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ROC priorities and activities: driving and influencing compliance

Our purpose, functions and priorities

The ROC’s purpose is to monitor acts and practices to ensure they comply with the provisions of the RO Act, encouraging high standards of accountability of federally registered organisations (and their office holders) to their members and providing for the democratic functioning and control of organisations.

We aim to be valued by the community for the way we regulate and foster the efficient management and accountability of registered organisations. We do this by:

  • educating, assisting and regulating federally registered organisations
  • promoting effective governance and financial transparency; and
  • investigating and taking appropriate enforcement action.

How we influence organisations

Education activities

The provision of compliance and governance education to registered organisations, supported by practical resources, is a priority for the ROC. Our education activities have been developed in consultation with organisations and their peak bodies, and are continuously refined in response to feedback. Every financial year we publish a national education strategy that outlines the education activities we propose to undertake in the following financial year. The strategy enables organisations to plan ahead on an annual horizon to meet their educational requirements.

In 2019-20, the ROC developed and released new education tools to assist organisations with compliance. This has included a new monthly podcast series called ‘ROCpod: talking with the Registered Organisations Commission’ which was launched in August 2019. The podcast series has featured a range of topics, as well as guests from external organisations. During the 2019-20 financial year, there were 11 podcast episodes recorded and made available online, with a total of 1300 downloads of ROCpod episodes.

Another tool launched during the 2019-20 year was our first e-learning module featuring an interactive quiz, designed to help participants understand how the operation of the RO Act and rules could mitigate the effects of the COVID-19 restrictions on elections and minimise their impact on the governance of registered organisations. Work also began on other e-learning modules for the 2020-21 year.

The ROC also released case summaries, written in plain English, on matters decided by the Federal Court involving both unions and employer associations. The aim of these summaries is to provide a simple overview of the court’s decision so that registered organisations can learn from them. It is anticipated these will be released on an ongoing basis.

We also published a compliance update outlining emerging issues relating to the disposal of motor vehicles, and recommend that organisations review their practices, policies and procedures in accordance with this to ensure high standards of governance and accountability.

The ROC website (www.roc.gov.au) continues to provide information and tools to assist organisations with compliance. In 2019–20 we received 221,040 visits to the website and 52,050 documents were downloaded (a 21% and 152% increase respectively on 2018-19). In January 2020, we held a consultation session with stakeholders in Melbourne to gather feedback about the website and other resources. As a result we made improvements to the website to make it easier for visitors to find information.

Since the ROC’s inception in 2017, we have held face-to-face information workshops in every capital city. In 2019–20 this included Adelaide, Hobart and Canberra. Workshops scheduled for Sydney (March 2020) and Melbourne (May 2020) were postponed because of COVID-19 restrictions. Since 2017 we have had 645 total attendances comprising 515 different attendees at these sessions, representing 81 registered organisations, other interested bodies and audit and accounting firms. This included 176 attendances in 2019–20 from 49 registered organisations. Feedback from participants has been overwhelmingly positive with 99% of workshop participants responding to ROC surveys indicating they would attend and benefit from future ROC workshops.

When COVID-19 caused the postponement of our last face-to-face workshop in Melbourne, we rapidly developed an online platform that enabled us to deliver a live, online Q&A panel of ROC subject matter experts and invited organisations and their representatives to “ask us anything”. This new tool proved so successful with organisations that it will be employed to deliver further specialist content in the 2020-21 year.

There are 736 subscribers who receive email communications from the ROC, including our quarterly newsletters, educational material and event information.

We also conducted 18 one-to-one meetings with organisations and peak bodies regarding compliance, allowing us to take a tailored, personalised approach to assisting those organisations.

In 2019–20 we delivered 36 major education activities targeted at organisations and their members. These campaigns covered topics including officer and related party disclosure statements, financial reporting, whistleblower resources, the importance of good governance, and elections. We also responded quickly to the needs of registered organisations when the COVID-19 pandemic began and developed appropriate tools and resources to assist them with compliance during this time.

ROC education activities provided to employer and employee organisations and their members July 2019 to June 2020

Type of activity:

Provided to:

Workshop: Adelaide

Employer and employee organisations (and peak bodies and registered auditors and other stakeholders)

Information about the new risk-based assessment for officer and related party disclosure statements

Employee and employer organisations (and peak bodies, registered auditors)

Two factsheets about amendments to the Australian Accounting Standards

Employee and employer organisations (and peak bodies and registered auditors)

Ninth edition of ROC quarterly newsletter with information about whistleblower resources, increased compliance with financial reports, officer and related party disclosure statements, the ROC’s new case management system and tips on financial reporting meetings

Employee and employer organisations (and peak bodies and registered auditors)

