Roads connect people and businesses to the places they live and work. When roads are managed well, they:

• facilitate and improve access to homes, work, education and open spaces used for recreation
• improve the safety and reliability of travel
• enable on-time running of commercial and public transport.

Local roads management arrangements

The NSW Roads Act 1993 establishes the authorities responsible for roads. A local council is the roads authority for all public roads within its local government area except for any freeway, Crown public road, or any public road declared to be under the control of some other authority.²

Under this responsibility, councils are responsible for funding, prioritising and carrying out works on local roads. This work is typically funded through own-source revenue, and through grants from state and federal governments (Exhibit 1).

Source: NSW Audit Office, from NSW Auditor-General’s Report to Parliament on Regional Road Safety, 2024.

Across the state, councils manage varying road lengths and road types, which are influenced by the roads’ design and function, traffic volumes and age (Exhibit 2).

Councils manage:

• urban roads, which includes all roads within built-up areas where predominant frontage is residential, commercial or industrial and where there is street lighting
• non-urban sealed roads, that is, sealed roads in all other areas, including roads sealed with cement, asphalt, bitumen, tar, epoxy and aggregate
• non-urban unsealed roads, that is, roads in all other areas, which are gravel, rubble, limestone or simply formed by a grader or similar without further materials.

Section 8B of the Local Government Act 1993 outlines asset management related principles that councils should have regard to. These include:

• investing in responsible and sustainable infrastructure;
• having effective financial and asset management, including sound policies and processes for asset maintenance and enhancement;
• regard to achieving intergenerational equity.

The Local Government Act 1993 also establishes strategic planning requirements, known as integrated planning and reporting (IP&R), for councils to bring plans for the future together under one framework (Exhibit 4). This includes:

• Community strategic plan – the highest level strategic plan with a ten-year timeframe
• Resourcing strategy – a strategy that connects long-term financial planning, asset management planning and workforce planning
• Delivery program – a council’s plan to deliver against the community strategic plan within the term of the council
• Operational plan – outlines individual projects and activities for a specific year.

Councils must comply with the guidelines for IP&R under s. 406 of the Local Government Act 1993 (IP&R Guidelines).

The Institute of Public Works Engineering Australia defines asset stewardship as the responsibility of an organisation to take care of the resources with which it is entrusted, while meeting social, environmental and economic responsibilities. Councils are the stewards of their roads, and their responsibilities include understanding the needs of their community and making investments in the interests of the community, seeking advice and monitoring performance of resources, and reporting on the performance of resources in their care.

Asset stewardship, including for road asset management, is operationalised through councils’ IP&R framework. A council’s suite of integrated strategies and plans should identify the community’s needs and objectives for the future and set strategic actions to meet these. This includes how supporting assets and resources will be funded and maintained. While councils’ strategic priorities may be aspirational, they must consider how they will meet their communities’ service-level expectations for existing and new services.

Responsibility for the preparation and endorsement of IP&R is shared between the general manager and the elected council, and asset stewardship will reflect these arrangements. The Local Government Act 1993 requires the general manager of a council to prepare IP&R plans and to provide advice in relation to community consultation, and for the elected council to receive advice and develop and endorse the plans and policies.

Annual reports and other regular reporting serve as mechanisms for reporting on the performance of councils and their asset portfolios, and how these meet asset management objectives relating to quality and cost, asset condition, and project timeframes and progress, including for restoring damaged assets. This, together with clear reporting on capital works progress assists councils to demonstrate they are responsible stewards of their assets, including road assets.

Local context and local challenges inform how councils prioritise road asset management activities, to meet the expectations of their communities.

Across all local government areas, roads support the transport of goods that underpin economic activity. The precise mix and balance of local conditions, breakdown of road composition, road users and the functions and businesses they serve varies between individual councils.

For some communities, roads connect residents to employment, neighbours and services over vast distances. In communities that rely on tourism, roads enable visitors to move around a region and patronise local businesses. In times of disaster, functioning roads facilitate the evacuation and movement of people and services in affected areas.

Some rural councils manage extensive road networks but have a small population of rate-payers, reducing the amount of own-source revenue for managing roads. These councils may rely more heavily on grants. Rural councils may also face difficulties in attracting and retaining relevant engineering expertise in remote areas with smaller population density.

It is important that councils engage with their communities to understand their vision and priorities for the road network. Community engagement provides an opportunity for councils to educate communities on road planning considerations, such as budgets and service levels.

Natural disasters can cause instant and widespread failures of road assets and, under certain circumstances, increase the speed of road deterioration.

Many NSW councils have been affected by natural disasters such as floods and storms over recent years, while managing the challenges of ongoing wet weather. Between 1 July 2020 and July 2024, 62 natural disasters have resulted in a formal disaster declaration and 124 local government areas affected by disasters. The extent, frequency and impacts of these disasters varies across local councils.

Some councils have responded with large programs of restoration works, and many have accessed natural disaster funding from the NSW Government and Commonwealth to fund these.

In addition to local challenges, all councils that experience regular natural disasters face challenges in delivering immediate responses to restore disaster-effected roads while continuing to plan and deliver capital works programs. Immediate and longer-term disaster responses (such as restorative road works) may consume a council’s resources and/or impact its cash flows (such as initial outlays by a council, in the time between acting and receiving any reimbursements), in turn affecting its ability to fund and sequence previously planned road asset management activities. In addition to assessing and addressing the physical impacts of these disasters, councils have been required to meet the data and compliance requirements of the Disaster Recovery Funding Arrangements (DRFA) reimbursement process.

All councils subject to this audit have been heavily impacted by natural disasters, including bushfires, storms and flooding across the audit period, which have had negatively affected their road assets. They also experienced frequent rainfall, contributing to road deterioration and affecting their road asset works. Exhibit 5 outlines a summary of disaster-related road asset expenditure across FY2020–21, FY2021–22 and FY2022–23.

Source: Council’s annual financial statements FY2020–21 to FY2022–23 and road asset expenditure data.

Further detail on how natural disasters have impacted audited councils is outlined later in this report.

Infrastructure assets are the physical resources that enable the delivery of services. Asset management focuses on achieving the best value from those assets by organising interacting elements into policy, objectives and plans to achieve outcomes. This includes determining processes, practices and systems to ensure financial, social and environmental sustainability.

Effective asset management enables organisations to realise the value of their assets by balancing costs, risks, opportunities and performance benefits. Effective strategic asset management frameworks comprise an integrated series of policies and plans that set out a council’s asset management principles and requirements. They also establish clear accountability, outcomes and objectives relevant to the local context – including when and how assets should be maintained, renewed or upgraded, as well as any associated risks.

Since 2017, Audit Office of NSW financial statements audits and reports to Parliament have identified risks and issues relating to asset management across the local government sector, including gaps in reporting, asset management systems, valuations, and application of useful life estimates. Gaps in asset management processes and outcomes, asset management policies, and strategies and plans have also been identified.

In 2023, our report to Parliament noted 266 findings relating to asset management across the local government sector financial statements audits, including deficiencies in asset revaluation processes, maintenance of information in asset management systems and accounting practices.

