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This is a Bill, not an Act. For current law, see the Acts databases.
Western Australia
ocal Government Amendment (Auditing)
Bill 2016
Contents
1. Short title 2
2. Commencement 2
3. Act amended 2
4. Section 1.4 amended 2
5. Section 3.64 amended 3
6. Section 5.53 amended 3
7. Section 5.55A inserted 4
5.55A. Publication of annual reports 4
8. Section 5.94 amended 4
9. Section 7.1 amended 4
10. Section 7.1A amended 5
11. Section 7.1D inserted 6
7.1D. Application 6
12. Section 7.3 amended 6
13. Section 7.7 amended 6
14. Section 7.8A inserted 7
7.8A. Application 7
15. Section 7.9 amended 7
16. Section 7.11 amended 7
17. Part 7 Divisions 3A to 3D inserted 7
Division 3A -- Financial audit
7.12AA. Application 7
7.12AB. Conducting a financial audit 7
7.12AC. Dispensing with a financial audit 8
7.12AD. Reporting on a financial audit 8
7.12AE. Fees for a financial audit 8
Division 3B -- Supplementary audit
7.12AF. Application 9
7.12AG. Conducting a supplementary audit 9
7.12AH. Reporting on a supplementary audit 9
7.12AI. Fees for a supplementary audit 9
203--1 page i
Local Government Amendment (Auditing) Bill 2016
Contents
Division 3C -- Performance audit
7.12AJ. Conducting a performance audit 10
7.12AK. Reporting on a performance audit 10
Division 3D -- Other audits
7.12AL. Audits of accounts of related entities and
certain subsidiary bodies 11
18. Section 7.12A amended 11
19. Section 7.13 amended 12
20. Schedule 9.3 amended 15
Division 3 -- Provisions for the Local Government
Amendment (Auditing) Act 2016
45. Terms used 15
46. Minister to publish status of audit
contracts 15
47. Audit contracts may be terminated after
completion of FY16/17 audit 16
48. Audit contracts are terminated after
completion of FY18/19 audit 17
49. No breach of contract 17
50. Transitional regulations 17
21. Superseded provisions to be deleted 18
page ii
Western Australia
LEGISLATIVE ASSEMBLY
Local Government Amendment (Auditing)
Bill 2016
A Bill for
An Act to amend the Local Government Act 1995 to provide for the
auditing of local governments by the Auditor General and for related
purposes.
The Parliament of Western Australia enacts as follows:
page 1
Local Government Amendment (Auditing) Bill 2016
s. 1
1 1. Short title
2 This is the Local Government Amendment (Auditing) Act 2016.
3 2. Commencement
4 This Act comes into operation as follows --
5 (a) sections 1 and 2 -- on the day on which this Act
6 receives the Royal Assent;
7 (b) the rest of the Act, other than sections 4(2) and 6(2) --
8 on a day fixed by proclamation, and different days may
9 be fixed for different provisions;
10 (c) sections 4(2) and 6(2) -- on the day fixed by
11 proclamation under section 21(2).
12 3. Act amended
13 This Act amends the Local Government Act 1995.
14 4. Section 1.4 amended
15 (1) In section 1.4 delete the definition of auditor and insert:
16
17 auditor means --
18 (a) in relation to an audit, other than a performance
19 audit --
20 (i) in relation to a local government that
21 has an audit contract that is in force -- a
22 person for the time being appointed
23 under Part 7 Division 2 to be the auditor
24 of the local government; and
25 (ii) in relation to a local government that
26 does not have an audit contract that is in
27 force -- the Auditor General;
28 and
page 2
Local Government Amendment (Auditing) Bill 2016
s. 5
1 (b) in relation to a performance audit -- the
2 Auditor General;
3
4 (2) In section 1.4 delete the definition of auditor and insert:
5
6 auditor means the Auditor General;
7
8 5. Section 3.64 amended
9 In section 3.64(e) delete "chairman" (each occurrence) and
10 insert:
11
12 chairperson
13
14 6. Section 5.53 amended
15 (1) Delete section 5.53(2)(h) and insert:
16
17 (h) the auditor's report prepared under
18 section 7.9(1) or 7.12AD(1) for the financial
19 year; and
20
21 (2) Delete section 5.53(2)(h) and insert:
22
23 (h) the auditor's report prepared under
24 section 7.12AD(1) for the financial year; and
25
page 3
Local Government Amendment (Auditing) Bill 2016
s. 7
1 7. Section 5.55A inserted
2 After section 5.55 insert:
3
4 5.55A. Publication of annual reports
5 The CEO is to publish the annual report on the local
6 government's official website within 14 days after the
7 report has been accepted by the local government.
