LIANZA Code of Practice - Part Four

Transcription

1 LIANZA Code of Practice - Part Four Financial Guidelines and Practices for Regions and Special Interest Groups (SIGs) updated July 2011 following all accounts being streamlined into the LIANZA Trust Management Account Table of Contents 1. OVERVIEW 2. SUMMARY OF OFFICE DUTIES 3. SUMMARY OF TREASURER'S DUTIES 4. FILE SET UP 5. PROCESSING RECEIPTS 6. PROCESSING PAYMENTS 7. INCIDENTAL EXPENSES 8. GOODS AND SERVICES TAX 9. FINANCIAL STATEMENTS REVIEW OR AUDIT 10. BUDGETING PRINCIPLES APPENDIX 1: CASHBOOK FORM AND EXAMPLES APPENDIX 2: FINANCIAL STATEMENT YEAR END APPROVAL APPENDIX 3 : REIMBURSEMENT CLAIM FORM APPENDIX 4: AUTHORISED SIGNATORIES FORM APPENDIX 5: INVOICE SAMPLE AND DEBTORS SCHEDULE If you have any comments or suggested improvements to this document, please advise the Association Office. 1. OVERVIEW The purpose of this document is to provide guidance to Region and Special Interest Group (SIG) Treasurers. This document replaces all instructions, guidelines, etc., previously issued by the Association to Region and SIG Treasurers. As a result of a 2010 Audit Recommendation LIANZA set up a trust management account with a separate sub-account for SIG and Region. Payment of accounts and management of GST returns was centralised, reducing workload for each Treasurer while maintaining the quality of information available to the SIG or Region. Regions and SIGs receive cash income from various sources and make payments for various purposes. These guidelines address the accounting procedures relating to the two broad categories of financial activity: Receipts (section 5) Payments (section 6) 1. Scheduling 1. Approval 2. Invoicing 2. Receipt of goods or services 3. Receipting 3. Invoice authorised 4. Banking 4. Invoice forwarded to LIANZA Office 5. Cashbook 5. Cashbook

2 6. Monthly financial report to committee 7. GST 8. Annual financial statement 2. SUMMARY OF OFFICE DUTIES The duties of the Office should include the following: 1. To maintain the books of account on a day-to-day basis. 2. To bank monies received and to acknowledge receipts. 3. To pay the accounts on behalf of the SIG/Region for any approved expenditure incurred. (all invoices must be signed off by two approved signatories of the SIG/Region). 4. To administer the bank accounts on behalf of the SIG/Region. 5. To provide a monthly bank statement to SIG/Region Treasurers and adhoc reports as requested. 6. To produce an annual financial report. 7. To make the necessary arrangements for the annual review or audit of the accounts to be carried out. 8. To prepare information for bimonthly GST returns and send them to the Association s Treasurer Accountant for processing. 9. The annual financial report, together with the required supporting documentation should be sent to the Association Treasurer by the end of July each year, and would normally comprise: (a) (b) (c) A statement of income and expenditure showing the surplus or deficit on the operations of the financial year; the statement should also contain the comparative figures for the preceding year. A balance sheet showing the assets, liabilities and accumulated funds as at the end of the financial year Bank and term deposit statements, bank reconciliation records and copies of payment vouchers exceeding $500. Year end financial statements will be prepared by National Office and sent to the SIGs/Regions for approval by 15 th July and must be returned to National Office by 31 st July each year. 3. SUMMARY OF TREASURER'S DUTIES Each Region and SIG must have a treasurer responsible for the financial affairs of the organisation. The duties of the treasurer should include the following:

3 1. To bank monies received and to issue receipts. Note: Deposits must be clearly identified e.g. Ikaroa, Aug Event and quote invoice number if available when banked. Details of monies banked also to be provided to the LIANZA Office. 2. To authorise payments by providing National Office with appropriately approved invoices. (2 approved signatories, see Appendix 4). To give periodical Treasurer's reports to meetings of members and/or of the committee. Financial reports are provided monthly, but ad hoc reports can be requested by from LIANZA office anytime (please allow 3-5 working days) 3. To send out accounts for monies due to the organisation and provide a debtors schedule to National Office showing invoice number, details of the debtor and amount owing. (Sample invoice and schedule see Appendix 5) Once the year end review or audit is completed and approved, each Region and SIG shall forward a copy of its annual report and reviewed statement of accounts to its members no later than one month post audit completion. 4. FILE SET-UP In addition to the bank deposit book, invoice book and receipt book, the Treasurer should maintain a file containing: 1. Budget 2. Copies of LIANZA office supplied Financial reports, including bank reconciliations, 3. Copies of LIANZA office supplied Bank statements 4. Revenue schedule 5. Copies of authorised invoices, outstanding issues (for example, disputed items) 6. Committee minutes (highlighting resolutions relating to approval of payments) 7. Correspondence These files may be requested by the National Office Auditor at year end. If requested they should be supplied within two weeks of the request being made. 5. PROCESSING RECEIPTS A schedule should be maintained for revenue and a copy sent to the office monthly (or on request). This should include SIG membership of non-lianza members. (See Inwards cash Appendix 1) The schedule would show: Who paid what amount(s) and the period to which the payment relates. This would enable reconciliation between membership records and financial records. Revenue schedules also assist the auditor in forming an opinion as to whether the revenue disclosed in the financial statements is complete and fairly stated.

