Risk management framework for all NSW councils open for public comment

By Shannon Jenkins

September 17, 2019


NSW councils will establish independent committees to improve financial management and prevent fraud and corruption under a new statutory framework released for public consultation. 

Minister for Local Government Shelley Hancock said the proposed initiative would provide the state’s councils with the strongest risk management and internal audit framework in Australia.

“The end result will be councils making better decisions and better use of their resources to deliver for their local communities,” she said.

“It will also help ensure councils create a culture of continuous improvement, accountability and transparency.” 

Under the proposal, Audit, Risk and Improvement Committees would be appointed at 128 local councils, with members and chairs to serve three to five-year terms. According to Hancock, nearly 70% of the state’s councils have already appointed these committees “in a strong show of support”.

The initiative would require councils to have a “robust” risk management framework that identifies and mitigates risks in line with current Australian risk management standards. An internal audit function that reports to the committee and is independent from council management would also be established.

Every council in NSW will be required to appoint and operate an Audit, Risk and Improvement Committee by March 2021. The councils will then have until December 2022 to establish their internal audit function and risk management framework. It is proposed that the committee’s role will include compliance, fraud control, financial management, governance, integrated planning and reporting, service reviews, performance measurement data and performance improvement by 2026.

The discussion paper will be open for comment until 31 December. 

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