Currently in the Australian state of New South Wales (NSW) local government councils have the authority to invest ratepayers’ money.. At the end of 2006-07 financial year local councils in NSW had invested $590 million dollars in structured financial products such as collateralised debt obligations (CDO). Six months later the market value of these investments dropped $200 million to $390 million. In light if these significant losses the NSW state government commissioned a review of the financial investments of NSW local councils. This review, the Cole Report, found that while acting within the parameters of the Local Government Act (1993), local councils had pursued high return high risk investment strategies. This paper reviews and evaluates how the local councils in NSW, identified by Cole as having a high level of financial exposure to investments such as CDOs, have disclosed their financial investments in their 2007-08 financial reports and the type of audit opinion issued on their general purpose financial reports. This paper will contribute to the literature on the 2008 global financial crisis as well as literature on Local Government council financial report audits.