Small Charities in New Zealand: Responses to the New Financial Reporting Changes
30 Pages Posted: 26 Apr 2017
Date Written: April 24, 2017
The introduction of a new financial reporting regime for registered charities as a result of the Financial Reporting Act 2013 (and amendments to the Charities Act 2005) has resulted in registered charities being required to comply with new financial reporting standards for periods beginning on or after 1 April 2015. These new standards were extensively consulted on by the External Reporting Board (XRB) in conjunction with Charities Services and sector bodies, such as ANGOA (now Hui E!). Further, extensive educational opportunities have been offered to registered charities to encourage compliance with the new regime. Indeed, in March 2017, Charities Services won the New Zealand Charity Technology Award for the ‘Best Government Agency’ for its webinars with the XRB which reached thousands of smaller charities, along with Charities Services’ regular blogs and outreach.
The purpose of this research project was to analyse the levels of awareness and capability of Tier 3 and Tier 4 Charities to comply with the new financial reporting standards. In particular, the survey-based research gathered responses from registered charities with less than NZ$2,000,000 in annual expenditure, which had a balance date of 31st March 2017 and thus were making their first mandatory filings under the new requirements. Charities Services has observed variable compliance with the new requirements, therefore a range of responses was expected.
As noted in this report we received 1594 analysable responses, and an overwhelming majority (92 percent) of respondents self-reported that they had used the new standards in their filing with Charities Services. Only 2% of respondents did not know what the standards were. Indeed, some respondents knew about the standards, but believed they were too hard to comply with or did not believe that they pertained to their charity in this year. There was a slight bias towards higher compliance by urban-based charities over those in rural areas, but no differences between charities based on the time the respondent had been in a position of authority.
In transitioning to the new standards, respondents overwhelmingly found the XRB website (with standards and templates) useful, and also find Charities Services website very useful. Other Charities Services education efforts were also seen as at least slightly useful. Charities were most likely to use a qualified person on a voluntary (rather than paid) basis. The findings are limited by the survey respondents who may have been more likely to be those charities that have attended to information about the new standards.
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