Compliance Framework
Compliance Driver
Australian Charities and Not-for- Profits Commission Act 2012 (Cth)
Classification
Level 2
University-wide requirement. Lower impacts.
Associated Legislation
None
Associated Standards
Associated Codes
None
Associated Information
None
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Administrative Information
Administrative Body
Australian Charities and Not-for-profits Commission
Administrative Name
Advice Services
Administrative Address
Mailing Address
GPO Box 5108
Melbourne
VIC
Australia, 3001
Administrative Phone
13 22 62
Administrative Email
advice@acnc.gov.au
Administrative Website
http://www.acnc.gov.au/
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General Introduction
VC Compliance Delegate
Karma Auden, Chief Financial Officer
Compliance Coordinator
Ilias Dimopoulos, Head of Finance
Business Units Impacted
Overview
This Act sets out the objects and functions of the ACNC, as well as the framework for the registration and regulation of charities.
Compliance Obligations
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Governance Standard 1: Purposes and not-for-profit nature
Description
A charity must be not-for profit and work towards its charitable purpose. It must be able to demonstrate this and provide information about its purposes to the public.
UNE can generally meet this standard if a copy of UNE's governing documents contain clauses about its charitable purpose and they appear on the ACNC Register.
Impacts
Breach Impact Financial:
Fines: The ACNC has the power to issue financial penalties for non-compliance. These fines are typically applied in cases of breaches relating to failure to comply with the annual reporting requirements, failure to maintain adequate records, or for failing to adhere to governance standards (s175-20, increased by 20% if conditions of 175-25 met).
Ineligibility for Tax Concessions: Charities and not-for-profits that breach the ACNC Act may lose their tax concession status (e.g., exemptions from GST, income tax, and fringe benefits tax).
Loss of Deductible Gift Recipient (DGR) Status: Breaching the ACNC Act can lead to the loss of DGR status, reducing donations and the organisation’s ability to attract funding.
For example:
s.100-25 Suspended/removed responsible entity managing the entity or exercising financial control - 250 penalty units (corporation) / 50 penalty units (individual)
s.100-70(1) Former trustees failing to give books to acting responsible entity within 14 days - 250 penalty units (corporation) / 50 penalty units (individual)
s.100-70(5) Former trustees failing to comply with notice requirements within 28 days - 250 penalty units (corporation) / 50 penalty units (individual)
s.85-30 Non-compliance with Commissioner's direction - 200 penalty units (corporation) / 40 penalty units (individual) per day
Breach Impact Non-Financial:
Revocation of Charity Status: The ACNC has the power to remove an organization’s charity status under the ACNC Act if it fails to comply with the legislative requirements or engages in serious misconduct. Losing charity status can lead to the loss of certain tax benefits and government funding.
Civil Penalties In addition to financial penalties, certain breaches of the ACNC Act can result in civil penalties being imposed on the charity or its responsible individuals (e.g., directors or trustees). The civil penalty provisions can be triggered for actions such as:
- Failure to meet governance standards
- Failure to keep proper financial records
- Failure to comply with the ACNC’s requests for information
- Directors and officers of charities could be personally liable for these civil penalties, which can include significant fines or other corrective actions.
Legal Consequences: Breach of the ACNC Act may lead to legal proceedings, including court orders requiring the charity or its officers to take certain actions (e.g., rectifying financial records, reinstating governance practices, or returning funds).
Misuse of charity funds, fraud, or dishonesty can result in criminal prosecution under the Criminal Code Act 1995 (Cth). If criminal conduct is identified, responsible officers can face imprisonment or fines in addition to the penalties under the ACNC Act.
Executive Liability: Yes. Directors and officers are responsible for ensuring that their charity complies with the governance standards set out in the ACNC Act. If directors and officers fail to meet these governance standards, they may be personally liable for civil penalties under the Act. The ACNC can suspend or disqualify responsible individuals (such as board members, trustees, or directors) from managing a charity if they have failed to uphold the governance standards or have engaged in serious misconduct.
