As such, the audit findings indicate that the organization has failed to address all non-compliance issues found in the previous audit. The audit covered the activities of the Organization for the period from January 1, 2013 to December 31, 2014. N/A - The Organization did not spend any funds on this ministry during the audit period.
The organization has indicated that the signature authority on the bank account is held by Moses Sarpong and. This represents a variance of 23.4% between the income reported in T3010 2013 and the deposits in the bank account of the Organization. This represents a variance of 20.4% between expenditures reported for T3010 2013 and withdrawals from the Organization's bank account.
70 and email transfers from the bank account of the Organization in the amount of. 15 and email transfers from the Organization's bank account in the amount of $4,775.
It is our opinion that the organization has failed to comply with this subsection of the Act by failing to keep adequate books and records.
Providing a personal benefit Legislation and jurisprudence
During the audit period, we discovered 84 purchases, of which we found supporting documentation for only 3. The organization on September 8, 2016 only and Moses Sarpong · have access to the organization's debit card(s) and make purchases. As such, it is our view that these expenditures constitute a personal benefit .. automobile receipts for which no charitable purpose could be established.
As with c) above, it is our view that these expenditures constitute a personal benefit provided to Moses Sarpong Conclusion. In summary, as a result of the above issues, our view is that the organization has allowed its charitable assets to be used for personal gain and has therefore failed to demonstrate that it meets the test for continued registration under s 149.1(1) as a charity of which "no part income is not paid or otherwise made available for the personal benefit of any owner, member, shareholder, trustee or founder". For this reason, there are grounds for revoking the organisation's charitable status under paragraph 168(1)(b) of the Act.
Issuing receipts not in accordance with the Act Legislation and jurisprudence
These requirements are contained in Regulations 3500 and 3501 of the Income Tax Act and are detailed in Income Tax Folio S7-F1-C 1, Split-receiving and Deemed Fair Market Value and in P113 - Gifts and Income Tax7. The Organization is required to maintain adequate books and records so that CRA can verify that a gift has been received by the Organization. Imperfections in the Organization's books and records limit our ability to make this determination.
We have identified a number of issues with donation summary statements. i) The overviews do not show which donors have received ODRs and which have not; The list also does not match the reported revenue figures on the organization's FIS. who donated mainly by check. Out of nine. donations made by check, four corresponded to entries in the summary spreadsheet, three did not correlate with entries in the spreadsheet, and two corresponded to entries in the spreadsheet that were different.
Given the lack of internal controls identified in points a) to d) and the lack of .. reliable books and records identified in point e) above, we have significant concerns with the reliability and accuracy of all ODRs issued by the organization. For example, copies of the ODR issued to the largest single donor were only released after we identified that these ODRs were missing from the original documentation provided by the organization. The organization also issued a parallel series of ODRs with an alpha character attached to the unique identifier.
The Organization did not provide an explanation as to why some donors received a second ODR or why these ODRs were in $165 increments. If a portion of this amount represents a gift-in-kind (GIK), we note that none of the ODRs provided by the Organization contain the necessary additional information required to be included on ODRs issued for A GIK is not. In addition, we have identified a number of concerns with the practices of the Organization as they relate to the issuance of donation receipts and the requirements set out in .. a) The ODR does not contain the exact phrase "official receipt for income tax purposes"; .
As a result, we are unable to determine whether we have received copies of all ODRs issued by the organization; and . g) The organization has indicated that where it is necessary to replace ODRs, it will issue another copy of the same receipt instead of replacing it with another ODR with a unique identification number. It is our opinion that the Organization has issued receipts in a manner other than in accordance with the law and the articles of association. An organization that issues donation receipts that are incomplete or incorrect may also be fined 5% of the eligible amount shown on the receipts below.
Failure to file an information return as and when required by the Act and/or its Regulations
We believe that this sanction is not appropriate. alternative, given the serious nature of the non-compliance identified during our audit. During the year 2014, the organization reported only $16,550 on Line 5000 as charitable expenses and reported expenses primarily on Line 5040 as other expenses. These assignments do not appear accurate based on our understanding of the organization's operations.
We could not identify any ODRs issued for these gifts, and the organization indicated that it did not receive any GIK on line 4000. In the 2013 T3010, the organization did not attach the Registered Charitable Foundation Information (TF725) worksheet to its T3010. Under subsection 168(1)(c) of the Act, the registration of a charity can be revoked if it fails to submit a charity statement when required under the Act.
It is our position that the Organization has failed to comply with the Act by not submitting an accurate T3010. For this reason, there are also grounds for revoking the registered status of the Organization, under paragraph 168(1)(c) of the Act. Under subsection, an Organization may receive a notice of suspension of its power to issue donation receipts for failure to meet their obligations under.
It is our opinion that the organization has failed to comply with this subsection of the Act by not submitting an accurate T3010. For this reason, there is a basis for suspension of the Organization's authorization to issue official receipts in accordance with subsection (1) of the Act. We do not believe that this sanction is an appropriate alternative given the serious nature of the non-compliance identified in our
In this case, the Director-General of the Charities Directorate may give notice of his intention to cancel the organisation's registration by issuing a notice of intention in the manner described in subsection 168(1) of the Act. b) Response. An organization issues a notice of intention to cancel in the manner described in subsection 168(1) of the Act. After a careful review of the Harvest Christian Church files, we found the loopholes we advised about.
APPENDIX A
Section 149.1 Qualified Donees
149.1 (2) Revocation of registration of charitable organization
149.1(3) Revocation of registration of public foundation
149.1 (4) Revocation of registration of private foundation
149.1(4.1) Revocation of registration of registered charity
Section 168
Revocation of Registration of Certain Organizations and Associations 168(1) Notice of intention to revoke registration
168(2) Revocation of Registration
A person may, on or before the day that is 90 days after the day on which the notice is given, serve on the Minister a written notice of objection in a manner approved by the Minister, stating the grounds for the objection and all relevant facts and the provisions of subsections apply and (3) to (7) and sections and 166.2, with any modifications required by the circumstances, as if the notice were a notice of assessment under section 152, if. b) in the case of a person who is or has been registered as a registered Canadian amateur athletics association or is an applicant for such registration, objects to a notice under any of subsections (1) and (22); or 172(3) Appeal against refusal of registration, cancellation of registration etc. (a) confirm a proposal or decision in respect of which the Minister has issued a notice under any subsection and (22) and 168(1) a person who is or has been registered as a registered Canadian amateur athletics association or is an applicant for registration as a registered Canadian amateur athletics association, or fails to confirm or reverse this proposal or decision within 90 days of service of notice of objection by the person. under subsection 168(4) in relation to that proposal or decision,.
180(1) Appeals to Federal Court of Appeal
Section 188: Revocation tax
188(1) Deemed year-end on notice of revocation
188(1.1) Revocation tax
188(1.2) Winding-up period
188(1.3) Eligible donee
188(2) Shared liability- revocation tax
188(2.1) Non-application of revocation tax
188(3) Transfer of property tax
188(4) Transfer of property tax
188(5) Definitions In this section,
B where
189(6) Taxpayer to file return and pay tax
189(6.1) Revoked charity to file returns
189 (6.2) Reduction of revocation tax liability
189(6.3) Reduction of liability for penalties
189 (7) Minister may assess