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A survey of New South Wales Shires and Councils has looked at risk management, business continuity, and internal audit practices and identified a number of gaps in some critical areas. Over 50 percent of NSW councils participated in the survey , which was conducted by InConsult.

“The high number of responses has provided data that we believe to be valid and paints a good picture of the current state of risk management in NSW councils” says InConsult Director Tony Harb.

“Overall, we have seen improvements across the board in risk management practices, such as developing formal risk management policies and strategies, formal risk appetite statements and maintaining comprehensive risk registers. More Councils now class their risk management in the ‘proficient’ category of risk management maturity.

The most common benefit realised from risk management was an improvement in the ability of a council to achieve its objectives.

“Done well, formal risk assessments across key activities, key projects and at key points during the integrated planning and reporting process can help councils reduce uncertainty and strengthen internal controls” Mr Harb said.

“Whilst the improvements are positive, a number of areas need attention to achieve better practice. 50 percent of Councils have not formally documented and communicated their risk appetite, attitude and tolerances. Only 29 percent of councils always conduct a risk assessment for major projects or new initiatives and 35 percent have not assessed their strategic risks, which may leave councils vulnerable to major changes in their operating environment.

“Workplace Health and Safety is still the best managed risk area. This is not surprising given the recent changes to the Work Health and Safety Act as a result of the harmonisation of work health and safety laws across Australia in 2011.

“Conversely, business continuity management is an area that councils felt was wanting. The survey highlights that 20 percent of councils did not have a business continuity plan. Of those that did, just 45 percent of councils were more positive than neutral about their confidence in their plans, 28 percent had not reviewed their plans for more than two years and 59 percent of councils have either never ever tested their plans or not tested them in the last 2 years to validate their effectiveness and efficiency.”

Local government in NSW is a $9 billion industry that serves a population of 7.5 million people and covers a geographic area of around 800,000 square kilometres. Collectively, councils have around 1,475 elected representatives, employ 45,000 people and are custodians of over $131 billion in infrastructure assets.

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