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New South Wales Aboriginal Land Council
Review of the Policy on Local Aboriginal Land Council Funding and
Financial Obligations
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CONTEXT 2007 and 2008 – major changes for NSWALC Out of administration New ALRA New Council Administrative, financial, governance and structural
reforms Opportunity and timely to review our policy and
procedures for LALC funding
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CONTEXT
Current policy developed in 2005 The Draft Policy on Local Aboriginal Land
Council Funding and Financial Obligations has been developed ensuring that the requirements of the Aboriginal land Rights Act have been :– i.e. Section 106 (8)(e),113, 114, 153, 158, 159,
161, 162 and 163
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OBJECTIVE
Ultimate aim is to support LALCs to operate at a high standard while still maintaining high levels of accountability
Streamline processes and reduce complexity Enable Zone offices to operate with more discretion
to respond to individual circumstances Demonstrate good management across the network
to stakeholders
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OBJECTIVE
Be consistent with general applicable principles of Administrative Law such as;– The requirement that powers be exercised
reasonably and for proper purposes; and– The requirement to act fairly in a procedural
sense
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Working Party
A Working Party was established to undertake a review of the current Policy on Local and Regional Aboriginal Land Council Funding and Financial Obligations.
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Working Party Members
Councillors
Councillor Craig Cromelin – Wiradjuri Region
Councillor Stephen Ryan – Central Region
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Working Party Members
Staff
Mr Lesley Turner, Director - Southern Zone Ms Jenny Bedford, Operations Manager - Southern Zone Mr Tony Sutherland, Director - Western Zone Mr Robert Barnes, Operations Manager – Western Zone Mr Andrew Riley, Director - Northern Zone Mr Trent Lynwood, Operations Manager - Northern Zone Mr Steve Merritt, Director – Eastern Zone Ms Carole Di Franco, Senior LALC Support – Eastern Zone Mr Neil Mandel, Network Services
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Main Recommendations
A separate “stand alone” Policy on Local Aboriginal Land Council Funding and Financial Obligations;
A new name - Policy on Local Aboriginal Land Council Funding and Financial Obligations
A revised Procedures framework to implement the changed policy;
A Risk Management approach relating to financial and performance;
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Main Recommendations
Reduce the 6 funding categories to 2; Introduce the concept of cessation of funding
for non-compliance; and Simplify the types of funding arrangements
and have just 2 – a Funding Agreement or an Assistance Agreement.
Introduce a standard LALC Management Support System for all NSWALC.
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Stand Alone Policy
Currently NSWALC has a policy titled Local and Regional Aboriginal Land Council Funding and Financial Obligations.
This includes Policy and Procedures all in the one document which presents a problem if NSWALC is to consider changes to policy.
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Stand Alone Policy
The working group has proposed a new policy with the following;– a set of principles; – a risk management approach; – financial and operational performance; – funding / assistance agreements;
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A Stand Alone Policy
– new funding categories;– new reporting requirements; and– cessation of funding aspects.
Name changed to Policy on Local Aboriginal Land Council Funding and Financial Obligations
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PRINCIPLES NSWALC’s principle objective is to support
LALCs to ensure sound and sustainable financial and operational management.
NSWALC will adopt a risk management approach to making funding decisions.
LALCs should not be unduly penalised for falling short of minimum operational performance standards.
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PRINCIPLES
NSWALC is to work closely with LALCs in ensuring satisfactory performance and proper management; and
The funding policy should focus on early identification of problem areas and on timely intervention and assistance where required.
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RISK MANAGEMENT Can be defined as consideration of events
that could occur and what would be the impact if such events occurred (likelihood and consequence).
These considerations enable risk events to be identified and if there is a likelihood of them occurring, strategies can be developed that would either reduce the likelihood or mitigate the impact of these events.
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RISK MANAGEMENT
Sound management practices The principle of risk management The need for a decrease in complexity for
NSWALC and LALCs; and The need to focus attention on overall good
management.
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FINANCIAL AND OPERATIONAL PERFORMANCE
LALCs are required to meet minimum operational performance standards:– Generate sufficient income to pay expenses;– Have enough cash at bank and investments to
cover liabilities as well as any employee leave entitlements;
– Collects rents when they fall due;
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FINANCIAL AND OPERATIONAL PERFORMANCE
LALCs are expected to:– Pay rates and charges when they fall due;– Lodge Business Activity Statements and taxes
when they fall due;– Ensure debts are paid, as and when they fall due
(as referred to in s91 (1) (e)), and are in line with the budget;
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FINANCIAL AND OPERATIONAL PERFORMANCE
LALCs are expected to:– Ensure employee related payments meet
legislative requirements, i.e. workers comp, superannuation; and
– Have at least 50 voting members.
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FUNDING CATEGORIES Principle change is the reduction of funding
categories from six to two (funded and unfunded).
There will be two main funding categories:– F - Funded– UF - Unfunded
Note that those LALCs under Administration will be classified as Funded
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FUNDING AND ASSISTANCE AGREEMENTS
All LALCs will be provided with a funding or maybe an assistance agreement from NSWALC;
These agreements will outline the terms and conditions under which NSWALC will provide financial and other support to LALCs;
The agreements will also outline the range and type of financial and performance reports required to be lodged under the ALRA or the terms of the agreement.
