Contents
1 The Community Development and Support Expenditure Scheme
2 The Establishment, Membership, Role and Operations of CDSE Local Committees
3 The CDSE Funding Categories
4 The CDSE Category 1 Application and Funding Process
5 The CDSE Accountability Process
6 The CDSE Annual Timetable
1 THE COMMUNITY DEVELOPMENT AND SUPPORT EXPENDITURE (CDSE) SCHEME
The Community Development and Support Expenditure (CDSE) Scheme is designed to ensure that larger registered clubs in NSW contribute to the provision of front-line services to their local communities; and to ensure that the disadvantaged in the community are better positioned to benefit from the substantial contributions made by those clubs.
The Gaming Machine Tax Act 2001 outlines the legislative arrangements for the granting of a rebate of gaming machine tax levied on registered clubs. Under the Act, a tax rebate is made available to registered clubs of up to 1.5% of their gaming machine profits over $1 million provided that the Liquor Administration Board (LAB) is satisfied that an equivalent amount has been applied to expenditure on community development and support.
The Act authorises the Minister to publish guidelines that determine what constitutes the application of profits for CDSE purposes. This document contains the guidelines for the period commencing 1 February 2003. These guidelines replace all previous CDSE guidelines.
In these guidelines, the tax rebate of 1.5% of gaming machine profits over $1 million is referred to as the “CDSE liability”.
In the Act, a distinction is made between two classes of expenditure:
• Category 1 - expenditure on specific community welfare and social services, community development, community health services and employment assistance activities;
• Category 2 - expenditure on other community development and support services.
To qualify for the CDSE liability, clubs must contribute at least 0.75% to Category 1 purposes, with the remainder allocated to Category 2 purposes. Category 1 expenditure in excess of 0.75% may be used to cover shortfalls in Category 2, but the reverse does not apply.
Schedule 1 to the Act outlines the matters that must be provided for in the guidelines for the CDSE Scheme. Those matters are:
(a) the minimum proportion of profits to be expended on Category 1 projects and services;
(b) the community priorities identified by CDSE Local Committees in relation to Category 1 projects and services;
(c) the advertising in newspapers across the State by ClubsNSW of notices indicating that registered clubs are seeking applications for CDSE projects;
(d) the accountability steps to be taken by registered clubs when claiming a gaming machine tax reduction on the basis of CDSE funding.
2 THE ESTABLISHMENT, MEMBERSHIP, ROLE AND OPERATIONS OF CDSE LOCAL COMMITTEES
2.1 The Establishment of Local Committees
The Minister for Gaming and Racing has determined that the CDSE Scheme, as a Government initiated scheme, should have a broad consultative and advisory process based on the establishment of locally appointed committees in which qualifying clubs and key community service agencies would participate.
As a result of that decision, CDSE Local Committees (LCs) must be established in each local government area (LGA) where the total CDSE Category 1 liability of local qualifying clubs is in excess of $30,000 in the tax year.
LCs may also be established, in line with these guidelines, in LGAs where the total CDSE Category 1 liability is less than $30,000, if all parties concur. If a LC is not formed, the Department of Community Services (DoCS) and the Council of Social Service of NSW (NCOSS) must develop a listing of social expenditure priorities in that area and make these available to the relevant clubs, either directly or through ClubsNSW, for the purposes of determining priorities with respect to Category 1 funding of community development and support projects.
When considering CDSE applications for funding, registered clubs in areas where a LC has not been established may wish to contact DoCS, NCOSS or a local council for their advice on the suitability of specific applications in the context of the listed social expenditure priorities, or of the capabilities of the organisation proposing to undertake the activity for which funding is sought.
2.2 The Membership of Local Committees
The core LC membership in each LGA is to comprise:
(a) a representative of each CDSE qualifying club;
(b) a representative of the local council;
(c) a representative of DoCS;
(d) a representative of NCOSS, or a major local or regional affiliate of NCOSS.
The core membership of LCs recognises the respective responsibilities of members.
