The Local Government Act 1993 ushered in a new era of financial management for Councils, introducing a new age of accrual based, strategic financial management centred on a corporate planning model. It is appropriate to examine where the industry stands at this point in time. This research report surveys literature concerning local government financial management and related performance indicators. The range of literature available on the subject in the Australian local government context is not extensive but when widened to encompass other Public Sector models and overseas experience a valuable array of pertinent references presents itself.
By means of a pilot survey of Queensland Councils the report makes some inferences about current knowledge and practice in the use of financial performance indicators in this state. The conclusions reached show a traditional short term, cash based, "balanced budget" approach that does not lend itself to the type of corporate planning based financial management envisaged by the new reformists.
The performance indicators identified by both the literature review and the pilot study are useful and still form the core of good practice, but will need to expand to accommodate the new concept of Operating Capacity which is to become a central element in the new financial management. Avenues for developing management skills to cope with advanced financial management techniques are proposed and areas for additional research to carry the topic further are identified.