Explanation to the 2021 End of Year Accounts

ANAWATU RANCH INTAGE AR LUB OF EW EALAND XPLANATION TO ND OF EAR CCOUNTS

Sarah Howell

Explanatory Note: At the 2021 AGM queries were raised regarding the 2021 Financial Accounts. It was felt that the accounts are difficult to understand. It was moved that a Chartered Accountant look at them. These accounts were not approved by the AGM meeting. Brian Halcox and Sarah Howell met with Chartered Accountant Chloe Richardson of Bennett Currie, who couldn’t see anything obviously wrong with the accounts. She said that she couldn’t audit the accounts as only an auditor can perform this task. She suggested that the Branch approach Michael Smit to audit them. He had a look at the accounts and could only find one thing that needed to be fixed – viz that Manawatu Branch is not a registered charity and does not appear on the Charities Register as stated in the notes to the accounts. Michael felt that the format was correct for an Incorporated Society. He did quote for an audit but suggested that this would not solve the problem of members not understanding the accounts. He will not proceed with an audit unless directed so by the Branch Committee. Issues raised at the AGM are as follows: 1. The figure for R&M does not match the figure given in the breakdown of costs for the hall which was prepared separately by Sarah Howell (as Treasurer) 2. The depreciation is higher in 2021 than in 2020. It was felt that it should be lower. 3. The accounts are said in the notes to have been prepared on an accrual basis but appear to be a mixture of accrual and cash based. As caretaker Treasurer, in the following document, I will answer the above queries and move that the accounts be accepted. 1. R&M figures: As pointed out at the AGM, the treasurer splits R&M into those items which pertain to the hirage of the building and those items which are of a general matter. Previous Treasurer, Peter Robinson set up this system to enable the true costs of the hirage of the hall to be shown. Electricity is also split to show the base rate, when there are no hires, and the amount that is used when the hall is hired. These figures were produced at the AGM. Ask Away Accounting chose to include all of the R&M in one figure. The figure of $4971.15 shown in the accounts consists of: payment to Wright

Tanks, replacement keys, downpipe fitting, Tootill Electrical - repair to dishwasher, mowing of grounds when there was a hire and sanitary bins which come to $2132.40 all of which relates to the hires. The balance of $2838.75 consists of: installation of floodlights next to the members’ room, mowing of the grounds when there were no hires, and repairs to a water pipe which were not considered to be hire related costs. I did attempt to explain at the AGM this splitting of costs by explaining which costs were not included in the hall R&M figure but the questioner did not accept the explanation given. 2. Depreciation: I asked Ask Away Accounting why the depreciation was higher in 2021 than in 2020. The reply was that the photocopier, UV water filter and chiller condenser (total cost $6094.00) were purchased late in the 2020 financial year and were depreciated for only a few months in that financial year instead of the whole year. In 2021 they were depreciated for the whole year which raised the overall total. 3. Mixture of Accrual and Cash basis of accounting: Ask Away Accounting agree with Bruce Dyer that a mixture of accrual and cash based systems were used. 4. Registered Charity: I asked Ask Away Accounting about this and was told that they used a generic template and will amend it to better suit our situation. 5. Accounts not able to be understood: Chloe suggested that the Branch switch to Zero which is a programme that many accountants use. She suggested that we set up the categories that we want so that categories are not lumped together. She reiterated that the format given follows the presentation that is required for legal purposes for an Incorporated Society. I have checked the figures in the accounts against those that I gave to Ask Away Accounting and they all appear to be correct.

Sarah Howell Caretaker Treasurer 9th June 2021

This letter was presented to the Branch Committee at the committee meeting on the 9th of June 2021 and it was decided by the committee, that, given that the AGM requested that the accounts be looked at by a Chartered Accountant and that this has been done with no obvious errors found, that an audit is not necessary.