This audit would examine the effectiveness of the Australian Charities and Not-for-profits Commission’s (ACNC’s) processes for the regulation of charities, including its compliance and enforcement activities.

The ACNC was established in December 2012 as the independent national regulator of charities. There were over 55,000 registered charities in Australia by the end of 2017, and in 2016 registered charities had a combined total revenue of $142.8 billion and total assets of $197.6 billion. Eligible charities can access tax concessions, including income tax exemptions and gain deductible gift recipient status via endorsement by the Australian Taxation Office.

In 2016–17, charities that were subject to ACNC compliance actions controlled nearly $5.1 billion of charitable assets. The number of charities that had their registration revoked by the ACNC following investigations rose by 30 per cent in the same year. The ACNC stated that it will focus on charity compliance in 2018 to help identify and stamp out misconduct in charities. Sound oversight arrangements and strong corporate governance and accountability is fundamental to effective regulation of this growing sector of the economy.