Archived: The Shane Warne Foundation, charity review

This is a charity review, a review, for supporters and potential supporters, of the Australian charity The Shane Warne Foundation (TSWF).

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 help you assess this charity.

You should note that, in order to properly assess the operation that is described on the TSWF website, it would be advisable to also assess the other fund mentioned, The Shane Warne Necessitous Circumstances Fund. Unfortunately, at the time of this review, there was no record of this charity on the ACNC Register.

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.)
• 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 names (see Charity Details, below).
• TSWF website. (And in case it goes offline again, I have saved each webpage.)
• TSWF on FaceBook, and Twitter.
• State government fundraising licence registers.
• www.glassdoor.com

CHARITY DETAILS

Legal Name

• The ABN record (see Charity ABN, below) says that the name of the entity is actually ‘The Trustee for the shane warne foundation’ (sic). So TSWF is a trust.
• More particularly, again from the ABN record, it is a ‘Discretionary Services Management Trust’, a trust where “The main source of income of the discretionary trust is from service activities, management activities or both.”
  • This does not fit what TSWF does.
• From the trust deed (see Charity’s Document (sic), below), the trustee, unless it has changed since, is The Shane Warne Foundation Pty Ltd, a proprietary (private) company.
• The other fund, the ‘necessitous circumstances fund’, is actually a separate charity, not a part of TSWF. Although it can’t be confirmed at the moment – for some reason the record is not on the ACNC Register – the connection is very likely that they have the same trustee.

Other Name(s)

• Apart from the two names above (The Trustee for …, and The Shane Warne Foundation), the charity may be called The Shane Warne Foundation Pty Ltd as trustee for The Shane Warne Foundation.

Charity ABN

• Tax deductibility: You can claim a tax deduction for a donation to TSWF.
  • It is a public ancillary fund.
• GST: The Foundation is not registered for GST. Why not?

Charity Address for Service

• If this doesn’t work try the one on the website: info@tswf.com.au

Charity Street Address

• The postal address, from the website, is PO Box 2305, North Brighton, VIC, 3186
• The address with Consumer Affairs Victoria for the fundraiser The Shane Warne Foundation Pty Ltd is 119 Were Street, BRIGHTON 3168.

Email

• Blank. Try, from the website, info@tswf.com.au.

Phone

• Blank. Try, from the website, (03) 9553 8847.
• The phone number with Consumer Affairs Victoria for the fundraiser The Shane Warne Foundation Pty Ltd is 03 9642 3223.

ANNUAL REPORTING

• AIS 2014
  • This is TSWF’s compulsory Annual Information Statement 2014 (AIS 2014).
  • It gives basic financial information.
    • If you think that this is sufficient for you then you should note that
      • General purpose financial statements were prepared, not special purpose.
      • None of the figures in the ‘Expenses/Payments’ match those in the Financial Report:
        • Grants were $50K, not $100K
        • ‘Employee expenses’ were $151K, not $133K
        • The deficit was $136K, not $186K.

• Financial Report 2014

• The report is unsigned but it should have been signed before the auditor signed on 21 January 2015, well over six months after the year end.
• It was then lodged one month after that.
• The coverage of finances in this review is left until the financial report proper (Latest financial report – detail, below).

ABOUT THE CHARITY

Date Established

• Here’s a history of TSWF.

Who the Charity Benefits

• Vision
  • None found.
• Mission
  • None found.
• Activities (What did TSWF do?)
  • From Description of charity’s activities and outcomes in the AIS 2014:
    • They (sic) raise funds to help ‘enrich the lives of seriously ill and underprivileged children and teenagers in Australia’. They achieve this by supporting a diverse cross section of charities and individual families that work ‘hands on’ within these areas. Unlike most charities, The Shane Warne Foundation is an umbrella organisation. We try to alleviate the constant burden of fund raising for these incredible charities, individuals and families, who so effectively handle the day to day (sic) needs of these brave children.
      • This is largely a copy of ‘Who we help’ on the website.
• Outcomes (What did TSWF deliver?)
  • Unfortunately, even though AIS 2014 asks for a Description of charity’s activities and outcomes, only an activity – fundraising – is given.
  • There is very little information on the website about outcomes.
• Impact (How were people’s lives improved?)
  • There is very little information on the website about impacts – certainly nothing systematic.

