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Local Government Compliance Framework

Last updated: 13/01/2017 6:50 PM
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The Local Government Compliance Framework outlines the Department of Local Government and Communities (DLGC) approach to ensuring that the integrity of the local government sector is of the highest order. The framework provides transparency and gives the local government sector and the public certainty about DLGC's approach to managing complaints made against the sector (or individuals within it). DLGC's aim is to build good governance by promoting and enforcing compliance and encouraging all local governments to move beyond minimum compliance through continuous improvement. DLGC also aims to ensure that there is proper accountability of local governments to their communities.

The regulatory framework

Under the Local Government Act 1995 and associated legislation and regulations, DLGC is responsible for the regulation of the local government sector in Western Australia. Its responsibilities are to:

  • Build good governance in the sector and provide effective regulation.
  • Strengthen the capacity of the sector to meet community aspirations.

Intent

The intent of the framework is to:

  • Demonstrate DLGC's commitment to using its powers in a way that is, and is seen to be, firm, fair and consistent.
  • Demonstrate the transparency of the compliance process.

The Compliance Framework is not a legal document; it is provided for the purposes of information and does not limit the discretion of DLGC to take any action it sees fit under the Local Government Act 1995 and associated legislation.

Principles

The Compliance Strategy is built on the following principles:

  • Transparency - in the approach to compliance including the tactics used.
  • Proportionality - to focus the compliance effort on areas of risk and seek to improve the overall governance of the local government sector. While DLGC cannot ignore a complaint about a breach of the law, it can determine its level of response.
  • Informed and unbiased -action taken in response to a complaint will be informed by the gathering of relevant information from all appropriate sources to ensure the decision is fully informed, based on proper judgment and unbiased.
  • Natural justice - to accord the subject/s of the complaint with the opportunity to respond, although DLGC will not allow the matter to unnecessarily extend because of an unreasonable delay on the part of the complainant or respondent.

Education and support

DLGC supports the local government sector to build its capability through the provision of education, advice and other services. DLGC is committed to providing accurate, consistent and timely information to help the sector understand its obligations, and does this by:

  • providing quality, up-to-date and timely information via phone contact, as well as information via the DLGC website and publications
  • ensuring there are systems in place that capture information to provide both DLGC and the sector with data about key risk areas and then developing products and services to assist the sector address those key risks, and
  • providing targeted advice and support through proactive compliance visits that are aimed at identifying key risk areas and encouraging local governments to address these in a timely and effective way.

When requested, DLGC will endeavour to provide interpretive advice relevant to the legislation but it is not able to provide legal advice or opinions nor (in most cases) share with the sector or other stakeholders legal advice it seeks or receives in respect of the statutory framework.

Dealing with non-compliance

DLGC deals with non-compliance by focusing reactive audits and investigations on those who have chosen not to comply, or where there is evidence of serious non-compliance, regardless of the reason for this.

This is done by:

  • undertaking research and gathering intelligence about sector performance leading to a deeper understanding of the sector's governance performance. This allows DLGC to segment the sector according to risk so that its compliance effort is focused on those most at risk of non-compliance
  • using this information, and other sources (such as formal complaints), DLGC will investigate allegations or instances of non-compliance and, in the most serious of cases, undertake authorised inquiries, and
  • taking prosecution action against an individual where a prima facie case exists and a prosecution is in the public interest. Very serious systemic (whole of organisation) issues may result in an independent inquiry being held.

Procedural fairness

Where a formal investigation or authorised inquiry is undertaken, DLGC will:

  • Ensure it is undertaken as efficiently as possible. DLGC understands that being under investigation is difficult for all parties involved, and is committed to undertaking quality investigations. It is important that all parties understand that this takes time.
  • Seek information voluntarily, but where this is not provided within a reasonable timeframe DLGC will issue a notice directing the production of information in accordance with the Local Government Act 1995.
  • Ensure that the processes of natural justice are applied so that individuals have the right of reply where an allegation has been made or during any other process applied by DLGC. DLGC will also apply reasonable time limits to the natural justice process to ensure the timely progress of investigations and inquiries.

Compliance model

The compliance model assumes that the local government sector will, by and large, comply or seek to comply with its statutory obligations. Therefore, it is not appropriate for DLGC to respond to all compliance issues in the same way; it will seek to educate and inform where genuine attempts at compliance are being made. Equally, DLGC will impose the full force of the law when there is evidence of a serious non-compliance or systemic or repetitive breaches.

Compliance model 

Compliance approach

DLGC's approach to compliance aims to be holistic.

Compliance approach 

Compliance tactics

DLGC can use a variety of tactics to obtain information about governance standards and/or in response to complaints about particular practices. These are outlined in the following table along with an overview of why DLGC might take a particular approach.

