The Ontario Not-For-Profit Corporations Act (2021) took effect as of October 19, 2021. In it the specified deadline for updating Bylaws of all Ontario Not-For-Profit Corporations is October 18, 2024. After that date all Not-For-Profit Bylaws are to be governed by ONCA rules. ONCA rules governing aspects of Governance and Financial Reporting come into effect for the MCC financial year, May 1’2024 to April 30’2025. This document outlines the specific ONCA rules for MCC financial reporting and dictates whether an Audit, Review Engagement or other are needed for this and the subsequent financial years.

This document will need to be updated if and when ONCA financial rules change in the future.

Not-for-Profit Corporations Act, 2010, S.O. 2010, c. 15

“Deeming re public benefit corporation

(2) Despite the definition of “public benefit corporation” in subsection (1), if a non-charitable corporation that is not a public benefit corporation at the beginning of a financial year receives donations, gifts, grants or similar financial assistance as described in that definition in that financial year,

(a)  the non-charitable corporation is deemed to not be a public benefit corporation in that financial year; and

(b)  the non-charitable corporation is deemed to be a public benefit corporation in the next financial year, as of the date of the first annual meeting of members in that next financial year. 2010, c. 15, s. 1 (2). “

Using the ONCA guidelines from above the decision of what type of financial review to be conducted for the financial year May 1’2024 to April 30’2025 will be based on the following:

• If MCC received LESS than $10,000 grant money, whether by direct government or by government agency (e.g. Ontario Trillium Foundation) or by the outside public (i.e. non members or employees of MCC), in the previous financial year e.g. May 1’2023 to April 30’2024, then the club was operating as a Regular Not-for-Profit Corporation during that period. One of the following financial reporting scenarios will apply for the next financial year, May 1’2024 to April 30’2025

o   If revenues were less that $500,000 in the previous financial year, then Members by Extraordinary Resolution can waive both an Audit and Review Engagement. In their absence internal accounting statements can be done.

o   If revenues were more that $500,000 in the previous financial year, then Members by Extraordinary Resolution can waive an Audit. A Review Engagement is required.

• If the corporation received MORE than $10,000 grant money, whether by direct government or by government agency (e.g. Ontario Trillium Foundation) or by the outside public (i.e. non members or employees of MCC), in the previous financial year e.g. May 1’2023 to April 30’2024, then the club was operating as a Public Benefit (PB) Not-for-Profit Corporation during that period. One of the following financial reporting scenarios will apply for the next financial year, e.g. May 1’2024 to April 30’2025:

o   If revenues were less than $100,000 in the previous financial year, then Members by Extraordinary Resolution can waive both an Audit and Review Engagement. Alternatives such as a Compilation Review can be done.

o   If revenues were more that $100,000 in the previous financial year but less than $500,000, then Members by Extraordinary Resolution can waive an Audit. A Review Engagement is required.

o   If revenues were more than $500,000, then an Audit is required.

Financial Statements for Grants:

It must be noted that the financial reporting requirements for any organization that MCC might apply for grant money from are separate from above. The MCC Board is free to apply for any grant at any time however they must meet the financial reporting requirements of the granting organization. Most granting organizations will want MCC financials for the previous year. This means that the MCC Board when deciding what financial reports to be prepared for the Annual Meeting should also take into account the need and expense of requesting an Audit or Review engagement.

For example, Trillium offers grants for charitable organizations within Ontario including Not-For-Profits. In 2024 their application process requires the following financial statements to be submitted.

Gross Annual Revenue: Between $100,000 and $249,999

Submit the following externally prepared financial statements from an accounting firm registered with CPA Ontario: Compilation Engagement*, Balance Sheet, Revenues and Expenses

Gross Annual Revenue: Between $250,000 and $499,999

Submit the following externally prepared financial statements from a licensed public accountant who is external to your organization and accounting firm registered with CPA Ontario: Review Agreement, Notes to Financial Statements, Balance Sheet, Revenues and Expenses

Gross Annual Revenue: Greater than $500,000

Submit the following externally prepared financial statements from a licensed public accountant who is external to your organization and accounting firm registered with CPA Ontario: Audit, Notes to Financial Statements, Balance Sheet, Revenues and Expenses, Statement of Change in Net Assets, Statement of Cash Flow

* Compilation Agreement: This type of engagement involves the preparation of financial statements by a CPA. Included with the financial statements that are prepared is a report that is called a “Notice to Reader” stating that the financial statements are unaudited, and that there is no assurance provided by the CPA that the amounts are free from materially misstatements. The CPA simply compiles the financial statements with information provided by the client, or the client’s bookkeeper.