The focus of the audit was to assess whether 10 sampled local governments were making payments to suppliers on a timely basis in accordance with better practice.
We assessed the policies and practices over an 11-month period from 1 January to 30 November 2017, using the following lines of inquiry:
- Have local governments developed procedures and controls for ensuring that payments are made on a timely basis?
- Are suppliers being paid on a timely basis?
We audited 600 transactions across 10 local governments with a total value of $68.9 million. Where payments were not made in accordance with policies and procedures or suppliers’ terms, we considered whether there were valid reasons for delays.
We conducted this audit under section 18 of the Auditor General Act 2006 and in accordance with Australian Auditing and Assurance Standards. The approximate cost of undertaking this audit was $170,000.
Local governments included in our audit
Focus area audits assess local governments against common business practices to identify good practices and control weaknesses and exposures so that local governments, including those not audited, can evaluate their own performance.
When deciding which local governments to include in this audit we aimed for a mix of different size local governments from diverse locations with varying budgets, resourcing and purchasing requirements. This allowed us to identify potential issues, better practice examples and improvement opportunities that are likely to be applicable across the broader local government sector. We included the following local governments in this audit:
