Meeting papers

• The Financial Services Manager will have responsibility for ensuring that any consideration of
  requests for exceptions to this policy and related guidelines are appropriately assessed and must
  ensure that the Financial Services Branch is appropriately monitoring and reporting Council’s risk
  exposure in relation to financial securities.

• Project managers will work closely with the Procurement Branch to determine the appropriate
  value of a financial security and be accountable for the accurate completion of the Acceptance
  checklist to minimise Council’s risk exposure. The necessary due diligence checks should be
  conducted throughout the delivery of a project (particularly where sub-contractors are engaged)
  to monitor and manage any emergent financial and credit risks to Council.

• The Planning and Development Assessment Branch will determine the appropriate value of a
  financial security and be accountable for the accurate completion of the Acceptance checklist to
  minimise Council’s risk exposure. The necessary due diligence checks should be conducted
  throughout the completion of the agreed works to monitor and manage any emergent financial
  and credit risks to Council.

• The Financial Services Branch will be responsible for the safe storage of the financial security
  documents.

• The Governance Branch will be responsible for providing general legal guidance to ensure all
  risks are minimised especially in relation to documentation risk.

• The CEO and Directors are responsible for ensuring compliance with this policy and ensuring
  accurate and reliable information is provided to Council for effective decision making.

DEFINITIONS

           Term                                           Definition
Financial Security         A bank guarantee or cash bond used to guarantee performance.
Financial Institution     An Authorised Deposit Taking Institution such as a bank or a non-
                          authorised Deposit Taking Institution that Council considers an
                          acceptable risk.
Authorised Deposit Taking A corporation that is authorised under the Banking Act 1995 and
Institution (ADI)         regulated by the Australian Prudential Regulation Authority (APRA).
                          Incudes banks, building societies and credit unions.
Bank Guarantee            Is a guarantee from an ADI promising to pay Council without reference
                          to the developer/contractor, an agreed amount upon the
                          developer/contractor failing to perform their obligations under the
                          contract.
Insurance Bond            Is a performance bond from an authorised insurer promising to pay
                          Council without reference to the developer/contractor, an agreed
                          amount upon the developer/contractor failing to perform their obligation
                          under the contract.
Cash Bond                 An amount paid by a developer/contractor to guarantee performance
                          that is held in Council’s Trust Account.
Call up                   A call-up of a financial security is when Council requests a cash
                          payment from a financial institution who has issued a financial security
                          when a developer/contractor cannot perform part or all of their entire
                          obligation.




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