The 2010 Annual Report A look at The Salvation Army Australia Southern Territory year
The Salvation Army -
International Mission Statment The Salvation Army, an international movement, is an evangelical part of the universal Christian Church. Its message is based on the Bible. Its ministry is motivated by love for God. Its mission is to preach the gospel of Jesus Christ and meet human needs in his name without discrimination
1
1.0 The Salvation Army Mission, Vision and Values
The Salvation Army is a worldwide Christian movement. In Australia we are known as one of the nation’s largest welfare providers. We are dedicated to helping Australians in crisis.Raised up by God our MISSION is to: • Transform lives • Care for people • Make disciples • Reform society
Vision Our vision is that we’re a growing, loving community of people dynamically living God’s mission in a broken world. This requires us to be people who are wholly devoted to God, obediently responsive to the Holy Spirit, powerfully committed to each other, compassionately engaged with people in need, totally dedicated to reaching other people with the good news of Jesus Christ and leading them to faith.
Values • Human dignity • Justice • Hope
Our Vision • Compassion • Community
2
Message from Territorial Commander Our 2010 Annual Report provides a comprehensive insight into the work and mission of The Salvation Army Australia Southern Territory, particularly in terms of the delivery of services and assistance to the Australian community. This year has been busy; we have seen more people seeking help in response to the ongoing affects of the global financial crisis, with 55% of those seeking our assistance indicating that their financial position has worsened.
This report highlights, importantly, The Salvation Army’s commitment to continuous improvement and evidence-based service outcomes. This year we have been able to extend our services and develop new ways to meet the needs of people who come to us for assistance. For example, the new crisis accommodation centre we opened in St Kilda, Victoria, provides more crisis accommodation places for homeless individuals and families as well as delivering best practice services. It is a wonderful facility, staffed by terrific, committed people, and will have lasting impact in the lives of those it assists. We have also conducted an extensive review of our emergency relief services across the territory, a process which led to the development of the pilot ‘Doorways’ integrated service delivery model. This is a way of serving people which looks to address the initial crisis need as well as building the capacity of people who experience continuing financial crisis. Being able to assist people with their immediate needs is important but we also need to support people in addressing the underlying issues in their lives that have created the crisis. The Salvation Army is now reinvigorating our commitment to continuous quality improvement, from our governance through to our front line service delivery. We have already set about identifying and tackling our key quality issues: from evidence based models that ensure best practice is common practice, to more robust strategic and operational planning and associated accountability frameworks. Our own internal analysis over the last year has highlighted a number of improvements we can make in forming robust client-centred strategy throughout the organisation. We have begun work on producing an overarching territorial strategy by the end of 2010 from which will flow measurable goals to focus our attention and inspire future plans. The Christian faith based ministry of The Salvation Army involves an holistic view of the human condition; therefore, we will continue to build the links between our congregations, social services and network with other agencies in order to achieve the best possible outcomes for those we serve. This annual report provides an opportunity to not only reflect on the need of those who seek assistance but to also celebrate the transformation in the lives of those we seek to serve. Raymond A. Finger, Commissioner, Territorial Commander
3
2.0
Who We Are The Salvation Army is one of world’s largest Christian social welfare organisations. Each year we extend care to more than one million Australians facing crisis. We are committed to supporting the most marginalised and disadvantaged members of the community. In Australia, The Salvation Army operates in two separate territories; the Australia Southern and the Australia Eastern Territory, enabling us to be responsive to local needs, emergencies and disasters.
2.0
Through the provision of more than 600 social programmes and centres, The Salvation Army Australia Southern Territory is dedicated to alleviating the suffering of people living in Victoria, South Australia, Tasmania, Western Australia and the Northern Territory. By providing assistance in the areas of homelessness, families facing crisis, family/domestic violence, emergency services as well as drug, alcohol and gambling addictions, we aim to be there for people during their time of crisis. The Territorial Commander, Commissioner Raymond Finger, is responsible for the operations of The Salvation Army Australia Southern Territory. The Territorial Commander and the leadership executive, the Cabinet, are responsible for the policy, strategy and stewardship of The Salvation Army in this Territory. The Territorial Commander reports to the International Leader of The Salvation Army, General Shaw Clifton, at International Headquarters. The Salvation Army operates in 122 countries and the International Headquarters is located in London. International Headquarters is responsible for facilitating the strategic direction, ideas and policies, as well as helping to allocate resources. Across the world, The Salvation Army provides a variety of services, programmes and everyday care to the poorest, most desperate people in the world.
4
The Cabinet of The Salvation Army Australia Southern Territory comprises senior officers who have been appointed to executive leadership roles within the organisation. The members of the cabinet are much like the board of directors in other organisations. Members of the cabinet are appointed with approval from the General. The Salvation Army uses military style ranks for officers who are ordained ministers of The Salvation Army and are appointed across a wide variety of roles within the organisation.
Territorial Commander Commissioner Raymond Finger Length of Service: 36 years Responsibilities: As the Territorial Commander, Commissioner Raymond Finger is responsible for all aspects of The Salvation Army in the Australia Southern Territory. The Territorial Commander provides the spiritual leadership for the territory and is a legal Trustee of The Salvation Army Australia Southern Territory. Commissioner Finger is the Chairman of the Policy Council, Finance Council and the Property Council.
Territorial President of Women’s Ministries Commissioner Aylene Finger Length of Service: 34 years Responsibilities: Commissioner Aylene Finger shares joint leadership of the territory with the Territorial Commander, which includes preaching and teaching in public ministry and membership of territorial councils. As Territorial President of Women’s Ministries. Commissioner Aylene Finger gives leadership to all aspects of women’s ministries; promoting, within the territory, the welfare and empowerment of women, relating to both church and secular women’s groups.
Chief Secretary Colonel Peter Robert Walker Qualifications: Bachelor of Arts (Soc) Length of Service: 28 Years Responsibilities: The Chief Secretary is equivalent to Chief Operations Officer and is Second in Charge of the Territory. The Chief Secretary is responsible for operational oversight of Territorial Headquarters and line management of divisional/regional headquarters. The Chief Secretary is also a Trustee of property trusts.
Territorial Secretary for Women’s Ministries Colonel Jennifer Walker Qualifications: Bachelor of Education, Diploma of Religious Education, and Diploma of Teaching Length of Service: 28 years Responsibilities: Colonel Jennifer Walker has a shared leadership role with the Chief Secretary, including public ministry and membership of territorial councils. Colonel Jennifer Walker has the role of Territorial Secretary for Women’s Ministries, relating to leadership for women within Divisions including pastoral support, training and resources and missionary project management.
5
Secretary for Personnel Lieut-Colonel Frank Daniels
Secretary for Programme Lieut-Colonel Ian E. Hamilton
Length of Service: 43 years Responsibilities: The Secretary for Personnel is responsible for all aspects of personnel – officers and employees. The Secretary for Personnel is a legal Trustee of The Salvation Army Australia Southern Territory and is responsible for the Personnel Department, People and Facilitation and Leader Development.
Dip. Theology, Dip. Management Length of Service: 37 years Responsibilities: The Secretary for Programme is a legal Trustee of The Salvation Army Australia Southern Territory and is responsible for Corps Programme, Social Programme, Staff Band and Staff Songsters. The Secretary for Programme is also responsible for programme matters relating to Employment Plus.
Secretary for Business Administration Lieut-Colonel Rodney Barnard Length of Service: 28 years Responsibilities: The Secretary for Business Administration is responsible for all business matters including finance, property, audit, public relations, Salvos Stores, the Geelong Conference Centre and business matters relating to Employment Plus. The Secretary for Business Administration is a legal Trustee of The Salvation Army Australia Southern Territory. *Mr Gregory Stowe, Chief Financial Officer, is also a legal Trustee of The Salvation Army Australia Southern Territory.
Who We Are
6
A Note from our Territorial Advisory Board Chairman Greetings. Like many Australians, I have long admired the work of The Salvation Army. I first came into contact with the Salvos at Bethesda Hospital when I was Chairman of the Transport
Earlier this year, I was honoured to have been asked by Salvation Army leadership to act as Chairman of its Territorial Advisory Board. I have seen the work of the organisation first hand, and I know now about the incredible need for the Salvos in our communities. I am proud to be a part of an organisation that does so much for Australians experiencing hardship. The Advisory Board assists Salvation Army leadership by providing guidance and advice in areas like government relations, strategic planning, business administration and programme development. Importantly, we are on hand to assist with organisational matters so that the people on the ground delivering service can continue to do what they do best – caring for people and transforming lives.
Accident Commission. Since then I have witnessed the innovative, dedicated and extraordinary work of this organisation. In 2008 I was asked to assist with a capital fundraising campaign charged with raising funds for the construction of the new crisis accommodation centre in St Kilda and the refurbishment of 69 Bourke Street, Melbourne. Both centres provide essential support to disadvantaged members of the community. The improvements to these facilities help The Salvation Army deliver better services to more people.
There are too many Australians struggling to get by, with nowhere to sleep or trapped by addiction with little hope. We are told we are blessed to live in such a fortunate country, and to a great extent this is true. But it is important that we always remember that there are many Australians who are living lives that are far from fortunate, suffering through difficulties that we can’t imagine. Across the country, more than one million Australians come to The Salvation Army for assistance. Reaching out to the most disadvantaged, the most marginalised and the most broken people in our community is something that the Salvos do every day. I am proud to be able to aid The Salvation Army through my role as Chairman of the Territorial Advisory Board. In the coming year we are working hard to deliver best-practice services, with plans to expand our programmes and offer people in need real opportunities to better their lives. On behalf of the Advisory Board I offer our continued thanks to the thousands of donors, volunteers, officers, employees and partners that make the work of The Salvation Army possible. Margaret Jackson AC, Territorial Advisory Board Chairman
7
Snapshot of Australia The Salvation Army in Australia works with people with a diverse range of needs. There are so many Australians experiencing disadvantage, sometimes it is easy to see and in other cases it exists behind closed doors. Although Australia is a prosperous nation, there are millions of people experiencing hardship. The following information provides some background as to the significant needs that exist within. The Australian Council of Social Services recently estimated that there are more than two million Australians living in poverty. This means that one in every ten people do not have an acceptable standard of living and go without the bare necessities such as housing, work, education, health care and community services. Through our Community Support Services, The Salvation Army Australia Southern Territory assists individuals and families who are experiencing poverty by providing practical assistance. The Salvation Army also looks to identify the underlying causes and contributors of hardship so that we can provide support to help break the cycle of poverty. The 2006 Australian Census data identified more than 105,000 people who do not have a permanent and safe place to sleep. Homelessness is a significant problem in Australia and is thankfully receiving attention from all levels of government in terms of developing solutions as well as funding homeless accommodation centres.
Homelessness is a key area of service for The Salvation Army. The Salvation Army’s street outreach teams look out for the people who are sleeping rough and those at risk of becoming homeless. The organisation also offers crisis and transitional housing so that people who are homeless can find stability while addressing their needs of securing permanent housing. Last year the Australian Government Office for Women found that one in five Australian women were affected by sexual violence over their lifetimes. Physical violence affects at least one in three Australian women. From these statistics it is clear than any woman can become a victim of violence and this is a key contributor to a woman becoming homeless. The Salvation Army provides safe places for women and children to find refuge as well as providing emotional support and assistance to work through the legal processes to build a new life free of violence. Across Australia there are thousands of people suffering addiction, feeling socially isolated, experiencing unemployment or personal crisis. Recognising the need, developing ways to meet the need, as well as remaining responsive and looking to find innovative solutions are part of the daily work of The Salvation Army.
The Australia Southern Territory Northern Territory Number of Officers Number of Employees Volunteers Number of Social Centres/Programmes Number of Corps Number of Employment Plus Offices Number of Salvos Stores
19 76 78 15 5 0 6
Western Australia Number of Officers Number of Employees Volunteers Number of Social Centres/Programmes Number of Corps Number of Employment Plus Offices Number of Salvos Stores
74 476 1079 47 30 20 45
South Australia Number of Officers Number of Employees Volunteers Number of Social Centres/Programmes Number of Corps Number of Employment Plus Offices Number of Salvos Stores
78 370 1185 51 30 11 38
Tasmania Number of Officers Number of Employees Volunteers Number of Social Centres/Programmes Number of Corps Number of Employment Plus Offices Number of Salvos Stores
29 270 495 29 15 17 12
Victoria Number of Officers Number of Employees Volunteers Number of Social Centres/Programmes Number of Corps Number of Employment Plus Offices Number of Salvos Stores
• In addition to the numbers represented here, across the territory there are 1,044 employees and one officer working in the Salvos Stores team and 786 employees and three officers working in Employment Plus services.
307 1975 3,933 199 103 17 104
8
Service Highlights for 2010 The Salvation Army in the Australia Southern Territory:
• M ore than 550,000 contacts were made with people in need this year. • A ssisted more than 75,000 people with emergency relief services this year. • S erved more than 80,000 meals to disadvantaged and marginalised members of the community each week. • A ssisted more than 1,100 people through Migrant and Refugee Services in the last 12 months. • P rovided support to more than 2,000 women through 20 Women and Family Violence services this year. • A ided more than 1,000 families in drought-affected areas and provided more than $330,000 in direct assistance to drought-affected communities in Victoria, South Australia and Western Australia in the last year. Assisted more than 4,000 Victorians affected by bushfire
• A ssisted more than 4,000 Victorians living in bushfire affected areas with financial, in-kind and personal support. To date $15.29 million has been spent to provide bushfire relief including more than $2.2 million on community projects. • P rovided approximately 600 crisis accommodation beds and over 4,000 non-crisis accommodation beds every night of the year. • A ssisted more than 6,000 young people through youth support services and had contact with more than 17,000 young people through street outreach and dropin centres in the past year. • H elped 7,000 people addicted to alcohol, drugs and gambling to face their problems and work to become free of addiction this year.
9
3.0
Our Mission The Salvation Army is dedicated to transforming lives, caring for people, making disciples and reforming society. We’re a growing, loving community of people dynamically living God’s mission in a broken world. This requires us to be people who are wholly devoted to God, obediently responsive to the Holy Spirit, powerfully committed to each other, compassionately engaged with people in need, totally dedicated to reaching other people with the good news of
3.0
Jesus Christ and leading them to faith. In all that we do we uphold our values of human dignity, justice, hope, compassion and community. We work in local communities across Australia, providing assistance to those in need and working to develop solutions that are suited to the specific needs in the local area. Our work spans a diverse range of areas including, but not limited to, homelessness, families facing crisis, family and domestic violence, addiction services, emergency and disaster relief services, children and youth services, aged care, drought relief, court and prison services, the list goes on. We actively serve the community, ensuring that the most marginalised and disadvantage receive the care they need and are given the opportunity to transform their lives.
10
4.0
Our Work
A message from our Territorial Social Programme Secretary During the past year The Salvation Army has continued to work together with many disadvantaged Australians who have encountered
The survey results indicate: • 55% of people visiting Salvation Army services believe they are worse off or a lot worse off because of the financial situation • 52% have cut down on basic necessities • 34% felt ‘pessimistic or very pessimistic’ about the next 12 months • 45% felt stressed about the future • 52% felt depressed about their own situation.
personal loss, tragedy, unexpected hardship and financial stress. The Salvation Army has been there to assist and support these people get back on their feet and engage more fully in the community. By doing so, The Salvation Army continues to support the transformation of the lives and circumstances of vulnerable Australians. In May, 2010, 699 people who requested emergency financial and housing assistance from the organisation were asked how they felt about their current financial circumstances; how they felt about the future; and what they have done differently as a result of their financial circumstances.
Analysis of the research data indicates that people most disadvantaged in the economy, the people The Salvation Army has regular contact with, are facing the worst of the current economic situation and the negative psychological impact is greater on them. In comparison with members of the public surveyed, Salvation Army client respondents feel ‘less in control’ and more depressed this year than in 2009 about the future, in light of the current economic situation. While members of the general public indicate some improvement from last year those people whom The Salvation Army works with continue to experience little improvement. Obviously, The Salvation Army’s response to these people must include more than just financial assistance. The Salvation Army continues to develop innovative ways and approaches to deliver the best possible outcomes for disadvantaged Australians. This is an indication of The Salvation Army’s commitment to serving those in greatest need, with dignity and compassion. The methods of service delivery may change, the motivation always remains the same.
4.0
This annual report gives opportunity to celebrate the achievements of the many Australians that The Salvation Army has the privilege of journeying with through difficult times. It also gives opportunity to celebrate the commitment and dedication of Salvation Army officers, employees and volunteers as they daily support those people who seek the organisation’s assistance. Robyn Fernihough, Major Territorial Social Programme Secretary
11
In the past 12 months The Salvation Army Australia Southern Territory has undertaken significant work in order to deliver ongoing services as well as looking to provide innovative solutions to social issues. Remaining true to the mission, The Salvation Army’s activities for this past year are grounded in dedication to provide care for people in need.
Mission Imperative – Caring for People Every day The Salvation Army extends care to people experiencing hardship, disadvantage and crisis. Assistance we offer may be as simple as providing financial aid and some material support to help a family through a difficult patch. In other cases, more ongoing and intensive support is required. Every day in the Australia Southern Territory, The Salvation Army is in touch with more than 1,300 people who are in need of care. Whether this is one of the thousands of people who eat a meal provided by the Salvos or receive food vouchers each week, the doors to a Salvation Army centre, service, outreach vehicle or corps are open. Each person who needs assistance from The Salvation Army is an individual who is treated with compassion, respect and dignity. The Salvation Army works with the individual to ensure they are provided with the most effective support available.
Doorways In 2008 The Salvation Army Social Programme Department commissioned a formal review of the 139 Community Support Services which provide emergency relief to members of the community experiencing difficulty. The review was designed to provide an overview of Community Support Service approaches operating across the Southern Territory and to explore possible future models for the delivery of emergency relief through these services. The outcome of this review is contained in the Doorways Report, which includes 28 recommendations relating to the delivery of emergency relief. From this report a model has been developed and trialed in several centres across the territory with, 240 staff and volunteers having participated in training in the Doorways principles and methods. Whilst providing support to address the initial crisis need, the Doorways model also focuses on building the capacity of people who repeatedly present with a financial crisis. It provides a prevention and early intervention response to help people in need so as to avoid the initial crisis from escalating out of control, and further entrenching them in poverty and disadvantage. The Salvation Army believes that the emergency relief response is only the first step and that the important work is to help people to deal with health, relationship, employment, emotional and well-being issues. The provision of emergency relief or material aid is not the end of engagement with an individual but rather an opportunity to help the individual to address the underlying issues in their lives that created the crisis.
12
Toodyay Bushfire Response in Western Australia In December, 2009, bushfires hit the outskirts of Western Australia’s picturesque rural town of Toodyay. Left in its devastating wake were 38 destroyed homes, rendering many locals homeless and without their possessions. A further 200 properties were damaged with many losing outbuildings and precious livestock, greatly affecting their livelihood. With generous donations from Western Australian businesses, residents and organisations, The Salvation Army was able to offer urgent assistance to around 120 locals who desperately needed financial support in the immediate aftermath of the fire. In total, we received more than $1.6 million in donations to provide financial support to those in need. This appeal was supported by the West Australian newspaper and Channel 7 News, in partnership with Bendigo Bank and the Shire of Toodyay. To ensure an equitable and fair distribution of funds, The Salvation Army endorsed a criteria based points system grading the categories of loss. Each affected property was assessed by the Shire of Toodyay and allocated a score under these criteria. Payments ranged from $850 to $18,000 depending on the scale of loss.
