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Oral Answer in Parliament on Societies 
Posted on Wednesday, January 18, 2006 - 07:00 PM

In an Oral Answer to a Parliamentary Question on whether the Registry of Societies will consider implementing strict accounting guidelines and conducting audit checks on other societies, such as religious organizations and associations, the Ministry of Home Affairs highlighted a light-touch approach.

The Answer on 17 January 2006 is as follows.

1 The primary responsibility of the Registrar of Societies is to ensure that societies comply with the Societies Act, and that the members and executivecommittee conduct their affairs in accordance with the society's Constitution.

2 By and large, societies should be self-regulating, with their affairs governed by their Constitutions. The primary responsibility for regulating the affairs of a society lies with the elected committee members and the general membership, to ensure that the finances are prudently managed and properly accounted for.

3 Out of some 6,200 societies registered with the Registry of Societies, only 16% or about 990 societies have a charitable purpose as their main objective. In any case, for all societies, whether charitable or not, basic safeguards are in place to ensure proper maintenance of the societies' financial accounts. Thus, all societies are required to submit their annual returns to the Registry of Societies within one month of holding the annual general meeting or, if no annual general meeting is held, then within one month after the close of the financial year. The returns are to be accompanied by a copy of the society's audited statement of accounts to be certified by the society's auditor, or if the gross income and expenditure exceeds $500,000, by a qualified company auditor.

4 Such statements of accounts enable the Registry to check on societies should there be allegations of mismanagement of society funds or fraud. If there is evidence of fraud or an offence that is criminal in nature, the Registrar will refer the matter to the appropriate authorities for investigation.

Light Touch and Self-Regulation

5 In watching over societies which are charities and institutions of a public character (IPCs), where funds are raised from the public, there are also other key organs such the Commissioner of Charities which play an important role. But in any case, as we strengthen corporate governance of these societies, we should avoid a heavy hand as that may stifle the initiative and public spiritedness of volunteers, thereby hindering the growth of civil society.

6 In summary Sir, in the case of a registered society, which is essentially a coming together of members by contract for a common purpose, the primary responsibility to ensure that the affairs of the society are properly conducted lie with its members. In addition, should the society raise funds from the public, the donating public can also play a part to ensure that the funds collected are used as intended.