The ATO should consider integrating online trustee declarations into an online portal as part of its plans for improving its SMSF operations as it would benefit everyone involved in the administration and audit processes of a fund.
SuperAuditors director Shelley Banton said with recent improvements to ATO data-matching capabilities, it was time to consider an online portal that allowed trustees to accept and submit declarations, as well as other important SMSF documents.
“It’s an enormous opportunity for everybody because I can see this central point where so much information can be stored that trustees, administrators and auditors can access the portal, and obviously the ATO can own it and data-match it,” Banton told selfmanagedsuper.
There was still so much paperwork involved with SMSFs, but at the end of the day auditors had a job to do and it was not to babysit trustees, she said.
“Effectively, we look at the trustee declaration form to make sure it’s been executed properly and that the correct date has been provided within 21 days of becoming a new trustee – that’s nanny-state stuff,” she said.
“But even more to the fact, the trustee declaration doesn’t go anywhere.
“The trustee declaration must be kept by trustees for 10 years and the ATO only wants to see it if the fund is under review, and even then the ATO isn’t really interested in documentation, rather they’re interested in serious compliance issues. So how many trustees are actually reading it?”
Earlier this month, the ATO revealed a number of priority outcomes for the SMSF sector, including digitising parts of the SMSF process.
The ATO did not provide further details about what parts would be moved online, but has mentioned the registration and wind-up process as examples.
Banton pointed out she was not downplaying the importance of the trustee declaration, but it was often signed without being read.
“To be fair, there are trustees who absolutely go through every single document and read every word, and also come back to their administrator or auditor if there’s an issue, but they are the few who are the exception rather than the rule,” she said.
“You want trustees who are meticulous with their fund who are going to be accountable and responsible for the operation of their SMSF.
“If the ATO did decide to go ahead with an online portal, the trustee declaration could be designed as a series of pages and points that trustees would be forced to read, absorb and digest before they can sign off on it.
“Then you could have accountants, and the trustees effectively, go into the portal and tick off on responsibilities such as the annual minutes so it’s been recorded as done and that moves through to data-matching.”
While the industry continued to talk about reduced audit fees and the auditing process became more streamlined, the compliance check could not be compromised, she warned.
“You can’t streamline the compliance side of the audit,” she said.
“So why don’t we think of other ways we can do that?
“Maybe this [an online portal] is one of the ways.”
Investment strategies could also eventually be put online, she said.
She added former ATO SMSF risks and products director Nathan Burgess personally responded to her suggestions of digitising trustee declarations on an online portal and had passed it onto the regulator for consideration.
All SMSF trustees and directors appointed after 30 June 2007 are required to sign an ATO trustee declaration within 21 days ensuring that they understand their responsibilities and obligations under the Superannuation Industry (Supervision) Act.