Office of Local Government guidelines and road asset management

The OLG’s IP&R Guidelines establish a range of compliance and performance expectations for councils’ asset management practices. For councils’ road asset management, the IP&R Guidelines require councils to develop and implement asset management plans and policy, including:

• preparation and adoption of
  • an asset management policy for all council-controlled assets
  • an asset management strategy that supports the community strategic plan and delivery program
  • asset management plans for each class of asset (road infrastructure is a class of asset)
• accounting and planning for existing assets and new assets proposed in the community strategic plan and delivery program
• identification of service standards for assets
• projections for long-term asset maintenance and renewal
• reporting obligations.

The OLG IP&R Handbookassists councils to implement the guidelines and identifies a range of principles for good, better and best asset management.

Industry guidance

Due to the technical nature and high level of specialisation of road asset management, councils use a variety of industry asset management guidance to interpret and incorporate professional asset management standards into practice. This includes publications from agencies such as the Institute of Public Works Engineering Australasia, Austroads and the Australian Road Research Board.

The International Organization for Standardization’s (ISO) ISO 55000 Asset Management standards are identified by the OLG as the ‘best practice’ benchmark for asset management.

The OLG’s IP&R Handbook recommends both the Institute of Public Works Engineering Australasia International Infrastructure Management Manual and the Australian Infrastructure Financial Management Manual to assist with applying the ISO standards. The IP&R Handbook also states that it is up to each council to decide how to structure its asset management planning documents and integrate them with IP&R.

Risk management

Risk management is an important element of effective asset management. Effective identification and management of key risks includes considering financial and operational risks to the cost, function and safety of road assets.

There are several types of risks associated with infrastructure service delivery. The most important are the impacts to critical assets (assets with a high consequence of failure, reduction in service levels and significant or total loss). Additional types include planning, management, delivery and physical risks.

Resilience refers to an entity’s ability or capacity to withstand and overcome the above types of risks.

A lack of entity resilience to road asset management risks could result in cost overruns and/or damage to road assets that disrupts transport services or causes harm to persons, vehicles and property.

Road maintenance and renewal

As roads age and deteriorate, their usefulness diminishes, and they become more expensive to repair. Exhibit 6 demonstrates how roads deteriorate over their life cycle and how this impacts service levels and road asset condition.

Audit scope and focus

The objective of this audit is to assess whether selected local councils are effectively managing their road assets to meet the needs of their communities.

The audit period of review is from FY2020–21 to present.

Overview of audited councils

Three councils were selected for this audit: Clarence Valley Council, Gwydir Shire Council and Wollondilly Shire Council.

These councils were selected to be audited following an examination of objective factors including road length, expenditure, local characteristics, a review of performance indicators including maintenance expenditure and backlog, and whether the councils have been previously audited. Exhibit 7 outlines council characteristics and Exhibit 8 profiles local roads for each audited council.

About Clarence Valley Council

Clarence Valley is a regional local government area located in the northern rivers region on the NSW coast. The Council had a population of around 55,000 people as at November 2022.

The Council has an area of 10,500 km² with a significant amount of coastline, rivers, coastal towns and national parks. The total road network in Clarence Valley Council is 2,476 km, 2,062 km of which is local roads.

Clarence Valley Council faces several challenges in managing its roads. The local government area is geographically large with the 15th largest local road network of 128 NSW councils and has a variety of road users and stakeholders, including agricultural workers, tourists and retirees.

Clarence Valley Council had a total workforce of 502 as at 23 November 2022, with 372 permanent full-time employees. The combined total residential, farmland and business rates revenue for FY2022–23 amounted to $38.3 million.

Road asset expenditure

Clarence Valley Council delivered around $56 million in road capital works between FY2020–21 and FY2022–23. Over the same period, the Council delivered $26.4 million on ‘actual maintenance’ across its road assets. This includes expenditure of around $14.6 million on sealed roads and around $8.9 million on unsealed roads.

In FY2022–23, expenditure on roads, bridges and footpaths⁴ represented 20% of the Council’s total expenditure.

Impacts of natural disasters

The Clarence Valley Council local government area is historically bushfire and riverine flood prone and has experienced eight declared disasters since FY2020–21.

The Council reported it had restored over 155 road infrastructure assets during FY2022–23.

The Council advised that for FY2020–21 to FY2022–23 its total road assets natural disaster expenditure was $23.9 million and that 547 km of roads were newly constructed, renewed or upgraded during the period. The Council’s FY2023–24 capital works program assigned $68.2 million in natural disaster repair works to be undertaken.

In 2024, the local government area was experienced bushfires in January to February and floods in April. In July 2024, the Council reported it had spent $42 million on natural disaster repair work, with $15 million (50 km) on regional roads rehabilitated across the financial year and $12 million on local roads restored (55 km). As at August 2024, the Council reported that DRFA approved and submitted project works covering declared natural disasters were valued at $184 million.

⁴ The ’roads, bridges and footpaths’ expenditure category is a consistent level of reporting across councils for infrastructure reporting. Below this reporting level, councils componentise and classify road assets differently, according to local needs and characteristics.

Clarence Valley Council has effectively established a strategic priority for road asset management, but delivery of this priority was not supported by formal governance arrangements or a long-term capital works program. While the Council is delivering and reporting on a large volume of road asset works in response to natural disasters, it does not report on consolidated targets for road asset quality and service. The Council has set benchmarks for maintenance, replacement and renewal of roads. It now needs to enhance this with clear service levels to ensure community needs and expectations are met.

By October 2025, Clarence Valley Council should:

1. update its transport asset management plan to ensure it reflects current governance arrangements, includes accurate and timely asset condition data, and reflects current practices for addressing asset defects and service requests under the Council’s roads policy
2. implement planned improvements for asset management practices, including:
   • establishing and implementing levels of service
   • consultations with community on levels of service
   • data management and quality
3. review and implement road asset management key performance indicators, and reporting arrangements for road asset management, including for capital works program progress and include these within asset management plans and IP&R documentation
4. capture lessons learned from natural disaster responses and recovery works, including:
   • formalising processes for considering network-wide priorities and betterment in assessments of disaster impacted road assets and planned responses
   • reviewing the impacts of asset performance and failures and their impact on the Council’s road network during natural disasters
   • reviewing the effectiveness of restructuring teams to rapidly respond to changing delivery priorities
5. develop and implement a long-term roads capital works program to prioritise projects linked to planned service levels and strategic asset management objectives.

Clarence Valley Council’s IP&R documents establish a clear, integrated priority for roads

Clarence Valley Council’s IP&R documents present a clear focus and purpose for the elected Council and its community in relation to its planned work to maintain, upgrade and renew roads. The Council’s community strategic plan features a key theme on infrastructure that includes roads, and its delivery program reiterates this key theme.

The Council’s FY2023–24 operational plan and budget outlines a priority to ‘complete current year roads and infrastructure capital works program’ and provides a list of projects with projected expenditure in the capital works section.

As mentioned above, Clarence Valley Council has been heavily impacted by natural disasters leading into and across the audit period of review. The Council’s IP&R documents outline the extent of the Council’s response to natural disasters. The Council’s recent operational plan FY2023–24 clearly outlines its focus on recovery from disasters, and the impact on its approach to repairing roads.

These documents enable the Council’s governing body and community to understand its strategic priorities for road asset management and how these have been affected by natural disaster events.

Clarence Valley Council’s asset management planning documents meet IP&R framework requirements

Clarence Valley Council has produced asset management plans that meet the requirements of the OLG’s IP&R framework for content and currency. The Council has developed an asset management strategy and an asset management policy that are part of its resourcing strategy, and were endorsed as part of the resourcing strategy by the Council each year in the period of review.

