On 18 June 2008, the Senate established an inquiry into disclosure regimes for charities and not-for-profit organisations. This inquiry is to examine the following:

• The relevance and appropriateness of current disclosure regimes for charities and all other not-for-profit organisations.
• Models of regulation and legal forms that would improve governance and management of charities and not-for-profit organisations and cater for emerging social enterprises.
• Other measures that can be taken by the government and by the not-for-profit sector to improve governance, standards, accountability and transparency in its use of public and government funds.

• a single national disclosure and regulatory regime
• the reporting regime operating under a tiered system on the basis of revenue thresholds
• a separate accounting standard for not-for-profits, with appropriate recognition for their unique characteristics.

Moore Stephen has advised a diverse range of charities and other not-for-profits for many years, and has assisted many with respect to reporting and accountability when working with public funds. As such we were in a position to provide a submission which incorporated this experience.

Some of the key aspects of our submission included: recognition of the possible benefits of a consistent disclosure and regulatory regime across Australia, both State and Federal.

Nonetheless, with the diversity of the sector and with many of the regulatory regimes in place currently operating effectively, both for the benefit of the organisation and for the public, our view is that it would be inappropriate and very costly to seek to amalgamate these into a single national regime. If any changes were to be contemplated it would require significant consultation and understanding of this diversity and complexity.

The government should seek to simplify and streamline reporting requirements with particular differentiation for smaller organisations that make a valuable contribution to the well being of the community.

Emphasising the need to take into account a far greater range of matters, than simply size when determining reporting requirements for the sector. This is particularly the case for the many private organisations within the sector that are not in receipt of any public funds. We included the following criteria for consideration in determining reporting obligations:

• the size of the organisation
• the use of mutual (private) versus public funds
• the ability of donors, members etc. to access information internally
• the nature of their operations
• the degree of public interest
• the basis on which any income tax exempt status has been applied.

As with many of the submissions received, we recognised that any reform must balance the cost of compliance with the need to ensure stakeholders have confidence in the governance of such entities.

Our full submission can be found on the Inquiry’s website or on the Moore Stephens website www.moorestephens.com.au/News/default.asp.

We welcome your views and comments as part of our ongoing involvement and our desire to assist charities and not-for-profit clients in their fulfilment of their mission.  We look forward to the outcome of the Inquiry and will provide further updates as its recommendations are formulated and adopted by the government.

Spiro Tzannes, Sydney
mailto:stzannes@moorestephens.com.au

Katrina Daly, Sydney West
kdaly@moorestephen.com.au