Archived: Every Home Global Concern Limited, charity review

This is a charity review, a review, for supporters and potential supporters, of the Australian charity Every Home Global Concern Limited (EHGC).

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 giving decision.

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 18 November 2015, 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.)
• 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 names (see Charity Details, below).
• EHGC websites: Global Concern and Every Home for Christ.
• Global Concern social media in the right of each webpage header. Not on LinkedIn.
• Every Home for Christ social media sites, excluding FaceBook, in the footer of each webpage. Facebook here.   Not on LinkedIn.
• State government fundraising licence registers.
• www.glassdoor.com

REGISTRATION DETAILS

Entity Subtype

• Neither of these types, despite the company’s name, is consistent with sharing the Gospel.
  • EHGC does, however, share the gospel – last year’s annual report (see below) records how many people have responded since the ministry began.
• The company’s objects cannot be checked because it has not lodged its Memorandum of Association with the ACNC.

CHARITY DETAILS

Legal Name

• EHGC is a public company, a company limited by guarantee.
• Because it does not have an explicit prohibition against paying directors’ fees, it is not permitted to omit ‘Ltd’ on the end of its name.

Other Name(s)

• The search result for the charity shows this to be separate names, Every Home for Christ and Global Concern, not one.
  • Despite the claim in last year’s annual report (see Charity’s Document (sic), below), that they are registered trading names, this is not supported by the register of such names – neither is registered as either a trading name or a business name.

Charity ABN

• Tax deductibility: You cannot claim a tax deduction for a donation to EHGC.
  • But you can for a donation to its fund Every Home Global Concern Ltd Australia Overseas Aid Fund.

Charity Street Address

• The postal address, from the website, is PO Box 168 Penshurst, NSW 2222 Australia. (Or PO Box 31-260 Milford, Auckland, 1330 NZ if you are in New Zealand.)

ANNUAL REPORTING

• AIS 2015

• • This is EHGC’s compulsory Annual Information Statement 2015 (AIS 2015).
  • It gives basic financial information.
  • If you think that this is sufficient for you then you should note that:

• • • Donations and bequests is, as far as can be calculated, $186K understated. All other revenue is therefore understated by the same amount.
    • There has been a small mistake in transcribing ‘Employee expenses’.
    • Grants and donations…for use outside Australia doesn’t match what’s shown in Section B in the same document, and cannot be checked with the Income Statement because it is not disclosed there.
    • All other expenses will therefore be correspondingly affected.

• Financial Report 2015

• • The report was signed just over three and a half months after the year end.
  • It was then lodged one month after that.
  • The coverage of finances in this review is left until the financial report proper (Latest financial report – detail, below).

ABOUT THE CHARITY

• Statement of Faith
  • Every Home for Christ: None found.
  • EHGC: NA
  • If there is one in the governing document (see Charity’s Document (sic), below), it would be in the Memorandum of Association. However, this has not been lodged with the ACNC.

Date Established

• Here’s a history of the global Every Home for Christ organisation.
• EHGC’s Story is not a history but a brief general description of what it does and how it does it.

Who the Charity Benefits

• Vision
  • Every Home for Christ: None found.
  • EHGC: None found.

• Mission
  • Every Home for Christ: None found.
  • EHGC: None found.

• Activities (What did EHGC do?)
  • EHGC: See Date Established, above.
  • EHGC apparently is able to ordain people – the Executive Director is an ‘Ordained Minister of Every Home for Christ’.
  • Unfortunately all we can learn from EHGC’s Description of charity’s activities and outcomes in the AIS 2015 is that it sent money overseas to some countries and distributed ‘literature’ in some others:
    • $1,583,410 was sent overseas for community development or relief assistance in countries such as Nepal, Iraq, Bangladesh, India, Malawi, Zambia, Togo, Ethiopia, Madagascar, Swaziland, Cambodia and the Amazon with literature distribution in many other countries.

• Outcomes (What did EHGC deliver?)
  • Unfortunately, although the AIS 2015 asked for a description of outcomes, EHGC gave only activities (see above).

• Impact (How were people’s lives improved?)
  • Nothing systematic found.

