Annual Reports for Non-Profit Organisations: Deadlines and Requirements

As the deadlines for annual reports approach, keep in mind that properly prepared reports, filed on time, are more than a legal obligation. Transparent, high-quality reporting strengthens an organisation’s reputation and the trust placed in it, and makes it easier to attract donations and other funding.

In this article we briefly review the main obligations of non-profit organisations (NPOs) and the practical points worth paying attention to when preparing and filing annual reports.

1. WHAT EXACTLY MUST YOUR ORGANISATION PREPARE?

The scope of documents depends on the type of your organisation and how you keep your accounts:

• Public institutions (VšĮ), associations and charity and support foundations (LPF): prepare a standard set of financial statements (balance sheet, statement of activity results and explanatory notes) and an activity report;
• Other entities (e.g. communities, unions): prepare only a set of financial statements. They do not need an activity report;
• Simplified accounting: if the NPO keeps simplified accounts, it prepares an annual report instead of the set of financial statements and the activity report (where one is required).

Tip: the financial statements show the numbers, while the activity report shows why your work matters.

2. DISCLOSING DONATIONS AND CHARITY IN THE REPORTS

Disclosing donations and charity is an important part of NPO reporting. The explanatory notes to the financial statements must include information on donations received and given and how they were used. The notes must therefore disclose three things in detail:

• how much support you received during the year, and of what kind;
• how that support changed and what exactly it was spent on;
• to whom you yourselves gave support or charity.

Practical tip: this is the most closely checked part of the report. Make sure the figures in the donation sections match your overall financial figures.

3. KEY DATES: THE “4 MONTHS + 30 DAYS” RULE

Filing deadlines matter because missing them can have negative consequences for the organisation, so mark these two key milestones clearly in your calendar (if your financial year matches the calendar year):

• By 30 April (within 4 months): the reports must be formally approved at the general meeting of members or shareholders;
• Within 30 days of approval: the documents must be filed with the Centre of Registers (Register of Legal Entities). Public institutions, associations and LPFs that have their own website must also publish the approved reports there.

Practical tip: do not leave filing until the last days before the deadline. In practice, as annual reporting deadlines approach, heavy user traffic can cause system outages or slowdowns. File your documents at least a week early.

4. UNFILED REPORTS: WHAT ARE THE CONSEQUENCES?

If reports are not filed, or are of poor quality, an NPO may face a range of consequences:

• Fine for the manager: a first offence carries a personal fine of €600–1,450, a repeat offence €2,000–6,000. The fine is imposed on the manager or another responsible individual, not on the organisation itself;
• Loss of support recipient status: the organisation loses its status as a support recipient and can no longer obtain state or municipal funding for projects;
• Public record of reporting deficiencies: the Authority of Audit, Accounting, Property Valuation and Insolvency Management (AVNT) checks the quality of reports on a sample basis. If serious deficiencies are found, a public note will be added to your organisation’s data in the Centre of Registers, visible to banks and potential donors;
• Liquidation: an organisation that ignores the requirements for a long time may be deregistered and liquidated.

FREQUENTLY ASKED QUESTIONS (FAQ)

Question: What if we cannot gather enough members at the meeting to approve the reports?

Answer: if not enough people attend, the meeting is not quorate and a repeat meeting must be called. The law does not extend the deadlines for this reason, so plan the first meeting for March or early April to leave time for a second attempt before 30 April.

Question: Our organisation had no activity last year and a zero bank balance. Do we still have to file reports?

Answer: yes, it is mandatory. Even “dormant” organisations must file reports with the Centre of Registers. If no data is filed, the organisation may be closed on the state’s initiative.

Question: The organisation’s manager changed recently. Who has to sign the old reports?

Answer: the reports are filed by the current manager (or an authorised person); they do not need to be signed.

Question: Can a fine for late reports be paid from the organisation’s account?

Answer: we recommend against it. An administrative fine is imposed personally on the manager or another responsible individual, not on the organisation, so it should naturally be paid from that person’s own funds. Paying it from the organisation’s funds raises questions about whether those funds were used for their intended purpose and, if the organisation receives donations, about how the donated funds were used.

HOW TO ENSURE SMOOTH PREPARATION OF YOUR REPORTS?

• Review your internal control processes. AVNT has published recommendations, “Organisation of Internal Control”, which can help you organise your work properly and reduce accounting-related risks;
• Voluntary audit: although an audit is not mandatory for everyone, audited reports earn far greater trust from donors.

Take care of your organisation’s reports on time and let your transparency work for you!

Prepared according to the latest reporting guidelines of the Ministry of Finance of the Republic of Lithuania. Official information and recommendations are always available on the websites of the Ministry of Finance (finmin.lrv.lt) and AVNT (avnt.lrv.lt).