The new accounting standards for not-for-profits proposed by the External Review Board (XRB) will mean community organisations will have a lot of extra reporting to do.
The at present very rarely produced Statement of Cash Flows will become mandatory for all organisations with expenses of more than $40,000. The new templates that the XRB would like small to medium non-profits to use also asks you to report on your budgets, and draw up a Statement of Service Performance, where you are asked for a breakdown of the outcome measures you have applied your funds to.
Organisations using the new templates will also likely face higher audit bills as auditors will now have more information to verify. Some auditors may decide to exclude the extra material from their audit, which will mean a ‘qualifier’ in their report.
The standards and templates are open for submissions until mid-March. The templates can be viewed here.
We believe it is important for all not-for-profits to make submissions as these new standards will place a significant additional compliance burden on the sector, and we will post more on this issue over the next weeks.