On June 16, 2010, The Salvation Army completed the distribution of almost $1.1 million in grants funded through donations made to the Toodyay Bushfire Appeal. In August, Bendigo and Adelaide Bank’s philanthropic arm, Community Enterprise Foundation™ provided a further $400,000 together with the Shire of Toodyay’s contribution of $126,000 enabling a further distribution specifically to those who experienced total destruction of their home and tenants who lost all their contents. The Salvation Army has made a commitment to provide emergency support well into the future with an allocation of the remaining funds to assist with utilities, whitegoods and basic essentials. Opening of the new St Kilda Crisis Accommodation Centre In April, 2010, The Salvation Army’s new $7.5 million St Kilda Crisis Accommodation Centre in Victoria was opened by the Hon. Tanya Plibersek, Federal Minister for Housing and Minister for the Status of Women, accompanied by the Victorian Government Minister for Housing, Hon. Richard Wynne. This state-of-the-art centre was funded with $2.3 million from the Federal Government’s stimulus package, $2 million from the Victorian Government and $3 million from private donors. The facility embraces cutting edge design to deliver best-practice services to homeless families and individuals in Melbourne. The centre provides crisis accommodation to 11 singles and two families experiencing homelessness for a period of up to eight weeks, with an expected average length of support expected to be four weeks. This centre will provide accommodation for 180 critically homeless people each year. Importantly, this centre keeps homeless families together which is something that most crisis centres struggle to do. The unique design of the centre has a flexible capacity to accommodate more families if necessary, both large and small, in an environment much like home. The ongoing operational costs of the facility are estimated to be approximately $1 million per year with $600,000 from the Supported Accommodation Assistance Programme (SAAP) and $400,000 from The Salvation Army funded by donations made to the Red Shield Appeal. Images and vision taken at the official opening are available at www.salvationarmy.org.au/newcrisiscentre
13
Therapeutic Residential Units for Young People – Tasmania In January, 2010, following a request from Tasmania’s Divisional Commander, The Salvation Army Tasmania successfully partnered with The Salvation Army Westcare in Victoria and the Australian Childhood Foundation (ACF) to design and tender to the Department of Health & Human Services (DHHS) for four innovative therapeutic residential units in Southern Tasmania, to accommodate young people who have come to the attention of Child Protection Services and who cannot, for various reasons, continue to live at home. The Therapeutic Residential Care programme is not just about providing shelter, clothing and food. It also aims to rebuild the lives of young people facing significant hurdles. Sometimes this needs changes to attitudes and behaviours, and being presented with a range of new options and goals, with the intention that the young people become valuable, contributing and independent members of our community. Peter Mulholland, who is Senior Manager Residential & Support Services at Westcare was seconded to Tasmania for three months and worked with the newly appointed Programme Manager, Steven Nelthorpe, and Administrative Coordinator, Rachel Mead. A committed mix of experienced and new adolescent residential staff were recruited to fill the available positions.
This development provides nurturing care, holistic therapeutic and individualised planning for four young people aged 12 – 18 years across four houses. (16 young people). Each house has six residential workers which include a Unit Manager, and Shift Coordinator. The roster and management on call operates 24 hours a day, 365 days a year. Two Therapeutic Specialists from ACF, offer specialised support to provide trauma informed care and planning, working closely with DHHS and other service providers. Westcare and ACF designed one week’s training and induction which was held for all staff. Ongoing support and mentoring will be provided by Westcare, with staff sharing skills and experiencing staff exchanges between Tasmania and Victoria. Formal nationally accredited training will also be provided in Certificate IV in Residential and Home Based Care by The Salvation Army Registered Training. Following the model established in Victoria, the intended extension of the programme in the future is a project called ‘Going Places, Creating Memories’. This will provide young people in the care of The Salvation Army with the opportunity to experience and learn through travelling to places that they would not normally be able to visit, such as Ceduna, Alice Springs, Cape York and Kakadu.
Mission Imperative – Transforming Lives The Salvation Army is offering people who seek assistance the opportunity to transform their lives. For example, each week The Salvation Army provides support and strength to more than 130 people who are fighting to overcome their addictions. This is not an easy path, The Salvation Army recognises the significant challenges ahead and has highly trained teams who are experienced in rehabilitation and are on hand every step of the way. Being free of addiction is life transforming. Similarly, for the many thousands who are homeless, finding somewhere permanent to call home is the beginning of a new stage of life. Each night more than 4,500 people across the southern states spend their nights in a bed provided by The Salvation Army. Knowing you have somewhere safe to sleep means you can start to make plans to find permanent accommodation, employment opportunities and in many cases health care. Finding a bed is often just the start of a transformation of life, beginning with stability, support and compassion. Through our national Employment Plus service, The Salvation Army is helping almost 1,000 people a week transform their lives by assisting them to find suitable employment opportunities. The Salvation Army Employment Plus works collaboratively with hundreds of organisations across the country to create sustainable employment opportunities for candidates. Community groups, training organisations, government agencies, local leaders, Indigenous elders and specialist support services are all essential to building strong communities which are inclusive and resilient.
14
Geelong Withdrawal Unit Extension Opening On Monday, 23 August, 2010, an extension to the Geelong Withdrawal Unit was opened by Commissioners Raymond and Aylene Finger. The Geelong Withdrawal Unit is part of the Kardinia Alcohol and Other Drug Service which offers intervention to people experiencing problems with drugs and alcohol.
Following the completed residential programme, clients are supported through the Post Withdrawal Linkages Support Programme which provides advocacy, support, outreach and referral to individuals during and following their withdrawal from alcohol and other drugs. The programme also offers facilitated groups to people in the community, as well as support to individuals and their families. This programme is based at the Geelong Withdrawal Unit. Statistics 281 people were admitted to the Geelong Withdrawal Unit during the 2009/2010 period. 176 clients were male and 105 were female. Alcohol was the primary drug of choice followed by cannabis, then heroin. Salvation Army Youth Camp – Western Australia
The Salvation Army funded the extension to the current building to provide more residential beds where people who are overcoming their addiction can stay and receive support and care 24 hours a day. This extension will also provide more space for the expansion of services offered by the Kardinia Alcohol and Other Drug Service. The Geelong Withdrawal Unit has grown to a 12-bed, community based, residential drug and alcohol withdrawal unit and a two-bed residential, independent living programme. The unit offers a recovery programme that comprises up to three stages. Stage one of the programme is a six to seven day residential stay for adults seeking to withdraw from alcohol and other drugs in a safe and supportive environment. Stage two of the programme comprises a further three week residential stay to enable people to stabilise following withdrawal. Stage three offers a further 12 week stay in an independent living house, located close to the unit.
In January, 2010, 22 young people aged between 12 and 16 years participated in a six-day camp at Margaret River in Western Australia. This camp has been operating annually for 14 years and was under threat due to lack of funding until McDonald’s Australia contributed $25,000. During the camp participants were involved in adventure activities like abseiling and canoeing, as well as activities designed to assist with building self confidence, self esteem and team work. Hundreds of disadvantaged and at risk young people have been part of the camps over the years, and some members of the support team were campers from previous years. Campers are invited through contact with The Salvation Army’s community support centres, corps, and school chaplains, and the Department of Child Protection. The young people who came on this camp were from disadvantaged and marginalised backgrounds and from foster care, and many had never had the opportunity to participate in these activities before. As part of the sponsorship agreement with McDonald’s Australia, a 30 minute documentary was produced in partnership with Channel Nine in addition to advertisements which aired on Channel Nine in Western Australia in March.
15
Central Violence Intervention Programme – South Australia The Central Violence Intervention Programme is an interagency initiative aimed at reducing domestic violence. The programme provides a service to men who acknowledge their violence and abuse as problematic and are prepared to work on ceasing their behaviours. Women whose partners (or ex-partners) are clients of the programme are offered support and information. The team is responsive to issues of domestic violence occurring within relationships, which are cohabiting or separated, and with or without children. The status of the relationship does not preclude eligibility. This programme is committed to enhancing women’s and children’s safety, providing quality services to women, men and children and reducing men’s violence. The vision of promoting violence-free relationships is at the heart of this programme which offers specialist services to men, women and children. Domestic violence counselling and support groups are available for both men and women and support is provided for women and children. This programme has been operating since October, 1999 and has a collaborative approach with many government departments headed by the Attorney General’s Department. In the last year, the service assisted nearly 250 people affected by domestic violence living in the Adelaide area.
Employment Plus The Salvation Army Employment Plus has experienced another rewarding year serving 117 communities around Australia. As the unemployment and economic strain caused by the financial crisis has begun to dissipate it has been important to meet the needs of jobseekers and employers, and we have been privileged to help nearly 16,000 people find work. Our staff in Queensland, NSW, Australian Capital Territory, Victoria, Tasmania, South Australia and Western Australia provided assistance to almost 94,000 people this year. This assistance included training, support, liaising with employers to find vacancies, placing jobseekers into those jobs, and supporting these new employees during their first few months at work. The Salvation Army’s services have been tailored to the needs of each community, whether the work was undertaken in remote Aboriginal communities or in the complex labour markets of large cities. Employment Plus has continued to place an emphasis on working closely with businesses and industries, developing innovative projects and programmes. The organisation matches jobseekers’ skills to areas of skills shortage and career opportunity and looks forward to the coming 12 months as it adapts and evolves to help “pierce the darkness of unemployment to let the light shine through”. For more information about The Salvation Army’s Employment Plus visit www.employmentplus.com.au
Mission Imperative – Making Disciples The Salvation Army’s core values of human dignity, justice, hope, compassion and community are at the heart of all that it does. It works to include the people living on the fringes of society, experiencing hardship, loneliness, addiction, abuse and disadvantage in our community. The Salvation Army strives for social inclusion and fairness. As part of its mission it is compassionately engaged with people in need and totally dedicated to reaching others with the good news of Jesus Christ and leading them to faith. Through many avenues The Salvation Army provides opportunities to connect with people who seek spiritual guidance, and looks to provide support to those seeking a way to understand the work of God in the context of their own lives.
16
Alice Springs Aboriginal Programme Operating from The Salvation Army in Alice Springs, the Aboriginal Programme provides support and opportunities for indigenous people living in the city and surrounding areas. As part of the organisation’s Christian grounding, The Salvation Army provides support to Indigenous people in Alice Springs with an opportunity to connect with others spiritually. Every day of the week The Salvation Army runs different activities specially designed to meet the needs of the indigenous people. One day a week the painting group gathers to work on traditional aboriginal paintings which the participants can then sell privately if they wish. On other days there are music groups, a movie morning and a community lunch. Activities often have grounding in faith and include the use of local indigenous languages.
As well as regular activities, people going to the centre can access the showers and washing machines. Many people who go to the centre only own the clothes they are wearing so clothing is provided for people to change into while they wash their clothes. The showers have towels, soap and shampoo ready to be used at no cost. These services are important as many of the indigenous people visiting the centre are homeless with little opportunity to maintain personal hygiene. During the busiest times, mostly during summer, the showers are used by 80 people a day; but even during the quieter times it isn’t unusual for around 30 people to use these facilities. In addition to providing social and interactive activities which can attract up to 40 people, local indigenous people can also access personal support. This can include providing assistance in dealing with housing issues and government services, as well as practical things like banking and healthy eating.
Mission Imperative – Reforming Society In 2011 The Salvation Army will celebrate 130 years of serving Australians in need. As part of its mission to serve the community, The Salvation Army actively advocates on behalf of those it serves. Through initiating, participating and leading public discussion, The Salvation Army aims to keep issues like homelessness and abuse on the public agenda. The Salvation Army also engages in political discussion, putting forward the needs of the community to all levels of government. The Salvation Army regularly undertakes research across areas of our service so that we remain responsive to the needs as they change. By listening to people affected by a broad range of issues, we can develop short-term solutions to meet immediate needs, as well as having the information at hand to implement longer term strategies addressing complex social problems. As an authority in areas like poverty, housing, homelessness, justice, mental illness, addiction, gambling and many others, The Salvation Army provides a voice for those people who often find it difficult to represent themselves. During the past 12 months the organisation has engaged in several significant advocacy activities including examining the perceptions of poverty, highlighting the impact of alcohol consumption, investigating the ongoing impact of the global financial crisis and importantly looking at ways the cycle of disadvantage can be broken. In addition to national and territorial projects, at centres across the Southern Territory, we have team members who actively advocate on behalf of people who come to us seeking support.
17
Perceptions of Poverty As part of The Salvation Army’s involvement in Anti-Poverty Week this year, research was commissioned to look behind the alarming statistics to give a compelling, real-life insight into the nature of poverty in our country. The report produced is based on The Salvation Army’s journey with people who experience poverty first hand. By sharing the stories of people who are experiencing hardship The Salvation Army aims to help others gain a more personal understanding of the struggle people in the community are experiencing. According to statistics, almost two million Australians, one in 10, live in poverty. This means there are two million individuals who are experiencing poverty; and there are two million stories that need to be heard. Coming from this research, The Salvation Army believes there are ten critical areas that need to be addressed if poverty is to be systematically tackled and prevented. These areas focus on underemployment, a review of the social security payment system, disability, mental health funding, indigenous poverty, child poverty, education options, skills development, financial literacy and the emergency relief sector.
Alcohol Awareness Week Each year, The Salvation Army undertakes public attitude and knowledge research looking at a specific area of alcohol consumption and abuse. In previous years the focus has been on things like warning labels on alcoholic products and the impacts of alcohol abuse on families. By engaging with the public through the research project, The Salvation Army examines community attitudes and facilitates further understanding of issues relating to alcohol and its misuse. This year The Salvation Army studied the consumption and misuse of alcohol in relation to the Australian way of life. Research showed that 12% of respondents consumed alcohol with the intention to “get drunk”, with one in three people aged 18 to 24 years reporting that they sometimes or often consume alcohol because they want to “get drunk”. The research also shows that in the past year 26.5% (approximately 4.8 million Australians) have deliberately cut down on the amount of alcohol they were drinking at the one time. Nearly 28% (approximately 5 million Australians) deliberately went without alcohol for a week. In an encouraging move, the new research shows that in the past 12 months, 16% (approximately 2.9 million people) deliberately changed their drinking habits so that at least one day a week was alcohol free. In any given week The Salvation Army provides support to around 500 people addicted to drugs, alcohol and gambling, so it is important to keep addiction related social issues in public discussion. The significant media interest in this year’s research provided The Salvation Army with an excellent reason to highlight these important findings in the public domain. You Think, Your Say This year The Salvation Army released a report prepared for the Federal Government’s Department of Education, Employment and Workplace Relations (DEEWR). This report, supported by Business Group Australia, is the result of extensive community consultations held in 2009, which were designed and facilitated by The Salvation Army to provide an opportunity for the voices of disadvantaged and disempowered young people to be heard by Hon Kate Ellis MP, Minister for Early Childhood Education, Childcare and Youth. More than 1,000 young people aged between 15 and 24 years participated in discussions at 40 separate locations across Australia. The forums highlighted the difficulties young people face across areas such as economic pressure, housing and government services. A total of 37% of all respondents indicated they felt positive about their future in Australia. Of concern, however, is the 33% of respondents who do not.
18
(cont...) Other concerns shared in discussions related to the challenges young people face when pursuing vocational education and training places in occupational areas where they believe there are real job opportunities, as well as a shared belief that government should do more to prevent homelessness before a young person finds themselves on the street. The Salvation Army is grateful to the young people who participated with so much enthusiasm and commitment, all the supporting organisations, the Business Group Australia team, Hugh Mackay, and officers of DEEWR and Centrelink for all their work in ensuring the best possible outcome. These discussions provided an important opportunity to engage with a segment of young Australians who rarely get the opportunity to talk directly to their national government.
The Ongoing Impacts of the Global Financial Crisis The ongoing impact of the Global Financial Crisis (GFC) continues to affect many Australians, and for people who were already experiencing some degree of hardship the impact was much more significant. In 2009 The Salvation Army asked the people who were coming to them for assistance how they felt about their current financial circumstances, how they felt about the future and what measures they have had to go to as a result of their financial circumstances. In order to better understand the longer-term impacts of the GFC, this year a follow-up study was undertaken asking people who sought assistance from 50 Salvation Army centres the same group of questions as the previous year. This research showed that 55% of people visiting Salvation Army community support services say they are now worse off or a lot worse off this year compared with 2009. This study also revealed that at least 20% of people coming to centres for assistance had never been to The Salvation Army for help before. As a result of worsening economic conditions one in four people had experienced new conflict in their families. When asked about how they felt about the approaching 12 months 34% of respondents said they felt pessimistic about their personal circumstances. While as a nation Australia fared better than many other countries impacted by the GFC, this research highlights that there are many people in our own country experiencing increased financial pressure and reduced hope about the coming years.
To access these reports in full or other Salvation Army research and reports visit www.salvationarmy.org.au/reports
19
Service Excellence Award for Homelessness Services in South Australia The Salvation Army’s homelessness services in South Australia achieved a Service Excellence award this year. The following highlight is from the report provided to The Salvation Army South Australia Division:
“Key achievements of this organisation include the high quality of service delivery across the diversity of programmes revised, demonstration of respect, consistency balanced with flexibility. Also noteworthy is the professionalism with which the values and vision of the organisation are aligned with action and policies of The Salvation Army both locally and nationally. The streamlined organisational charts, purpose and procedures that are consistently applied across the homelessness services are to be commended. Within this overarching attempt to align all services, policies and procedures, individual sites are flexible in developing and adjusting policies and procedures to fit with unique circumstances. The Salvation Army is encouraged to continue its current project to identify organisation wide policies and procedures and site specific ones.�
20
As part of our ongoing commitment to provide support to communities affected, The Salvation Army is constantly reviewing the services and programmes we provide to ensure that they meet the current needs of the people.
21
Victorian Bushfire Recovery The Salvation Army is continuing to support Victorian communities affected by the bushfires in February, 2009. Although many people have re-built or are in the process of rebuilding their homes and some have moved out of the area, there are still many people experiencing distress and hardship as a result of the most destructive fires Australia has seen. Although many people have refurnished their homes, bought new clothes and replaced the possessions they could, there is still significant emotional distress attached to the loss of lives and property that affected so many. As part of our ongoing commitment to provide support to communities affected, The Salvation Army is constantly reviewing the services and programmes we provide to ensure that they meet the current needs of the people. In recent months The Salvation Army has introduced a small business assistance grant to help businesses re-establish themselves and provide an income stream for their families.
