Preamble and Implications of GST Legislation

The requirements of the GST Legislation imposed certain conditions on businesses with respect to the collection and subsequent remittance of GST to the Australian Taxation Office (ATO). In summary, these are:

• If the business is registered (for GST), it must lodge a GST return for each tax period, normally by the 28th day of the following month;
• The GST return is included on the Business Activity Statement (BAS);
• If the annual turnover is $20 million or more, the BAS must be lodged electronically; and
• Any net payment due to the ATO must be paid electronically.

The Section 355 Committees that trade within Council's General Ledger system are considered by the ATO to be an "operation" of Council. Therefore all receipts and payments need to be processed through Council's systems in accordance with the strict guidelines imposed on all other Council departments.

Initial Set-up Procedures

When a Section 355 Committee is set up in Council's system, several processes will take place:

• A Council contact (coordinator) will be established who will have appropriate authority to provide the necessary advice on Council regulations to the Committee and for authorising Request for Goods and Services forms;
• The Committee will be issued with appropriate General Ledger Account Number(s) by the Finance Section (following advice to Finance by the coordinator that the Committee has been set up);
• The Committee will be issued with a Westpac Bank deposit book;
• The Committee will be issued with a book containing manual Tax Invoice/Receipt forms. (An example will be provided as to how to fill them out and training will also be provided, if required);
• The Committee will be issued with a supply of Banking Details forms. Note that there are two distinct sections on this form and the use of each is discussed below;
• The Committee will be issued with a number of Request to Raise an Invoice forms; and
• The Coordinator of the Committee will be issued with a Request for Goods and Services book and a Stores Issue Docket book on behalf of the Committee.

Income

Income earned by a Section 355 Committee can take several different forms. For example:

• Weekly playing fees paid by members;
• Annual membership fees paid by members;
• Hall hire fees paid by external hirers; and
• Bond/Security deposits paid by external hirers.

Due to the fact that the Committee is an operating section of Council, GST will need to be accounted for on appropriate types of income. Of the four examples shown above, GST is payable on the first three, but not on the fourth. It will be necessary for a member of the Committee to initially liaise with Council's GST Officer to determine those charges that will be subject to GST and those that will not.

Cash or Credit Sales

Cash Sales
On most occasions, the Committee will be collecting cash from members for fees for the use of the facility. These collections are easily accounted for and merely require a receipt to be issued for the amount paid. Once all collections have been taken for the day, the total collections should be banked as soon as possible.

The procedure is as follows:

• Write out a receipt for each individual collection (or as a bulk amount if no receipt is individually required);
• The white copy (original) goes to the customer
• The pink copy is attached to and filed with the Banking Details form (see iii below)
• The blue copy is retained in the book (which is eventually returned to Council's Revenue Department when full for audit purposes)
• Complete the appropriate details in the Westpac Bank deposit book, ensuring to add the name of the S355 Committee in the section "FOR CREDIT OF GOSFORD CITY COUNCIL GENERAL FUND".
  This information is vital to Council's Revenue Section in being able to trace who made the deposit, should it need to at a later date;
• Deposit the money at any branch of the Westpac Bank; and
• Fill out a Council Banking Details form immediately and fax to Council's Revenue Department (4322 4398). Details of all cash/cheques received should be entered in Section 1 of the form under the heading "CASH RECEIVED FOR WHICH NO INVOICE HAS BEEN ISSUED".

Under no circumstances should any money paid to the Committee not be banked or used as "petty cash".

Credit Sales

There may be instances where the Committee hires out the facility to an external hirer who may require an official Tax Invoice to be issued to them prior to payment. Extreme caution needs to be exercised in such circumstances and it is mandatory that a "bond/security deposit" be held to cover Council against non-payment of the invoice for hire fees and as an insurance against damage to the facility.

A formal Hire Agreement will also be drawn up, copies of which are available from Council's Recreation or Community Services sections.

In such circumstances a Request to Raise an Invoice form is to be completed and forwarded to Council's Debtors Section to allow the invoice to be raised. Council's debtors clerk will mail the completed invoice to the appropriate address.

The invoice would normally be paid at Council. If, on the other hand, the debtor pays at the location where the hire was made, details of such payment are entered in Section 2 of the Banking Details form under the heading "CASH RECEIVED FOR WHICH A DEBTORS INVOICE HAS BEEN ISSUED" and must include such details as "DEBTOR'S ACCOUNT NUMBER" and "INVOICE NUMBER".

Purchase of Goods and Services

Under the Local Government Act 1993, a member of a S355 Committee does not have the authority to purchase goods and services on behalf of Council. Hence any purchase must be initiated and authorised by the Coordinator.The purchase may be made through either the Council Store (at Erina or Woy Woy) or by means of a Council Purchase Order if the goods need to be supplied by an external supplier.

Stores Issue Docket (SID)
Certain basic stores items are held as stock at the Council Stores. This covers such items as stationery, minor building supplies, tools, protective clothing etc. If such items are required, an authorised Committee member will request the Coordinator to complete a Stores Issue Docket (SID). The Coordinator will organise for the goods to be picked up from the store and delivered to the Committee.

Purchase Order
To initiate an order for supply of goods or services by an external supplier, a Request for Goods and Services form will be completed. The form is filled out by the Coordinator following a request from an authorised Committee member.

In circumstances where a tradesperson is required, a list of qualified persons is available from the Purchasing Section at Erina Depot and should be the basis upon which an order is issued. Under no circumstances should a Committee member contract a non-qualified tradesperson to carry out work on a Council facility.

Of equal importance, the Committee must not take delivery of goods or services until an official Council purchase order has been raised and issued to the approved supplier.

Once the Committee has received the goods, the Delivery Docket will be signed by the Coordinator to indicate that the goods, as ordered, have been supplied in good order and condition. The Delivery Docket is then returned to the Store to allow the invoice to be paid.

It should be noted that these outlined procedures are subject to audit by the Council Auditor therefore it is imperative they are followed to avoid audit issues developing.