Focus on Finance
Winter 2018

The sole purpose of this newsletter is to provide information to members. The contents of the newsletter are limited to that purpose and should not be taken as advice on finance, management or the law. All material contained in the newsletter is subject to copyright of the various authors who contribute to it. Contents of this newsletter may be reproduced in whole or in part only with the prior permission of the South Australian Local Government Financial Management Group who will, where required, seek appropriate permissions from copyright owners or rights holders. The South Australian Local Government Financial Management Group accepts no liability or responsibility whatsoever for or in respect of any use of or reliance on the newsletter by any party. Information contained in this newsletter has partly been provided by third parties. The South Australian Local Government Financial Management Group does not guarantee the information. All interested parties should make their own enquiries to verify the information and to satisfy themselves in all respects.


Clive Hempel

Anthony Amato

Ray Barnwell

Stephanie Juhas

Craig Mudge
Alex Oulianoff
Elizabeth Williams
Eion Williamson

President’s Message

Clive Hempel

Hopefully everyone has completed the process of public consultation on their respective Annual Business Plan and Budget. Next year’s process may be quite different if the State Government is successful with the introduction of the Local Government (Rate Oversight) Amendment Bill 2018. If passed, it will be another six months (31 December 2018) until we are advised of the capped standard rate for 2019/20 and possibly be given an insight of the drivers along with any efficiency or productivity component that have been used in the capping calculation. Any council wishing to change their rating methodology in 2019/20 relation to Section 148, 154 or 155 must advise ESCOSA before 31 October 2018 (refer to S187I(1)), but as we are in the lead up to an election year Council would need to make a decision prior to the commencement of the caretaker period being the 18 September 2018. Representatives of the SALGFMG have been in discussions with the Local Government Association (LGA) prior to the introduction of the Local Government (Rate Oversight) Amendment Bill 2018 and will continue to offer assistance and advice to the LGA on this matter.

As always, our working groups are busy on annual duties and the various one-off projects. The Financial Management Framework group has once again given their annual submission for the draft 2017/18 Model Financial Statements. The model statements have now been approved by the Minister. This group is also looking at providing supplementary information to Councils to clarify new Accounting Standards and other matters in relation to the Model Financial Statements. The Australian Taxation Office (ATO) are yet to provide rulings in regards to the GST treatment of fees and charges. Unfortunately, there is very little that we can do but wait for the ATO to process the multi rulings that have been lodged. An agreement has been drafted with LG Solutions in regards to the new Lite version of their LTFP model that will be used by South Australian Councils. The model is expected to be available later this calendar year. I would like to thank all the members of the work groups for their valuable time and effort in giving back to the Local Government sector. For a full update of our groups and their latest activities please refer to the “Projects / Work Groups Update” section of the newsletter.

The Annual General Meeting is planned to be held on 31 August, 2018 at the Adelaide Zoo Sanctuary and the next Workshop and Conference is to be held on 29 and 30 November, 2018 at the Adelaide Oval. The two day Workshop and Conference has been brought forward from early December to late November due to feedback that has previously been received and will hopefully make it a more convenient time for members to attend. Please save these dates in your calendars.

I would also like to mention that after 11 years of working as the SALGFMG Finance Officer, Maria Hocking has advised that she will be ceasing work from 30 June, 2018. I would like to thank Maria for her 11 years of service and for her offer to complete the work required for the 2017/18 annual financial statements.

To all our sponsors, we thank you for your continual support. Without our sponsors we would not be able to provide our members the professional development and networking opportunities at our workshops and conferences. When requiring services for your organisation please ensure that you consider our sponsors as in this way they will be able to continue their support of the SALGFMG.

Clive Hempel

President SALGFMG

President's Message proudly sponsored by
Local Government Finance Authority

Key Dates

10 August 2018 (Local Government Elections)
Roll close 5pm

31 August 2018
SALGFMG Breakfast AGM. Adelaide Zoo Sanctuary, Adelaide

2 September 2018 (Local Government Elections)
Candidate nominations open for Local Government elections

18 September 2018 (Local Government Elections)
Nominations Close for Local Government elections - 12 noon
Commencement of Caretaker Period

30 September – 31 May
At least twice, a council/ council subsidiary/regional subsidiary must consider a report showing a revised forecast of its operating and capital investment activities for the relevant financial year compared with the estimates for those activities set out in the budget presented in a manner consistent with the note in the Model Financial Statements entitled Uniform Presentation of Finances.

