Government of Western Australia
Department of Local Government and Communities
Governance Bulletin
Issue 12
September 2016
Government Case Study
Purchasing and procurement policy
Local government purchasing policies set out the minimum number of oral and/or written
quotations that must be obtained in accordance with regulation 11A of the Local Government
(Functions and General) Regulations 1996. All quotations should be recorded by the person
making the purchase. Policies are only effective if applied correctly, as demonstrated in the
following case study.
Background
1) Consultant
An officer engaged a consultant via email to
undertake a project of almost $9,000 value. Over an
18 month period the consultant was paid more than
$140,000 in total.
2) Equipment leasing
The same officer entered into a number of arrangements
for leasing equipment on behalf of the local government,
Also in this issue:
totalling nearly $700,000. However, the delegation to the
officer for acceptance of tenders was limited to $250,000.
It was argued that the provider was a preferred Western
Australian Local Government Association (WALGA)
supplier in accordance with regulation 11(2)(b) of the
Local Government (Functions & General) Regulations
1996. A further exemption was suggested on the basis
that the provider was a unique supplier of a product in
accordance with regulation 11(2)(f). This would exempt
the local government from having to invite tenders for
the contract.
Continued on page 2 >
xx Governance case study:
xx Legislation update: Graffiti
Purchasing and procurement policy Vandalism Act 2016
xx Use of corporate credit card
xx Upcoming elected member training
xx Complaints management
xx Key compliance dates
Making a difference for local communities
Governance Bulletin – September 2016
Welcome
from the Director General
Page 2 of 6
The allegation
1) Consultant
The local government did not comply with its own
purchasing policy or regulation 11A in engaging the
consultant.
2) Equipment leasing
Although the provider was a WALGA preferred supplier,
Council did not provide approval for procurement. There
was also insufficient evidence to support the claim of a
sole supplier for the leased equipment.
Welcome to the second issue of the
Department of Local Government and
Communities (DLGC) Governance
Bulletin for 2016. This issue includes
information about the need for local
governments to develop a purchasing
and procurement policy. There
are also articles about the use of
corporate credit cards and complaints
management.
I hope you find the articles of benefit
and continue to be a part of our
readership.
To provide suggestions or add/update
your email address, contact us at
[email protected]
or by telephone on (08) 6551 8700.
Jennifer Mathews
Director General
The finding
1) Consultant
No record was found of any verbal or written quotes for
the consultant. No contract was found for these services
and no tender was invited by the local government.
Therefore the officer breached the purchasing policy and
regulation 11A.
2) Equipment leasing
The local government must use its best endeavours to
determine if the sole source of supply is genuine by
exploring any alternative sources. Once determined, the
justification must be endorsed by the local government
either in line with the relevant delegation or by Council
decision. No evidence was found that this process was
followed, nor was there any formal Council approval to
exempt the lease from tender provisions on the basis of
being a WALGA preferred supplier.
Record keeping practices
A local government must keep records relating to all
procurement activities in accordance with:
• the State Records Act 2000 (WA)
• the local government’s record keeping process
• associated procurement procedures.
Governance Bulletin – September 2016
Page 3 of 6
Use of corporate credit card
Credit cards provide a convenient way to
purchase goods or services for the local
government and are now a modern business
practice. Most local governments have
corporate credit cards either in the form of
one card for use by all authorised employees
or for each senior employee including the
CEO. However, a credit card should not be
issued to a Mayor or President.
Credit cards issued to individuals require additional
policies and procedures to ensure the proper use
of the cards when making purchases: for example,
a corporate credit card policy, an agreement for
use of credit cards and/or a reference to credit card
allocation and usage in an employee’s terms of
employment as part of their contract.
Proper identification and verification
of credit card expenses
DLGC examined a case where there was a failure
to properly identify and verify errors and personal
expenses charged to an employee’s credit card.
Duplicates and reimbursements were recorded, but
no reimbursements or credits appeared to have been
transacted back to the local government. However,
some reimbursements had been made back to the
cardholder.
There were also instances where it appeared that the
employee had charged personal expenses to their
corporate credit card. These expenses were either
not reimbursed by the credit cardholder or there was
a considerable length of time before the expenses
were reimbursed back to the local government.
All credit card policies should contain a provision
restricting use such as:
Restrictions on use
Corporate credit cards are not to be used for personal
expenses under any circumstances.
Policies should also indicate that transactions are to
be acquitted and reconciled on a monthly basis. This
allows any reimbursements for expenses that are
restricted, such as personal expenditure, to be dealt
with in a reasonable timeframe.
Restrictions on credit card use may also be
addressed with the following provisions:
• Each cardholder will be issued with a monthly
statement listing all their transactions. It is
the responsibility of the cardholder to match
their supporting documentation to the monthly
statement.
Continued on page 4 >
Governance Bulletin – September 2016
Page 4 of 6
• When the monthly statement is received, the
cardholder is required to check all purchases are
supported by a tax invoice.
