Posted on August 7, 2014 by Frances Tse

First Performance Improvement Order Issued to Strathfield Council

The Division of Local Government has just published on it’s website the first ‘performance improvement order’ (‘Order‘) issued by the Minister for Local Government under s438A of the Local Government Act 1993 (‘LG Act‘).

The Order was issued to Strathfield Council on 24 July 2014 and appears to be the first of such orders since the new ‘early intervention’ provisions were inserted into the LG Act on 25 June 2013.

A performance improvement order is an order that can be issued by the Minister to a council if he reasonably considers that action must be taken to improve the performance of the council.

Such an order must specify the reasons why the Minister has decided to issue the order and the actions that the Minister requires to be taken to improve the performance of the council. The order must also be published on the Division of Local Government’s website.

In this case, the Order issued to Strathfield Council was issued in relation to ‘serious deficiencies with Council’s internal control systems in the undertaking of procurement and purchasing’.

The Order requires the Council to implement various actions to ‘improve its internal controls that have a direct impact on the procurement and purchasing of services and goods’. The Council is given 12 months to comply with the Order.

The Order specifies that the governing body of the Council is responsible for ensuring the Council’s compliance with the Order and that the Council is to provide the Office of Local Government with a monthly progress report detailing actions taken to improve performance.

Further, a temporary adviser has been appointed to provide advice and assistance to the Council for the purpose of ensuring and monitoring compliance with the Order.

The Minister had previously issued a ‘suspension order’ to Central Darling Shire Council in December 2013 under s438I of the LG Act.  That appears to have been the very first of any order made under the new early intervention provisions of the LG Act.

It is clear that the  Minister is making use of the new powers given under the LG Act.