Archived: Deaf Ministries International Ltd, charity review

This is a charity review, a review for those with an interest in the Australian charity Deaf Ministries International Ltd (DMI).

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 DMI.

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 9 April 2016, and invited them to comment. They did not respond.

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.
• DMI website.
• FaceBook. YouTube. Not on LinkedIn.
• State government fundraising licence registers.
• No reviews yet on Glassdoor.

REGISTRATION DETAILS

Entity Subtype

• A subtype consistent with sharing the Gospel.
• The first object shows that the extension of the Kingdom is very much what they are about:
  • The promotion of Christianity amongst deaf and hearing-impaired children and adults worldwide through evangelism, church planting, leadership training, Christian education and humanitarian assistance.

CHARITY DETAILS

Legal Name

• DMI is a company limited by guarantee.
  • As it has the necessary provisions in its constitution, it is entitled to omit ‘Limited/Ltd’ when it uses its company name.  As it does on FaceBook.
• For the year covered by the latest AIS (see below), DMI was an incorporated association. (In fact it is, according to ASIC, still registered as one.)
  • DMI changed from an association to a company in February 2016.
• There is also a DMI organisation called DMI International (see the early pages in the 14th AGM held 2nd May 2015 document from here.). Not Australian though – even though the office and International Director appear to be in Australia. Nowhere is the relationship to DMI explained.
• There are also organisations that seem to belong to DMI in Norway, Japan and Korea (bottom right here.) This connection is also not explained.

Charity ABN

• You are not entitled to a tax deduction for a donation to DMI.
  • This is contradicted by the second section on the home page of the website.
  • Following the link there is the only way that you will find out that the organisation described on the website is not just DMI, but actually a combination of DMI and The Trustee For Deaf Action Fund. (DMI is the trustee.) There is nothing on the Register to indicate this.
    • The ‘DMI Finance Manager’, who is also on the board of both organisations, confirms this in the Deaf Ministries International 2013 Finance Report (in the last item on the home page):
      • There are several parts to the financial reports that follow. Because DMI and Deaf Action are separate legal entities, we have included the audited financial reports for each as provided by our auditor [a misunderstanding of the reporting process]. However, because DMI and Deaf Action essentially operate as one organisation, I have also included a set of financial reports that show the combined figures and give a better overview of DMI’s financial position [emphasis mine].
        • You might ask them therefore, why they have not provided consolidated financial statements for the Register.

Charity Address for Service

• I have no reason to believe that this doesn’t work.

Charity Street Address

• Postal address, from the website: PO Box 395 | Beaconsfield Victoria 3807.

Email

• I have no reason to believe that this doesn’t work.

ANNUAL REPORTING

• AIS 2014
  • This is DMI’s compulsory Annual Information Statement 2014 (AIS 2014).
  • It gives basic financial information. If you think that this might be sufficient for you, note that these figures come from financial statements that do not comply with all the Australian Accounting Standards – see below – and are for the legal entity DMI only.
• Financial Report 2014
  • Because nothing is signed in the report, we don’t know when it was finished.
  • It was lodged four and a half months after year end.
    • 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 on the website.
  • But there is one in the constitution.

Date Established

• There’s a brief history on the website.

Who the Charity Benefits

• Vision
  • ‘OUR VISION’ here goes to a YouTube video with much more than that.
• Mission
  • None found – but see the above video.
• Activities (What did DMI do?)
  • From the Description of charity’s activities and outcomes in the AIS 2014:
    • Deaf Ministries International raises funds in Australia to support Christian ministry to the deaf in developing countries throughout Asia. DMI also runs primary and secondary schools for deaf children, and provides training and employment opportunities for deaf adults in those communities.
      • Not particularly about 2014.
  • See ‘Missionaries’ and ‘Countries’ in the main menu on the website.
• Outcomes (What did DMI deliver?)
  • DMI did not respond to the request in the AIS 2014 for a description of its outcomes.
  • Nothing systematic found on the website.
  • You will find some anecdotal evidence under Newsletters, and in the 14th AGM held 2nd May 2015 document from here.
• Impact (How were people’s lives improved?)
  • Nothing systematic found.
  • You will find some anecdotal evidence under Newsletters, and in the 14th AGM held 2nd May 2015 document from here.

Size of Charity

• With a revenue of $892K, DMI is $108K under the $1 m threshold for ‘Large’.
  • However, when their tax deductible operation, Deaf Action Trust, is included, their revenue is over $1 m.

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 ask for more up-to-date information.

