Archived: International Needs, charity review

This is a charity review, a review for those with an interest in the Australian charity International Needs (IN).

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 IN.

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 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.
• IN website.
• Social and other media (see the buttons in the footer of webpages).
• State government fundraising licence registers.
• No reviews on Glassdoor yet.

REGISTRATION DETAILS

Entity Subtype

• Neither of these subtypes suggest any commitment to sharing the Gospel.
  • Nor does anything in the constitution.
  • The first of INA’s ‘core values’ (on the website) is ‘We are Christian: We are motivated by the example of Jesus, reaching out to the poor, marginalised and oppressed of the world.” Whether the solution includes the Gospel is, understandably given their acceptance of government grants, unstated.
• IN says that it is committed to ‘holistic transformation’ in its community development work. For a Christian this is not possible without the Gospel.

CHARITY DETAILS

Legal Name

• IN is a company limited by guarantee.
• It is permitted to omit ‘Ltd/Limited’ at the end of it same. (But not to add ‘Australia’.)
• There is another charity with International Needs in its name: The Trustee for International Needs Overseas Assistance and Development Fund.
  • The trustee is IN. The charity is not entitled to receive tax deductible gifts, is not registered for GST, and has no responsible persons.
  • Nowhere does IN explain the connection between the two charities. In fact, it acts as if it doesn’t exist: it paints a picture of IN itself being a overseas aid fund.
  • There is no disclosure of the all the things that are required by the trust’s governing document.
  • The AIS 2014 for the second charity says that it had no activities in 2014, and it doesn’t report. Confusing.

Other Name(s)

• This is neither a trading name nor a business name, so shouldn’t be included here.
• IN operates under this name. See, for instance, its website, its Annual Report, and its FaceBook page. To continue to do this, legally that is, it should register it as a business name.

Charity ABN

• No tax deduction is claimable for a donation to IN. However, donations to a fund that it operates, International Needs Overseas, do qualify for a deduction.
  • This fund doesn’t have its own ABN, being part of IN.
  • Why does IN make no distinction on its website, including its invitation to donate, and no distinction in its Financial Report, between IN and its DGR fund?
• IN as the trustee for the second charity (see Legal Name, above) has an ABN different to IN’s ABN.
• What is the relationship between the trust International Needs Overseas Assistance and Development Fund (the second charity above), and the fund International Needs Overseas?

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 121, MITCHAM VIC 3132

Email

• I have no reason to believe that this doesn’t work
• Another, address, from the website: info@internationalneeds.org.au.

Phone

• This number, from the website, may be a cheaper option for you: 1300 731 550.
• Another one, again from the website: 03 9877 7177.

ANNUAL REPORTING

• AIS 2015
  • This is INA’s compulsory Annual Information Statement 2015 (AIS 2015).
  • It gives basic financial information. If you think that this might be sufficient for you that is unfortunate – the majority of the figures do not agree with the financial statements.
• Financial Report 2015
  • The report was signed three months after the year end.
  • It was then lodged two months after that.
  • 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, nor in the constitution.

Date Established

• There’s a modicum of history on the website, a little more in the Annual Report.

Who the Charity Benefits

• Vision
  • “International Needs Australia is a Christian organisation journeying to create a just world where girls and boys, men and women are treated equally with respect, dignity and opportunity to reach their full potential.
• Mission
  • Nothing particularly about 2014-15:
    • We are committed to building innovative partnerships for community well-being(sic) through empowering women and children in our work.  To achieve our charitable purposes International Needs Australia partners with overseas non government (sic) organisations to deliver quality programmes and aid projects that empower the poor and underprivileged in developing countries.
• Activities (What did IN do?)
  • From the Description of charity’s activities and outcomes in the AIS 2015:
  • There’s a fuller description of what IN did in 2014-15 in its Annual Report.
• Outcomes (What did IN deliver?)
  • IN did not respond to the request IN the AIS 2015 for a description of its outcomes.
  • I think these are for the organisation globally. As, with maybe one exception, are those in the Annual Report.
• Impact (How were people’s lives improved?)
  • There is some information in the Annual Report.

Size of Charity

• Even without including its associated charity, IN easily exceeds the qualification for this size.

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]

• IN calls for donations on its website (at the top of every page).
  • It holds a fundraising licence in all bar one of the seven states that have a licensing regime. (Perhaps it has assessed that it is exempt in the ACT?)

Operates in (Countries)

• This single country is a long way short of the number, 12, given on the website.

CHARITY’S DOCUMENT (SIC)

• There is no Annual Report/Review available on the ACNC Register.
• There’s one on the website.

