Local Government Performance Monitoring in New South Wales: Are 'At Risk' Councils Really at Risk?

Performance monitoring is a significant method of establishing accountability in Australian local government. In New South Wales (NSW) councils are assessed by the State Government to either be 'at risk' or 'not at risk', with this outcome dependent on the analysis of a range of key performance indicators derived from comparative performance tables. This paper seeks to evaluate the process of performance monitoring in NSW and the method of identifying 'at risk' councils using a standard econometric model for the fiscal years 2000-2001 and 200120/02 respectively. The results suggest that the selection of 'at risk' councils does not accurately identify municipalities that are in fact 'at risk'.