The Council’s current asset management strategy covers the period FY2023–24 to FY2032–33. The strategy:

• identifies and summarises the key asset classes the Council manages
• identifies general condition assessment and key critical risks
• forecasts resource requirements and timeframes from 2021 to 2030.

Some data used in the asset management strategy was not updated, with asset value data stated as sourced from FY2021–22. Outdated data risks the Council making important decisions about assets based on old information. The Council advised that data in the plan was the most recent available at the time of drafting the strategy, and that staff vacancies and the response to natural disasters in 2022 had an impact on data production.

Clarence Valley Council is not actively using its transport asset management plan to guide current practice

Clarence Valley Council has developed a transport asset management plan that meets IP&R compliance requirements set by the OLG for councils to have an asset-class specific long-term plan.

The Council advised that it did not use this plan to guide strategic or operational road asset management practices as the condition and forecast data in the plan is unreliable. Further, the Council has outlined in an internal review that revised condition ratings will be required as road assets are restored or renewed, and consequently a revised asset management plan will be needed.

Instead, Clarence Valley Council’s priorities for capital planning, renewal and upgrades of its roads, and its policies and processes for road maintenance are driven by immediate risks to the function of its roads, responses to natural disasters and addressing asset defects.

Not using or implementing the transport asset management plan, and the processes and governance set out in the plan limits the usefulness of this document to Council. It also reduces transparency of whether planned actions, levels of service and improvements are being delivered in line with timeframes and community expectations.

Clarence Valley Council advised it plans to use its asset planning documents and asset management to guide its operational management of roads as its asset condition data improves. However, the Council has not been in a position to do so due to engineering staff shortages, recruitment challenges and its focus on delivering grant commitments and broader infrastructure works carried out in response to natural disasters.

Clarence Valley Council’s improvement actions for asset management have not been clearly implemented

The OLG’s IP&R Guidelines require that a council’s asset management strategy includes specific actions to improve the council’s asset management capability, as well as projected resource requirements and timeframes.

Clarence Valley Council has developed two asset improvement plans across its asset management planning documents:

• the Council’s asset management strategy includes specific actions required to improve its asset management capability
• the Council’s transport asset management plan also identifies an asset improvement plan with tasks, responsibilities, resources required and timelines. It details monitoring, review procedures and performance measures.

It is not clear how the Council is prioritising actions identified in these plans, and whether some actions are required to be done in sequence. The Council has not provided evidence that improvement actions have been implemented in line with planned timeframes. Some actions have remained in progress since 2007.

The Council advised that its asset management improvement initiatives cover broad improvements for all assets, as well as specific actions for road asset management improvement.

Clarence Valley Council’s management of local roads was subject to an internal service level review in 2023. In considering the recommendations and opportunities for adjustments to service levels following the review, the Council advised it would be difficult to understand any potential changes due to the impacts of natural disasters. The Council advised that the outcomes of the review were presented through its executive leadership team (ELT) to its audit, risk and improvement committee (ARIC), but it is unclear whether it has implemented planned actions identified in the review. The Council advised in 2024 it was progressing a broader re-orientation of the purpose and outcomes expected from its service review framework.

Clarence Valley Council recommenced its asset management governance arrangements for road asset management decision-making and oversight in May 2024

Asset management practices have a direct impact on all areas of council business, including financial management, community service delivery and environmental and sustainability issues.

Roles and responsibilities for road asset management delivery and oversight within Clarence Valley Council are set out in its asset management plans. However, the Council’s implementation of these arrangements does not reflect the plans, and there has been limited evidence provided of strategic governance by the Council’s ELT. For example, the Council’s ELT has not formally reviewed the asset management strategy since 2018. The Council advised that the ELT considers asset management matters where they impact different directors’ responsibilities. This is usually discussed in the context of policy adoption or reports to Council.

Further, the Council’s asset management policy and asset management strategy outline the framework for an asset management steering group to report to the ELT and provide assurance over asset management activities, objectives of the IP&R framework and the long-term financial plan.

The Council’s asset management steering group did not meet regularly, nor provide advice or information to the ELT across the audit period. The latest meeting records provided by the Council are minutes from August to November 2020.

The Council has advised that an asset management advisory group was re-established in May 2024, and will meet regularly. Steering committees or other governance arrangements help to formalise and ensure inputs from important stakeholders across council, and ensure common understanding of risks and implications of road asset management in areas like finance, environment and planning.

Gaps in Clarence Valley Council’s data reduce the reliability of asset management plans and limit its ability to forecast maintenance and renewal needs

Clarence Valley Council has reported in its asset management plans and consultations that there are gaps in data for some of its road assets. This has reduced its understanding of asset conditions across its road network The Council does not have a clear plan to address these gaps.

These gaps in Clarence Valley Council’s asset condition data reduce its capability to make data-driven decisions for asset safety and functionality, and to forecast cost-effective maintenance and renewal needs.

Clarence Valley Council has noted in its transport asset management plan that it aims to implement a fully integrated system to improve its confidence in asset data and strategic planning. The Council advised in June 2024 that it plans to implement a new approach for revaluation that will improve the accuracy of its asset condition assessments. However, the Council has not planned resources or a timeline to address the current data discrepancies and, as mentioned above, its asset improvement plans are not being actively applied.

Clarence Valley Council’s enterprise management system enables integrated asset and finance management, but this function is not being used consistently by staff

Clarence Valley Council’s asset information system houses its asset register, which contains basic information to complete asset valuation and supports work prioritisation. The Council advised that some functions, such as defect identification, management and monitoring, are working well, and demonstrated this to the audit team during interviews. The Council also demonstrated that Geographic Information System (GIS) display information has been integrated and segments can be interrogated through the mapping function in the asset register.

However, the audit team observed that some important processes, such as asset management planning, rely on manual processes and are based on historical expenditure, rather than current and assured data from within the enterprise management system.

Clarence Valley Council advised that since the audit period it has progressed asset improvement initiatives, including the use of machine learning to collect asset condition data, to improve defect collection processes to inform asset condition and value assessments, review of its asset components, and upgrade its GIS capabilities. The Council has not yet formalised a plan to implement this, nor reflected this in its asset management documentation.

Clarence Valley Council has identified relevant risks to road asset management

Clarence Valley Council has a dedicated risk information management system. The Council has a strategic risk register linked to an operational risk register; both registers identify risk and control owners, controls and mitigating actions. The operational risk register contains a number of asset management risks. The Council’s ARIC considers risk management including road asset management.

Clarence Valley Council has also identified relevant risks to road asset management in its asset planning documents. The Council’s transport asset management plan identifies critical assets, key risks to road assets and planned treatments.

Clarence Valley Council faced challenges in recruiting staff to effectively support road asset management and implement plans and improvements

Clarence Valley Council advised that issues with staff recruitment have slowed its plans to improve asset management and undertake some essential activities over the audit period.

In June 2023, the Council reported that vacancies in its local roads team were having an impact on service outputs. In January 2024, 30 total positions of the total 136 positions across Council’s broader civil services team were vacant. Gaps in resources for capital works (7), road maintenance (4) and engineering positions (3) negatively affected the Council’s roads asset management activities.

The Council advised that these vacancies, particularly the four roles across middle management in the civil services team, had an impact on its ability to focus on strategy and consequently its focus has been on delivery. Other teams with responsibilities for finance and asset management, and which contribute to the Council’s asset planning and governance, have also experienced staff shortages and gaps in expertise.

