Our Audit Partner, Navin Prasad, explores the critical concept of going concern and what it means for community clubs across Queensland. With deep experience supporting not-for-profit organisations, Navin outlines the key risks threatening the financial viability of these clubs and provides practical strategies to build resilience, improve governance, and secure a sustainable future.
Understanding the Going Concern Concept for Community Clubs
The concept of going concern refers to an organisation’s ability to continue meeting its obligations and operating sustainably for at least the next 12 months. For community clubs, this goes beyond compliance or accounting standards; it is deeply connected to their mission to serve members and support their communities.
When an auditor raises a going concern issue, it highlights significant financial distress that may attract scrutiny from regulators, lenders, members, and other stakeholders. It is therefore crucial for clubs to proactively address the factors threatening their long-term viability.
Key Going Concern Risks Facing Queensland Community Clubs
1. Declining Gaming Revenue
Many Queensland clubs rely heavily on gaming machines as a major income stream. However, tightening regulations, increased competition, and evolving member preferences have reduced profitability in this area.
2. COVID-19 Aftershocks and Inflation
Though the pandemic’s peak has passed, its financial after-effects continue. Clubs are still recovering from extended closures, disrupted events, and altered consumer behaviour. Rising utility costs, staff wages, and supply chain expenses have added to the burden.
3. Ageing Membership and Shifting Demographics
An ageing membership base threatens the traditional support structure of many clubs. Without effective strategies to attract younger demographics, clubs risk a slow decline in patronage, volunteer support, and overall engagement.
4. Poor Financial Management or Governance
A lack of rigorous budgeting, cash flow forecasting, and risk management frameworks can lead to insolvency risks going undetected until it’s too late to act.
5. Underutilised Assets
Clubs may hold valuable land and facilities that are poorly leveraged. Failure to modernise, commercialise, or repurpose these assets can inhibit long-term sustainability.
Solutions and Strategies to Strengthen Going Concern Status
1. Diversify Revenue Streams
Clubs should explore additional income sources such as:
- Hiring out facilities for functions and co-working spaces
- Offering childcare, wellness, or fitness programs
- Forming partnerships with hospitality or tourism operators
2. Strengthen Governance
Strong governance is essential. Clubs should:
- Conduct regular board training and skills assessments
- Introduce clear KPIs and performance dashboards
- Undertake independent financial reviews and scenario planning
3. Improve Financial Planning and Forecasting:
Robust budgeting and forecasting tools allow clubs to:
- Monitor cash flow accurately
- Identify financial pressure points early
- Respond with targeted cost-saving or fundraising measures
4. Review Assets and Invest Strategically
A formal review of property and equipment may uncover opportunities such as:
- Joint ventures with developers
- Leasing unused space to tenants
- Selling surplus land to generate capital reserves
5. Boost Community Engagement and Membership Growth
Revitalising community ties and attracting younger members requires:
- Social media campaigns and digital outreach
- Events tailored for families and younger adults
- Rebranding initiatives aligned with current values
The Role of Auditors and Accountants
Auditors play a critical role by evaluating going concern risks and issuing early warnings. Likewise, trusted accounting partners help clubs conduct financial health checks, prepare clear and transparent financial statements, and engage effectively with banks, regulators, and stakeholders.
At SRJ Walker Wayland, our team brings deep experience in auditing and advisory for Queensland’s not-for-profit community sector. Working alongside our accounting and business advisory professionals, our Audit Partner Navin Prasad helps club boards to identify emerging risks, develop robust financial reporting processes, and make confident decisions about the future.
Sustainability Through Proactive Leadership
For Queensland community clubs, the going concern challenge is real – but it is not insurmountable. With the right governance, financial planning, and strategic innovation, clubs can reimagine their future and continue delivering value for generations to come.
If your club is facing financial pressures or seeking long-term sustainability solutions, contact our team for tailored advice and strategic support.
Navin Prasad
Audit Partner
📞 (07) 3490 9988 | 0488 023 218
✉️ navin.prasad@srjww.com.au
🌐 www.srjww.com.au
