Compliance audits of Victorian councils

Our examinations of Victorian local councils assess their compliance with the Local Government Act 2020 and make recommendations for future improvements.

The examination program gives council staff skills to improve compliance, best practice and transparency in governance.

About the audit program

The program aims to:

  • provide an independent assessment of key council practices
  • review the effectiveness and efficiency of selected governance processes
  • assist councils to achieve clear and transparent governance, mitigating the risk of possible breaches of the Act.

The audit process

Step 1: We’ll be in contact to organise a date for the audit.

Step 2: You’ll receive information on how to prepare for the audit.

Step 3: We confirm the audit date and discuss any other arrangements.

Step 4: The audit is completed, and includes:

  • initial meeting with council CEO and representatives to discuss audit process
  • the audit which can take 2-5 days
  • meeting to discuss preliminary findings

Step 5: Audit report and actions.

Following the audit:

  • your council will receive a draft audit report where you can consider the report findings and make comments
  • we’ll consider comments and any council actions to be completed
  • if needed, a final agreed audit report and action plan will be forwarded to council

Step 6: We’ll review any actions have been completed by the agreed timeframe.

Step 7: Outcome of review provided to council.

About audit ratings

We use criteria to test how well each council complies to the Local Government Act. Council’s are given a rating in one of the following 3 categories:


Council has met their legislative requirements and there is no action required - based on answers and supporting documents supplied by staff.

Close to compliant

Council has attempted to meet the requirements of the Act, however, answers and supporting documents haven’t fully met the requirements of the Act. Minor amendments to administrative procedures are needed.

Not compliant

Council hasn’t met the requirements of the Act. Staff could not provide acceptable responses or supporting documentation. 

Findings from recent audits

We’ve conducted council audits since July 2010. 

The audit process has revealed some common trends across local councils, as well as opportunities for improvements.


Councils have performed well in the following areas:

  • Councillor code of conduct
  • staff code of conduct
  • Councillor and Mayoral allowances
  • insurance
  • oath of office
  • election of Mayor
  • audit committee.


We’ve noticed the following areas for improvement:

  • special committees
  • senior officer contracts
  • council budgets
  • primary and ordinary returns
  • annual reports
  • regulations 
  • delegations.

More information

Reviewed 16 July 2021

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