Podcast first episode: What to expect from your auditor

Employee and employer organisations (and peak bodies and registered auditors)

Factsheet on protection for whistleblowers: what disclosers need to know

Employee and employer organisations and their members (and peak bodies, registered auditors and other stakeholders)

Workshop: Canberra

Employer and employee organisations (and peak bodies and registered auditors and other stakeholders)

Podcast second episode: good governance in registered organisations

Employee and employer organisations (and peak bodies and registered auditors)

Release of financial training exemption form

Employee and employer organisations (and peak bodies)

Interim report on ROC’s audit of financial training

Employee and employer organisations (and peak bodies)

Podcast third episode: interview with the Registered Organisations Commissioner

Employee and employer organisations (and peak bodies and registered auditors)

Tenth edition of the ROC quarterly newsletter with information about exemption from officer financial training, a recent Federal Court decision, outcomes and learnings from the financial training audit and the difference between state and federal obligations for registered organisations

Employee and employer organisations (and employers)

Workshop: Hobart

Employer and employee organisations (and peak bodies and registered auditors and other stakeholders)

Podcast fourth episode: Who is an officer?

Members of registered organisations, employee and employer organisations (and peak bodies)

Re-release of previously recorded webinars to a dedicated YouTube channel

Employee and employer organisations (and peak bodies and registered auditors)

Podcast fifth episode: Dual registration

Employee and employer organisations (and peak bodies and registered auditors)

Information on new risk-based assessment of annual returns

Employee and employer organisations (and peak bodies)

Annual education survey

Employee and employer organisations (and peak bodies, registered auditors and other stakeholders)

Review and restructure of ROC website

Employee and employer organisations (and peak bodies)

Compliance update: below-value disposal of vehicles – a potential emerging issue

Employee and employer organisations (and peak bodies, registered auditors and other stakeholders)

Podcast sixth episode: Spotlight on whistleblower disclosures

Employee and employer organisations (and peak bodies, registered auditors and other stakeholders)

Eleventh edition of the ROC quarterly newsletter with information about officer and related party disclosure statement compliance, below-value disposal of motor vehicles, spotlight on a recent Federal Court decision, risk-based assessment of annual returns of information

Employee and employer organisations (and peak bodies, registered auditors and other stakeholders)

Podcast seventh episode: common enquiries about ORP statements

Employee and employer organisations (and peak bodies)

Launch of case summaries

Employee and employer organisations (and peak bodies)

Education campaign hot topic: Guidance note on meetings during COVID-19 restrictions

Employee and employer organisations (and peak bodies)

Podcast eighth episode: Discussion with the Registered Organisations Commissioner and the Executive Director of the ROC

Employee and employer organisations (and peak bodies)

Podcast ninth episode: Election tips and hints for organisations during COVID-19 restrictions

Employee and employer organisations (and peak bodies)

E-learning module: elections

Employee and employer organisations (and peak bodies)

Twelfth edition of ROC quarterly newsletter with a COVID-19 focus including information on accessing financial governance training, holding meetings using appropriate technology, conducting elections, importance of record keeping, how audits could be affected

Employee and employer organisations (and peak bodies, registered auditors and other stakeholders)

Podcast tenth episode: Behind the scenes with the ROC

Employee and employer organisations (and peak bodies)

Guidance note on conduct of elections in organisations and their branches during COVID-19 restrictions

Employee and employer organisations (and peak bodies)

Online panel discussion with subject matter experts from the ROC on a range of issues including compliance during the COVID-19 pandemic, financial reporting, officer financial training and other governance matters

Employee and employer organisations (and peak bodies)

Release of new financial reporting resources including model financial statements and checklists

Employee and employer organisations (and peak bodies, and registered auditors)

Launch of the 2020-21 National Education Strategy

Employee and employer organisations (and peak bodies, registered auditors and other stakeholders)

Hot topic: record keeping – re-released package of information to assist registered organisations to keep proper records

Employee and employer organisations (and peak bodies)

Podcast eleventh episode: Good governance in practice, record keeping

Employee and employer organisations (and peak bodies)

Assisting registered organisations during the COVID-19 pandemic

The COVID-19 pandemic is an extraordinary global event. Registered organisations, their branches and their members, like almost everyone in the community, have faced significant challenges as a result. The ROC is committed to working constructively and pragmatically with the organisations we regulate, mindful that they may encounter difficulties with compliance due to the impacts of COVID-19. While the ROC’s offices have been closed to the public, the ROC itself has remained open and available to assist organisations that require advice, guidance or assistance with their compliance obligations.

During the pandemic we have been communicating regularly with our stakeholders via our subscriber list, as well as informally engaging with senior officers in a range of employee and employer associations to determine if the ROC could provide any additional assistance as a regulator. This has also helped us to understand if there are any barriers, constraints or problematic regulatory issues being experienced by our stakeholders at this time. We are also working closely with the Australian Electoral Commission (AEC) on managing the scheduling of elections during this time.

