agenda - finance and operations committee 3 october 2018 · 10/3/2018 · agenda – finance and...

Finance and Operations Committee

Agenda

Date: Wednesday 3 October 2018

Time: 6pm

Venue: Civic Centre (Council Meeting Room)

13 Mair Street, Benalla

Members of the community are welcome to attend the Meeting.

In accordance with the Governance Local Law 2016 clause 4.6.4 an audio recording will be made of the proceedings of Council / Special Committee meetings.

PO Box 227 Benalla Victoria 3672 1 Bridge Street East

Tel: 03 5760 2600 Fax: 03 5762 5537 [email protected]

Agenda – Finance and Operations Committee 3 October 2018

BENALLA RURAL CITY COUNCIL 2

Contents

Contents .................................................................................................................. 2

Acknowledgement of Country ............................................................................... 3

Apologies ................................................................................................................ 3

Confirmation of the Minutes of the Previous Meeting ......................................... 3

Business ................................................................................................................. 5

1. Public submissions on any matter ..................................................................... 5

Presentation:

2. LaunchVic Innovate NEVic project briefing – TBC ............................................. 6

Other Business:

3. 2018/19 Community Sponsorship Program ....................................................... 7

4. BPACC Venue Hire by Schools ......................................................................... 9

5. Benalla Art Gallery Special Committee Terms of Reference ........................... 11

6. City Decorations 2018 ..................................................................................... 13

7. Mayoral and Councillor Allowances – allocation of savings ............................. 17

8. Fraud Prevention Policy ................................................................................... 19

9. Procurement Policy Review ............................................................................. 21

Closure of Meeting ............................................................................................... 26



Agenda

Chair Councillor Alexander

Councillors Councillor Claridge

Councillor Davis (Acting Mayor)

Councillor Firth

Councillor Hearn

Councillor Upston

Councillor van Wersch

Chief Executive Officer Tony McIlroy

General Manager Corporate Robert Barber

Manager Community Jane Archbold

Manager Arts, Communications, Tourism and Events Jilian Mulally

Manager Finance Cathy Fitzpatrick

Business Development Coordinator Catherine Macmillan Governance Coordinator Jane Still

Acknowledgement of Country

We acknowledge the traditional custodians of this land and pay respect to their elders and the elders from other communities who may be here today.

We also acknowledge all other peoples who have contributed to the rich diversity of this Country.

Apologies

It is noted that Councillor Don Firth is on a Leave of Absence to 24 November 2018.

Confirmation of the Minutes of the Previous Meeting

The minutes have been circulated to Councillors and posted on the Council website www.benalla.vic.gov.au pending confirmation at this meeting.

Recommendation:

That the Minutes of the Finance and Operations Committee meeting held on Wednesday 29 August 2018 be confirmed as a true and accurate record of the meeting.



Governance Matters

This Committee Meeting is conducted in accordance with the Local Government Act 1989 and the Benalla Rural City Governance Local Law 2016.

a) Recording of Council and Special Committee Meetings

All Council and Special Committee meetings will be audio recorded and made available for public access, with the exception of matters identified as confidential items in the agenda. This includes the public participation sections of the meetings.

These recordings are taken to facilitate:

the preparation and accuracy of the minutes of open Council and Special Committee meetings

broader access to open Council and Special Committee meetings, and the accuracy of submitter details (where relevant). By participating in open Council and Special Committee meetings, individuals consent to the use and disclosure of the information that they share at the meeting (including any personal/sensitive information) for the purposes of Council carrying out its functions. Individuals also consent to the disclosure of that information to any person(s) who access those recordings.

Individuals may request, prior to presenting to Council, they be identified only by their first name. Any statements made or questions asked will still be captured on the recording.

Any queries about these recordings can be directed to the Council by calling 5760 2600.

b) Behaviour at meetings

It is an offence for any person to engage in improper or disorderly conduct at the meeting. Members of the public present at a meeting must remain silent during the proceedings other than when specifically invited to address the Committee.

The Chair may order and cause the removal of any person, not being a Councillor, who disrupts any meeting or fails to comply with a direction. A person removed from a Meeting must leave the premises or move to a public area of the premises where they can no longer disrupt the meeting.

If the Chair is of the opinion that disorder in the gallery makes it desirable to adjourn the meeting, the Chair may adjourn the meeting to a later time on the same day or to some later day as the Chair thinks proper.



c) Disclosures of Conflict of Interest

Pursuant to Sections 77, 78 and 79 of the Local Government Act 1989 direct and indirect conflict of interest must be disclosed prior to debate on specific items within the agenda; or in writing to the Chief Executive Officer before the meeting.

