Part 9 Management and accountability
In this Part:accounting records of a council means the records that section 412 of the Act requires the council to keep, and includes any cash receipt record, assets register, contracts register, stores register or ledger, debtors’ ledger and creditors’ ledger.
Code means the Local Government Code of Accounting Practice and Financial Reporting published by the Department, as in force from time to time.
Departmental representative means a person authorised under section 430 of the Act.
estimate includes any sub-estimate that an estimate is required to contain.
Manual means the Local Government Asset Accounting Manual published by the Department, as in force from time to time.
quarter means the period of 3 months ending on 30 September, 31 December, 31 March or 30 June.
records includes books, registers, deeds and documents, and any other sources of information compiled, recorded or stored in written form or on microfilm, or by electronic process, or in any other manner or by any other means.
responsible accounting officer of a council means:
(a) a member of the staff of the council designated by the general manager, or(b) if no such member has been designated, the general manager.
197–200A(Repealed)
Division 3 Budgeting by councils
201 Annual statement of council’s revenue policy
(1) The statement of a council’s revenue policy for a year that is required to be included in an operational plan under section 405 of the Act must include the following statements:(a) a statement containing a detailed estimate of the council’s income and expenditure,(b) a statement with respect to each ordinary rate and each special rate proposed to be levied,Note. The annual statement of revenue policy may include a note that the estimated yield from ordinary rates is subject to the specification of a percentage variation by the Minister if that variation has not been published in the Gazette when public notice of the annual statement of revenue policy is given.(c) a statement with respect to each charge proposed to be levied,(d) a statement of the types of fees proposed to be charged by the council and, if the fee concerned is a fee to which Division 3 of Part 10 of Chapter 15 of the Act applies, the amount of each such fee,(e) a statement of the council’s proposed pricing methodology for determining the prices of goods and the approved fees under Division 2 of Part 10 of Chapter 15 of the Act for services provided by it, being an avoidable costs pricing methodology determined by the council in accordance with guidelines issued by the Director-General,(f) a statement of the amounts of any proposed borrowings (other than internal borrowing), the sources from which they are proposed to be borrowed and the means by which they are proposed to be secured.(2) The statement with respect to an ordinary or special rate proposed to be levied must include the following particulars:(a) the ad valorem amount (the amount in the dollar) of the rate,(b) whether the rate is to have a base amount and, if so:(i) the amount in dollars of the base amount, and(ii) the percentage, in conformity with section 500 of the Act, of the total amount payable by the levying of the rate, or, in the case of the rate, the rate for the category or sub-category concerned of the ordinary rate, that the levying of the base amount will produce,(c) the estimated yield of the rate,(d) in the case of a special rate—the purpose for which the rate is to be levied,(e) the categories or sub-categories of land in respect of which the council proposes to levy the rate.(3) The statement with respect to each charge proposed to be levied must include the following particulars:(a) the amount or rate per unit of the charge,(b) the differing amounts for the charge, if relevant,(c) the minimum amount or amounts of the charge, if relevant,(d) the estimated yield of the charge,(e) in relation to an annual charge for the provision by the council of coastal protection services (if any)—a map or list (or both) of the parcels of rateable land that are to be subject to the charge.(4) The statement of fees and the statement of the pricing methodology need not include information that could confer a commercial advantage on a competitor of the council.
202 Responsible accounting officer to maintain system for budgetary control
The responsible accounting officer of a council must:(a) establish and maintain a system of budgetary control that will enable the council’s actual income and expenditure to be monitored each month and to be compared with the estimate of the council’s income and expenditure, and(b) if any instance arises where the actual income or expenditure of the council is materially different from its estimated income or expenditure, report the instance to the next meeting of the council.
