Clubs, groups and ministry areas
Activities of your Church
Running activities, groups and events will lead to various property and management issues that a church should address and document.
Clubs, groups and ministry areas
Activities in this category might include:
- Youth groups;
- Craft groups; and
- Sports teams.
Church leadership structures are often unclear and difficulties arise when leaders are not accountable for their ministry area. Preparing a leadership diagram will help identify who the key leaders are and will also highlight any structural weaknesses.
Protection of church property
Often a church will have many people requiring access to the building during the week to run their various activities. In order to prevent the misappropriation of church property, church access and security needs to be managed. The church should have a key register, with only people that require a key having access to one. There should also be a clear policy in relation to securing the church premises prior to leaving. The church should also consider installing an appropriate security system.
Safety of church property
The church has a legal responsibility to ensure its property does not threaten the safety those who use it. Any damage that causes the property to be hazardous should be repaired promptly. Any hard rubbish should be cleared as soon as practicable.
Working with children
The church needs to consider the suitability of all employees and volunteers who are involved with children under the age of 18. A working with children check (WWC) should be done on all relevant employees and volunteers on a timely basis. Application forms can be obtained from most post offices. Lodgement of the application can also be made at the post office.
Written permission from a parent or guardian should be considered before taking children under the age of 18 away from church property.
Permission for specific events
Requesting permission from the council may also be necessary when using community facilities for recognised church events. Running activities without approval increases the risk of legal proceedings and the risk of an accident not being covered by insurance.
Handling of cash
Wherever cash is being dealt with, there is a risk of it being lost or stolen. Where cash is received at a church activity, the internal controls around monies received must be considered. Note that it may be impracticable to apply some internal controls due to the nature of the activity and the people involved.
Activities in this category could include:
- Annual fete;
- Fund raising dinners; and
Handling of cash
Fundraising money is typically obtained as cash, and therefore, it is essential to plan for its collection, counting and banking. The key people involved, procedures to be followed and ways to raise the accountability of those handling cash should be clearly documented. Communicating these procedures to employees and volunteers will help to determine each person’s suitability for the task and ensure they are aware of their responsibilities.
The following may be considered in the procedure document:
- Using numbered tickets, allocating tickets to individuals and holding them responsible for returning the correct amount of cash. The allocation of tickets should be formally recorded.
- Cash should be counted promptly. There should be two counters and money should be counted and recounted. A formal record of the counting should be filled in and signed by each of the counters.
- Counted cash must be secured in a safe that can only be accessed by authorised persons.
- Funds should be banked regularly to prevent large amounts of cash being kept on the church premises. Reconciliation of the deposit slip to counting slips should be undertaken and signed by the appropriate person to prove this reconciliation has occurred.
At the conclusion of the event, the total money raised and use of the funds should be communicated to the church to encourage those that contributed and to build confidence and support for future events.
The church may be required to register a fundraising event. See Fundraising Regulatory Requirements.
The GST Act contains specific rules regarding the GST treatment of fundraising events by non-profit entities. Please refer to our GST Handbook. If the fundraising event is being undertaken by an entity or fund that it is a deductible gift recipient (DGR), it may be possible for donors to obtain a tax deductible receipt in certain circumstances. More information is available in the DGR section.
Activities in this category include:
- Counselling services;
- Inner-city outreach;
- Housing for disadvantaged; and
- Refugee support.
There are a number of significant tax issues that need to be considered when operating welfare services. The church must determine if it is appropriate to register for a separate ABN, ensure that its welfare program meets the not-for-profit provisions for activities to be considered income tax exempt and tax deductible donation receipts must not be issued without the appropriate registration from the Australian Taxation Office.
If fees are charged, the GST treatment needs to be considered. In many instances, the services will be GST free. More information can be found in the GST Handbook.
Seeking professional tax advice is highly recommended to ensure the implications of establishing a welfare service are considered and all registrations are correct.
Duty of care
Welfare services typically serve sensitive community groups and as a result legislation designed to protect these groups is stringent. Care must be taken to ensure all legal requirements are met. For example, only counselors with the appropriate qualifications and professional registration should provide counselling services. Food handling standards must be met when providing meals, and occupational health and safety requirements met when providing housing.
Security and confidentiality
Trust of the community can only be maintained if confidentiality is kept. All records containing personal information must be stored securely and only authorised persons given access. Measures to protect records, including electronic records, must be installed and may include the installation of an alarm system, password protection on all computers and regularly updating anti-virus software.
Information about government privacy laws and legislation can be found at http://www.privacy.gov.au/law.
All buildings, vehicles and equipment used should be protected from damage or theft. Items that are expensive to replace should always be sufficiently covered by insurance.
Examples of activities that fall into this category include:
- Opportunity Shop; and
- Coffee Shop.
Handling of cash
Procedures to prevent cash from being stolen or lost must communicated and followed by employees and volunteers. Using a cash register is often viable in a retail environment and helps to safeguard cash during the day and reduces mistakes when giving change. A vital component when using a cash register is to ensure that reconciliation of sales and cash is completed at the end of each day. This should be formally documented and signed by two people.
Maintaining good records is the primary way to track inventory levels. Examples of inventory management systems that may be implemented include:
- Scanning inventory when delivered and at the point of sale. This allows for an electronic record to be maintained and a manual inventory count will indicate its accuracy. When large differences between the electronic record and manual inventory count occur, it is necessary to review scanning procedures and the effectiveness of security measures. This system is most effective in a bookshop environment.
- In an opportunity shop the nature of inventory can be an obstacle for accurate record keeping. A way of managing this inventory is to classify all items as they are received using coloured tags, pegs or stickers.For example, all items costing $1 or less may be classified with a red tag, all those costing between $1 and $2, a yellow tag. An estimate of the value of inventory can be easily calculated by multiplying the number in each category by its assigned value.At the point of sale, the tag should be removed and at the end of the day all tags counted and totals recorded. The inventory balance can then be reduced by the number of tags removed. A manual inventory count will help to correct any errors.
- Securing inventory (especially food when running a coffee shop) will ensure the church is not donating cans of soft drink to the youth ministry each week. Goods should always be locked when the shop is closed. Regular inventory counts should be undertaken. There should be clear documentation of items sold.
The complexity and the level of disclosure required by the Taxation Office significantly increases when running a retail operation. Many issues, including GST, must be continually monitored and we suggest professional advice is sought to avoid any incorrect treatment.
Duty of care
When providing premises for employees and volunteers, work safety laws must be complied with, including obtaining appropriate Workcover insurance. The premises and products provided must not endanger the public and, if providing food, it is critical that the food handling requirements are met.