9 November 2018 – 5pm (Local Government Elections)
Closure of votes for Local Government Elections – 5pm

First ordinary Council meeting after periodic election (Local Government Elections)
Date of effect for allowances for Council Members for the ensuing 12-month period. (Rate of allowances now set by Remuneration Tribunal – see for latest determination)

29 & 30 November 2018
SALGFMG Workshop and Conference. Adelaide Oval, Adelaide

30 November
Last date that audited financial statements must be submitted to the Minister and the SA Local Government Grants Commission.

Deadline for Local Government Grants Commission returns.

Last date for adoption of annual report for the preceding financial year.

31 December
Last date that a council, single council subsidiary or regional subsidiary must prepare and consider a report showing the audited financial results of the council, council subsidiary or regional subsidiary (as the case may be) for the previous financial year compared with the estimated financial results set out in the budget presented in a manner consistent with the Model Financial Statements

Last date for a copy of the annual report to be submitted to both Houses of Parliament and the SA Local Government Grants Commission

Key Dates proudly sponsored by
LG Solutions

Are you ready for the changes to lease accounting?

By Tim Muhlhausler
galpins new

The way that Councils, in their capacity as lessees, account for leases is changing. The changes come into effect for the 2019-20 financial year – so why should you care about them now?

The new standards completely change the way that lessees account for their leased assets. This means that having an understanding of what lease arrangements are in place, and ensuring that documentation exists to support them, is more important than ever.

The new requirements in a nutshell

The major changes under the new standard AASB 16 impact on the lessee only, not the lessor.

Under existing standards, operating leases do not require the recognition of any asset or liability by lessees. A new requirement is being introduced for lessees to recognise a ‘right-of-use’ asset representing their right to use the underlying leased asset, and a corresponding lease liability representing their obligations to make lease payments. This requirement applies to all leases with a term of more than 12 months (subject to materiality).

Additionally, when combined with income recognition requirements of new standard AASB 1058, any difference in value between the value of the right-of-use asset and the obligation to make lease repayments (liability) is recognised as income for leases with below-market terms (e.g. peppercorn leases).

Accounting Entries

In simple terms, the journal entries required will be:


What do Council’s need to do to get ready?


Lastly, keep your eyes open for the latest commentary in the Model Financial Statements – the finer details of required disclosures and transition method are still being determined, and will be detailed in future editions of the Model.

The information in this article is general in nature - if you would like more information on the potential impacts for your Council, please do not hesitate to give Tim from Galpins a call on 8332 3433.

Project / Work Group Updates

Seminars Group

Thanks to all the people that attended our "Bulletproof" conference on 16 March, 2018 at the Adelaide Convention Centre. The day was filled with great informative sessions with many participants giving us feedback that it was one of the best conferences that they had ever attended.

Registrations will soon be open for our Annual General Meeting to be held on 31 August, 2018 at the Adelaide Zoo Sanctuary with guest speaker Andrew Leunig - Business Model Innovation Expert.

Please also save the date in your diary for our Workshop and Conference to be held on 29 and 30 November, 2018 at the Adelaide Oval with our keynote speaker Craig Reucassel, best known for his work on The Chaser.

Have you recently heard a great presenter or would like to hear about a particular topic at a future conference? If so, please contact me with your suggestion.

For further information please contact Clive Hempel This email address is being protected from spambots. You need JavaScript enabled to view it.

Fees & Charges Group

The work group are currently undertaking a GST review of Fees & Charges on behalf of all South Australian Councils in conjunction with BDO.
The Class Ruling has been lodged on behalf of the Local Government Association (LGA) and will be for use by all South Australian Councils. This information will be consolidated into a comprehensive matrix to ensure that an ongoing accurate and compliant listing of GST treatment for fees and charges is available.

The work group continue to liaise with BDO and the Australian Taxation Office to achieve the outcomes of this project.

For further information please contact Elizabeth Williams This email address is being protected from spambots. You need JavaScript enabled to view it.

Financial Management Framework Group

The annual review of the Model Financial Statements 2018 is complete and the final version of the 2018 Model Financial Statements have been approved by the Minister.

The document is made available for South Australian users as a recommended format and presentation for the financial statements, notes and other information. It is intended use is a best practice model providing information on each of the required areas and for practical guidance includes some examples of the how, what, when, why and where.

