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Registered Charities

Annual Return

The Charities Act 2005 requires all charities registered with the Charities Commission to file an Annual Return.

Important information

Incomplete Annual Returns don’t count. Make sure yours does!

The Commission won’t accept incomplete or incorrectly completed Annual Returns, as they don’t comply with the Charities Act.

See the Annual Returns must be complete heading below for more information

For the purposes of the Charities Act, an Annual Return consists of a completed Annual Return Form and a copy of your accounts.

After registration, charities must submit an Annual Return. The regulations defining the Annual Return and other registration forms came into force on 1 November 2006.

The Annual Return asks for a copy of the charity's financial accounts and includes a statement of the financial performance of the charity. This information will be available on the public Charities Register.

Although there is no requirement for the Annual Return to contain information that comes from a financial audit, if a charity's accounts have been audited, the form asks for these to be attached. See FAQ below for more information.

Annual Returns must be complete

The Commission won’t accept incomplete or incorrectly completed Annual Returns, as they don’t comply with the Charities Act.

When filing your Annual Return, please remember to send us:

What does “incomplete” mean?

Annual Returns are incomplete if:

What will the Commission do if you file an incomplete Annual Return?

The Commission won’t publish the incomplete Annual Returns on your charity’s summary page on the Charities Register. We will do our best to contact you to ask for the missing information.

Your summary page, visible to the public, will show a “missing” Annual Return.

If we don’t receive a reply, or the missing or correct information within a reasonable time, your charity will be deregistered. This means you won’t be able to access all the benefits of registration, including charitable tax status.

Donee status (granted by Inland Revenue) may also be revoked, which means that your donors won’t be able to claim tax credits on their donations.

So remember, incomplete Annual Returns don’t count. Make sure yours does!

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Important note for Incorporated Societies!

Section 23(4)(b) of the Incorporated Societies Act says that an incorporated society that is also a charitable entity (i.e. registered under the Charities Act 2005) does not also have to file an annual financial statement with the Registrar of Incorporated Societies.

This applies as soon as your organisation is registered with the Charities Commission. Incorporated Societies that are also registered under the Charities Act must otherwise comply with all reporting requirements of both Acts.

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Ministry of Economic Development is reviewing the Financial Reporting Act.

The Ministry of Economic Development is reviewing the Financial Reporting Act. Here is background information about some of the current proposals:

Background to the Financial Reporting Act 1993

The Financial Reporting Act 1993 established a framework for putting in place financial reporting standards and created the Accounting Standards Review Board

This Board can review and approve financial reporting standards. These include standards developed and submitted to the Board by the New Zealand Institute of Chartered Accountants (NZICA).

The reporting standards arising out of the Financial Reporting Act don't apply to most charities. There are some specific exceptions — for example, charities that are companies or "issuers" in terms of the Securities Act, such as aged care facilities where the style of ownership is by issuing occupiers with a "licence to occupy" or a similar "security".

NZICA has established a framework of financial reporting and auditing standards, and its members are required by their professional ethics to observe those standards when they are either preparing or auditing financial statements. While the standards are applicable to all types of organisations, certain smaller entities are exempt from some standards because of their size. This is known as "differential reporting".

If an organisation is not incorporated or is not required to prepare financial accounting reports for consideration by external agencies, then it may use whatever standards it chooses to prepare its financial reports.

The Financial Reporting Act also defines "generally accepted accounting practice" (GAAP) as:

Some guidance on applying GAAP to not-for-profit organisations appears in a booklet prepared in 1999 by NZICA called Financial Reporting by Voluntary Sector Entities (also called R-120).

It is important for charities to remember that the Financial Reporting Act and NZICA requirements continue to apply to their reports when it is required by legislation or constitutional documents. When a member of NZICA is involved in the preparation or audit of the report, their standards will also apply.

Key documents

In 2009, the Ministry of Economic Development released the discussion document   Proposed application of accounting and assurance (PDF) while the Accounting Standards Review Board put out a discussion document Standards under the proposed new statutory framework for financial reporting

The Ministry of Economic Development has published submissions it received in response to these documents including a submission made by the Charities Commission.

Next steps

After reviewing the submissions the Ministry of Economic Development will report to Ministers on options for change. These may include proposals for a Bill to amend the Financial Reporting Act.

Timing

No changes are expected until at least 2011 and the Charities Commission understands that any changes will have a transition period before coming into effect.

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What will I need to file an Annual Return?

The paperwork

Your return must include:

  1. a properly completed Annual Return Form — either online or on paper and
  2. a copy of your financial accounts for your last financial year (these do not have to be audited)

Notification of Change

If any of your information has changed and is now different from the information we have for you on the Charities Register, you can update it using a notification of change form. If anything has changed, you may also need:

Basic details

General information needed includes:

Financial information

Financial questions include:

Constitutional Rules

If your rules have changed you need to send us:

Your People

Questions about your staff:

  • The approximate number of paid full time and paid part time employees that work for you in an average week, and the approximate number of hours they work.
  • The approximate number of volunteers that work for you in an average week, and the approximate number of hours they work.

    Charitable Purpose

    Information on your organisations purpose:

    • the sectors your organisation operates in, for example — "health". Choose from the list on the form.
    • your activities. For example — "makes grants". Choose from the list on the form.
    • who benefits from your organisation? Choose from the list on the form.
    • the geographical area your organisation operates in. Choose from the list on the form.

    Officer details

    Information about certified officers

    • The names of any new officers accompanied by a signed Officer Certification Form for each.
    • The name of any officer who is no longer an officer and their last date as an officer.

    Other

    Other non-essential information may include:

    • The name, phone and email details of the person you would like us to contact regarding any administrative matters. For example — if we find a question has been overlooked.
    • A letter asking us to restrict public access to your information on the Register. View the public register page to read about restricting public access to your information on the Charities Register.

