المملكة: Most notably, a third of the seats go to the founder… New controls for establishing government non-profit entities

Introducing the National Center For the development of the non-profit sector Controls for the establishment of non-profit entities by government agencies through the “Estalaa” platform, with the aim of regulating the establishment of non-profit entities by government agencies, and clarifying the procedures for their establishment and management mechanism, in a way that ensures the unification of statutory and regulatory practices in this field.

The controls are applied to all government agencies that establish non-profit entities, except for those excepted. Among them are a statutory provision, provided that the non-profit entity established by a government entity must take the form of a civil institution, and the government entity may not establish an entity that takes any other form of non-profit entity.

According to the controls, Government agencies When they establish a non-profit entity by following a number of steps, they begin by submitting an application to establish the center through the approved channels, attached to the bylaws of the entity and a study of the social and financial impact expected from its establishment. The center studies the appropriateness of the entity establishing the non-profit entity and informs it of its opinion within a period not exceeding “30” days from the date of receipt of the application.

In the event that the application is approved, the government entity will complete the regulatory procedures for establishing the entity. However, in the event of disapproval, the government entity may submit its request to the High Commissioner, explaining the extent of the need and justifications, accompanied by the opinion of the Center to consider appropriate guidance.

The controls explained that the Center studies applications according to specific criteria, which include the entity’s activity and purpose. The name of the entity and the extent of its clarity, in addition to administrative governance and the extent of the government entity’s participation in the management of the entity, and reviewing the bylaws’ fulfillment of the regulatory requirements, with coordination with the Ministry of Finance to review the financial resources, the percentage of subsidy provided, its duration and justifications.

The controls confirmed that the center does not take any action regarding the establishment of any non-profit entity for a government entity except in accordance with what is stated therein, and that the non-profit entity It acquires a special legal personality and independent financial liability, enabling it to own, dispose of, and litigate in accordance with the bylaws.

The controls stipulate that the bylaws of a non-profit entity must include a set of mandatory provisions, including: the name of the entity and its headquarters, the name of the founding body, its activity and purpose, defining its resources and how to dispose of them, financial and administrative governance, And the mechanism for investing its funds, the provisions for dissolution, merger and liquidation, the mechanism for amending the bylaws, and any additional provisions that the entity deems appropriate and that do not conflict with the relevant regulations.

Under the controls, the government entity determines in the bylaws the number of its representatives on the board of directors or trustees of the entity to be no less than one-third of the members, and the board assumes the management of the entity and responsibility for its funds and properties in accordance with the provisions of the controls and regulations. Relevant.

It stipulates that the founding government entity provides an annual subsidy, according to its discretion, to the entity it establishes at a specific rate and for a specific period after the approval of the Ministry of Finance, from its budget or from the revenues and services it obtains within its jurisdiction.

With regard to investing the entity’s funds, it stipulated ControlsThe government entity sets the method for investing funds in the bylaws, provided that the investment is low-risk and within the Kingdom.

The controls oblige non-profit entities established by government agencies to maintain accounting records and documents supporting their work, and to appoint an external auditor to review their accounts in accordance with what the bylaws specify.

It also stressed that the entity must have an annual budget, a final account, and an annual report to be submitted to the government agency that established it within four months of the end of the fiscal year, including achievements, challenges, financial statements, and regulatory data, provided that the Ministry of Finance is provided with a copy of the auditor’s report and financial statements, and the National Center for Nonprofit Sector Development sends a copy of the report to ensure the entity’s contribution to the sector.

The controls stipulate that a non-profit entity may not be dissolved or merged except with the approval of the government entity that established it or in accordance with the bylaws, with coordination with the Center and the Ministry of Finance to determine the transfer of the entity’s funds and properties after dissolution or merger.

The controls also permitted the Ministry of Finance, the Center and the Zakat, Tax and Customs Authority to request any information or data from non-profit entities. The controls were concluded by confirming that they are issued by a decision of the Council of Ministers and shall be implemented from the date of their issuance, thus consolidating the regulatory framework for establishing government non-profit entities and enhancing transparency and financial and administrative governance in the non-profit sector.