All posts by admin

End of Financial Year – 30 June 2019 – HELP with End of Year Financial Statements

The Accountants within the office of the Board of Administration of the Methodist Church of New Zealand are in the process of planning and allocating work for July, August and September 2019. As you will be aware this is a very busy time of year with many financial statements needing to be prepared, audited or reviewed, signed and distributed.  The time we have available to undertake other work is limited during this time.

Once again, we will have the assistance of a Contract Accountant.  Last year Christine Chisholm provided that assistance and this year we are going to use Rebecca Hitchcock, who will be available to prepare the Annual Financial Statements on parishes behalf.  As most of you will know, Rebecca was one of our accountants in the office but has now moved to sunny Blenheim. Rebecca will do all the necessary work from there but is still able to access the resources of the office here in Christchurch as well as Xero. Her email address will remain the same (rebeccah@methodist.org.nz) and she will provide her telephone number to those who require assistance.

Last year we had a flat fee of $500.00 per entity.  This was heavy subsidised by the Board of Administration. What we discovered from previous years was that the hours required to prepare the financial information ready for the financial statements to be finalised ranged from an hour or so to 35 to 40 hours.  This year we are looking at a two tier system based on the hours that Rebecca provides help in preparing the accounting information ready for the production of the financial statements and then preparation of the financial statements.  The cost structure proposed is this:

Hours Worked Cost
Up to a maximum of 10 hours $500.00
Over 10 hours of $500.00 plus the actual hourly cost for time over 10 hours.

The Board of Administration is still providing a subsidy for this work and the above charges do not reflect the actual costs.  The service being provided acknowledges that there are some people who require little help and others that require significant help.  For those who used this service last year and are likely to be in the second group, Peter van Hout will email you separately in April to let you know.

While the above table is the set rule, we will take care on the charges.  If your final hours used were 10.5 hours for example, then you will not be charged for the additional 0.50 of an hour and you would be charged $500.  There is some discretion.  However, if we believe that Rebecca will need more hours than first anticipated, then we will alert you to that. I do not wish to be in a position whereby the other accountants in the office are placed under additional stress during July, August and September and hence why Rebecca has been engaged to do the work.

Can you indicate to Peter van Hout (peterv@methodist.org.nz) if there is a strong likelihood that the parish will require us to assist in completing their annual accounts to 30 June 2019.  Could you let Peter know by Friday 10th May 2019 by sending him an email as we need to be in a position to finalise arrangements with Rebecca as soon as possible.  We will also try to give you a “rough” idea on your likely cost based upon the hours Christine spent on your accounts last year.

Community Meetings – Charities Act Review

The Charities Act 2005 is being reviewed and our feedback is important. The Department of Internal Affairs (DIA) is running a series of 21 community meetings in March and April 2019 to explain the review and seek your feedback.

The DIA policy team is running the meetings, which is separate from the Charities Services team that regulates charities.  Having said that, Charities Services is part of the DIA and therefore I could view the review as “reviewing yourself”.

The meetings will involve discussions on a public discussion document which will be released in late February 2019. The discussion document will cover a range of issues within scope of the review.  As soon as this document becomes available, we will circulate it.

Although attending a community meeting gives the opportunity to ask questions in person, you don’t have to attend a meeting to make a submission. More information on how to make a submission will be included with the release of the discussion document in late February.

You can find more information on the community meetings, including dates, locations, and details how to register, on the DIA website  .

The link to the meeting locations and dates is THIS ONE.

Annual Return – Charities Services – 31 December 2018

For most of the Methodist Church of New Zealand, the financial year end is 30 June and therefore the Annual Return to Charities Services is due by 31 December.  The 31 December is coming up very quickly and therefore, if your entity (Parish, Synod, Charitable Trust, etc.) has NOT already filed its Annual Return and checked to make sure the Officers listed on the Charities Services website are correct PLEASE do so as quickly as possible.

You will need your annual accounts that comply with the  financial reporting standards that were mandatory three years ago.

In the past Charities Services have given time extensions but their stance on this is hardening and extensions of time are becoming more difficult to obtain.  The Annual Return takes about 20 minutes to 30 minutes to complete (assuming you have all the correct information) and can be done online.

 

If you require assistance, please let Peter van Hout at the Board of Administration know.

Charities Act Review

Some users will know that the Charities Act is currently in the process of being reviewed.

Earlier in the year there were meetings held in Wellington, Auckland and Christchurch.

As a result of those meetings a questionnaire was developed. Some members of the Core Working Group are asking for your help.  They are asking you to complete the questionnaire, but also please share it with your networks, whether registered charities or not, by email, Facebook, or however.

If you are connected to more than one group or organisation, we’d welcome if you could fill it out multiple times, giving the information separately for each one. The more completed questionnaires we receive, the stronger will be the data that we can gather, for input to the review of the Charities laws.

Here is the link to the questionnaire: https://www.surveymonkey.com/r/CA2005

We realise the questionnaire is quite long but there are a lot of issues where we need data to feed into the review, and we really appreciate your time. We also appreciate that your connections and understanding with the Charities Act may be limited to changing details on the Charities Services website and completing the Annual return.

 

Meeting with IRD

On 31 October 2018, Peter van Hout from the Board of Administration (as a member of the AllChurches Bureau) has a meeting with the Inland Revenue Department.  If you have issues that you would like to have aired with the Inland Revenue Department that concerns the activities of the Church, please email Peter van Hout directly by 12 October.