Those respective responsibilities are:
• qualifying clubs are the CDSE funding bodies;
• local councils provide local area governance, and provide local community service planning input;
• DoCS is the lead government agency providing a community service planning, co-ordination, and delivery role across the State; and
• NCOSS, or its nominated local affiliate, represents local non-profit community organisations.
Where there is a large number of qualifying clubs in an area, those clubs may nominate one delegate to represent more than one of the clubs at LC meetings. Individual clubs electing to be represented in this manner must indicate in writing to their LC convenor:
(a) their intention to be represented at meetings by a delegate;
(b) the name and contact details of their chosen delegate;
(c) their intention to participate in all other required aspects of the LC process.
Under such arrangements, delegates representing clubs must ensure that all LC information is forwarded to the club/s they are representing.
A LC may invite representatives of other government or non-government organisations to participate in meetings, when appropriate. However, for optimal effective operation of a LC, the number of members will be restricted to the core membership outlined above.
The local council representative will be responsible for convening the first meeting of the LC. If the council is unable to undertake this task, DoCS would be expected to convene the meeting. A qualifying club will normally be a member of the LC in the LGA in which the club is located. Where a club’s catchment area and activities cover more than one LGA, it may seek advice from other relevant LCs and allocate funds to organisations in those other areas. A club is at liberty to seek representation on the LC of a neighbouring LGA, possibly via the representative of another club in that LGA, where the first club's catchment area and activities cover more than one LGA
2.3 The Key Roles and Responsibilities of Clubs and Local Committees
2.3.1 Mandatory Provisions for Clubs
Decisions about CDSE funding allocations are the responsibility of each club’s board of directors. However, in all LGAs where it is required that a LC be established, it is compulsory for all qualifying clubs in that LGA to participate in the LC processes, including attendance at meetings.
It is also mandatory for clubs to disclose in writing to their LC information on their Category 1 grants, including those made in previous tax years (see section 5.6).
The information to be provided by each club must include advice on the funding recipients and amounts of funding for each Category 1 project, together with advice as to whether the club’s Category 1 allocations in the previous year were in line with the local community priorities identified by the LC. Clubs need to provide some evidence and/or written explanation to indicate how their Category 1 projects aligned with the local community service priorities identified by the LC.
Qualifying clubs with long-term or pre-existing Category 1 commitments to organisations must also provide information on these commitments to their LC.
2.3.2 Key Roles of Local Committees
The key roles of LCs are to:
(a) identify the community service priorities for Category 1 expenditure in their LGA based on evidence provided by local government social plans and DoCS advice on regional and whole-of-government community service priorities;
(b) advise qualifying clubs in their LGA of the identified community service priorities for Category 1 expenditure;
(c) assess Category 1 applications received by the LC as to whether they align with the identified community service priorities;
(d) inform qualifying clubs in their LGA of the outcomes of the assessment of Category 1 applications;
(e) in the case of Category 1 applications forwarded directly to a club without referral to the LC and subsequently funded by that club, review the evidence received from clubs as to whether such applications align with the identified community service priorities and whether clubs are working in the spirit and intent of the guidelines so as to ensure that there is no duplication of funding, and that a club’s funding
priorities are based on what are known needs in the community;
(f) if requested by any qualifying club/s, determine a priority listing of Category 1 applications received by the LC to assist those clubs requiring additional information to determine which projects to fund;
(g) obtain written reports from local qualifying clubs listing the Category 1 projects funded by them, together with evidence from clubs as to whether these aligned with the community service priorities identified by the LC;
(h) provide each qualifying club with a certificate of attendance, signed by the LC convenor, indicating their attendance or otherwise at LC meetings, for forwarding with their annual return to the LAB at the end of the tax year.
LCs are also required to:
(a) organise local promotion of the CDSE Scheme, in conjunction with state-wide and regional advertising of the Scheme by ClubsNSW;
(b) encourage clubs to publicise and disseminate information on CDSE funded projects within the local community;
(c) distribute standard application forms and take enquiries about CDSE activities;
(d) discuss and review on an annual basis the operation and impacts of CDSE within the LGA.
LCs are not authorised to veto or disallow Category 1 applications for funding. LCs are authorised to assess and provide advice as to whether applications align with the identified local community service priorities and, where requested by qualifying club/s, to develop a priority listing of those applications to assist those clubs requiring additional information in order to determine which projects to fund.
