adopted report governance & administration committee meeting · 24/11/2016 · governance...

727

Adopted Report of the

Governance & Administration Committee Meeting

held

Thursday 24 November 2016

at

9am

City of Gold Coast Council Chambers 135 Bundall Road Surfers Paradise

727th Council Meeting 29 November 2016 2 Governance & Administration Committee Meeting 24 November 2016 Adopted Report

Index

Adopted Report

Governance & Administration Committee Meeting

Thursday 24 November 2016

Item Direct. File Page Subject

1 OCEO LG115/1328/01/2016(P1) 5 Governance And Administration Committee Action List And Forward Planning Schedule

2 OCEO LG964/06/16/01/CF(P1) 6 Audit Committee Chair’s Report To Council 2015-16

3 OS HR829/02(P1) 28 Travel And Travel Related Expenses – Councillors And Staff 1 July – 30 September 2016

4 OCEO LG426/1112(P3) 36 Connecting Southern Gold Coast - Bi-Annual Performance Review - Period Ended June 2016

5 OS PN265841/20/07(P4) 87 Application For Funding Grant - Gold Coast Hindu Cultural Association Inc

KEY:

OCEO - Office of the Chief Executive Officer CI - City Infrastructure GCW - Gold Coast Water CS - Community Services OS - Organisational Services EDMP - Economic Development & Major Projects PE - Planning & Environment

727th Council Meeting 29 November 2016 3 Governance & Administration Committee Meeting 24 November 2016 Adopted Report ADOPTED BY COUNCIL 29 NOVEMBER 2016 RESOLUTION G16.1129.016 moved Cr Owen-Jones seconded Cr Tozer That the Report of the Governance & Administration Committee Recommendations of Thursday, 24 November 2016, numbered GA16.1124.001 to GA16.1124.005, be adopted with the exception of:- Recommendation Numbers GA16.1124.004 and GA16.1124.005 which were specifically resolved.

CARRIED UNANIMOUSLY ATTENDANCE Cr W M A Owen-Jones (Chairperson) Cr D I McDonald Cr D Gates Cr K L Boulton Cr D M Crichlow OAM Cr G M Tozer Cr P A Taylor Visitor Cr G J Baildon AM departed 10:17am Cr P C Young Mr A J McCabe Chief Operating Officer Mr G Potter Director Organisational Services Mr G Mather Manager Corporate Assurance (part) Mr B Madden Manager City Property (part) Mr S Bowden Coordinator Controlled Entities & Community Grants (part) APOLOGY / LEAVE OF ABSENCE Nil PRESENTATIONS Item 2 Audit Committee Chair’s Annual Report 9am Mr Bill Turner (Chairperson) Item 5 Application For Funding Grant - Gold Coast Hindu Cultural

Association Inc (CONFIDENTIAL PRESENTATION) 9:20am Dr G Subakumar, President, Dr V Muthukkumarasamy, Vice President and Mr S Barata Raj, Joint Secretary

Item 4 Connecting Southern Gold Coast Ltd –

Bi-Annual Performance Review 9:30am Ms Anne Stovin (Chairperson) and Mr Peter Doggett (CEO)

727th Council Meeting 29 November 2016 4 Governance & Administration Committee Meeting 24 November 2016 Adopted Report The information below is extracted from the Procurement Policy and Guidelines. Refer to the Policy and Guidelines for complete details.

QUOTATIONS TO LOCAL BUSINESSES FOR CONTRACTS WORTH LESS THAN $200,000 (EXCLUDING GST)

If the best value pricing submission is not from a Gold Coast business or business with a branch office on the Gold Coast and there is a Gold Coast business or business with a branch office on the Gold Coast directly employing a minimum of 10 FTEs with a pricing submission within:

30 per cent of the best value pricing submission for quotations up to $50,000, 25 per cent of the best value pricing submission for quotations between $50,000 and

$100,000, 20 per cent of the best value pricing submission for quotations between $100,000 and

$200,000,

then the Gold Coast business or business with a branch office on the Gold Coast directly employing a minimum of 10 FTEs submission will be deemed to be more advantageous and this supplier chosen.

TENDERS FOR CONTRACTS WORTH MORE THAN $200,000 (EXCLUDING GST)

Local Content Scoring for Tenders Weighting % Score Description

15 100% 15 Developing or established Gold Coast business

15 80% 12 Branch office on the Gold Coast directly employing a minimum of 10 FTEs

15 60% 9 Branch office on the Gold Coast, established for a minimum of six months, directly employing less than 10 FTEs

15 27% 4 Adjacent local government (Logan, Scenic Rim, Redland or Tweed Shire) business

15 13% 2 Queensland business 15 7% 1 Interstate business 15 0% 0 Overseas business

Gold Coast Business Excellence Awards Scoring for Tenders Weighting % Score Description

2 100% 2 A winner of the Gold Coast Business Awards within the past 4 calendar years

2 50% 1 A finalist of the Gold Coast Business Awards within the past 4 calendar years

2 0% 0 All other businesses Where a tenderer has qualified for the Gold Coast Business Excellence Awards’ Hall of Fame and as a result is not eligible to enter the annual awards, this tenderer will score full points (i.e. 2 out of 2). TENDERS LEADING TO CONTRACTS WITH AN ANNUAL VALUE BETWEEN $200,000 AND $1,000,000 (EXCLUDING GST)

Council will provide a 15 per cent pricing advantage to Gold Coast businesses or businesses with a branch office on the Gold Coast directly employing a minimum of 10 FTEs.

727th Council Meeting 29 November 2016 5 Governance & Administration Committee Meeting 24 November 2016 Adopted Report ITEM 1 OFFICE OF THE CHIEF EXECUTIVE OFFICER GOVERNANCE AND ADMINISTRATION COMMITTEE ACTION LIST AND FORWARD PLANNING SCHEDULE LG115/1215/01/2016(P1)

Item Action Officer &/or Branch

Action/Previous Resolution

(728) Governance and Administration Committee 6 December 2016

Gold Coast Arts Centre Pty Ltd – Bi-annual Performance Review

Executive Services Includes Presentation

Operational Plan Performance Report 2016-17 Q1 Corporate Planning & Performance

Contract No. LG314/254/17/001 – Kerb and Channel and Associated Works

Procurement

Contract No. LG314/690/16/076 – Surveying Services

Procurement

Contract No. LG314/411/16/040 – Work Health and Safety Training and Development

Procurement

Propose to make new Local Law No. 21 (Major City Events) 2016 and Subordinate Local Law No. 21.1 (Major City Events) 2016

Community Services

Audit Committee –28/11/2016 Corporate Assurance Confidential Report

Audit Committee Membership Corporate Assurance Confidential Report

(729) Governance and Administration Committee 25 January 2017

Contract No. LG314/411/17/022 – Collection, Transportation and Processing for Reuse / Disposal of Landfill Leachate

Procurement

Contract No. LG314/411/16/029 – Advanced Rate Recovery

Procurement

Propose to make new Local Law No. 20 (Waste Management) 2017 and Subordinate Local Law No. 20.1 (Waste Management) 2017

Community Services

RECOMMENDATION It is recommended that Council resolves as follows: That the list of proposed Agenda Items for the Governance and Administration Committee be noted. Authorised by:

Joe McCabe Chief Operating Officer

TRACKS REF: # 54648256

COMMITTEE RECOMMENDATION GA16.1124.001 moved Cr Crichlow seconded Cr Gates That the list of proposed Agenda Items for the Governance and Administration Committee be noted.

CARRIED


ITEM 2 OFFICE OF THE CHIEF EXECUTIVE OFFICER AUDIT COMMITTEE CHAIR’S REPORT TO COUNCIL 2015-16 LG964/06/16/01/CF(P1) Refer 1 page attachment A 1 BASIS FOR CONFIDENTIALITY Not Applicable. 2 EXECUTIVE SUMMARY The Council’s Audit Committee is an essential element of good corporate governance. The Committee continued to operate in a very productive manner throughout 2015-16 having addressed several key financial reporting, financial management, fraud and corruption and risk management issues while providing broad oversight of the Council’s internal control framework and asset valuation matters. This included valuation of the Council’s buildings, resolution of the valuation of light rail assets and consideration of the outcomes of interim indexation calculations for the remaining asset classes. The Committee noted with satisfaction that the Council’s financial statements were provided with an unmodified audit opinion by the due date and with the highest rating of good in terms of quality while the elements of internal control were all attributed the highest rating of generally effective by the Queensland Audit Office (QAO). This is the first year in which all ratings have been at this high level. In addition, unqualified audit opinions were issued in relation to the financial statements of each of the Council’s five controlled entities although those of the Gold Coast Arts Centre Pty Ltd were not completed in a timely manner due to the departure of a key staff member. The Committee also noted that the Council’s financial sustainability for 2015-16 continued to improve with the operating surplus ratio, the asset sustainability ratio and the Net Financial Liabilities ratio all improving with the overall rating remaining as Moderate Risk. During 2015-16 QAO also undertook a performance audit focused on the long-term sustainability of local government with five councils selected for detailed analysis (which did not include the City of Gold Coast). QAO found that most councils plan poorly for the long term with long term financial forecasts and Asset Management Plans (AMPs) lacking substance and rigour and not being properly integrated. Only 8 councils of the 77 in Queensland were found to have up to date AMPs and a financial plan. The Committee noted that the City of Gold Coast has devoted significant resources in developing extensive asset management plans and integrated long-term financial forecasts which provide councillors with a sound view of ongoing sustainability. Committee also noted that QAO has recommended that a more flexible, broader and relevant long-term sustainability framework be introduced including a broadening of the number of ratios to include an asset renewal funding ratio. The audit also recommended that councils be allowed to set their own financial sustainability targets where they can justify that a different target is more appropriate. These recommendations are consistent with views previously advocated by the City of Gold Coast. Finally, the Committee considered every recommendation associated with various Internal Audit Unit and QAO reports on different audit and performance audit reporting matters, and made several suggestions in relation to business improvement opportunities. The Committee also monitored the implementation of recommendations and their timeliness.


ITEM 2 (Continued) AUDIT COMMITTEE CHAIR’S REPORT TO COUNCIL 2015-16 LG964/06/16/01/CF(P1) For 2016-17, the Committee will give continuing emphasis on internal control with particular focus on several other issues including:

the ICT Transformation Program; valuation of water and waste water assets (which will be undertaken as a complete

revaluation in accordance with the Council’s asset valuation schedule); risk management; the implementation of reporting of related party transactions; monitoring of policies and processes designed to avoid fraud and corruption; preparedness for the Commonwealth Games and the achievement of legacies arising

from the Games; and continuing simplification of Council’s financial statements.

3 PURPOSE OF REPORT The Audit Committee Chair’s report is prepared annually and is designed to provide councillors with a summary of the responsibilities, work, operations and deliberations of the Audit Committee for the 2015-16 meeting cycle. The report is also designed to inform Council of significant relevant issues and/or matters which were addressed or are currently being addressed by the Committee. 4 PREVIOUS RESOLUTIONS GA15.1209.019 in part That the annual report of the Audit Committee Chairperson is noted. 5 DISCUSSION

5.1 Introduction

The Local Government Act 2009 (Act) requires all large local governments to establish an Audit Committee to:

monitor and review the - (i) integrity of financial documents; (ii) internal audit function; and (iii) effectiveness and objectivity of the local government’s internal

auditors; and make recommendations to the local government about any matters that the audit

committee considers need action or improvement.

The City of Gold Coast’s Audit Committee (Audit Committee) is an advisory committee of Council currently consisting of two (2) councillors and four (4) independent external members charged with providing assurance, oversight and advice to Council and the Chief Executive Officer in relation to the governance, risk and internal control functions of the City of Gold Coast and its controlled entities. Council’s Audit Committee has been in existence for many years and is considered a vital part of good governance practice. This report documents the Committee’s work consistent with the above accountabilities.


ITEM 2 (Continued) AUDIT COMMITTEE CHAIR’S REPORT TO COUNCIL 2015-16 LG964/06/16/01/CF(P1) 5.2 Membership

The Local Government Regulation 2012 (Regulation) requires an audit committee to consist of between 3 and 6 members and stipulates that 2 of the members must be councillors.