Gmail – Google lets app developers access personal emails

This appeared in the Christchurch Press on Saturday 22 September 2018 and highlighted that extreme care needs to be taken when using Gmail for official Church business.  If you have any concerns, it is strongly suggested that you talk to the Connexional Office about creating a “@methodist.org.nz” email address for official Church business.  There is no cost for this service and takes 5 minutes to setup and get underway.

“Google is allowing hundreds of companies to scan people’s Gmail accounts, read their emails and even share their data with other firms, the company has confirmed.

In a letter to US senators Susan Molinari, Google’s vice president for public policy in the Americas admitted that it lets app developers access the inboxes of millions of users – even though Google itself stopped looking in 2017.

In some cases human employees have manually read thousands of emails in order to help train AI systems which perform the same task.

The disclosure has uncomfortable echoes of last year’s Cambridge Analytica scandal, in which political consultants covertly harvested data from 87 million Facebook users through…” CLICK HERE for the full article.

Performance Reports (end of Year Financial Statements) – 30 June 2018

Just a reminder that all Methodist Church entities that report either directly or indirectly to the Conference of the Methodist Church need to supply the General Secretary with a final signed copy of their Performance Report (financial statements) for the 12 months ending 30 June 2018 by 12 October 2018. PLEASE put a reminder in your diary or let the person doing the work know of the deadline.

These Performance Reports need to comply with generally accepted accounting practice, which for most Church entities means that they comply with the Tier 3 or Tier 4 reporting standards as issued by the External Reporting Board.

The Annual Return for those Church entities whose financial year end is 30 June 2018 (as set out in the Law Book) needs to include the Performance Report.  This needs to be filed with Charities Services by 31 December 2018.

Also a reminder that you need to also look at  your constitution and the Independent Assurance Policy of the Church to see if you also require an audit or review. For Parishes and Synods, the general rule is that if your operating expenditure is under $500,000 then you do not need either a review or an audit.  If your operating expenditure is between $500,000 and $1,000,000 then you will need to have a independent review undertaken.  If your operating expenditure is over $1,000,000 then you will need an audit.  For some entities it is mandatory that an audit or review to be undertaken.  This work needs to be undertaken by a qualified person. A qualified person is defined within the Financial Reporting Act as a person who is professional qualified to undertake the work.

If an independent audit or review IS undertaken, then any management report/letter received from auditor  or reviewer will also need to be sent to the General Secretary.

The Independent Assurance Policy can be found HERE .

Related Party Transactions

From the 1 January 2019 the way report related party transactions will change so care will be required.  For Tier 3 and 4 reporting entities, the simple word “significant” will be removed from WHAT is required to be reported in the performance reports.  While this may seem a simple change the effects may be quite dramatic.  After the “annual audit season” is over, Peter van Hout will rewrite the related party document to reflect the changes but in the meantime, to understand what is required in the performance reports (financial statements) see this link…..Related Party Transactions

Goods and Services Monthly Returns

This is a reminder that Conference decided in 1986 that the Methodist Church of New Zealand be registered as one “person” (group registered) for the purposes of the Goods and Services Tax Act 1985.  One of the consequences of this decision is that ALL entities that are under the authority of Conference need to lodge monthly GST returns through the Methodist Church online GST system so that the Church is able to comply with the Act.

The Information Leaflet that relates to GST can be found on the Methodist Church website.  Click HERE to download it.

Monthly GST Returns need to be loaded into the online GST system by midnight on the 25th of each month.  For more information, please contact Peter van Hout in the Connexional Office of the Board of Administration.

End of Financial Year Preparation

It is nearly Happy New Year time for prepares of financial statements within the Church.

The Independent Assurance Policy (audit or review) for financial statements has not changed from last year and can be downloaded from HERE. It has already been sent out as part of the annual statistics package in May 2018.  In summary, if your operating payments are under $500,000 then the Church does not require an audit or review (but you can still have one done if you choose to. If your operating payments are between $500,000 and $1,000,000 then the financial statements need to be reviewed by a qualified person (normally a Chartered Accountant in Public Practice).  For operating expenditure greater than $1,000,000, then an audit is required to be undertaken by a qualified person (normally a Chartered Accountant in Public Practice).

If you do have an audit or review undertaken, then the auditor or reviewer is required by the assurance standards to also issue a “management letter” or “business issues” report.  This must also be submitted with your annual accounts to the General Secretary.

Please remember that the financial statements need to be prepared using the appropriate financial reporting standards issued by the External Reporting Board (Tier 1, 2 , 3 or 4).   If you need support in the preparation of these, then the Connexional Office is able to assistance.

Things to note are:

  • If you are using Xero, please make sure that all bank transactions are coded and that the bank accounts are fully reconciled.
  • If you have MTA and CB&L accounts, then please make sure that journal entries are undertaken to balance these accounts with the statements you have received from the Connexional Office.  These statements may not appear until the second or third week of July.
  • If you have any loans outstanding, once again undertake the necessary journal entries to balance these off with the appropriate interest paid and capital repayments journaled.
  • Were there any large repairs and maintenance items that should be capitalised as a fixed asset or did you purchase new furniture, computers, etc. that need to be on the fixed asset register?
  • If you have fixed assets, has depreciation been run and entered into the accounts.
  • Cast your eye over the entries going through the bank accounts to make sure they have been allocated to the correct accounting code.
  • Has GST been claimed on only those tax invoices that have GST on them and that tax invoices are in the files?
  • Have services that the Church has provided (hire of hall, etc.) been correctly charged.
  • Look at and start documenting your Outcomes and Outputs that your Parish has undertaken in the year.