Creating Structures
8 Financial Management
How sound financial systems protect integrity and sustain activity
Financial management is more than bookkeeping it is the foundation of trust.
Every dollar handled by the Association represents confidence placed in its leadership.
When financial records are accurate, transparent, and accountable, members and donors can see that funds are used for their intended purpose.
Sound systems also protect Committee members from risk and ensure compliance with law and policy.
This module explains the financial responsibilities of office-bearers, the processes for managing funds, and the records required to keep your Association credible and secure.
1 Financial Responsibility
Under Section 9 (Finances) and By-Law 4 (Financial Procedures), the Committee holds collective responsibility for all financial matters.
The Treasurer maintains records, prepares reports, and ensures compliance.
The Committee as a whole authorises expenditure, approves budgets, and verifies reports.
This shared responsibility prevents misuse and strengthens confidence.
Committee members must act honestly and with care, following the standards of Section 15 (Governance and Compliance).
Ignorance is not a defence every Committee member is accountable for ensuring financial rules are followed.
Trainer’s Reflection
Financial integrity is a shared duty. Transparency protects both individuals and the Association.
2 Bank Accounts and Authorisations
All funds must be deposited in an account in the Association’s name (By-Law 4.1).
Accounts must be operated with at least two signatories from among the President, Treasurer, and Secretary.
Payments may be made by cheque, electronic transfer, or other approved method.
No cash payments should occur without receipt and authorisation.
To safeguard funds:
- Require written approval for all expenditure, either by minute or signed request.
- Reconcile bank statements regularly.
- Keep records of invoices, receipts, and authorisations for every payment.
These procedures ensure compliance with accounting standards and make every transaction traceable.
Practice
Prepare a simple list of the documents needed to approve and record a payment for example, a Committee resolution, invoice, and receipt number.
3 Treasurer’s Reports
Regular reporting keeps members informed and decisions transparent.
Under By-Law 4.3 (Treasurer’s Reports), the Treasurer must present a financial report at every Committee meeting and at the AGM.
Reports should show:
- income received,
- expenditure made,
- current bank balance, and
- outstanding liabilities.
A full financial statement, including income, expenditure, assets, and liabilities, must be presented at the AGM.
When incorporated, this statement forms part of the Annual Summary of Financial Affairs lodged with NSW Fair Trading, or equivalent in other jurisdictions.
Trainer’s Reflection
Reports turn figures into accountability. When members see clear numbers and explanations, confidence grows naturally.
4 Budgeting and Planning
A budget is a financial plan that guides the Association’s priorities.
Under By-Law 4.4 (Annual Budget), the Committee must prepare a yearly budget for approval at the AGM.
A sound budget:
- anticipates income (such as memberships, donations, or grants);
- sets expenditure limits for projects and administration; and
- includes a contingency reserve for unexpected costs.
Budgets allow the Committee to make informed decisions and ensure that spending aligns with the Association’s Purpose and Objects.
Practice
Draft a short example budget for one community activity.
List expected income, estimated costs, and how the Committee will approve expenditure and review results.
5 Record-Keeping and Retention
Accurate records are required by Section 11 (Record-Keeping) and By-Law 5 (Records and Registers).
The Treasurer must:
- maintain a cashbook or electronic record using Appendix J (Financial Record Template);
- keep all receipts, invoices, and supporting documents;
- reconcile balances monthly; and
- retain records for at least five years.
Records should be accessible to the Committee and ready for inspection at General Meetings.
Digital copies should be backed up securely and access shared with at least one other Committee member for continuity.
Trainer’s Reflection
Financial order is part of good governance.
When records are clear, questions are easy to answer and confidence remains high.
6 Transparency and Risk Management
Financial transparency prevents suspicion and protects reputation.
Under By-Law 6 (Code of Conduct), Committee members must not misuse funds or property for personal benefit.
To manage risk:
- Separate duties; the Treasurer records transactions, but the Committee authorises spending.
- Conduct an annual internal review of finances before the AGM.
- Use the Compliance Calendar (Appendix E) to check key dates for lodgements and renewals.
- When incorporated, maintain public liability insurance as required under Section 15 (Governance and Compliance).
Consistent reporting and oversight prevent problems before they occur.
Practice
Discuss how separating financial duties (for example, approval vs. processing) reduces the risk of error or misuse.
Summary
Financial management protects trust, reputation, and stability.
When systems are transparent and consistent, members know their contributions are respected and used responsibly.
Accurate records and disciplined processes turn accountability into confidence and capability.
Next Steps
Continue to Module 9 – Governance and Risk to learn how financial integrity connects with broader organisational governance.
Use the Heritage Australians Constitution Toolkit to:
- Apply By-Law 4 (Financial Procedures) and Appendix J (Financial Record Template) for transactions.
- Review Section 9 (Finances) and Section 15 (Governance and Compliance) for oversight duties.
- Check the Compliance Calendar (Appendix E) for reporting deadlines and insurance renewals.