My first month back has been a busy one. I was pleased to read about the winners and highly commended in the New Zealand Charity Reporting Awards organised by Chartered Accountants Australia and New Zealand (CA ANZ). I would like to congratulate those charities recognised for their excellent financial reporting in the awards. It's great to see so many charities sharing their mahi through their performance report or financial statements. You can read more about the awards below.

This month’s pānui (newsletter) includes lots of great information and resources about completing your financial reporting and why effective reporting is important. We know that financial reporting is often a big obligation for charities, so I want to remind you that the Charities Services team is here to support you. I encourage you to look at the information in this pānui. If you need extra support, please reach out. We have online clinics every Thursday for charities that want one-on-one support.

I will finish with a whakataukī I’ve used before, it speaks of the importance of connection. This reflects how I feel coming back to the role of General Manager of Charities Services and our vision - that our work contributes to a well-governed, transparent and thriving charitable sector with strong public support.

Waiho i te toipoto, kaua i te toiroa.

Let us keep close together, not wide apart.

Natasha Weight
General Manager, Kaiwhakahaere Matua

IN THE SPOTLIGHT

It's reporting time!

31 March 2021 will be the end of the financial year for most of you, which means it is time to start thinking about annual reporting. The reporting process looks different for every charity, but all charities must submit an annual return form and either a performance report (Tier 3 and 4) or financial statements (Tier 1 and 2) within six months of their balance date (end of financial year). Check out our Annual Returns page for more information on filing your return.

What should I be doing right now?

All charities with their balance date on 31 March 2021 should be finalising their transactions for the year. Tier 4 charities should be gathering their bank statements and/or cash, and larger charities should be calculating their year-end journals and closing their general ledger.

It also pays to start collecting information needed to complete your Statement of Service Performance, though we suggest doing this throughout the year. Remember, this is the non-financial information Tier 3 and 4 charities provide about their activities (outputs) and the reasons for doing this work (outcomes).

Your reporting might look a little different this year if your charity was affected by the lockdown. You may have done more, or you may have closed down or reduced services. Remember to record the main activities you performed in achieving your purpose or mission, so you have something to compare with in the future.

Where can I find help?

Our annual return checklist for Tier 4 charities goes over the key things you need to record throughout the year to complete your annual return and performance report. We also have guides, templates and loads of other information for both Tier 3 and Tier 4 charities. You told us that you needed an automated cash book so we made one to help you with reporting. Also, make sure you check out the reporting webinars on our website if you need some reporting tips!

What if I use a professional?

If you get a professional to prepare your accounts, remember to give them plenty of time - you need your accounts back in time for your annual general meeting, if you have one. Let them know your filing date and make sure they know you are a charity, as the accounts need to be prepared under the Not For Profit (PBE) reporting standards.

If your annual expenses are above $500,000 for the last two years, or your rules say you must get an audit or a review, you will need to speak with a qualified auditor. A review or audit may take some time to complete, so it pays to engage early.

When writing your performance report, think about what your members, donors and supporters expect to see in it. We often hear of charities writing two separate reports and we would like you to save your valuable time. It’s better to put more into your performance report to satisfy everyone if you need to. You can use pictures or graphs if that helps illustrate the work you do. Your performance report is something you file with us once a year, but it can be used in multiple ways throughout the year to showcase your mahi.

Reporting timeline for Tier 3 and 4 charities

We created a step-by-step timeline to support Tier 3 and 4 charities when completing their performance report.

The resource outlines the steps you should take, and when to take them, to complete your performance report within 6 months of your balance date.

You can view the reporting timeline here.

New Zealand Charity Reporting Awards 2021 winners announced 

The winners and highly commended in the 2021 New Zealand Charity Reporting Awards have been announced.

The awards, organised by Chartered Accountants Australia and New Zealand (CA ANZ), recognise best practice among registered charities in meeting financial reporting standards. These reporting standards give greater transparency and consistency among charities.