    Helpful tips - We encourage you to file your Annual Return online. This is because we will fill in part of the online form using your current details from the Charities Register. The fee for filing an Annual Return online is $51.11 as opposed to for filing on a paper form is $76.67.

    Restricting information

    The information provided in your Annual Return, including your financial accounts, will be publicly available on the Charities Register. However, the Charities Act does allow the Commission to restrict information from the public if it believes it is in the public interest to do so. You can request that information is restricted under section 25 of the Charities Act. To do this, you will need to write to us. You can find out more about restricting information from the public in our information sheet Restricting public access to your information on the Charities Register.

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    What are the financial reporting requirements under the Charities Act?

    Currently there are no requirements in the Charities Act for an Annual Return to include audited accounts or to comply with any standards set by external groups. However, the Commission expects that charities will do their best to provide accurate financial information.

    Introduction

    This information explains the current financial reporting requirements for charities registered under the Charities Act 2005 and outlines the financial reporting requirements review process.

    The current framework

    The financial reporting requirements for charities that were in place before the Charities Act was passed have not changed, apart from one exception relating to incorporated societies and explained below.

    The current financial reporting requirements for a charity can be found in either:

    • the charity's own rules or
    • any legislation to which the charity is subject.

    Charitable Trusts Act 1957

    Charities incorporated under this Act have no particular obligations for financial reporting under this Act.

    Incorporated Societies Act 1908

    section 23(4)(b) of this Act says that an incorporated society that is also a charitable entity (registered under the Charities Act) is no longer required to send financial statements to the Companies Office. They only need to send an Annual Return to the Charities Commission.

    Incorporated Societies that are also registered under the Charities Act must continue to comply with all other reporting requirements of both Acts.

    For the purposes of the Charities Act, an Annual Return consists of a completed Annual Return Form, which includes statements of financial position and performance, and a copy of the charity's accounts.

    While there is no requirement for the Annual Return to contain information that comes from a financial audit, if the accounts have been audited, the form asks for these to be attached.

    Currently there is no requirement in the Charities Act for an Annual Return to include audited accounts or to comply with any standards set by external groups. However, the Commission expects that charities will do their best to provide accurate financial information

    Unincorporated societies

    charities that are not registered charitable trusts, incorporated societies or companies have no legal requirement to meet any particular financial reporting standard.

    Funding applications

    Charities applying for funding may find that, regardless of their constitutional arrangements, the funding agency to which they are applying requires financial statements prepared to a certain standard, and possibly audited.

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    When and how often do we need to file an Annual Return?

    The Charities Act requires all charities registered with the Charities Commission to file an Annual Return each year.

    Due date

    When the Commission confirms registration, we let charities know when their first Annual Return is due. Then, closer to the due date, we send a reminder (you may have received this information sheet with your reminder). You must send your completed Annual Return back to the Commission no later than six months after your balance date (the end of your financial year).

    Notice of change

    You can also use your Annual Return Form to notify the Commission of changes to your organisation's details. In this case, you must send the Return back within three months of the effective date of the changes or of you becoming aware of them. See our information about What to do when something about your charity changes for more details.

    Overdue returns

    The Commission can require a charity to pay a penalty if it does not provide an Annual Return within the required time (six months after its balance date). If a charity persistently fails to provide an Annual Return, it can be deregistered.

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    What is the fee for filing an Annual Return and how do we pay it?

    Fees

    If your organisation has an annual gross income of less than $10,000, you still have to file an Annual Return but you do not have to pay a fee.

    • The fee for filing an Annual Return on a paper form is $76.67.
    • The fee for filing an Annual Return online (and uploading supporting documents electronically) is $51.11.

    Paying by cheque

    Payable to "Charities Commission" Remember to write your charity's unique registration number on the back and Post to:

    Charities Commission
    Processing Centre
    PO Box 30112
    Lower Hutt 5040
    New Zealand

    Internet banking

    You can make one off payments online by using the details below

    Account Name:  Department of Internal Affairs – Charities
    Bank:  Westpac
    Branch:  Government (Wellington)
    Account number:  03-0049-0002007-06  
    Payee reference:  Your charity's unique registration number, so it will appear on Charities’ bank statement.

    Credit Cards

    We can now accept credit card payments, if they are faxed to 04 495 7257, and include the following information:

    Card number
    Name (as it appears on your credit card)
    Four digit expiry date (MM/YY)
    Payment amount
    Invoice/CC number (the number shown on the invoice we have sent you, or your unique Charities registration number)

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    Are your officers still qualified?

    To qualify for registration with the Charities Commission your charity must make sure that people who hold positions of responsibility in the charity are named on the Charities Register as ‘officers’ and meet the criteria of the Charities Act 2005.

    Officers must be qualified under section 16 of the Act. But, things can change. Sometimes, officers become disqualified – for example, they may become bankrupt.

    If one of your officers has become disqualified for any reason, it’s important that you know about it and consider their suitability to remain in a position of responsibility in your charity.

    Most charities hold an Annual General Meeting (AGM) and we suggest that prior to your AGM you should contact each of your officers and ask them to confirm to you that they are still qualified.

    If nothing has changed you won’t need to take any action. But, if they are no longer qualified, you will need to choose from one of three options. Our information sheet Disqualified officers details these options and explains what action you must take.

    To help you confirm that your officers are still qualified you can use our template ‘officer confirmation’ letter, below. (Please don’t send this back to us – just keep a copy for your records.)

    If you do find that an officer has become disqualified, refer to the Disqualified officers information sheet for further information.

    To see who is currently listed as an officer of your charity, see your summary page on the Charities Register.

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