Student Leadership Training

Dave TannerDirector

Audit & Risk

Topics Covered

• Legal• Secretariat• Risk• Financial Management

Legal

Unincorporated Associations compared with Incorporated AssociationsUnincorporated Associations• Unincorporated associations are not legal entities.

They are nothing more than the collection of individuals or members of the club at a particular time.

• The lack of legal entity status causes problems:– The inability to enter into contracts in the club’s

name, therefore the association itself cannot enter sponsorship agreements or contracts for events/balls.

– It is the members or officers authorised by the members under the Rules that have to enter a contract.

– Officers can be left personally exposed (to pay cost of the ball venue if there is not enough money in the club’s account).

– Members are usually not liable as they have entrusted management to the committee.

– Rules of the association may provide that committee members shall be indemnified against personal liability

– Inability to sue or be sued

– The liability of committee members or officers is unlimited

– No perpetual succession – all property acquired by the organisation belongs to the members

– Gifts cannot be made to an unincorporated association

Advantages – Structure is flexible and the least costly and time

consuming– No need to report to regulatory authorities.

Incorporated associations• Incorporation under the Associations Incorporation Act

is relatively easy.• Liability of members (including office bearers) is

limited. Members will not be personally liable for debts or liabilities of the association.

• Can enter contracts, sue or be sued.• Association has perpetual succession. Property

acquired by the association remains with the association.

• Disadvantages: – fee for incorporation and lodging annual

statement.– Structure more rigid – changes must be approved

by the Registrar. – Associations have to adopt grievance procedure

rules.

Decision to incorporate– Clubs with sufficient members who conduct

activities / events of any scale or size (higher risk) should incorporate

– To limit exposure of committee members to personal financial risk

• Insurance protection by UNE – If the unincorporated or incorporated student

association and its activities are recognised /endorsed by the University then the University’s insurance cover would extend to cover the club and its officers.

– However if the officers were grossly negligent then the cover may not be available.

– If the officers acted unlawfully then the cover is not available.

Secretariat

• Constitution/ Rules• Following examples – not all inclusive.– Election of committee and office holders– Purpose and objects of the club– Role of Office holders– Meeting rules – proper notice, conduct– Reporting to external parties– Suspending/expelling members– Recordkeeping

• Meetings– Meeting rules/standing orders e.g. proper notice,

distribution of papers etc– Agenda – starred v unstarred items– Minutes– Action Items– Conduct of meetings– Reporting

Risk Management

• If holding an event you need to complete the Event Assessment and Registration Form available from the website, the campus manager or Daphne McCurdy the UNE Health and Safety Consultant.

• Daphne is also available to assist with any questions about completing the form and potential risks that may impact on your event.

• Risks might include transportation, insurance, alcohol licensing requirements, event games and activities, etc

• UNE reputational risk.– Newspaper test

Financial Management

• Simple Rules– Operate a separate bank account for your activity,

never use your personal bank account– All monies received and payments made should

be receipted to the bank account and paid from the bank account.

– Operate a ledger and maintain it frequently, this is subject to activity, but at least weekly.

– Do regular bank reconciliations.

• Budget– Prepare a budget at the start of the year, have the

Committee approve it.– Cash flow your budget to facilitate reporting.– Provide variance reports (actual v budget) to each

Committee meeting with explanation of variances. – Get into the habit of preparing a budget for any

events you hold and identify your estimated break-even point

• Receipts– If using manual systems issue individual sequentially

numbered receipts for cash and cheques received from individuals e.g. membership fees, donations etc,

– If receiving EFT payments record these in your ledger directly from the bank statement as part of the bank reconciliation process.

– Reconcile receipts issued to monies taken and banked frequently, e.g. daily if large amounts, but at least weekly.

– Once banked, an independent post banking check should be completed (stamped deposit book slip agrees to the amount sent for banking or download bank statement to confirm deposit amount)

– Where an event is held and entry fees are taken at the door, the monies received should be removed to a secure place from time to time during the event.

– It is sufficient to issue one receipt for the door fees received for that night, but this should be reconciled to the number of people who attended the event. (e.g. you can use raffle books to record numbers attending and a stamp for people who leave and want to re-enter.)

– Where an event is held, monies taken at the door should be counted and checked by two independent people prior to receipting and banking the monies.

• Payments– When making payments always use cheques or

EFT. – Never make payments directly from monies that

have not been banked and posted to the ledger.– If you need cash for items, establish a petty cash

imprest account and reconcile it frequently but at least monthly.

– If you need to establish till imprests for events create them and record them through the ledger.

– Payments should only be made upon receipt of an invoice. If an invoice is lost request a copy from the supplier or if it is a reimbursement and the receipt is lost have them sign a declaration.

– Establish a Financial Delegations Register approved by the Committee.

• Reconciliations– Bank Account - frequently but at least monthly.– Petty Cash Imprest - frequently but at least monthly– Till imprests for events – either the day of the event

or the next day if a late night finish and incorporate it as part of the reconciliation of the event takings.

– General receipts – daily unless the amounts are small e.g. < less than $100 then at least weekly.

• Reporting– Financial Reports e.g. Budget variance, payments

summary provided to each committee meeting, while Balance Sheet, Profit &Loss provided quarterly subject to level of activity.

– If the financial reports are not provided at a meeting seek a detailed explanation.

– If the financial reports are not provided for two meetings immediately investigate and request to see the accounts.

– Failure to provide reports to the Committee can be an indicator of fraud.

– Also investigate if the reports are frequently late, as this can also be an indicator of fraud.

– These are important governance financial controls.

• Records– Maintain proper financial records including

supporting documentation.– If manual, receipts should be issued in sequential

number order and the receipt books retained.– If manual, invoices should be recorded and filed in

cheque number order.