Finance

The Office of Local Government provides guidance, procedures and guidelines to help councils follow the principles of sound financial management as required by the Local Government Act 1993. 

While spending should always be responsible and sustainable, under the act, councils must also:

• implement effective financial and asset management procedures
• invest in sustainable infrastructure to benefit the local community
• take opportunities to achieve intergenerational equity into consideration during decision-making.

Councils should also refer to the information on long term financial planning, delivery plans and operational plans provided through Integrated Planning and Reporting.

For a timeline of reporting requirements, visit council annual reporting requirements.

The guidelines aim to ensure that a council’s evaluation of the proposed capital expenditure is consistent and rigorous, the merits of projects can be compared and resource allocation can be made on an informed basis. It is important that the evaluation of the project is carried out in a clear, transparent and systematic way. The process of evaluation and reporting methods outlined in these guidelines will enhance the transparency and rigour of capital expenditure project evaluation.

Capital expenditure review is a necessary part of a council’s capital budgeting process and as such should be undertaken as part of the Integrated Planning and Reporting requirements in the preparation of the community strategic plan and resourcing strategy.

The use of credit cards is a convenient and efficient way for council staff and members of the governing body to make small, frequent business related purchases as opposed to more traditional purchase order processes.

However, as councils are responsible for the prudent management of community resources, it is important they have a robust credit card policy and related procedures in place and that cardholders understand their responsibilities.

To assist councils to develop and/or review their credit card policies and to build consistency across the sector, the Office of Local Government has developed the Guideline on the use and management of credit cards (PDF, 213 KB) under section 23A of the Local Government Act 1993.

The guideline is based NSW Treasury’s credit card policy apply to NSW state agencies to the extent its principles are relevant to local government and was developed in response to a performance audit of credit card usage at 6 local councils by the NSW Audit Office. The NSW Audit Office released its final report, Credit card management in Local Government on 3 September 2020.

The Office of Local Government is grateful to NSW Treasury for permission to adapt their guideline and to all stakeholders for the useful comments and suggestions provided during consultation on a draft version of the guideline.

For further information, read the Circulars – Release of the Guideline on the Use and Management of Credit Cards (PDF, 83.9 KB).

The Debt Management and Hardship Guidelines (PDF, 353 KB) were issued in November 2018 to outline best practice approaches for councils to better manage ratepayer debt and respond to genuine hardship.

The guidelines assist councils to develop proactive measures to ensure prompt payment, minimise default, follow up ratepayers, recover debts fairly, assess hardship claims and monitor debt.

Each council should adopt robust, fair and transparent policies and procedures outlining how they will communicate with ratepayers, collect monies owing, assess hardship claims and, where necessary, recover overdue payments to manage debt.

The guidelines promote a range of strategies and actions councils can use to help ratepayers pay on time including:

• simplified rates notices including information in relevant languages
• options for ratepayers to receive their rates notices by email and pay electronically
• flexible payment options including weekly, fortnightly and monthly instalments as well as tailored plans
• discounts to provide incentives for prompt payment in full
• use of Centrepay as a voluntary way for people to pay their rates directly from their Centrelink payments
• greater discounts for pensioners facing hardship
• a ‘stop the clock’ approach to suspend debt recovery, legal action and interest accrual while a ratepayer’s hardship application is awaiting determination or while they are complying with a payment plan.

The guidelines, which are part of the NSW Government’s Civil Justice Strategy, have been issued by the Office of Local Government under the Local Government Act. All NSW councils must take them into account when developing and implementing debt management and hardship policies and procedures.

To assist councillors, General Managers and the Responsible Accounting Officers of councils to invest surplus funds in a prudent and appropriate manner, all councils are required to develop an investment policy. The Investment Policy Guidelines 2010 (PDF, 212 KB) were developed to provide assistance with the preparation of a policy and the prudent and appropriate management of a council’s surplus funds.

Investments are not considered to be a principal activity for councils, but the knowledge and skill required to manage investments can be quite specialised. Read the Investment Order (2011) (PDF, 345 KB).

For application forms for a special variation to general income or to increase the minimum rate above the rate peg, visit the Independent Pricing and Regulatory Tribunal (IPART).

View the resources below for more information about rating and revenue, including Special Variation and Minimum Rates Guidelines.