Overseas Council Australia: charity review

This is a review^[1] in the series ‘Members of Missions Interlink’, Missions Interlink being ‘the Australian network for global mission’^[2] (and a means for a Member to get income tax exemption when it might not otherwise be available^[3]). ‘Overseas Council Australia’ is one such member.

The website linked from the Missions Interlink membership goes to a website in the same name, ‘Overseas Council Australia’. Here they seek online donations.

Covid-19 – no information

Donors

Given what Missions Interlink does, ‘Overseas Council Australia’ is probably a charity.

The ACNC, in their article, Donating to Legitimate Charities, gives “some things to consider to help you make sure your donation is going where it is intended”:

1. Check the charity’s name.
2. Ask for identification from anyone seeking a donation.
3. Be careful of online requests for donations.
4. No tax deduction doesn’t mean the charity is not a legitimate one, and
5. Find out more about how the charity says it uses donations.

Here’s the results for ‘Overseas Council Australia’, with #5 supplemented by the essentials of the ACNC’s What should I consider when deciding which charity to support?^[4].

1.  There is a registered^[5] charity in that name (OCA).

• The Register record shows that OCA is a member of an ACNC_Group. The other member is The Trustee for Overseas Council Fund^[6].
  • This is a public ancillary fund controlled by OCA. Donations to the Fund are tax deductible.
• Although OCA is a public company, ASIC has permitted registration without the usual ‘Ltd’/’Limited’ at the end of the name.

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2.  There is nothing to indicate that OCA uses either volunteer or professional collectors door-to-door or in the street.

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3.   The web address begins with a closed padlock symbol, so the website is secure [the ACNC article above]. But there is nothing about security on the giving page^[7].

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4.   The ABN records say that donations to OCA are not tax deductible, but those to the Fund are. Even though the website covers both OCA and its fund (see above), and OCA says that a tax deduction is possible, tax is not mentioned on the giving page.

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5.   The use of your donations

As context, here’s what OCA says, in their Group Annual Information Statement (AIS) 2019, that they do:

The audited account of how a charity uses donations is the Financial Report on the ACNC Register. For OCA it is the Group Financial Report.

Directors have a choice between two kinds of reports, special purpose or general purpose. The requirements of the former are less onerous than the latter.

OCA’s auditor, Lawrence R Green FCA, is a partner in the firm Snedden and Green Partners. This is what his professional body, Chartered Accountants Australia & New Zealand, has to say about the choice between the two types of reports^[8]:

With two charities, operations all over Australia and in 30 overseas countries [ACNC Register], 3.9 full-time equivalent employees, 258 volunteers [AIS 2919], $1.82 million revenue ‘derived mainly from donations from individuals, churches and foundations’, and donations for missionaries [Directors’ Report], it is hard to see how a special purpose report is the right choice. But that is the choice that the directors of OCA made.

And the auditor, a Chartered Accountant, agreed with them.

One of the implications of their choice is that you can ring OCA’s office and request that they prepare financial statements that answer the question or questions you have about the charity. I strongly doubt that they will agree^[9]. And if they don’t then the accounts presented by the directors are not for you. In fact, they say (in the Notes to and Forming Part of the Financial Statements) that you don’t exist:

The use of your donations

If you are still prepared to consider a donation to OCA, here is how the donations were used:

Cash spent

From the Statement of Cashflows (with last year in the second column):

It’s one line more than most charities have, but because no further information is given on these figures, we don’t have enough information to understand where the cash went.

Resources consumed (i.e. accrual)

This, from the Income Statement, is how the activities translated into expenses (with last year’s figures in the second column):

A list of the ‘Administration’ expenses is given in a second income statement, the Detailed Income Statement. There’s only one over $32K, ‘Promotion’ $77K.

Note 4 (above) has nothing to do with ‘Payments and in kind…’ Instead the breakup is given in the second income statement:

The destination of these payments is not given. Presumably it was these charities identified on the website:

The first three have been reviewed by us. Search here.

OCA give no information on (a) whether the money sent overseas was received, and (b) whether it was used for the purpose given.

Other issues with the Financial Report

• Two income statements have been included.
• The income statements do not comply with the applicable Accounting Standard.
• The surplus in the income statements is not the same as the surplus in the Statement of Changes in Equity.
• The auditor omits to say which reports in the Financial Report 2019 he audited.
• ‘Ministry Expenses Income’, an unusual item, and comprising 24% of revenue, is unexplained.

The directors

Here are the directors who approved the Group Financial Report 2019:

John Anderson

David Brown

Timothy Clemens

Kenneth Chapman

Miyon Chung

Catherine Crouch

Sandra Errey

Alan Hall

Stephen Kerr [Directors’ Report]^[10]

From the OCA website and the ACNC Register, John Anderson and Miyon Chung are not longer on the board.

Impact

Nothing systematic found.

Charity response

Both Members and Associates have to accept a set of standards, the introduction to which includes this statement:

OCA also has a strong connection to leading edge accountability for Christ-led organisations: one of its directors, Stephen Kerr, is the Executive Director of the CMA Standards Council. Here’s what the Council is about:

OCA has a ‘Complaints Handling Policy’. It covers ‘negative feedback’ as well as complaints. In it they say that ‘We value complaints and feedback as a means of identifying and understanding how we can do things better.’ We sent OCA a draft of this review. By the time of publication, two and a half weeks later, they had not responded.

1. See here for the previous review. ↑

2. https://missionsinterlink.org.au/about/ ↑

3. ↑

4. A section in the article, Donating and Volunteering:

   1. Focus on the nature of the charity’s work, its beneficiaries and the impact the charity is having in the community.
   2. Is it clear what the charity is trying to achieve and how its activities work towards its objectives?
   3. Would you like to spend your money, or time if volunteering, to support these objectives?
   4. Is the charity being transparent about its activities?

   ↑

5. The ACNC implies, therefore, that it is a ‘legitimate’ charity. But this is not correct – as the ACNC itself points out, registration is voluntary. ↑

6. The Fund continues to be registered without the second ‘The’ in its name. ↑

7. As separate to security of the information once collected, that is, as part of a privacy policy. ↑

8. Enhancing Not-for-Profit Annual and Financial Reporting, March 2013, accessed from their website March 2020. ↑

9. The accounting profession says that you are therefore ‘potentially interested in the information provided in general purpose financial reports’. [From Objective of General Purpose Financial Reporting (SAC2), www.aasb.gov.au]. ↑

10. The directors are accountable to the members. There were 65 of those at 30 June 2019 [Directors’ Report]. ↑