JulieAnne Mee

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THE QUT Standard Chart of Accounts and
Introduction to BudgetLink

• Julie-Anne Mee
• Louis de Beer
• Jeff Stephenson

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CUTTING RED TAPE AND BUILDING ACCOUNTABILITY
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• Julie-Anne Mee
• The Australian Centre for Philanthropy and
  Nonprofit Studies
• 10 September 2008
• People, Place and Country
• QCOSS Regional Conference,Townsville

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This morning we will

• Standard Chart of Accounts
• Cutting to the Core - Reducing the Costs of
  Government imposed paperwork
• Government Inquiries and actions

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Standardisation

• Standardisation best described by its benefits
• Consistency
• Comparability
• Sectoral coordination
• Communication and discussion
• Better info for decision makers
• Simpler reporting (by preparers)
• Accountability
• Robustness

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Advantages of a Standard Chart of Accounts

• Consistent and uniform reporting with some
  flexibility
• True financial performance can be ascertained
• Assists auditors in the annual audit
• Clear guidelines for account names
• Incoming treasurers and bookkeepers have a
  framework and
• Enables benchmarking and development of KPIs
  within an organisation

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Sample page in SCOA
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Sample page in SCOA
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Next Phases

• National approach Senate Inquiry
• Funding acquittals align with standards
• Accounting and auditing profession engage with
  nonprofit sector
• Research is supported about impact of nonprofit
  financial performance (eg benchmarking and KPIs)

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Cutting to the Core - Reducing Red Tape

• On COAG Agenda
• Victorian Red Tape Report
• Visit CPNS web site
• Summary
• http//www.bus.qut.edu.au/research/cpns/documents/
  2008_4PaperworkReportingCostsofGovtGrants.pdf
• Full Paper
• Electronic copies of CPNS Working Paper 39 How
  Long is a Piece of Red Tape? The Paperwork
  Reporting Costs of Government Grants is available
  from
• http//eprints.qut.edu.au/archive/00012986/

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Compliance Costs

• Compliance Pilot Survey
• For a one year period, the project surveyed 20
  nonprofit organisations on their compliance costs
  in formulating submissions, reporting, and other
  government paperwork.
• Variations in size, purpose multiple funders
• NPOs kept a log of all government documentation
  and further 2 page survey.
• 14 NPOs remained for the whole 12 months.

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Summary
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• Over the 12 months
• An average of 143.57 hours (median of 95
  hours) to complete government generated
  paperwork.
• Average time taken per form was 5.05 hours,
  but with a median of 1.00 hour.
• Pre Survey views
• Estimates were much higher and this has
  implications for government red tape review

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• The fourteen NPOs completed
• 46 grant submissions (on average taking 15.17
  hours to prepare)
• 157 grant acquittals (average 6.04 hours per
  acquittal)
• 90 tax forms (average 1.87 hours per form) and
• 111 other forms, e.g. database information on
  client services for Health or Disability
  departments (average 1.88 hours).
• Grant submissions and acquittals, together made
  up just over 50 of all compliance paperwork for
  NPOs.

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By Type of Form
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Small and Large Organisations
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Size by type of form and of revenue
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Department Analysis
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Form Issues

• Less than 50 of forms had instructions/guides
• Only one third provided a contact point
• Limited use of external advisors to complete
  forms
• Time constraints in appln. external audit issues

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Some Suggestions.

• Whole of Government data dictionary
• Data collected once
• Any data should be either useful or returned as
  useful information
• Communication and reasons of failed submissions
• adequate instructions and a contact point
• Proportional paperwork
• funding submission processes reviewed

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• Further research to establish the benefits of red
  tape reduction measures
• Further quantitative research is required into
  quality accreditation processes
• Further research into the non-paperwork burden of
  government regulation

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Engage in Process?

• Register with dyo_at_qut.edu.au giving name, state
  and generally about your interest.
• Become part of the SCOA discussion forum (email
  dyo_at_qut.edu.au to register)
• Look at https//wiki.qut.edu.au/display/CPNS/DYOH
  ome and follow the prompts to Standard Chart of
  Accounts QLD and NSW currently
• OR Look at http//www.bus.qut.edu.au/research/cpns
  /
• On right hand side, click on green icon DYO

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Social Services Accounting made, well,
easier...

• Louis de Beer
• CEO LANDS Community Services Inc
• Treasurer QCOSS
• 10 September 2008
• People, Place Country
• QCOSS Regional Conference Townsville

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Background

• CEO LANDS Community Services
• Treasurer QCOSS Board
• Background in accounting as CFO of media group
• Corporate and Commercial Solicitor, but-
• Social Services accounting has by so far been the
  biggest challenge!!

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Why is it so complicated?

• Government departments are seeking to control
  both
• The Inputs (Resources) AND
• The Outputs (Product)
• AND how to apply them
• We have to acquit
• Every dollar (Well, almost)
• Received from every different government
  department
• Within the parameters of the very different
  agreements (both inputs and outputs!) made by
  every government department, and-
• Most organisations have more than one source of
  funding

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What is the result?

• Accounting is complicated and three tier
  accounting is needed in most cases
• Consolidated
• Department (Acquittal or Actual)
• Project
• MYOB or QuickBooks cannot cope with three tier
  accounting
• The chart of accounts gets massive, with
  comparative income and expense line items
• Expenses are divided among multiple projects
• The Coordinators/Managers become overwhelmed
• The Accountants become isolated

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This could lead to

• Disconnection of the management and the
  accounting functions
• Management accounting and accountability of
  project coordinators is minimal, and time
  consuming
• Inefficiencies in spending funds
• The growth of the organisation is hampered
• Poorly Funded Government Department Syndrome

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Some suggestions to follow

• Some suggestions regarding the financial
  structure of the organisation
• How budgets can be set up in terms thereof
• Management accounting tools to keep track of it
  all, such as BudgetLink

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Financial Structure Case StudyLANDS
TransportOptions
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Service Cost Recoveries

• Terminology used, for reference
• Acquittal Departments
• Central Department
• Direct Cost Line Items
• Indirect Cost Line Items
• Chargeouts for LANDS on whiteboard
• For a typical organisation on whiteboard

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Budgeting

• Direct Cost line items go to acquittal PL
• Indirect Cost line items go to central
  department and are recovered as a percentage
• At yearend, adjustment downwards should be made
  in audit, otherwise income and expenditure
  overstated

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Variance Budgets

• Where funding body allows variances in line
  items
• Set up Quarterly Budgets in Acquittal Departments
  with
• Lowest parameter
• Highest parameter
• Keep track of both and acquit accordingly

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Finally, keeping track of it all

• Background to my involvement with BudgetLink
• And heres Jeff to explain how it all is made
  easy...

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Budgetlink

• Jeff Stephenson
• CEO Accounting Addons Pty Ltd
• 10 September 2008
• People, Place Country
• QCOSS Regional Conference Townsville

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Questions?