Australian Infrastructure Financial Management Guidelines Engineers & Accountants Speaking the Same Language Andrew ThomasAnnette Martin President IPWEA SAChair, LG FMG

Need for Financial Guidelines Decline in infrastructure National Financial Sustainability Study National renewal backlog $14.6b Underspend on renewals $2.2b ($3.1m /council) 35% of councils not financially sustainable Deficiencies in service, AM and long-term financial planning & reporting

3 Need for Financial Guidelines “Avoiding unexpected financial shocks in future periods…” Consistent financial sustainability indicators Regulatory framework – accounting standards Need to tell a true and consistent story about infrastructure

Sustainable Communities A FRAMEWORK 1.Stewardship: Role of Elected Members 2.Managing existing as well as new: Asset Management Planning 3.Essential part of Business: Long Term Financial Planning Sustainable Communities: Critical Insights > National consistency

1.Stewardship: Role of Elected Members 2.Managing existing as well as new: Asset Management Planning 3.Essential part of Business: Long Term Financial Planning Sustainable Communities A FRAMEWORK International Infrastructure Management Manual > National consistency

Sustainable Communities A FRAMEWORK 1.Stewardship: Role of Elected Members 2.Managing existing as well as new: Asset Management Planning 3.Essential part of Business: Long Term Financial Planning Australian Infrastructure Financial Management Guidelines > National consistency

Author Team John Howard Asset Management Jim Dixon Accounting & Audit John Comrie Financial Management Integrating the technical & financial

National Steering Committee Professionals Engineers (NAMS.AU), Accountants (NLGFM Forum) All Local Government Associations State Governments Tas Audit Office NSW, Vic Local Government Department Qld Treasury Valuer-General Victoria Australian Government Dept of Finance and Deregulation Dept of Infrastructure, Transport, Regional Development & LG

Guidelines Structure Part A Introduction Background Part B Planning Service, asset and financial management Part C Regulatory Framework Financial reporting & auditing Part D Application Valuation, accounting for infrastructure & implementation [14 Sections]

Quick Guide

11 Sustainability in Providing Services ASSET MANAGEMENT PLAN Services required, how provided & funds required $$$ LONG TERM FINANCIAL PLAN How services are to be funded POLICY FINANCIAL SUSTAINABILITY

4 Key Points Need to tell a true and consistent story about infrastructure Can only be achieved through financial statements Use AMP & LTFP process to improve asset register & financial statements Guidelines give direction and guidance to do this

13 AIFMG Benefits Improving knowledge how assets are performing in service managing replacement options Will improve Financial reporting at Fair Value Asset management planning Financial planning

Use this Data for Asset Renewal Planning Now What do you need to spend?$ When you need to spend it?

Keys to Optimal Asset Management AIFMG advocates & explains how to; Determine affordable service levels Set & manage to appropriate accrual accounting based financial targets Responsibly use debt Develop and maintain a soundly based Long-term Financial Plan

Linking Expenditure and Revenue

17 AIFMG Outcome Takes Asset Management to the next level Integrates technical and financial management Delivery of financially sustainable services Improved financial reporting National consistency in financial reporting Improved services to the community

4 Key Points Need to tell a true and consistent story about infrastructure Can only be achieved through financial statements Use the AMP and LTFP process to improve asset register & financial statements AIFM Guidelines give direction and guidance to do this

Resources, training & events Training: Joint workshop – IPWEA and FMG NAMs plus Asset Management training Resources: AM for small Councils (due mid 2011) Sustainable Communities-critical insights IIMM

AIFMG puts you in the drivers seat Optimising asset management & financial sustainability