Reformed Theological College

This is a review^[1] in the series ‘Members of Missions Interlink’, Missions Interlink being the Australian Evangelical Alliance Inc‘s ‘network for global mission‘. We review these charities because their membership means that they must sign up to a set of standards, and this, at least on paper, makes them a better bet for your donations (or other involvement).

‘Reformed Theological College’’ is one such member. It seeks donations on the website linked from Missions Interlink^[2].

COVID-19  No dedicated message on the website.

Donors

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 ‘Reformed Theological College’, with #5 supplemented by the essentials of the ACNC’s What should I consider when deciding which charity to support?^[3]

1.  A search of the ACNC Register for ‘Reformed Theological College’ leads to two registered^[4] charities:

The first is the Missions Interlink member (RTC). The second (the Foundation) is controlled by the first^[5].

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2.  There is nothing in the RTC material to indicate that it collects donations door-to-door or in the street.

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3.  The RTC website begins with a closed padlock symbol, so the website is secure [the ACNC article above^[6]]. But there is no mention on the first three pages of the donation process about the security of your information.

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4.  RTC’s ABN record says that it is entitled to receive tax-deductible gifts. However, there is no mention of tax-deductibility on the ‘Donate’ page.

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5.  The use of your donations

For context, see the home page, then ‘Who We Are’, further down on the same page.

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

RTC’s Financial Report 2019^[7] repeats previous years in being seriously deficient:

• The audit report, by David Scott, is materially non-compliant with the Australian Auditing Standards.
• The Directors’ Declaration does not comply with the ACNC’s requirements.
• The Statement of Income and Expenses omits a comprehensive income section (long a legal requirement).
• There is no comment on the going concern assumption.
  • For the third year in a year, RTC incurred a substantial deficit (which is understated, see below). 15% of revenue.
  • Without the $6.59 million revaluation of assets in 2019, equity would have dropped to 206K, a figure that is less than the average deficit over those three years.
  • Working capital is only 122%, and that is with a question hanging over the classification of a large loan (see below).
  • The comment in the Directors’ Report [Financial Report 2019] doesn’t make sense:

• • • The deficit occurred despite 32% of their revenue coming from ‘Church Collections, etc.’
    • They increased borrowings by $200K.
• The revaluation has been incorrectly classified. There is no Asset Revaluation Reserve, the increase having been transferred to Retained Earnings.
• $1.2 million ‘Secured liabilities’ (up $200K on last year) are classified as entirely non current. Is not a portion repayable within 12 months? (No information on the borrowings is given in the Note.) The question is very relevant because of the thin working capital (see above), and the repeated deficits (see above).
• ‘Other expenses from ordinary activities’, 33% of expenses, is far too large to be unexplained.
• Why are ‘Donations for non-recurrent purposes’ any less part of ‘Operating Activities’ than the other revenue?
• The audit report was signed on 9 April, well into the COVID-19 pandemic, yet there is no comment on its effect on RTC.
• The directors report the deficit as being from ‘ordinary activities’. This distinction has long since been replaced. (All revenue comes from ‘ordinary activities’.)
• 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. The directors of RTC at the time (see below), decided on special purpose. Based on the facts^[8], this decision is questionable^[9].
  • The directors do not explain their decision.
  • Because of this choice, the directors did not have to
    • consolidate (include the balances and transactions) of subsidiaries. This includes the Foundation (see above). Does it also include RTC Support Services?
    • Include a Note on related parties.
• There is no explanation given for classifying an ‘Overseas student assist fund’ as a (a) a liability, and (b) an employee entitlement.
• The directors continue to contravene the Accounting Standards by not charging depreciation on either buildings or the library. This means the deficit is understated.
  • The Library is held at ‘Director’s Valuation’ undertaken six years ago. What’s happened since?

Despite all the above, the directors signed that the accounts gave a ‘true and fair view’, and the auditor gave a ‘clean’ opinion.

If you are still interested in where the money went, have a look at the Statement of Income and Expenses.

Who’s responsible?

These are the directors responsible for the Financial Report 2019 (Directors’ Report, Financial Report 2019):

John Bysma

Anthony Deenick

Michelle Dempsey

William Gadsby

Ben Murphy

Corey Van Garderen

Andy van Ameyde

Dawie van Vuuren

RTS records the same eight people on the ACNC Register. The RTC website, however, says that there are 10 on the board.

The directors are responsible to the members. The customary disclosure of the number of members is absent, so no assessment of accountability is possible

Impact

There is nothing on the website about the impact of the donations.

Charity response

The introduction to the Mission Interlink standards (see above) includes this statement:

We sent the member a draft of this review. They received the email but chose not to respond.

End of review.

1. See here for the previous review. ↑
2. Something that is says, in its Annual Information Statement (AIS) 2019, that it doesn’t do. ↑
3. A section in the article, Donating and Volunteering:
   • • Focus on the nature of the charity’s work, its beneficiaries and the impact the charity is having in the community.
     • Is it clear what the charity is trying to achieve and how its activities work towards its objectives?
     • Would you like to spend your money, or time if volunteering, to support these objectives?
     • Is the charity being transparent about its activities?

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4. The ACNC implies, therefore, that it is a ‘legitimate’ charity. But this is not correct – as the ACNC itself points out, registration is voluntary. ↑
5. The Foundation is over a year late in submitting its Annual Information Statement (AIS) 2018. ↑
6. The ACNC’s information (in its article above) is not correct for the Chrome browser; it does not have ‘https’. ↑
7. The document labelled ‘Annual Report’ under ‘Documents’ on the ACNC Register is not an annual report, but another copy of the Financial Report. ↑
8. 18 staff and 20 volunteers for a start. And then there’s the students and the donors. ↑
9. This is what the auditor’s professional body, Chartered Accountants Australia & New Zealand, has to say about the choice between the two types of reports: ↑