The current members of the Audit Committee are: Member Meetings held Meetings attended

Councillor William Owen-Jones; 7 6

Councillor Glenn Tozer (from April 2016); 4 3

Mr Bill Turner, Chair and independent member; 7 7

Mr Len Scanlan, independent member; 7 6

Mr Graeme Stratford, independent member; 7 6

Mr Geoff King, independent member (from 1/7/2016) 3 3

Councillor William Owen-Jones and Councillor Glenn Tozer as Chair and Member of the Governance and Administration Committee respectively, ensure that Council’s objectives and perspectives are considered when relevant matters are under consideration. Both Councillors also have significant financial accounting and financial management experience. Mr Turner has extensive senior financial, audit, probity and risk management experience within the public service particularly in infrastructure and being a resident of the Gold Coast brings valuable local knowledge to Committee discussions. Messrs Stratford and Scanlan have substantial experience in, and knowledge of, the accounting, auditing and risk profession with Mr Stratford being an audit assurance partner with PricewaterhouseCoopers for many years and Mr Scanlan being a former Auditor-General of Queensland. During the financial year, Council approved the addition of a further external member with specific skills in auditing of IT systems. Mr Geoff King was appointed to that role commencing on 1 July 2016 for a period of three years. Mr King has extensive experience in internal audit, risk management and governance, with particular emphasis on Information and Communication Technology, across a diverse range of industries in the public and private sector, most recently with Queensland Rail and Aurizon. Council has previously expressed a preference for the position of Chair of the Audit Committee to be rotated periodically so that a new Chair is in place during the last year of the term of Council and of the Audit Committee. Consistent with that approach, Mr Bill Turner was appointed as Committee Chair for a period of two (2) years commencing 1 July 2015 with the former Chair, Mr Graeme Stratford continuing as an independent member until 31 December 2016. Arrangements are currently underway to recruit a new independent member to commence from 1 January 2017.

5.3 Committee meetings

The Audit Committee met seven times in relation to the 2015-16 reporting cycle as follows: # Date Meeting

1 23 November 2015 Regular Meeting

2 18 February 2016 Asset Valuation Workshop

3 4 March 2016 Regular Meeting

4 11 April 2016 Annual Planning Workshop

5 11 July 2016 Regular Meeting

6 7 September 2016 Draft Financial Statements for 2015-16

7 10 October 2016 Final Financial Statements for 2015-16


ITEM 2 (Continued) AUDIT COMMITTEE CHAIR’S REPORT TO COUNCIL 2015-16 LG964/06/16/01/CF(P1) In addition to the members of the Committee, the Chief Executive Officer (CEO) Mr Dale Dickson, who under the Act cannot be a member of the Committee, is a standing invitee and regular attendee. Other management and staff are invited to attend meetings as required. Council’s Internal Audit function is represented at Committee meetings by Council’s Manager Corporate Assurance, Mr Grant Mather and internal audit staff as required. Council’s Chief Operating Officer Mr Joe McCabe, Manager Corporate Finance Mr John Blair and other Corporate Finance staff also attend Committee meetings on a regular basis, particularly those meetings where financial statements, financial management and internal and external audit matters are discussed. Representatives of the Queensland Audit Office (QAO) are invited to attend meetings or part thereof and contribute where relevant and appropriate. It is a responsibility of the Committee to undertake appropriate liaison with the QAO on matters raised or arising from their audit. The Committee has continued to take a strategic focus to the conduct of its responsibilities and operations via a Forward Meeting Schedule and review cycle which ensures that over the course of the Council term, all elements outlined in the Audit Committee Charter are addressed.

5.4 Responsibilities

The Audit Committee is governed by the Council endorsed Audit Committee Policy (Charter) which is reviewed annually and updated by the Committee. (Council endorsement to any updates is sought).

The Charter imposes greater responsibilities on the Audit Committee than those defined in the Local Government Act thereby demonstrating Council’s commitment to strong corporate governance. This was a position taken by Council some time ago to utilise the Committee as a broader governance tool rather than a just legislative compliance tool.

The oversight responsibilities of the Committee are set out in the Audit Committee Charter and include the following key matters. (More detail concerning these key responsibilities is included in the Charter which is published on Council’s website. http://www.goldcoast.qld.gov.au/documents/bf/Audit_Committee_Policy.pdf)

5.4.1 Financial statements and reporting

a) Council of the City of Gold Coast

Process

The Audit Committee is required under its Charter and in accordance with the Local Government Act to review the financial statements of Council and all its controlled entities including City of Gold Coast Insurance Company Ltd, Gold Coast Arts Centre Pty Ltd and the three events based entities:

I. Surfers Paradise Alliance Ltd; II. Broadbeach Alliance Ltd and

III. Connecting Southern Gold Coast Ltd NB Note that the Council, Committee and QAO have agreed that Bleached Ltd is not a

controlled entity.


ITEM 2 (Continued) AUDIT COMMITTEE CHAIR’S REPORT TO COUNCIL 2015-16 LG964/06/16/01/CF(P1)

However, the major focus of the Committee’s work in relation to financial reporting remains the review of the financial statements of the Council of the City of Gold Coast.

Past practice has continued whereby the Committee is initially provided with a template (shell) set of financial statements where the focus is on the format and content of notes accompanying the financial statements together with proposed changes in asset valuations, new or revised Accounting Standards, accounting treatment of items or their presentation.

A key objective is to identify and resolve any potential issues and to agree the initial shell financial statements with the QAO.

As part of this process, the Committee reviewed the draft set of statements (excluding current year financial data) and sought explanations or further information from Corporate Finance or other management representatives. The Committee discussed the draft set of statements with QAO representatives and provided interim approval of the draft statement format and notes subject to those matters requiring follow up. Any current or future issues arising were discussed and resolved in subsequent meetings.

For 2015-16, the template was provided significantly earlier than in previous years and Corporate Finance staff devoted considerable time to reviewing the notes with a view to reducing their size. This was achieved by focussing on the relevance and materiality of matters included.

As part of the initial review by the Committee, some questions arose concerning the proposal that indexation not be applied to a number of asset classes due to the immateriality of changes in the indices however the Committee accepted the proposal after reviewing the available data. The Committee also noted that Council had again identified some assets not previously recognised as belonging to the Council and sought some assurance that this issue was diminishing. The Committee also sought some further information concerning the full scale valuation of buildings and the implications of some valuations.

The draft financial statements for 2015-16 were completed and made available to the Committee in September. The Committee endorsed the statements being made available to the QAO for audit (subject to minor amendments identified by the Committee). Further discussions and work were later undertaken in relation to two matters which were identified by QAO:

the value of commitments shown in the notes to the accounts; and

the amount noted in the accounts relating to contingencies and in particular, the amount indicated for possible rehabilitation of various landfill sites.

The Committee endorsed the statements as appropriate for certification by the CEO and the Mayor on 10 October 2016 subject to resolution of these two minor matters.

Outcome

Both matters were resolved satisfactorily and QAO provided an unmodified audit opinion on the financial statements (including the Financial Sustainability Statements) on 24 October 2016.



Issues

The Committee’s primary focus in relation to the 2015-16 financial statements included:

Again holding a separate asset valuation workshop to ensure that asset management and valuation activities were adequately and appropriately planned and all conceptual matters had been properly addressed.

Review of the extent and methodology associated with the full valuation of buildings owned by the Council. The Committee worked with Council staff towards reducing the likely cost to Council of this exercise including determining which of the buildings were likely to have a market value. Only those buildings with a market value were subject to a full market valuation.

Review of the proposals to not apply indexation to a number of asset classes given that application of the relevant indices would result in immaterial adjustments to the valuation of such classes.

consideration of accounting estimates, assumptions and judgements.

Review of changes proposed to the basis of valuation of some road inventory items.

The final resolution of the value and extent of Stage 1 light rail assets to be included in the financial statements following their transfer from the State Department of Transport and Main Roads (TMR).

Review of planning for treatment of assets impacted by Stage 2 of the light rail project, noting that impacts are considered to be very much less than those for Stage 1

Review of progress in updating water and waste water asset data which was the subject of a concerted effort and should form a sound basis for the full valuation of such assets to be conducted in 2016-17.

Continuing review of the treatment and proper accounting for the Council’s involvement in the Gold Coast 2018 Commonwealth Games™ activities and venues and in particular, the correct accounting treatment of payments made by Council as part of its contribution to the cost of the Games.

Simplification of the notes to the accounts

The Committee also considered other changes to accounting policies during the year. Council’s financial statements are required to be prepared in accordance with appropriate legislation and accounting standards. The implications of new and updated accounting standards are assessed by Council staff and reviewed by the Committee to ensure the appropriateness of their application and any impacts and/or implications. In addition, accounting policies may be changed for operational purposes, for example, a change in deprecation policies (for example, through a change in estimated useful lives- see above) or thresholds for asset capitalisation. Accounting policies are reviewed by the Committee when changes occur and are also reviewed as part of the consideration of the financial statements.

Going forward

The Committee will continue to place emphasis on several items in relation to the financial statements for 2016-17 and beyond:



Valuation of Non-Current Assets

Accounting Standards and Council policy require a full review of the valuation of non-current assets at least every 5 years and periodic revaluation reviews within that period which can be based on appropriate indices or data available from Council or external sources. Full revaluations of all classes of assets are staged over the five year period to ensure that workloads can be managed as the complete process is resource intensive, expensive and time consuming and, in the past, has resulted in considerable financial adjustments due to a range of factors. Where there are significant movements in valuations, the basis for these changes needs to be confirmed with explanations capable of understanding by the Committee, the Council and the community.

Prior to 2014-15, revaluations had been conducted as at 30 June each year however following suggestions by the Committee and the QAO, Council has since undertaken revaluations at an earlier date to ensure that the valuations are completed before the end of the financial year. This has allowed resolution of any outstanding issues without jeopardising the timeframe for completion and audit of the financial statements.

Going forward, the Committee will provide appropriate oversight of asset valuation activities particularly in relation to water and waste water assets which will be subject to a complete revaluation exercise during 2016-17 while continuing to monitor any asset identification and valuation matters arising in relation to all other assets.

Accounting for Stage 2 of the light rail project

Following completion of the identification and valuation of assets related to Stage 1 of the light rail project, the Committee will monitor the accounting treatment of assets affected by Stage 2 of the light rail project (that is, the Parkwood to Helensvale stage).

The Committee understands however that there will be few assets so affected unlike Stage 1 where many Council assets (and other utilities) had to be relocated and/or replaced.

Related party transactions

As noted in the Chair’s report to Council in 2014-15, Council is required to comply with Accounting Standards determined by the Australian Accounting Standards Board (AASB) in preparation of its financial statements. AASB 124 which deals with related party transactions now applies to Council’s financial reporting for the 2016-17 financial year (although no comparative data is required to be included for the previous year). AASB 124 has been adopted to ensure that an entity’s financial statements contain the disclosures necessary to draw attention to the possibility that its statement of financial position and statement of comprehensive income may have been affected by the existence of related parties and by transactions and outstanding balances, including commitments with such parties.

Disclosure of related party transactions is seen to be important because transactions with related parties may not be on normal commercial terms and conditions or may create instances of economic dependency. Accordingly, the disclosure of the existence and nature of related party transactions is key to an understanding of the risks impacting an entity and its financial position and performance. To ensure that appropriate disclosure is made, the Council has developed a framework which identifies:

o who are related parties; and

o what are related party transactions



In general, related parties have been defined as key management personnel (that is, Councillors and the Executive Leadership Team) who have authority and responsibility for planning, directing and controlling the activities of the Council, directly or indirectly. In considering each possible related party relationship, consideration was given to the substance of the relationship and not merely the legal form.

Council has also established a framework to determine what comprises a related party transaction. Where the transaction is of a very minor nature, the Council has determined that such transactions are unlikely to influence the decisions that users of the Council’s financial statements make having regard to both the extent of the transactions, and that the transactions have occurred between the Council and the related party within a public service provider/ taxpayer relationship. Consequently they will not need to be disclosed.

Council staff have developed systems and procedures to capture the details of such parties and transactions however it will be critical that all related parties’ interests are kept completely up to date.

Accounting for Council transactions in relation to the Gold Coast 2018 Commonwealth Games™

The Committee will exercise appropriate and continuing oversight of the treatment of Council contributions for the Games both monetary and in kind including accounting treatment of any assets to be owned by the Council.

