Friday, April 7, 2017

South Carolina Contemplates Additional Reporting Requirements

South Carolina State Representative Bill Herbkersman has introduced legislation that will require some nonprofits to make more frequent and more detailed disclosures about their financials. The bill covers entities organized under the South Carolina Nonprofit Corporation Act (Chapter 31, Title 33). The proposed bill reads:

 

A BILL

TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 11-1-130 SO AS TO REQUIRE CERTAIN NONPROFIT CORPORATIONS THAT RECEIVE MORE THAN ONE HUNDRED DOLLARS IN PUBLIC FUNDS TO SUBMIT A QUARTERLY EXPENDITURE REPORT TO THE AWARDING JURISDICTION, AND TO PROVIDE THAT THE AWARDING JURISDICTION MUST MAKE THE REPORTS AVAILABLE TO THE PUBLIC.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION    1.    Chapter 1, Title 11 of the 1976 Code is amended by adding:

"Section 11-1-130.    (A)    Any entity organized pursuant to Chapter 31, Title 33 that received more than one hundred dollars in public funds from a state agency or political subdivision in the previous calendar year or the current calendar year, must submit a quarterly expenditure report to the jurisdiction awarding the funds.

(B)    The expenditure report must include:

(1)    the amount of funds expended;

(2)    the general purposes for which the funds were expended; and

(3)    any other information required by the jurisdiction so as to increase the public's knowledge of the manner in which the funds are expended.

(C)    The expenditure reports must be made available by the awarding state agency or political subdivision in accordance with the requirements of Chapter 4, Title 30; however, the entity receiving the funds is not subject to such disclosure provisions."

SECTION    2.    This act takes effect upon approval by the Governor and applies to any public funds received thereafter and within three calendar years thereof.

 

Proponents claim that because South Carolina nonprofits employ ten percent of the state workforce and are the recipient of over 130 million volunteer hours, South Carolina citizens deserve a more accurate accounting of what these organizations do with their money. It is further claimed that because of inconsistent reporting requirements, it is difficult to compare and assess different organizations, thus making hold them accountable a daunting task.

 

 

 

David A. Brennen

http://lawprofessors.typepad.com/nonprofit/2017/04/south-carolina-contemplates-additional-reporting-requirements-.html

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