The new laws aim to provide incorporated associations with a clearer framework in which to operate.
A notable change will be the introduction of a three tier structure for annual reporting and assurance obligations based on the size of the incorporated association.
“Tier 1 entities” with annual revenue of under $250,000 can elect to prepare basic financial statements with no independent review or audit.
“Tier 2 entities” with annual revenue between $250,000 and $1,000,000 must prepare financial reports that give a true and fair view of the financial position of the association in accordance with Australian Accounting Standards. Such reports must be reviewed by a member of a professional accounting body.
“Tier 3 entities” with annual revenue above $1,000,000 must prepare financial reports that give a true and fair view of the financial position of the association in accordance with Australian Accounting Standards. Such reports must be audited by a member of a professional accounting body holding a public practising certificate.
The changes will modernise the administrative processes for associations. This includes setting out clearer explanations of the duties owed by committee / board members. The changes also require each association to include in its constitution a formal process for resolving disputes. Any unresolved disputes can be heard by the State Administrative Tribunal.
Fletcher Law is assisting its clients to prepare for the new laws by reviewing and updating their constitutions. Associations should begin the process of educating members about the proposed changes as this will assist members to better understand required amendments to constitutions. Associations will be given a transitional period to amend their constitutions.
Please contact Fletcher Law for assistance with next steps.