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Council matters


The need for an Efficiency/Performance Audit of council

Effective from 1 October 2016, the NSW Auditor-General is to be the auditor for all of NSW councils. See section 422 of the Local Government Act 1993.

For the financial year 2016-17 and beyond, the Auditor-General has been given the mandate to:

  • audit the financial statements of NSW local councils and council entities

  • conduct performance audits of a council or the sector

  • provide any audit-related service to a council at the request of the council or at the request of the Minister or the Chief Executive of the Office Local Government

  • table performance audit reports and an annual financial audit overview report in parliament.

Details of these arrangements are available at the NSW Audit Office website.

For convenience, that part of the linked document that relates to performance auditing is copied here:

Performance auditing

20. What are performance audits and why are they being introduced to the [local government] sector?

Performance audits examine whether councils and agencies are operating efficiently, effectively, economically and in accordance with the law. They are sometimes referred to as value-for-money audits.

The Auditor-General has been given the mandate to conduct performance audits as this supports the NSW Government’s reform goal of creating stronger performing councils.

See here for more information on recent performance audits of the NSW Government sector.

21. Who decides the performance audit topics to be audited?

The Auditor-General will decide the performance audit topics, and the councils to be audited, in the same way she does for NSW Government. The Audit Office has a robust topic selection process to help the Auditor-General decide. This includes consulting with key external stakeholders such as the Office of Local Government, Local Government NSW and the Minister for Local Government.

22. Are performance audits made public?

All completed performance audits are tabled in parliament and published on the Audit Office’s website.

23. How does the Audit Office ensure performance audits are fair and balanced?

We adopt a consultative and ‘no surprises’ approach to performance auditing. We devote a large amount of time and effort in consulting on the design of the audit, the accuracy of our findings and on any recommendations for improvement. This is in addition to the statutory requirement to give the Chief Executive of the Office of Local Government, the Minister for Local Government and affected councils the right to respond in writing to our findings and recommendations and to include these responses in our published report.

24. When does the Audit Office expect to start performance audits?

We expect to start scoping our first performance audit later in 2016 and finish it during 2017.

I wonder if staff have advised councillors of these new arrangements and of the availability of the Audit Office in undertaking Performance Audits of councils?

If councillors have not been advised, why? And if that is the case, what of the General Manager’s statutory obligations under section 335 of the LGA, in particular sub-section (f), which reads as follows?

(f) to ensure that the mayor and other councillors are given timely information and advice and the administrative and professional support necessary to effectively discharge their functions

If councillors have been advised of these new arrangements, why have we not heard from them? All it takes is five councillors, who want to see council run more efficiently, pass a resolution seeking such an audit.

Either way, on this matter at least, something is very wrong with our now-not-so-new council. Either the General Manager has failed to advise councillors of the availability of this service or the advice has been given and councillors have failed to act upon it. Which is it?

If the responses to virtually all council issues raised thus far – in The Beagle and elsewhere – are anything to go by, we can again expect a nil response. We shout into the wind.

Take for example, the detailed report on the Twyford experience in 2010, the history of which was reported on in The Beagle on 8 May: The Twyford history – the call for an efficiency audit remains. As far as I know, absolutely nothing has come of that article.

Nothing will come of these matters of reform until we can find five councillors who have the capacity to understand what’s going on, have the will to make change and can work together as a team of at least five. The seat warmers who are comfortable with the status quo need to go.

It may be that those of our councillors who fail to meet the requirements set out in the LGA will be subject to a test case for dismissal from office for failing to meet their statutory obligations.

To remind those of them who are all too comfortable in simply turning up and playing the part, you each made an oath to carry out the duties set down in the LGA. Those duties are spelt out at sections 223 and 232 of the LGA. In particular, sub-section 223(g) requires that you “keep under review the performance of the council, including service delivery”.

Please take the initiative – take control - and work towards positive reform, especially in the areas of transparency, accountability and efficiency.


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