Simplification of the financial statements and notes

Some further simplification of the financial statements and the accompanying notes will again be the focus of efforts by the Committee and Corporate Finance for the 2016-17 financial year and will be undertaken in conjunction with QAO. One of the objectives of pursuing simplification is to make the financial statements more readily understandable and reader friendly.

b) 2015-16 Financial Sustainability Statements

The Financial Sustainability Statements for the Council comprising both current year and long term perspectives are required to be completed, and in respect of the current year’s statement, audited by the QAO. The various sustainability ratios and the methods of calculation are prescribed by legislation. As was mentioned in last year’s report, the City of Gold Coast has made representations to various parties over time concerning the legislated methodologies and in particular, the appropriateness of using depreciation costs rather than the amount expended on renewal of assets. It was gratifying to see QAO adopt several of the points made by the City of Gold Coast in their performance audit report referred to below.

During 2015-16 the QAO undertook a sector wide performance audit of long-term sustainability which identified failures and/or serious deficiencies in many local governments’ asset management and forecasting plans. In some cases, they were effectively non-existent and in other cases, the currency, relevance and appropriateness was questionable. In addition, there was a lack of integration between Asset Management Plans (AMPs) and long-term financial forecasts. The audit raised the question of the future sustainability of a number of councils given the lack of information available to councillors and their communities in terms of asset maintenance and/or replacement needs, the poor basis of long-term forecasting of revenue and expenses and the lack of integration between the plans. QAO foreshadowed the potential for the asset base of many local governments to be eroded unless they generate sufficient finances to operate and maintain that asset base.



In this regard, the Committee noted that the City of Gold Coast has devoted significant resources in developing extensive asset management plans and integrated long-term financial forecasts which provide councillors with a sound view of ongoing sustainability. The Committee also noted that QAO has recommended that the Department of Infrastructure, Local Government and Planning allow a more flexible, broader and relevant long-term sustainability framework to be introduced including a broadening of the number of ratios to include an asset renewal funding ratio once councils have improved their asset condition data (my emphasis). The audit also recommended that the Department allow councils to set their own financial sustainability targets where they can justify that a different target is more appropriate. These recommendations support views previously advocated by the City of Gold Coast however the Committee would support an immediate move to include an asset renewal funding ratio as Council’s data is already sound.

Notwithstanding the above, the Financial Sustainability Statements for 2015-16 continue to reflect improvements from previous years and QAO has assessed the Council as Moderate risk although some ratios remain outside departmentally determined benchmarks (see below). It is therefore possible that City of Gold Coast will be highlighted in the QAO’s local government sector report to Parliament in relation to financial sustainability. At the date of this report, QAO’s 2015-16 report has not been finalised.

Council of City of Gold Coast Benchmark Operating Surplus Ratio 2012-13 -11.2% 0% - 10% 2013-14 -5.4% 0% - 10% 2014-15 -1.6% 0% - 10% 2015-16 +1.1% 0% - 10% 2015-16 Council preferred method 12.6% 0% - 10%

Asset Sustainability Ratio 2012-13 24.0% >90% 2013-14 47.5% >90% 2014-15 34.8% >90% 2015-16 46.0% >90% 2015-16 Council preferred method 124.1% 90% - 100%

Net Financial Liabilities Ratio 2012-13 41.5% <60% 2013-14 35 3% <60% 2014-15 15.8% <60% 2015-16 -3.6% <60%

c) Controlled Entities

After strongly advocating over time for standardisation of financial reporting (including notes to the accounts) by the Council’s controlled entities, the Committee noted that there had been continuing improvement in 2015-16.

The financial statements for all controlled entities were provided with unmodified audit opinions by QAO with three entities achieving their targets in terms of timeliness. However, there was a delay in having the financial statements of the Gold Coast Arts Centre Pty Ltd (GCAC) available for audit in accordance with the agreed timeframe.



Whilst this was attributed to the departure of a key finance person around the end of the financial year and the inability to obtain a suitable short term replacement, the Committee had several concerns and invited the General Manager and other GCAC staff to address the Committee on the circumstances leading to this situation. This allowed the identification of a number of areas for improvement including the development of an end of financial year manual for GCAC and better communication between the GCAC and Council Corporate Finance staff who only became aware of the delay late in the timeframe.

d) City of Gold Coast Insurance Company Ltd

The Committee reviewed the CEO’s report on the operations of the company for the financial year 2015-16 and noted that the financial statements of the Company had been audited by Ernst & Young LLP (one of the world’s largest accounting firms) and that an unmodified audit opinion had been issued. During the year, QAO also undertook a review of the company and made a small number of recommendations in relation to reporting and communication, governance and independence and market testing before renewal. The recommendations generally relate to business improvement opportunities and have been addressed and responses provided to, and discussed with, QAO.

5.4.2 Internal Audit

a) Internal Audit Function

The Internal Audit function is a key function underpinning the governance framework of Council and provides integral support to the work of the Audit Committee. Council’s Internal Audit function is led by the Manager, Corporate Assurance and comprises four professional internal audit staff (including an IT specialist Internal Auditor) and one business support officer. The Manager, Corporate Assurance, Mr Grant Mather has been with Council’s internal audit team for seven years, the last five as Manager Internal Audit and more recently as Manager Corporate Assurance. Prior to joining Council, Grant spent 10 years with a prominent large professional services firm where he led the Queensland Risk and Advisory Services practice based in Brisbane. Grant has a broad range of internal audit, risk management and business consulting skills, and is a Certified Practising Accountant (CPA), Certified Information Systems Auditor (CISA) and long standing member of the Institute of Internal Auditors (Australia). Grant also continues to act as a Councillor of the Institute of Internal Audit Queensland Chapter.

Council’s Internal Audit Charter provides the Manager Corporate Assurance with a direct communication line to the Audit Committee and to the Chief Executive Officer to ensure independence at the highest level while the Manager is also encouraged to freely raise issues directly with the Audit Committee. For administrative matters, the Corporate Assurance Branch incorporating the Internal Audit Unit and the Integrity and Ethical Standards Unit sits within the Office of the CEO Directorate and reports to the Chief Operating Officer.

Internal Audit services continued to be provided through a mix of professional internal staff supported by external specialist services as required particularly where a specific review is required. The Committee noted that there have been some temporary transfers of staff to key projects from the Internal Audit Unit which has provided significant value to the projects while providing the transferee with detailed knowledge and experience of business activities. The Committee also noted the loss of a specialist IT audit professional for personal reasons during 2015-16 however was pleased to see the recruitment of well qualified replacement staff.



Professional internal audit staff have various qualifications and experience in the fields of accounting, finance, commerce, IT, data analysis and internal audit. Professional development plans are in place to ensure internal audit staff stay abreast of current risk and control developments and leading internal audit practices. Approximately 10% of available audit time is spent on professional development and related activities to ensure staff are providing high quality advice and audit services.

Findings and recommendations made in internal and external audit reports and relevant Auditor-General reports to Parliament are recorded and tracked by the Internal Audit Unit to ensure management address improvement actions in a timely manner. Reports on management’s progress in addressing audit actions are provided to the Audit Committee for monitoring purposes. Whilst progress continues to be reasonable, the Audit Committee continues to note instances over the past 12 months where delays in addressing audit matters have occurred. The Committee has requested Internal Audit provide additional focus in this area during the 2016-17 audit year to ensure that management continues to resolve audit actions in a timely manner.

The Manager Corporate Assurance and staff of the Internal Audit Unit provide specialist advice and guidance to the Audit Committee and to Council management through their active participation in a range of organisational working groups and project steering committees. Through this involvement, Internal Audit assists management to identify and implement risk and control improvements early in the change/project cycle and provide ongoing assurance. In undertaking this work, conditions are imposed by Internal Audit such that involvement is in no way part of the management or implementation process and is advisory only. This is important to protect the independence of Internal Audit.

The Internal Audit Unit has maintained a strong but independent working relationship with management and the Audit Committee. This has allowed for robust discussions surrounding risk and control issues as and when they arose. The Internal Audit Unit also continued to play an active role in maintaining open and effective lines of communication with the QAO to ensure internal and external audit activities are aligned and integrated during audit planning activities, and that issues identified by external audit are addressed by management in a timely manner. Both audit functions collectively worked together to minimise duplication of audit activities where possible. Under the guidance of the current Manager, and with the support of the Committee and CEO, the Internal Audit Unit has moved from a heavily compliance based auditing function, to a more balanced and strategically aligned assurance and advisory function that seeks to add value to the organisation by helping management understand and better manage their key risks. The Audit Committee continues to note increasingly positive feedback from the areas being audited of the value-add provided by the Internal Audit Unit.

The Internal Audit Unit budget for internal audit services in 2015-16 was approximately $1 million. This continues to represent around 0.08% of Council’s total operating expenditure ($1.3billion). The average for Queensland State Government Departments reported by the Auditor-General in QAO Results of Audit: Internal Control Report #6 2014-15 was 0.128% of total expenditure.


ITEM 2 (Continued) AUDIT COMMITTEE CHAIR’S REPORT TO COUNCIL 2015-16 LG964/06/16/01/CF(P1) b) Internal Audit Activities

A table of formal internal audit reports issued during the 2015-16 cycle is attached as Attachment A. Each internal audit report is reviewed by the Committee together with management responses.

The results of internal audits undertaken throughout 2015-16 were a little mixed. In large part this reflected the fact that the Internal Audit Unit was called upon to undertake out of sequence audits because of management concerns which in a number of cases, proved to be justified. Overall, the control environment continues to improve, but at the same time existing risks are evolving and some new operational risks emerging which require continual review and refinement of the audit plan.

In addition to normal audit activities undertaken, the Unit was engaged in a variety of other advisory and consultative activities and governance forums throughout the year where the ability of the Unit to provide authoritative advice has been shown to be valued without compromising its independence.

c) Going forward - Internal Audit Planning

As is the normal practice, the Audit Committee undertook a planning workshop in April 2016 where participants, including Committee members, Council executives and Manager Corporate Assurance, considered emerging trends and issues in audit and risk environments, Queensland Audit Office and Internal Audit Unit reports and existing audit plans and outcomes. In addition, information was provided and presented by management concerning specific audit, risk and/or internal control matters allowing the Committee’s consideration of such matters and to ensure:

that there is appropriate recognition of higher and emerging risk matters in audit planning, scheduling and resourcing; and

that the development of the Annual Internal Audit Plan for the ensuing financial year was facilitated and agreed and that the existing rolling 3 year Strategic Audit Plan was reviewed and modified to ensure its currency and appropriateness.

Allowance is made in the Annual Internal Audit Plan for emerging issues in the current year that are unable to be identified or quantified at time of planning. Flexibility remains important in the audit plan to enable adaptation to changed circumstances. Any material changes to the Plan are reviewed by the CEO and Audit Committee during committee meetings. From time to time, a particular Director or Manager may request internal audit assistance in dealing with an emerging matter. This requires mature discussions to determine if the needed time could be spent more productively elsewhere. The Committee has noted a continuing increase in such requests from management and sees them as a positive reflection on the quality of internal audit services and the strength of the working relationship with management.



A range of specific matters were considered in establishing the Internal Audit Plan including:

risk - with focus generally on high risks areas such as IT systems, the LGP and mobile technology and external security threats. Internal Audit rely on Council’s risk management processes where possible, but also need to independently assess risk;

risk of damage to reputation; crisis management and the Council’s ability to respond to a crisis event and maintain

business continuity; the period since the previous internal or external audit and the results of those audits

and whether there were adverse conclusions. Consideration is also given to the extent and timeliness of implementation of agreed actions;

the balance between undertaking an extensive review of an area which is time consuming versus high level reviews of a wider range of areas is always considered in plan formulation;

specific requests from management for a particular focus; the need for certain internal audit work to be undertaken annually simply because of

the size, importance and sensitivity of the activities, regardless of risk. These are not necessarily full activity audits but can be restricted to selected component audits. Currently the following functions are subjected to some selective annual audit activity

o payroll including leave management; o procurement including accounts payable; o risk management; and o fraud and corruption control

major projects being undertaken such as the new ICT Managed Services implementation where there are inherently high risks particularly given that the Council will depend more on the external suppliers for internal controls and security;

current and/or emerging issues, for example, the Commonwealth Games, Stage 2 of the light rail project and the Cultural Precinct;

consideration of major accounting processes and whether good governance would require an internal audit, for example, non-current asset valuation methodology and performance;

the need for compliance with project assurance requirements; the extent of effective consultation with QAO to ensure appropriate levels of reliance

can be placed on internal audit work; and major legislative and/or regulatory reform impacts and implications.

