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Not-For-Profit & Charity Organisation Audits

Annual Audit Requirements

The accounts of any person or organisation that holds authority to conduct a fundraising appeal must be audited annually by a registered company auditor.

Where do you start?

To start with, make sure that your charitable organisation keeps good records for the whole year. If this is done from the beginning of the year, the job of finishing the end of year reports is much easier and quicker. If your organisation has an accountant or bookkeeper as an employee, then they would normally prepare some of the reports or at least prepare the information that goes into the reports. Generally, most organisations would use an external accountant to assist them in preparing the final reports. The Quinn Group can assist you in preparing your financial reports and ensure they are in line with the obligations and regulations instilled by the Department of Gaming and Racing. What records must you make sure your company keeps? The Department of Gaming and Racing regulations require that the following books of account and record are to be maintained:

  • Cash book (for each account into which gross proceeds are deposited)
  • Register of assets
  • Register of receipt books
  • Register of tickets (where tickets are used)
  • Petty cash book (where petty cash is used)
  • Minute book (where authority holder is an organisation)
  • Register of participants (where collectors engaged)
  • Record of identification badges
  • Register of collection devices (where such devices used)
  • Record of employment for children receiving wage or commission or some other material benefit
  • Register of pecuniary benefits (where conflicts of interest arise)

An annual financial report must be prepared and include certain disclosures as attached What are your obligations? In addition to the requirements of the Charitable Fundraising Act, the structure of your charitable organisation may dictate other legislative and regulatory requirements that you must follow:

Structure of Charitable Organisation Legislative Requirements
Companies Limited by Guarantee Corporations Act 2001 (C’th)
Associations Associations Incorporation Act 1984 (NSW)
Community Advancement Societies Co-operative Act 1992 (NSW)

Further, the need to prepare financial reports may be a requirement of receiving government grants. All charitable organisations have some form of governing instrument, whether it is a constitution, a trust deed, or rules. These normally require the preparation of financial reports. Each financial year a charitable organisation must prepare the following documentation:

  • Financial Statements incorporation a statement of income and expenditure
  • Information and notes to the financial statements
  • A declaration by the president or principal officer of the governing body
  • An Auditor’s Report that includes details from an audit of the financial statements

Who Can Conduct the Audit?

Depending on the size and structure of your Charitable Organisation there will be varying levels of qualifications needed by your selected Auditor. The Department of Gaming and Racing’s auditor qualifications and experience policy states that a Charitable Organisation must be audited by a Registered Company Auditor unless it comes under the following size limits:

Fundraising income average over the past two years OR value of assets Auditor Qualifications
> $100,000
  • Must be a member of either the Institute of Chartered Accountants in Australia or CPA Australia
> $20,000 – ≤ $100,000
  • Member of the Association of taxation and Management Accountants
  • Member of the National Institute of Accountants
  • Person holds a degree, diploma or certificate in accounting
≤ $20,000
  • Person holds a degree, diploma or certificate in accounting
  • Person with experience and expertise in the field of commercial and government finance
  • Person with sound accounting knowledge and experience

What is involved in the audit?

The Quinn Group has registered auditors within the firm and conducts the audit in a streamlined process that simplifies your effort needed in meeting your obligations. During an audit, Quinns check the financial reports of the charitable organisation to give the members an opinion as to whether the financial reports are true and fair. This helps the members to know what all the assets and liabilities are, and what has happened to the money of the charitable organisation during the last twelve months. The information obtained from the audit can be used to make and evaluate decisions about scarce resources.

What records does the Auditor need?

Essentially, the auditor will need a copy of all your financial statements for the past 12 months, including:

  • Director’s Declaration
  • Statement of Financial Performance
  • Statement of Financial Position
  • Statement of Cash Flows
  • Notes to Financial Statements

It is best if you have this information already prepared, and then meet with the auditor before the auditor starts any work. The auditor will also need:

  • Receipts issued during the year
  • Bank deposit book
  • Cash book recording the receipts for the year
  • Bank statements for the whole year for all bank accounts
  • Cheque butts
  • Cash book recording payments for the year
  • File of invoices and other documents you have that support each of the payments made. It is normally best to have this in a file in the same order as the cheque butt numbers.
  • Wages book
  • Employee files that have the history of annual leave, long service leave, and sick leave taken
  • Group certificates and the Tax office end of year reconciliation
  • Assets register, or details of all the assets that the corporation bought or sold during the last twelve months
  • Copy of the insurance policy documents and the insurance invoices
  • List of any debtors at June 30 (money owed to the organisation)
  • List of any creditors at June 30 (money owed by the organisation to another organisation or person for goods or services that had not yet been paid for at June 30)
  • Minutes of meetings of the Directors, special general meetings, or annual meetings held in the last twelve months

There may be other records needed. Some of your records may also be on your computer. You should check with Quinns as to exactly what is needed.

The Auditor’s Report

The auditor is required by the Charitable Fundraising Act to examine and provide the charitable organisation with a report (to accompany the financial statements) which states whether:

  • The Charitable Organisation has complied with relevant legislation, accounting standards and the corporations regulations;
  • The financial statements show a true and fair view of the financial result of fundraising appeals conducted during the year;
  • Records were properly kept;
  • All fundraising monies collected have been properly accounted for; and
  • The financial viability of the company and ability to pay its debts.

The Quinn Group has a specialist auditing division with the experience and qualifications required to conduct and issue such Audit Reports and can assist you preparing for your reporting obligations.

What to do after the Audit

The audited financial statements must be submitted to an annual general meeting of the membership of the organisation within six (6) months after conclusion of the financial period. At the annual general meeting the financial reports must be formally adopted, and the motion recorded in the minutes.

Our dedicated team consists of Registered Company Auditor’s who can assist you with Not-For-Profit and Charity audits. Complete and submit the Express Enquiry form on the top right hand side of this page and we will contact you to discuss your enquiry or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to arrange an appointment.

© The Quinn Group Australia Pty Ltd ABN 86 078 526 860

The Quinn Group operates Quinn Consultants, Quinn Lawyers, Quinn Financial Planning and Quinn Financial Solutions. The Quinn Group provides related information in regard to legal, accounting and financial planning issues. Liability limited by a scheme approved under Professional Standards Legislation* *other than for the acts or omissions of financial services licensees.