National Financial Management Guide

1. 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.

2. Organisational Structure • Non-profit Organisations • Definition • Purpose • Management • Incorporated Organisations • Definition • Advantages of Incorporation • Legislation: Associations Incorporation Act 1981 • What does incorporation mean for non-profit organisations? • Unincorporated Organisation • Definition • Advantages of Remaining Unincorporated • Disadvantages of remaining unincorporated

3. Organisational Structure • Constitution • Register of Members • The Minute Book • Management Committees • Definition • Legal Responsibilities • Financial Responsibilities • Treasurer • Criteria for Treasurer • Responsibilities • Financial Sub-committee • Structure • Responsibilities

4. Organisational Structure • Public Benevolent Institution (PBI) • Definition • Characteristics • 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

5. 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 Non-Reporting Entity

6. THE ROLE OF FINANCIAL ADMINISTRATORS • Position’s Objective • Roles and Responsibilities • Essential Selection Criteria for the position

7. ACCOUNTING STANDARDS • Australian Accounting Standards (AAS) • Australian Accounting Standards Board (AASB) • Statement of Accounting Concepts (SAC’s) • 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 • International Accounting Standards (IAS)

8. BUDGETING • A Guide for Budget Preparation • Equipment • Team Output • Budget Calendar • Laying out the Budget • Expenditure • Income • Budget Balancing • Budget Monitoring • Key Factors to Consider • Program Budgets • Budget Revisions

9. RECORD KEEPING • Accounting Records • Filing System • Important Information from Service Agreement

10. Cash Management • Internal Control Structure • Investments • Bank Accounts • Main Operating Account • Cash management/ Investment Account • Individual Funder’s Accounts • Donations Account • Credit Card Facility • Term Deposits • Trust Account • Banking • Electronic Banking • Bank Reconciliations • Receipt Books • Cheque Payments • Process • Cheque Requisitions • Capital Expenditure • Remittance Advice Slips • Board or Committee Approval • Payments to Members of Management Committee • Petty Cash • Purchasing Procedures

11. PAYROLL • Employment Records • Paying Wages • Tax File Number Declarations • Flexi-time (Time in Lieu) • Salary Sacrifice • Reportable Fringe Benefits • Grossing Up • Salary Sacrifice Agreement • Time Sheets • Superannuation Guarantee

12. Payroll • 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

13. PROVISIONS • Definition • Adjustments • Carry Over of Funds

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

15. TAXATION • Australian Business Number (ABN) • Fringe Benefits Tax (FBT) • Common Fringe Benefits • Common Exempt Benefits • Public Benevolence Institutions (PBI’s) • Reportable Fringe Benefits • Goods and Services Tax (GST) • GST on Income • GST Tax Invoices • Accounting on a cash basis • Reinbursement of volunteer expenses • Business Activity Statement (BAS) • Pay-As-You-Go (PAYG) Withholding System • Payment Summaries (formerly ‘Group Certificates’) • Annual reporting • No ABN Withholding • Voluntary Agreements • Labour Hire Arrangements • Volunteers • Sample Salary Packaging Policy

16. ASSET MANAGEMENT • Asset Register • Depreciation • Straight Line Depreciation • Reducing balance Depreciation • Retirement or Disposal of Depreciable Assets

17. MOTOR VEHICLE EXPENSES • Centre-owned Vehicles • Employee’s Private Vehicles

18. 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

19. REPORTING TO FUNDERS • Funding Agreements • MYOB Set-up for Reports • Important Information from the Service Agreement

20. TRUST ACCOUNTS Types of Money • Trust Money • Transit Money • Controlled Money • Keeping Records • Trust Receipts • Cash Books • Bank Reconciliation Statement • Trial Balance • Delegation of Authority • The Accountant’s Report • Content of the Report • Procedural Matters • Common Areas of Concern

21. AUDITS • External Audits • Important Information from the Service Agreement

22. ACCOUNTING SYSTEMS • MYOB Software • Backing Up Data Files

23. COMPUTER PASSWORDS • Security

24. COMMUNITY LEGAL CENTRE SPECIFIC ISSUES • Practising Certificates • Conferences • Professional Indemnity Insurance

25. POLICIES • Policy Development and Review • Suggested List of Financial Policies • Examples of Policies

26. NETWORKING AND SUPPORT INFORMATION • Administration Group Meetings • ATO Website • Australia Wide Taxation and Payroll Training • External Auditor • MYOB Customer Care • Bulletin Board Service (BBS)