In identifying the local community service priorities for Category 1 expenditure, it is expected that LCs would identify a sufficiently broad range of local priorities to allow the funding of a wide range of local community service projects by clubs.
2.4 The Operational Procedures of Local Committees
LCs must provide a fair, transparent and consistent process for managing the local operations of the CDSE Scheme, and provide a forum for qualifying clubs to discuss LC advice and thereby avoid unnecessary duplication of grants.
Every LC must operate in accordance with the following procedures:
(a) Annually elect one of its members to chair the LC.
(b) Formally adopt rules and procedures for the conduct of LC meetings.
(c) Adopt a rule specifying that:
(i) LC members must declare in writing any situation where they or their organisation have any direct or indirect conflict of interest with the priorities set for the local area or with any application for funding; and
(ii) any member who has declared a conflict of interest must withdraw from the meeting during the discussion of any such matter.
(d) Ensure adequate notice (at least 14 days) of LC meetings is given to all LC members, including all qualifying clubs.
(e) Keep an accurate record of proceedings of LC meetings.
(f) Ensure sufficient resources are made available, by agreement between the parties, for effective implementation of LC activities and functions.
(g) Appoint an agency or organisation to provide administrative support and to receive and collate Category 1 applications submitted to the LC.
3 THE CDSE FUNDING CATEGORIES
3.1 Category 1 - Expenditure on Specific Community Welfare and Social Services, Community Development, Community Health Services, and Employment Assistance Activities.
Eligible Category 1 expenditure is that expenditure allocated to projects/services that contribute to the welfare and broader social fabric of the local community, and are aimed at improving the living standards of low income and disadvantaged people.
It is important that funding preference is not given to projects or services that can be readily assisted by an existing Government funding program.
3.1.1 Community Welfare and Social Services
Eligible expenditure under this sub-category is funding allocated to:
• family support;
• child protection;
• supported emergency or low cost accommodation;
• counselling services;
• child care;
• aged, disability or youth services;
• services to victims of natural or other disasters;
• volunteer emergency services, such as surf life-saving and rural fire services.
3.1.2 Community Development
Eligible expenditure under this sub-category is funding allocated to:
• neighbourhood centre activities;
• community education programs;
• youth drop-in facilities;
• community transport services;
• tenants' services;
• state-wide or regional services developing social policies and providing advocacy for local community services.
3.1.3 Community Health Services
Eligible community health services expenditure is funding allocated to:
• early childhood health;
• child and family services;
• community nursing;
• therapy;
• community mental health services;
• health promotion initiatives;
• drug and alcohol services;
• palliative care services;
• women's health services;
• Aboriginal and Torres Strait Islander health services;
• dental services;
• home and community care services;
• disability services.
Funding for buildings (for example, new hospital wards) and equipment for in-patient care (for example, CT scanners) may be recognised as Category 1 expenditure in certain limited circumstances, so long as the expenditure is identified by a LC to be of very considerable potential importance and value to the local community. It is important to note that grants for such items as buildings and equipment for in-patient care that are not endorsed by a LC will only be recognised as Category 2 expenditure.
Funding for medical research is not eligible as Category 1 expenditure.
3.1.4 Employment Assistance Activities
Eligible expenditure under this sub-category is funding allocated to:
• employment placement services;
• group training;
• employment advocacy;
• community enterprises;
• local job creation schemes.
3.1.5 Treatment of Expenditure ‘in kind’
Category 1 expenditure ‘in kind’ provided to the community is acceptable provided that claims for such expenditure:
• reflect the actual cost to the club (and not market price);
• are properly documented; and
• represent eligible Category 1 expenditure as defined in these guidelines.
3.2 Category 2 - Expenditure on other Community Development and Support
3.2.1 Other Community Development and Support Expenditure
Eligible Category 2 expenditure is that expenditure allocated to community development and support activities and projects not listed in section 3.1. However, there are a number of specific funding allocations that are disallowed under Category 2.
