handbook - nzei

Treasurer’s

Handbook

2014 Edition

NZEI TE RIU ROA

This is the 2014 edition of the NZEI Te Riu Roa Treasurer’s Handbook. It is intended for use by Branch and Area Council Treasurers. The information contained in this publication is based on the NZEI Te Riu Roa Rules (as adopted by the Institute’s Annual Meeting – 2014) and intended for reference only. Please refer to the Rules for exact guidelines. If in doubt please contact NZEI National Office for clarification. Amendments to the Rules override policy as stated in this publication.

New Zealand Educational Institute Te Riu Roa Level 12 Education House, 178-182 Willis Street, Wellington

P O Box 466, Wellington 6140, New Zealand Phone 0800 693 443 Fax (04) 385 1772

www.nzei.org.nz

Table of Contents

1. Introduction ......................................................................................... - 1 -

2. Role and responsibilities .................................................................... - 2 -

3. Annual Calendar .................................................................................. - 3 -

4. Maintaining financial records ............................................................. - 4 -

4.1 Receipts Cash Book .............................................................................................. - 5 - 4.2 Payments Cash Book ............................................................................................ - 5 - 4.3 Bank Reconciliation ............................................................................................... - 5 -

5. Branch financial report ....................................................................... - 7 -

5.1 Statement of profit and loss ................................................................................. - 7 - 5.2 Bank reconciliation statement .............................................................................. - 7 -

6. Annual financial statements ............................................................... - 8 -

6.1 Statement of financial performance ..................................................................... - 8 - 6.2 Statement of financial position ........................................................................... - 10 - 6.3 Asset Register ...................................................................................................... - 12 - 6.4 Accounting polices .............................................................................................. - 13 - 6.5 Notes to accounts ................................................................................................ - 13 -

7. Cash and bank ................................................................................... - 14 -

8. Inland Revenue and tax .................................................................... - 15 -

9. Payments to officials ........................................................................ - 16 -

9.1 Honorarium ........................................................................................................... - 16 - 9.2 Reimbursement of expenses .............................................................................. - 17 - 9.3 Wages .................................................................................................................... - 18 -

10. Koha…… ............................................................................................ - 19 -

11. Annual Meeting and Conference ...................................................... - 20 -

11.1 Communication .................................................................................................... - 20 - 11.2 Grants .................................................................................................................... - 20 - 11.3 Cash advances ..................................................................................................... - 20 - 11.4 Reconciliation form .............................................................................................. - 20 - 11.5 Wash-up calculation ............................................................................................ - 20 -

12. Funding entitlements ........................................................................ - 22 -

12.1 Requirements (three criteria) .............................................................................. - 22 -

NZEI Te Riu Roa P a g e | - 1 - Treasurer’s Handbook

12.2 Payments (usually three drawdowns a year) .................................................... - 23 -

13. Goods and Services Tax (GST) ........................................................ - 25 -

13.1 GST registration ................................................................................................... - 25 - 13.2 GST formulas ........................................................................................................ - 25 - 13.3 GST refund ............................................................................................................ - 25 -

14. Audit…… ............................................................................................ - 26 -

14.1 Auditor................................................................................................................... - 26 - 14.2 Audit requirements .............................................................................................. - 26 -

15. Planning and budgeting ................................................................... - 27 -

15.1 Budget cycle ......................................................................................................... - 27 - 15.2 Budget checklist .................................................................................................. - 27 - 15.3 Budget template ................................................................................................... - 28 -

16. Imprest Accounting ........................................................................... - 29 -

17. Glossary of Terms ............................................................................. - 30 -

Appendix 1: NZEI Branch Reporting Package 2014 ............................ - 31 -

Appendix 2: Funding request form ....................................................... - 32 -

Appendix 3: Best practice checklist ..................................................... - 33 -

Appendix 4: Group Audit Checklist ...................................................... - 34 -

Appendix 5: Honorarium Declaration ................................................... - 35 -

Appendix 6: Imprest Payment Request Form ...................................... - 36 -

Appendix 7: List of Area Councils and Branches ................................ - 37 -


1. Introduction The NZEI Te Riu Roa Treasurer’s Handbook is provided to support Branch and Area Council treasurers in carrying out their individual role and responsibilities. Treasurers are to act in accordance to the Rules of NZEI Te Riu Roa, exercise duties as outlined in the Treasurer’s Handbook, and pay particular attention to the statutory and legal obligations mentioned therein. For simplicity, NZEI Te Riu Roa is referred to as ‘the Institute’, Aronui Tomua, Komiti Pasifika, Branch and Area Council is referred to as ‘Branches’. Direct any queries to National Office Finance: Mark Chan Finance Manager E: [email protected] Ph: 04-382 2742 Fax: 04-385 1772 Lily Yin Accountant E: [email protected] Ph: 04-382 2753 Fax: 04-385 1772

mailto:[email protected]



2. Role and responsibilities Keeping accurate and reliable financial records and preparing financial statements is very important for Branch to achieve its goals and assisting National Office in financial management. Responsibilities include:

Maintaining accurate, reliable and up-to-date financial records

Managing funds

Regular reporting on the state of Branch’s finances

Developing Branch annual budgets

Working with Branch president and secretary

Liaison with auditor and National Office Finance What is required to fulfil the responsibilities effectively?

