Adjustment to Size Thresholds of Registered Charities
In an effort to facilitate the efficient operation of Australian charities, the Australian Government announced the easing of financial reporting obligations. The new reforms will result in lifting of financial thresholds for small and medium charities registered with the ACNC, which will in turn allow over 5,000 charities to redirect their funds to assist Australians in need.
A consultation period is underway until 8 October 2021, for responses to the proposed legislation. If passed, the legislation will, from 1 July 2022, effect the changes in the table below.
|Current Thresholds||1 July 2020 Proposed Thresholds||Nature of Financial Accounts|
|Small charity - annual revenue less than $250,000||Small charity - annual revenue less than $500,000||None required|
|Medium sized charity - annual revenue between $250,000 and less than $1,000,000||Medium sized charity - annual revenue between $500,000 and $3,000,000||Reviewed financial statements only|
|Large charity - annual revenue $1,000,000 or more||Large charity - annual revenue $3,000,000 or more||Audited financial statements|
Although the changes are not planned to occur till 1 July 2022, the reporting will relate to the preceding financial period 2021-22. Additionally, large charities with two or more key management personnel will be required to report remuneration paid to responsible persons and senior executives on an aggregated basis in their 2022 annual information statement.
From 1 July 2023, all charities will be required to report related party transactions in their annual reporting to ACNC.
The aim of the latter two requirements is to improve transparency and eliminate possible conflicts of interest.