1. Financial Management Part 1

2. An initiative of the NSW Government What it is Why does it matter? What can go wrong? What can we do? How do we do it? What we will cover Financial Management

3. An initiative of the NSW Government Whats important for your organisation? Area of concern for your organisationRanking Succession planning / business continuity ? Staffing issues ? Operational planning ? Reporting to funders ? Partnerships with other organisations ? Mission statement ? Service delivery ? Financial management ? Strategic plan ? Dysfunctional board ?

4. An initiative of the NSW Government What is financial management? Financial management is the use of planning, reporting and forecasting techniques based on the strategic goals of an organisation. It can include things such as financial reports, business plans, accounting records (e.g. tax statements, bank receipts), funding agreements, and policies / procedures for finance.

5. An initiative of the NSW Government Why does financial management matter? Financial Management Strategic Management Operational Management

6. An initiative of the NSW Government Why does financial management matter? Good Business Legal responsibility Organisational responsibility Strategic responsibility Financial responsibility

7. An initiative of the NSW Government Recap- What it is and why we care? What is Financial Management Importance Purpose It makes good business sense!

8. An initiative of the NSW Government Your role… Directors need to be aware of their obligations and responsibilities with regard to financial management (Chapter 4 AHDC Its Your Business Manual) Be able to read financial reports, be aware of taxation / incorporation requirements and understand compliance requirements Set financial directions for the organisation Ensure organisation complies with financial requirements Monitor and review finances of the organisation

9. An initiative of the NSW Government Some Questions…. 1.What are the assumptions behind our budget? 2.What are the key cost drivers for our organisation? 3.What insurance cover is in place? 4.Do we budget for contingencies? 5.What are our biggest financial risks? 6.How often are our assets valued? 7.What else?

10. An initiative of the NSW Government End of Financial Year

11. An initiative of the NSW Government Expect to see… Regular reports against budget Reasonable explanations of variances Forecast report showing expected position at 30 June Action taken on prior year auditors letter

12. An initiative of the NSW Government Whats due when… Within 3 months of EOFY (30 September): FaHCSIA and DEEWR acquittals Within 4 months of EOFY (31 October): NSW Health and Community Services acquittals Lodge financial reports with ASIC (Form 388) AGM: within 5 months of EOFY for Companies within 6 months of EOFY for Associations (lodge annual statement within 1 month of AGM) ADHC acquittals: December (pending receipt of acquittal pack)

13. An initiative of the NSW Government So what can go wrong?

14. An initiative of the NSW Government So what can go wrong? Inadvertent issues – examples and discussion Deliberate issues, e.g. fraud – definitions, examples and discussion Consequences – effects arising from things going wrong

15. An initiative of the NSW Government So what can go wrong? Consequences – what would this mean for you? Case study – HIH insurance

16. An initiative of the NSW Government But that could never happen to me, right? Understand and plan = plan to succeed OR Fail to plan = plan to fail

17. An initiative of the NSW Government So what can go wrong? Summary Inadvertent issues – poor reporting, ignorance Deliberate issues – fraud Consequences – internal vs. external

18. An initiative of the NSW Government So what can we do? Follow guidelines – Ch. 4 AHDC Its Your Business Develop understanding – role of financial management, financial reports, KPIs/budgets Systems – policies/procedures for transparency, accountability and effectiveness, delegations. Code compliance – funding agreements, legal requirements, reporting entities, etc.

19. An initiative of the NSW Government How do we do it? Start now – doing a little bit of something is infinitely better than doing nothing Be realistic – what is achievable / appropriate with your own organisations set of skills Dont be scared – high level of additional expertise in the community Measure your own progress – planning, tracking, reporting

20. An initiative of the NSW Government How do we do it? Accrual vs. cash accounting – dont be frightened!

21. An initiative of the NSW Government How do we do it? 3 basic financial reports – these are the ones that show at a glance how an organisation is going Balance sheet – snapshot in time of an organisations financial position (solvency) Profit & loss statement – income and expenditure (fraud) Cashflow statement – movement of money (liquidity)

22. An initiative of the NSW Government How do we do it? Standard Chart of Accounts – this is where all transactions are recorded (QUT & Matrix websites) Financial Report – financial statements for the year, notes, directors declaration, etc. Directors Report – review of operations, names of directors, principal activities, significant changes, etc. Auditors Report – scope of the audit, qualifications, and statement of compliance

23. An initiative of the NSW Government How do we do it? Summary Plan, track, report – everything from understanding of financial management to budget / actual Types of accounting – cash vs. accrual Financial Reports – balance sheet, profit and loss and cashflow statement and also using the end-of-year Financial, Directors and Auditors Reports Dont have to be an expert in everything – plenty of assistance and advice available

24. An initiative of the NSW Government Resources NCOSS Management Support Unit www.ncoss.org.au/msu www.ncoss.org.au/msu QUT Develop Your Board https://wiki.qut.edu.au/display/CPNS/Board+evaluation https://wiki.qut.edu.au/display/CPNS/Board+evaluation National Disability Services NSW www.nds.org.au/projects/article/47 PILCH Connect http://www.pilch.org.au/legal_info/ http://www.pilch.org.au/legal_info/ Matrix on Board www.mob.com.au www.mob.com.au

25. An initiative of the NSW Government

27. Next steps IYB Checklists QUT assessment Tailored consultancy Register for sessions Your actions Evaluation

28. An initiative of the NSW Government Financial services Management support Financial literacy Training (RTO) NFP experienced staff Thank you! Matrix on Board provides financial and management support to non-profit organisations Matrix is part of the NDS Good Governance consultants panel Contact us on 02 9281 1700 or at admin@mob.com.au

29. An initiative of the NSW Government Associations in NSW Strategic Plan – vision, mission, goals, strategies, performance indicators Annual Budget – to fund the strategies Policies and procedures – guidelines for how the organisation functions

30. An initiative of the NSW Government Corporations To provide leadership, safeguard the organisations interest, ensure accountability and and ensure long-term viability.

31. An initiative of the NSW Government Corporations To provide leadership, safeguard the organisations interest, ensure accountability and and ensure long-term viability.

32. An initiative of the NSW Government Corporations To provide leadership, safeguard the organisations interest, ensure accountability and and ensure long-term viability.