The Acting Victorian Auditor-General Dr Peter Frost tabled the Local Government: 2014–15 Audit Snapshot report yesterday, which found the sector has generated more than $900 million annually for the past five financial years.
The report provides an analysis of the 2014–15 financial results and performance statements of the 79 Victorian local councils and their financial sustainability risks.
Dr Frost said generally local councils received a low financial sustainability risk assessment.
“However, some local councils continue to face the ongoing challenge of maintaining spending on capital works and existing assets at sufficient levels.”
It was found that the local government sector generated a net surplus of $1.5 billion in the 2014–15 financial year ($923.6 million surplus in 2013–14) and has low financial sustainability risks.
Although this has been partly driven by the advance payment of $269.8 million of Commonwealth grants in 2014–15 and the strong position may be impacted by the introduction of rate capping in 2016–17.
“The changed timing for financial assistance grants in 2014–15 also impacted several short-term financial sustainability risk indicator results, leading to a more favourable outcome for the sector,” Dr Frost said.
For the first time local councils were required to prepare performance statements in accordance with the Local Government Performance Reporting Framework.
“It is a significant deficiency of the new performance reporting framework that targets are not included in performance statements for performance indicators,” Dr Frost said.
“Local councils also need to refine their processes around performance data preparation and improve on their quality assurance processes.”
Dr Frost said 51 percent of the previous years findings relating to high- and medium-risk internal control deficiencies are yet to be rectified.
“Local councils need to be more timely in addressing the issues identified. That these control deficiencies remain unremedied is a very poor reflection on both the management and governance of these councils.”
