Monitoring Local Government

New South Wales needs better oversight of local councils

The Auditor-General, Peter Achterstraat, released a report today calling for better oversight and public scrutiny of local councils.

“The Division of Local Government (DLG) has helped many NSW councils improve their long-term financial planning and asset management practice,” said Mr Achterstraat.

“Many councils are serving their communities well. However, because DLG lacks the power, it finds it difficult to respond effectively when things go wrong,” he added.

DLG does not have a standard way to determine whether councils are in good financial health.

“Even though NSW councils spend more than $9.3 billion annually, manage over $117 billion in public assets and employ over 50,000 people, there is no consistent way to identify councils in financial trouble,” Mr Achterstraat said.

Other Australian States provide more information to the public about how councils are performing.

“When compared to other states, the people of New South Wales are not getting the same level of comfort that councils comply with relevant laws, are financially viable and deliver efficient and effective services to residents and ratepayers,” he added.

DLG has no power to direct councils or demand their compliance with local government legislation.

“As a last resort, DLG can recommend a public inquiry that may lead to the dismissal of all the council’s elected councillors. This last occurred in 2008,” said Mr Achterstraat.

The Division of Local Government also finds it difficult to address complaints about the behaviour of individual councillors.

“Since July 2008, DLG has only once imposed its maximum penalty for misbehaviour, being one month’s suspension. The law is complex and it took DLG a year from being notified of the misbehaviour to issuing the penalty.”

“In contrast, other States can impose hefty fines on councillors who misbehave,” he added.

“DLG’s inability to address councillor misbehaviour is a concern. Left unresolved, matters can deteriorate and disrupt council operations, as meetings break down and decisions are not made,” said Mr Achterstraat.

Mr Achterstraat concluded, “Even though DLG meets its legislative obligations, the Local Government Act places few requirements on DLG to monitor councils. This is why my recommendations focus on improving the oversight of councils, and amending the Act to support this.” 

Further information

Barry Underwood, Executive Officer, on 9275 7220 or 0403 073 664; email: