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Archived: Morling College Ltd, charity review

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This is a charity review, a review for those with an interest in the Australian charity Morling College Ltd (MC).

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 MC.

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 14 January 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.



Entity Subtype

  • The first subtype is consistent with sharing the Gospel. (Even so, MC has deductible gift recipient status (see Charity ABN, below).
  • The ‘Objects’ in the constitution parallel these two subtypes.


Legal Name

  • MC is a public company, a company limited by guarantee.
  • Although the fact is not disclosed in the Financial Report, MC is ‘owned’ entirely by the Baptist Union of NSW. It appoints the MC Board.
    • This should mean that that organisation consolidate MC’s financial information with its own when reporting. It doesn’t.
  • Do not confuse MC with these other ‘Morling’ charities, all with the same person as the Charity Address for Service:
    • Morling College (Tinsley Bequest) Limited[ii]
    • Morling Foundation Limited
    • Morling Foundation Public Fund.

Other Name(s)

  • ‘Morling College’ should appear here – although as a trading name it does not entitle MC to use this name (that would require the registration of a business name.)

Charity ABN

  • Tax deductibility: Despite the fact that MC is about advancing Christianity, you can claim a tax deduction for your donation.

Charity Street Address

  • No postal address on the website.



  • AIS 2014
    • This is MC’s compulsory Annual Information Statement 2014 (AIS 2014).
    • It gives basic financial information. However, only three of the 13 figures in this Statement agree with the financial statements[iii].
  • Financial Report 2014
    • The report was signed three months after the year end.
    • It was then lodged three months after that.
    • The coverage of finances in this review is left until the financial report proper (see Latest financial report – detail, below).


  • Statement of Faith
  • The website directs readers to the website of Baptist Churches of NSW & ACT[iv] for MC’s statement of faith.
    • The redirection is because MC is “the Baptist Bible & Theological college of NSW & ACT.”
  • There is no statement of faith in the constitution.

Date Established

Who the Charity Benefits

  • Vision
    • None found.
  • Mission
    • None found.
    • It’s ‘strategic objectives’ are here.
  • Activities (What did MC do?)
    • From the Description of charity’s activities and outcomes in the AIS 2014:
      • Equipping theological students, teachers and counsellors for Christian ministry, education, community participatation and support services.
  • Outcomes (What did MC deliver?)
    • MC did not respond to the request in the AIS 2014 for a description of its outcomes.
    • None found on the website.
  • Impact (How were people’s lives improved?)
    • Nothing found.

Size of Charity

  • With a revenue of $5.64 m, MC easily qualifies in the largest of the ACNC three size categories (‘Large’).

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.


  • MC calls for donations on its website[vi]. It also has two (tax-deductible) appeals on GiveNow for Morling Foundation.
    • It does not hold a fundraising licence in this state, nor in any of the other six that have a licencing regime.
      • Apart from exemptions, whether it needs these licences depends on whether those states think that MC, by calling for donations publicly, are ‘fundraising’ in their State.


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


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

Kelvyn Willis                            2

Richard Sindel                         2

Alan Rice                                   5

William Rusin                          3

Brian Powell                             2

William Peirson                       1

Beverley Moore                        1

Stephen Frost                           3

Angelo Gratsounas                  2

Ian Deane                                  2

Trevor Cairney                         7

Peter Adcock                             2

  • The Council is not mentioned on the website.
  • Compared to the situation at 23 March 2015 (the Directors (sic) Report), McCrindle and Powell have joined and a Joshua Thomas has left.

(End of review of the ACNC Register information)

Latest financial report – detail

  • There is no explanation for why the public would be asked to donate to MC when the Morling Foundation exists to support MC and has $20.65 m cash in the bank.

Directors (sic) Report (the first page of the Financial Report)

  • No such report is required by the ACNC.
  • Normally signed by two directors.
  • Missing sections:
    • Performance measures
    • Company secretary
    • Meetings of director
  • Incomplete sections:
    • (1): ‘the qualifications, experience and special responsibilities of each Director’.
    • The time period should be ‘during the whole of the financial year and up to the date of this financial report’.
    • Objectives and strategies: short-term/ long-term split.
  • Sections included but not required:
    • Result and review of Operations
    • Directors’ benefits

Where the directors put their name to the report – the Declaration by Board of Directors (the third page of the Financial Report)

  • Normally signed by two directors.

The Auditor’s Independence Declaration (the third page of the Financial Report

  • The ACNC does not require this to be lodged.