The ROC has been responsive to stakeholder needs and has provided a range of resources to assist with common issues arising from COVID-19 restrictions. This has included:

  • a dedicated COVID-19 page on the ROC website
  • provision of information on newly approved online financial training courses for officers with financial responsibilities
  • a guidance note on holding meetings using appropriate technology during the pandemic
  • a guidance note on conducting elections in organisations and branches during COVID-19
  • a new e-learning module on conducting elections that are due during the COVID-19 pandemic
  • an online panel discussion answering questions from organisations about COVID-19 related issues
  • a newsletter dedicated to COVID-19 issues and guidance; and
  • a podcast episode dedicated to helping organisations during the COVID-19 pandemic.

Our website analytics reveal that these resources have been among the most accessed items on the site from 25 March to 30 June 2020. These resources were accessed more than 850 times during that period. Our online panel discussion attracted 81 attendees with a further 48 people accessing the recording of the session.

Promoting effective governance and financial accountability

In 2019–20, we promoted effective governance and financial accountability within organisations by:

  • sending tailored reminders about upcoming statutory obligations
  • assessing financial reports
  • seeking to ensure all registered organisations’ auditors are registered; and
  • approving financial management training for office holders.
Reminders and alerts

As a discretionary service to registered organisations, the ROC actively emails specifically tailored reminders to them and to their reporting units prior to their obligations arising. This is designed to assist them with timely compliance. In 2019–20, we issued 1424 such reminders and alerts comprising:

  • 568 reminders about the requirement to lodge an officer and related party disclosure statement
  • 167 reminders about the requirement to lodge an annual return of information
  • 459 reminders about the requirement to lodge a financial report
  • 188 reminders about lodging statements of loans, grants and donations
  • 42 reminders about the requirement to lodge information for an election; and

516 alerts about training for office holders.

Officer and related party disclosure statements

The requirement for organisations and branches to lodge a copy of their officer and related party (ORP) disclosure statement came into effect in 2018–19. ORP statements provide information about remuneration received by the top five-ranked officers of organisations and branches, including remuneration received by officers from a board or a related party of the organisation. Certain payments made by organisations and branches to related parties and declared persons or bodies are also required to be disclosed.

During the 2019-20 year, the ROC provided educational information on ORPs to registered organisations and their branches. We also engaged directly with organisations on 32 occasions about how the provisions are applicable to their circumstances.

More than 96% of organisations and branches lodged their statements with the ROC within the statutory timeframes in 2019-20 compared with 92% the previous year. This is considered to be an excellent result, as the requirement is quite new, and organisations are still becoming familiar with the statements.

In 2019-20, the ROC implemented a new risk-based approach to the future assessment of ORP statements. This will enable us to effectively manage disclosure obligation requirements and use our resources more effectively to help organisations to comply. Over a five-year period, every organisation and branch will undergo at least one advanced ORP statement assessment. This will be a more comprehensive review and will thoroughly evaluate compliance with the requirements of the RO Act. Identified patterns of non-compliance may trigger more than one advanced assessment in the five-year period.

This risk-based approach allows the ROC to focus regulatory and public resources more effectively, and ensures each organisation and branch is subject to review based on the level of associated risk.

Annual returns of information

Annual returns provide information about office holders, election requirements, branches and an organisation’s membership numbers. It is important for the democratic control of organisations for these returns to be accurate, lodged and published in a timely manner, so members can easily determine who their officers are and when elections are due.

In 2019-20, 96% of organisations lodged their annual returns by the statutory deadline of 31 March. While the ROC continues to intervene in the period immediately prior to 31 March by directly engaging with organisations who may not be preparing to lodge on time, it is anticipated that our intervention will not be required in future years and that voluntary compliance will be achieved.

Percentage of annual returns of information lodged within statutory timelines Percentage of annual returns of information lodged within statutory timelines

Financial returns

Financial returns include lodgements by organisations and their branches of financial reports, applications for exemptions from financial reporting and applications for reduced reporting requirements. Timely lodgement of accurate returns and publication of these documents promotes financial accountability and transparency.

Compliance rates for the lodgement of financial returns within the statutory timeframe have incrementally improved over four years. As a result of our proactive intervention, encouragement and the deployment of our model financial statements, we are pleased to report that 99% of reporting units lodged financial returns on time in 2019–20.

