All councils and joint organisations are required under the Local Government Act 1993 to have an audit risk and improvement committee from 4 June 2022. Councils and joint organisations can share audit risk and improvement committees.
Amendments are currently being made to the Local Government (General Regulation 2021 to require all councils and joint organisations to have a risk management framework and an internal audit function and to prescribe membership requirements for audit risk and improvement committees. The Regulation amendments will be made in early 2023. Councils and joint organisations will be required to comply with these requirements from 1 July 2024 and, commencing with the 2024/25 annual report, to attest to their compliance with the requirements in their annual reports.
The Office of Local Government has issued comprehensive Guidelines for Risk Management and Internal Audit for Local Government in NSW to assist councils and joint organisations to implement these requirements. The Guidelines have been issued in draft form pending the supporting Regulation amendments being made so that councils can commence the steps necessary to implement them. The Guidelines will be reissued in a final form when the supporting regulations are made in early 2023, to align them with the regulations as drafted.
The model terms of reference for audit risk and improvement committees, an example risk management policy and the model internal audit charter have been provided below in Word format for use by councils and joint organisations to assist them in implementing the Guidelines.