NFP reporting and audit obligations – regulatory responses during COVID-19

CPA Australia has recommended that the government act on implementing the proposed improvements to ACNC legislation to further red-tape reduction and streamline charity regulation.

What concessions have Australian regulators provided to not-for-profits, including charities, incorporated associations, fundraising licensees and companies limited by guarantee during these challenging times? Here’s a guide to the relief provided in various jurisdictions.

Not-for-profit (NFP) entities are subject to a number of different regulatory reporting and assurance requirements, depending on the legal form they take, their registration status with different regulators and the licences they hold. 

There are many regulators who impose compliance requirements on the sector both at the Commonwealth and state or territory levels.

The COVID-19 pandemic has highlighted many of the shortcomings in Australia’s approach to NFP regulation. 

A decentralised regulatory framework that relies on state and territory-based regulations as well as Commonwealth laws has meant that different approaches have been adopted by regulators to providing relief and assistance to the NFP sector.

The current crisis has highlighted beyond doubt the increasingly important need to hasten regulatory reform and red-tape reduction in the NFP sector

On 6 March, the government responded to the recommendations of the Australian Charities and Not-for-profits Commission (ACNC) independent review panel to reform charity law and regulations. One of the key themes was “reducing red tape”, which is also one of the three primary objectives of the ACNC.  

CPA Australia has recommended that the government act on implementing the proposed improvements to ACNC legislation to further red-tape reduction and streamline charity regulation. 

Although the government’s response did not support broadening the regulatory oversight of the ACNC beyond charities to the wider NFP sector, we believe there should be a roadmap developed to achieving a streamlined and consistent NFP regulatory framework in Australia. 

This roadmap will provide a clear set of objectives that all stakeholders in the NFP sector can work towards achieving over time.

While we await announcements from government on their plans to reform NFP regulation, the complexity of NFP regulation continues to result in inconsistent approaches. 

Currently that inconsistency is manifested in the range of regulatory relief provided as a result of COVID-19 across Australia, which is summarised below.

COVID-19 Relief: NFP reporting, auditing and annual general meeting (AGM) obligations 

Jurisdiction: Commonwealth – companies limited guarantee
Regulator: Australian Securities and Investments Commission (ASIC)
Relief provided:

  • One-month extension provided for financial report lodgement by all listed and unlisted entities. This will mean that for 30 June 2020 year-ends, public companies limited by guarantee will have five months instead of the normal four months to lodge their financial reports.
  • ASIC has adopted a “no action” position for public companies with 30 June 2020 year-ends that hold an AGM in January or February 2021, instead of during the calendar year 2020.
  • ASIC has announced that it will continue to monitor how market conditions and COVID-19 developments are affecting financial reporting and AGM obligations for year-ends post 30 June 2020.

Jurisdiction: Commonwealth – registered charities
Regulator: Australian Charities and Not-for-profits Commission (ACNC)
Relief provided:

  • Charities with Annual Information Statement due dates between 12 March 2020 and 30 August 2020 have an extension until 31 August 2020.
  • The ACNC will not investigate certain breaches of the Governance Standards and the External Conduct Standards that occur from 25 March until 25 September 2020, unless they are significant breaches that harm the public interest. These breaches are: operating outside the charity’s purposes, incurring debts such that the charity becomes insolvent, or being unable to obtain reporting from the charity’s overseas operations or partners.
  • Recommends holding AGMs remotely via video or phone conference in order to be unless they are significant breaches that harm the public interest. These breaches are: operating outside the charity’s purposes, incurring debts such that the charity becomes insolvent, or being unable to obtain reporting from the charity’s overseas operations or partners.
  • Recommends holding AGMs remotely via video or phone conference in order to be accountable to members during social distancing, but to refer to the relevant state or territory regulator to delay or postpone its AGM.

Jurisdiction: Commonwealth – ancillary funds
Regulator: Australian Taxation Office (ATO)
Relief provided:

  • For public ancillary funds and private ancillary funds, there is no change to the current requirement that the fund should provide the financial statements and audit or review report to the ATO Commissioner on request, unless the reports have already been given to the ACNC.

Jurisdiction: Australian Capital Territory – incorporated associations and NFPs associations and NFPs
Regulator: Access Canberra (Fair Trading)
Relief provided:

  • Since 1 July 2017, incorporated associations and NFPs with charitable collection licences that are also registered with the ACNC no longer have to lodge financial reports with Access Canberra as long as they comply with ACNC requirements. No specific reporting  relief announcements have been made for such entities in connection with the COVID-19 crisis.
  • A blanket three-month extension for holding AGMs until 30 June 2020, which will be extended if the restrictions continue beyond 30 June 2020. The extension has been automatically applied. The Associations Incorporation Act 1991 (the Act) has been amended to allow virtual general meetings, which was previous only available to associations that made provision for meetings via alternative communication methods in their rules.

