Figure G1 lists and describes the financial indicators that we use to assess councils' financial sustainability risks. These indicators should be considered collectively and are more useful when assessed over time as part of a trend analysis.

Refer to the data dashboard on our website (www.audit.vic.gov.au/report/results-2020-21-audits-local-government) for individual council financial sustainability data and analysis.

Figure F1 defines the risk ratings that we apply to internal control issues. It also details what the ratings represent and the expected timeline for the issue to be resolved.

FIGURE F1: Risk rating definitions

Click the link below to download a PDF copy of our audit opinions issued for the local government sector for 2020–21.

Our methods

We conduct our financial audits of the local government sector in accordance with the Audit Act 1994 and the Australian Auditing Standards. As part of an audit, we:

Local Government Victoria classifies councils into five local government comparator groups. These cohorts, which Figure B1 summarises, are determined based on size, demographics and funding.

FIGURE B1: Council cohorts

We have consulted with the Department of Jobs, Precincts and Regions and the entities named in this report, and we considered their views when reaching our audit conclusions. As required by the Audit Act 1994, we gave a draft copy of this report, or relevant extracts, to those agencies and asked for their submissions and comments. 

Responsibility for the accuracy, fairness and balance of those comments rests solely with the agency head.

Internal controls snapshot

Councils are required to develop effective internal control systems to maintain proper accounts and records.