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Financial records

All incorporated associations must take reasonable steps to keep accounting records that record and explain the transactions and financial position of the association. An association and any officer of an association who fails to do this can each be fined up to $2,500 in the case of a prescribed association, and in other cases $1,250 {Associations Incorporation Act 1985 (SA) s 39C]. The records must be kept at the association's office or in the custody of an officer of the association, whichever the rules or a resolution of the committee allow.

Accounting records include "invoices, receipts, orders for the payment of money, bills of exchange, cheques, promissory notes, vouchers and other documents of prime entry, and books and records which record such entries, and also includes such working papers and other documents as are necessary to explain the methods and calculations by which accounts are made up" [s 3].

Under the association's constitution, a member may have the right to see the financial records of an association. If not, or if the request is refused, the member may apply to the District Court for an order that the financial records be inspected and copied by a lawyer or a person authorised to audit the accounts of a prescribed association [s 39D], see Prescribed associations, Accounting records. Before the Court will make an order it must be satisfied that the member is acting in good faith and that the inspection is for a proper purpose.

Common mistakes

Common mistakes made by associations when managing their records are:

  • mixing together the petty cash float (which is for expenses) and cash income (for example, membership fees, donations);
  • not including comments on the balance sheet at the end of the financial year indicating possible future liabilities for employee entitlements or contractual payments due in the future;
  • not showing that a loss has been avoided only because of a one-off or unusual income item;
  • where an association has considerable assets, not preparing an assets and liabilities statement every financial year.
Financial records  :  Last Revised: Thu Sep 7th 2023
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