The financial management of a club is by far one of the most important areas in the running of a bowls club. No matter the size of the club, it is vital that all the club’s finances are managed in a responsible way and that includes having all the necessary insurance required in place.
Good financial management is essential for your club’s survival and is an important part of good governance. Often clubs appoint a financial director/treasurer with some accounting experience to take on this responsibility. However, every board/committee member should have an understanding of a club’s accounts and financial reports.
Sports clubs have certain legal obligations in relation to financial management. Below are some of the key issues. For further information, it is recommended that you talk to your association or sporting body and/or obtain professional advice.
Common law duties
Directors and committee members are required to act competently, honestly, in good faith and in what they consider to be the best interests of the organisation. The broader principles of common law that directors should follow include:
- Monitor the management of the organisation
- Understand the fundamentals of the organisation’s business
- Keep informed of the club’s activities and assess appropriateness of management’s business practices
- Monitor the club’s policies
- Be familiar with the club’s financial status by regularly reviewing financial statements
- Enquire into matters where necessary.
Your club’s situation needs to be taken into consideration when applying these duties. This includes the type of structure, the club’s size and nature, the composition of the board and the distribution of work between directors and other officers.
Corporate governance requirements
Directors and committee members are required to understand the needs of their club in relation to statutory and common law requirements and corporate governance issues. Here’s a checklist:
- Do you have access to accurate up to date financial reports?
- Do financial reports prove the information you need?
- Do you understand key terms and relationship between the different figures and reports?
- Do you recognise the significance of the major items in your organisation’s finanical reports and can you assess whether these items are realistic and accurate?
- Is your organisation an incorporated entity?
- Does your organisation prepare a 3-5 year strategic business plan, an annual budget plan (fixed) and a revised annual estimate (actual YTD and forecast)?
- Do you monitor performance against the above?
- Is your organisation an employer? If so, does it comply with all statutory requirements – WorkCover, PAYG/FBT, superannuation, holiday and sick leave entitlements?
- Do all employed have a letter of appointment/contract of employment?
- Do you have the appropriate insurance?
- Do you understand the process of internal control and the policies for monitoring within your organisation ie. cash, overdraft, purchasing, tendering, major contracts, other financial instruments?
- Does your organisation have an appointed independent auditor?
Incorporation requirements – if your club is incorporated under the Associations Incorporation Act there are specific legal obligations in relation to financial responsibilities that apply to your club.
Role of the finance director / treasurer
The role of finance director or treasurer varies depending on the size of your club; whether you have a volunteer or paid workforce; the range of activities offered; and whether your club is affiliated or not.
Clearly for a club with no paid staff, the role will be much more hands-on than the overseeing role of a finance director with staff. The level of responsibility is different. For this reason, the information below has been separated into these categories.
Key financial management questions for clubs
- Do you ensure that all cash that comes into the organisation is collected, receipted if necessary and subsequently banked?
- Do you have records that identify which cash comes from members, bar sales etc and which is from a sponsor or from fundraising?
- The signatories for cheques are authorised by the board. Do you retain receipts and documentation for funds expended?
- Are the financial statements for your organisation prepared and provided to appropriate members/directors?
- Do you or someone else in the organisation have the skills to review and analyse the financial statements to identify significant issues?
- Who ensures the accuracy of your financial date?
Budgets and cashflow management
- Does your organisation have a budget?
- If a large purchase/expenditure is going to occur, have the cashflow implications on the club been considered (i.e. given the timing of the expense, will the club run out of money?)
- At year end, is the budgeted result compared with the actual result?
- Do you have a process for managing and monitoring accounts payable and accounts receivable.
- Are you aware of any rules and requirements governing your club in relation to when you produce financial statements, what needs to be produced, and who requires/is entitled to a copy?
- Have you arranged for an audit of the financial statements (if required) and notified the auditor as to when they will receive the work, and when it is due?
- Do you understand the extent of any personal liability you may have if you enter into transactions on behalf of the club which the club cannot pay for?
- Are you required to be registered for GST? If so do you know the paperwork obligations relating to GST such as BAS completion and tax invoices?