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FUNDING AND ASSISTANCE AGREEMENTS
Without limiting the types of reports, they may include:– Community, Land and Business Plans
(implementation, progress/status);– Community Benefit Schemes– Operational / Financial Reports
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MAKING A FUNDING DECISION
NSWALC can only fund LALCs that are not prohibited from receiving funds pursuant to s.163 of the ALRA 1983;
NSWALC will only offer Funding Agreements to LALCs who are in a funded category and may offer Assistance Agreements to LALCs in an Unfunded category.
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FINANCE PROVISIONS
BUDGETs.158
Must be submitted by
21 April
APPLICATIONs.52
Must be submitted by
31 March
Funding Agreement
s.162
ANNUAL REPORTING
Periodic ReportsTo be submitted
to NSWALC within 4 weeks of end of period
PerformanceReports
Audited Financial Statements
Annual Reports
Maintain Records and Accounts
s.153(1)
Financial Statements(Incl. assets and liabilities)
Bank StatementsAccounts to Auditor by 14 September
s.153(4)
Audit to NSWALCBy 1 November
s.153(5)
Must include1. Management Letter 2. Copies of all Insurance
PoliciesReg. 95
Membership Rolls
Voting Rolls
Minutes of Meetings
Attendance List of Meetings
Lease, contracts & other documents
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BUDGETSs.158
AUDITED STATEMENTS
s.153
FUNDING AGREEMENTS
s.162
PERIODICREPORTS
s.159
APPLICATION s.52
ASSESSMENT APPROVAL s.106
ANNUAL REPORTS
s.161
PERFORMANCEREPORTS
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REPORTING REQUIREMENTSReporting requirements will be
streamlined. LALCs will be required to provide financial reports and also to report against their community land and business plan.
LALCs will be able to demonstrate up to 10 per cent variation in expenditure against budget line items.
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LALC MANAGEMENT SUPPORT SYSTEM
A new database, the LALC Management Support System, will be used to monitor performance against five key operational areas.
The LMSS provides the diagnostic tool to inform the risk category (which in turn informs the delegate in relation to how funds will be offered and what reporting regime the LALC’s will be required to adhere to) and the LALC management plan.
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Overview / SummaryFinancial ManagementProperty ManagementSystems ManagementHuman ResourcesGovernance
LALC MANAGEMENT SUPPORT SYSTEM
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NEXT STEPS
The ARLA requires NSWALC to refer the policy to each Local Aboriginal Land Council for comment, and consider any submissions made by any Local Aboriginal Land Council within 30 days of the referral of the policy, and obtain the approval of the Minister and the Policy /gazetted.
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NEXT STEPS
The revised policy will take effect on its publication in the Gazette or on a later day specified in the policy.
NSWALC staff and LALCs will need to implement the new arrangements from that date.
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SUMMARY OF ISSUES
The procedures are less prescriptive and allow greater flexibility.
The ultimate aim is to support LALC’s to operate at a high standard while still maintaining high levels of accountability.
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SUMMARY OF ISSUES
The proposed policy provides the framework;
The procedures provide guidance and instruction on how the policy framework will be operationalised.
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Comparison – Current and Proposed Policy
CURRENT PROPOSED
POLICY / PROCEDURES SEPARATE(1 DOCUMENT) STAND ALONE
6 FUNDING CATEGORIES 2 FUNDING CATEGORIES (F) OR (UF)
BREACH REGIME LESS COMPLEX COMPLIANCE REGIME
s162 AND 163
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Comparison – Current and Proposed Policy
CURRENT PROPOSED
Policy complex Simplifies – less prescriptive allow flexibility
Termination Clause By NSWALC or LALC
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Comparison – Current and Proposed Policy
CurrentFunding AgreementsUF 2 “Out of Policy” AgreementsAdministratorsBreach database regime12 months rates non-paymentPayment of Essential Services
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Comparison – Current and Proposed Policy
Proposed Funding Agreement. Assistance Agreements. 28 days to rectify non compliance. Otherwise assistance agreement
negotiated. If beyond 90 days the funding agreement
is terminated, funds forfeited. An Assistance Agreement can be negotiated
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Comparison – Current and Proposed Policy
ProposedLALC Management Support System Assessment against five key operational
areas– Financial Mgt, Office Systems Mgt, Property Mgt,
Human Resources and Governance– Auditors 2nd Certificate is also used to assess /
measured 20 % weighting against each key area LALCs assessed on above and total
determines its indicative level of risk i.e. within one of the following three levels
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Comparison – Current and Proposed Policy
Low Risk 90% - 100% - Funded Quarterly & six
monthly reporting
Medium Risk 70% - 89% - Funded quarterly and
quarterly reporting
High Risk 50% - 69% Funded monthly and
monthly reporting
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Process from here?
Approval of Draft Policy : 3 Mar 2009 Feedback from LALCs : 10 Apr 2009 Approval of Final Policy : 30 Apr 2009 Ministerial Approval and Gazettal : 30 May
2009 Implementation of LALC Risk Assessments Recommendations to the NSWALC Board Approval of grants for costs and expenses Issue 2009/2010 Funding Agreements 1 Jul
2009
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THE END
ANY QUESTIONS