Treasury

The activity report (also called reporting) helps a higher-level body to assess the financial situation of an association and to prepare for the future. The committee gives an account of its activities in the past year to the general meeting. For this purpose, it prepares the annual report and the annual financial statements. The administrative office or the working groups report regularly to the committee. The activity report always has a content-related and a financial component. Together with the controlling reports, it forms the basis for the superior body to assume its responsibilities. The executive committee, for instance, reports to the general meeting on its activities in the past year (annual report and annual financial statements). The administrative office reports regularly to the committee. Activity reports are submitted orally or in writing.

The annual accounts show the financial aspects of the association’s activities. They provide information about profit or loss and show how much money was raised and what it was used for. The committee must submit the annual accounts for approval to the general meeting.

Question

Does the association year always have to be the calendar year?

Answer

As a rule, no. The majority of all associations are, however, likely to align their activities with the calendar year, which is useful as the two years then run parallel to one another. On the other hand, associations that are active, for example, in the area of education or childcare tend to plan their activities according to the school year or on a semester basis. In such cases, it makes sense for the association year to deviate from the calendar year. Under certain circumstances, there may be a certain amount of additional work due to the fact the some administrative tasks (insurance, tax, etc.) also always have to be completed with the reference date of 31 December for legal reasons.

The balance sheet provides information about all assets and liabilities of the association and also shows whether the association has closed the year with a profit or loss. The closing balance is usually prepared as per the end of the association’s business year.

The financial statements are prepared as per the end of the association’s business year. They include an income statement and a balance sheet. If provided for by law or the articles of association, the accounting records and the annual financial statements are submitted to the auditors for review before the general meeting. Together with the annual report (management report), the annual financial statements must be submitted to the general meeting for approval. This approval relieves the committee (discharge).

The income statement provides details of income and expenditure and allows a comparison to the budget. The income statement shows whether the association records a profit or loss in the financial year (or during a certain business period).

Question

A member wishes to inspect and recheck the complete accounts (balance sheet and income statements) for the last five years of the association's existence. The member is not part of the committee and thus also has no direct access to the accounts. Is it permitted to deny the member access to the accounts? Or, as a rule, do all members have the right to check the complete accounts themselves or at least to view them?

Answer

The provision of Article 802(2) of the Swiss Code of Obligations (SCO) also applies to associations:
"Unless the company has an auditor, company members have unrestricted access to the company books and files. If the company has an auditor, the books and files may be inspected only if a legitimate interest is credibly demonstrated".

If the association has an auditor, the member in question must therefore justify their interest in viewing the accounts. A general need to check the accounts or distrust do not represent relevant reasons.

Accounting activities include bookkeeping and the presentation of the accounts. Depending on the type of association and the statutory provisions, there are different rules on how the books should be kept and the accounts should be presented.

According to the law (Art. 69a SCC), the board is required to keep records of the accounts of the association. The provisions of the Swiss Code of Obligations with respect to commercial and financial reporting apply here mutatis mutandis. Bookkeeping is necessary to have an overview about the financial situation, the liabilities and assets as well as the operating result (profit or loss) of the association for the financial year. With the implementation of double-entry accounting, the provisions of the Swiss Code of Obligations on commercial bookkeeping are met. Associations that engage in commercial activities in order to fulfil their purpose are obliged to register in the commercial register and are subject to the obligation to keep accounting records.

Larger acquisitions that are in use over several years can be “capitalised”, i.e. they do not affect the current income statement, but are included as assets in the balance sheet. The book value of the acquisition must be adjusted by the loss of value to the actual value by means of a depreciation. There are two main depreciation methods: linear depreciation – in this case the asset is depreciated every year by the same amount – or depreciation as percentage of the book value (= value of the acquisition in accounting) – in this case the asset is depreciated by the same percentage of the book value every year, the depreciation rate remains the same, however, since the book value decreases each year, the depreciation amount also decreases. If the association is liable to tax, only depreciation in accordance with cantonal regulations is permitted.