With the support of Sony Foundation, The Salvation Army is providing regular support to the young people in areas affected through the Salvos Youth and Music Project. This project provides young people with the opportunity to learn how to write songs that will help them express the emotions that they may find hard to articulate. Groups and individuals have been able to perform, record their songs and produce music videos to go with their songs. Hundreds of young people have participated so far with musicians and youth workers providing tuition and support during regular workshops. The Salvos Youth and Music Project is running across 15 sites and there are plans for a celebratory concert in 2011. To date, The Salvation Army has assisted more than 4,000 people affected by the Victorian bushfires and has spent $15.29 million in the provision of relief and support. A recovery team has been formed with the employment of 13 community outreach workers, four material and financial aid workers and eight youth workers. In addition there has been a wide range of partnerships involving non-government organisations, church groups, volunteers, government bodies and the health sector. The Salvation Army is remaining to support these communities into the coming years thanks to the generous support from public donations. For more information about The Salvation Army’s Victorian Bushfire recovery effort visit www.salvationarmy.org.au/bushfire
22
International Focus The Salvation Army is active in 122 countries, providing a variety of services, programmes and everyday care to the poorest, most desperate people in the world. During the last year across the world The Salvation Army has: • Provided emergency relief to nearly two million people • Supported nearly 350,000 prisoners through regular visits and chaplain support • Traced nearly 6,000 missing people • Counselled nearly 400,000 people • Provided general relief to more than 13 million people
Haiti relief effort A devastating earthquake of intense magnitude shook the impoverished nation of Haiti on 12 January, 2010. Countries around the globe promised aid, but the desperation of the people of Haiti required an immediate response. The Salvation Army headquarters in London responded with a sense of urgency to the disaster, sending personnel to work with officers already based in Haiti. Working alongside the local Salvation Army corps in Haiti, international aid teams set up staging areas in Jamaica and the USA in the days after the disaster. Relief workers were sent to Haiti, and distributed one week’s worth of food to 6,000 families days after the earthquake occurred. On 19 January, 2010, officers and volunteers served 10,000 meals from its feeding centre. Just over a week after the earthquake, The Salvation Army helped to reopen a school at a temporary site in Port-au-Prince, close to the epicentre of the earthquake. Officers were also responsible for nearly 20,000 displaced people living in and around Port-au-Prince. In the months following the disaster, The Salvation Army World Service Organisation along with Numana Inc packaged ten million meals for distribution in Haiti. The meals were packaged by volunteers in the USA, and more than 72,000 people volunteered their services to help the island nation of Haiti. Most of these volunteers had never volunteered or been involved with The Salvation Army before, but were moved to provide help in any way they could. It is estimated that70 per cent of Haiti’s population lives on less than $2.15 per day. The Salvation Army had been serving the island nation for 60 years, but rebuilding the island nation has only just begun. For more information on The Salvation Army’s work in Haiti or other countries visit www.salvationarmy.org
23
24
5.0
Our People In late 2009, The Salvation Army Human Resources and Risk Management Department underwent an extensive evaluation and restructure process emerging in 2010 as the new look People and Facilitation Department. Throughout 2010, the Department has worked collaboratively with its internal and external stakeholders in redefining its strategies and core intentions to reflect a higher level of organisational engagement and customer service. The inclusion of People & Facilitation representation on a number of the organisation’s Governance Councils has assisted in positioning the Department as a key strategic partner within the Territory.
Achievements
5.0
• Development and implementation of a new Volunteer Leadership System • Implementation of a new Human Resources Information System • Implementation of the Modern Awards – rationalisation of 70 Awards down to 15 • Achieved full compliance with EOWA legislative requirements
25
Our Workforce The Salvation Army Australia Southern Territory workforce consists of officers, employees and volunteers who are located in 714 centres across Victoria, South Australia, Tasmania, Western Australia and the Northern Territory.
In 2010, our workforce was deployed throughout the Territory’s as follows: Employees
Officers
Volunteers
Territorial Headquarters
294
62
35
Melbourne Central Division
861
85
485
Eastern Victoria Division
456
85
1722
Western Victoria Division
226
35
692
Northern Victoria Division
138
40
999
South Australia Division
370
78
1185
Western Australia Division
476
74
1079
Tasmania Division
270
29
495
Northern Territory Region
76
19
78
1044
1
2450
Salvos Stores Employment Plus
786
3
6
Totals
4997
511
9226
* This number is not inclusive of corporate volunteer groups.
Our employee workforce is made up as follows: Ms Katrina D’Ore Leader - People and Facilitation
Status
Women
Men
Total
#
%
#
%
Full Time
1534
63.2
897
36.8
2431
Part Time
1048
75.0
349
25.0
1397
Casual
886
75.8
283
24.2
1169
Totals
3468
69.4
1529
30.6
4997
Our employees are assigned as follows: Status
Women
Men
Total
#
%
#
%
Executive Management
1
11.11
8
88.89
9
Senior Management
8
40.00
12
60
20
Middle Management
186
50.41
183
49.59
369
Supervisors / Team Leaders
403
72.22
155
27.78
558
All Other Staff
2870
71.02
1171
28.98
4041
Totals
3468
69.40
1529
30.60
4997
26
Volunteers The Salvation Army Australia Southern Territory recognises and highly values the substantial and ongoing contribution made by individual volunteers and corporate volunteer groups toward the successful achievement of its organisational mission. In recognition of this, the organisation engages in specific programmes to foster and encourage participation by the community in its work.
The National Standards provide a best practice model for supporting and involving volunteers and cover eight key areas: • • • • • • • •
Policies and procedures Management responsibility Recruitment, selection and orientation Work and the workplace Training and development Service delivery Documentation and records Continuous improvement
Volunteer Contribution In 2010, The Salvation Army volunteer work force contributed close to 3,118,388 hours of work to The Salvation Army’s mission.
To ensure that all volunteers contributing to the mission of The Salvation Army are given volunteer work that is meaningful, safe, significant, fulfilling, and appreciated, the organisation has developed a new suite of procedures, guidelines and tools which will assist both leaders and volunteers to achieve these goals.
“Based on the national minimum wage rate (plus on costs), the organisation estimates this contribution to an equivilant work value of $58.5 million without which, a number of major goals could not be achieved.”
The Salvation Army Volunteer Policy adheres to the standards as set out in Volunteering Australia’s National Standards for Involving Volunteers in Not for Profit Organisations.
The Salvation Army wishes to acknowledge and thank each and every individual and corporate volunteer for their outstanding contribution to our work.
In addition to the above, the organisation is privileged to engage with corporate volunteer groups throughout the year. These include Accenture, AGL, ANZ, Back in Motion, Bankwest, Ford, Foxtel, Goldman Sachs, KPMG, Kleenheat, Melbourne University, Middle Park Soccer Club, National Australia Bank, Optus, Pfizer, PWC, RACV, World Religious Conference, and United Way, to name a few.
Professional Development The Salvation Army has policy and procedures in place to encourage employee professional development that has current and future value to the mission of the organisation. Full time and part time staff are eligible to apply for study leave and contribution toward costs for an approved course of study after six months service. In 2010, The Salvation Army participated in a collaboration of the four major Church providers in the Workforce Innovation Project. The aim of this project is to develop and pilot vocational education and training programmes throughout the country which address skill sets that have been identified as deficient within the social sector workforce.
27
Workplace Health and Safety In accordance with our stated principles and mission intentions, the organisation endeavours at all times to be a responsible employer with regard to our commitment to work place health and safety. The Salvation Army feels that its respected standing within the community means it must demonstrate a commitment not only to our workforce but also to other employers or organisations that we, or our agents or contractors, deal with. To achieve this, The Salvation Army maintains a Territorial OHS Management System that utilises policies, procedures, strategic plans and ongoing action plans to identify and manage hazards and risks across the Southern Territory. Divisional Commanders and Business Unit Leaders are to maintain programmes and plans that address OHS issues particular to their activities or local legislative requirements as necessary.
The Salvation Army uses a systematic approach to identify and control risks associated with health and safety issues that follow guidelines established by standards, AS/NZS ISO 31000:2009 (Risk management – Principles and guidelines) and AS/NZS 4804 (Occupational health and safety management systems - General guidelines on principles, systems and supporting techniques). The organisation recognises that there are varying degrees of accountability for the proper implementation and management of its risk and safety systems across the Territory. Through its induction processes and ongoing workplace training, The Salvation Army ensures that all staff - employees, officers and volunteers alike are familiar with their responsibility for maintaining safe work practices and environments.
Continuous Improvement In 2010, the organisation commenced a process of Quality Accreditation for its Social Programmes. In support of this, the People & Facilitation Department has reviewed a number of its key processes. This has led to some significant improvements in areas such as data collection, analysis and reporting. The development and implementation of integrated systems for recording end to end employment processes has substantially improved the organisation’s ability to forward plan and utilise its workforce capability.
Employer of Choice Existing to serve the most disadvantaged members of the community, the organisation targets its recruitment towards the engagement of the individual whose heart and purpose aligns with this mission. The Salvation Army is working towards becoming an Employer of Choice within the not-for-profit sector. To achieve this, The Salvation Army has developed and implemented policies and procedures to encourage the recruitment and retention of talented, committed, and suitably qualified employees. These policies and procedures offer prospective and current employees work opportunities and benefits whilst providing them with the chance to make a difference in the community carrying out the mission and vision of The Salvation Army. The benefits provided to employees currently include:
28
Employee Assistance Programme
Salary Packaging
The Employee Assistance Programme (EAP) is offered to all employees and immediate family members. The EAP provides confidential and professional counselling services to help employees resolve personal or work related problems that have the potential to impact on an individual’s work performance and well-being.
Full-time and part-time employees have access to salary packaging as part of The Salvation Army’s employment policies. In consultation with the current packaging provider, The Salvation Army has extended the benefits available to employeeys to included discount purchasing options.
Critical incident debriefing is also provided to individuals and groups following major incidents such as bushfire, flood, or life threatening event. The immediate provision of professional assistance has been proven to reduce the likelihood of delayed stress reaction and cumulative stress response.
Work/Life Balance The Salvation Army is cognisant of the need for employees to be able to balance the requirements of the workplace and their family commitments. Policies and practices have been introduced which allow employees access to flexible work options. These include compressed working hours (9 day fortnight, 19 day month), flexible start/finish times and purchased additional annual leave. (48/52)
Officer, Employee and Volunteer Guidelines The Salvation Army Australia Southern Territory provides guidelines for officers, employees and volunteers through the Human Resources Manual and the Code of Conduct. The Orders and Regulations are specific to officers of The Salvation Army, worldwide.
Human Resources Manual The Human Resources Manual provides information on the ways The Salvation Army enables and facilitates more effective people and organisation practices to support the Australia Southern Territory’s mission, values and strategic activities. It documents principles and policies and their rationale, which together with any external legislative requirements, provide the framework for managing human resources in this large and diverse organisation. It also provides access to tools and forms to enable managers and other employees to action human resource management requirements.
29
Code of Conduct The Code of Conduct provides a basis for all employees to maintain a working environment that is productive, positive, enjoyable, safe and free from harassment and discrimination. It also assists managers to induct employees into the organisation and address any circumstances that may arise, which conflict with the required standards, mission and values of The Salvation Army. The Code of Conduct outlines standards of personal and professional conduct, which are in keeping with both organisational and community expectations of employees working for The Salvation Army. It provides guidelines for the appropriate behaviour of all employees, and is provided to employees as part of their induction process. The Code of Conduct is consistent with the mission and values of The Salvation Army, and will be periodically reviewed so that is continues to benefit employees and the organisation.
Promote Ethical and Responsible Decision-Making The Salvation Army has key policies and codes of conduct that apply to all Salvation Army officers and employees throughout the Australia Southern Territory.
Orders and Regulations Orders and Regulations are documents published by the International Headquarters of The Salvation Army which outline the principles and procedures specific to the various types of activity. They apply to all Salvation Army officers throughout the world, irrespective of rank, appointment or territory. These orders and regulations aim to facilitate global organisations understanding, and are intended to ensure that decisions arrived at, and work undertaken, are in harmony with the interests, principles and aims of The Salvation Army as an organisation. It was never envisaged that The Salvation Army would be governed solely by orders and regulations, as a living army has to make expedient decisions related to the circumstances of the time. Nevertheless, in general, guidelines are necessary, which are based on Christian principles and the best methods discovered from experience. Every officer, cadet and candidate for officership, learns from these. The subjects covered by the various orders and regulations will not deal with every possible contingency. Principles, however, are paramount and serve as a proven guide in every situation, which demands an officer’s personal judgment.
30
6.0
Our Partners The Australia Southern Territory has many partners who work with the organisation across various aspects of our operations. The Salvation Army considers its partners to be all levels of government, corporate entities that provide it with professional services, and individuals and groups who provide funding to support the work of the organisation.
6.0
31
Government Funding The Salvation Army Australia Southern Territory seeks significant funding from federal and state government in order to continue to deliver services and provide improved options for the people The Salvation Army serves. Both federal and state governments provide critical support on which The Salvation Army depends. In all cases The Salvation Army follows a funding process as required by the particular government department, often involving a standard tender for a specific service, centre or programme. In many cases government funding is renewed from the previous year for ongoing work. Funding from government is granted for the rendering of services and, to a lesser extent, for capital work. The following table provides an indication as to the level of government funding received for the past five years.
2009/10 $’000
2008/09 $’000
2007/08 $’000
2006/07 $’000
2005/06 $’000
Government Grants – Rendering of Services
104,500
96,733
86,612
83,675
77,769
Government Grants – Capital
4,436
994
962
7,180
18
The Salvation Army prepares individually audited accounts for the centre, service or programme in question and provides an annual report as a complementary means of reporting to government departments, along with normal financial acquittal and accountability statements and reports.
Public Fundraising Donations made to The Salvation Army are generally made to the Red Shield Appeal which is the central fundraising appeal running throughout the year. The Christmas Appeal is an extension of the Red Shield Appeal which is conducted over the Christmas and New Year period. The Salvos Crisis Partners programme is a pledge giving programme where regular donations are made to the Red Shield Appeal. People wishing to donate to The Salvation Army have a degree of choice as to where their donation goes. In addition to the Red Shield Appeal, donors can opt to sponsor a child through The Salvation Army’s Child Sponsorship Programme, to international aid appeals running for specific international disasters and emergencies, or through bequests made through a Will. The Salvation Army Australia Southern Territory aims to communicate in a clear and transparent manner with all donors and members of the general public. Public complaints received are directed to the Territorial Public Relations Department with a view that they are resolved at this level. Regular communication with leadership ensures that Cabinet members are aware of issues as they arise. Donor questions or complaints are directed specifically to the Donor Care Service Team located at Territorial Headquarters in the first place. The Territorial Public Relations Secretary is ultimately responsible for the resolution of donor queries or complaints. We have a dedicated telephone number and email address where complaints and feedback from donors can be directed.
32
Operational Partners Several organisations provide The Salvation Army with professional services that are important to the operations of the organisation. Westpac is the national banking partner and also supports the Red Shield Appeal by receiving collections from the doorknock. The territorial auditing partner is KPMG who have audited the social fund financial statements which form part of this report. In order to ensure The Salvation Army meets its legal obligations and receives relevant legal advice to the state and territory in question, the following organisations assist in the relevant state/territory:
Principal Legal Advisors for The Salvation Army Australia Southern Territory E P JOHNSON & DAVIES Level 3, 52 Collins Street MELBOURNE VIC 3000 Legal Advisers for States - General and Property Northern Territory - Cridlands NT Lawyers Victoria -E P Johnson & Davies Western Australia - Freehills South Australia - Minter Ellison Tasmania - PWB Lawyers Legal Advisers – Specialist Deceased Estates Western Australia - Anderson Kershaw Sale / Commercial Litigation Victoria - Clayton Utz Copyright /Trademark - Davies Collison Cave IT – Stephens (Lawyers and Consultants) Red Shield Housing (South Australia) – Kain Corporate + Commercial Lawyers Abuse/Children in Care - Nevett Ford The Salvation Army Constitutional Issues – Corrs Chambers Westgarth
33
7.0
Community Without the support of so many people The Salvation Army would not be able to extend care to so many Australians in need. The Salvation Army’s stakeholders – the people it serves, commissioned officers, valued staff and volunteers, the communities The Salvation Army is a part of, all levels of government, Salvation Army congregations, partner organisations and agencies, private and corporate donors and supporters – all are critical to the organisations ability
7.0
to fulfill our mission. The Salvation Army remains accountable to those who support its mission, value its work and have faith in its ability to deliver care and support to others. Continuing to provide a wide array of programmes and services means The Salvation Army needs to look to corporate entities and private donors for their support.
34
The Salvation Army does not have shareholders but has members. The Salvation Army engages in communication with members and other stakeholders in an open, regular and timely manner. Its policy provides for the use of electronic and other means to ensure a regular and timely release of information about the organisation to members and stakeholders. Communication is made through the distribution of the annual report and annual financial report and its availability online, through regular updates on the territorial home page (www.salvationarmy.org.au), the organisation’s weekly national publication WarCry and fortnightly territorial publication On Fire, and supporter communications. The Salvation Army’s practice is to ensure that an independent external auditor attends the meeting of the Territorial Finance Council at which the organisation’s annual financial report is presented for signing, and organisational leadership is available to answer board members’ questions about the conduct of the audit and the preparation and content of the auditor’s report.
Corporate Community The Salvation Army Australia Southern Territory works with many businesses, large and small, in order to generate funds and materials that enable its work. This year The Salvation Army would like to particularly acknowledge the support of some of the organisations that have provided it with long term support that greatly increases our capacity to assist others. For more than 20 years Kmart has worked with The Salvation Army nationally through the Kmart Wishing Tree Appeal. This appeal has generated millions of gifts over the years which The Salvation Army has distributed to families and individuals in need at Christmas time. This appeal continues to grow and is supported by many Australians who make it part of their annual Christmas tradition. Myer has also supported The Salvation Army at Christmas time for many years through the production and sale of the annual Spirit of Christmas album. Each year headline artists contribute a favourite festive song to the compilation which is sold exclusively at Myer stores nationally. The proceeds of the sale are donated to The Salvation Army to be used in its relief services, particularly at Christmas time. As part of its corporate social responsibility programme AXA has supported the work of The Salvation Army in the City of Melbourne for many years. The AXA youth outreach bus is a central part of the support AXA provides to The Salvation Army. A need was recognised to provide a safe place where young people could meet with their friends as well as access support networks. In response, a mobile youth centre was created by refurbishing a bus with the generous support of AXA. Team members from AXA also regularly volunteer on the bus as part of their engagement with The Salvation Army. A national partnership with Kleenheat is currently providing monthly grants of $5,000 for rural assistance work across Australia. This partnership provides The Salvation Army with funding to operate selected programmes and services that assist Australian rural communities. South Australian based national company, Built Environs, and its parent company, McDonnell Dowell, have given the South Australia Division outstanding support during the 2009/10 year. McDonnell Dowell provided $40,000 to help feed Adelaide’s homeless on Monday and Friday evenings for a period of 12 months through a soup run. This donation has enabled The Salvation Army to extend the service to weekends. McConnell Dowell also supports the work of The Salvation Army in Victoria, New South Wales, Western Australia and Queensland.
35
Built Environs donated $50,000 towards the establishment of two single bedroom units for youth without parental support at The Salvation Army’s Muggy’s Youth Accommodation Service in South Australia. In addition, the company and its staff are project managing the building project donating their expertise and network of suppliers to ensure the overall cost is significantly reduced. The Salvation Army is grateful for the contributions that businesses provide through the donation of funds and goods, as well as the contribution that corporate volunteers make to its daily operations. For a full list of corporate acknowledgments see the final pages.
Media Engagement Through regular engagement with the media The Salvation Army highlights issues of social importance in the public domain to help inspire discussion and ultimately encourage innovative solutions. Throughout this year The Salvation Army has engaged with media on issues like alcohol consumption and drinking culture, poverty, the impacts of the global financial crisis, homelessness, and community violence to name but a few. The Salvation Army has also sought the support of the media to help promote the Red Shield Appeal with a particular focus on our neighbourhood doorknock in May.
As well as being pro-active in the 2010 media strategy, The Salvation Army is often called upon to provide media comment on a wide range of social and community issues. As an illustration, the table below provides an indication of the level of engagement with media and through this The Salvation Army has connected to the community. Month
Television
Radio
July 2009
300
24
81
August 2009
297
19
63
September 2009
358
41
175
October 2009
144
17
39
November 2009
221
30
133
December 2009
362
111
206
January 2010
144
33
92
February 2010
121
7
42
March 2010
80
3
36
April 2010
136
50
151
May 2010
348
67
245
June 2010
259
42
193
Total
2770
444
1465
In 2010 we were grateful to receive more than $2.5 million in media coverage nationally leading up to the Red Shield Appeal Neighbourhood Doorknock. For media information visit www.salvationary.org.au/media
Community Engagement The Salvation Army is an active participant in all the communities where it serves. Through its corps, social centres, Salvos Stores and Employment Plus offices The Salvation Army engages with members of the community every day. The Salvation Army also works alongside local councils and governments to provide useful services and solutions to local issues. Through the Beyond the Classroom programme, The Salvation Army works with students in interactive and educational workshops to help aid their understanding of critical social issues like poverty and homelessness. In other states The Salvation Army regularly engages with schools and students by providing guest speakers, partnering with groups in fundraising activities and taking groups of students on tours of our social centres.
