Developing a financial assistance policy
The Office of Local Government encourages councils to develop a policy on granting financial assistance to local charities, community groups and organisations, sport and recreation clubs, and private individuals.
Such a policy will help councils achieve greater transparency and accountability and adhere to section 356 – Provision of Financial Assistance of the Local Government Act 1993.
Under the act, financial assistance must be for the purposes of exercising the council’s functions. Section 356(2) requires councils to give at least 28 days public notice of a proposal to pass a resolution to grant financial assistance prior to doing so.
The financial assistance or donations policy should outline issues such as:
- Forms of application for financial assistance.
- Assessment processes, including, where applicable, obtaining supporting information to establish the bona fides of applications.
- Procedures for ensuring public notice is given and for dealing with any public submissions.
- Establishing clear and transparent criteria for the assessment of applications for financial assistance.
- A procedure for ensuring financial assistance is used by the recipient for the specified purpose.
A procedure to meet the public notice requirement and consider any public submissions in response to the request should also be developed.
The policy should be applied with sufficient flexibility to ensure that the council strikes an appropriate balance between prudent financial management and its ability to effectively meet meritorious requests for financial assistance.
Public notice is not required if:
- the assistance is part of a specific program which has been included in the council’s management plan
- the program’s budget does not exceed 5% of the council’s income from ordinary rates for the year
- the program is uniformly available to all or a significant group of persons within the area.