Archived: Slavic Gospel Association, charity review

This is a charity review, a review for those with an interest in the Australian charity Slavic Gospel Association (SGA).

It is structured according to the charity’s entry on the ACNC[i]Register, and its purpose is to supply some information extra to what is there, information that may be helpful in your decision about SGA.

It is up to you to decide whether any or all of the information presented here is what you need in order to make that decision, and whether you should seek any other information, either from the charity itself or from other sources.

Ministry response

Prior to publishing this review, I sent my observations to the charity, on 19 April 2016, and invited them to comment. They did not respond.

Organisation of this review

• The first part of this review is organised according to the headings in the Register entry. This is how to use this section of the review:
  1. For each heading in the register entry, first read the information under that heading.
  2. Then check if that heading is included below. (Headings for which there is no comment are not included. This also applies to the information in the Financial Report.)
• There is then a more detailed comment on the Financial Report.
• Lastly, there is a section Membership of accountability organisations

Sources

• ACNC Register (including links)
• Google search on the charity’s name.
• SGA website.
• Facebook
• Not on LinkedIn.
• State government fundraising licence registers.
• No reviews yet on Glassdoor.

REGISTRATION DETAILS

Entity Subtype

• A subtype consistent with sharing the Gospel.
• Is the message under the subtype an ACNC mistake?
• Spreading the gospel is prime in the objects:
  • To promote the advancement of Christianity based upon an international charter with defined objectives.

The Charter states: Slavic Gospel Association Inc. is an interdenominational, evangelical missionary organisation, formed in 1934 to engage in spreading the gospel of Jesus Christ and in the building up of His church through….

CHARITY DETAILS

Legal Name

• The name that the ACNC has registered is incorrect: SGA is a Victorian incorporated association (No. A0027142A), and therefore has ‘Inc’ or ‘Incorporated’ at the end of its name.

Other Name(s)

• In not always using its full name (see, for instance, on its website and Facebook page), SGA appears to be in contravention of its enabling legislation (section 23, Associations Incorporation Reform Act 2012).
• SGA has a lapsed trademark.

Charity ABN

• The name on the Australian Business Register is incorrect – see Legal Name, above.
  • So is the Entity type: it is not an ‘Other Unincorporated Entity’.
• You are not entitled to a tax deduction for a donation to SGA.

Charity Street Address

• Postal address, from the website: PO Box 396 Noble Park Vic. 3174.

Phone

• From the website: (03) 9562- 3434.

Website

• From the Google search: sga.org.au

ANNUAL REPORTING

• AIS 2014
  • This is SGA’s compulsory Annual Information Statement 2014 (AIS 2014).
  • It gives basic financial information. If you think that this might be sufficient for you
    • ‘Donations and bequests’ is overstated by $5K
    • Interest of $5K is missing from ‘All other revenue’.
• Financial Report 2014
  • None of the reports in the Financial Report are signed, and the date they were authorised for issue is missing from Note 1.
  • However they were lodged five months after year end, a month before the deadline.
  • The coverage of finances in this review is left until the financial report proper (see Latest financial report – detail, below).

ABOUT THE CHARITY

• Statement of Faith
  • There doesn’t appear to be one on the website. (No search function.)
  • But there is ‘doctrinal statement’ in the constitution [clause 5].

Date Established

• The history of SGA is included in the history on the website (under ‘Future’).
• It was established in 1965, not 1993.

Who the Charity Benefits

• Vision and Mission
  • None found
• Activities (What did SGA do?)
  • From the Description of charity’s activities and outcomes in the AIS 2014:
    • Provided financial support to Christian ministries in the Commonwealth of Independent States.
      • Not particularly about 2014.
  • See under ‘Projects’ on the website.
• Outcomes (What did SGA deliver?)
  • SGA did not respond to the request in the AIS 2014 for a description of its outcomes.
  • Nothing systematic found on the website.
  • You will find some anecdotal evidence under News.
• Impact (How were people’s lives improved?)
  • Nothing systematic found.
  • You will find some anecdotal evidence under News.

Size of Charity

• With a revenue of $396K, SGA is well under the threshold for the next size up, ‘Large’, a size that would require SGA to have an audit rather than a review.

Financial Year End

• This means that the next financial report is due by 30 June 2016. Before that the financial information on the Register will be up to 18 months out-of-date.
  • You may therefore need to ask for more up-to-date information.

WHERE THE CHARITY OPERATES

Operating State(s)[ii]

• Is it fundraising in these states? It doesn’t have a fundraising licence in any of them. (Or in the ACT, the other one that has a licensing regime.)
• SGA calls for donations on its website. Have they considered whether this gives rise to the need for a fundraising licence?
• If SGA has understood the ACNC’s definition of ‘operating’, then, as a registrable Australian body, there is a strong argument that it requires an ARBN. It doesn’t have one.

