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The Central Co-operative Fund Regulations 2016 – Corrected by LN 408/2016 – Committee and Funding

The Central Co-operative Fund Regulations 2016 – Corrected by LN 408/2016 – Committee and Funding

Legal Notice 408 of 2016, entitled Correction of Law Orders, 2016, (Central Co-operative Fund Regulations, 2016 – L.N. 344 of 2016) was published on the Government Gazette No. 19691 on the 6th December 2016.  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 corrected 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 as amended by L.N. 408 of 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 primary co-operative societies may vote to appoint such Committee Members:
    • as long as the society is not in arrears in its Fund contribution;
    • the payments of the Fund contribution are made within 9 months of the year end of the society’s financial statements;
    • the co-operative society is in conformity with all the provisions of the Act;
    • the co-operative society 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 co-operative society’s audit reports on their financial statements are not seriously modified/qualified in the last 2 financial years.

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

  • 6 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.

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

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