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YWAM Medical Ships – Australia Ltd

This is review in the series ‘Australian Council for International Development (ACFID) Members’. ACFIDis the peak body for Australian non government organisations (NGOs) involved in international development and humanitarian action.’ It requires Members to adhere to a Code of Conduct. ‘YWAM Medical Ships’ is one such Member.

The name in the ACFID membership list links to a website where donations are sought from the public.

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[1] for ‘YWAM Medical Ships’, with #5 supplemented by the essentials of the ACNC’s What should I consider when deciding which charity to support?[2]

1.  A search on the ACNC Register for ‘YWAM Medical Ships’ gives two results:

The first is the subject of this review (YWAM MS).

The second charity, ‘YWAM Townsville’, comes up because it has ‘YWAM Medical Ships Training’ recorded under ‘Also known as’. But the relationship is closer than this. In its ACNC Register entry, ‘YWAM Townsville’ says that it is not just the training that is run by them, but that its client, YWAM MS, is one of its departments:

And the website above is shared by the two charities.

More on the relationship later.

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2.  There is nothing to indicate that YWAM MS collects donations door-to-door or in public places.

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3.  The web address begins with a closed padlock symbol, so the website is secure [the ACNC article above].

However, the security of your information is not mentioned on the donation page.

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4.  YWAM MS’s ABN record (via the ACNC Register) says that a tax deduction is available for a donation both to it as an organisation and to a fund that it runs, YWAM Care Trust Fund.

It appears the Fund is inactive – it is mentioned neither on the website or in the Financial Report 2019 – but the donation page says that all donations over $2 are tax deductible.

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5.  The use of your donations

Context

Read all about what YWAM MS does from here.

Notice that the website, although badged YWAM MS, is also the website for YWAM Townsville.

Share the Gospel? [3]

YWAM MS is a ‘Christian’ organisation, subscribing to the ‘Purpose, Beliefs, & Values’ of the international YWAM movement. Evangelism is central in these.

YWAM MD’s ‘Vision & Mission’ page on the website says that the charity is about ‘helping to build healthy lives, communities, and nations’. ‘Religion’ is included in their definition of healthy[4].

However, there is nothing on the website to suggest that YWAM MS shares the Gospel.

COVID-19 response

How YWAM MS used its donations is in its Financial Report 2019 on the ACNC Register.

Going concern[5]

This is what the directors said about this assumption in the Financial Report 2019 [Notes to the Financial Statements]:

The loans that must be renegotiated in December 2020 total $5.55 million. This, and the other things identified, caused both the directors and the audit to say that YWAM MS’s circumstances casted “significant doubt on the entity’s ability to continue as a going concern” [paragraph 18, ASA 570[6]].

Directors’ reporting decisions

On top of this, the Financial Report 2019 shows some questionable decisions by the directors. Here are the ones that should be understandable by a non-accountant[7]:

Statement of Profit or Loss and Other Comprehensive Income

  • Without explanation, five of the figures in the 2018 column are materially different from the same items in the 2018 column last year.
  • The audit fee is not disclosed.

Statement of Financial Position

  • Without explanation, two of the figures in the 2018 column are materially different from the same items in the 2018 column last year.
  • Note 13 doesn’t explain the decrease in ‘Borrowings’ from $5.36 million to $1.80 million.
  • Without explanation, the provision for doubtful debts has increased from zero last year to 67% of the amount owed to the company.
  • The reduction of ‘Intangible Assets’ to zero is not explained.

