Following final approval of the distribution of funds in July by the Commonwealth Minister, quarterly payments are made on the first working day after the 15th day of August, November, February, and May.

The Commission will advise all local governing bodies that payment has been made on day of payment.

As the Commission is required to apply the National Principle of Effort Neutrality, the internal functioning of a council on its decisions does not impact on a council's grant. The allocation of the grant is determined by state averages; council revenues and expenditures contribute to state averages only. State revenue and expenditure averages are determined by aggregating the financial data and function detail splits supplied by councils in the Consolidated Data Collections.

There are two, relatively small, areas of council activity which are treated as "effort positive' rather than effort neutral by the Grants Commission. These are Environmental Protection and Other Transport (including aerodromes and ferries).

Effectively a council cannot improve its grant, however to get the best return a council should provide information in Consolidated Data Collections by the required due date (30 November).

The Commission is not inclined to provide indicative out year information on the Financial Assistance Grant for a number of reasons:

• With the current four year straight line phase in period and research program currently underway it is not possible for the Commission to estimate what may be the future effect on grant outcomes for individual councils.
• As the annual pool is updated annually for CPI and population growth, this can change the distribution depending on individual council population movements and if the prior year estimation of CPI was over or understated. (The estimation is generally understated, resulting in a minimal increase in cash for each council the following year).
• Annual updates of data used in the calculation will also cause changes in the outcomes from year to year, however, generally the variance should be minor.

Ideally the Commission would like to inform councils of an estimate in the grant before budgets are adopted, and although it was not possible this year, the Commission will aim to provide estimates in future years.

Since the review was finalised in January 2003, the Commission has consistently advised councils and other interested parties, that individual council grants will change from year to year due to a number of factors including those listed in the previous FAQ and in the Indicative 2004/05 Grants fax distributed to councils on Thursday 24 June 2004.

The figures provided in the January 2003 Final Report and later sent by the then Minister for Local Government and Planning were for the purpose of finalising the review of the methodology and to give councils an idea of what may happen to the grant over time. The commission cannot forecast the actual movement of a grant from year to year, nor can it isolate for a particular council what is the major cause of the movement in their grant. Councils have been advised that the nature of the grant is that it will fluctuate from year to year and the Commission is unable to forecast where your council's grant will be the following year.

Also, the phase in the report was based on a five year straight line phase in. The agreement with the Commonwealth is for a four year straight line phase in. It also had an estimated pool increase of 4%. This year's pool increase was less.

Each year the total funding pool is updated for annual CPI and population growth. As this advice is provided in July, and is very close to the end of the June quarter, an estimate is made on the annual CPI. The following year, the difference between the estimated CPI and actual CPI is allocated to the State.

The grant is allocated each year on the estimated CPI and population growth pool. This is termed a council's grant entitlement.

In addition each year the adjustment relating to the prior year CPI is allocated to all councils on the prior year's distribution. It is these two amounts together that make up a council's cash grant.

A council’s relative capacity to provide services is compared to a State average. If a council is assessed as below average in its capacity to provide services, it will receive funds on a per capita basis that allows it to function as close to the average standard as possible. If a council is assessed as above or meeting the average standard, it is only entitled to receive a minimum grant, which is no less than 30% of the available funds if it were distributed on a per capita basis across the State.

Cost Adjustors are indices that are applied to expenditure or revenue categories to account for factors outside a council’s control, that potentially impact on its ability to provide services.

For example, demography is a cost adjustor applied to a council’s resident population figure for the purpose of assessing expenditure needs. The cost adjustor represents additional use of facilities due to the composition of the population according to age or indigenous descent. The weighting given to the cost adjustor is an additional 0.5 person for every resident:

• under 19
• over 65, or
• with indigenous descent

The Commission appointed in November 2001 felt that a review of the methodology was needed based on their own concerns and those expressed by councils and other interested bodies about the methodology used for distributing the Financial Assistance Grant.

In April 2003, the former Department of Local Government and Planning (now Department of Local Government, Planning, Sport and Recreation) initiated a project to improve and streamline the collection of local government financial and performance data. The data collection instrument has been developed to standardize the requirements of the ABS, the LGGC, and include the Department’s annual performance indicator collection.

Yes, the Commission is staffed with three permanent employees of the Department of Local Government, Planning, Sport and Recreation. The Executive Officer, is supported by a Research Officer and an Assistant Research Officer.