Financial Year End

• This means that the next financial report is due by 31 December 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)[ii]

• Licensed in all seven states except for Tasmania.
• No State offices or representatives.

Size of Charity

• With a revenue of $2.40 m, EHGC easily qualifies in the largest of the ACNC three size categories (‘Large’).

CHARITY’S DOCUMENT (SIC)

• There is no Annual Report/Review available on the ACNC Register.
• Neither is one available yet on the website. (Last year’s is on each website: Every Home for Christ and EHGC.

RESPONSIBLE PERSONS

• Once appointed, EHGC directors serve for their lifetime. (See the company’s Articles of Association (Charity’s Document (sic), below)).

No. of Australian charity directorships[iii]

John Ealand                             1

Ken Koh                                    2

Roger Mackay                          1

Alexander Thomas                  1

D’arcy Watson                          2 (one D arcy, one D’arcy)

Steven Skorobogaty                2

Eric Leach                                 1

Davidson James                      1

• It appears that neither website (EHGC and Every Home for Christ) has been updated for the latest changes (see the Directors’ Report, below).
• James, Leach, Skorobogaty and Thomas have been on the board since the inception of the company. 

(End of review of the ACNC Register information)

Latest financial report – detail

• Both the NZ organisations, Every Home Global Concern Incorporated and Every Home for Christ New Zealand, (a) have the same CEO as EHGC, and (b) three of the same directors as EHGC, one of whom is the Chairman of both companies.   The email address and website for Every Home for Christ are Australian. Despite these connections, there is no mention of related parties, let alone control and consolidation.

Directors’ Report (page 1 of the Financial Report)

• No such report is required by the ACNC.
• The qualifications, experience, and special responsibilities are not given for each of the directors.
• ‘Director’ is not a ‘special responsibility’.
• The following sections are missing: ‘Objectives’, ‘Strategy for achieving the objectives’, ‘Performance measures’, and ‘Contributions on winding up’.
• Most of the sections included by EHGC are not required.

Auditor’s Independence Declaration…(page 5 of the Financial Report)

• The ACNC does not require this to be lodged.
• If an Act is referenced it should be the ACNC Act, not the Corporations Act.

What was earned, what was consumed during the year – the Income Statement (page 6 of the Financial Report)

• The title of this statement does not comply with the Accounting Standards.
• The format is long out-of-date.
  • ‘Other comprehensive income’ is missing.

Where the money came from

• Revenues from ordinary activities $2.40 m (including Note 2)
  • This implies that revenue can also arise from extraordinary activities, a distinction that has long since gone from the Accounting Standards.
  • Besides, revenue is itself defined in the Standards as inflows that arise from ordinary activities.
  • There is no separate total for the Overseas Aid Fund.
  • Contributions received $1.69 m
    • There is no disclosure of bequests.Why are the contributions from ‘Every Home for Christ NZ’ and ‘Every Home for Christ UK’ not included in this total?
    • Why is ‘Spain funds for overseas’ not included in this total?
    • An unaudited additional statement, a Detailed Profit & Loss Account, is included at page 24.
      • Why was Israel Tour Income $84K included as ‘contributions’ in the Income Statement?
  • Interest received $10K
    • This should be ‘interest revenue’
    • Why is the amount identical to the cash received?
  • Contribution received from Every Home for Christ NZ $64K
  • Contribution received from Every Home for Christ UK $25K
    • Why are these two organisations making ‘contributions’ to EHGC?
  • Government grant received $598K
  • Spain funds for overseas $13K
    • Why is and the previous item not from operating activities?
  • Interest revenue from: other persons?
    • As opposed to interest from whom?

Where the money went

• The following expenses are not disclosed:
  • Fundraising
    • In the ‘Information and Declarations to be Furnished under the Charitable Fundraising Act 1991’ (Note 12 of the Notes), ‘Fundraising expenses’ $62K are deducted from the income raised by fundraising to give a ‘Net income from fundraising’. However, in part (b) of the same statement ‘Total cost of fundraising’ includes ‘Administration’ of $494K.
  • Superannuation
  • Auditor’s fee
  • Administration
    • ‘Administration’ is shown as $494K in the ‘Information and Declarations to be Furnished under the Charitable Fundraising Act 1991’ (Note 12 of the Notes).
• Employee benefits expense $382K (including Note 3)
  • Assuming that part-time employees average half-time, and ignoring the casual employees, this represents $85K per employee.
• Borrowing costs expense $2K (including Note 3)
  • ‘Other persons’: as opposed to whom?
• Other expenses from ordinary activities $1.98 m
  • This is 83% of expenses yet there is no explanation.