Recognise the significance and importance of role of treasurer

Be aware that Branch has important statutory and legal obligations

Ensure you are fully conversant with the contents of this handbook

Work well with others

Understand what is expected of you by your committee and members, your Area Council and National Office

Regular attendance and reporting to Branch meetings

Ensure there is a proper handover by the outgoing treasurer before taking office to enable a smooth transition (inform National Office Finance prior to change occurring)

To further prepare, attend treasurer workshops as required. This meeting is a good place to network with experienced treasurers from other Branches, share notes, discuss issues and learn from one another.


3. Annual Calendar Due date Information required From To

31st January

Bank statement shows 31st December bank balance

Branch/AC

Finance

31st January

Approval of Branch costed activity plans

AC

Finance

28th February

Costed activity plans and prior year plan reviews

AC

Finance

31st March

Completed annual financial statements for group audit

Branch/AC

Finance

31st March

Externally audited financial statements

Branch/AC

Finance

20th July

Second funding drawdown

Finance

Branch/AC

15th September

Next year’s budged funding entitlement

Finance

Branch/AC

20th October Annual Meeting and Conference wash-up (include final funding drawdown)

Finance

Branch/AC

20th November Audit requirements and checklist Finance Branch/AC

Others:

GST refund is processed on 20th of month following receipt of audited financial statements at National Office

National Office makes weekly payments on Fridays, expect payments (death benefit, funding drawdowns, etc.) in line with this timeframe


4. Maintaining financial records Financial year: The Institute’s financial year is 1st January to 31st December in any one year. Main ingredients of good financial records: Timeliness: Up-to-date, preferably monthly, definitely yearly Accuracy: Accurately record Branch activities Reliability: Information contained in financial records is reliable Verifiability: Information contained in financial records is supported by

appropriate approvals and validating documentary evidence, satisfies audit and complies with financial reporting requirements

Relevance: Fulfils requirements of all stakeholders of Branch Objectivity: True and fair representation and free of bias Comparability: Ability to compare between different periods and years Understandability: Simple and easy to understand Reporting tool: To achieve the above stated main ingredients of good financial record keeping, a NZEI Branch Reporting Package 2014 (Appendix 1) is developed for the use of treasurers. This Reporting Package provides for:

Recording receipts (income)

Recording payments (expenditure)

Performing bank reconciliation

Producing Branch Financial Report for reporting to Branch Meetings

Producing Annual Financial Statements for audit

Contact Finance to get a latest version of NZEI Branch Reporting Package.


4.1 Receipts Cash Book

Income is recorded in receipts cash book. Income categories include funding grants, Annual Meeting grants, Te Kahui Whetu, interest income, death benefit, and other income. GST inclusive amount is recorded under ‘Bank’ column. GST amount is recorded under ‘GST on income’ column. GST exclusive amount is recorded under appropriate income categories. 99% income of Branch does not have GS, refer to section 13 GST for more information.

4.2 Payments Cash Book

Expenditure is recorded in payments cash book. Expenditure categories include administration, Branch meetings, honoraria, Annual Meeting and Conference, campaigns, networks, training, Te Kahui Whetu, end of year function, membership support and welfare, CTU activities, and other expenses. GST inclusive amount is recorded under ‘Bank’ column. GST amount is recorded under ‘GST on payments’ column. GST exclusive amount is recorded under appropriate expenditure categories. Branch can claim GST on purchases if tax invoices or GST receipts are kept on file. Refer to section 13 GST for more information. 4.3 Bank Reconciliation

Six simple steps for effective bank reconciliation: 1. As you make deposits update receipts cash book, and as you write out

cheques update payments cash book, immediately or as soon as possible thereafter.

2. Have available all the bank statements for the month you are reconciling. 3. Starting with receipts cash book (source), make sure every deposit is also

shown in the bank statement (destination). Any deposit in receipts cash book not shown in the bank statement is a ‘deposit in transit’ to be recorded separately in step 6 below.

Similarly, starting with payments cash book (source), make sure every payment made is also shown in the bank statement (destination). Any payment in payments cash book not shown in the bank statement is an ‘unpresented cheque’ to be recorded separately in step 6 below.


Ensure all amounts for deposits in source and destination and payments in source and destination above are the same as differences are either mistakes or errors that will affect bank reconciliation.

4. Make a list of deposits in transit and a list of unpresented cheques. 5. There will be items on the bank statements such as interest income and bank

fees that are not yet recorded in the cash books. Ensure these are now recorded in the cash books accordingly.

6. Complete your monthly bank reconciliation as follows:

Opening cash book balance at beginning of month $XXXX.XX

Add total receipts for the month +$XXXX.XX

Less total payments for the month - $XXXX.XX

Closing cash book balance at end of month = $XXXX.XX

Less deposits in transit - $XXXX.XX

Add unpresented cheques + $XXXX.XX

Balance as per bank statement at end of month = $XXXX.XX


5. Branch financial report The Branch Financial Report is set up to assist treasurers to report easily and in a standard format to the Branch Meetings each term. It is included in the NZEI Branch Reporting Package and comprises:

Statement of profit and loss; and

Bank reconciliation statement.

5.1 Statement of profit and loss This statement shows:

Income and expenses for the reporting period. This part of the financial report is automatic, i.e. the numbers come directly from the receipts cash book and payments cash book, without the need for any manual entry.

