National Financial Management Guide - National Association of ...

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Nov 9, 2013 (3 years and 8 months ago)

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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 Organisations

o
Definition


o
Purpose

o
Management





Incorporated Organisations

o
Definition

o
Advantages of Incorporation

o
Legislation: Associations Incorporation
Act 1981

o
What does incorporation mean for non
-
profit organisations?





Unincorporated Organisation

o
Definition

o
Advantages of Remaining
Unincorporated

o
Disadvantages of remaining
unincorporated




Organisational Structure


Constitution


Register of Members


The Minute Book





Management Committees

o
Definition

o
Legal Responsibilities

o
Financial Responsibilities



Treasurer

o
Criteria for Treasurer


o
Responsibilities



Financial Sub
-
committee

o
Structure

o
Responsibilities


Organisational Structure



Public Benevolent Institution (PBI)



o
Definition

o
Characteristics

o
Taxation 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 Entities

o
Definition


Reporting Requirements


Financial Report Format and
Content


Mandatory Audit

o
Financial Audits

o
Audit and Certification
Requirements


Timing of AGM

o
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
Equipment

o
Team Output

o
Budget Calendar

o
Laying out the Budget

o
Expenditure

o
Income



o
Budget Balancing

o
Budget Monitoring



Key Factors to Consider



o
Program Budgets

o
Budget Revisions





RECORD KEEPING



Accounting Records



Filing System




Important
Information from
Service Agreement



Cash Management



Internal Control Structure


Investments


Bank Accounts




o
Main Operating Account

o
Cash management/ Investment Account

o
Individual Funder’s Accounts

o
Donations Account

o
Credit Card Facility

o
Term Deposits

o
Trust Account




Banking


Electronic Banking


Bank Reconciliations


Receipt Books


Cheque Payments

o
Process

o
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 Sacrifice

o
Reportable Fringe Benefits

o
Grossing Up

o
Salary Sacrifice Agreement







Time Sheets


Superannuation Guarantee






Payroll


Voluntary Superannuation Contributions




o
Employer Contributions

o
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



TAXATION





Australian Business Number (ABN)

Fringe Benefits Tax (FBT)



o
Common Fringe Benefits

o
Common Exempt Benefits

o
Public Benevolence Institutions (PBI’s)

o
Reportable Fringe Benefits

Goods and Services Tax (GST)


o
GST on Income

o
GST Tax Invoices

o
Accounting on a cash basis

o
Reinbursement of volunteer expenses

Business Activity Statement (BAS)

Pay
-
As
-
You
-
Go (PAYG) Withholding System



o
Payment Summaries (formerly ‘Group Certificates’)

o
Annual reporting

o
No ABN Withholding

o
Voluntary Agreements

o
Labour Hire Arrangements

o
Volunteers

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 Money

o
Transit Money

o
Controlled Money



Keeping Records

o
Trust Receipts

o
Cash Books

o
Bank Reconciliation Statement

o
Trial Balance


o
Delegation of Authority



The Accountant’s Report

o
Content of the Report


o
Procedural Matters

o
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)