4.5.2 Financial accountability requirements
Funded organisations are required to report their financial position to the department. Reporting requirements are aligned with the organisation's legal reporting requirements and operating year. Financial reporting to the department is commonly called the Financial Accountability Requirements (FAR).
Standard financial reporting forms have been developed for use by organisations, and templates are provided in this section. Organisations may also provide the department with a copy of their annual report, instead of using some report templates, where the annual report contains required financial information.
The department will write to funded organisations each year to request completion of the FAR.
FAR completion dates
Annual FAR reports must be submitted to the department within three months of end the organisation's financial operating period. For example, an organisation operating on a financial year (1 July to 30 June) must submit the FAR by 1 October. An organisation operating on a calendar year (1 January to 31 December) must submit the FAR by 1 April.
Where circumstances warrant, the due dates for the FAR can be extended. Contact the department if your organisation cannot submit the FAR by the requested due date.
Where the department has reasonable concerns about an organisation's financial position, the department can require more frequent FAR reporting. The department will discuss any concerns it has with the organisation.
Financial reporting standards
Organisations are required to comply with the Australian Equivalents to International Financial Reporting standards (AIFRS) which came into effect from the commencement of 2005.
Information about the AIFRS can be found on the Australian Accounting Standards Board's website at www.aasb.com.au/index.html (external link).
FAR requirements for organisation type
The FAR requirements for a particular organisation will depend on the:
- organisation legal status
- service agreement type, and
- whether the organisation is required by legislation to produce audited annual financial statements.
The following is a summary of legislative financial reporting requirements, along with the departmental FAR requirements for each situation.
Incorporated Associations (non-prescribed):
Organisations established under the Associations Incorporation Act 1981 (as amended) having gross receipts of less than $200,000 and gross assets of less than $500,000 are defined as non-prescribed Incorporated Associations. They are required to produce an annual financial statement that does not need to be audited. FAR requirements are:
- certification
- Cash Indicators Statement (CIS), and
- an Annual Report that contains the association's financial statement can be provided instead of the CIS.
Incorporated Associations (prescribed):
Organisations established under the Associations Incorporation Act 1981 (as amended) having gross receipts of more than $200,000 or gross assets of more than $500,000 are defined as prescribed Incorporated Associations. They are required to produce an annual financial statement that must be audited. FAR requirements are:
- certification
- Financial Indicators Statement (FIS)
- Audit Report, and
- an Annual Report that contains the association's audited financial statement can be provided instead of the FIS and Audit Report.
Companies limited by guarantee:
Organisations established as a company limited by guarantee under the Corporations Act 2001 (as amended) are required to produce an annual financial statement that must be audited. FAR requirements are:
- certification
- Financial Indicators Statement (FIS)
- Audit Report, and
- an Annual Report that contains the company audited financial statement can be provided instead of the FIS and Audit Report.
Companies limited by shares:
Organisations established as a company limited by shares under the Corporations Act 2001 (as amended) are required to produce an annual financial statement. In large proprietary companies, these must be audited. In small proprietary companies an audit is not required by legislation. FAR requirements are:
- certification
- Financial Indicators Statement (FIS)
- Audit Report (large proprietary companies only), and
- an Annual Report that contains the company audited financial statement can be provided instead of the FIS and Audit Report.
Cooperatives:
Organisations established under the Cooperatives Act 1996 (as amended) are required to produce an annual financial statement that must be audited. FAR requirements are:
- certification
- Financial Indicators Statement (FIS)
- Audit Report, and
- an Annual Report that contains the cooperative's audited financial statement can be provided instead of the FIS and Audit Report.
Government entities:
The legislative financial reporting requirements of government entities, including local government, public hospitals, government schools and educational bodies including universities and TAFE, is determined by the legislation under which they are established and governed.
Entities established under other legislation:
Some charitable and denominational non-government organisations are established or operate under specific Acts of Parliament. These Acts specify financial reporting requirements. FAR requirements are:
- certification
- Financial Indicators Statement (FIS)
- Audit Report, and
- an Annual Report that contains the entity's audited financial statement can be provided instead of the FIS and Audit Report.
Trusts:
Organisations established under the Trustees Act 1958, Trustee Companies Act 1984 or other relevant Acts governing incorporation of trusts have financial reporting governed by these Acts. Many are required to produce an annual financial statement that must be audited. FAR requirements are:
- Certification
- Financial Indicators Statement (FIS)
- Audit Report, and
- an Annual Report that contains the trust's audited financial statement can be provided instead of the FIS and Audit Report.
Unincorporated consortia:
An unincorporated consortium is a group of independent legal entities, working together but with each member having its own financial reporting requirements. FAR requirements are for the consortium:
- Certification.
Other:
Where the organisation holding a service agreement is not covered by the above, the department will discuss and determine the most appropriate financial reporting requirements. The organisation will be advised of this.
Where the department has concerns about the financial position of an organisation, the organisation may be required to produce more frequent (interim) FAR reports. The department will discuss any concerns about the organisation's financial position with the organisation.
Copies of the relevant legislation can be obtained online at:
- http://www.dms.dpc.vic.gov.au (external link)
- http://www.lawsearch.gov.au (external link)
- http://www.lawlex.com.au (external link)
- For information about associations, cooperatives and limited partnerships registered in Victoria, search the Victorian Names Register on Consumer Affairs Victoria's website at http://www.consumer.vic.gov.au (external link)
- For information about Incorporated Aboriginal Associations, cooperatives or groups, search the Office of the Registrar of Aboriginal Corporations website at http://www.orac.gov.au (external link)
- For information about companies registered in Australia, search the National Names Index on the Australian Securities and Investment Commission website at http://www.asic.gov.au/easylodge (external link)
- For information about friendly societies registered in Australia, search the Australian Prudential Regulation Authority website at http://www.apra.gov.au/friendly/FriendlyList.cfm (external link).
- For information about the incorporation status of bodies corporate formed by individual Acts of Parliament, refer to the applicable Acts on the Victorian Legislation and Parliamentary Documents website at http://www.dms.dpc.vic.gov.au or the Australasian Legal Information Institute website under Victorian Consolidated Acts at http://www.austlii.edu.au. (external link). Alternatively, use an internet search engine, such as Google (external link).
Standard FAR templates.
Following are links to the standard FAR templates for DHS and DEECD financial reporting. Where your organisation's Annual Report contains the required financial data, this can be submitted instead of the FIS, Audit and CIS. A certification will be required in all cases: