The Central Co-operative Fund Regulations 2016 – Committee and Funding

The Central Co-operative Fund Regulations 2016 – Committee and Funding

Legal Notice 344 of 2016, entitled Central Co-operative Fund Regulations, 2016 was published on the Government Gazette No. 19666 on the 21st October 2016.  These Regulations revoked, with immediate effect, the then applicable Central Co-operative Fund Regulations and the Central Co-operative Fund (Provisional Board) Regulations.  These regulations have come into force following a consultation process with the two Maltese co-operative federations.

The following are the salient regulations of the new Central Co-operative Fund Regulations, 2016.

The Central Co-operative Fund Committee

The Committee will consist of 11 voting Members who will be appointed for a period of 3 years as follows:

  • 6 independent Members appointed by the Minister;
  • 3 Members appointed from amongst members of eligible and registered co-operative societies by majority vote; and
  • 2 Members appointed from amongst members of eligible recognised organisations.

Eligibility to vote for the 3 Committee Members from amongst members of eligible and registered co-operative societies

  • All co-operative societies may vote to appoint such Committee Members as long as the society is not in arrears in its Fund contribution. Payments of the Fund contribution are to be made within 9 months of the year end of the society’s financial statements.

The Committee Members’ Eligibility

  • All Members will be persons of integrity and of good moral conduct;
  • All Members will have extensive knowledge in co-operative matters, financial management, legal, regulatory and accountancy;
  • The 6 Members appointed by the Minister will not:
    • be involved, directly or indirectly, in any activity or function of the Committee that can give rise to any conflict of interest; or
    • be involved, directly or indirectly, in any activity or function of the Committee that can prejudice the work undertaken by the Committee; or
    • offer or be engaged in any other kind of service to any co-operative registered with the Board, or to founding members in the process of setting up a cooperative, or any recognised organisation, or the Co-operatives Board.
  • The 3 Members appointed from amongst members of eligible and registered co-operative societies and the 2 Members appointed from amongst members of eligible recognised organisations will declare under oath that they:
    • are not subject to any criminal proceedings, and
    • have not been convicted of a serious criminal crime, and
    • have not been interdicted for any period, and
    • will not have been declared bankrupt or insolvent.
  • No member of a co-operative society may be a Committee Member if his/her co-operative society is in arrears in its Fund contribution.

Committee Members’ Removal from Office

  • A Committee Member appointed by the Minister may be removed by the Minister if such Member is;
    • in the opinion of the Minister, guilty of serious misconduct in the performance of his/her duties; or
    • incapable of carrying out his/her duties; or
    • in breach of any of the provisions of these regulations.
  • Committee Members appointed from amongst members of eligible and registered co-operative societies and Committee Members appointed from amongst members of eligible recognised organisations may be removed by a simple majority of the Committee Members if such Member is:
    • in the opinion of the Committee, guilty of serious misconduct in the performance of his/her duties; or
    • incapable of carrying out his/her duties; or
    • in breach of any of the provisions of these regulations.

Committee Meetings

  • 9 Committee Members will constitute a quorum;
  • Decisions are taken by a simple majority of those present and the Chair has a casting vote.

Committee Secretary

  • The Secretary will be appointed by the Minister from among public officers.

Reporting

  • The Committee will exercise a high degree of diligence in administering the funds and will assure adequate liquidity of the Fund;
  • At least twice a year the Committee will report to the Minister and the Co-operatives Board on the utilisation of the funds;
  • Within 3 months from the end of each calendar year the Committee will prepare a complete report of its activities and operations together with the Fund’s audited financial statements;
  • The complete report will be made available to the public;
  • There will no longer be a Central Co-operatives Fund Annual General Meeting.

FUNDING

Funding Eligibility

  • Co-operative societies will be eligible for funding as long as
    • they are in conformity with all the provisions of the Act;
    • they will have declared a surplus of at least €15,000 annually and paid up a minimum contribution of €750 annually to the Fund in at least 2 out of the last 3 years as declared in their audited financial statements (reviewable upwards every 3 years);
    • the audit reports on their financial statements are not seriously modified/qualified in the last 2 financial years
    • the society’s payments of the Fund contribution will have been made within 9 months of the year end of the society’s financial statements.
  • Recognised organisations will be eligible for funding as long as
    • at least 35% of its members are registered primary co-operative societies; or
    • its members contribute at least 35% of all the paid-up annual contributions to the Fund;
      and
    • the audit reports on their financial statements are not seriously modified/qualified in the last 2 financial years.
  • The Committee
  • The Co-operatives Board
  • Any person who actively contributes to the promotion and development of the co-operative movement.

Maximum Funding

  • Funding shall not exceed 100% of the total annual contribution to the Fund as declared in the latest audited financial statements of the Fund, unless the Minister approves a higher contribution.

Funding Criteria and Allocation

  • Eligible Co-operative Societies
    • may apply for full funding to finance research and development, training and educational programmes of the co-operative society;
    • are not entitled to funding for general administration costs, salaries, wages, honoraria, international membership fees and related personnel expenditure.
  • Eligible Recognised Organisations
    • may apply for full funding to finance research and development, training and educational programmes relating to the promotion and development of the co-operative movement;
    • reimbursement of approved international and local membership fees only;
      • capped at €20,000 annually for each eligible recognised organisation;
    • reimbursement of up to €70,000 covering administration costs including salaries for each eligible recognised organisation;
      • salaries shall be capped at €23,000 annually for each full-time staff member.
  • The Committee
    • may avail itself of funds to finance research and development, training and educational programmes relating to the promotion and development of the co-operative movement, support services and general administration costs including honoraria of its members’ salaries and wages and to fulfil its functions.
  • The Co-operatives Board (Statutory Body)
    • full funding to finance initiatives, training and educational programmes relating to the promotion and development of the co-operative movement;
    • reimbursement of approved international and local membership fees only capped at €20,000 annually.
  • Any person who actively contributes to the promotion and development of the co-operative movement
    • may apply for full funding to finance initiatives, training and educational programmes relating to the promotion and development of the co-operative movement.

Returns and Verification of Funding

  • All beneficiaries of the Fund will submit annually a detailed account and proof of use of such funds to the Committee;
  • All excess funding shall be reimbursed to the Fund;
  • The Committee may prescribe rules and establish methods of verification of expenditure;
  • The Committee may withhold, suspend or reclaim funds:
    • if the verification exercise is obstructed;
    • if the beneficiaries misinterpret their funding accounts;
    • if the funds are not utilised for the specific purpose they were intended.

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Links:
  Malta Co-operative Federation

Corrections have been made to the L.N. 344 of 2016 with L.N. 408 of 2016.  Follow updated post and new Central Co-operative Fund Regulations.

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