Governance: Comments from the regulator

Date: March 27, 2020
Author: FAL Lawyers
Posted in: News

The ACNC has published commentary on how the COVID-19 crisis will affect the ACNC, as well as charities and not-for-profits. The comments recognise the current climate might restrict a charity’s ability to hold regular Annual General Meetings, submit its Annual Information Statement (AIS) and otherwise conduct its operations as usual.

Holding meetings

Many charities will find it difficult to hold regular board/committee meetings in person for the foreseeable future. Holding an AGM or other members’ meeting is also likely to be problematic.

The recommendation from the ACNC is that charities and their Responsible Persons (directors, committee members, trustees, etc.) openly discuss if and how meetings can proceed.

Subject to each organisation’s governing rules and logistics, it may be possible to hold meetings remotely, whether that be over the phone or by video-link.

If your organisation is considering holding meetings remotely, it is important to ensure:

  • the governing rules permit the organisation to do so;
  • the method chosen enables each attendee to participate meaningfully in the meeting (i.e. can hear and be heard); and
  • participants have access to any key documents.

If your organisation is due to hold its AGM, it may also be possible to delay or postpone the meeting, and you may need to liaise with the relevant regulator (e.g. ASIC, Consumer Affairs) to achieve this.

Annual Information Statements (AIS)

The due date for submitting an AIS depends on your organisation’s reporting period.

For example, charities with a January 2019-December 2019 financial year must submit their AIS by 30 June 2020.

If your organisation thinks it will be unable to submit its AIS by the due date, you can request an extension.

However, it’s likely that such an extension will only be granted if your organisation relies on meetings (e.g. board/committee meetings, or the AGM) to approve information contained in the AIS.

Operations and fundraising

The current crisis may affect the day to day operations of charities – in some cases, your organisation’s activities may need to change or even cease.

The recommendation from the ACNC is for charities to keep everyone informed of what they are doing, including any changes to activities.

Organisations and responsible persons should ensure that any change in activity is consistent with the organisation’s objects and charitable purpose(s).

Charities which have had to cancel or postpone fundraising events will also need to consider how to deal with money received to date.  This might include refunding the money or holding the money until the event is rescheduled.

Any decision should be communicated clearly with donors, beneficiaries and other supporters to ensure monies are refunded or otherwise expended in accordance with donors’ wishes and the organisation’s charitable purpose(s).

ACNC availability

To ensure the health of the ACNC’s staff, the advice telephone line will only be open on weekdays from 1-5pm (Melbourne time) until further notice.

For more information, please refer to https://www.acnc.gov.au/node/5781959.

Got questions?

We appreciate that this is a very trying time for all organisations, including charities and not-for-profits.

FAL has introduced a fixed price, low cost initiative called Business HibernationTM to assist businesses and organisations of all types to ride-out the current crisis.  We also have a referral network of other professionals and specialists to help with your accounting, business strategy and other non-legal issues.

Please don’t hesitate to get in touch with us to see how we can assist.

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