Acquittals

What are charitable trusts?

Charitable trusts are legal organisational structures established to hold and distribute funds as charities. Trusts registered as charities must meet certain legal requirements for registration with the Australian Charities and Not-for-profits Commission (ACNC).

This includes being a not-for-profit organisation, having only charitable purposes intended for the benefit of the public, not having a disqualifying purpose, and not being an individual, political party, or government entity.

The Trust has a legal and compliance obligation to ensure funds received are granted and used for the charitable purpose. This is controlled and verified though the acquittal process.

The Trust must keep operational records that shows how the charity:

• is entitled to be registered as a charity and as its subtype
• meets its obligations under ACNC Act
• meets its obligations under Australian tax law, including Public Ancillary Funds prescribed by the Australian Taxation Office (ATO)
• Is using public funds for Grants, and Acquittals confirming the funds have been spent in accordance with the terms of the grant.

 

What is an acquittal?

The acquittal process involves demonstrating that the granted funds have been used appropriately and according to the terms set out in the funding agreement (Grant Agreement, Schedule and Terms and Conditions)

This requires thorough financial reporting and documentation, including receipts, invoices, and financial statements. Successful acquittal of funds helps maintain the trust of the funding body and could impact the organisation’s eligibility for future funding.

What information should an acquittal report include?

An acquittal report will normally include four key types of information.

• financial information, including documentary evidence, (eg invoices, receipts, records)
• data and statistics
• qualitative information
• project documentation.

The financial part of the report will provide confirmation that the grant recipient not only spent the grant funding on the project, but proves what the grant recipient actually spent it on (via receipts or supporting evidence). For acquittal of some grants the grant recipient may be required to provide a Statutory Declaration as part of the financial reporting.

The Data part of the report provides a snapshot of the project impact and results the grant was used for.

Acquittal commitment required before funds dispersed

Following the award of a grant from the Trust, the authorising officer of the grant recipient is required to complete a declaration that they will participate with the acquittal process. The Trust grant funds will not be distributed until the acquittal commitment is signed off.

This commitment and authorisation is through the Trust form : Grants – Acquittal Commitment Agreement-2024

The planned start and finished dates for the grant project are tracked and used for follow up milestones.

Acquittal report during or at end of project

Most grants are awarded on the basis that the funds will be received and consumed within 6 months. Within 1 month of the project completion, an acquittal form is required to provide evidence that the funds have been used for the approved purpose.

Should the grant be awarded for a 12 month project, then it is possible an interim acquittal report may be required. This may also occur for compliance purposes related to financial year ending June 30 reporting and auditing obligations.

This end of project acquittal is through the Trust form : Grants – End of Project Acquittal Report-2024

How is the acquittal information used?

In addition to verifying the funds were used for the grant purpose, the information is used to confirm community impact benefits and may influence how or where future grants are awarded.

Aspects of the acquittal may be used for promotional purposes, and only after grant recipient approval.

Who has access to the acquittal information?

The acquittal information, in conjunction with the Trust privacy policy is accessible to:

• Directors of the Trust, including directors of the sub-committees
• Trust accountant services (internal or external), and / or authorised contractors
• The Beneficial Enterprises Coordinator and Corporate Governance and Compliance Officers of the Logan City Council.
• The delegate(s) of the Queensland Government Auditor General via the Queensland Audit Office (QAO). The QAO conducts annual and surveillance audits of the Trust
• Regulatory officers of the ATO or ACNC.