Ignite Your Power: Ikuthatha la Ikubeke le with NPO & SME Assist for Positive Change in South Africa
What is NPO Assist?
Welcome to NPO Assist, an initiative started by the Chartered Institute for Business Accountants (CIBA) to support Non-Profit Organisations (NPOs) in Southern Africa. We understand the importance of compliance and transparency in the financial operations of NPOs. In line with the Department of Social Development’s (DSD) ongoing deregistration campaign, NPO Assist aims to help NPOs navigate the requirements related to bookkeeping and financial statements. This page provides valuable information to assist NPOs in understanding the significance of maintaining accurate financial records and complying with legislative obligations.
The Legislative Framework and Reporting Requirements for NPOs
As an NPO, you are governed by the Nonprofit Organisations Act, Act 71 of 1997 (NPO Act). This legislation outlines the detailed requirements for record-keeping and reporting responsibilities. It is essential to maintain accounting records of your income, expenditure, assets, and liabilities, including all cash and credit transactions. Within six months of your financial year-end, you must prepare financial statements, including an income and expenditure statement and a balance sheet. These statements provide a clear overview of your organisation’s financial health and activities.
The Department of Social Development's Role
The Department of Social Development (DSD) in Southern Africa plays a crucial role in monitoring and supervising NPOs under the NPO Act. The DSD is responsible for ensuring that NPOs comply with the law and taking action against non-compliant organisations. The ongoing deregistration campaign aims to identify and address non-compliance among registered NPOs. By participating in NPO Assist and adhering to the reporting requirements, you demonstrate your commitment to compliance and contribute to the overall integrity of the NPO sector.
CIBA's Role in Supporting NPOs
The Chartered Institute for Business Accountants (CIBA) is dedicated to promoting professional excellence in the field of business accountancy. As part of its commitment to the NPO sector, CIBA has initiated NPO Assist to provide guidance and support to NPOs in their financial operations. CIBA offers resources, expertise, and training to help NPOs understand and fulfill their financial reporting obligations. By partnering with CIBA through NPO Assist, you gain access to valuable knowledge and assistance from qualified professionals who are well-versed in the specific needs and challenges faced by NPOs.
The Importance of the Treasurer's License
The NPO Act mandates that all registered NPOs appoint a treasurer who holds a valid treasurer’s licence. This licence ensures that the individual possesses the necessary skills and knowledge to handle financial matters accurately and responsibly. The treasurer plays a crucial role in maintaining financial records, overseeing financial transactions, and ensuring compliance with the NPO Act and other relevant regulations. By appointing a treasurer with a valid licence, you demonstrate your commitment to financial integrity and effective governance.
The Role of the Accounting Officer and Compliance
In addition to the treasurer, the NPO Act requires all registered NPOs to appoint an accounting officer who is a practising member of a professional body, such as CIBA. The accounting officer works closely with the treasurer and holds the responsibility of compiling a written report within eight months of your organisation’s financial year-end. This report assesses the consistency of financial statements with accounting records, appropriateness of accounting policies, and compliance with the NPO Act and your organisation’s constitution. If any non-compliance is identified, the accounting officer must report it to the NPO Directorate.
Appointment of an Accounting Officer and Engagement Terms
As an NPO, it is your responsibility to appoint an accounting officer. The engagement terms should be clearly outlined in an engagement letter issued by the accounting officer. This letter ensures a mutual understanding of the accounting officer’s responsibilities and the conditions of the engagement. It also specifies any relevant parties who will receive copies of the report. By appointing a licensed accounting officer and establishing clear engagement terms, you promote transparency and accountability in your financial management.
NPO Assist supported by the DSD and CIBA, is dedicated to NPOs maintaining accurate financial records, preparing comprehensive financial statements, and ensuring compliance with the NPO Act. By participating in NPO Assist and leveraging the resources and expertise available, you can strengthen your financial operations, demonstrate transparency, and contribute to the sustainable growth and impact of your NPO.
