ACNC Commissioner article highlights the value of good record keeping

A recent opinion piece in The Australian from ACNC Commissioner Dr Gary Johns focused on the issue of charity service delivery, donations to bushfire victims and the distribution of funds.

While Dr Johns acknowledged the complexities involved with ensuring that support reached those in need, his comments on the 2019 ACNC investigation of two small charities that were swamped by public generosity, struck a chord. The ACNC had told the charities that “by law, charities require good record keeping” and advised that they spend some of their donations on “hiring competent staff and building systems to account for the money”.

NFPs need to meet ongoing reporting and compliance requirements in a systematic manner, but should also be ready to scale up activities when required. Technology and professional support are ideal foundations for a progressive charity or NFP that must be flexible and resilient.

How efficient are Australia’s NFPs at this process of “building systems to account for the money”? While the use of paid cloud technology continues to be embraced by Australian businesses – with 42% of businesses reporting the use of cloud computing in 2017–18, compared to 31% in 2015–16 (ABS) – the NFP sector has not yet fully recognised the benefits of this technology in assisting with record keeping and accountability.

We have previously written about the benefit of cloud accounting for charities and NFPs. In terms of record keeping, significant benefits can be achieved with outsourced professional accounting advice and digital systems.

The benefits to organisations include:

  • Real time data, information and reports that can be accessed by multiple people from numerous sites
  • Easy to understand reports that provide concise and relevant information
  • Automated processes that are designed to save time and money, ensuring that funds can be allocated for other purposes
  • The ability to record real time data and speed up fund allocation for those requiring support in times of need.

Dr Johns notes in his article that charities are, “built of the same sturdy stuff as the firefighters who, by the way, have enormous administrative backup systems.”

The allocation of funding to Australia’s bushfire-affected communities will continue to keep the issues of administration systems and processes and record keeping top of mind for those working in the charity sector and those who have donated.

The proactive embrace of technology, external expertise and change will ultimately equip NFPs and charities to support those in need in a timely manner.

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