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Institute launches benchmark reporting guide for local government- TAS
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23 June 2006 
 
The Institute of Chartered Accountants, today launched its inaugural definitive ‘Best practice guide for reporting local government budgets in Tasmania' to assist Councils in preparing their 2006 / 2007 budget reports.  
 
In a changing regulatory environment that includes the introduction of Australian International Financial Reporting Standards (AIFRS) and the likely demise of Australian Accounting Standard AAS27 “Financial reporting by Local Government’, local governments in Tasmania will be expected to revise their annual reporting standards.  
 
General Manager for the Institute in Tasmania, Michael Nazzari said that the Guide not only focuses on improving the quality of budget reports, but it places an emphasis on the changing regulatory requirements and developing a model that can be clearly understood by non-financial readers.  
 
”Annual budget reports are a valuable communication tool that should provide clear, simple messages for all stakeholders including those not trained in understanding financial management matters. The Guide aims to assist practitioners in developing easily comprehended budgets without jargon and complex reports,” Mr Nazzari said.  
 
The Guide is based on a fictitious council, “Tasmanian City Council” using sample information from real budget reports and includes changes for the 2005 / 2006 year aimed at better meeting the needs of all readers including:  

  • Financial performance,
    •  
  • Cash position,
    •  
  • Financial position
    •  
  • Capital works and
 
Updates relating to the introduction of AIFRS, which will apply to financial reporting by Tasmanian local governments in 2006/2007. 
 
“While it is difficult to determine the full extent of the impact AIFRS on local government financial reporting, known changes have been made such as statement titles and the format of the Budgeted Income Statement,” Mr Nazzari said.  
 
Structured in three layers, the Guide includes an overview of the budget, an analysis of the key issues embodied in the budget and links the budget to the long-term financial strategies of council. Also included is an appendix providing greater detail on important matters directly related to the budget and statutory disclosures required by the Local Government Act 1993.  
 
“The structuring of the Guide into three layers is considered best practice as it recognises the different levels of interest in the budget and therefore includes different levels of detail that stakeholders seek when reviewing a local government budget,” Mr Nazzari said.  
 
The Guide was developed by a working party headed up by Tasmanian based Chartered Accountant, Christine Bell and included other Chartered Accountants and local government finance professionals, who together debated many conceptual and practical issues to produce a guide that reflects the most commonly occurring events and transactions encountered by local governments.  
 
The Guide is not intended to take the place of independent professional advice with regard to the precise application of the requirements of the local government legislation, Accounting Standards and other mandatory professional accounting requirements.  
 
The Guide will be distributed by the Local Government Association of Tasmania and is also available on the Institute’s website: www.icaa.org.au.