The Committee worked with the Internal Audit Unit to ensure an appropriate balance between competing focus areas and the consequent risks when developing the Annual Audit Plan for 2015-16 and the Strategic Audit Plan.

5.4.3 External Audit

a) QAO Financial Statement Audit

The Audit Committee, management and the Internal Audit Unit all continue to work closely with the QAO as the Council’s external auditors and have built a strong and effective working relationship.

Committee members liaise extensively with representatives of the QAO through their attendance at Committee meetings. From time to time relevant presentations are made by QAO and on occasion the Committee meets “in camera” with QAO representatives to ensure that open and honest communication can ensue.



In the interests of efficiency, arrangements continue to be in place with the QAO that they can elect not to attend every meeting or only attend selected items. Agendas are changed if required to accommodate requests received from the QAO.

QAO throughout the audit process kept management and the Committee informed of the audit process and any matters requiring attention. This was achieved by presentation of the audit strategy and plan and regular reports to the Committee as well as ad hoc briefing notes.

QAO formally advise the Mayor and Chief Executive Officer of any major matters they have raised with management during the interim and final stages of the audit by issuing observation reports. These reports, when received by the Mayor, are tabled with Council as required by legislation. The final QAO observation report for 2015-16 is expected in early to mid-November and will be tabled with Council shortly thereafter.

It is worthy of noting that the QAO Closing Report for the 2015-16 audit, tabled at 10 October 2016 Audit Committee meeting, included no high risk issues outstanding as at the date the QAO certified Council’s financial statements. The Committee considers this to be a very good outcome and reflects well on the quality of Council’s policies and procedures as well as the quality and dedication of management and staff. The external audit fee set by, and adhered to by the QAO for Council’s 2015-16 external audit is $350,000.

b) QAO Report to Parliament on local government audits

In early 2016, the QAO will issue its consolidated local government sector report covering the 2015-16 financial statement audits of all local government entities. The Committee would suggest that given the performance report on financial sustainability recently delivered by the Auditor-General, the matter of financial sustainability may not receive the same level of scrutiny in the consolidated report.

c) Other QAO reports to Parliament

From time to time, the Auditor-General tables reports to parliament which deal with both sector wide issues and specific performance audits which may have application to more than one organisation. The Committee monitors such reports particularly where they have specific relevance to the Council, for example, the performance report on financial sustainability of local governments referred to in section 5.4.1 (b) above. All reports are also analysed by the Manager Corporate Assurance and the Committee to establish whether the findings and recommendations have relevance to the operations of the Council. Where they have relevance, action is taken to draw the attention of management to the findings and to the recommended actions.

5.4.4 Fraud and Corruption Control

The Audit Committee have continued to take a keen interest in fraud and corruption control during the 2015-16 meeting cycle and supports management’s attention to this matter. The Committee also noted the continuing interest of the Auditor-General in this area and notes that the Manager Corporate Assurance has developed a fraud and corruption assessment tool which will be used throughout the Council’s operations to assess the strength of the Council’s current framework including policies, processes and responses. The tool was based on material provided by QAO and by the Committee.



The Committee will monitor this matter to ensure that staff, external suppliers and contractors are fully aware of Council’s zero tolerance towards fraud and corruption. In this regard, the Committee also took particular note of the outcomes of the Internal Audit report on Information Security – Employee Awareness which indicated only fair to poor awareness with Moderate to High Exposure. Recent media articles continue to suggest that employees are often the source of security breaches because of a lack of awareness and/or care.

5.4.5 Internal Control and Governance

a) Internal Control

The Internal Audit Unit and the Committee have continued to focus on any areas of internal control weakness raised either through previous internal audits or by QAO. The Committee was pleased to note that in its Closing Report to the Audit Committee, QAO has assessed the Council’s control effectiveness as Generally Effective. Virtually all matters previously raised and reported were now considered closed by QAO.

b) Management Presentations to Audit Committee

The Committee continues to believe that there is considerable value in receiving presentations from senior managers and directorates with at least an annual presentation and, in the higher risk areas, six monthly or as needed. The focus of the presentations is to update the Committee on activities since the last report with the focus on current and emerging issues, risks and activities being undertaken to address relevant matters. In the confines of a confidential environment, issues of concern are freely identified and discussed.

During the 2015-16 meeting cycle, regular presentations included: Chief Executive Officer – on strategic direction, issues and challenges; Chief Operating Officer – in relation to scope of operations, structure changes, key

issues and risks faced and fraud and corruption management; Director, Economic Development and Major Projects on the Commonwealth Games

planning and progress Director Planning and Environment in relation to the City Plan and planning issues

generally; Director, Gold Coast Water in relation to restructuring, regulatory matters,

infrastructure needs and key issues and risks; Manager Corporate Planning and Performance in relation to the Annual Report and

quarterly corporate performance; Manager ICT Service Transformation Program in relation to the letting and

management of contracts for IT service provision and the Local Government Platform; Manager Corporate Asset Management in relation to asset management plans; Manager Corporate Finance on financial statements, financial performance, Financial

management Plan, financial management, related parties reporting, financial sustainability and proposed changes in accounting policies or presentation;

Manager Corporate Assurance on progress against the audit plan and major findings and recommendations arising from internal and external audit activities together with various assurance matters and fraud and corruption matters;

City Solicitor on legal, compliance, contingency provisions and insurance matters including the operation of the Council’s Captive Insurance Company (together with the CEO);

Manager Corporate Risk on current and emerging risks; and Manager Corporate Asset Management on asset management plans and issues.


ITEM 2 (Continued) AUDIT COMMITTEE CHAIR’S REPORT TO COUNCIL 2015-16 LG964/06/16/01/CF(P1) c) Circulation of Better Practice Guidance material

The Audit Committee continued to encourage the sharing of better practice guidance within Council and supported Internal Audit’s regular dissemination of relevant better practice guidance or other independent reports for the consideration of Council managers.

d) Employee Screening (Positions of Trust)

Committee members noted the completion of processes associated with the use of more formal employee screening processes for staff employed in “Positions of Trust” in Council. This process will help to strengthen the internal control environment and support adherence to the Code of Conduct. The Committee will monitor the implementation of this initiative with a view to considering whether this process could be adopted more widely throughout Council as part of the Council Fraud and Corruption Control Policy.

5.4.6 Risk Management

a) Enterprise Risk Management

The Committee has continued to exercise oversight of risk management activities which continue to become more complex and wide ranging. Council’s Manager Corporate Safety and Risk is required to present to the Committee half yearly on all aspects of Council’s risk profile and risk register and the extent of changes from prior presentations. Changes can be made to Council’s overall risk profile due to an emerging new risk such as the implementation of new systems or processes, the effective outsourcing of services, the identification of environmental risks, for example, in relation to tip contamination or variations in the control environment which have reduced or increased an individual risk rating. The Committee again sought explanations of major changes in risk ratings from relevant areas and continues to monitor whether new risks are being properly addressed. Council’s Executive Leadership Team actively monitors corporate risks on a regular basis with quarterly corporate risk profile updates and an annual emerging risk discussion. The Committee noted the heightened focus on risk management particularly in relation to fraud and corruption while operational management and staff remain fully aware of the importance of managing risks within their directorate and more generally Council wide. The Committee continues to have some concerns in relation to cyber security and IT security generally given the number of “scams” and/or attempts to penetrate organisations to access vital or personal data. The Committee has also noted that significant contracts with external suppliers have been let for several critical services which will need to be carefully monitored to ensure that there are adequate safeguards in terms of security and adequate provision for ongoing review of those safeguards by Internal Audit or QAO staff.

5.4.7 Legislative and Policy Compliance

Continuing with established good corporate governance, representation letters for 2015-16 were prepared by Directors and Managers in relation to specific activities. This is a structured and continuous process with representation effectively to Council officials who sign the financial statements on behalf of Council. Executives remain acutely aware of the significance and importance of this process and the reliance that is placed on their representations. The process works very effectively and is a useful mechanism to highlight any major issues for the Committee.



As Councillors would be aware, there are often changes to legislation (including regulations) that control the activities of Council. As changes are made, relevant discussion papers are prepared, presented and discussed at Committee meetings. The Committee’s focus remains on how any changes effect Council’s position and risks relating thereto. Further, the Committee are advised of what processes are being put in place to comply with legislative changes and how compliance is to be monitored. The Committee is also aware that several external organisations conduct compliance reviews such as privacy and environmental reviews which assist in ensuring that the Council remains compliant.

Finally, the Committee continues to promote the need for clear accountability for all compliance matters.

a) Legal Matters

The City Solicitor presented to the Committee twice during the year to update the Committee on outstanding legal matters, insurance issues and legislative or regulatory changes requiring implementation. Additionally, officers from the Integrity and Ethical Standards Unit (now within the Corporate Assurance Branch) updated the Committee on instances of fraudulent or corrupt activity and the implementation of the fraud and corruption control framework. The City Solicitor also updated the Committee on contingent liabilities/potential claims against the Council for the purposes of the financial statements and, together with the CEO, provided an update on the activities of the Council’s Captive Insurance Company.

b) Other Assurance Activities

From time to time certain Council activities are subjected to independent reviews of their operational activities by regulators or other independent bodies. Where such reports are known to Internal Audit and available, executive summaries are made available to the Committee. All such information and data adds to the overall governance of Council.

Examples include independent reviews by the Crime and Corruption Commission, Office of the Information Commissioner, regular Work Health and Safety reviews by the self insurance regulator and QTC Credit Reviews.

Overall compliance responsibility

Notwithstanding the many activities undertaken to ensure compliance, the Committee is aware that there is no one point of accountability for ensuring Council’s overall compliance and would again suggest that management considers this matter. The Committee understands that work on a compliance management framework and supporting system is currently ongoing.

5.4.8 Other Current and/or Emerging Matters

a) New ICT Managed Services arrangements

Council has entered into significant contracts with suppliers in relation to the replacement of legacy IT systems. The Committee will maintain a close oversight of the governance processes adopted in relation to implementation of the new ICT arrangements.


ITEM 2 (Continued) AUDIT COMMITTEE CHAIR’S REPORT TO COUNCIL 2015-16 LG964/06/16/01/CF(P1) b) Other

As a result of internal audit activities, various recommendations are determined and agreed with the responsible Manager and Director, and ranked on a high, medium and low scale together with timelines for corrective action. A register of these issues is maintained and regularly followed up by Internal Audit and reported to the Committee and Chief Executive Officer on a regular basis. Progress reports on management’s resolution of audit issues are provided to each regular Committee meeting. The Committee particularly focuses on the high rated outstanding actions and those more than three months overdue.

During 2015-16 the Internal Audit Unit has continued to focus on this area which has resulted in the escalation of some matters to ELT/CEO and the Audit Committee however the Committee noted that there are still a number of outstanding recommendations to be implemented.

5.4.9 Audit Committee Improvements

The Committee remains aware of the need to continually enhance the effectiveness of its operations. At the completion of the 2015-16 cycle, members provided feedback to the Manager Corporate Assurance concerning the Committee’s operations including some suggestions for improvements. During 2016-17, Committee members will complete a self-assessment tool which will be focussed on the local government environment in general and the Council of City of Gold Coast environment in particular.

During 2015-16, the Committee also:

reviewed the Audit Committee Charter and recommended a number of amendments for adoption by Council;

continued to work towards more standardised reporting from key governance areas; and

further reviewed the forward schedule of activities to better align with the updated Audit Committee Charter.

In addition, the Chair of the Committee has attended QAO briefings provided specifically for Audit Committee Chairs to ensure that they are aware of current and emerging issues and approaches.

6 ALIGNMENT TO THE CORPORATE PLAN, CORPORATE STRATEGIES AND

OPERATIONAL PLAN The role of Council's Audit Committee is aligned with the "Supporting the Delivery of Gold Coast 2020" elements of the corporate plan, particularly:

B We manage the city responsibly Our stewardship of the city provides value for money for ratepayers.

7 GOLD COAST 2018 COMMONWEALTH GAMES™ IMPACT

Not Applicable.


