Principles & Standards

Overview

The CMA Standards Council's 'Nine Principles of Ministry Accountability', the 54 standards that fall under those principles, and the four supporting policies, represent the essential requirements necessary for an organisation to become accredited by the Standards Council.

These principles and standards are about organisational accountability, not organisational effectiveness, which is a far larger topic. There are many things an organisation can do, in addition to these principles, that will enhance both accountability and effectiveness, but we consider these to be an excellent starting point, and the absolute minimum for a truly accountable ministry.

the 9 principles

PRINCIPLE 1: GOD FIRST

The organisation must declare its Christian ethos and confirm that it acts in accordance with that ethos.

standards

1.1 The organisation must publicly state its Christian ethos and purposes, for example in its constitution, vision/mission statements or website.

1.2 The organisation must have a written statement of faith, approved annually and unanimously by its governing body, which is consistent with, and is not in conflict with, the Nicene Creed or otherwise satisfactorily demonstrate its commitment.

PRINCIPLE 2: CHARITABLE STATUS

The organisation must be a registered, legitimate and active Australian Charity.

standards

2.1 The organisation must be registered in good standing on the ACNC register.

2.2 The organisation must have been operating for at least one year and have at least one annual information statement visible on the ACNC register.

2.3 The members of the organisation’s governing body must meet the ACNC’s suitability requirements.

2.4 The organisation must keep its information on the ACNC register (for example responsible persons, contact details, constitution, and required reports) up-to-date.

PRINCIPLE 3: DILIGENT GOVERNANCE

The organisation must be governed by a properly structured body which acts with care, diligence and independence.

standards

3.1 The constitution or equivalent must clearly state who bears the ultimate responsibility for the organisation.

3.2 The governing body must have at least five properly appointed members.

3.3 The majority of the governing body must be independent (see the CMA Standards Council's Supporting Policy on Governing Body Independence).

3.4 The governing body must meet at least 4 times per year, at times reasonably spaced apart.

3.5 A quorum must be at least half the governing body, with a majority of those attending being independent.

3.6 The governing body must keep written minutes of all meetings, documenting all decisions made.

3.7 Financial dealings between the organisation and any member of the governing body must be governed by the CMA Standards Council's Supporting Policy on Governing Body Remuneration.

3.8 The chair and vice-chair (if any) must be non-executives.

3.9 The governing body must have a policy which addresses the length of service of its members and which balances the benefits of knowledge and experience of the organisation against the danger of losing the member’s independence from management, their effectiveness and enthusiasm.

3.10 If the organisation has subsidiaries or related entities with which it is grouped on the ACNC register or equivalent, this Standard 3 should also apply to such subsidiaries and related entities.

3.11 If the governing body has any standing or ad hoc committees (for example, an audit committee), it must document the establishment of each committee, including its membership, responsibilities and powers.

PRINCIPLE 4: RESPONSIBLE LEADERSHIP

Leadership is critical and sets the culture of the entire organisation. The members of the organisation’s governing body must be responsible, competent and comply with their legal obligations.

standards

4.1 Each member of the governing body must at all times meet the ACNC's published criteria for responsible persons (whether regulated by the ACNC or not) and must meet their legal duties, including the duties set out in ACNC Governance Standard 5.

4.2 The governing body must have a selection process for recruiting appropriately skilled and diverse members.

4.3 The organisation must have an induction process which informs and educates members of its governing body about their duties and responsibilities.

4.4 The organisation must have a governing body development plan, which outlines how that body intends to continuously review and improve its effectiveness.

4.5 The governing body must take steps to identify any conflict of interest and deal with it in a manner consistent with the CMA Standards Council's Policy For Excellence In Handling Conflicts of Interest.

PRINCIPLE 5: CHARITABLE PURPOSE

The governing body must ensure that the organisation carries out the purpose for which it exists.

standards

5.1 The organisation's constitution or equivalent must clearly identify the charitable purpose of the organisation.

5.2 The organisation's constitution or equivalent must contain the customary non-profit clauses which meet the non-distribution constraints required for not-for-profit entities.

5.3 The charitable purpose for which the organisation exists must be clearly articulated in websites, brochures, reports and other relevant and appropriate publications.

5.4 The organisation must ensure that an overall plan exists which describes how current and future activities align with the organisation's charitable purpose.

5.5 The governing body must conduct an annual review of the organisation's overall finances and activities, to satisfy itself that they are being applied in the pursuit of the organisation's charitable purpose.

5.6 The governing body must, either itself or by way of an approved process, ensure that each significant program or activity is evaluated at intervals of no greater than every three years, to verify that it is progressing the organisation's charitable purpose, and represents an effective use of organisational resources.

PRINCIPLE 6: FINANCIAL OVERSIGHT

The governing body must undertake proper financial oversight of the organisation.

standards

6.1 The organisation must maintain detailed accounting records, and prepare complete and accurate financial statements, including a balance sheet, profit & loss statement and statement of cash flows.

6.2 The governing body must ensure that the reports provided to it contain sufficient detail, in appropriate formats, to allow it to determine the financial health and performance of the organisation.

