Paper type: Essay Pages: 8 (1760 words)
5.4. Proficiency level in Excel and Word.To work effectively in a workplace you must have a proficiency level with Word and Excel. 5.5. Basic understanding of internal controls and governance. The effective implementation and monitoring of a sound internal control system helps ensure that Not for Profit entities meet their objectives, such as providing services to the community professionally, while utilising resources efficiently and minimising the risk of fraud, mismanagement or error. Good internal controls will :help align the performance of the organisation with the overall objectives ” through continuous monitoring of the performance and activities carried out by the Not for Profit entities.
encourage good management ” allowing management to receive timely and relevant information on performance against targets, as well as key figures that can indicate variances from targets.ensure proper financial reporting ” maintaining accurate and complete reports required by legislation and management, and minimising time lost correcting errors and ensuring resources are correctly and efficiently allocated.safeguard assets ” ensuring the organisation’s physical, intellectual property and monetary assets are protected from fraud, theft and errors.
deter and detect fraud and error ” ensuring the systems quickly identify errors and fraud if and when they occur.reduce exposure to risks ” minimising the chance of unexpected events. (Information retrieved from CPA Australia, Internal control for Not for Profit organisations).The board of directors and management are the ultimate responsible for internal control within the Not for Profit organisations. They are in charge to ensure the organisation is accountable for its activities, policies, and finances to contributors, members, government regulators and other key stakeholders.6. WORKSHOP FOR NOT FOR PROFITS6.1. What is a not for profit organisation. (See Definitions in point 2). Defining the Not Profit sector in New Zealand.The general purpose of the Not for Profit organisations is to benefit the community and its members and not to make profits. The Not for Profit sector in New Zealand includes charities, voluntary and non-government-organisations as well as Maori organisations. In June 2016, Statistics NZ stated that Not for Profit organisations contribute $6 billion to the New Zealand economy. 6.2. Legal structuresThere is a variety of legal structures for Not for Profit organisations in New Zealand that includescharitable trust boards, incorporated societies, limited liability companies, limited partnerships, industrial and provident societies, co-operative companies and Mori land trusts. However, the Hub for Not for Profit organisations is more likely to work with the following legal structures:Charitable TrustIncorporated societySports club.6.2.1. CHARITABLE TRUSTUnder the Charitable Trusts Act 1957 trusts and societies may be incorporated as charitable trust boards if they have charitable purposes like the relief of poverty, the promotion of education, the promotion of religion or other purposes beneficial to the community. The Charitable Trusts may be registered as trust-based, which requires at least two trustees, or society-based which requires at least five members. In general, there is limited personal liability, provided the decision-makers act prudently, legally, within their charitable purpose, and not for personal gain. Charitable trusts are created to undertake charitable activities so when they make profits on their trading activities they must be used for their charitable purposes and cannot be distributed to members. Where trading activity becomes a significant source of income, a charitable trust board may decide to carry out its business through a separate trading arm. That separate arm then needs to return its profits to the not-for-profit arm. In the case of disposal of assets on liquidation any surplus assets must be passed on to other charitable organisations.6.2.2. INCORPORATED SOCIETYAn incoporated society is a group or organisation that has been registered under the Incorporated Societies Act 1908 (currently a new legislation for incorporated societies is in progress). They operate for the non-financial benefit of their members and subject to the activities outlined in their constitution or set of rules which must comply with certain minimum requirements regarding accountability, purpose and structure. Upon winding-up any surplus assets must be passed on to other not-for-profit organisations. There is a minimum of 15 members required. Limited liability exists, provided the decision-makers act prudently, legally, within their objects, and not for personal gain. Incorporated societies can be deemed social enterprises if their efforts are focused on benefiting community and they have an important trading activity. Like charitable trusts, trading activities may be operated by the incorporated society itself, or a separate trading arm. In the case of a separate arm it needs to return profits to the social/environmental mission. There are a wide variety of groups and organisations that have become incorporated societies including sport clubs, social clubs, musical and cultural groups, special interests and activists organisations. 6.2.3 SPORTS CLUBSSports organisations are commonly registered under the legal structures of incorporated societies or charitable trust and they can vary in size from very small to very large and include both professional and amateur components. Local groups are often aggregated into larger regional or national networks and sometimes they can combine the social and sporting or other interests together. 