8
9 8. Section 5.94 amended
10 After section 5.94(t) insert:
11
12 (ta) a report on a supplementary audit prepared
13 under section 7.12AH(1);
14
15 9. Section 7.1 amended
16 (1) In section 7.1 delete "Part --" and insert:
17
18 Part, unless the contrary intention appears --
19
20 (2) In section 7.1 insert in alphabetical order:
21
22 audit has the meaning given in the Auditor General Act
23 section 4(1);
24 audit contract means an agreement in writing that --
25 (a) was made under section 7.8(1); and
26 (b) was in force immediately before
27 commencement day;
28 Auditor General Act means the Auditor General
29 Act 2006;
page 4
Local Government Amendment (Auditing) Bill 2016
s. 10
1 audit report means a report prepared by an auditor on a
2 local government audit;
3 commencement day means the day on which the Local
4 Government Amendment (Auditing) Act 2016 section 9
5 comes into operation;
6 financial audit means an audit conducted under
7 section 7.12AB;
8 local government audit means an audit conducted
9 under this Part or a performance audit;
10 performance audit means an examination or
11 investigation carried out under the Auditor General Act
12 section 18 (as applied by section 7.12AJ(1) of this
13 Act);
14 supplementary audit means an audit conducted under
15 section 7.12AG.
16
17 (3) In section 7.1 in the definition of regulations delete "Part." and
18 insert:
19
20 Part;
21
22 10. Section 7.1A amended
23 In section 7.1A(3) delete "him or her" and insert:
24
25 the CEO
26
page 5
Local Government Amendment (Auditing) Bill 2016
s. 11
1 11. Section 7.1D inserted
2 At the beginning of Part 7 Division 2 insert:
3
4 7.1D. Application
5 This Division applies in relation to a local government
6 that has an audit contract that is in force.
7
8 12. Section 7.3 amended
9 (1) In section 7.3(1) delete "A local" and insert:
10
11 Subject to subsection (1A), a local
12
13 (2) After section 7.3(1) insert:
14
15 (1A) A local government cannot appoint a person to be its
16 auditor after commencement day.
17
18 13. Section 7.7 amended
19 (1) In section 7.7 delete "If " and insert:
20
21 (1) Subject to subsection (2), if
22
23 (2) At the end of section 7.7 insert:
24
25 (2) The Departmental CEO cannot appoint a person to be
26 the auditor of a local government after commencement
27 day.
28
page 6
Local Government Amendment (Auditing) Bill 2016
s. 14
1 14. Section 7.8A inserted
2 At the beginning of Part 7 Division 3 insert:
3
4 7.8A. Application
5 This Division applies in relation to a local government
6 that has an audit contract that is in force.
7
8 15. Section 7.9 amended
9 In section 7.9(4) delete "government to be dealt with under
10 section 7.12A." and insert:
11
12 government.
13
14 16. Section 7.11 amended
15 In section 7.11 delete "inspection or inquiry,".
16 17. Part 7 Divisions 3A to 3D inserted
17 After Part 7 Division 3 insert:
18
19 Division 3A -- Financial audit
20 7.12AA. Application
21 This Division applies in relation to a local government
22 that does not have an audit contract that is in force.
23 7.12AB. Conducting a financial audit
24 The auditor must audit the accounts and annual
25 financial report of a local government at least once in
26 respect of each financial year.
page 7
Local Government Amendment (Auditing) Bill 2016
s. 17
1 7.12AC. Dispensing with a financial audit
2 (1) Despite section 7.12AB, the auditor may dispense with
3 all or any part of a financial audit if the auditor
4 considers that the dispensation is appropriate in the
5 circumstances.
6 (2) The auditor must consult the Minister before exercising
7 the power conferred by subsection (1).
