Financial management

Local governments must adopt certain documents as part of their financial management system. These record the local government’s strategic, financial, and operational plans and report on its financial accountability. These documents are supported by financial policies on investment, debt, and revenue. Planning documents and financial policies must be regularly reviewed and updated.

Corporate planning

Local governments must have a five-year corporate plan. The corporate plan is the business plan that drives and coordinates all strategic documents and policies and forms the basis of strategic decision-making. This plan must incorporate community engagement.

Rates, budget, and asset management plan

Budgets are adopted each year between 1 June and 31 July for the financial year starting on 1 July.

They include a forecast financial position, cash flow, income, expenditure, and changes in equity for that financial year and the next two financial years. The budget must also include a long-term financial forecast for at least 10 years, a revenue statement, and a revenue policy.

A long-term asset management plan sets out strategies to ensure the sustainable management of assets and infrastructure. This plan identifies the estimated capital expenditure for renewing, upgrading, and extending the assets for the period covered by the plan. It is part of, and consistent with the long-term financial forecast, and covers a period of 10 years or more.

At the budget meeting, the local government will pass resolutions about the rates and charges that will be levied for the financial year. The forecast revenue from rates and charges is an important source of income in the local government’s budget. Rates and charges are levied on rateable land in the local government’s area and must be made in accordance with the LGA and LGR.

Operational plan

Local governments prepare and adopt an operational plan each financial year that is consistent with the budget and states how the local government will implement the five-year corporate plan and manage operational risks. Typically, the operational plan will include specific initiatives, projects, and activities to help meet the strategic objectives of the corporate plan.

Annual report and audited financial statements

At the end of each financial year, the local government must prepare a general-purpose financial statement to report on income, expenses and cashflows for the year, as well as assets and liabilities at year’s end. This statement is audited by the Auditor-General of Queensland. It must comply with requirements published by the Australian Accounting Standards Board.

The local government must also prepare current-year and long- term financial sustainability statements.

The audited general-purpose, current-year and long-term financial sustainability statements must be included in the local government’s annual report.

The annual report is an important part of the accountability cycle for local governments. It allows it to report on its performance and provides the community with an opportunity to assess this performance against the outcome measures stated in the corporate and operational plans.

In addition, the annual report provides information about councillor complaints to the Independent Assessor and administrative action complaints, how the local government has implemented its complaints management process, and its performance in resolving complaints.

Financial policies

Local governments must make, implement, and review financial policies, including an investment policy, annual debt policy and revenue policy.

The investment policy provides guidance for those undertaking an investment process. The policy outlines the local government’s investment objectives and overall risk philosophy, and procedures for achieving the goals related to investment stated in the policy.

The debt policy must state the new borrowings planned for the current financial year and the next nine financial years, and the time over which the local government plans to repay existing and new borrowings.

The revenue policy sets the local government’s broad strategy for raising revenue. This will include principles for setting rates and charges, and the extent to which it employs a ‘user pays’ approach for the delivery of its services. The local government must review the policy annually and in time to allow an annual budget that is consistent with the revenue policy to be adopted for the next financial year.

Accessing plans, reports, and policies

Copies of a local government’s corporate plan, annual budget (including long-term forecast, revenue statement and policy), annual report, investment policy and debt policy must be published on its website. Each of council’s meeting minutes, including minutes of the budget meeting, are also to be published on their websites.