Size of Charity

• With a revenue of $465K, TSWF easily qualifies in the middle category of the ACNC’s three size categories (‘Medium’).

Financial Year End

• This means that, normally, the next financial report would be due by 31 December March 2015. However, the ACNC has graciously given all charities an extra two months. This means that before that the financial information on the Register will be up to 20 months out-of-date.

WHERE THE CHARITY OPERATES

Operating State(s)[ii]

• Although it says here that it only operates in Victoria, by having a fundraising licence in six of the seven states[iii] in which there is a licensing regime, it acknowledges that its reach is Australia-wide.
  • But it has no licence in South Australia.

CHARITY’S DOCUMENT (sic)

• TSWF is a public ancillary trust. But this is a trust deed for a private ancillary trust, not a public one:

The Trust Fund is intended to operate as a prescribed private fund for the purpose of item 2 of the table in section 30-15 of the Act.

• Although the Foundation has been registered with the ACNC since its inception in 2012, the trust deed was lodged three days after this story broke.
• There is no Annual Report/Review available on the ACNC Register.
• Nor on the website.

RESPONSIBLE PERSONS

No. of Australian charity directorships[iv]

Anne Peacock                                1

Shane Warne                                 1

Glen Robbins                                 1

Andrew Bassat                               1

• The website also shows David Evans and Eddie McGuire as directors. Which listing is correct?
• The trust deed provides that at least one of these directors be a ‘Responsible Person’.
  • This is not the same as a responsible person under the ACNC Act.
  • Not only this, but a public ancillary fund requires three of them for the Foundation (or four if the other two people are still directors):
    • At all times, a majority of the individuals involved in the decision-making of the fund must be individuals with a degree of responsibility to the Australian community as a whole [paragraph 14].
      • A Note to the paragraph says that these individuals
        • would generally include: school principals, judges, religious practitioners, solicitors, doctors and other professional persons, mayors, councillors, town clerks and members of parliament. Generally, individuals who are accepted as having a degree of responsibility to the community as a whole are known to a broad section of the community because they perform a public function or they belong to a professional body (such as the Institute of Chartered Accountants, State Law Societies and Medical Registration Boards) which has a professional code of ethics and rules of conduct. Individuals who have received formal recognition from the Government for their services to the community (for example, an Order of Australia award) will also usually have the requisite degree of responsibility.
      • Do three of the directors meet the definition?[v]
• Warne should be shown as ‘Chairman’, not director. 

(End of review of the ACNC Register information)

Latest financial report – detail

What was earned, what was consumed during the year – the Statement of Comprehensive Income (page 1 of the Financial Report)

• The line item ‘Other Comprehensive Income’ is missing.
• There are no Notes to explain the material items.
  • There is, however, a statement included in the Financial Report that is not required, an Unaudited Profit and Loss Statement, that allows one to calculate the composition of the line items.

Where the money came from

• Revenue $453K
  • The AIS 2014 (see Annual Reporting, above) says that this is all ‘Donations and bequests’.
  • This doesn’t agree with what is shown in the Unaudited Profit and Loss Statement:
    • Sponsorship $64K
      • Presumably this is where sponsorship by italktravel (and others?) is included.
  • Donations $110K
    • There is a prominent invitation to donate at the top of each webpage.
• Fundraising $279K
  • The Unaudited Profit and Loss Statement discloses that Fundraising Expenses totalled $281K, meaning that fundraising cost $2K more than it raised.

Where the money went to (reordered by size)

• The inclusion of fundraising expenses as a line item makes this listing of expenses, contrary to the Australian Accounting Standards, a mixed classification.
• Administration expense, another item often of interest to donors, is not shown.
• Superannuation expense is not disclosed in the audited statement.

