Administration of Deductible Gift Recipients (Non-profit Sector) - Released 22 June 2011
Introduction to the audit
The ANAO conducted an audit into the ATO’s administration of Deductible Gift Recipient (DGR) endorsements and associated arrangements in 2011. A deductible gift recipient is a non-profit entity. Donations made to the entity are income tax deductible.
Particular emphasis was given to the:
- governance arrangements supporting the management of DGR processes
- DGR endorsement assessment process to achieve consistent outcomes that are timely and in line with legislation
- communication and coordination of DGR application requirements to assist applicants to achieve DGR endorsement and minimise unnecessary administrative requirements for applicants; and
- compliance approach, which provides assurance that fundraising entities comply with DGR endorsement requirements.
The ANAO found that many aspects of the DGR and related tax concession legislation are administratively challenging for both the ATO and for fundraising bodies. At the time of the audit there were 49 separate DGR categories. These have been progressively introduced into legislation since the mid-1930s.
The audit found that the ATO has appropriate arrangements in place to administer DGR endorsements and the associated tax concessions.
At the time of the audit, government initiatives were directed at reform in the not for-profit sector, so it was timely for the ATO to review its existing administrative arrangements. To this end, the ANAO made recommendations to improve compliance with the legislative requirements relating to DGR administration.