The Council has implemented a range of responses to these pressures and their impact on service outputs, including procuring specialist equipment, researching and implementing innovative use of materials, introducing a dedicated team to respond to delivery impacts from natural disasters and undertaking long-term staff planning to upskill its employees to fill senior roles in the civil services division.

In July 2024, after the completion of audit fieldwork, the Council advised it had filled nearly all vacancies in its civil services division.

Clarence Valley Council’s capital works program does not set out how it will support planned service levels and quality outcomes in line with its strategic priorities

Clarence Valley Council has not developed a long-term capital works program to guide its decision-making about constructing, renewing or upgrading its roads consistent with service levels and strategic priorities set out in its transport asset management plan.

Between FY2020–21 and FY2022–23, the Council did not publish a long-term capital works program. Since July 2022, the Council has identified a need to develop a long-term capital works program. In July 2023, the Council identified that this program needed to be evidence-based to support transparent decision-making.

The Council published a four-year program of works both in FY2023–24 and FY2024–25. While the Council’s plans establish detailed works and estimated costs, it is unclear whether this is linked to data on road asset condition and required improvement or maintenance, nor whether works are to be delivered in response to strategic priorities for road asset management set out in the Council’s transport asset management plan or other IP&R documentation.

Having a data driven long-term capital works program that is linked to the Council’s strategic objectives and planned service levels for road asset management would support transparent decision-making about strategic asset management plans and long-term expenditure.

Clarence Valley Council has identified broad levels of service for road asset categories, but it is unclear whether these are being used to drive delivery

Clarence Valley Council advised that its levels of service for road assets are guided by industry technical standards for design, function and safety. This approach has flowed through to the Council’s Roads Policy, which guides its responses to service requests, defect rectification and upgrades. Road maintenance activity in accordance with the policy is based on risk ratings applied to roads according to use, function, traffic, safety and connections to other services.

The Council’s April 2023 transport asset management plan outlines a levels of service framework for the Council’s road assets, including sections on customer and technical levels of service. However, performance data for customer levels of service across all transport assets are incomplete or out of date, and benchmarks and expected trends for road assets have not been identified.

The Council’s asset management strategy contains benchmarks to maintain asset condition at a rating between 1 and 3, and assets rated 4 or 5 assessed for risk then replaced, renewed or disposed. These scores have been established through previous inspections and revaluation processes.

It is unclear whether the Council is delivering its roads to the levels of service it has identified in its asset management plans. As mentioned above, the Council has not implemented the plans, and its 2022–23 and 2023–24 delivery program and operational plans state it aims to ‘establish and implement service levels’.

Implementing the levels of service identified in the transport asset management plan would allow the Council to monitor whether the available budget is sufficient to meet services at the levels agreed to as circumstances change.

Clarence Valley Council has surveyed its community, but not used this information to consider current service levels, nor establish actions to improve customer satisfaction

Understanding community expectations for assets and services informs councils about the perceived importance and quality of their services. It also supports councils in making sustainable decisions about levels of service that reflect their community’s priorities.

In 2022 Clarence Valley Council commissioned an independent customer satisfaction survey. Findings from the survey showed that road maintenance services:

• had the lowest customer satisfaction rating among all council service delivery categories
• were considered to be the most important council service
• were the area most in need of Council’s resources.

The Council has used these survey results to demonstrate a broad understanding across its IP&R and asset planning documents that the community want the Council to prioritise improvements in road asset maintenance. However, the Council has not formed a clear plan to increase its community satisfaction, nor used these outcomes to guide further consultation on its community levels of service.

This means that while the Council has broadly consulted with its community, it has not assessed whether the community would prefer a different level of service for particular roads or road types. The Council has identified this as an area for future development.

Clarence Valley Council formally consulted its community on road maintenance through exhibition processes on its Roads Policy update in 2023. The Roads Policy establishes a risk-based approach to responding to customer requests for road maintenance, as well as criteria for sealing an unsealed road. The Council advised it received no submissions from its community on this process, which it interpreted to mean that the community had no issues to this change in practice.

The Council plans to undertake a community satisfaction survey in 2024. This presents an opportunity for the Council to assess the performance of its road asset management works since 2022, confirm priorities for improving customer satisfaction and further consultation with the community on their satisfaction with current service levels for roads.

Clarence Valley Council transparently documents broader objectives for road asset management, but its reporting on road asset capital works has reduced in detail

The Council has transparently outlined its progress against delivery program objectives. It has reported against its progress in delivering objectives set out in IP&R documentation in quarterly reports since June 2022 and, since July 2023–24, in a quarterly community magazine.

However, current public reporting does not transparently demonstrate consolidated progress against planned capital works projects, including specific road capital works projects, as outlined in the Council’s annual capital works program.

Over the audit period, the Council changed the way it reports progress against capital works programs, from providing detailed monthly acquittals to Council to quarterly reports on broad outcome objectives. This has reduced the transparency of project progress, and reduced detail on council’s performance against the capital works program.

The Council advised that it made this change based on an assessment of the value this detailed reporting was adding to the elected Council and its community. It also advised that internal reporting generates regular, detailed reports on capital works projects to the elected Council and a weekly report update is provided to the community.

Clarence Valley Council has consistently reported progress of disaster-related works

Clarence Valley Council’s roads have been significantly affected by natural disasters over the audit period. The Council has catalogued the damage to its network and developed a plan for delivering capital works, including disaster recovery packages since FY2020–21. The Council reported in 2022 that emergency works and immediate recovery works from natural disasters were prioritised and completed.

Clarence Valley Council has provided consistent reporting on its activity and progress in addressing its infrastructure backlog related to natural disasters to the elected Council and through them to the community since 2019–20. Since 2023, the Council has transparently reported this information directly to its community through quarterly magazines.

The Council has a plan to address defects and restore or enhance its road assets following natural disasters. Its most recent capital works program for 2023–24 indicates expenditure of $68.2 million is required to respond to natural disasters. The Council advised that while it aims to restore its network to a ‘serviceable status’, it is also pursuing betterment⁵ outcomes for some of its roads through augmenting road works funded by natural disaster recovery grants.

Clarence Valley Council has not clearly reported against identified detailed key performance indicators for road asset management

Clarence Valley Council has identified KPIs for road asset management since 2021. The KPIs for road asset management have included:

• capital works program development and delivery
• maintenance program development and delivery
• road renewal program completion
• asset records management
• defects management
• delivery of maintenance to programs
• asset inspections.

Clarence Valley Council has not clearly or publicly reported against these detailed KPIs since FY2021–22. Broader, outcome focused projects outlined in its delivery program are reported quarterly, but there is no evidence in annual reports or quarterly performance updates that the Council has publicly reported against these KPIs.

This limits the ability of its community to scrutinise delivery, and whether and how the Council may be delayed in delivering road maintenance, renewal or upgrades.

⁵ Betterment in this context means taking a damaged asset to an improved condition than prior to a disaster event.

About Gwydir Shire Council

Gwydir Shire is a rural local government area located in north-western NSW. The Council is geographically large with an area of 9,122 km² and total road network length of 2,328 km, comprising 2,062 km of local roads.

With a population of 4,940, Gwydir Shire Council has the 17th smallest population of any local government area in NSW, despite being the 23rd largest council by area. The Council advised that this, combined with its rural and remote nature, has resulted in more challenging access to skilled workers and labour and difficulty covering road asset management costs through own source revenue.

