Archived: Church Missionary Society Victoria Inc, charity review

This is a charity review, a review for those with an interest in the Australian charity Church Missionary Society Victoria Inc (CMS-V).

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

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 11 June 2016, and invited them to comment. After initially seeking an extension of time to respond, they then declined the offer of more time, deciding to not submit a response.

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.

Sources

• ACNC Register (including links)
• Google search on the charity’s name.
• CMS-V’s share of a website.
• Facebook. Vimeo. No other social media.
• Not on LinkedIn.
• State government fundraising licence registers.
• No reviews on Glassdoor.

REGISTRATION DETAILS

Entity Subtype

• ‘Advancing religion’ would seem to be the right selection according to the constitution:
  • The object of the Branch is to work within the state of Victoria and Tasmania for the coming of God’s Kingdom through the proclamation of the Gospel of Jesus Christ throughout the world in fellowship with local churches…

CHARITY DETAILS

Legal Name

• CMS-V is a Victorian incorporated association (A0032305D).
• It is a mission agency of the Anglican Church (see page 27 here).

Other Name(s)

• No business names are held, so CMS-V should always be using its full name.
  • Not like on Facebook.

Charity ABN

• Tax deductibility: No, you cannot claim a tax deduction for a donation to CMS-V.

Charity Street Address

• Postal address, from the website: PO Box 2150, Rangeview, Victoria, 3132

Phone

• From the website: (03) 9894 4722.

Website

• Not one of its own, but a page on Church Missionary Society – Australia’s site.

ANNUAL REPORTING

• AIS 2015
  • This is CMS-V’s compulsory Annual Information Statement 2015 (AIS 2015).
  • It gives basic financial information. If you think that this might be sufficient for you
    • ‘Total revenue’ (and ‘Total Gross Income’) should be $2.36 m. (Which means that ‘All other revenue’ is similarly understated.)
    • ‘Employee expenses’ should be $634K.
    • There is insufficient disclosure in the income statement to confirm the two grants figures.
      • Their total is $27K short of the amount transferred to CMS-A.
• Financial Report 2015
  • The accounts were signed three and a half months after year.
  • The Report was then lodged another three and a half months after that, two days before the (extended) deadline.
  • The coverage of finances in this review is left until the financial report proper (see Latest financial report – detail, below). (Go straight there.)

ABOUT THE CHARITY

• Statement of Faith
  • There isn’t one on the website. But as a branch of CMS-A, it is required to ‘act in accordance with the CMS-A Principles and Objects, as contained in the CMS-A Constitution’. So that charity’s statement would apply.
    • CMS-A doesn’t have a conventional statement of faith on its website, but there is a short statement of what they believe under ‘Our Foundations’.
    • The Apostles’ Creed is the ‘Statement of Faith’ in CMS-A’s constitution (Schedule 2).

Date Established

• No history found. They do have archives though.
• I expect that CMS-V is mentioned in the history on the CMS-A website, and in this book.

Who the Charity Benefits

• Vision & Mission
  • Nothing separate to CMS-A.
  • Under ‘Our Goal’ on the website:
    • CMS Victoria is a network of members, supporters, churches and missionaries working together to see lives transformed by the Gospel message. We are passionate about supporting world mission, raising up and equipping workers to spread the gospel abroad. Our vision is for a world that knows Jesus.
• Activities (What did CMS-V do?)
  • In the AIS 2015:
    • CMS workers have continued to serve as co-labourers with over 100 international partners, including churches, schools, universities and Christian organisations, in more than 35 countries around the world. Our partners are involved in ministries that fit with our gospel vision and purpose. Our partners have welcomed CMS workers into their programs and ministries to share the lasting hope of Jesus Christ with people. We have continued to encourage churches and individuals in VIC to get involved in cross-cultural mission. CMS is a deductible gift recipient for provision of overseas aid in several countries, for aboriginal work in North Australia and in support of St Andrews Hall, the CMS training college in Victoria.
      • Apart from substituting ‘churches and individuals in VIC’ for ‘six branches across Australia’, and the deletion of a paragraph about the Sydney office, this is identical to what appeared in CMS-A’s AIS two years ago. So nothing specific about either CMS-V’s activities, or 2015’s activities, as requested.
  • Current activities are described on the website, and past activities in the Branch Matters newsletter.
• Outcomes (What did CMS-V deliver?)
  • CMS-V did not respond to the request in the AIS for its outcomes.
  • Nothing systematic found.
  • I’m sure there would be some anecdotal information in the Branch Matters newsletter.
• Impact (How were people’s lives improved?)
  • Nothing systematic found.
  • I’m sure there would be some anecdotal information in the Branch Matters newsletter.