From time to time the group considers new and revised Accounting Standards where this joint review approach can benefit the wider LG sector for a suggested application. Currently AASB16, AASB15 and AASB1058 are being discussed, where relevant for the appropriate timing for recognition of grant income early adoption of these AASB’s may be required.

For further information please contact Mark Lague This email address is being protected from spambots. You need JavaScript enabled to view it.

Dog & Cat Management

By the time you are reading this, DACO (Dogs and Cats Online) should be up and running, allowing animal owners to register their dogs and cats over the internet. In May, data in relation to a total of 282,147 dogs and 4,632 cats were successfully loaded into the system in readiness for go live.

Councils will still be required to take payments over the counter should animal owners wish to register in this way. This will require Councils to remit these funds to the Dog & Cat Management Board. The Board will be remitting Council’s net registration fees (ie excluding the contribution paid into the Dog and Cat Management Fund) on a regular basis throughout the year.

The project group continues to meet on a fortnightly basis to update its members of the process of the project as well as to discuss any matters relating to the project.

For further information please contact Simon Zbierski This email address is being protected from spambots. You need JavaScript enabled to view it.

Newsletter / Website Group

This is our second newsletter for the calendar year, with our next edition scheduled for Spring 2018. If you have ideas for future articles or areas of interest please contact me and we can see if it can be written by one of our knowledgeable sponsors.
For further information please contact Elizabeth Williams This email address is being protected from spambots. You need JavaScript enabled to view it.

Smart cities start with smart councils


As the world becomes increasingly entrenched in the digital age, the push for ‘smart cities’ continues to gather momentum.

As a leading enterprise provider of enterprise software to councils, TechnologyOne understands this is of particular importance to the custodians of city and community service delivery – the local government authorities. Councils are responsible for using and applying technology to create the smart cities of our future.

So what makes a smart city ‘smart’? We see smart as a broader mindset, not just a desire to get on board the technology train. It’s about improving the experience for our customers and taking a whole-of-council view.

Every community has a unique landscape that determines what smart looks like. Intelligent parking systems may be the way forward in capital city centres, but there’s little need for them in rural and regional towns. In locations where residents are separated by hundreds of kilometres, smart may be as simple as providing reliable access to council services online.

While each environment may be unique, there are always common goals that make smart communities a success:

1. An enterprise approach
The whole really is greater than the sum of its parts. Where disparate systems deliver disparate data, an enterprise solution offers a single point of truth.

2. A suitable technology platform
An underlying IT platform that supports mobile devices and delivers real-time access to council data is key to enabling smart communities.

3. A focus on core competencies
Smart councils concentrate on delivering better outcomes for residents and ratepayers through improved efficiencies and ease of doing business, rather than on the technology itself.

Making the switch

To deliver a smart city or community, it’s essential to be a smart council. A council’s core information system, comprised of outdated and disparate applications, is a potential black hole of costs, creating its own set of inefficiencies and constraints. That’s why local government organisations are increasingly turning to TechnologyOne’s enterprise SaaS solution to help realise their smart strategies. Last year alone we signed 240 new deals across Australia, New Zealand and the United Kingdom.

True enterprise SaaS offers a range of advantages including accessibility, reliability, scalability and superior security, all of which mean councils can comfortably focus on providing services to their community, while their technology is seamlessly updated to keep them ahead of the curve. By removing the burden of managing the technology environment, councils can focus on becoming 'smarter' and delivering better services to their community.

About TechnologyOne

TechnologyOne (ASX:TNE) is Australia's largest enterprise software company and one of Australia's top 200 ASX-listed companies, with offices across six countries. We create solutions that transform business and make life simple for our customers. We do this by providing powerful, deeply integrated enterprise software that is incredibly easy to use. Over 1,200 leading corporations, government departments and statutory authorities are powered by our software.

We participate in only eight key markets: government, local government, financial services, education, health and community services, asset intensive industries, project intensive industries and corporates. For these markets we develop, market, sell, implement, support and run our preconfigured solutions, which reduce time, cost and risk for our customers.

For 30 years, we have been providing our customers enterprise software that evolves and adapts to new and emerging technologies, allowing them to focus on their business and not technology. Today, our software is available on the TechnologyOne Cloud and across smart mobile devices.

