The recommendation came in the Auditor-General's 2013-14 report on local governments, released on Thursday.

In it he named Sorell, George Town and Glamorgan Spring Bay councils as breaching the Local Government Act 1993 in this regard.

Yesterday the mayors of those three councils - who were not in their positions at the time of the incidents - said they would be more thorough when going through such processes in the future.

Mr Blake said the recommendation stemmed from his investigation into the Local Government Digital Project where councils received federal funding for the roll-out of the NBN.

He said in the material distributed to councils, it included a list of only interstate contractors to do the work.

However, Mr Blake said councils should have carried out a regular tender process for the job and in particular, allow locally-based contractors to apply.

He said that although this was very much not an ongoing issue, councils should make it good practice to go through a tender process, particularly for such expensive contracts.

Sorell Mayor Kerry Vincent described the experience as a learning curve and something they would try to be more aware of in the future.

He said Sorell along with Glamorgan Spring Bay had already used the services of an independent auditor and also took part in benchmark measures with other councils.

Glamorgan Spring Bay Mayor Michael Kent said his council would be fully open and transparent into the future for its ratepayers.

George Town Mayor Bridget Archer said it was an oversight which would not occur again.