Surf clubs are the heartbeat of Australian coastal communities. But behind the flags and patrols, there’s a surprisingly complex financial structure that needs careful attention come audit time.

Allen Audit & Advisory Audit Managers, Jeremy Richards-Ghosn and Rebecca Farley, have extensive experience working with surf clubs. Rebecca brings a perspective few auditors can offer — she is a volunteer lifesaver and has held various committee and board positions at Gold Coast surf clubs for the last 26 years, giving her insight into both sides of the audit process.

“Surf clubs are essentially a not-for-profit (NFP), while supporters’ clubs are separate licensed entities, similar to a leagues or bowls club that offers meals and gaming,” Rebecca says.

“The biggest thing to remember is the relationship between the two and how that’s accounted for.”

How surf clubs differ from other not-for-profits

Jeremy says the relationship between surf and supporters’ clubs makes them unique to other clubs and associations.

“Surf clubs and supporters’ clubs are two separate legal entities,” Jeremy says.

“The majority of surf clubs lease the land from the council, and the supporters’ club has a sublease agreement with the surf club for the use of the operating floor, which is the key driver for revenue.

“The supporters’ club exists to assist the surf club, and in most cases the majority of funds raised will go back to the surf club for their primary role of beach patrolling.”

Jeremy says key difference between surf clubs and other NFPs is the multiple revenue streams.

“Surf clubs receive income from memberships, sponsorships, fundraising and grants, while further revenue comes from the supporters’ club bar, bistro, and gaming,” Jeremy says.

The surf club audit journey

A surf club audit is a two-part process, covering both the surf club and supporters’ club, each with their own regulatory requirements.

Surf clubs registered as charities are regulated by the Australian Charities and Not-for-Profits Commission (ACNC), while supporters’ clubs fall under state incorporated associations legislation and Office of Liquor and Gaming Regulation (OLGR).

“In Queensland, the surf club annual financial reporting period is 30 April, with many supporters’ clubs aligning with the surf club. Members must be given notice of the Annual General Meeting (AGM) in line with the respective club constitution before the meeting,” Jeremy says.

“Our main roles and responsibilities are to review and understand system procedures on the key three cycles: revenue, payroll, and expenditure.”

Jeremy says it’s important to understand what controls and systems are already in place, and whether any weaknesses can be improved.

“At the interim audit, we’ll update and review their policies and systems. During the year-end audit we will cross-check all balance sheet items. These include bank balances, gear and equipment, and liabilities such as Business Activity Statement payable, loans or leases, ” he says.

“A week or two after our on-site visit, we collect all our audit findings, draft the reports, and present them to management for review and commentary before it becomes a collated part of their report at the AGM.”

Above all, Jeremy’s advice to clubs is straightforward — be prepared. “Ensure all documentation is completed in a timely manner, that it’s easily presentable and legible, and transparent so any external parties can review and have clarity over balances.”

Understanding audit qualifications

Audit qualifications arise if the client has insufficient details or evidence to support the overall balance of key areas. The audit will raise the respective concerns and provide advice for subsequent years in the closing report to aid the club in future improvements.

“The supporters’ club receives external audits from OLGR with an audit report of findings they need to adhere to, which can include penalties depending on the severity,” Jeremy says.

“General qualifications can still apply based on the auditor’s view. The most common areas we look at are cash receipting and misappropriation, stocktakes, and ongoing concerns.

“It ultimately comes down to the due diligence of the board and how their corporate governance is structured.”

Treasurers and the surf club audit

Rebecca’s dual perspective — as both an auditor and volunteer — shapes how she approaches the treasurer’s role, which is central to any financial audit.

“Vital roles for the treasurer include recording data correctly, particularly the GST, staying on top of any asset additions or write-offs, and storing the supporting documentation from fundraising.

“Making sure any financial decisions are minuted in the recordings on the committee or board, including membership fees and any large purchases, are also important.”

Getting acquittals right

Surf clubs gain grant funding from multiple sources for projects or specific capital acquisitions. Most, if not all, grant funders will require an acquittal.

Rebecca says ensuring the acquittals are done correctly and efficiently is essential to ensure funds are retained, and future grant funds aren’t jeopardised.

“Surf clubs must ensure the money they’ve received is spent in line with the grant request, and the acquittals are done in accordance with that,” Rebecca says.

“The acquittals are completed by either the grants officer and board or finance team and board members.”

Why sector experience matters

Due to the unique structure of surf clubs compared to other NFPs, Jeremy says clubs should look for auditors with sector experience and understanding.

“Surf clubs should look for auditors with a key understanding of the relationship between the surf and supporters’ clubs,” Jeremy says.

“They should also understand the ACNC and OLGR compliance and have a strong knowledge of the trading areas within the supporters’ club.”

If you’re an Australian surf club seeking specialised audit and advisory services, please call Allen Audit & Advisory on 07 5503 1709 or email info@allenaudit.com.au.