Current year’s budget (once the budget is approved, enter it in this column)

Variance, i.e. the difference between actual and budget (this is automated) Regular financial reporting at Branch meetings will enable the committee to review areas of over spend or underspend and make appropriate decisions.

5.2 Bank reconciliation statement

This statement is for performing bank reconciliation for the period. Refer to section 4.3 Bank reconciliation for steps of reconciling bank.


6. Annual financial statements Financial statements are the full set of records required for audit:

Statement of Financial Performance (as known as Profit & Loss)

Statement of Financial Position (as known as Balance Sheet)

Asset Register

Accounting Policies

Notes to Accounts

Producing annual financial statements is easy if you have followed Section 4 Maintaining financial records. 6.1 Statement of financial performance

This statement presents a true and fair picture of where the funds have come from and been spent, it shows the result of activities for Branch at the end of the financial year, either a surplus or a deficit. Income - expenditure = surplus/ (deficit) This worksheet is entirely automated, you are not required to perform any manual entries in here. A surplus gets added to the accumulated funds or net worth Branch had at the beginning of the year. A deficit reduces Branch net worth. A sample of statement of financial performance is shown below:


6.2 Statement of financial position

This statement shows the net worth of Branch at the end of the year, it includes items of assets, liabilities and equity. Item Definition Example

Assets Monetary and physical resources

GST to be refunded, cheque a/c, investment a/c, laptop, fax machine

Liabilities Payments owed to external parties

Accounts payable

Equity Net worth This worksheet is mostly automated, you are required to perform certain manual entries in here, refer to the worksheet for detailed instructions. A statement of financial position must always ‘balance’, i.e. total net asset is equal to equity at end of year. Assets – Liabilities = Equity at start of year +/- Surplus/ (deficit) for the year A sample of statement of financial position is shown below:


6.3 Asset Register

In general, the only assets Branch is likely to purchase are:

Filing cabinets

Fax machines

Computer hardware/software Assets are recorded separately in the Asset Register. For audit purposes record only those assets with a value of $500 (GST exclusive) or more. A sample of asset register is shown below:

This worksheet requires manual entries, refer to the worked example below for calculating depreciation and book value. Depreciation is calculated using straight line method. An asset should only be depreciated from the month of purchase, so if it is purchased in June it will have 7 months of depreciation for that financial year.


Worked example: Filing cabinet purchased on 1 June 2014 for $600.00 (GST exclusive), depreciation rate is 20% per annum. Year 2014 Depreciation (7 months): $600.00 x 20% ÷ 12 × 7= $70.00 Book value: $600.00 - $70.00 = $530.00 Year 2015 Depreciation: $600 x 20% = $120.00 Book value: $530.00 - $120.00 = $410.00 Year 2016 Depreciation: $600 x 20% = $120.00 Book value: $410.00 - $120.00 = $290.00 Asset Depreciation rate

Furniture: 20% Computer software: 40% Computer hardware: 33% Office equipment: 25%

6.4 Accounting polices This polices show the reporting basis and significant accounting policies used. No manual entry is required in here as this worksheet is entirely automated.

6.5 Notes to accounts This note is supplementary to financial statements, it explains each income and expenditure category. No manual entry is required in here as this worksheet is entirely automated.


7. Cash and bank Funds should be banked with one of the main trading banks, i.e. ANZ, ASB, BNZ, Kiwibank, TSB or Westpac. If possible ANZ is preferred as National office banks with ANZ. Branch can maximize interest income by placing ‘surplus’ cash on interest bearing account such as on call account and short-term deposit. Decisions on these must be approved and minuted at Branch meetings for audit purposes. Bank account name: Branch name

Account type: Non-Profit Organisation

Number of signatories: Branch president, secretary and treasurer

Resident withholding tax (RWT):

The Institute is exempt from RWT on interest income. Request a RWT certificate from National Office Finance to provide to the bank

Bank fees and interest: If your bank charges fees and does not pay interest on your non-profit account try to find a more favorable bank

Internet banking: Branch should have internet banking facility as far as possible, and have at least two authorizing signatories


8. Inland Revenue and tax All tax related matters between the Institute and Inland Revenue (IRD) are dealt with by National Office. Branch is not required to deal with IRD directly, however you need to know relevant tax obligations such as:

RWT on interest income

Withholding tax on honoraria

GST Branch is not required to file separate income tax returns. If your branch receives any communication from IRD or bank relating to tax issues, direct queries to National Office Finance immediately.


9. Payments to officials 9.1 Honorarium

Decisions on honorarium to officials reside with Branch. However treasurer and Branch must understand the tax implications and ensure compliance with legal requirements. Any payment made to officials for voluntary service rendered (i.e. time spent on preparation of Branch financial report and annual financial statements) is deemed an honorarium. Honoraria are treated as scheduler payments for tax purposes, i.e. subject to withholding tax. Honoraria are taxed at a flat rate of 33% for someone who is not an employee of the Institute. Branch must declare tax on honorarium and inform Finance accordingly.

Legal requirements

Honoraria are paid with Branch approval and minuted at Branch meetings for audit.

Branch must submit Honorarium Declaration Form (Appendix 5) and forward tax payment to National Office for every honorarium paid.

