Emil Ford Lawyers

It’s time to re-read the ACNC Governance Standards

The ACNC Charity Compliance Report has revealed that in 2017, there was a 42% increase in the number of complaints about charities compared to 2016. Many of these complaints were made because charities failed to adhere to the ACNC Governance Standards, especially Governance Standard 5, which covers the duties of directors.

According to the Compliance Report, the most common complaints in 2017 were that charities failed to maintain good financial controls, did not carry out adequate due diligence and that charities’ directors did not act in the best interests of the charity.

In 2017, one charity had its charity status revoked after it misused charitable funds. The charity had entered into a contract with a for-profit company and this resulted in a financial benefit to one of the charity’s directors. This person was also a director of the for-profit company. When the ACNC issued the charity with a notice to show cause as to why its registration should not be revoked, the charity could not satisfy the ACNC that it had sufficient governance practices in place to ensure that the funds the charity received were being used to further the purposes of the charity. Its charity status was therefore revoked.

This charity breached ACNC Governance Standard 5. We have written about this Governance Standard and the duties that board members owe to their charities here. All charities should take this opportunity to re-familiarise themselves with the Governance Standards so that they do not find themselves having to respond to an ACNC notice or investigation. 

Contact  if you would like more information about the Governance Standards. We recommend that charity boards undertake professional development in this area. Contact if you would like me to address your board.


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