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Monday, November 30, 2015

Role of the Executive Committee (Ahli Jawatankuasa) of a Registered Society in Malaysia


Perhaps you have just been invited by a friend, colleague or family member, to sit on the Executive Committee (Exco) of a non-profit organisation. It is an honour to serve in such a capacity, and it is encouraging to see more and more community organisers stepping forward to start non-profit organisations and charities. Volunteer work not only serves the greater good but allows Malaysians from all walks of life to come together and work side-by-side on worthy causes for the benefit of all communities.

However, before you accept the invitation to be an Exco member or a main office bearer, it’s a good idea to familiarise yourself with the scope of duties beforehand so that you can honestly assess your existing commitments, and evaluate whether you can really take on the job. Time is a finite resource after all, and not everyone has the luxury of focusing on a non-profit role. More likely than not, you’ll be balancing your full time job and family obligations as well as the additional tasks that may fall to you in your role as an exco member.   

For the most part, non-profits are small organisations running on a shoestring budget and almost all those involved are volunteers. In such an organisation, you should be prepared to take a hands-on approach. There won’t be a host of administrative assistants to take care of the administrative work. If you accept the position of Secretary or Treasurer for example, and if the organisation does not employ any administrative assistants, you could quickly find your role taking up a lot of man-hours J.

Under the Societies Act 1966 (“the Act”), and in accordance with the registered society’s constitution (see http://www.ros.gov.my/index.php/my/perkhidmatan for sample Constitutions for societies with and without branches, provided by ROS), there will usually be a President, Secretary, Treasurer, and a number of Deputies or Assistants (such as Deputy President, Assistant Secretary, Assistant Treasurer etc). Once these main office bearer positions are filled, the rest of the members forming part of the “Ahli Jawatankuasa” are usually referred to as “Exco members” with no corresponding office bearer title. They do however still need to sign circular resolutions, attend Exco meetings, and are still deemed to be office bearers within the meaning of the Act.

President
The President is the face of the organisation, and will need to set the direction for the organisation in terms of day-to-day activities as well as short, medium and long-term planning. The President will need to oversee aspects such as sourcing for funding, identifying and courting corporate and other sponsors, seeking out opportunities to raise funds and generate publicity, coming up with ideas for programmes to generate awareness and attract volunteers, as well take overall responsibility for the society’s general compliance with regulatory requirements. The President is also an authorised signatory with the registered society’s bank for the purposes of signing cheques on behalf of the society, and is one of the office bearers authorised to deal with the society’s bank account.


Secretary
Be warned…if you don’t like paperwork and regulatory compliance, don’t sign up for this job :-) The Secretary is responsible for a lot of the back-end functions, or rather, to manage the documentation that forms part of the regulatory aspect of running a registered society. The Secretary must maintain updated registers of members and of Exco members, prepare/circulate all documentation relating to Exco Meetings and Annual/Emergency General Meetings (these would include notices of agenda, minutes of meetings, reports such as the President’s report, the audited accounts, attendance lists, etc), and the preparation of the annual returns - a set of documents that needs to be lodged with the ROS once every financial year. In addition, the Secretary will need to draft circular resolutions when needed. The Secretary is also likely to be an authorised signatory with the registered society’s bank for the purposes of signing cheques on behalf of the society and dealing with the society’s bank account. The role of Secretary has been greatly assisted by the recent introduction of ROS’ online submission system, called eROSes. (Go to http://www.eroses.gov.my/).

Treasurer
This is a role for numerically-minded, so if you still rely on your fingers and toes to count, then perhaps, this is not quite the role for you :-). Prepare to be buried under a pile of receipts and claim forms as soon as you take up the job. Once you have extricated yourself from the pile, you might be confronted with another pile...of cheques this time J. OK, this is an exaggeration, it shouldn’t be as bad as all that. If your organisation is small and just starting out, there should not be so many transactions to start with. However, Standard Operating Procedures and templates should be created from day 1, to ensure that the accounts are managed properly. The Treasurer is responsible for the society’s funds. So, however few transactions there are, and however small your non-profit organisation is, records must be kept, data must be entered into an accounting system such as MYOB, receipts and documents must be filed and bank statements must be reconciled. Petty cash boxes, chequebooks, the registered society’s chop and other important items should be locked up at all times. Once a year, the Treasurer will need to liaise with an external auditor for the purposes of conducting an audit. Once again, the more organised and up-to-date the accounting and finance records, the easier the audit fieldwork process will be. The Treasurer will definitely be an authorised signatory with the registered society’s bank for the purposes of signing cheques on behalf of the society, and is one of the office bearers authorised to deal with the society’s bank account.

