Hilltops Council has submitted its audited financial reports for 2017-2018 almost 12 months late.
Council on September 6 this year received notice from the Minister for Local Government Shelley Hancock of intention to issue a performance improvement notice and an order to deliver the financial statements within 28 days.
Council failed to meet its initial four-month deadline on October 31 last year, and then its extension to February 28.
A report prepared for councillors at the September meeting responding to the notice identified "legacy issues" relating to the rollover of financial systems from Boorowa, Harden and Young.
The report says the rollover created "significant issues".
General manager Dr Edwina Marks described the process as a "crisis" and a "disaster". She noted a combination of decision making failures, lack of expertise and lack of experience in the sector, and challenges involved with migrating data into one operating system.
"It combined created a disaster and crisis for us which we have rectified. But certainly it's taken much longer than anyone expected, including the state audit office, including our external audit office, including the enormous amount of work put in by our own local staff," she said.
Councillor Tony Flanery said the report didn't adequately address why the issues arose.
"I find the explanations in here at a council level to be questionable. I don't understand how these processes weren't achieved," he said.
"I think there's insufficient information as to why we didn't meet these deadlines."
Dr Marks said it was a unique situation in the history of Hilltops Council.
"Yes it was a crisis, yes there were management problems along the way well and truly, however we have met the other side, we have our unqualified audit which was critical and vital to our organisation."
Mayor Brian Ingram noted the report needed to be sent.
"Hopefully this submission is accepted by the Minister's office. We have told them we will send this report off to them tomorrow [September 26] with the financials that have been done," he said.