Archived: NT Christian Schools: charity review

Mini-charity review of NT Christian Schools (NTCS), an organisation that is an Associate member of Missions Interlink.

The previous review is used as a base, with comment only if the situation has changed.

As a member of Missions Interlink^[1], NTCS had to accept a set of standards, the introduction to which includes this statement:

Are they responsive to feedback?

• They did not respond to the draft I sent on 24 February.
• 2018 review: I sent a draft of this review to the ‘Address for Service Email’ on the ACNC Register. When that bounced, I sent one to the ‘Email’ address on the Register. My website host later told me that it appears that NTCS has blocked me as a sender.

Is NTCS registered?

• Yes, as a charity.
• As a public company, a company limited by guarantee.
  • It is permitted to omit ‘Ltd/Limited’ at the end of its name.
• Fundraising licences: it only operates in the Northern Territory and that state doesn’t have a fundraising licensing regime.

What does NTCS do?

• While from the name you might think that they are a representative organization for Northern Territory Christian schools, NTCS actually owns and runs five colleges and three schools itself.
• 2018 review: now five colleges and two schools.

Do they share the Gospel?

• Their Statement of Faith, ‘the central document of this organisation’, says that ‘God wants us to tell people about Jesus and why He died for us’, but the use of ‘Gospel’, ‘Jesus’, and ‘Christ’ on the website suggests that this is too difficult in practice.

What impact are they having?

• No information found.
• 2018 review: Nothing systematic found.

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

• Insufficient information is published to allow this calculation.

Can you get a tax deduction?

• Not to NTCS itself, but to its fund Northern Territory Christian Schools Building Fund.
• 2018 review: There is only a single reference to this fund in the 2017 Annual Report, just saying that it exists.

Is their online giving secure?

• NA – they don’t seek donations online.

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

• NA
• 2018 review: Although it is not currently^[2] seeking donations on the internet (or anywhere?), NTCS does take money from the public, indirectly through your duties and taxes. In 2016 (2017 not yet available) it received ‘Recurrent Government Income’ of $26.60 million plus another $1.26 million in ‘Capital Grants’. And then there are the parents and others who paid $4.69 million in ‘Fees and Charges’.

Is their reporting up-to-date?

• Yes (five months after their year-end).
• 2018 review: The AIS 2017 was lodged the day before the last day allowed; the Financial Report 2017, because NTCS is a non-government school, has ‘No due date’. The ACNC is waiting on the government to provide the NTCS financial report for 2017:

Does their reporting comply with the regulator’s requirements?

• Annual Information Statement 2015 (AIS 2015): Apart from the absence of outcomes, yes.
• Financial Report 2015: No
  • From Section E of the AIS 2015 we know that NTCS produced the lower standard special purpose financial statements. For an organisation running eight public educational institutions all over the Northern Territory, using principally taxpayers’ money ($23.01 m of it), it is implausible that all the stakeholders, both present and prospective, have the capacity to command the preparation of a financial statements tailored to their needs.
  • Because NTCS’s schools are non-government schools, NTCS was not required to lodge a Financial Report.
  • However, their Associate membership of Missions Interlink requires them to “have available for [their] members and supporters a clear and appropriate financial statement which has been approved by its auditor.”  So just ask.
• 2018 review: From the audit report published – without the financial report – in the 2017 Annual Report, we know that the directors (see below) maintained their stance that there were no users dependent on general purpose financial statements^[3]. So, if you are reading this, the directors say that you are the type of user of their financial statements that doesn’t exist.

What financial situation was shown in that Report?

