Funder by the Department of Human Services Auspiced by Our Community

Help Sheet

What's involved in being a treasurer of a community group?

What makes people become treasurers of community organisations?

Some gravitate to the role because they're good with numbers, others just want to 'put something back'.

But a really good treasurer is more than that. Victorian psychologist Dr John Gora says that if a group finds someone who has the ability for critical appraisal, can contribute to strategic planning and be creative about generating funds, 'then they have probably found the perfect treasurer'.

The treasurer is usually appointed at the annual general meeting and is tasked with keeping the finances healthy so the organisation can achieve its mission.

Anyone taking on the role of treasurer in a not-for-profit organisation must have - or needs to learn - a basic understanding of accounting and a working knowledge of the laws governing the organisation's operation. This may sound daunting, but most accounting is commonsense once you understand the basics - it is about money coming in, and money going out.

Some people on the committee of management may not have well-developed financial skills and the treasurer needs to be able to explain the financial reports simply and clearly. Remember that financial terms like 'accrual' and 'cash accounting' mean nothing to some people, so explain the financial jargon.

Being treasurer of a community organisation is a great honour, and a great responsibility. An active and alert treasurer can ensure their community group is able to extend its activities, resulting in greater benefits to the wider community.

It's a big job - while you may be able to delegate some duties to staff and volunteers, you can't delegate the responsibility.

The main duties of a treasurer are to oversee the financial administration of the group, review procedures and financial reporting, advise the committee of management on financial strategy, and advise on fundraising.

Let's look at what the treasurer needs to do in each of these areas:

Financial administration

In small organisations that don't employ staff, the treasurer has to do the banking, depositing cash and cheques, paying the bills and tracking income and expenditure throughout the year.

You need to be on top of your finances so the organisation knows how well it is tracking against the budget and how to respond if unexpected problems arise.

In larger organisations, professional staff manage the daily transactions and record-keeping and the treasurer maintains a watching brief on the monthly accounts. Sometimes the treasurer can share this responsibility with a Finance Sub-committee which can provide a link between staff and the committee of management.

If you're a medium-sized organisation, and either doing the books yourself or employing someone part-time, consider using an accountant once a month or every quarter to check your work. This will give you the security of knowing your procedures are working.

Whether you are using an Excel spreadsheet, software such as MYOB or Quicken, or a simple paper-based book system, you will need to keep track of the money. You will need to compare actual financial performance against predicted financial performance so the committee of management understands the state of its finances. This analysis gives the committee the ability to make informed decisions about future income or expenditure.

You may have to lodge returns with authorities such as the Australian Securities and Investments Commission (ASIC), Office of Fair Trading and the Australian Tax Office (ATO). Find out what returns you have to lodge and the dates they are due.

Review procedures and financial reporting

You will need policies and procedures to protect the organisation and its people. These will include:

  1. Controls on expenditure, such as who can authorise spending, upper limits before committee approval is needed, and who can sign cheques.
  2. Controls on income generation, including appropriate and inappropriate ways of raising money.
  3. Systems for ensuring cash and chequebooks are kept securely.

Our Community's Policy Bank provides a range of sample policies you may be able to adapt and adopt for your group.

You need to track:

You also need to be aware of any risks that may arise.

Advising the Committee of Management on financial strategy

There is more to managing the finances than just good bookkeeping. You need to prepare reports for members, management and sponsors, outlining the current financial situation, looking at possibilities for the future and drawing people's attention to tax implications, and potential risks or opportunities.

Financial accountability includes planning and budgeting. The budget will fall out of the strategic plan, so ideally a treasurer would work with the committee of management to develop strategy and help set goals.

On the basis of the treasurer's reports, the committee may have to modify the budget. Unfortunately, a blow-out in expenses is more common than an unexpected expansion in income.

If you have made an unexpected profit, you may wish to put it aside as a reserve to protect yourself against potential cash-flow problems or use the money to strengthen your current operations or programs.

Advising on fundraising

As treasurer you may be asked to prepare funding proposals for one-off grants and longer-term sponsorship arrangements.

The treasurer's duties will vary according to the organisation's size and culture, but financial management is a team responsibility. The treasurer, the chair, other members of the governing body and staff must work together to develop a budget, and monitor and evaluate financial progress.

Many organisations appoint Finance Sub-committees to help the treasurer. The advantage of having a finance sub-committee is that a group of interested and financially knowledgeable people can share the load. Another advantage is that you can co-opt experts on to the finance committee and so bring new people into your organisation. Don't spread the team too thin - people may not feel the same sense of commitment or responsibility.

Some committees also appoint an Audit Committee whose role is to liaise with external auditors, ensure the control systems are adequate, and examine any financial irregularities (if there's no audit committee, these duties fall on the treasurer).

You've been elected treasurer - Now what?

Here is a checklist of all the things you need to do as soon as you get the job:

Once you have done your first budget statement, see if you can check with the outgoing treasurer that nothing is missing.

An initiative of Department of Human Services, Developed & Managed by www.ourcommunity.com.au