As at 23 November 2022, Gwydir Shire Council had a total workforce of 228, with 136 permanent full-time employees. The FY2022–23 combined total residential, farmland and business rates revenue amounted to $8.5 million.

Road asset expenditure

Gwydir Shire Council delivered nearly $20 million in road asset capital works between FY2020–21 to FY2022–23. Over the same period, the Council delivered around $34.9 million of ‘actual maintenance’ across its road assets. This includes around $27.6 million expenditure on sealed roads and around $7.2 million on unsealed roads.

In FY2023–23, expenditure on roads, bridges and footpaths represented 45% of the Council’s total expenditure.

Impacts of natural disasters

Gwydir Shire Council has experienced severe weather events and seven declared disasters since 2020, including bushfires, storms and flooding. The Council advised that these events, which followed an unprecedented drought, led to complicated geotechnical conditions and had an impact on its road conditions.

The Council reported that the greatest impact to the road network condition is the cumulative damage from consecutive flood events. In FY2022–23, the Council reported this cost was more than $22 million, with average expenditure on rectification works over $120,000 per week, largely dedicated to repairing road assets.

Gwydir Shire Council advised that for FY2020–21 to FY2022–23 total road assets natural disaster expenditure was $5.3 million and that over 340.8 km of its roads were subject to capital works during this period. The Council also advised it had completed extensive maintenance work to address natural disaster damage across its entire road network over the audit period.

In 2024, the local government area was again affected by floods. The Council advised in June 2024 that flood-related damage would cost around $30 million to repair.

Gwydir Shire Council did not have aligned, up-to-date long-term asset management plans to support a strategic framework for road asset management across the audit period. The Council did not effectively implement formal governance and coordinated management oversight for its road assets. The Council implemented updates to its asset management plans in June 2024 and governance arrangements in July 2024.

The Council has reported on the large volume of works it is delivering, including in response to natural disasters, but is not reporting in the context of information about targets and quality benchmarks. The Council does not have a long-term capital works program, but adopted a prioritised rolling program of works in August 2024 to guide its priorities and efforts over time.

By October 2025, Gwydir Shire Council should:

1. ensure the Council complies with IP&R processes
2. prioritise, implement, and monitor planned improvements for asset management practices, including:
   • identify critical assets and management strategies for these
   • improvements in asset condition data in asset management approaches
   • ensuring enterprise risk management processes are in place and supported by clear reporting to the ELT and the Council’s ARIC
   • formalising and documenting governance, decision-making and record-keeping in relation to roads and other assets
3. implement the levels of service framework identified in its 2024 transport asset management plan
4. formalise and document community priorities for road asset management within its IP&R and asset management documents, and establish performance measures for delivery against these priorities
5. document how it approaches the transition from disaster reconstruction to business-as-usual and ensure lessons learned in disaster operations and reconstruction are captured.

Gwydir Shire Council has not met strategic asset management planning requirements under the OLG’s IP&R framework

Gwydir Shire Council has not met requirements established under the OLG’s IP&R guidelines for strategic asset management planning.

The Council does not have a current resourcing strategy and components that would usually form this strategy, such as the long-term financial plan, workforce management strategy and asset management strategy were not updated in line with review timeframes.

The Council’s IP&R asset planning documents, including its asset management strategy and transport asset management plan, are not clearly integrated with its long-term financial planning documents. Funding estimates in its asset management documents are based on historical figures, rather than data-driven projections of future expenditure. The Council has identified this as an improvement priority for the transport asset management plan.

Gwydir Shire Council’s 2018 long-term financial plan, which was in place for most of the audit period, does not contain scenario planning, and does not integrate with the Council’s long-term asset management plans. The plan does not contain sensitivity analysis, financial modelling for different scenarios, nor demonstrate how the Council will resource the objectives of its community strategic plan.

Gwydir Shire Council developed a draft long-term financial plan in June 2024. While the draft plan projects the Council will be sustainable from 2026–27 onwards over the ten years to 2034, it lacks detail, context and disclosure of any financial assumptions. Further, the plan presents a consolidated fund scenario only, without separating different and potentially restricted funding sources. This limits the ability to confirm and estimate the amount of funding available for general fund activities, including funding road maintenance and capital works over the next ten years.

Gwydir Shire Council did not maintain or implement its road asset management plans across the audit period, but has updated these in June 2024

Effective asset management planning provides important inputs into a council’s budget and delivery of road asset maintenance, renewal and upgrade processes. It also promotes transparency to residents and ratepayers about the use of council resources. Across the audit period of review, Gwydir Shire Council did not maintain a current road asset management plan. The Council’s transport asset management plan was previously updated in 2017, and did not reflect changes in its operating context and environment. The Council advised that asset management plans were not a focus area over the audit period as natural disasters reduced the importance of implementing business-as-usual asset management practices.

Since the last update to the transport asset management plan, the Council experienced several natural disasters and severe weather events, and significantly increased its roads budget. In 2023, the Council reported that the addition to the Council’s asset register of formed tracks on Council public road reserves (318.37 km) resulted in an increase in untied grant funding (financial assistance grants). These changes to the Council’s road asset profile have not been reflected in current and draft plans.

The Council advised that it is providing no level of service to the additional formed track assets included in its register and that they are non-depreciable assets. The Council advised in June 2024 that it has directed this additional funding toward new maintenance equipment and changes in maintenance and renewal practices.

Gaps in the Council’s asset management planning framework meant that the Council did not follow clear, planned priorities, document and update risks to effective road asset management practices, and consider the potential demand for and use of critical road assets.

Gwydir Shire Council updated its asset management strategy, asset management policy and transport asset management plan in June 2024 after the audit had completed fieldwork.

Gwydir Shire Council has identified actions to address asset management gaps in its 2024 asset management improvement plans

The OLG’s IP&R Guidelines require that a council’s asset management strategy include specific actions to improve the council’s asset management capability, as well as projected resource requirements and timeframes. Gwydir Shire Council’s previous documents did not set out a clear asset improvement plan and actions to address gaps.

The Council’s 2024 asset management strategy and plan has improved its links between IP&R documents, but some gaps remain. For example, the Council has identified a need to:

• identify critical assets and management strategies for these
• improve and better use asset condition data in asset management approaches
• undertake a climate change impact review and risk assessment to determine mitigation measures, recognising the impact of natural disasters on the Council and its assets
• review and implement levels of service following engagement with its community.

The Council has recognised some of these gaps, and has set out some longer-term improvement opportunities in an asset management improvement plan. The Council has also identified that changes in maintenance equipment and practices present opportunities to change its approach to restoration and improvement of road assets.

The Council has not set out clear implementation actions, or policies, procedures or instructions that support implementation, nor how these would be prioritised in the event of a natural disaster affecting its operations.

Gwydir Shire Council has not adequately represented its focus on roads as a priority in its community strategic plan, delivery program and operational plan

Gwydir Shire Council’s economic development strategy 2017–2023 discusses the importance of its roads, including the priority of particular roads in the context of the north-west freight network and scenic and other roads significant to tourism.

