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New financial reporting requirements for prequalified building contractors from
1 September 2013.
On 26 June 2013, the Minister for Finance, Dr Mike Nahan MLA, tabled the Small Business Commissioner’s Construction Subcontractor Investigation Report in Parliament. The Department of Finance’s Building Management and Works has initiated a program of process improvements which will implement the Report recommendations and a number of related initiatives.
As part of this process the Department is making a series of changes to its Builders Prequalification Scheme (the Scheme) and business risk assessment processes. The purpose of this letter is to advise you of some important changes that are being made to the quality of the information that must be provided in order to provide you with time to start preparing that information.
New Information Requirements for Prequalification and Business Risk Assessment
From 1 September 2013 the Department will require the following financial information from contractors when the contractor submits an application to become prequalified under the Scheme or when requesting that its existing prequalification be renewed.
· Quarterly management accounts signed by a company director
· Financial reports prepared by a qualified accountant (levels 1-4)
· Financial reports prepared by a qualified accountant and audited by a registered Auditor or an Authorised Audit Company (for level 5 only)
The reports are required for the last three financial years.
This same level of information may be required when a business risk assessment is conducted in relation to a tender process that is released to the market from 1 September 2013.
If a contractor fails to submit all the requested financial information, the contractor will be deemed to not have adequate financial capacity. This may lead to the contractor being passed over for a tender award, or having its prequalification suspended or cancelled.
The table included on the following page describes in detail what financial information is required as part of the financial reports and who they must be prepared by.
Previously Provided Prequalification and Appeal Applications
Contractors who have submitted requests for, or renewals of, prequalification do not need to submit new information unless the Department determines that the information it currently has is inadequate under the requirements of the Scheme as of 15 August 2013. If this is the case the Department will contact the contractor directly.
Further information about changes to the prequalification scheme will be available on the Department’s website and communicated to industry within the next month. For any questions or if you require further guidance, please contact:
Manager Business Risk on 08 6551 1789 or email
Minimum Financial Reporting Requirements
Audited Financial Report / Financial Report / Management Accounts
· Statement of Comprehensive Income (or Profit and Loss Statement)
· Statement of Financial Position (or Balance Sheet)
· Statement of Changes in Equity
· Statement of Cash Flows
· Notes to the Financial Statements
· Signed Director’s Declaration
· Director’s Report
· Details and Signature of Accountant preparing the Financial Report
· Signed Auditor’s Report (Level 5) / · Statement of Comprehensive Income (or Profit and Loss Statement)
· Statement of Financial Position (or Balance Sheet)
· Notes to the Financial Statements
· Signed Director’s Declaration
· Director’s Report
· Details and Signature of Accountant preparing the Financial Report (Levels 1 to 4) / · Set of summarised accounting data for a Profit and Loss Statement and Balance Sheet.
· Must have balances for current assets, non-current assets, total assets, current liabilities, non-current liabilities, total liabilities, equity.
· Signed Director’s Certification
Notes to the minimum financial reporting requirements
Who can Prepare Financial InformationAudited Financial Report / Financial Report / Management Accounts
Financial Report - Qualified Accountant who is a member of the Institute of Chartered Accountants of Australia (ICAA), Certified Practicing Accountants Australia (CPA) or Institute of Public Accountants (IPA). / Qualified Accountant who is a member of the Institute of Chartered Accountants of Australia (ICAA), Certified Practicing Accountants Australia (CPA) or Institute of Public Accountants (IPA). / Prepared or generated internally.
Auditor’s Report - Qualified Accountant who is a Registered Company Auditor or an Authorised Audit Company, registered by the Australian Securities and Investments Commission (ASIC) under the provisions of the Corporations Act.