Audit background

Water regulation aims to achieve sustainable environmental, economic and social outcomes from the management of water resources, consistent with the Water Management Act 2000. Following recommendations from reviews into allegations of water theft and regulatory failure, reforms were made to strengthen water regulation, compliance and enforcement – including the establishment of the Natural Resources Access Regulator (NRAR) in 2018. The Department of Climate Change, Energy, the Environment and Water (DCCEEW) shares responsibility for issuing water access licences and approvals with WaterNSW.

Audit objective

This audit will assess the effectiveness of DCCEEW, NRAR and WaterNSW in implementing compliance and enforcement measures for the sustainable and integrated management of non-urban water use in NSW. This includes assessment of the following activities and functions:

• governance arrangements for the oversight and enforcement of water laws in NSW
• implementation and monitoring of water reforms since 2018
• policies and procedures used to regulate non-urban water use
• compliance and enforcement activities and practices of the regulator
• support, guidance and education provided to assist water users
• information management and data sharing to support effective regulation. 

The audit will not assess the development of water sharing plans, administration or trading of water licences, water pricing, or the management of urban water supplies.

Estimated tabling period

June 2026

Audited entities

• Department of Climate Change, Energy, Environment and Water
• Natural Resources Access Regulator
• WaterNSW.

This audit is open to taking submissions from members of the public and sector organisations or stakeholders. If you would like to make a submission to the audit, please consider the following targeted questions:

1. Is there sufficient information available to water users and licence holders to understand the roles, responsibilities and priorities of the three NSW Government entities (listed above) overseeing non-urban water?
   
   Please provide any examples to help us understand where information could be improved, or where the rules and regulations for water use are too complex to easily understand.
    
2. Has NRAR conducted its investigations effectively, including to ensure that decisions are fair, proportionate, timely and clearly communicated?
   
   Please provide any examples to help us understand what has worked well and what could be improved.

To share your views, click on ‘Contribute to this audit’ on the left-hand side of your screen or the comment icon below the audit title on a mobile device.

Submissions will be accepted until Friday 19 September 2025.

We may use your feedback to identify key themes, risks or issues that we may investigate further during the audit. In some instances, we may use extracts of contributions in our audit report as examples of feedback provided where appropriate. If we use extracts of a contribution, we will not identify the source in the report.

However, please note:

• We will not examine individual matters, nor can we investigate all issues or concerns raised. In general, the audit team will look for supporting evidence from other sources (such as documentation, data and audit interviews).
• We will not share your feedback with any other party and nor do we publish feedback on our website.
• While we will consider all feedback provided, we may not contact you to discuss.
• We are not able to answer questions or provide information collected during the course of the audit.
• Performance audits focus on assessing whether public money is spent efficiently, effectively, economically and in compliance with the law. The Auditor-General is not permitted to question the merits of government policy objectives. Please visit the Performance audit guide for audited entities (including non-public sector entities) for more information on how we undertake performance audits.

In specific circumstances the Audit Office does have certain reporting obligations for matters relating to wrongdoing in the public sector that come to our attention. For more information on our confidentiality and reporting obligations for submissions, please visit this page: https://www.audit.nsw.gov.au/who-we-are/our-accountability/access-our-information/our-confidentiality-and-reporting-obligations.