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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 2017
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 3.70A inserted 3
3.70A. Audit requirements for regional
subsidiaries 3
7. Section 5.53 amended 4
8. Section 5.55A inserted 4
5.55A. Publication of annual reports 4
9. Section 5.94 amended 4
10. Section 7.1 amended 5
11. Section 7.1A amended 6
12. Section 7.1D inserted 6
7.1D. Application 6
13. Section 7.3 amended 6
14. Section 7.7 amended 7
15. Section 7.8A inserted 7
7.8A. Application 7
16. Section 7.9 amended 7
17. Section 7.11 amended 7
18. Part 7 Divisions 3A to 3D inserted 8
Division 3A -- Financial audit
7.12AA. Application 8
7.12AB. Conducting a financial audit 8
7.12AC. Dispensing with a financial audit 8
7.12AD. Reporting on a financial audit 8
7.12AE. Fees for a financial audit 9
Division 3B -- Supplementary audit
7.12AF. Application 9
3--1 page i
Local Government Amendment (Auditing) Bill 2017
Contents
7.12AG. Conducting a supplementary audit 9
7.12AH. Reporting on a supplementary audit 9
7.12AI. Fees for a supplementary audit 10
Division 3C -- Performance audit
7.12AJ. Conducting a performance audit 10
7.12AK. Reporting on a performance audit 11
Division 3D -- Other audits
7.12AL. Audits of accounts of related entities and
certain subsidiary bodies 11
19. Section 7.12A amended 11
20. Section 7.13 amended 13
21. Schedule 9.3 amended 15
Division 4 -- Provisions for the Local Government
Amendment (Auditing) Act 2017
49. Terms used 15
50. Minister to publish status of audit
contracts 16
51. Audit contracts may be terminated after
completion of FY17/18 audit 16
52. Audit contracts are terminated after
completion of FY19/20 audit 17
53. No breach of contract 17
54. Transitional regulations 17
22. Superseded provisions to be deleted 18
page ii
Western Australia
LEGISLATIVE ASSEMBLY
Local Government Amendment (Auditing)
Bill 2017
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 2017
s. 1
1 1. Short title
2 This is the Local Government Amendment (Auditing) Act 2017.
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 7(2) --
8 on a day fixed by proclamation, and different days may
9 be fixed for different provisions;
10 (c) sections 4(2) and 7(2) -- on the day fixed by
11 proclamation under section 22(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 2017
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 3.70A inserted
15 After section 3.70 insert:
16
17 3.70A. Audit requirements for regional subsidiaries
18 (1) Section 7.1 and the provisions of Part 7 Divisions 3A
19 to 4 apply in relation to a regional subsidiary as if the
20 regional subsidiary were a local government.
21 (2) The application of a provision under subsection (1) is
22 subject to any prescribed or necessary modifications to
23 the provision provided for in the regulations.
24
page 3
Local Government Amendment (Auditing) Bill 2017
s. 7
1 7. Section 5.53 amended
2 (1) Delete section 5.53(2)(h) and insert:
3
4 (h) the auditor's report prepared under
5 section 7.9(1) or 7.12AD(1) for the financial
6 year; and
7
8 (2) Delete section 5.53(2)(h) and insert:
9
10 (h) the auditor's report prepared under
11 section 7.12AD(1) for the financial year; and
12
13 8. Section 5.55A inserted
14 After section 5.55 insert:
15
16 5.55A. Publication of annual reports
17 The CEO is to publish the annual report on the local
18 government's official website within 14 days after the
19 report has been accepted by the local government.
