Related Party Transactions & Remuneration Disclosure
What are related party transactions and remuneration disclosures, and why do they matter? This guide explains the requirements, risks, and what associations need to report.
What Queensland Incorporated Associations Must Now Report
Transparency in community organisations is increasingly important. From 1 July 2024, Queensland incorporated associations must disclose remuneration and other benefits paid to key individuals at their Annual General Meeting (AGM).
This requirement comes from section 70D of the Associations Incorporation Act 1981 (Qld) and applies even if the amount to disclose is zero.
For many committees and treasurers, this change has raised questions about related party transactions, transparency, and governance.
Let’s break down what this means in practice.
What Must Be Disclosed at the AGM
The management committee must ensure that details of remuneration or other benefits given during the financial year are presented to members at the AGM.
This applies to benefits provided to:
• Management committee members
• Senior staff
• Relatives of those individuals
Relatives include a spouse, parent, sibling, child, grandparent or grandchild.
Remuneration includes:
• Salaries
• Allowances
• Other entitlements or benefits
However, reimbursement of out-of-pocket expenses is not considered remuneration.
Even If the Amount Is Zero
An important point that many associations miss:
You must still disclose the information even if no remuneration or benefits were paid.
If nothing was paid, the association may simply state at the AGM:
“No remuneration or benefits were paid to management committee members, senior staff, or their relatives during the financial year.”
This statement must be recorded in the AGM minutes.
How the Disclosure Can Be Made
Associations have flexibility in how they present the disclosure.
It can be included in:
The financial statements presented to members, or
A separate written remuneration statement, or
A verbal statement at the AGM (if the amount is zero).
The disclosure may present the total value of remuneration and benefits, together with the number of people who received them.
This approach provides transparency while protecting individual privacy.
Why This Matters: Related Party Transactions
This new requirement reflects growing expectations around governance and related party transparency in the not-for-profit sector.
Related party transactions occur when an organisation pays or provides benefits to people who are closely connected to decision-makers.
Common examples include:
• A committee member receiving payment for services
• A relative of a committee member is being employed
• A committee member’s business supplying goods or services
These arrangements are not necessarily improper — but they must be transparent and properly disclosed.
Charities Registered with the ACNC
Some associations are also registered charities with the Australian Charities and Not-for-profits Commission (ACNC).
Even if the association is exempt from lodging financial statements with the Office of Fair Trading, it must still make this remuneration disclosure at the AGM.
Transparency to members remains a legal requirement.
Good Governance Practice
To manage these obligations, committees should:
• Maintain a register of related party transactions
• Ensure conflicts of interest are declared and recorded
• Document committee approval for any related party payments
• Include the required remuneration disclosure at each AGM
These simple steps help protect both the organisation and its volunteers.
The new disclosure requirements are designed to strengthen trust, accountability and transparency within incorporated associations.
For most community organisations, compliance is straightforward — but it must not be overlooked.
Even a simple statement confirming no remuneration was paid should be recorded in the AGM minutes.
As the Office of Fair Trading guidance explains, incorporated associations must ensure financial information and governance disclosures are presented clearly to members at the AGM.
Technical note for auditing students: related parties, risk assessment and fraud risk
For auditing students, related party transactions are not just a disclosure issue. They are also part of the auditor’s preliminary risk assessment.
When an auditor seeks to understand an entity, its structure, governance and financial reporting framework, one important question is whether related parties exist and whether any transactions with those parties have been properly identified, recorded and disclosed.
Under AASB 124 Related Party Disclosures, the objective is to ensure the financial statements contain the disclosures needed to alert users that the entity’s financial position or performance may have been affected by related party relationships, transactions, outstanding balances or commitments.
AASB 124 explains that related parties can include people or entities connected through control, joint control, significant influence, key management personnel, close family members, parent entities, subsidiaries, associates and joint ventures. A related party transaction is a transfer of resources, services or obligations between the reporting entity and a related party, whether or not a price is charged.
From an audit perspective, related parties matter because transactions may not occur on normal commercial terms. AASB 124 notes that related parties may transact on terms that unrelated parties would not, and that even the existence of a related party relationship may affect the entity’s financial position or performance.
This is why related party transactions can also be relevant to fraud risk. Significant related party transactions, transactions outside the normal course of business, poor governance, weak internal controls, unusual year-end transactions and significant post year-end adjustments may all increase audit risk. Their presence does not prove fraud, but they do require professional scepticism and further audit consideration.
For Queensland incorporated associations, this has a practical governance connection. Management committee members are expected to act in good faith, avoid conflicts of interest, and advise the committee where their personal interests may conflict with the association’s interests.
In simple terms, students should remember this:
Related party disclosures are not just a note to the accounts. They are connected to audit planning, risk assessment, governance, fraud risk and the auditor’s understanding of the entity.