What’s left at the end of the year – the Balance Sheet (page 7 of the Financial Report

• Cash and Cash Equivalents $738K (including Note 14)
  • There is no separate total for the Overseas Aid Fund.
  • These accounts should be summarised; a common classification is Cash on hand, Cash at bank, and Cash on deposit.
  • Why so many accounts anyway? Except for tax deductible versus not tax deductible, why not use the accounting system to provide the separation?
  • What is ‘No TDR’?

• Receivables $117K (including Note 15)
  • The title is usually ‘Trade and other receivables’.
  • What are the material amounts in ‘Other Debtors’ $112K?
  • Are any of these amounts of doubtful collectability?

• Property, Plant & Equipment $764K (including Note 17)
  • Why is the Queensland property not depreciated?
  • A reconciliation of written down values is missing.
  • The valuations were done four and nine years ago. Is this sufficiently recent so as to comply with AASB 116?

• Payables $106K (including Note 18)
  • With money in the bank, why is an overdraft necessary?
  • If ‘Other Creditors’ $91K is accrued expenses, it is normally shown separately.
  • Normally titled ‘Trade and other payables’.

• Borrowings $137K (including Note 18)
  • There is no explanation why the ‘Interest Free Loans’ are interest free.
    • Are they from related parties?
  • There is no explanation why the ‘Unsecured Loans for Investment’ are unsecured.
    • Are they from related parties?
  • Why are all these borrowings repayable beyond 12 months?

Movements in the net wealth of the charity – the Statement of Changes in Equity – page 8 of the Financial Report

• This statement diverges markedly from what is required by the Accounting Standards.
  • Other comprehensive income is missing.
  • Reserves are missing.

Essential information to go with the figures – the Notes to the Financial Statements – page 10 of the financial report

Note 1   Statement of Significant Accounting Policies

• It is unlikely that an Australian not-for-profit complying with the Australian Accounting Standards will also be in compliance with the International Financial Reporting Standards.
• ‘Income’ should be ‘Revenue’.   The policy on ‘contributions’ (donations), and grants should be disclosed.
• ‘Employee Benefits’ is missing the distinction between short-term and long-term benefits. And the policy on defined contribution superannuation payments.
• ‘Goods and Services Tax (GST)’ is missing the policy on GST and (a) cash flows and (b) commitments and contingencies.
• Missing from Note 1:

• • New, revised or amending Accounting Standards and Interpretations adopted
  • Current and non-current classification
  • Trade and other receivables
  • Impairment of non-financial assets
  • Trade and other payables
  • Fair value measurement
  • New Accounting Standards and Interpretations not yet mandatory or early adopted
  • Critical accounting judgments and estimates
  • Financial instruments
  • Related party information
  • Events after the reporting period

Note 5 Remuneration and Retirement Benefits

• Two directors are being paid directors’ fees yet this is not authorised by the Articles of Association.
• How can ‘Executive remuneration’ be zero?

Where the directors put their name to the Report again – the second Declaration by Directors of the Company (page 21 of the Financial Report)

• The Act referenced should be the ACNC Act, not the Corporations Act.

An independent opinion on the financial statements – the Independent Auditor’s Report (page 22 of the Financial Report)

• The Act referenced should be the ACNC Act, not the Corporations Act.
• Reports by Australian NFPs that follow the Australian Accounting Standards are unlikely to comply with International Financial Reporting Standards.
• This is a ‘clean’ opinion.  Read here and here to draw the right conclusions from this.

Membership of accountability organisations claimed

• Each website (here and here) says that EHGC is accredited with AusAid/DFAT and ACFID.
  • You can confirm the first here, and the second here
• Although the charity doesn’t refer to it, this listing of members shows that EHGC 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.