Compliance audits of Victorian councils

Our examinations of Victorian local councils assess their compliance with the Local Government Act 1989 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 – Section 76C
  • Staff code of conduct – Section 95AA
  • Councillor and Mayoral allowances – Section 74
  • Insurance – Section 76A
  • Oath of office – Section 63 and 64
  • Election of Mayor – Section 71
  • Audit committee – Section 139


We’ve noticed the following areas for improvement:

  • Special committees - Sections 81, 86, 87 and 98
  • Senior officer contracts - Section 95A
  • Council budgets - Sections 127 and 130
  • Primary and ordinary returns – Section 81
  • Annual reports - Sections 131 and 134, and Regulation 17 of the Local Government (Finance and Reporting) Regulations 2004
  • Delegations - Section 98

More information

Reviewed 11 February 2020

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