To improve the effectiveness of the risk assessments of deductible gift recipients (DGRs), the ANAO recommends that the ATO:
- uses relevant information available internally and from other government bodies to identify risks and non-compliant entities;
- identifies DGRs whose applications for endorsement may not meet current endorsement requirements because of changes over time to the DGR endorsement processes and interpretation of legislation; and
- strengthens its education and information activities to encourage DGRs to annually self assess their continued eligibility for DGR status.
We agreed with this recommendation and implementation was completed on 21 May 2013.
Since 3 December 2012 the Australian Charities and Not-for-profits Commission (ACNC) has had responsibility for the registration and regulation of charities. The ATO has implemented exchange of information arrangements to ensure effective identification and management of compliance risks and issues.
The implementation of a new risk engine to analyse information held internally has been completed resulting in more timely and effective identification of compliance risks. We regularly meet with other Commonwealth agencies that have responsibility for particular categories of Deductible Gift Recipients (DGRs) to ensure early detection of compliance issues.
A risk assessment was undertaken to identify DGRs that may not meet current endorsement requirements. This resulted in corrective action to remove DGR endorsement for some entities. We also apply law changes in assessing new applications for DGR endorsement.
We encourage DGRs to regularly self-assess their ongoing entitlement to DGR status through direct mail outs to organisations, updating guidance material on ato.gov.au and issuing messages through electronic news service.