Feature Story
Effective governance and strong internal controls are fundamental to the success of any organisation. In Local Government, leaders need confidence that decisions are being made appropriately, risks are being managed effectively, and resources are being used responsibly.
Good governance provides the framework through which organisations are directed and controlled. It helps ensure decisions are made in the best interests of stakeholders, responsibilities are clearly defined and strategic objectives are achieved.
Internal Audit
Internal audit is an independent and objective assurance and advisory function that provides confidence to management, Audit Committees and Councils that governance, risk management and internal controls are operating effectively.
By providing independent insight and practical recommendations, internal audit supports organisational accountability, transparency and continuous improvement. It is not, however, the only assurance activity that councils rely upon to support good governance.
The Broader Assurance Landscape
Councils undertake a wide range of assurance activities that support good governance and operational effectiveness, many of which are not included in the internal audit plan. These activities may include:
- Statutory compliance assessments, such as water testing laboratories, food preparation facilities, National Heavy Vehicle compliance and external audits.
- Third-party partner assurance and monitoring, including software supplier reviews, plant maintenance monitoring and specialist contractor assessments.
- Outsourced assurance activities, such as operational reviews, policy reviews, training needs analyses and independent assessments.
Often, these activities are managed within individual business areas and are not widely visible across the organisation. As a result, they may not be recognised as part of the council’s overall assurance program. More importantly, the recommendations flowing from these reviews may not always receive the visibility and follow-up they deserve.
Supporting Better Governance
Internal audit and other assurance activities contribute to good governance by providing independent assurance over:
- Decision-making processes
- Accountability and reporting arrangements
- Policy and legislative compliance
- Risk management practices
- Ethical conduct and organisational culture
- Oversight and monitoring mechanisms
Through their work, assurance providers help Councils, Audit Committees and management understand whether governance structures are operating effectively and where improvements may be required.
Importantly, assurance activities provide an independent perspective that assists leaders in making informed decisions, strengthening accountability and maintaining public and stakeholder confidence.
Assurance Visibility
Many councils undertake a substantial volume of assurance activity each year. While these reviews provide valuable insights, they are often managed within individual business areas and may not be visible across the organisation.
As a result, the total investment in assurance, the themes emerging from reviews and the status of agreed actions can be difficult to monitor. Opportunities to identify common issues, avoid duplication and learn from reviews conducted elsewhere in the organisation may also be missed.
A more coordinated view of assurance activities enables management and Audit Committees to better understand organisational risks, monitor the implementation of recommendations and maximise the value derived from assurance investments.
By bringing assurance activities together into a single organisational view, Councils can improve visibility, strengthen accountability and ensure recommendations lead to meaningful and lasting improvements.
Ensuring Assurance Adds Value
Internal audit and other assurance activities are often viewed as a “health check” for an organisation. Rather than looking for fault, their purpose is to provide assurance that systems and controls are functioning as intended and to identify opportunities for improvement.
The insights generated through assurance activities help management:
- Improve business processes
- Enhance accountability
- Address emerging risks
- Strengthen governance frameworks
- Build organisational resilience
In an increasingly complex and challenging operating environment, independent assurance has never been more valuable.
However, for assurance activities to deliver their full value, they must be visible, recognised, reviewed and supported by effective monitoring of agreed actions. Assurance provides value not only through the identification of issues, but through the successful implementation of improvements.
Everyone Has a Role
While audit and review activities provide assurance, responsibility for governance and controls rests with management and staff across the organisation.
Effective governance is achieved when everyone understands their responsibilities, follows established procedures and actively contributes to a strong control environment.
Assurance activities are much more than compliance exercises. They are strategic tools that help organisations strengthen governance, improve accountability and maintain effective internal controls.
By providing independent assurance and practical recommendations, these activities help organisations build confidence that they are operating effectively, managing risks appropriately and delivering value to their communities and stakeholders.
Key Takeaway
Strong governance sets the direction. Strong controls keep the organisation on course. Effective assurance that has centralised visibility provides confidence that both are working as intended and that opportunities for improvement are being identified and acted upon.