203 Budget review statements and revision of estimates
(1) Not later than 2 months after the end of each quarter (except the June quarter), the responsible accounting officer of a council must prepare and submit to the council a budget review statement that shows, by reference to the estimate of income and expenditure set out in the statement of the council’s revenue policy included in the operational plan for the relevant year, a revised estimate of the income and expenditure for that year.(2) A budget review statement must include or be accompanied by:(a) a report as to whether or not the responsible accounting officer believes that the statement indicates that the financial position of the council is satisfactory, having regard to the original estimate of income and expenditure, and(b) if that position is unsatisfactory, recommendations for remedial action.(3) A budget review statement must also include any information required by the Code to be included in such a statement.
204 Council to establish and maintain accounts with authorised deposit-taking institutions
A council must establish and maintain at least one account with an authorised deposit-taking institution for its consolidated fund and at least one account with an authorised deposit-taking institution for its trust fund.
205 Withdrawal of certain money
A council must ensure that the following classes of money are withdrawn for use only for the purpose for which it is held or for investment in accordance with section 625 of the Act:(a) money that the council must set aside to repay the principal outstanding on loans made to the council on interest-only terms,(b) money lent to the council not yet expended for the purpose for which the money was obtained,(c) money that the council must set aside to meet outstanding claims to be met by the council under any self-insurance scheme that the council operates.Note. Section 409 (3) of the Act contains requirements in respect of the use of other classes of money. Those classes are:(a) money received as a result of levying a special rate or charge,(b) money that is, by the provisions of an Act, required to be set aside for a specific purpose,(c) money received from the Government or a public authority for a specific purpose.Section 625 of the Act specifies the way in which a council may invest its surplus funds.
Division 5 Accounting records and accounting practices
206 Accounting records and accounting practices to accord with the Code
(1) A council’s accounting records must be kept in a form that accords with the Code.(2) A council’s accounting practices must accord with the Code.Note. Section 412 of the Act contains the general requirements for the keeping of a council’s accounting records.
207 Responsibility for accounting records
(1) The responsible accounting officer of a council is responsible for keeping the council’s accounting records.(2) The responsible accounting officer must ensure that the accounting records are kept up-to-date and in an accessible form.(3) The responsible accounting officer must take all reasonable measures to ensure that:(a) all money payable to the council is collected or recovered promptly, and(b) appropriate arrangements are implemented for the security and banking of money received by the council, and(c) the assets of or under the control of the council are properly accounted for, and(d) liabilities are incurred by the council only with the authority of the council and the council’s funds are properly spent in meeting those liabilities, and(e) appropriate budgeting and accounting systems (including internal control systems) are established and maintained for the purposes of the council, and(f) adequate measures are taken to protect the council’s valuable securities and accounting records from loss, destruction, damage and theft.
208 Production of accounting records
A member of the staff of a council who has control of any of the council’s accounting records must:(a) produce those records for inspection and audit in proper order whenever directed or requested to do so by the council’s mayor, responsible accounting officer, general manager (if not the council’s responsible accounting officer) or auditor or by a Departmental representative, and(b) render all practicable assistance to the mayor, responsible accounting officer, general manager, auditor or Departmental representative with respect to those records.
209 Particular responsibilities of the general manager
The general manager of a council must ensure that:(a) the provisions of the Act, this Regulation and any other written law relating to councils’ financial obligations or the keeping of accounts by councils are complied with, and(b) effective measures are taken to secure the effective, efficient and economical management of financial operations within each division of the council’s administration, and(c) authorising and recording procedures are established to provide effective control over the council’s assets, liabilities, revenue and expenditure and secure the accuracy of the accounting records, including a proper division of accounting responsibilities among the council’s staff, and(d) lines of authority and the responsibilities of members of the council’s staff for related tasks are clearly defined.
210 Council to rectify defects in internal control systems
On becoming aware:(a) that the systems for properly accounting for the receipt, investment, handling or expenditure of money by a council are defective or inadequate, or(b) that the existing systems established for those purposes are not being complied with,the Director-General may, by notice in writing served on the council, direct the council to remedy the defect or inadequacy, or to comply with the existing systems. The council must comply with such a direction.Note. Failure to comply with a direction under this clause may lead to an investigation being held under Part 5 of Chapter 13 of the Act.
