By: Penny Corkill
Partner Risk & Assurance
Fraud and corruption remain significant risks for local government organisations. As councils continue to manage increasing regulatory expectations, complex procurement activities and growing cyber threats, effective fraud prevention and detection have become essential components of good governance.
Recent public sector data points to a clear trend: fraud and corruption risks are increasing, while scrutiny from regulators, oversight bodies and the community continues to grow. For councils, the challenge is no longer whether fraud controls exist, but whether those controls are actively reducing risk and supporting early detection.
These challenges were recently explored at Centium’s fraud prevention and detection webinar, which brought together local government professionals from 10 Councils to discuss patterns / trends, discuss approaches to managing fraud and corruption risk, and strengthening organisational resilience. The discussion was based on our findings from recent local government engagements, including audits using our proprietary Fraud & Corruption Evaluation Tool (FACET), risk assessments, and training. These engagements reinforced the importance of moving beyond compliance and considering how effectively fraud controls operate in practice.
Audits conducted in 2025-2026 found that most councils have invested considerable effort in establishing fraud and corruption control frameworks. Policies, codes of conduct, conflict of interest declarations, Public Interest Disclosure procedures and governance arrangements are now common features of local government control environments.
These foundations are important, but documentation alone does not prevent fraud and corruption.
The most effective organisations ensure fraud and corruption controls are embedded into day-to-day operations. This includes regular staff awareness activities, clear accountability, ongoing monitoring, and a culture where concerns can be raised safely and acted upon appropriately.
Prevention is most effective when fraud and corruption controls become part of organisational culture rather than operate as a compliance exercise.
The same audits also found that while many organisations have established prevention controls, detection capabilities are frequently less mature.
Increasingly, leading organisations are complementing traditional reporting mechanisms with targeted data analytics; exception reporting; trend analysis; control testing; and proactive monitoring of high-risk activities such as procurement, payroll and contactor management.
These approaches enable councils to identify unusual activity earlier and strengthen their ability to respond before issues become significant investigations.
For many councils, meaningful improvements can be achieved without introducing overly complex frameworks.
Some of the most common opportunities include:
These practical initiatives help bridge the gap between documented compliance and demonstrated control effectiveness.
One challenge faced by many organisations is understanding whether their control environment is keeping pace with the broader sector.
Benchmarking can provide valuable context by highlighting how organisations compare against their peers, identifying common strengths and revealing areas where additional focus may be beneficial.
Importantly, benchmarking is not about ranking organisations. It is about providing perspective, promoting shared learning and supporting continuous improvement.
Drawing on recent fraud and corruption reviews conducted across NSW local government, Centium has observed recurring themes, common challenges and examples of stronger practice emerging across the sector. These insights help councils better understand evolving risks and identify practical opportunities to enhance prevention, detection and response capabilities.
Our recent webinar event provided a valuable opportunity to continue this conversation across the sector and share practical insights into strengthening fraud prevention, detection and response. We thank those who joined us and contributed to the discussion.
Contact Centium to discuss practical approaches to fraud prevention, detection and response, our Fraud & Corruption Evaluation Tool (FACET) and how benchmarking insights can support continuous improvement across your organisation.
Penny is a highly experienced and qualified internal and risk management professional, with strong communication and relationship-building skills.
She leads a team of auditors, project managers and senior consultants in delivering service excellence across audit, risk, governance, organisational analysis and strategy, Workforce Planning and WHS.
Her experience spans Local, State and Federal Government operations.