Gwydir Shire Council’s staff conveyed their understanding of the key drivers for road use in terms of function, safety and economic productivity within the shire during audit interviews. This understanding reflects the language used within the Council’s economic development strategy. However, these priorities for roads and outcomes are not reflected in the Council’s IP&R documentation:

• the Council’s community strategic plan does not clearly identify provision and maintenance of roads as a major strategic focus of the Council
• the Council’s delivery program does not set out performance objectives clearly linked to roads management within the 2021–24 term of Council, listing the Council's assets (including road assets) and describing the road network but not setting out a plan of action
• the Council's operational plans for FY2021–22 to FY2023–24 list total asset values, grant funding programs and contain action plans to be delivered during the financial year, but there are no identified targets or measures to determine the effectiveness or efficiency of the actions and annual budgets for associated actions are not included in the 2022–23 and 2023–24 operational plans.

Gwydir Shire Council’s ELT advised in June 2024 that while there are gaps in representation of road priorities in IP&R documents, roads are a high priority for staff and councillors. The Council advised that roads are a significant proportion of the Council’s budget, a known priority area and a fundamental day-to-day management concern for the ELT.

Gwydir Shire Council staff demonstrated a strong focus on delivery, but the Council did not implement formal ELT governance for road-related planning and expenditure across the audit period

Asset management practices have a direct impact on all areas of council business, including financial management, community service delivery and environmental and sustainability issues. For this reason, it is crucial that the ELT supports the general manager in oversight of the development and implementation of the council’s asset management strategy.

Gwydir Shire Council does not have dedicated asset management executive governance arrangements and there is no evidence of coordinated ELT input into oversight of asset management practices.

Operational management of roads is the responsibility of the engineering services team. The Council’s staff have experience with, and local knowledge of, road conditions, economic activity and application of priority maintenance and/or ‘rejuvenation’ to ensure safety, access and activity (e.g., bus lines and high economic production routes). The audit team observed collaborative decision-making at team meetings, as well as a strong staff focus on service delivery and community outcomes.

The Council advised that its asset management strategy had been discussed and approved by the ELT. However, the Council cannot demonstrate this as it did not formally document ELT meeting minutes and outcomes across the audit period. The Council commenced formal meeting minutes for ELT meetings in July 2024. This includes a standing item on asset management.

The Council advised that its Public Infrastructure Committee has strategic oversight for roads. The Committee is comprised of elected councillors and the director of engineering services. The Committee meets monthly, and its agendas and minutes are published on the Council’s website providing a level of transparency regarding road project activities.

The Council has advised that it does not have terms of reference for this committee. This means that the aims, roles and responsibilities, authority and outcomes of the Committee are not transparent, and it is unclear whether the Committee is making appropriate and authorised decisions, consistent with its intended functions.

Gwydir Shire Council has not reviewed the effectiveness of its asset management practices

In June 2023, Gwydir Shire Council’s ARIC requested regular six-monthly updates on the Council’s engineering projects (including roads). The Council advised these updates are provided quarterly and consider the status of current projects, and significant issues that may affect the Council, such as potential cash flow issues.

Gwydir Shire Council has not undertaken internal reviews for road asset management or broader asset management practices and processes across the period of review. This means the Council has not obtained internal assurance that its asset management and other practices are effective, efficient and compliant, and contribute to sound risk management. It also risks opportunities for continuous improvement being missed.

The Council advised that its ELT meets to discuss improvements and risks across all Council activities, and that it holds regular management meetings with department heads to promote collaboration. As mentioned above, until July 2024 the Council did not have formal meeting records for its ELT.

Gwydir Shire Council’s road asset risk management documents do not clearly identify risks and mitigating actions

Gwydir Shire Council does not have an enterprise risk register or policy. The Council advised it manages road asset management risks under each road project, and it considers this level of risk management to be appropriate. However, our review of a sample of project management risk documentation found gaps in completeness and consistency.

The Council’s asset management strategies and plans in place for the audit period of review did not adequately address risks experienced over recent years, including those associated with natural disasters, the impact of natural disasters on the Council’s current program of works, or how it intends to better structure its future road asset management activities to move between disaster recovery and business-as-usual.

Gwydir Shire Council’s recently adopted 2024 transport asset management plan identifies relevant risks to road asset management, including climate change but the Council has not supported this with clear operational risk registers, assessment of the effectiveness of any mitigation measures, or timeframes to address the risks. The Council has identified improvements in its risk assessment process, including consideration of critical assets as a priority improvement action.

Gwydir Shire Council’s road asset condition and financial data is not aligned across its finance, asset management, defects management and other enterprise management systems

Throughout the audit period, Gwydir Shire Council relied on the local knowledge and expertise of its staff to guide its understanding of road asset conditions and decisions for maintenance, renewal and upgrades. It did this rather than using its systems to drive asset management and maintenance of current condition data.

Gwydir Shire Council’s data is not aligned across its finance, asset management, defects management and other information management systems. Systematic, documented and reliable data collection is not currently in place. Data is inconsistently stored, duplicated and applied through multiple systems. Some data is not current.

The Council advised this is a factor of its approach to road asset management, and that refining data to reflect current conditions would use resources otherwise allocated to carrying out roadworks. Without reliable, assured, data, the Council risks making decisions for maintaining roads and prioritising works based on inaccurate or outdated asset condition information.

In August 2024, the Council adopted a program of works that prioritised work based on criteria including pavement condition, surface condition and traffic volume. The development of a standard methodology for determining prioritisation is an improvement on previous practices.

Gwydir Shire Council has not yet integrated plans to implement automated data collection for asset condition assessments

In July 2024, Gwydir Shire Council advised it had implemented a multi-year lease of an automated machine learning-based condition rating assessment application. The Council intends to use this application to increase the frequency of condition assessments, and advised that the assessments will be complemented by staff inspections to validate data.

The Council has not provided a roadmap or plan to deliver this, so it is unclear how it aims to use this data to amend its asset management practices and inform staff’s professional judgements, nor how it may impact or reduce existing manual asset management processes.

Gwydir Shire Council does not have a published capital works program to guide its delivery of road asset works

Over the period of review, Gwydir Shire Council did not publish a capital works program to guide its plans for, and delivery of, road asset works.

As mentioned earlier, in August 2024 the Council adopted a ten-year rolling works program based on a criteria-driven prioritisation process. The program does not include a draft schedule or estimated costings.

Having a long-term capital works program that is linked to the Council’s strategic objectives and planned service levels for road asset management would support transparency around decisions, strategic asset management plans and long-term expenditure. It could also support the ELT and Council in decisions to pursue grants, and in identifying and prioritising any enhancements to its roads, such as those the Council has done while implementing a large program of work to respond to natural disasters.

Gwydir Shire Council has not formalised a levels of service framework to guide its standards for, and delivery of, road assets

Gwydir Shire Council uses technical and design standards and other associated guidance for the safety, function and specifications of roads it constructs and maintains. The design and function of its roads are based on traffic, construction materials and road classification according to industry guidance.

However, the Council does not have formal processes to systematically assess compliance with these, nor monitor whether road assets were delivered or maintained an approved level for condition and function.

The Council’s 2024 asset management strategy states that over time it will track asset performance against its levels of service targets by utilising technical engineering data, direct feedback from the community and from targeted community engagement surveys.

The Council advised that it plans to bring together sources of information that support the use and importance of the road, based on community consultation, shire-wide condition surveys, traffic counters, bus routes and artificial intelligence work to inform its priorities for servicing and improving roads. It also predicts changes in maintenance practices and resourcing levels for patching crews could support increased improvement works.