20
21 9. Section 5.94 amended
22 After section 5.94(t) insert:
23
24 (ta) a report on a supplementary audit prepared
25 under section 7.12AH(1);
26
page 4
Local Government Amendment (Auditing) Bill 2017
s. 10
1 10. Section 7.1 amended
2 (1) In section 7.1 delete "Part --" and insert:
3
4 Part, unless the contrary intention appears --
5
6 (2) In section 7.1 insert in alphabetical order:
7
8 audit has the meaning given in the Auditor General Act
9 section 4(1);
10 audit contract means an agreement in writing that --
11 (a) was made under section 7.8(1); and
12 (b) was in force immediately before
13 commencement day;
14 Auditor General Act means the Auditor General
15 Act 2006;
16 audit report means a report prepared by an auditor on a
17 local government audit;
18 commencement day means the day on which the Local
19 Government Amendment (Auditing) Act 2017
20 section 10 comes into operation;
21 financial audit means an audit conducted under
22 section 7.12AB;
23 local government audit means --
24 (a) an audit conducted under this Part; or
25 (b) a performance audit;
26 performance audit means an examination or
27 investigation carried out under the Auditor General Act
28 section 18 (as applied by section 7.12AJ(1) of this
29 Act);
30 supplementary audit means an audit conducted under
31 section 7.12AG.
32
page 5
Local Government Amendment (Auditing) Bill 2017
s. 11
1 (3) In section 7.1 in the definition of regulations delete "Part." and
2 insert:
3
4 Part;
5
6 11. Section 7.1A amended
7 In section 7.1A(3) delete "him or her" and insert:
8
9 the CEO
10
11 12. Section 7.1D inserted
12 At the beginning of Part 7 Division 2 insert:
13
14 7.1D. Application
15 This Division applies in relation to a local government
16 that has an audit contract that is in force.
17
18 13. Section 7.3 amended
19 (1) In section 7.3(1) delete "A local" and insert:
20
21 Subject to subsection (1A), a local
22
23 (2) After section 7.3(1) insert:
24
25 (1A) A local government cannot appoint a person to be its
26 auditor after commencement day.
27
page 6
Local Government Amendment (Auditing) Bill 2017
s. 14
1 14. Section 7.7 amended
2 (1) In section 7.7 delete "If " and insert:
3
4 (1) Subject to subsection (2), if
5
6 (2) At the end of section 7.7 insert:
7
8 (2) The Departmental CEO cannot appoint a person to be
9 the auditor of a local government after commencement
10 day.
11
12 15. Section 7.8A inserted
13 At the beginning of Part 7 Division 3 insert:
14
15 7.8A. Application
16 This Division applies in relation to a local government
17 that has an audit contract that is in force.
18
19 16. Section 7.9 amended
20 In section 7.9(4) delete "government to be dealt with under
21 section 7.12A." and insert:
22
23 government.
24
25 17. Section 7.11 amended
26 In section 7.11 delete "inspection or inquiry,".
page 7
Local Government Amendment (Auditing) Bill 2017
s. 18
1 18. Part 7 Divisions 3A to 3D inserted
2 After Part 7 Division 3 insert:
3
4 Division 3A -- Financial audit
5 7.12AA. Application
6 This Division applies in relation to a local government
7 that does not have an audit contract that is in force.
8 7.12AB. Conducting a financial audit
9 The auditor must audit the accounts and annual
10 financial report of a local government at least once in
11 respect of each financial year.
12 7.12AC. Dispensing with a financial audit
13 (1) Despite section 7.12AB, the auditor may dispense with
14 all or any part of a financial audit if the auditor
15 considers that the dispensation is appropriate in the
16 circumstances.
17 (2) The auditor must consult the Minister before exercising
18 the power conferred by subsection (1).
19 (3) If the auditor exercises the power conferred by
20 subsection (1), the auditor must notify --
21 (a) the Public Accounts Committee as defined in
22 the Auditor General Act section 4(1); and
23 (b) the Estimates and Financial Operations
24 Committee as defined in the Auditor General
25 Act section 4(1).
26 7.12AD. Reporting on a financial audit
27 (1) The auditor must prepare and sign a report on a
28 financial audit.
page 8
Local Government Amendment (Auditing) Bill 2017
s. 18
1 (2) The auditor must give the report to --
2 (a) the mayor, president or chairperson of the local
3 government; and
4 (b) the CEO of the local government; and
5 (c) the Minister.
6 7.12AE. Fees for a financial audit
7 (1) The auditor must determine whether a fee is to be
8 charged for a financial audit of a local government and
9 if so, the amount of that fee.
