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 oDefinition oPurpose oManagement Incorporated Organisations oDefinition oAdvantages of Incorporation oLegislation: Associations Incorporation Act 1981 oWhat does incorporation mean for non- profit organisations? Unincorporated Organisation oDefinition oAdvantages of Remaining Unincorporated oDisadvantages of remaining unincorporated

3. Organisational Structure Constitution Register of Members The Minute Book Management Committees oDefinition oLegal Responsibilities oFinancial Responsibilities Treasurer oCriteria for Treasurer oResponsibilities Financial Sub-committee oStructure oResponsibilities

4. 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

5. REPORTING REQUIREMENTS OF INCORPORATED ASSOCIATIONS Sources of Authority Reporting Entities oDefinition Reporting Requirements Financial Report Format and Content Mandatory Audit oFinancial Audits oAudit and Certification Requirements Timing of AGM oAnnual 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) oSAC 1 - Definition of the Reporting Entity SAC 3 – Qualitative Characteristics of Financial Information oSAC 4 - Definition and Recognition of the Elements of Financial Statements International Accounting Standards (IAS)

8. BUDGETING A Guide for Budget Preparation oEquipment oTeam Output oBudget Calendar oLaying out the Budget oExpenditure oIncome oBudget Balancing oBudget Monitoring Key Factors to Consider oProgram Budgets oBudget Revisions

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

10. Cash Management Internal Control Structure Investments Bank Accounts oMain Operating Account oCash management/ Investment Account oIndividual Funder’s Accounts oDonations Account oCredit Card Facility oTerm Deposits oTrust Account Banking Electronic Banking Bank Reconciliations Receipt Books Cheque Payments oProcess oCheque 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 oReportable Fringe Benefits oGrossing Up oSalary Sacrifice Agreement Time Sheets Superannuation Guarantee

12. Payroll Voluntary Superannuation Contributions oEmployer Contributions oEmployee 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) 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

16. ASSET MANAGEMENT Asset Register Depreciation oStraight Line Depreciation oReducing balance Depreciation oRetirement 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 oTrust Money oTransit Money oControlled Money Keeping Records oTrust Receipts oCash Books oBank Reconciliation Statement oTrial Balance oDelegation of Authority The Accountant’s Report oContent of the Report oProcedural Matters oCommon 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)