Archived: Hands at Work in Africa (Australia) Limited, charity review

This is a charity review, a review for those with an interest in the Australian charity Hands at Work in Africa (Australia) Limited (HAW).

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 HAW.

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 10 March 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.
  • HAW’s page (bottom right) on this website.
  • Not on any social media. Not on LinkedIn. (See the footer of the Australian webpage for the buttons for the head office overseas.)
  • State government fundraising licence registers.
  • No reviews yet on Glassdoor. (Not even for the head office.)

REGISTRATION DETAILS

Entity Subtype

• Neither subtype suggests that HAW shares the Gospel.
• The first of HAW’s seven ‘core values’, in the constitution, is ‘We are Christian.’ But a footnote to this makes places no obligation on HAW to spread the Gospel.

CHARITY DETAILS

Legal Name

• HAW is a company limited by guarantee.
• It does not have the necessary provisions in its constitution to allow it to omit ‘Ltd/Limited’ at the end of its name.

Other Name(s)

• Missing here is its trading name, Hands at Work in Africa (Australia) Ltd. Even if this name were different to the legal name, it wouldn’t enable HAW to do business under it – this requires a business name.

Charity ABN

• Yes, you can claim a tax deduction for a donation to HAW.

Charity Address for Service

• I have no reason to believe that this does not work.

Charity Street Address

• Postal address, from the website: PO Box 730 Sutherland NSW 1499

Email

• I have no reason to believe that this does not work.

Phone

• Alternative phone number, from the Victorian register of fundraisers: 0414 503 920 (Stephen Harvey)

Website

• This address leads to www.handsatwork.org. In the footer there is a link to a page for Australia, one of four ‘International offices’.

ANNUAL REPORTING

• AIS 2015
  • This is CH’s compulsory Annual Information Statement 2015 (AIS 2015).
  • It gives basic financial information. If you think that this might be sufficient for you there are no differences with the financial statements.
• Financial Report 2015
  • The report was signed six months after the year end.
  • It was then lodged a month after that, right on the last day of the ACNC’s generous seven months allowed.
  • 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
  • There isn’t one on the website.
  • Or in the constitution.

Date Established

• There’s a description on their website of how they got started.

Who the Charity Benefits

• Vision/Mission
  • None found on the website.
• Activities (What did HAW do?)
  • There is nothing specific to either 2015 or to Australia under Description of charity’s activities and outcomes in the AIS 2015:
    • The activities of the organisation have continued to develop and build the capacity of indigenous community organisations in developing countries including by undertaking in partnership with in-country partners, specific community development projects in Zambia, Nigeria, DRC, Zimbabwe and South Africa, and ancillary fundraising activities to sustain those objectives.
• Outcomes (What did HAW deliver?)
  • HAW did not respond to the request in the AIS 2015 for a description of its outcomes.
  • Nothing found on the website.
• Impact (How were people’s lives improved?)
  • Nothing found on the website.

Size of Charity

• HAW is only 31K short of the next size, ‘Medium’.

Financial Year End

• This means that the next financial report is due by 31 December 2016 (or 31 January 2017 if the ACNC is generous again). 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]

• HAW calls for donations on its website.
• And on GiveNow.
  • It holds a fundraising licence in only two of these states, NSW and Victoria.
    • Apart from exemptions, whether it needs such a licence in the other five states that have a licensing regime depends on whether those states think that CH, by calling for donations publicly, is ‘fundraising’ in their territory.

CHARITY’S DOCUMENT (SIC)

• There is no Annual Report/Review available on the ACNC Register.
• Nor on the HAW website.

RESPONSIBLE PERSONS

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

Rachel McLaughlin         This function was not working at the time of publication

Clinton Wood

George Snyman

Shane Lepp

• Is the Shane Lepp this one?
• HAW is one short of the minimum required by the constitution. HAW said, when lodging its AIS 2015, that this listing was ‘complete, current and accurate’. This means that they should only have been acting as a Board to rectify this situation (clause 21.13, constitution).
• However, one month earlier, in the Directors’ Report, they said that they had five on the board.
  • Stephen Harvey and Jonathon Chueng were additional, but Rachel McLaughlin wasn’t included.
• Under ‘Position’, ‘Chairperson’ should be changed to ‘President’ in order to match the requirements of the constitution. 