211 Authorisation of expenditure
(1) A council, or a person purporting to act on behalf of a council, must not incur a liability for the expenditure of money unless the council at the annual meeting held in accordance with subclause (2) or at a later ordinary meeting:(a) has approved the expenditure, and(b) has voted the money necessary to meet the expenditure.(2) A council must each year hold a meeting for the purpose of approving expenditure and voting money.(3) All such approvals and votes lapse at the end of a council’s financial year. However, this subclause does not apply to approvals and votes relating to:(a) work carried out or started, or contracted to be carried out, for the council, or(b) any service provided, or contracted to be provided, for the council, or(c) goods or materials provided, or contracted to be provided, for the council, or(d) facilities provided or started, or contracted to be provided, for the council,before the end of the year concerned, or to the payment of remuneration to members of the council’s staff.
212 Reports on council investments
(1) The responsible accounting officer of a council:(a) must provide the council with a written report (setting out details of all money that the council has invested under section 625 of the Act) to be presented:(i) if only one ordinary meeting of the council is held in a month, at that meeting, or(ii) if more than one such meeting is held in a month, at whichever of those meetings the council by resolution determines, and(b) must include in the report a certificate as to whether or not the investment has been made in accordance with the Act, the regulations and the council’s investment policies.(2) The report must be made up to the last day of the month immediately preceding the meeting.Note. Section 625 of the Act specifies the way in which a council may invest its surplus funds.
213 Restrictions on writing off debts to a council
(1) This clause does not apply to amounts owed to a council for rates or other charges for which the Act, or any other regulation in force under the Act, makes specific provision for writing off those amounts in specified circumstances.(2) A council must from time to time, by resolution, fix an amount above which debts to the council may be written off only by resolution of the council.(3) A debt of or below that amount can be written off either by resolution of the council or by order in writing of the council’s general manager. In the absence of a resolution under subclause (2), the council’s debts can be written off only by resolution of the council.(4) A resolution or order writing off a debt to a council must:(a) specify the name of the person whose debt is being written off, and(b) identify the account concerned, and(c) specify the amount of the debt,or must refer to a record kept by the council in which those particulars are recorded.(5) A debt can be written off under this clause only:(a) if the debt is not lawfully recoverable, or(b) as a result of a decision of a court, or(c) if the council or the general manager believes on reasonable grounds that an attempt to recover the debt would not be cost effective.(6) The fact that a debt is written off under this clause does not prevent the council concerned from taking legal proceedings to recover the debt.
Division 6 Annual financial reports
214 Additional requirements for preparation of a council’s financial reports
(1) For the purpose of section 413 (2) (b) of the Act, any matters required by the Code or the Manual to be included in a council’s financial reports are prescribed matters.(2) For the purpose of section 413 (3) (b) of the Act, the Code and the Manual are prescribed standards.
215 Statement by a council on its annual financial reports
(1) The statement required by section 413 (2) (c) of the Act must:(a) be made by resolution of the council, and(b) be signed by:(i) the mayor, and(ii) at least one other member of the council, and(iii) the responsible accounting officer, and(iv) the general manager (if not the responsible accounting officer).(2) The statement must indicate:(a) whether or not the council’s annual financial reports have been drawn up in accordance with:(i) the Act and this Regulation, and(ii) the Code and the Manual, and(iii) the Australian Accounting Standards issued by the Australian Accounting Standards Board, and(b) whether or not those reports present fairly the council’s financial position and operating result for the year, and(c) whether or not those reports accord with the council’s accounting and other records, and(d) whether or not the signatories know of anything that would make those reports false or misleading in any way,and include such information and explanations as will prevent those reports from being misleading because of any qualification that is included in the statement.(3) The council must ensure that the statement is attached to the relevant annual financial reports.
