Local Government (Finance and Reporting) Regulations 2004

Victorian Legislation Parliamentary Documents i Local Government (Finance and Reporting) Regulations 2004 S.R. No. 30/2004 TABLE OF PROVISIONS Regulation Page PART 1—PRELIMINARY 1 1. Objective 1 2. Authorising provision 2 3. Commencement 2 4. Definitions 2 PART 2—STANDARD STATEMENTS 5 5. The standard statements 5 6. Basis of preparation of the standard statements 5 7. Formats of the standard statements 5 PART 3—BUDGETS 7 8. Other matters to be included 7 9. Public notice of proposed budget or revised budget 8 PART 4—ANNUAL REPORT 10 Division 1—Report of Operations 10 10. Report of operations 10 11. General information 10 12. Certification of standard statements 12 Division 2—Financial Statements 14 13. Financial Statements 14 14. Notes to financial statements 14 15. Financial ratios 14 16. Certification of financial statements 14 Division 3—Meeting to consider annual report 16 17. Time for holding of meeting to consider annual report 16 -- 1 of 22 -- Victorian Legislation Parliamentary Documents Regulation Page ii PART 5—CONSEQUENTIAL AMENDMENTS 17 18. Consequential amendments 17 __________________ SCHEDULE—Financial Ratios 18 ═══════════════ ENDNOTES 20 -- 2 of 22 -- Victorian Legislation Parliamentary Documents 1 STATUTORY RULES 2004 S.R. No. 30/2004 Local Government Act 1989 Local Government (Finance and Reporting) Regulations 2004 The Governor in Council makes the following Regulations: Dated: 20 April 2004 Responsible Minister: CANDY BROAD Minister for Local Government DIANE CASEY Clerk of the Executive Council PART 1—PRELIMINARY 1. Objective The objective of these Regulations is to prescribe for the purposes of the Local Government Act 1989— (a) the manner in which the standard statements and financial statements of a Council are to be prepared and their contents; (b) the information to be included in a Council Plan, budget, revised budget and annual report; (c) other matters required to be prescribed under Parts 6 and 7 of the Act. -- 3 of 22 -- Victorian Legislation Parliamentary Documents Part 1—Preliminary Local Government (Finance and Reporting) Regulations 2004 S.R. No. 30/2004 2 2. Authorising provision These Regulations are made under section 243 of the Local Government Act 1989. 3. Commencement These Regulations come into operation on 1 May 2004. 4. Definitions In these Regulations— "accounting basis" means the general underlying basis of accounting, including, but not limited to, the historical cost basis, the current cost basis, the going concern basis, the accrual basis and the cash basis of accounting; "Act" means Local Government Act 1989; "annual report" means the annual report prepared by a Council under section 131 of the Act; "AAS" means the Australian Accounting Standard AAS 27 "Financial Reporting by Local Governments" as issued by the Australian Accounting Research Foundation from time to time; "budget" means the budget prepared by a Council under section 127 of the Act; "Council Plan" means the Council Plan prepared by a Council under section 125 of the Act; "current assets" means cash or other assets of the Council that would in the ordinary course of the operations of the Council be consumed or converted into cash within 12 months after the end of the last reporting period of the Council; r. 2 -- 4 of 22 -- Victorian Legislation Parliamentary Documents Part 1—Preliminary Local Government (Finance and Reporting) Regulations 2004 S.R. No. 30/2004 3 "financial statements" means the financial statements and the notes to the financial statements prepared in accordance with AAS as it applies to the general purpose financial reports of local governments; "non-current assets" means all assets other than current assets; "Principal Accounting Officer" means the person designated by a Council to be responsible for the financial management of the Council; "report of operations" means the report of operations prepared by a Council under section 131 of the Act; "revised budget" means the revised budget prepared by a Council under section 128 of the Act; "standard statement of capital works" means a statement which shows all capital expenditure of a Council in relation to non- current assets during the financial year; "standard statement of cash flows" means a statement which shows all cash inflows and cash outflows from all activities of a Council during a financial year; "standard statement of financial performance" means a statement which shows all revenue and expenses and other adjustments from all activities of a Council during a financial year; "standard statement of financial position" means a statement which shows all the assets and liabilities of a Council as at 30 June for a financial year; r. 4 -- 5 of 22 -- Victorian Legislation Parliamentary Documents Part 1—Preliminary Local Government (Finance and Reporting) Regulations 2004 S.R. No. 30/2004 4 "Strategic Resource Plan" means the Strategic Resource Plan prepared by a Council under section 126 of the Act. __________________ r. 4 -- 6 of 22 -- Victorian Legislation Parliamentary Documents Part 2—Standard Statements Local Government (Finance and Reporting) Regulations 2004 S.R. No. 30/2004 5 PART 2—STANDARD STATEMENTS 5. The standard statements (1) For the purposes of sections 126(2)(a), 127(2)(a), 128(3) and 131(3)(a) of the Act the standard statements are— (a) standard statement of financial performance; (b) standard statement of financial position; (c) standard statement of cash flows; (d) standard statement of capital works. (2) Despite the commencement of these Regulations, sub-regulations (1)(b) and (1)(d) will not apply to annual reports prepared in respect of the financial year ending 30 June 2004. 