M5; Branch Finances
1. PURPOSE
The purpose of this policy is to define the requirements relating to operation of VFF Branch Finances.
2. BACKGROUND
This policy provides includes the consideration of various legal requirements including the Corporations Act, VFF Constitution, Australian tax law, Australian Accounting Standards, and financial audit and reporting requirements. This policy ensures effective management of its finances while maintaining compliance with legal requirements and fulfilling its obligations to members.
3. POLICY
3.1 PRINCIPLES
3.1.1 The financial management of each VFF Branches is required to comply with the Corporations Act, VFF Constitution, Australian Tax Law and the internal policies of the VFF.
3.1.2 Compliance with this policy is required by all VFF members and Staff including Branch Officials (Presidents, Secretaries, Treasurers etc), Elected Officials and staff.
3.1.3 All branches, irrespective of commodity group or title, are legally (including for Australian Tax Office (ATO) purposes) part of the VFF corporate consolidated entity. This means that the branches are part of the VFF company and are not separate entities.
3.1.4. Branches are legally part of the VFF and are subject to the same laws and regulations as the VFF consolidated entity. The VFF Board and Management are accountable and responsibly for any non-compliance, or action that is illegal or exceeds the powers of a Branch or members as defined by the Corporations Act, Constitution and internal policies.
3.2 BRANCH REVENUE AND EXPENDITURE
3.2.1 In the course of its activities, a Branch is likely to receive revenue (interest, donations, grants, and other sundry income) and incur expenditure for its activities.
3.2.2 All Branch revenue and expenditure transactions are part of the VFF consolidated entity and must comply with the law and VFF internal policy requirements, including those for governance and reporting.
3.2.3 A Branch may operate its financial accommodation to manage revenue and expenditure using the VFF company bank account (currently Westpac).
3.2.4 If a Branch uses the VFF company bank account, to prevent unidentified balance sheet deposits, a specific document must establish the purpose and management of the Branch finances. On request the Branch Treasurer will be notified of finance balances and supplier invoices paid.
3.2.5 Branch raffles must not be conducted without the formal approval of the Victorian Gaming Authority.
3.2.6 The VFF financial year ends on 30 September and each Branch is required to report it’s financial statement to the VFF CFO ([email protected]) annually by 15 October each year so that the VFF can comply with financial legal requirements. Reporting must include:
– Revenue
– Expenditure
– Balance
– Supporting bank statement (if applicable – see section 3.3)
– Statutory GST (if applicable – see section 3.4)
3.2.7 Each Branch is required to annually provide the VFF CFO minutes of the AGM that ratified the Branch financial statement by 30 June following the provision of the report to the VFF CFO ([email protected]).
3.3 BANK ACCOUNTS
3.3.1 At the discretion of each Branch, it may choose not to use the VFF company bank account and may individually establish and utilise Branch specific financial accommodation (bank account).
3.3.2 A Branch may establish it’s own bank account under the following conditions:
– Each Branch must operate using the same ABN as the VFF, that is ABN 67 079 980 304;
– The signatories to the financial accommodation must be only 2 of any of the Branch President, Vice-President, Secretary or Treasurer;
– The approval of 2 signatories is required for any approval of expenditure or transfer of funds; and
– The VFF CFO must be the default contact for the Branch bank account should the Branch lose it’s officer bearers, or become inactive for more than 12 months.
3.3.3The Branch office bearers must notify the VFF CFO of authorised signatory names, bank account number and BSB.
3.3.4 When Branch office bearers change (such as after an Annual Meeting) the account signatories must change within 30 days. This involves the outgoing office bearers signing off the account, and the new office bearers validating their signatures. The bank will supply the required form on request.
3.3.5 If the Branch becomes inactive, or fails to appoint office bearers for a period longer than 12 months, Branch finances revert to the VFF either on request of outgoing office bearers, or upon Bank notification to the VFF that the account has been inactive for the previous 12 month period.
3.3.6 If a Branch merges with another, Branch finances are combined into the remaining (or new) Branch and the bank account and signatories amended accordingly.
3.4 GST REQUIREMENTS
3.4.1 The VFF GST requirements apply to all Branches as they are part of the VFF company.
3.4.2 The VFF is required, under GST legislation, to provide quarterly Business Activity Statements (BAS) to the ATO, and to remit any GST owing at the same time. Heavy penalties can apply for failure to submit or for excluding GST receipts and expenditures from the BAS return. Most types of expenditure will include a GST component, as do grants and rental generally.
3.4.3 Where a Branch has received GST in the last quarter, a standard GST return should be completed and provided to the Chief Financial Officer (CFO).
3.4.4 Where a Branch has not received any GST income but has incurred GST expenditure, a GST return should also be provided. However, although GST paid is an important component of the BAS return, the lack of its inclusion in the BAS is less critical, and the ATO is not being deprived of the GST entitlement from the VFF, ie. the VFF loses out on a GST payment deduction.
3.4.5 The VFF will include Branch GST receipts in its quarterly BAS return to the ATO.
3.5 BRANCH ASSETS
3.5.1 A Branch may own assets in addition to cash.
3.5.2 Details of any assets purchased (included cost) must be provided to the VFF CFO, for inclusion in the financial records and assets register.
3.5.3 The VFF annual audit shall include assets held by each branch.
3.6 COMPLIANCE
3.6.1 A Branch that does not comply with this policy, including reporting requirements may be closed by the VFF Board in accordance the Constitution (clause 6.19).
4. ACCOUNTABILITY
VFF CEO
5. RELATED POLICIES/PROCEDURES
Policy G1: Strategy and Policy Framework
Policy M1: Membership
Policy M2: Member Code of Conduct