In order to comply with relevant legislation and the terms of our funding agreement with Department of Justice, it is a requirement that all NHW groups adhere to the following instructions regarding the maintenance of financial records and annual reporting.
The absolute control of the funds remains with the local groups. The Board only requires the financial information to comply with its reporting requirements.
Incorporation of Neighbourhood Watch
Neighbourhood Watch Victoria Inc (‘NHW Victoria’) is incorporated under the provisions of the Associations Incorporations Act (‘the Act’). It is a requirement of our funding agreement with the Department of Justice that NHW Victoria be the only incorporated entity operating as NHW in Victoria.
Details of the incorporated entity are:
Name: Neighbourhood Watch Victoria Inc
Registration No: A0018739R
Australian Business No: 41 586 657 273
Financial Year: 1 July to 30 June
All NHW groups within the state, including LGA Committees, local areas and town committees, are included in the NHW Victoria structure and all are therefore subject to the provisions of the Act. It is essential that good governance be maintained in relation to all financial dealings across all the groups within NHW Victoria.
Every NHW group must maintain proper financial records which are reviewed/audited and balances are required to be submitted to the NHW Victoria State Treasurer annually. For further information on the review/audit and the reporting requirements please see below.
It is a requirement of the Act that the financial records of all NHW groups within Victoria are consolidated and included in the NHW Victoria Annual Accounts.
The Board of NHW Victoria has no intention of taking control of the funds of local groups, but the Annual Report of every group must be submitted in accordance with the law.
Note: An audit is a review of the financial accounts by an independent and suitably qualified person. See further information below.
Each NHW group must have a Treasurer to be responsible for the correct and accurate handling and recording of that group’s funds and other assets.
The basics of the role include:
- Banking of monies received.
- Ensuring that all payments are made as and when due.
- Reporting the group’s financial position at all meetings.
- Keeping accurate accounts of all income and expenditure.
- Preparing the group’s annual financial statement.
- Having the financial statement reviewed/audited.
- Ensuring that the group is solvent at all times.
The group’s bank accounts must be held with mainline banks, building societies and/or credit unions as approved by the NHW Victoria Board of Management. If in doubt as to the suitability of your chosen financial institution, please email the NHW state office at (firstname.lastname@example.org.)
When opening an account, it should be designated as ‘Neighbourhood Watch Victoria Inc A0018739R’ followed by the name of the group. This can be abbreviated to ‘NHW Vic Inc A0018739R’. Quote the ABN 41 586 657 273 and advise the financial institution that NHW Victoria is a Charitable Institution and is exempt from Income Tax.
Two signatories are required for all transactions on your account and it is recommended that at least three authorities are maintained with the financial institution at all times.
Investments of surplus funds may only be made by way of term deposits or cash management type accounts. Funds must not be invested in stocks, bonds or debentures.
Full details of all bank and investment accounts are to be set out in the annual financial statement, including the name of the financial institution, branch and account number.
Keeping the Accounting Records
The Act requires that an incorporated association must maintain adequate and accurate accounting records.
The basic record could be a simple Cash Book which may be handwritten or in the form of a computer spreadsheet.
The Cash Book should include:
- Date and description of item.
- For income records, the dollar amount and receipt number.
- For expenditure records, the dollar amount and cheque number or bank reference.
- A column for the resulting balance.
Additional columns should contain the different types of income and expenditure (eg Income from donations, grants, bank interest, advertising etc and expenditure for printing costs, insurance, venue hire).
Documentary evidence must be kept for all transactions.
Having the Accounts Reviewed (Audited)
The accounting records and annual financial statements of all NHW groups must be audited each year.
The audit should be carried out by a qualified accountant, or if one is not available, by an independent person with financial knowledge and experience, such as the manager of a financial institution.
The auditor may be a volunteer of NHW, but must not be a committee member or a relative, business associate or employee of a committee member of the group being audited.
The auditor should be given:
- The current financial statement – comprised of a Statement of Income and Expenditure and a Statement of Financial Position (Balance Sheet).
- The previous years’ audited statement.
- Cash book
- Bank statements
- Cheque books
- Copies of all vouchers, invoices, receipts, etc providing evidence of the cash book entries.
In accordance with Section 18 of the Constitution, the balance of any funds of a NHW group which ceases to operate are to be transferred to the relevant LGA to be held in trust for up to three years.
If there is no LGA the money is to be transferred to NHW Victoria to be held in trust for three years.
As the funds have been raised from the public for use by NHW, it is not legally allowable that they be donated to any other organisation or charity on the winding up of a group.
For management purposes, each LGA is required to prepare a list of the bank balances of all NHW groups within the LGA as at 31 March each year. However, only the total balance for the LGA as at 31 March is to be emailed to the NHW state office (email@example.com.)
Those groups, which are not part of an LGA Committee, are to report directly to the NHW state office for their individual committee.
Once accounts have been audited at the end of the financial year, a copy is to be scanned and emailed to NHW state office by 30 September each year.