6. Basis of preparation of the standard statements (1) The standard statements must be prepared on accounting bases that are consistent with the financial statements. (2) In respect of each financial year, the standard statements must use the same accounting bases in the Strategic Resource Plan, budget, revised budget and annual report. 7. Formats of the standard statements In respect of each financial year, the standard statements must use the same key categories in the Strategic Resource Plan, budget, revised budget and annual report in relation to— (a) revenue and expenditure in the standard statement of financial performance; (b) assets and liabilities in the standard statement of financial position; r. 5 -- 7 of 22 -- Victorian Legislation Parliamentary Documents Part 2—Standard Statements Local Government (Finance and Reporting) Regulations 2004 S.R. No. 30/2004 6 (c) cash inflows and cash outflows in the standard statement of cash flows; (d) capital expenditure in the standard statement of capital works. __________________ r. 7 -- 8 of 22 -- Victorian Legislation Parliamentary Documents Part 3—Budgets Local Government (Finance and Reporting) Regulations 2004 S.R. No. 30/2004 7 PART 3—BUDGETS 8. Other matters to be included For the purposes of sections 127(2)(e) and 128(3) of the Act, the budget and any revised budget must contain the following information for the financial year to which the budget or revised budget relates— (a) the total amount proposed to be borrowed, other than borrowings to refinance existing loans; (b) the proposed total amount of debt redemption; (c) in the case of the proposed budget— (i) the proposed rate in the dollar for each type of rate to be levied; (ii) the estimated amount to be raised by each type of rate to be levied; (iii) the estimated total amount to be raised by rates; (iv) the proposed percentage change in the rate in the dollar for each type of rate to be levied compared to that of the previous financial year; (v) the number of assessments for each type of rate to be levied compared with the previous year; (vi) the total number of assessments; (vii) the basis of valuation to be used; (viii) the estimated total value of land in respect of which each type of rate is to be levied compared with the previous year; r. 8 -- 9 of 22 -- Victorian Legislation Parliamentary Documents Part 3—Budgets Local Government (Finance and Reporting) Regulations 2004 S.R. No. 30/2004 8 (ix) the proposed municipal charge, if any; (x) the proposed rate or unit amount to be levied for each type of service rate or charge under section 162 of the Act; (xi) the estimated amount to be raised by each type of charge to be levied compared with the previous year; (xii) the estimated total amount to be raised by rates and charges; (xiii) any significant changes that may affect the estimated amounts to be raised; (d) in the case of a revised budget, those matters referred to in paragraph (c) as applicable to any additional rates and charges to be levied. 9. Public notice of proposed budget or revised budget For the purposes of section 129 of the Act, the following information must be included in the public notice of the preparation of a proposed budget or revised budget— (a) the date on which Council will meet to adopt its budget or revised budget; (b) the total amount borrowed as at 30 June of the previous financial year; (c) the total amount proposed to be borrowed during the financial year or the total amount borrowed immediately before the preparation of the revised budget, other than borrowings to refinance existing loans; (d) the total amount projected to be redeemed during the financial year; (e) the projected total amount of borrowings as at 30 June of the financial year; r. 9 -- 10 of 22 -- Victorian Legislation Parliamentary Documents Part 3—Budgets Local Government (Finance and Reporting) Regulations 2004 S.R. No. 30/2004 9 (f) the projected cost of servicing the borrowings during the financial year; (g) the proposed rate in the dollar for each type of rate to be levied; (h) the proposed municipal charge, if any; (i) the proposed rate or unit amount for each type of service rate or charge to be levied under section 162 of the Act; (j) in the case of a revised budget, a summary of reasons for the preparation of the revised budget. __________________ r. 9 -- 11 of 22 -- Victorian Legislation Parliamentary Documents Part 4—Annual Report Local Government (Finance and Reporting) Regulations 2004 S.R. No. 30/2004 10 PART 4—ANNUAL REPORT Division 1—Report of Operations 10. Report of operations For the purposes of section 131(2)(b) of the Act, the report of operations of a Council which is to be included in the annual report must contain information, including information with respect to the activities of the Council in previous years, that gives an accurate description of the operations of the Council during the financial year. 11. General information