The Council has commenced development of a levels of service framework in its June 2024 transport asset management plan, but several measures are in progress and do not reflect the current levels of service. The Council has committed to reviewing existing and potential performance measures, levels of service metrics and targets with stakeholders.

Gwydir Shire Council has consulted with its community during the audit period but has not formally used the results to inform its consideration of levels of service for road quality, function and safety

Gwydir Shire Council has engaged with its community for a range of service delivery and asset management issues, including roads, across the audit period. It has held direct consultation with residents across the communities within its shire, including providing updates on funding priorities, grant opportunities and planned works. The Council also advised it has consulted directly with landholders on focus roads for specific projects.

Gwydir Shire Council has not commissioned formal research to survey its community on their perceptions of the importance and quality of its roads network. The Council undertook a survey of community perceptions across a range of council managed services in 2022, and its results indicated that roads were highly important. Across a small sample, some residents were not satisfied with road maintenance, nor with the overall condition of the road network.

Gwydir Shire Council has not formalised a framework to guide its standards and understanding of community priorities for service levels across its roads. It has not documented formal success measures for community consultation, and the reports it has commissioned from previous consultations do not contain metrics in terms of engagement success or outline the number of interviews held or number of responses received.

The Council undertook a process to understand its residents’ priorities for the expected levels of maintenance across road types in 2024. However, the Council has not reflected its community’s perceptions of roads in its asset management strategy and in its development of community levels of service for quality, function and safety. As mentioned above, this is identified as an area of future development.

Gwydir Shire Council details activity in monthly reports, but has not set performance measures to demonstrate how it meets road asset management objectives

Gwydir Shire Council produces monthly activity reports for work undertaken by its engineering services team. These reports contain photographs and descriptive information relating to current and future road projects, including for project budget and expenditure. The reports are provided to the Public Infrastructure Committee and the elected Council.

Our review of a sample of reports from FY2021–22 to FY2023–24 found that the reports provide useful information for assessing roadworks against the operational plan as well as many other road projects.

The Council also outlines project progress, including for road projects and delivery program actions in reports to the its Community Services and Planning Committee.

However, while the Council outlines its progress in completing works, including responding to natural disasters and other grant funded works, it does not formally produce or report against a consolidated transport capital works program to its community. This limits its ability to demonstrate timely, clear achievement of capital works programs, including for restoration works. The Council does integrate some works reporting against it operational plan through monthly reporting to Council using performance reporting software.

Gwydir Shire Council documents damage to its roads from natural disasters but does not link current condition information on its roads between asset management systems

Gwydir Shire Council advised that it has catalogued and prioritised all works required in response to natural disasters. Staff demonstrated how the photographic, geographic and other damage assessment and project data collected for the purposes of DRFA is collated in comprehensive detail. This information is stored in ‘Recover’, the NSW Government centralised system required for this process. Recover is not able to integrate with the Council’s other asset and finance systems, so this data is managed separately.

Gwydir Shire Council advised that road asset condition data is drawn from its revaluation processes performed every three to five years. This process was last completed in 2020. The Council noted that this is its main source of asset condition data. The Council advised its next revaluation is planned for 2025.

Apart from its revaluation data collection, Gwydir Shire Council does not have a structured cycle or program for collecting and updating data on asset condition. However, staff advised that asset condition reporting can be drawn from road staff, ratepayer queries and reports, and collected in ‘Reflect’ as they drive and assess the roads among other activities.

Gwydir Shire Council implemented a risk-based approach to responding to unplanned service requests in 2023

Clear processes and criteria for assessing and triaging service requests assists councils to implement risk-based, prioritisation that reflects the council’s risk appetite, safety requirements and costs considerations. It can also assist in clear and timely messaging to requestors.

Gwydir Shire Council advised that it developed a system in 2023 to formalise its approach to cataloguing and assigning service requests to fix road defects. Through this approach, the Council prioritises maintenance requests according to risks including safety, road significance and function, and reputational risks to the Council. The Council advised it has dedicated staffing and system-based support to implement this approach and that they now use metrics to establish priorities and discuss response times.

Gwydir Shire Council advised that this approach will increase consistency, equity and transparency in its maintenance decisions. However, the Council has not set performance measures or review timeframes to demonstrate the impact of implementing this approach, nor reflected this in its asset management plan and transport asset management plan documentation adopted in June 2024.

About Wollondilly Shire Council

Wollondilly Shire is a local government area located on the south-western fringe of the Sydney metropolitan area, covering an area of 2,560km². The Council’s FY2022–23 annual report estimated its population was around 57,000 residents.

The total road network in Wollondilly Shire Council local government area is 906 km, with 779 km of local roads.

As at 23 November 2022, Wollondilly Shire Council had a total workforce of 339, with 258 permanent full-time employees. The FY2022–23 combined total residential, farmland, business and mining rates revenue amounted to $43.9 million.

Road asset expenditure

Wollondilly Shire Council delivered around $65 million in capital works for road assets between FY2020–21 and FY2022–23. Over the same period, the Council delivered $25.6 million on ‘actual maintenance’ across its road assets across the audit period. This includes around $20.6 million expenditure on sealed roads and $923,000 on unsealed roads.

In FY2022–23 expenditure on roads, bridges and footpaths represented 18.4% of the Council’s total expenditure.

Impacts of natural disasters

Wollondilly Shire Council has experienced six declared disasters, including bushfires, severe weather events, storms and flooding since 2020.

The Council reported that some responses to storm and emergency events have included fast-tracking road projects and adding road crew members to increase the capacity of the Council’s road maintenance program.

In FY2021–22 the Council estimated that unplanned emergency works had cost $2 million and widespread damage to its road network had cost over $20 million. In FY2022–23 the Council reported receiving $9.5 million to address flood damage across Wollondilly Shire’s road network. In December 2023, the Council reported it had completed 95% of the works associated with this funding.

The Council advised that for FY2020–21 to FY2022–23 its total road assets natural disaster expenditure was $13.1 million and that 79.2 km of roads were upgraded or renewed during this period.

The Council reported in 2024 that it has had over $20 million in disaster-related roads damage since FY2019–20.

Wollondilly Shire Council has effectively applied a coordinated and strategic framework to deliver road asset management. The Council has long-term plans to guide its efforts and uses data to inform its approach. The Council has delivered a large volume of works in response to natural disasters during the audit period. The Council is reporting its road asset management outcomes and can demonstrate progress against a clearly defined capital works program, but could improve its use of performance indicators.

By October 2025, Wollondilly Shire Council should:

1. ensure its transport asset management plan is finalised, implemented and supporting asset data and funding estimates are kept current
2. review its key performance indicators for road asset condition to ensure they are fit for purpose, regularly monitored and reported to its ELT, elected Council and the community
3. formalise and document community priorities for road asset management within its IP&R and asset management frameworks, and establish performance measures for delivery against these priorities.

Wollondilly Shire Council’s IP&R plans and documents establish its priorities and planned actions for managing roads

IP&R requirements establish that councils should identify and set guiding principles for how they will pursue strategic road management outcomes for their community. Wollondilly Shire Council’s community strategic plan outlines goals for Council’s service delivery, asset and infrastructure management, and economic and social outcomes, across the longer term (at least ten years) in line with its community’s priorities.