Accounting for honorarium

Step 1: Decide how much honorarium your Branch intends to pay. Is it net or

gross? Step 2: Calculate tax amount. Step 3: Complete Honorarium Declaration Form and write a cheque to

NZEI Te Riu Roa for the tax amount.


Example 1: Net Your Branch decides to pay net amount of $1000.00 to official A. Honorarium net (after tax): $1000.00 To gross up for tax: ÷ 0.67 Honorarium grossed up: = $1,492.53 Tax amount: = $ 492.53

Official A receives $1000.00 in hand

Branch sends payment for tax of $492.53 to National Office

National Office files tax return and pays IRD $492.53

Total cost of honorarium to Branch is $1,492.53

Record $1,492.53 in your payments cash book under ‘Honorarium’ column

Example 2: Gross

Your Branch decides to pay gross amount of $1000.00 to official B

Honorarium gross (before tax): $1000.00 Tax (33%): $330.00 Honorarium net (after tax) = $670.00

Official B receives $670.00 in hand

Branch sends payment for tax of $330.00 to National office.

National Office files tax return and pays IRD $330.00

Total cost of honorarium to Branch is $1,000.00

Record $1,000.00 in your payments cash book under ‘Honorarium’ column

9.2 Reimbursement of expenses

From time to time Branch officials may incur expenses in carrying out Branch activities, for example:

Food and drinks

Printing paper and cartridge

Stationery

Branch may reimburse expenses incurred, based on submission of GST receipts or tax invoices.


9.3 Wages

There are important legal compliance issues such as PAYE and ACC in employment. Any Branch wishing to employ staff should contact the National President. National Office pays the employee fortnightly or on receipt of timesheets, the Branch is then billed for the reimbursement of wages quarterly.


10. Koha A guide document (IR 278) explaining the tax treatment of payments and gifts made in the Maori community is available on IRD’s website www.ird.govt.nz. “Any unconditional gift given by non-members of the marae isn’t liable for income tax. Any gift from a member of the marae is not unconditional because they’ll eventually receive some benefit from it. However these gifts are also not liable for income tax as they come from within your circle of membership” (IR 278) For audit purposes, Branch needs to have evidence to support this having taken place, a sample receipt for koha is shown below:

KOHA RECEIPT This is to confirm that ______________________________________________ (Name of NZEI Branch) Official s Name ___________________________________________ Koha Paid $_______________________________________________ On (date) ________________________________________________ Received by ________________________________________________ On behalf of ________________________________________________ Name of Marae

http://www.ird.govt.nz/


11. Annual Meeting and Conference 11.1 Communication

Regular updates are posted on the Institute’s website (www.nzei.org.nz). Branch is advised to keep up-to-date with these communications as they include all required information, e.g. entitlement to representatives and observers to attend Annual Meeting and Conference, registration process, travel and accommodation requirements, action points and deadlines, guidelines to accounting for Annual Conference expenses. 11.2 Grants Each Branch receives a grant of $350 per representative to attend Annual Conference (61.3.2 of the Rules). This is paid by National Office in the wash-up calculation after Annual Conference. 11.3 Cash advances

Branch may choose to advance money to cover incidental expenses so that a representative or observer is not out of pocket.

11.4 Reconciliation form

The Institute is registered under the Incorporated Societies Act 1908. The Act restricts members being paid for attending meetings except for reimbursement of expenses incurred by the members.

It is essential that GST receipts and tax invoices are attached to this form for all items claimed. Any unspent money from cash advances must be returned to Branch with the reconciliation form.

11.5 Wash-up calculation

Upon completion of wash-up calculations. Finance will email to each Branch a wash-up letter which containing the following:

Balance of actual funding grant for the year

Grants for Annual Meeting and Conference

Group audit fee

Annual Meeting cost (accommodation/airfare/President Dinner/boxed lunch)

http://www.nzei.org.nz/


The above income and expenditure items need to be recorded separately in receipt and payments cash books under the correct column headers, e.g. Group audit fee needs to be shown under ‘Administration’ in cash payments book, do not net off against the balance of actual funding grant.

Sample wash-up letter:

17 October 2014 NZEI Branch/AC etc Attn: Treasurer Dear xxx, Re: 2014 Annual Conference Wash-up Income

1 2014 Funding entitlement (based on FTEs @ 02/09/14) $41,071.93

less Funding grant already received $27,588.24

equals Final funding grant $13,483.69

2 Annual Conference grant $ 700.00

equals Total income $14,183.69 Expenditure

3 Group audit fees (year ended 31/12/2013) $ 375.00

4 Annual Conference expenses: $ 861.51

- Accommodation $ 652.17

- Airfares $ .00

- Dinner $ 146.14

- Lunch $ 63.20

equals Total expenditure $1,236.51

Direct credit to bank account on 23/10/2014 $12,947.17

Kind regards Mark Chan Finance Manager


12. Funding entitlements 12.1 Requirements (three criteria)

1. 61.1.3 of the Rules require three criteria to be met:

a) Audited financial statements from previous year have been received at

National Office, and

b) A costed activity plan has been approved by the appropriate Area

Council (for Branches) or the National Executive (for Area Councils).

