1. Representing the Project Development Team
A National Financial Management and Asset Management Framework for Local Government
Ian Mann
Jeff Roorda
Representing the Project Development Team

2. Prime Minister’s address to ACLG
“Councils that plan & manage their assets effectively are councils that can deliver value for money to communities“
“We need to know what we’ve got, what condition it is in, whether it needs to be repaired and how much it costs to maintain. This is the most basic level of information”.
“The Commonwealth will also consider making its future infrastructure investments linked to the implementation of nationally consistent asset management systems”

3. National Sustainability Frameworks

4. National Sustainability Framework Genesis
May 2006 – LGPMC meeting determined the a series of nationally consistent Frameworks on financial sustainability measures for Local Government would be developed
Three Frameworks were subsequently developed
Assessing local government financial sustainability;
Asset Planning and Management
Financial Planning and Reporting.
October 2006 – Consultation with Local Government and other relevant bodies
March 2007 – LGPMC endorsed the national consistent frameworks
May 2009 – LGPMC agreed to enhance the nationally consistent framework on Local Government asset and financial management frameworks and committed to an accelerated implementation.
Refer:

5. Enhanced National Sustainability Frameworks
Enhanced Asset Planning and Management
Enhanced Financial Planning and Reporting.
Criteria for assessing financial sustainability of local councils
Refer:

6. National Approach to AM – 1. Enhanced Asset Planning & Management
The 7 elements of the Enhanced National Framework on Asset Planning and Management are:
Development of an asset management policy
Strategy and planning
Governance and management arrangements
Defining levels of service
Data and systems
Skills and processes
Evaluation

7. National Approach to Financial Management 2
National Approach to Financial Management 2. Enhanced Financial Planning & Reporting
Strategic longer term plan
Annual budget, and
Annual report

8. How it might work

9. General Principles One common set of assessment criteria
Each State may adjust criteria to suit their needs however should be able to apply consistency to core criteria
Councils could use assessment criteria to help prepare Asset Management Improvement Plans
Councils would determine priority of improvements
Recognise that different Councils be at different stages of development

10. $ Funding (AM Dependent)
Federal Government
Local Government Planning Ministers Council
State Government
3 National Frameworks
$ Funding (AM Dependent)
State Legislation
Report
State Assoc &
IPWEA
National Assessment Framework
State Association
Councils

11. National Assessment Framework

12. Working Group
MAV CT Management Group AECOM IPWEA Jeff Roorda & Associates
MAV
John Hennessy
CT Management Group
Ian Mann
Bruce Lorimer
AECOM
Gary Rykers
IPWEA
Peter Way
Chris Champion
Jeff Roorda & Associates
Jeff Roorda
John Howard

13. Maturity Assessment of a Council
Built around the asset management journey of a Council
Assesses where Council is on the Asset Management maturity curve
Two benchmark levels of Maturity – Core and Advanced
(Advanced is not Best Practice)

14. National Asset Management and Financial Planning Assessment Framework
Financial Sustainability
Asset Management Sustainability
National Assessment based on Detailed Assessment Criteria
Built around a set of common questions
Focused on best appropriate practice
Each State may add additional questions to align with their own “good practice” guidelines
Must be linked to and based upon the National Sustainability Framework
Core and Advanced maturity grading
Step 1 – Assessment of Maturity
Assessor/Auditor Opinion
One of three possible statements for each framework element plus an overall assessment
Unqualified ;
Qualified – reflects good practice except for ……….. (qualifications); or
Adverse
Step 2 –
Audit or Assessment
State based Local Government Asset Management Capacity Building Programs
Each State and/or Local Government Association develops their own Local Government asset management capacity building program linked to the elements of the National Sustainability Framework (to suite each State’s circumstances)
In Victoria this is the MAV STEP program
Industry Support

15. Step 1 – Assessment of Maturity
Two part questionnaire linked to National Framework
Undertaken as a self assessment by the organisation
Possible answer to each question
“Compete”, “Partially Complete” and “Not Started”
Independently overviewed
Maturity Level
Total No of Questions
Part 1
Core 76
Part 2
Advanced
145 (including the 76 Core – 67 additional)

16. Core Maturity Assessment Questions
Status
Complete
Partially Complete
Not Started
Assessment Opinion
Strategic Long Term Plan
Council has a Strategic Longer Term Plan (planning horizon of at least 5 years) that incorporates a vision, strategic outcomes, mission, values and service outcomes that Council wants to achieve.
The development of the Strategic Longer Term Plan included community consultation and reflects community needs.
The Strategic Longer Term Plan incorporates priorities and performance measures and indicates how they will be monitored and measured.
Council has a sustainable Long Term Financial Plan covering the period of the Strategic Longer Term Plan (at least 5 year) supporting the implementation of its Long Term Plan.
The Long Term Financial Plan has been prepared based on the resource requirements and strategic objectives detailed in Council’s Long Term Plan and Asset Management Plans.
Strategic Long Term Status Summary 2 3
Annual Budget
The Annual Budget contains estimates of revenue and expenditure with an explanation of the assumptions and methodologies underpinning the estimates, an explanation of the financial performance and position of the Council and has been prepared based on the resource requirements and strategic objectives detailed in Council’s Strategic Longer Term Plan, Asset Management Plans and Long Term Financial Plan.
The Annual Budget reflects the Council's strategic objectives and contains a statement of how Council will meet the goals and objectives of its Strategic Longer Term Plan.
The Annual Budget aligns with Year 1 of the Long Term Financial Plan, and was adopted following community consultation
Council’s Annual Budget includes resources to implement Strategic Longer Term Plan strategies.
Annual Budget Status Summary

