November 2016, The BC Societies Act came into effect to govern the creation and operation of not-for-profit organizations. Key financial reporting changes from the previous Act include the requirement for remuneration disclosure and clarity in regard to public access to financial information.
To discuss these changes, Vantage Point, a Vancouver based non-profit organization dedicated to enhancing organizational capacity through governance and leadership guidance, hosted a podcast outlining the “BC Societies Act Financial Requirements” and invited one of our Accounting Managers, Chris Adams-Brush, to weigh in on the matter. Maria Turnbull, Associate Executive Director at Vantage Point, led the conversation while Chris addressed some of the changes that societies are exposed to.
Disclosure of Senior Management Remuneration
In the new BC Societies Act, an organization is required to disclose in its financial statements the monetary impact of employees or contractors of the organization that earn $75,000 or more annually. The names of such individuals are not required to be provided, rather the organization needs to either disclose a list of the salaries and titles of those who meet the criteria or disclose the total value of the group of individuals that meet the criteria. This list or group total is limited to the 10 most remunerated persons of the organization if there are more than 10 individuals that meet the criteria.
Directors are prohibited from receiving any monetary incentive unless outlined by specific bylaws. If they are to be remunerated, a separate disclosure outlining each directors’ earnings and position is required to be attached to the financial statements. Directors may be listed individually, however the individual’s name does not need to be provided in the disclosure.
Disclosure Requirements for Societies
Depending on the society type, financial information must be provided to the public upon request. In the new Act, there are two types of societies: member and non-member funded societies.
Member funded societies are funded primarily by members to carry out activities for the benefit of members, such as a sports club or professional association. Societies other than member-funded societies must provide financial statements to the public, upon request.
Additional resources can be found on the BC Societies Act website as all changes will need to be effectively implemented by November 2018.
Listen to the full podcast here. At just 15 minutes long, it is a convenient length to listen to while on the go or when you have limited time to learn.
We’d like to thank Vantage Point for inviting us to join in on this important conversation and we are proud to continually partner with them and collaborate on initiatives designed to support non-profit organizations throughout British Columbia.
Specializing in non-profit bookkeeping services, our team at Enkel is always happy to discuss our services in more detail. Feel free to give us a call for more information!