36
8.0
Governance Corporate Governance The Salvation Army endorses the Principles of Good Corporate Governance and Best Practice Recommendations developed by the Australian Securities Exchange (ASX) in 2003 and revised in 2007. The Salvation Army, being a notfor-profit organisation, is not required to include a statement of the main corporate governance practices, which is required of listed corporations. However, it is considered appropriate to ensure best practice in reporting by including corporate governance practices in this Trustees’ report.
8.0
37
Governance and Oversight The Salvation Army has its International Headquarters in London. At the head of the international Salvation Army is the General of The Salvation Army, who is elected at a High Council, comprising all the Salation Army’s national and territorial leaders. The Salvation Army in Australia has been operating in Australia since 1880. For the business purposes of its Australia Southern Territory, it is incorporated by the following Acts J38of Parliament: The Salvation Army (Victoria) Property Trust Act 1930 The Salvation Army (South Australia) Property Trust Act 1931 The Salvation Army (Western Australia) Property Trust Act 1931 The Salvation Army (Tasmania) Property Trust Act 1930 The Salvation Army (Northern Territory) Property Trust Act 2002 The Territorial Commander acts as the representative of the General in The Salvation Army Australia Southern Territory. The Territorial Commander receives a Commission and acknowledges this by signing a bond under legal seal. This document is legally binding upon the parties concerned, and creates a legal relationship between the Territorial Commander and the General of The Salvation Army. From time to time, further particulars affecting that relationship may be set down in a power of attorney issued from the General to the Territorial Commander.
Trustees The Salvation Army acts as a trustee of the gifts, grants and contributions received from individuals and bodies (private and governmental). As a result, after meeting its legal obligations, its internal and international financial reports are prepared to meet the needs of donors, contributors, grantors and managements. It is essential that The Salvation Army meets its obligations to each donor, who specifies any particular use to which a gift is to be put, and it is a clearly stated principle that the Territorial Commander, on behalf of the General, has control of funds entrusted to him, and is authorised to expend them for the purpose for which they are obtained and no other. This standard of scrupulous stewardship is maintained through the structure of accounting systems and records, and the manner of presentation of accounts. The Trustees of the respective Property Trusts are required to ensure the use of the assets owned by the Trusts are properly released for the use of The Salvation Army Australia Southern Territory. There is a board meeting of Trustees who authorise these assets to be so used. The Territorial Finance Council and Territorial Property Council make the decisions of The Salvation Army in relation to finance and property matters respectively. The following persons were Trustees of The Salvation Army Australia Southern Territory during the whole of the financial year and to the date of this report: • • • • •
Commissioner Raymond A. Finger (formerly Colonel) Colonel Peter Walker (formerly Lieut-Colonel) Lieut-Colonel Frank Daniels Lieut-Colonel Ian Hamilton Mr G F Stowe
Commissioner James Knaggs resigned as a Trustee as of 30 June 2010. Lieutenant-Colonel C-D, Park was appointed on 16 February 2010, and resigned as a Trustee as of 30 September 2010. Lieutenant-Colonel Rodney Barnard was appointed as a Trustee on 1 July 2010.
38
The number of Trustees’ meetings and the number of meetings attended by each of the Trustees during the financial year are:
Trustee
Number of Meetings Eligible to Attend
Number of Meetings Attended
Commissioner James Knaggs
11
6
Commissioner Raymond A. Finger
11
10
Lieut-Colonel Frank Daniels
11
9
Lieut-Colonel Peter Walker
11
10
Lieut-Colonel Ian Hamilton
11
10
Lieut-Colonel C-D, Park
4
4
Mr G Stowe
11
9
Board Processes The Finance Council and other boards, while not relieving the Territorial Commander or any other Salvation Army officer of personal responsibility for the success of the work of The Salvation Army, are established to: • Give strength to decisions taken • Guard against ill-considered action • Provide information at first hand from people who are constantly in close personal touch with all aspects of the work • Secure counsel and advice on all matters involving the expenditure of The Salvation Army’s funds The membership of the various boards is determined by the Territorial Commander or Chief Secretary, with certain board memberships required to be endorsed by International Headquarters. Board members are required to attend meetings regularly and to acquire a broad knowledge and understanding of The Salvation Army’s operations and functions. They must be aware of, and conversant with, the statutory, regulatory and policy requirements affecting the operations of The Salvation Army.
39
Territorial Finance Council The Territorial Finance Council (TFC) is the territory’s primary policy and decision making body for the control and management of territorial financial and property resources. The TFC is responsible for approving:
• T he territorial budget and any subsequent revisions • Non-budgeted expenditures
The TFC also monitors the performance of the territorial budget, plans future financial strategy (including the raising of money), deals with serious matters arising out of audit reports, considers matters of a confidential nature, and supervises the work of expenditure boards. It meets on a weekly basis. Membership of the TFC is currently 14 members, reviewed and approved annually by International Headquarters, one of whom must be the Financial Secretary. The Territorial Commander presides ex-officio. In the absence of the Territorial Commander, the Chief Secretary presides. No meeting can be held without one or the other present. Four members form a quorum. The number of TFC meetings held during the year ended 30 June, 2010 and the number of meetings attended by each member were: Member
Number of Meetings Number of Eligible to Attend Meetings Attended
• T he price at which property is bought and sold
Commissioner James Knaggs
43
24
Commissioner Carolyn Knaggs
43
23
• G rants to divisions and other centres
Colonel Raymond A. Finger
43
37
Colonel Aylene Finger
43
31
• A llowances of officers and employees
Lieut-Colonel Peter Walker
43
38
Lieut-Colonel Frank Daniels
43
38
Lieut-Colonel Ian Hamilton
43
38
Lieut-Colonel C-D Park
18
16
Major Denis Rowe
21
20
Major Neil Venables
43
32
• Grants to officers
Major Christine Faragher
21
14
• Annual statements of accounts
Major Jenny Pratt
21
15
Major Kirsten Elliott
22
17
Major Carelle Begley
22
15
Mr David Sinden
43
41
Mr Gregory Stowe
43
38
Ms Katrina D’Ore
22
19
• Capital spending
• Investment of funds • T ransfers to and from reserves and trust funds • F urniture requisitions for leading officers
40
Territorial Policy Council The Territorial Policy Council (TPC) is the policy-making body for the strategic and mission direction of The Salvation Army. The TPC tables its recommendations on policy matters to the TFC or other appropriate board for approval. It meets on a weekly basis. Membership comprises the executive leadership of the territory, with the Territorial Commander presiding. In the absence of the Territorial Commander, the Chief Secretary presides. No meeting can be held without one or the other present.
Territorial Property Council The Territorial Property Council is the official body authorised to conduct property business, which meets each fortnight. It gives direction regarding property purchases, sales, construction, land acquisition, extensions, renovations, replacements, financing, and also recommends to the TFC any payment of accounts relating to property expenditure above the limit to which divisional/regional expenditure boards may approve. The Council’s authority must be obtained before alterations, renovations, purchase, sale or lease of property, or other expenditure may take place. The Council is chaired by the Territorial Commander, and its membership comprises all seven Trustees of the Australia Southern Territory, and a further eight representatives from various territorial headquarters departments.
General Management Council The General Management Council (GMC) is responsible for monitoring, recommending and approving in a consistent and efficient manner all expenditure according to the approved budget in the following areas: • • • •
Requisitions (including motor vehicles) Cash requirements for payment of accounts Officer health assistance scheme payments General business matters, including insurance claims
The chairperson of the GMC is the Secretary for Business Administration, and membership includes the Chief Financial Officer and eight other senior staff members from territorial headquarters. The GMC meets weekly, and all minutes of the GMC are tabled at the TFC for ratification. Similar expenditure boards operate in each of the divisional headquarters within the territory, to monitor, recommend and approve all expenditure within the division in accordance with approved budgets, and within the authority levels prescribed and approved by the TPC.
41
Territorial Advisory Board The role of the Territorial Advisory Board is to advise and assist the Territorial Commander and the appointed Trustees in the administration of their responsibilities. Expertise and practical support is provided in four key areas:
Investment Committee The Salvation Army also established an Investment Committee to provide independent and unbiased advice to the territorial leadership on matters relating to the management of investment assets for the territory. The Committee is comprised of the Trustees and two senior finance department staff members, plus two external advisors who are drawn from relevant professional and commercial sectors of the community, and are responsible for working closely with the Trustees and making recommendations to the Trustees on investment management. The Territorial Commander appoints one of the external advisors as chairperson of the Committee. The Investment Committee’s responsibilities include:
• Strategic planning • B usiness administration, including the raising of funds as well as the efficient administration of resources • P rogramme development, including discernment of demographic trends and analysis of Federal and State Government policy • Human resources management
• • • • • •
Provision of independent and unbiased information Assistance in the development of investment policy and guidelines Monitoring compliance with investment policy and guidelines Assistance in the development of strategic asset allocation targets Assistance in the development of performance measurement standards Monitoring and evaluation of investment manager performance on an ongoing basis
The Committee currently meets on a quarterly basis during the year. Current members of the Investment Committee are: John Paterson former Board Member, Future Fund
The Territorial Advisory Board operates under the leadership of an appointed Chairperson recruited from the business community. Membership includes a minimum of five Trustees, a minimum of seven community members in addition to the Chairperson, The Salvation Army Public Relations Secretary and The Salvation Army Victoria State Council Chairperson. Meetings are held no less than four times per calendar year. A Property Advisory Board also operates as a sub-committee of the Territorial Advisory Board, to provide independent advice to territorial leadership on matters relating to property and real estate.
Paul Laband retired, formerly with UniSuper and Russell Investment Group Lt-Col Rodney Barnard Secretary for Business Administration, Australia Southern Terrtiory Gregory Stowe Chief Financial Officer, Australia Southern Territory Chris O’Neill Financial Controller, Australia Southern Territory Colin Solomon Finance Manager, Australia Southern Territory
42
Territorial Audit Council The Territorial Audit Council meets, on average, every two months and considers internal audit reports and associated responses to internal audit reports. The Council consists of Salvation Army officers and senior staff appointed annually by the Chief Secretary. The chairman of the Council is always the Secretary for Business Administration. Three members constitute a quorum and no proxies are permitted.
Audit Committee The Audit Committee was established in April 2006. The Committee assists The Salvation Army executive in fulfilling its governance responsibilities, and is responsible for the oversight of: • Financial performance and the financial reporting process including the annual financial statements • The scope of work, performance and independence of internal audit • Providing advice to management in relation to the engagement of the external auditor • The scope of work, performance and independence of the external auditor • The operation and implementation of the risk management framework • Matters of accountability and internal control affecting the operations of The Salvation Army • The effectiveness of management information systems and other systems of internal control • The acceptability of and correct accounting treatment for and disclosure of significant transactions that are not part of The Salvation Army’s normal course of business • The sign off of accounting policies • The Salvation Army’s process for monitoring compliance with laws and regulations and its own Code of Conduct and Code of Financial Practice In performing its duties, the Committee maintains effective working relationships with the TFC, territorial leadership, relevant heads of departments, and the internal and external auditors. Membership of the Committee comprises up to four members recruited from outside The Salvation Army and the Secretary for Business Administration. The Territorial Commander and Chief Secretary are exofficio members. The Chief Financial Officer and Territorial Auditor attend meetings of the Committee, but are not members of the Committee. The period of service for the external members will be three years with an option to extend for up to a further three years, at the discretion of the Territorial Commander. The Chairperson is selected and appointed by the Territorial Commander. The Committee currently meets at least four times during the year. Current members of the Audit Committee are: • • • • •
John Thomson (Chairman) - Retired Partner, PricewaterhouseCoopers Hugh Somerville - Retired Partner, PricewaterhouseCoopers Bruce Brook - Company Director Peter Lowe - Company Director Lieut-Colonel Rodney Barnard - Secretary for Business Administration
43
Remunerate Fairly and Responsibly The Trustees are officers or staff of The Salvation Army Australia Southern Territory, and receive remuneration in accordance with established Salvation Army guidelines. In addition, officer Trustees also receive accommodation and use of a motor vehicle at minimal cost as part of their officership, in accordance with established Salvation Army guidelines. No additional remuneration is received by these officers for acting in their capacity as Trustees of The Salvation Army. Staff Trustees receive the use of a motor vehicle as part of their employment contract. Salvation Army employees are paid in accordance with their classification position as per the relevant award or agreement under which they are employed, and are paid any pay increases or other variations to remuneration and benefits as per the relevant award or agreement. Non-award/agreement employees are paid in accordance with their terms and conditions outlined in their contracts of employment. For non-award employees, internal review of remuneration is conducted on an annual basis to maintain market position in the not-for-profit sector, with recommendations for salary adjustments submitted to the TFC for consideration. Individual remuneration submissions are submitted to the appropriate board at divisional or territorial level for approval. External members of advisory boards and committees volunteer their time and skills to the organisation and as such, no remuneration was paid or is payable to these persons in their capacity as Board members.
44
Risk Management The Trustees are responsible for the oversight of The Salvation Army Australia Southern Territory’s risk management. The Audit Committee assists the Trustees in fulfilling their responsibilities in this regard by reviewing The Salvation Army’s risk policies, as well as the financial and reporting aspects of the organisation.
In recognising its legal responsibilities and other obligations, The Salvation Army places a high priority on human resources and risk management requirements in all aspects of its operations. Our values provide significant anchor points for our risk management programmes, particularly the values of human dignity and compassion. The Salvation Army’s programmes are consistent with the Australian/ New Zealand Standard for Risk Management: AS/NZS 4360. We anticipate that The Salvation Army will be able to comply with the proposed new international standard when it is introduced. The Salvation Army has a Risk Management Policy and Procedure Manual encompassing Business Continuity Management, Occupational Health & Safety, and Workers Compensation. The Risk Management Manual details clearly the roles and responsibilities of leadership, managers and employees, and the requirements for contractors and visitors in relation to risk management. Human Resources and Risk Management professionals are in place throughout the Territory, and support divisions and departments in achieving good governance and compliance.
45
9.0 Sustainability and
Environment
The Salvation Army aims to fulfill its mission in a way that is mindful of the environment in which it operates. Team members are encouraged to recycle when possible, make use of paperless communications and to consider the impact on the environment in daily operations. The most significant sustainability effort of The Salvation Army comes through the reuse and recycling undertaken through the Salvos Stores network. As part of the Salvos Stores strategic plan for 2010 to 2013, specific strategies are underway to address waste minimisation and environmental sustainability. These strategies include engaging government, business and the community in waste minimisation issues and identifing and implementing cost effective sustainability initiatives. In October of this year, Salvos Stores introduced a new public initiative, “Buy Nothing New in October,� which encouraged the community not to purchase anything new and look to extend the life cycle of goods as well as understanding the embedded cost and resources that go into the purchase of new goods.
As well as encouraging people to consider ways their possessions can be reused or donated for someone else to use, Salvos Stores are also introducing sustainability reporting and measures to quantify and reduce greenhouse gas emissions. The Sustainability Manager at Salvos Stores plays a leading role in developing ways it can undertake business in harmony with protecting the environment. For more information about Salvos Stores visit www.salvationarmy.org.au/salvosstores
9.0
46
10.0
Financial Performance and Position
10.0
47
Australia Southern Territory Finance Summary The lingering effects of the Global Financial Crisis were persistent, causing continuing financial pressure for many individuals. Although Australia appears to have evaded the worst of the downturn in comparison to other nations, there are many Australians who were greatly affected. The Salvation Army’s survey of people visiting its community support services indicated that more than half of people coming to the organisation for help felt that they were a lot worse off this year when compared to 2009.
Mr Gregory Stowe Chief Financial Officer Qualifications: B.Bus. (Dist), FCPA Length of Service: Seventeen years working for The Salvation Army in Finance, five years in current role as Chief Financial Officer. Prior to commencing with The Salvation Army, Greg worked as a management consultant with KPMG for five years, principally in consulting to government departments and agencies, and for more than six years as a senior accountant for the Melbourne and Metropolitan Board of Works. He commenced his career as a graduate accountant with Alcoa Australia in 1979. Special responsibilities: Mr Stowe is a legal trustee of The Salvation Army Australian Southern Territory and is a member of the Territorial Finance Council, Territorial Property Council and the Territorial General Management Council.
For low income earners, the unemployed and under-employed, and those struggling to make ends meet, increased financial stress can push a difficult situation to breaking point. The Salvation Army understands that this sort of stress can lead to family conflict and feelings of depression. It is important that The Salvation Army continues to reach out to people in need to try and assist them before their situation becomes desperate. The Global Financial Crisis has also impacted the operations of The Salvation Army with an increased demand on its services. In the past year The Salvation Army has spent $278.0 million on the delivery of services. The Salvation Army’s investments were also significantly impacted by the GFC.
Social Fund - Total Operating Expenses Social Fund - Total Operating Expenses 1990 to 2010 1990 - 2010 $ million 400 350 300 250 200 150 100 50 -
48
Red Shield Appeal Finance Summary Territorial Public Relations Secretary Major Neil Venables In the 2009/10 financial year $39.4 million was raised through the Red Shield Appeal in the Australia Southern Territory. Many of our community services and programmes rely on funding generated through the appeal and I would like to express our deep gratitude to the generous individuals, groups and businesses who help make a difference in the lives of others through supporting the work of The Salvation Army.
Year after year we are amazed by the generosity of the Australian public. The people who give up their time and volunteer to help us collect for the doorknock, our loyal donors who respond to our requests for support and the businesses who take a good corporate citizenship seriously, all play a vital role. I would like to thank everyone who was involved in our Red Shield Appeal this year; your efforts make a real difference. This year we saw a significant increase in donations during the doorknock collection with $4.5 million donated in our territory, a 10% increase on the result last year. We are aware that our Red Shield logo is a sign of trust in the community and people recognise it and donate knowing that their contribution is going to be spent where it is most needed. We do not take this trust and responsibility lightly; it is something that we value immensely. And so, it is an important part of our role in the Public Relations Department to ensure that we regularly communicate with our supporters so that they feel a part of the work they make possible. In a previous section of this report several corporate partnerships were highlighted. We are fortunate to have many corporate supporters who assist us in our service to the community. This year Austereo provided a new interactive online component to the appeal. We greatly appreciate corporations sharing with us their innovative and creative ideas, helping us to broaden our strategies. We also value corporate partners who make a long-term commitment giving us security in our on-going service delivery. Newcrest Mining is one example of amajor companys wishing to make a difference in the lives of others through their partnership with our Brunswick Youth Services and Creative Opportunities. I also acknowledge the important contribution of our advisory boards and many others who work hard to ensure the continuing success of the appeal. The leadership, expertise and insight offered provides us great support and guidance which is extremely valuable. Being able to raise much needed funds is a huge task and one that we would not be able to meet without the support of so many – thank you to everyone who worked with us to ensure the Red Shield Appeal was successful. The contribution of time, skills, leadership and financial support continues to have a lasting and positive impact on many Australians in need.