ITEM 2 (Continued) AUDIT COMMITTEE CHAIR’S REPORT TO COUNCIL 2015-16 LG964/06/16/01/CF(P1) 8 FUNDING AND RESOURCING REQUIREMENTS There were no new budget/funding considerations. The budget for the Committee’s operations remains at $80,000 per annum. 9 RISK MANAGEMENT The Audit Committee plays an active role in relation to Council's corporate and directorate risk profiles in ensuring that appropriate focus is placed on identifying, prioritising, monitoring, mitigating and managing risks to which the Council is exposed. The Committee received regular updates on ongoing risks and actions being taken by management including details of risk registers where relevant. 10 STATUTORY MATTERS Section 105 of the Local Government Act 2009 (Act), requires all large local governments to establish an audit committee to: monitor and review the -

o integrity of financial documents; and o internal audit function; and o effectiveness and objectivity of the local government’s internal auditors; and

make recommendations to the local government about any matters that the audit committee considers need action or improvement.

The Council’s Audit Committee Charter and operations for 2015-16 in accordance with that Charter, satisfied all the above statutory requirements. 11 COUNCIL POLICIES Audit Committee Policy and Charter 12 DELEGATIONS Not Applicable. 13 COORDINATION AND CONSULTATION In the table below, identify how internal and external stakeholders have been involved / participated in the proposal to date and the outcome of that participation. Name and/or Title of the Stakeholder Consulted

Directorate or Organisation Is the Stakeholder Satisfied With Content of Report and Recommendations (Yes/No) (comment as appropriate)

Grant Mather Manager Corporate Assurance

Office of the CEO Yes


ITEM 2 (Continued) AUDIT COMMITTEE CHAIR’S REPORT TO COUNCIL 2015-16 LG964/06/16/01/CF(P1) 14 STAKEHOLDER IMPACTS

Not Applicable. 15 TIMING Council's Audit Committee Charter requires the Chair of the Audit Committee to present an annual report of the Committee's activities for the year after the QAO has certified Council's financial statements. 16 CONCLUSION

The Audit Committee has had a very productive year with significant contributions to continuing improvements in internal control, asset valuation exercises, fraud and corruption control, financial reporting and risk management. It also continues to meet its obligations as set out in the Audit Committee Charter and applicable legislation. The Charter imposes considerable responsibilities on the Committee which considers its contribution to good corporate governance within Council as a vital role. In accordance with past practice, complying with such responsibilities is considered over the term of Council as against an annual basis.

Although this report has been submitted by me as the Chair of the Audit Committee, I would like to also acknowledge the excellent contributions made by all other members of the Committee. All members are totally independent of management and free from conflicts of interest (with all declarations of external interests maintained up to date). They have continued to participate in a very focussed and robust manner through detailed and searching questions of attendees to assess their understanding of the topic under discussion or review, the quality of their responses and the management of associated risks and opportunities. Their extensive experience, strategic insights and knowledge of current audit, financial management and governance issues and developments offer significant value to the Committee’s workings.

In particular, I would like to acknowledge the extensive contribution made by Graeme Stratford who will retire from the Committee in December of this year. Graeme joined the

Committee in January 2005 and was Chair of the Committee from 2011 to 2015. During Graeme’s membership of the Committee, there has been a significant improvement in the standard of the Council’s financial reporting, financial management and internal control.

Graeme’s strategic leadership, incisive and focussed comments and inquisitive approach has played a major role in the achievement of those significantly improved outcomes.

I would also like to acknowledge the excellent work undertaken by the Internal Audit Unit and the Manager Corporate Assurance. The improvements noted above are in no small way reflective of the dedicated efforts and work of the Manager and his staff and the Committee has very much appreciated the support afforded to it in its work by the Internal Audit Unit.

The Committee remains strongly committed to continuing to work closely with management, Councillors and other stakeholders to continue to improve the efficiency and effectiveness of Council's operations including management of risks and to working towards protection of the Council from fraud, loss and/or corruption.


ITEM 2 (Continued) AUDIT COMMITTEE CHAIR’S REPORT TO COUNCIL 2015-16 LG964/06/16/01/CF(P1) Through the minute process, matters the Committee believe Council should be advised of are so noted. Matters that may require escalation are discussed with Councillors Owen-Jones and Tozer as Chair and Member of the Governance and Administration Committee respectively.

Finally, it is should be noted that there is a standing offer for any Councillor to attend Audit Committee meetings for the whole or any session of a meeting that may be of interest. 17 RECOMMENDATION It is recommended that Council resolves as follows: That the annual report of the Audit Committee Chair for 2015-16 is noted. Author:

Mr Bill Turner Independent Audit Committee Chair 9 November 2016

TRACKS REF:#56670207

COMMITTEE RECOMMENDATION GA16.1124.002 moved Cr Owen-Jones seconded Cr Tozer 1 That the annual report of the Audit Committee Chair for 2015-16 is noted.

2 That the City thank Mr Graeme Stratford for his twelve years of service on the Audit Committee (including a four year term as Chair).

CARRIED



Attachment A

2015-16 INTERNAL AUDIT REPORTS

Review of the Total Cost of Ownership (TCO) Models for LGP and Managed Services

ICT Vulnerability Scanning and Penetration Testing Assurance

ICT Service Transformation Assurance Activity Closure Memo

LGP Procurement Report – Final Probity Report

Managed Services Procurement Report - External Probity

Cyber Security Threat Profile - Discussion Report

Management of Conflict of Interest (COI) Risks

Project Management Controls – PMIS General and Application Environment

Internal Quality Assurance Review – Benchmarking against IIA Standards

Continuous Controls Monitoring - Quarterly Reports

Quarterly Audit Recommendations Monitoring Reports

Tourist Parks Performance Management

Commonwealth Games Follow up

Gold Coast Aquatic Centre Operations

Payment Card Industry (PCI) standard Version 3 Gap Analysis - Follow-up Review

Information Security – Employee Awareness

Non Order Payments

Gold Coast Arts Centre Food and Beverage


ITEM 3 ORGANISATIONAL SERVICES TRAVEL AND TRAVEL RELATED EXPENSES – COUNCILLORS AND STAFF 1 JULY – 30 SEPTEMBER 2016 HR829/02(P1) Refer 4 page attachment A Refer 1 page attachment B 1 BASIS FOR CONFIDENTIALITY Not applicable. 2 EXECUTIVE SUMMARY Not applicable. 3 PURPOSE OF REPORT This report provides a summary of Council funded travel activities for Councillors and staff for the period 1 July to 30 September 2016 and a comparison report summarising travel expenditure for July to September 2015. 4 PREVIOUS RESOLUTIONS Ex Council Minute No GF08.0611.007:

“That a report be brought back to Council on all conferences paid for by Council, attended by staff, contractors or consultants, on a three monthly basis. The report to contain details of the dates, cost, the relevant budget numbers they were charged to, and whether the attendees were speakers at the conference or convention.”

5 DISCUSSION A report of Council funded travel activities for Councillors and staff for the period 1 July to 30 September 2016 is provided as Attachment A. There were 49 travel requests processed within this period. Five were conference speakers (Council employees). The following table shows a comparison with the same period last year.

1 July – 30 Sep 2015 1 July – 30 Sep 2016

No. of Travel Requests

Total Expenditure($)

No. of Travel Requests

Total Expenditure($)

Commonwealth Games Related Travel 2 1,658 0 0Conferences 38 76,085 27 39,299Business Meetings 12 20,389 8 8,683Trade Missions 3 9,443 5 32,881Expo / Trade Show 0 0 4 14,352Conference Speakers 3 3,010 5 2,294

Total 58 110,585 49 97,509


ITEM 3 (Continued) TRAVEL AND TRAVEL RELATED EXPENSES – COUNCILLORS AND STAFF 1 JULY – 30 SEPTEMBER 2016 HR829/02(P1) A comparison report by directorate for travel-related expenditure for the period 1 July to 30 September 2015 and 1 July to 30 September 2016 is provided as Attachment B. Attachment B contains a quarterly international travel comparison summary report. This report summarises total international travel-related expenditure for the periods 1 July to 30 September 2015 and 1 July to 30 September 2016. The expenditure on travel and related activities to 30 September 2016 of $97,509 represents 0.0073% of Council’s initial accrual budget of $1.326 billion for 2016-17. 6 ALIGNMENT TO THE CORPORATE PLAN, CORPORATE STRATEGIES AND

OPERATIONAL PLAN Not applicable. 7 GOLD COAST 2018 COMMONWEALTH GAMES™ IMPACT Commonwealth Games related travel is included in this report. 8 FUNDING AND RESOURCING REQUIREMENTS All travel costs are funded from individual directorate budgets. 9 RISK MANAGEMENT Not applicable. 10 STATUTORY MATTERS The Local Government Regulation 2012 requires disclosure of overseas travel in Council’s Annual Report. 11 COUNCIL POLICIES Corporate Travel and Accommodation Policy – Employees and Contractors. Expenses Reimbursement and Provision of Facilities for Mayor and Councillors Policy. 12 DELEGATIONS Not applicable. 13 COORDINATION & CONSULTATION Not applicable. 14 STAKEHOLDER IMPACTS Not applicable.


ITEM 3 (Continued) TRAVEL AND TRAVEL RELATED EXPENSES – COUNCILLORS AND STAFF 1 JULY – 30 SEPTEMBER 2016 HR829/02(P1) 15 TIMING This Report is for the period of 1 July 2016 to 30 September 2016. 16 CONCLUSION The attached summary of travel expenditure is submitted for Council’s information. The report lists activities undertaken by Council that require either airfares or accommodation for staff, contractors or Councillors to attend an event. All travel is subject to a formal approval process. Furthermore, there is regular corporate oversight through reports to the CEO and external disclosure via Council’s Annual Report. Overall, Council’s travel costs continue to amount to a very small percentage of Council’s overall annual budget. 17 RECOMMENDATION It is recommended that Council resolves as follows: That the information contained in the report be noted.

Author: Authorised by:

Christina Da Silva Glen Potter Corporate Travel and Administration Officer Director Organisational Services 07 November 2016

Item: # 58634606 Attachment A: # 58589355 Attachment B: # 58612711

COMMITTEE RECOMMENDATION GA16.1124.003 moved Cr Tozer seconded Cr Owen-Jones That the information contained in the report be noted.

CARRIED UNANIMOUSLY


ITEM 3 (Continued) TRAVEL AND TRAVEL RELATED EXPENSES – COUNCILLORS AND STAFF 1 JULY – 30 SEPTEMBER 2016 HR829/02(P1)

As at: 01 November 2016

From To Position Title Description Provider Venue Reg Fee** Travel Accom Other*Total Gross

Cost

14/07/2016 15/07/2016Business Complaince Facilitator

Safety Institute of Australia - Visions Conference Safety Institute of Australia Maroochydore 750 0 161 57 968

25/07/2016 27/07/2016Manager Transport and Traffic Branch

Driving Growth in Light Rail Criterion Conferences Sydney 0 0 371 379 750

25/07/2016 27/07/2016Executive Coordinator Transport Planning & Policy Portfolio

Driving Growth in Light Rail Criterion Conferences Sydney 0 0 0 218 218

26/07/2016 29/07/2016Executive Coordinator Strategic Operations

AITPM 2016 National ConferenceAustralian Institute of Traffic Planning and Management Incorporated (AITPM)

Sydney 0 0 0 157 157

23/08/2016 25/08/2016Senior Planning & Response Officer - Disaster Management

Guardian User Group Conference 2016 QIT Plus Gympie 495 0 507 211 1,213

23/08/2016 25/08/2016Project Officer - Disaster Management

Guardian User Group Conference 2016 QIT Plus Gympie 495 0 507 211 1,213

1,740 0 1,547 1,233 4,520


Cost

21/07/2016 22/07/2016Senior Pest Management Specialist

Stakeholder Consultative Group for the National Wild Dog Action Plan

National Wild Dog Action Plan Sydney 0 0 0 44 44

17/08/2016 18/08/2016Senior Environmental Health Officer

FSANZ's 25th Anniversary Symposium - Food Safety and Public Health

Food Standards Australia New Zealand Canberra 150 357 164 249 920

24/08/2016 27/08/2016Coordinator Connected Communities

Planning and Managing Community Infrastructure Criterion Conferences Melbourne 2,419 316 321 303 3,358

29/08/2016 2/09/2016 Manager City Libraries ALIA 2016 National Conference Australian Library and Information Association

Adelaide 1,275 0 603 462 2,339

11/09/2016 14/09/2016 City Law Officer 20th Australiasian Weeds Conference 2016 Weed Management Society Perth 1,080 648 680 266 2,67415/09/2016 16/07/2016 Corporate Librarian Australian Government Libraries Forum 2016 Aglin Association Canberra 0 374 425 184 982