For further information please visit: 

Download images from TechnologyOne’s image library here:

2018 March Conference Summary

Bulletproof small

Members of the South Australian Local Government Financial Management Group gathered at the Adelaide Convention Centre on Friday 16 March for its ‘Bulletproof’ conference. An excellent line up of speakers had been organised for the day, with the Executive Committee receiving an overwhelming amount of positive feedback with reports that this was the best yet.

With Lisa McAskill once again providing MC duties, the morning commenced with now former LGA President Mayor Lorraine Rosenberg providing an overview of ‘What Every Finance Professional Needs to Know’, focusing on the importance of clearly and simply communicating financial information to Council and the community. Her presentation also covered current sector issues, including rate capping, financial sustainability, transparency and accountability.

Justine Keenan and James Barden from the Australian Accounting Standards Board then discussed new accounting standard AASB 1058 Income for Not-for-Profit Entities, as well as other projects the AASB is focused on, including Conceptual Framework, Australian Financial Reporting Framework, Public Sector Licences, Fair Value Measurement and Insurance Contracts. Their presentation can be found here (you must be signed in to view): Justine Keenan and James Barden AASB

Davin Lambert, Manager Financial Markets, Local Government Finance Authority, presented an LGFA and Market Update. The LGFA have been a Platinum Sponsor of the SALGFMG for over 25 years. Davin’s presentation can be found here: Davin Lambert LGFA

John O’Connor, Manager, LG Solutions gave an overview and update on their products, including End of Financial Year Statements and Fees & Charges.

National Australia Bank’s Head of Industry Analysis, Dean Pearson, gave an overview of NAB’s outlook for the economy, markets and the Local Government sector, focusing on South Australia in his presentation ‘What Can Human Behaviour (and NAB data) tell us about the Economy, Business, Consumers and Ourselves?’. Dean’s presentation can be found here: Dean Pearson NAB

The Chair of the City of Marion’s Audit Committee, Greg Connor, discussed the perspective of independent Chairpersons on Council Audit Committees, and discussed the Local Government reform package which suggests making better use of Audit Committees to enhance both the quality of financial management and accountability to the community. Greg’s presentation can be found here: Greg Connor CoM Independent Chair

Kevin Smith from the Australian Tax College provided an update to the ATO’s new approach to the treatment of private travel in the context of Fringe Benefits Tax. Kevin presented the key changes and illustrated how the approach in providing car fringe benefits may need to change. Kevin’s presentation can be found here: Kevin Smith ATC

The keynote speaker was Kristen Hansen, founder of EnHansen Performance, on the topic ‘Neuroscience of Resilience’. Kristen’s discussion focused on how the brain works, peak mental performance and insights into problem solving, as well as how to regulate stress and emotions and the neuroscience of wellness. Kristen further demonstrated how using neuroscience can provide strategies to renew mental resources throughout the day while managing stress, motivation levels and information overloaded environments. Kristen’s presentation can be found here: Kristen Hansen EnHansen Performance

The day concluded with a presentation from members of LGITSA, which over the past two and a half years has established itself as an independently funded group of IT and IM practitioners within Local Government. Chris James, President, gave an overview of LGITSA and its involvement with key initiatives, including DACO. Karin Mahoney, Vice President, demonstrated the crossover between IT strategy, asset management planning and finance, and Daniel Kiley, Senior Associate, HWL Ebsworth, provided an overview of cryptocurrencies and blockchain. These presentations can be found here: Chris James LGITSA Karin Mahoney LGITSA Daniel Kiley HWL Ebsworth

The SALGFMG would like to sincerely thank all our sponsors for their continued support of the conferences, as once again it enabled a program full of high calibre speakers. Members can access their presentations on the SALGFMG website (login required for access).

The next Workshop and Conference will be held on Thursday 29 and Friday 30 November at the Adelaide Oval, please see preview below for more information.

Improvements in Revenue recognition?
Impact of the new standards

By David Papa


The upcoming standard changes will be some of the biggest we have seen since the international framework was adopted. With regards to revenue for the Local Government sector, there are two key areas that all Councils need to be aware of when applying the new accounting standards, AASB 15 Revenue from Contracts with Customers and AASB 1058 Income for Not for Profit Entities (both accounting standards should be considered together). The two areas we will focus on are:

  • Treatment of grant revenues; and
  • Recognition of volunteer services as revenue

Impact of grant revenue changes

For years there has been confusion over the treatment of revenue from sources other than annual services, typically grants and other special funding. With the the adoption of IFRS and the implementation of AASB 1004 Contributions, the old principals of matching revenue with expenditure was lost and the concept of recording all grant income upon receipt resulted in the distortion of annual results, especially when the money had not been spent in the period of receipt. Over this time the sector has needed to justify volatility in revenue and profits and constantly revise operating budgets for grant funded programs.

