Part 4Management of internal affairs

Part 4—Management of internal affairs Division 1—The committee 29—Management of incorporated associations (1) Subject to this Act, the persons who have under the rules of an incorporated association power to administer the affairs of the association constitute, for the purposes of this Act, the committee of the association. (2) No person is to be precluded from being appointed as a member of the committee of an incorporated association by reason only of the fact that he or she is a member of a class of persons for whose benefit the association is established. (3) Subject to the rules of the association, no employee of an incorporated association is to be precluded by reason of that employment from being appointed as a member of the committee of the association. 30—Certain persons not to be members of the committee (1) A person who is an insolvent under administration must not, without leave of the Commission, be a member of the committee of an incorporated association, or be in any way (whether directly or indirectly) concerned in or take part in the management of an incorporated association. (2) A person who has been convicted within or outside the State— (a) on an indictment of an offence in connection with the promotion, formation or management of a body corporate; or (b) of an offence involving fraud or dishonesty punishable on conviction by imprisonment for a period of not less than three months; or (c) of an indictable offence; or (d) of— (i) an offence against section 39A; or (ii) an offence against a provision applied by section 41B; or (iii) an offence against section 60, must not, within a period of five years after his or her conviction or, if he or she was sentenced to imprisonment, after his or her release from prison, without leave of the Commission, be a member of the committee of an incorporated association, or be in any way (whether directly or indirectly) concerned in or take part in the management of an incorporated association. (3) When granting leave under this section, the Commission may impose such conditions or limitations as it thinks fit and any person contravening or failing to comply with any such condition or limitation that is applicable to him or her is guilty of an offence. (4) The Commission may, at any time, revoke leave granted by it under this section. 31—Disclosure of interest (1) A member of the committee of an incorporated association who has any direct or indirect pecuniary interest in a contract, or proposed contract, with the association— (a) must, as soon as he or she becomes aware of his or her interest, disclose the nature and extent of his or her interest to the committee; and (b) must disclose the nature and extent of his or her interest in the contract at the next annual general meeting of the association (if an annual general meeting is required to be held by the association). (2) Subsection (1) does not apply in respect of a pecuniary interest that exists only by virtue of the fact— (a) that the member of the committee is an employee of the association; or (b) that the member of the committee is a member of a class of persons for whose benefit the association is established; or (c) that the member of the committee has the pecuniary interest in common with all or a substantial proportion of the members of the association. (3) Where a member of the committee of an incorporated association discloses a pecuniary interest in a contract, or proposed contract, in accordance with this section, or his or her interest is not such as need be disclosed under this section— (a) the contract is not liable to be avoided by the association on any ground arising from the fiduciary relationship between the member and the association; and (b) the member is not liable to account for profits derived from the contract. 32—Voting on a contract in which a committee member has an interest (1) A member of the committee of an incorporated association who has any direct or indirect pecuniary interest in a contract, or proposed contract, with the association must not take part in any decision of the committee with respect to that contract (but may, subject to complying with the provisions of this Division, take part in any deliberations with respect to that contract). (2) Subsection (1) does not apply in respect of a pecuniary interest— (a) that exists only by virtue of the fact that the member of the committee is a member of a class of persons for whose benefit the association is established; or (b) that the member of the committee has in common with all or a substantial proportion of the members of the association. Division 2—Accounts and audit of prescribed associations 33—Preliminary In this Division— Commonwealth Act means the Australian Charities and Not‑for‑profits Commission Act 2012 of the Commonwealth; Commonwealth Commissioner means the Commissioner of the Australian Charities and Not‑for‑profits Commission established under the Commonwealth Act; Commonwealth registered entity means an entity registered under the Commonwealth Act; relevant prescribed association means a prescribed association that is a Commonwealth registered entity. 