RESPONSIBLE PERSONS

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

Belinda Knight             This function was not working at the time of publication

William Murcutt

Ian Neil

Lum Patrick

Shelley Naylor

Richard Lim

Daryl Crowden

• Is the Daryl Crowden this one?
• Compared with the website the above list
  • Is missing the ‘Board Chair’, Ian Curtis.
  • Has additional directors of Lum Patrick (should be reversed?) and Shelley Naylor.
  • Has McCulloch as the surname for Belinda instead of Knight
• With the addition of Ian Curtis (see just above), all these responsible persons are also directors of IN Network Australia Inc.

(End of review of the ACNC Register information)

Latest financial report – detail

• Nowhere is it disclosed that IN is controlled by another charity, IN Network Australia Inc.
• Nowhere is there disclosed that IN is a trustee for an overseas aid fund.
• The directors’ belief that IN is not a ‘reporting entity’, a choice that allows them to make less than a full disclosure about INA’s finances and operations, is implicitly a statement that any user is able to command the preparation of a financial report tailored to their needs. Do the directors realise they are saying this?
• Combined, these things are a serious challenge to the directors’ claim that the accounts show a ‘true and fair view’.

Directors’ Report (page 2 of the Financial Report)

• No such report is required by the ACNC.
• Missing section: information on the directors
  • The report refers the reader to the Annual Report for the missing information. However, it is far from complete there.
• Incomplete section: separate short-term and long-term objectives
• Sections not required:
  • Achievement of Objectives
  • Operating Results
  • Review of Operations

What was earned, what was consumed during the year – the Statement of Comprehensive Income (page 4 of the Financial Report)

• ‘Total Expenditure’ should be ‘Total Expenses’. With a corresponding change to the next line.
• The Statement of Changes in Equity incorrectly says that it is the ‘Excess of Revenue over Expenses’ that is transferred from the Statement of Comprehensive Income. It should be ‘Total comprehensive income for the year’.

Revenue

• Other Income is not revenue.
• ‘Interest on DFAT Funds’ is not a grant.
• Investment Income’ is called ‘Interest’ in the cash flow statement.
• Why, using accrual accounting, is interest revenue (this statement) the same as interest received (the Statement of Cash Flows)?

Expenses

• The expenses required to be shown when a functional classification is used are not shown:
  • Employee benefits expense
    • ‘Employee expenses’ are shown as $463K in the AIS 2015.
      • Assuming half-time for part-time employees and one-tenth for casuals, this total represents an average of $65K per employee.
    • The cash payment for ‘Wages and salaries’ (Statement of Cash Flows), that is without any other benefits, is shown as $456K.
  • Superannuation expense

Essential information to go with the figures – the Notes to the Financial Statements (page 8 of the Financial Report)

• General Information
  • As acknowledged under ‘Basis of preparation’, It is the ACNC Act that governs charity reporting, not a code of the Australian Council for International Development.
  • Missing information:
    • IN as an individual entity?
    • Functional and presentation currency
  • It appears that the directors do not have the power to amend the statements after their issue.
• Note 1: Significant Accounting Policies
  • Basis of preparation
    • ‘for not-for-profit oriented entities that qualify for and apply different reporting concession’: What does this mean?
  • (d) Employee Benefits: the final sentence is incomplete.
  • (e) Cash and Cash Equivalents: No reason is given for doubling the time to maturity of investments to be included.
  • Missing policy Notes
    • Current and non-current classification
    • Trade and other receivables
    • Fair value measurement
• Note 2: Surplus/Shortfall for the Year
  • The depreciation figure includes amortisation.
• Note 4: Trade and Other Receivables
  • If the cash and accrual figures for interest are the same (see above), from where did Interest Receivable come?
• Note 17: Members (sic) Guarantee: If donors become members – see the constitution – why are there still only 89 members?
• Missing Notes
  • Critical accounting judgements, estimates and assumptions
  • Contingent liabilities
  • Commitments
  • Events after the reporting period

The Auditor’s Independence Declaration…(the 16^th page of the Financial Report

• This is not required by the ACNC.

An independent opinion on the financial statements – the Independent Auditor’s Report… (the 17^th page of the Financial Report)

• This is a ‘clean’ opinion.  Read here and here to draw the right conclusions from this.

Membership of accountability organisations claimed

• On the ‘Support and Accreditation’ page:
  • ‘We are accredited with’ the Department of Foreign Affairs and Trade. Confirmed, but under the name International Needs Australia.
  • ‘We are an ACFID Member’. Confirmed, but under the name International Needs Australia.
• IN is not a member of Mission Interlink, but IN Network Australia Inc is.

(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.