Title: InterMinistry Committee on Regulation of Charities
1Inter-Ministry Committeeon Regulation
ofCharities IPCs
2IMC on Regulation of Charities IPCs
- Chaired by the PS (CYS) to review the regulatory
framework for charities IPCs to - Develop regulatory models for charities IPCs to
help the sector to grow - Rationalise existing regulations, roles powers
of various regulatory agencies - Streamline processes to facilitate registration,
reporting fund-raising requirements
3IMC Members
4(No Transcript)
5Key Principles
- Basic set of rules
- Not to over-burden the sector nor stifle
volunteerism - But basic rules enforced to maintain standards
uphold public confidence - Move towards self-regulation
- Boards of charities are ultimately responsible
- Lead charities towards greater transparency
accountability to gain public support
6Key Principles
- Build a culture of transparency among charities
IPCs - Facilitate informed giving grow charitable
giving - Should not be one-size-fits-all
- Stratified by size and fund-raising target
audience
7Recommendations
- Regulatory framework
- Specific governance, financial reporting
fund-raising regulations - Facilitating charities IPCs
8Recommendation Commissioner of Charities
- Commissioner of Charities (COC)
- Transfer office of COC, currently under the
purview of MOF, to MCYS - COC will be appointed by Minister(CYS)
- The COC will
- Regulate charities IPCs
- Promote governance standards best practices
- Conduct audits investigations into charities
IPCs where necessary
9Recommendation Commissioner of Charities
- Consolidate regulatory powers for both charities
IPCs under COC, in Charities Act - To oversee both charities IPCs effectively
- Grant COC additional powers to act for the
protection of charities IPCs (slide 10)
10Additional Powers for COC
- While the charity or IPC is being investigated,
COC may suspend all forms of public fund-raising,
including fund-raising conducted by 3rd party
fund-raisers - After completion of inquiry and there is a
necessity to act in protection of a charity or
IPC, COC may continue to suspend or prohibit any
public fund-raising by the charity or IPC,
including fund-raising conducted by 3rd party
fund-raisers - In acting for the protection of a charity or IPC,
COCs suspension or removal of a trustee shall
also disqualify the person from standing for
election at the next AGM or for a period of one
year, whichever is later and - COC may give specific directions on the
management of the property of the charity or IPC
upon its dissolution
11Recommendation Sector Administrators
- Rationalise current 11 CFAs into 6 Sector
Administrators, overseeing both charities IPCs
in their sectors (slide 12)
12Sector Administrators
- NCSS Social Welfare
- MOE Education
- MICA Arts Heritage
- PA Community Youth
- MOH Health
- SSC Sports
- Charities IPCs that do not fall neatly under
any of the six Sector Administrators will be
regulated directly by COC
13Recommendation Sector Administrators
- To delegate certain powers from COC to perform
their role more effectively - Receive annual reports statement of accounts
- Ensure proper annual financial audits of
charities IPCs - Call for documents search records of charities
IPCs and - Appoint auditors to investigate into charities
IPCs
14Recommendation Sector Administrators
- COC will work with SAs to co-ordinate regulatory
stance for consistency across sectors - Points of contact for public to raise concerns
over any specific charities, conduct
preliminary checks further investigations, if
necessary.