(prior year plan reviews need to be included), and

Sample of Branch plans approval form:

Area Council: Wellington2014 REVIEWS 2015 PLANS

RECEIVED APPROVED

(YES / NO) (YES / NO)

A T - Te Whanganui A Tara

Heretaunga

Hutt Valley

Kapiti

Komiti Pasifika - Wellington

Mana

Parumoana

South Wairarapa

Te Kura

Wainuiomata

Wairarapa

Wellington

Wellington North

Authorised by:

Name:

Date:

Note:

1. Area Council is to keep all Branch Reviews and Plans, National Office does not require copies of them.

2. This form is to be authorised by Area Council chairperson(s) and forwarded to Mark at [email protected]

3. It is the Area Council's responsibility to inform National Office on Branch Plans approval.

BRANCH DATE APPROVED NOTES


c) Total available cash is equal to or less than funding threshold (i.e. 30%

of budgeted funding entitlement)

2. To request for funding, complete Funding Request Form (Appendix 2)

12.2 Payments (usually three drawdowns a year)

1st drawdown: upon request made by Branch when all three criteria are met.

2nd drawdown: automatically disbursed on 20th July or earlier when Branch

informs Finance that available cash is below threshold again

(Note: 2nd drawdown assumes 1st drawdown has been

requested and paid).

Final drawdown: upon wash-up after Annual Meeting and Conference, usually

20th October.

Branch is entitled to their full funding in any one financial year provided all three criteria are met, regardless of when they fulfil the criteria. There is no deadline for requesting funding.

Branch that is likely to fulfil all three criteria closer to the end of the financial year is required to monitor available cash closely and inform Finance as soon as possible to avoid payment delays due to holiday seasons.

Scenario 1 Branch X meets all three criteria before 20th July, and requests

funding. National Office disburses 1st drawdown upon receipt of Funding

Request Form. 2nd drawdown will be made automatically on 20th July. Final drawdown will be made at wash-up after Annual Meeting.

Scenario 2 Branch Y meets all three criteria after 20th July but before Annual

Meeting wash-up, and requests funding.


National Office disburses 1st and 2nd drawdown upon receipt of

Funding Request Form. Final drawdown will be made at wash-up

after Annual Meeting.

Scenario 3 Branch Z meets all three criteria after Annual Meeting wash-up and

before end of financial year.

National Office disburses full funding upon receipt of Funding

Request Form.

There is currently no provision to carry forward any current year funding into the

following year.


13. Goods and Services Tax (GST) 13.1 GST registration

The Institute (include Branches) is GST registered. GST number is 010-385-377.

Keep original GST receipts and tax invoices on file whenever possible, Branch

cannot claim GST without this evidence. Branch is disadvantaged and loses out

by not keeping GST receipts or tax invoice

Does GST apply on the following items? INCOME GST

Funding No

Annual Meeting grant No

Te Kahui Whetu No

Interest income No

Death benefits No

Other income Yes if it is from parties other than the Institute

EXPENDITURE

Honoraria No

Death benefits No

Any other expenditure Yes if it is supported by GST receipts or tax invoices

Transactions between parties within the Institute do not have GST.

13.2 GST formulas

The current rate of GST is 15%.

GST exclusive amount = GST inclusive amount divide by 1.15

GST inclusive amount = GST exclusive amount multiply 1.15

GST amount = GST inclusive amount multiply 3 then divide by 23

GST amount = GST exclusive amount multiply 0.15

13.3 GST refund

GST refund amount is shown under ‘GST to be refunded’ in the Statement of Financial Position. This amount is paid to Branch on 20th of the month following the receipt of audited Financial Statements at National Office.


14. Audit 14.1 Auditor

Audit can be carried out by:

A contracted auditor appointed by National Office (i.e. Group Audit), or

An auditor appointed by Branch at Branch meeting The auditor should be totally independent of the person who maintains the accounting records and prepares the annual financial statements. The auditor must be a member of Chartered Accountants Australia New Zealand to comply with 67.3.1 of the Rules. Refer to Annual Calendar for due dates for audit. 14.2 Audit requirements

1. As mentioned in section 6 Annual financial statements, the full set of records

required for an audit are:

Statement of Financial Performance (as known as Profit & Loss)

Statement of Financial Position (as known as Balance Sheet)

Asset Register

Accounting Policies

Notes to Accounts 2. Supporting documentation:

Bank statements

Invoices/receipts

Relevant communications with bank and National Office

Cheque stubs

Meeting minutes

Branch financial reports

Receipts cash book

Payments cash book

Bank reconciliation Refer to Group Audit Checklist (Appendix 4) for information required for group audit.


15. Planning and budgeting Branch has its own timeline to complete a costed activity plan for the following financial year, however it should broadly match the National Office budget cycle which begins in September leading to final executive endorsement in November. 15.1 Budget cycle

Branch finance committee is overall responsible for budget preparation. A recommended budget cycle is:

Hold a brain-storming session about September on ideas for activities in the following year.

Use the budget checklist below and make sure essentials are included.

Remember all planned activities should fall within the objects and policy goals of the Institute.

Advise internal networks that the planning and budgeting process has started and invite them to submit ideas.

Involve members in the planning and budgeting process so activities genuinely reflect the priorities of the Branch.

Draw up budget bids. Treasurer should advise the committee of known cost obligations it must budget for before other ideas are considered. Once these costs are known the committee, in consultation with members, should seek to cost the range of activities it wishes to fund and build them into an activity plan. The Branch will find the task of planning and budgeting easier if it has made a declaration of its goals and objectives for the following year.

