Victoria’s 79 councils carry a range of risks across their significant assets and operations—at 30 June 2017, they controlled $91.2 billion of community assets, employed over 30 000 people and received $10.5 billion in revenue against $8.1 billion of expenditure. Councils need to identify, mitigate and, where appropriate, transfer any risks associated with their assets and operations. Councils purchase insurance as a form of risk transfer against a range of unforeseen losses.
This audit examined whether councils have been prudently managing insurable risks and procuring insurance that represents value for money. This audit assessed councils’ risk assessment policies and practices, including risk identification, risk mitigation and evaluation of insurable risks. The audit also assessed whether councils’ insurance policies adequately cover their insurable risks.
We audited seven councils, to provide comparability (four metropolitan councils and three regional or rural councils), contrast (metropolitan versus regional) and varying insurance histories.
The audited councils were:
- City of Ballarat
- Benalla Rural City Council
- Glen Eira City Council
- Kingston City Council
- Pyrenees Shire Council
- City of Stonnington
- Yarra City Council
The audit also included the Municipal Association of Victoria (MAV) as the provider of Liability Mutual Insurance, and the Department of Environment, Land, Water and Planning (DELWP) as the lead agency supporting local government.
We made 17 recommendations—two for DELWP, five for all Victorian councils, one for Yarra City Council, one for City of Stonnington and eight for MAV.