Message from Julia

So a little more about me - I have an absolute passion for leading people to deliver services that really matter to people. I’ve worked in customer services for the best part of the last 18 years so you could say that being people focused is part of my DNA!

Charities Services is part of the ‘Service, Delivery and Operations’ branch of the Department of Internal Affairs, and the Māori branch name is ‘Kāwai ki te Iwi’ which means ‘links to the people’. This really resonates with me as it reflects how we are always striving to improve the ways we connect people to the information and resources they need.

One of the ways we’re making these connections right now is through the Sector User Group which aims to provide a channel for information sharing between us and representatives of the charitable sector. We’re currently planning the next SUG meeting which will be another first for me, and one I’m very much looking forward to. Until next time…

Ka kite ano,

Julia Wootton

IN THE SPOTLIGHT

Financial Reporting Standard Compliance Increase 

In October 2017, we began our second year of reporting checks which have steadily progressed during the new year.

As of March 2018, over three hundred checks have been completed with great results. Overall, the adoption of the financial reporting standards has increased significantly from 65% to 82%.  The Tier 4 category, in particular, shows exceptional improvement moving from 56% attempting to use the new standards in 2017 to 72% this year.  It’s clear from this result that all the hard work charities have done in understanding the requirements has paid off and is something to be proud of!

The important thing to know about these figures is that they represent a general check of whether the financial reporting standards are being applied at all. Within those that have applied the standards, there are still a few areas that could be improved upon. Here are some of the most common:

• Some Tier 2 charities are filing summary financial statements instead of the full set.  Unfortunately, summary statements are not acceptable under the Charities Act.

• Some charities which are required to have an audit under the law are not filing their audit opinions with their financial statements or performance reports.

• Some Tier 3 and Tier 4 charities are not grouping their revenue and expenses (receipts and payments for Tier 4) into categories. Instead they are providing a list of all of their expenses. This makes the reports hard to understand.

• Some Tier 3 and 4 charities are not including all of the required notes. Usually this is to do with related party transactions or property, plant, and equipment. Remember, all compulsory parts of the performance report are denoted with an asterisk in the optional template. Tier 3 and Tier 4 templates can be found on our website. 

Despite the overall improvement, the figures above show that there is still a significant number of charities not applying the standards. If you know anyone involved with a charity please help us to remind them that the financial reporting standards are mandatory for all registered charities.

We are, of course, still supporting any charities who are finding their reporting challenging. We've been getting in touch with those who have been struggling to prepare their reports correctly to find out what else we can do to support them in telling their story. It's our hope that gathering this information will help charities to continue to improve and to tell the public about the amazing work they do.

Do you have a question about your financial reporting?

We have an email inbox specifically for queries about preparing your financial statements and performance reports. Email us at nrs.charities@dia.govt.nz if you have any questions about understanding and applying the financial reporting standards. We’re here to help!

You can find more information on the financial reporting standards on our website and the full standards on the External Reporting Board (XRB) website. 

Does my charity need to submit an Annual Return?

This obligation is set out in the Charities Act 2005 which specifies that registered charities must provide both of these things for each financial year it remains registered.

It’s really important for registered charities to report to the public on the years where they did a lot of work and also on the years when they may not have done as much.

Reporting every year helps a charity tell its story and shows how it has changed over time. It also supports the view that registered charities are committed to transparency and consider themselves accountable for the benefits they receive as registered charities. 

Don’t forget, we have templates for Tier 3 and Tier 4 performance reports on our website which will help you complete your reporting quickly and easily. Using the template will also make sure that you have met all of the requirements of the financial reporting standards. 

Returned mail - it's worse than it looks

Keeping Charites Services up to date with your current contact details is one of the duties of being a registered charity and it’s also the simplest way to ensure you don’t miss out on updates and reminders that can impact you and your charity. 

Remember, your charity’s contact information on the Charities Register is open to the public so making sure it’s correct is important, especially when you’re applying for funding.

Increase your chances of getting the support you want from volunteers, funders and donors by keeping your details in tip-top shape! 

A final tip: If your charity has ceased operation, make sure to update this information as well. Why? Because voluntarily deregistering is a much better look in the public’s eye than to be deregistered for failing to file!

Update your details now by logging into your account.

SECTOR SHOWCASE

Me mahi tahi tātou mo te oranga o te katoa. Trustees, hapu, whānau and community members caring for the marae grounds.

Manukorihi Pā Reserve Trust

For our sector showcase this month, we catch up with Tiri Porter and Dave Rogers, Secretary and Chairperson of the Manukorihi Pā Reserve Trust which is also a registered charity.

When we first heard that ‘Manukorihi’ means the chorus of the birds, we knew we had to learn more about this historical pā in Waitara and the trust that works hard to look after it.

The living past

Manukorihi Pā has a deep-rooted and treasured past.

It was once a place of refuge for people from Parihaka and its main building, Ōwae marae, features whakairo carved by iwi from all around New Zealand. 

