Elected officials responsible for financial decisions: Woodward

By Rob O'Brien

New guidelines on council investments will ensure that elected officials do not delegate financial decision making, according to the NSW Department of Premier and Cabinet.

Deputy Director General (Local Government), for the Department of Premier and Cabinet, Ross Woodward, told delegates at the Government News Local Government Investment Conference in Sydney that new guidelines would clear up areas of financial management that have previously been “a bit blurred”.

Part of the guidelines will clarify where accountability lies, he said, and would ensure councils are more business-like in the way they invest.

Draft guidelines were sent to councils for consultation in May last year.

Mr Woodward stressed that the buck stopped with elected officials and that any investment decisions should not be delegated to council staff.

“The system holds councillors accountable for investment decisions, and what we were suggesting was to make that absolutely clear in legislation, that councillors could not delegate that to general managers or other staff," he said.
“Setting that policy for investments is a council decision and implementing that is the administration's role, we all understand that, but sometimes those lines have been a bit blurred.”

Mr Woodward said that last year $712 million of local government revenue was held in managed funds and other investments, including collateralised debt obligations (CDOs), the financial product that exposed a number of NSW councils to the US subprime crisis in 2008.

Mr Woodward said that from next year new councillors would receive more training in risk, financial planning and long-term strategic planning as part of the new guidelines. 

“We see our role as setting up a framework, so that the people making those decisions make them in the best possible way and have all those risks outlined and explained.

“We hold councillors accountable for all of the investment decisions that councils make. And most of them, like me, don’t have financial backgrounds,” he said.

“We are all responsible for public money and the community demands that as trusted custodians we look after that money in the best possible way." 

Mr Woodward said the new guidelines would be "signed off soon" by the State Government along with the revised Ministerial Investment Order. 

The inaugural Local Government Investment Conference also included presentations from the author of the 2008 Cole Report on council investments, Michael Cole; Local Government Managers Australia chief executive officer, John Ravlic; TCorp general manager, Michael Allen; and University of NSW associate professor of actuarial studies, John Evans.

Full coverage in the April/May issue of Government News magazine.

Comment below to have your say on this story.

If you have a news story or tip-off, get in touch at editorial@governmentnews.com.au.  

Sign up to the Government News newsletter

Leave a comment:

Your email address will not be published. All fields are required