Govt studies possibility of separate accounting rules for charities
By Dominique Loh, Channel NewsAsia | Posted: 23 January 2007 1819 hrs

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SINGAPORE : The government is looking at the possibility of a separate set of accounting rules for the charity sector.

This was brought up by the Community Development, Youth & Sports Minister, Dr Vivian Balakhrishnan, when Parliament passed an amendment bill to change the laws governing charities.

Even as the National Kidney Foundation civil suit continues at the Supreme Court, changes have been made to tighten laws for charitable organisations.

Among them - giving the Commissioner of Charities (COC) the authority to officially register and de-register a charity.

This is to prevent suspect organisations from claiming official status.

Other changes include moving the Commissioner's office from the Inland Revenue Authority to the Ministry of Community Development, Youth and Sports.

The Commissioner will also have the authority to empower his officers to prosecute offending charities.

"This bill unfortunately has come at a time when perhaps we are reacting to events which have caused public consternation. But even as we put that aside, I think the direction in which we are amending is still correct, and is appropriate for the future that we are trying to steer the charity sector towards. The fundamental point is about self regulation, it is about trust, about transparency and confidence," says Dr Balakrishnan.

But the government is also going one step further.

"We're thinking of establishing an accounting standards board, which will help devise accounting standards which can apply to these other non-corporate sectors as well. That will give everyone a common term of reference," says Dr Balakrishnan.

While the intent of the new law is good, MPs pointed out there is also a downside to more rules.

"The issue is how far the state should regulate these charities in the public interests, and at the same time, without imposing too much on these bodies to a point where it becomes counter productive," says Sin Boon Ann, MP for Tampines GRC.

"The people who run these charities must be able to get on with the business of running these charities without having to worry too much about the regulator knocking at his door at midnight. It would be sad if these well-meaning volunteers decide to throw in the towel because of too much red tape."

"A lot of IPCs... are seeing difficulties getting auditors to audit their books at a reasonable rate. I think many have already increased prices or backed out of this market. So what plans does the ministry have to work with the industry to address this?" asks Zaqy Mohamad, MP for Hong Kah GRC.

One suggestion, Dr Balakrishnan says, is making the financial year for charities out of sync with the commercial sector.

This will reduce the workload of auditors during busy periods. - CNA /ls