A Local Government Electoral Review Panel has found a few holes to patch in Victoria's electoral system.

A review was launched after more than 450 complaints were made to the Local Government Inspectorate after the 2012 elections.

In its new list of 55 recommendations, the Panel has answered many of the residents' concerns.

A key suggestion was for council candidates to be banned from accepting donations of more than $1,000.

Under current rules, candidates must declare donations over $500 , but there is no cap on the total amount of money they can receive.

The panel found the lack of a cap to be an anomaly. It also raised the issue created by not requiring candidates to report donations under $500 at all.

It means that one could hold a fundraising event, have everyone donate $499, and appear as though no money has been taken.

The panel said potential councillors should be made to disclose their political backing before an election in order to stop the growing number of 'dummy candidates', and provide more information about those who stand.

The review recommended banning people who are disqualified from running a company from also taking part in council elections.

Another suggestion was for all council elections to be held by postal vote only, which reviewers said would increase overall turnout and reduce the disproportionate weight against elderly voters that attendance voting creates.

Authorities are entering into an eight-week period of public consultation on the report, but it is already too late for any changes to be implemented before the next Victorian election.

Action on the reforms will now be up to the new State Government ahead of the 2016 local government elections.