Thursday, 26 May 2016

The End of the Financial Year for NFPs

The end of the financial year is literally just around the corner, is your NFP ready? As a volunteer treasurer, there are a host of duties that you must fulfill at the end of the year.

End of Year Duties for Treasurers

End of year functions for the treasurer include getting your NFP's accounts in order, compiling and filing various reports, making sure your paperwork is in up to date before any independent reviews or audits, calculating GST, as well as preparing for the start of the new fiscal year. The volunteer treasurer isn't the only board member, however, with duties and responsibilities at the end of the financial year. 

Directors and Board Members Also Have a Role to Play at the End of the Financial Year

As part of their oversight and fiduciary duties, directors and other board members also have certain responsibilities at the end of the financial year.  For example, board members have a responsibility to ensure that they have a solid understanding of their NFP's finances and that they have the knowledge necessary to be able to understand financial reports, and question the accounting methods and information used to compile reports and statements, including the various NFP budgets.

Even though board members are not involved in the day to day management and operation of the NFP, they are still responsible for seeing that the books are kept properly, and reports and other documents are filed on time with the ASIC.  Directors and board members should also take steps to ensure that adequate controls have been put in place to ensure the fair and transparent handling of cash and other assets and that accepted accounting standards are used by the treasurer.  They must also take steps to ensure that any audits are conducted by professionals who are impartial, unbiased and avoid any potential conflicts of interest.

Don't Wait Until the Last Minute to Compile End of Year Financials

There are many duties that must be fulfilled to get your NFP's finances and filings completed in a timely manner. Delays can occur nearly anywhere in the process, and can result in the loss of time and funds for your NFP. For example, if your accounts and other paperwork are not in order before your audit begins, it will take the auditor more time to complete the audit, which can result in the auditor charging a higher rate. Delays can lead to late filings, which can result in fees and other penalties for your NFP.

Treasurers should already be working on preparing for the end of the financial year now in to avoid the extra cost and hassle that can result from unforeseen delays and complications.

As a board member, you can help keep your NFP on track by checking in with the treasurer to make certain that they have all of the resources that they need to get ready for the end of the financial year.  If there are newer members of the board that have less financial experience, consider offering a short class or training now, before the end of the financial year, to help bring them up to speed on the ins and outs of your NFPs finances and their responsibilities as board members.