A new report highlights inadequate oversight of Local Government in New South Wales.

In a scathing report released by the New South Wales Audit Office, the Office of Local Government (OLG) has been slammed for its lax approach to regulating councils. 

The report revealed a lack of effective monitoring and supervision, leaving councils to their own devices when it comes to compliance and performance issues. 

This assessment marks a stark contrast to the previous government's intervention in the local government sector, which saw a controversial amalgamation of councils in 2016.

Previously functioning as a statutory agency, the OLG has since been downgraded to a mere business unit within the Department of Planning and Environment. 

This downgrade has resulted in concerns about the organisation's effectiveness and ability to provide adequate oversight. 

“The OLG has not clearly defined and communicated its regulatory role to ensure that its priorities are well understood,” the Auditor's report states.

Transparency and accountability are significant concerns raised in the report, as the OLG fails to consistently review and improve its regulatory activities. 

The lack of performance measurement and reporting further compounds the issue, hindering the organisation's ability to demonstrate effective regulation of the local government sector.

These findings are particularly troubling considering the recurring issues faced by NSW councils. 

Notably, councils have faced inquiries and investigations by the Independent Commission Against Corruption (ICAC), as well as public scrutiny. 

Financial instability is another pressing challenge, with some councils struggling to remain viable due to limited resources and external factors like floods, fires, and climate change. 

The capped rate rises imposed by the Independent Pricing and Regulatory Tribunal also add to the financial strain faced by councils.

Councillor misconduct remains an ongoing concern, often making headlines with scandals such as inappropriate expenses. 

A review conducted in 2022 made several recommendations to improve the accountability framework for dealing with councillor misconduct. 

However, the report clarifies that assessing this framework fell outside the scope of the audit, emphasising that it is the responsibility of the Department of Planning and Environment to consider relevant findings and recommendations from the review.