Governance examinations

The Inspectorate conducts both council-specific governance examinations and broad reviews of systemic or thematic issues identified during council visits, investigations or feedback from the sector or the general community. Examinations and audits of council governance arrangements are a key proactive function of the Inspectorate in assessing the effectiveness of councils’ risk management and governance processes.

The objective of this function is to ensure council operating procedures are compliant with relevant legislation and avoid breaches of the Act. The governance arrangements and operations of three councils were examined during the financial year resulting in specific reports to each organisation setting out the scope and findings of the work. A total of 42 recommendations were made in the course of this work, with one report and accompanying recommendations yet to be finalised.

Case study: governance examinations

  • Three examinations of regional councils – West Wimmera, Golden Plains and Yarriambiack – were conducted during the year.

    Governance examinations are conducted regularly at councils across the state and are designed to assess governance requirements and ensure operating procedures are compliant with relevant legislation.

    While issues at each council varied due to individual circumstances, the Inspectorate identified key themes across the three councils, including required improvements to record keeping and document management; policies either not in place, inadequate or not being followed; and the management of staff contract arrangements.

    Detailed reports with recommendations were provided to the councils and the Inspectorate will conduct periodic checks to ensure improvement actions are undertaken.

    An example of this work can be found on the West Wimmera Shire Council website, where the Inspectorate examination report and detailed action plan is available.

Thematic reviews

Thematic or systemic issue reviews are a function of the Inspectorate to assess a theme or issues that affect the entire sector and draw on cases, information and/or intelligence from across the state. The primary objective of this work is to guide or change individual, organisational or sector behaviour to deliver better outcomes for the community. Often this results in the identification of policy or legislative reform.

Case study:CEO employment cycle report

  • Information from the sector and findings from several examinations and investigations drove a major thematic project, completed in 2018/19, relating to the employment relationship between a CEO and elected councillors. Previous investigations had demonstrated sub-optimal outcomes for either the council or the individual but with a consistent theme of a financial cost to the community.

    In February, the Inspectorate published Protecting integrity: leading the way – Managing the employment cycle of a council CEO, which included views from across the sector and recommendations for improvements to legislation, policies or processes that would enhance future management of the CEO employment cycle. In case studies reviewed for the report, there were either adverse outcomes for the CEO, adverse outcomes for the councillors, or significant challenges for the council as an organisation.

    The report was widely distributed and read by the local government sector, both in Victoria and interstate, and has had an immediate impact on CEO employment processes. Several councils used the report as guide during their CEO recruitment process and the recommendations relating to contract terms, advisory committees and performance management were regularly discussed at various sector forums and workshops attended by the Inspectorate. Policy recommendations are under consideration by the Victorian Government.

Reviewed 01 February 2020

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