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Local Government Act 2002

Council-controlled organisations and council organisations - Council-controlled organisation planning

64: Statements of intent for council-controlled organisations

You could also call this:

“Organisations run by councils must make plans about what they will do”

You need to know about statements of intent for organisations controlled by councils. These organisations must create and adopt a statement of intent following the rules in Part 1 of Schedule 8.

The statement of intent has three main purposes:

  1. It tells everyone about the organisation’s activities, intentions, and goals for the year.
  2. It lets shareholders have a say in the organisation’s direction.
  3. It helps hold the directors accountable to shareholders for how well the organisation performs.

The statement of intent must agree with the organisation’s constitution. It can cover more than one related council-controlled organisation.

There are different rules for different types of organisations:

  • All council-controlled organisations must follow Part 2 of Schedule 8.
  • Council-controlled trading organisations must also follow Part 3 of Schedule 8.
  • Other council-controlled organisations that aren’t trading organisations must follow Part 4 of Schedule 8.

If the information in the statement of intent is financial, it must follow proper accounting practices.

If an organisation becomes council-controlled less than 6 months before the end of a financial year, it doesn’t need to prepare a statement of intent for that year.

Each local authority that owns shares in the organisation must put the adopted statement of intent on their website within 1 month and keep it there for at least 7 years.

If an organisation doesn’t follow these rules or its own statement of intent, it doesn’t affect the validity of any agreements or obligations it has made.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM171888.

Topics:
Government and voting > Local councils
Business > Industry rules
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Part 5 Council-controlled organisations and council organisations
Council-controlled organisation planning

64Statements of intent for council-controlled organisations

  1. Every council-controlled organisation must prepare and adopt a statement of intent in accordance with Part 1 of Schedule 8.

  2. The purpose of a statement of intent is to—

  3. state publicly the activities and intentions of the council-controlled organisation for the year and the objectives to which those activities will contribute; and
    1. provide an opportunity for shareholders to influence the direction of the organisation; and
      1. provide a basis for the accountability of the directors to their shareholders for the performance of the organisation.

        1. The statement of intent—

        2. must not be inconsistent with the constitution of the council-controlled organisation; and
          1. may include and apply to 2 or more related council-controlled organisations.

            1. Every statement of intent of a council-controlled organisation must comply with Part 2 of Schedule 8.

            2. Every statement of intent of a council-controlled trading organisation must comply with Part 3 of Schedule 8.

            3. Every statement of intent of a council-controlled organisation that is not a council-controlled trading organisation must comply with Part 4 of Schedule 8.

            4. All information that is included in a statement of intent under this section must be prepared in accordance with generally accepted accounting practice if that information is of a form or nature for which generally accepted accounting practice has developed standards.

            5. Despite this section, an organisation that becomes a council-controlled organisation not more than 6 months before the end of a financial year is not required to prepare a statement of intent for that financial year.

            6. Each shareholding local authority must publish the adopted statement of intent on an Internet site maintained by or on behalf of the local authority within 1 month of adopting it, and must maintain the statement on that site for a period of no less than 7 years.

            7. A failure by a council-controlled organisation to comply with any requirement of this section, or with any statement in the organisation’s statement of intent, does not affect the validity or enforceability of any deed, agreement, right, or obligation entered into, obtained, or incurred by that organisation.

            Notes
            • Section 64: replaced, on , by section 23 of the Local Government Act 2002 Amendment Act 2019 (2019 No 54).