• Fund raising (sic) expenses $281K
  • The entry on the Victorian fundraisers register for ‘Commercial fundraisers working with the principal fundraiser’ is ‘Red Hot Concepts’ at Crown Casino’s address. There is no such business registered in Australia (although there is one in Nigeria.)
  • From the Unaudited Profit and Loss Statement, there are three expenses that form 86% of the expenses:
    • Catering/Food and Beverages $96K
    • Venue $65K
    • Partnership Agreements $55K
    • Audio Visual $26K
  • Given TSWF’s way of raising the bulk of its money, the first two and the fourth are expected. But the third?
    • The ‘event partners’ are shown here. Add ‘1:Face Watch’ as a result of a site search. Why did these organisations need to be paid $55K?

• Employee benefits expenses $151K
  • From the Unaudited Profit and Loss Statement:
    • Salaries & Wages $133K
    • Staff Related Costs – Other $2K
    • Superannuation Contributions $12K
    • Workcover $3K

• Just the first item is shown as ‘Employee expenses’ in the AIS 2014.

• Distribution to beneficiaries $50K
  • Unfortunately the Unaudited Profit and Loss Statement (see below) stops at ‘Profit before distribution to beneficiaries’, and there is no further information elsewhere in the Financial Report, so the usual identification of trust beneficiaries is absent.
  • The trust deed includes The Shane Warne Necessitous Circumstances Fund in the public charities that it intended to support.
    • This other Fund is also shown as a beneficiary on the company’s Victorian fundraiser registration.

• Rent and occupancy expenses $48K
  • ‘Telephone’ $4K has been included in this item (Unaudited Profit and Loss Statement).

• Other expenses $32K
  • From the Unaudited Profit and Loss Statement the largest of the expenses not listed separately here is ‘Consultancy’ $10K. What consulting was required?

• Legal and Professional Fees $29K
  • Given that TSWF has been running for many years, why the need for $29K professional advice outside the $8K paid to accountants and auditors?

• Auditor’s remuneration $6K
  • A 10% increase over last year to KPMG.

The net result for the year

• Comprehensive income for the year ($136K)
  • Compared to a $494K surplus the previous year

What’s left at the end of the year – the Statement of Financial Position (page 2 of the Financial Report)

• Cash and cash equivalents $312K (no Note
  • There is no Note to explain the composition of this total.
  • Nor an explanation for why, on a turnover of $465K, a charity needs to hold this much cash. (At least it is $167K less than last year.)
• Trade and other receivables $122K (including Note 2)
  • What is sold on credit so that trade debtors owe $113K?
  • What is the other company that is related to TSWF? There isn’t one disclosed under ‘Related Party Disclosures’ (Note 5).
• Property, Plant and Equipment $6K
  • There is no reconciliation of written down values.
• Other creditors $33K (no Note)
  • What are these?
  • The line item should be ‘Trade and other payables’?  It would then match Note 1.
• Employee benefits $8K (including Note 4)
  • Superannuation liabilities $3K
    • Why have over three months of compulsory superannuation contributions yet to be paid to the funds?
    • Why is this included in ‘Employee benefits’? This is not consistent with Note 1.

Movements in the net wealth of the charity – the Statement of Changes in Equity (page 3 of the Financial Report)

• The ‘Balance at 30 June 2013’ does not match that in the Statement of Financial Position.
• For last year, what is described as ‘Comprehensive loss for the year’ is actually a gain.
• For this year, what is described as ‘Comprehensive gain for the year’ is actually a loss.

Where the cash came from and went to – the Statement of Cash Flows (page 4 of the Financial Report)

• Cash flows from operating activities
• Cash receipts $535K
  • Receipts for what?
  • $50K was the amount of the beneficiary expense, but $100K was paid in cash. Where’s the difference?
• Net cash (used in) operating activities
  • The addition, for both years, is incorrect.
  • When the subsequent totals are adjusted, the cash figures no longer match those in the Statement of Financial Position.
• Cash Flows from financing activities
  • These should be changes in contributed equity and borrowings. Why then are ‘intercompany receivables’ and ‘other current assets’ included here?
• Decrease / (Increase) of net intercompany receivables ($101K)
  • The only mention of intercompany receivables in the Statement of Financial Position is under ‘Trade and other receivables’. How then is there a ‘net’ position?
  • How does this $101K increase relate to the increase of $1K in ‘Intercompany Receivable’?