15Recommendation Charity Council
- Set up a Charity Council
- Chaired by a prominent people sector person
members (leading representatives from the people
sector) will be appointed by the Minister. - Functions
- Promote self-regulation good governance
standards and - Advise COC on key regulatory issues
16Recommendation Charity Council
- Council comprises
- Chairman from people sector
- 6 representatives from the people sector
- 6 representatives from the Sector Administrators
- A representative from COC
- A representative from NVPC
17Recommendation Charity Unit
- COC should be supported by an adequately
resourced unit, which will - monitor charities IPCs
- coordinate the various SAs regulatory stance for
consistency - carry out audits investigations from
time-to-time - promote governance standards best practices
- help develop charities IPCs capabilities in
governance
18Recommendation Charity Unit
- COC, supported by the Charity Unit, will regulate
the charitable sector in a more systematic
structured manner - Focus on large charities IPCs (with total
annual income 10m) - Actively review the accounts of large charities
IPCs - Introduce random audits of large charities IPCs
- Conduct more field visits to better understand
charitable sector
19Recommendation Proposed Regulatory Framework
Commissioner of Charities (under the purview of
MCYS staffed by adequately resourced Charity
Unit )
- Charity Council
- Chairman (from the people sector)
- 6 people sector appointees
- 6 representatives, one from each Sector
Administrator - Representative from COC
- Representative from NVPC
6 Sector Administrators (Overseeing charities
and IPCs under their sectors purview)
Charities and IPCs that do not fall under any of
the 6 Sector Administrators
PA Community Youth
SSC Sports
NCSS Social Services
MICA Arts Heritage
MOE Education
MOH Health
20Recommendation Governance, Financial
Fund-raising Regulations
- Strengthen regulatory oversight over IPCs large
charities (with total annual income 10m) by - Introducing additional regulations that require
greater disclosure compliance on the part of
IPCs (with more stringent requirements placed on
large IPCs) large charities (slide 21-25)
21Additional Rules for IPCs (All IPCs)
- All IPCs have to
- Disclose use of commercial third-party
fund-raisers during their public appeals, in
addition to other disclosures currently required - Disclose ratio of reserves to annual operating
expenditure online - Declare their conflict of interest policy in
their annual report - Ensure that total expenses incurred on
fund-raising appeals in a financial year do not
exceed 30 of total donations collected through
the appeals in that year - Have their auditors certify whether they have met
the 30/70 rule on fund-raising expenses as part
of their annual audits. - Where a non-commercial 3rd party fund-raiser
raises funds for or on the behalf of an IPC, the
third-party fund-raiser should submit to the IPC
a statement of its expenses
22Additional rules for IPCs (All IPCs)
- All IPCs will be exempted from 30/70 rule for
house-to-house and street collections under the
House-to-House and Street Collections Act and
lotteries under the Common Gaming Houses
(Exemption) Notification - They will be subjected to the 30/70 rule under
the IPC regulations, on an annual basis - To assist IPCs, COC will clarify accounting
definitions, e.g. accounting for sponsorships
under the 30/70 rule, definition of operating
reserves and operating expenditure, and to make
explicit auditing specifications expected of
public auditors in their annual audits of IPCs - IMC recommends that for this computation, IPC
shall include sponsorships both as expenses and
donations where receipts have been issued
23Additional rules for IPCs (Large IPCs)
- Large IPCs have to
- Have at least 10 members
- Post their annual report audited financial
statements online, in addition to information on
online disclosure template that they are already
required to post
24Additional Rules for IPCs(Best Practices)
- Best Practice for Large IPCs
- Disclose remuneration of trustees top 3
executives in annual report - Disclose number of trustees whose remuneration is
more than 5,000 - how many trustees receive annual remuneration btw
5,000-15,000, how many trustees receive
annual remuneration between 15,000-25,000 etc. - Disclose number of top 3 executives in wage bands
- how many executives receive annual remuneration
btw 0-100,000, how many executives receive
annual remuneration btw 100,000-150,000 etc.
