Archived: Overseas Council Australia: charity review

This is a charity review of Overseas Council Australia (OCA), an organisation that invites the public to donate to it, and that is connected, through Stephen Kerr, to the CMA Standards Council, Christian Ministry Advancement Ltd‘s ‘major new initiative, accrediting Christian organisations against a set of standards of good governance, financial oversight, and fundraising ethics.’

(Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

To see the situation last year, read this review.

Is it responsive to feedback?

• Its own accountability is not mentioned on the website.
• I sent them a draft of this review. They…did not respond.
  • OCA has a ‘Complaints Handling Policy’. It ‘sets out how we approach complaints or negative feedback about us.’

Is it registered?

• Yes, as a charity.
• OCA is a public company, a company limited by guarantee.
  • It is entitled to omit ‘Limited/’Ltd’ from the end of its name.
• OCA is a member of an ACNC ‘reporting group’. There’s one other member of the group, The Trustee For Overseas Council Fund (the Fund)^[1]. They are a member because OCA is the trustee.
• Both charities operate, per the ACNC Register, all over Australia. And OCA solicits donations online. However, OCA is only registered as a fundraiser in its home state, NSW, and in South Australia. They give no explanation for the absence of licences in the other four states that have a licensing regime for registered charities.

What does OCA do?

• Here’s their strategy:
  • Choose the best theological college within a context, with strong governance and accountability: support the college with funding and resources, to enable it to do what it does best, so that the college in turn becomes an enabler and leader to other neighbouring colleges to assist them to become leaders and enablers to others also. Through this process thousands of new leaders are trained each year for work in the church as pastors, evangelists and church planters.

Do they share the Gospel^[2]?

• No. (It funds the training of those that will).
  • There is no mention of evangelism in the ‘Statement of Faith’, and the constitution doesn’t even mention Christianity

What impact are they having?

• Nothing systematic found.
• The latest Annual Report on the website is for 2016.

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

• If we define ‘Payments and in kind (sic) allocations to Projects’ as these direct costs, then 28% was ‘administration’.

Do they pay their directors?

• This is not disclosed.
• There is insufficient public information to say.

Can you get a tax deduction?

• No
  • This is contradicted on the ‘Giving to Growth’ page:

Is their online giving secure?

• GeoTrust is used, so yes.

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

• ‘Where most needed’
• ‘Student support’
• ‘Faculty support’
• ‘Infrastructure project’
  • You will need to know the name of the project
• ‘Translation or commentary project’
  • You will need to know the name of the project
• ‘Africa Bible Commentary’
• If you are giving a tax-deductible donation, you are donating to the Fund. In that case, you are effectively donating to other charities. See the next section.

Where were your (net) donations sent?

• This is not disclosed.
• For your donations to the Fund, here are the intended destinations:

• I have reviewed three of these organisations: WorldShare, Melbourne School of Theology, Eastern College Australia, and World Relief Australia.

Is their reporting up-to-date?

• Yes (two weeks late, six and a half months after their year-end).

Does their reporting comply with the regulator’s requirements?

• Group Annual Information Statement 2017 (Group AIS 2017): No
  • ‘General community in Australia’ is not the group that was helped most.
  • There is one less state shown than on the Register entries for the group members.
  • ‘Donations and bequests’ does not match the financial statements.
  • No outcomes are reported.
• Group Financial Report 2017: No.
  • There is no reason given for reducing short-term liabilities by 98% – 943K – by converting them to equity.
  • The surplus in the income statements is again not the same as the surplus in the Statement of Changes in Equity.
  • ‘Prior year adjustments’ are again included in the Administration Reserve without being explained.
  • Any why are there ‘Prior year adjustments’ in the Statement of Cash Flows?
  • ‘Increase in borrowings’ in included in ‘Investing Activities’ in the Statement of Cash Flows.
  • Not only do the directors continue to produce the lower standard special purpose financial statements, but they continue to think that no explanation is required. For a charity with an income of $2.13 m, most of it from donations, operating in all states, and in 30 overseas countries, operating a public ancillary fund, and with 12 staff, it is not plausible that all stakeholders, both present and prospective, can command OCA to produce a report tailored to their needs.
  • Two income statements are again, without explanation, included. And both continue to omit ‘Other comprehensive income’. As does the Statement of Changes in equity^[3].