The association must document its activities, i.e. keep records in the form of written documents such as minutes, annual reports, accounting records and other documents and retain these documents for at least ten years.

The articles of association and, if applicable, the commercial register entry indicate the authorised signatories among committee members. In addition, the rules of operation shall specify who has the authority to spend and commit what amount of funds within a certain period. The limitation of the spending authority, for instance by joint signatures or board decisions, ensures that only authorised withdrawals can be made from the association’s account.

Depending on the type of association, spending on printed matter and mailing accounts for a large amount in the books of an association. Even small amounts should be properly recorded and documented.

Question

The issue of finances does not play a very major role within our association. We trust each other, with the treasurer making deposits and payments. Are we nevertheless required to keep accounts?

Answer

Since 2008, the legal provisions concerning associations in Article 69a of the Swiss Civil Code (ZGB) have contained the following section:

"The committee shall maintain the association’s business ledgers. The provisions of the Code of Obligations on commercial bookkeeping and accounting apply mutatis mutandis".

The committee is therefore required to maintain accounts. Irrespective of this obligation, it is otherwise also important to handle financial matters in a clean and precise manner even if the amounts in question are not significant. While trust is good, finances, in particular, can quickly become a reason for disagreement. The members have the right to know how the money is being collected and spent and the committee should be in a position to provide information in this regard at all times.

Provisions may be made for expected obligations that cannot be accurately quantified, e.g. warranty cases, damage claims, repairs, litigation. Three conditions must be met: An obligation exists (mandatory), there is no financial equivalent, the obligation is probable. Provisions are part of the liabilities. Precautions for renovations, replacements, reorganisations, anniversaries, future projects, further education etc. are not provisions, but reserves. An association can form internal reserves for anniversaries, acquisitions, construction measures, etc. or reserves for payments to third parties: Donations received for a certain project. Reserves are part of the equity.

Question

A member wishes to inspect and recheck the complete accounts (balance sheet and income statements) for the last five years of the association's existence. The member is not part of the committee and thus also has no direct access to the accounts. Is it permitted to deny the member access to the accounts? Or, as a rule, do all members have the right to check the complete accounts themselves or at least to view them?

Answer

The provision of Article 802(2) of the Swiss Code of Obligations (SCO) also applies to associations:
"Unless the company has an auditor, company members have unrestricted access to the company books and files. If the company has an auditor, the books and files may be inspected only if a legitimate interest is credibly demonstrated".

If the association has an auditor, the member in question must therefore justify their interest in viewing the accounts. A general need to check the accounts or distrust do not represent relevant reasons.

Question

Our association was founded in July last year. Is it correct that we only have to prepare our annual accounts at the end of this year and thus also our tax statement?

Answer

The association's annual accounts can be completed as stipulated in the articles of association. For the tax year, however, it is the calendar year that applies. If your association generated a profit during the first six months of its existence and if this profit exceeded the exemption limit, you must complete a tax return. In the cantons of Bern and Lucerne, you are required to register your association with the tax authority.

The committee is planning (budgeting) the allocation of funds for the coming year together with planning the association’s activities. The budget lists how much income is expected and for which areas or activities how much money can be spent. Depending on the articles of association, the budget must be presented to the general meeting for information or approval. As the budget provides information about the association’s activities in the future, it is important that the general meeting be informed.

Question

As our association finds itself at somewhat of a standstill, we have taken the decision within the committee to spend money on new flyers, a website and a special campaign, increasing the budget accordingly.  We are convinced that the association can afford this rather steep additional expenditure, but do not know whether the members will also see things the same way.
As the chair of the meeting, how should I proceed if the budget is rejected at the general meeting?

Answer

As authority for approving the budget at your association lies with the general meeting, the committee and the chair of the meeting need to ensure that they are well prepared and equipped with good arguments. It is also important that the entire committee is behind the proposal and that the relevant figures are made transparent, meaning that they are comprehensible for the members. It is also helpful to present a longer-term financial plan.