216 Council’s annual financial reports to be amended in certain cases
(1) If the Director-General, by notice in writing served on a council, directs the council to amend its annual financial reports in a way specified in the notice, the council must comply with the direction as soon as practicable after service of the notice.(2) A council that amends its annual financial reports to give effect to such a direction must give public notice of the amendment in a newspaper circulating in its area. The council must specify in the notice that any member of the public is entitled to inspect, without fee, the amended financial reports at each of the council’s offices during the council’s ordinary office hours.
Subdivision 1 Additional information—general
217 Additional information for inclusion in annual report
(1) For the purposes of section 428 (4) (b) of the Act, an annual report of a council is to include the following information:(a) details (including the purpose) of overseas visits undertaken during the year by councillors, council staff or other persons while representing the council (including visits sponsored by other organisations),(a1) details of the total cost during the year of the payment of the expenses of, and the provision of facilities to, councillors in relation to their civic functions (as paid by the council, reimbursed to the councillor or reconciled with the councillor), including separate details on the total cost of each of the following:(i) the provision during the year of dedicated office equipment allocated to councillors on a personal basis, such as laptop computers, mobile telephones and landline telephones and facsimile machines installed in councillors’ homes (including equipment and line rental costs and internet access costs but not including call costs),(ii) telephone calls made by councillors, including calls made from mobile telephones provided by the council and from landline telephones and facsimile services installed in councillors’ homes,(iii) the attendance of councillors at conferences and seminars,(iv) the training of councillors and the provision of skill development for councillors,(v) interstate visits undertaken during the year by councillors while representing the council, including the cost of transport, the cost of accommodation and other out-of-pocket travelling expenses,(vi) overseas visits undertaken during the year by councillors while representing the council, including the cost of transport, the cost of accommodation and other out-of-pocket travelling expenses,(vii) the expenses of any spouse, partner (whether of the same or the opposite sex) or other person who accompanied a councillor in the performance of his or her civic functions, being expenses payable in accordance with the Guidelines for the payment of expenses and the provision of facilities for Mayors and Councillors for Local Councils in NSW prepared by the Director-General from time to time,(viii) expenses involved in the provision of care for a child of, or an immediate family member of, a councillor, to allow the councillor to undertake his or her civic functions,(a2) details of each contract awarded by the council during that year (whether as a result of tender or otherwise) other than:(i) employment contracts (that is, contracts of service but not contracts for services), and(ii) contracts for less than $150,000 or such other amount as may be prescribed by the regulations,including the name of the contractor, the nature of the goods or services supplied by the contractor and the total amount payable to the contractor under the contract,(a3) a summary of the amounts incurred by the council during the year in relation to legal proceedings taken by or against the council (including amounts, costs and expenses paid or received by way of out of court settlements, other than those the terms of which are not to be disclosed) and a summary of the state of progress of each legal proceeding and (if it has been finalised) the result,(a4) details or a summary (as required by section 67 (3) of the Act) of resolutions made during that year under section 67 of the Act concerning work carried out on private land and details or a summary of such work if the cost of the work has been fully or partly subsidised by the council, together with a statement of the total amount by which the council has subsidised any such work during that year,(a5) the total amount contributed or otherwise granted under section 356 of the Act,(a6) a statement of all external bodies that during that year exercised functions delegated by the council,(a7) a statement of all corporations, partnerships, trusts, joint ventures, syndicates or other bodies (whether or not incorporated) in which the council (whether alone or in conjunction with other councils) held a controlling interest during that year,(a8) a statement of all corporations, partnerships, trusts, joint ventures, syndicates or other bodies (whether or not incorporated) in which the council participated during that year,(a9) a statement of the activities undertaken by the council during that year to implement its equal employment opportunity management plan,(b) a statement of the total remuneration comprised in the remuneration package of the general manager during the year that is to include the total of the following:(i) the total value of the salary component of the package,(ii) the total amount of any bonus payments, performance payments or other payments made to the general manager that do not form part of the salary component of the general