Archived: The Archbishop of Sydney’s Overseas Relief And Aid Fund, charity review

This is a charity review, a review for those with an interest in the Australian charity The Archbishop of Sydney’s Overseas Relief And Aid Fund (ASORAF).

It is structured according to the charity’s entry on the ACNC[1]Register and its purpose is to supply some information extra to what is there, information that may be helpful in your decision.

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 16 April 2016, and invited them to comment. Their responses that remain relevant are included throughout the review.

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 claimed.

Sources

• ACNC Register (including links)
• Google search on the charity’s name
• The website belonging to Anglican Aid (see Legal Name, below).
• Not on social media, or LinkedIn.
• State government fundraising licence registers.
• No reviews yet on Glass Door.

REGISTRATION DETAILS

Entity Subtype

• Notice the absence of ‘Advancing religion’.
• The ‘Purpose’ of the Fund in its Rules (see Charity’s Document (sic), below) also makes no mention of sharing the Gospel:
  • The purpose of the Fund is to carry out development and/or relief work in accordance with the Guidelines, solely for the relief of people in Declared Developing Countries.

CHARITY DETAILS

Legal Name

• ASORAF is an unincorporated body, a trust fund, that was established by the Archbishop of Sydney in 1971.
• Not to be confused with the Archbishop’s other four charities:
  • The Archbishop Of (sic) Sydney’s Anglican Aid
  • The Archbishop Of (sic) Sydneys (sic) Overseas Ministry Fund
  • Archbishop Of (sic) Sydney’s Discretionary Trust
  • Archbishop of Sydney’s New Churches for New Communities Public Ancillary Fund
    • ASORAF’s comment: Neither the Archbishop of Sydney’s Discretionary Trust or The Archbishop of Sydney’s New Churches for Communities Public Ancillary Fund have any relationship with Anglican Aid, OSORAF or OSOMF apart from having the Archbishop of Sydney’s name in their Title
    • The first, trading under the unregistered name Anglican Aid, is ASORAF’s trustee.
    • Anglican Aid is reportedly^[2] also the trustee of the second charity.
      • Given that Anglican Aid runs its own operations and its trusteeships from the one office, reports on them in its Annual Report as its ‘three funds’, and all three charities have the same directors, one wonders why
        • they don’t present consolidated financial statements, especially as the canon law governing their financial reporting requires a ‘charities group status report’ for Synod using the criterion for consolidation that is in the Australian Accounting Standards, and
        • they don’t take advantage of the ACNC Act’s group reporting provisions, thus simplifying their reporting requirements to the ACNC (both Annual Information Statement and Financial Report).
    • The third charity has one responsible person, the Archbishop. He controls the income, the Archbishop-in-Council the capital.
    • The last charity has a company trustee, itself a charity, NCNC Funds Limited. It has three directors, but they sit at the will of the single member, the Archbishop.

Other Name(s)

• This name is not a registered business name. Nor is ‘Anglican Aid’. ASORAF can therefore only legally trade under its full name.

Charity ABN

• Tax deductibility: Yes, you can claim a tax deduction for a donation to ASORAF.

Charity Street Address

• No postal address separate to that of its trustee (from its website): PO Box Q190, QVB Post Office NSW 1230

ANNUAL REPORTING

• AIS 2015
  • An Annual Information Statement 2015 (AIS 2015) has been submitted. Why has Anglican Aid, the trustee, not taken advantage of the group reporting provisions of the ACNC Act?
    • This would also negate the need for a Financial Report (see next).
      • ASORAF’s comment: Anglican Aid reporting is done internally to the Synod of the Diocese and requires the production of separate financial reports for each fund. Prior to the establishment of Anglican Aid this is how we have reported publicly as well. We will review whether group reporting should be undertaken for 2015/16.
  • It gives basic financial information. If you think that this is all that you might need, all the figures agree with the financial statements.
• Financial Report 2015
  • The Report was signed two months after year end, and lodged four months after that, days before the expiry of the period normally allowed by the ACNC. (The 21/04/2016 date reflects the fact that an updated Report was lodged.)
  • The coverage of finances in this review is left until the financial report proper (see Latest financial report – detail, below). Go straight there.

ABOUT THE CHARITY

• Statement of Faith
  • There is no statement of faith in the governing document (see Charity’s Document (sic), below).
  • Nor on the trustee’s website.
    • ASORAF’s comment: See https://anglicanaid.org.au/about and click the Ordinance hyperlink and see 9 (2). Whilst not listed separately on the website, Anglican Aid operates as a Christian organisation which is public about its Christian approach to development and ministry.