Without limiting the generality of regulation 10, the report of operations of a Council must to the extent applicable— (a) contain a statement which reviews the performance of the Council against the Council Plan including outcomes in relation to the strategic indicators included in the Council Plan under section 125(2) of the Act; (b) contain information on— (i) legislative, economic or other factors which have had an impact on the Council's performance; (ii) major policy initiatives taken by the Council; (iii) major works undertaken or completed by or for the Council; r. 10 -- 12 of 22 -- Victorian Legislation Parliamentary Documents Part 4—Annual Report Local Government (Finance and Reporting) Regulations 2004 S.R. No. 30/2004 11 (iv) major changes which have taken place during the financial year in relation to the functions of the Council or to the Council's structure, the methods of carrying out its objectives and functions and the reasons for those changes; (v) other major operations and achievements of the Council; (c) contain information with respect to the nature and range of activities undertaken by the Council, including— (i) the range of services provided by the Council; (ii) the persons or sections of the community served by the Council; (d) list the names of all Councillors and their dates of election and retirement; (e) contain information with respect to the administrative structure of the Council including— (i) the name of the Chief Executive Officer; (ii) the names of the occupants of senior offices, together with a brief description of the area of responsibility of each officer; (iii) a chart setting out the organisational structure of the Council; (f) set out the addresses, telephone numbers, fax numbers and e-mail addresses of Council offices; r. 11 -- 13 of 22 -- Victorian Legislation Parliamentary Documents Part 4—Annual Report Local Government (Finance and Reporting) Regulations 2004 S.R. No. 30/2004 12 (g) list the documents specified in Part 8 of the Local Government Regulations 2001 and the places where those documents can be inspected or copies obtained in accordance with section 222 of the Act; (h) specify the number, classification and types of jobs of— (i) members of Council staff of either sex; (ii) members of Council staff in designated groups; (i) if the Council is required to implement an equal opportunity program under Schedule 6 to the Act, contain— (i) a statement of the objectives and indicators of the program; (ii) a description and an analysis of action taken to develop and implement the program; (iii) an assessment of those objectives. 12. Certification of standard statements For the purposes of section 131(3)(c) of the Act, the Principal Accounting Officer, 2 Councillors and the Chief Executive Officer must certify the standard statements contained in the annual report in the following form— "In my opinion the accompanying standard statements have been prepared on accounting bases consistent with the financial statements and in accordance with the Local Government Act 1989 and the Local Government (Finance and Reporting) Regulations 2004. r. 12 -- 14 of 22 -- Victorian Legislation Parliamentary Documents Part 4—Annual Report Local Government (Finance and Reporting) Regulations 2004 S.R. No. 30/2004 13 Principal Accounting Officer (Name) (Qualifications (if any)) Dated: In our opinion the accompanying standard statements have been prepared on accounting bases consistent with the financial statements and in accordance with the Local Government Act 1989 and the Local Government (Finance and Reporting) Regulations 2004. As at the date of signing, we are not aware of any circumstances which would render any particulars in the standard statements to be misleading or inaccurate. We have been authorised by the Council on [date] to certify the standard statements in their final form. Councillor (Name) Dated: Councillor (Name) Dated: Chief Executive Officer (Name) Dated:". r. 12 -- 15 of 22 -- Victorian Legislation Parliamentary Documents Part 4—Annual Report Local Government (Finance and Reporting) Regulations 2004 S.R. No. 30/2004 14 Division 2—Financial Statements 13. Financial Statements For the purposes of section 131(3)(a) of the Act, the financial statements of a Council to be included in the annual report must be prepared in accordance with AAS as it applies to the general purpose financial reports of local governments. 14. Notes to financial statements In addition to any matters required by AAS, the financial statements must disclose by way of note the following information for the financial year to which the financial statements relate— (a) the amounts of money and assets held in trust, the purposes for which they are held and the nature of any restrictions imposed on the way in which the money and assets can be applied; (b) a summary of grants and subsidies by type, classified separately as to recurrent and non-recurrent expenditure components; (c) all assets and liabilities committed to joint venture activities. 15. Financial ratios A Council must include in the financial statements the financial ratios set out in the Schedule for the financial year to which the financial statements relate and for each of the previous 2 financial years. 