Well done to all the winners and highly commended!

Read the winning reports here.

Myth busting

When we’re out and about, we often hear myths about what charities can and can't do.

Our Myth busting series is a regular feature on our website where we address some misconceptions and bust some myths about the obligations of charities.

This month, we’re looking at when charities can provide housing.

You can read the Myth busting feature on our website.

Resuming work to modernise the Charities Act 2005

The Policy Group at Te Tari Taiwhenua, Department of Internal Affairs is resuming work on modernising the Charities Act. The work is focused initially on changes to address some of the practical, day-to-day process and transparency issues faced by the charitable sector. The objective of this work is to enable charities to thrive and continue their trusted and vital contribution to community wellbeing across New Zealand.

The initial topics to be advanced are reporting requirements for small charities, charities’ business and accumulation activities, investigating potential improvements to the appeals mechanism, matters relating to the regulator, and duties of officers of charities.

The Act regulates more than 27,000 charities in New Zealand. Many of these charities provided feedback in 2019 about the issues they are facing. This previous engagement forms a solid foundation to work from, and there is now an opportunity to seek input from a more targeted group of stakeholders as we develop policy advice. 

It is expected that this work will lead to legislative proposals in 2022-2023. You can find more information on our website including questions and answers. If you have any further questions, email us at charitiesact@dia.govt.nz

SECTOR SHOWCASE

Auckland Community Accounting 

Photo: Auckland Community Accounting Project Manager and student team meeting with a charity representative

Auckland Community Accounting is collaborative service run by Auckland North Community and Development (ANCAD) in partnership with Massey University. Community groups are paired with accounting students who provide support or advice on financial matters.

The service is hugely beneficial to community groups who gain free and ongoing financial support, as well as the students who gain experience and knowledge of the charitable sector.

You can read more about Auckland Community Accounting here.

QUICK NEWS OF INTEREST 

New blog post: How does Charities Services handle complaints?

Our latest blog looks at how Charities Services handles complaints and what happens when complaints lead to investigations. The write up also includes links to useful information if you need to make a complaint.

Changing reporting tiers

The end of cheques

Banks across Aotearoa will stop accepting cheques from mid-2021.

If you have previously paid your annual filing fee by cheque, we can no longer accept cheques as payment from 1 June 2021. You can pay your filing fee by bank transfer. We have a guide on paying by bank transfer on our website.

This change is also going to have wider impacts for you, your donors, and the communities you support. If you rely on cheques for receiving funds, you will need to find other ways of doing this. We recommend you get in touch with your bank about what alternatives will work best for your charity.

Now is a good time to make sure you have clear finance processes in place, especially if you deal with cash. You can find great examples on CommunityNet Aotearoa.

We recently participated in a webinar put together by the Fundraising Institute of New Zealand (FINZ), who provide some useful resources on how to navigate the removal of cheques. You can watch the webinar here: Impact, Insights & Practical Action to Help You & Your Charity Navigate the Demise of Cheques.

Charities Services is available if you have any questions or concerns. You can get in touch via phone, email, or set up a one-on-one online clinic with one of our people.

Incorporated Societies Bill

The Incorporated Societies Bill was introduced into Parliament last month and will modernise the old Act that was written in 1908!

The Institute of Directors have written an informative article on the Incorporated Societies Bill that will help you understand what the changes might look like and how these changes may affect incorporated societies.

Public submissions are currently being accepted and close on Friday 28 May. Find out more about making a submission on the Incorporated Societies Bill here.

UPDATES FROM WIDER GOVERNMENT

Funding dates for Hāpai Hapori Community Operations

Do you want to know more about the funding dates for 2021? Hāpai Hapori has a full funding calendar available on their website. It includes dates for a variety of different funds administered by the Department of Internal Affairs.

Hāpai Hapori is always keen to hear from groups and organisations about how they can work with you. You can email Hāpai Hapori at community.matters@dia.govt.nz or find your nearest regional office to connect with a local advisor.

