Review of the Registered Clubs Industry in NSW - Clubs NSW

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7 Improving clubs’ financial reporting and performance benchmarking 7.1.1 Current financial reporting requirements As incorporated entities under the Corporations Act, clubs are required to lodge audited financial reports that meet Australian accounting standards with the Australian Securities and Investments Commission (ASIC). The Registered Clubs Amendment Regulation 2007 places additional reporting requirements on clubs, including that they must: prepare, on a quarterly basis, financial statements that incorporate: – the club’s profit and loss accounts and trading accounts for the quarter, and – a balance sheet as at the end of the quarter provide the financial statements to the governing body of the club make the financial statements available to the members of the club within 48 hours of the governing body adopting the statements indicate by displaying a notice in the form approved by the Director on the club’s premises, and on the club’s website (if any), how the club’s members can access the financial statements provide a copy of the financial statements to any member of the club or the Director on the request (in writing) of the member or the Director. These requirements are intended to ensure regular (ie, quarterly) disclosure of the club’s financial position to its members. But they are not sufficient to ensure that clubs have access to enough information to understand their own performance. Nor do they specify what reporting format clubs should use, or what level of detail should be included. 7.1.2 Implementing a requirement for clubs to use a standardised reporting format for financial management accounts IPART considers that a requirement for clubs with annual gaming revenue less than $5 million to use a standardised reporting format for financial management accounts should be established by amending the Registered Clubs Regulation. It also considers that the only exemption from such a requirement should be for clubs that can show that their existing financial management accounts format can readily produce the business efficiency and financial viability measures clubs are required to submit to the Club Viability Panel. In addition, IPART considers that there may be a need for more than one standardised reporting format, to take into account variations in club size. In particular, it may be appropriate to require clubs with annual gaming machine revenue between $1 million and $5 million to provide a greater level of detail in their financial management accounts than clubs with annual gaming machine revenue less than $1 million. For example, larger clubs often have more operational departments – such as gyms, restaurants and accommodation – and so it would appropriate to 110 IPART Review of the Registered Clubs Industry in NSW
7 Improving clubs’ financial reporting and performance benchmarking require them to report on the trading performance of these departments individually, to provide the board, management and members with an understanding of the profits (or losses) from each department. IPART considers that the Club Viability Panel it is recommending be established (see Chapter 8) should be asked to develop and recommend the standardised reporting format(s) for financial management accounts to the Minister for Gaming and Racing. The best practice guidelines for benchmarking club performance developed by ClubsNSW and discussed in Box 7.1 (in section 7.2) would provide a good starting point for developing these formats. Once the standardised reporting formats are approved, clubs should be required to submit one set of financial management accounts in the format they currently use to the Club Viability Panel. The Panel will then determine if their current format is consistent with the standardised reporting format or can readily produce the business efficiency and financial viability measures clubs are required to submit to the Club Viability Panel, in which case they are exempt from the requirement to adopt the standardised reporting format. If the current format is not consistent with the standardised reporting format and no exemption is granted, clubs with annual gaming revenue between $1 million and $5 million should be allowed a transition period of 18 months to comply with the standardised reporting format. Clubs with annual gaming machine revenue less than $1 million should be allowed a period of two years to comply, in recognition of their more limited resources. All clubs with annual gaming machine revenue of less than $5 million should be eligible to apply for financial assistance from the Club Viability Panel to help them comply with the standardised reporting format (eg, to buy and install new accounting software). IPART notes that 90 per cent of clubs in NSW earn annual gaming revenue of less than $5 million (see Table 2.2) and so would be required to use the standardised reporting format. IPART considers that it is not necessary to require the other 10 per cent of clubs (those with annual gaming revenue of more than $5 million) to use the standardised reporting format. As discussed above, these larger clubs are likely to already prepare and analyse detailed financial management accounts. Thus, requiring them to use the standardised reporting format would not provide them with additional benefits, and so would create an unnecessary administrative burden. While some large clubs are not currently profitable (see Table 6.4), IPART considers that these clubs have the necessary information and resources available to adequately assess their financial position. IPART also notes that a club’s financial management accounts provide the basis for its audited financial reports. Using a standardised reporting format for these accounts will not reduce the club’s ability to prepare its audited financial reports, in line with ASIC’s requirements. Nor will it affect the club’s ability to prepare quarterly financial statements in line with the requirements of the Registered Clubs Amendment Regulation 2007. Rather, the standardised reporting format for financial Review of the Registered Clubs Industry in NSW IPART 111
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Independent Pricing and Regulatory
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© Independent Pricing and Regulato
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Contents 6 Strengthening the financ
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Executive Summary Executive Summary
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Executive Summary estimated the val
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Executive Summary Therefore, IPART
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Executive Summary However, IPART al
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Executive Summary List of Recommend
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Executive Summary 15 Once the stand
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Executive Summary 29 That ClubsNSW
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Executive Summary 46 That ClubsNSW
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Executive Summary 60 That OLGR deve
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1 Introduction 1 Introduction Over
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1 Introduction 1.1.2 Review’s foc
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1 Introduction 1.2 Other reviews an
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1 Introduction 1.3 The structure of
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2 The registered clubs industry in
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3 Understanding the social contribu
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10 Helping clubs better understand
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11 Making it easier for clubs to am
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12 Making it easier for new clubs t
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13 Removing unnecessary regulatory
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14 A framework for a management pla
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A Terms of reference A Terms of ref
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A Terms of reference The proc
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B Terms of reference checklist Term
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C List of submitters, roundtable pa
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D Gambling expenditure and problem
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E IPART’s methodology for recordi
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F ACG’s approach to measuring the
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G ClubsNSW - steps to establishing
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G ClubsNSW - steps to establishing
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Glossary and Abbreviations Glossary
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Review of the Registered Clubs Industry in NSW - Clubs NSW

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