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PRESENTATION

BY

DIRECTORATE NONPROFIT: MONITORING COMPLIENCE

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Structure

1. Monitoring and Compliance2. De-registrations of NPOs

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Defining NPO  The NPO Act 1997 (Sec.1x) defines an NPO as:  a trust, company or other association of persons:-  established for a public purpose.  the income and property of which are not

distributable to its members or office bearers except as reasonable compensation for service rendered

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Other Names for NPO

• Non-governmental organisations. (NGOs)• Community Based Organisations. (CBOs)• Faith Based Organisations. (FBOs)• Civil Society Organisations. (CSOs)• Public Benefit Organisations. (PBOs)

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NPO Act objectives (cont:)

• (S2) NPO Act are to:encourage NPOs to maintain standards of

governance, transparency and accountability and to improve those standards

create an environment in which the public may have access to information concerning registered organisations

promote the spirit of co-operation and shared responsibility within government, law enforcement agencies, donors and other interested persons/institutions

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NPO Act Objectives

• (S2) To encourage and support NPOs in their endeavor to meeting the diverse needs of the population of the Republic, by:– creating an enabling environment in which NPOs

can flourish; – establishing an administrative and regulatory frame

work within which NPOs can conduct their affairs;

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NPO Directorate mandate(S5)

Facilitate the process for developing and implementing policy;

determining and implementing programs, to support NPOs in their endeavor to register;

to ensure that the standard of governance within NPOS is maintained and improved;

liaising with other organs of state and interested parties; facilitating the development and implementation of multi-sectoral and multi-disciplinary programs

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Classification of NPOs in SAUnited Nations Nonprofit sector classification, clustered according to sector, objective, theme and description of activities.

Eleven (11) Clusters.1. Culture and recreation2. Education and research3. Health4. Social Services5. Environment6. Development and housing7. Law, advocacy and politics8. Philanthropic, intermediaries and volunteerism promotion9. International10. Religion11. Business and professional associations and unions

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Responsibility of Registered NPOs

(3) Every registered NPO must preserve each of its books of (in an original or reproduced form, for the prescribed period):

• account, • supporting vouchers, • records of subscriptions or levies paid by its members,• income and expenditure statements, • balance sheets and accounting officer’s reports.

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• NPO Monitoring and Compliance means:

1. Monitoring and compliance of NPOs as prescribed in S18 & 20

2. Deregistration as prescribed in S21

3. Appeals Process as prescribed in S22

Monitoring and Complience

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Compliance

S 17 & 18 prescribes that:

• NPO to submit the NPO Directorate with annual report within 9 months of the end of its financial year.

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Duty to provide Reports

Department of Social Development

1. Narrative:

•Office bearers

•Contact details

•Id numbers

•Telephone numbers

•Number of meetings

•Annual General meetings

2. Financial:•Assets and Liabilities – balanced•Closing balance correspond with opening balance•Income and expenditure statement

3. Accounting Officer:•Report•Professional status

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Narrative Report:Organization's activities over the previous twelve months, and includes the following sections:

Section A: Basic details about the organisation on the form provided.

Section B: The organization's major achievements over the year, in response to the questions provided.

Section C: List of important meetings held during the year, and details of any changes to constitution.

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Financial Reports

Department of Social Development

(s17) Prescribes that: organisations must keep accounting records to the

standard of Generally Accepted Accounting Principles (GAAP):

Income and Expenditure (statements) Assets and liabilities (balance sheet)

Arrange written report compiled by an accounting officer.

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Duties imposed on accounting officer (sect 18(4 and 5))

• If the accounting officer becomes aware of any instance in which the organisation has failed to comply with the financial provisions of this Act or its constitution, the accounting officer must notify the director of the occurrence—– (a) within one month after becoming aware of it; and– (b) in writing with sufficient detail to describe the nature of the

noncompliance.

• The duty imposed on an accounting officer subsection (4) supersedes the duty of confidentiality owed to the organisation by the accounting officer.

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NPOs duty to provide information

• (S18) provide to the Director in writing with – any appointment or election of its office-bearers even if their

appointment (even in swapping of capacities);– the names and physical, business and residential addresses of

its office-bearers– a physical address in the Republic for the service of

documents.– of any change of address; and– any change of contact details (physical and postal) in the

Republic– such other information as may be prescribed.

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Noncompliance • Non submission of reports in terms S18• Deviation from the material provisions of own

constitution– Acting contrary to the procedures of own constitution– Non-adherence to the objectives

• Non-adherence to conditions or terms of any benefit or allowance conferred in terms or reference to the Act (S11)

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Ignorance of Obligations

• Reminder to comply• Notice of non-compliance• Cancelation of registration and notice of

cancellation

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Types of cancelation• Cancellation due to noncompliance• Voluntary deregistration (requests from

organisation for deregistration and reasons thereof plus effective date)

• Closing down/wounding up

NPO register…• In January 2013 the status of

NPO Register was reflected as follows:– Registered NPOs: 29 286.– Non-Compliant NPOs: 35 190– Deregistered NPOs: 36 428

• The reflection of this status on the register had major implications for the NPO and the sector and put a lot of pressure on the Department.

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Registered

Non-complia

nt

De-regis

tered 0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

…NPO Register• After the Minister met with the Ministerial Task Team

(MTT) on 31st January 2013 a determination that all NPOs should be reflected as registered in the NPO register.

• It was agreed that all NPOs will be given a period of six months (1st Feb- 31st July) to file their reports.

• In this same meeting, it was also agreed that– a reporting compliance drive (Road Shows)

should be design to reach-out to these affected NPOs and the MTT should a meaningful role.

Comparison of the NPO RegisterBefore 31st Jan 2013

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29%

34%

35%

Registered NPOs Non-Compliant NPOs Deregistered NPOs

Submited14%

Outstanding 86%

Current NPO Register compliance status in-

creased by 4%

NPO Register Status per Province

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Province Registered

NPOs Submitted Reports Outstanding Reports

Gauteng 33 579 4 792 31 895Kwazulu Natal 20 555 2 750 19 650

Free State 5 327 815 4 955Western Cape 10 590 1 856 9 758Northern Cape 2 178 269 2 065

North West 5 619 787 5 365

NPO Register Status per Province

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Province Registered

NPOs Submitted Reports

Outstanding Reports

Eastern Cape 9 090 959 8 703

Limpopo 11 426 2 243 10 855

Mpumalanga 6 531 1 065 6 120

Total 105 069 15 536 99 366

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Effects of cancelation of registration

• Cessation of all conditions or term of any benefit or allowance in terms of sec11

• Cancellation of certificate• Reflection on Register

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Offences (S 29) • A person convicted of an offence in terms of this Act is

liable to a fine or to imprisonment or to both a fine and imprisonment– Being wound up or dissolved, to transfer its remaining assets

otherwise than to another NPO with similar objectives as contemplated in section 12(2)(o).

– represent themselves as being validly registered;– Use of a registration number, a registration certificate or any

information contained in the registration certificate if they have not been registered

– Make material false representations in any document or a narrative, financial or other report submitted to the director.

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I THANK YOU!!!