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LG Alert – Ombudsman SA Audit Report (December 20th, 2016)

LG Alert – Ombudsman SA Report – An audit of Local Government Internal Review of Council Decision Procedures

Following a ‘desktop evaluation’ of all 68 council websites in April 2015, the OmbudsmanSA (“the Ombudsman”) surmised that certain councils’ “internal review of decisions” policies and procedures were not compliant with section 270 of the Local Government Act 1999 (“the Act”), and that internal reviews were not being properly utilised. Accordingly, the Ombudsman “considered it was in the public interest to conduct an audit of councils’ practices and procedures concerning internal review of council actions”.
The Ombudsman selected 12 councils to audit over a 16 month period. The audit consisted of two (2) surveys, as well as interviews and consultation.
On Thursday 17 November 2016, the Ombudsman tabled his report in Parliament, “An audit of Local Government Internal Review of Council Decisions Procedures”. The report made the following findings and recommendations:

1. Availability of internal review policy to the public
Whilst all councils recognised the importance (and statutory requirement) of making their procedure available to the public, many were not making complainants aware that they had a right to access the formal internal review process provided for under the Act. Also, the internal review procedure was difficult to locate on some council websites.
The Ombudsman has recommended that all councils actively promote internal review procedures by way of highlighted direct link to the procedure on the council website and that it be linked to the council’s complaint handling policy. This recommendation arises from the Ombudsman’s view that “councils have a responsibility to promote all mechanisms available under the Act to resolve grievances received from members of the public”.

2. Compliance with the Local Government Act 1999
Half of the audited councils were not compliant with section 270 of the Act, as it applies to complaints regarding the impact of the declaration of rates or service charges on ratepayers (see section 270(2)(ca) of the Act).
The Ombudsman has suggested that there may be some confusion amongst councils between the issue of reviewing the setting of rates and investigating grievances that relate to the impact of rates levied. Importantly, whilst the Act does not allow for the setting of rates to be reviewed, it does require a council to review a complaint pertaining to the impact the setting of rates may have/had on ratepayers.
The Ombudsman has recommended that all councils ensure their procedure is fully compliant with the requirements of section 270 of the Act. The Ombudsman has also requested that all council CEOs (not just the audit councils) confirm in writing to the Ombudsman full compliance with section 270 by 31 March 2017.

3. Time limits on applications for review
Section 270(2)(e) of the Act requires councils to determine, through the internal review procedure, “the time frame within which notifications will be made”. The Act is otherwise silent as to what this time limit should be.
The Ombudsman found that, of the audited councils, the procedures allowed for varying time limits including, in some circumstances, no time limit.
Whilst the majority of the audited councils suggested a three (3) month time limit was appropriate, the Ombudsman determined that a six (6) month time limit should be applied, with discretion to accept a complaint outside of this timeframe in certain circumstances. It was further recommended that such timeframes should be consistently applied by all councils.

4. Decisions to which the internal review process applies
The audited councils varied in their approach to appeal and review arrangements in the areas of planning, development and expiation of offences.
To this end, the Ombudsman stated that:
it is unsatisfactory and inconsistent with the intent of the legislation for there to be situations where a review is allowed in one council area, but the same, or a similar review, disallowed in a neighboring jurisdiction. Such inconsistencies are rightly seen as unjust and may well erode confidence in the integrity and professionalism of local government.
The Ombudsman recommended that all procedures should explicitly state that matters falling outside of statutory appeal procedures will be considered for a section 270 review on the merits of the individual application, to ensure that councils appropriately consider all applications for review on the merits of the application, rather than subject matter.

5. Independent conduct of an internal review of decision
When a section 270 review is undertaken, the Ombudsman is of the opinion that the original decision maker should not be involved in the review, as they will undoubtedly have a conflict of interest. Further, the transparency and impartiality of the review may be compromised. To address this, many councils’ engage an independent reviewer.
To this end, the Ombudsman recommended that all councils, through the auspices of regional LGA’s, consider and report to the Ombudsman by 31 March 2017 on the option of developing regional panels of independent reviewers who can assist with review matters.
Whilst, from a good governance, transparency and accountability perspective, it is good practice to engage an independent third party to undertake a review, we caution against the wholesale adoption of developing regional panels of independent reviewers. This will limit a council’s ability to determine, firstly, whether the review could appropriately be conducted internally (for example, by a senior staff member not involved with the original decision making) or, alternatively, engaging an independent reviewer of its own choosing. There may also be increased costs associated with such an arrangement and councils may lose controlover the management of, as well as timeframes taken, to conclude a review.

6. Matter types and learning outcomes from internal review of decisions
On a positive note, the Ombudsman found that section 270 review applications have doubled over the past seven (7) years and attributes this to a willingness of councils to use the internal review mechanism, noting that “councils have shown an ability to analyse review outcomes to inform better administrative practice”.
The Ombudsman attributes the increase in review applications to: better promotion of the review policy/procedure by some councils; more internal review referrals from [the Ombudsman’s] Office; and a greater willingness and confidence by councils to use the review mechanism where informal resolution has failed.
This finding appears at odds with recommendation 1, that councils are not adequately promoting their procedure and that complainants are not aware of their right to formal review! The Ombudsman also found that councils were able to demonstrate the administrative improvements that have resulted from conducting internal reviews.
To ensure these learnings continue, the Ombudsman has recommended that all councils periodically evaluate their section 270 review investigations and learning outcomes, relevant to administrative practices and functional responsibilities.

7. Do councils need more governance support?
Finally, the Ombudsman enquired about councils’ internal governance support arrangements and their membership of the Local Government Governance and Policy Officers Network (“GPON”). He found that whilst nine (9) of the 12 audit councils had a dedicated governance officer, many also utilised legal services for more complex governance matters.
Similarly, 10 of the 12 audit councils were members of GPON and expressed support for that group as an information sharing and problem solving forum. However, many also suggested that there is room for GPON to expand and be given “more clout”.
In response to this, the Ombudsman has recommended that the GPON consider if it could have an expanded role in the sector to assist councils with governance issues.

In his concluding remarks and of a positive note, the Ombudsman suggested that whilst “the use of section 270 reviews is still uneven and inconsistent, there is some confirmation from councils that the reviews are being conducted more confidently, openly and with clearer resolutions in mind”.

Councils are reminded that the Ombudsman has required a response from all councils to the matters set out at findings two (2) and five (5), as above, by 31 March 2017.

If you have any questions regarding the above, or require any assistance in preparing your response, please contact Tracy Riddle on 8113 7106 or or Tyler Johns on 8113 7108  or