Archived: Prison Fellowship Australia: charity review

Mini-charity review of Prison Fellowship Australia (PFA),

The previous review is used as a base, with comment only if the situation has changed or extra information would be helpful.

an organisation that invites the public to donate to it, and that is connected, through a director, John Peberdy, to the organisation that is planning to accredit ‘Christian organisations against a set of standards of good governance, financial oversight, and fundraising ethics.’

2018 review: it has now been running since 16 November 2017. So far it has accredited 10 organisations.

(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?

• I sent a draft of the review on 5 April 2017. They did not respond.
• 2018 review: They did not respond to the draft.

Is it registered?

• Yes, as a charity.
• PFA is a public company, a company limited by guarantee.
  • It is entitled to omit ‘Limited/’Ltd’ from the end of its name.
• It operates, per the ACNC Register, in all eight states of Australia. It has offices in six states. It also fundraises via the internet. However, it has a fundraising licence in only two of the seven states that have a licensing regime^[1].
  • 2018 review: PFA has registration in five of the six states that have a licensing regime. There is no explanation for the lack of a licence in Victoria.

What does PFA do?

• ‘Across Australia there are over 1000 volunteer men and women visiting prisoners, running programs in prisons, organising camps and providing Christmas presents for prisoners’ children, supporting ex- prisoners when they are released, playing sports, running in-prison Bible studies, and providing many other services.’ [https://prisonfellowship.org.au/prison-fellowship-australia/].
• 2018 review: For their programs, see here.

Do they share the Gospel?

• The PFA mission is ‘To share the Gospel of Jesus Christ with prisoners, ex-offenders, and their families.’
• 2018 review: How does this fit with being a public benevolent institution (PBI), an organisation that offers donors a tax deduction?

What impact are they having?

• Nothing systematic found.
  • The website has only two references to impact.
• 2018 review: A Google search gives a number of individual stories of impact.

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

• The expenses are not classified to allow this calculation.

Can you get a tax deduction?

• It says so on their ABN record, but there is no mention of it on their website.

Is their online giving secure?

• If security is mentioned it is after you have entered your personal information.

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

• ‘Prison Visiting’
• ‘Angel Tree’
• ‘The Prisoners (sic) Journey’
• ‘Sycamore Tree Project’
• ‘SLAM’
• ‘Change On The Inside’
• ‘Camp for Kids’
• ‘Darwin’
• ‘Where Most Needed
• 2018 review:
  • all the above except ‘Prison Visiting’ is now ‘Visiting in Prison’, ‘Where Most Needed’ has become ‘General Ministry’, ‘Darwin’ has been dropped, and ‘Chainbreakers’ has been added.
  • There is no information in the Financial Report showing the use of donations for these purposes.

Is their reporting up-to-date?

• Yes (six months after their year-end).

Does their reporting comply with the regulator’s requirements?

• Annual Information Statement 2015 (AIS 2015): No
  • The description of activities is not particularly about 2015.
  • No outcomes are reported.
  • Their business name is missing.
• 2018 review: AIS 2017: No
  • The description of activities is identical to that provided in 2015, except updated in the reduction in the number of volunteers.
  • No outcomes are reported.
• Financial Report 2015: No.
  • The directors have again adopted the lower standard special purpose financial statements.
    • It stretches credulity to suggest, as the PFA directors do, that an organisation with $1.70 m turnover, 15 employees, 1075 volunteers, and that has offices in six states^[2], had ‘no users who are dependent on general purpose financial statements’.
  • 2018 review: The directors have not changed their mind.
  • Note 1 first says that the financial statements cover PFA ‘as an individual entity’ then, two paragraphs later, says that ‘the report covers (PFA) as a consolidated entity, made up by the following entities:
    • Prison Fellowship Queensland
    • Prison Fellowship National (sic) Territory
    • Prison Fellowship Western Australia
    • Prison Fellowship New South Wales
    • Prison Fellowship Tasmania
    • Prison Fellowship South Australia
    • Prison Fellowship National Office
    • Prison Fellowship Victoria
      • All these entities have an ABN except for ‘National Office’.
      • Four of them are in the former name of PFA, Prison Fellowship of Australia (emphasis added).
  • 2018 review: PFA say that the report ‘covers Prison Fellowship Australia as an aggregated entity…made up of the following entities [as above^[2]]
  • Consolidation fits with the fact that the Articles of Association [clause 60A], require ‘Each State Council’ to produce “a balance sheet and profit and loss account’ for their AGM.
  • 2018 review: now ‘aggregation’.
  • But
    • There is no mention of Councils on the PFA website.
    • There are seven state entities above but only six ‘State contacts’.

What financial situation was shown in that Report?

• A 16% decline in revenue was more than compensated for by a 37% reduction in ‘Employee benefits expense’. This helped to turn a negative 3% return on revenue into a positive 4%.
• 2018 review: A 2% increase in revenue was swamped by a 30% increase in ‘Employee benefits expense’. This was the principal reason why the deficit increased by 690%.
  • Remaining equity is only 1.3 times the last deficit.
• The ratio of current assets to current liabilities was increased significantly (from 1.9 to 2.8).
• 2018 review: The ratio declined significantly, from to 4.0 to 2.0.
• Long-term financial structure appears sound.
• 2018 review: long-term liabilities now marginally exceed long-term assets.

What did the auditor say about the last financial statements?

• Although he gave a ‘clean’ opinion, the auditor, Matthew Hung of rdl.accountants,
  • agreed with the directors’ decision that there are no users (present or prospective) who are dependent on general purpose financial statements (see ‘Financial Report’, above), and
  • 2018 review: Matthew Hung, CA, of rdl.accountants.
  • left in the accounts the confusion over the connection between PFA and its state bodies.
  • 2018 review: The connection between the PFA and its state bodies is clearer. But the need for ABNs for the councils is still not explained.

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

• Almost – their business name is missing.
  • The governing document is still missing the Memorandum of Association though.

Who are the people controlling the organisation?

• The nine people shown here on the website.
• Who are also shown under ‘Responsible Persons’ on the ACNC Register:
  • David Cormack
  • Shane Ellery
  • Peter Hall
  • David Maxwell
  • Daryl Myatt
  • Steven Nicholson
  • Vera Ou-Young
  • Michael Wood
  • John Peberdy
  • John is a director of Christian Ministry Advancement Ltd, the organization that is introducing a ‘major new initiative, accrediting Christian organisations against a set of standards of good governance, financial oversight, and fundraising ethics.’
  • 2018 review: it has now been running since 16 November 2017. So far it has accredited 10 organisations.
• There are 14 directorships recorded for the name ‘John Peberdy’, and 11 for ‘Peter Hall’. 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 PFA director, you are left with their total being more than a handful, it would be legitimate for you to question whether their ability to discharge his fiduciary responsibilities is threatened.
• 2018 review: Since the revamp of the ACNC website, it is no longer possible to search the register of responsible persons.

To whom is PFA accountable?

• To the ACNC.
• And, as a company, to ASIC.

1. The licence in NSW is in the name Prison Fellowship of Australia, a NSW entity. The licence in Queensland is in the name Prison Fellowship of Australia Queensland Council; 2018 review: ‘Prison Fellowship of Australia’ is the old name of PFA; the introduction to the Notes to the Financial Statements says that ‘Prison Fellowship Queensland’ and ‘Prison Fellowship Queensland are divisions of PFA. the law in this area is not straightforward – is an internet invitation ‘fundraising’ for instance? – and advice varies, so check with the charity before drawing any conclusions. ↑
2. Except for the correction of the spelling mistake. ↑