report

Fraud Prevention in Local Government

Appendix 1: Summary of legislated responsibilities

Entities are required to meet a number of legislated responsibilities that help control fraud risks. A summary of key elements are listed below. This list is not exhaustive.

Legislation Fraud related requirements
Local Government Act 1995
  • disqualifies individuals from becoming elected members due to insolvency, criminal convictions, or misapplication of funds
  • councils must believe that a person is suitably qualified for the position of CEO, and CEOs must believe that staff are suitably qualified for their positions
  • all employees must be selected in accordance with the principles of merit and equity
  • mandates a general need for good government and the creation of a Code of Conduct
  • council members, the CEO and designated staff members must disclose financial interests’
  • employees must disclose any interests when they are advising or reporting to council
  • an audit committee must be formed
  • sets out penalties for improper use of information
Local Government (Rules of Conduct) Regulations 2007
  • requires council members to act ethically, be open and accountable
  • forbids council members from influencing employees or using their office for personal advantage
  • council members must declare any interests in matters being discussed at council or audit committee meetings
  • sets out restrictions on gifts and travel contributions to councillors and requirements for records to be kept
Local Government (Financial Management) Regulations 1996
  • CEOs are to establish efficient systems and procedures for collection and custody of money owing to the entity
Local Government (Audit) Regulations 1996
  • describes the function of the audit committee
  • Regulation 17 requires a CEO to review appropriateness and effectiveness of systems and procedures relating to risk management, internal control and legislative compliance. This is then reported to the audit committee
Local Government (Administration) Regulations 1996
  • sets out information on disclosure of financial interests
  • provides detailed information on what value of gifts must be reported and which are prohibited
  • requires a register of gifts to be publicly accessible
  • requires Codes of Conduct to contain information on gifts, travel contributions and disclosing interests
Local Government (Functions and General) Regulations 1996
  • entities must develop a policy for purchases less than, or equal to, $150,000
  • purchases worth more than $150,000 must be conducted through tender
  • sets out requirements for pre-qualified suppliers
Public Interest Disclosure Act 2003
  • entities must
    • publish internal procedures for reporting a PID
    • designate at least 1 PID officer to receive reports. They must comply with the Public Sector Commissioner’s minimum standards of conduct and integrity

Source: OAG

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