MidCoast Council has joined councils from across the State rejecting a determination from the government that NSW Rural Fire Service (RFS) mobile assets are the 'property' of councils.
In MidCoast Council's case, the impact of this is about $1 million on its budget each year.
Councillors unanimously supported mayor, Claire Pontin's mayoral minute and extensive recommendation objecting to the State government request.
"It is important to do this now because this is part of a campaign which has been initiated by Local Government NSW to cover the entire State," mayor Claire Pontin said.
The long standing dispute over the accounting treatment of the RFS mobile assets, known as the "red fleet", has come to a head with the Auditor General's 2021 report on Local Government, Cr Pontin said.
The audit report re-emphasises the State government determination that RFS assets are the "property" of councils and must be recorded in council's financial statements with council required to therefore absorb all depreciation costs.
Cr Pontin said the report reinforced the notion that RFS mobile and other fire-fighting assets were somehow deemed to be council assets, a move which applied more pressure on councils and the Office of Local Government (OLG) to conform with this determination, even though councils do not have effective management or control of these assets.
The impact of this is about $1 million on our budget each year.- MidCoast Council mayor, Claire Pontin
She said councils did not have any say in the acquisition, deployment or disposal of these assets, while comparable assets held by Fire and Rescue NSW (FRNSW) and the State Emergency Service (SES) were not vested anywhere other than with the organisations that purchase, use, maintain and dispose of them.
As a result of pressure from the Audit Office, MidCoast Council now records RFS assets and reports this in its financial statements.
However, council maintains a position that, under the relevant Australian Accounting Standards, it does not maintain effective management or control of these assets, Cr Pontin said.
Council will write to members of parliament giving its reasons for objecting to the government recommendation.
"I believe the inequity needs to be addressed and we note that this action is widespread amongst many councils throughout NSW," deputy mayor, Allan Tickle said.
"It is an impact of roughly $1 million per year, not in cash but in appreciation (non-capital) on council's budget," Jeremy Miller said. "It is significant cost shifting and responsibility shifting by the State government.
"The accounting standards are quite clear the asset responsibility is controlled by an entity; we don't control these assets and for the audit office to sweep aside the accounting standard and try to have councils record it on their books is patently absurd."
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