Date Established

• The only history on the trustee’s website has the date much earlier (lower down here):
  • In 1971, Archbishop Sir Marcus Loane took Sydney’s eyes from the suffering in our suburbs to needs overseas. To those affected by war, poverty, disease, injustice and natural disaster. The Archbishop’s Overseas Relief and Aid Fund (ORAF) was established.

Who the Charity Benefits

• Vision and Mission
  • None found.
• Activities (What did ASORAF do?)
  • From the Description of charity’s activities and outcomes in the AIS 2015:
    • The fund worked with partners in over 15 countries. Activities included emergency relief activities and longer term development activities. The activities included over 35 individual projects. Emergency activities provided relief to minorities fleeing IS in Iraq and Syrian refugees in Egypt. In Nepal medical aid and temporary housing was provided for people affected by the earthquakes. In Vanuatu, funds were sent to assist in provision of water and emergency building materials for communities affected by the cyclone. Funds were distributed to support a Liberian hospital providing care and treatment for people affected by ebola. A grant to Pakistan was made for floods in Punjab which provided water and food. Housing in the Philippines was provided for people on Leyte Island impacted by the 2013 Cyclone Haiyan. Agricultural activities in South Sudan were supported to provide food for people affected by the civil conflict in that country. Emergency grants were made to churches in Pakistan and Kenya to provide emergency relief for communities affected by terrorism.
• Outcomes (What did ASORAF deliver?)
  • From the Description of charity’s activities and outcomes in the AIS 2015:
    • Development activities have achieved the following outcomes: Reduced infant mortality from Malaria education and treatment in Aru, DRC and from water borne diseases in Ethiopia through a WASH program; Provided educational resources including buildings for children who would otherwise not receive educational opportunities in Sierra Leone, Indonesia, Tanzania, Zambia, Zimbabwe, Pakistan and India; Improv
• Impact (How were people’s lives improved?)
  • Nothing systematic found.

Financial Year End

• This means that the next financial report is due by 31 December 2015 (or 31 January if the ACNC is generous again.)
• Before that the financial information on the Register will be up to 18 months out-of-date.
  • You may therefore want to seek more up-to-date information.

WHERE THE CHARITY OPERATES

Operating State(s)^[3]

• ASORAF is exempt from the fundraising licence requirements in this state.
• However, it raises funds all over Australia, so probably has to comply with the fundraising legislation elsewhere. It is possible that it is exempt in Victoria, but what about in the other six states that have a fundraising regime?

Size of Charity

• With a revenue of $3.52 m (up dramatically from $2.32 m last year), ASORAF easily qualifies in this, the largest of the ACNC three size categories.

CHARITY’S DOCUMENT (SIC)

• Why is the governing document for ‘ASORAF ‘Rules’, whereas the one for the other fund for which Anglican Aid is the trustee is a deed?
  • ASORAF’s comment: The Rules were developed on legal advice in 2014 following legal advice that best practice according to ATO law required specific rules outlining how the fund was to operate given it has DGR status. The OMF as a non DGR trust requires no rules.
• There is no Annual Report/Review available on the ACNC Register.
• There is an Annual Report on the trustee’s website, but it is for the group, not just ASORAF.
  • ASORAF’s comment: Anglican Aid produces one printed report, reporting on all activities in a printed document to provide information to supporters.

RESPONSIBLE PERSONS

No. of Australian charity directorships^[4]

David Dennis               This function was not working at the time of publication Brett Hall

Douglas Marr

John Menear

Emma Penzo

Peter Rogers

Robert Stewart

Peter Tasker

Keith Walker

• A listing that matches the one on the trustee’s website.
• No reason was found for the ‘Positions’ to vary between ‘Board Member’, ‘Director’, and ‘Other’.

(End of review of the ACNC Register information)

Latest financial report – detail^[5]

• ASORAF produces special purpose financial statements rather than those requiring full compliance with the Australian Accounting Standards. It does this because the directors believe that ‘the Fund is not publicly accountable, nor (sic) reporting entity’. However, whether or it is ‘publicly accountable’ is not directly relevant to the choice. And not being a ‘reporting entity’ means that they have no users or potential users who depend on general purpose statements to make decisions about ASORAF, which, given that they are a multi-million dollar Australia-wide charity with thousands of donors, is not credible.