10 (2) A fee determined under subsection (1) must be paid by
11 the local government.
12 Division 3B -- Supplementary audit
13 7.12AF. Application
14 This Division applies in relation to a local government
15 that does not have an audit contract that is in force.
16 7.12AG. Conducting a supplementary audit
17 The auditor may audit any particular aspect of the
18 accounts of a local government that the Minister
19 requests the auditor to audit.
20 7.12AH. Reporting on a supplementary audit
21 (1) The auditor must prepare and sign a report on a
22 supplementary audit.
23 (2) The auditor must give the report to the Minister.
24 (3) The Minister --
25 (a) may give a copy of the report to the mayor,
26 president or chairperson of the local
27 government, and to the CEO of the local
28 government; and
page 9
Local Government Amendment (Auditing) Bill 2017
s. 18
1 (b) may request the CEO of the local government
2 to publish the report on the local government's
3 official website.
4 (4) The CEO must publish a copy of the report on the local
5 government's official website within 14 days after
6 receiving a request under subsection (3)(b).
7 7.12AI. Fees for a supplementary audit
8 (1) The auditor must determine whether a fee is to be
9 charged for a supplementary audit of a local
10 government and if so, the amount of that fee.
11 (2) A fee determined under subsection (1) must be paid by
12 the local government.
13 Division 3C -- Performance audit
14 7.12AJ. Conducting a performance audit
15 (1) The Auditor General Act section 18 applies in relation
16 to a local government as if --
17 (a) the local government were an agency; and
18 (b) money collected, received or held by any
19 person for or on behalf of the local government
20 were public money; and
21 (c) money collected, received or held by the local
22 government for or on behalf of a person other
23 than the local government were other money;
24 and
25 (d) property held for or on behalf of the local
26 government, other than money referred to in
27 paragraph (b), were public property; and
28 (e) property held by the local government for or on
29 behalf of a person other than the local
30 government were other property; and
page 10
Local Government Amendment (Auditing) Bill 2017
s. 19
1 (f) the reference in the Auditor General Act
2 section 18(2)(d) to "legislative provisions,
3 public sector policies or its own internal
4 policies;" were a reference to "legislative
5 provisions or its own internal policies;".
6 (2) A performance audit is taken for the purposes of the
7 Auditor General Act to have been carried out under the
8 Auditor General Act Part 3 Division 1.
9 7.12AK. Reporting on a performance audit
10 (1) The Auditor General Act section 25 applies in relation
11 to a performance audit as if --
12 (a) a local government were an agency; and
13 (b) the council of the local government were its
14 accountable authority.
15 (2) The auditor must give a report on a performance audit
16 to the local government.
17 Division 3D -- Other audits
18 7.12AL. Audits of accounts of related entities and certain
19 subsidiary bodies
20 The Auditor General Act sections 16 and 17 apply in
21 relation to a local government as if --
22 (a) the local government were an agency; and
23 (b) the council of the local government were its
24 accountable authority.
25
26 19. Section 7.12A amended
27 (1) In section 7.12A(1)(a) delete "his or her" and insert:
28
29 the auditor's
30
page 11
Local Government Amendment (Auditing) Bill 2017
s. 19
1 (2) In section 7.12A(3):
2 (a) delete "is to examine the report of the auditor prepared
3 under section 7.9(1), and any report prepared under
4 section 7.9(3) forwarded to it, and is to --" and insert:
5
6 must --
7
8 (b) before paragraph (a) insert:
9
10 (aa) examine an audit report received by the local
11 government; and
12
13 (c) in paragraph (a) delete "report, or reports," and insert:
14
15 audit report,
16
17 (3) Delete section 7.12A(4) and insert:
18
19 (4) A local government must --
20 (a) prepare a report addressing any matters
21 identified as significant by the auditor in the
22 audit report, and stating what action the local
23 government has taken or intends to take with
24 respect to each of those matters; and
25 (b) give a copy of that report to the Minister within
26 3 months after the audit report is received by
27 the local government.
28 (5) Within 14 days after a local government gives a report
29 to the Minister under subsection (4)(b), the CEO must
30 publish a copy of the report on the local government's
31 official website.
