New South Wales Aboriginal Land Council Review of

New South Wales Aboriginal Land Council Review of the Policy on Local Aboriginal Land Council Funding and Financial Obligations 1

CONTEXT l l l 2 2007 and 2008 – major changes for NSWALC Out of administration New ALRA New Council Administrative, financial, governance and structural reforms Opportunity and timely to review our policy and procedures for LALC funding

CONTEXT l l Current policy developed in 2005 The Draft Policy on Local Aboriginal Land Council Funding and Financial Obligations has been developed ensuring that the requirements of the Aboriginal land Rights Act have been : – 3 i. e. Section 106 (8)(e), 113, 114, 153, 158, 159, 161, 162 and 163

OBJECTIVE l l 4 Ultimate aim is to support LALCs to operate at a high standard while still maintaining high levels of accountability Streamline processes and reduce complexity Enable Zone offices to operate with more discretion to respond to individual circumstances Demonstrate good management across the network to stakeholders

OBJECTIVE l Be consistent with general applicable principles of Administrative Law such as; – – 5 The requirement that powers be exercised reasonably and for proper purposes; and The requirement to act fairly in a procedural sense

Working Party l 6 A Working Party was established to undertake a review of the current Policy on Local and Regional Aboriginal Land Council Funding and Financial Obligations.

Working Party Members Councillors l l 7 Councillor Craig Cromelin – Wiradjuri Region Councillor Stephen Ryan – Central Region

Working Party Members Staff l l l l l 8 Mr Lesley Turner, Director - Southern Zone Ms Jenny Bedford, Operations Manager - Southern Zone Mr Tony Sutherland, Director - Western Zone Mr Robert Barnes, Operations Manager – Western Zone Mr Andrew Riley, Director - Northern Zone Mr Trent Lynwood, Operations Manager - Northern Zone Mr Steve Merritt, Director – Eastern Zone Ms Carole Di Franco, Senior LALC Support – Eastern Zone Mr Neil Mandel, Network Services

Main Recommendations l l 9 A separate “stand alone” Policy on Local Aboriginal Land Council Funding and Financial Obligations; A new name - Policy on Local Aboriginal Land Council Funding and Financial Obligations A revised Procedures framework to implement the changed policy; A Risk Management approach relating to financial and performance;

Main Recommendations l l 10 Reduce the 6 funding categories to 2; Introduce the concept of cessation of funding for non-compliance; and Simplify the types of funding arrangements and have just 2 – a Funding Agreement or an Assistance Agreement. Introduce a standard LALC Management Support System for all NSWALC.

Stand Alone Policy l l 11 Currently NSWALC has a policy titled Local and Regional Aboriginal Land Council Funding and Financial Obligations. This includes Policy and Procedures all in the one document which presents a problem if NSWALC is to consider changes to policy.

Stand Alone Policy l The working group has proposed a new policy with the following; – – 12 a set of principles; a risk management approach; financial and operational performance; funding / assistance agreements;

A Stand Alone Policy new funding categories; – new reporting requirements; and – cessation of funding aspects. Name changed to Policy on Local Aboriginal Land Council Funding and Financial Obligations – l 13

PRINCIPLES l l l 14 NSWALC’s principle objective is to support LALCs to ensure sound and sustainable financial and operational management. NSWALC will adopt a risk management approach to making funding decisions. LALCs should not be unduly penalised for falling short of minimum operational performance standards.

PRINCIPLES l l 15 NSWALC is to work closely with LALCs in ensuring satisfactory performance and proper management; and The funding policy should focus on early identification of problem areas and on timely intervention and assistance where required.

RISK MANAGEMENT l l 16 Can be defined as consideration of events that could occur and what would be the impact if such events occurred (likelihood and consequence). These considerations enable risk events to be identified and if there is a likelihood of them occurring, strategies can be developed that would either reduce the likelihood or mitigate the impact of these events.

RISK MANAGEMENT l l 17 Sound management practices The principle of risk management The need for a decrease in complexity for NSWALC and LALCs; and The need to focus attention on overall good management.

FINANCIAL AND OPERATIONAL PERFORMANCE l LALCs are required to meet minimum operational performance standards: – – – 18 Generate sufficient income to pay expenses; Have enough cash at bank and investments to cover liabilities as well as any employee leave entitlements; Collects rents when they fall due;

FINANCIAL AND OPERATIONAL PERFORMANCE l LALCs are expected to: – – – 19 Pay rates and charges when they fall due; Lodge Business Activity Statements and taxes when they fall due; Ensure debts are paid, as and when they fall due (as referred to in s 91 (1) (e)), and are in line with the budget;

FINANCIAL AND OPERATIONAL PERFORMANCE l LALCs are expected to: – – 20 Ensure employee related payments meet legislative requirements, i. e. workers comp, superannuation; and Have at least 50 voting members.

FUNDING CATEGORIES l l Principle change is the reduction of funding categories from six to two (funded and unfunded). There will be two main funding categories: – – l 21 F - Funded UF - Unfunded Note that those LALCs under Administration will be classified as Funded

FUNDING AND ASSISTANCE AGREEMENTS l l l 22 All LALCs will be provided with a funding or maybe an assistance agreement from NSWALC; These agreements will outline the terms and conditions under which NSWALC will provide financial and other support to LALCs; The agreements will also outline the range and type of financial and performance reports required to be lodged under the ALRA or the terms of the agreement.

