3. Internal controls and financial reporting issues
Councils have adequate internal controls for preparing reliable financial reports and performance statements, but there is room for improvement.
Information technology (IT) controls and asset management weaknesses continue to be key areas for improvement across the sector.
2. Financial analysis
The COVID-19 pandemic continued to affect the sector in 2021–22.
The sector’s financial performance only improved because government funding increased. It would have declined without this financial assistance. The growth in council expenses outpaced the increase in their own source revenue.
Councils’ balance sheets remain relatively strong.
Councils face challenges ahead due to the:
1. Audit outcomes
We gave clear audit opinions for financial reports and performance statements across the local government sector. Parliament and the community can confidently use these reports.
Financial reports and performance statements are reliable
The local government sector
The Victorian local government sector consists of 105 agencies, including 79 councils.