Criminal Penalty/Offence: Yes
Responsible Manager
Radha Thomas, Director Governance and University Secretary
Coordinating Officer
Radha Thomas, Director Governance and University Secretary
Coordinating Unit
Office of the Director Governance and University Secretary
Oversight Committee/Group
None
Business Units Impacted
Obligation Framework
Associated Legislation
None
Associated Standard
None
Associated Code
None
Associated Information
None
Management Tools
Rule
None
Policy
None
Protocol
None
Procedure
None
Guideline
None
Other Websites
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Governance Standard 4: Suitability of Responsible Persons
Description
UNE must take reasonable steps to:
• be satisfied that its Responsible Persons (such as board or committee members or trustees) are not disqualified from managing a corporation under the Corporations Act 2001 (Cth) or disqualified from being a Responsible Person of a registered charity by the ACNC Commissioner, and
• remove any Responsible Person who does not meet these requirements.
This standard requires UNE to take reasonable steps to be satisfied that its Responsible Persons (its board or committee members, or trustees) are not disqualified from:
• managing a corporation under the Corporations Act 2001 (Cth) (the Corporations Act), or
• being a Responsible Person by the ACNC Commissioner, within the previous 12 months.
If UNE is not satisfied, it must not appoint this person. If the person is already appointed, the charity must take reasonable steps to remove them as a Responsible Person.
The requirement to ensure that Responsible Persons are not disqualified from managing corporations applies even if your charity is not a company.
Provide confirmation that for existing or potential Reasonable Persons UNE:
• understands how a person becomes disqualified
• does a search of the ASIC Disqualified Persons Register for that person
• does a search of the ACNC Register of Disqualified Persons for that person (the ACNC has not disqualified anyone at this time), and
• requires each of its Responsible Persons to sign a declaration confirming that they are not disqualified and that they understand what it means to be disqualified
If UNE suspects that a Responsible Person is disqualified, UNE must take further steps to be satisfied that the person is not disqualified.
Impacts
Breach Impact Financial:
Fines: The ACNC has the power to issue financial penalties for non-compliance. These fines are typically applied in cases of breaches relating to failure to comply with the annual reporting requirements, failure to maintain adequate records, or for failing to adhere to governance standards (s175-20, increased by 20% if conditions of 175-25 met).
Ineligibility for Tax Concessions: Charities and not-for-profits that breach the ACNC Act may lose their tax concession status (e.g., exemptions from GST, income tax, and fringe benefits tax).
Loss of Deductible Gift Recipient (DGR) Status: Breaching the ACNC Act can lead to the loss of DGR status, reducing donations and the organisation’s ability to attract funding.
For example:
s.100-25 Suspended/removed responsible entity managing the entity or exercising financial control - 250 penalty units (corporation) / 50 penalty units (individual)
s.100-70(1) Former trustees failing to give books to acting responsible entity within 14 days - 250 penalty units (corporation) / 50 penalty units (individual)
s.100-70(5) Former trustees failing to comply with notice requirements within 28 days - 250 penalty units (corporation) / 50 penalty units (individual)
s.85-30 Non-compliance with Commissioner's direction - 200 penalty units (corporation) / 40 penalty units (individual) per day
Breach Impact Non-Financial:
Revocation of Charity Status: The ACNC has the power to remove an organization’s charity status under the ACNC Act if it fails to comply with the legislative requirements or engages in serious misconduct. Losing charity status can lead to the loss of certain tax benefits and government funding.
Civil Penalties In addition to financial penalties, certain breaches of the ACNC Act can result in civil penalties being imposed on the charity or its responsible individuals (e.g., directors or trustees). The civil penalty provisions can be triggered for actions such as:
- Failure to meet governance standards
- Failure to keep proper financial records
- Failure to comply with the ACNC’s requests for information
- Directors and officers of charities could be personally liable for these civil penalties, which can include significant fines or other corrective actions.
Legal Consequences: Breach of the ACNC Act may lead to legal proceedings, including court orders requiring the charity or its officers to take certain actions (e.g., rectifying financial records, reinstating governance practices, or returning funds).
Misuse of charity funds, fraud, or dishonesty can result in criminal prosecution under the Criminal Code Act 1995 (Cth). If criminal conduct is identified, responsible officers can face imprisonment or fines in addition to the penalties under the ACNC Act.
Executive Liability: Yes. Directors and officers are responsible for ensuring that their charity complies with the governance standards set out in the ACNC Act. If directors and officers fail to meet these governance standards, they may be personally liable for civil penalties under the Act. The ACNC can suspend or disqualify responsible individuals (such as board members, trustees, or directors) from managing a charity if they have failed to uphold the governance standards or have engaged in serious misconduct.