These are:
(a) sporting-related expenditure as follows:
(i) professional or semi professional sporting bodies/persons when any of the expenditure is to be used to finance the professional or semi professional sporting activity;
(ii) non-professional sporting expenditure that is used to make monetary payments to the sports persons or persons directly participating in the sporting activity.
However this does not exclude funding for such items as coaching, equipment or uniforms for non-professional sporting bodies/persons.
(b) professional entertainers and entertainment provided for club patrons and used for the purpose of directly promoting activities associated with the trading operations of the club;
(c) expenditure on a club's commercial activities or activities directly related to fulfilling its obligations under the legislative and licence requirements applying to its trading operations (for example, Occupational Health and Safety);
(d) capital and related expenditure on club facilities where:
(i) the project is primarily commercial in nature;
(ii) the project is related to the upgrading or enhancement of gaming facilities, including expenditure on poker machine entitlements and social impact assessments obligations under the Gaming Machines Act 2001;
(iii) the facility is operated on a profit basis.
3.2.2 Restrictions on Claims - Capital Expenditure
Category 2 claims by clubs relating to capital expenditure to enhance non-gaming related club facilities can only be sourced from the balance of funds available after expenditure requirements for Category 1 have been fulfilled.
3.2.3 Tourism Promotion
Category 2 expenditure on the promotion of tourism is acceptable provided that the expenditure is not specifically targeted to promoting the club.
3.2.4 Treatment of Expenditure ‘in kind’
Category 2 expenditure ‘in kind’ provided to the community is acceptable provided that claims for such expenditure:
• reflect the actual cost to the club (and not market price);
• are properly documented;
• represent eligible expenditure as defined in these guidelines.
3.2.5 Administration costs incurred by organisations providing administrative support to a LC
Category 2 expenditure provided to reimburse local councils (or other organisations represented on a LC) for reasonable costs incurred in the provision of administrative support for the LC in their LGA is acceptable. The maximum allowable amount of funding is limited to either 10% of the total CDSE Category 2 liability for the relevant clubs in the relevant LGA, or $1,000 per participating club, whichever is the lesser amount.
For ease of administration, any application for reimbursement of costs is to be made in the tax year following the year in which the costs were incurred.
In this context, administration support is taken to include the provision of goods, such as stationery and postage, the provision of services, such as staff to prepare for meetings or take minutes, or costs of local advertising of the Scheme, but does not include such matters as equipment used at meetings or cost of room hire for meetings.
In order to qualify for this reimbursement, the organisation(s) providing the administrative support must apply in writing to the LC for the relevant LGA, and provide such documentation to verify the claim as may be requested by the LC. A statement must also be included in any media release issued by the LC, noting that some CDSE funds have been utilised for costs to the organisation providing administrative support.
Once a LC has determined that reimbursement is warranted, the costs should be spread equitably across all participating clubs in the LGA, and should not be funded from the Category 2 expenditure of a single club. The costs may also be allocated on a pro-rata basis if so agreed by the LC.
4 THE CDSE CATEGORY 1 APPLICATION AND FUNDING PROCESS
4.1 The Application Process
The current gaming machine tax year that commenced on 1 December 2003 is a transitional year, comprising only three tax quarters and ending on 31 August 2004. In line with this, it is advised that applications for CDSE funding be called for in March 2004, and in March of subsequent years. As it is customary for each LC to set its own application closing date, and applicants should refer to the LC list on the ClubsNSW website (www.clubsnsw.com.au) for the relevant deadlines.
Category 1 application forms can be obtained from LCs or from the ClubsNSW website.
Category 2 application form.
Category 1 application methods vary between LCs. For example:
• some clubs request that all applications be forwarded to the LC convenor;
• some clubs accept applications directly;
• in some LGAs, applications can be sent either to the LC or directly to clubs.
Applicants are advised to refer to the ClubsNSW website for details of:
• arrangements for lodgement of Category 1 applications in a LGA;
• local application closing dates;
• LC contact details.
Advice to potential applicants and qualifying clubs as to whether proposed projects or activities would be eligible Category 1 expenditure under these guidelines is available from the LAB.