4 An invoice should be issued for all categories of income. The invoice should comply with Tax Invoice requirements listed in the "Goods and Services Tax" section in this document. Sample invoice see Appendix 5 Invoices should be consecutively numbered. A receipt should be issued when payment is received. Cash and cheques should be banked promptly. Inwards cash should be recorded in the inwards cashbook (see inwards cashbook example at Appendix 1) and details forwarded to the LIANZA office by the 15 th of each month (for the previous month) 6. PROCESSING PAYMENTS Although most minor payments are usually approved by the Committee after payment has been made it is preferable that, before the Region or SIG incurs contractual liability for the transaction, the Treasurer has confirmed that funds are available and that the transaction is either minor or routine. Major or non-routine items should be referred to the Committee before any contractual liability has been incurred on behalf of the Region or SIG. Invoices can be authorised for payment prior to Committee approval by approved Committee Signatories. The appointment of these signatories must be minuted by the Committee and the National Office notified and provided with a copy of their signatures for reference (appendix 4). On receipt of an invoice, if the supplier has charged GST then the Treasurer should confirm that the invoice complies with Tax Invoice requirements as listed in the "Goods and Services Tax" section in this document. The Treasurer should confirm that the invoiced goods or services have been received, and have been invoiced at the agreed price. The invoice total should be consistent with unit prices and quantities. Payments may be authorised by two approved signatories (see appendix 4) and sent to the LIANZA office for payment (by , fax or post). All payments should be noted by minuted resolution of the Committee. Payments can be noted either payment-by-payment (preferred for major or nonroutine payments) or as a group (for example, "That payments for [month) totalling $[ ] GSTinclusive be approved"). Payments should be recorded in the outwards cashbook (see outwards cashbook example at Appendix 1) 7. INCIDENTAL EXPENSES From time to time it will be necessary for SIGs/Regions to provide small cost items such as catering and supplies for meetings and events. LIANZA would prefer that these are charged to an account and encourages SIGs and Regions to open appropriate accounts with local suppliers supermarkets, stationers and caterers for example. If personal funds are used a request for reimbursement form must be completed, authorised and forwarded to National Office together with receipts (See appendix 3). Every effort will be made to refund these as soon as possible. Please allow 3 to 5 working days.

5 8. GOODS AND SERVICES TAX 8.1 History GST was introduced on 1 October 1986 at a rate of 10%. The rate was increased on 1 July 1989 to 12.5% and sits at 15% as of 29 th May Required content for a Tax Invoice An invoice for which GST has been included shall contain: 1. Vendor's name and GST number. 2. Identification of the purchaser (that is, the Region or SIG or their agent). 3. The date that the invoice was issued. 4. The words "Tax Invoice" and either separately identify the GST component or include reference that GST has been included in the total price. 5. Description of the goods or services supplied, If an invoice does not contain all of these requirements, then it is not a GST invoice and therefore can not be included in the two-monthly GST return. 8.3 Tax Invoice amount threshold The Inland Revenue Department does not require Tax Invoices for payments of less than $50. However, to claim GST on payments of less than $50.00 there must be reasonable assurance that the vendor of the particular goods or services be registered for GST (i.e. a commercial enterprise based in New Zealand) and that the goods or services are taxable supplies (i.e. not exempt supplies such as bank fees, cheque duty and interest). Invoices are always required for accounting and audit purposes irrespective of the amount. 8.4 GST report The GST return will be completed by the LIANZA office, and processed by Kendons (LIANZA s Accounting firm) and the GST paid by LIANZA. The GST Report will be forwarded to each SIG/Region Treasurer for approval of any monies owed. Refunds will be transferred to the SIG/Region sub-account. 9. FINANCIAL STATEMENT REVIEW OR AUDIT 9.1 Annual Financial Statements (prepared by the LIANZA office) The Association requires that the annual financial statements of all regions and SIGs be reviewed by the Association Treasurer. Each region and SIG is required to sign off the statement of accounts for the previous financial year and any supporting financial documentation as the Association Treasurer shall require. (See 9.2 Statement of Accuracy)

6 The SIGs and Regions financial statements form part of the LIANZA Accounts which are subject to Audit. 9.2 Statement of Accuracy The Statement of Accounts and supporting documentation sent to the Association Treasurer for review must be accompanied by a statement signed by the Region or SIG Treasurer that the accounts presented are a true and accurate record. (See Appendix 2 for the statement) 10. BUDGETING PRINCIPLES The following principles apply in respect to preparing, approving, maintaining and reporting against budgets; 1. The budget for the financial year should be prepared and tabled at a Committee meeting prior to the commencement of the financial year and forwarded to LIANZA office. 2. The budget should be approved (as amended if necessary) at the Annual General Meeting. 3. Budget does not constitute approval for members of a SIG or region to spend. Sign-off must still be sought for expenditure as per the process laid out in this document. 4. The budget should be reported against during the year by way of Treasurer's monthly reports to the Committee and at the Annual General Meeting following the end of the financial year. Reasons should be given for any significant variances between budget and actual, To enable reporting variances, it is important to be aware of the underlying factors behind the budget (for example, if the membership revenue is budgeted at $2,000, then the underlying factor may be 50 members at $40.00 each) Appendix 1 CASHBOOK FORMAT AND EXAMPLES (Section 4, 5 & 6 of this document refers) Appendix 2 FINANCIAL STATEMENT YEAR END APPROVAL (Section 2 & 9 of this document refers) Appendix 3 REIMBURSEMENT CLAIM FORM (Section 7 of this document refers) Appendix 4 AUTHORISED SIGNATORIES FORM (Section 3 refers) Appendix 5 INVOICE & DEBTORS SCHEDULE (Section 3 & 5 refers)