National Financial Management Guide

• The National Financial Management Guide for Community Legal Centres has been produced to assist staff at CLCs meet the financial accountability requirements to their funders. It is also designed to assist staff to better provide centre management committees with the information that the committee needs to perform its management function.

• The Guide contains basic how-to information; sample reports, forms and budgets;checklists; and where to find further information.

Organisational Structure• Non-profit Organisationso Definition  o Purposeo Management•  • Incorporated Organisationso Definitiono Advantages of Incorporationo Legislation: Associations Incorporation

Act 1981o What does incorporation mean for non-

profit organisations?•  • Unincorporated Organisationo Definitiono Advantages of Remaining

Unincorporatedo Disadvantages of remaining

unincorporated•  

Organisational Structure

• Constitution• Register of Members• The Minute Book•  • Management Committeeso Definitiono Legal Responsibilitieso Financial Responsibilities

• Treasurero Criteria for Treasurer o Responsibilities

• Financial Sub-committeeo Structureo Responsibilities

Organisational Structure •Public Benevolent Institution (PBI) oDefinitionoCharacteristicsoTaxation Obligations

• Tax Exempt/Charitable Status•Endorsement of Income Tax Exempt •Charity Status

•Non-profit Requirements• Deductible Gift Recipient•Definition•Endorsement•Taxation

• Discount from Suppliers

• Funding Service Agreements•CLSP Service Agreement 

REPORTING REQUIREMENTS OF INCORPORATED ASSOCIATIONS

• Sources of Authority • Reporting Entitieso Definition• Reporting Requirements• Financial Report Format and

Content• Mandatory Audito Financial Auditso Audit and Certification

Requirements• Timing of AGMo Annual Return Lodgement• Model Reports for a Non-

Reporting Entity

 THE ROLE OF FINANCIAL ADMINISTRATORS

• Position’s Objective

 • Roles and

Responsibilities

• Essential Selection Criteria for the position

ACCOUNTING STANDARDS • Australian Accounting Standards

(AAS) • Australian Accounting Standards

Board (AASB)

• Statement of Accounting Concepts (SAC’s)

o SAC 1 - Definition of the Reporting Entity

• SAC 3 – Qualitative Characteristics of Financial Information 

o SAC 4 - Definition and Recognition of the Elements of Financial Statements

• International Accounting Standards (IAS)

BUDGETING • A Guide for Budget Preparation o Equipmento Team Outputo Budget Calendaro Laying out the Budgeto Expenditureo Income o Budget Balancingo Budget Monitoring

• Key Factors to Consider o Program Budgetso Budget Revisions

•  

RECORD KEEPING

• Accounting Records

• Filing System

 • Important

Information from Service Agreement

Cash Management • Internal Control Structure• Investments• Bank Accounts•  o Main Operating Accounto Cash management/ Investment Accounto Individual Funder’s Accountso Donations Accounto Credit Card Facilityo Term Depositso Trust Account • Banking• Electronic Banking• Bank Reconciliations• Receipt Books• Cheque Paymentso Processo Cheque Requisitions

• Capital Expenditure• Remittance Advice Slips• Board or Committee Approval• Payments to Members of Management Committee• Petty Cash• Purchasing Procedures•

PAYROLL

• Employment Records

• Paying Wages

• Tax File Number Declarations

• Flexi-time (Time in Lieu)

• Salary Sacrificeo Reportable Fringe Benefitso Grossing Upo Salary Sacrifice Agreement•   • Time Sheets• Superannuation Guarantee

 

Payroll• Voluntary Superannuation Contributions•  o Employer Contributionso Employee Contributions•  • Workers Compensation•  Travel Claims• Union Fees• Recording and Monitoring Employee Entitlements•  • ACCRUAL ACCOUNTING•  • Definition• Accrued Expenses• Prepaid Expenses• Accrued Income• Income in Advance• Reversals of End-of-period Adjustments• Standing Journals•  

PROVISIONS 

• Definition

• Adjustments

• Carry Over of Funds

 

RECONCILIATIONS • Reconciliation Work Papers•  • Accounts Payable•  • Accounts Receivable•  • Assets•  • Bank Accounts•  • Accruals•  • Prepayments•  • Payroll Clearing•  • Deductions Clearing Accounts•  • Leave Entitlements

TAXATIONAustralian Business Number (ABN)Fringe Benefits Tax (FBT) 

oCommon Fringe BenefitsoCommon Exempt BenefitsoPublic Benevolence Institutions (PBI’s)oReportable Fringe Benefits

Goods and Services Tax (GST)

oGST on IncomeoGST Tax InvoicesoAccounting on a cash basisoReinbursement of volunteer expenses

Business Activity Statement (BAS)Pay-As-You-Go (PAYG) Withholding System 

oPayment Summaries (formerly ‘Group Certificates’)oAnnual reportingoNo ABN WithholdingoVoluntary AgreementsoLabour Hire ArrangementsoVolunteers

Sample Salary Packaging Policy

ASSET MANAGEMENT

• Asset Register• Depreciation•  o Straight Line Depreciation o Reducing balance

Depreciation

o Retirement or Disposal of Depreciable Assets

MOTOR VEHICLE EXPENSES

• Centre-owned Vehicles

•  • Employee’s Private

Vehicles

MANAGEMENT COMMITTEES

Role of the Management Committee Role of the Finance Sub-Committee Monitoring and Reporting Report Preparation Relationship with the Management

Committee Treasurer’s Role Important Information from the

Service Agreement

REPORTING TO FUNDERS

• Funding Agreements • MYOB Set-up for

Reports

• Important Information from the Service Agreement

TRUST ACCOUNTS Types of Money o Trust Moneyo Transit Moneyo Controlled Money • Keeping Recordso Trust Receiptso Cash Bookso Bank Reconciliation Statemento Trial Balance o Delegation of Authority • The Accountant’s Reporto Content of the Report o Procedural Matterso Common Areas of Concern

AUDITS

•   • External Audits • Important

Information from the Service Agreement

ACCOUNTING SYSTEMS

•  • MYOB Software•  • Backing Up Data

Files

COMPUTER PASSWORDS

 • Security

COMMUNITY LEGAL CENTRE SPECIFIC ISSUES

 • Practising

Certificates

• Conferences

• Professional Indemnity Insurance

•  

POLICIES • Policy Development

and Review

• Suggested List of Financial Policies

• Examples of Policies

NETWORKING AND SUPPORT INFORMATION

• Administration Group Meetings

• ATO Website • Australia Wide Taxation

and Payroll Training• External Auditor• MYOB Customer Care• Bulletin Board Service

(BBS)