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

  • The auditor says he audited a ‘special purpose financial report’. MC’s report is a general purpose report.
  • He specifies the wrong page numbers for the statements he audited.
  • This is a ‘clean’ opinion.  Read here and here to draw the right conclusions from this.

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

  • An unusual item of income for $1.38m – 19% of the total – is unexplained.
  • There are no Notes for this Statement.
  • A total for ‘revenue’ should be disclosed.
  • ‘Other comprehensive income’, a required section, is missing.
  • The following expenses are not disclosed:
    • Fundraising
    • Administration
    • Superannuation expense
  • The expenses classification is a mixture of the two permitted methods.
  • The inclusion of both ‘Surplus (Deficit) on operations’ and ‘Operating Surplus for the year’ is confusing – both are the result of ‘operating’.

‘Income’: Where the earnings came from

  • Tuition revenue $3.79 m
    • The policy note uses a different name for this item.
  • Morling College Tinsley Bequest donations $107K, Morling Foundation donations $641K, Other donations $109K
    • Donations total $856K, or 15% of ‘Total income’
    • There is no explanation for why the public would be asked to donate to MC when the Morling Foundation exists to support MC and has $20.65 m cash in the bank.
  • Residential revenue $772K
    • There is no explanation of this term, and no policy note on how it is recognised.
  • Denominational recurrent grants $212K
    • There is no explanation of this item.
    • MC belongs to the Baptist denomination, specifically the Baptist Union of NSW (see Legal Name, above), and Note 1(l) confirms that they are the source of this revenue

‘Expenses’: What was consumed during the period (reordered by size)

  • Employee beneftis $3.59 m
    • Based on the number of employees shown in AIS 2014, and assuming that part-timers work 50% and casual 10% of full-time, this total represents average annual benefits of $90K.
  • Tuition $933K
    • There is no explanation of this large item
  • Other administration costs $480K
    • ‘Other’? Where’s the main lot?
    • There’s no total for administration, and one can’t be calculated.
    • There is no description of what is included in this item.
  • Catering $261K
    • There’s no event income, so what was catered for?
  • Library $74K
    • Why is this not capitalised?
  • Inventory is held but Cost of sales is not shown.

‘Other Items of Comprehensive Income’

  • Reimbursement of Property Development costs $1.38
    • There is no explanation of this substantial item.
    • Who reimbursed MC?
    • An identical amount is shown as Construction in Progress under Freehold Property. Is this a donation?
  • Prior year adjustments $55K
    • There is no explanation for this item.
    • Have the requirements of AASB 1008 been observed?

What’s left at the end of the year – the Statement of Financial Position (the seventh page of the Financial Report)


  • Cash on hand and at bank should be ‘Cash and cash equivalents’, and Receivables should be ‘Trade and other receivables’.
  • Other Receivables $208K (including Note 5)
    • The type of debtor is not idenfifie
  • Fixed Assets $8.58 m (including Note 6)
    • This is an antiquated term.
    • The title of the Note doesn’t match the one in the balance sheet.
    • Not all the assets are ‘freehold property’.
    • The nature of the construction that is in progress is not identified.
    • Why is the land included if the property is leased?
    • The valuation basis for motor vehicles is not disclosed.
    • The required reconciliation of written down values is missing.
    • Neither the nature nor the timing of the valuation of the property is shown.
  • Why is there no asset for the library?


  • Payables $421K, Other Payables $138K
    • This should be ‘Trade and other payables’
  • Deferred Income $365K
    • There is no explanation of this item.
  • Staff Entitlement Provisions $293K (current), $297K (non-current)
    • Do these have the same content as the Accounting Standards’ item ‘employee benefits provision’
  • Morling Foundation Loan $600K
    • There is no explanation of this item.
    • What are the terms?
    • Is the Foundation a related party?
  • Mortgage Loan – interest bearing $651K
    • There is no explanation of this item.
    • What are the terms?
    • Is it from a related party?

Movements in the net wealth of the charity – the Statement of Changes in Equity and Funds (the eighth page of the Financial Report)

  • This is an atypical, and therefore confusing, display.
    • There is no total for either Other Unrestricted Funds or Unrestricted Funds.
    • There is no obvious reason for the distinction between Unrestricted Funds and Other Unrestricted Funds.