The new accounting standards, AASB 15 Revenue from Contracts with Customers and AASB 1058 Income for Not for Profit Entities may provide some relief.

Key points from AASB 1058 Income for Not for Profit Entities:

  • Effective as of years beginning 1 January 2019, but can early adopt if early adopting AASB 15 Revenue from Contracts with Customers
  • Replaces AASB 1004 Contributions
  • The timing of income recognition depends on whether such a transaction gives rise to a liability or other performance obligation,
  • Effectively, this allows NFP entities to account for some grants as ‘tied funding’.

Key points from AASB 15 Revenue from Contracts with Customers:

  • Replaces AASB 118 Revenue, AASB 118 Construction Contracts and some revenue related interpretations
  • Aims to recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
  • Allows an entity to recognise revenue when (or as) a performance obligation is satisfied, i.e. when ‘control’ of the goods or services underlying the particular performance obligation is transferred to the customer. Effectively, the standard recognises revenue on a ‘milestone’ basis

Application of the Standard:

  • Specifically, the Standard introduces a 5 step approach to revenue recognition:
  • Step 1: Identifying contract(s) with customers
  • Step 2: Identify the performance obligations in the contract
  • Step 3: Determine the transaction price
  • Step 4: Allocate the transaction price to the performance obligations in the contract
  • Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation

What does all this mean?

Effectively funds that are received as “tied” to a set outcome or “performance obligation” can be carried as a liability on the balance sheet until the obligation is met. Say you receive a grant for the construction of a playground in a new development, Funds received are held on the balance sheet as revenue in advance (or similar) and recorded as revenue as the obligations for the grant are met. The requirements to be met should be clearly stated in the agreement and comply with the 5 steps above that are from the Standard.

Is this for all grants?

No. This relates to grants that meet the criteria above, funding that links to a defined and measurable performance obligation, such as grants for capital works. So, the Financial Assistance Grant will still be recognized on receipt as it is untied funding.

How to prepare

Conduct a review of all grants and consider the flowing:

How to prepare

Recognition of Volunteer services as revenue

AASB 1058 Income for Not for Profit Entities clearly states that:

When an entity receives volunteer services and can reliably measure the fair value of those services, the entity may elect to recognise the services as an asset (provided the relevant asset recognition criteria are met) or an expense. Local governments, government departments, general government sectors (GGSs) and whole of governments are required to recognise volunteer services if they would have been purchased if not provided voluntarily and the fair value of those services can be measured reliably.

Practically this means time, and therefore its value, captured under this standard is time that a Local Government would have to pay for if it was not volunteered.

Recognition of Volunteer services as revenue

What about other revenue items?

Most revenue items for the sector are annual or for service of only 12 months or less, therefore no real impact, or they are not material.

Yes, there are some other revenue types that are impacted by the above Standards, such as up-front membership fees, up front license costs, phone costs when on a contract, but very none of these appear material within Local Government.

With an application date of years beginning 1 January 2019, we do have some time to prepare. However, we suggest implementing systems to capture the right information so we are all prepared for the upcoming changes.

The information above is our interpretation of the Standards and are of a general nature. You should discuss the specific impact of the upcoming standards with your accounting team and your auditor, and always feel free to contact David Papa at Bentleys on 8372 7900 to discuss further.

Prudential Reviews – the importance of appointing a suitably qualified Reviewer

By John Jovicevic


As all readers would be aware, the completion of a Section 48 Prudential Report is a statutory compliance requirement when stipulated parameters are met.

The Prudential Report must address the mandated scope as prescribed by Section 48 of the Local Government Act 1999. Notwithstanding that a Prudential Review is a prescribed compliance requirement, there is often the opportunity for the Reviewer to add value beyond addressing the mandated scope.

In my experience, a common misconception within local government is that a Prudential Report will give the reader the answer on whether a particular project ‘should or should not proceed’.

Essentially, the Prudential Report is intended to inform Elected Members as to whether they have all of the necessary prescribed information to enable them to make a fully informed decision regarding the merits of the project in question.

The appointment of the Prudential Reviewer should never be taken lightly – selecting an independent professional who has the necessary level of commercial and local government experience and who can readily identify and appreciate the risks a project is likely to encounter, is where added value can be realised.

