Mrs Pat McAllister
Liquor Review Team
Level 1 James House, 2/4 Cromac Avenue
Gasworks Business Park, Ormeau Road
BELFAST BT7 2JA
27 January 2006
Dear Mrs McAllister
Submission to the Department for Social Development - Liquor Licensing Team In response to the Consultation Document (October 2005), “Liquor Licensing – The Way Forward”
We have read with interest the above Consultation Document and in particular Chapter 10, Registered Clubs Accounts. As you may be aware we have, since the publication of first draft Accounts Regulations back in November 1996, closely followed their development; challenging many of the provisions embodied therein.
Nine years on, the overall impression remains that the Registration of Clubs (Accounts) Regulations 1997, taken as a whole, continue to be unduly onerous, discriminatory and beset with practical difficulties.
We have been asked by our client, Northern Ireland Federation of Clubs to respond, on their behalf, to your invitation to provide comment on the proposals for Registered Clubs as set out in the Consultation Document.
The “private member/non-profit making” sector in Northern Ireland can proudly boast of its financial size, and of its significant contribution to the economic and social fabric of the province. All interested parties recognise, and accept, that an “industry” of such size and influence should necessarily attract some form of financial regulation and accountability. The perennial issue for clubs and auditors alike has been the mechanism by which such financial control has been imposed since 1997; the Accounts Regulations.
Many of the Regulations continue to appear rather petty, time consuming to implement and without meaningful explanation as to their purpose or merit. We set out below our comments and suggestions on the relevant regulations.
Our objective, in making this submission on behalf of the NI Federation of Clubs, is to highlight those provisions within the Regulations that, in our experience, have little relevance or influence on our shared objective; sensible, focussed and cost-effective regulation and accountability for members, for clubs and for the wider community of interested parties.
Schedule 1 – Vouchers
1. It would be more practical to explicitly state for what period of time vouchers must be retained by a club. We would suggest adopting a period consistent with the requirements of HM Revenue and Customs, ie 6 years.
2. The term ‘vouchers’ might better be replaced with the more commonly used description; “books and records”.
Schedule 2 – Systems of Control
3. Regulation 3, Para 2 – Till Reconciliations
We believe there is scope for simplifying the current procedures governing the reconciliation of supplies and money.
4. Regulation 3, Para 3 – Machines
Many of the onerous requirements in relation to gaming machines should be revoked and replaced with a simpler set of procedures; yet still retaining the essential underlying objective of controlling and reconciling machine monies.
5. Regulation 3, Para 7 – Payments
The ceiling of £50, in relation to the payment for goods or services, might more realistically be raised to £100.
However, in relation to the payment of wages, we maintain that with the existence of the proper controls and properly written up wages records, the drawing up of one wages cheque per week is more than adequate and is a procedure common to many businesses.
6. Regulation 3, Para 8 (2)
Following on from point 5 above, there should then be inserted “in the payment of club wages or” immediately after the words “drawn for cash”. This does not remove the requirement for clubs to maintain appropriate wages records.
7. Regulation 3, Para 9 (8)(a)
We believe that once each month is sufficient in checking petty cash balances.
8. Regulation 3, Para 9 (8)(b)
On the basis that the requirement to have petty cash counted is amended to read once each month (as suggested above) by a member of the committee, all receipts are retained and properly written up in the books then we see no need for an independent check of the petty cash float at the end of the year.
It is important not to lose sight of the essentially immaterial nature of petty cash transactions when compared to a club’s main transaction streams. This being the case we consider it perfectly appropriate for a member of the committee to undertake this task.
9. Regulation 3, Para 9 (10)
There is a need to revisit the question of discrepancy above which a “systems failure” report ought to be drafted. The imposition of a £5 excess needs to be revised.
10. Regulation 3, Para 10 (6)(a)
Point 7 above refers.
11. Regulation 3, Para 10 (6)(b)
We see no need for an independent check of the till floats by an independent person at the year end. A member of the committee should be solely empowered to undertake this task.
12. Regulation 3, Paras 12 and 13
By simply referring to “best practice” in relation to maintaining a cash received book and cheque journal, written up, analysed and summarised weekly, would obviate the need for paras 12 and 13.
13. Regulation 3, Para 14
The increasingly higher incidence of accounting software usage within clubs negates the need for such a record. Indeed, even in the absence of computerisation the maintenance of an “unpaid invoice” file is more than sufficient in providing a record of creditors; a method commonly used in other businesses.
14. Regulation 3, Para 15
Given the nature of a club’s activities and transactions we see no merit in maintaining this requirement.
15. Regulation 3, Para 16
We remain unconvinced as to the merit in continuing to require function reports to be prepared. As a source of income for clubs, the revenue generated already falls to be included in the club’s records by dint of Para 11 (2)(c). Any expenditure incurred would be recorded either in the proposed cheque journal or the petty cash book.
16. Regulation 3, Para 18
The rationale, or indeed objective, of the requirements contained in this paragraph in relation to bar staff have never been satisfactorily defined. In our view this paragraph should be reviewed.
17. Regulation 3, Para 24
The need for a monthly report is obviated by the fact that many clubs now operate computerised accounting systems and for those who don’t, the adoption and maintenance of cash received books and cheque journals, in line with best practice, will provide the required details. Consequently, it is our view that this paragraph should be reviewed.
18. Regulation 3, Para 25
The requirement that every record, receipt, document etc must carry a unique identification number and carry the date and signature of its creator continues to impose a significant administrative burden on clubs without any tangible benefit. In our view this regulation should be reviewed.
19. Regulation 3, Para 26
This particular regulation has, in our opinion, been the cause of great confusion, misdirection and practical problems. It is our view that it has served no meaningful purpose and should consequently be reviewed.