manager,(iii) the total amount payable by the council by way of the employer’s contribution or salary sacrifice to any superannuation scheme to which the general manager may be a contributor,(iv) the total value of any non-cash benefits for which the general manager may elect under the package,(v) the total amount payable by the council by way of fringe benefits tax for any such non-cash benefits,(c) a statement of the total remuneration comprised in the remuneration packages of all senior staff members (other than the general manager) employed during the year, expressed as the total remuneration of all the senior staff members concerned (not of the individual senior staff members) and including totals of each of the following:(i) the total of the values of the salary components of their packages,(ii) the total amount of any bonus payments, performance payments or other payments made to them that do not form part of the salary components of their packages,(iii) the total amount payable by the council by way of the employer’s contribution or salary sacrifice to any superannuation scheme to which any of them may be a contributor,(iv) the total value of any non-cash benefits for which any of them may elect under the package,(v) the total amount payable by the council by way of fringe benefits tax for any such non-cash benefits,(d) (Repealed)(e) if the council has levied an annual charge for stormwater management services—a statement detailing the stormwater management services provided by the council during that year,(e1) if the council has levied an annual charge for coastal protection services—a statement detailing the coastal protection services provided by the council during that year,(f) a detailed statement, prepared in accordance with such guidelines as may be issued by the Director-General from time to time, of the council’s activities during the year in relation to enforcing, and ensuring compliance with, the provisions of the Companion Animals Act 1998 and the regulations under that Act.(2)–(3) (Repealed)
(Repealed)
218 Application of planning and reporting provisions to county councils
Part 2 (Strategic planning) of Chapter 13 of the Act applies to county councils with the following exceptions and modifications:(a) section 402 (Community strategic plan) does not apply to county councils,(b) each county council is required to have a business activity strategic plan as provided by clause 219,(c) a reference in a provision of that Part to a community strategic plan is (in the application of the provision to and in respect of a county council) to be read as a reference to a business activity strategic plan.
219 Business activity strategic plan of county council
(1) A business activity strategic plan is a plan developed and endorsed by a county council that:(a) identifies the main business activity priorities of the council covering a period of at least 10 years from when the plan is endorsed, and(b) establishes strategic objectives together with strategies for achieving those objectives, and(c) has been developed having due regard to the community strategic plans of the county council’s constituent councils and in consultation with those councils.(2) Following an ordinary election of councillors for the constituent councils of a county council, the county council must review the business activity strategic plan before 30 June following the election. The council may endorse the existing plan, endorse amendments to the existing plan or develop and endorse a new business activity strategic plan, as appropriate to ensure that the council has a business activity strategic plan covering at least the next 10 years.(3) Within 28 days after a business activity strategic plan is endorsed, the council must post a copy of the plan on the council’s website and provide a copy to the Director-General. A copy of a business activity strategic plan may be provided to the Director-General by notifying the Minister of the appropriate URL link to access the plan on the council’s website.
227 Matters to be taken into consideration by auditor
For the purposes of section 415 (3) of the Act, the matters that an auditor must consider and provide comment on in auditing a council’s financial reports are the matters that the Code requires an auditor to consider and provide comment on.
228 Half-yearly inspection of council’s accounting records
(1) For the purposes of section 426 (1) (b) of the Act, the prescribed periods are after the first 6 months of each financial year.(2) The responsible accounting officer of a council must:(a) ensure that, within 1 month after the first 6 months of each financial year, the council’s ledgers are balanced and a list of ledger balances is prepared so as to enable the council’s auditor to conduct a six-monthly inspection of the council’s accounting records, and(b) as soon as practicable afterwards, notify the council’s auditor that those records are available for inspection.
229 Loans to council to be charge on the council’s income
The repayment of money borrowed by a council (whether by way of overdraft or otherwise), and the payment of any interest on that money, is a charge on the income of the council.
230 General manager to notify borrowings to Director-General
(1) Within 7 days after a council borrows money under a loan contract, the general manager must notify the Director-General of the borrowing.(2) This clause extends to further advances made to a council under an existing loan contract, but does not apply to a borrowing by a council by way of overdraft.