• Monthly statements must be reconciled and
returned to the finance section within seven days
of receiving the statement.
Local governments should have processes in place
to not only identify breaches in a timely manner, but
also to enforce the provisions of the policy should any
breaches occur.
Corporate credit cards, like any other purchase or
procurement, are a form of payment for goods or
services made by a local government. The details of
payments for all expenses (details of payments to all
creditors) are to be presented to Council on a monthly
basis in accordance with the local government
financial management regulations.
Have a question or need
more information?
Local Government
Advisory Hotline
Telephone (freecall): 1300 762 511
Email: [email protected]
?
Governance Bulletin – September 2016
Page 5 of 6
Complaints management
and disrupts administrative operations. The WA
Ombudsman published the guidelines below:
http://www.ombudsman.wa.gov.au/Publications/
Documents/guidelines/Binder-Complaint-Handling.pdf
http://www.ombudsman.wa.gov.au/Publications/
Documents/guidelines/Unreasonable_Complainant_
Conduct_Manual.pdf
The guidelines are a valuable resource for public
authorities dealing with unreasonable complainant
behaviour and contain steps to follow before a
decision is made to restrict a person’s access to a
Council service.
Effective complaints management allows a
public authority to simultaneously provide
satisfactory customer service and monitor
its own performance. Not everyone will
agree with the decisions Council may make.
While it is realistic that people will raise
complaints and issues regardless of merit,
local governments are expected to fulfil their
obligations as regulatory authorities ensuring
that legitimate complaints are addressed.
Occasionally DLGC is asked whether a local
government can ‘declare’ a person a ‘vexatious
complainant’ and the answer is always no.
A local government (and any other public authority
of the State or Commonwealth) cannot legally make
such a declaration. A decision of this nature could be
potentially defamatory and actionable by the person
affected.
The WA Ombudsman, in conjunction with other
State and Territory Ombudsman offices and the
Commonwealth Ombudsman office, recognise that
some complainant behaviour can be unreasonable
Rather than denying a person’s right or ability to make
complaints; the process provides guidance on how
a local government can respond to unreasonable
complainant behaviour.
In short, a decision by a Council to restrict a person’s
avenue for complaint should be taken only as a
measure of last resort and should not be used to
avoid dealing with legitimate concerns.
Important to note: DLGC has established three
new email inboxes to respond to queries more
efficiently.
For all matters relating to minor breach
complaints, whether it is an initial complaint,
additional information or response
from an individual should be sent to
[email protected]
All requests for elected members to participate
in a meeting after declaring an interest should be
sent to [email protected]
Matters relating to serious complaints,
responses to Investigator requests, and
requests for updates should be sent to
[email protected]
Governance Bulletin – September 2016
Page 6 of 6
Legislation Update: Graffiti Vandalism
Act 2016
The Graffiti Vandalism Act 2016 (GV Act)
comes into effect on 7 October 2016,
enabling police, public transit officers and
the local government sector to deal with
graffiti offences. The relevant powers of
these agencies have been transferred from
various Acts into the GV Act.
This means that objections must be lodged in the
approved form, with approval being by the local
government. The existing Form 4 in Schedule 1
to the Local Government (Functions and General)
Regulations 1996 can be used, provided section 22
of the GV Act is included at the top and the form is
approved by a Council resolution.
Of note, objections to notices issued under the GV
Act are to be treated as though they were objections
to the decision of a local government under Part 9 of
the LG Act.
For further information, please refer to the
Department’s Circular No. 18-2016.
Upcoming elected member training*
Seminar date
Topic / Location
17 September 2016
Meeting Procedures and Debating (Dowerin)
29 September 2016
Understanding Financial Reports and Budgets (Geraldton)
30 September 2016
Sustainable Asset (infrastructure) Management (Geraldton)
*For further information, please contact Ms Jacqui Dodd, Training Services Manager at WALGA on 9213 2000
Governance Bulletin – September 2016
Page 7 of 6
Key compliance dates
Compliance dates
Requirements to be met
Within 30 days of
adopting budget
(and no later than 30
September)
Local government to submit a copy of Annual Budget to the Director
General of the Department of Local Government and Communities.
In the financial report for
the year ended 30 June
2016
Local government must show the fair value of all assets that are:
• Plant and equipment, and either
• Land and buildings or
•Infrastructure
Department of Local Government and Communities
Gordon Stephenson House, 140 William Street, Perth WA 6000
GPO Box R1250, Perth WA 6844
Telephone: (08) 6551 8700 Fax: (08) 6552 1555 Freecall (Country only): 1800 620 511
Email: [email protected] Website: www.dlgc.wa.gov.au
Translating and Interpreting Service (TIS) – Tel: 13 14 50
If you require further information
related to the topics covered in this
bulletin, you are welcome to call or
email the Local Government Advisory
Hotline on 1300 762 511 or
[email protected]
or by phone on 6551 8700.