PROGRESS REPORTS

JAN 2017:

Preliminary planning has started. Investigatory requirement research and analysis findings so far are shared in the next section.

Next Step: The next milestone is to interview selected stakeholders from councils, state agencies and peak bodies, to understand their views of good governance and ideas for measuring governance performance in council decision making and community engagement contexts.

To flush out politicising influencers and regular offenders, two key selection criteria require choosing people who are genuinely committed to:

  1. Facilitate, assure and ensure corporate governance improvements to the systematic integrity and performance of the current broken Local Government (LG) system;
  2. Develop greater provisioning capacity building to provide strategic council plan aligned and critical and essential municipal services and infrastructure amenities that bring relevant, value adding and sustainable benefits to local communities and upper authorities.

Their feedback will help the project team conceptualise a governance KPI model, which will be reviewed, discussed and sanctioned, before completing preliminary project planning, as directed and guided by PMBOK standards.

REQUIREMENT FINDINGS

The Good Governance Baseline

Governance is the culture and institutional environment in which citizens and stakeholders interact among themselves and participate in public affairs (United Nations Educational, Scientific and Cultural Organisation (UNESCO), 2016).    Governance in action is framed by the:

  1. Behavioural norms, values and rules of the game through which public affairs are managed in a manner that is transparent, participatory, inclusive and responsive. In Local Government, these relate to matters of conduct.
  2. Systematic and organisational structures and processes that are designed to ensure accountability, transparency, responsiveness, rule of law, stability, equity and inclusiveness, empowerment, and broad-based participation. In Local Government, these are specified in the Local Government Act and other appropriate state laws; state and council policies and good practice guidelines.

Governance is NOT government. The later often refers to the elected parties, who by constitutional laws, are given the statutory powers to (a) set and direct public strategies (called public policies) for a state or country, and (b) administers their implementation through the provision of public programs, services and infrastructure amenities[1].

The performance of elected parties and their support agencies are guided by conduct and practice frameworks, which are integrated and include consistent good governance principles, to facilitate, assure and ensure they:

  1. engage with the citizens, other stakeholders, among and between themselves, inclusively and responsively and
  2. make public decisions that are compliant to the laws and policies, and can demonstrate transparency, accountability and value add.

Simply out, good governance is meant to be a conduct and practice integrated performance management framework for governments and their agencies, including down to the lowest level of municipal councils and their peak bodies.

Current Corporate Governance (Framework)

Corporate Governance is an organisation’s a meta system that  directs, builds and controls its good governance and operational capabilities throughout the organisation and its dealings and interactions with other external stakeholders. Each council’s corporate governance framework describes:

  1. The good governance principles and rules of conduct and practice to be applied in councils’ community engagement and decision making and implementation activities;
  2. A behavioural and structural control system that facilitates, assures and ensures the integrity and efficacy of a council’s organisational, legal and administration functions.

State’s Expectation of Corporate Governance in councils:

In Victoria, the present corporate governance framework for councils comprises of the following references (DTPLI, 2014):

  1. Guide to councils – a general information reference to inform how councils work, how they make and spend money and how they are elected, and how citizens can engage and participate in council affairs
  2. Special Committees guide, to check compliance to Section 86 of the LG Act and local limits imposed by a council’s instrument of delegation
  3. Legitimacy of Councils and Rating Powers , to confirm the state constitutional legitimacy of councils, which in today’s business language, are the 79 decentralised and autonomous business units of the Victorian Government’s LG portfolio.
  4. Ensuring Unbiased Democratic Council Decision Making: Principles to Guide Good Practice, to guide councils check compliance to the common law rule of bias when making council decisions affecting people’s rights, interests and legitimate expectations. This reference helps one to ensure councillors’ actions are free from bias and offers suggestions on steps to take if bias may prevail in a proposed decision.
  5. Good Governance Guide, for all LG stakeholders, including local communities, to better understand, promote and enhance the practice of good governance.
  1. Conflict of Interest guides, of which there are 3, for
    1. Councillors
    2. Members of Councils Staff
    3. Members of Council Committees
  1. Long Service Leave guidelines, Local Government (Long Service Leave) Regulations 2012, accompanied by Regulatory Impact Statement, to modernise long service entitlements and conditions for people working in LG
  1. Council Staff Codes of Conduct framework, Framework for the Development and Review of Council Staff Codes of Conduct, to empower and support councils CEOs “in fulfilling their responsibilities to develop and implement staff codes of conduct under the Local Government Act 1989. It has been designed as a resource for those Council officers across Victoria involved in governance, human resources and risk management that have a lead role in assisting the CEO in developing the code”.
  1. Guidelines for reimbursing expenses to councillors and providing facilities and resources support, Mayor and Councillor Entitlements Information Guide
  1. Guidelines for reviewing councillors’ remunerations, a HRM modernisation guide for councils to construct their own policies.
    1. Recognition and Support: the Victorian Government’s Policy Statement on Local Government Mayoral and Councillor Allowances and Resources
    2. Local Government (Councillor Remuneration Review) Panel Report
    3. Government’s Response to recommendations of the Local Government (Councillor Remuneration Review) Panel Report
  1. A research report, which highlights the positive and negative conditions of working in councils, especially for women, Moving On: Women and Retirement from Local Government. This research report is included in the current governance framework, is perhaps to highlight the environmental issues and enablers of councils as a workplace, especially for women.

