New Officer definition
The definition of an officer under the Act now captures more than trustees (in the case of charitable trusts) and members of a committee or board (in the case of incorporated societies and companies).
Regardless of the type of entity your charity is, your officers also include any person who holds a position of significant influence over substantial decisions. Such positions could include a chief executive officer, chief financial officer or general manager.
You must notify Charities Services of all changes to your charity’s officers within three months of the officer’s appointment or removal taking place.
Requirement to review governance procedures
You are now required to review your charity’s governance procedures at least once every three years. Governance procedures include:
• Your rules - Trust deed or constitution.
• Your governance policies which could include policies in respect to financial management, conflicts of interest, staff, volunteers and health and safety.
Reviewing your rules and policies at your AGM may be the easiest way to ensure that you are complying with this change and your rules are still appropriate for achieving your charitable purposes.
The Charities Services annual return form will include a declaration in respect to when your rules and policies were last reviewed.
Financial Reporting Requirements
Rather than submitting a copy of your financial statements, charities are now required to submit a performance report. The report includes both financial and non-financial information. The smaller the charity, the simpler the reporting requirements are.
Larger charities (with annual operating payments over $140,000) are now required to report the reasons for their accumulated funds when filing their annual return. This change increases transparency and gives the public greater confidence in how large charities operate.
Smaller charities (with annual operating payments under $140,000) have less reporting obligations in recognition of the fact that smaller charities do not have the resources to prepare extensive financial statements. These charities are only required to submit simple format reporting (cash received and paid) as part of the performance report.
Contact us
Please do not hesitate to contact us if you would like assistance with reviewing and updating your rules (trust deed or constitution) and your ongoing compliance with the Act.
By Brittany Ivil | Senior Associate | 07-571-7960 | brittany@bchlaw.co.nz
The information contained in this article is provided for informational purposes only and should not be construed as legal advice on any subject matter.