17. Core Maturity Assessment Results
Framework Element
Total Items
Items Complete
Items Partially Complete
Items Not Started
Strategic Planning 5 3 2
Annual Budget 4
Annual Report
Asset Management Policy 1
Asset Strategy
Asset Plans 22 6 16
Governance and Management 7
Levels of Service
Data & Systems 8
Skills & Processes 10
Evaluation
Total 76 11 34 31

18. Part 2 – Assessment/Audit Opinion
National Frameworks Assessment and Reporting
To be based on the audit opinion concept of a ‘true and fair’ view of the financial report.
An audit opinion is expressed on audited statements.
“When reporting, the auditor is required to express an opinion as to whether the financial report ‘gives a true and fair view’ or ‘presents fairly’, in all material respects, in accordance with an applicable financial reporting framework.”
For the National Frameworks Assessment, a similar audit/assessment approach would entail an internal or external auditor/assessor forming an opinion that each LGPMC Sustainability Framework Element had been followed

19. Assessment/Audit Opinion
Assessment opinion
Opinion
Requirement
Core Maturity (Unqualified)
That the council’s asset management and financial practices meet the requirements of the LGPMC National Sustainability Frameworks
All the elements within the National Assessment Framework have been met at a ‘core’ level, OR all except a small number of ‘core’ element items have been met and the assessor has reached the opinion that these omissions have a immaterial effect on and low risk of not achieving the LGPMC National Sustainability Framework’s desired outcomes
Intermediate
(Qualified)
That the council’s asset management and financial practices meet the requirements of the LGPMC National Sustainability Frameworks except for certain material and high risk exceptions
The majority of the ‘core’ element items within the National Assessment Framework have been met with a number of omissions having a material effect on and high risk of not achieving the LGPMC National Sustainability Framework’s desired outcomes
Low Maturity
(Not reached Core Maturity)
That the council’s asset management and financial practices do not meet the requirements of the LGPMC National Sustainability Frameworks
The majority of the ‘core’ element items within the National Assessment Framework have not been met

20. Core Maturity Assessment Opinion
QUESTIONS
Status
Complete
Partially Complete
Not Started
Assessment Opinion
Strategic Long Term Plan
Council has a Strategic Longer Term Plan (planning horizon of at least 5 years) that incorporates a vision, strategic outcomes, mission, values and service outcomes that Council wants to achieve.
The development of the Strategic Longer Term Plan included community consultation and reflects community needs.
The Strategic Longer Term Plan incorporates priorities and performance measures and indicates how they will be monitored and measured.
Council has a sustainable Long Term Financial Plan covering the period of the Strategic Longer Term Plan (at least 5 year) supporting the implementation of its Long Term Plan.
The Long Term Financial Plan has been prepared based on the resource requirements and strategic objectives detailed in Council’s Long Term Plan and Asset Management Plans.
Strategic Long Term Status Summary 2 3
Intermediate
Annual Budget
The Annual Budget contains estimates of revenue and expenditure with an explanation of the assumptions and methodologies underpinning the estimates, an explanation of the financial performance and position of the Council and has been prepared based on the resource requirements and strategic objectives detailed in Council’s Strategic Longer Term Plan, Asset Management Plans and Long Term Financial Plan.
The Annual Budget reflects the Council's strategic objectives and contains a statement of how Council will meet the goals and objectives of its Strategic Longer Term Plan.
The Annual Budget aligns with Year 1 of the Long Term Financial Plan, and was adopted following community consultation
Council’s Annual Budget includes resources to implement Strategic Longer Term Plan strategies.
Annual Budget Status Summary

21. Council Core Maturity Assessment
Total Items
Items Complete
Items Partially Complete
Items Not Started
Assessment Opinion
Strategic Planning 5 2 3
Intermediate
Annual Budget 4
Annual Report
Core Maturity
Asset Management Policy 1
Low Maturity
Asset Strategy
Asset Plans 22 6 16
Governance and Management 7
Levels of Service
Data & Systems 8
Skills & Processes 10
Evaluation
Total 76 11 34 31

22. Council Results – Core Maturity

23. Management report by councils *
National Results
State/Territory
No councils
Assessment Opinion
Management report by councils *
Core Maturity
Intermediate
Low Maturity
NSW (Inc ACT)
153 62 50 41
40 of 91 (44%)
Qld 73 40 20 13
25 of 33 (76%)
Vic 79 65 1
13 of 14 (93%) SA 68 8
20 of 28 (71%) WA
141
60 of 91 (66%)
Tas 29 15 10 4
8 of 14 (57%) NT 16 5 2 9
6 of 11 (55%)
Total
559
277
165
117
172 of 282 (61%)

24. National Results

25. National Improvement Measures
Year
Assessment Opinion
(No. of Councils)
Improvement
Core Maturity
Intermediate
Low Maturity
Dec 2010
117
165
277
Dec 2011
209
170
180
Yes
Dec 2012
399 80

26. National Improvement Measures

27. Questions