49
Red Shield Appeal results (excluding bushfire appeal) Australia Southern Territory 2010
2009
Difference
22,237,000
20,759,000
7.12%
South Australia
4,990,000
4,766,000
4.70%
Western Australia
9,641,000
7,726,000
24.79%
Tasmania
2,034,000
2,092,000
-2.77%
519,000
465,000
11.61%
39,421,000
35,808,000
10.09%
25,069,000
35,070,000
-28.52%
3,132,577
1,682,000
86.24%
67,622,577
72,560,000
-6.80%
RSA Expenses
8,980,000
8,660,000
Wills and Bequests
1,148,334
1,048,719
10,128,334
9,708,719
14.98%
13.38%
Victoria
Northern Territory Total Southern Territory Wills and Bequests Southern Territory Other/miscellaneous donations Southern Territory Total Fundraising results Southern Territory Expenses
Fundraising ratio
50
Salvos Stores Salvos Stores has continued to expand with exceptional growth in revenue and surplus which generated $14 million to support the social work of The Salvation Army. Salvos Stores comprises 205 stores spread across the territory. There are 1,076 staff and 2,250 volunteers that form the Salvos Stores team and work to sustain the broader work of The Salvation Army. In 2010, 10 new stores were opened, providing more locations where the community can access good quality donated goods at a reasonable cost. Salvos Stores also provides goods free of charge to the value of $2.5 million to people who are experiencing hardship and seek assistance through Salvation Army Community Support Centres. Salvos Stores remains focused on developing ways to minimise waste and promote environmental sustainability. This features as a key component of Salvos Stores overall strategic plan.
Investments The main investment of The Salvation Army Australia Southern Territory is in unlisted units held in managed investment funds, managed by MLC Implemented Consulting on behalf of the organisation. Units are held in six different trusts, and the Investment Committee determines the percentage allocated to each trust, with advice from MLC Implemented Consulting. MLC’s investment approach is designed to deliver superior long-term returns, and to do so with consistency. The investment objectives are: • To have the ability to meet all financial obligations of the territory when they fall due • To maintain the purchasing power of the current assets and all future capital contributions by maximising the rate of return on Trust assets • To achieve and maintain a fully funded status for all reserves held by the Trust • To control costs of administering the Trust and managing the investments • To ensure investments are held in securities that can be legally held by churches/charities in Australia and are either quoted on recognised stock exchanges of repute or deposited with financial institutions of high standing • To ensure investments are ethically acceptable while remaining economically sound Further information regarding the investment policy can be found in the Financial Statements – Note 21 Money may be invested, if recommended on investment grounds, in enterprises designed to improve the economy of the country concerned or of underdeveloped countries generally, but must not be invested in companies which are known: • • • • • •
To disregard the pollution of the environment To produce or sell alcoholic drinks or tobacco products To promote gambling in any form To manufacture armaments To produce or distribute films To promote industry or commerce in a country where participation would be generally unacceptable in the investing country
Money may be invested in investment trusts, preference being given (subject to normal commercial prudence) to trusts where the portfolio contains no stocks of companies prohibited under the above list, but in any case no money shall be invested in trust where 10% or more of the total portfolio is held in stocks of such prohibited companies.
51
Management of Investments The Salvation Army Australia Southern Territory administers its investments through The Salvation Army (Victoria) Property Trust (“the Trust”), which acts as the legal entity representing each of the individual State/Territory Property Trusts that comprise the Territory.
Trustees’ Responsibilities • Establish the strategic investment policy for the Trust (asset allocation) and periodically review policy in light of any changes in operational and capital requirements and market conditions • Select qualified advisory persons and investment managers to advise on and manage the Trust’s assets • Monitor and review the performance of selected managers to determine achievement of goals and compliance with policy guidelines • Monitor the costs of the investment operations on a quarterly basis Finance Staff Responsibilities • Manage the overall Trust assets under its care, custody and/or control in accordance with objectives and guidelines • Manage the Trust assets that form part of the working capital fund under its care, custody and/or control in accordance with objectives and guidelines • Monitor both internally and externally managed assets to ensure compliance with the guidelines • Monitor the performance of the Trust’s investment portfolio against defined benchmarks, including asset class indices and ethical (screened) indices • Maintain proper detailed records of investment transactions and assets of the Trust in accordance with accepted accounting standards and audit requirements • Report to the Trustees monthly regarding the status of the portfolio and its performance for various time periods against goals and objectives • Meet with the Advisory Board and Trustees at least annually to report on the performance and compliance with goals and objectives Investment Advisory Board Responsibilities • Provide independent and unbiased information • Assist in the development of the investment policy • Monitor compliance with the investment policy • Assist in the development of strategic asset allocation targets • Assist in the development of performance measurement standards • Monitor and evaluate investment manager performance on an ongoing basis
52
Management of Investments
Investment Managers’ Responsibilities • Manage the Trust assets under its care, custody and/or control in accordance with objectives and guidelines • Exercise proper investment discretion over the assets in their care within guidelines • Promptly inform the Trustees and Finance staff in writing regarding all changes of a material nature pertaining to the firm’s organisation and professional staff • If directed, promptly vote all proxies and related actions in a manner consistent with the long-term interests and objectives of the Trust. Each manager designated to vote will keep detailed records of said votes of proxies and related actions, and will comply with all regulatory obligations related thereto • Report to the Trustees monthly regarding the status of the portfolio and its performance for various time periods. Meet with the Investment Advisory Board and/or Finance Staff at least annually to report on their performance and compliance with goals and objectives • Acknowledge and agree in writing to their fiduciary responsibility to fully comply with the entire investment policy, and as modified in the future The implementation of an investment portfolio designed to achieve the goals and objectives of the Trust must be consistent with legislative and common law requirements. The Investment Advisory Board, composed of up to six members including two non-executive members drawn from the private business sector, will be responsible for working closely with the Trustees and will make recommendations to the Trustees on investment management. The Investment Advisory Board will establish specific search procedures, including the specification of minimum criteria for the selection of new qualified investment managers, to implement the strategic asset allocation plan. Among the criteria that will be used for screening purposes will be assets managed, manager style, track record of staff, communication, fees, risk/reward statistics, etc. All managers must meet the criteria established by the Investment Advisory Board. The Investment Advisory Board will give equal consideration to minority owned and controlled firms, and firms owned and controlled by women which otherwise meet the criteria established by the Investment Advisory Board.
53
Long Term Financial Performance Prior to the Global Financial Crisis (GFC), The Salvation Army Australia Southern Territory had enjoyed healthy returns on its investment portfolio. We were significantly impacted by the GFC in 2008/09, having to recognise an impairment expense on unlisted units in managed investment funds, which resulted in an overdrawn Investment Fluctuation Reserve of $9.5M. In the last financial year, however, the investment strategies have seen solid returns on the portfolio, which have enabled The Salvation Army to achieve its budget objectives.
2009/10 $’000
2008/09 $’000
2007/08 $’000
2006/07 $’000
2005/06 $’000
Short-Term Deposits
23,975
60,365
33,720
26,411
39,234
Long-Term Deposits
42,036
34,275
-
-
9,243
Unlisted Units in Managed Investment Funds
120,441
98,424
136,168
170,017
165,465
Total Financial Assets
186,452
193,064
169,888
196,428
213,942
Income Distribution – Investment Fund
9,737
3,174
16,573
22,023
16,255
Interest Income (Bank Accounts)
956
1,702
2,279
2,015
3,071
Total Investment Income
10,693
4,876
18,852
24,038
19,326
-
(14,172)
(3,665)
-
-
Impairment Expense
Five Year Trend – Revenue and Expenses 2009/10 $’000 Total Operating Revenue
2008/09 $’000
2007/08 $’000
2006/07 $’000
2005/06 $’000
300,437
318,026
284,981
277,963
296,148
13,724
23,679
8,063
14,099
4,897
(314,368)
(315,393)
(271,032)
(267,821)
(282,491)
Total Allocations
1,344
(24,390)
(22,665)
(20,357)
(5,815)
Net Surplus/ (Deficit) after Allocations
1,137
1,922
(653)
3,884
12,739
Total Capital Revenue Total Operating Expenses
The detailed financial statements included as part of this report provides further detail and explanation as to the accounts for the Social Fund.
54
55
56
11.0
Financial Report
11.0
57
FINANCIAL REPORT THE SALVATION ARMY AUSTRALIA SOUTHERN TERRITORY SOCIAL FUND FOR THE YEAR ENDED 30 JUNE 2010
Contents Trustees’ Report
58-61
Statement of Comprehensive Income
62
Statement of Financial Position
63
Statement of Cash Flows
64
Statement of Changes in Capital Funds
65
Notes to the Financial Statements
66-92
Trustees’ Declaration
95
Independent Audit Report
96
The Salvation Army Australia Southern Territory WILLIAM BOOTH – Founder SHAW CLIFTON – General RAYMOND A. FINGER - Territorial Commander
International Headquarters 101 Queen Victoria Street, London, EC4P 4EP
Australia Southern Territory Headquarters 95-99 Railway Road, Blackburn 3130 PO Box 479, Blackburn 3130 Telephone (03) 8878 4500 Fax (03) 8878 4819 www.salvationarmy.org.au
58
The Salvation Army Australia Southern Territory Social Fund TRUSTEES’ REPORT The Trustees of The Salvation Army Australia Southern Territory submit the following report, together with the financial statements, on the operations of the Social Fund for the financial year ended 30 June 2010, and the independent audit report thereon. Principal Activities During the year, the principal continuing activities of The Salvation Army Australia Southern Territory Social Fund comprised of: • • • • • • •
Aged care and disability services Employment, education and training services Homelessness and domestic violence programmes Individual and family support programmes Children and young people at risk programmes Addictions and substance abuse programmes Salvos Stores
No changes in the nature of these activities occurred during the financial year. Review of Operations In 2010, The Salvation Army Australia Southern Territory Social Fund’s operating result was a surplus after allocations of $1,137,000 (2009: surplus of $1,922,000). Total revenues were $314,161,000 (2009: $341,705,000), whilst total operating expenses were $314,368,000 (2009: $315,393,000). Total revenues in 2009 included the funds raised in relation to the Victorian Bushfire disaster, which were included in the results of the Red Shield Appeal for 2009. In line with The Salvation Army’s policies and compliance with donors’ restrictions on the use of certain funds, net transfers of $1,344,000 were made from various reserves for specific purposes (2009: $24,390,000 of net transfers were made to capital projects or set aside in various reserves for future specific purposes). 2010 2009 $’000 (incl Victorian Bushfire Appeal) $’000
2009 (excl Victorian Bushfire Appeal) $’000
Revenue
314,161
341,705
323,746
Expenditure
314,368
315,393
307,906
Surplus before Allocations
(207)
26,312
15,840
Allocations
1,344
(24,390)
(13,918)
Surplus after Allocations
1,137
1,922
1,922
Other comprehensive income
4,787
-
-
Total comprehensive income after allocations
5,924
1,922
1,922
59
2010 Sources of Income Sources of Income
2010 $’000
2009 $’000
150,547
156,686
Trading Revenue
83,438
77,409
Residents Contributions
11,961
10,240
Red Shield Appeal/ Other Donations
40,967
63,109
Investment Income
10,693
4,876
Legacies
7,680
20,595
Miscellaneous
8,875
8,790
314,161
341,705
Government Income
Total Income
Government Income, 48%
Misc, 3% Legacies, 2% Investment Income, 3%
Red Shield Appeal/Other Donations, 13%
Government Income, 48%
Misc, 3% Legacies, 2% Investment Income, 3%
Red Shield Appeal/Other Donations, 13%
Trading Revenue, 27%
Residents Contributions, 4% Trading Revenue, 27%
The following is a summary of the areas of expenditure (excluding internal eliminations) within social programme category, in relation to social services provided by the various centres operating within The Salvation Army Australia Employment, Residents Education and Southern Territory in 2010. Salvos4% Contributions, Training, 19%
Social Centre Expenditure
2010 $’000
2009 $’000
Aged Care & Disability Services
22,996
21,858
Employment, Education and Training
44,493
60,030
Salvos Stores
67,044
61,898
Homelessness & Domestic Violence
47,724
45,436
Individual & Family Support
34,960
33,341
Children & Young People at Risk
29,424
27,162
Addictions & Substance Abuse
21,320
20,396
Administration & Research
10,101
8,483
278,062
278,604
36,306
36,789
314,368
315,393
Total Social Centre Expenditure Other Expenditure including Red Shield Appeal Total Expenditure
Stores, 24%
2010 Social Centre Expenditure Aged Care & Disability Services, 8% Administration & Research, 3%
Addictions &Employment, Substance Education and Abuse, 8% Training, 19% Children & Young People at Aged Care Risk, & 11% Disability Services, 8%
Administration & Research, 3%
Addictions & Substance Abuse, 8% Children & Young People at Risk, 11%
Homelessness & Domestic Violence, 17% Salvos Stores, 24% Individual & Family Support, 13% Homelessness & Domestic Violence, 17%
Individual & Family Support, 13%
60
The significant impacts on the 2010 result are: • T he overall reduction in Government funding for the year was principally due to the new contract associated with employment services delivered through the Employment Plus network. The new contract with the Department of Education, Employment and Workplace Relations which came into force from 1 July 2009 saw a reduction in the number of Job Services Australia Sites from 80 to 68, with an accompanying reduction in active caseload. Coupled with the reduced unemployment rate, this has led to a significant reduction in government funding for employment services compared to the previous year. • S alvos Stores had an outstanding year in terms of sales revenue from operations, which enabled them to contribute $13.5Mn towards the operations of the Social Fund. • T he Red Shield Appeal achieved a record result for the year ended 30 June 2010, with $39.4Mn raised across the territory. This was an increase on the previous year’s record total of $35.8Mn (excluding the Victorian Bushfire Appeal total of $18Mn). • T he investment fund generated strong returns for the year, as part of the global economic recovery following the GFC. The income return on the investment portfolio managed by MLC Implemented Consulting generated a 5.75% return compared to the budgeted return of 5.04%. The main reason for the higher income return was favourable currency movements with global investments. During the year, rebalancing of the MLC portfolio to maintain asset allocations within agreed thresholds resulted in realised losses of $825,000. As in past years, these losses have been funded through an allocation to the Investment Fluctuation Reserve in the balance sheet. General interest rate increases during the year on short-term deposits and funds held ‘at call’ also contributed to the stronger result for financing income. At 30 June 2010, the Social Fund Statement of Financial Position (page 63) is showing a negative current ratio (current assets less current liabilities). The Social Fund’s major investment asset (unlisted units in managed investment funds) is disclosed as a non-current asset in accordance with Australian Accounting Standards. However, these funds are available to the Social Fund as required to support cash flow requirements. Events Subsequent to Reporting Date In the opinion of the Trustees, since 30 June 2010, there have been no transactions or events of an unusual nature likely to affect significantly the operations of The Salvation Army Australia Southern Territory Social Fund, the results of those operations, or the state of affairs of the entity in future financial years. Likely Developments In the opinion of the Trustees, there are no likely changes in the operations of The Salvation Army Australia Southern Territory that will adversely affect the results of the Social Fund in subsequent financial years. Environmental Issues The operations of The Salvation Army Australia Southern Territory are not regulated by any significant environmental regulation under a law of the Commonwealth or of a State or Territory.
61
Insurance of Officers The Salvation Army has, during the financial year, paid an insurance premium in respect of an insurance policy for the benefit of the Trustees and Officers of The Salvation Army. The insurance is in the normal course of business and grants indemnity for liabilities permitted to be indemnified by The Salvation Army under Section 199 of the Corporations Act 2001. In accordance with commercial practice, the insurance policy prohibits disclosure of the terms of the policy including the nature of the liability insured against and the amount of the premium. Auditor KPMG continues as The Salvation Army’s auditor at the date of this report. Make Timely and Balanced Disclosures The Salvation Army is not subject to the ASX Listing Rule disclosure requirements. The Salvation Army does, however, report to its stakeholders in the form required by the ASX Principles of Good Corporate Governance – Principle 5.
