Fraud control over local government grants

Financial Year: 2020-2021



To determine whether fraud and corruption controls over local government grants are well-designed and operating as intended.


Victorian councils receive grants from the state and federal governments and also distribute grants to community groups, businesses and individuals. In 2019–20, Victorian councils will receive a total of $616.3 million in financial assistance grants, including $455.6 million in general purpose grants and $160.7 million in local roads grants. The councils in this audit were awarded grants in the 2018–19 financial year varying from $39 000 to $913 415.

Past audits on fraud and corruption controls indicate significant weaknesses in agencies’ efforts to guard against fraud and corruption.

In 2017, the Local Government Inspectorate released its report Protecting integrity: Central Goldfields Shire Council investigation. It found that the council had mismanaged significant grant funding. Following the Inspectorate’s investigation, the Local Government Act 2020 will require councils’ audit and risk committees to monitor and provide advice on risk management and fraud prevention systems and controls.

This audit is the second in a series of our audits on fraud and corruption in local government. It presents an opportunity to identify potential fraud and corruption in grants to and from local councils, and to consider how well councils are managing their exposure to fraud risk.

Proposed agencies

Hume City Council, Knox City Council, Loddon Shire Council, Southern Grampians Shire Council, West Wimmera Shire Council.

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