Bishops warn Senate Inquiry

08 Oct 2008

By The Record

By Robert Hiini
Catholic Social Services Australia (CSSA) has described existing disclosure requirements for not-for-profit organisations as “onerous, inconsistent, and inefficient” to a Senate inquiry that is due to report next month. 

Both CSSA and the Australian bishops have also warned the Inquiry that reporting requirements must not hurt the disadvantaged.
The Inquiry into the Disclosure Regimes for Charities and Not-for-profit Organisations has been looking at the “relevance and appropriateness” of existing disclosure regimes – the data organisations are currently required to provide to government.  
The inquiry is examining the feasibility of a uniform national reporting regime, a single not-for-profit regulater and the possibility of a special legal structure for not-for-profits; aiming to improve the governance of not-for-profits, particularly where public funds are involved.
The inquiry’s background paper cites two principal concerns that have been expressed about the not-for-profit sector: a perceived lack of transparency and a lack of accountability.
This follows a report by Choice magazine in March, which the background paper summarises as highlighting “wide variability and inconsistency in the way that charities disclose information to the public”.
The inquiry began on June 18 and has received over 170 submissions as well as conducting public hearings. 
In their submission, CSSA, the peak body representing Catholic social agencies, reported the results of a survey of 19 of its 64 member organisations.
Those agencies were found to be engaged in 620 different contracts and associated reporting schedules with government agencies at the federal, state and local level. “It is not surprising (then), that many not-for-profit organisations are puzzled by the suggestion from government that they lack transparency,” CSSA says.
The submission points to a lack of uniformity across governments and funding bodies as to the type of data each demands, citing the inability of governments to agree on formats. “It is difficult to convey in a submission such as this the sense in which organisations frequently feel they are the subjects of these contracts rather than partners,” the submission says. 
CSSA says that a focus on accountability through ‘measurement’ often excludes the more intangible benefits Catholic organisations deliver. 
In being client focused, Catholic services often extend beyond the minimum service outcomes listed in contracts, CSSA says, with projects often being contingent upon such unreported work.
This is particularly true of the role Catholic agencies play in coordinating services for clients.
The Australian Conference of Catholic Bishops (ACBC), in its submission, has urged the inquiry not to underestimate the complexity of the sector made up of charities, sporting clubs, advocacy groups, churches and trade unions, amongst others.  
The bishops say that attempts to implement a uniform reporting regime must take account of the costs incurred by organisations in meeting such reporting requirements.
The submissions of both CSSA and ACBC to the inquiry list three principles of Catholic social teaching that should inform policy developments:
l The Common Good – public authorities have a responsibility to “to make accessible to each what is needed to lead a truly human life.”
l Distributive Justice – public authorities must order all social systems toward the common good.
l Preferential Option for the Poor – “The greater the needs of people, the greater the responsibility of authorities and those with a capacity to meet those needs.”
The bishops say that the role of the community sector over the past 15 years has changed due to reduced sensitivity towards the plight of the poor and a trend towards cost reduction and outsourcing by governments.
“An attraction to Government in outsourcing to the (community) sector is that, with its generally lower salaries and cost bases”, the sector “has traditionally been able to provide services at a much lower cost,” the bishop’s submission says.
The bishops contend that in meeting a variety of community and client needs, organisational diversity in the sector isn’t necessarily a negative.
At present, not-for-profits can be legally incorporated in a multitude of ways. The inquiry will examine whether a single mode of incorporation is advantageous. 
This may be beneficial, say the bishops, provided “that it does not simply replace the current level of reporting with a new regime built up with a new bureaucracy”.
 CSSA’s executive director, Frank Quinlan, says that transparency is a very important principle for his organisation and that he understands the concern that not-for-profits be accountable for the public funds they receive. 
However, he says that substantially, this is already the reality for Catholic social agencies with “so many terms and conditions being determined by funding arrangements”. He believes that the principal motivation for the inquiry is simplicity, adding that in his view “there’s a lot to be said for simplifying things as much as possible”.