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LGA Schemes Review report to councils released

15 February 2017

An independent review into the insurance and indemnity arrangements administered by the LGA on behalf of its member councils has found they offer good value, but could be further improved through changes to their governance.

LGA CEO Matt Pinnegar said the Board initiated this review after the Auditor-General’s 2015 report on the LGA’s Mutual Liability and Worker’s Compensation Schemes identified a number of areas of concern.

“In response to the Auditor-General’s report, we established an audit committee, and committed to a complete review of all of the insurance and indemnity arrangements we administer on behalf of our sector,” Mr Pinnegar said.

“This included not only the Mutual Liability and Worker’s Compensation Schemes, but also the Asset Mutual and Income Protection Funds.”

Jardine Lloyd Thompson (JLT) are contracted to manage all of these schemes and funds on behalf of the LGA of SA.

Finity Consulting and Rosey Batt & Associates were commissioned to undertake the review, and their findings were presented to councils on Friday 10 February.

A written report produced by Finity Consulting was provided to councils at this briefing, and can be downloaded from the LGA’s website.

Mr Pinnegar said the LGA’s Schemes Review highlighted that the arrangements are providing real value to councils, and are prudently managed from a financial perspective. 

“However, it also found there are opportunities to improve the governance of these arrangements,” Mr Pinnegar said.

“The LGA is currently working with JLT towards implementing a more transparent and modern governance structure across all of the insurance and indemnity arrangements they manage on our behalf, as well as address concerns raised in the Auditor-General’s report.” 

“The Auditor-General’s office has been kept abreast of our progress and has a copy of the report.”  

The Schemes Review report confirms the LGA receives around 4% of the total contributions paid to the schemes by councils, which is consistent within the marketplace.

“This funding helps provide services to member councils and keep membership fees as low as possible,” Mr Pinnegar said.  

“Council membership fees make up around $2 million of the LGA’s approximate $6 million budget, with the rest funded through commercial activities and grants.”

“Our commitment remains to deliver value for money for members by providing commercial products that are fit for purpose, cost effective and with robust governance arrangements.”

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