Following on from the Curtin report released last week, the ACNC has published the EY report on red tape: Research into Commonwealth Regulatory and Reporting Burdens on the Charity Sector and an associated Media Release.
The report provides us with an independent insight into the source and scale of government obligations on charities and explores how much of the regulatory and reporting burden constitutes red tape. The research, which focussed on Commonwealth burden, was based on case studies of charities working in social welfare, other education, and health/aged care.
The key finding is that Commonwealth funding agreement obligations impose a far greater burden on charities than legislative obligations.
the estimated Commonwealth reporting burden on the 15 case study charities averaged $108,000 for the 2012-13 year, with between $27,000 and $38,000 constituting red tape. The average Commonwealth burden was $18,000 for small charities and $235,000 for large charities.
the estimated average annual burden imposed by the ACNC was $150, or 0.1% of annual Commonwealth burden.
Common sources of red tape for charities include:
overly-frequent reporting and excessive information requirements under funding programs
duplication of information required under multiple funding programs and across different levels of government
inconsistency in financial reporting requirements and processes across government; and
inconsistencies in key regulatory frameworks across the states and territories, particularly with fundraising and incorporated associations regulations.
Recommendations include:
Commonwealth agencies providing funding to charities should incorporate the Charity Passport and National Standard Chart of Accounts (and the ACNC should work with them to do so)
The ACNC should consider adopting an ‘honest-broker’ role to drive government reforms to further reduce inter-jurisdictional sources of burden such as fundraising regulation.