Does CBF share the Gospel?

• Although not required by its constitution – there is actually no purpose or objects written there– it is assumed that at least some of CBF’s activities (see ‘What does CBF do?’, above), include the proclamation of the Gospel.

What impact are they having?

• Nothing found.

What does CBF spend outside the costs directly incurred in delivering the above impact, that is, on administration?

• CBF do not make the impact they are seeking explicit. But even if they did, there is likely insufficient disclosure in the Statement of Comprehensive Income to calculate the cost of administration.

Can you get a tax deduction?

• Not to CBF. But you can to its fund, City Bible Forum Public Library.
  • Where is the library?

Is CBF’s online giving secure?

• They use eway, so yes.

Is their reporting up-to-date?

• Yes (three days before the deadline, seven months after their year-end).
  • But if you are considering a large donation, I would ask for more up-to-date financial information – the accounts are for a year-end that is now over 16 months ago.

Does their reporting comply with the regulator’s requirements?

• AIS 2015: No
  • No outcomes are given.
  • The type of financial statements said to be produced is incorrect.
  • The figures for ‘All other revenue’ and ‘Other income’ do not match those in the financial statements.
• Financial Report 2015: Questionable
  • Special purpose financial statements: CBF has offices in five states, at least 27 employees, and receives $1.68 m in donations. Yet the directors say that CBF has no users, past or prospective, who are dependent on normal financial statements to make decisions about the charity. (The corollary is that any stakeholder, now and in the future, can ask CBF to tailor a financial report for them.)
  • How can an organization that has offices in five states have no non-current assets, for instance, office equipment?
  • Why is the library not included in the balance sheet?
  • In the audited accounts:
    • Almost the entire expenses total, $1.81 m, is included merely as ‘Other expenses…’
    • Employee benefits expense is not disclosed.
      • ‘Employee expenses’ in the AIS 2015 is $1.44 m, 79% of the total.
        • The number of employees is reported as 14 full-time and 28 part-time in AIS 2015, considerably different from the 28 shown on the website.
    • No explanation is given for the inclusion of a liability, Provision for Long Serve Leave, in the Statement of Comprehensive Income…, or for it being a negative expense.
    • ‘Ministry activities’ ($141K) is not explained.

What financial situation was shown by that Report?

• The surplus as a percentage of income was decreased marginally from 2.2% to 2.0%.
  • The surplus is overstated by the amount of any depreciation that should have been charged.
• They borrowed once for working capital (rather than capital assets). Will they have to do it again?
• Liabilities exceed assets by $29K (down from $64K). This means that if CBF closed at 31 December 2015, it would owe people outside CBF at least this amount.
• Only $3K of the $104K loan is shown as a current (short-term) liability. The term of the loan is not given, but the directors’ comment that ‘The creditor has given a written undertaking not to call on the debt until the association has eliminated the deficiency of funds’, implies that it is repayable on demand. Such an undertaking, because it is not an unconditional right to defer settlement, does not qualify the loan to be classified as non-current [AASB 101.69, www.aasb.gov.au].
• This means that the working capital (current assets less current liabilities) is not the positive 1.2 times that is currently shown, but slightly negative.
• The administrative burden is increased by the use of a very large number of bank accounts.

What did the auditor say about the last financial statements?

• He gave a ‘clean’^[4] opinion. But
  • Silence by the directors on the challenge to the going concern assumption, plus their misclassification of the loan, suggests that a ‘clean opinion’ might not have been appropriate.
  • By accepting the engagement, the auditor implicitly agreed with the directors’ choice of special purpose financial statements over normal statements.
  • It appears that he signed before the directors signed their declaration.
  • And see the comments under ‘Financial Report 2015’, above.

If a charity, is their information on the ACNC Register complete?

• Yes

What choices do you have in how your donation is used?

• Infinite: ‘Please tell us if your donation has a special purpose’
  • There is no mention of the tax deductibility (see ‘Can you get a tax deduction?’, above).
  • Melbourne office is seeking money separately, and says that ‘We are able to make contributions of $2000 and more tax deductible (only a portion of our budget is tax deductible). This information does not match that shown on CBF’s ABN record (see above).

Who are the people controlling the CBF?

• Not shown on the website.
• The following people (from ‘Responsible Persons’ on the ACNC Register).
  • David Barnsdall
  • Andrew Charleston
  • Darryl Cross
  • Mark Daly (who is also a director of The Spiritual Assembly of the Baha’Is of Warringah Limited).
  • Mark Genning
  • Jacqueline Hodges
  • Peter Kaldor
  • Michael Raiter
  • Craig Shilson-Josling
• These directors are on more than three charity boards:
  • Peter Kaldor: seven
    • If it is the same Peter Kaldor for all seven charities, and knowing that this number does not include directorships of non-charity not-for-profits or businesses, you may reasonably question how somebody who is the managing director of a national charity with 28 staff can successfully discharge their fiduciary responsibilities to all these organisations.
  • Michael Raiter: four (including SparkLit and Familyvoice Australia Incorporated)

To whom is CBF accountable?

• To the ACNC.
• And to the New South Wales associations regulator.

1. Review sent 17 April 2107; published 1 May 2017. ↑
2. Not, as their ABN record says, an ‘Other Unincorporated Entity’. ↑
3. The law in this area is not straightforward and advice varies, so check with the charity before drawing any conclusions. ↑
4. To take the right amount of comfort from a ‘clean opinion’, please read here and here. ↑