Notes to the Financial Statements

  • The debt that was forgiven (Note 6 and see above) is not identified.
    • There were ‘Related party payables’ last year that are no longer there this year. But they were $3.20 million, not $2.59 million.
  • Why was depreciation charged on the asset ‘MV YWAM PNG’ this year but not in previous years?
    • This asset has a different name in the second part of Note 10.
  • The disposal of a vessel (‘MV YWAM PNG’) is a material event yet is not mentioned in the accounts.
  • Goods received for free have not been accounted for correctly.
  • The creation of the $3.00 million ‘Right-of-Use – Motor Vessels’ asset by a ‘transfer’ is not explained.
  • The figures in the first part of Note 10 for the asset ‘Right of Use – Motor Vessels do not match the figures for the same asset in the second part of that Note.
  • Note 13 does not identify those short-term loans that are from related parties.
  • Note 17, saying that there are no ‘contingencies’, is contradicted by Note 21, reporting a liability of $5.55 million.
  • Note 18 says that ‘The Company’s main related parties’ include the ‘Key management personnel’ in Note 16. But note 16 doesn’t identify any such people.
  • The two related parties identified in Note 21 are not shown in the Related Parties’ Note (Note 18).
  • Two organisations, YWAM Townsville Association Inc and YWAM PNG Ship Ltd, are identified as related parties in Note 18, but in neither case is the nature of the relationship is not described.
    • Five of the eight directors of YWAM MS are also directors of YWAM Townsville.
    • YWAM MS say that YWAM MS is one its ministries (see above).
    • YWAM MS and YWAM Townsville sharethe same
      • office
      • website
      • ‘Email’,
      • ‘Address for Service email’ [ACNC Register].
  • The $2.59 million transaction with YWAM PNG Ship Ltd is identified only as ‘Other’.

How the revenue was used

If you are still prepared to do business with YWAM MS, here’s how they consumed their resources (i.e. accrual figures, with last year in the second column):

  • What are ‘Donation expenses’?

‘Employee benefits expenses’

Based on this explanation (pasted below), and the fact that the Annual Information Statement (AIS) 2019 shows that there were less than three full-time equivalent employees, the figure should be considerably lower:

The people responsible for the situation and the reporting

This year YWAM MS has reduced its transparency by not including its Directors’ Report in its Financial Report 2019.For one thing this means that we cannot see who was responsible for the Financial Report.

These are the current directors [ACNC Register – the board is not identified on the company’s website]:

Anna Scott (a YWAM MS manager)

Jared Hoover (a YWAM manger)

Jennifer Rentsch (a YWAM manager)

Jeremy Schierer (a YWAM MS staff member)

Kenneth Mulligan (the YWAM MS managing director)

Melissa Kauk (a YWAM MS manager)

Nathan Randell (a YWAM staff member)

Rebekah Hoover (director of company sharing space with YWAM)

Accountability

With only one of the eight directors not working for either YWAM MS or YWAM Townsville, there is limited accountability of the executives.

With only 13 members at 31 December 2019 [Notes to the Financial Statements], and directors required to be members, the accountability possible by the membership is limited.

The accountability exerted by the Australian Council for International Development is limited.

Impact

Charity response

YWAM MS welcomes feedback:

We sent them a draft of this review. They…did not respond.

 

 

  1. See here for the previous review.
  2. A section in the article, Donating and Volunteering:
    1. Focus on the nature of the charity’s work, its beneficiaries and the impact the charity is having in the community.
    2. Is it clear what the charity is trying to achieve and how its activities work towards its objectives?
    3. Would you like to spend your money, or time if volunteering, to support these objectives?
    4. Is the charity being transparent about its activities?

  3. ‘When Helping Hurts by Brian Fikkert and Steve Corbett says this about sharing the Gospel: ‘A host of contextual issues determine the best manner and the appropriate time to present the gospel verbally, particularly in militant Muslim or Hindu settings. But without such a presentation, it is not possible for people to be personally transformed in all their relationships, which is what poverty alleviation is all about [Kindle Locations 1262-1264, Moody Publishers].
  4. Framework document – CF Framework for the Preparation and Presentation of Financial Statements – June 2014 (Compilation), www.aasb.gov.au, accessed 20.08.2020.
  5. Auditing Standard ASA 570 Going Concern, www.auasb.gov.au, accessed 20.08.2020.
  6. Here are the others:
    • The $2.59 million debt that was forgiven has not been included in ‘Revenue’. Nor has ‘Interest received’.
    • The required item ‘Other Comprehensive Income’ has been omitted.
    • The new $3.00 million ‘Right-of-Use – Motor Vessels’ asset is incorrectly classified (it is not ‘Property, plant and equipment’).
    • In the Statement of Changes in Equity, the changes for the year are not shown as they should be.
    • The asset classes ‘Gifted Goods’ and ‘MV YWAM PNG components have been omitted from the Note on ‘Property, plant and equipment’.
    • The largest current liability is described merely as ‘Contract liability’.

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