Many Australian charities and not-for-profits (NFPs) rely heavily on volunteer committees. Often, these committee members may be time-poor or lack formal financial training, which can lead to challenges when it comes to overseeing the finances of these organisations.

Allen Audit & Advisory Principal Richard Allen says having consistent financial processes is one of the biggest hurdles for Australian charities and NFPs. “Volunteer committees change frequently, and each group brings its own way of doing things,” he says.

“This can result in inconsistent record‑keeping, incomplete documentation, and controls not being applied the same way throughout the year.

“Additionally, volunteers may not always have financial training, which can lead to well‑intentioned decisions that increase risk unintentionally.”

The volunteer-led landscape

Richard says financial oversight is often harder in volunteer‑led organisations, when compared to those with paid management teams. “Volunteer‑led organisations usually lack the dedicated time and continuity that paid managers would bring,” he explains.

“Committee members are balancing volunteer duties with full‑time jobs or other commitments, which means financial oversight is often ‘fitted in’, rather than systematically managed.

“Limited training and high turnover add complexity, making long‑term oversight more difficult.”

Having committees that are time-poor or overstretched can lead to key tasks—like reviewing transactions, checking reconciliations, or asking critical questions—being skipped.

“This leads to missed errors, undetected fraud, late lodgements, and poor documentation,” Richard warns.

Common problems

The most common financial control gaps in small to mid‑sized charities and NFPs include missing or weak segregation of duties, poor documentation of approvals, inconsistent bank reconciliations, and a lack of formal policies.

Richard says these can go on to create issues when it comes to complying with regulations set by the Australian Charities and Not-for-profits Commission (ACNC) and the Australian Securities and Investments Commission (ASIC).

“When committees change, knowledge frequently walks out the door. Missing files, incomplete transition notes, or unclear access permissions can create gaps that affect audits, grant acquittals, and regulatory reporting,” he explains.

“Shared responsibility can quickly become no responsibility. Without clear delegation, key tasks such as reconciliations, BAS preparation, or payroll compliance can be overlooked.”

Striking the right balance

Australian charities and NFPs don’t need to over-engineer financial processes and risk overwhelming volunteers. “For example, requiring multiple layers of paperwork for small transactions or creating overly detailed policies that volunteers struggle to follow can do more harm than good,” advises Richard.

“The key is to focus on a handful of simple but effective controls: regular financial reports, dual authorisation for payments, reconciled bank accounts, and clear delegation of roles.”

Richard recommends committees review a profit and loss summary, bank reconciliation report, balance sheet, and a list of significant payments at each meeting.

“Then, even with small teams, segregation of duties can be achieved by separating key steps such as having one person enter payments and another approve them,” he says.

“And monitor any red flags moving forward, which may include unexplained variances, missing reports, delays in reconciliations, sudden changes in financial trends, or difficulty obtaining supporting documents.”

Staying audit-ready

Richard recommends integrating cloud accounting software, shared document drives, automated bank feeds, and simple approval tools to significantly reduce risk within an organisation.

“By embedding simple monthly routines—reconciling bank accounts, filing invoices as they come in, keeping minutes updated, and reviewing financial reports consistently—organisations can stay audit-ready year-round,” he says.

“When volunteers see clarity, transparency, and solid controls, they feel more confident that the organisation is being managed responsibly.”

Audits and regulation

Despite best intentions, volunteer committees may feel intimidated by audits or regulatory requirements. Richard is keen to dispel the idea that audits exist to “catch people out”.

“Committees should ask questions early, keep good records, and view the audit as an opportunity to improve systems, rather than something to fear,” he says.

“Good communication and documentation go a long way. When organisations are proactive rather than reactive, audits become far more constructive and far less stressful.”

Finding your audit partner

For volunteer-led organisations, knowing when to seek external support can be just as important as knowing who to engage.

“When the workload becomes too great, when controls start slipping, or when the organisation is growing in size or complexity—those are strong signals that external support can add real value,” says Richard.

“External advisors can help committees stay ahead of any changes brought by growth, including increases in funding, reporting, staff, or programs, rather than scrambling to catch up once issues arise.”

Choosing the right audit partner

Not all auditors are the same, and for volunteer-run organisations, sector experience matters. “Committees should look for auditors with experience in the NFP sector that have a practical approach and a genuine understanding of volunteer dynamics,” Richard advises.

“They should be able to explain requirements in plain language and work collaboratively with committees.

“Strong oversight allows charities and NFPs to shift their attention back to their mission—supporting their community, delivering programs, and growing their impact—which is why these organisations exist in the first place.”

If you’re an Australian charity or not-for-profit organisation seeking specialised audit and advisory services, please call Allen Audit & Advisory on 07 5503 1709 or email info@allenaudit.com.au.