Size of Charity

• CMS-V is $1.61 m over the threshold for this size (and it is the largest).

Financial Year End

• This means that the next financial report is due by 31 December 2016 – or 31 January if the ACNC again gives its (generous) extension (to all charities). Before that the financial information on the Register will be up to 18 months out-of-date.
  • You may therefore need to ask for more up-to-date information.

WHERE THE CHARITY OPERATES

Operating State(s)^[1]

• Although, at least from this information, it doesn’t operate interstate, CMS-V nevertheless is a Registered Australian Body (603 583 624).
• CMS-V’s donations come principally from ‘parishes and individuals’. However, because there are CMS branches throughout Australia, and because CMS-V is an Anglican mission, presumably most of this money comes from Victorian Anglican churches and Victorian Anglicans. However, it doesn’t have a fundraising licence in Victoria.
• CMS-V calls for donations on their website.
  • They do not have a fundraising licence in any of the other six states that have a licensing regime.

Operates in (Countries)

• This does not match the information on the website.

CHARITY’S DOCUMENT (SIC)

• An Annual Report/Review can be lodged on the ACNC Register, but CMS-V hasn’t done this.
• Nor is there one on the website.

RESPONSIBLE PERSONS

No. of Australian ‘responsible person’ positions^[2]

Kirsty Brown                   7

Bob Browne                     1

Graeme Chiswell             2

Simon Koefoed                1

Wei-Han Kuan                1

Peter North                      3

Jane Peters                       1

Roslyn Schnerring          4

John Sugars                     7

Pam Thyer                        6

• This matches the directors listed on the website.
• Under ‘Position’:
  • What is the distinction between ‘Board member’ and ‘Other’?
  • The constitution requires a President, Chairperson, Deputy Chairperson (or two), and a Treasurer.

(End of review of the ACNC Register information)

Latest financial report – detail^[3]

• The directors believe that a special purpose financial report is acceptable. This choice allows them to make less than a full disclosure about CMS-V’s finances and operations, and is implicitly a statement that any current or prospective user is able to command the preparation of a financial report tailored to their needs. Do the directors realise they are saying this?

What was earned, what was consumed during the year – the Statement of Income and Expenditure and Other Comprehensive Income (page 1 of the Financial Report)

• The list here is of expenses, not revenue as might be first thought (due to the lack of a heading).

Revenue ‘from operating activities’ $2.36 m, including Note 2

• Operating and non-operating is neither a helpful nor a current distinction.
• The slightly different distinction, between ‘Operating activities’ and ‘Other Income’, in Note 2 is also not correct. It should be ‘Sales revenue’ and ‘Other revenue’.
• There are two ‘Other Income’s shown. Confusing.
• Why is ‘Gain on sale of investments’ shown in one section but ‘Net surplus from sale of property’ in another?
• Contributions from parishes and individuals $1.55 m
  • There is no sub-total for donations and bequests – they are not even collected together – but it is $1.76 m.
• Estates and trusts income $192K
  • Aren’t these from individuals too?
• Investment income $245K
  • What return was achieved by the external managers of the $3.13 m investment portfolio?
• Legacies income $6K
  • Aren’t these from individuals too?
• Gain on sale of investments $83K
  • This is investment income. Why is it not included in that item?
• Contribution from CMS Australia in relation to fundraising expenses $84K, including Note (a)
  • From Note (a), this the total fundraising expenses incurred by CMS-V.
  • It represents 4% of revenue.

