The overhaul was recommended by the auditor-general after a state-wide performance audit into credit card management practices in local councils was conducted in 2020.

The audit was called for by then-Minister for Local Government Gabrielle Upton in 2018 after it was alleged former general manager of Hay Shire Council Allen Dwyer spent more than $500,000 on a corporate credit card between 2014 and 2017. Mr Dwyer maintains all personal expenses were paid back in an agreement with council.

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An examination of six councils across the state during the audit found each had important gaps in their credit card policies and procedures. The auditor-general recommended sector-wide guidelines be implement by the Office of Local Government - the first time credit card guidelines have been imposed by the department.

Under the new guidelines, each council must establish an audit risk and improvement committee and appoint of a primary program administrator to oversee credit card usage.

Other recommendations include monthly spending limits and individual transaction limits, with purchase splitting to be prohibited and restrictions imposed on prohibited items.

In a statement, Minister for Local Government Shelley Hancock said the new requirement will improve transparency and accountability.

"Local communities rightfully expect their council to be responsible when it comes to spending their hard-earned ratepayer dollars so these new guidelines will not only help manage their credit card expenditure more efficiently but also give ratepayers confidence about how their money is being spent," she said.

Wagga City Council's current credit card policy will be reviewed in February 2022.

The current policy was adopted in 2018 after a confidential audit on corporate credit card usage within Wagga City Council.

The current policy includes monthly spending limits of $10,000 for the general manager and the executive assistant to the general manager, and $5000 for the mayor and any card-holding council employees.

Wagga's policy does not specify a limit on individual transactions, but cost splitting is prohibited in the policy as are certain transactions including personal memberships or subscriptions and the payment of fines or penalties.

Wagga Council's chief operating officer Scott Gray said the OLGs new guidelines will be incorporated into the 2022 review of the policy with the newly elected council.

"The new guidelines will be taken into consideration when the policy is reviewed, under the newly-elected council, to ensure council is meeting those requirements," Mr Gray said.

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