Responsibilities of Governing Board Members
Governing board members are members of the governing board of a charity or trustees for a charity having the general control and management of the administration of the charity. The governing board members should be responsible for the charity's performance.
The governing board members are responsible for ensuring that the charity is governed and managed responsibly and prudently such that the charity is solvent, well-run, and delivering the charitable outcomes for the benefit of the public for which it has been set up.
Governing board members must:
(a) be at least 18 years of age;
(b) not be disqualified as a company director;
(c) not convicted of an offence involving dishonesty or deception;
(d) not be an undischarged bankrupt;
(e) not have been disqualified from being a governing board member, key officer or trustee for a charity by an order made by the Commissioner.
Duty Of Care And Prudence
Governing board members must:
(a) act in the best interest of the charity and be actively involved in the management and decision making process, and jointly make decisions as a Board on policy matters;
(b) exercise strict control over financial matters of the charity:
- ensure the charity remains solvent;
- ensure charitable funds and assets are used reasonably, and only for the furtherance of the charity’s objects; and Commissioner.
- avoid undertaking activities that will place charity funds, assets and reputation at undue risks.
Governing board members must:
(a) ensure that the charity complies with the Charities Act and Regulations, and with the requirements of the Office of the Commissioner of Charities or Sector Administrators;
(b) stay true to the charitable purposes and objects, and abide by the rules set out in the charity’s governing instrument;
(c) ensure proper management of the charity such that it is not open to abuse and avoid conflict of interests; and
(d) comply with the other legislations which govern the charity’s activities such as the Trustees Act, Companies Act and Societies Act, if applicable.
The governing board members’ key duties under the Charities Act are as follows:
(a) Charity Application: Apply for the charity to be registered within 3 months and to supply documents and information required for the purpose of the registration.
(b) General Administrative Duty: Notify the Commissioner of Charities/Sector Administrator within 7 days if the charity ceases to exist or if there is any change in its trusts or in its particulars entered in the register. This includes:
any removal of governing board members or appointment of new governing board members to fill a vacancy;
any change to the particulars entered in the register; and
any change to the address of each immovable property and name of each trustee.
Governing board members should seek approval from the Commissioner of Charities/Sector
Administrator before any amendment can be made to the governing instrument.
(c) Accounting Records: Ensure that accounting and donation records are properly kept and preserve the accounting records for at least 5 years.
(d) Annual Report: Prepare an annual report and statement of accounts of the charity in respect of each financial year.
(e) Submission: Submit the annual report and statement of accounts to the Commissioner of Charities/ Sector Administrator within 6 months from the end of the financial year of the charity. In addition, all IPCs regardless of income are required to seek approval from the Commissioner of Charities/Sector Administrator for their auditor and change of auditor every 5 years.
|For accounts with Financial Year ending before 1st March 2011:
- Accounts of all IPCs have to be externally audited.
- Charities which are companies limited by guarantee have to be audited based on the requirements under the Companies Act.
- For the other charities, those with annual income or expenditure exceeding $250k are subject to external audit.
For accounts with Financial Year ending on or after 1st March 2011:
- Accounts of all IPCs will continue to have to be externally audited.
- Charities which are companies limited by guarantee will continue to be audited based on the requirements under the Companies Act.
- To provide greater flexibility, the new audit thresholds for the other charities have been revised upwards, as shown in the table below:
|$250k or less
||Accounts can be examined by an independent person who the governing board members believe have the relevant ability and practical experience. No change.
|Between $250k and $500k
||Accounts can be examined by an independent person who is a member of the Institute of Singapore Chartered Accountants (formerly known as the Institute of Certified Public Accountants of Singapore) or who possesses the necesaary qualifications to be a member of the Institute of Singapore Chartered Accountants.
||Accounts have to be externally audited by a public accountant.
Independent Examiners can refer to the Guidance for Independent Examination on how to carry out the independent examination. Independent Examiners can also refer to the sample Independent Examiner's Report to assist in the preparation of their report to accompany the financial statements.
Governing board members are encouraged to adopt the Code of Governance for Charities and IPCs, which sets out the principles and best practices on key areas of governance and management of charities and IPCs.
Governing board members are required to file annual reports within six months from the end of the financial year to the Commissioner of Charities/ Sector Administrator.
(a) Information relating to the charity or its governing board members or officers:
Description of the instrument setting up the charity (e.g. society, company or trust deed);
Singapore Unique Entity Number of the charity;
Registered address of the charity;
Particulars of the governing board members/management committee; and
Names of advisers of the charity (e.g. bankers, lawyers, auditors, etc.).
(b) Report by the governing board members:
An explanation of the objectives of the charity;
The policies adopted during the financial year;
A review of the activities carried out by the charity during the financial year;
Review of financial state; and
Future plans and commitments.
(c) Statement of Accounts.
- Click here to view the Charities Accounting Standard (CAS). An accounting template and explanatory notes is also available to assist charities in the preparation of your accounts according to the CAS.
- For charities with gross income or total expenditure below $500k and needs to have their financial statements reviewed by an independent examiner, please refer to the Guidance on Independent Examination and a sample of the Independent Examiner's Report for Independent Examiner's adoption. This Guidance is applicable for the examination of financial statements of accounting periods ending on or after 1 March 2011.
Large charities will have to comply with additional rules relating to governing board members and auditors.
A large charity refers to a charity with gross annual receipts of not less than $10 million in each of the last 2 financial years.
These additional rules include:
(a) Having at least 10 governing board members
(b) Financial statements to be audited by auditors approved by the Commissioner of Charities/Sector Administrator
(c) Auditor to be changed every 5 years, with the Commissioner of Charities’Sector Administrator’s approval
Click here to download a copy of the auditor’s declaration.
All charities which are subject to external audit are required to post a summary of their financial information online. This includes all charities set up as companies, and all other charities with annual income/expenditure over $500,000.
The changes will apply for financial years ending or after 1 January 2013.