October 20 2015

Auditor-General's report published, Governance and accountability of council-controlled organisations

This afternoon the Office of the Auditor-General’s report Governance and accountability of council-controlled organisations was presented to the House of Representatives.

Council-controlled organisations (CCOs) have been in existence since 2002. The Auditor-General has a long-standing interest in these organisations, being the auditor of 124 council-controlled trading organisations (CCTOs) and 74 non-profit CCOs.

This report updates our earlier publications on local authority subsidiaries and re-examines the principles for good governance of subsidiaries that we proposed in 2001. It also identifies and discusses the issues relevant to CCOs that have come to our attention since 2002.

This report confirms that the principles of good governance that we proposed in 2001 are still relevant. We have added an additional principle – effective working relationships based on mutual respect and trust are essential.

We also found that:
· clarity of purpose is important; and
· CCOs must understand the political environment they operate in and must meet the expectations of both shareholder and community.

Although we focus on CCOs, our report applies to other local authority subsidiaries, such as electricity lines businesses, port companies, and energy companies. We hope that our discussion of some of the matters that we have encountered will help local authorities and CCOs when they deal with similar issues.

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