Analysis Findings

A logical inference from these corporate governance elements is as follows. It reveals the current framework of corporate governance areas that are expected by the State Government, to be localised and sustained in councils.

current-lg-de-facto-corporate-governance-framework

Table 1 – Victorian State’s Expectations of Corporate Governance Scope in Local Government.

þ Gap Analysis

Good Governance Framework

Operational Control Framework
1.       No state-wide community engagement guidelines for councils:

2.       Operational control areas have not been structurally designed and aligned to the core operational functions of a council

3.       State directed service provisioning controls are missing, a major gap when municipal service provisioning is the core business of councils.

  1. Integration of these state corporate governance areas in councils’ frameworks is discretionally translated by each council. This has resulted in the growing prevalence of good governance and operational performance quality issues in and across councils, including varying and often lacking compliance policing intensities and offence handling.

Developing Governance KPIs

The LG Performance Report Framework (LGPRF)

The LGPRF, as is, focused on three areas of performance management in councils:

  1. Financial management (which is most developed)
  2. Service management (under developed)
  3. Governance & compliance management (least and most under developed).

The LGPRF is an oversight improvement necessity because the sector lacks clarity of a corporate governance framework that the LG Portfolio Director, notably the prevailing LG Minister, can use to monitor performance and identify and navigate interventions in council affairs.

Practice sustainability of the LGPRF will depend on the future prevalence of a more explicit corporate governance framework and accountability structure (showing the chain of commands between the LG Minister, state LG agencies and councils (including their peak-bodies) and preferably including Ratepayers Victoria[2]. If these instruments are missing or lacking, performance management and oversight will become a bigger dog’s breakfast with wider and deeper spread of systematic failure.

Current Environmental Constraints

Developing governance key performance indicators (KPIs) is heavily constrained by what already exist in the evolving and less obvious state interpreted corporate governance framework for councils. Consequently, we choose the areas that are already well supported by existing documentation and embedded in common practice. Hence we propose choosing the development scope to cover:

  1. Decision making – all councillors have to make decisions in every council meeting. Guidelines exist for a number of years and how transparent and accountable is decision making, will be the areas of investigation and problem solving.
  1. Community engagement – all councillors claim they do well in community engagement, views that are not often agreed with their own communities and lacks hard evidence. ESC’s community engagement guidelines for sustaining the legislated Fair Go Rates (capping) policy is IAP2 aligned in principles and facilitates more structural consistency in councils’ community engagement activities and expected outcomes.

Footnotes:

[1] Local government, under the Victorian Government, is obliged to comply with state laws and especially so, the LG Act, state policies and other governance instruments. They are state constituted body corporates, which legally are (private) corporations and are given limited local statutory powers, such as to set and charge local rates (general and differential property taxes) and other fees pertaining to municipal service and amenity provisioning and fines; setting and governing compliance to local laws, community advocacy, etc. Because councillors are elected and the objectives and functions of councils are notionally similar to those of state and federal governments, people have misread or have been mislead by the misinterpretation of the laws, and consequently (incorrectly) believe that councils are also the constituted third tier of governments in Australia. Unfortunately the growth and rivalry of political party segregated councillors have also caused wide spread influence of and support for this incorrect belief.

[2] to ensure ratepayers and local communities are collectively and formally recognised as an important stakeholder and custodian-owner of the LG system.

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