2017 EOY Update for Business Managers

Commonwealth Funding for 2018 and beyond

As indicated in our earlier briefing the School Funding Estimator is once again available on the Department of Education’s website along with updated Fact Sheets and FAQs regarding the Quality Schools Funding Package.  Some schools have also expressed a desire for a simple Excel spreadsheet to allow projections and scenario planning to be undertaken around Commonwealth funding.  If this would be helpful for schools please let us know.

Changes to Financial Questionnaire for 2018

There will be changes in the 2018 Financial Questionnaire (FQ) which draws data from the 2017 financial statements of schools.  These changes stem from ACNC requirements for their financial reporting and the Commonwealth’s desire for more transparency around the use of funding.   The new FQ items capture more data from both the income and expense side, to include non-school related items which were not previously within the scope of the FQ but included in the audited financial report for the registered charity.

The FQ now aims to capture financial information relating to the whole registered charity to align to the 2017 AIS and the audited financial report. The ACNC have created a document to explain the mapping methodology for non-government schools. The chart shows how the FQ18 data from DET is mapped to the ACNC Annual Information Statement.  You can download a copy from the ACNC website here.

Key changes include:

  • Excluding investment income and recurrent donations from RI.060 and including them them separately in two new items – RI.061 (Investment Income) and RI.065 (Donations),
  • Excluding capital donations from CI.050 and reporting them separately in a new item – CI.055 (Donations for Capital Purposes),
  • Excluding management fees from RE.080 and including them in a new item – RE.085 (External Management Fees),
  • Excluding the rental and lease expenses associated with land and buildings used by the school from RE.090 and reporting them separately in a new item – RE.095 (Rent and Lease Expenses),
  • Reporting non-current loans receivable and non-current loans payable separately in two new items – GF.035 (Non-current Loans Receivable [Assets]) and GF.045 (Non-Current Loans Payable [Liabilities]),
  • Including any income generated and expenditure incurred by the school entity (using the ABN as the indicator) and included in the entity’s audited financial reports, not captured elsewhere in two new items – TA.030 (Income for all other operations not already recorded in the FQ) and TA.040 (Expenditure for all other operations not already recorded in the FQ).

Schools will need to ensure that their 2017 year end accounts are presented in a form with facilitates compliance with these obligations

Changes to Deductible Gift Recipient (DGR) obligations and reporting

The Minister for Revenue and Financial Services, Kelly O’Dwyer recently announced that the government will reform the administration and oversight of organisations with Deductible Gift Recipient (DGR) status. Key changes include:

  • All non-government DGRs will be automatically registered as a charity with the ACNC from 1 July 2019 with a 12 month transitional period to assist current non-charity DGRs with compliance. In addition, the Commissioner of Taxation will have the power to exempt DGRs from this requirement in certain circumstances. Public fund requirements will be abolished.
  • The DGR registers and Overseas Aid Gift Deduction Scheme will be integrated with the ACNC charity register and duplicative reporting requirements will be abolished. The ACNC will also provide a central location for applications and reporting and will work with the ATO to provide a streamlined experience.
  • The ACNC and ATO will receive additional funding to review a greater number of DGRs for ongoing eligibility, where risks are identified – we do not anticipate that school building or scholarship funds or public library funds will be high priorities.
  • The Government will not proceed with the unlegislated 2009-10 Budget measure Philanthropy – reforming the ‘in Australia’ requirements that apply to tax exempt entities. According to the Minister the un-enacted measure ‘could prevent many DGRs from conducting legitimate activities outside Australia such as visits to foreign medical institutions or participating in international cultural or sporting events and would not provide appropriate oversight of the overseas activities of exempted organisations such as overseas disaster relief funds’.

Once these measures are finalised and the ongoing requirements are clear we will update our DGR Toolkit to reflect the new measures.  In the meantime schools are reminded of the obligations in the relevant taxation rulings or ATO explanatory materials relating to DGRs often associated with schools –

School Building Funds – TR2013/2

Public Library Funds – TR2000/10

Educational Scholarship Funds – ATO Explanatory Materials