Local Government Regulations Amendment Regulations 2023

The Local Government Regulations Amendment Regulations 2023 amend the:

• Local Government (Financial Management) Regulations 1996 (Financial Management Regulations)
• Local Government (Administration) Regulations 1996 (Administration Regulations)
• Local Government (Regional Subsidiaries) Regulations 2012 (Regional Subsidiaries Regulations).

These amendments support the Model Financial Statements guidance materials and templates for 2022-23 and are great news particularly for smaller local governments, which have previously had the same reporting requirements WA’s larger councils.

Tiered reporting

Good news for many local governments is the introduction of proportionate and tiered reporting obligations for class 1 and 2 local governments, with different reporting obligations for class 3 and 4 local governments.

Class 3 and 4 local governments will have reduced financial reporting requirements and standardised annual financial statements, to reflect the less complex operations of a smaller local government.

Statement of financial position to be prepared monthly

The amendments require local governments to prepare a statement of financial position each month that details the current position (for the previous month). The statement must be presented to council at the next ordinary council meeting within 2 months of the statement being prepared.

Credit card reporting

From 1 September 2023, local governments are required to prepare a list of credit card payments made by employees each month, and the list must be presented to council at the next ordinary meeting and recorded in the minutes.

Reduced reporting requirements

Amendments to the Financial Management Regulations and Administration Regulations will reduce local government reporting requirements and the scope of the audit work for the 2022-23 financial statement audits, from 1 July 2023.

This means that the following information is no longer required to be included in a 2022-23 annual financial report:

• fees and charges
• disposal of a class of assets
• certain rating information and service charges
• certain information relation to reserve accounts
• discounts for early payment
• interest charges in relation to a late payment of rate or service charge
• invested money.

Amendments to the Administration Regulations mean that information regarding trading undertakings, major land transactions and completed major land transactions must now be provided in the annual report.

Information regarding capital grants and contributions for renewal of assets must also be provided in the annual report to inform the Local Government Financial Health Indicator of a local government.

Budget review to be submitted by 31 March

From 1 July 2023, a local government must carry out a review of its budget between 1 January and the last day of February (previously 31 March) and submit the review to council by 31 March in each financial year.

Annual budget to be submitted within 14 days of adoption

From 1 July 2023, a local government is required to provide a copy of the annual budget to the Department CEO within 14 days (previously 30 days) of adoption. A copy of the minutes must also be submitted.

Consequential amendments

Other key changes include amendments to:

• definitions to update and reflect terminology used in the Australian Accounting Standards
• descriptions used under nature classifications
• figures presented in the annual budget and annual financial report which are to be rounded to the nearest dollar (except for the rate in the dollar)
• specify that a copy of the audited annual financial report is no longer required to be submitted DLGSC Director General
• update the CEO Statement
• the reporting of net current assets.
  

In addition to amendments made to the Financial Management Regulations and the Administration Regulations, consequential amendments to the Regional Subsidiaries Regulations include: 

• Requirement for a regional subsidiary to provide a copy of the annual budget to each participant within 30 days of the adoption.
• Requirement for a regional subsidiary to prepare a statement of financial position on a monthly basis.
• Specifying that any reference to a class 3 and 4 local government in the Financial Management Regulations apply to a regional subsidiary.
• A regional subsidiary is to provide information about fees, expenses and allowances in an annual report.
• A regional subsidiary is to include a statement of financial activity in the annual financial report and the annual budget.
  

For more information contact the team at: LG.accounting@dlgsc.wa.gov.au