Signed in accordance with a resolution of the Trustees:
Raymond A Finger, Commissioner Territorial Commander TRUSTEE
Gregory F Stowe Chief Financial Officer TRUSTEE
Dated at Melbourne this 26th day of October 2010
62
The Salvation Army Australia Southern Territory Social Fund xxxxxxxxxxx STATEMENT OF COMPREHENSIVE INCOME FOR YEAR ENDED 30 June 2010 NOTE 2010 2009 $’000 $’000 Revenue from rendering of services 2 158,072 165,932 Other revenues from ordinary activities 2 92,251 93,451 Financing Income 10,693 4,876 Red Shield Appeal donations 5 39,421 53,767 Total operating revenue 300,437 318,026 Capital revenue: Legacies 7,680 20,595 Government grants 4,436 994 Other revenue 1,608 2,090 Total capital revenue 13,724 23,679 Total revenue 314,161 341,705 Employee expenses (159,029 ) (155,841 ) Depreciation expenses (7,918 ) (6,545 ) Computer expenses (2,146 ) (2,289 ) Impairment expense 1(i), 21 - (14,172 ) Welfare/Jobseeker expenses (31,539 ) (36,922 ) Building/Occupancy expenses (40,038 ) (41,189 ) Motor Vehicle expenses (9,111 ) (9,000 ) Contribution - General Fund 1(q) (18,804 ) (18,173 ) Rollover accommodation bond credits/(expenses) 1(f)(i) 1,427 1,919 Amenities and supplies (10,297 ) (9,587 ) Professional fees expenses (5,517 ) (4,301 ) Other expenses from ordinary activities (31,396 ) (19,293 ) Total operating expenses (314,368 ) (315,393 ) Operating (deficit)/surplus before allocations 14 (207 ) 26,312 Other comprehensive income Net change in fair value of available for sale financial assets 4,787 - Total comprehensive income for the period before allocations 4,580 26,312 Allocations from/(to) capital funds 3 1,344 (24,390) Total comprehensive income for the period after allocations 5,924 1,922
The income statement is to be read in conjunction with the notes to the financial statements set out on pages 66 XX to 94 XX
63
The Salvation Army Australia Southern Territory Social Fund xxxxxxxxxxx STATEMENT OF FINANCIAL POSITION FORATYEAR AS 30 June ENDED 2010 30 June 2010 NOTE
2010 $’000
2009 $’000
CURRENT ASSETS Cash 6 1,883 6,200 Receivables 7 9,743 11,090 Other financial assets 8 23,975 60,365 Inventories 9 1,058 916 TOTAL CURRENT ASSETS 36,659 78,571 NON-CURRENT ASSETS Receivables 7 35,493 34,793 Property, plant and equipment 10 197,781 178,805 Other financial assets 8 162,477 132,699 TOTAL NON-CURRENT ASSETS 395,751 346,297 TOTAL ASSETS 432,410 424,868 CURRENT LIABILITIES Payables 11 31,675 31,039 Employee benefits 12 15,600 14,085 Provisions 13 3,450 2,750 TOTAL CURRENT LIABILITIES 50,725 47,874 NON-CURRENT LIABILITIES Payables 11 21,335 22,349 Employee benefits 12 1,766 1,625 Provisions 13 3,549 3,600 Interest free loans 16 5,461 4,474 Special purpose funds 17 176 128 TOTAL NON-CURRENT LIABILITIES 32,287 32,176 TOTAL LIABILITIES 83,012 80,050 NET ASSETS 349,398 344,818 CAPITAL FUNDS Working capital fund 14(a) 6,855 5,718 Property contributions fund 14(a) 189,609 181,040 Reserves 14(a) 109,831 110,356 Trusts and special purpose funds 14(a) 19,278 26,492 Legacies 14(a) 23,825 21,212 TOTAL CAPITAL FUNDS 349,398 344,818
The income statement is to be read in conjunction with the notes to the financial statements set out on pages 66 XX to 94 XX
64
The Salvation Army Australia Southern Territory Social Fund STATEMENT OF CASH FLOWS FOR YEAR ENDED 30 June 2010
NOTE
2010 $’000
2009 $’000
CASH FLOWS FROM OPERATING ACTIVITIES Cash receipts in the course of operations 292,710 314,911 Cash payments in the course of operations (305,902 ) (292,170 ) Net cash received/(used) in operating activities 20(ii) (13,192 ) 22,741 CASH FLOWS FROM INVESTING ACTIVITIES Investment revenue received 9,738 3,174 Receipts from redemption of investments 12,674 58,278 Payments for investments (1,274 ) (88,149 ) Capital revenue received 13,724 23,679 Payments for property, plant and equipment (27,481 ) (25,391 ) Proceeds from sale of property, plant and equipment 410 3,693 Net cash received/(used) by investing activities 7,791 (24,716 ) CASH FLOWS FROM FINANCING ACTIVITIES Repayment of borrowings (95 ) Proceeds from borrowings 1,000 1,100 Proceeds from residents’ interest free loans 1,035 1,561 Repayment of residents’ interest free loans (856 ) (765 ) Net cash provided by financing activities 1,084 1,896 Net increase/(decrease) in cash held (4,317 ) (79 ) Cash at the beginning of the financial year 6,200 6,279 Cash at the end of the financial year 20(i) 1,883 6,200
The income statement is to be read in conjunction with the notes to the financial statements set out on pages 66 to 94
65
The Salvation Army Australia Southern Territory Social Fund STATEMENT OF CHANGES IN CAPITAL FUNDS FOR YEAR ENDED 30 June 2010 ($,000) Working Property Reserves Trusts Capital Contrib’n and Fund Fund Special Purpose Funds
Legacies
Total
At 1 July 2008 Operating Surplus before allocations
3,796 26,312
171,933 -
105,111 -
8,542 -
21,649 -
311,031 26,312
Allocations to/(from) other capital funds Transfers to/(from) fair market reserve
30,108 (24,390 )
171,933 9,107
105,111 (2,231 )
8,542 17,950
21,649 (437 )
337,343 -
5,718 -
181,040 -
102,880 7,476
26,492 -
21,212 -
337,343 7,476
At 30 June 2009 5,718 181,040 110,356 At 1 July 2009 5,718 181,040 110,356 Operating Deficit before allocations (207 ) - - Other comprehensive income - - 4,787 5,511 181,040 115,143 Allocations to/(from) other capital funds 1,344 8,569 (5,312 )
26,492
21,212
344,818
26,492 - -
21,212 - -
344,818 (207 ) 4,787
26,492 (7,214 )
21,212 2,613
349,398 -
At 30 June 2010
19,278
23,825
349,398
6,855
189,609
109,831
The income statement is to be read in conjunction with the notes to the financial statements set out on pages 66 to 94
66
The Salvation Army Australia Southern Territory Social Fund NOTES TO THE FINANCIAL STATEMENTS
1. Statement of Significant Accounting Policies The Social Fund aggregates the results of all social centres, Salvos Stores and a 50% share of the Employment Plus Programme. The financial report was authorised for issue by the trustees on 26th October 2010. (a) Statement of compliance The financial report is a general purpose financial report, which has been prepared in accordance with Australian Accounting Standards (‘AASBs’) adopted by the Australian Accounting Standards Board (‘AASB’). International Financial Reporting Standards (‘IFRSs’) form the basis of Australian Accounting Standards (‘AASBs’) adopted by the AASB, and for the purpose of this report are called Australian equivalents to IFRS (‘AIFRS’) to distinguish from previous Australian GAAP. (b) Basis of preparation The financial report is presented in Australian dollars. Presentation of financial statements The Salvation Army applies revised AASB 101 Presentation of Financial Statements (2007) which became effective as of 1 January 2009. As a result, The Salvation Army presents in the consolidated statement of changes in equity all owner changes in equity, whereas all non–owner changes in equity are presented in the consolidated statement of comprehensive income. (c) Annual Appeals The Salvation Army Red Shield Appeal is an annual appeal. The amount raised and corresponding fundraising expenses are reflected in the financial report in the same year as the appeal. In addition, the Territorial Public Relations department oversights our wills and bequests works, and overseas appeals. (d) Property, plant and equipment (i) Owned assets Items of property, plant and equipment are stated at cost, or if donated, at appraised value at date of gift, less accumulated depreciation (note (d)(ii)) and impairment losses. Capital gifts are shown as revenue and an allocation is made to the property contributions fund. Property that is being constructed for future use is classified as ‘building schemes in progress’ and stated at cost until construction is complete, at which time it is reclassified as ‘freehold buildings’ or ‘leasehold property’. Upon disposal of freehold properties, the cost is transferred to a capital property reserve, together with sales proceeds to determine the profit or loss on the sale of the property. In addition, the funding contribution or grant in the property contributions fund relating to the disposal is transferred to the same reserve, to provide funding for future property acquisitions. Independent valuations are obtained as to the market value of any property before it is sold.
67
The Salvation Army Australia Southern Territory Social Fund NOTES TO THE FINANCIAL STATEMENTS
(ii) Depreciation With the exception of freehold land, depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Land is not depreciated. Depreciation commences from the date of acquisition or, in respect of constructed assets, from the time an asset is completed and ready for use.
The estimated useful lives in the current and comparative periods are as follows:
• Buildings • Plant and Equipment (excluding motor vehicles) • Motor Vehicles/Trucks • Leasehold Improvements • Information Technology capital projects
50 years 3 years 5 years Term of the lease Deemed useful life to a maximum of 5 years
The residual value, the useful life and the depreciation method applied to an asset are reassessed annually.
(iii) Capital Contribution Property Reserve Under International Salvation Army accounting policies and procedures, funds that have been utilised to finance the acquisition of freehold properties must be transferred to the capital contribution – property reserve. These contributions are transferred to meet building depreciation costs, thus relieving the impact on the working capital fund. (e) Investments The Salvation Army classified its investments in the following categories: financial assets at fair value through profit and loss, receivables, held-to-maturity and available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and, in the case of assets classified as held-to-maturity, ‘re-evaluates’ this designation at each reporting date. (i) Financial assets at fair value Financial assets at fair value through profit and loss are the investments held by managed portfolio, which are acquired principally for the purpose of selling in the short term with the intention of making a positive return. (ii) Receivables Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the organisation provides goods or services directly to a debtor with no intention of selling the receivables. They are included in current assets, except for those with settlements greater than 12 months after the balance sheet date, which are classified as non-current assets. Receivables are carried at amortised cost using the effective interest method. Receivables are included in receivables in the balance sheet (note 7). (iii) Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the organisation’s management has the positive intention and ability to hold to maturity. These investments normally have a maturity of more than three months but less than 12 months from the date of acquisition.
68
The Salvation Army Australia Southern Territory Social Fund NOTES TO THE FINANCIAL STATEMENTS
(iv) Available-for-sale financial assets Available-for-sale financial assets comprise principally the managed investment portfolio. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the balance sheet date. The fair value of available for sale financial assets is determined by reference to their quoted closing unit/bid price at the reporting date. Available-for-sale financial assets and financial assets at fair value through profit and loss are subsequently carried at fair value. Gains or losses arising from changes in the fair value of the “financial assets at fair value through profit or loss” category, including interest and dividend income, are presented in the income statement within other income or other expenses in the period in which they arise. Gains or losses arising from changes in the fair value of the “available-for-sale” investments are recognised in equity unless there is evidence of impairment. When investments classified as available-for-sale from the long term managed investment portfolio are sold or impaired, the accumulated fair value adjustments recognised in equity are included in the income statement as gains and losses from investment portfolio.
The Salvation Army assesses at each balance date whether there is objective evidence that a financial asset or group of financial assets is impaired. In the case of investment portfolio classified as available-for-sale, a significant or prolonged decline in the fair value of an investment portfolio below its cost is considered in determining whether the investment is impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and current fair value, less any impairment loss on that financial asset previously recognised in the profit and loss – is removed from equity and recognised in the income statement. Impairment losses recognised in the income statement on equity instruments classified as available-for-sale are not reversed through the income statement. The fair value of available for sale assets is determined by reference to the redemption price at the reporting date.
69
The Salvation Army Australia Southern Territory Social Fund NOTES TO THE FINANCIAL STATEMENTS
(f) Accommodation Bond (i) Rollovers Prior to 1 August 2002, the practice of the Social Fund was to ‘rollover’ an independent living unit (ILU) resident’s ingoing contribution when that resident moved from an ILU into low care/hostel accommodation on the same site. As part of the sale of various aged care centres on 1 July 2005, the Social Fund retained responsibility, under certain conditions, to fund part/all of any future accommodation bonds charged to ILU residents who had resided at such centres prior to 1 August 2002, when they moved into low care/hostel accommodation on the same site. The majority of any funds released under this ‘rollover’ policy will be repaid to the Social Fund when the residents vacate the aged care centre. An assessment was made at balance date by the Social Fund as to the present value of estimated future payments under this rollover policy, and estimated receivables representing funds to be returned to the Social Fund, when the residents vacate the aged care centre, with any adjustment recorded through the Income Statement. (ii) Refundable/Amortisable Accommodation Bonds Many residents of aged care centres pay a refundable and amortisable accommodation bond to The Salvation Army. The refundable portion is in the form of an interest free loan repayable in full, whilst the amortisable amount is recognised as revenue and then transferred from accumulated surplus to reserves and held for aged care centre capital projects. The return of accommodation bond is solely dependent upon the resident. The Salvation Army does not have an unconditional right to defer settlement of the liability and therefore it has been accounted for as a current liability. (g) Inventories Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. No allocation of overheads has been included in the valuation.
Stocks of foodstuffs and consumable stores held at various social centres are expensed.
Inventory is assessed on a regular basis, and slow moving or damaged items are provided for within a provision for stock obsolescence. (h) Cash and cash equivalents Cash and cash equivalents comprise cash on hand, cash at bank and cash in transit balances (i) Impairment The carrying amounts of the Social Fund’s assets, other than inventories (see accounting policy 1(g)) and investments are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. Calculation of recoverable amount The recoverable amount of the Social Fund’s receivables carried at amortised cost is calculated as the present value of estimated future cash flows, discounted at the original effective interest rate (i.e. the effective interest rate computed at initial recognition of these financial assets). Receivables with a short duration are not discounted.
Impairment of receivables is not recognised until objective evidence is available that a loss event has occurred.
70
The Salvation Army Australia Southern Territory Social Fund NOTES TO THE FINANCIAL STATEMENTS
(j) Employee benefits (i) Defined contribution superannuation funds Obligations for contributions to defined contribution superannuation funds are recognised as an expense in the income statement as incurred. (ii) Wages, salaries, annual leave and non-monetary benefits Liabilities for employee benefits for wages, salaries and annual leave that are expected to be settled within 12 months of the reporting date represent present obligations resulting from employees’ services provided to reporting date, are calculated at undiscounted amounts based on remuneration wage and salary rates that the Social Fund expects to pay as at reporting date including related on-costs. (iii) Long-term service benefits The Social Fund’s net obligation in respect of long-term service benefits, other than the Officer Retirement Fund, is the amount of future benefit that employees have earned in return for their service in the current and prior periods. The obligation is calculated using expected future increases in wage and salary rates including related on-costs and expected settlement dates, and is discounted using the rates attached to the Commonwealth Government bonds at the balance sheet date which have maturity dates approximating to the terms of the consolidated entity’s obligations. (k) Other payables Payables are stated at cost, being non-interest bearing, and are normally settled within 30 days. (l) Revenues Revenues are recognised at fair value of the consideration received net of the amount of goods and services tax (GST). Revenue from government grants for rendering services and funding for the Employment Plus Job Network is recognised in the period in which the services are provided, having regard to the stage of completion of the service agreements.
Trading revenue from the sale of goods is recognised when control of goods passes to the customer.
Resident contributions and patients’ fees are recognised when the service is provided.
Revenue from legacies and donations is recognised when the Social Fund gains control of the contribution. The Territorial Finance Council in accordance with the expressed terms of the Testator approves all allocations of bequests.
Interest revenue is recognised as it accrues. Dividends are recognised when they are received.
Any profit on the sale of a non-current asset is recorded as revenue when control of the asset passes to the buyer. The profit is calculated as the difference between the carrying amount of the asset, and net proceeds received from the buyer.
71
The Salvation Army Australia Southern Territory Social Fund NOTES TO THE FINANCIAL STATEMENTS
(m) Expenses Payments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease.
Borrowing costs are expensed as incurred and included in financing expenses.
(n) Provisions A provision is recognised in the balance sheet when the Social Fund has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. A provision for ‘make-good’ costs on leased premises has been recognised, based upon an assessment of lease terms and conditions (see note 13). (o) Goods and services tax Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Tax Office (ATO). In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables are stated with the amount of GST excluded.
The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the balance sheet. Cash flows are included in the statement of cash flows on a net basis. The GST components of cash flows arising from investing and financing activities, which are recoverable from, or payable to, the ATO are classified as operating cash flows. (p) Accounting estimates and judgements Management discussed with the Territorial Finance Council and the Audit Committee the development, selection and disclosure of the Social Fund’s critical accounting policies and estimates and the application of these policies and estimates. The estimates and judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Key sources of estimation uncertainty Notes 1(n) and 22 contain information about the provision for compensation claims. (q) Contribution to General Fund The General Fund records all territorial and divisional headquarters’ costs. These headquarters oversee the social infrastructure of The Salvation Army. An ‘arms length’ contribution is charged by the General Fund to the Social Fund for services provided.
72
The Salvation Army Australia Southern Territory Social Fund NOTES TO THE FINANCIAL STATEMENTS
(r) Capital Revenue available for allocation The Salvation Army Australia Southern Territory has adopted a policy of separately disclosing revenue received which is designated for capital purposes rather than operating activities. This designation is determined either directly by the donor or by the trustees of The Salvation Army Australia Southern Territory. This revenue is fully allocated to reserves and special purpose funds to be used to provide and maintain the various service programmes of The Salvation Army Australia Southern Territory. (s) Employment Plus The Salvation Army Australia Southern Territory in conjunction with The Salvation Army Australia Eastern Territory has been jointly involved in the management of the national Salvation Army Employment Plus programme since 1 May 1998. This project commenced when The Salvation Army in Australia won a tender from the Federal Government to provide employment services to long term unemployed persons. This project is considered to be part of the overall aims of The Salvation Army and is not considered separate from these aims in any way. This programme is not considered to be a stand-alone operation. It is consistent with the aims of The Salvation Army to assist the long term unemployed. The proportionate interests in the assets, liabilities, income and expenses of the Employment Plus joint programme activity have been incorporated in the financial statements. (t) Leases The Salvation Army leases some shops and office facilities. The provisions of these leases are such that substantially all the risks and benefits of ownership of the property are retained by the lessors and accordingly, in the financial statements, they are classified as operating leases. Payments made under operating leases are expensed on a straight-line basis over the term of the lease. Refer note 18 for details of non-cancellable operating lease commitments. (u) Comparatives Where necessary, comparative information has been reclassified to achieve consistency in disclosure with current financial year amounts and other disclosures. (v) Rounding All amounts in the financial report have been rounded to the nearest thousand dollars except where otherwise indicated.
73
The Salvation Army Australia Southern Territory Social Fund NOTES TO THE FINANCIAL STATEMENTS
(w) New standards and interpretations not yet adopted The following standards, amendments to standards and interpretations have been identified as those which impact the entity in the period of initial application. They are available for early adoption at 30 June 2010, but have not been applied in preparing this financial report. • AASB 9 Financial Instruments includes requirements for the reclassification and measurement of financial assets resulting from the first part of Phase 1 of the project to replaces AASB139 Financial Instruments: Recognition and Measurement. • AASB 9 will become mandatory for The Salvation Army’s 30 June 2014 financial statements. Retrospective application is generally required, although there are exceptions, particularly if the entity adopts the standard for the year ended 30 June 2012 or earlier. The Salvation Army has not yet determined the potential effect of the standard. • AASB 124 Related Party Disclosures (revised December 2009) simplifies and clarifies the intended meaning of the definition of a related party and provides a partial exemption from the disclosure requirements of government-related entities. The amendments, which will become mandatory for The Salvation Army’s 30 June 2012 financial statements, are not expected to have any impact on the financial statements. • AASB 2008-9 Further amendments to Australia Accounting Standards arising from the Annual Improvements Process affect various AASBs resulting in minor changes for presentation, disclosure, recognition and measurement purposes. The amendments, which became mandatory for The Salvation Army’s 30 June 2011 financial statements, are not expected to have a significant impact on the financial statements.
