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
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Non-profit Organisations
Definition
Purpose
Management
Incorporated Organisations
Definition
Advantages of Incorporation
Legislation: Associations Incorporation
Act 1981
What does incorporation mean for nonprofit organisations?
Unincorporated Organisation
Definition
Advantages of Remaining
Unincorporated
Disadvantages of remaining
unincorporated
Organisational Structure
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Constitution
Register of Members
The Minute Book
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Treasurer
Criteria for Treasurer
Responsibilities
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Financial Sub-committee
Structure
Responsibilities
Management Committees
Definition
Legal Responsibilities
Financial Responsibilities
Organisational Structure
•Public Benevolent Institution (PBI)
oDefinition
oCharacteristics
oTaxation 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
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REPORTING REQUIREMENTS OF INCORPORATED
ASSOCIATIONS
Sources of Authority
Reporting Entities
Definition
Reporting Requirements
Financial Report Format and
Content
Mandatory Audit
Financial Audits
Audit and Certification
Requirements
Timing of AGM
Annual Return Lodgement
Model Reports for a NonReporting Entity
THE ROLE OF FINANCIAL ADMINISTRATORS
• Position’s Objective
• Roles and
Responsibilities
• Essential Selection
Criteria for the
position
ACCOUNTING STANDARDS
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Australian Accounting Standards
(AAS)
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Australian Accounting Standards
Board (AASB)
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Statement of Accounting Concepts
(SAC’s)
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SAC 1 - Definition of the Reporting
Entity
SAC 3 – Qualitative Characteristics of
Financial Information
SAC 4 - Definition and Recognition of
the Elements of Financial Statements
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International Accounting Standards
(IAS)
BUDGETING
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A Guide for Budget Preparation
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Equipment
Team Output
Budget Calendar
Laying out the Budget
Expenditure
Income
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Budget Balancing
Budget Monitoring
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Key Factors to Consider
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Program Budgets
Budget Revisions
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RECORD KEEPING
• Accounting Records
• Filing System
• Important
Information from
Service Agreement
Cash Management
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Internal Control Structure
Investments
Bank Accounts
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Banking
Electronic Banking
Bank Reconciliations
Receipt Books
Cheque Payments
Process
Cheque Requisitions
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Capital Expenditure
Remittance Advice Slips
Board or Committee Approval
Payments to Members of Management Committee
Petty Cash
Purchasing Procedures
Main Operating Account
Cash management/ Investment Account
Individual Funder’s Accounts
Donations Account
Credit Card Facility
Term Deposits
Trust Account
PAYROLL
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Employment Records
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Paying Wages
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Tax File Number Declarations
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Flexi-time (Time in Lieu)
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Salary Sacrifice
Reportable Fringe Benefits
Grossing Up
Salary Sacrifice Agreement
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Time Sheets
Superannuation Guarantee
Payroll
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Voluntary Superannuation Contributions
Employer Contributions
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
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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)
oCommon Fringe Benefits
oCommon Exempt Benefits
oPublic Benevolence Institutions (PBI’s)
oReportable Fringe Benefits
Goods and Services Tax (GST)
oGST on Income
oGST Tax Invoices
oAccounting on a cash basis
oReinbursement of volunteer expenses
Business Activity Statement (BAS)
Pay-As-You-Go (PAYG) Withholding System
oPayment Summaries (formerly ‘Group Certificates’)
oAnnual reporting
oNo ABN Withholding
oVoluntary Agreements
oLabour Hire Arrangements
oVolunteers
Sample Salary Packaging Policy
ASSET MANAGEMENT
• Asset Register
• Depreciation
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o Straight Line Depreciation
o Reducing balance
Depreciation
o Retirement or Disposal of
Depreciable Assets
MOTOR VEHICLE EXPENSES
• Centre-owned
Vehicles
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• 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
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• External Audits
• Important
Information from the
Service Agreement
ACCOUNTING SYSTEMS
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• MYOB Software
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• Backing Up Data
Files
COMPUTER PASSWORDS
• Security
COMMUNITY LEGAL
CENTRE SPECIFIC ISSUES
• Practising
Certificates
• Conferences
• Professional
Indemnity Insurance
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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)