New Standard Chart of Accounts Saves Victorian NFPs Millions - Review
25 August 2011 at 12:24 pm
An independent review of the implementation of a Standard Chart of Accounts in Victoria has found that the model will save the Victorian Not for Profit sector in the order of $3.1 million per year over the next 10 years.
The Standard Chart of Accounts was developed by QUT’s Australian Centre for Philanthropy and Nonprofit Studies (ACPNS).
The independent review found that 80 percent of the community organisations who implemented the Standard Chart of Accounts (SCOA) found the implementation easy and 94 percent would recommend other organisations to implement it.
The report also identified several non quantifiable benefits including increased quality of financial information which should benefit government assessment of programs and the internal governance of community organisations.
It commended the implementation process as a model for successful engagement with small and medium Not for Profit organisations.
The Standard Chart of Accounts was developed by the ACPNS to standardise financial information used in the funding relationship between government and community organisations.
Victorian government departments were mandated to use only terms defined by the SCOA from 1 July 2010, as were other Australian jurisdictions, through a COAG agreement.
The Victorian Standard Chart of Accounts (SCOA) initiative was outlined in the former Victorian Labor Government’s Action Plan: Strengthening Community Organisations (2008). The Victorian Office for the Community Sector (OCS) was responsible for coordinating the development and implementation of the initiative both for the Victorian Government and for the Victorian NFP community sector.
The Victorian SCOA provides a common approach for NFP community organisations when collecting and recording financial information. It consists of a set of accounts, which can be set up in most accounting software systems.
In March 2011, the OCS engaged Strategic Project Partners (SPP) to conduct a Post-Implementation Review (the Review) of the Victorian SCOA implementation,
Using the Regulatory Change Measurement (RCM) methodology, recommended by the Department of Treasury and Finance (DTF), the Review found that the Victorian SCOA will save the Victorian NFP sector in the order of $3.1m per year over the next 10 years from implementation (net of the costs to implement the Victorian SCOA).
The review says that this saving represents the time saved by NFP community organisations using the Victorian SCOA when they perform a number of bookkeeping, grant application and financial reporting tasks.
In addition, the review says several non-quantifiable benefits have been identified, relating to the increased quality in financial information that should become available from the NFP community sector following this initiative.
This Review found that the overwhelming majority of stakeholders, within both the Victorian Government and the NFP community sector, thought that the implementation of the Victorian SCOA has been well managed by the OCS.
The review found that 87 percent of the NFP community organisations surveyed were satisfied with the tools and level of support provided by the OCS to help them implement the Victorian SCOA. Similarly, all the Victorian Government stakeholders interviewed indicated that the OCS successfully engaged across the Whole-of-Victorian Government throughout the implementation of the Victorian SCOA.
The Review found that the OCS was able to reach and provide the right level of support to a wide range of NFP community organisations. In particular, NFP community organisations appreciated:
- The range of training, tools and support programs
- The ability to “cherry-pick” tools and support programs that best suited their needs and
- The responsiveness of those involved in the delivery of the tools and support programs.
The Review highlighted some improvements that the OCS may want to consider in future implementations:
- Victorian Government departments may require specific tools to implement initiatives
- The benefits of any change programs should be clearly demonstrated at an operational level
- Some NFP community organisations may benefit from more individualised support.
QUT SCOA website, with templates and tools, is available at https://wiki.qut.edu.au/display/CPNS/Standard+Chart+of+Accounts