Navigation Begin
Content Begin

Standard Chart of Accounts

Background

Western Australia, along with all other jurisdictions, agreed at the Council of Australian Governments (COAG) meeting on 30 April 2009 to the inclusion of regulation of the not-for-profit (NFP) sector as part of the Business Regulation Competition Working Group’s (BRCWG) 2009 work plan.

In December 2009, COAG agreed that as part of this work plan, a nationally-agreed Standard Chart of Accounts (the national SCOA) would be implemented by all jurisdictions in funding agreements involving the NFP sector.

This means that government agencies in each jurisdiction will use the national SCOA to ensure that the financial information they request from NFP organisations is consistent across government. New South Wales, Victoria and Queensland adopted the national SCOA on 1 July 2010. Other jurisdictions will follow suit in 2011. It should be noted, however, that adoption of the national SCOA by NFP organisations will be voluntary. Organisations can continue to use their existing chart of accounts. However, by aligning their existing charts NFP organisations stand to benefit more fully from the reduction in administrative burden the SCOA offers.

What is a Standard Chart of Accounts?

A Standard Chart of Accounts (SCOA) provides a common approach to the capture of accounting information by NFP organisations, enabling government departments and other funding bodies to talk the same accounting language as NFP organisations and their advisors. Essentially, it is a reporting convention agreed to by accountants at the top level.

The Chart of Accounts is grouped into:
Assets
Liabilities
Income
Expenditure
Equity
Cost of Sales

Once transactions are accurately coded according to the Chart of Accounts and then processed in an accounting system (e.g. MYOB), the accounting system will group ‘like’ transactions together and can generate reports that separate income and expense into appropriate and meaningful groupings. For example, government grant   reduction in the number of investigations auditors have to conduct into NFP organisations, because of the more consistent application of accounting definitions.

Implementation Process

A number of working groups are responsible for developing and implementing the SCOA reform. Western Australia SCOA Implementation Group The Western Australia SCOA Implementation Group (WASIG) has been established to provide strategic oversight and monitor implementation progress. It is comprised mostly of Directors or Managers in government agencies that oversee funding programs for NFP organisations. SCOA Technical Group.

The Department of Treasury and Finance (DTF) has also established a small technical group, consisting of officers from both the government and NFP sectors who are involved in the day to day financial reporting processes. This group meets as required to identify and address common implementation issues for the SCOA relevant to their sector. NFP and Accountants Consultative Group.

The DTF intends to convene a group of NFP representatives, and accountants, that work with the NFP sector to address particular implementation issues and concerns.

Quick Links

Council of Australian Government decisions on the Standard Chart of Accounts – December 2009 and April 2010
Queensland University of Technology Standard Chart of Accounts Wiki
Related research reports and reform processes:
− Economic Audit Committee (2009) ‘Putting the Public First: Partnering with the Community and Business to Deliver Outcomes’ Report and Implementation Website.
− Productivity Commission (2010) ‘Contributions of the Not For Profit Sector’ Report.

CONTACT

Department of Treasury and Finance Business Working Group SCOA website updates

Nigel Parke Regulatory Reform Unit Department of Treasury and Finance Phone: (08) 9278 6723 Email: nigel.parke@dtf.wa.gov.au