3.3 Auditing Amendments to Long-Term Council Community Plans

Local government: results of the 2002-03 audits.

The Local Government Act 2002 (the 2002 Act) requires a local authority’s long-term council community plan (LTCCP) to be audited. Similarly, it requires there to be an audit report on any amendment to an LTCCP.

The Act makes specific provision for amendments to LTCCPs because communities are reasonably entitled to expect that, when LTCCP changes are proposed, they will be dealt with in a manner that:

  • makes the change, and the reasons for and effects of the change, clear;
  • enables community consultation and feedback on a basis similar to that by which the LTCCP was adopted; and
  • provides confidence that the integrity and robustness of the LTCCP remains, so that its proposals can be relied on.

Key sections of the Act relevant to amendments to LTCCPs include:

  • Section 97, which sets out certain decisions that can be taken only if they are provided for in the LTCCP – including decisions to significantly alter service levels, to transfer ownership or control of a strategic asset, to construct, replace or abandon a strategic asset, and that will significantly affect the costs to or capacity of a Council;
  • Section 102, which says that changes to the funding and financial policies listed under that section are amendments to the LTCCP; and
  • Section 141, which makes it a condition of sale or exchange of endowment property that information about the intention to sell or exchange, and the use to which proceeds will be put, must be included in the LTCCP (section 97 may also apply).

We note that, while section 80 acknowledges that a Council may make a decision that is significantly inconsistent with any plan or policy (subject to disclosure), this does not over-ride the specific requirements of sections 97, 102, and 141.

We are currently working to establish how LTCCP amendments can be identified, and, where an amendment is proposed,

  • the steps a local authority is required to take for public consultation on the proposed amendment; and
  • the audit work we are required to perform to issue an audit report on a proposed amendment.

In respect of a local authority’s first LTCCP (for 2003 or 2004), the 2002 Act provides that an audit report is not required. The intention was that local authorities should be given time to become familiar with the new requirements associated with preparing an LTCCP, including improving the quality of information and assumptions underlying the forecast information provided in the LTCCP.

But there is no corresponding exception provided for in respect of amendments to 2003 or 2004 LTCCPs. It therefore appears that we are obliged to issue audit reports on any amendment to a 2003 or 2004 LTCCP, although we have not audited the LTCCP itself. We have in fact issued some reports accordingly.

It is difficult to prepare an audit report on an amendment without having audited the document being amended, unless the subject of the amendment is a discrete matter that does not affect the whole LTCCP (for example, the sale of endowment land).

The Local Government Law Reform Bill, as reported back to the House of Representatives in early-June 2004, proposes to amend the 2002 Act to clarify that amendments to 2003 or 2004 LTCCPs do not have to be audited. We welcome this proposal. However, regardless of whether the Bill removes the audit requirement for amendments to a local authority’s first LTCCP, local authorities must comply with the requirements of section 84 of the Act for amendments. Therefore, Councils will still need to review changes proposed in 2005 annual plans to consider if any of these changes would constitute an amendment, and provide information accordingly.

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