What financial situation was shown in that Report?

• By a reclassification of liabilities to equity (see above), OCA has fixed it negative working capital (current liabilities exceed current assets), and negative equity, issues of last year.
• The ‘net income’ as a percentage of ‘income’ has declined from 6% to less than 1%.

What did the auditor say about the last financial statements?

• The auditor, Lawrence R Green, FCA, of Shedden and Green Partners, issued a ‘clean’ opinion on the financial statements.
• But before you decide how much comfort to take from this opinion,
  • note that he has omitted an essential paragraph in his report. It is especially important in the case of OCA, because as usual OCA includes an extra income statement, and the paragraph is the one that identifies what the auditor audited,
  • read the ‘Financial Report 2017’ section above, and, if you are still relying on the opinion after that,
  • read here and here to understand what ‘clean’ means.

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

• OCA: Almost – ‘General community in Australia’ is not the group that was helped most.
• The Fund: ditto
• The Group: The same question is blank.

Who are the people controlling the organisation?

• The nine people introduced on the website here.
• The ACNC Register (under ‘Responsible Persons’) has the same names:
  • John Allison
  • John Anderson
  • David Brown
  • Kenneth Chapman
  • Miyon Chung
  • Sandra Clarke
  • Timothy Clemens
  • Alan Jeffrey Hall
  • Stephen Kerr
    • Stephen is the Executive Director of the CMA Standards C0uncil, Christian Ministry Advancement Ltd‘s ‘major new initiative, accrediting Christian organisations against a set of standards of good governance, financial oversight, and fundraising ethics.’
      • So perhaps he’s now only part-time with this legal firm?
  • There are 26 directorships recorded for the name ‘John Anderson’, 21 for ‘David Brown’, and eight for ‘Kenneth Chapman’. And the register only covers charities, not all not-for-profits, and no for-profit organisations. Therefore, if after eliminating the charities that don’t belong to the OCA director, you are left with his total being more than a handful, it would be legitimate for you to question whether his ability to discharge his fiduciary responsibilities is threatened.
• The Fund doesn’t have ‘trustees nominated from the OCA board’, as it says above, but, because OCA is the trustee, the entire OCA board are the ‘responsible persons’ for the Fund.
• The board is responsible to the members. Having 64 members [Directors’ Report] provides some accountability.

To whom is OCA accountable?

• As charities, both OCA and the Fund are accountable to the ACNC.
• And, as a company, OCA is still accountable for some things to ASIC.
• OCA displays the Missions Interlink ‘Member’ seal:

• • Membership confirmed^[4].
  • Missions Interlink has an accountability regime.
    • For one opinion on the strength of that accountability, see the section Activities in this review.

1. The name is missing ‘The’ (Overseas…). ↑
2. “Good living and social concern are important [to the cause of evangelism], but they are not uniquely Christian graces…I’ve met a lot of fine Hindus, Muslims and atheists. Just living the life is not going to bring someone to Christ. There is much more to it than that. We must help people, certainly, but we must also share with them why we are motivated to do so. We must stand against injustice, poverty and need, but we must at the same time point to the One who brings justice and who can meet the deepest need. Until they know our reasons, how can they come to know our Lord?” [Dan Armstrong, the Fifth Gospel: The Gospel According to You, Anzea Books, pp. 13-14.  ↑
3. In addition, there is again insufficient disclosure in the first section of the Statement of Cash Flows, ‘Donations received’ in Note 6 does not match the statements, the Notes to the accounts are again missing some that are customarily included, and restricted donations are not shown. ↑
4. Missions Interlink is not though, the ‘peak body of churches, ministries and missions’. It is only about ‘missions’, and only has 103 ‘Members Organisations’. ↑