Essential information to go with the figures – the Notes to the Financial Statements (page 5 of the Financial Report)

• 1   Statement of Significant Accounting Policies
  • The directors show confusion: they say that the trust ‘is not a reporting entity’ yet present the financial statements applicable to one?[vi].
  • The audit report confirms that the trust is a reporting entity.
  • Interpretations, as well as the Australian Accounting Standards, were followed?
  • The disclosure about early adoption of Standards is incomplete.
  • A number of the policies that are normally included in Note 1 are absent:
    • Critical accounting judgements, estimates and assumptions
    • Impairment of non-financial assets
    • Fair value measurement
    • Goods and services tax (GST) and similar taxes
    • Financial instruments
    • Contingent liabilities
• Property, Plant and Equipment
  • The trust doesn’t have any leasehold improvements.
  • The policy on depreciation does not match the assets held.
  • The derecognition policy, gains and losses policy, and the useful life of the Office Furniture & Equipment is missing.
• Revenue
  • Actually ‘Revenue recognition’.
  • ‘Donations’ policy omits the recognition policy.
  • Why is interest not accrued?
  • The policy for sales revenue (events, fundraising and sponsorships) is not disclosed.
  • There is no ‘Prepaid income’ in the Statement of Financial Position.
• Employee Benefits
  • The policy on superannuation payments is missing.
• 5 Related Party Disclosures
  • Which director benefited from the rent paid?
  • There is no disclosure of
    • Receivables from and payables to related parties
    • Loans to/from related parties
• 6
  • This is ‘Events after the reporting period’
• Missing Notes:
  • Financial instruments
  • Contingent liabilities
  • Reconciliation of surplus to net cash from operating activities

Directors’ Declaration (page 9 of the Financial Report)

• The directors show the same confusion between reporting entities and non-reporting entities as they show in Note 1 (see above).
• The redaction on the signatures of those making the declaration, Shane Warne and Ann Peacock, is presumably as a result of a request by TSWF to the ACNC.
• The declaration is undated.

An independent opinion on the financial statements – the Independent Audit Report (the tenth page of the Financial Report)

• This is a ‘clean’ opinion by Dean Waters of KPMG.  Read here and here to draw the right conclusions from this.

Membership of accountability organisations claimed

• None claimed.

(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] Three are in the name of the company, three in the name of the Foundation.

[iv] 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.

[v] The Guidelines overrule what is in the trust deed:

“Responsible Person” means an individual who is not an Associate, officer or employee of the Founder and who:

• Performs a significant public function;
• Is a member of a professional body having a code of ethics or rules of conduct;
• Is officially charged with spiritual functions by a religious institution;
• Is a director of a company whose shares are listed on the Australian Stock Exchange;
• Has received formal recognition from government for services to the community; or
• Is approved as a Responsible Person by the Commissioner, and who, unless the Commissioner otherwise agrees, is not an Associate of the Founder, a Trustee or a Donor or the directors or members of the board or other controlling committee of the Trustee other than:
  • In a professional capacity;
  • As a member of the board or other controlling committee of the Trustee; or
  • As a member of the Trustee.

[vi] Because, as a licensed fundraiser in Victoria, TSWF is required to submit ‘a copy of (its) financial statements’ to Consumer Affairs, it qualifies for ‘Transitional reporting arrangements’ with the ACNC.

This means that, for the 2014 year, whatever is required by Consumer Affairs is acceptable to the ACNC. As Consumer Affairs has no particular requirements, it is reasonable to expect TSWF to adopt what is generally accepted. This is financial statements that comply with the Australian Accounting Standards.

The trust deed requires ‘a financial statement showing the financial position of the Trust Fund at the end of that Accounting Period.’ Since the audit that is also required has to be done by a registered company auditor, and it is highly likely that they are members of one of the professional accounting bodies, the ‘financial statement’ should comply with the Australian Accounting Standards. This means that the statements – for there are four – will be either general purpose financial statements or special purpose financial statements.