The Cost of Community Development to Not-For-Profit Community Development Organizations.

Community Development and the Community and Voluntary Sector have not escaped the enormous changes that have taken place in Ireland in the past 20 years. The increase in regulations which voluntary community organizations are subjected to is just one imposition of many. This document relates to Local Voluntary Community Organisations that operate on a completely voluntary and not-for-profit basis.

Meath Community and Voluntary Forum have a number of concerns as follows:

 

·        Insurance cost. Typically €1,500 annually.

 

·        The necessity for some organizations to establish companies (where property is involved), and also because national and local funding agencies require legal entities to be formed. There are two options here. The appointment of Trustees or the formation of a Company Limited by Guarantee. Legal advice will always recommend the latter.

 

·        The cost of audited accounts (Company Law). Auditors fees in excess of €1,000 annually. The Accounts are prepared by an Accountant at a cost of at least €500 annually.

 

·        Where a number of Community Organisations come together to Avail of a FAS Community Employment Scheme, a Company is formed. Typical Insurance costs and Account/Audit Fees can amount to a much as €5,000 in total. This is paid out of the Scheme’s Materials Budget.

 

A whole industry at national level has developed over the years that, purports to be representative of the voluntary community sector on the ground. These organizations are Government funded, with paid staff and significant administrative budgets.  Why is it then that many community volunteers are disgruntled with the cost that attaches to community development at grassroots-level.

 

Volunteers with a long term commitment to community development in their communities are a rare breed, many having clocked up 30 years and more of voluntary service. These volunteers have built up track records and huge credibility banks in their communities, and that is why community development is supported and works at grassroots level. However, Community Members do not appreciate their monetary contributions being used to pay Accountant and Auditors Fees.

 

The Reporting and Accountability Procedure should be overhauled to make it more Community Volunteer Friendly. Some recommendations:

 

·        A special section in the Companies Register for Voluntary Community Organisations, so that they are not viewed in the same way as the-for-profit national and multi-national companies with administrative budgets and professional accounting staff employed.

 

·        Standard Templates should be designed that allow Voluntary Community Organisations to submit their accounts for inspection without having to pay professional Audit fees.

 

·        Templates should be general and broad enough to cater for all Voluntary Community Organisations, including FAS CE and other such Schemes. Currently, the Rural Social Scheme administrative work is carried out by the County Partnership Company, in Meath’s case, Meath Partnership. FAS CE Schemes are subject to intense internal auditing at local and national level, this should suffice and obviate the need for any other form of auditing. 

 

·        The Audit Exemption for Private Limited Companies should be extended to Voluntary Community Organisations established as public companies limited by guarantee and not having a share capital, which are set up for the benefit of their local communities on a wholly voluntary basis. Revenue limits could be applied, that would facilitate most Organisations. The Charities Act should be revisited, and could help here.

 

·        Voluntary Community Organisations that are registered with their Local Authority as a bona-fide organization, and subject to certain criteria, should have access to a National Insurance Scheme. Criteria might include; Committee Structure and Constitution (Articles and Memo), details of Annual General Meeting, Bank Account details and information on Signatories, any other information deemed relevant. The contribution of the BHP Insurance Scheme to Voluntary Community Organisations is acknowledged.

 

Conclusion

 

The Object of these recommendations is to ensure value for money. It makes no sense that community volunteers should have to hold church gate collections to pay for their organizations audit fee or next insurance premium. Much of the work being done by community volunteers saves the National Exchequer millions each year. The Leader Rural Development Programme allows €13 per hour for voluntary labour, where it is an allowable component of a project. This should give some indication of the worth of voluntary effort in Ireland today.

 

It is important to point out that the concerns expressed and recommendations outlined are not an attempt to avoid openness, transparency or accountability. They are submitted to ensure that community organizations are not overburdened with expensive, user unfriendly, unnecessary paperwork. The Community Volunteers job is to be proactive in their communities and get the work done. That is their primary function, and they should be supported to the hilt in this regard.

 

A good example of the value at local level of the Voluntary Community Organisation and Community Volunteer is the Seniors Alert, Communities Supporting Older People Scheme, formally the Scheme of Community Support for Older People (CSOP). This Scheme could never be delivered in a cost effective and efficient way without the involvement of the Voluntary Community Organisation and their Volunteers, who are delighted to be involved. This needs to be recognized. There is a saving to the State here. There can be further savings as the recommendations illustrate.

 

We, the Meath Community and Voluntary Forum believe that the decency, honesty, integrity, respect and trust that is demonstrated by the Community Volunteers on a daily basis, is respected and acknowledged. It is on these values that communities develop and prosper. There is no conflict between these principles and openness, transparency and accountability. They just need to be facilitated. Voluntary Community Organisations that spend €3,000 on Accounting, Auditing and Insurance fees each year could put this money to great effect providing and supporting activities for the Youth and the Elderly, the two most dependant groups in our society. 

 

 

 

 

 

Garret O’Brien

 

 

 

 

 

Chairman

 

 

 

Meath Community & Voluntary Forum