Schedule 3 – Form and Content of Accounts
20. Section A, Para 1(1)
We do not believe that the requirement for a separate supplies account to be prepared in respect of non-bar supplies adds to the understanding of the reader of the accounts.
Income and expenditure arising from each category of non-bar supplies should simply be included as separate entries with the main Income and Expenditure Account.
21. Section A, Para 2 (2)
In our experience this paragraph has caused much debate and confusion for committee members and auditors alike. The absence of a clear and unambiguous definition of the term “is not comparable” has led to various interpretations and, as a result, inconsistent application.
We again suggest that the wording contained within Schedule 4, paragraph 4 (2) of the Companies (Northern Ireland) Order 1986 should be the wording adopted if this paragraph is to be retained.
22. Section B, Preparation of Account
The requirement to disclose the name of the preparer of accounts together with their signature is unique to club accounts. We are not aware of any other major legislation (including the Companies Order) that provides for this requirement.
It should be sufficient that those responsible for the preparation of the year end accounts, ie the committee of each club, sign off the accounts together with the statement of responsibilities that is already incorporated in the requirements of the Regulations.
23. Section B, Notes
We would suggest that a full review needs to be undertaken in relation to the notes and information disclosure requirements of each of the Statements making up a club’s year end accounts with a new to achieving some degree of consistency with that required for companies and other similar entities.
We would be delighted to discuss with you further any aspect of our submission or indeed any other issues you believe it gives rise to.
Please do not hesitate to contact us.
DELOITTE & TOUCHE LLP
Shean, Dickson, Merrick
It is submitted that Article 3(3) should be amended. A Court presently is compelled to make a disqualification order for any premises on which an offence set out at Article 3(1) and (2) has been committed.
Article 3(4) suggests that there is a defence for “a person” in relation to a breach of Article 3 (1) and (2) in that they will be exonerated if they can prove that they exercised all due diligence to avoid the commission of an offence. However the wording of Article 3 (3) suggests that even if all officials were exonerated the very fact that a breach has occurred on the Club premises compels the Court to disqualify the premises. Article 3 (3) should be changed so that the wording is “the Court may”.
Article 8 (3)(d).
It is submitted that this Clause should be amended so that only those persons who have an unspent conviction for an offence involving dishonesty or any person whose name appears on the Sex Offenders Register should be disqualified from holding office in a club.
The Federation understands the original intent of Article 15. However the Federation believes that the disqualification of a Club “premises” is unnecessary providing no members of the disqualified “club” are permitted to use the premises after the club loses its registration. They propose that this Clause be amended so that the premises are disqualified for use only by the Club and it’s members who previously occupied the premises and which has lost its registration. Other than that the Federation believes that if there are satisfactory premises in a neighbourhood which have become vacant they should be available for purchase or use by other unconnected Clubs and their members.
The Federation propose that Clubs be permitted to open until 2.00am on each evening similar to the proposal for all other licensed premises.
The Federation propose the abolition of this Clause. The Clause creates ambiguity because recreational activities, ranging from dancing to darts can be publicly advertised whereas other activities not appearing in the Schedule to the Rates Herditaments Order. There does not appear to be any real justification for the distinction, either legally or morally.
The consultation document accepts that Clubs enhance their neighbourhood because of the activities taking place and facilities available on Club premises. If activities are ongoing on a club premises then a Club should be able to advertise them to persons living in the locality. If they wish to avail of the facilities they still must be signed into the Club by either a member or a guest or alternatively apply for associate or full membership. Advertisement of activities on a club premises encourages the membership to use the Club, thereby generating revenue which can be reinvested into the Club to enhance its facilities. The Federation believe that the legislation should promote this endeavour rather than seek to hinder it.
The Federation propose that the obligation to notify the PSNI of alterations to rules should be altered so that notification should be sent within three months of the change taking place rather than within 14 days as this is too onerous a requirement for small Clubs with part-time officials.
The Federation propose that the PSNI should have rights of entry onto their premises similar to those which they have with other individuals or businesses but no greater or less. In light of the proposal to relax the accounting regulations the provision for inspection and rights of entry should also be relaxed so that Police officers visit premises and request documents only upon reasonable notice to the officers of the club and without notice only for the investigation of a crime.
The informal and formal inspection procedures which have been adopted by the PSNI under the current legislation are unduly onerous for club officials and undermine rather than enhance the relationship which should exist between Clubs and the Police. It is the Federations view that this relationship could be fostered and improved by a less formal approach by the Police in relation to their inspections and that this should be provided for by relaxation of the provisions of Article 42.
The Federation propose that penalty points be abolished. The facility to impose fines is available to the Courts when there is a conviction for an offence. Secondly Article 13 enables the PSNI to apply to cancel registration if they are not satisfied with the conduct of the club.
It is proposed that good practice in the running of a Club requires a Club to have a Chairman and so Schedule 1 Rule 1 should be amended to include reference to a Chairman.
Schedule 3 – Renewal Procedures
It is proposed by the Federation that composite advertisements in respect of the renewal of club registrations should be permitted and facilitated in the legislation. Therefore Clubs in any particular petty sessions district should be able to reduce the costs of advertising by advertising details of the proposal to renew their registration by way of a joint advertisement with all other Clubs in the area. This would significantly reduce the expense faced by clubs at the time of renewal but would still notify potential objectors of the intention to renew and the procedure for objection.
Finally the Federation propose that Ordinary Members of clubs may be affiliated to other Clubs to enable entry to the affiliated Clubs on the same basis as ordinary members of the affiliated Club, on production of an approved Affiliate card.