Incoming Treasurer – Where do I Start?

When transitioning into your role as a new treasurer of the church, it is vital that you do as much preparation work as possible. This preparation would include, but is not limited to:

knowing the church’s structure;
learning the operations and activities of the church;
understanding the financial operations of the church;
understanding your role and responsibilities as treasurer;
knowing the church’s reporting and income tax obligations; and
being well informed on all significant financial issues.

Further, you should also update records with the relevant parties/authorities to inform them that you are the new treasurer/contact person for the church. This includes:

updating banking authorities;
updating records with the ACNC;
updating records with the Australian Taxation Office;
updating records with ASIC and/or relevant state authorities; and
informing the external accountant and/or auditor.

Important Documents

You should also locate copies of important documents such as:

the church’s constitution (or similar document);
Tax File Number or Australian Business Number notifications;
correspondence from the Australian Tax Office regarding the church’s tax concessions;
correspondence from ACNC regarding the church’s registration details;
insurance contracts;
asset registers;
loan/lease agreements;
employee contracts; and
policies and procedures manuals.

These documents should be kept in a safe and secure place.

Knowing the church’s structure and operations

Before any accounting work is performed, an incoming treasurer should gain extensive knowledge of the church’s structure. This includes understanding its legal structure as well as its reporting structure.

To gain a better understanding of the church structure and its operations you should take the following steps:

obtain a copy of the church’s governing document (for example, the church’s constitution) and familiarise yourself with it;
obtain a copy of the church’s structure diagram (consider making a structure diagram if the church does not already have one) – this diagram will be useful in helping you knowing the church’s operation and in identifying potential risk areas; and
detail all relevant activities of the church, the people responsible for these activities (ie, organisational chart), the entity type(s) through which the church and its related activities operate and the financial reporting requirements of the church and its related activities.

Gain an understanding of the church’s financial operation

Having obtained an understanding of the church’s activities and operations, as new treasure you should also:

establish an understanding of the accounting system used; and
determine what policies, processes and procedures are in place and what internal controls exists for those transactions connected with church activities.

It would be helpful to read relevant policy and procedure manuals, observe and speak to staff, the accountant, bookkeeper, auditor and the outgoing treasurer. Do not be afraid to ask questions.

If your church belongs to a denomination, you should also consider the impact of any ‘Denominational Guidelines’ on the operation of the church as well as your responsibilities as the church treasurer.

Understanding your role and responsibilities as a treasurer

Your role and responsibilities as a treasurer is largely determined by the church’s structure and operations, and its reporting obligations.

It may be that the church has an internal accounts team who assist the treasurer with the day to day bookkeeping and accounts. There may be external accountants and/or volunteers who do bookkeeping for the church.

You will therefore need to consider:

What are your areas of responsibility? You should clearly define the areas for which you are responsible and the areas for which the church secretary and other members of church leadership are responsible.
What accounting information do you need to maintain and what is maintained by others?
To whom are you reporting; when and what do you need to report?
What sort of assistance or resource is available to assist you in your role as a treasurer?
What are your legal obligations and liabilities?

If there is a bookkeeper, you should consider how the responsibilities of your role shall be allocated between this person and yourself.

Developing a structure diagram may be helpful in understanding your roles and responsibilities.

Understanding the church’s reporting and taxation obligations

Some churches will need to comply with regulatory requirements where as other churches have no such obligations. The church legal structure will provide you with an idea of its legal reporting requirements. Each church will also have its own internal deadlines for preparing reports and accounts. Therefore you should determine whether:

The financial statements need to be audited;
The financial statements or any other reports need to be lodged and with which authority – i.e. ASIC or relevant state authority; and
The deadline in preparing the financial statements or any other reports – For example, is there a due date for lodging the financial statements with the relevant authority? When is the church’s Annual General Meeting usually scheduled?

Taxation obligations

Further, you should obtain an understanding of the church’s current taxation registrations by searching on the Australian Business Register (ABR) website http://www.abr.business.gov.au. This register will be able to inform you of the church’s:

Entity Type – this will give you an indication of its reporting obligations;
Australian Business Number (ABN);
Income tax exemption status (whether it is a self-assessed exemption or an endorsement by the Taxation Office);
Goods and Services Tax (GST) registration status;
Availability for GST or Fringe Benefits Tax (FBT) concessions/exemptions; and
Deductible Gift Recipient (DGR) status or if it has any funds/authority/activity that has been endorsed as a DGR.

Other special purpose reports

You should also consider if you are required to prepare any other special purpose financial reports or management reports – such as budgets, monthly reports, reports for specific activities, etc. You should consider the purposes of the reports, for whom are you preparing them for and how often are you required to produce them.