Queensland councils at risk of going bust
MORE than a quarter of Queensland councils are at risk of becoming financially unsustainable amid concerns some are simply unable to protect public money from fraud.
In a damning report, the Queensland Audit Office has warned "good governance and financial stewardship" is not a priority for many of the state's 76 councils.
Their report revealed about half of councils were in deficit in the 2017-18 financial year, with long term financial sustainability a major risk for 22 local governments.
This included 12 indigenous councils, as well as five in rural and remote communities.
"Our analysis shows that the five-year average operating surplus ratio continues to deteriorate, with the sector still spending more than it earns," the report said.
"Breaking even or making a small surplus over the long term is important for financial sustainability."
The report also took aim at 15 councils that were yet to complete fraud risk assessments, suggesting they were unable to "safeguard the public moneys entrusted to them".
A further 16 councils had failed to introduce appropriate risk management processes.
The report also raised concerns about internal controls at the councils, pointing out there were 273 "significant control weaknesses" in 57 councils last financial year.
The Audit Office described some of them as systemic, with 62 per cent of the problems remaining unsolved from previous years, allowing for weak governance and ineffective oversight to be "common throughout the sector".
"The inaction of many councils in addressing significant (high-risk), long-outstanding, internal control weaknesses indicates that internal controls are not valued across the sector," the report said.
The Audit Office also took issue with Doomadgee Aboriginal Shire Council after it failed to complete its financial statements for the past two years.
But they did praise the work councils were doing to curb their expenses and increase their own revenue raising so they were not dependent on grants.
"While they continue to make operating losses, councils will be dependent on grant funding to maintain service delivery to their communities," the report said.