Some councils in Queensland are forgetting which roads and bridges they own and the state’s local government sector has discovered $1.3 billion in “found assets” in the last five years, according to a report by the Queensland Audit Office (QAO).
The QAO’s report is highly critical of the asset management practices of the Queensland local government sector, outlining systemic failures in asset management and problems with internal controls.
QAO senior director Sri Narasimhan said that while isolated instances of found assets were not a concern, the frequency of the errors was alarming.
The report notes that only 9.6% of Queensland councils met the minimum international standards of asset management.
It includes examples such as the 2021 discovery of $17 million in unaccounted assets by the Brisbane City Council.
Some of the issues were caused by council mergers, with assets lost in the transition process.
The Central Highlands Regional Council, for example, discovered after 13 years that they owned $32.5 million worth of footpaths, pipes, culverts, and floodways.
These assets were previously part of former Duaringa Shire Council which merged with Central Highlands Regional Council in 2008.
The QAO also looked at financial reporting by Queensland’s 77 local government entities for the 2023 financial year and found that 14 failed to complete their 2023 financial statements by their 31 October statutory reporting deadline, and seven had still not completed them by the time the report was compiled in the beginning of 2024.
“Of the 14 councils that did not complete their financial statements by 31 October 2023, ten of these have also missed the deadline in at least two of the last three years,” the report said.
“Poor accounting practices are the primary driver for councils not being able to complete their financial statements in a timely manner.
“Being able to attract and retain skilled staff also contributes. Having the right skills and capability in key positions and a strong framework for financial controls would help councils mitigate financial and operational risks.”
The QAO report was backed up by a separate study from the Grattan Institute which found that lost assets is a national problem, with 25% of councils not knowing how many roads or bridges they owned within a 10% margin of error.
Remote councils, in particular, were struggling with 50% not knowing the number of roads and bridges they owned, and 40% not accurately aware of the conditions of their roads.
