Over the past year the Commission has noted issues in reporting units’ financial reports relating to timelines and how loans, grants and donations are reported. We will be focusing closely on these areas this year.
The Fair Work (Registered Organisations) Act 2009 (the RO Act) sets out a particular chronological order in which financial documents and statements must be prepared, audited, provided to members and presented to a meeting. The summary of financial reporting timelines (PDF) summarises these requirements.
It is an obligation to prepare and lodge a statement showing the relevant particulars in relation to each loan, grant or donation of an amount exceeding $1000 for a reporting unit during its financial year. Section 237 of the RO Act requires this statement to be lodged with the Commission within 90 days of the end of the reporting unit’s financial year.
A sample statement of loans, grants or donations (Word) is available on the Fact sheets, templates & webinars page.
Fact sheets, guidance notes and model financial statements relating to financial reporting under the RO Act are available on this website. This includes a model set of financial statements which have been developed by the Commission. It is not obligatory to use this model but it is a useful resource to ensure compliance with the RO Act, the financial reporting guidelines and the Australian Accounting Standards.
The RO Act requires organisations and their branches to prepare financial reports.
Financial reports are to be prepared in accordance with the relevant provisions of the RO Act, the Fair Work (Registered Organisations) Regulations 2009 (the Regulations), the reporting guidelines and the Australian Accounting Standards.
Each of these steps is explained in further detail in the Fact sheet – Financial reporting process (PDF). You can find a summary of the timelines on the Fact sheet – Summary of financial reporting timelines (PDF).
The financial report must be prepared in accordance with:
On Friday, 11 December 2015 the Regulatory Compliance Branch of the Fair Work Commission invited auditors of organisations registered under the Fair Work (Registered Organisations) Act 2009 to a meeting to discuss emerging auditing and governance issues for federally registered organisations.
Around 30 auditors, subject matter experts and others involved in auditing attended and made the most of the opportunity to engage with each other and the Commission as the regulator. Participants were urged to provide feedback and their professional views about what was working well within the regulatory environment for registered organisations and what could be improved.
Overall the response from participants was positive, with many indicating that they found the session very worthwhile, particularly the Q&A and general discussion, and would attend future sessions.
As a result of feedback, the Regulatory Compliance Branch hosted a webinar, and will consider running similar sessions in other locations.
The Fair Work Commission has developed a set of model financial statements for registered organisations for the 2014–15 financial year.
There is no requirement for reporting units to use this model, but it may be a useful resource to ensure compliance with the RO Act, the s.253 reporting guidelines and the Australian Accounting Standards.
The financial reporting guidelines made by the General Manager set out specified disclosures that must be made in financial reports.
The guidelines supplement and are additional to the financial reporting provisions of the RO Act, the Regulations and the Australian Accounting Standards.
The s.253 reporting guidelines are the relevant guidelines for most organisations and their branches.
New financial reporting guidelines for the purposes of s.253 of the RO Act were issued on 13 June 2014. The s.253 financial reporting guidelines apply to each financial year that ends on or after 30 June 2014.
The s.253 guidelines apply unless a s.270 certificate is in force for the financial year.
The current s.270 financial reporting guidelines apply to financial years which commenced on or after 1 November 2004.
The s.270 guidelines only apply where a s.270 certificate has been issued for that financial year (a certificate can only be issued to an organisation which is a single reporting unit, and where income was less than $100,000 for that financial year).
The Regulatory Compliance Branch of the Commission uses a risk-based approach when reviewing financial reports lodged by reporting units. It does so in order to effectively manage the risks arising from the regulatory framework applicable to the financial reporting obligations of registered organisations.
Our risk strategy is to ensure that every reporting unit is subject to an advanced review at least every 5 years. A reporting unit may have 2 or more advanced reviews during a 5 year period. The Commission will allocate a reporting unit for advanced review based on a number of factors including but not limited to circumstances where the reporting unit has not addressed previously raised non-compliance issues or is under investigation.
Our risk-based approach means that we focus our regulatory activity and public resources more efficiently and effectively by ensuring each reporting unit is subject to an advanced review at least once over a 5 year cycle.
The advanced review involves confirming that financial reports satisfy all requirements set out in the Australian Accounting Standards, the financial reporting guidelines, the RO Act and its regulations. Based on the advanced review, a reporting unit may be required to amend their financial report and provide members and the Commission with a copy of the amended financial report before this can be filed and published on this website.
If a reporting unit is not subject to an advanced review, it will be subject to a primary review. The primary review involves confirming that the financial reporting timelines required under s.253, s.265, s.266 and s.268 of the RO Act have been satisfied, all documents required under s.268 of the RO Act were lodged and that selected disclosure requirements under the Australian Accounting Standards, RO Act and financial reporting guidelines have been complied with. A primary review does not examine all disclosure requirements.