In the Association’s written submission on the Bill, it noted that a significant number of community sport organisations would be subject to the more comprehensive financial reporting requirements of the new law, despite the fact that their main assets are not liquid, and that their liquid assets fall well below the operating payment threshold. The Association recommended that the definition of “small society” be amended to increase the financial thresholds for what constitutes a small society.
In response, the Select Committee said that it was concerned that “the Bill as introduced could place an unnecessary compliance burden on smaller societies.” In particular, the Select Committee noted “how the thresholds would affect societies that own valuable land, such as sports clubs. If the value of a club’s sports field exceeds the $30,000 asset threshold, the society would be required to prepare comprehensive financial statements every year, even if its income was below the $10,000 operating payments threshold.”
The Committee went on to note that “a society should not be required to prepare comprehensive annual financial statements simply because it owns a valuable fixed asset.” As a result, the Committee has amended clause 96(2)(b) of the Bill “to increase both the operating payments and assets thresholds to $50,000 each”, also recommending “that the assets threshold in clause 96(2)(b), which defines a “small society", would require a society to have “total current assets” of less than $50,000, rather than “total assets” (as in the bill as introduced).” This is a major improvement on the draft legislation to the direct benefit of around 60% of all registered incorporated societies, a large proportion of which are sport clubs.
It's important to note that financial reporting for "small" incorporated sport clubs will still be required under the new law (if passed), however it will not be as complex as proposed in the first draft of the Bill.
Association Chairman, Gordon Noble-Campbell says, “given the bulk of incorporated society dissolutions arise from a failure to meet the current regulatory requirements for the filing of financial statements, all sport clubs nationally can breathe a sigh of relief that these requirements are not going to become more difficult to comply with going forward”.
Association President, Marian George says, “sport clubs rely on passionate volunteers to administer their activities. The Association is pleased to be able to advocate successfully on their behalf at a time when all sectors of the community, including community sport organisations, are facing challenges arising from COVID-19.”