74
The Salvation Army Australia Southern Territory Social Fund xxxxxxxxxxx notes to financial statements FOR YEAR ENDED 30 June 2010
NOTE
2010 $’000
2009 $’000
2. REVENUE FROM ORDINARY ACTIVITIES Revenue from rendering of services: Government grants 104,500 96,733 Fee for service – Government Funding 41,611 58,959 Resident contributions and patient fees 11,961 10,240 158,072 165,932 Other revenue from ordinary activities: Trading revenue 83,438 77,409 Donations received – other than from the Red Shield Appeal 1,546 9,342 Profit on sale of property, plant and equipment 344 1,355 Other 6,923 5,345 92,251 93,451 Total revenue from ordinary activities 250,323 259,383
3. ALLOCATIONS Allocations have been made to/(from) the following capital funds, excluding working capital: Property contributions fund 14(a) 2,148 (1,339 ) Reserves 14(a) (3,611 ) (13,581 ) Trusts and special purpose funds 14(a) (5,050 ) 18,649 Legacies 14(a) 5,169 20,661 (1,344 ) 24,390 4. AUDITORS’ REMUNERATION Audit services: Auditors of the Trust KPMG Australia Audit of the Social Fund 325 455 Other services: Auditors of the Trust KPMG Australia - -
The income statement is to be read in conjunction with the notes to the financial statements set out on pages XX to XX
75
The Salvation Army Australia Southern Territory Social Fund xxxxxxxxxxx notes to financial statements FOR YEAR ENDED 30 June 2010
2010 2009 $’000 $’000 5. RED SHIELD APPEAL DONATIONS Donations Victoria 21,655 20,759 South Australia 4,984 4,766 Western Australia 9,638 7,726 Tasmania 2,034 2,092 Northern Territory 519 465 Victorian Bushfire Appeal 591 17,959 39,421 53,767 Less: Expenses (8,980 ) (8,660) Net Revenue Available For Distribution/Allocations 30,441 45,107 Distribution/Allocations Social programme deficits: Employment, education and training 601 550 Children and young people at risk 1,502 1,605 Addictions and substance abuse 511 2,502 Aged care and disability support 262 210 Individual and family support 11,933 11,404 Homelessness and domestic violence 4,687 4,250 Chaplaincy 3,255 3,023 Social services and community programmes total 22,751 23,544 Capital Appeals 1,603 557 Other Emergency Appeals 1,173 81 Victorian Bushfire Appeal 591 17,959 Donor designated gifts for social services and community programmes 4,323 2,966 Total Distribution/Allocations 30,441 45,107
The income statement is to be read in conjunction with the notes to the financial statements set out on pages XX to XX
76
The Salvation Army Australia Southern Territory Social Fund xxxxxxxxxxx notes to financial statements FOR YEAR ENDED 30 June 2010
5. RED SHIELD APPEAL DONATIONS (continued) NOTE
2010 $’000
2009 $’000
Victorian Bushfire Appeal Amount set aside within reserves at 30 June 2009 for commitments beyond 30 June 2009 18,132 Donations The Salvation Army Australia Southern Territory Red Shield Appeal Emergency appeals 591 17,959 The Salvation Army Australia Eastern Territory Red Shield Appeal Emergency appeals 421 7,660 Other 48 19,192 25,619 Expenditure in 2009/10 (within welfare/jobseeker expenses) (7,147 ) (7,487 ) Transfers to capital asset contributions (for equipment purchases) (188 ) Amount set aside within reserves at 30 June 2010 for commitments beyond 30 June 2010 11,857 18,132
6. CASH Cash on hand 154 Cash in transit 317 Cash at bank 1,412 20 1,883
160 295 5,745 6,200
7. RECEIVABLES Current Prepayments 988 869 Accommodation Bond Rollovers 2,562 419 Sundry debtors 6,193 9,802 9,743 11,090 Non-current Deferred Consideration 3,750 3,300 Accommodation Bond Rollovers 31,306 30,812 Sundry debtors 437 681 35,493 34,793 The income statement is to be read in conjunction with the notes to the financial statements set out on pages XX to XX
77
The Salvation Army Australia Southern Territory Social Fund xxxxxxxxxxx notes to financial statements FOR YEAR ENDED 30 June 2010
2010 2009 $’000 $’000 8. OTHER FINANCIAL ASSETS Current Short term deposits 23,975 60,365 Non-current Unlisted units in managed investment funds 120,441 98,424 Long term deposits 42,036 34,275 162,477 132,699 186,452 193,064 9. INVENTORIES Raw materials and stores 308 280 Work in progress 20 13 Finished goods 730 634 Less provision for stock obsolescence - (11 ) 1,058 916
10. PROPERTY, PLANT AND EQUIPMENT Freehold Land and Buildings Freehold land at cost 29,919 29,332 Buildings at cost 162,701 153,304 Accumulated depreciation (35,960 ) (33,164 ) 126,741 120,140 Total Freehold Land and Buildings 156,660 149,472
The income statement is to be read in conjunction with the notes to the financial statements set out on pages XX to XX
78
The Salvation Army Australia Southern Territory Social Fund xxxxxxxxxxx notes to financial statements FOR YEAR ENDED 30 June 2010
10. PROPERTY, PLANT AND EQUIPMENT (continued)
2010 $’000
2009 $’000
Leasehold Property At cost 11,798 8,457 Accumulated depreciation (3,212 ) (2,067 ) Total Leasehold Land and Buildings 8,586 6,390 Building Schemes in Progress - at cost 21,955 13,317 Motor Vehicles At cost 4,028 3,563 Accumulated depreciation (2,809 ) (2,592 ) Total Motor Vehicles 1,219 971 Plant and Equipment At cost 16,926 13,062 Accumulated depreciation (7,565 ) (4,407 ) Total Plant and Equipment 9,361 8,655 Total Property, Plant and Equipment Net Book Value 197,781 178,805 Social Fund land and buildings of $165,247,000 (2009: $155,862,000) are funded through the Property Contributions Fund (excluding building schemes in progress funding) of $164,188,000 as at 30 June 2010 (2009: $155,167,000). The remaining balance is funded from the following sources: Unsecured loans
600
695
Social Fund freehold properties – unfunded 459 -
The income statement is to be read in conjunction with the notes to the financial statements set out on pages XX to XX
79
The Salvation Army Australia Southern Territory Social Fund xxxxxxxxxxx notes to financial statements FOR YEAR ENDED 30 June 2010
10. PROPERTY, PLANT AND EQUIPMENT (continued) 2010 2009 $’000 $’000 Freehold Land and Buildings Carrying amount at beginning of year 149,472 130,339 Additions (transfers from Building Schemes in Progress - Cost) 10,716 23,589 Disposals (587 ) (1,837 ) Depreciation (2,941 ) (2,619 ) Carrying amount at end of year 156,660 149,472 Leasehold Property Carrying amount at beginning of year 6,390 7,646 Additions (transfers from Building Schemes in Progress - Cost) 3,564 333 Disposals - (230 ) Depreciation (1,367 ) (1,359 ) Carrying amount at end of year 8,587 6,390 Building Schemes in Progress – Cost Carrying amount at beginning of year 13,317 16,779 Additions 22,053 21,506 Transfers to Freehold Land and Buildings/Leasehold Property (13,415 ) (23,922 ) Transfers to Plant and Equipment - (1,046 ) Carrying amount at end of year 21,955 13,317 Motor Vehicles Carrying amount at beginning of year 971 931 Additions 580 452 Disposals - (97) Depreciation (332 ) (315 ) Carrying amount at end of year 1,219 971 Plant and Equipment Carrying amount at beginning of year 8,655 6,431 Additions (including transfers from Building Schemes in Progress – Cost) 3,981 4,480 Disposals - (5 ) Depreciation (3,275 ) (2,251 ) Carrying amount at end of year 9,361 8,655
The income statement is to be read in conjunction with the notes to the financial statements set out on pages XX to XX
80
The Salvation Army Australia Southern Territory Social Fund xxxxxxxxxxx notes to financial statements FOR YEAR ENDED 30 June 2010
NOTE
2010 $’000
2009 $’000
11. PAYABLES
Current Sundry creditors and accruals 20,035 20,800 Prepaid government funding 8,354 6,686 Accommodation bond rollovers 1(f) 3,286 3,553 31,675 31,039 Non-current Accommodation bond rollovers 1(f) 21,335 22,349 12. EMPLOYEE BENEFITS Current Employee entitlements 15,600 14,085 Non-current Employee entitlements 1,766 1,625
13. PROVISIONS Current Compensation claims 3,450 2,750 Non-current Compensation claims 3,000 3,600 Make good of leased premises 1(n) 549 3,549 3,600 14. CAPITAL FUNDS (a) Movements in Capital Funds Property Contributions Fund Opening Balance 181,040 171,933 Net Transfers 6,421 10,446 Allocations from/(to) working capital fund 3 2,148 (1,339 ) Closing balance 189,609 181,040
The income statement is to be read in conjunction with the notes to the financial statements set out on pages XX to XX
81
The Salvation Army Australia Southern Territory Social Fund xxxxxxxxxxx notes to financial statements FOR YEAR ENDED 30 June 2010
14. CAPITAL FUNDS (continued) NOTE 2010 2009 $’000 $’000 Reserves Opening Balance 110,356 105,111 Net Transfers - other (1,701 ) 11,350 Transfer to/(from) Fair Market Reserve 4,787 7,476 Allocations from/(to) working capital fund 3 (3,611 ) (13,581 ) Closing balance 14(c) 109,831 110,356 Trusts and Special Purpose Funds Opening Balance 26,492 8,542 Net Transfers (2,164 ) (699 ) Allocations from/(to) working capital fund 3 (5,050 ) 18,649 Closing balance 14(d) 19,278 26,492 Legacies Opening Balance 21,212 21,649 Net Transfers (2,556 ) (21,098 ) Allocations from/(to) working capital fund 3 5,169 20,661 Closing balance 23,825 21,212 Working Capital Fund Opening Balance 5,718 3,796 Operating surplus before allocations (207 ) 26,312 Allocations from/(to) other capital funds 3 1,344 (24,390 ) Closing balance 6,855 5,718 (b) Property Contributions Fund Under International Salvation Army accounting policies and procedures, all contributions, grants, donations and other revenue that will finance property projects must be specifically accounted for in the books of The Salvation Army Australia Southern Territory. Upon completion of each project, the respective contributions are transferred to the Property Contributions Fund. This balance represents the commitments that were fulfilled in acquiring the land and buildings shown as assets held by The Salvation Army Australia Southern Territory. These contributions remain in the balance sheet to ‘fund’ the depreciation on these properties, thus relieving the working capital fund of this charge.
The income statement is to be read in conjunction with the notes to the financial statements set out on pages XX to XX
82
The Salvation Army Australia Southern Territory Social Fund xxxxxxxxxxx notes to financial statements FOR YEAR ENDED 30 June 2010
14. CAPITAL FUNDS (continued)
2010 $’000
2009 $’000
(c) Reserve Balances Board Designated Funds Property development 14,927 21,778 Training 8,817 8,865 Social programme enhancement and development 21,493 19,288 Capital asset contribution 5,538 5,641 Planned maintenance 7,097 6,672 Asset replacement 6,373 6,605 Aged care reserves 31,872 30,690 Capital projects funding 3,188 3,909 Employment and training 14,033 14,178 Fair Market Investment Reserve 4,787 - Investment Fluctuation Reserve (10,303 ) (9,478 ) Other 2,009 2,208 109,831 110,356 These balances are amounts set aside by the Territorial Finance Council to meet realistic, planned or anticipated needs for The Salvation Army Australia Southern Territory, thereby relieving the working capital fund from the future cost of these needs. An explanation of the purpose of each reserve is provided below. Property Development This balance represents funds set aside for future property development within the Social Fund. It also represents the net proceeds on sold properties, which are set aside until allocated to new capital schemes. In most cases, the net proceeds on a particular sold property are utilised as part funding for a specific new capital scheme. However, in some cases, excess property is sold and the net proceeds are available more generally for a number of capital schemes, or other purposes as determined by the Territorial Finance Council. It also includes a specific allocation for property development purposes in relation to retired officers’ quarters. Training This balance represents funds set aside to be used towards the cost of officer and employee training, and to further enhance future service provision and delivery. Social Programme Enhancement and Development This balance represents funds retained by specific social centres to be utilised, in conjunction with the funding bodies supporting these programmes, for the enhancement and development of these programmes, as well as unused quota funding available at the reporting date by division for future social programme development, within their social centres. Capital Asset Contribution This balance represents funds utilised to purchase capital assets (excluding land and buildings). These funds will be used to offset the future expensing of such assets through depreciation charges in subsequent financial periods.
The income statement is to be read in conjunction with the notes to the financial statements set out on pages XX to XX
83
The Salvation Army Australia Southern Territory Social Fund xxxxxxxxxxx notes to financial statements FOR YEAR ENDED 30 June 2010
14. CAPITAL FUNDS (continued) Planned Maintenance This balance represents funds set aside for the future maintenance and repair of property assets held by the Social Fund of The Salvation Army Australia Southern Territory. Asset Replacement This balance represents funds set aside for the future replacement of various fixed assets, including computers, across various social centres and territorial headquarters social departments. Aged Care Reserves This balance includes funds set aside for warranty issues resulting from the sale of 15 aged care centres on 1 July 2005, forthcoming major property developments at aged care centres retained by The Salvation Army; and a perpetual reserve, from which its interest will be used to assist with funding the ongoing operational costs within our remaining aged care centres. Capital Projects Funding This balance represents funds set aside by the Territorial Finance Council to cover various project costs included within non-current assets. Employment and Training This balance represents funds set aside for future initiatives across the territory, including the servicing of existing Employment Plus clients during the remainder of the current Job Network contract period and beyond. Fair Market Investment Reserve This balance represents the unrealised gain or loss on unlisted units held in managed investment funds as at 30 June 2010. Investment Fluctuation Reserve This balance represents the impairment expense recorded on unlisted units in managed investment funds in the previous financial year, offset by realised gains or losses on disposal of unlisted units. Other This is the balance of a number of minor reserves that have been set aside at the direction of the Territorial Finance Council.
The income statement is to be read in conjunction with the notes to the financial statements set out on pages XX to XX
84
The Salvation Army Australia Southern Territory Social Fund xxxxxxxxxxx notes to financial statements FOR YEAR ENDED 30 June 2010
14. CAPITAL FUNDS (continued)
2010 $’000
2009 $’000
(d) Trust and Special Purpose Fund Balances Restricted Funds Special purpose trusts 2,446 2,233 Emergency Appeals 12,262 18,904 General deposits 4,081 3,775 Building deposits 489 1,581 19,278 26,492 The Salvation Army is called upon to utilise large amounts of specified donations and other restricted revenue, which must be accounted for meticulously in accordance with the donor’s wishes. It is therefore common for large balances to be unavoidably carried forward from one year to another, until such time as the funds can be used for the specific purposes for which they have been given. On this basis, the trusts and special purpose fund balances are not actually revenue available to The Salvation Army Australia Southern Territory until they are expended on the purpose specified by the donors. There can be no change of purpose of any amount donated without reference to the person or organisation that set the conditions. An explanation of the purpose of each special purpose reserve is provided below. Special Purpose Trusts The Salvation Army holds a number of balances, where the donor has stipulated that the capital is invested, and interest generated on such capital funds be used in a particular way. This reserve identifies the balance of such capital funds. Emergency Appeals The Salvation Army has received funds from donors for specific emergency appeals, mainly for Victorian bushfire relief. These relief efforts will continue well beyond 30 June 2010 so this balance represents the unexpended portion of funds donated for this purpose. Building and General Deposits This balance represents funds held on behalf of specific social centres, set aside for specific purposes until used. For example, if a centre receives a specified donation from the Red Shield Appeal, but has not utilised the funds at the end of the year, then the funds are carried forward to the next year as part of this reserve.
The income statement is to be read in conjunction with the notes to the financial statements set out on pages XX to XX
85
The Salvation Army Australia Southern Territory Social Fund xxxxxxxxxxx notes to financial statements FOR YEAR ENDED 30 June 2010
15. INCOME TAX The following Salvation Army organisations are endorsed by the Australian Taxation Office as Income Tax Exempt Charities: The Salvation Army Australia Southern Territory General Work Institution The Salvation Army Australia Southern Territory Social Work Institution The Salvation Army (Victoria) Property Trust The Salvation Army (Tasmania) Property Trust The Salvation Army (South Australia) Property Trust The Salvation Army (Western Australia) Property Trust The Salvation Army (Northern Territory) Property Trust Donations of two dollars ($2) or more given to the following funds attract income tax deductibility: (i) The Salvation Army Australia Southern Territory Social Work Institution (ii) The Salvation Army Red Shield Appeal
16. INTEREST FREE LOANS 2010 $’000
2009 $’000
Entry contributions/Accommodation Bonds – amortisable 239 Entry contributions/Accommodation Bonds – refundable 3,122 Unsecured Loans 2,100 5,461
251 3,028 1,195
4,474
Entry Contributions/Accommodation Bonds These balances are repayable to residents of aged care centres upon their vacating of the centres. When taking up residence at aged care centres, government legislation allows for residents to pay a refundable and an amortisable entry contribution to The Salvation Army. The refundable portion is in the form of an interest-free loan repayable in full, while the amortisable portion is amortised over five years. The amortisation amount is transferred to reserves held for aged care redevelopments. Unsecured loans These balances represent loans provided by government bodies towards the construction of aged care centres.
17. SPECIAL PURPOSE FUNDS - NON-CURRENT LIABILITY This amount relates to trust funds held by The Salvation Army on behalf of residents of various social centres.
The income statement is to be read in conjunction with the notes to the financial statements set out on pages XX to XX
86
The Salvation Army Australia Southern Territory Social Fund xxxxxxxxxxx notes to financial statements FOR YEAR ENDED 30 June 2010
18. COMMITMENTS (a) Capital Commitments The Salvation Army Australia Southern Territory is constantly engaged in planned and ongoing construction projects requiring the commitment of significant funds. Certain portions of these funds will be provided by Territorial Headquarters and other funds will be received from other sources. Due to the uncertainties necessarily surrounding funding from sources other than Territorial Headquarters, it is not possible, at any point in time, to quantify the exact financial commitment required of Territorial Headquarters for these projects. However, the maximum values are
2010 $’000
2009 $’000
Cost to complete property schemes in progress 27,979 22,649 Property schemes approved but not commenced As at 30 June 2010 1,441 1,192 29,420 23,841 (b) Operating Lease Commitments Future operating lease rentals for properties not provided in the financial statements and payable:
2010 $’000
2009 $’000
Not later than one year Later than one year but not later than five years Later than five years
19,805
22,330
32,546
41,644
760
615
53,111
64,589
The Social Fund leases a number of properties under operating leases. The leases typically run for a period of 3 to 5 years and usually include an option to renew the lease after that period. Lease payments are increased at the end of the lease period to reflect market rentals.
The income statement is to be read in conjunction with the notes to the financial statements set out on pages XX to XX
87
The Salvation Army Australia Southern Territory Social Fund xxxxxxxxxxx notes to financial statements FOR YEAR ENDED 30 June 2010
19. RELATED PARTY DISCLOSURES (a) General The Salvation Army Australia Southern Territory is part of the International Salvation Army and follows operational guidelines issued by the International Headquarters of The Salvation Army in London, United Kingdom. Transactions are conducted on a normal commercial basis. (b) Key Management Personnel Disclosures The Trustees of The Salvation Army are deemed to be the key management personnel of the Social Fund. The names of the Trustees who held office during the year ended 30 June 2010 were: Commissioner James M. Knaggs Colonel Raymond Finger Lieutenant-Colonel Peter Walker Lieutenant-Colonel Ian Hamilton Lieutenant-Colonel Frank Daniels Lieutenant-Colonel Chong-Duk Park Mr Gregory Stowe Trustees’ Remuneration The Trustees are officers or staff of The Salvation Army Australia Southern Territory, and receive remuneration in accordance with established Salvation Army guidelines as below. In addition, officer trustees also receive accommodation and use of a motor vehicle at no cost as part of their officership, in accordance with established Salvation Army guidelines. No additional remuneration is received by these officers for acting in their capacity as Trustees of the Social Fund. Staff trustees receive the use of a motor vehicle at no cost as part of their employment contract. 2010 2009 $’000 $’000 Total income paid or payable, or otherwise made available to all Trustees of the Social Fund from the Social Fund or any related party 288 314
The income statement is to be read in conjunction with the notes to the financial statements set out on pages XX to XX
88
The Salvation Army Australia Southern Territory Social Fund xxxxxxxxxxx notes to financial statements FOR YEAR ENDED 30 June 2010
20. NOTES TO THE STATEMENT OF CASH FLOWS (i) Reconciliation of Cash For the purposes of the statement of cash flows, cash includes cash on hand and at bank, cash in transit and cash held at social centres net of outstanding bank overdrafts. Cash at the end of financial year as shown in the statement of cash flows is reconciled to the related items in the balance sheet as follows:
NOTE 2010 2009 $’000 $’000 Cash 6 1,883 6,200 (ii) Reconciliation of Total Surplus to Net Cash used in Operating Activities Total operating/capital surplus before allocations (207 ) 26,312 Add/(less) items classified as investing/financing activities: Investment income received (9,738 ) (3,174 ) Capital revenue received (13,723 ) (23,679 ) Net (profit)/loss from sale of property, plant and equipment 175 (1,529 ) Accommodation bond rollover expense (1,427 ) (1,919 ) Add/(less) non-cash items: Impairment expense - 14,172 Depreciation 7,918 6,545 Amortisation of entry contributions (97 ) (94 ) Net cash provided in operating activities before change in assets and liabilities (17,099 ) 16,634 Change in assets and liabilities during the financial year: Decrease/(increase) in inventories (142 ) (232 ) Decrease/(increase) in receivables 2,074 1,914 (Decrease)/increase in payables (375 ) 5,681 (Decrease)/increase in employee entitlements 1,653 471 (Decrease)/increase in provisions 648 (1,707 ) (Decrease)/increase in other liabilities 49 (20 ) Net Cash provided in Operating Activities (13,192 ) 22,741
The income statement is to be read in conjunction with the notes to the financial statements set out on pages XX to XX
89
The Salvation Army Australia Southern Territory Social Fund xxxxxxxxxxx notes to financial statements FOR YEAR ENDED 30 June 2010
21. ADDITIONAL FINANCIAL INSTRUMENTS DISCLOSURE Financial risk management Overview The Fund has exposure to the following risks from its use of financial instruments: • Credit risk; • Liquidity risk; and • Market risk. This note presents information about the Fund’s exposure to each of the above risks, its objectives, policies and processes for measuring and managing risk. Further quantitative disclosures are included throughout this financial report. The Trustees of the Fund have overall responsibility for the establishment and oversight of risk management. The Trustees have established the Investment Committee, which is responsible for developing and monitoring investment policies. The committee reports to the Territorial Finance Council on its activities, and meets on a quarterly basis. Risk management policies are established to identify and analyse the risks faced by the Fund, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Fund’s activities. The Fund, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations. Credit risk Credit risk is the risk of financial loss to the Fund if a debtor or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Fund’s receivables from debtors and other financial assets. Trade and other receivables The Fund’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Fund’s receivables primarily consist of government funding provided from Commonwealth and State Governments and investment income from financial institutions. Losses have occurred infrequently. An allowance for impairment is recognised when it is expected that any receivables are not collectible. The Fund does not require any collateral in respect of trade and other receivables.
