Accurately costing all activities
In response to the introduction of National Competition Policy (NCP) and Councils being more open to market forces, Tweed Shire Council has adopted Activity Based Costing (ABC).
Endorsed by the New South Wales Department of Local Government, ABC measures activities, and resources used in work practices, to determine accurate costings. To ensure competitive neutrality, that Council is operating without competitive advantage over other private sector businesses, Tweed Shire believes it must have in place a costing system that identifies the true cost of all its activities.
As a leader in New South Wales in introducing this accounting tool, Tweed first moved to ABC in its 1996/97 Budget year. Preparation of subsequent Budgets has included a re-analysis of all cost centres, activities and time spent on activities. This means, on an annual basis, all charges are re-analysed and re-calculated using the latest cost driver and costing information.
ABC at Tweed has resulted in the following achievements.
- Higher fees and charges as a result of the full costs of services being identified.
- Improved costing information.
- Non value adding activities being deleted.
- More informed decision making with regard to quality and level of services provided by Council.
As part of its implementation process, Tweed also coordinated two one day training sessions involving Councils in Northern New South Wales and South East Queensland.
For further information contact Reg Norvill, Manager Finance Unit, telephone (02) 6672 0414.