The Local Government Act 1993 requires every council to establish an Audit, Risk and Improvement Committee (ARIC). ARICs review council operations and provide independent advice to councils on matters including governance, risk management, financial management, compliance and strategic planning and reporting. 

Requirements for the composition, operation and oversight of ARICs are set out in the Local Government (General) Regulation 2021 and the Office of Local Government’s Guidelines for Risk Management and Internal Audit for Local Government in NSW. Councils have been required to establish an ARIC since 4 June 2022, with mandatory requirements relating to ARIC membership, risk management and internal audit taking effect from 1 July 2024. Councils must provide support to enable their ARIC to fulfil its responsibilities.

The audit will assess whether the Audit, Risk and Improvement Committees of selected councils are effectively fulfilling their responsibilities under section 428A of the Local Government Act 1993 and providing advice to councils to improve performance of its functions. 

The audit will consider whether:

• the ARIC reviews and provides advice to the council for the purpose of improving relevant council operations 
• the council has effectively established and supports its ARIC to perform its required functions.

The period of review is from 2024-25 to present, reflecting when the Office of Local Government’s mandatory requirements came into effect.