Archived: Hills Alliance Church Incorporated: mini charity review

Mini charity review of Hills Alliance Church Incorporated (HAC), including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask before donating.

Are they responsive to feedback?

• I sent them a draft of this review on 8 July 2017. On 14 July they said that they did not want to comment.

Is HAC registered?

• As a charity, yes.
• Other registrations:
  • As a New South Wales incorporated association (INC9874502).
  • For GST.
  • Doesn’t appear to be fundraising, so doesn’t require fundraising licences.
  • Not, at least from the information on the ACNC Register, operating interstate, so doesn’t need an ARBN registration.

What do they do?

• From its Facebook site, its Mission is
  • To Glorify God by obeying his command to make disciples of all nations” (sic). The Great Commission teaches that we should love God, this is called Worship. We are to love our neighbour as ourselves, this is called service. We are to obey the great commission to preach the Gospel to all peoples, this is called evangelism. We are to obey the Lord Jesus Christ by teaching men to observe all that He taught, this is called discipleship. We understand we will all give an account of our lives at the judgment seat of Christ – so we are to be stewards of all God has entrusted to us. All that we do at Hills Alliance Church inc. Falls under these five headings; Worship, Service, evangelism, Discipleship and stewardship.
• HAC is a Christian church, a member of the Christian & Missionary Alliance of Australia denomination.
  • The ‘head office’ is a charity, reviewed here.

Do they share the Gospel?

• Yes

What impact are they making?

• Nothing found.

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

• The expenses are not classified to allow this calculation.

Can you get a tax deduction?

• No

Is their online giving secure?

• NA – none offered.

Is their reporting up-to-date?

• Yes (lodged six+ 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 12 months ago.

Does their reporting comply with the regulator’s requirements?

• AIS 2016: No
  • The accounting method given, cash, does not match the financial statements.
  • There are no outcomes given.
  • ‘Email address’ is blank.
  • ‘Donations and bequests’ does not match what’s in the Profit & Loss Statement.
• Financial Report 2016: NA
  • HAC’s size, ‘Small’, means that it is not required to submit a Financial Report to the ACNC, and they didn’t submit one voluntarily.
  • Nor, for the same reason, is it required to submit financial statements to the state regulator.
  • However, it is required, under the Associations Incorporation Act 2009, to ‘prepare financial statements that give and true and fair view of the association’s affairs’.
  • And it is required, under its constitution, to have those statements audited [section E] by ‘An auditor with suitable accounting qualifications and external to the Board of Deacons’ [Article V].
  • A request for the audited statements to the ‘Charity Address for Service’ got an immediate response from David Benyon (one of the ‘responsible persons, see below): I was told that the accounts for 2016-17 had not been finalized^[1], but that I was welcome to use the ‘2015~2016 balance sheet Profit and loss and Audit approval’ (which he attached).
  • The ‘Audit approval’ is a signed Independent Auditors Report for the 2015-16 year dated 1 June 2016; that is, it is an audit completed one month before the year ended!^[2]

What financial situation was shown by that Report?

• Keeping in mind the restriction that the financial situation is described in a Report that falls far short of what should be produced by a professional accountant, and has had a very questionable audit –
  • HAC made a loss of $11K, 8% of ‘Total income’.
  • The largest expense was ‘Total Employment Expenses’, $87K.
    • This was 61% of ‘Total Expenses’.
    • This was, per the AIS 2016, for one full-time and two part-time employees.
  • The second largest expense was ‘Citibank Old Arrears’, $11K. If this was, as its name implies, the repayment of a loan, it is misclassified: it should be a reduction to a liability. (Not such liability exists in the Balance Sheet.)
  • HAC made no donations or gifts (usually called ‘missions’ in a church).
  • Are repayments to the loans under ‘Long-Term Liabilities’ required? If so, the repayments that are due in the next 12 months should be classified as current liabilities.
  • Even without this reclassification, HAC has a significant shortfall in working capital (current liabilities $31K compared to current assets$5K). This is a red flag for the going concern assumption, yet nothing was said by the auditor.
  • Although HAC’s constitution allows it to hold real property^[3], HAC belongs to a denomination that has a separate charity, The Christian And Missionary Alliance Development Fund (see ‘Is CMAA registered’ here), that describes its activity as holding and administering properties for its churches.
  • HAC has determined, and the auditor has accepted, that it, not the property trust, owns the land and buildings that it is using.
  • HAC doesn’t have the capacity to repay its loans from current assets or cash flow. If the property is not, as the Balance Sheet implies, at its disposal, then it couldn’t even repay these loans by using the property. Again, there is no comment from the auditor.

What did the auditor say about the last financial statements?

• See first ‘Financial Report 2016’, above. There you will see why you should take little comfort from this opinion.
• In addition
  • The report is on the letterhead of EzyBooks Accounting, a letterhead that also has a logo saying ‘RP’ (see below), and the CPA Australia logo.
  • There is no CPA Australia public practice in that name in the suburb in which EzyBooks has its office.
  • The name that appears under the signature appears to be a combination of two names:
    • The first one is Roshani Priyanga. (The ‘RP’ above?) Although the firm’s website has no names, this service says that she works for them.
      • Is this the same Roshani Priyanga, an accountant who says that she works for Wentworth Williams & Associates?
    • I cannot find the second, Kahadalwala Ritchie Donna, on the internet. You could check with CPA Australia.

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

• If there are indeed only three ‘responsible persons’, yes. Otherwise, not quite.
  • ‘Phone’, ‘Email’, and ‘Website’^[4] are blank, but none of them are compulsory.

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

• NA

Who are the people controlling the organisation?

• Not shown on the website or on Facebook.
• The ACNC Register, under ‘Responsible Persons’, says that it is these people:
  • David Benyon
  • Robert Berry
  • Terrence Davidson
  • If these are the only officers, then HAC is not following its constitution:
    • The officers shall consist of: the Pastor, Associate Pastor and Assistant Pastor where such may be called; Elders; Deacons, including the Treasurer and Missionary Treasurer, Trustees where such are required; and such other officers as the membership may elect [Article VI – Officers].

To whom are HAC accountable?

• Primarily to the ACNC.
• But also to the New South Wales associations regulator.

1. The audit report was sent to HAC, together with the financial statements, from Account Care Bookkeeping Services. ↑
2. Even without this issue, this audit should not be relied on. If the auditor is a member of one of the three professional accounting bodies, and this one (or two?) has the CPA Australia logo on the audit, he or she is required to comply with the Australian Auditing Standards. But this audit report falls well short of those requirements. (This is chiefly because ‘a true and fair view’ for a professional accountant means financial statements that comply with the Australian Accounting Standards. These statements are far from compliant with those standards.) ↑
3. ‘The church may acquire, own, dispose of, improve, encumber and convey property, real and personal, for church purposes, in conformity with the laws of the States or Territories where the property is situated and, where Trustees are requires (sic), they are to be elected by the membership according to the law. Such property may be sold, conveyed, exchanged, or encumbered only by order of the membership through the church Board of Deacons. In States or Territories where Trustees are required, the order of the membership shall proceed through them.’ [Arp[ ticle XIII – Property]. ↑
4. The website, http://www.hillsalliance.org.au/ is a copy of the Facebook news Feed. ↑