What was earned, what was consumed during the year – the Statement of Profit or Loss and Other Comprehensive Income (page 3 of the Financial Report)

Revenue

• Donations $2.97 m, including Note 3
  • The amount in the Note does not match the amount in the Statement.
  • This represents, together with ‘Bequest Income’ (below), 99% of income.
  • There is insufficient detail to compare the revenue with the giving options on the website.
• Bequest Income $501K
  • Is this bequests received or the income on past bequests?
    • ASORAF’s comment: This was the aggregate of Bequests actually received during the financial year – One large bequest in particular boosted this figure
• Revenue from Ordinary Activities
  • The distinction between ordinary and extraordinary has been long gone from the Accounting Standards.
  • A different description is used in the Statement of Changes in Distributable Funds and Reserves.

Expenses

• Grants Paid $2.12 m, including Notes 4 and 5
  • Note 4 Donations Received and Grants Paid $2.11m
    • Why ‘Donations Received’?
      • ASORAF’s comment: Correct – should be Grants Paid from Designated Purpose Donations
    • There must be a way of classifying the information in this very long list to make the information more useful? By size? By country?
      • ASORAF’s comment: The list is made on a roiling chronological basis – we will consider splitting into relevant country
• Fund Management Services and other Operating Expenses $531K, including Note 7
  • For those expenses that are not disbursements by the trustee, how is it that the figures are so precise?
    • ASORAF’s comment: Prior to the beginning of the financial year, the Board sets a budget for the three funds. The expense allocation is a percentage based on the projected income of that fund as a percentage of the income of the three funds- in the year under review OSORF’s percentage was 75% of the total expenses of the three Funds. OSORAF also incurred additional expenses such as Bank fees and Audit costs. On reflection, we should have called the allocated expenses “Fund Management Fee” rather than splitting costs for expenses (personnel, fundraising, etc
  • How does the trustee decide how much to charge?
  • Personnel Costs $249K (Note 7)
    • Assuming that part-timers work 50% of full-time hours, and based on the number of employees disclosed elsewhere in the AIS, this represents $83K per employee.
      • ASORAF’s comments: (1) Anglican Aid employs all staff (EFT 5) and charges each fund a percentage as determined annually according to the budget. (2) Personnel  Costs are for 6 six staff for “group”, two of whom work full time – rest part time – 4,3 or 2 days PW – costs include superannuation expenses, workers comp etc – OSORAF effectively paid 75% of total Personnel costs
        • Reviewer’s response: Neither of these explanations match the number of employees disclosed in the AIS 2015.
  • Fundraising Costs – Public $110K (Note 7)
    • Why ‘public’?
      • ASORAF’s comment: Yes, sound strange, but needs to comply with ACFID designations
        • Reviewer’s response: Whatever the cause, there is nothing preventing ASORAF from including an explanation of the terms (and their source, if they like).
  • Forward Exchange Contract Premium $25K (Note 7)
    • There is no explanation anywhere for the need for this.
      • ASORAF’s comment: This was actually a refund of a deposit paid for a forward exchange contract which was met during the year
    • Why is it negative? And why put revenue under expenses?
  • Program Support Costs $86K (Note 7)
    • What’s included in this?
      • ASORAF’s comment: These costs include costs of personnel visiting overseas partners, and the (assessed) direct personnel costs in monitoring projects from our Sydney Office. We have only begun to split these costs in this way to bring us somewhat into line (albeit more modestly) with similar bodies. We have shown this line separately in the notes, but as part of total Management and operating costs on which our cost to income or cost to grants paid (as a percentage) may be assessed
    • This is a departure from the classification by nature for the other expenses.
  • Missing disclosures:
    • Administration. Note 1(e) equates the $531K of this item with ‘Administration Expenses’. But ‘administration’ doesn’t normally include, for instance, fundraising expense.
      • ASORAF’s comment: Noted – we apportion Fundraising expenses incurred by the group in same percentage as other costs are allocated – again on the basis of the percentage of budgeted income between Funds
    • Superannuation expense
  • There are no ‘Fund management service fees’ in the list, as implied in the note.