WHERE THE CHARITY OPERATES

Operating State(s)[ii]

• In what sense does DMI operate in these four states rather than the other four?
• DMI doesn’t have a fundraising licence in any of the seven states that have a licensing regime.
• DMI calls for donations on its website (the right hand side, plus Sponsorship, Projects, and Donate in the main menu.)
  • Have they considered whether this gives rise to the need for a fundraising licence?

Operates in (Countries)

• 12 here, 18 under ‘Countries’ on the website, and 20 on the Home page.

CHARITY’S DOCUMENT (SIC)

• There is no Annual Report/Review available on the ACNC Register.
• The reports presented to the AGM for the 2014 year are towards the bottom here.

RESPONSIBLE PERSONS

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

Rodney Chapman        This function was not working at the time of publication

Lynne Graham

Susan Shannon

Neville Muir

Matthew Farmilo

Geoffrey Brooke

• The website is silent on the Board.
• No directors are mentioned in the Financial Report.

(End of review of the ACNC Register information)

Latest financial report – detail

• These accounts did not rate a ‘clean’ opinion from the auditor. He says that he had to qualify his opinion because
  • It was found that there are not appropriate controls over income received prior to entry into the accounting records.
    • Even if restricted to donation income, which I think the auditor meant to do, that’s 95% of income.
    • So for 95% of income, DMI has no assurance that all the money that it was given has ended up in the company’s bank account.
    • Why is it not practicable for the company to control this cash? Most other companies can. Directors please read this.
  • Apart from this, please first read the sections Charity ABN and Legal Name (both above), and consider how these unknowns might affect the information below.

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

• Note 2: ‘Conference income’ less ‘Conference expense’ = $3K surplus.
• The expenses are, contrary to the Accounting Standards, a mixture of the two classification methods.
• ‘Employee benefits expense’ $193K: Allowing 50% for part-timers, and 25% for casuals, this figure represents $86K per employee.
• ‘Administration expense’ $71K: This is 8% of revenue.
• The following expenses are not disclosed:
  • Superannuation
  • Fundraising
• Note 3:
  • With the Financial Report having been prepared by the same person who subsequently reviewed it, you will have to rely on the (unsigned) Auditor’s Independence Declaration… for an assurance that this obvious threat to independence was handled appropriately.
  • There is no policy Note on leases.

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

• ‘Total non-current assets’ should read ‘Total current assets’.
• Why no non-current employee benefits?
• ‘Trade and other receivables’: there is no mention of collectability.
• ‘Property, plant and equipment’: the usual reconciliations of written down values is absent.

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

• Note 1 Summary of Significant Accounting Policies
  • The directors say that DMI is not a reporting entity because ‘there are no users dependent on its general purpose financial statements’. Do they realise that they are saying that anybody who has an interest in DMI can request a financial report tailored to their specific needs?
  • The directors do not say which Accounting Standards they complied with.
  • Relatively minor omissions/mistakes:
  • (a) General Information: missing are DMI’s functional and presentation currency, and the date that the accounts were authorised for issue.
  • (c)  Income taxes: the exemption comes from the registration with the ACNC.
  • (d) Property, Plant and Equipment: missing is the policy on derecognition.
  • (g) Employee Benefits: no disclosure of the policy on superannuation expense, and no discussion of short-term versus long-term benefits.
  • (k) Revenue: no policy on ‘Interest income’ or ‘Conference income’.
  • (l)  Why is such a significant expense recognised only on payment when the accounts use the accrual basis
  • Missing policy Notes:
    • New, revised or amending Accounting Standards and Interpretations adopted
    • Current and non-current assets
    • Fair value measurement
    • New Accounting Standards and Interpretations not yet mandatory or early adopted
• Note 11 Related Parties: but what is DMI’s relationship to all these entities?
• Missing Notes:
  • Critical accounting judgements, estimates and assumptions
  • Contingent liabilities
  • Commitments
  • Events after the reporting period

An independent opinion on the financial statements – the Independent Review Report to the Members (page 15 of the Financial Report)

• Not a ‘clean’ opinion – see Latest financial report – detail, above.
• This report is unsigned (and therefore undated).
• Minor mistakes in the report:
  • The company’s name is repeated in the title.
  • Third paragraph: ‘is not satisfy’.

The other statements

• Page 3: Both surplus and other comprehensive income should be shown.
• Page 4: Why is interest revenue the same as interest received if the accrual basis is being used?
• Page 12: This important statement is unsigned (and therefore undated).
• Page 13: This declaration is not required by the ACNC; it is unsigned (and therefore undated).

Membership of accountability organisations claimed

• None claimed. However, DMI is a member of Missions Interlink.

(End of review)

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

[ii] 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.’

[iii] 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.