6.3. Issues with unincorporated societies.There is no legal requirements for societies to acquire a legal personality, and many choose not to do so. However, those societies that choose not to adopt one of the legal forms of registration should consider the following issues:Membership status is uncertain ” The relationship between members in unincorporated societies is often uncertain due to the lack of an agreement. This status can create doubts about membership rights and obligations like how people become or resign as members or how to resolve disputes between them, among others.Unclear rules and rights ” If a society is not incorporated it is not required to have rules to govern it. This can be a problem if there are disputes about how the society is run.No perpetual existence, no legal standing ” Unincorporated societies are not separate legal entities. They do not have a continuing existence separated from their members, and they have no legal standing to own property, enter into contracts, or borrow money in their own name. Because of this it can be difficult to receive funding. Personal liability ” Potentially, the members of the unincorporated society are personally liable for any obligations the society takes on, and for any judgment made against the society by the courts. Committee members are likely to be personally responsible for the society’s debts and for debts incurred by an employee of the society.6.4. Financial reporting by not for profit entities in New ZealandThere was a significant change in the financial reporting and audit requirements for not for profit entities, and in particular registered charities, which came into effect on 1 April 2015. With the introduction of the new reporting standards the registered charities had to comply with the financial reporting obligations for first time from periods begining on or after 1 April 2015. In line with legislative changes as to who’ has to provide financial statements, the External Reporting Board also changed what’ the financial reporting requirements are, creating new challenges for those preparing the financial statements.6.4.1. ARE FINANCIAL STATEMENTS REQUIRED?To answer this question is necessary to look at three key sources of requirement of financial statements:Statutory requirement to prepare financial statements. Legislation will establish where there is a statutory obligation to prepare financial statements with GAAP or a non-GAAP standard issued by the XRB.Tax legislation requirement to prepare financial information. IRD can aslo precribe minimum requirements for financial reporting.Other contractual requirements. Certain entities might be obliged to provide financial statements in accordance with GAAP established in other documents such as entity’s constitution, trust deed, bank agreements or other contractual documents.6.4.2. WHO HAS A STATUTORY FINANCIAL OBLIGATION?The following table outlines the obligations to prepare financial statements as well as the audit and filing requirements depending on the entity type that the Hub is more likely to work with.Entity typePreparationAuditFilingRegistered Charity (Charities Act 2005)Preparation within 6 months of balance dateMaybe. Depending on the size/can be audited or reviewedIncluded with the annual return within 6 months of balance dateIncorporated society Act 1908 (Incorporated Societies Act 2016 ” bill draft )Preparation within 6 months of balance date/bill draftNo ” Unless required by the rules/ bill draftIncluded with the annual return within 6 months of balance date. N/A charity entities.Note that Sports Clubs may be registered under different legal structures or may not even be incorporated. Depending on their own structure the sports clubs will incur in different financial obligations. Appendix V Differences between different legal structures of NFP entities shows in detail the legal and financial obligations of incorporated societies and charities.Not complying with the statutory financial obligation may result int the imposition of fines payable of up to $50,000. In specific situations the persons who are in charge of the governance of the entity, like the officers of a registered charity, can also be held liable for these fines. Likewise, charities that fail to provide their annual returns over two or more years may be subject to deregistration by the Charities Services on behalf of Charities Registration Board.6.4.3. WHAT IS A REPORTING ENTITY?A reporting entity is an entity whose financial statements, group financial statements, reports, or other information is required by any enactment to comply, or be prepared in accordance, with GAAP or a non-GAAP standard (Financial Reporting Act 2013, section 5). A Not for Profit organisation, who is a reporting entity, should include in their financial statements all transactions, balances and activities undertaken by the reporting entity or in its name. Additionally, the reporting entity should include any relationship it has with other entities.All registered charities are obliged to provide annual reporting to Charity Services which includes an Annual Return and their financial statements. The new reporting standards are based on a tiered system. Every charity needs to report under one of the four tiers established by the XRB depending on their annual expenses or operating payments of its previous two financial years (see table attached below). Charities with annual expenses over $ 30 million, or with public accountability must report using Tier 1 standards. All other charities may choose to report under a lower tier if they meet certain criteria (see point 6.4.5. Transition between Tiers).When a charity receives cash or assets from other people and hold them (like it is the case for banks, credit unions or insurance providers) and this is its main activity, the charity may have public accountability and be required to report under Tier 22.214.171.124. WHAT ARE THE STANDARDS THAT NFP PBE SHOULD BE APPLYING?The table below outlines the tiers applicable to NFP PBEs. Entities may choose to report under a higher tier (see for periods beginning on or after 1 April 2015
Cite this page
Proficiency level in Excel and WordTo work effectively in a workplace. (2019, Aug 20). Retrieved from https://studymoose.com/proficiency-level-in-excel-and-wordto-work-effectively-in-a-workplace-essay