Advice, Education and Support

Compliance TacticWhat This Tactic Aims to AchieveLevel of compliance
Media monitoring (eg local newspapers) This allows us to keep a ‘finger on the pulse’ and quickly identify any emerging issues.Low
Monitoring Minutes of council MeetingsThis allows us to ‘remotely’ monitor Council performance around the conduct of meetings and identify any potential concerns ideally before they becomeissues.Low
Using Departmental DataThe Department maintains a database of information drawn from the sector and uses this to identify emerging issues and trends, the extent to which compliance has/has not been an issue in the past etc. Low
Attending council Meetings This is one tool that allows us to assess the conduct of a meeting and determine whether there are any concerns around process/approach etc. While we may notify the Council in advance of our attendance we may also attend unannounced – the latter approach means our attendance does not affect the conduct of the meeting but also allows us to observe proceedings in their more natural setting. Low

Targeted and Proactive Compliance

Compliance TacticWhat This Tactic Aims to AchieveLevel of compliance
Compliance checklists We will issue checklist style requests for information from the sector when we are seeking information relating to a specific compliance element. Minor
Proactive compliance We will undertake proactive compliance audits (eg Better Practice Reviews and Probity Audits) to gather information about compliance at a specific level (iefocused on a particular organisation or a specific issue).Minor
Letters and phone calls We will issue requests for information either formally (eg via letter) or informally (eg via phone or email). Minor
Discussions with council auditorIn some instances (eg where there is a concern/issue around financial compliance) we may elect to discuss our concerns with the Council Auditor to establish whether there is a need to investigate further. Minor

Complaint Investigations

Compliance TacticWhat This Tactic Aims to AchieveLevel of compliance
Issuing a Directions for information notice We will formally issue a Directions for Information letter in more serious circumstances or where information has not been provided voluntarily or in response to other less formal requests. High Risk
Investigation We may investigate a complaint by seeking information from the complainant, person/s of interest, witnesses etc and then forming a conclusion, based on all the evidence provided. High Risk

Complaint Investigations

Compliance TacticWhat This Tactic Aims to AchieveLevel of compliance
Authorised InquiryThe CEO of the Department may authorise an Inquiry into the operations/ affairs of a local government organisation. This action is not taken lightly but in response to indications of systemic compliance/governance issues. Departmental staff and/or other suitably qualified people will usually be authorised to conduct such an inquiry and to exercise powers and responsibilities provided under Part 8 of the Local Government Act 1995Serious

Responding to compliance matters

DLGC's response will vary depending on the risk level and possible consequences.The response approach is generally as follows:

TopicOverview/Rationale
Advice: complaint unfoundedWhere there has been a complaint lodged but investigation shows there has been no breach DLGC will notify the council accordingly.
Formal or informal feedbackIn cases where DLGC has, for instance, formed a view about local government/council operations (eg via announced or unannounced attendance at council meetings) it will notify the council of the outcome including, where applicable, providing feedback about the conduct of the meeting.
Request for follow up actionIf the issue is perceived by DLGC to be low-level it may issue a letter to the relevant council outlining the issue and asking for details of corrective action that will be taken.
Meeting procedure trainingDLGC provides training on meeting process understanding and working with standing orders to help achieve best practice. This could include mock council meetings to demonstrate practical application of meeting process.
Peer support programDLGC works proactively with the Western Australian Local Government Association (WALGA) and the Local Government Managers Australia (LGMA WA) to deliver a peer support program that is aimed at early intervention where there has been a breakdown in good governance (most often around a breakdown in relationships).
MediationDLGC will facilitate mediation sessions to address issues where this is considered an effective strategy – this occurs mostly around relationship breakdowns.
Referral to the Corruption and Crime Commission (ccc) or another State or Federal bodyWhere there are serious allegations made DLGC may exercise its legislative powers and refer the matter to the CCC or another State or Federal body. DLGC is also required to notify the CCC in the circumstances where it suspects misconduct may have occurred.
Referral to the State Administrative TribunalAs a result of an investigation, where there is prima facie evidence of a serious breach, DLGC may refer a matter to the State Administrative Tribunal. This action may be taken as an alternative to criminal prosecution.
SuspensionThe Minister for Local Government may suspend a council before or after an Inquiry if there is a concern about the council being able to perform its function due to the seriousness or duration of an Inquiry, if the Minister believes the Inquiry may be prejudiced if the council were to continue to operate or if there are other factors the Minister considers relevant. DLGC can provide advice to the Minister in relation to a potential suspension but is not able to effect a suspension.
ProsecutionProsecution action can only be taken against individuals (be they council employees or elected members) and will occur where there is prima facie evidence of a very serious breach of the Local Government Act 1995 and prosecution is considered to be in the public interest.

 

In addition to the actions DLGC is mandated to take (as outlined above), the Minister for Local Government may establish an independent inquiry into a local government where there are concerns about high level and/or systematic governance issues. DLGC may be asked to provide advice to the Minister prior to such a decision being made, however the decision to establish an independent inquiry can only be made by the Minister (these powers cannot be delegated). Such an inquiry has the powers of a Royal Commission and operates independently of DLGC (although departmental staff may be seconded by the inquiry to assist it to fulfil its responsibilities).