Financial controls & audit

Auditor

F1 The Association, if required by law to do so, shall appoint an auditor to act in each financial year. They must be qualified as provided by Section 41 of the Act.

F2 The following cannot act as auditor:

F2.1 an Officer or employee of the Association;

F2.2 a person employed by or employer of, or the partner of, an Officer or employee of the Association.

F3 The Association’s auditor may be appointed by the Board or by a resolution of Shareholders.

F4 Where an auditor is appointed to audit the accounts for the preceding year, they shall be re-appointed to audit the current year’s as well unless:

F4.1 a General Meeting has appointed someone else to act or has resolved that the auditor cannot act; or

F4.2 the auditor does not want to act and has told the Association so in writing; or

F4.3 the person is not qualified or falls within rule F2 (above); or

F4.4 the auditor has become incapable of acting; or

F4.5 notice of the intention to pass a resolution to appoint another auditor has been given.

F5.1 No less than twenty-eight days’ notice shall be given for a resolution to appoint another person as auditor, or to forbid a retiring auditor being re appointed;

F5.2 the Association shall send a copy of the resolution to the retiring auditor and also give notice to Shareholders at the same time and in the same manner, if possible;

F5.3 if not, the Association shall give notice by advertising in a local newspaper at least 14 days before the proposed meeting. The retiring auditor can make representations to the Association which must be notified to Shareholders under Section 40 of the Act.

Auditor’s duties

F6 The findings of the auditor shall be reported to the Association, in accordance with Section 43 of the Act.

F7 The Board shall produce the revenue account and balance sheet audited by the auditor, if required, and the auditor’s report, if required, at each annual General Meeting. The Board shall also produce its report on the affairs of the Association which shall be signed by the person chairing the meeting which adopts the report.

Accounting requirements

F8 The end of the accounting year must be a date allowed by the Registrar.

F9 The Association shall keep proper books of account detailing its transactions, its assets and its liabilities, in accordance with Sections 35 and 36 of the Act.

F10 The Association shall establish and maintain satisfactory systems of control of its books of account, its cash and all its receipts and payments.

Annual returns and balance sheets

F11 Every year, within the time period specified by legislation, the Secretary shall send the Association’s annual return to the Registrar. The return shall be prepared in accordance with the period specified in the Act, or such other date allowed by the Registrar and shall be lodged within the period required by law. The annual return shall be accompanied by the auditor’s report, if required, for the period of the return and the accounts and balance sheets to which it refers.

Borrowing

F12 The total borrowings of the Association at any time shall not exceed £7 50 million (seven hundred and fifty million) pounds sterling or the value of the Association’s housing stock net of the Association’s government grant, or such a larger sum as the Association determines from time to time in General Meeting. For the purpose of this rule F12, at any relevant time, any amount of the Association’s borrowings in any currency other than pounds sterling (as may be permitted or not prohibited by the Regulator from time to time) shall be converted to sterling using the exchange rate or rates applicable under the related Derivative Transaction or transactions by which the Association has hedged its exposure to currency exchange rate movements in relation to the principal amount of such borrowings, or in the absence of such a rate or rates (in whole or in part) using the official spot exchange rate or rates recognised by the Bank of England for the conversion of that currency or currency unit into sterling at or about 11:00 on the relevant day.

F13 The rate of interest payable at the time terms of borrowing are agreed on any money borrowed shall not exceed the rate of interest which, in the opinion of the Board, is reasonable having regard to the terms of the loan. The Board may delegate the determination of the said interest rate within specified limits to an Officer, Board Member or member of a committee.

F14

F14.1 In respect of any proposed borrowing, for the purposes of rule F12 and in relation to the amount remaining un discharged of any deferred interest or index-linked monies or amounts on any deep discounted security previously borrowed by the Association, the amount of such pre-existing borrowing shall be deemed to be the amount required to repay such pre-existing borrowing in full if such pre-existing borrowing became repayable in full at the time of the proposed borrowing; and

F14.2 for the purposes of rule F13 in respect of any proposed borrowing intended to be on deferred interest or index-linked terms or on any deep discounted security the amount of borrowing shall be deemed to be the proceeds of such proposed borrowing receivable by the Association at the time of the proposed borrowing; and

F14.3 no person dealing in good faith with the Association shall be concerned to know whether rule F12, F13 or this rule F14 have been complied with.

Investment

F15 The funds of or monies borrowed by the Association may be invested by the Board in such manner as it determines and in such manner as permitted by the Act.

Annual Report and Return and Register of Charities

F16

F16.1 The Board members must comply with the requirements of the Charities Act (Northern Ireland) 2008 with regard to the:

(a) preparation of the statements of account and the transmission of a copy of it to the Commission;

(b) preparation of an annual report and the transmission of a copy of it to the Commission;

(d) the auditing or independent examination of the statement of account of the Association.

F16.2 The Board members must notify the Commission promptly of any changes to the Association’s entry on the register of charities.

A PDF copy of the full Co-Ownership Rules can be found by clicking here.