(End of review of the ACNC Register information)

Latest financial report – detail

• These accounts did not rate a ‘clean’ opinion from the auditor. (See here for the different kinds of opinions.) He says that he had to qualify his opinion because
  • It is not practicable for the company to maintain control over cash receipts prior to their being received and receipted by officers.
    • So where is this cash? It’s the company’s money, but not controlled by its ‘officers’. So who has it?
    • ‘Maintain control’: they had control and lost it?
    • This says all cash receipts. Surely not? That kind of gap in internal controls might well warrant an adverse opinion, not just a qualification.
      • It’s probably just fundraising revenue. That would be better, but still not good. Directors please read this.
    • Why is it not practicable for the company to control this cash? Most other companies can.
• The directors’ believe that HAW is not a ‘reporting entity’, a choice that allows them to make less than a full disclosure about the company’s finances and operations.
  • It’s also implicitly a statement that any user is able to command the preparation of a financial report tailored to their needs. Are the directors aware that this is what they are saying?

The report by the directors (untitled) (the first page (unnumbered) of the Financial Report)

• No such report is required by the ACNC.
• Missing sections:
  • Performance measures
  • Company secretary
• Incomplete sections:
  • Objectives: the division into short-term and long-term.
  • Information on directors: the section is blank.

The Auditor’s Independence Declaration (page 3 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 4 of the Financial Report)

• Other comprehensive income is missing.

Income (ordered by size)

• Revenue is not disclosed.
• Other income should be separated from the other items.
• General Funds $48K
  • What are these? According to the AIS 2015 they are not donations.
• Volunteer Income $16K
  • What is this unusual item?
• Hands at Work Administration $12K
  • What is this? Hiring out the staff
• Director Income $1K
  • What is this unusual item? According to the AIS 2015 they are not donations.
• Interest received
  • Why not ‘revenue’. The amounts are the same in the cash flow statement – accrual accounting is not used for this item?

Expenses

• The following expenses are not disclosed:
  • Administration
  • Fundraising
  • Employee benefits
  • Superannuation
  • Depreciation
• Team Project Deployment Exp $18K
  • These have risen from zero last year. What’s changed?
• Designated Sponsorship ($4K)
  • Why is this negative?
• Donations (total $148K)
  • Why are two of the Donations negative?

Where the cash came from and went to – the Statement of Cash Flows (page 8 of the Financial Report)

• Cash flows from operating activities
  • Receipts $217K: from what?
• Cash flows from investments
  • ‘investments’ should be ‘investing activities’
• Notes to Statement of Cash Flows
  • Inclusion of ‘Loss on disposal of asset’ confuses
  • Rounding, 2014: $11 is a bit large for rounding.

Essential information to go with the figures – the Notes to the Financial Statements (page 9 of the Financial Report)

• Missing information
  • A description of the entity; ‘individual’, ‘not-for-profit’ etc
  • Functional and presentation currency
  • The date the accounts were authorised for issue
• Note 1   Summary of Significant Accounting Policies
  • (a) Basis of preparation:
    • ACNC Act not mentioned
    • ‘differential reporting concessions’?
  • (c) Accounts receivable and other debtors
    • What amounts are due from members?
    • What goods are sold? And why on credit?
  • (d) Goods and Services Tax (GST)
    • What about GST and cash flows?
  • (h) Revenue and Other Income
    • This is covered under (d), but conflicts with that Note.
• Note 3 Trade and other receivables
  • Taxation: but HAW is exempt.
  • Unallocated Donations: how are these a receivable?
• Missing policy Notes
  • Revenue recognition
  • Current and non-current classification
  • Property, plant and equipment (it is unusual not to have any)
  • Employee benefits
  • New, revised or amending Accounting Standards and Interpretations adopted
  • New Accounting Standards and Interpretations not yet mandatory or early adopted
• Missing Notes
  • Remuneration of auditors
  • Critical accounting estimates and judgement
  • Contingent liabilities
  • Commitments
  • Events after the reporting period

Where the directors put their name to the Report – the Directors’ Declaration (page 12 of the Financial Report)

• The ACNC Act is not mentioned.

An independent opinion on the financial statements – the Independent Auditor’s Report… (page 4 of the Financial Report)

• See Latest financial report – detail, above.
• The paragraph giving the opinion should be labelled Qualified Opinion.

Membership of accountability organisations claimed

• None claimed. HAW 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] 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.