8 (3) If the auditor exercises the power conferred by
9 subsection (1), the auditor must notify --
10 (a) the Public Accounts Committee as defined in
11 the Auditor General Act section 4(1); and
12 (b) the Estimates and Financial Operations
13 Committee as defined in the Auditor General
14 Act section 4(1).
15 7.12AD. Reporting on a financial audit
16 (1) The auditor must prepare and sign a report on a
17 financial audit.
18 (2) The auditor must give the report to --
19 (a) the mayor, president or chairperson of the local
20 government; and
21 (b) the CEO of the local government; and
22 (c) the Minister.
23 7.12AE. Fees for a financial audit
24 (1) The auditor must determine whether a fee is to be
25 charged for a financial audit of a local government and
26 if so, the amount of that fee.
27 (2) A fee determined under subsection (1) must be paid by
28 the local government.
page 8
Local Government Amendment (Auditing) Bill 2016
s. 17
1 Division 3B -- Supplementary audit
2 7.12AF. Application
3 This Division applies in relation to a local government
4 that does not have an audit contract that is in force.
5 7.12AG. Conducting a supplementary audit
6 The auditor may audit any particular aspect of the
7 accounts of a local government that the Minister
8 requests the auditor to audit.
9 7.12AH. Reporting on a supplementary audit
10 (1) The auditor must prepare and sign a report on a
11 supplementary audit.
12 (2) The auditor must give the report to the Minister.
13 (3) The Minister --
14 (a) may give a copy of the report to the local
15 government; and
16 (b) may request the CEO of the local government
17 to publish the report on the local government's
18 official website.
19 (4) The CEO must publish a copy of the report on the local
20 government's official website within 14 days after
21 receiving a request under subsection (3)(b).
22 7.12AI. Fees for a supplementary audit
23 (1) The auditor must determine whether a fee is to be
24 charged for a supplementary audit of a local
25 government and if so, the amount of that fee.
26 (2) A fee determined under subsection (1) must be paid by
27 the local government.
page 9
Local Government Amendment (Auditing) Bill 2016
s. 17
1 Division 3C -- Performance audit
2 7.12AJ. Conducting a performance audit
3 (1) The Auditor General Act section 18 applies in relation
4 to a local government as if --
5 (a) the local government were an agency; and
6 (b) money collected, received or held by any
7 person for or on behalf of the local government
8 were public money; and
9 (c) money collected, received or held by the local
10 government for or on behalf of a person other
11 than the local government were other money;
12 and
13 (d) property held for or on behalf of the local
14 government, other than money referred to in
15 paragraph (b), were public property; and
16 (e) property held by the local government for or on
17 behalf of a person other than the local
18 government were other property; and
19 (f) the reference in the Auditor General Act
20 section 18(2)(d) to "legislative provisions,
21 public sector policies or its own internal
22 policies;" were a reference to "legislative
23 provisions or its own internal policies;".
24 (2) A performance audit is taken for the purposes of the
25 Auditor General Act to have been carried out under the
26 Auditor General Act Part 3 Division 1.
27 7.12AK. Reporting on a performance audit
28 (1) The Auditor General Act section 25 applies to a
29 performance audit as if --
30 (a) a local government was an agency; and
page 10
Local Government Amendment (Auditing) Bill 2016
s. 18
1 (b) the council of the local government was the
2 accountable authority of the local government.
3 (2) The auditor must give a report on a performance audit
4 to the local government.
5 Division 3D -- Other audits
6 7.12AL. Audits of accounts of related entities and certain
7 subsidiary bodies
8 The Auditor General Act sections 16 and 17 apply in
9 relation to a local government as if --
10 (a) the local government was an agency; and
11 (b) the council of the local government was the
12 accountable authority of the local government.
13
14 18. Section 7.12A amended
15 (1) In section 7.12A(1)(a) delete "his or her" and insert:
16
17 the auditor's
18
19 (2) In section 7.12A(3):
20 (a) delete "is to examine the report of the auditor prepared
21 under section 7.9(1), and any report prepared under
22 section 7.9(3) forwarded to it, and is to --" and insert:
23
24 must --
25
26 (b) before paragraph (a) insert:
27
28 (aa) examine an audit report received by the local
29 government; and
30
page 11
Local Government Amendment (Auditing) Bill 2016
s. 19
1 (c) in paragraph (a) delete "report, or reports," and insert:
2
3 audit report,
4
5 (3) Delete section 7.12A(4) and insert:
6
7 (4) A local government must --
8 (a) prepare a report addressing any matters
9 identified as significant by the auditor in the
10 audit report, and stating what action the local
11 government has taken or intends to take with
12 respect to each of those matters; and
13 (b) give a copy of that report to the Minister within
14 3 months after the audit report is received by
15 the local government.
