Councils warned by the Auditor-General

FIVE of the state's councils are operating at high financial risk, according to the Auditor-General's most recent local government report.

Although the report found that collectively councils reported a low financial sustainability risk, Break O'Day, Kingborough, Central Highlands, Flinders Island, and Latrobe recorded a high sustainability risk from a financial operating perspective.

Devonport, Glamorgan-Spring Bay, Kentish, King Island and West Coast councils were at a high sustainability risk from a governance perspective.

"Councils in general had a high financial sustainability risk from a governance perspective, moderate financial sustainability risk from financial operating and asset management perspectives, but low risk from a net financial liabilities perspective," the report said.

"While there has been some improvement since 2011-12, a number of councils need to address continued operating deficits, introduction of audit committees, and further development of long-term asset and financial management plans.

"Councils are generally under- investing in existing assets with eight out of 29 councils investing in existing assets, on average over a seven-year period, in excess of their annual depreciation charge."

West Coast, King Island, Derwent Valley and Glamorgan- Spring Bay Councils do not have an audit committee or long-term asset management or financial management plans.

Sorell, Kentish and Break O'Day councils do not have long- term asset management plans.

Managed assets for all councils totalled $8.6 billion - a growth in value of more than $500 million in three years.

Councils invested $222 million in these assets over 2012-13 whereas $255 million had been invested in 2009-10.

Of the councils that achieved a net surplus, most would have gone into deficit had it not been for government grants.

Launceston received the most in government grants, $6.5million, or $98 per head of population.

Meander Valley received $4.6million ($237 per head), Northern Midlands received $4million ($317 per head), West Tamar received $2.4 million ($106 per head), Break O'Day received $2.6 million ($402) per head, Dorset received $3.7 million ($531 per head), and George Town received $1.6 million ($248 per head).

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