For each of the 7 councils, the Inspectorate audited a sample of expense reimbursement claims for compliance with the council’s expenses policy and discussed relevant matters with council representatives.
As part of the audit exercise, the following matters were considered:
1. Councillor expenses reimbursement claim forms.
2. Councillor expenses policy.
3. Councillor expenses procedure.
4. Oversight of councillor expenses, including audits.
During the audit exercise, various risks were identified, which ranged in severity from issues that could lead to fraudulent activity or the wrong amount being reimbursed (both very high risk) to claims being submitted outside of the required time period (lower risk) (see Figure 12).
While these specific issues have been pursued with the relevant council and rectified where possible, they are shown here as examples of common issues seen across councillor expense reimbursement audits.
|Hepburn||Small shire||Central Highlands|
|Campaspe||Large shire||Loddon Mallee North|
|Hobsons Bay||Metro||Greater Melbourne|
What are the key issues or challenges?
Councillor expenses policies and procedures vary greatly across councils.
There is no uniform level of evidence required to support claims for reimbursement.
Council oversight of expenses, including checks on legitimacy and sign-off on claims, is also varied and is a potential financial or integrity risk.
|Issues found in council audits||Risk rating32|
|Claims submitted outside of the required time
|Inconsistent application of the practice of
rounding of kilometres travelled to the nearest
whole number for private vehicle use
|No evidence required in support of private
vehicle use kilometres travelled
|Descriptions of the expenses incurred lack detail||Moderate|
|Administrative error in failing to accurately
document the basis of calculating a
|Claims for car mileage expenses for council
meeting attendance do not include the locations
of the meetings attended
|Policy refers to an outdated claim form||Moderate|
|Claims not applied for in writing but petty cash
form used instead
|Claims not clear on how the expenses were
incurred while performing duties as a councillor
|Claim forms include space for signature of
authorising officer, but do not include space for
their name or position
|CEO’s corporate credit card used for purchases
by the Mayor
|Incorrect rate for kilometre reimbursement for
private vehicle use applied
Best practices observed in the course of the audit, which may assist in reducing the risks of inappropriate or fraudulent expenses claims, include:
- expense claims are authorised by more than one senior council employee with the appropriate financial delegation, thereby providing additional oversight
- instead of using phrases like ‘reasonable costs’ or ‘appropriate costs’ will be reimbursed, monetary ranges or caps for food/beverage and accommodation costs are specified
- claims for private vehicle use are required to be supported by logbook entries or records of odometer readings at the start and end of the journey, rather than just a single figure for kilometres travelled
- councillors are required to submit a written report following attendance at training and professional development courses in order to justify their attendance and to share their learnings with council
- councillors are not permitted to cover the costs of meals or refreshments for anyone other than themselves, where these items relate to the duties of councillor.
- LGV should consider a more detailed model councillor expenses policy and claim form, which councils can adopt to suit their individual circumstances.
- Councils must publish their current Council Expenses Policy on their website.
- Councils must train councillors on the Council Expenses Policy during their induction training and provide refresher training on the policy mid-term.
- Councillor expenses must be authorised by council employees with the appropriate financial delegation, not the mayor.
32. Risk ratings determined by Inspectorate risk criteria