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‘Pressure and punitive action’ used in regard to RFS assets

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Coolamon Shire Council General Manager Tony Donoghue said arguments still continued in regard to who should include Rural Fire Service assets in their financial statements.

“The information provided by the Minister for Local Government does not change Council’s opinion that these assets should not be included as part of Council’s financial statements. Even the argument that over time there will be a no profitability impact, and it will have no direct cash impact, begs the question – why would they then not be put on the RFS books?” he said.

“The key technical arguments presented in the Minister’s attachment attempt to conclude that when taken together the assets are controlled by councils, however this does not really offer any new information to sway the argument.”

Mr Donoghue made the following points on these arguments:

  1. Ability to direct the use of RFA
    “We are all aware that this is not the reality. We have no ability to direct the RFS in regard to their assets and from our experience we are not consulted with for any purchase or asset use,” Mr Donoghue said.
  2. Obtaining economic benefit from the RFA
    “Part 4 of Rural Fires Act requires ALL landowners to take practical steps to prevent the occurrence of bush fires. As this also applies to Crown Land (approximately 50% of the State) it is wrong to suggest that councils receive the most benefit from the RFA.”
  3. Preventing other entities from obtaining the benefits from an Asset
    “Our experience is that we cannot question or reject the SLA’s. If we don’t sign it they revert to the previous one and maintain in continuity. Additionally, we are in no position to restrict the use of these assets by any other State Government Party as determined by the RFS,” Mr Donoghue said.

He said this latest information from the Minister was contrary to a report prepared by an independent expert for the Office of Local Government.

“This is a draft report and was only disclosed through a GIPA request from a representative of Local Government Professionals and councils arguing the position. As can be seen the independent experts’ advice aligns with what Councils believe is appropriate, but this has been ignored or changed. It can only be assumed that this position has been reversed by the Treasurer and the Office of Local Government and Auditor General’s Office have been advised to act accordingly.

“In reality, this information only reinforces our position, that in order to properly account for and then run the RFS, the assets should be included in that State Department’s financial statements.

“From a legal perspective, councils are required to prepare and sign off on the way they account for their finances and this is to be in accordance with the Australian Accounting Standards. This is signed by the General Manager, the responsible Accounting Officer (Samantha Jennings) and the Mayor and another Councillor. Historically at Coolamon this has been the Deputy Mayor and the auditor then reviews the statements and provides a review/report on compliance.

“The Australian Accounting Standards are quite clear on how Assets are to be considered and recorded – based mainly on use/control/benefit.”

Mr Donoghue said this has been reinforced with previous correspondence from the OLG indicating Council should make their own determination.

In addition, the OLG provided supporting documentation with advice on how to handle this specific issue.

Rural Fire Services (RFS) assets Under Section 119 of the Rural Fire Services Act 1997 (NSW) states ‘all firefighting equipment purchased or constructed wholly or from money to the credit of the Fund is to be vested in the council of the area for or on behalf of which the firefighting equipment has been purchased or constructed’.

The NSW Government has confirmed its view that these assets are not controlled by the NSW Rural Fire Services or the State.

Councils need to assess whether they control any rural firefighting equipment in accordance with Australian Accounting Standards and recognise in their financial statements any material assets under their control and state the relevant accounting policy in relation to the treatment.

“So from here, it would appear that the actions of the Audit Office and the Minister for Local Government are an attempt to have Local Government change their financial statements through pressure and punitive action,” Mr Donoghue said.

“Council continues to believe we have completed our financial statements in accordance with the Australian Accounting Standards.’

The Council endorsed the GM’s report and agreed that Council make representations to the Minister regarding the matters raised in the meeting relating to membership.

Narrandera Argus 1 December 2022

This article appeared in the Narrandera Argus, 1 December 2022.

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