25/09/2016 28/09/2016Cemeteries & Venue Administration Officer

ACCA ConferenceAustralasian Cemeteries & Crematoria Association (ACCA)

Perth 1,295 802 953 360 3,410

6,219 2,496 3,146 1,867 13,728

Booking Comment**

CEO Approved

Conference Speaker/CEO Approved/Flights funded by event organiser

Conference Speaker/CEO Approved/Flights and accommodation funded by event organiser

Attachment A

Conference Speaker/ Flights and accommodation funded by event organiser

Quarterly Travel Report

1 July to 30 September 2016

City Infrastructure

Flights and accommodation funded by event organiser

CEO Approved

CEO Approved

Total:

Booking Comment**

Community Services

Flights funded by event organiser

Total:




Cost

28/07/2016 29/07/2016 Councillor Division 13Australian Local Government Women's Association QLD Conference

Australian Local Government Women's Association

Brisbane 580 0 126 21 727

1/08/2016 2/08/2016 Councillor Division 13Enhancing Public Sector Performance with Metrics, KPI to ensure Alignment with Strategic Plans: Program B

Clariden Global International Limited Melbourne 2,995 302 390 319 4,005

25/08/2016 25/08/2016 MayorThe Palaszczuk Government's Connecting to Asia Forum Mayoral Breakfast

Queensland Government Cairns 0 1,234 294 57 1,585

7/09/2016 7/09/2016 MayorThree tiers of Government discussion for M1 Funding

City of Gold Coast Sydney 0 1,001 0 0 1,001

18/09/2016 23/09/2016 Councillor Division 1 China Trade Mission City of Gold Coast China 0 0 1,068 432 1,50018/09/2016 27/09/2016 Mayor China Trade Mission City of Gold Coast China 0 11,532 1,353 265 13,14918/09/2016 27/09/2016 Mayoress China Trade Mission City of Gold Coast China 0 3,648 0 0 3,648

18/09/2016 27/09/2016 MayoressChina Trade Mission - Mayor's personal contribution towards Mayoress' flights

City of Gold Coast China 0 -3,648 0 0 -3,648

3,575 14,069 3,230 1,093 21,967


Cost

6/07/2016 7/07/2016 Director Gold Coast Water Water Utility Chairs and MD Symposium Water Services Association of Australia Adelaide 0 409 182 121 711

8/07/2016 8/07/2016Executive Coordinator Regulation and Reporting

Regulators Forum with Jonson Cox Water Services Association of Australia Sydney 0 366 0 0 366

1/08/2016 3/08/2016Team Leader Catchment Planning

Australian Stream Management Conference River Basin Management Society Blue Mountains 1,122 264 882 490 2,759

10/08/2016 11/08/2016Senior Data Management Officer

Australasian Waste & Recycling Expo Diversified Communications Australia Sydney 296 196 385 411 1,288

6/09/2016 6/09/2016Manager Business Performance

Commerical Performance Network Meeting Water Services Association of Australia Sydney 100 228 204 102 633

1,518 1,463 1,654 1,123 5,757

G16.0524.016

Total:

CEO Approved

CEO Approved

Council

Gold Coast Water

Booking Comment**

CEO Approved

G16.0906.023

Total:

Booking Comment**

CEO Approved

CEO Approved/G12.0514.004




Cost

14/07/2016 17/07/2016Senoir Arts and Culture Project Officer

Cairns Indigenous Art Fair Cairns Indigenous Art Fair Cairns 0 408 808 1,151 2,367

17/07/2016 20/07/2016Strategic Advisor - Arts & Culture

Provision of high level strategic advice on the GC2018 Commonwealth Games cultural legacy strategy

City of Gold Coast Gold Coast 0 153 585 124 863



City of Gold Coast Gold Coast 0 298 740 166 1,204

3/08/2016 5/08/2016Senior Arts & Culture Project Officer

Contemporary Music Roundtable Music Australia / Live Music Office Sydney 0 335 186 272 792




18/08/2016 19/08/2016Executive Coordinator Feasability & Partnerships

LGAQ Future Cities Summit 2016 Local Government Assoc of Qld Brisbane 1,120 0 185 62 1,367




1/09/2016 18/09/2016 TradeStart Export Advisor Surf Expo and Canada Sport Business Showcase City of Gold Coast Orlando & Vancouver 0 3,357 3,078 3,013 9,447

7/09/2016 9/09/2016Business and Investment Attraction Officer - Industry

PNG Mission City of Gold Coast Port Moresby 0 687 898 430 2,015

12/09/2016 15/09/2016Senior Business Development Officer Commonwealth Games

Fine Foods Melbourne Fine Food Australia Melbourne 0 289 479 482 1,250

18/09/2016 27/09/2016Business and Investment Attraction Officer

China Trade Mission City of Gold Coast China 0 2,783 2,360 2,566 7,709

22/09/2016 23/09/2016 Events Officer Australian Events Symposium 2016 Australian Event Awards Sunshine Coast 825 0 180 21 1,02622/09/2016 23/09/2016 Events Officer Australian Events Symposium 2016 Australian Event Awards Sunshine Coast 825 0 237 21 1,08322/09/2016 23/09/2016 Events Officer Australian Events Symposium 2016 Australian Event Awards Sunshine Coast 825 0 247 21 1,09322/09/2016 23/09/2016 Events Officer Australian Events Symposium 2016 Australian Event Awards Sunshine Coast 825 0 180 21 1,02622/09/2016 23/09/2016 Events Officer Australian Events Symposium 2016 Australian Event Awards Sunshine Coast 660 0 180 21 861

5,080 8,988 11,823 8,818 34,709


Cost

14/07/2016 15/07/2016Manager Corporate Risk and Safety

Safety Institute of Australia - Visions Conference Safety Institute of Australia Maroochydore 750 0 323 92 1,165

14/07/2016 15/07/2016Executive Coordinator Coporate Workplace Health & Safety

Safety Institute of Australia - Visions Conference Safety Institute of Australia Maroochydore 750 0 323 92 1,165

26/07/2016 26/07/2016 Manager Corporate Assurance CEB Audit Leadership Council Annual Forum 2016 Corporate Executive Board Sydney 0 198 180 255 634

11/08/2016 12/08/2016 Chief Executive Officer2016 Australian Local Government Leadership Summit

Australian School of Applied Management

Melbourne 995 271 484 349 2,099

7/09/2016 7/09/2016Workplace Health & Safety Data Analyst & Reporting Officer

Myosh Forum Myosh Sydney 199 228 0 257 684

18/09/2016 27/09/2016 International Relations Officer China Trade Mission City of Gold Coast China 0 3,079 2,401 3,028 8,508

2,694 3,776 3,711 4,073 14,255

Booking Comment**

CEO Approved

CEO ApprovedCEO Approved

Total:

G16.0524.016

G16.0624.031

G16.0524.016

CEO ApprovedCEO ApprovedCEO Approved

Office of the CEO

Mayor Approved

G16.0524.016

Total:

CEO Approved

Booking Comment**

CEO Approved

Economic Development & Major Projects




Cost

26/07/2016 27/07/2016 Chief Procurement OfficerCIPS Australasia Conference & Supply Management Awards 2016 / CIPS Regional Chairs' Meeting / CIPS Advisory Group Meeting

CIPS Australasia Melbourne 0 270 430 335 1,034

6/09/2016 7/09/2016Energy Management Coordinator

Expotrade Australia Lighting Summit 2016 Expotrade Australia Pty Ltd Melbourne 600 274 177 240 1,291

600 543 607 575 2,325


Cost

27/07/2016 28/07/2016Director Planning and Environment

Griffith University IMPACT Event & UDIA on the Radar: Infill Event

Griffith University Brisbane 0 0 185 62 247

0 0 185 62 247

Reg Fee** Travel Accom Other*Total Gross

Cost

Total: $21,426 $31,336 $25,903 $18,844 $97,509

Organisational Services

Planning and Environment

Conference Speaker

Total:

# This report provides information on attendance at business meetings, conferences, seminars and similar activities.

* Other - includes daily allowances, cab charges, car hire and other minor costs.

** Registration - Includes conference registration or other costs required to attend the event.

*** Booking Comments - Where applicable a comment is made to clarify the details of the event attendance.

Booking Comment**

Conference Speaker

Total:

Booking Comment**



Attachment B

01 Jul 15 - 30 Sep 15

01 Jul 16 - 30 Sep 16

01 Jul 15 - 30 Sep 15

01 Jul 16 - 30 Sep 16

01 Jul 15 - 30 Sep 15

01 Jul 16 - 30 Sep 16

01 Jul 15 - 30 Sep 15

01 Jul 16 - 30 Sep 16

01 Jul 15 - 30 Sep 15

01 Jul 16 - 30 Sep 16

01 Jul 15 - 30 Sep 15

01 Jul 16 - 30 Sep 16

Community Services 4 7 $4,132 $6,219 $2,434 $2,496 $1,298 $3,146 $2,514 $1,867 $10,378 $13,728Councillors 7 6 $1,954 $3,575 $3,567 $14,069 $2,331 $3,230 $945 $1,093 $8,797 $21,967Economic Develop & Major Projects 11 16 $1,403 $5,080 $6,410 $8,988 $7,240 $11,823 $4,547 $8,818 $19,600 $34,709City Infrastructure 3 6 $2,447 $1,740 $320 $0 $1,347 $1,547 $526 $1,233 $4,640 $4,520Gold Coast Water 2 5 $700 $1,518 $805 $1,463 $572 $1,654 $621 $1,123 $2,699 $5,757Office of the CEO 10 6 $9,259 $2,694 $4,859 $3,776 $3,697 $3,711 $4,566 $4,073 $22,381 $14,255Organisational Services 7 2 $12,607 $600 $2,482 $543 $2,167 $607 $1,685 $575 $18,941 $2,325Planning and Environment 14 1 $9,753 $0 $5,187 $0 $4,914 $185 $3,295 $62 $23,148 $247Total 58 49 $42,256 $21,426 $26,064 $31,336 $23,566 $25,903 $18,700 $18,844 $110,585 $97,509

01 Jul 15 - 30 Sep 15

01 Jul 16 - 30 Sep 16

$2,884 $0$4,223 $14,649$6,969 $19,171

$0 $0$0 $0

$5,221 $8,508$0 $0$0 $0

$19,296 $42,328

Community ServicesCouncillors

Total

Office of the CEOOrganisational ServicesPlanning and Environment

Gold Coast WaterCity InfrastructureEconomic Development & Major Projects

Total

Other

01 July - 30 September 2015 and 01 July - 30 September 2016Quarterly International Travel Comparison Summary Report

(This summary report provides information on international travel, but excludes events that have been funded externally)

Quarterly Travel Comparison Summary Report01 July - 30 September 2015 and 01 July - 30 September 2016

(This summary report provides information on attendance at business meetings, conferences, seminar and similar activities)

No. of Attendees Registration Travel Accom Total


ITEM 4 OFFICE OF THE CHIEF EXECUTIVE OFFICER CONNECTING SOUTHERN GOLD COAST LTD – BI-ANNUAL PERFORMANCE REVIEW LG426/1112/-(P3) Refer attachments: Bi-annual Performance Report (Attachment 1) Annual Financial Report (Attachment 2) 1 BASIS FOR CONFIDENTIALITY Not applicable. 2 EXECUTIVE SUMMARY Not applicable. 3 PURPOSE OF REPORT The purpose of this report is to present the Bi-annual Performance Report for Connecting Southern Gold Coast Ltd (CSGC) for the six month period ended 30 June 2016. 4 PREVIOUS RESOLUTIONS Governance Administration & Finance Committee 29 October 2015 (minute GA15.1029.001): 1 That Council notes the Connecting Southern Gold Coast Ltd bi-annual performance

report for the half year ended 30 June 2015 and the Audited Annual Financial Report for the year ended 30 June 2015.

2 That Council note that Connecting Southern Gold Coast Ltd proposes to work on a special project regarding event strategy to secure further visitation from Northern NSW market for which a funding request may be made in 2016-17.

