Annual reporting is crucial and here's what you need to know

Performance report

Performance reports from the winners of the Annual Reporting Awards

Published 21 August 2019

 5 minutes to read]

We know that many registered charities with a 30 June balance date will be beginning to prepare their financial statement or their performance report for the year. If your charity has a 31 March balance date you should already be well on the way to submitting your report for the 30 September due date.

With that in mind, we thought now was a good time to remind everyone of a few things about filing with Charities Services.

#1 – You need to file both an annual return AND your financial statements or a performance report

Under the Charities Act 2005 (the Act), registered charities must file both an annual return and their financial statements (Tiers 1 and 2) or a performance report (Tiers 3 and 4). The annual return includes general information about your charity and summarises key financial information. The information presented in your Annual Return is then added to the public Charities Register. Having accurate and complete data is important because it allows the public to find registered charities working in areas they are passionate about and see what they have been doing.

If you want to see the information we collect, you can search the Charities Register(external link) to find the annual returns of registered charities.

A set of financial statements or a performance report is a separate document to the annual return and reports on a charity’s activities in more detail. A charity’s financial statements or performance report does not form part of the Charities Register database, but it can be viewed and downloaded by finding that charity on the Charities Register.

The financial statements or performance report must be prepared using financial reporting standards issued by the External Reporting Board(external link) (XRB). If you need more information or guidance on preparing your financial statements or your performance report, we have links to a range of resources and guidance on our website at the bottom of this blog.

#2 – Your charity may need an audit or review

The Act requires some charities to have an audit or a review based on their size. If a registered charity has spent more than $1 million in each of its two preceding financial years, it is required to have an audit. If a registered charity spent more than $500,000 in each of the two preceding financial years, it is instead required to have a review.

When an audit or a review is required, it must be performed by a Qualified Auditor. This means they must be recognised by Chartered Accountants Australia and New Zealand (CA ANZ) or by CPA Australia.

If you need an audit or a review and you don’t already have a Qualified Auditor to do this for you, both CA ANZ and CPA Australia have a search function on their website to help you find accountants in your specific area of New Zealand. You can click on the links to start your search for a Qualified Auditor:

Some smaller charities have a requirement to have an audit or review as part of their rules, even though they aren’t required to by the Act. If this is the case for your charity, we recommend considering whether you still need an audit. Because audits and reviews can be costly and time consuming you may decide you don’t need one, in which case you can change your rules to remove the requirement.

If you don’t know whether an audit or review is right for your charity or want more information about changing your charity’s rules you can find this by clicking the links below.

#3 – It’s a great way to publicise your charity

Because your annual return and your financial statement or your performance report is made available on the public Charities Register, it’s a great opportunity to showcase your charity and the work you do.

The financial reporting standards set the minimum requirements for your financial statements or your performance report, however, we encourage you to include any additional information you think helps people understand your charity. This is particularly true for Tier 1 and 2 charities who do not currently have to file a statement of service performance. If your charity prepares an annual report for your stakeholders, it would be great if you filed it alongside your financial statements to give a wider picture of the work your charity undertakes.

While the XRB have published templates for Tier 3 and 4 charities which are available on our website, you can present the document in any way you choose—so long as you meet the requirements of the standards, you can add colour, include pictures or change the layout in any way you want. To ensure that you meet these standards and to support you as you prepare your performance report, we have links to a range of resources and guidance on our website at the bottom of this blog. If you want to see how other charities have done their reporting, you can use the Charities Register to download their reports. CA ANZ run the annual Charity Reporting Awards which also provide examples of great reporting by registered charities. Click here(external link) to find links to the reports of both the winning and highly commended charities.

Links to reporting resources

Example financial statements and Performance Reports