M3: Learner Manual

8.2. Associations

Associations must keep records that correctly record and explain their financial transactions and financial position. Where any of the financial records are kept in a language other than English, an English translation must also be kept with the documents.

Tier 1 and Tier 2 Associations

An association's reporting obligations under the Associations Incorporations Act 2009 (the Act) is based on its status as either a Tier 1 (large) or Tier 2 (small) association.

 

Tier 1 Associations are those whose:

• Total revenue as recorded in the income and expenditure statement (i.e. gross receipts) for a financial year is more than $250,000 or
• Current assets* are more than $500,000.

Before the Annual General Meeting (AGM)

As soon as practical after the end of the association’s financial year the committee must:

1. Prepare financial statements in accordance with Australian Accounting Standards. See information below on Complying with Australian Accounting Standards.
2. Arrange for the statements to be audited in time for submission to members at the AGM.
3. Consider the financial statements and confirm that they provide a true and fair view of the association’s financial performance.  It is good practice to record this confirmation in the minutes of the committee meeting.
4. Ensure the AGM is held within 6 months of the end of the financial year.

At the Annual General Meeting (AGM)

The committee must:

1. Arrange for the financial statements and auditor’s report to be submitted to the meeting.
2. Ensure a copy of the financial statements, auditor’s report and a record of any resolution passed concerning the statements or auditor’s report is included in the minutes of the AGM.

After the Annual General Meeting (AGM)

Within 1 month following the AGM the committee must lodge with NSW Fair Trading*:

1. The Annual summary of financial affairs.
2. A copy of the audited financial statements.
3. A signed and dated auditor’s report.
4. A copy of the terms of any resolution passed at the AGM concerning the statements and audited report.
5. Payment of the prescribed lodgement fee.

 

Tier 2 Associations are those whose:

• Total revenue as recorded in the income and expenditure statement (i.e. gross receipts) for a financial year is $250,000 or less, and
• Current assets* are $500,000 or less.

Before the Annual General Meeting (AGM)

As soon as practical after the end of the association’s financial year the committee must:

1. Prepare financial statements that include:
• An income and expenditure statement that sets out appropriately classified individual sources of income and individual expenses incurred in the operation of the association.
• A balance sheet that sets out current and non-current assets and liabilities.
• A separate income and expenditure statement and balance sheet for each trust for which the association is the trustee, and
• Details of any mortgages, charges and other securities affecting any property owned by the association.
2. Consider the financial statements and confirm that they provide a true and fair view of the association’s financial performance. It is good practice to record this confirmation in the minutes of the committee meeting.
3. Ensure the AGM is held within six months of the end of the financial year.

 

 

Audit of financial statements

NSW Fair Trading does not require Tier 2 association’s financial statements to be audited however, it may direct an association to conduct an audit and request an auditor’s report.

An association’s constitution or funding arrangements may require an audit.

At the Annual General Meeting (AGM)

The committee must:

1. Arrange for the financial statements to be submitted to the meeting.
2. Ensure a copy of the financial statements and a record of any resolution passed concerning the statements is included in the minutes of the AGM.

After the Annual General Meeting (AGM)

Within 1 month following the AGM the committee must lodge with Fair Trading*:

1. The Annual summary of financial affairs.
2. Payment of the prescribed lodgement fee.

The financial statement presented to members at the AGM and other documents such as the minutes, agenda and notice of meeting are not required to be lodged, unless specifically requested by Fair Trading.[1]