• No report is publicly available.
• From Section E of the AIS 2015:
  • The had a deficit of 3% of Gross Income.
  • Over 70% of Gross Income is from government grants.
  • Current assets are only 60% of current liabilities.
    • Did the auditor comment on this?
  • Long-term financial structure is sound.
• 2018 review: Without the 2017 financial statements, we have only limited information. Limited, but helpful:
  • Unless they have had a miraculous turnaround since April this year, NTCS is in trouble. Creditors, particularly unsecured creditors, are in a risky position.
  • For all the years that are shown on the ACNC Register, NTCS was losing money. A significant amount of money. And that has just got a whole lot worse: from a deficit (excluding relatively nominal capital grants) of $2.54 million in 2016 to eight times that, $20.43 million, in 2017^[4].
  • The other main thing that auditors look at, whether there are more current assets than current liabilities, is also in the red. Severely in the red. And not just recently – the shortfall has grown from $2.93 million in 2013 to $8.13 million in 2017.
  • The directors say that they will be alright though.
  • However, this the same company and the same auditor, MunLi Chee of Merit Partners, who made no mention of the troubles in 2014 when the deficit was already $2.82 million, and the negative working capital was already $3.97 million. Why not? If they were one step behind reality then, perhaps they are one step behind now? That would mean that, instead of a prominent paragraph in the audit report and an unqualified opinion, the accounts should be recast to show liquidation values.
  • If the charity is not able to keep things going despite the financial pressures, it this lot (updated for 2017) who will bear the brunt of the direct loss:

What did the auditor say about the last financial statements?

• No audit report is available publicly.
• The last page of the audit report is included in the Annual Report. This shows a ‘clean opinion’.
  • However, the auditor agreed with the directors’ view that special purpose financial statements are appropriate.
• 2018 review: He gave a ‘clean opinion’, but included the following under a heading ‘Material Uncertainty Regarding Continuation as a Going Concern’:

‘We draw attention to the statement of comprehensive income (sic) in the financial report, which indicates that the Company incurred a net loss of $9,886,901 during the year ended 31 December 2017 and, as of that date, the Company’s current liabilities exceeded its current assets by $8,131,964. As stated in Note 16, the Company is dependent upon the continuation of adequate funding from the Australian and Northern Territory Governments in respect of operational and capital grants to continue as a going concern. As a result of these matters there is significant uncertainty whether the Association will continue as a going concern. Our opinion is not modified in respect of this matter.’

Even without the huge loss and the significantly negative working capital position, NTCS was dependent on Government grants. The question is: how is it going to get the very large extra amount it needs in order to get back on an even keel?

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

• Almost – it is missing some responsible persons.
• 2018 review: It appears so.

Who are the people controlling the organisation?

• Not directly shown on the website.
  • Via the Annual Report (2015):
    • Bevan Richardson (Board Chair)
    • Martin Hanscamp
    • Ruth Ridley
    • Mal Farnsworth
    • Adrian Cook
    • Tim Woods
    • Cor Koole
    • Geoff Bateman (Company Secretary)
    • Phoebe Van Bentum (Company Secretary)
• The ACNC Register show only two people, with only one of those matching the above list:
  • Danielle Little
  • Phoebe Van Bentum
• 2018 review: Not shown on the website: On the ACNC Register, these people:
  • Adrian Cook
  • Darran Plumb
  • Geoffrey Harper
  • John Lyndon
  • Malcolm Farnsworth
  • Ruth Ridley
  • Van Bentum Phoebe (round the wrong way)

To whom is NTCS accountable?

• To Missions Interlink^[5] via its an Associate membership.
• NTCS is also accountable to the ACNC.
• And, as a company, to ASIC.

1. Why it continues to belong to this organisation is not clear: Missions Interlink is an organisation for those with ‘an active interest in global mission’, and there is nothing on the NTCS website to indicate such an interest. In fact, how were they accepted when one of the qualifications for applying to be an associate is ‘a significant interest or involvement in cross-cultural and/or global mission’? Missions Interlink is not mentioned on the NTCS website. ↑
2. NT Christian Schools has a fund with deductible gift recipient status, but it is not mentioned on the website, nor in the last published accounts. ↑
3. From Objective of General Purpose Financial Reporting (SAC2), www.aasb.gov.au:  ↑ ↑
4. $10.26 million of this was due to the write-down of the building assets of a school that closed. ↑
5. For one opinion on the strength of that accountability, see the section Activities in this review. ↑