Regulator Outlines Clear Expectations on Financial Governance

Strengthen Financial Controls and Segregation of Duties

• Ensure invoice creation, approval and payment are clearly segregated and cannot be influenced by a single executive.
• Mandate supporting documentation and independent verification for unusual or once‑off payments.
• Maintain a robust audit trail. No payments should be processed using non‑standard invoices, unregistered vendors or off‑system documentation.

If it isn’t documented, independently verified and properly approved, it shouldn’t be paid.

Enforce Strict Board‑Approval Protocols

• Compensation arrangements, offsets or discretionary payments must be formally approved by the board in writing, before any transaction occurs.
• Verbal approvals should never substitute for proper governance processes.
• Encourage boards to maintain structured oversight even during operational disruptions (e.g. emergencies, closures).

Implement Strong Whistleblower and Reporting Protections

• Protect and promote an internal reporting pathway.
• Ensure employees know how and when to escalate concerns, including to the relevant regulator (L&GNSW, ASIC, AUSTRAC) or to the NSW Police.

Regularly Review and Refresh Governance Training

• CEOs, secretaries and directors should receive regular training on:
  • financial governance
  • conflicts of interest
  • integrity expectations under the Registered Clubs Act
  • personal accountability for authorisation of payments.
• Training should emphasise that ethical conduct must be maintained even during high‑pressure periods.

Strengthen Vendor and Third‑Party Due Diligence

• Require verification that vendor invoices match legitimate suppliers’ systems and invoice formats.
• Conduct periodic reviews of supplier relationships to detect unusual links to staff or third parties.

Conduct Periodic Forensic or Internal Audits

• Regularly test payment controls, including random sample reviews.
• Commission independent reviews where governance risks appear elevated.