Internal audit is a mechanism that a council will use to receive independent assurance that it is performing its functions legally, effectively and efficiently and to advise on how it can improve its performance.

A council’s internal audit function reports to an Audit and Risk and Improvement Committee that provides independent advice to the council’s governing body and general manager on the performance and governance of the council.

The NSW Government issued Internal Audit Guidelines in 2010 to encourage all councils in NSW to appoint an Audit and Risk Committee and establish an internal audit function. The Guidelines recommend that each council’s internal audit activities comply with international internal auditing standards issued by the Institute of Internal Auditors.