Corporate Services Manager Keith White said the report was the most complementary that the council had received in many years.

Mr White also presented a report from the internal audit committee to council and said this too had a positive outcome.

``This is a very active committee of council. It is a show of good governance that this council is right behind the activities of the audit committee,'' he said.

``The committee has met on a number of occasions this year and what the committee has been asking us for were the internal auditors to provide a number of audit reports, not just on the financial operations of the organisation, but on a number of the operational elements.

``In the report is a list of activities or reviews that have been undertaken by our internal auditors. The committee was presented with reports on community relations, contract management and tendering. That's just an example of the types of reports the committee is calling for.''

Mr White said another important issue was that within the number of internal and external audits that had happened over the years, there had been 126 issues raised by the various audits.

He said it was very pleasing that of these, only 16 of the issues still remained open.

Mr White advised council that the remaining items would be addressed over the coming months.

He said the committee was currently dealing with the following issues:

Valuation of lands under roads.

Review of the audit charter.

Review of various accounting policies.

Mr White said another key element was that the Auditor General had appointed a new external auditor and the external auditor undertook an interim audit in late May.

``It is pleasing to report to council that from that two day review, the auditors actually left with a very high impression of our procedures and our processes.

``It is the first time in many years that council will not receive an interim management letter from the external auditors.

``I think that shows a lot about all the work that is being undertaken by the finance department in improving the processes and procedures and the management of the finances of this organisation.''

Cr Greg Earle commended Mr White for presenting the report and welcomed the outcome.

``This group is an advisory committee to the council, but it also has three external members on it, which is extremely important, so it is not a total councillor driven committee,'' he said.

``The three external members keep us very much on the straight and narrow and look at the organisation from the outside.

``It is a very interesting committee and I can assure you the detailed report we received back from the external auditors is extremely good.

``This really is the policeman overlooking how this shire operates.

``I can assure you that because of this, our administration is kept in order and we never seem to have any major issues about the administration of our shire.''

Mayor Cr Bryan Small said he was pleased with the fact that council would not be receiving an interim management letter from the Auditor General this year.

``When letters are sent by the Auditor General, one is sent to the mayor's private address as well as to the organisation, so there can be no understanding that the mayor didn't know or the council didn't know about any concerns,'' he said.

``That letter is awaited with some trepidation by mayors of the day and I must say it is a great pleasure that this year, there isn't going to be one.

``The external auditors were quite happy with what they saw when they came here and they left this building very happy with what we are doing and that is absolutely terrific.

``There was a rumour or what I would describe as one of the better Northern Grampians myths that occurred recently and that was that the auditors had stormed out of the building in disgust. That is absolute nonsense, in fact it was quite the reverse. It was the first time the auditors had left totally satisfied with what our finance staff were doing and that is very pleasing indeed.''