34—Application of Division to relevant prescribed associations (1) Subject to this section, if a relevant prescribed association has, in respect of a particular period— (a) submitted to the Commonwealth Commissioner an information statement that the association is required to prepare under the Commonwealth Act and, if relevant, a financial report together with any auditor's report or reviewer's report that the association is required to obtain under that Act; and (b) submitted to the Commission any other information relevant to the affairs of the association required by the Commission, the association is exempt from this Division in relation to that period. (2) Despite subsection (1), a relevant prescribed association must cause— (a) the information statement and any reports referred to in subsection (1)(a); and (b) a report of a committee of the association prepared in accordance with section 35(5) (as modified by subsection (3)), to be laid before the members of the association at the annual general meeting of the association or, if an annual general meeting is not to be held, within 6 months of the end of the financial year to which the reports relate. (3) Despite subsection (1), section 35(5) applies to the committee of a relevant prescribed association as if a reference to the financial year to which the accounts relate were a reference to the financial year to which the information statement that the association is required to prepare under the Commonwealth Act relates. (4) A document or information required to be provided to the Commission under this section must be provided in accordance with any requirements specified by the Commission (including requirements as to the form and verification of the document or information, or the time or manner in which it is to be provided). (5) If a relevant prescribed association contravenes or fails to comply with this section, the association is guilty of an offence. 34A—Disclosure of information relating to relevant prescribed associations The Commission may enter into an agreement with the Commonwealth Commissioner in relation to— (a) the manner in which relevant prescribed associations may provide information for the purposes of this Act; and (b) the provision of information obtained under the Commonwealth Act to the Commission for the purposes of this Act. 34B—Commission may provide information to Commonwealth Commissioner Despite any other Act or law, the Commission is authorised to provide to the Commonwealth Commissioner (whether at the request of the Commonwealth Commissioner or otherwise) such documents and other information in the possession or control of the Commission that may be reasonably required by the Commonwealth Commissioner in connection with the performance or exercise of its functions or powers under the Commonwealth Act. 35—Accounts to be kept (1) A prescribed association must keep its accounting records in such a manner as will enable— (a) the preparation from time to time of accounts that present fairly the results of the operations of the association; and (b) the accounts of the association to be conveniently and properly audited in accordance with this Division. (2) A prescribed association must, after the end of a financial year of the association— (a) cause accounts in respect of the financial year to be prepared; and (b) cause the accounts to be audited by a registered company auditor, a firm of registered company auditors, a person who is a member of the Australian Society of Certified Practising Accountants or The Institute of Chartered Accountants in Australia or such other person who may be approved by the Commission as an auditor of the accounts of the association for the purposes of this Division; and (c) cause to be attached to the accounts, before the auditor reports on the accounts, a statement made in accordance with a resolution of the committee of the association and signed by two or more members of the committee— (i) stating whether or not— (A) the accounts present fairly the results of the operations of the association for the financial year and the state of affairs of the association as at the end of the financial year; and (B) the committee has reasonable grounds to believe that the association will be able to pay its debts as and when they fall due; and (ii) giving particulars— (A) of any body corporate that is a subsidiary of the association within the meaning of section 46 of the Corporations Act 2001 of the Commonwealth; and (B) of any trust of which the association is a trustee. (3) A prescribed association will not be taken to have complied with subsection (2) unless the accounts prepared for a financial year are submitted to the auditor in sufficient time to enable the auditor to audit the accounts and furnish a report in respect of the accounts in accordance with section 37(3). (4) A person who is— (a) an officer; or (b) a partner, employer or employee of an officer; or (ba) an employee; or (c) a partner or employee of an employee, of a prescribed association, may not be appointed as auditor of the accounts of the association for the purposes of this section. (5) The committee of a prescribed association must cause a report of the committee to be made in accordance with a resolution of the committee and signed by two or more members of the committee, stating in relation to each officer of the association— (a) whether or not, during the financial year to which the accounts relate— (i) the officer; or (ii) a firm of which the officer is a member; or (iii) a body corporate in which the officer has a substantial financial interest, has received or become entitled to receive a benefit as a result of a contract between the officer, firm or body corporate and the association, and if so the general nature of the benefit; (b) whether or not, during the financial year to which the accounts relate, the officer has received directly or indirectly from the association any payment or other benefit of a pecuniary value, and if so the general nature and extent of that benefit. (6) The committee of a prescribed association that has members must cause— (a) the audited accounts including the statement prepared in accordance with subsection (2)(c); and (b) the auditor's report on those accounts; and (c) the report of the committee prepared in accordance with subsection (5), to be laid before the members of the association at the annual general meeting of the association or, if an annual general meeting is not to be held, within five months of the end of the financial year to which the accounts relate. (7) A member of the committee of an association who fails to take all reasonable steps to comply with or secure compliance with this section is guilty of an offence. (a) if the offence is committed with intent to deceive or defraud the association, creditors of the association or creditors of any other person or for any fraudulent purpose—$20 000 or imprisonment for four years; or (b) in any other case—$5 000. 