32
page 12
Local Government Amendment (Auditing) Bill 2017
s. 20
1 20. Section 7.13 amended
2 In section 7.13(1):
3 (a) delete "provision --" and insert:
4
5 provision as follows --
6
7 (b) delete paragraphs (aa), (ab), (ac) and (ad) and insert:
8
9 (aa) as to the functions of a CEO in relation to --
10 (i) a local government audit; and
11 (ii) a report (an action report) prepared
12 by a local government under
13 section 7.12A(4)(a); and
14 (iii) an audit report; and
15 (iv) a report on an audit conducted by a local
16 government under this Act or any other
17 written law;
18 (ab) as to the functions of an audit committee,
19 including in relation to --
20 (i) the selection and recommendation of an
21 auditor under Division 2; and
22 (ii) a local government audit; and
23 (iii) an action report; and
24 (iv) an audit report; and
25 (v) a report on an audit conducted by a local
26 government under this Act or any other
27 written law;
28 (ac) as to the procedure to be followed in selecting
29 an auditor under Division 2;
30
page 13
Local Government Amendment (Auditing) Bill 2017
s. 20
1 (c) in paragraph (ae) delete "a report by an auditor;" and
2 insert:
3
4 an audit report;
5
6 (d) in paragraph (a) delete "agreements between local
7 governments and auditors;" and insert:
8
9 an agreement in writing (agreement) made under
10 section 7.8(1);
11
12 (e) delete paragraph (b) and insert:
13
14 (b) for notifications and reports to be given in
15 relation to an agreement, including any
16 variations to, or termination of an agreement;
17
18 (f) in paragraph (ba) delete "the copies of agreements
19 between local governments and auditors" and insert:
20
21 a copy of an agreement
22
23 (g) in paragraph (c) delete "auditor;" and insert:
24
25 auditor under section 7.5;
26
27 (h) in paragraph (d) delete "for --" and insert:
28
29 for the following --
30
page 14
Local Government Amendment (Auditing) Bill 2017
s. 21
1 (i) in paragraph (f) delete "by auditors in their reports;" and
2 insert:
3
4 in an audit report;
5
6 (j) delete paragraphs (g) and (h) and insert:
7
8 (g) requiring an auditor (other than the Auditor
9 General) to provide the Minister with
10 prescribed information as to an audit conducted
11 by the auditor;
12 (h) prescribing the circumstances in which an
13 auditor (other than the Auditor General) is to be
14 considered to have a conflict of interest and
15 requiring an auditor (other than the Auditor
16 General) to disclose in an audit report such
17 information as to a possible conflict of interest
18 as is prescribed;
19
20 21. Schedule 9.3 amended
21 (1) Delete Schedule 9.3 clause 32.
22 (2) At the end of Schedule 9.3 insert:
23
24 Division 4 -- Provisions for the Local Government
25 Amendment (Auditing) Act 2017
26 49. Terms used
27 In this Division --
28 audit contract has the meaning given in section 7.1;
29 commencement day has the meaning given in section 7.1.
page 15
Local Government Amendment (Auditing) Bill 2017
s. 21
1 50. Minister to publish status of audit contracts
2 During the period beginning on commencement day and
3 ending on the day fixed by proclamation under the Local
4 Government Amendment (Auditing) Act 2017 section 22(2),
5 the Minister must publish on a website maintained by the
6 Department a list of --
7 (a) local governments that have an audit contract that is
8 in force; and
9 (b) local governments that do not have an audit contract
10 that is in force.
11 51. Audit contracts may be terminated after completion of
12 FY17/18 audit
13 (1) In this clause --
14 FY17/18 audit, in relation to a local government, means an
15 audit of the local government conducted under
16 section 7.9(1) in respect of the financial year ending on
17 30 June 2018.
18 (2) This clause applies in relation to a local government after
19 the completion of the FY17/18 audit for the local
20 government.
21 (3) The Departmental CEO may give notice (a notice) to a local
22 government specifying the date (the termination date) on
23 which the audit contract for the local government is to
24 terminate.