Finalise costed activity plans in the required format and submit to Area Council for approval.

15.2 Budget checklist

Essential items:

Area Council liaison

Branch meetings

Grants

Audit fees

Networks

Contract negotiation activity


Annual Meeting/Conference Likely items

Conference and hui attendance

Liaison with outside bodies (eg. School Trustees Association)

Branch-initiated activities falling within the objects, policies and priorities of the Institute

Asset depreciation

Branch training 15.3 Budget template

A Budget template is included in the NZEI Branch Reporting Package. This template is to assist Branches to plan/prepare next year’s budget, it contains three columns: Year-to-date actual: This column is automated, figures are derived from

receipts and payments cash books which represent the actual income received and expenditure incurred year-to-date.

Forecast: This column requires manual entries, it is a forecast of current year’s income and expenditure, i.e. year-to-date actual plus forecast for the rest of the year.

Budget: Upon approval of the Branch costed activity plans, complete the Budget 2015 column, This is only required to be done once a year.


16. Imprest Accounting Why Imprest accounting?

Imprest accounting was set up by the National Executive with the objective of protecting members’ funds in cases where Branches are unable to fulfil the financial compliance requirements as determined by the Rules of the Institute. How does Imprest accounting work?

Branch’s funds are held in an imprest account managed by National Office

Income to Branch is paid into Imprest account

Expenses shall be made from Imprest account upon receipt of Payment

Request Form (Appendix 6).

The following rules apply for imprest accounting:

1. Opt for imprest accounting can be done by notifying National Office before

1 February (62.1 of the Rules)

2. Branches who fail to have their previous year financial statements audited

by 1 July will be transferred to imprest accounting by National Office (62.2

of the Rules)

3. Branches shall retain $200 in their bank accounts and return funds held in

excess of $200 to National Office to be deposited to their imprest accounts

(62.3 of the Rules)

4. Any Branch may wish to remit back to self-management by notifying

National Office in writing, and provide evidence of competency in self-

managing its ongoing financial affairs (62.5 of the Rules)


17. Glossary of Terms Annual Conference Grant Grant paid by National Office to the Branch, being

$350 for each representative the Branch has at Annual Conference.

Death Benefit On the death of any full or trainee member that

member’s Branch shall pay to an approved recipient the sum of four (4) times the annual subscription.

Financial Statements Comprises of Statement of Financial Performance,

Statement of Financial Position, Assets Register, Accounting Polices and Notes to Accounts.

Financial Year From 1st day of January to 31st day of December in

the same year. Te Kahui Whetu Meeting held annually for the purpose of formulating

The Institute’s policy on Maori issues and organising miro Maori.

Funding Grants Branch share of the subscriptions collected by

National Office from each member of the Branch as at 1 September.

Honorarium Payment made for voluntary services provided where

no fixed payments would normally be made. Honoraria are subject to tax at a flat rate of 33%.

Depreciation Reduction in the value of an asset over time, due in

particular to wear and tear.


Appendix 1: NZEI Branch Reporting Package 2014 The NZEI Branch Reporting Package 2014 is an excel package developed for the use of treasurers and contains individual worksheets as shown in the content page.

CONTENTS PAGE

Title and Contents

Statement of Financial Performance 1

Statement of Financial Position 2

Asset Register 3

Accounting Policies 4

Notes to Financial Statements 5

Audit Certificate 6

Receipts Cash Book

Payments Cash Book

Bank Reconciliation

Investment Reconciliation

Financial Report to Branch Committee

Budget

FINANCIAL STATEMENTS

NZEI xxxx BRANCH

YEAR ENDED 31 DECEMBER 2014


Appendix 2: Funding request form

dd/mm/yyyy NZEI National Office Attn: Accountant Re: Funding request Dear Lily, xxxx Branch 2014 budgeted funding entitlement is $x,xxx and funding threshold is $x,xxx. This is a request for a funding drop as we have met the three funding criteria below:

2013 audit finalised

2014 plans approved

bank balance of $x,xxx as at dd/mm/yyyy is below the funding threshold

Could you please advise the payment date and amount when this is actioned. My email is: xxxxxxx Attachment: Bank statements Kind regards Name Treasurer xxxx Branch Please send this letter to: NZEI Te Riu Roa PO Box 466 Wellington 6140, or Fax: 04-385 1772, or Email: [email protected]



Appendix 3: Best practice checklist Monthly

Make deposits and update Receipts Cash Book

Make payments and update Payments Cash Book

Perform monthly bank reconciliation

Keep track of cash book balance at the end of each month

Circulate monthly Branch financial report to Branch Committee

Annually

Prepare budget that is in line with the planned activities

Prepare annual financial statements for audit

Request for funding once all three criteria are met

Branch meetings

Attend meetings as required

Table financial report at meetings and have it minuted as ‘noted’

Table audited financial statements at AGM and have it minuted as ‘noted’

All decisions are minuted and properly recorded

Dos

Declare tax on honorarium

Reconciliation form is completed by Annual Meeting and Conference

attendees, collect unspent money if any

All payments must be authorised by two signatories

All transactions must be supported by invoices, receipts, expense claims,

vouchers and any other validating documentary evidence

Claim GST only if a tax invoice or a GST receipt is kept

All financial records must be kept as part of the permanent record for at least

seven years

Don’ts

Avoid withdrawing cash or writing cash cheques. Ensure payments are

made by cheques or direct credits

Do not post your books for audit via snail mail, either hand deliver or courier

books to National Office


Appendix 4: Group Audit Checklist A checklist is provided for material required for 2014 financial year group audit. 1. NZEI Branch Reporting Package for year ended 31st December

2014 Email it to [email protected], or save it in a USB stick and send in with the books.

2. Audited Financial Statements for year ended 31st December 2013

This is to provide comparative figures of the previous financial year.