36—Lodgment of periodic returns (1) A prescribed association must lodge with the Commission such periodic returns, containing accounts and other information relevant to the affairs of the association, as the regulations may require. (2) The requirements of the regulations in relation to periodic returns and the accounts and other information to be contained in them may vary according to the various classes of associations to which the regulations are expressed to apply but no such regulation may require the disclosure of the identity of members of the association. (3) If a prescribed association fails to comply with subsection (1), the association is guilty of an offence. 37—Provisions relating to auditors acting under this Division (1) An auditor of a prescribed association has a right of access at all reasonable times to the accounting records and other records of the association and is entitled to require from any officer of the association such information and explanations as he or she desires for the purposes of an audit. (2) An officer of a prescribed association must not, without lawful excuse— (a) refuse or fail to allow an auditor of the association access, for the purposes of this Division, to any accounting records and other records of the association in his or her custody or control; or (b) refuse or fail to give any information or explanation as and when required by the auditor; or (c) otherwise hinder, obstruct or delay an auditor in the performance of his or her duties or the exercise of his or her powers as auditor. (3) The auditor of a prescribed association must furnish to the committee of the association, in sufficient time to enable the committee to comply with section 35(6), a report that states— (a) in respect of accounts consisting of an account of income and expenditure and a balance sheet, whether or not the auditor is satisfied that these accounts are drawn up so as to present fairly— (i) the results of the association's activities for the association's financial year; and (ii) the financial state of the association at the end of the association's financial year; and (b) in respect of accounts consisting of an account of receipts and payments and a statement of assets and liabilities, whether or not the auditor is satisfied that these accounts present fairly— (i) the results of the association's activities for the association's financial year; and (ii) the financial state of the association at the end of the association's financial year, notwithstanding that the accounts may not have been prepared on the accrual method of accounting; and (c) whether the auditor has examined the accounts and auditors' reports of— (i) each body corporate that is a subsidiary of the association within the meaning of section 46 of the Corporations Act 2001 of the Commonwealth; and (ii) each trust of which the association is a trustee, and the conclusions drawn from the examination; and (e) whether the auditor has obtained all of the information and explanations that he or she required from the association. (4) If, in the course of performing his or her duties, an auditor of a prescribed association is satisfied that— (a) it is likely that there has been a contravention of, or failure to comply with, a provision of this Act or a rule of the association; or (b) there is a deficiency in relation to the accounts or information in respect of the activities of the association that, in the auditor's opinion, will not be adequately dealt with by bringing the matter to the notice of the committee of the association, the auditor must immediately report the matter to the Commission by notice in writing. (5) If an auditor is removed or dismissed as auditor of a prescribed association, the auditor must immediately report the matter of his or her removal or dismissal and the circumstances of the removal or dismissal to the Commission by notice in writing. (6) An auditor of a prescribed association is not, in the absence of malice on his or her part, liable to any action for defamation in respect of any statement that he or she makes, orally or in writing, in the course of performing his or her duties as an auditor under this Act. (7) In subsection (6)— auditor includes a person who has been removed or dismissed as the auditor of a prescribed association. (8) Subsection (6) does not limit or affect any right, privilege or immunity that an auditor has, apart from that subsection, as a defendant in an action for defamation. 37A—Payment of auditor The reasonable fees and expenses of an auditor of a prescribed association are payable by the association. 38—Power of exemption (1) The Commission may, on the written application of an incorporated association to which this Division applies, or on its own motion, exempt an association from the obligation to comply with one or more provisions of this Division. (2) An exemption under subsection (1) may be granted upon such conditions as the Commission thinks fit and may, at any time, by instrument in writing, be varied or revoked by the Commission. Division 3—Annual general meeting 39—Annual general meeting (1) Subject to this section, a prescribed association must hold an annual general meeting— (a) if the prescribed association is a relevant prescribed association (within the meaning of section 33)—within 6 months; or (b) in any other case—within 5 months, after the end of the financial year of the association. (2) A prescribed association may hold its first annual general meeting at any time within the period of 18 months after its incorporation. (4) The Commission may, on the written application of a prescribed association, or on its own motion, exempt an association from the obligation to comply with a requirement of this section. (5) An exemption under subsection (4) may be granted upon such conditions as the Commission thinks fit and may, at any time, by instrument in writing, be varied or revoked by the Commission. (6) This section does not apply to an incorporated association where the rules of the association do not provide for the membership of the association.