What’s left at the end of the year – the Statement of Financial Position (page 4 of the Financial Report

• Cash and Cash Equivalents $2.38 m, including Note 8
  • Why is it necessary to hold this level of donations unspent? ($1.86 m is ‘available for distribution (Note 11).
    • ASORAF’s comment: The moneys carried forward
      • Could relate to designated donations which are held by us in trust for the projects to which they have been given – at the end of the financial year $845,063 was held for such donations included significant sums received just prior to the end of the financial year and paid out in next financial year. In addition, funds are not just “shovelled” out. We hold recipients accountable for moneys they receive or are offered and require budgets, programs and regular reports. Funds are often paid in tranches
      • OSORF takes the foreign exchange risk as it is believed that our overseas partners budgets are too small – most of our payments are in USD which has fallen from $1.1 5 years ago to just over $0.70. Our projects are usually on a three year basis and we build in a buffer to cover foreign exchange risk
      • As many of our projects are on a three year commitment, we retain funds to cover the fluctuation in donations that may aris
      • Some funds held represent bequests which are averaged over 5 years to iron out lumps such as the $501,450 received in year under review against $192,696 in previous year
  • There is no policy Note for foreign currency balances and transactions. Where, for instance, are they held?
    • ASORAF’s comment: Noted – they are held in trust by our foreign currency provider, Compass Global Markets
  • Clarity would be aided by separating the first two sentences under the figures.
• Bequest Program Reserve $615K, including Note 12(a)
  • What is the relationship between this ‘Policy Statement’ and the governing document on the Register?
    • ASORAF’s comment: The policy statement is included in Policy and Procedures Manual as approved / amended by the Board from time to time
  • How does action consistent with ‘to maintain and develop the work of the Fund’ differ from the regular work of handing donations on?
    • ASORAF’s comment: The work of the fund may change over time – the 5 year average allows funds to be used evenly for work undertaken in the future as well as the current year
  • This Note implies that bequests are always received free of instructions. Is this the case?
    • ASORAF’s comment: Yes, bequests name the fund but have never named a project or use to the writers knowledge
• Fair Value Reserve $34K, including Note 17
  • Wrong Note number.
  • But Note 12, the one on the reserves, doesn’t include this reserve. Nor the Foreign Currency Translation (Reserve)
    • ASORAF’s comment:  Agree – we should add next year

Where the cash came from and went to – the Statement of Cash Flows (page 6 of the Financial Report)

• Donations $2.97 m: given the recognition policy, how is it that the cash received is identical, both years, to the revenue earned?
• Bequests by way of direct income $218K:
  • What does this mean?
    • ASORAF’s comment: This is an incorrect figure – should be the bequest income received during the year – $501,450 – this will flow on to Payments in respect to Operating Activities
• If accrual accounting is used,
  • why is interest received identical to interest revenue?
    • ASORAF’s comment: Agree – we have used actual interest received and not that accrued at 30 June – with low interest rates – around 2% and most deposits 3/6 months, income is not overly significant, but will take on board
  • is it correct that grant payments totalling $2.12 m to multiple recipients were identical to the same grants as expenses?

Essential information to go with the figures – the Notes to the Financial Statements – page 7 of the financial report