Where the cash came from and went to – the Statement of Cashflows (the ninth page of the Financial Report)

  • Funds from/(used in) Operations
    • Tuition Income: this is the third different term for this item.
    • Residential Income:
      • A term slightly different to the one used earlier.
      • Whereas the accrual and cash amounts differ for Tuition Income they don’t for this item.
    • Donations are not shown.
    • Nor is interest.
  • Funds from/(used in) investing activities
    • Prior year adjustments: how did this involve cash?
  • Funds from(used in) financing activities
    • Increase/(Decrease) in borrowings/Increase in Morling Foundation loan
      • The Morling Foundation loan is a borrowing, and therefore should be included in the first item.
    • Why, when the Morling Foundation exists primarily to support MC, is a loan necessary rather than a donation?
  • (a) Funds which may only be used for the designated purpose
    • Given that long service leave is provided by the Baptist Union (Note 1(d), why is there any need for a reserve fund?
    • And even if there is a need, that decision is a choice, not compulsory (i.e. properly in category (b))

Essential information to go with the figures – the Notes to and forming Part of the Accounts (the tenth page of the Financial Report)

  • Missing from the preamble:
    • The type of company that MC is.
    • Functional and presentation currency.
    • The date the accounts were authorised for issue and whether the directors have the p0wer to amend and reissue the financial statements.
  • 1. Significant Accounting Methods and Policies
    • The ACNC Act should be referenced, not the Corporations Act.
    • (a) Recognition of revenue
      • The Note doesn’t match the revenue disclosed.
    • (b) Depreciation
      • This should be Property Plant & Equipment
      • The third sentence doesn’t make sense.
      • There is no mention of the Construction in Progress.
      • The depreciation method is not disclosed.
      • No rate is shown for leasehold improvements.
      • Policies on derecognition and the review of depreciation factors are missing.
    • (d) Employee Benefits
      • The usual distinction between short-term and long-term benefits is missing.
    • (f) Designated Funds
      • The third sentence implies that designated funds are not revenue, a practice that would be contrary to the Accounting Standards.
      • The last sentence implies that unrestricted designated funds are held outside MC, again a practice that would be unlawful.
    • (m) Secured loan – interest bearing
      • There is no ‘loan provided by Baptist Financial Services Australia Ltd’ in the balance sheet.
      • The remainder of the note is about a property, not the loan, and should be included under Note (b).
      • The property is not identifiable in the balance sheet.
    • Missing policy Notes
      • New, revised or amending Accounting Standards and Interpretations adopted
      • Current and non-current classification
      • Cash and cash equivalents
      • Trade and other receivables
      • Impairment of non-financial assets
      • Trade and other payables
      • Fair value measurement
      • Goods and services tax (GST) and other similar taxes
      • Critical accounting judgments, estimates and assumptions
  • 8. Related Parties
    • The nature of the relationship with The Baptist Union is not identified.
    • The MC constitution shows that the Union controls MC. (For some reason, though, it does not consolidate MC’s figures with its figures.)
    • The two units that are owned by the Union but used by MC are not mentioned.
    • What is the value of the ‘administrative assistance’ provided by The Baptist Union?
    • The nature of the relationship with Morling College (Tinsley Bequest) Limited is not identified.
    • Does this company pay rent?
    • The nature of the relationship with Baptist Financial Services Limited is not identified.
    • Nor is it for Morling Foundation Limited.
    • A listing of the directors is incomplete as a disclosure of ‘key management personnel’ disclosures.
    • Isn’t there also a relationship with College of Christian Higher Education Incorporated?
  • 12 Economic Dependency
    • This Note contradicts Note 1(l).
  • 13 Secured Loan
    • This Note duplicates Note 1(m).
    • The last sentence doesn’t make sense.
  • Missing Notes
    • Contingent Liabilities
      • Don’t student fees have to be repaid under certain circumstances?
    • Commitments

Membership of accountability organisations claimed


(End of review)


[i] Australian Charities and Not-for-profits Commission, Australia’s national regulator of charities.

[ii] The registration of yet another Morling charity, The Trustee for Morling College Tinsley Bequest, was revoked by the ACNC during the year because it has not submitted an AIS for the last two years.

[iii] And the year end is 31 December 2014, not 2013.

[iv] This is not a charity, but a business name of the charity Baptist Union Of New South Wales.

[v] 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.’

[vi] There is no separate page for two of the menu items ‘Donations’ and ‘Bequests’. They both lead to another of the menu items, ‘Partnership Mission’.

[vii] 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.