By Vera Visevic, Partner

Despite the Australian Charities and Not-For-Profits Commission (ACNC) being a national regulator for charities across all Australian jurisdictions, charities structured as incorporated associations are subject to financial reporting requirements that vary from state to state. In many cases, these financial reporting requirements apply alongside the financial reporting requirements established by the ACNC. The resulting effect is that many charities are burdened with duplicative reporting requirements.

The ACNC has acknowledged the reduction on regulatory burden on the Australian not-for-profit sector as a key function of the ACNC. Likewise, the past few years have seen changes in state legislation concerning incorporated associations, and in particular, the reporting requirements of incorporated associations registered as charities with the ACNC. In the meantime, transitional reporting arrangements have also been put into place by the ACNC, allowing incorporated associations to submit the same financial reports to both the ACNC and their state regulator.

Below are summaries of the current reporting requirements of incorporated associations, and the effect of ACNC registration on reporting obligations to respective state regulators.

New South Wales

Do we need to submit financial information to the state regulator?

Yes. The ACNC will, however, accept the same financial report provided to NSW Fair Trading, and this will meet the ACNC requirements for
financial reporting.

Details of reporting requirements

All Incorporated Associations: Incorporated associations in New South Wales are required to:

1. maintain financial records – s 50;
2. lodge a summary of financial affairs with NSW Fair Trading (and financial statements for ‘Tier 1’ associations*) – ss 45, 49;
3. present financial statements at the AGM (with an auditor’s report for ‘Tier 1’) – ss 44, 48;
4. have an audit conducted by a Registered Company Auditor (‘Tier 1’ only) – s 43; and
5. prepare financial statements in accordance with the Australian Accounting Standards (‘Tier 1’ only) – ss 43(2)–(3).

* ‘Tier 1’ associations have gross receipts of greater than $250,000 or current assets of greater than $500,000.

Legislation

Associations Incorporation Act 2009 (NSW), see also Associations Incorporation Regulation 2010 (NSW).

Victoria

Do we need to submit financial information to the state regulator?

Yes. The ACNC will, however, accept the same financial report provided to Consumer Affairs Victoria, and this will meet the ACNC requirements for financial reporting.

Details of reporting requirements

All Incorporated Associations: Incorporated associations in Victoria are required to:

1. maintain financial records – s 89;
2. lodge an annual statement with Consumer Affairs Victoria (must be reviewed by an independent accountant for ‘Tier 2’ associations* and by an independent auditor for Tier 3) – ss 101–102;
3. present financial statements at the AGM – ss 94, 97, 100;
4. have an independent audit conducted by an independent accountant for ‘Tier 2’ associations and by an independent auditor for ‘Tier 3’ – ss 96, 99; and
5. prepare financial statements in accordance with the Australian Accounting Standards (‘Tier 2’ and ‘Tier 3’ only) – ss 95, 98.

* ‘Tier 1’ associations have total revenue of less than $250,000. ‘Tier 2’ associations have total revenue of between $250,000 and $1 million. ‘Tier 3’ associations have total revenue of greater than $1 million.

Legislation

Associations Incorporation Reform Act 2012 (Vic), see also Associations Incorporation Reform Regulations 2012 (Vic).

Queensland

Do we need to submit financial information to the state regulator?

Yes. The ACNC will, however, accept the same financial report provided to the Queensland Office of Fair Trading, and this will meet the ACNC requirements for financial reporting.

Details of reporting requirements

All Incorporated Associations: Incorporated associations in Queensland are required to:

1. maintain financial records – reg 9;
2. lodge financial information with the Queensland Office of Fair Trading – ss 59–59B;
3. present financial statements at the AGM – ss 59–59B; and
4. have financial statements verified (by the president or treasurer for ‘Level 3’ associations*, and by an auditor, certified accountant, or person approved by the OFT for ‘Level 2’. An auditor or certified accountant must audit the financial statements for ‘Level 1’ associations) – ss 59–59B.

* ‘Level 1’ associations have either total assets or revenue of more than $100,000. ‘Level 2’ associations have either total assets or revenue between $20,000 and $100,000. ‘Level 3’ associations have both total assets and revenue of less than $20,000 respectively.

Legislation

Associations Incorporations Act 1981 (Qld), see also Associations Incorporation Regulation 1999 (Qld).

Australian Capital Territory

Do we need to submit financial information to the state regulator?

Not if registered with ACNC.

Details of reporting requirements

Incorporated Associations (Registered with ACNC): Incorporated associations in the Australian Capital Territory, registered with the ACNC, only need to report to the ACNC.

Incorporated Associations (Not registered with ACNC): ACT Incorporated Associations not registered with the ACNC are required to:

1. maintain financial records – s 71;
2. lodge financial information with Access Canberra – s 79;
3. present financial statements at the AGM – s 73;
4. have financial statements verified (by any person who is not an officer of the association and has not prepared or helped to prepare the accounts, for ‘Small’ associations*; by a Registered Company Auditor or Chartered Accountant, for ‘Medium’ associations; and by a Registered Company Auditor for ‘Large’ associations) – ss 74, 76, reg 12-13; and
5. ensure that the audit opinion states whether accounting standards have been complied with, and if not, whether they are a true and fair view of the matter – ss 76.

