This project's final report and evaluation was completed on 10 June 2022

Project summary

Councils are required to comply with the model Financial Statements as published by the Minister for Local Government from time to time. Due to the nature of accounting standard changes, the templates are reviewed and updated annually. Funding is being sought for the term of the agreement with the current external contractor.

The Minister for Local Government, the Hon. Geoff Brock, MP, approved the Model Financial Statements (MFS) for 2022 and these are now available on the LGA website.

LGA Members can refer to the LGA Financial Sustainability Resources for further information.

Project achievements

The MFS are a key reference document for finance managers. It supports continuous improvement and best practice financial management. The document is reviewed and updated by a specialist consultant and a working group of council finance managers to ensure relevance to local government.

Project distribution

The Model Financial Statements were endorsed by Minister Brock on 29 June 2022, loaded to the LGA member portal and promoted via a Latest News item on the same day.

Project evaluation

The LGA produce an annual Financial Indicators Report which aims to provide an understanding of the current financial performance and position of the local government sector in South Australia. To produce the report, the Local Government Association (LGA) undertakes an analysis of the most recent SA Local Government Grants Commission Database Reports (2019-20).

The report highlighted the sound financial performance and position of the local government sector as a whole. The evidence showed that South Australian local government is living within its means, has a very low level of indebtedness, and generally is managing its assets satisfactorily.

In 2019-20:-

• the sector’s operating surplus ratio was 1.4 per cent – showing that existing levels of income are sufficient to cover day-to-day spending. Overall, the sector’s income exceeded operating expenses by $33 million;
• the sector’s net financial liabilities ratio was 41 per cent – showing that the net amount owed to others is a relatively modest portion of one-year’s income. The sector’s net amount owed to others of around $1 billion at 30 June 2020 is also very low when put in the context of infrastructure and other physical assets valued at $26 billion. It is comparable to a family living in a $500,000 house having a mortgage of only $19,000 and no other debts; and
• there were substantial variations in the asset renewal funding ratio recorded by individual councils. While most councils are renewing and replacing their assets in either a satisfactory or optimal way, there are some councils that could improve on the capital spending needed to cost-effectively maintain desired and affordable service levels from their assets.