4.2 Advertising
ClubsNSW, on behalf of clubs participating in the CDSE Scheme, will advertise in statewide and regional newspapers on an annual basis to invite Category 1 CDSE funding applications from community groups.
Advertisements placed by ClubsNSW must refer prospective applicants, in areas where a LC is established, to their LC contact for information on the local community service funding priorities in their LGA.
LCs are encouraged to undertake local follow-up advertising at the same time as the main ClubsNSW campaign. Any local advertisements calling for Category 1 submissions must either list the community service funding priorities identified by the LC or refer potential applicants to a source for obtaining these.
4.3 Expenditure Approvals by Clubs
Clubs and LCs must process applications for CDSE funding in a timely manner, and ensure that letters of acknowledgment are sent to applicants in a timely manner. Formal letters of offer should be made to successful organisations along with a request for a report to be forwarded to the club at the completion of the activity (see section 5.3). Unsuccessful applicants should also be notified.
4.4 Publicising Approved Projects
Clubs and benefiting organisations should make every attempt to publicise the programs, projects or services for which funding has been provided.
5 THE CDSE ACCOUNTABILITY PROCESS
5.1 General Principles
In allocating community development and support expenditure, a club needs to:
(a) ensure that it can satisfy the LAB that the activities funded fall within Category 1 or Category 2 as defined in these guidelines; that appropriate expenditure has been applied to Category 1 and Category 2 purposes; and that it has maintained appropriate records;
(b) indicate whether the Category 1 activities funded by the club are in line with the local community service priorities identified by the LC, and report this to its LC;
(c) ensure that it has provided to the LC details of any long term Category 1 funding commitments;
(d) obtain from the LC a certificate of attendance, signed by the convenor of the LC, and forward this to the LAB with the club’s annual return;
(e) follow the special provisions in section 5.5 and 5.8 relating to trusts and to benefiting organisations located outside NSW;
(f) satisfy the LAB that all relevant reports and statutory declarations have been sought from benefiting organisations.
5.2 LAB Statutory Declaration Form
Each registered club claiming a tax reduction under the CDSE Scheme must satisfy the LAB that appropriate expenditure has been applied to Category 1 and Category 2 purposes.
The LAB has developed a standard statutory declaration form, for reporting Category 1 and Category 2 expenditure, that must be completed by qualifying clubs at the end of the tax year (that is, 31 August of each year) and sent to the LAB by 7 September of that year.
If a club's expenditure is less than the CDSE liability, the difference must be paid to the LAB within 21 days of the conclusion of the tax year (that is, by 21 September of any year). If the amount expended is more than 1.5%, the difference may not be accumulated and used to offset shortfalls in future years’ CDSE expenditure.
Clubs must ensure that successful applicants receive their funding before 31 August in order for that expenditure to qualify for the current tax year. This means that cheques must be cleared, or cash advanced, before 31 August. The LAB will consider any funding received after this date to be part of the next tax year’s CDSE allocations. This may mean that a club will need to make up the shortfalls in the current year’s expenditure.
5.3 Other CDSE Reporting Requirements
CDSE qualifying clubs are also responsible for requesting reports from organisations receiving CDSE funding from a club as to the manner in which that funding was applied.
5.3.1 Reports from Benefiting Organisations – Expenditure up to and including $5,000
Clubs must request organisations receiving CDSE funds of up to and including $5,000 to provide a report detailing the application of the CDSE funds. Where a previously funded project has not been completed within the current tax year, a progress report must be provided.
Where a benefiting organisation has received funding in line with the LC’s identification of local community service priorities, the club should request the benefiting organisation to supply a copy of a report on the project to the relevant LC.
The type of report required depends on the level of funding. For cash amounts of less than $500, a receipt will suffice. For in-kind funding valued at less than $500 (such as free use of club meeting rooms), a letter of acknowledgement from the benefiting organisation or individual is required.
In the case of cash or in-kind expenditure for funding of between $500 and $5,000, a written report from the recipient as to the application of the funding is required.
If a report (or progress report) is not received from a benefiting organisation, no additional Category 1 funding should be considered, other than in exceptional circumstances.