3. Supporting documentation (a) Bank statements

This needs to be a complete set, filed in chronological order, for each account operated. The first statement needs to show the opening bank balance on 1 December, 2013, the last statement needs to show the closing bank balance on 31 January, 2015.

(b) Invoices / receipts / communication

These should be filed in transaction order and must be referenced back to the cheque numbers or receipt numbers. Also include Annual Conference 2014 wash-up letter. Each transaction needs to be supported by validating documentary evidence.

(c) Cheque stubs

Stubs must clearly show the dates, payee names, amounts and a short description of the expenditure.

(d) Meeting minutes

A hard copy of the minutes of meetings held during the financial year. These should be signed off by the chairperson as being a true and correct record. Of special interest to the auditors will be the record of any changes to signing authorities, any financial decisions made and Branch financial report.

A coversheet is to be included with your name, physical address, phone number and email for the return of the books upon audit completion, package your books securely and send it to: National Office Group Audit Attn: The Accountant Level 12 Education House 178-182 Willis Street Wellington 6011



Appendix 5: Honorarium Declaration 01 September 2014 NZEI National Office PO Box 466 Wellington 6140 Attn: Accountant Re: Withholding tax on honorarium Below is the disclosure of tax on honorarium:

Ms Wiggles (President) IRD No.: 01-171-846

Gross: $298.50 Tax: $98.50 Net: $200.00

Ms Fancy (Secretary) IRD No.: 01-549-552

Gross: $100.00 Tax: $33.00 Net: $67.00

Mr Beancounter (Treasurer) IRD No.: 01-783-189

Gross: $447.76 Tax: $147.76 Net: $300.00

A cheque is enclosed for the tax amount of $279.26 Yours faithfully Mr Beancounter Treasurer MiddleEarth Branch, NZEI


Appendix 6: Imprest Payment Request Form

Branch Name:

Date: / /

Payee:

Address:

Payment For:

Expense Code:

(Per reference below)

Amount: $

GST Inclusive: YES NO

Due Date: / /

Direct Credit to:

(Bank A/c no.)

Payments will only be made via bank direct credit, please provide payee's bank a/c details

Signed: (Two signatures are required)

President:

and/or Secretary:

and/or Treasurer:

Please attach a copy of the invoice/receipt and meeting minutes for the above payment

Forward to: The Accountant

NZEI Te Riu Roa

PO BOX 466

Wellington 6140

or Fax (04) 385 1772

or Email: [email protected]

National Office Use Only:

Expense Code Description

1100 Branch Administration Checked by:

1200 Branch Meeting

1300 Honorarium

1400 Annual Meeting Approved by:

1500 Campaigns

1600 Networks

1700 Branch Training Code:

1800 Te Kahui Whetu

1900 End of Year Function

2000 Members Support & Welfare Payment Date:

2100 CTU Activities

2200 Other Expenses

NZEI IMPREST ACCOUNTING

PAYMENT REQUEST FORM

Cash Payments:


Appendix 7: List of Area Councils and Branches As at 17th November 2014, NZEI has 13 Area Councils and 115 Branches.

