Review of the Registered Clubs Industry in NSW - Clubs 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