NELN Administrative Guidelines
The NELN Environmental Education Fund (“the Fund”) is operated by the NELN Committee.
Donations are sought for the fund with the following wording:
“Narara Eco Living Network Inc (ABN 95 813 021 962) is endorsed as a deductible gift recipient under Subdivision 30-BA of the Income Tax Assessment Act 1997. All donations to the NELN Environmental Education Fund of $2 or more are tax deductible.”
Financial procedures
Any tax-deductible donations to the Fund are placed in the NELN Environmental Education Fund account. A receipt is issued for each donation above $2. The receipt includes:
“Narara Eco Living Network Inc (ABN 95 813 021 962) is endorsed as a deductible gift recipient under Subdivision 30-BA of the Income Tax Assessment Act 1997. All donations to NELN are tax deductible.”
All donations without tax deductibility (including membership fees for Voting and Associate Members) are placed in the main NELN account.
Expenditure of funds from all accounts are decided by the NELN Committee. For funds in the non Gift-fund NELN accounts, decisions are made internally by the Committee and reported in the Annual Report and at the Annual General Meeting. Gift Fund account procedures are below.
All accounts are dual signatory. The Treasurer and Convenor are signatories, and the Secretary is the back-up second signatory.
Decision-making on expenditure of the NELN Environmental Education Fund
For funds in the NELN Environmental Education Fund, the following procedures are used:
- Submissions can be made by Committee members, NELN members or others for funding of specific projects with monies from the Fund. This funding will normally be in the form of grants, with reports of expenditure against budgets. The Committee can choose to implement policies governing expenditure of these funds, including priority for specific types of projects or projects related to specific issues; and/or deciding that some percentage of funds are to be used for short-term projects and other funds are to be held back for use on larger projects.
- Grants
from the Fund can be for the following purposes:
- Protection and enhancement of the natural environment or of a significant aspect of the natural environment, particularly repair and regeneration of bushland and riparian land on the Central Coast of NSW, with specific focus on Narara Creek; and
- Preparation of educational materials and/ or provision of information or education, or the carrying on of research, about the natural environment or a significant aspect of the natural environment, including at least propagation of native plants, advice on sustainable building, composting and re-use of waste.
- Submissions need to be provided to the Convenor, Dave Burrows (db042042@gmail.com) on the form attached. The Convenor distributes copies of all submissions received to all Committee members one week (7 days) before each Committee meeting. Committee meetings are usually conducted quarterly. (For urgent decision-making, an interim meeting or email exchange can be used to expedite decisions on submissions.)
- At each Committee meeting, the Treasurer reports on the amount available in the Fund account. The Committee discusses submissions received and decides whether to fund each submission. Submissions are assessed against a set of criteria which are published with the submission form.
- Notice of decisions are provided to the person(s) listed as contacts on the submission, and successful submissions are listed on the external NELN webpage.
Grant implementation
Reporting requirements (project and financial) are negotiated by the Convenor or his/ her nominee with contact persons for successful submissions.
Grants are usually provided as the total amount to an entity or individual(s) to carry out a project. This will normally be an entity with an ABN, but can be an individual with or without an ABN. The grant recipient carries out all expenditures and keeps records of expenditures for financial reporting to NELN, providing all supporting documentation (e.g., invoices and receipts). Grants will be assigned specific codes in Xero to help with accounting.
Reporting procedures
Any reports required by the grant must be sent to the Convenor or his/ her nominee. Reports required by external funders must meet the standards set by those funders: this will not be the job of NELN, but of the implementers of the successful grant.
For
multi-month grants, brief monthly reports will usually be required. All grants
require an end-of-grant report, stating the activities carried out and impacts
(if any are measured). A separate financial report may be required for larger
or more complex projects.
Related Parties Transactions
The Australian Charities and Not-for-Profits Commission (ACNC) has issued guidance to charities about “related parties transactions”. ACNC says charities “must carefully manage any related party transactions to ensure they are handled:
- appropriately
- transparently, and
- in the best interests of the charity”.
A charity’s financial decisions must be made in its own best interests, and not in the interests of related parties or key management personnel. Charities need to manage the risk that related parties or key management personnel could receive significant private benefits from charity operations.
