East Fremantle Council Named in Auditor General's 'Naughty List' for Financial Reporting Failures
The Town of East Fremantle has found itself on what is being colloquially termed a 'naughty list' after failing to submit its annual financial statements by the mandated deadline. This designation comes from the Auditor General's latest report, which highlights local governments across Western Australia that have not complied with statutory financial reporting requirements.
Auditor General's Report Exposes Delinquent Councils
The Status Of Local Government Audits 2025 report was formally tabled in the Western Australian Parliament on January 28. This document, a first of its kind in publicly naming non-compliant entities, identified nine local government authorities that missed the critical December 31 deadline for submitting their audited annual financial reports.
The report categorised the delinquent councils into two distinct groups:
- Repeat Offenders: Local governments with a history of audit delays spanning multiple years. This group includes the Shire of Halls Creek, the Shire of Yalgoo, and notably, the City of Nedlands, which has not met its reporting deadline since 2021.
- One-Off Events: Councils delayed by specific, unforeseen circumstances such as the sudden loss of key finance personnel, executive officer departures at critical junctures, or last-minute technical accounting complications.
Auditor General Caroline Spencer provided clear commentary on the findings. She noted that repeat offenders are frequently grappling with ongoing systemic issues, including deficiencies in governance culture and significant capability gaps within their finance teams.
East Fremantle's Specific Challenge: The Community Park Audit
The Town of East Fremantle's placement on the list falls into the second category, attributed to a specific operational hurdle. The council operates the East Fremantle Community Park (EFCP) as a standalone entity. A critical requirement is that the Park's own financial audit must be fully completed and signed off before the Town's overarching financial statements can be finalised.
"An auditor was not appointed to EFCP until after June 30, 2025, and it is not yet known when its audit will be complete," the report details. This delay has created a domino effect, preventing the finalisation of the Town's audit and subsequently postponing its Annual General Meeting of Electors.
The financial repercussions are also mounting. The Office of the Auditor General initially quoted an audit fee of $69,875 in March. However, by a council meeting on December 9, a staff report warned it would be "no surprise" if the final cost doubled, placing an additional burden on ratepayers.
Council Response and Defence
In an official statement, the Town of East Fremantle asserted that, to its knowledge, this marks the first instance it has ever missed an annual reporting deadline. "The OAG has advised the town that the audit sign-off has been deferred until at least March," the statement read, adding that dates for receiving the annual report and holding the electors' meeting would be announced in due course.
Former Mayor Jim O'Neill, who retired at the October local government elections, defended the council's management of the EFCP project at his final meeting in September. He acknowledged the project's complexity for a small local government but emphasised that issues were addressed with "utmost professionalism, community input and transparency."
A Proactive Shift in Financial Oversight
Auditor General Caroline Spencer framed the new reporting approach as a necessary step towards greater accountability. She argued that earlier disclosure, such as naming the Shire of Coolgardie last year, could have alerted stakeholders to serious operational concerns sooner.
"This proactive approach to reporting delays raises awareness of relevant issues for Parliament, the community, the new Local Government Inspector — and indeed, councillors themselves who may not always have visibility of these matters," Ms Spencer stated.
She expressed hope that the so-called 'OAG naughty list' would incentivise entities to prioritise robust financial governance and cooperate fully with auditors to ensure timely completions. "Delayed audits represent poor accountability and transparency, and can be a red flag for more widespread serious governance concerns," she cautioned, highlighting that these delays ultimately translate into avoidable extra work and costs borne by the community.