16 (5) Within 14 days after a local government gives a report
17 to the Minister under subsection (4)(b), the CEO must
18 publish a copy of the report on the local government's
19 official website.
20
21 19. Section 7.13 amended
22 (1) In section 7.13:
23 (a) delete "provision --" and insert:
24
25 provision as follows --
26
27 (b) delete paragraphs (aa), (ab), (ac) and (ad) and insert:
28
29 (aa) as to the functions of a CEO in relation to --
30 (i) a local government audit; and
page 12
Local Government Amendment (Auditing) Bill 2016
s. 19
1 (ii) a report (an action report) prepared by a
2 local government under
3 section 7.12A(4)(a); and
4 (iii) an audit report; and
5 (iv) a report on an audit conducted by a local
6 government under this Act or any other
7 written law;
8 (ab) as to the functions of an audit committee,
9 including in relation to --
10 (i) the selection and recommendation of an
11 auditor under Division 2; and
12 (ii) a local government audit; and
13 (iii) an action report; and
14 (iv) an audit report; and
15 (v) a report on an audit conducted by a local
16 government under this Act or any other
17 written law;
18 (ac) as to the procedure to be followed in selecting
19 an auditor under Division 2;
20
21 (c) in paragraph (ae) delete "a report by an auditor;" and
22 insert:
23
24 an audit report;
25
26 (d) in paragraph (a) delete "agreements between local
27 governments and auditors;" and insert:
28
29 an agreement in writing (agreement) made under
30 section 7.8(1);
31
page 13
Local Government Amendment (Auditing) Bill 2016
s. 19
1 (e) in paragraph (b):
2 (i) delete "agreements between local governments
3 and auditors," and insert:
4
5 an agreement,
6
7 (ii) delete "such agreements;" and insert:
8
9 an agreement;
10
11 (f) in paragraph (ba) delete "the copies of agreements
12 between local governments and auditors" and insert:
13
14 a copy of an agreement
15
16 (g) in paragraph (c) delete "auditor;" and insert:
17
18 auditor under section 7.5;
19
20 (h) in paragraph (d) delete "for --" and insert:
21
22 for the following --
23
24 (i) in paragraph (f) delete "by auditors in their reports;" and
25 insert:
26
27 in an audit report;
28
29 (j) delete paragraph (g) and insert:
30
31 (g) requiring an auditor (other than the Auditor
32 General) to provide the Minister with
page 14
Local Government Amendment (Auditing) Bill 2016
s. 20
1 prescribed information as to an audit conducted
2 by the auditor;
3
4 (k) in paragraph (h):
5 (i) after "auditor" insert:
6
7 (other than the Auditor General)
8
9 (ii) delete "auditors" and insert:
10
11 an auditor (other than the Auditor General)
12
13 (iii) delete "their reports" and insert:
14
15 an audit report
16
17 20. Schedule 9.3 amended
18 (1) Delete Schedule 9.3 clause 32.
19 (2) At the end of Schedule 9.3 insert:
20
21 Division 3 -- Provisions for the Local Government
22 Amendment (Auditing) Act 2016
23 45. Terms used
24 In this Division --
25 audit contract has the meaning given in section 7.1;
26 commencement day has the meaning given in section 7.1.
27 46. Minister to publish status of audit contracts
28 During the period beginning on commencement day and
29 ending on the day fixed by proclamation under the Local
30 Government Amendment (Auditing) Act 2016 section 21(2),
page 15
Local Government Amendment (Auditing) Bill 2016
s. 20
1 the Minister must publish on a website maintained by the
2 Department a list of --
3 (a) local governments that have an audit contract that is
4 in force; and
5 (b) local governments that do not have an audit contract
6 that is in force.
7 47. Audit contracts may be terminated after completion of
8 FY16/17 audit
9 (1) In this clause --
10 FY16/17 audit, in relation to a local government, means an
11 audit of the local government conducted under
12 section 7.9(1) in respect of the financial year ending on
13 30 June 2017.