The income statement is to be read in conjunction with the notes to the financial statements set out on pages XX to XX
90
The Salvation Army Australia Southern Territory Social Fund xxxxxxxxxxx notes to financial statements FOR YEAR ENDED 30 June 2010
21. ADDITIONAL FINANCIAL INSTRUMENTS DISCLOSURE (continued) Other financial assets The Fund limits its exposure to credit risk by only investing in liquid securities and only with counterparties that have very high credit ratings. Management does not expect any counterparty to fail to meet its obligations. Liquidity risk Liquidity risk is the risk that the Fund will not be able to meet its financial obligations as they fall due. Senior finance staff review forecasted cash flows of the Fund and determine the level of funding that will be required to meet expected expenditure as it falls due. The Fund’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Fund’s reputation. Typically the Fund ensures that it has sufficient cash on demand to meet expected operational expenses as they come due. Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices, will affect the Fund’s income and expenses or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, whilst optimising the return. Currency risk Currency risk is the risk that changes in exchange rates affect the Fund’s income and expenses, or the value of its holdings of certain financial assets. The Fund holds ‘available-for-sale’ assets, which include units in overseas equities, some of which are ‘unhedged’. These units are managed by MLC Implemented Consulting, on behalf of The Salvation Army. Interest rate risk Interest rate risk refers to the risk that the value of a financial instrument or cash flows associated with the instrument will fluctuate due to changes in market interest rates. Interest rate risk arises from interest-bearing financial assets of the Fund. Other market price risks Equity price risk arises from available for sale investments held by the Fund in the form of investments in listed equitites held within the managed investment funds units. The portfolio of investments is managed by external portfolio managers, who buy and sell equities based on their analysis of returns. The asset position and returns are reported to the Investment Committee on a quarterly basis. At this meeting, the Investment Committee members monitor the effective returns.
The income statement is to be read in conjunction with the notes to the financial statements set out on pages XX to XX
91
The Salvation Army Australia Southern Territory Social Fund notes xxxxxxxxxxx to financial statements FOR YEAR ENDED 30 June 2010
21. ADDITIONAL FINANCIAL INSTRUMENTS DISCLOSURE (continued) Financial instruments The carrying amount of the Fund’s financial assets represents the maximum credit exposure. The Fund’s maximum exposure to credit risk at the reporting date was: Carrying Amount 2010 2009 $’000 $’000 1,883 45,236 186,452 233,571
Cash Receivables Other financial assets
6,200 45,883 193,064 245,147
Impairment losses At 30 June 2010 the Social Fund has reviewed its financial assets for impairment and determined that no adjustment is required. At 30 June 2009 the Social Fund reviewed its financial assets for impairment. As a result, the Social Fund recorded an impairment expense of $14,172,000 on unlisted units in managed investment funds in 2009, resulting in an overdrawn Investment Fluctuation Reserve of $9,478,000 at 30 June 2009. Liquidity risk The following are the contractual maturities of the financial liabilities included estimated interest payments. Contractual amounts are expected payments that have not been discounted:
Carrying Contractual 0-6 amount cash flows months $ $ $
6 - 12 More than months 12 months $ $
2010 Financial liabilities Payables 53,010 Interest-free loans 5,461 58,471
53,010 5,461 58,471
31,039 - 31,039
- - -
21,335 5,461 26,796
2009 Financial liabilities Payables 53,388 Interest-free loans 4,474 57,862
53,388 4,474 57,862
31,039 - 31,039
- - -
22,349 4,474 26,823
The income statement is to be read in conjunction with the notes to the financial statements set out on pages XX to XX
92
The Salvation Army Australia Southern Territory Social Fund xxxxxxxxxxx notes to financial statements FOR YEAR ENDED 30 June 2010
21. ADDITIONAL FINANCIAL INSTRUMENTS DISCLOSURE (continued) Interest rate/market risk Profile At the reporting date, the carrying amounts of the Fund’s interest-bearing financial instruments were: Fixed rate instruments Financial assets Short term deposits Long term deposits Floating rate instruments Financial assets Cash and cash equivalents Unlisted units in managed investment funds
2010
23,975 42,036 66,011
1,412 120,441 121,853
2009
60,365 34,275 94,640
5,745 98,424 104,169
Sensitivity analysis The Fund’s main investment is in unlisted units held in managed investment funds, managed by MLC Implemented Consulting on behalf of The Salvation Army. Units are held in six different trusts, and the Investment Committee determines the percentage allocated to each trust, with advice from MLC Implemented Consulting. MLC’s investment approach is designed to deliver superior long-term returns, and to do so with consistency. The portfolio is rebalanced when the actual asset allocation moves away from the strategic ‘neutral’ target exposure for each asset sector, by a predetermined margin (usually 2%). The nature of each unit trust is as follows (with ‘neutral’ percentage allocations indicated in brackets) –
• Australian shares (14%) – equity ownership of corporations predominantly listed on the Australian Stock Exchange. • Global shares unhedged (11.5%) – equity ownership of corporations listed on any exchange globally, including emerging markets, but with exposure to exchange rate fluctuations. • Global share hedged (8.5%) – equity ownership of corporations listed on any exchange globally, including emerging markets, but derivatives are used to ‘hedge’ currency risk, therefore providing a buffer against currency movements. • Property securities (3%) – equity ownership of property-related corporations and trusts listed on any exchange globally. • Short-term maturity diversified debt (48%) – investment in a wide range of different types of debt securities, including domestic nominal and inflation-linked securities, cash and short-term securities, global credit, global high-yield, global inflation-linked securities and emerging markets debt securities, with an average duration of 3 years. • All-maturity diversified debt (15%) - investment in a wide range of different types of debt securities, including domestic nominal and inflation-linked securities, cash and short-term securities, global credit, global high-yield, global inflation-linked securities and emerging markets debt securities, with an average duration of 8-10 years.
The income statement is to be read in conjunction with the notes to the financial statements set out on pages XX to XX
93
The Salvation Army Australia Southern Territory Social Fund xxxxxxxxxxx notes to financial statements FOR YEAR ENDED 30 June 2010
21. ADDITIONAL FINANCIAL INSTRUMENTS DISCLOSURE (continued) At 30 June 2010, the following market value of the Fund’s investment of units in each trust, and the impact of a specified movement in the market value of each holding, was as follows – 2010
Type
Carrying Value 30/6/10 % Impact ($’000)
Australian Shares
Equity
15,793
Global Shares – unhedged
Equity
Global Shares - hedged
Equity
Property Securities
Equity
Short-term maturity diversified debt All-maturity diversified debt
$ Impact ($,000)
+/- 10%
+/- $1,579
13,447
+/- 10%
+/- $1,345
9,793
+/- 10%
+/- $979
4,168
+/- 10%
+/- $416
Debt
58,538
+/- 2%
+/- $1,171
Debt
18,701
+/- 2%
+/- $374
It should be noted that the full impact amounts disclosed above would not necessarily result in an immediate impact through the Income Statement, as these units are deemed to be ‘available-for-sale’ investments. Such amounts would only be recorded through the Income Statement if they were realised, either from unit disposals (including re-balancings), or if an impairment loss was recorded at year-end. Fair values
Fair values versus carrying amounts The carrying amounts of assets and liabilities shown in the balance sheet approximate their fair value. Fair value hierarchy The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:
• Level 1: quotes prices (unadjusted) in active markets for identical assets and liabilities • Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset and liability either directly (i.e. as prices) or indirectly (i.e. derived from prices) • Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs) In thousands of AUD Level 1
Level 2
Level 3
Total
Financial assets
30 June 2010
-
66,011
-
66,011
Available for sale financial assets
-
120,441
-
120,441
-
186,452
-
186,452
Level 1
Level 2
Level 3
Total
Financial assets
-
94,640
-
94,640
Available for sale financial assets
-
98,424
-
98,424
-
193,064
-
193,064
In thousands of AUD 30 June 2009
The income statement is to be read in conjunction with the notes to the financial statements set out on pages XX to XX
94
The Salvation Army Australia Southern Territory Social Fund xxxxxxxxxxx notes to financial statements FOR YEAR ENDED 30 June 2010
22. CONTINGENT LIABILITIES Sale of aged care centres on 1 July 2005 On 1 July 2005, The Salvation Army completed the sale of 14 of its 19 sites catering for aged care hostels and nursing homes, as well as retirement living units to Retirement Care Australia (RCA). In addition, TriCare acquired the Hayville retirement village in Box Hill, Melbourne. The business sale agreements included various warranties from The Salvation Army to the purchasers, whereby under certain circumstances, they may seek financial compensation from The Salvation Army. In addition, at the time of divesting some of its aged care centres, the Department of Health and Ageing had provided The Salvation Army with capital grant funding towards the construction of Gilgunya Village, Weeroona Hostel, Inala Village Nursing Home, Edenfield Hostel, Warrina Hostel and Darwin Nursing Home. Under certain conditions, a portion of these capital grants may need to be repaid by The Salvation Army to the Department of Health and Ageing. The amount repayable to the Department of Health and Ageing reduces over time, with 2021 being the last expiration date for the capital grant funding provided for Gilgunya Village. As at 30 June 2010, the maximum capital grant funding which would have been repayable to the Department of Health and Ageing was $2,748,730. At 30 June 2010, the trustees are of the opinion that provisions are not required in respect of these matters, as it is not probable that a future sacrifice of economic benefits will be required. However, funds have been set aside to an ‘aged care divestment warranty reserve’ to cover contingencies. Compensation claims The Salvation Army has publicly expressed it is deeply regretful of any incident of abuse perpetrated between the 1940’s and 1980’s, towards children who had been in its care. This provision is to cover claims currently being processed, including costs for access to professional counselling services, pastoral care, medical expense reimbursements and legal costs. In addition to the provision for compensation of $6,450,000 recorded at 30 June 2010 (refer Note 13), there may be further claims lodged with The Salvation Army, which would need to be assessed. The Salvation Army is unable to quantify the estimated future costs of such claims.
The income statement is to be read in conjunction with the notes to the financial statements set out on pages XX to XX
95
The Salvation Army Australia Southern Territory Social Fund xxxxxxxxxxx TRUSTEES’ DECLARATION FOR YEAR ENDED 30 June 2010
In the opinion of the Trustees of The Salvation Army Australia Southern Territory Social Fund:
(i) The accompanying financial statements and notes set out on pages 62 to 94 are drawn up so as to present fairly the financial position of the Social Fund as at 30 June 2010 and the results of its operations and its cash flows for the year then ended;
(ii) The operations of the Social Fund have been carried out in accordance with its Trusts Deeds poll during the year ended 30 June 2010; and
(iii) The financial statements have been prepared in accordance with Accounting Standards in Australia.
Signed in accordance with a resolution of the Trustees:
Raymond A. Finger, Commissioner Territorial Commander
TRUSTEE
Gregory F Stowe Chief Financial Officer
TRUSTEE
Dated at Melbourne this 26th day of October 2010
The income statement is to be read in conjunction with the notes to the financial statements set out on pages XX to XX
96
Independent audit report to the trustees of The Salvation Army Australia Southern Territory Social Fund
We have audited the accompanying financial report of The Salvation Army Australia Southern Territory Social Fund, which comprises the statement of financial position as at 30 June 2010, and the statement of comprehension income, statement of changes in capital funds and statement of cash flows for the year ended on that date, a summary of significant accounting policies and other explanatory notes 1 to 22 and the trustee’s declaration. Trustees’ responsibility for the financial report The trustees of the fund are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations). This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor’s responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the trustees, as well as evaluating the overall presentation of the financial report. We performed the procedures to assess whether in all material respects the financial report presents fairly, in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations), a view which is consistent with our understanding of the entity’s financial position, and of its performance and cash flows. We believe that the audit evidence we have obtained is sufficient ad appropriate to provide a basis for our audit opinion. In conducting our audit, we have complied with the independent requirements of the Australian professional accounting bodies. Auditor’s opinion In our opinion the financial report presents fairly, in all material respects, in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations), the financial position of The Salvation Army Australia Southern Territory Social Fund as of 30 June 2010 and of its financial perfeormance and its cash flows for the year then ended.
KPMG
Paul McDonald Partner Melbourne 26 October 2010
97
Thank you Throughout the year we receive enormous support from individuals, businesses, trusts and foundations that believe in our ability to provide relief and resolution to Australians in crisis. Without this assistance many of our programmes would cease operation. It’s here that we wish to acknowledge and thank our generous supporters; we cannot express our gratitude enough.
South Australia
Tasmania
Apex Communication Technologies Pty Ltd
ABC Giving Tree
Arrowcrest Group Australian Executor Trustees Limited Bendigo/Adelaide Bank BHP Billiton (Matched Giving Programme)
Allport Trust Aurora Energy Budget Rent a Car Colin Bisdee Trust AG Cowley Trust Bruce Wall Estate
Built Environs Pty Ltd
Grote Reber Foundation
Channel 7
Hills Transplants Pty Ltd
Christmas Party for Special Children
Motorcycle Riders Association
Como Investment Company Pty Ltd Community Benefit SA Dareel Pty Ltd as Trustee for Uhrig Family Trust Diamond Photographics Flexichem Pty Ltd Graeme Johnsom Pty Ltd Holcim Concrete IGA Jareden Pastoral Company Pty Ltd Medallion Homes Pty Ltd Messenger Community News Morialta Trust McConnell Dowell Corporation Ltd Mc Mahon Services Myer Community Fund Perpetual Ltd - The AM & BM Quinn Memorial Trust PGH Bricks Radio 5AA Romeo Foodland Group Savings & Loans Credit Union SGIC
Namarragon Pty Ltd State Government of Tasmania Tasmanian Community Fund The Examiner Vodafone Foundation
98 98
Victoria A A Holdings Pty Ltd AdPartners Group Pty Ltd AGL Albert George & Nancy Caroline Youngman Trust Amelia Eliza Holland Charitable Trust Annie & John Paterson Foundation AON Risk Services Australia Limited Austereo Group Ltd Australian Charities Fund
Dennis Osborne Clarke Charitable Trust Dibbs & Massie Foundation Dimmick Funds Pty Ltd Drakensberg Trust Equity Trustees Fairfax Media Flaming Rhino Design Pty Ltd Ford Motor Company Foxtel George W Vowell Foundation Ltd Goldman Sachs JBWere G P Smith Equipment (Vic) Pty Ltd
Australian Drilling Associates Pty Ltd
Grenet Foundation Ltd
AXA Asia Pacific Holdings Ltd
Guardian Pharmacies
Guthrie Family Charitable Trust
AXA Australia
Helsinki Bear
Balios Pty Ltd
Home Loan Shelter Appeal
Bell Charitable Trust BHP Billiton Blake Dawson BlueScope Steel Limited CAF Community Fund (Payroll) C W Dobbie Trust CitiPower and Powercor Australia Coles Group Limited
Hugh Williamson Foundation IAG Insurance Australia Group Incitec Pivot Ltd Inner Range Pty Ltd Isabel & John Gilbertson Charitable Trust Joe White Bequest Joyce Mary Harrison Charitable Trust
Myshare Marketing My Size Pty Ltd Newcrest Mining Limited Optus/Optus Giving Orica Australia Pty Ltd Origin Energy Pandora Paper Agencies (Aust & NZ) Pty Ltd Perpetual Trustees Pitcher Partners (Payroll) Reece Pty Ltd Ritchies Stores Pty Ltd Rotary District 9810 Charitable Trust Smith & Smith Cabinet Makers Smith & Smith Manufacturing Sumo Salad Swan Plumbing Plus Telstra The 3624 Point Nepean Road Trust The Andrews Foundation The Cassidy Bequest Gift Fund The Danks Trust The Decor Corporation Pty Ltd The Kilwinning Trust The Kimberley Foundation The Marian & E H Flack Trust
Kleenheat Gas Pty Ltd
The Miller Foundation Limited
Community Enterprise Foundation (Bendigo Bank)
Kmart Australia Pty Ltd
The Orloff Family Charitable Trust
Lionel R.V. Spencer Trust
The Russell Foundation
CSIRO (Payroll Deductions)
Lord Mayor’s Charitable Fund
The Sun Foundation
Lorenzo & Pamela Galli Charitable Trust
Tieco International (Aust) Pty Ltd
Collier Charitable Fund
Mallesons Stephen Jaques Mary Kay Cosmetics Pty Ltd
Tonnex International Westpac Banking Corporation
McConnell Dowell Corporation Ltd
William Angliss (Victoria) Charitable Fund
Medibank
Wood Family Foundation
Melbourne Airport Corporation Minter Ellison Lawyers Myer Community Fund
99
Western Australia
McVay Foundation
Advertising Federation of Australia
Medibank Private
Alcock Brown-Neaves Foundation
Mineral Processing Engineers
AMCHAM
Mining and Civil Australia Pty Ltd
Apache Energy Ltd
PEK Nominees Pty Ltd
Austal
Printforce
Austereo
Professional Business Equipment
Bedding Superstore
Q Contracting
Bendigo Bank
SGIO
Budget Rent-A-Car
Solid Gold
Bunnings Group Limited
Southern Cross Electrical
Burswood Entertainment Complex
Swan Transit Operations Pty Ltd
City of Bayswater
Temco Distributors
Community Newspaper Group
The Richardson Foundation
Compass Foundation
The Stan Perron Charitable Trust
Courier Australia
The Wearne Charitable Trust
Dale Alcock Homes
The West Australian Newspapers Ltd
DVG Automotive Group
Total Telephone
Flinders Charitable Foundation
WA Business News
Fruit Boost
Wonteco Pty Ltd
Fuel Creative
Wythenshawe Foundation
HS Sales and Contracting Pty Ltd IKEA Innovative Hair Loss Solutions Jancic Pty Ltd Jayleaf Holdings Pty Ltd JBA Jim Kidd Sports Katana Asset Management Kimbar Nominees Pty Ltd Kleenheat Gas Lavan Legal Mallesons Stephens Jacques McConnell Dowell McCusker Charitable Foundation McDonalds Australia
100
While women weep, as they do now, I’ll fight; While little children go hungry, as they do now, I’ll fight; While men go to prison, in and out, in and out, as they do now, I’ll fight; While there is a drunkard left, While there is a poor lost girl upon the streets, While there remains one dark soul without the light of God, I’ll fight – I’ll fight to the very end!
General William Booth, Founder of The Salvation Army
www.salvationarmy.org.au
Publisher: The Salvation Army Australia Southern Territory 95-99 Railway Road, Blackburn VIC 3130 While every effort has been made to ensure the accuracy of information in this publication, the publisher assumes no responsibility for error or omissions or any consequence of reliance on this publication. Š 2010 The Salvation Army Australia Southern Territory Editorial Director: Major Brad Halse Editorial Team: Major Brad Halse Major Neil Venables Amity Cartwright Staff Writer: Amity Cartwright Feature Photography Stuart Milligan Design: vanzella.com.au