Getting your reporting right is not just a compliance exercise. It shapes how funders, donors, and your own board understand what the organisation is actually doing with its money.
The ATO Self-Review Return for Non-Charitable NFPs
From the 2023-24 income year, non-charitable NFPs with an active ABN must lodge an annual NFP self-review return with the ATO to confirm their income tax exemption status. The return is due by 31 October each year. Charities registered with the ACNC are not required to lodge this return, as they already report through their AIS.
The not-for-profit clauses in question are the anti-distribution clause (preventing income or assets going to members while operating) and a dissolution clause (directing assets to another NFP or a charitable purpose on winding up). If those clauses are missing or unclear, the ATO may determine that income tax exemption does not apply, which triggers a tax return obligation.
Practical Steps to Tighten Your Reporting Year-Round
Most financial reporting problems trace back to poor record-keeping during the year, not errors at reporting time.
Step 1: Set up your chart of accounts to reflect your programs
Each program, grant, and fund should have its own code from the start of the financial year. This makes it possible to report against each separately and is the foundation of any acquittal or ACNC financial report.
Step 2: Classify every income source on receipt
At the point money arrives, note the source, whether it is restricted or unrestricted, and whether AASB 15 or AASB 1058 applies. Do not leave this for the accountant to sort out in June.
Step 3: Reconcile monthly, not quarterly
Monthly reconciliation allows you to catch miscoded transactions, missing documentation, and budget variances while there is still time to correct them. Acquittal-time reconciliation significantly increases the risk of errors and funding clawbacks.
Step 4: Maintain an obligations register
A simple spreadsheet listing every grant, its acquittal due date, its reporting conditions, and its current unspent balance gives your finance committee a clear line of sight throughout the year. This is also what the board needs to see at every meeting.
Step 5: Brief your Responsible Persons before signing
For medium and large charities, the ACNC requires a signed Responsible Persons declaration as part of the annual financial report. The people signing that declaration are attesting that the report gives a true and fair view of the charity’s financial position. Make sure they have actually reviewed the statements, not just signed them.
What Your Financial Statements Should Actually Show
The minimum requirements for a medium or large charity’s annual financial report under ACNC guidance are:
- Statement of profit or loss and other comprehensive income
- Statement of financial position
- Statement of changes in equity
- Statement of cash flows
- Notes to the financial statements
- Responsible Persons declaration
- Reviewer’s or auditor’s report (depending on size)
Note: the statement of changes in equity and other comprehensive income component may not be required in all cases. Check the ACNC’s annual financial report checklist for your specific situation.
Funders, in particular, read the notes section carefully. A financial report that shows a large surplus without distinguishing restricted from unrestricted funds, or that doesn’t explain why reserves are low, invites the wrong questions from the wrong people at the wrong time.
For organisations where not-for-profit accounting expertise matters most, accurately classifying your size and financial statement type from the start avoids double handling and audit complications later.