Trust ac­counts get a tardy mark

Kapi-Mana News - - NEWS - By SI­MON ED­WARDS

six The Hutt Mana Char­i­ta­ble Trust’s per­sis­tent late fil­ing of fi­nan­cial re­turns risks it be­ing struck off by the Char­i­ties Com­mis­sion, los­ing its tax ex­emp­tion sta­tus.

The trust looks af­ter about $35 mil­lion of as­sets – the last rem­nants of the carve-up of power boards in the 1990s – on be­half of Porirua, Hutt Val­ley and north Welling­ton peo­ple. Its own deed re­quires a set of fi­nan­cial ac­counts to be au­dited and an an­nual meet­ing held within five months of the end of its fi­nan­cial year – June 30.

Char­i­ties Com­mis­sion rules al­low months to file re­turns.

Trust chair­man Ian Hutch­ings said the 2010-2011 ac­counts were fi­nally signed off two weeks ago – nine months af­ter the nom­i­nal bal­ance date.

Kapi-mana News put it to him that since the in­cep­tion of HMCT and its fore­run­ner the Hutt Mana En­ergy Trust, the ac­counts and an­nual meet­ing have al­ways been late.

‘‘I’m not sure that’s right,’’ he said. ‘‘For most of the years I’ve been in­volved they have been late at times – in my view far too late some­times. I con­tinue to be­come frus­trated when we out­line our ex­pec­ta­tion we want to have the ac­counts done within three months and hold our AGM, and they [ac­coun­tants and au­di­tors] all smile nicely and say they’ll do their best.’’

He said the prob­lem this year was the liq­ui­da­tion last Septem­ber of the Hmct-owned in­su­la­tion in­stal­la­tion com­pany En­er­gys­mart.

In Novem­ber the es­ti­mated loss to HMCT was put as high as $2.5 mil­lion so there is par­tic­u­lar in­ter­est in the 2010/11 ac­counts.

Mr Hutch­ings said there has been a great deal of dis­cus­sion ‘‘back and for­ward’’ be­tween the ac­coun­tants and au­di­tors on how to ac­count for the En­er­gys­mart ‘‘im­pair­ment’’. The liq­uida­tor had also been in­volved.

His view was the de­lay had not hin­dered trus­tees’ abil­ity to have a clear view of the trust’s fi­nan­cial po­si­tion, on which to base de­ci­sions such as the dis­tri­bu­tion this month of $301,000 in com­mu­nity grants.

‘‘We’ve had to put some num­bers of pa­per and they’ve been there since Novem­ber. The de­bate has been about find­ing ad­e­quate doc­u­men­ta­tion the au­di­tors are sat­is­fied sup­ports that.’’

Char­i­ties Com­mis­sion chief ex­ec­u­tive Trevor Gar­rett said char­i­ta­ble or­gan­i­sa­tions reg­is­tered with it that have not filed re­turns six months af­ter the end of their fi­nan­cial year are sent a re­minder let­ter. They get a more ‘‘strongly worded’’ re­minder a month or two later and at around three months over­due – which is where HMCT is at – ‘‘We get to the stage where we look at de-reg­is­ter­ing. That’s how se­ri­ously we take it.’’

There may be prob­lems with a char­ity’s change of sec­re­tary, in­for­ma­tion not be­ing passed on, etc., but such or­gan­i­sa­tions have obli­ga­tions to the public and the me­dia, who are en­ti­tled to view that fi­nan­cial in­for­ma­tion, he said.

Of the more that 25,000 reg­is­tered char­i­ties, Mr Gar­rett guessed around 1000 would be dereg­is­tered each year for fail­ing to meet re­turns deadlines. They can reap­ply, but the Com­mis­sion no­ti­fies In­land Rev­enue, and tax obli­ga­tions kick in for the pe­riod un­til they are re-reg­is­tered.

A stand down pe­riod of some years for rereg­is­tra­tion can be ap­plied to a char­ity where there is proof of gross neg­li­gence, money go­ing miss­ing, etc. There is po­ten­tial for a sim­i­lar stand down for ‘‘per­sis­tent non-com­pli­ance’’, Mr Gar­rett said.

‘‘We haven’t got to that stage yet but we might have to re­view that.’’

Bay drive: Fa­cil­i­ta­tor and writer David Par­menter and Porirua Li­brary as­sis­tant Joel Al­corn with two of Mr Par­menter’s ti­tles held on lo­cal shelves.

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