I recently received a copy of an interesting document from CRA dealing with registered charity audit stats that was released as a result of an access to information request.
In this document, the CRA identifies the audit outcomes. It is interesting to see that they cover from the 2017/2018 until the 2020/2021 year and that the outcomes of audits have declined from 345 in 2017/2018 to only 142 in 2020/2021. We had discussed this concerning trend earlier in our blog post Dramatic changes to charity audits by CRA over the last few years.
You can also see only a small number of the notices of intention to revoke and that number has dropped from 23 in 2017/2018 to 0 in 2020/2021.
This means that some really bad charities are allowed to continue to operate and to act inappropriately. It is also interesting to note that the most likely outcome of an audit is either an educational letter or a compliance agreement.
CRA also discusses the findings that they make in audits. As they note in the footnotes, when the charity has multiple findings, they only put down one finding for the charity in this chart.
The most common findings are inappropriate donation receipts at 60.4%, T3010 issues at 58.1% and inadequate books and records at 44% using the 2017/2018 numbers. Some other issues include foreign activities, acting outside their charitable objects, gifting to non-qualified donees, and undue benefits. The disbursement quota shortfall came up in 2.6% of audits.
In terms of the designations, most of the audits were against charitable organizations and that makes sense as there are about 75,000 charitable organizations out of the 86,000 registered charities.
Of course, the interesting part about “Selection reasons” and “Level/Compliance treatment” are redacted!
They also discuss the category codes for charities have that were audited. It is interesting to note that they do not have a category code listed here for Jewish organizations. I find that particularly interesting. If you look at the number of Jewish charities revoked over the last few years, it is very high in comparison to any other religious group in terms of numbers. That does not mean that CRA is antisemitic or hates Jewish people. It rather probably means that many Jewish organizations were not dealing well with compliance issues and also were not prepared to adjust their approach after CRA raised issues with them.
So, it is interesting that CRA can identify in the list of groups, Islamic groups, Sikh groups, Hindu groups, Roman Catholic groups, Presbyterian, Pentecostal, Buddhist, Mennonite, Baha’i, Lutheran, Baptist, Anglican but they cannot identify Jewish.
The category codes are not that helpful and a CRA notes many organizations could be in many different category codes but they are using the category code that they were assigned initially when the charity was registered. So it may not even be that accurate.