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The report includes results of the audits of the local governments’ annual financial reports, identifies significant issues and makes recommendations.

Local governments should be aware of the financial audit issues raised in this report and are urged to implement all relevant recommendations.

While improvements were noted in quality and timeliness of annual financial reporting and weaknesses in financial management controls from prior years, the OAG stated there is still a long way to go before best practice can be achieved.

Local governments are reminded to implement their financial audit recommendations in a timely manner and to use the tools and resources available to improve their financial management and reporting practices, processes and procedures.

This includes the OAG’s Western Australian Public Sector Financial Statements — Better Practice Guide.

Maintaining the integrity of the financial control environment is critical to the production of good quality financial information. The financial control environment should be fit for purpose and relied upon to produce fairly presented financial statements. Local governments should be:

1. periodically reviewing and updating all financial, asset, human resources, governance, information systems and other management policies and procedures and communicating these to staff
2. conducting ongoing reviews and improvement of internal control systems in response to regular risk assessments
3. regularly monitoring compliance with relevant legislation
4. promptly addressing control weaknesses brought to their attention by audit and other audit and review mechanisms
5. ensuring, they consider new and revised accounting standards for their impact on financial operations to prepare a compliant financial report at year end.

DLGSC works to develop a supportive environment and provide local governments with the tools to build a transparent, robust, and innovative sector.

Please refer to DLGSC’s LG Alert Financial Better Practice Review for more information or contact us LG.accounting@dlgsc.wa.gov.au