You can also meet one-on-one with a Hāpai Hapori staff member at our online clinics every Thursday. Sign up for a ‘funding clinic’ here to meet with a Hāpai Hapori staff member.

As well as the Charities Register, the Department of Internal Affairs (DIA) also holds the births, deaths and marriage registers. DIA is currently consulting about a proposal to make it easier for organisations to access information about deaths.

Dealing with the death of a loved one and winding up their affairs is difficult, and made more so because organisations often need a death certificate. DIA is developing an Approved Information Sharing Agreement (AISA) so some approved organisations can receive death information directly, without having to contact people who have died or their family members.

The proposed AISA will be a formal agreement made into law. It will clearly set out the purposes organisations will be allowed to use death information for and how privacy will remain protected.

Some approved registered charities will be able to receive death information under the AISA. Some charities need to know when members or customers have died so they can amend their data and services. The AISA will help charities correctly identify someone who has died and their relationship to the organisation, and take appropriate action without delay. 

If you want to comment on the AISA proposal, or are interested in participating in a class of parties to the AISA, find more information here.

In May last year, the Government introduced temporary changes to the Companies Act and other legislation to support businesses and other entities affected by COVID-19, both financially and in terms of their legal obligations. A number of those provisions have now expired.

Provisions that expired 31 March 2021

Legislation giving registered entities – including charitable trust boards and incorporated societies – relief from certain compliance obligations, expired on 31 March 2021. These provisions:

• enabled the use of electronic means, such as online meeting platforms and electronic signatures
• allowed modifications to constitutions or rules
• provided for exemptions in regard to certain regulatory obligations.

You can find a full update on the COVID-19 provisions, and their current status, on the Companies Office’s website.

Relief measures that are still in place

Remote declarations

Until further notice, the Companies Office continues to accept statutory declarations taken by alternative means, providing they meet the requirements of the Oaths and Declarations Act 1957.

Insolvency relief

Business Debt Hibernation (BDH) allows business entities impacted by COVID-19 to apply for a month’s protection while they talk to their creditors. During this period most creditors will be unable to take legal action to enforce a debt, for example, applying to have a debtor liquidated. If your creditors agree, you can get a further 6 months’ protection.

The BDH scheme was due to expire on 24 December 2020 but will now continue until 31 October 2021.

Holding meetings

COVID restrictions, and the need for physical distancing, may require you to change the way you hold meetings, including your annual general meeting (AGM), or even to cancel some meetings.

If you have not recently made changes to your constitution or rules, especially in regard to the future use of electronic means, you may wish to do so now and, if necessary, consult with a legal adviser.

The Companies Office provides incorporated societies with a Constitution Builder tool, to help them produce a draft document.

Digital Boost

Want to learn more about how to use digital tools in your mahi?

The Ministry of Business, Innovation and Employment started a new service called Digital Boost late last year.

Check out the website for free online courses, taught by experts, for all skill levels. Courses range from how to develop a website, through to using accounting software to make your life easier.

GOVERNANCE MATTERS

New educational videos are now available for your Chairperson

A new series of four videos has been created to help those who are new to their chair role and prepare people who may aspire to take on the position. 

These videos are part of the National Action Plan for Community Governance, begun by a group of organisations and community leaders to create supporting resources for people in board roles in community organisations.

The videos are designed to support one of the key outcome areas – that ‘All Boards are well chaired.’

The content for these videos was created with the input of more than 30 experienced board chairs, based on what they wished they knew when they got their first chair role. 

• Chairing the Board - Part 1: Back To Basics
• Chairing the Board - Part 2: Board Dynamics
• Chairing the Board - Part 3: Getting Strategic
• Chairing the Board - Part 4: Focus on Process

You can read more about the National Action Plan for Community Governance and how you can get involved here.

RESOURCES

Read the plain text version of this email here.