Financial Reporting within the Methodist Church of New Zealand – 30 June 2015

Introduction

As we all should know, the way that annual financial accounts are prepared and furnished to Charities Services is changing.  There has been much said and written within the Church regarding these and it has been expected that treasurers and others appointed to look after the financial affairs of a Church based entity have been keeping up to date with these changes.

As a consequence of these changes, for the year ending 30 June 2015 the Connexional Financial Review Committee will be checking the annual accounts of Tier 3 and 4 entities within the Church to ensure that they comply with the financial reporting standards issued by the External Reporting Board.  If the annual financial accounts do not comply with these standards, then the Connexional Office will be sending them back to the entity concerned to be reassessed and returned back to us within an agreed timeframe.

You will then use these annual financial statements to present at parish/synod annual meetings for approval and then file these as part of your annual return.

Please refer to the following web sites for help:

http://accounting.methodist.org.nz/ – Methodist Church Accounting Blog Site

https://www.charities.govt.nz/im-a-registered-charity/new-reporting-standards/tier-4/tier-4-get-started-videos/ – Charities Services videos on Tier 4 reporting

https://www.charities.govt.nz/im-a-registered-charity/new-reporting-standards/tier-3/tier-3-get-started-videos/ – Charities Services videos on Tier 3 reporting

http://www.xrb.govt.nz/Site/Accounting_Standards/Current_Standards/Standards_for_Not-For_Profit_PBEs/Stds_for_Not-For-Profit_T1-4.aspx – External Reporting Board to get the actual standards, guidance notes, etc. (these are also on the Accounting Blog Site).

To make it clear.

Format of Annual Accounts

If the operating payments of your parish, synod or other entity are under $125,000 for the 12 months ending 30 June 2015 and for the periods end 30 June 2014 and 2013 then you need to prepare your financial accounts for the 30 June 2015 using the Tier 4 standards.  There are guidance notes and an Excel spreadsheet to help you achieve this. Please contact either Rebecca, Sarah or Peter in the Connexional Office for these.

If the operating expenditure of your parish/synod or other entity is over $125,000 for the 12 months ending 30 June 2015 and has been over $125,000 in the year ending 30 June 2014 and 30 June 2013 then you will need to prepare your financial accounts for the 30 June 2015 using the Tier 3 standards.  There are guidance notes and an Excel spreadsheet to help you achieve this.  Please contact either Rebecca, Sarah or Peter in the Connexional Office for these.

Statistical Returns

The M4 Form is in addition to and not a substitute for the annual accounts.  The information in the M4 comes from the annual accounts.  Please follow the instructions supplied with the M4.

Audit or Review

There have been other posts on this blog site regarding the need to have accounts audited or reviewed and I would refer you to the full posting HERE.

To recap, an it summary, subject to the policy document.  If you have operating expenditure UNDER $500,000 there is no formal requirement for an audit or review (but you can have one done if you so choose).   If the operating expenditure is OVER $500,000 but UNDER $1,000,000 the you need to have an independent review undertaken by a qualified person.  If your operating expenditure is OVER $1,000,000 then you need to have an audit conducted by an independent qualified person.

Annual Return to Charities Services

Once the annual accounts have been completed and approved, you are then able to log onto Charities Services website and lodge your Annual Return.  Please do this before 31 December 2015.