Other Exco members

If the main office-bearer positions sound like too much work, perhaps you might helpfully offer yourself for the position of “Exco member”...as you’re probably thinking, “Hey, sounds pretty good, I’m not being responsible for any actual work, but I get to attend meetings, hang out with the rest of the committee and enjoy the food and drinks….” :-) Ha ha! Well, to some extent you might be right, but usually, Exco members also do need to contribute time and expertise to the organisation, especially if the organisation is small, has just started out, and does not have much funding or resources at its disposal yet. But yes, your role is not statutorily defined, so the scope of your duties and contribution depends largely on the organisation itself. Perhaps you could help with co-ordinating volunteer activities, generating publicity, fundraising and awareness campaigns, contributing ideas for future expansion and helping the main office bearers.:-)

Conclusion

If the role of a main office-bearer or other exco member sounds like too much to take on given your current commitments, it’s best to politely decline up front so that the organisation can look for someone else who has more time to contribute. However, this does not mean that you cannot participate. If the cause is something you believe in passionately and want to support, think about other ways that you can help the organisation. Talk to your friend, colleague or family member about other ways that you can be involved and help support the organisation. As the saying goes, many hands make light work, and almost all organisations need volunteers with different skillsets and profiles.  


Wednesday, November 25, 2015

Overview of External Service Providers for Non-Profit Organisations


If you’ve registered your non-profit organisation with the Jabatan Pendaftaran Pertubuhan or Registry of Societies (ROS), here are some brief pointers on the kinds of external service providers you would need in order to comply with the relevant compliance requirements.

As costs are always a factor for new non-profit organisations, you might be able to use existing volunteers  or founding members to contribute their time and expertise – if any of them has a legal or financial background. 

In the event you are not able to enlist the help of a volunteer with the right expertise, you would probably need to get in touch with the following professionals.

Company Secretary
Company secretaries could either be practising lawyers or licensed company secretaries in public practice. Meaning, such professionals would be attached to a legal firm or a company secretarial firm. Basically, you would contact one of these firms to act for your non-profit organisation and take care of company secretarial matters such as preparation of documentation for Executive Committee meetings, as well as Annual General Meetings (AGMs) or Emergency General Meetings (EGMs).  These documents could include notices of agenda, minutes and circular resolutions. Such a professional could also assist with compilation and lodgement of the registered society’s annual returns with ROS every year  (though with the advent of the new eROSES system, it is possible for any of the founding members/volunteers to do this, with some guidance on how to fill the online forms).  

To locate a company secretarial firm near you, here’s a list of chartered company secretaries in public practice  provided by the Malaysian Institute of Chartered Secretaries and Administrators (MAICSA) http://www.maicsa.org.my/pc_holders_dir.aspx.

External Auditor
In order to come up with a set of audited accounts which need to be tabled before the members of the registered society during its AGM, you will also need an external auditor. The ROS guidelines provide for an internal auditor to be appointed by the registered society (juruaudit dalaman) as well. But an external auditor would  still be required to conduct the full year audit of the registered society’s accounts, which would need to be tabled before the members in general meeting (that is, during the AGM) within 6 months of the close of the society’s financial year. The external auditor would also need to comment/advise on tax issues.
To locate an audit firm,  there’s a member firm directory search provided by the Malaysian Institute of Accountants at http://www.mia.org.my/new/members_memberfirms_directory.asp.Be sure to refine the search based on the state in which your non-profit organisation is located, and also, select “audit firms” instead of “non-audit firms”.

As always, the cost of appointing an external service provider varies. On the whole, large established firms charge more than smaller firms. In order to save costs, perhaps you could try to interest your preferred service provider in the possibility of “adopting” your non-profit organisation as a corporate CSR project . In return for a programme run by your non-profit organisation in collaboration with the service provider, such as volunteer sessions for the staff, perhaps the firm could subsidise the cost of services, or better still, provide them to your non-profit organisation FOC. An added selling point might be some positive publicity for the firm, in your social media postings, newsletter or email blasts to your members.