An association is a Tier 2 association if:
- the association’s total revenue as recorded in the income and expenditure statement (i.e. gross receipts) for a financial year (excluding GST) is less than $250,000 AND
- its current assets are less than $500,000.
Refers to assets (other than real property or assets that are capable of depreciation) held by the association as at the end of the association’s last financial year. It includes amounts held in financial institutions, stocks and debentures.
What records have to be kept?
Associations must keep records that correctly record and explain their financial transactions and financial position.
Preparing financial statements
The committee must ensure the financial statements for the association, and any trust for which the association acts as a trustee, are prepared as soon as possible after the end of the association's financial year, for submission to the annual general meeting (AGM).
The financial statements must include:
- an income and expenditure statement that sets out appropriately classified individual sources of income and individual expenses incurred in the operation of the association
- a balance sheet at the end of the financial year, that sets out current and non-current assets and liabilities
- a separate income and expenditure statement and balance sheet for each trust for which the association is the trustee, and
- details of any mortgages, charges and other securities affecting any property owned by the association.
Can an association be directed to conduct an audit?
NSW Fair Trading may direct an association to conduct an audit of its financial records and request an auditor’s report within a specified period, regardless of whether a tier 1 or tier 2 association or any previous audit.
What financial documents need to be presented to members at the AGM?
The association’s committee must submit the financial statements for the previous financial year to the AGM.
What do we lodge with Fair Trading?
A Tier 2 association must lodge the following documents with Fair Trading within 1 month of the AGM and no later than 7 months after the end of the association’s financial year:
- an Annual summary of financial affairs – Tier 2 (form A12 – T2) for the financial year, and
- payment of the prescribed lodgement fee and late fee if applicable.
Associations should obtain a copy of the Annual summary of financial affairs – Tier 2 from the Associations Forms page.
An Annual summary of financial affairs is not considered to be lodged until a correctly completed form and the set fees have been received.
From 1 October 2018, most incorporated associations that are also registered with the Australian Charities and Not-for-profits Commission (ACNC) will only need to submit annual financial reports to the ACNC. The ACNC will share the information with NSW Fair Trading. However, if an Annual summary of financial affairs is outstanding, it must still be lodged with Fair Trading.
More information is available on the Reporting changes for associations registered as charities with ACNC page.
How do we lodge the Annual summary of financial affairs?
The Annual summary of financial affairs and the prescribed payment can be lodged:
- by email to email@example.com together with a completed credit card payment form
- by mail to Registry Services, PO Box 22, Bathurst NSW 2795
- in person at any Service NSW Centre.
What if we need more time?
An association should apply for an extension of time if it cannot hold its annual general meeting within 6 months after the end of its financial year or lodge its Annual summary of financial affairs or reports by the due date. This can be done by lodging an Application for extension of time for holding annual general meeting or lodging annual summary of financial affairs (form A11).
The form should be lodged as soon as possible after the association becomes aware that it will be unable to comply with its obligations under the Act.
Need more information?
PO Box 22
Bathurst NSW 2795
Tel: 02 6333 1400
Free Call: 1800 502 042