Early issue of Financial Assistance Grants creates accounting headaches

While the early payment of Financial Assistance Grants (FAGs) to local councils by the Federal Government means councils can start work on crucial new projects immediately, it is not all plain sailing.

Last week the Minister for Regional Development, Territories and Local Government John McVeigh announced the cash injection of more than $1.2 billion.

“These vital funds support local government to deliver the infrastructure and services communities need across Australia, such as critical transport, health, recreation, environmental and employment projects,” Dr McVeigh said.

“We recognise the importance of giving councils the power to determine local priorities in their region.

“Under the Financial Assistance Grants program Australia’s 546 councils have access to untied funds to allow them to spend the money according to local needs.”

Nambucca Shire Council’s General Manager, Michael Coulter, said the early payment of FAG grants does cause problems with the council’s financial reporting.

”The FAGs are budgeted for every year – the funding is largely known and doesn’t change - except for when the coalition didn’t index them for a number of years,” Mr Coulter said.

“As such they are effectively part of our general revenue and we don’t ear mark the funding to any particular projects.”

More information about the Financial Assistance Grant program, including funding being made to individual councils across Australia, is at: www.regional.gov.au/local/assistance