14 (2) This clause applies in relation to a local government after
15 the completion of the FY16/17 audit for the local
16 government.
17 (3) The Departmental CEO may give notice (a notice) to a local
18 government specifying the date (the termination date) on
19 which the audit contract for the local government is to
20 terminate.
21 (4) An audit contract in relation to which a notice is given is
22 terminated by force of this provision on the termination
23 date.
24 (5) The Departmental CEO may give a notice on the
25 Departmental CEO's own initiative.
26 (6) The Minister may --
27 (a) request the Departmental CEO to give a notice to a
28 local government; and
29 (b) nominate the termination date to be specified in the
30 notice.
31 (7) On request by the Minister, the Departmental CEO must
32 give a notice to the local government specifying the
33 termination date nominated by the Minister.
page 16
Local Government Amendment (Auditing) Bill 2016
s. 20
1 (8) A notice given or request made under this clause must be in
2 writing.
3 48. Audit contracts are terminated after completion of
4 FY18/19 audit
5 (1) In this clause --
6 FY18/19 audit, in relation to a local government, means an
7 audit of the local government conducted under
8 section 7.9(1) in respect of the financial year ending on
9 30 June 2019.
10 (2) An audit contract for a local government, unless earlier
11 lawfully terminated, is terminated by force of this provision
12 on completion of the FY18/19 audit for the local
13 government.
14 49. No breach of contract
15 Anything that occurs by operation of this Division is not to
16 be regarded as a breach of contract.
17 50. Transitional regulations
18 (1) In this clause --
19 specified means specified or described in the regulations;
20 transitional matter --
21 (a) means a matter or issue of a transitional nature that
22 arises as a result of the enactment of the Local
23 Government Amendment (Auditing) Act 2016; and
24 (b) includes a saving or application matter.
25 (2) If there is not sufficient provision in this Division for
26 dealing with a transitional matter, regulations under this Act
27 may prescribe all matters that are required or necessary or
28 convenient to be prescribed for dealing with the matter.
29 (3) Regulations made under subclause (2) may provide that
30 specified provisions of a written law --
31 (a) do not apply to or in relation to any matter; or
page 17
Local Government Amendment (Auditing) Bill 2016
s. 21
1 (b) apply with specified modifications to or in relation
2 to any matter.
3 (4) If regulations made under subclause (2) provide that a
4 specified state of affairs is taken to have existed, or not to
5 have existed, on and from a day that is earlier than the day
6 on which the regulations are published in the Gazette but not
7 earlier than the day this clause comes into operation, the
8 regulations have effect according to their terms.
9 (5) If regulations made under subclause (2) contain a provision
10 referred to in subclause (4), the provision does not operate
11 so as --
12 (a) to affect in a manner prejudicial to any person
13 (other than the State or an authority of the State) the
14 rights of that person existing before the day of
15 publication of those regulations; or
16 (b) to impose liabilities on any person (other than the
17 State or an authority of the State) in respect of
18 anything done or omitted to be done before the day
19 of publication of those regulations.
20 (6) Regulations made under subclause (2) in relation to a matter
21 referred to in subclause (3) must be made within whatever
22 period is reasonably and practicably necessary to deal with a
23 transitional matter.
24 21. Superseded provisions to be deleted
25 (1) In this section --
26 superseded provisions means the following provisions --
27 (a) section 5.43(c);
28 (b) in section 7.1, the definitions of approved auditor,
29 disqualified person, qualified person and registered
30 company auditor;
31 (c) Part 7 Division 2;
32 (d) Part 7 Division 3;
33 (e) section 7.12AA;
page 18
Local Government Amendment (Auditing) Bill 2016
s. 21
1 (f) section 7.12AF;
2 (g) section 7.13(1)(ab)(i), (ac), (a)-(e), (g) and (h).
3 (2) The superseded provisions are deleted on a day fixed by
4 proclamation.
5 (3) A proclamation cannot be made under subsection (2) unless the
6 Minister is satisfied that there is no reason for the superseded
7 provisions to remain in operation.
8 Note for Part 7:
9 The description at the beginning of Part 7 is to be altered by:
10 (a) deleting "the financial accounts of " ;
11 (b) deleting paragraph (a) and inserting:
12 (a) the establishment of audit committees; and
13
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