Division 3 Auditors
422 Appointment of auditors
(1) A council must appoint a person as its
(2) A council’s auditor may be:
(a) an individual who is a registered company auditor,
(b) a partnership whose members or employees include a registered
company auditor, or
(c) a corporation whose employees include a registered company
(3) If the council’s auditor is a partnership, any member or
employee of the partnership may act as the council’s auditor as long as
he or she is a registered company auditor.
(4) If the council’s auditor is a corporation, any employee of
the corporation may act as the council’s auditor as long as he or she is
a registered company auditor.
(5) An auditor may not be appointed or reappointed unless tenders for
the appointment or reappointment have been called.
(6) In this section, registered
company auditor has the same meaning as it has in the Corporations Act 2001 of the Commonwealth
and includes the Auditor-General.
423 Disqualified persons
(1) A person may not be appointed as a council’s auditor:
(a) in the case of an individual, if he or she is a disqualified
(b) in the case of a partnership, if any member or employee of the
partnership is a disqualified person, or
(c) in the case of a corporation, if the corporation or any employee
of the corporation is a disqualified person.
(2) In this section, disqualified
person means a person:
(a) who is a councillor or an employee of the council,
(b) who is in debt to the council otherwise than for rates or charges
owed by the person as a ratepayer, or
(c) who has a contractual arrangement with the council that (if the
person were the council’s auditor) might reasonably be seen to give rise
to a conflict between the person’s duties as an auditor and the
person’s interests under the arrangement.
424 Auditor’s term of office
(1) A council’s auditor holds office for 6 years and, if
otherwise qualified, is eligible for re-appointment subject to this
(2) The office of auditor becomes vacant if the auditor:
(a) dies, or
(b) completes a term of office and is not re-appointed,
(c) ceases to be qualified to hold office as auditor or becomes a
disqualified person within the meaning of section 423, or
(d) resigns office by notice in writing addressed to the council,
(e) becomes a mentally incapacitated person, or
(f) becomes bankrupt, applies to take the benefit of any law for the
relief of bankrupt or insolvent debtors, compounds with his or her creditors
or makes an assignment of his or her remuneration for their benefit,
(g) is convicted in New South Wales of an offence that is punishable
by imprisonment for 12 months or more or is convicted elsewhere than in New
South Wales of an offence that, if committed in New South Wales, would be an
offence so punishable, or
(h) is removed by the council in accordance with this
(3) The council may remove an auditor from office only with the
consent of the Minister.
(4) If the office of auditor becomes vacant, the council must appoint
a qualified person to fill the vacancy.
425 Auditor-General to be auditor in certain
(1) The Auditor-General is authorised to audit a council’s
financial reports if the council fails to appoint an auditor or during any
vacancy in the office of auditor.
(2) The costs certified by the Auditor-General as having been incurred
by the Auditor-General in auditing a council’s financial reports in
accordance with the authorisation given by this section must be paid by the
426 Auditor may exercise general power of inspecting
(1) A council’s auditor:
(a) may inspect the council’s accounting records and other
records necessary in order to carry out the auditor’s functions at any
(b) must inspect those records at such periods as may be prescribed by
for the purpose of forming an opinion as to whether the requirements of
this Act and the regulations are being complied
(2) The auditor may report to the council or to the Minister on the
results of the inspection.
(3) Such a report may deal with such matters concerning the
council’s accounting and other records as, in the auditor’s
opinion, should be dealt with by the report.
(4) The auditor must give the council a copy of any report made under
this section to the Minister.
427 Powers of auditor
(1) When exercising the functions conferred on a council’s
auditor by this Part, a council’s auditor is entitled at all reasonable
times to full and free access to the council’s accounting records and
other records necessary in order to carry out the auditor’s functions
and may direct a councillor, the general manager or any other member of staff
of the council:
(a) to produce to the auditor any document relating to those records
that is in that person’s custody or under that person’s control,
(b) to grant to the auditor such authorities as may be necessary to
enable the auditor to gain access to any document relating to those records
that is in the custody or control of any bank, building society, credit union
or other person, or
(c) to answer any question,
being a document or question that, in the opinion of the auditor, is
relevant to the carrying out of the auditor’s
(2) An auditor may make copies of or take extracts from any document
to which the auditor gains access under this