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Local government finances

The Office of Local Government monitors the financial performance and position of local government, and identifies trends in its finances over time.

The Office of Local Government has drawn together financial data from all councils and provided a high-level summary and analysis of the Financial Performance and Position of the Local Government Sector (PDF 383 KB)

Financial planning and reporting requirements

The Local Government (Financial Management) Regulations 2011 require councils to use three specific financial indicators in their financial planning and reporting.

Detailed information about each financial indicator and trend data covering individual councils is available in the Financial Indicators Dashboard (XLS 298 KB).

Model financial statements

The South Australian Model Financial Statements help councils comply with Australian Accounting Standards and provide a better understanding of publicly available information on council finances.

The latest version is the Model Financial Statements 2019 (PDF 2 MB).

Financial reporting framework

The Local Government (Financial Management) Regulations 2011 require that council budgets, long-term financial plans, annual financial statements and mid-year budget reviews include summary financial information using a uniform approach.

An explanation of the sector-wide financial reporting framework is given in Uniform Presentation of Finances (PDF 32 KB).

It helps councils provide summary information on both operating and capital investment activities on a consistent basis and enables more meaningful comparisons of council's finances. It also focuses on a council's operating surplus or deficit as the key measure of financial performance.

Financial institutions and initiatives

The Local Government Authority (LGA), with state government assistance, has created a number of financial institutions to manage a range of commercial arrangements on behalf of councils, including:

  • Local Government Finance Authority
  • LGA Mutual Liability Scheme
  • Local Government Superannuation Scheme
  • LGA Workers Compensation Scheme.

These institutions deliver shared service arrangements for local government.

Councils are custodians, on behalf of their communities, of infrastructure and other assets valued at $24.3 billion at 30 June 2018. As the result of an independent inquiry in 2005, the LGA, with the support of councils and the state government, embarked on a comprehensive Financial Sustainability Program to improve councils' long-term financial and asset management planning.

One of the most important outcomes of the program was a state-wide project, initiated in 2006, to help councils develop strategies, policies and tools for sustainable asset management. The LGA entered into an alliance with the Institute of Public Works Engineering Australia to adopt an internationally recognised approach for preparing asset management policies and plans.

Associated projects included development of rigorous long-term financial plans, improvement of external financial reporting and strengthening of internal and external audit regimes.

More information about the program can be found on the LGA's Financial Sustainability Program webpage.

Financial relationships

Australian Government

The Australian Government provides both general and specific purpose payments to local government in South Australia.

General purpose payments are made to the state and passed on to councils based on the recommendations of the South Australian Local Government Grants Commission.

The financial assistance is provided in two parts:

  • general purpose grants
  • untied local roads grants.

Details of commonwealth payments for specific purposes received by SA councils under a variety of programs are available in Federal Budget Paper No. 3 - Australia's Federal Relations.

State Government

The Local Government Act 1999 and local government regulations outline the requirements for councils. These include:

  • preparing and adopting long-term financial plans
  • preparing and adopting long-term infrastructure and asset management plans
  • establishing audit committees
  • adopting several measures to strengthen the independence of external auditors
  • adopting a consistent and improved reporting format for annual financial statements.

Details of state government grants and subsidies to councils can be found in the state government Budget papers.