No. Area Council name Region

1 Taitokerau Northern

2 Auckland Northern

3 Te Pipiri Mananui o Nga Tataha-a-Maui Northern

4 Te Rohe o Waiariki Northern

5 Waikato Northern

6 Taranaki Central

7 Te Haunui Central Central

8 Central East Central

9 Wellington Central

10 Te Tau Ihu O Te Waka A Maui Southern

11 Waitaha Canterbury Southern

12 Otago Southern

13 Murihiku-Southland Southern

No. Imprest Branch name Area Council name Region

1 Bay Of Islands Taitokerau Northern

2 Far North Taitokerau Northern

3 Hokianga Taitokerau Northern

4 Kaipara Taitokerau Northern

5 Northern Wairoa Taitokerau Northern

6 Rodney-Otamatea Taitokerau Northern

7 Whangarei Taitokerau Northern

8 Auckland Auckland Northern

9 Franklin Auckland Northern

10 Hibiscus Coast Auckland Northern

11 Howick Auckland Northern

12 Yes Komiti Pasifika - Auckland Auckland Northern

13 Manurewa Auckland Northern

14 North Shore Auckland Northern

15 Otahuhu Auckland Northern

16 Papakura Auckland Northern

17 Papatoetoe Auckland Northern

18 Waiuku Auckland Northern

19 West Auckland Auckland Northern

20 Yes A T - Hokianga Ki Taumarere

Te Pipiri Mananui o Nga Tataha-a-Maui

Northern

21 A T - Manaakitia o Potiki Te Pipiri Mananui o Nga Northern


Tataha-a-Maui

22 Yes A T - Manaia Ki Tutamoe Te Pipiri Mananui o Nga Tataha-a-Maui

Northern

23 A T - Manukau Whanui Te Pipiri Mananui o Nga Tataha-a-Maui

Northern

24 A T - o Mataatua Te Pipiri Mananui o Nga Tataha-a-Maui

Northern

25 A T - o Te Rohe Potae Te Pipiri Mananui o Nga Tataha-a-Maui

Northern

26 A T - Rotorua Te Pipiri Mananui o Nga Tataha-a-Maui

Northern

27 A T - Tamaki Makaurau Te Pipiri Mananui o Nga Tataha-a-Maui

Northern

28 A T - Tauranga-Moana Te Pipiri Mananui o Nga Tataha-a-Maui

Northern

29 A T - Te Mangai Maori Waikato

Te Pipiri Mananui o Nga Tataha-a-Maui

Northern

30 A T - Te Whanau-A-Apanui Te Pipiri Mananui o Nga Tataha-a-Maui

Northern

31 Yes A T - Tokoroa Te Pipiri Mananui o Nga Tataha-a-Maui

Northern

32 Yes Murupara Te Rohe o Waiariki Northern

33 Opotiki Te Rohe o Waiariki Northern

34 Rotorua Te Rohe o Waiariki Northern

35 Taupo Te Rohe o Waiariki Northern

36 Tauranga Te Rohe o Waiariki Northern

37 Te Puke Te Rohe o Waiariki Northern

38 Turangi Te Rohe o Waiariki Northern

39 Whakatane Te Rohe o Waiariki Northern

40 Cambridge Waikato Northern

41 Central King Country Waikato Northern

42 Coromandel Peninsula Waikato Northern

43 Yes Huntly Waikato Northern

44 Maniapoto Waikato Northern

45 Matamata Waikato Northern

46 Piako Waikato Northern

47 Thames Waikato Northern

48 Tokoroa Waikato Northern

49 Yes Waihi Waikato Northern

50 Waikato Waikato Northern

51 Yes Waipa Waikato Northern

52 A T - Parininihi Ki Taipake Taranaki Central

53 North Taranaki Taranaki Central

54 Patea-Waverley Taranaki Central

55 South Taranaki Taranaki Central


56 Yes A T - ki Ruapehu Te Haunui Central Central

57 Yes A T - Manawatu Te Haunui Central Central

58 A T - Whanganui Te Haunui Central Central

59 Feilding Te Haunui Central Central

60 Yes Horowhenua Te Haunui Central Central

61 Manawatu Te Haunui Central Central

62 Yes Pahiatua Bush Te Haunui Central Central

63 Rangitikei Te Haunui Central Central

64 Taihape Te Haunui Central Central

65 Wanganui Te Haunui Central Central

66 A T - Hikurangi Ki Te Tairawhiti

Central East Central

67 A T - Kahungunu Ki Te Wairoa

Central East Central

68 A T - Kahuranaki Central East Central

69 A T - Turanga Central East Central

70 Yes A T - Whanganui A Orotu Central East Central

71 Central Hawkes Bay Central East Central

72 Hastings Central East Central

73 Napier Central East Central

74 Poverty Bay Central East Central

75 Southern Hawkes Bay Central East Central

76 Wairoa Central East Central

77 A T - Te Whanganui A Tara

Wellington Central

78 Heretaunga Wellington Central

79 Hutt Valley Wellington Central

80 Kapiti Wellington Central

81 Yes Komiti Pasifika - Wellington

Wellington Central

82 Mana Wellington Central

83 Parumoana Wellington Central

84 South Wairarapa Wellington Central

85 Te Kura Wellington Central

86 Wainuiomata Wellington Central

87 Wairarapa Wellington Central

88 Wellington Wellington Central

89 Wellington North Wellington Central

90 A T - Whakatu - Motueka - Mohua

Te Tau Ihu O Te Waka A Maui

Southern

91 Buller Te Tau Ihu O Te Waka A Maui

Southern

92 Golden Bay Te Tau Ihu O Te Waka A Maui

Southern

93 Marlborough Te Tau Ihu O Te Waka Southern


A Maui

94 Motueka Te Tau Ihu O Te Waka A Maui

Southern

95 Nelson Te Tau Ihu O Te Waka A Maui

Southern

96 A T - Waitaha Waitaha Canterbury Southern

97 Ashley Waitaha Canterbury Southern

98 Christchurch Waitaha Canterbury Southern

99 Ellesmere Waitaha Canterbury Southern

100 Grey Waitaha Canterbury Southern

101 Yes Hurunui Waitaha Canterbury Southern

102 Yes Mackenzie Waitaha Canterbury Southern

103 Malvern Waitaha Canterbury Southern

104 Mid Canterbury Waitaha Canterbury Southern

105 South Canterbury Waitaha Canterbury Southern

106 Waimate Waitaha Canterbury Southern

107 Westland Waitaha Canterbury Southern

108 A T - o Otepoti Otago Southern

109 Central Otago Otago Southern

110 Otago Otago Southern

111 South Otago Otago Southern

112 Waitaki Otago Southern

113 A T - Te Ropu .. Murihiku Murihiku-Southland Southern

114 Hokonui Murihiku-Southland Southern

115 Takitimu Murihiku-Southland Southern

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