5.3.2 Reports from Benefiting Organisations - Expenditure over $5,000
Where an individual grant for CDSE funding exceeds $5,000, the club must require the benefiting organisation to complete a statutory declaration detailing the application of the funds at the end of the project.
Where a project has not been completed within a tax year, a statutory declaration providing a progress report must be obtained by 31 August of the current year.
Where a benefiting organisation has received funding in line with the LC’s identification of local community service priorities, the club should provide a copy of the report (statutory declaration) to the relevant LC.
Clubs and LCs (as appropriate) must consider the report (or progress report) before further Category 1 applications from the benefiting organisation are entertained.
5.4 Joint Funding of Projects and Pooled Funding Arrangements
The joint funding of projects is allowable where each individual club directly forwards its own contribution to a project to the benefiting organisation, keeps a record of its own direct contribution to the project, and receives reports and returns from the benefiting organisation confirming how the club’s Category 1 allocation was applied.
However, if a number of clubs’ CDSE Category 1 funds are pooled and allocations made from a central fund administered, for example, through a LC, pooled funding is not eligible CDSE Category 1 expenditure.
5.5 Establishment of Trusts
Club directors considering the establishment of a trust as a potential benefiting organisation need to carefully consider the administrative, financial and legal implications of doing so, and should seek professional advice. Ideally, trust proposals should be supported by the LC. Clubs should ensure that CDSE allocations are spread, as far as possible, across a wide variety of activities.
Trusts involving pooled funding arrangements as outlined in section 5.4 will not be recognised as eligible CDSE Category 1 expenditure.
Neither the Department of Gaming and Racing nor the LAB will assume responsibility for the control or administration of any trust or trust funds.
5.6 Notification to Local Committees of all Category 1 Funding Allocations
Each club must advise its LC (in writing) at the beginning of each tax year their Category 1 funding allocations made in the previous tax year.
The information to be provided by each club must include the names of the funding recipients and the amount of funding for each Category 1 project, together with advice as to whether the club’s Category 1 allocations were in line with the local community priorities identified by the LC. Clubs must provide some evidence and/or written explanation to indicate how their Category 1 projects aligned with the local community service priorities identified by the LC.
5.7 Examples of Best Practice
It is good practice for a club to keep reports for at least three years in the event of later review (either of the club or of the benefiting organisation) by the LAB. The LAB retains the option of removing recognition for CDSE expenditure if the activity is subsequently found to be non-complying with these guidelines.
Clubs should recommend that benefiting organisations list all CDSE grants received in their annual reports (where published), and send copies of these to their LC (where appropriate).
5.8 Special Provisions for Expenditure outside New South Wales
Expenditure on community development and support outside NSW is only recognised for CDSE purposes if it is made in respect of:
(a) services provided to victims of natural or other disasters within Australia;
(b) locally based activities eligible for Category 1 or Category 2 consideration where the activity is of a genuine cross-border nature (that is, where the activity or service offers a substantial service to NSW residents);
(c) funding provided to nationally operating organisations with a presence in NSW and which perform functions relevant to Category 1 or Category 2.
A club that has allocated CDSE funding to cross-border organisations where the activity or service provides a substantial service to NSW residents must request information from those organisations on the nature and level of services provision to NSW residents.
6 THE CDSE ANNUAL TIMETABLE
Each LC must draw up an annual timetable for implementation of the CDSE Scheme to ensure timely and effective priority setting and consideration of applications for Category 1 funding, and to ensure timely allocation of CDSE funds by clubs.
The annual LC timetable needs to incorporate the following milestones:
1 LC meeting to finalise the local community service priorities for Category 1 funding.
2 Clubs to provide advice to LCs early in the tax year on previous year’s Category 1 allocations.
3 Statewide, regional and local advertising and promotion of the CDSE Scheme.
4 Clubs to provide advice to their LCs prior to the end of the tax year on their Category 1 allocations.
5 LC to distribute (either at a LC meeting or out of session) attendance certificates, signed by the convenor, to clubs prior to the end of the duty year.
6 All CDSE funding cheques cleared by club’s bank by 31 August.
7 Annual returns for CDSE expenditure forwarded to LAB by 7 September.
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