Engaging the Reviewer at an early stage of a project’s planning phase gives them the best opportunity to observe and make comment on the work being conducted by a council’s Administration and, importantly, provide constructive input. Appointing a suitably qualified Reviewer, and at an early stage, will ensure that effective channels of communication are put in place and maintained.

Elected Members and the Administration can benefit from drawing on the Reviewer’s professional experience and getting their input on various aspects of the project from an early stage.

More often than not, projects will inherently have numerous outstanding matters and risks - identified and yet to be identified. Engaging the Reviewer in a timely manner should result in addressing outstanding matters and risks well before the Prudential Report is to be considered by Elected Members.

Engaging the Reviewer late in the project timeframe may result in a number of outstanding matters being identified that cannot be rectified in time before Elected Members are scheduled to consider the Prudential Report.

In my experience, the prescribed consultation requirement raises many outstanding issues for the Reviewer. Given the complexity surrounding most projects, the nature and scope naturally evolves and variables such as financial considerations included in a Long Term Financial Plan, or the draft concept plan that was used for consultation purposes, often are not the same by the time the Prudential Report comes to consider the latest information available.

Engaging the Reviewer early in the project’s life enables them to identify risks and concerns so they can be addressed in a timely manner. Often, there are a number of different council staff involved in the project. The Reviewer has the ability to uniquely collate all stakeholder information and assess whether there are any inconsistencies that the council itself may not be aware of.

It is always prudent practice to have an independent ‘set of eyes’ cast over the processes which enables any issues to be addressed.

Without doubt, in my view the key to getting the best value out of the Prudential Review process is to only appoint an experienced Reviewer with a proven commercial and local government track record, to engage early and to get the Reviewer involved with the evolution of the project.

2018 Breakfast AGM Preview

The Annual General Meeting Breakfast will be held on Friday 31 August 2018 at the Adelaide Zoo Sanctuary.
The breakfast will include Special Guest Speaker Andrew Leunig who will discuss ‘Transforming Local Government: Technology & Business Model Innovation’.

Andrew specialises in Business Model Innovation, working with corporates and fast growing companies. Andrew has helped hundreds of companies (large and small) review and refresh their Business Model. He is a Board Adviser to a number of technology and mid-sized companies, he works with early stage companies, is a mentor for a number of incubators and in 2013, the Adelaide Business Startup Community named him Mentor of the Year.

Registrations and the flyer are now available on the website, go to:

The breakfast will be followed by the formal Annual General Meeting, agenda papers will be available soon. Please consider nominating for the SALGFMG Executive Committee. The nominations form can be found on the website, go to:

Members Profile

Leta Northcott

I started working in local government approximately 14 years ago when I was fortunate enough to be given an opportunity to work at Adelaide City Council as a Management Accountant. While my time at Adelaide was relatively short, it was great insight into working in local government. After a year, I moved on to the role of Senior Accountant for The City of Unley. Now I am about to start a new chapter with being given an opportunity to take leave from the City of Unley and work at the City of Mitcham for a year as their Senior Systems Accountant.

Leta Northcott

My journey to get to local government included completing my Bachelor of Business (Accounting) degree through La Trobe University (Bendigo) and joining the wine industry in Mildura. While not necessarily noted for producing fabulous wine, it was a good introduction to the world of accounting. This led to working for a winery in the Barossa (much better quality wine!) and studying to achieve my CPA. I then did the somewhat usual accounting thing and headed over to the UK to have a working holiday. Upon my return I worked for a roller shutter manufacturer before being lured to ACC.

One of the many reasons I have enjoyed working in local government is the sector provides services and infrastructure that make a real difference in people’s everyday lives, whether they are aware or not. I enjoy the variety that LG offers, there is never a dull moment, with something always going on. While we have the usual accounting cycle with end of month, budgets, end of financial year, etc, what happens in between is usually pretty eventful, with many different projects delivered whilst attending to many different and varied challenges.

I have been a member of FMG for most of my time in Local Government and two years ago joined the Executive Committee. What I enjoy about being part of FMG is the ability to meet other finance professionals grappling with the same or similar issues, presenting the opportunity to communicate information with each other and share and learn from the conferences.