25Additional Rules for Charities
- Large Charities have to
- Have at least 10 members
- Seek COCs or respective Sector Administrators
approval for the appointment of external
auditors. - Change external auditor/firm every 5 years
- Best Practice for All Charities
- All Charities encouraged to follow
- Financial Reporting Standards (FRS) and
- Statement of Recommended Accounting Practice
(RAP) 6 for Charities issued by Institute of
Certified Public Accountants of Singapore (ICPAS)
26Recommendation Governance, Financial
Fund-raising Regulations
- Bring forward recommendations by Council on
Governance of IPCs, which were originally to be
implemented on 1 January 2007, to take effect
from 1 July 2006 - Additional requirements for IPCs large
charities (refer to recommendation 9) will also
be implemented from 1 July 2006
27Recommendation Governance, Financial
Fund-raising Regulations
- For All Charities Third-party Organisations
- Certain basic regulations on public fund-raising
that currently apply only to IPCs should be
extended to charities (slides 29-32)
28Recommendation Governance, Financial
Fund-raising Regulations
- Public Fund-raising
- Going beyond the charitys membership to actively
raise funds - Public includes both individuals
organisations (e.g. companies and institutions) - Examples
- House-to-house collections, fund-raising events
at public venues, mailers, TV shows, telephone
etc - Unsolicited donations not considered public
fund-raising
29Fundraising Regulations To Be Extended to
Charities
- Ensure that total expenses incurred on public
fund-raising appeals in a financial year should
not be more than 30 of total donations collected
through the public appeals in that year - Have independent examiner or auditor to certify
if charity has met the 30/70 rule as part of
their annual audits - Submit examiners or auditors report on use of
donation monies raised through public appeals and
whether such use is in accordance with the
charitys objectives - Submit to COC no more than 6 months from close of
financial year - Exempted from complying with 30/70 rule for
house-to-house and street collections under the
House-to-House and Street Collections Act and
lotteries under the Common Gaming Houses
(Exemption) Notification.
30Fundraising Regulations To Be Extended to
Charities
- Ensure information provided to donors, potential
donors and general public in their public appeals
does not contain any misrepresentation or
material omission that will lead to a conclusion
of misrepresentation - Disclose name of their organisation, intended use
of funds and use of commercial 3rd party
fund-raisers during their public appeals - Disclose total funds raised, fund-raising
expenses incurred planned use of funds raised
for each public fund-raising event that raises 1
million or more - Disclosure should be done online at end of each
financial year (need not be audited or examined
separately) - Maintain separate financial accounts for public
fund-raising events that raise 1 million or more - Accounts need not be audited or examined
separately
31Fundraising Regulations To Be Extended to
Charities
- Ensure adequate control measures for all
collection instruments used in public appeals,
e.g. serialise collection tins or pledge cards - Ensure that funds and donations raised through
public appeals are used in accordance with
donors intentions and the specific purpose as
communicated when soliciting for donations - Respect donors confidentiality e.g. not to
transfer donor lists or records without donors
prior approval, respecting wishes to remain
anonymous and to be excluded from contact lists,
etc.
32Fundraising Regulations To Be Extended to Third
Party Fund-raisers
- In a commercial 3rd party fund-raiser
arrangement, all donations shall be made directly
to the charity - Fees to the fund-raisers shall be separately paid
- Where a non-commercial 3rd party fund-raiser
raises funds for or on behalf of charity, the 3rd
party fund-raiser should submit to the charity a
statement of its expenses
33Recommendation One-Stop Charity Portal
- Build one-stop online charity portal for
registration reporting - Registration Reporting to be less confusing
time-consuming for charities IPCs - Common platform for greater coordination across
different regulatory agencies
34Recommendation One-Stop Charity Portal
- Resource Centre
- Advice on complying with various regulatory
requirements, - Best practices and information on permits for
fund-raising events - Charity Registration
- Incorporate with ACRA, register with ROS,
register with COC apply for IPC status - Processing by the different authorities can be
done concurrently
35Recommendation One-Stop Charity Portal
- Charity Reporting
- Upload annual reports financial statements and
submit requests - Automatically route documents requests to
relevant authorities - Fund-Raising Permits
- Provide a listing of permits commonly required
for various types of fund-raising events - Work towards leveraging on Online Business
Licensing System to allow application for permits
online and simplify process of obtaining relevant
permits
36Recommendation Rating System
- Move towards a system of rating of charities to
facilitate culture of greater disclosure
transparency, and of informed giving - Rating initiative can be carried out by
non-governmental organisations, as is the case in
the USA, or by the Charity Council
37Implementation
- Other recommendations will be implemented by end
of 2006, taking into account legislative
amendments required
38Feedback
- Government Consultation Portal
- http//www.feedback.gov.sg
- Public consultation will close on 17
February 2006.
39Thank You