The members can put forward amendments to the proposed budget; it is not a matter of all or nothing. If the passing of the budget appears to be at risk, the chair of the meeting can call on the members or individual voters to make targeted requests for deletion or, where necessary, suggest (tolerable) reductions him- or herself.
Otherwise, the association's democratic rules have to be adhered to.

The object of controlling is the procurement, preparation, analysis and communication of data for the preparation of decisions. It is an important planning and steering tool, both at an operational and strategic level. Frequently, regular controlling reports to the subsidising body are the basis of service agreements. It contains statistics on the use of the service as well as budget reports and their interpretation.

Question

Our choir is planning to issue a brochure to mark its upcoming anniversary and gained approval from the general meeting for a budget of CHF 500. It has now materialised, however, that the costs have been completely underestimated. Do we now have to have the members vote again on a higher amount?

Answer

By voting on the issue again at an extraordinary general meeting, the committee is playing things safe. You can better judge for yourself whether the ordinary general meeting would approve of a corresponding cost overrun upon being presented with the accounts. Either way, the committee is well advised to inform the members in a timely and transparent fashion.

If the association gets into financial difficulties because funds are scarce and the budgeted expenses are higher than the expected income, and if no other means are available, the association has to devise a recovery plan. It has to adjust the budget and/or raise additional funds. The recovery can consist of austerity measures or of measures to collect additional funds.

A chart of accounts is a listing of all accounts used in the accounting system of an association. Associations have some freedom in the choice of a suitable chart of accounts. They can select the accounts that are most relevant for the respective association. It is important that members and the executive committee know on which items money has been spent, where the money comes from, and what the current status of assets and liabilities is. The balance sheet accounts, i.e. assets and liabilities, should be based on the actual assets and liabilities of the association. In concrete terms, this means that if an association has a bank account, its chart of accounts must include a “bank” account or if the association has a loan, a “loan” account must be included in the chart of accounts. With regard to the income statement, i.e. income and expenses, the association is free to choose which accounts it wishes to add to its chart of accounts. The executive committee must consider which information it wants to gain from the accounting. Proportionality is important here: it is only possible to draw relevant conclusions if the individual items are neither too small nor too large (it makes little sense to have an account with a final balance of CHF 15.20). In principle, it is advisable not to have too many accounts in the income statement, as a large number of accounts increases the risk of incorrect postings or of posting transactions of the same kind to different accounts, and incorrect postings lead to a distortion of the information generated in the accounting system. A variety of accounting software is available to help associations manage their accounting. They offer the flexibility to tailor each chart of accounts to best suit the individual association’s needs, adding accounts as needed.

Checklists are useful tools for repetitive processes and activities such as the planning and organisation of the annual meeting, the annual report or other meetings. Once created, they can be used and adapted repeatedly.

Committee decisions can be taken at a meeting or in the form of a circular resolution, in which all committee members express approval or rejection with their signature. Nowadays, where e-mail is more common than letters, the signature is replaced by an affirmative or negative sentence or by ticking the corresponding box. If a committee member requests an oral discussion, this must be granted. Circular resolutions are only valid if permitted by the articles of association.

Collaboration means doing things together: completing, achieving, accomplishing something. Every collaboration is defined by three "factors": the individuals ("I"), the group ("we") and the topic being worked on. In a good collaboration all three factors are considered, with none being given short shrift.

Committee meetings are held to take decisions concerning the management of the association. They should take place regularly and as often as necessary. They are convened and conducted by the chairperson. As a rule, there should be a list of agenda items and it should be clear which topics will be discussed and which decisions are to be made. A record shall be prepared of the resolutions that have been passed. Persons that are not committee members may participate in committee meetings, too, e.g. the executive manager or the secretary. They have no voting rights and are not allowed to participate in any decisions, however, they may participate in the discussion in an advisory capacity.

Consensus means agreement on a proposal or solution, with no tacit or overt disagreement. Thus, there are no losers. However, it is easier to reach consensus on uncontroversial topics. Complex, controversial topics require long discussions and therefore often take up a lot of time.