25 (4) An audit contract in relation to which a notice is given is
26 terminated by force of this provision on the termination
27 date.
28 (5) The Departmental CEO may give a notice on the
29 Departmental CEO's own initiative.
30 (6) The Minister may --
31 (a) request the Departmental CEO to give a notice to a
32 local government; and
33 (b) nominate the termination date to be specified in the
34 notice.
page 16
Local Government Amendment (Auditing) Bill 2017
s. 21
1 (7) On request by the Minister, the Departmental CEO must
2 give a notice to the local government specifying the
3 termination date nominated by the Minister.
4 (8) A notice given or request made under this clause must be in
5 writing.
6 52. Audit contracts are terminated after completion of
7 FY19/20 audit
8 (1) In this clause --
9 FY19/20 audit, in relation to a local government, means an
10 audit of the local government conducted under
11 section 7.9(1) in respect of the financial year ending on
12 30 June 2020.
13 (2) An audit contract for a local government, unless earlier
14 lawfully terminated, is terminated by force of this provision
15 on completion of the FY19/20 audit for the local
16 government.
17 53. No breach of contract
18 Anything that occurs by operation of this Division is not to
19 be regarded as a breach of contract.
20 54. Transitional regulations
21 (1) In this clause --
22 specified means specified or described in the regulations;
23 transitional matter --
24 (a) means a matter or issue of a transitional nature that
25 arises as a result of the enactment of the Local
26 Government Amendment (Auditing) Act 2017; and
27 (b) includes a saving or application matter.
28 (2) If there is not sufficient provision in this Division for
29 dealing with a transitional matter, regulations under this Act
30 may prescribe all matters that are required or necessary or
31 convenient to be prescribed for dealing with the matter.
page 17
Local Government Amendment (Auditing) Bill 2017
s. 22
1 (3) Regulations made under subclause (2) may provide that
2 specified provisions of a written law --
3 (a) do not apply to or in relation to any matter; or
4 (b) apply with specified modifications to or in relation
5 to any matter.
6 (4) If regulations made under subclause (2) provide that a
7 specified state of affairs is taken to have existed, or not to
8 have existed, on and from a day that is earlier than the day
9 on which the regulations are published in the Gazette but not
10 earlier than the day this clause comes into operation, the
11 regulations have effect according to their terms.
12 (5) If regulations made under subclause (2) contain a provision
13 referred to in subclause (4), the provision does not operate
14 so as --
15 (a) to affect in a manner prejudicial to any person
16 (other than the State or an authority of the State) the
17 rights of that person existing before the day of
18 publication of those regulations; or
19 (b) to impose liabilities on any person (other than the
20 State or an authority of the State) in respect of
21 anything done or omitted to be done before the day
22 of publication of those regulations.
23 (6) Regulations made under subclause (2) in relation to a matter
24 referred to in subclause (3) must be made within whatever
25 period is reasonably and practicably necessary to deal with a
26 transitional matter.
27 22. Superseded provisions to be deleted
28 (1) In this section --
29 superseded provisions means the following provisions of the
30 Local Government Act 1995 --
31 (a) section 5.43(c);
32 (b) in section 7.1, the definitions of approved auditor,
33 disqualified person, qualified person and registered
34 company auditor;
page 18
Local Government Amendment (Auditing) Bill 2017
s. 22
1 (c) Part 7 Division 2;
2 (d) Part 7 Division 3;
3 (e) section 7.12AA;
4 (f) section 7.12AF;
5 (g) section 7.13(1)(ab)(i), (ac), (a)-(e), (g) and (h).
6 (2) The superseded provisions are deleted on a day fixed by
7 proclamation.
8 (3) A proclamation cannot be made under subsection (2) unless the
9 Minister is satisfied that there is no reason for the superseded
10 provisions to remain in operation.
11 (4) This section is deleted immediately after the superseded
12 provisions are deleted.
13 Note for Part 7:
14 The description at the beginning of Part 7 is to be altered by:
15 (a) deleting "the financial accounts of " ;
16 (b) deleting paragraph (a) and inserting:
17 (a) the establishment of audit committees; and
18
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