A Performance Audit of MidCoast Council conducted by the NSW Auditor-General has found the Council has not met all legislative and policy requirements for long-term financial planning.
The audit assessed whether MidCoast Council had effective financial management arrangements that supported councillors and management to fulfill their responsibilities as financial stewards.
The Audit Office report found that during the 2019/20 and 2020/21 financial years, the Council had financial management and governance gaps.
“MidCoast Council experienced significant challenges in its implementation of a consolidated financial management system following amalgamation in 2016 and the merging of MidCoast Water in 2017,” the Auditor-General’s report states.
“This led to gaps in finance processes and data quality.”
The Report recommends that MidCoast Council undertake service reviews and improve its quality of asset management information to better understand its net costs to inform future budget and financial planning decisions.
The Office also recommended that the Council:
– ensure its long-term financial plan meets legislative and policy requirements
– use the financial management components of the MC1 system to its full potential
– address control and process gaps identified in audits and reviews
– ensure competency of those responsible for finance and budget
– ensure financial sustainability initiatives account for the cost of services and asset management information.
NSW Auditor-General, Margaret Crawford said financial and performance audits of local councils aimed to improve financial management, governance and public accountability across the local government sector.
Annual Local Government reports to Parliament have consistently highlighted risks and weaknesses across the sector in relation to financial management and governance, she said.
“We will continue to focus on these matters as a priority area in our forward work program.”
“While this report focuses on MidCoast Council, the findings should be considered by all Councils to better understand the challenges and opportunities when addressing financial sustainability and financial management needs.”
She said the findings and recommendations around the effectiveness of long-term financial planning, comprehensive and timely financial reporting and financial management governance arrangements were relevant for all Councils.