CORPORATE LAW UPDATE: A LOOK INTO THE TANZANIA NON-GOVERNMENTAL ORGANIZATIONS (AMENDMENTS) REGULATIONS, 2018 ON FINANCIAL TRANSPARENCY AND GENERAL ACCOUNTABILITY
- Brief of the new legal requirements for Non-Governmental Organizations (NGOs) in Tanzania
- Summation of the provisions of the Non-Governmental Organizations Act (Amendments) Regulations, 2018.
- Money Laundering and Anti-Corruption compliance measures are introduced
- How International NGOs in Tanzania need to adapt to the current legal changes
- Final thoughts and conclusion.
On 29th October, 2018, the Ministry of Health, Community Development, Gender, Elderly and Children issued the Non-Governmental Organisations Act (Amendments) Regulations, 2018 (hereinafter referred to as “the Non-Governmental Organizations (Amendments) Regulations, 2018”) through Government Notice No. 609 published on 09th October, 2018.
The Non-Governmental Organizations (Amendments) Regulations, 2018 have introduced new provisions which are to be read together and in alignment with the Principal Regulations (The Non-Governmental Organizations Regulations, 2004) with regard to financial transparency and accountability. This brief will highlight the new provisions and the impact they may bring to Non-Governmental Organizations (hereinafter referred to as “NGOs”) operating in Tanzania.
2.0. Summation of the provisions of the Non-Governmental Organizations Act (Amendments) Regulations, 2018
2.1. Disclosure of issues related to fundraising activities (Regulation 12 of the Non-Governmental Organizations (Amendments) Regulations, 2018)
NGOs are required to disclose to the Public, Registrar of NGOs and all other stakeholders regarding sources, expenditure, purpose and activities of resources obtained from fundraising activities. The disclosure has to be made within fourteen (14) days after completion of the fundraising activities.
2.2. Requirement of disclosure of amounts fundraised in excess of Tanzania Shillings Twenty Million (Tshs. 20,000,000/=) (Regulation 13 of the Non-Governmental Organizations (Amendments) Regulations, 2018)
Where an NGO obtains funds that exceed Tanzania Shillings Twenty Million (Tshs. 20,000,000/=), it is required to:-
- publish bi-annually fund reports together with its expenditure in a media that can be easily accessed by targeted beneficiaries;
- to submit to the treasury and Registrar of NGOs contracts entered with the person who grant the said fund;
- to declare to the Registrar of NGOs any other resource received in cash or kind before its expenditure.
2.3. Financial accountability and transparency (Regulation 14 of the Non-Governmental Organizations (Amendments) Regulations, 2018)
Generally, Regulation 14 provides for the manner that NGOs need to operate to make sure that there is financial accountability and transparency. NGOs are required to set up proper financial management and accountability process to provide assurance that finances are well managed, as well as procurement processes, asset management.
Likewise, the Regulation seeks to ensure that NGOs do develop programs which are geared to strengthen the institutional framework and its sustainability.
What has been keenly observed is the introduction of measures to combat Money Laundering and Corruption. The government seems ardent to ensure that NGOs are not used as money laundering schemes or corruption fronts. In this aspect, Regulation 14(n) is very clear with regards to what the government expects of NGOs. It states;-
“Each NGO shall be obliged to……
(n) exercise zero tolerance on corruption, money laundering and other forms of substantive misuse of funds, and take effective actions to hold persons or institutions responsible accountable”.
2.4. General obligations of NGOs (Regulation 15 of the Non-Governmental Organizations (Amendments) Regulations, 2018)
Each NGO shall be accountable to the people it serves; not to enter into contracts which undermines sovereignty of the state and rights of the people; and always work in accordance with the laws of Tanzania.
3.0. Final thoughts and conclusion
The Non-Governmental Organizations (Amendments) Regulations, 2018 will undoubtedly have positive impact to NGOs in Tanzania.
NGOs will need to introduce new policy or adjust the existing policies within their Organisation to make sure that there is a high level of disclosure and transparency of their accounts. One may raise a question that; what exactly information would be needed to achieve appropriate level of financial transparency and accountability? While the answer may be a bit wanting, it still remains a duty of NGOs to make sure that all relevant accounting information are fully and freely available to all stakeholders and public in general.
NGOs that are yet to be registered in Tanzania may need to familiarize themselves with the Non-Governmental Organizations (Amendments) Regulations, 2018 in order to adjust and fit in with the same. For further reference on NGOs especially International Non-Governmental Organizations (INGOs) please have a look at our article .
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