Bookkeeping and financial statements
The NPO Act requires that all registered NPOs must:
- Keep, accounting records of its income, expenditure, assets and liabilities.
- This will include all cash and credit transactions.
- Draw up financial statements within six (6) months of its financial year-end, which must include an income, and expenditure statement, and a balance sheet reflecting its assets and liabilities.
- Every NPO must preserve each of its books of account, supporting vouchers, records of subscriptions or levies paid by its members, income and expenditure statements, balance sheets and accounting officer’s reports, in an original or reproduced form.
- Financial statements may be prepared using:
- International Financial Reporting Standards (IFRS),
- International Financial Reporting Standards for Small and Medium Enterprises (IFRS for SMEs),
- Modified cash basis of accounting or other basis suitable to the activities and nature of the NPO.
- An NPO should select a reporting convention by considering the following:
- Any legislative requirements applicable to the NPO,
- The specifications from donors or government grants,
- The nature and scope of the activities of the NPO.
- Every NPO must, in writing, provide the NPO Directorate with:
- A narrative report of its activities in the prescribed manner together with its financial statements and the accounting officer’s report within nine (9) months after the end of its financial year,
- The names and physical, business and residential addresses of its office bearers within one month after any appointment or election of its office-bearers even if their appointment or election did not result in any changes to its office bearers,
- A physical address in the Republic for the service of documents
- A notice of any change of address within one month before a new address for service of documents will take effect.
- The narrative report consists of the following three sections:
- Section A: Basic details about the organisation on the form provided.
- Section B: The organisation’s major achievements over the year, in response to the questions provided.
- Section C: List of important meetings held by the organisation during the year, and details of any changes to your constitution.
Accounting officer reports
- The NPO Act requires that all registered NPOs appoint an accounting officer
- The accounting officer is a practicing member of a professional body such as SAIB
- The accounting officer has a duty in terms of the NPO Act to compile a written report within eight (8) months of the organisation’s financial year-end
- The accounting officer’s report must be submitted to the NPO and state whether the
- Financial statements of the organisation are consistent with its accounting records
- Accounting policies of the organisation are appropriate and have been appropriately applied in the preparation of the financial statements, and th
- NPO has complied with the provisions of the NPO Act and of its constitution, which relate to financial matters
- The accounting officer also has a reporting duty to the NPO Directorate
- If the accounting officer of a NPO becomes aware of any instance in which the NPO has failed to comply with the financial provisions of the NPO Act or its constitution, the accounting officer must notify the NPO Directorate of this non-compliance
- The notice must be sent within one (1) month after becoming aware of the failure and must be in writing with sufficient detail to describe the nature of the non-compliance. 19. The duty to report to the NPO Directorate supersedes the duty of confidentiality owed to the organisation by the accounting officer.
- It is the duty of an NPO to appoint an accounting officer. If an accounting officer accepts the appointment then the terms of the engagement should be specified in an engagement letter issued by the accounting officer to the NPO
- The accounting officer should ensure, with representatives of the entity and, where appropriate, with other specified parties who will receive copies of the report, that there is a clear understanding regarding the accounting officer engagement procedures and the conditions of the engagement.