Expenses

• This classification of expenses mixes the two permissible methods.
• Administration expense is not disclosed.
• Fundraising expense is somewhat hidden: it is not in the expenses but under revenue in Note 2.
• Finance costs are not disclosed.
• Contribution to Church Missionary Society Australia Limited $1.15 m, including Note 4
  • This covered the payments made to CMS-V’s missionaries.
    • There are nine missionaries listed on the website, but ‘for security or privacy reason’, this is not all of them.
  • Why is it not included under ‘Employee benefits expenses’?
• Employee benefits expenses $634K
  • Based on the number of employees declared in the AIS 2015, and assuming this doesn’t include missionaries, part-timers work 50% of full-time hours, and casual employees 10%, this is $48K per employee.
• Summer conference and other events $131K
  • $141K revenue, see above, so a $10K surplus on those activities.
• Utilities, repair and maintenance $15K
  • If utilities are included here, what accounts for the difference between ‘Office accommodation’ ($80K) and the rent in Note 3(a) ($44K)?
• Mission support $10K
  • Is this CMS-V’s giving? It is less than ½% of revenue.

Other comprehensive income

• This item should be classified as either an amount that will not be classified subsequently to profit or loss or one that will be so classified when specific conditions are met.

What’s left at the end of the year – the Statement of Financial Position (page 2 of the Financial Report)

• Financial assets $3.37 m, including Note 7
  • Together with the cash held, this represents over 19 months of revenue. Why is so much held?
  • What is the asset mix for this portfolio?
• Employee benefits $37K (current), $15K (non-current), including Note 11
  • Is there no provision for resettlement of missionaries?
• Reserves $1.34 m
  • There is no breakup of this amount.

Essential information to go with the figures – the Notes to the Financial Statements (page 5 of the Financial Report)

• 1 Summary of Significant Accounting Policies
  • (a) Basis of preparation
    • The directors don’t say why they think that CMS-V is not a reporting entity.
      • The implication is that they think that all those currently involved with CMS-V, plus all those who might become involved as a result of CMS-V’s promotions and website, can get a financial report tailored to their particular needs.
    • Missing:
      • the type of entity (individual, not-for-profit), functional and presentation currency,
      • date the accounts were authorised for issue.
      • which Accounting Standards they complied with.
  • (d) Property, Plant and Equipment
    • Missing:
      • the useful lives adopted
      • policies on the review of the depreciation factors and
      • the derecognition policy
  • (g) Employee Benefits
    • What are these benefits?
    • There is normally a distinction between short-term and long-term benefits.
    • Defined benefit superannuation contributions?
  • (k) Revenue and Other Income
    • With the donations missing from the financial statements, is this because CMS-V believe that they become their monies at the point of collection, e.g. within churches? If so, is this valid?
  • (l) Agency Arrangement
    • They might not be CMS-V revenue and expense, but presumably they are still put through the books?
  • (m) Goods and Services Tax (GST)
    • What about GST and commitments and contingencies?
  • Missing policy Notes:
    • New, revised or amending Accounting Standards and Interpretations adopted
    • Current and non-current classification
    • Impairment of non-financial assets
    • Fair value measurement
• Notes normally included, even if the amounts are zero, but missing here:
  • Critical accounting estimates, judgements and assumptions
  • Contingent liabilities
  • Events after the reporting period

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

• This report is a ‘clean’ opinion. To take the right amount of comfort for this finding, please read here and here.
• The auditor says that the financial report complies ‘with Australian Accounting Standards to the extent described in Note 1’. However, there’s no such description there.
• He draws ‘attention to Note 1(k) about ‘the uncertainty associated with donation revenue’. However, that Note that doesn’t fully explain the issue.

Certificate of Members of Branch Council (the last page of the Financial Report)

• Although the other statement by the Branch Council is signed (see above), this one isn’t.

Membership of accountability organisations claimed

• None claimed on the website.
• However, CMS-V is a member of Missions Interlink.

(End of review)

1. 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.’ ↑
2. 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. ↑
3. I use the Pinnacle Financial Statements, respected in the profession as providing a very sound basis for producing compliant financial reports. To this I add an assessment of materiality (both quantitative and qualitative), where the users being considered are donors. ↑