FUNDING AND ASSISTANCE AGREEMENTS l Without limiting the types of reports, they may include: – – – 23 Community, Land Business Plans (implementation, progress/status); Community Benefit Schemes Operational / Financial Reports

MAKING A FUNDING DECISION l l 24 NSWALC can only fund LALCs that are not prohibited from receiving funds pursuant to s. 163 of the ALRA 1983; NSWALC will only offer Funding Agreements to LALCs who are in a funded category and may offer Assistance Agreements to LALCs in an Unfunded category.

FINANCE PROVISIONS BUDGET APPLICATION s. 158 Must be submitted by 21 April s. 52 Must be submitted by 31 March Audited Financial Statements Funding Agreement s. 162 Maintain Records and Accounts s. 153(1) ANNUAL REPORTING Periodic Reports To be submitted to NSWALC within 4 weeks of end of period Annual Reports Accounts to Auditor by 14 September s. 153(4) Financial Statements (Incl. assets and liabilities) Bank Statements Membership Rolls Performance Reports Audit to NSWALC By 1 November s. 153(5) Must include 1. Management Letter 2. Copies of all Insurance Policies Reg. 95 Voting Rolls Minutes of Meetings Attendance List of Meetings 25 Lease, contracts & other documents

BUDGETS s. 158 APPLICATION s. 52 ASSESSMENT APPROVAL s. 106 FUNDING AGREEMENTS s. 162 PERFORMANCE REPORTS PERIODIC REPORTS s. 159 AUDITED STATEMENTS 26 ANNUAL REPORTS s. 153 s. 161

REPORTING REQUIREMENTS Reporting requirements will be streamlined. LALCs will be required to provide financial reports and also to report against their community land business plan. l LALCs will be able to demonstrate up to 10 per cent variation in expenditure against budget line items. l 27

LALC MANAGEMENT SUPPORT SYSTEM l l 28 A new database, the LALC Management Support System, will be used to monitor performance against five key operational areas. The LMSS provides the diagnostic tool to inform the risk category (which in turn informs the delegate in relation to how funds will be offered and what reporting regime the LALC’s will be required to adhere to) and the LALC management plan.

LALC MANAGEMENT SUPPORT SYSTEM Overview / Summary l Financial Management l Property Management l Systems Management l Human Resources l Governance 29

NEXT STEPS l 30 The ARLA requires NSWALC to refer the policy to each Local Aboriginal Land Council for comment, and consider any submissions made by any Local Aboriginal Land Council within 30 days of the referral of the policy, and obtain the approval of the Minister and the Policy /gazetted.

NEXT STEPS The revised policy will take effect on its publication in the Gazette or on a later day specified in the policy. l NSWALC staff and LALCs will need to implement the new arrangements from that date. l 31

SUMMARY OF ISSUES l l 32 The procedures are less prescriptive and allow greater flexibility. The ultimate aim is to support LALC’s to operate at a high standard while still maintaining high levels of accountability.

SUMMARY OF ISSUES l l 33 The proposed policy provides the framework; The procedures provide guidance and instruction on how the policy framework will be operationalised.

Comparison – Current and Proposed Policy CURRENT PROPOSED POLICY / PROCEDURES (1 DOCUMENT) 6 FUNDING CATEGORIES 2 FUNDING CATEGORIES (F) OR (UF) BREACH REGIME 34 SEPARATE STAND ALONE LESS COMPLEX COMPLIANCE REGIME s 162 AND 163

Comparison – Current and Proposed Policy CURRENT PROPOSED Policy complex Termination Clause 35 Simplifies – less prescriptive allow flexibility By NSWALC or LALC

Comparison – Current and Proposed Policy Current l Funding Agreements l UF 2 “Out of Policy” Agreements l Administrators l Breach database regime l 12 months rates non-payment l Payment of Essential Services 36

Comparison – Current and Proposed Policy l l l 37 Proposed Funding Agreement. Assistance Agreements. 28 days to rectify non compliance. Otherwise assistance agreement negotiated. If beyond 90 days the funding agreement is terminated, funds forfeited. An Assistance Agreement can be negotiated

Comparison – Current and Proposed Policy Proposed LALC Management Support System l Assessment against five key operational areas – – l l 38 Financial Mgt, Office Systems Mgt, Property Mgt, Human Resources and Governance Auditors 2 nd Certificate is also used to assess / measured 20 % weighting against each key area LALCs assessed on above and total determines its indicative level of risk i. e. within one of the following three levels

Comparison – Current and Proposed Policy l 90% - 100% - Funded Quarterly & six monthly reporting l Medium Risk 70% - 89% - Funded quarterly and quarterly reporting l 39 Low Risk High Risk 50% - 69% Funded monthly and monthly reporting

Process from here? l l l l 40 Approval of Draft Policy : 3 Mar 2009 Feedback from LALCs : 10 Apr 2009 Approval of Final Policy : 30 Apr 2009 Ministerial Approval and Gazettal : 30 May 2009 Implementation of LALC Risk Assessments Recommendations to the NSWALC Board Approval of grants for costs and expenses Issue 2009/2010 Funding Agreements 1 Jul 2009

THE END ANY QUESTIONS 41