6.3 Organisations with an annual revenue of $1 million or more must be audited annually by an appropriately qualified, independent auditor.

6.4 Organisations with an annual revenue of less than $1 million must be reviewed (within the meaning of the Australian Charities and Not-for-profits Act) or audited annually by an appropriately qualified, independent auditor.

6.5 Each year the governing body must review and approve the final financial statements of the organisation, and must review any audit report and / or management letter provided by the auditor.

6.6 Each year the governing body must review the appropriateness of its policies and procedures relating to internal controls, segregation of duties and expenditure approval policies, taking into consideration the size and capacity of the organisation.

6.7 At intervals of no greater than every five years, the governing body must review the quality of the audit or review.

6.8 The organisation must not make a loan to staff, volunteers or members of its governing body unless the loan is documented and approved by the governing body, and is either on arm’s length terms providing a commercial return, is clearly part of an approved remuneration package, or is otherwise within the charitable purposes of the organisation.

6.9 If the governing body delegates some of its responsibilities to an audit committee, all members of that committee must be independent and non-executive (see the CMA Standard Council's Supporting Policy on Governing Body Independence), the audit committee must include members of the governing body, and the governing body members must not be able to be outvoted.

PRINCIPLE 7: RISK MANAGEMENT

The organisation must take steps to identify and monitor risks to which it is exposed.

standards

7.1 The organisation must develop, implement and monitor a risk management plan that identifies the significant risks to which the organisation is exposed, classifies them according to severity and likelihood, and documents appropriate management strategies and insurance programs. The plan must be reviewed at least annually.

7.2 The organisation must take reasonable steps to ensure that it meets its legal obligations and in particular must not act in a way which could be dealt with as an indictable offence or could be punishable by a civil or criminal penalty of over $10,000.

PRINCIPLE 8: TRANSPARENCY AND ACCOUNTABILITY

The organisation must be transparent and accountable to its stakeholders.

standards

8.1 The organisation must hold an annual meeting to inform members of its activities, performance and achievements. There must be a reasonable opportunity at the meeting for members to ask questions or seek clarity about matters of legitimate interest.

8.2 The organisation must produce an annual report which is available to members, donors, staff, volunteers and members of the public. The report must contain sufficient detail to enable readers to gain a reasonable overview of the activities, performance and achievements of the organisation.

8.3 The organisation must supply at any time a copy of its most recent audited/reviewed financial statements to any legitimate stakeholder who submits a written request. The organisation may charge a reasonable fee reflecting the costs and effort of supplying the statements.

8.4 The organisation must supply a summary report on the financial and operational results of any significant specific purpose appeal, in response to a written request from a donor to or volunteer of that project. The organisation may charge a reasonable fee reflecting the costs and effort of supplying the report.

8.5 The organisation must ensure that postal, email and telephone contact details are kept up-to-date on websites, reports and publications.

8.6 The organisation must ensure that a suitable mechanism exists for members, donors, volunteers and other interested parties to receive communications about the organisation's activities and progress in between annual meetings.

8.7 The organisation must maintain and publicise a mechanism for members, donors, staff, volunteers and other interested parties to submit feedback or register a complaint with the organisation, and respond in a timely and appropriate manner.

8.8 The governing body must set the remuneration package of its top leader and address related-party transactions in a manner that demonstrates integrity and propriety (see for example the CMA Standards Council's Policy for Excellence in Remuneration-Setting).

8.9 All information supplied for publication in the Standards Council Online Directory must be correct and up-to-date at all times.

PRINCIPLE 9: HONEST COMMUNICATION

All gift appeals and stewardship activities of the organisation must be carried out in a truthful and ethical manner.

standards

9.1 In securing gifts, all representations of fact, descriptions of the financial condition of the organisation, or narratives about events must be current, complete, and accurate. References to past activities or events must be appropriately dated. There must be no material omissions or exaggerations of fact, use of misleading or disrespectful photographs, or any other communication which would tend to create a false impression or misunderstanding or unrealistic expectations of what a gift will actually accomplish.

9.2 The organisation must honour statements made about how it will use gifts that it seeks. If a donor gives any special instructions with the gift, and the organisation accepts the gift, it must honour the instructions.

9.3 The organisation must give donors appropriate and timely receipts for all tax deductible gifts and otherwise on request.

9.4 Organisations must ensure that their representatives do not take improper advantage of any fiduciary relationship of trust the representative may have with the potential donor. An organisation must not knowingly accept a gift if it appears to the organisation that it is a major financial commitment by the donor and the donor has not considered his or her financial capacity to make the gift.

9.5 Every item of communication used for solicitation of gifts must clearly identify the organisation's name, address, phone number, ABN (if applicable), and the purpose for which support is being solicited.

9.6 The organisation must have a plan for how funds will be applied in the case of an appeal for a particular purpose being oversubscribed and (if appropriate) undersubscribed, and will communicate its intent at the commencement of the appeal or as soon as practicable after the risk of oversubscription became apparent.

view our supporting policies