Improving SA Councils' Asset and Financial Management Practices

A South Australian Project Funded under the Australian Government's Local Government Reform Fund

Introduction

For many years, the LGA has been assisting Councils in various ways to identify and address major risks that could impact on their long-term financial sustainability.  Financial and asset management practices, in particular, have been a focus area for all South Australian Councils.

Councils exist to provide services to their communities. Sustaining good governance, financial and asset management practices and seeking to continually enhance them is critical if Councils are to do this in an enduring way.

In December 2009 the LGA and the Department of Planning and Local Government made a funding submission to the Australian Government's Local Government Reform Fund for a comprehensive program which will improve South Australian Councils' financial and asset management practices.  The 'Improving SA Councils' Asset and Financial Management Practices' program both extends the platform of asset and financial management reform that had been progressing in SA and also embraces contemporary reform issues such as climate change and demographic change adaptation, workforce planning and pursuit of collaborative service delivery opportunities.  The proposal comprised components focusing on the following:

• Council asset and financial management assessments;
• workforce planning;
• climate change adaptation;
• building regional collaboration capacity;
• data management; and
• asset and financial management technical support.

On 28 February 2010 the then Federal Local Government Minister Anthony Albanese announced the provision of $1.65 million towards the 'Improving SA Councils' Asset and Financial Management Practices' project to undertake the Council asset and financial management assessments, asset and financial management technical support and building regional collaboration capacity components.  The remaining components of the original proposal are being considered as part of a second round of Reform Fund announcements that might be made in early 2011.

Since the February 2010 announcement the LGA has been working with the Department of Planning and Local Government to implement the funded components of the proposal as follows:

Managing for the Future - Performance Improvement Program

This project is being rolled-out progressively across Councils and aims to embed continuous improvement of financial and asset management as a governance practice in all SA Councils.  The project involves a comprehensive assessment of each Council's progress in asset and financial management reform, to establish a baseline position for reform work undertaken to date, and preparation of a continuous improvement plan to guide further reform work.

In addition to pure financial and asset management, the project has a focus on other important aspects in a continuous improvement cycle for effective management such as:

• regional collaboration;
• good workforce planning and practices;
• assessment of climate change and demographic change adaptation; and
• data collection and analysis.

To view a copy of the Assessment Tool used to measure Councils' progress in asset and financial management reform click here.

Building Regional Collaboration Capacity

The roll-out of the asset and financial management assessment process is being undertaken on a region by region basis and regional analyses of the Council results are being prepared.  Councils are being encouraged to work collaboratively with other Councils in their region in implementing their reform agendas.

Asset and Financial Management Technical Support

This project extends the financial sustainability reform work undertaken by Councils and the LGA since 2005 and involves providing support, advice, resources and tools to Councils to assist them in improving practices over time thereby ultimately assisting to ensure they are sustainable into the future.

The LGA has been working with the Institute of Public Works Engineering Australia to progress a number of asset management reforms including:

• migration of all SA Councils to the NAMS.PLUS asset management planning system and provision of training in NAMS.PLUS;
• development of the Asset Management for Small, Rural & Remote Communities methodology and conduct of training for a selection of small SA Councils; and
• promotion of the adoption of the Australian Infrastructure Financial Management Guidelines by SA Councils.

Work with the SA Local Government Financial Management Group has been completed to:

• develop a web based system which allows Councils to implement best practice internal controls and which facilitates monitoring and reporting of those controls: note that under the Local Government (Financial Management) Regulations 2011 all Councils must have internal controls in place that provide a reasonable assurance that the Council's financial records are complete, accurate and reliable; and
• revise and release to Councils a Long-term Financial Planning model that links to annual updates of the SA Model Financial Statements.

A review of the LGA's asset and financial management training programs has been undertaken and refinements are reflected in the LGA's 2011 training program.

For further information on the 'Improving SA Councils' Asset and Financial Management Practices' program contact Michael Barry on 8224 2033 or email shane.sody@lga.sa.gov.au