Percentage of financial returns lodged within statutory timelines Percentage of financial returns lodged within statutory timelines

Assessment for compliance and publication for transparency

When assessing documents against compliance requirements (including annual returns of information, financial reports, election information and officer and related party disclosure statements), the ROC takes a risk-based approach, which is designed to direct resources to areas where the risk of non-compliance is highest. In 2019–20, 2309 regulatory matters were subject to risk-based assessment and closed. This was a 41% increase over the previous financial year. Most documents lodged by organisations are published on our website.

Improving financial reporting compliance

Consistent with our risk-based approach to regulation, all financial reports lodged with the ROC are assessed against key compliance requirements (primary review). Around 20-25% of all financial reports are assessed against all of the financial reporting requirements and timelines under the RO Act, including the mandatory disclosure requirements under the reporting guidelines, along with the disclosure requirements under the relevant Australian accounting standards (advanced review). During an advanced review a reporting unit may be required to amend their financial report to ensure any non-compliance issues are remedied. Over a five-year period, each reporting unit has been subjected to an advanced review at least once (and more often if circumstances warrant).

To be considered compliant, a financial report must meet the key compliance requirements in the primary review. This includes whether:

  • significant disclosure requirements under the reporting guidelines are met
  • statutory timeframes are met
  • appropriate notes regarding preparation of accounts are made
  • related-party disclosures are made
  • concise reports contain all disclosure requirements within the reporting guidelines (if applicable)
  • key components of the auditor’s report are met, including whether the General Purpose Financial Report (the GPFR) is ‘unqualified’, and
  • the report is audited by a registered auditor.

Applications for exemptions from financial reporting (s. 271 of the RO Act) and applications for reduced financial reporting (s. 269 of the RO Act) are reviewed against all legislative criteria that must be satisfied.

As at 30 June 2020 not all financial returns with a 2019 year end had been lodged. Of those that had been lodged and assessed for compliance, 81% met the key compliance measures listed above, compared to 84% in 2019, 73% in 2017 and 70% in 2016. A range of factors can influence the extent to which lodged financial reports comply with relevant financial reporting guidelines, and the ROC continues to work productively with organisations and auditors, seeking to ensure continuous improvements in compliance.

Initial compliance of financial reports with financial year end 2016, 2017, 2018 and 2019

2019

2018

2017

2016

Primary review

80%

83%

70%

68%

Advanced review

58%

70%

57%

45%

Applications for reduced reporting requirements and applications for exemptions

96%

99%

99%

98%

TOTAL

81%

84%

73%

70%

NOTE: Prior to 1 May 2017 financial Returns were lodged with the FWC. On and from 1 May 2017 they were lodged with the ROC.

Registration of auditors

All auditors of organisations’ financial reports are required to meet criteria specified in the RO Act and be registered with the Commissioner. As at 30 June 2020 there were 309 registered auditors. This was a 7% increase in registrations over the number at 30 June 2019. In 2019–20 100% of financial reports were audited by a registered auditor demonstrating a high level of compliance – in the previous year all but one financial report, lodged with the ROC had been audited by a registered auditor.

Approved financial training for office holders

Every officer of a registered organisation with financial duties must complete approved training within six months of taking office, under s. 293K of the RO Act, unless they hold an exemption.

The Registered Organisations Commissioner may grant an exemption from the requirement for officers with financial management duties to undertake financial training in certain circumstances, under s.293M of the RO Act. The Commissioner may grant the exemption if satisfied the officer has a proper understanding of their financial duties because of either their experience as a company director, their experience as an officer of a registered organisation or other professional qualifications and experience. In 2019-20 the Commissioner granted 230 exemptions.

The ROC has approved 17 financial training courses that can be undertaken by the relevant officers, the details of which we have published on our website. The COVID-19 pandemic presented challenges in 2020 for some officers to attend approved face-to-face financial training within six months of taking office. The ROC worked closely with the Australian Council of Trade Unions (ACTU) to develop an online governance training package, to be delivered by the ACTU and its affiliates, to assist organisations who could no longer access face-to-face training. The ROC also approved two other online training courses.

During 2019-20, the ROC has undertaken an audit of compliance with s. 293K of the RO Act. The voluntary audit process was designed to educate people in registered organisations about the requirements of the legislation, and to benchmark and increase compliance. Where non-compliance has been identified, the ROC has worked with registered organisations to achieve appropriate remediation, and we have found that the voluntary audit has raised greater awareness around this training requirement.

Notwithstanding the voluntary nature of the audit, a significant number of registered organisations have chosen to engage with the ROC and participate in consultations for the audit. Audits of 69% of federally registered organisations have been completed to date. The audit process found that 43% of organisations had been compliant and had either completed the training or were still to complete the training in the six month period, a further 24% were found to be non-compliant but had planned remediation, while the remaining 2% were non-compliant with no planned remediation. A final report will be released by the ROC later in 2020, and more work will continue in this space to increase awareness and seek to elevate compliance levels.