* ‘Small’ associations have gross receipts of less than $400,000. ‘Medium’ associations have gross receipts between $400,000 and $1 million. ‘Large’ associations have gross receipts greater than $1 million.

South Australia

Do we need to submit financial information to the state regulator?

Not if registered with ACNC.

Details of reporting requirements

Incorporated Associations (Registered with ACNC): Incorporated associations in South Australia, registered with the ACNC, only need to report to the ACNC. All incorporated associations in SA are still however required to maintain financial records – s 39C.

Non Charitable Incorporated Associations: ‘Prescribed’ incorporated associations* in South Australia, not registered with the
ACNC, are required to:

1. maintain financial records – ss 35, 39C;
2. lodge financial information with the Corporate Affairs Commission (part of Consumer and Business Services) – ss 35, 48;
3. present financial statements at the AGM – s 35; and
4. have financial statements audited by a Registered Company Auditor, Chartered Accountant or other person approved by the Corporate Affairs Commission – s 35.

* ‘Prescribed’ associations have gross receipts greater than $500,000.

Legislation

Associations Incorporation Act 1985 (SA), see also Associations Incorporation Regulations 2008 (SA).

Western Australia

Do we need to submit financial information to the state regulator?

Not if registered with ACNC.

Incorporated Associations (Registered with ACNC): Incorporated associations in Western Australia, registered with the ACNC, only need to report to the ACNC. All incorporated associations in WA are still however required to maintain financial records and present financial statements at the AGM – ss 66, 70, 73, 76.

Non Charitable Incorporated Associations: ‘Tier 2’ and ‘Tier 3’ incorporated associations in South Australia, not registered with the ACNC, are required to:

1. maintain financial records – s 66;
2. lodge financial information with Consumer Protection – ss 70, 73, 76;
3. present financial statements at the AGM – ss 70, 73, 76; and
4. prepare financial statements in accordance with the Australian Accounting Standards (‘Tier 2’ and ‘Tier 3’ only) – ss 71, 74.

* ‘Tier 1’ associations have total revenue of less than $250,000. ‘Tier 2’ associations have a total revenue of between $250,000 and $1 million. ‘Tier 3’ associations have total revenue of greater than $1 million.

Legislation

Associations Incorporation Act 2015 (WA), see also Associations Incorporation Regulations 2016 (WA)

Northern Territory

Do we need to submit financial information to the state regulator?

Yes. The ACNC will, however, accept the same financial report provided to Licensing NT, and this will meet the ACNC requirements for financial reporting.

Details of reporting requirements

All Incorporated Associations: Incorporated associations in the Northern Territory are required to:

1. maintain financial records – s 41;
2. lodge summary of financial affairs with Licensing NT – s 45;
3. present financial statements at the AGM – ss 43–44;
4. have an independent audit conducted by an unrelated person (for ‘Tier 1 only’, see s 46), a member of an accountant’s body or person approved by the Commissioner of Consumer Affairs (‘Tier 2’ only), or a person certified for public practice by an accountant’s body or person approved by the Commissioner (‘Tier 3’ only) – ss 46–48; and
5. ensure that the audit opinion states whether accounting standards have been complied with, and if not, whether they are a true and fair view of the matter (‘Tier 3’ only) – s 48; and ensure that audit opinions comply with auditing standards – reg 11.

* ‘Tier 1’ associations have annual gross receipts of less than $25,000 and gross assets of less than $50,000. ‘Tier 2’ associations have either gross receipts between $25,000 and $250,000, or gross assets between $50,000 and $500,000. ‘Tier 3’ associations have either gross receipts above $250,000, or gross assets above $500,000.

Legislation

Associations Act (NT), see also Associations Regulation (NT).

Tasmania

Do we need to submit financial information to the state regulator?

Not if registered with ACNC.

Details of reporting requirements

Incorporated Associations (Registered with ACNC): Incorporated associations in Tasmania, registered with the ACNC, only need to report to the ACNC – s 24B(1B). All incorporated associations in Tasmania are still however required to maintain financial records and have an audit conducted confirming the accuracy of the income and expenditure statement (exempt for associations with total revenue of less than $250,000) – ss 23A, 24.

Incorporated Associations (Not registered with ACNC): Incorporated associations in Tasmania, not registered with the ACNC, are required to:

1. maintain financial records – s 23A;
2. lodge annual returns with Consumer, Building and Occupational Services – s 24; and
3. have an audit conducted confirming the accuracy of the income and expenditure statement (exempt for associations with total revenue of less than $250,000).

Legislation

Associations Incorporation Act 1964 (Tas), see also Associations Incorporation Regulations 2007 (Tas).