The ACNC has welcomed the federal government's announcement of $2.9 million in the budget to conduct risk reviews of charities.

The funding, which will roll out over three years, will enable the ACNC to undertake field-based compliance reviews to assess charities' governance risks, intervene before significant issues arise, and where possible and appropriate provide assurance to the public to maintain confidence in the sector.

A total of $474,000 will be allocated in 2020-21 to review charities at risk of failing to meet governance standards.

The program's aim is to strengthen assurance that charities have appropriate governance in place and use their incomes for charitable purposes, including when responding to natural disasters.

Acting commissioner Anna Longley said it was a positive move to help charities comply with their obligations.

'We intend to conduct reviews of charities based on risks and issues that we identify through our engagement with the sector, compliance work and intelligence analysis. How we select each cohort will depend upon the risks that we seek to address,' she said.

'In future we may decide to produce educational resources for the sector to improve governance more broadly. We may also undertake further compliance activity if significant issues are identified.'