Key management personnel are the people with authority and responsibility for planning, directing and controlling the activities of an entity, directly or indirectly, including any director (whether executive or otherwise) of that entity.
For a small charity, a related party is a person or organisation that is connected to the charity and has significant influence over the charity.
This includes:
- a charity’s Responsible People and their close family members
- a charity’s senior management and their close family members
- other people or organisations that can influence a charity’s decision-making
- another organisation where a related party controls the organisation, a related party has significant influence over that organisation, or a related party is a member of the key management personnel of that organisation.
A related party transaction is a transfer of resources, services, or obligations between related parties. It does not have to include financial payment.
A related party transaction can include:
- purchases, sales or donations
- receiving goods, services or property
- leases
- transferring property, including intellectual property
- loans
- guarantees
- providing employees or volunteers
- a Responsible Person of a charity providing professional services (for example, accounting or legal services) at a discounted rate or for free.
At NELN, Narara Ecovillage Co-operative (NEV) is regarded as a related party, in that several people involved in the NELN Committee have some relationship to NEV, either as current or previous shareholders.
Reporting and managing related party transactions
Charities must report on their related party transactions through the Annual Information Statement and annual report.
If there are no reportable related party transactions, small charities should answer ‘No’ to the question about ‘Did your charity have any reportable related party transactions in the 2023 reporting period?’
Small charities who do have reportable related party transactions in the reporting period must select one or more applicable types of related party transaction in the 2023 Annual Information Statement:
- Fees paid to a related party for providing goods or services to the charity
- Loans from/to a related party
- Salary/wages paid to a related party’s relative(s)
- Transfer of charity property or assets to a related party
- Charity goods or services provided at a discount to a related party
- Significant use of charity property by a related party
- Investment in a related party
Small charities can provide additional information about their charity’s related party transactions in an optional question: ‘Include any other relevant details’.
For example, small charities can include a dollar value of the transaction, how they manage such transactions or list the page number of their voluntary financial report containing the related party transaction disclosure.
Managing related party transactions
When entering an arrangement that could result in the potential for related party transactions and conflicts of interest, having a clear series of steps to manage the issue is vital.
- Maintain a Register
For each related party transaction, the register should keep enough information about the related party and the transaction. The information will help charities to meet the reporting requirements in the Annual Information Statement or for the relevant disclosure note in the financial statement
- Have appropriate policies and procedures (see Annex)
- Manage conflicts of interest (see Annex)
Annex
Policy
It is the policy of Narara Eco Living Network, Inc (NELN) that any decisions about engaging a related party must be made by those without any conflict of interest.
The Committee of the NELN is comprised of Voting Members of NELN, elected by Voting Members of NELN at an AGM. Some Voting Members of NELN are also shareholders in Narara Ecovillage Co-operative, a related party to NELN.
All Committee members are asked to declare any conflict of interests (CoI) when joining the Committee (beginning at the 2024 AGM): this includes any material benefits that may flow to Committee members or their families. CoI is registered at the beginning of each Committee meeting. In particular, those Committee Members who are also shareholders in Narara Ecovillage Co-operative (NEV) are asked to recuse themselves from any decisions on use of charitable funds by NEV.
The whole Committee must consider all decisions to determine that each agreed action is appropriate and necessary to meet the charity’s purposes. Those Committee members who are not also NEV shareholders must consider all decisions related to NEV in order to demonstrate that the transaction is appropriate and necessary to meet the charity’s purposes.
Procedure
Decisions that may involve a charity entering into a relationship with a related party will be conducted transparently. This will be done through an open procurement process that considers offers from multiple, unrelated parties, except in specific circumstance where sole-source procurement will be considered.
Sole-source procurement from related parties will only be considered when there is no feasible, reasonable way that alternative offers can be sought. The Committee must record reasons for sole-source contracts being provided in the Register of Related Party Transactions in each year’s Financial Statement and in the Annual Financial Report provided to NELN members.
Where a decision is made to carry out a related party transaction, formal documentation will include:.
- objectives of the arrangement
- financial details
- roles and responsibilities within the arrangement
- performance and reporting expectations
- how the relationship will be regularly monitored, reviewed and evaluated
- how the NELN Committee will monitor the relationship to ensure it remains in the charity’s best interest.