5 DISCUSSION 5.1 Background The City contracts with Connecting Southern Gold Coast Ltd (CSGC) to manage the provision of marketing, promotional and security patrol activities in the Southern Gold Coast precinct. Council is the sole member of CSGC. Consequently, CSGC is classified as a “public sector controlled entity” under the Auditor-General Act 2009. The City’s current Service Agreement concludes on 30 June 2019. The Agreement requires CSGC to submit performance reports to Council for review on a biannual basis in March and October. CSGC’s performance was last reviewed by the Governance Administration & Finance Committee at its meeting on 15 October 2015. CSGC’s performance report for the period ended 31 December 2015 was not considered by GAF Committee due to the volume of reports pre-election, but was circulated to Councillors for their information. 5.2 Review of Performance CSGC’s Performance Report submission was received on 25 October (see Attachment 1). The report comprises three components, these being: Corporate Governance Alignment with Destination Tourism Management Plan (DTMP) / KPI’s Financial Management


ITEM 4 (Continued) CONNECTING SOUTHERN GOLD COAST LTD – BI-ANNUAL PERFORMANCE REVIEW LG426/1112/-(P3) Corporate Governance

All governance requirements have been recorded in the performance report. It is considered that CSGC is satisfactorily meeting its obligations under the service agreement. Director Retirements

As the term of all six (non-Council) directorships was due to conclude on 30 September 2016, the Chief Executive Officer (Member’s Representative) conducted a “director retirement process” in August 2016, in consultation with the Councillor for Division 14. Four of the five incumbent directors sought re-appointment for a further term resulting in two vacant directorships. As the majority of directors had not yet served a four-year term, the CEO subsequently decided to: re-appoint the four incumbent directors (including the Chairperson of the Board,

Ms Anne Stovin) for terms concluding on either 30 June 2018 or 30 June 2020; and appoint Mr Greg Jenke (John Flynn Hospital) and Mr Benjamin Crompton (Ben Crompton

Accountants & Lawyers) to the two vacant directorships for terms concluding on 30 June 2020.

Work Health & Safety

While Council established CSGC and its other controlled entities as private sector entities so they could operate in a less regulated environment, because these entities are classified as a “Related Body Corporate” under Workers’ Compensation & Rehabilitation Act 2003, Council must provide workers’ compensation coverage to them. Because Council self-insures for workers’ compensation, in order to retain its self-insurance licence, like Council, each controlled entity must maintain a work health and safety management system that is compliant with the National Self-insurer OHS Management System Audit Tool; and subject to external audit by the regulator.

A recent interim audit conducted by the regulator identified a range of improvements to the WHS management systems of the four controlled entities to bring them up to the required standard (this essentially being best practice standard for large organisations). Given the criticality of Council retaining its self-insurance licence, Council’s Corporate Safety & Risk Branch is working closely with all four entities to implement the required improvements ahead of the formal external audit in 2018. It should be noted that each of the controlled entities will be required to devote more resources to maintaining their WHS management systems. Alignment with Destination Tourism Management Plan (DTMP) / KPI’s DTMP Partnership Agreement One of the key elements of the DTMP was to provide for the establishment of a Gold Coast Tourism Partnership Agreement between Gold Coast Tourism, the City and Precinct Entities. The Partnership Agreement, which was recently signed by all parties, provides for:

• a long-term commitment to the partnership • delineation of clear roles and responsibilities • shared destination performance outcomes • comprehensive two-way reporting and accountability


ITEM 4 (Continued) CONNECTING SOUTHERN GOLD COAST LTD – BI-ANNUAL PERFORMANCE REVIEW LG426/1112/-(P3) City-wide Event Coordination The CEO’s of the three precinct entities meet with the Executive Officer City Events on a regular basis to collaborate and coordinate with regards to the nature and timing of events held across the city. The last meeting was held on 1 September 2016. The next meeting is scheduled for 15 November 2016. Operational KPI’s CSGC’s performance against agreed KPI’s is detailed in Attachment 1. CSGC’s report was forwarded to the Principal Strategic Project Officer (Tourism) for assessment however advice was not able to be provided prior to the finalisation of this report. The assessment will therefore be provided separately prior to the meeting.

Financial Management CSGC’s financial performance is detailed in Attachment 1. The Corporate Financial Accountant has reviewed the information provided by CSGC and advises as follows:

There are no financial issues to note. The Audit Committee reviewed CSGC’s Annual Financial Report at its meeting on 10 October. A copy of the Annual Financial Report is attached for noting (see Attachment 2). The Queensland Audit Office has provided an opinion that CSGC’s Annual Financial Report gives a true and fair view of the Company’s financial position and performance and complies with the Australian Accounting Standards and Corporations Regulations 2001. 6 ALIGNMENT TO THE CORPORATE PLAN, CORPORATE STRATEGIES AND

OPERATIONAL PLAN

Gold Coast 2020 2.0 Prosperity built on a strong diverse economy What we want to see by 2020 2.5 We are a globally recognised tourism destination - our city attracts visitors from all over the world Key strategy: Implement the Economic Development Strategy to build and create a

sustainable local, national and international tourism market for the city.

Key programs of work: Develop and implement a citywide Destination Management Plan.

Work with Gold Coast Tourism to promote the city as a world-class tourism destination through a range of marketing programs and activities.

Operational Plan There are no specific strategies relating to CSGC contained in 2015-16 Operational Plan. 7 GOLD COAST 2018 COMMONWEALTH GAMES™ IMPACT Not applicable


ITEM 4 (Continued) CONNECTING SOUTHERN GOLD COAST LTD – BI-ANNUAL PERFORMANCE REVIEW LG426/1112/-(P3) 8 FUNDING AND RESOURCING REQUIREMENTS

Not applicable 9 RISK MANAGEMENT The funding of CSGC does not relate directly to any of the Corporate Risks. However it does relate to Directorate Risk No. CO000410 below, which is currently rated as Low 48 under Council’s Risk Management methodology.

Adverse impact on Council through inappropriate/illegal actions of any of Council's controlled entities for which the OCEO is responsible (ie, Gold Coast Arts Centre Pty Ltd, Surfers Paradise Alliance Ltd, Broadbeach Alliance Ltd and Connecting Southern Gold Coast Ltd)

The bi-annual performance review process and the appointment of a Councillor to each of the boards are mitigations for this risk. 10 STATUTORY MATTERS Corporations Act 2001

CSGC is registered with the Australian Securities & Investments Commission as a company limited by guarantee. Its operations are governed by the Corporations Act 2001. Auditor-General Act 2009

Under the Auditor-General Act 2009, CSGC is classified as a “public sector controlled entity”. Section 5 of the Act states:

5 What is a controlled entity (1) An entity is a controlled entity if it is subject to the control of 1 or more of the following (the controlling entity)—

(a) a department; (b) a local government; (c) a statutory body; (d) a GOC; (e) another entity subject to the control of 1 or more of the entities mentioned in paragraphs (a) to (d).

(2) In this section—control means the capacity of an entity to dominate decision-making, directly or indirectly, in relation to the financial and operating policies of another entity so as to enable the other entity to operate with it in pursuing the objectives of the controlling entity.

With respect to the City’s “control” of CSGC, the City:

is the sole member of the Company and therefore has control over its constitution as well as the appointment of the directors and chairperson

has control over the Company’s specific role and responsibilities via the service agreement

provides annual funding in accordance with the service agreement regularly reviews the Company’s performance against the service agreement including

the strategic direction of the Company. The Act requires that Queensland Audit Office be appointed as the Company’s Auditor.


ITEM 4 (Continued) CONNECTING SOUTHERN GOLD COAST LTD – BI-ANNUAL PERFORMANCE REVIEW LG426/1112/-(P3) Workers’ Compensation & Rehabilitation Act 2003 CSGC is also classified as a “Related Body Corporate” of the City under this Act and the Corporations Act 2001 and, as such, the City must provide workers’ compensation coverage to CSGC. As Council self-insures for workers’ compensation, like Council, CSGC must maintain a work health and safety management system that is compliant with the National Self-insurer OHS Management System Audit Tool (NAT 3- 2014) – and forms part of the external audit of Council’s WHS Management System by the regulator. 11 COUNCIL POLICIES

Not applicable 12 DELEGATIONS The Council has delegated authority to the Chief Executive Officer to determine all matters within the responsibility of Council as the sole member of the Company – with the exception of the determination of annual funding and review of the entity’s performance. 13 COORDINATION & CONSULTATION Name and/or Title of the Stakeholder Consulted

Directorate or Organisation

Is the Stakeholder Satisfied With Content of Report and Recommendations

Joanne Cullen, Corporate Finance Accountant

OCEO (Corporate Finance)

Yes

Frances Cream, Principal Strategic Project Officer (Tourism)

EDMP Yes

14 STAKEHOLDER IMPACTS The CSGC Board and Council, being the sole Member of the Company, are the key stakeholders in terms of CSGC’s performance in the achievement of the objectives detailed in CSGC’s Constitution, the obligations detailed in its service agreement with Council and the agreed KPI’s. The CSGC Board is broadly representative of the stakeholders in the Southern Gold Coast precinct. CSGC works cooperatively and in consultation with Gold Coast Tourism and the other precinct entities in accordance with the new Destination Tourism Management Plan Partnership Agreement. 15 TIMING The next bi-annual performance review is due in March 2017 (for the six month period ending 31 December 2016). 16 CONCLUSION

It is considered that CSGC is satisfactorily performing its role and responsibilities under the Service Agreement and meeting the objects for which it was established. The Queensland Audit Office has provided an unqualified audit opinion in relation to CSGC’s Annual Financial Report.


ITEM 4 (Continued) CONNECTING SOUTHERN GOLD COAST LTD – BI-ANNUAL PERFORMANCE REVIEW LG426/1112/-(P3) 17 RECOMMENDATION It is recommended that Council resolves as follows: That Council notes Connecting Southern Gold Coast Ltd’s bi-annual performance report for the half-year ended 30 June 2016 and its Annual Financial Report for the year ended 30 June 2016. Author: Authorised by:

Stephen Bowden Dale Dickson Coordinator Controlled Entities & Community Grants Chief Executive Officer 9 November 2016 Document # 58468287 COMMITTEE RECOMMENDATION CHANGED COUNCIL MEETING 29 NOVEMBER 2016 COMMITTEE RECOMMENDATION GA16.1124.004 moved Cr Taylor seconded Cr Tozer That Council notes Connecting Southern Gold Coast Ltd’s bi-annual performance report for the half-year ended 30 June 2016 and its Annual Financial Report for the year ended 30 June 2016.

CARRIED UNANIMOUSLY

COUNCIL MEETING 29 NOVEMBER 2016 RESOLUTION G16.1129.014

That Committee Recommendation GA16.1124.004 be adopted, with the addition of Part 2, such that it reads in its entirety as follows:

1 That Council notes Connecting Southern Gold Coast Ltd’s bi-annual performance report for the half-year ended 30 June 2016 and its Annual Financial Report for the year ended 30 June 2016.

2 That a report be brought forward to Council on 7 December 2016 outlining the status of the issues discussed during closed session.

CARRIED UNANIMOUSLY

727th Council Meeting 29 November 2016 Governance & Administration Committee Meeting 24 November 2016

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CLOSED SESSION LOCAL GOVERNMENT ACT 2009 AND SUPPORTING REGULATIONS PROCEDURAL MOTION moved Cr Owen-Jones seconded Cr Gates That the Committee move into Closed Session pursuant to section 275 (1) of the Local Government Regulation 2012, for the consideration of the following item for the reason shown:-

Item Subject Reason

Item 5 Presentation Application For Funding Grant – The Gold Coast Hindu Cultural Association Inc

Prejudicial Matter

CARRIED by SUPER MAJORITY

PROCEDURAL MOTION moved Cr Tozer seconded Cr Taylor That the Committee move into Open Session.

CARRIED Following resumption into Open Session Item 5 was moved and carried as shown on the following page.


ITEM 5 ORGANISATIONAL SERVICES APPLICATION FOR FUNDING GRANT – THE GOLD COAST HINDU CULTURAL ASSOCIATION INC PN265841/20/07(P4) Refer 6 page CONFIDENTIAL attachment 1 BASIS FOR CONFIDENTIALITY 1.1 I recommend that the attachments 1 and 2 be considered in Closed Session pursuant

to section 275 (1) of the Local Government Regulation 2012 for the reason that the matter involves

(h) other business for which a public discussion would be likely to prejudice the interests of the local government or someone else, or enable a person to gain a financial advantage.

