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Can do better: Auditor shines light on books of local councils

Statewide

Most local councils in Queensland are at a moderate or high risk of not being able to sustain their finances, according to the state’s auditor-general, Brendan Worrall.

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Worrall’s office found that while the performance of local councils had improved, there were still 45 local governments – or 60 per cent of the sector – that were at moderate or high risk of failing to maintain their financial sustainability.

The sector, made up of 77 local councils with about $136.4 billion in assets, was still tracking below its pre-pandemic level of financial sustainability.

In its yearly assessment of the state of the local government sectors finances, the auditor-general’s office found most councils were failing to meet deadlines for their financial statements.

The sector overall has slipped in meeting legislative deadlines in recent years, it found.

“In 2019–20, this number had dropped to 47 councils, in the face of the Covid-19 pandemic, local government elections, and the need to implement new accounting standards,” its latest financial audit report into local government stated.

“In 2020–21, despite not facing these sorts of challenges, only 36 councils had their financial statements certified 2 weeks prior to the statutory deadline.”

The report, tabled in State Parliament on Wednesday,  acknowledged there were several challenges to ensuring councils in Queensland remained financially sustainable, including a smaller and more dispersed population compared with other states.

“Having a low revenue base and a large infrastructure asset base to maintain adds significant financial pressure to councils in Queensland,” the report said.

“These factors make it difficult for councils, especially in regional Queensland, to be financially sustainable.”

While the four community service staples of roads, water, waste collection and wastewater were common across all councils, many of them – particularly in rural and regional areas – also needed to provide services like airports and child and aged care centres that were covered by the private sector in larger urban areas.

The report said that while councils overall believed the process they used to prepare their financial statements were mature, many still needed improvement.

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