Local authority project funding

LAPF is paid after the regional council submits its LAPF acquittal by 31 August for the previous financial year ended 30 June and an assessment of the acquittal is completed by the Local Government Unit (LGU) of the Department of the Chief Minister and Cabinet (Department).

From 2024- 25 LAPF funds will be fully paid by November, noting that any delays with submitting the acquittal will lead to a delay in payment of funds. However if the council has LAPF funds that are older than 2 years then the council will need to provide an explanation to the LGU as to the reason why funds are unspent.

The LGU will need to approve council to retain the aged funds before they can be spent.

Individual funding for each Local Authority

A fixed LAPF amount is allocated to each LA and remains the same for the term of the council (subject to the regional council meeting the terms and conditions of the grant each year). The current LAPF allocations are fixed until 30 June 2025. Each year a confirmation letter will be sent to the council with the approved LAPF for each LA.

New LAPF grant allocations for individual LAs will be calculated for 2025-26 and be fixed until the next local government general elections.

The funding guidelines require regional councils to work with individual LAs to develop a list of priority projects through a community engagement process. Ideally alternative projects should also be identified by the LA to avoid any delays if a particular project cannot be progressed.

Community engagement

It is up to individual regional councils to work with their local authorities to decide how it will undertake its community engagement process.

The timing of the community engagement process should provide sufficient time for the engagement process to occur and list of projects to be finalised by the LA for inclusion in the regional council’s budget papers for the forthcoming financial year. This needs to be done during the budget development process.

Example for community engagement

Individual local authority members could hold a community barbecue or otherwise liaise with community members outside a local authority meeting and then discuss priority community projects at a local authority meeting; or community engagements could occur during a local authority meeting where community members are invited to bring forward project proposals.

Funding for a project or initiative outside an LA area

LAPF is to be used for projects that benefit community members in a local authority area. Funds may be used for projects / initiatives outside the local authority area but there must be a clear linkage to community members from that local authority area benefitting from such projects / initiatives.

LAPF must not be used for any activity or purpose within the perimeter of a private dwelling or premise.

Combining of LAPF grants

LAPF grant of one local authority can be pooled with another local authority’s LAPF for a combined project but there must be a clear linkage to community members of each local authority area benefitting from such projects / initiatives and the project / initiative should be one-off and for a fixed period of time.

For all funds that are pooled the annual LAPF acquittal must include each LA’s respective portion of the combined project’s total actual expenditure, along with a note (as part of the annual acquittal for the relevant LAs) stating the nature of the project / initiative; the value of the LA funds that were contributed for the combined project; and total actual expenditure incurred.

Payments to external organisations or another council

LAPF can be paid to an external organisation or another council to deliver a project  but there must be a clear linkage to community members from that local authority area benefitting from such projects / initiatives and the project / initiative should be one-off and for a fixed period of time.

The council must aim to mitigate any possible risks that may be associated with providing LAPF funds to another organisation. The regional council must ensure it fully understands the risks including any potential liabilities the council may be exposed to if entering into such arrangements.

The Department will not be held liable for any risks or liability that may arise if LAPF is paid to another organisation to deliver a project.

Where LAs have delegated authority to make decisions on LAPF, then the LA decides on the project/s to be delivered at an LA meeting, with the minutes of the meeting provided to the regional council for incorporation into the budget or budget revision if applicable. Where there is no delegation issued to the LA, then the LA is to submit project recommendations to the Regional Council for approval and incorporation into the budget.

Councils are encouraged to consider delegation of decision making to their LA.

Delegation issued to LA

Any project changes are to be discussed and resolved at an LA meeting. A copy of the minutes of the meeting is to be included in the regional council’s meeting agenda papers for the meeting that is scheduled immediately after the LA meeting.

A project change is authorised immediately at the LA meeting resolving to change the project. Council staff should then endeavour to progress the project soon after the resolution is made.

No delegation issued to LA

The project change must be considered for approval at the next council meeting. If elected members approve the project then Council staff should endeavour to progress the project soon after the resolution is made.

If elected members do not approve the project then the LA is to be notified as soon as possible and an alternative project proposed.

Regardless of whether a delegation has been issued to an LA, if the project change results in a material change to the cost of a project then the regional council should consider whether this needs to be published as a variation in the budget.

Missing approval of LA projects

If an LA project is not supported by elected members at a council meeting then LA members must be advised of the decision (ideally within 10 days) and requested to provide alternative project proposal(s).

LAPF projects are allowed to span over council election years.

The LAPF funding agreement signed by the regional council will stipulate the date the LAPF funding offered for that year is to be fully spent by. Generally funds are to be fully spent within 2 years of receipt of funding.

For major projects, projects are to be completed within four years of receipt of the first year’s funding, with the actual project completion date stipulated in the major project approval given by the LGU.

A ‘major project’ is any project intended to be delivered by pooling up to 4 years’ of LAPF grants into a single project.

Project approval

A regional council must submit a project proposal to the LGU of the Department for each major project it intends to deliver with the LAPF. All major project proposals will need to be approved by the LGU before multiple years’ LAPF are combined for a major project.

Councils must be ready to commission a major project at the time it submits its project plan for approval. If there are delays with commencing a major project, the regional council runs the risk of the Department requesting the value of unspent funds older than two years (from the original year of funding receipt) to be repaid if no compelling reason(s) could be demonstrated on why the project was delayed.

Councils must be ready to deliver a major project at the time it submits its project plan for approval.

Changes of scope of a major project

Once the scope of a major project is approved by the LGU then it cannot be changed unless there are compelling reasons beyond a council’s control that has caused this situation. An entire new project proposal will need to be submitted and go through the approval process if the council wishes to replace a major project with another major project.

In all cases the Department retains the authority to recover unspent funds if an alternative major project is not approved or progresses as approved, noting that the first preference is always that LAPF is spent on community priorities in the community for which it is intended.

If a major project falls behind schedule  the regional council must inform the LGU as soon as it becomes aware a major project has fallen behind schedule and that there is a possibility funds may not be able to be fully spent by the stipulated date. An extension approval may be granted by the LGU for the regional council to retain funds beyond the stipulated date if there are compelling reasons as to why the project has fallen behind schedule.

In all cases the Department retains the authority to recover unspent funds if an alternative major project is not approved or progresses as approved, noting that the first preference is always that LAPF is spent on community priorities in the community for which it is intended.

If the total project cost for a major project was completed under budgeted amount the council can repurpose any unspent LAPF for another LA project so long as the unspent amount was not paid more than two years prior to the project completion.

Pooling for a major project

Funds can only be pooled from LAPF received in 2023-24 onwards. Funds received prior to 1 July 2023 cannot be pooled for a major project.

As the LAPF allocation is fixed for the term of a council, regional councils should be aware that new grant allocations will be calculated and offered from 2025-26 for the next four years. There is a possibility that the level of funding offered for individual LAs will change based on the revised calculations.

The regional council should be prepared to cover any funding gaps for major projects that may arise if the value of the LAPF grant decreases in future LAPF allocations.

The LAPF acquittal must be submitted in the required format as provided to the council and provide a list of project delivered during the year along with a ledger print out and any other information requested.

The final acquittal of each major project must be submitted in the required format as provided to the council and is to include a ledger print out and photos and any other information requested.

Definition of  fully expend LAPF funds

GST

GST is excluded from the grant amount.

Administration fees

Administration/management fees are considered in-kind contributions and are not an eligible expense.