• 1 Summary of Significant Accounting Policies Adopted in the Preparation of the Financial Report
  • (a) Reporting Entity
    • Missing information:
      • ‘as an individual entity’
      • The date the accounts were authorised for issue.
        • ASORAF’s comment: signed and dated on page 17
    • The directors do not say why they think that ASORAF is not a reporting entity.
      • ASORAF’s comment: Noted – will expand next year
    • Do the directors realise that they are effectively saying that all those people who have donated the $3.47 m, and all those people who might donate in the future, are able to require ASORAF to produce a financial report to suit their particular information needs?
      • ASORAF’s comment: No, I don’t think they are saying that – para 3 of (a) set out who accounts are specifically prepared for
        • Reviewer’s response: ‘Effectively saying’: the implication comes clearly from ASORAF saying that there are no users, present or prospective, who are dependent on general purpose financial statements. Preparing the accounts for the Synod does not mean that ASORAF can ignore other users.
    • It is the requirements of the ACNC Act that determine the reporting.
    • Critical accounting estimates:
      • Do they mean ‘IFRS’? If so, don’t their financial statements follow the Australian Standards, not the International ones?
        • ASORAF’s comment: Will clarify for next year
      • It is common for critical estimates to be involved in employee benefits. This is not the case for ASORAF?
        • ASORAF’s comment: Will consider for next year
  • (b) Statement of Compliance: what are ‘classification aspects?
    • ASORAF’s comment: Will consider for next year
  • (c) Cash and Cash Equivalents:  up to what length for the term deposits?
    • ASORAF’s comment: usually 3 or 6 months
  • (d) Revenue Recognition: what about bequest income and interest?
    • ASORAF’s comment: Will clarify for next year
  • (e) Administration Expenses:
    • There are no ‘Fund Management Services’ separately shown.
    • Does the basis for apportionment vary from item to item?
      • ASORAF’s comment: No, apart from direct expenses (Fund Bank Fees, audit etc, all costs are apportioned at % determined by the board at the beginning of each financial year (subject to review if fund income differs substantially to that budgeted for)
  • (g) Goods and Services Tax (GST): cash flows and commitments and contingencies are missing.
    • ASORAF’s comment: Note – Effectively all income is GST free and GST on certain purchases paid by Anglican Aid – the Fund Management Fee is net of GST – Non Reportable
  • Missing policy Notes:
    • Current and non-current classification
      • ASORAF’s comment: There are no non current Assets or Liabilities
        • Reviewer’s response: The distinction is still relevant.
    • Trade and other receivables
      • ASORAF’s comment: Only Trade and other receivables would be between Funds
        • Reviewer’s response: The funds are separate legal entities.
    • Trade and other payables
      • ASORAF’s comment: Only between Funds if any – usually previous months donations deposited to incorrect account or Fund Management Fee to be paid
    • Property, plant and equipment. (It is unusual not to have any.)
      • ASORAF’s comment: There is none for OSORAF
    • Employee benefits
      • ASORAF’s comment: There is none for OSORAF
        • Reviewer’s response: The AIS 2015 reports that there are six employees.
    • Fair value measurement
      • ASORAF’s comment: Noted
• Adoption of New and Revised Accounting Standards
  • How has the impact been assessed as immaterial when the evaluation hasn’t been completed?
    • ASORAF’s comment: Noted – New / Revised accounting standards and implications are discussed with our auditors at the time accounts are assessed and enables us (in year under review) to make such statement
  • There is no Note 2.
• 15 Related Parties
  • Don’t the rules give control of the fund to the Management Committee, whose membership is drawn from Anglican Aid, not the Archbishop?
    • ASORAF’s comment: Yes, we need to clarify next year
  • If the Archbishop is in control, then aren’t all the other entities that he controls also related parties?
    • ASORAF’s comment: I guess the buck stops with him, but where does it really stop – every diocesan organisation, parish, school….. Anglican Aid and OSORAF and OSOMF are considered stand alone by the Synod of the Anglican Church and the Diocesan Secretariat
  • Isn’t some of what Anglican Aid charges an allocation of a larger figure, not just the reimbursement of expenses?
    • ASORAF’s comment: No, it is an allocation of expenses only passed on a percentage determined by the Board – Anglican Aid does not seek to “make a profit”
  • The dollars don’t match those in Note 7.
    • ASORAF’s comment: Note 7 includes “other Operating Expenses such as Bank fees, audit costs and some program support costs paid separately by OSORAF

Where the directors put their name to the report – the Members’ Declaration (page 17 of the Financial Report).

• This declaration doesn’t comply with the ACNC’s requirements.
  • ASORAF’s comment: Noted – we will review for next year

Membership of accountability organisations claimed

• In Anglican Aid’s website footer: ‘ACFID Member’ and the Missions Interlink (MI) ‘Accredited Member’ logo.
  • The MI membership is in the name Anglican Aid Overseas Ministry Fund, which is not ASORAF (nor the name of any of the other of the Archbishop’s charities).
    • ASORAF’s comment: For (name) to consider next year’s reports and web page
  • The ACFID membership is in the name Anglican Aid. Is this in their own right, as trustee for one of the trusts, or both?
    • ASORAF’s comments: (1) Membership is on behalf of the ORAF only. Previously it was ORAF which is not an entity and was changed to Anglican Aid some years ago; (2) For (name) to consider (for) next year’s reports and web page

(End of review)

1. Australian Charities and Not-for-profits Commission, Australia’s national regulator of charities. ↑
2. I say reportedly because its trust deed says that Anglicare is the trustee. It must have changed. ↑
3. 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.’ ↑
4. 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. ↑
5. I use the Pinnacle Financial Statements, respected in the profession as providing a very sound basis for producing compliant financial reports. To this I add an assessment of materiality (both quantitative and qualitative), where the users being considered are donors. ↑