CHARITY’S DOCUMENT (SIC)

• There is no Annual Report/Review available on the ACNC Register.
• Nor on the website.

 RESPONSIBLE PERSONS

No. of Australian ‘responsible person’ positions[iii]

Douglas Brown          This function was not working at the time of publication

Harry Caudasko

Peter Dubyna

Ralph Hewes

Larissa Porublev

Nickolai Porublev

Bruce Ronalds

Alexander Shevchuk

• This listing matches the one on the website.
• The Register is missing, under ‘Position’, a Chairman, Vice-Chairman, and an Executive Director.
• What is the distinction between ‘Other’ and ‘Committee member’?

(End of review of the ACNC Register information)

Latest financial report – detail

• There is no audit report. (There are audit fees, so presumably there was an audit.)
• These are the kind of financial statements that do not comply with all the Australian Accounting Standards.

Board members’ report (the first page of the Financial Report)

• Sections on objectives and the strategy to achieve those objectives are missing.
• The wrong content is under ‘Performance measures’.
• The report is unsigned (and therefore undated).

What was earned, what was consumed during the year – the Statement of profit or loss and other comprehensive income (the third page of the Financial Report)

• The amounts for interest revenue (Note 4) are the same as those for interest received. Accrual accounting not used?
• No travel and accommodation expense? Or is that ‘deputation’ (Note 8).
• The following expenses are not disclosed:
  • Finance costs
    • ‘Interest and other finance costs paid’ in the Statement of cash flows. But there is an identical amount in the Statement of profit or loss… for ‘Bank fees’, so is this misnamed?
  • And two that are generally expected for charities:
    • Fundraising
    • Administration

Essential information to go with the figures – the Notes to the financial statements (the seventh page of the Financial Report)

• Note 1. General information
  • The date the statements were authorised for issue is missing.
• Note 2. Significant accounting policies
  • Basis of preparation
    • Surely amongst all the donors who together donated $391K over the year, and all the prospective donors who will be touched by SGA’s fundraising efforts over the next year, there are some who are dependent on general purpose financial statements? Do the directors realise that they are saying that anybody who has an interest in SGA can request a financial report tailored to their specific needs?
    • The Act cited was superseded in 2012.
    • Historical cost convention: this does not match SGA’s situation.
  • Revenue recognition: the policy for each major type of revenue should be disclosed.
  • Property, plant and equipment:
    • Fair value here is contradicted in Note 13 (cost).
    • The use of a rate certificate is not normally thought of as valuation by ‘external independent valuers’.
      • Plus wouldn’t that only allow valuation of the land?
    • With valuations due at least every three years, isn’t one overdue?
    • There are, contrary to the note, neither leasehold improvements nor plant and equipment under lease.
  • Less significant:
    • Investments and other financial assets: this is a bit long and complicated for some short-term term deposits.
    • Finance costs: the borrowings are interest-free.
    • Goods and Services Tax (‘GST’) and other similar taxes: the policy on receivables and payables, cash flows, and commitments and contingencies is missing.
  • Note 3. Critical accounting judgements, estimates and assumptions
    • There are no receivables for which provision for impairment has been made.
  • Missing Notes
    • Remuneration of auditors
    • Contingent liabilities
    • Commitments
      • For these two, the industry norm is, if there aren’t any, to state that.

Other reports

• The Board members’ declaration, the report where the directors put their name to the Financial Report, is unsigned (and therefore undated).
• Is it correct that there are no non-current employee benefits? (Statement of financial position)

Membership of accountability organisations claimed

• Membership of Missions Interlink claimed, here. Confirmed.
• SGA also say that ‘financial accountability to our partners and donors’ is ensured by their annual audit and the submission of their accounts to the State associations regulator.  It is wise to understand the level of comfort that it is legitimate to draw from these two processes:
  • see here and here, for what a ‘clean’ audit opinion means.  (SGA have not lodged their audit on the Register.)
  • the State regulator does minimal compliance work.
• The US organisation is a charter member of the ECFA.

(End of review)

[i] Australian Charities and Not-for-profits Commission, Australia’s national regulator of charities.

[ii] This is how the ACNC explains ‘operating locations’ in their application guide: ‘You need to give details about where in Australia your organisation conducts (or plans to conduct) its activities.’

[iii] Because of the possibility of two (or more) directors having the same name on the register of responsible persons, it is not possible to be definitive about the number of directorships held.