16. Certification of financial statements For the purposes of section 131(3)(c) of the Act, the Principal Accounting Officer, 2 Councillors and the Chief Executive Officer must certify the financial statements contained in the annual report in the following form— r. 13 -- 16 of 22 -- Victorian Legislation Parliamentary Documents Part 4—Annual Report Local Government (Finance and Reporting) Regulations 2004 S.R. No. 30/2004 15 "In my opinion the accompanying financial statements have been prepared in accordance with the Local Government Act 1989, the Local Government (Finance and Reporting) Regulations 2004, Australian Accounting Standards and other mandatory professional reporting requirements. Principal Accounting Officer (Name) (Qualifications (if any)) Dated: In our opinion the accompanying financial statements present fairly the financial transactions of the.......................Council for the year ended 30 June 20..... and the financial position of the Council as at that date. As at the date of signing, we are not aware of any circumstances which would render any particulars in the financial statements to be misleading or inaccurate. We have been authorised by the Council on [date] to certify the financial statements in their final form. Councillor (Name) Dated: Councillor r. 16 -- 17 of 22 -- Victorian Legislation Parliamentary Documents Part 4—Annual Report Local Government (Finance and Reporting) Regulations 2004 S.R. No. 30/2004 16 (Name) Dated: Chief Executive Officer (Name) Dated:". Division 3—Meeting to consider annual report 17. Time for holding of meeting to consider annual report For the purposes of section 134(2)(a) of the Act, a Council must hold a meeting to consider the annual report within one month after providing the annual report to the Minister pursuant to section 131(6) of the Act. __________________ r. 17 -- 18 of 22 -- Victorian Legislation Parliamentary Documents Part 5—Consequential Amendments Local Government (Finance and Reporting) Regulations 2004 S.R. No. 30/2004 17 PART 5—CONSEQUENTIAL AMENDMENTS 18. Consequential amendments (1) In regulation 5 of the Local Government Regulations 2001 1 the definitions of "annual report", "AAS 27", "current assets", "designated group", "non current assets" and "Principal Accounting Officer" are revoked. (2) Parts 4 and 5 and Schedule 3 of the Local Government Regulations 2001 are revoked. __________________ r. 18 -- 19 of 22 -- Victorian Legislation Parliamentary Documents Local Government (Finance and Reporting) Regulations 2004 S.R. No. 30/2004 18 SCHEDULE Regulation 15 FINANCIAL RATIOS 1. Definitions In this Schedule— "current assets" means cash or other assets of the entity that would in the ordinary course of the operations of the Council be consumed or converted into cash within 12 months after the end of the last reporting period of the Council; "current liabilities" means the total current liabilities as shown in the statement of financial position; "debt redemption" includes the principal component of repayments on loans and financial leases and capital items purchased on vendor terms, and contributions to sinking funds; "debt servicing costs" includes interest and charges on loans, overdrafts, financial leases and interest on payments for capital items purchased on vendor terms; "rate revenue" includes revenue from general rates, municipal charges, special rates, special charges, service rates and service charges; "total indebtedness" means total liabilities, both current and non-current, as shown in the statement of financial position; "total realisable assets" means total current assets and total realisable non-current assets; "total revenue" means total revenue as shown in the Operating Statement. Sch. -- 20 of 22 -- Victorian Legislation Parliamentary Documents Local Government (Finance and Reporting) Regulations 2004 S.R. No. 30/2004 19 2. Financial ratios The financial ratios referred to in regulation 15 must be expressed in the following manner— (a) Debt Servicing Ratio (to identify the capacity of a Council to service its outstanding debt); Debt servicing costs Total revenue (b) Debt Commitment Ratio (to identify a Council's debt redemption strategy); Debt servicing and redemption costs Rate revenue (c) Revenue Ratio (to identify a Council's dependence on non-rate income); Rate revenue Total revenue (d) Debt Exposure Ratio (to identify a Council's exposure to debt); Total indebtedness Total realisable assets (e) Working Capital Ratio (to assess a Council's ability to meet current commitments). Current assets Current liabilities ═══════════════ Sch. -- 21 of 22 -- Victorian Legislation Parliamentary Documents Local Government (Finance and Reporting) Regulations 2004 S.R. No. 30/2004 20 ENDNOTES 1 Reg. 18(1): S.R. No. 30/2001. —— Table of Applied, Adopted or Incorporated Matter Required by Subordinate Legislation Regulations 1994 Note that the following table of applied, adopted or incorporated matter is included in accordance with the requirements of regulation 6 of the Subordinate Legislation Regulations 1994. Statutory Rule Provision Title of applied, adopted or incorporated document Matter in applied, adopted or incorporated document Regulations 13 and 14 Australian Accounting Standard AAS 27 "Financial Reporting by Local Governments" as issued by the Australian Accounting Research Foundation The whole ═══════════════ Endnotes -- 22 of 22 --