Archived: Kids Outreach International Limited, charity review

This is a charity review, a review for those with an interest in the Australian charity Kids Outreach International Limited (KO).

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 KO.

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 4 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.)
• 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.
• KO websites: the main one, Step Up to the Mission, and Step Up Against Slavery.
• FaceBook (Step Up/Step Up to the Mission). Not on LinkedIn.
• State government fundraising licence registers.
• No reviews on Glassdoor yet.

REGISTRATION DETAILS

Entity Subtype

• Not a subtype suggestive of an objective of sharing the Gospel.
• Nor is anything in the company’s objects (in the constitution).

CHARITY DETAILS

Legal Name

• KO is a company limited by guarantee.
• As it doesn’t have the necessary provisions in its constitution, it is not entitled to omit ‘Limited/Ltd’ when it uses its company name.

Other Name(s)

• Step Up Against Slavery has a website that seeks donations, yet the name is not registered.
• Love for Kids Russia is another name that’s being used; however, the business name is Love for Kids.

Charity ABN

• No tax deduction is claimable for a donation to KO.

Charity Address for Service

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

Charity Street Address

• It is different on the website: 26 Cartwright St. Charnwood ACT 2615,
• Postal address, from the website: PO BOX 6887, Charnwood ACT 2615.

  Email

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

Phone

• From the website: 02 6259 0760.

Website

• From the Google search: www.kidsoutreach.org.

ANNUAL REPORTING

• AIS 2014
  • This is KO’s compulsory Annual Information Statement 2014 (AIS 2014).
  • It was lodged six months after year end, five days before the final date.
  • It gives basic financial information. If you think that this is all you might need
    • ‘Income/Receipts’, because ‘Other Income/Receipts’ have been omitted, don’t add up.
    • The accounts show $50K in the expenses for ‘Outreach Project’ that is not included under grants.
    • The ‘Employee expenses/payments’ $76K are, according to information elsewhere in the AIS, for two full-time employees.
• Financial Report 2014
  • Because of its size KO doesn’t have to lodge a Financial Report.
  • However, KO is a member of Missions Interlink[ii], and one of their requirements is that members ‘have available for its members and supporters a clear and appropriate financial statement which has been approved by its auditor [Standards Statement, 4.1]. So maybe the lodgement is in response to that.
  • There is no Directors’ Declaration, and the Directors (sic) Report is unsigned, so we don’t know when the directors put their name to the Financial Report. The auditor signed on 27 March 2015, and this is the date that the directors signed the engagement letter – inappropriately included in the Report- so presumably the directors have signed another copy.
    • This means that the accounts were finished within three months of year end.
  • This is a report that is not of a particularly high quality – see Latest financial report – detail, below.

ABOUT THE CHARITY

• Statement of Faith
  • Neither on the website nor in the constitution.
  • As a member of Missions Interlink (see below), however, they have to be able to demonstrate from [its] historical documents that its theological basis is not in conflict with the Statement of Faith of the Australian Evangelical Alliance.

Date Established 

• No history found.

Who the Charity Benefits

• Vision and Mission
  • None found.
• Activities (What did KO do?)
  • From the Description of charity’s activities and outcomes in the AIS 2014:
    • 1. Facilitated teams of volunteers from Australia, New Zealand and USA to live in Russian summer camps to provide cultural exchange, life-skills education and broadening the horizons of the Russian children and their carers/camp counselors. 2. Assisted in the construction and refurbishment of family homes for orphans who might otherwise be homeless. This a joint project with local families in eastern Russia. 3. Organized, funded, and participated in a seminar on youth welfare for academics and post-graduate students from universities in the St Petersburg region. Focus was on youth engagement and the issue of sex-trafficking.
      • Not particular to 2014?
• Outcomes (What did KO deliver?)
  • KO did not respond to the request in the AIS 2014 for a description of its outcomes.
  • Nothing systematic found.
  • Anecdotal evidence in the testimonies.
  • There is a newsletter, but you have to ask for it.
• Impact (How were people’s lives improved?)
  • Nothing systematic found.
  • Anecdotal evidence in the testimonies?

Size of Charity

• KO is $63K under the threshold for ‘Medium’.

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]

• KO doesn’t have a fundraising licence in any of these four states. No fundraising done, or do they think they are exempt?
• KO calls for donations on its website (main menu).
• KO also has two pleas on GiveNow, one it its name, and one for Love for Kids Russia.
  • It doesn’t have a fundraising licence in any of the other three states that have a licensing regime.
    • Apart from exemptions, whether it needs such a licence in these states depends on whether those states think that KO, 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 website.

RESPONSIBLE PERSONS

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

Antti Haavisto          This function was not working at the time of publication

Taru Kohonen

Kevin Mackay

Risto Rummukainen

Roger Nicoll

Kari Lehelma

Ross Kelly

John Donovan

• Is Risto this one?
• The website doesn’t mention the board.
• Under ‘Position’, to comply with the constitution, there should be a President, Vice-President, a Honorary Treasurer, and Executive Director. And maybe a Secretary.

Latest financial report – detail

• The statements are said to be general purpose financial statements, that is those that fully comply with the Australian Accounting Standards.
  • The company has not claimed to have taken advantage of the Reduced Disclosure Requirements available to all non-for-profit entities.
• This Report is seriously deficient:
  • It does not contain a complete set of financial statements, there being no statement of changes in equity, and no statement of cash flows.
  • It is missing the statement where the directors put their name to the report (the directors’ declaration).
  • The Directors (sic) Report is missing most of the required sections, and is unsigned.
  • The Income Statement
    • is neither titled correctly nor complete.
    • Doesn’t disclosure all the expenses required to be disclosed.
    • Leaves unusual terms unexplained.
    • Provisions (employee benefits) are not shown separately.
  • The Notes to, and forming part of, the Financial Statements are missing much information in Note 1 (Statement of significant accounting policies), and at least eight of the usual other Notes.
    • One of those missing is a Note disclosing related parties. For instance, what is the relationship between KO and their Finnish ‘sister organisation’ (the President of KO lives in Finland), the two organisations at the Charity Street Address (see above), Life Unlimited Church, and Anytime Fitness, and the church, Canberra International Church, where two of the directors are part of its ‘ministry team’?
  • There is no mention of the ACNC Act.
  • The reviewer – ‘an assurance practitioner who is not the auditor of the entity’ [ASRE 2400, www.auasb.gov.au], and in this case a Fellow of CPA Australia – says that
    • ‘nothing has come to our attention that causes us to believe that the annual financial report…does not present fairly in all material respects the financial position of the company and of its (sic) financial performance…in accordance with the Australian Accounting Standards.

(End of review of the ACNC Register information)

Membership of accountability organisations claimed

• The Missions Interlink ‘Accredited Member’ logo is displayed here. Membership confirmed.

(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.