In mid-December the Gillard Government released draft Governance Standards for consultation. These standards will apply to all charities registered with the ACNC (for more information on the draft governance standards and the information see our article “Draft Governance Standards and Financial Reporting Regulations Released” published on 18 December 2012). Although the consultation period only closed 3 weeks ago, the Assistant Treasurer, Hon David Bradbury has confirmed that next week the Government will table a revised version of the governance standards in Parliament.
The governance standards as tabled in parliament are available here, and the explanatory memorandum is available here.
The ACNC governance standards are proposed to commence on 1 July 2013, subject to the special Parliamentary scrutiny provisions of the Australian Charities and Not-for-profits Commission Act 2012.
According to the Assistant Treasurer’s press release a number of changes were made to the governance standards following the consultation process.
These include:
- inserting references that the governance standards must be interpreted in a manner that is consistent with the objects of the Act and the requirements of section 15‑10 of the Act (in particular, the principles of regulatory necessity, reflecting risk and proportionate regulation, as well as the unique nature and diversity of not‑for‑profit entities and the distinctive role that they play in Australia);
- removing the governance standard proposed in consultation that specifically covered responsible management of financial affairs (this standard has now been incorporated as part of the governance standard that deals with duties of those who govern charities);
- clarifying that the governance standard about compliance with Australian law is necessary to trigger the ACNC Commissioner’s enforcement powers in the event of a serious breach of the law, and that compliance with the law sets a minimum benchmark by which all entities should govern themselves;
- clarifying that the governance standard dealing with accountability to members does not mandate annual general meetings, and does not add to the financial reporting requirements that already exist in the ACNC Act; and
- introducing transitional arrangements that apply until 1 July 2017 and will allow incorporated associations to comply with duties under their State or Territory laws, instead of ACNC governance standard 5, which deals with duties of those who govern charities. This transitional arrangement arose from consultation on the Council of Australian Governments’ Regulatory Impact Assessment on regulatory duplication in the NFP sector.
We will continue to keep you informed of the final governance standards and other ACNC developments thorough our blogs and bulletins.
If you require any further information or have concerns in relation to the ACNC or governance standards, please contact Bill d’Apice or Anna Lewis.