With a consent decision, a proposal is deemed to be accepted if there are no major or justified objections: Not "Yes, I agree!" but rather "I have no major, justified objection against it." Rather than the highest level of active consent, there is a minimum of concern. In other words, decisions are deemed "good enough" so they can be carried out quickly.

As a rule, the executive committee decides with a simple majority of the committee members present. For very important decisions, the committee members can apply the principle of consensus (unanimity). The committee regulations or the articles of association can stipulate what to do in the case of a tie or in case not all committee members are present. As a rule, the chairperson has the casting vote in the case of a tie.

This term refers to the distribution of responsibilities between the general meeting and the committee as well as between the committee and the administrative office or commercial business. It is important to describe tasks and responsibilities as well as decision-making powers for the different functions within the committee, too. Such a description should specify activities and define the authorisation to spend funds up to a certain amount as well as the obligation to inform the committee (reporting). The definition of powers and responsibilities can be part of the regulations. The responsibility for the activities of individual functions always lies with the entire committee as well.

To delegate a task means to entrust that task to another person or group. For instance, the committee may delegate tasks to working groups, to individual members of the association or to an administrative office. Together with the tasks, the corresponding powers (competencies) and the responsibility for them shall be delegated, even if the overall or ultimate responsibility remains with the committee.

In the context of associations, digital cooperation refers to the cooperation within the executive committee as well as to interactions with members or between them. Digital media facilitate the exchange of media content and offer the possibility to digitally create media content individually or together with other users. Digital collaboration includes joint data storage and processing (e.g. Dropbox, Google docs, etc.), communication channels such as WhatsApp, Slack, social media platforms and planning tools such as Trello and Doodle. With a survey tool such as Findmind or Surveymonkey, member’s needs and ideas can be surveyed at any time; the interactive Mentimeter presentation software is suitable for live surveys at the general meeting.

Where several individuals join together to pursue a common goal, it is useful to clarify responsibilities and competencies. This object can be accomplished by means of a functional description, the rules of distribution of responsibilities or by functional specifications. These documents specify the name of each function, to which body or area it belongs, what the duties, competences and responsibilities of the person entrusted with this function are and to whom he/she has to report on their work, i.e. who is the supervisor. A function diagram lists all functions available in the organisation.

The tasks, competencies and duties of a committee function or of employees are set up in the functional specifications.

The get it done session is a meeting format in which people meet in order to complete tasks together. Prior to the get it done session, the tasks are gathered and the time frame is defined. The potential tasks for a get it done session with management include preparing a budget, sending a mailing, cleaning up an archive, planning a social media campaign, etc. A get it done session can take place online or in person and lasts two hours or longer.

Kanban is a simple (Japanese) planning method that makes it easier to complete work and collaborate. Kanban makes the individual steps and tasks clear and helps to avoid misunderstandings and ensures that no tasks are "forgotten". With kanban, teams work with a shared analogue or digital board on which each task is recorded with a Post-it note, which is then moved either to the left (to do) or right (done) as the work proceeds.

Question

Who is king/queen of the association?

Answer

There is neither a king nor a queen in the association. The committee as an overall body assumes responsibility for the association's business. It has the right and the obligation to take care of the association's affairs and to represent it externally. That's what the law says.

Unless the articles of association provide more specific requirements, the committee can organise itself and the distribution of its tasks as it sees fit. It can, for example, introduce a departmental system. However, it is always true that the committee is a collegial body that assumes joint liability for the association. It must be ensured that all committee members can have their say. The chairperson cannot issue commands alone.

The organisation chart shows who works in which position/function for the association. It graphically displays the ranks of the different positions, to which area they belong and the relationship among the organisational units.

The committee is responsible for the management of the association. To accomplish the association’s tasks, a suitable structure and organisation of the management is necessary. In many cases, if the workload of the committee is unmanageable and if their financial situation allows it, associations set up a secretariat or an administrative office. Large associations create sub-units with different degrees of competence. There are associations with sections at the local and/or cantonal level and an umbrella organisation at the federal level.