Across its IP&R plans and documents, the Council has established a clear and integrated focus on road asset management. The Council has produced and updated IP&R key documents relevant to asset management planning. Its community strategic plan, resourcing strategy (including asset management strategy), delivery program and operational plan and other documents are integrated, and mostly reflect the OLG’s IP&R Guidelines. The documents reflect strategic and operational objectives for road asset management – its community’s most significant service delivery and asset management priority:

• community strategic plan identifies the strategic aims for road asset management and measures for success, such as progress against scheduled works
• resourcing strategy meets IP&R principles, identifies sustainability principles and contains integrated discussions on asset and financial management, projects and resourcing through the Council’s asset management strategy and long-term financial plan
• delivery program reiterates the community strategic plan and outlines priority projects and actions with timelines for delivery, as well as outlining recent achievements in road asset management
• operational plan FY2023–24 reiterates roads as a priority area and includes messages from the CEO and the Mayor; it features roads in detail throughout the document, including an overview of road capital works funding, operational expenditure and priority projects, and the operational plan links back to the community strategic plan and establishes performance measures (pavement condition index, road work completed on time).

Through this integrated approach, the Council has demonstrated its understanding of its community priorities for roads, and set out how it plans to achieve intended outcomes for roads, through clear resourcing, actions and projects. This assists the Council and its community to monitor progress and promote accountability.

Transparency to the community for delivery of objectives is managed through the Council’s operational delivery reporting, quarterly budget reviews and the Council’s ‘road tracker’ function on the Council website, which displays individual projects and their progress.

Wollondilly Shire Council has an asset management strategy and plan that identify critical infrastructure and improvement actions

Wollondilly Shire Council has implemented an asset management framework that meets most industry guidance principles for asset management, as recommended in the OLG’s IP&R framework.

The Council has developed an asset management strategy that identifies information specific to roads, including critical infrastructure, projects and actions to improve its asset management capability. The strategy sets out its approach for timely intervention to address road deterioration through renewals and upgrades. Following public exhibition, the Council adopted an updated strategic asset management policy in May 2024.

Implementing an asset management strategy that is integrated with other IP&R strategy documents, such as the long-term financial plan, assists the Council to forecast renewal needs and identify associated resources and when these will be needed.

The Council has also drafted a new transport asset management plan to guide its long-term approach to managing roads. This draft plan applies the overarching principles in the Council’s strategy, and sets out relevant context, resourcing requirements, projections for demand, life cycle management plans and improvement actions. The transport asset management plan has not yet been formally adopted and some data in the draft plan is not current. However, some road-specific information is covered in the asset management strategy.

Wollondilly Shire Council recommenced its asset management steering committee in April 2024

Asset management practices impact all areas of council business including financial management, community service delivery, and environmental and sustainability issues. For this reason, it is important that a council has established management oversight of the development of, and support for, the implementation of the council’s asset management strategy.

Wollondilly Shire Council has established organisational governance arrangements with divisions for finance, assets and operational maintenance. This allows for specific expertise and checks and balances between functions. Decisions on road asset management funding and initiatives are also supported through ELT deliberations and reviews of relevant council reports. For example, in 2022, the Council re-prioritised funding to address maintenance needs, rather than works programs in its operational delivery plan. This process was supported by formal reporting to the Council.

Wollondilly Shire Council formed an asset management steering committee in 2018, with the purpose of determining and implementing the Council’s asset management strategy and improvement plan, as well as ensuring:

• principles and standards of best practice asset management are applied appropriately and consistently
• appropriate operational mechanisms are in place for the effective engagement of relevant internal and external stakeholders
• corporate governance and risk management policies, procedures and guidelines are applied consistently to the management of Council assets
• organisational confidence in data quality and subsequent information is built and maintained at an acceptable level.

However, the Council did not use the committee to guide its asset management governance across most of the audit period, in particular during the time it was delivering natural disaster responses. The Council advised that since 2022, its processes for collaboration, planning and decision-making, occurred within alternative approaches, including monthly capital works program reviews with the senior leadership team, and bimonthly operational meetings between its finance, assets and IP&R teams. These discussions were not formally documented and did not occur under the governance arrangements of the committee.

This committee was re-established in April 2024 and contributes to coordinating inputs across different departments that are affected by roads, such as asset management, finance and planning, where consistent positions on the budget for, and impact of, road asset decisions are required.

Wollondilly Shire Council has identified relevant risks to road asset management

Wollondilly Shire Council has dedicated risk documentation outlining its risk management approaches and internal controls processes for roads. It has an enterprise risk register that analyses strategic financial risks that include asset management and its operational risk register lists risks to transport infrastructure assets, including asset failure, poor flood plain risk management and inadequate road infrastructure. The Council’s ARIC considers risk management including road asset management.

The Council’s draft transport asset management plan identifies risks to delivering levels of service, such as risks associated with limited funding and ways to manage these risks. The plan outlines critical risks and treatments to regional roads, footpaths and geotechnical risks, as well as risks to asset classes. Critical road assets, where failure has significant consequences, are listed however the roads identified are based on a risk assessment conducted in 2011.

Wollondilly Shire Council’s asset management improvement plan is not integrated with broader asset management plans, which limits formal monitoring of progress

Asset improvement plans assist councils in identifying and addressing gaps and opportunities in their asset management processes. These plans prioritise actions, timeframes and deliverables, as well as the resourcing required to implement these.

Wollondilly Shire Council has undertaken several improvements in its asset management practices following internal reviews in 2017, 2018 and 2019.

The Council is monitoring actions in response to review recommendations, but its asset management improvement plan is not integrated into its broader asset management framework.

A formal, integrated improvement plan with measurable KPIs would allow the Council to monitor progress and report more clearly on achievements to its ELT and elected Council.

Wollondilly Shire Council has procured and implemented asset management systems that enable collection, management and assurance of road asset data

Asset management data provides councils with the information to plan cost-efficient and effective road maintenance activity. Regular data collection provides councils with insights for road prioritisation.

Wollondilly Shire Council has information systems for road assets that enable scenario generation, prediction of maintenance and capital costs, and spatial mapping capability. The Council has implemented processes to regularly collect, manage and assure road asset data on condition and valuation, including data provided by third parties.

The Council is using its data and systems to produce reports and tools for management, the elected Council and its community. It has published a ‘roads tracker’ and prepared regular reports on road asset construction, expenditure and depreciation to inform councillor briefings, council reports and other formal consultation and correspondence.

Aligned and assured systems, supported by validation processes for asset condition data, means the Council has good asset condition information, and can make data-driven decisions on prioritisation and cost. It also supports production and sharing of detailed information to external stakeholders.

Wollondilly Shire Council is monitoring road asset management outcomes across its road network

Documenting and monitoring levels of service, including performance measures, assists councils to clearly demonstrate agreed service levels for roads, and whether these are being met. This can help to outline capacity, function and cost considerations for the council in making decisions on road asset activity and expenditure.

Wollondilly Shire Council has developed a pavement condition index (PCI),⁶ which provides a network-wide assessment of the level of service across its roads based on condition, quality and function against target levels. The Council advised it uses this indicator to match the condition of each particular road against planned treatments and to prioritise maintenance or renewal works.

In its 2017–18 to 2020–21 Delivery Program , Wollondilly Shire Council identified that 17% of its road network was below the acceptable PCI of 3 and would therefore require full renewal.

That delivery program also outlined the approach to be taken by Council to move from a reactive program to a prioritised program that focused on early resealing to avoid the higher costs of total reconstruction (Exhibit 9).