Criminal Penalty/Offence: Yes
Responsible Manager
Radha Thomas, Director Governance and University Secretary
Coordinating Officer
Radha Thomas, Director Governance and University Secretary
Coordinating Unit
Office of the Director Governance and University Secretary
Oversight Committee/Group
None
Business Units Impacted
Obligation Framework
Associated Legislation
None
Associated Standard
None
Associated Code
None
Associated Information
None
Management Tools
Rule
None
Policy
None
Protocol
None
Procedure
None
Guideline
None
Other Websites
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Governance Standard 5: Duties of Responsible Persons
Description
UNE must take reasonable steps to make sure that its Responsible Persons are subject to, understand, and carry out the duties as follows:
- to act with reasonable care and diligence
- to act honestly and fairly in the best interests of the charity and for its charitable purposes
- not to misuse their position or information they gain as a Responsible Person
- to disclose conflicts of interest
- to ensure that the financial affairs of the charity are managed responsibly, and
- not to allow the charity to operate while it is insolvent.
UNE can meet this standard by:
• bringing these duties to the attention of Responsible Persons (such as providing them with a copy of this guidance or other resources) or outline their duties in a letter of appointment or by setting them out in a board or committee charter
• regularly provide information or training to Responsible Persons on their duties to refresh their knowledge (such as by advising of ACNC webinars on relevant topics, such as Welcome to the board)
• encourage Responsible Persons to attend, prepare for, and participate at meetings
• have processes for the responsible management of money
• have processes in place to manage conflicts of interests, and
• take action if your Responsible Persons are failing to meet their duties.
Impacts
Breach Impact Financial:
Fines: The ACNC has the power to issue financial penalties for non-compliance. These fines are typically applied in cases of breaches relating to failure to comply with the annual reporting requirements, failure to maintain adequate records, or for failing to adhere to governance standards (s175-20, increased by 20% if conditions of 175-25 met).
Ineligibility for Tax Concessions: Charities and not-for-profits that breach the ACNC Act may lose their tax concession status (e.g., exemptions from GST, income tax, and fringe benefits tax).
Loss of Deductible Gift Recipient (DGR) Status: Breaching the ACNC Act can lead to the loss of DGR status, reducing donations and the organisation’s ability to attract funding.
For example:
s.100-25 Suspended/removed responsible entity managing the entity or exercising financial control - 250 penalty units (corporation) / 50 penalty units (individual)
s.100-70(1) Former trustees failing to give books to acting responsible entity within 14 days - 250 penalty units (corporation) / 50 penalty units (individual)
s.100-70(5) Former trustees failing to comply with notice requirements within 28 days - 250 penalty units (corporation) / 50 penalty units (individual)
s.85-30 Non-compliance with Commissioner's direction - 200 penalty units (corporation) / 40 penalty units (individual) per day
Breach Impact Non-Financial:
Revocation of Charity Status: The ACNC has the power to remove an organization’s charity status under the ACNC Act if it fails to comply with the legislative requirements or engages in serious misconduct. Losing charity status can lead to the loss of certain tax benefits and government funding.
Civil Penalties In addition to financial penalties, certain breaches of the ACNC Act can result in civil penalties being imposed on the charity or its responsible individuals (e.g., directors or trustees). The civil penalty provisions can be triggered for actions such as:
- Failure to meet governance standards
- Failure to keep proper financial records
- Failure to comply with the ACNC’s requests for information
- Directors and officers of charities could be personally liable for these civil penalties, which can include significant fines or other corrective actions.
Legal Consequences: Breach of the ACNC Act may lead to legal proceedings, including court orders requiring the charity or its officers to take certain actions (e.g., rectifying financial records, reinstating governance practices, or returning funds).
Misuse of charity funds, fraud, or dishonesty can result in criminal prosecution under the Criminal Code Act 1995 (Cth). If criminal conduct is identified, responsible officers can face imprisonment or fines in addition to the penalties under the ACNC Act.
Executive Liability: Yes. Directors and officers are responsible for ensuring that their charity complies with the governance standards set out in the ACNC Act. If directors and officers fail to meet these governance standards, they may be personally liable for civil penalties under the Act. The ACNC can suspend or disqualify responsible individuals (such as board members, trustees, or directors) from managing a charity if they have failed to uphold the governance standards or have engaged in serious misconduct.
