4.5.1 Brought Forward Figures Opening and Closing Funds – The Rate Setting Statement is a statutory requirement and is unique to local government in Western Australia in that it contains values of the opening funds and closing funds. Opening funds refer to 'net current assets less restricted funds and committed cash and amounts already reflected in the current year budget'. The opening fund forms part of the calculation of the amount of the deficiency to be raised from rates as referred to in Section 6.2(2)(c) of the Local Government Act 1995. The calculations of opening funds brought forward at 1 July from the previous financial year, and closing funds carried forward at 30 June into the next financial year in the rate setting statement of the budget, have a direct impact in the determination of the amount of rates to be raised, and whether it is a balanced, surplus or deficit budget. Some local governments have found themselves in difficulties over miscalculation of these funds. Errors have led to situations where the funds available during the year have been less than that required to deliver the services and facilities provided for in the budget. In other cases councils have imposed higher rate increases than were necessary. For more on calculation of Opening and Closing funds please refer to ‘Local Government Operational Guidelines Number 8: Net Current Assets (Opening and – Closing Funds) used in the Annual Budget’. 4.5.2 Rating Valuations up to date – Changes in valuation are regularly forwarded to a local government from the Valuer General and include interim valuations, GRV general valuations approximately every three years and UV general valuations yearly. It is essential that the valuations are updated prior to 30 June each year and that the local government valuation register balances with the total of valuations provided by the Valuer General. 4.5.3 Early Adoption Calculation of projected estimates to 30 June for the early adoption of the budget should be based on relatively accurate data. Early adoption of a budget can use an incorrect closing estimated balance for the end of the previous financial year. Estimated actuals need to be very carefully scrutinised to ensure accurate figures are carried forward and should include: Analysis of outstanding purchase orders; Contract payments; Leave accruals entered or estimated; Analysis of restricted cash; Accurate calculation of year end reserve transfers; All raised or estimated; debtor’s invoices Inventory calculations; Interest and staff accruals; Current provisions.
4.5.1 Brought Forward Figures – Opening and Closing Funds The Rate Setting Statement is a statutory requirement and is unique to local government in Western Australia in that it contains values of the opening funds and closing funds. Opening funds refer to 'net current assets less restricted funds and committed cash and amounts already reflected in the current year budget'. The opening fund forms part of the calculation of the amount of the deficiency to be raised from rates as referred to in Section 6.2(2)(c) of the Local Government Act 1995. The calculations of opening funds brought forward at 1 July from the previous financial year, and closing funds carried forward at 30 June into the next financial year in the rate setting statement of the budget, have a direct impact in the determination of the amount of rates to be raised, and whether it is a balanced, surplus or deficit budget. Some local governments have found themselves in difficulties over miscalculation of these funds. Errors have led to situations where the funds available during the year have been less than that required to deliver the services and facilities provided for in the budget. In other cases councils have imposed higher rate increases than were necessary. For more on calculation of Opening and Closing funds please refer to ‘Local Government Operational Guidelines – Number 8: Net Current Assets (Opening and Closing Funds) used in the Annual Budget’. 4.5.2 Rating – Valuations up to date Changes in valuation are regularly forwarded to a local government from the Valuer General and include interim valuations, GRV general valuations approximately every three years and UV general valuations yearly. It is essential that the valuations are updated prior to 30 June each year and that the local government valuation register balances with the total of valuations provided by the Valuer General. 4.5.3 Early Adoption Calculation of projected estimates to 30 June for the early adoption of the budget should be based on relatively accurate data. Early adoption of a budget can use an incorrect closing estimated balance for the end of the previous financial year. Estimated actuals need to be very carefully scrutinised to ensure accurate figures are carried forward and should include: Analysis of outstanding purchase orders; Contract payments; Leave accruals entered or estimated; Analysis of restricted cash; Accurate calculation of year end reserve transfers; All debtor’s invoices raised or estimated; Inventory calculations; Interest and staff accruals; Current provisions.
WAAccountingManual_Section4_Part1.docx