Outside of work, I enjoy playing tennis and have somehow ended up not only being Treasurer for many years but now President of my Tennis Club. I get a lot of satisfaction facilitating the female members gain on court confidence through organising a night during the week where we have a social hit, a good laugh and hopefully provide encouragement. The most recent summer season was the Clubs most successful for at least 50 years, with 6 senior premierships won from 11 teams. All my family also plays tennis. My two children are now at the age where we can all play tennis together as a family and have fun. It is true what they say, tennis is a sport for all ages!

2018 November Workshop &
Conference Preview

The annual Workshop and Conference will be held on Thursday and Friday 29 and 30 November 2018 at the Adelaide Oval.

This workshop and conference has been scheduled a week earlier than usual, as an attempt to minimise the bustle of Christmas festivities and summer cricket.

Set to be another informative event, we are very excited to confirm that Craig Reucassel will be the Keynote Speaker. Craig is best known for his work on ‘The Chaser’ and the ABC’s Logie Award winning ‘War on Waste’. The SALGFMG Seminar Workgroup is currently finalising the full program.

Further details regarding the registration process and the program will be released closer to the date.


By Corinne Grant

Fraud is a scary word and not one you want to hear as a finance professional. However, it is a reality that fraud occurs in every type of organisation including Local Government. “BUT I have internal financial controls so I am ok?” Maybe not. Let’s explain and hope that you all don’t start looking at your colleagues with too much suspicion.

Fraud is likely to occur when 3 elements coincide (the Fraud Triangle);

  • Attitude/rationalisation
  • Pressure
  • Opportunity.


An employee who pretends they are just ‘borrowing’ funds and will pay them back, or believe that their employer owes them, or has contempt for the organisation and colleagues, or thinks others are doing this so they should too, or are basically dishonest, or think it will be covered by insurance anyway, or believe rules are vague and it’s not their fault if they break them. A culture of not questioning senior executives has led to some very high-profile frauds.


An employee who has personal financial problems, gambling or other addictions or wants to show their friends how well they are doing.


Weak internal controls create an opportunity to commit fraud. It can occur where an employee is trusted and not properly supervised, there are constantly changing people or processes or key employees have access to everything.

Internal financial controls assist by reducing the opportunities available to commit fraud but don’t help much in improving attitude or reducing pressure.


So, what does a fraudster look like? 69% of fraudsters are male; 40% are aged between 35 and 45 years; 50% have been with their employer for more than 5 years; 50% have a university degree; 53% acted alone; 46% lived beyond their means; and 88% have never been charged with or convicted of a fraud-related offence.

There are typical profiles of fraudsters:

  • The Career fraudster: feels superior, are loners, feels talents are underrated;
  • The Opportunist fraudster: once they have done it once and find it easy they keep going and are often very helpful during audits;
  • The Bulletproof fraudster: fraud provides funds for addictions, start out small and then take more, usually detected by audit as not very well thought out;
  • The Wolfpack fraudster: works with others to commit fraud, difficult to detect, strong loyalty to their group, socialise after work;
  • The Royal fraudster: they have personal status from their position in an organisation, they feel they are owed due to their status, often management and don’t see rules about conflict of interest or gifts as relating to them;
  • The Under-Pressure fraudster: under pressure by an organisation to meet goals, sees the goals as not achievable, misstates figures on statements to look better and often don’t gain personally from fraud;
  • The Sanctioned fraudster: don’t see it as fraud but as bending rules, usually expense claims and misuse of assets such as motor vehicles, and supported by superiors.

Red Flags

There are some standard red flags about people that are often present when someone is committing fraud. Some are:

  • an employee that doesn’t take leave;
  • is at the office at times when others aren’t;
  • avoids having work checked;
  • works in isolation;
  • is vague when asked about their work; and
  • is defensive when questioned.


Internal Financial Controls assist in reducing the likelihood of fraud in relation to opportunity but how can you improve attitudes and relieve pressure so that your Council is further protected?

  • An integrity framework can assist. This involves developing and enforcing a culture from the top to the bottom of ethical behaviour. It includes the Code of Conduct but needs everyone in the organisation to know, understand and embrace that code.
  • Accountability from the top to the bottom is important. Authorising activities are undertaken seriously not just signed off.
  • Communication throughout the organisation occurs to explain changes in processes.
  • Training is provided to employees on ethics, integrity and what the Code of Conduct means.
  • Potential employees are screened and references and work history are checked.
  • Performance reviews occur which cover performance against polices and processes.
  • KPIs are realistic and make sense so employees are not tempted to take short cuts to achieve them.