Criminal Penalty/Offence: Yes
Responsible Manager
Radha Thomas, Director Governance and University Secretary
Coordinating Officer
Radha Thomas, Director Governance and University Secretary
Coordinating Unit
Office of the Director Governance and University Secretary
Oversight Committee/Group
None
Business Units Impacted
Obligation Framework
Associated Legislation
None
Associated Standard
None
Associated Code
None
Associated Information
None
Management Tools
Rule
None
Policy
None
Protocol
None
Procedure
None
Guideline
None
Other Websites
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Governance standards and external conduct standards
Description
Compliance with the Governance Standards and External Conduct Standards is a condition of entitlement to registration under paragraph 25â€'5(3)(b) of the Act
Many of the obligations outlined in the Governance Standards and External Conduct Standards are met under separate legislation and captured in various tasks under separate Drivers. The obligations not covered by other legislation will be outlined under this Driver.
Impacts
Breach Impact Financial:
Fines: The ACNC has the power to issue financial penalties for non-compliance. These fines are typically applied in cases of breaches relating to failure to comply with the annual reporting requirements, failure to maintain adequate records, or for failing to adhere to governance standards (s175-20, increased by 20% if conditions of 175-25 met).
Ineligibility for Tax Concessions: Charities and not-for-profits that breach the ACNC Act may lose their tax concession status (e.g., exemptions from GST, income tax, and fringe benefits tax).
Loss of Deductible Gift Recipient (DGR) Status: Breaching the ACNC Act can lead to the loss of DGR status, reducing donations and the organisation’s ability to attract funding.
For example:
s.100-25 Suspended/removed responsible entity managing the entity or exercising financial control - 250 penalty units (corporation) / 50 penalty units (individual)
s.100-70(1) Former trustees failing to give books to acting responsible entity within 14 days - 250 penalty units (corporation) / 50 penalty units (individual)
s.100-70(5) Former trustees failing to comply with notice requirements within 28 days - 250 penalty units (corporation) / 50 penalty units (individual)
s.85-30 Non-compliance with Commissioner's direction - 200 penalty units (corporation) / 40 penalty units (individual) per day
Breach Impact Non-Financial:
Revocation of Charity Status: The ACNC has the power to remove an organization’s charity status under the ACNC Act if it fails to comply with the legislative requirements or engages in serious misconduct. Losing charity status can lead to the loss of certain tax benefits and government funding.
Civil Penalties In addition to financial penalties, certain breaches of the ACNC Act can result in civil penalties being imposed on the charity or its responsible individuals (e.g., directors or trustees). The civil penalty provisions can be triggered for actions such as:
- Failure to meet governance standards
- Failure to keep proper financial records
- Failure to comply with the ACNC’s requests for information
- Directors and officers of charities could be personally liable for these civil penalties, which can include significant fines or other corrective actions.
Legal Consequences: Breach of the ACNC Act may lead to legal proceedings, including court orders requiring the charity or its officers to take certain actions (e.g., rectifying financial records, reinstating governance practices, or returning funds).
Misuse of charity funds, fraud, or dishonesty can result in criminal prosecution under the Criminal Code Act 1995 (Cth). If criminal conduct is identified, responsible officers can face imprisonment or fines in addition to the penalties under the ACNC Act.
Executive Liability: Yes. Directors and officers are responsible for ensuring that their charity complies with the governance standards set out in the ACNC Act. If directors and officers fail to meet these governance standards, they may be personally liable for civil penalties under the Act. The ACNC can suspend or disqualify responsible individuals (such as board members, trustees, or directors) from managing a charity if they have failed to uphold the governance standards or have engaged in serious misconduct.
Criminal Penalty/Offence: Yes
Responsible Manager
Radha Thomas, Director Governance and University Secretary
Coordinating Officer
Radha Thomas, Director Governance and University Secretary
Coordinating Unit
Office of the Director Governance and University Secretary
Oversight Committee/Group
None
Business Units Impacted
Obligation Framework
Associated Legislation
None
Associated Standard
None
Associated Code
None
Associated Information
None
Management Tools
Rule
None
Policy
None
Protocol
None
Procedure
None
Guideline
None
Other Websites
Compliance Overview