Consultation on increasing financial reporting thresholds for charities
The Commonwealth Government is consulting on a proposal to increase the financial reporting thresholds for charities registered with the Australian Charities and Not-for-profits Commission (ACNC). This would reduce red tape for many charities across Australia.
To remain eligible to be registered as a charity with the ACNC, charities must meet specific requirements. All charities must submit to the ACNC an Annual Information Statement which provides information about their charity’s operations, programs and finances. In addition, charities with a higher revenue must meet more stringent reporting requirements than those with a lower revenue.
Proposed changes to the reporting thresholds are outlined below.
Annual financial statements are encouraged, but not required, of small charities as part of their reporting obligations to the ACNC.
Charities are currently considered to be small if they have an annual revenue less than $250,000.
Under the proposed changes, small charities would be those with an annual revenue less than $500,000.
Medium charities must submit a financial report to the ACNC each year. The financial report can be either reviewed or audited.
Charities are currently considered to be medium if they have an annual revenue of $250,000 or more, but less than $1 million.
Under the proposed changes, medium charities would be those with an annual revenue of $500,000 or more, but less than $3 million.
Large charities must submit an audited financial report to the ACNC each year.
Charities are currently considered to be large if they have an annual revenue of $1 million or more.
Under the proposed changes, large charities would be those with an annual revenue of $3 million or more.
The ACNC, working with state and territory charity regulators, is seeking views from stakeholders about increasing financial reporting thresholds. In particular, would the proposed changes strike the right balance between reducing the regulatory burden for charities and maintaining suitable transparency of charities’ operations and finances.
For more information about the consultation paper and how to provide feedback visit https://treasury.gov.au/consultation/c2021-141336
Feedback can be provided until 11:59pm Sunday 21 March 2021.