Tiri points out, “this is significant because it represents a safe place for anyone to be able to come and connect - from rangatahi, kaumatua, kuia and international guests”.

Today, hundreds of people from around the globe gather at Ōwae each year to celebrate the legacy of Sir Maui Pōmare (politician, doctor and prominent Māori leader who led inquiries into the Taranaki land confiscations). 

Other annual celebrations include the official pōwhiri welcome for the artists of the WOMAD (World of Music and Dance) festival to New Zealand. 

At the heart of it 

Dave explains that advancing education and providing a venue to promote public health initiatives and public meetings is at the very heart of what the trust does.

The trust is active in linking whānau of Te Atiawa Nui Tonu iwi back to their marae through fund raising efforts, special events, and providing a gathering hub for the wider community. 

Visiting schools and dignitary groups are often hosted onsite to hui and to experience tikanga and mātauranga Māori.

A secret to success

Tiri shares with us a secret. Running a charity effectively couldn’t be possible without the collective strength of all the people involved - the trustees, the community and over 100 dedicated volunteers!

Working bee events are held regularly to maintain and care for the grounds ahead of visits, but it’s not just hard work that’s the key to success. These events are “great opportunities for people to re-engage with the marae on an informal setting, to share stories, time and effort to contribute to community need”.

Trustee, Patsy Bodger, and daughter, Alice, preparing hangi kai at WOMAD.

Trials, tribulations and triumph

Being a trust and registered charity is not always easy, so we asked Dave to share with us (and you) some of the highs and lows and more interesting moments of being a chairperson of a Māori trust and charity. His response is candid and honest.

“Forming a strong team of trustees can be challenging when individuals are appointed by the Maori Land Court and the selection process is therefore out of your hands”.

“When the trust came to be, it also inherited deteriorating buildings and infrastructure, high maintenance costs, issues with neighbours and facilities that were not fit for purpose”.

Dave’s words of advice? 

“Exercise bravery!” 

The trust is now conducting a feasibility study focused on restoring its heritage buildings, which has united the members with the shared goal of conserving a future vision for the pā. The hope is to present a re-development business case to funders to ensure that “Manukorihi Pā is still valued and relevant in the next 20 years for Aotearoa”.

Dave also reveals that although the role of ‘Chairperson’ is a privilege, it comes with significant responsibilities and despite the best intentions, sometimes things can go wrong.

The trust experienced this first-hand several years ago when a self-requested audit of their financials uncovered discrepancies and missing money. Faced with disappointing facts, the trust took immediate action and laid a complaint with the authorities.

It was a very difficult time for the trust but misfortune eventually has good results!

Continuously thinking about best practices, the trust now has effective safeguards in place to make sure they keep going from strength to strength.

Dave reflects, “Ensuring funds and assets are properly used to advance your organisation’s charitable purposes is critical” and filing the complaint with the police was ultimately about demonstrating good governance.

Manukorihi Pā Reserve Trust’s tips for other charities

• Don’t be scared to be open and transparent!

• Ensure you have the right people in the key roles of secretary and treasurer.

• Make sure your financial accounting and reporting systems are accurate and expect to see monthly financial reports.

• Provide training opportunities to your trustees – nurture and seek to grow your group’s governance capabilities. 

• Remember that it’s okay to ask questions about your charity’s financials, in fact, the treasurer is more than likely waiting in anticipation to answer your questions and to share as much information as possible!

• Don’t be afraid to ask for help from Charities Services, your accountant or other similar trusts.  People recognise the good work that charities deliver to communities and would be more than willing to assist or point you in the right direction.

• Finally, be open to opportunities. It will surprise you where your support will come from - so often it can come from the most unlikely quarters.

Read Manukorihi Pā Reserve’s working bee article. 

Do you have a story to tell or some tips to help other registered charities? Email us and you could be featured in our next newsletter!

HAVE YOUR SAY

Proposed Amendments to Tier 3 and Tier 4 Accounting Standards

If the amendments are adopted, Tier 3 and 4 charities will be required to sign and date their performance reports to show when it was authorised for issue and who it was authorised by.

For Tier 3 charities, an explanation of what to do when you are increasing the value of an asset that you have previously written down has also been added. 

Remember, from 1 January 2018 Tier 4 charities are required to consolidate where they control other entities if their combined annual operating payments are over $125,000.

Also included in the proposed changes are additional requirements and further guidance. You can find the full details of the changes and provide comments through their survey.

More information on consolidation requirements can be found on our website.

Tier 1 and Tier 2 Standards – Accounting for Leases

A new accounting standard affecting lease accounting in the not-for-profit sector is being developed by the International Public Sector Accounting Standards Board (IPSASB). The XRB are also seeking comments on the proposed international standard which they will feedback to the IPSASB.

The accounting effect of the proposed standard is quite technical so we won't delve into it here.  However, if you are a Tier 1 or Tier 2 charity who could be affected by changes to lease accounting you can find the full exposure draft and information on how to comment here.

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