Detecting fraud requires an openness to complaints. Allowing employees to voice concerns, having a process for them to report suspected issues and having a whistle-blower protection program increases the likelihood of suspicious activities being reported.

A closed attitude where employees do not feel they can report something of concern results in a culture where a fraudulent person feels they might ‘get away with it’.


I would like to acknowledge the Institute of Internal Auditors for much of the material referenced in this article.

Local Government Finance Authority - Financial Market Conditions

Global financial markets saw some volatility over the past month due to political instability in Italy and renewed concerns about the state of the European Union.

Recent Italian elections did not produce a clear winner with a complex structure of coalitions and alliances finally forming a government led by a former law professor and populist, Giuseppe Conte. During negations, Italian bond yields spiked around 1% when an anti-euro campaigner was nominated as the finance minister, however, retreated when his nomination was withdrawn. The moves in Italian Bonds saw a flight to quality with the yields on US Treasury and other high-quality bonds falling as a result. Market participants fear that the anti-establishment and right-wing mix of the new Italian government has renewed debate about the long-term prospects of the European Union and the single currency.

Australian financial markets also experienced some volatility in May. Australian bond yields fell over the past month partially on the back of Italian and Euro concerns but also due to weaker internal dynamics. The bank Royal Commission currently being held in Melbourne has highlighted some of the poor lending practices by banks with many in the market speculating that the bank regulator APRA, will introduce stronger serviceability requirements, which could have negative implications for housing prices and economic growth. In mid-May Australia’s unemployment rate increased to 5.6% (from 5.5%) even though employment grew by 22,600.


The Reserve Bank (RBA) met in early May and left the official cash rate unchanged at 1.5%. In the statement accompanying the decision, the RBA reiterated that strengths in the economy highlighted by strong business conditions and strong employment growth were being tempered by low inflation and low wage growth. In mid-May, highly regarded Australian economist Bill Evans, altered his interest rate forecasts by removing a rate hike originally scheduled for early next year and also adding that rates would be on hold for the 2019 calendar year. He altered his forecast due to recent decreases in housing prices having a negative wealth effect on Australian households and reduced likelihood of higher wage growth due to a deteriorating/stagnating employment market. Interest rate futures market pricing currently doesn’t have a rate hike factored in this year.

Implied RBA Cash rate as at 31/05/2018:


It’s almost time to lodge -
Taxable payments annual report


It’s almost time for government entities to lodge their first Taxable payments annual report for the 2017-18 financial year.

The Taxable payments annual report is due by 28 August 2018.

The information reported to the ATO will be used in the ATO’s pre-filling service, to make it easier for individual businesses to lodge their tax returns. It will also allow the ATO to identify businesses that haven’t lodged or included all of their income in their tax return, as well as check compliance with GST obligations.

Who needs to report?

From 1 July 2017, you need to report if you’re a government related entity. These include:

  • Federal government departments
  • Executive or statutory agencies or authorities
  • State or territory government departments and agencies
  • Local governing bodies established by or under state or territory law

There are some classes of government related entities that have been exempt from reporting. A full list of these can be found at

What you need to report

From 1 July 2017, government entities at the federal, state, territory and local levels need to report total payments they make to entities for providing services each year.

Federal, state and territory government entities will also need to report grants they pay to people or organisations with an Australian business number (ABN). Local government entities do not need to report grants.

If you make any of these payments you need to report them in the Taxable payments annual report and lodge the report to the ATO by 28 August.

How to lodge your report

You can lodge the report online by creating your report using business software that can generate the Taxable payments annual report. You can then lodge it through the ATO’s Portal’s by selecting ‘File transfer facility’. You will need an AUSkey to login to the ATO’s Portal.

You can find more information about the ATO’s online services on their website

Some government entities don’t need to lodge a Taxable payments annual report if they are exempt from reporting. To find out more visit

If you did not make any payments for services or pay grants to recipients that have an ABN, there is no need to lodge an annual report. If you don’t need to lodge an annual report, you do need to let the ATO know by writing to them at This email address is being protected from spambots. You need JavaScript enabled to view it.

Remember to include the:

  • name and ABN of your government entity
  • reason you don’t need to lodge
  • contact details for an authorised representative should they need to discuss the matter further.

Where to find more information:

  • You can find more information on the ATO’s website:
  • View a video tutorial on ‘How to lodge the Taxable payments annual report’ at:

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