Jurisdiction: New South Wales – incorporated associations and cooperatives
Regulator: NSW Fair Trading
Relief provided:

  • NSW Fair Trading is currently granting extensions for holding AGMs and submission of financial reports to individual incorporated associations and cooperatives that apply for this extension. Application fees are waived.
  • NSW Fair Trading is working towards granting exemptions and deferrals for AGMs and annual financial reporting for all incorporated associations and cooperatives.

Jurisdiction: Northern Territory – incorporated associations
Regulator: Northern Territory Government
Relief provided:

  • From 2020, incorporated associations that are also registered with the ACNC no longer have to lodge financial reports with the Northern Territory Government as long as they comply with ACNC requirements. No specific blanket relief announcements have been made for such entities in connection with the COVID-19 crisis.

Jurisdiction: Queensland – incorporated associations
Regulator: The Office of Fair Trading (OFT)
Relief provided:

  • AGMs for incorporated associations can be delayed up to six months without a written application, in addition to the six months ordinarily required. This may result in a management committee’s term being longer than is described in the rules, but the OFT encourages members to be accepting of this.
  • Lodgement of financial statements with the OFT can likewise be delayed up to six months, as lodgement is required one month after the AGM.

Jurisdiction: South Australia – incorporated associations
Regulator: Consumer and Business Services
Relief provided:

  • Six-month extension for associations to lodge periodic returns and hold AGMs.
  • “No action” if virtual AGMs do not comply with the association’s rules, but they must maintain accessibility and inclusiveness and appropriate record keeping, and give members reasonable notice of meetings and opportunity to ask questions.
  • “No action” in related to non-compliance involving actions in response to COVID-19.

Jurisdiction: Tasmania – incorporated associations
Regulator: Consumer, Building and Occupational Services
Relief provided:

  • Since 2016, incorporated associations that are also registered with the ACNC no longer have to lodge financial reports with Consumer, Building and Occupational Services as long as they comply with ACNC requirements. No specific blanket relief announcements have been made for such entities in connection with the COVID-19 crisis. 
  • While associations regulate running AGMs through their constitutions, an association may need to delay an AGM due to COVID-19, in which case the committee should discuss the possible delay with their members while considering their constitution’s requirements, and may agree on a time to meet again and hold a special general meeting to deal with any outstanding business. 
  • Associations are still required to complete and lodge the annual return form.

Jurisdiction: Victoria – incorporated associations and fundraising licensees
Regulator: Consumer Affairs Victoria
Relief provided: 

  • Since 2019, incorporated associations that are also registered with the ACNC no longer have to lodge financial reports with Consumer Affairs Victoria as long as they comply with ACNC requirements. No specific blanket relief announcements have been made for such entities in connection with the COVID-19 crisis. However, Consumer Affairs Victoria has indicated that if the current crisis makes it difficult to engage an independent accountant or auditor to review financial statements, an extension may be requested. Entities in connection with the COVID-19 crisis. However, Consumer Affairs Victoria has indicated that if the current crisis makes it difficult to engage an independent accountant or auditor to review financial statements, an extension may be requested.
  • Three-month extensions of time to hold an association’s AGM are being granted upon application with the usual fee waived. 
  • NFPs with a fundraising licence have to lodge financial reports with the regulator. No blanket relief announcements have been made for such entities in connection with COVID-19.

Jurisdiction: Western Australia – incorporated associations and fundraising licensees
Regulator: Department of Mines, Industry Regulation and Safety
Relief provided: 

  • Although there are financial reporting and audit or review requirements applicable to incorporated associations in Western Australia, such entities are not required to lodge these financial reports with the regulator. No reporting relief announcements have been made for such entities in connection with COVID-19.
  • Associations can apply for an extension of time to hold its AGM, if they require more than the usual six months after financial year end. The application fee has been waived.
  • NFPs with a fundraising licence have to lodge audited financial reports with the regulator. No blanket relief announcements have been made for such entities in connection with COVID-19.

CPA Australia’s “Charities: a guide to financial reporting and assurance requirements” provides more details around the various existing reporting/assurance requirements applicable to many charities and NFPs.  

Members with concerns regarding AGM or reporting deadlines for NFPs or the response of regulators to requests for extensions can obtain CPA Australia’s support by emailing [email protected] 

Claire Grayston FCPA is CPA Australia’s policy adviser for audit and assurance. Ram Subramanian is CPA Australia’s policy adviser for reporting. 


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