1.2 I recommend that the attachments 1 and 2 be deemed confidential documents and be treated as such in accordance with sections 171 (3) and 200 (5) of the Local Government Act 2009 and that the document remain confidential unless Council decides otherwise by resolution

2 EXECUTIVE SUMMARY Not Applicable. 3 PURPOSE OF REPORT To advise Council of an approach from The Gold Coast Hindu Cultural Association Inc (‘GCHCA’) for a funding grant from Council to enable the development of the Association’s leasehold site at Arundel and to seek Council’s resolution on that approach. 4 PREVIOUS RESOLUTIONS Excerpts from Council resolution dated 25 July 2003 (ex Minute G03.0725.027) 1. That Council approve the ….. plan of development criteria at the attachment enabling

construction of the internal access road, car parking and services provision to proceed immediately.

3. That any lease issued ….. be subject to Council’s standard terms document for community groups and with a requirement that lessees repay to Council a pro-rata share of development costs incurred by Council in providing road, car park and services provision to the respective lease sites.

6. That (lessees) be offered a lease subject to confirmation of their financial details and ability to commence a significant stage of development within 12 months of being granted a lease.

5 DISCUSSION The GCHCA holds a sublease from Council over an area of 5,216 square metres being situated at Dunkirk Close, Arundel. The sublease held by the Association comprises part of a community precinct fostered by the City granting subleases for nominal rentals, thus assisting community based organisations to provide a myriad of worthwhile outcomes.


ITEM 5 (Continued) APPLICATION FOR FUNDING GRANT – THE GOLD COAST HINDU CULTURAL ASSOCIATION INC PN265841/20/07(P4) History of the Arundel Community Precinct The Arundel Community Precinct comprises 14.3 hectares of State land secured under lease by the City for community purposes. The lease commenced on 1 September 1990 and has a term of thirty (30) years. Since inception of the lease, the City has issued about 20 subleases to many and varied community based organisations. The grant of subleases has been pursued in two (2) separate stages – the first occurred in the early 1990s with entities such as St Vincent de Paul, the Islamic Society of the Gold Coast, Assemblies of God, Serbian Orthodox Church, Presbyterian Church, Hopewell Hospice and Alzheimers Association etc gaining leasehold tenure. The second and most recent stage of sublease grants occurred from 2003. At that time, Council specifically resolved to adopt a plan of development criteria which established a Code for the development of Stage 2. Since the adoption of that Code, subleases have issued to entities such as Montrose, Bravehearts, Gold Coast Chinese Christian Church, Tzi Chu Association, Gold Coast Homeless Youth, AEIOU Foundation etc. As can be seen, the Arundel Community Precinct represents a mix of a large number of community organisations providing for places of worship in some cases and social services provision in others. When Stage 2 of the Precinct was adopted for progression, Council specifically resolved (ex Minute G03.0725.027) that any sublease that issued would be subject to standard sublease terms and conditions, that the grant of a sublease would be subject to a proposed sublessee confirming their financial capacity to proceed with sublease development, that (at least) stage 1 of any sublease development occur with 12 months of sublease grant and any sublease be subject to upfront payment of a pro-rata contribution to the development costs incurred by the City in developing the community precinct. The pre-paid development costs applicable to Stage 2 subleases was subsequently confirmed at $40 per square metre of proposed sublease area and each sublessee now in place in the precinct has paid that contribution in full. History of The Gold Coast Hindu Cultural Association Inc Proposal (“the GCHCA proposal”) The initial approach from GCHCA was received by officers via the then Divisional Councillor in February 2012. At that time, there was a single remaining parcel in the Arundel Community Precinct still available with all remaining areas subject to subleases already in place/in negotiation. At the time, the GCHCA proposal was for the development of a cultural and education centre. In accordance with Council’s adopted position on the grant of subleases, requests were subsequently issued for details on the GCHCA proposal – what financial resources existed to see a development proceed if a sublease was offered, what would the plans for the development comprise having regard to the development Code in place, what would these plans if implemented cost and, finally, confirmation that financial capacity existed for pre-payment of $40 per square metre for development costs for the proposed sublease area. Since 2012, the GCHCA proposal has progressed slowly. At different times requests were made for pre-payment of development costs to be waived in full, halved or finally as agreed by officers, paid in instalments over 4 years.


ITEM 5 (Continued) APPLICATION FOR FUNDING GRANT – THE GOLD COAST HINDU CULTURAL ASSOCIATION INC PN265841/20/07(P4) With respect to the adopted Code of development for the proposed sublease site, considerable effort was expended on securing a ‘generally in accordance with’ determination based on the concept plans finally adopted for the GCHCA proposal. That matter did not finally get resolved until February 2015. With respect to the capacity for the GCHCA proposal to be funded, it is of note that in August 2014 a tentative approach was forwarded to the Divisional Councillor wherein a ‘partnership grant of $500,000’ was sought. At that time, the lack of clarity around many aspects of the GCHCA proposal remained and accordingly, the ‘partnership’ was not progressed. It was not until January 2016 that final clarity was provided in respect of the GCHCA proposal. At that time, stage 1 of the proposed development of the site was said to comprise a multi-purpose hall and toilet facilities estimated to cost around $1.4 million. Also at that time, documentation was provided confirming that cash in bank and pledges existed for stage 1, such that stage 1 could be funded in full. So while it is apparent that 4 years have elapsed since the original GCHCA proposal was first received, it is the case that the formal grant of sublease to the Association occurred in January 2016 with the sublease having a commencement dated of 1 February 2016. Consistent with Council’s resolution on the grant of subleases for the Arundel Community Precinct, the sublease which issued contains a clause which requires the sublessee to commence development of the sublease area within 12 months of sublease commencement and thereafter proceed with the development at a rate satisfactory to Council. Current Situation In March 2016 GCHCA provided advice that it was seeking a funding grant under the National Stronger Regions Fund administered by the Commonwealth. Attachment 1 to this report details the nature of the grant being sought, which as noted included letters of support provided by the Mayor and the then Councillor. The grant being sought was $4 million with the said matching commitment from the GCHCA of $4 million. In August 2016, advice was received from GCHCA that they had approached the State for a $2 million funding grant. That approach is outlined at Attachment 2. On 18 October 2016, a formal request was received from GCHCA for a funding grant from Council for $1.5 million – see attachment 3 to this report. The Divisional Councillor has provided advice, sourced from GCHCA, that if the Council provided the grant as requested, that the GCHCA was confident that matching funding would be available from the State at $1.5 million enabling an expansion of stage 1 development works for the sublease site to include (above the multi-purpose hall and toilets already committed to) a community square and caretaker’s residence. The only works that have occurred at the sublease site since sublease commencement consist of vegetation clearing. Consideration of the Grant Request The Arundel Community Precinct is now substantially developed by those community entities holding subleases. For its part, the City provides benefits such as rates concessions and nominal sublease rentals for all existing subleases.


ITEM 5 (Continued) APPLICATION FOR FUNDING GRANT – THE GOLD COAST HINDU CULTURAL ASSOCIATION INC PN265841/20/07(P4) Since 1990, there have been no grants advanced by the City to aid in the development of leasehold sites and as noted above, the actual grant of subleases to end users occurs only when costed development programs are in place and sublessees have the confirmed financial capacity to proceed with their development objectives. In the case of the GCHCA, significant energies have been devoted to funding grant applications at the Commonwealth, State and now local level. There is no precedent for a funding grant to the GCHCA from the City, nor have officers done anything to indicate to GCHCA, since 2012, that they should hold any expectations of the availability of any City grant to put towards capital works. Of course, it is for Council to determine a position on the GCHCA approach for a funding grant of $1.5 million. At the current time, significant expenditures continue for the Cultural Precinct, Commonwealth Games and Gold Coast Light Rail Stage 2 etc, with such projects having priority status. Further, the merit of funding the GCHCA approach, as against many other historic or potentially future funding requests by community organisations, needs careful consideration. That said, the intended outcomes at the GCHCA site cannot be questioned in respect of desirable outcomes and benefits, nor the efforts from the sublessee community exploring all options to see their development proposal advance in a substantial way and quickly. However, the existing funding request is a substantial ask of the City and it is without precedent – and thus priorities and the merit of funding this request as against others is considered as determining factors worthy of close consideration. 6 ALIGNMENT TO THE CORPORATE PLAN, CORPORATE STRATEGIES AND

OPERATIONAL PLAN The recommendations in this report support the delivery of Gold Coast 2020 by planning for the future of the City and managing the City responsibly: Theme 2: Prosperity built on a strong diverse economy 2.3 We have infrastructure that supports productivity and growth We have connected and vibrant economic precincts 7 GOLD COAST 2018 COMMONWEALTH GAMES™ IMPACT Not Applicable. 8 FUNDING AND RESOURCING REQUIREMENTS There is no identifiable budget funding to support a grant allocation of $1.5 million towards the GCHCA proposal. 9 RISK MANAGEMENT Not Applicable. 10 STATUTORY MATTERS Not Applicable.


ITEM 5 (Continued) APPLICATION FOR FUNDING GRANT – THE GOLD COAST HINDU CULTURAL ASSOCIATION INC PN265841/20/07(P4) 11 COUNCIL POLICIES Not Applicable. 12 DELEGATIONS Not Applicable. 13 COORDINATION & CONSULTATION Not Applicable. 14 STAKEHOLDER IMPACTS Not Applicable. 15 TIMING Council’s resolution will be implemented immediately upon adoption. 16 CONCLUSION The GCHCA holds a sublease within the City fostered community precinct at Arundel. The sublease is proposed for development with a multi-purpose hall, toilets, community square and caretaker’s residence. At the time of the grant of the GCHCA sublease in January 2016, stage 1 of the proposed development (multi-purpose hall and toilets) was to be funded by existing cash and pledges held by the GCHCA. A funding grant application in the sum of $1.5 million has now been made of the City, enabling the ‘bringing forward’ of additional capital works. The City’s priorities for funding continue to be directed to the Cultural Precinct, Commonwealth Games, Gold Coast Light Rail Stage 2 etc. Additionally, while there is unquestioned merit in the GCHCA proposals and the commitment of the GCHCA community, the merit of the City funding one such proposal as against others both past and in the future is considered the most pertinent consideration for Council.


ITEM 5 (Continued) APPLICATION FOR FUNDING GRANT – THE GOLD COAST HINDU CULTURAL ASSOCIATION INC PN265841/20/07(P4) 17 RECOMMENDATION It is recommended that Council resolves as follows: 1 That attachments 1 and 2 be deemed confidential documents and be treated as such in

accordance with sections 171 (3) and 200 (5) of the Local Government Act 2009 and that the attachments remain confidential unless Council decides otherwise by resolution.

2 That Council note the contents of this report.

3 That Council confirms that while The Gold Coast Hindu Cultural Association Inc development proposal is unquestioned in respect of merit, that Council has funding priorities such that the merit of offering a grant of $1.5 million as applied for cannot be favourably considered.

Author: Authorised by:

Brendan Madden Glen Potter Manager Property Services Director Organisational Services 4 November 2016

TRACKS REF: 58624423 COMMITTEE RECOMMENDATION GA16.1124.005 moved Cr Owen-Jones seconded Cr Crichlow RECOMMENDATION ADOPTED AS PRINTED COUNCIL MEETING 29 NOVEMBER 2016 1 That attachments 1, 2 and 3 be deemed confidential documents and be treated as

such in accordance with sections 171 (3) and 200 (5) of the Local Government Act 2009 and that the attachments remain confidential unless Council decides otherwise by resolution.



A division was called. For 5 Cr Crichlow, Cr Gates, Cr Tozer, Cr Taylor, Cr Owen-Jones. Against 2 Cr Boulton, Cr McDonald. Abstained 0 Absent 0

CARRIED The Gold Coast Hindu Cultural Association’s presentation to the Committee was held prior to Item 3.


ITEM 5 (Continued) APPLICATION FOR FUNDING GRANT – THE GOLD COAST HINDU CULTURAL ASSOCIATION INC PN265841/20/07(P4)

COUNCIL MEETING 29 NOVEMBER 2016 RESOLUTION G16.1129.015 moved Cr Owen-Jones seconded Cr Crichlow

That Committee Recommendation GA16.1124.005 be adopted as printed which reads as follows:- 1 That attachments 1, 2 and 3 be deemed confidential documents and be treated as

such in accordance with sections 171 (3) and 200 (5) of the Local Government Act 2009 and that the attachments remain confidential unless Council decides otherwise by resolution.



CARRIED

There being no further business the meeting closed at 11:20am.


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Of The Governance & Administration Committee

Held Thursday 24 November 2016

adopted report governance & administration committee meeting · 24/11/2016 · governance...

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