The pending items list helps the executive committee to manage its matters on a day-to-day basis. It contains a list of what to do, who should do it, when to do it, and who to report to after completion of the task (what, who, by when, report to whom).

Question

Our committee has taken the decision to symbolically record the work it performs so as to be able to legitimise its position well during negotiations for subsidies. Is it only the time spent in attendance at the office that should be recorded? Or should the, in some cases, very long amounts of time required to reach the office also be taken into account as no other work can be performed during the journey?

Answer

It is great that you record your hours and can thus substantiate the work you perform! This forms the basis for the recognition of performed work, irrespective of whether compensation is provided for it or not. At the same time, the recording of hours worked is also helpful for things like job descriptions for interested volunteers.

Whether travel time should be included in these working hours is actually contentious, with both approaches being legitimate. Ideally, both should be reported separately, with different rates being applied to working hours and travel time (e.g. half the [fictive] remuneration for work is paid for travel time).

The executive committee may issue regulations for its executive management or for the administrative office and amend these if necessary. The regulations must not contradict the articles of association.

Within organisations, responsibilities are designated to different bodies or people. Responsibilities are either explicitly defined by a competent authority or the mandate results from the job description, the definition of powers and responsibilities, departmental processes, committee regulations or any other organisational basis. The clear definition of responsibilities is an important task of the management. A lack of clearly defined responsibilities leads to poor results and, in many cases, causes conflicts. A mandate is a contract type under the Code of Obligations (CO).

The retrospective is a meeting format in which a brief review of a (sub)project is carried out following its completion. It focuses on a discussion of how the (sub)project went and what needs to be changed for the next one. A retrospective can be conducted online or in person. It lasts at least one hour.

It is very helpful to have a clear definition of who is responsible for what, in other words, if there are clear rules of competences. This applies not only to the distribution of tasks between the different functions within the committee, but also between the committee and the administrative office, the secretariat or the operation. Clear competency rules help to prevent conflicts.

In the rules of procedure, the committee sets up rules that define its tasks and competences as well as the responsibilities of the entire committee, its different functions and its individual members. Depending on what is stipulated in the articles of association, the rules of procedure may also be issued by the general meeting.

The executive committee may adopt rules of procedure or business regulations for the organisation of its activities. These regulate and facilitate cooperation. Rules of procedure or regulations can be drawn up for all committees or executive bodies of an association.

The term social media refers to digital media and technologies that enable users to share media content and to create media content individually or together with other users. The most popular social media platform at the moment is Facebook. Social media also include services like Google+, Twitter, Dropbox, Flickr, Instagram, Doodle, WhatsApp.

Committee members often work a lot and they do not receive any remuneration. It is therefore important to promote not only member relations, but also relations with the committee. Good discipline in meetings and the appreciation of the honorary committee work can be helpful and motivating.

An association needs funds to meet its objectives and fulfil its purpose. An association’s funds are composed of membership fees, donations, subsidies, income from sales and services as well as other sources. If an association does not spend its income, it will accumulate assets. The association’s finances must be managed diligently and competently. The committee and the finance area are responsible for this task. The accounts must be kept accurately (by the treasury office, quaestor) and be submitted for approval to the general meeting. Financial planning and budgeting are important tasks of the committee (strategic). The committee must take care of raising the necessary funds and control the use of these funds; it is accountable to the general meeting with regard to the funds.

Misappropriation is unlawful conduct and will be punished. Misappropriation is the act of finding and keeping a thing or an asset without being entitled to keeping it. Embezzlement, which is also punishable, is something else: Anyone who appropriates an asset entrusted to him commits embezzlement. This includes the act of taking cash from the cash register without authorisation.

In Switzerland, quaestor is the once common name for the treasury, a committee function.

The committee member who deals with finances and accounting is called treasurer. In Switzerland, another name for this function is quaestor. Even if there is a treasurer, the entire committee is responsible for the finances. In smaller associations, the treasury often includes the accounting activities as well.