Local government

Performance Audits are a new type of audit for Local Government.

With this in mind, the Audit Office has produced a Performance Audit Guide for Local Government. This guide outlines the purpose of Performance Audits and explains how the Office will work with Councils in undertaking them.  


Council reporting on service delivery

Councils have a high level of autonomy to provide services in response to the needs and priorities of their communities. It is important that those communities can see clearly how decisions are made about the services they deliver and understand the value that Councils deliver.

Councils’ annual reports are one of the important ways to:

  • communicate the effectiveness and efficiency of the services they deliver
  • demonstrate transparency in decision making
  • encourage engagement of local communities in planning.
The Local Government Act requires each council to report annually on its 'achievements in implementing its delivery program and the effectiveness of the principal activities undertaken in achieving the objectives at which those principal activities are directed'. The Local Government Act and Integrated Planning and Reporting framework provide a basis for such reporting.
This audit will assess how well council annual reports communicate performance in delivering key services to the public. It will do this by examining whether councils effectively report to constituents on: 
  • achievement of planned outcomes
  • service levels (outputs) delivered
  • efficiency of service delivery.
The audit’s primary focus will be on councils’ most recent annual reports and it will cover all councils. The audit will only comment on reporting of service delivery performance, and will not actually assess the underlying service performance. For the purposes of the audit, we will accept each council’s decisions about the types of services it provides to its community.

The first stage of the audit will establish a set of good practice principles through research and consultation. The second stage will be to compare council annual reports against these principals. The third stage will be to identify and discuss examples of good practice with those councils, with a view to profiling them in our final report.

The proposed tabling date is third quarter 2017.

Fraud control in local government

Fraud is the crime of obtaining financial or another benefit by deception. The impact of fraud on councils and their communities can be significant. It can disrupt business continuity, reduce the quality and effectiveness of critical services, and threatens the financial stability of a council. It can also damage a council’s public image and reputation.

This audit will provide a snapshot of fraud in NSW local government and an analysis of council fraud controls against the Audit Office’s Fraud Control Improvement Kit.

As part of the audit, the Office will conduct a survey of councils. This will be similar to our survey of state government agencies reported in November 2016.

The objective of the audit is to determine whether councils manage the risk of fraud effectively. The audit criteria are:

  • councils identify, analyse and assess their fraud risks regularly
  • controls put in place by councils to prevent or detect frauds are effective
  • councils investigate suspected or alleged fraud
  • councils monitor their fraud risks, controls and responses and use the results to improve their fraud risk management framework.
The proposed tabling is fourth quarter of 2017, and we expect to issue the survey to councils early in the second quarter.

Shared services

This audit will seek to identify key enablers and barriers to effective and efficient shared services arrangements. Such arrangements are likely to include corporate services but may also include customer services such as waste collection, road maintenance or libraries.  This audit may also examine shared service arrangements between local councils and state government agencies.

This audit is currently being scoped.


To be announced.