Disclosure of indirect interests must also include the classification of the interest (in circumstances where a Councillor has made a disclosure in writing, the classification of the interest must still be declared at the meeting):

(a) direct financial interest

(b) indirect interest by close association

(c) indirect interest that is an indirect financial interest

(d) indirect interest because of conflicting duties

(e) indirect interest because of receipt of an applicable gift

(f) indirect interest as a consequence of becoming an interested party

(g) indirect interest as a result of impact on residential amenity

(h) conflicting personal interest.

A Councillor who has declared a conflict of interest, must leave the meeting and remain outside the room while the matter is being considered, or any vote is taken. Councillors are also encouraged to declare circumstances where there may be a perceived conflict of interest.

Business

1. Public submissions on any matter

A person wishing to address the Committee on a matter not listed on the agenda must submit a ‘Request to be heard’ form by 10am on the day of the meeting. At the time of registering to speak persons must provide a summary of the matter on which they will be speaking. It must not be in contravention of the Governance Local Law 2016.

Requests to speak will be registered strictly in the order of receipt of the request at the Customer Service Centre.

A total of 12 minutes will be allocated for public submissions with a maximum of three minutes to each speaker.

Recommendation:

That the submission(s) be received.



2. LaunchVic Innovate NEVic project briefing – TBC Business Development Coordinator and Project Manager for the Startup Shakeup Project (Innovate North East Victoria) will introduce Project Coordinator Emma Jones to provide an overview of the project.

Information about the Startup Shakeup project is attached as Appendix 1.

STARTUP SHAKEUP – Project Overview

Page 1 of 3

STARTUP SHAKEUP ‐ INNOVATE NORTHEAST VIC Presented by Emma Jones ‐ Project Coordinator

PROJECT OVERVIEW

Background

The project comes after the recent allocation of $400,000 to the consortium of Benalla Rural City Council,

Indigo Shire Council, Mansfield Shire Council and Rural City of Wangaratta, under a grant from LaunchVic

‐ the independent government agency responsible for developing Victoria's startup ecosystem.

Benalla Rural City Council is the lead applicant. Each Council is also contributing $10,000.

Read more on LaunchVic’s Initiative for Supporting Local Council Startup Communities

What’s a Startup? How is it different to a Small Business?

Startup ‐ A business with high impact potential

that uses innovation and/or addresses national

or global markets

Small Business ‐ A company that is

independently owned and operated, organised

for profit, and not dominant in its field

Victoria’s Startup Ecosystem is a $4 billion opportunity that we want to be part of

Melbourne ranks in the Top 5 for the world’s strongest startup ecosystem growth ‐ Victoria has a

strong track record of proven success when it comes to transforming startups into high growth

firms. Already, five ‘unicorns’ have emerged (REA Group, Carsales.com, SEEK, MYOB and Aconex)

each valued at more than $1 billion ‐ more than any other state in Australia.

This is a $4 billion opportunity ‐ As Victoria’s ecosystem grows and achieves stronger global status

there is the potential to add $2.5 ‐ $4 billion in value to the Victorian economy.

97% of Victoria’s 2700 startups are based in the Melbourne CBD – so LaunchVic’s focus is to expand

the opportunities for startups to be created anywhere in Victoria with the right support and

ecosystem.

References: Melbourne Startup Genome Report 2018 & LaunchVic Startup Ecosystem Mapping Report.

APPENDIX 1


Page 2 of 3

Why does our region need a Startup Ecosystem? Startup Shakeup is about supporting local entrepreneurs with big ideas that create jobs and attract

investment. This will help our region respond to fast paced change and disruption by developing and

retaining skills to take advantage of new technologies and ways of working.

PROJECT SUMMARY

Vision: North East Victoria will be a leader in regional innovation and startups in Australia within 10 years (2028)

Mission

To build, nurture and support startup initiatives in North East Victoria, realising innovative solutions to

local and global challenges, creating employment, new skills, and developing export opportunities.

Our Approach

We will be delivering a program of events, workshops, and courses to grow our region's startup

capability. By mid‐2019 our aim is to have

A network of 150 engaged members,

1000 attendances at our program of events,

20 registered startups

a committed, active ecosystem to support them; and

the foundations for a sustainable ongoing program.

In addition to hosting regular startup networking events, members of Startup Shakeup will have access to

an exciting program of mentoring, workshops, courses, hackathons and coaching to get ideas business‐

ready, including:

The GHD Smart Seeds program focuses on solving local challenges with ideas that could have

national or global reach.

JumpStartMe ‐ a highly regarded start‐up pre‐accelerator program to help get ideas business‐

ready.

‘Founders of Social Enterprise’ ‐ a workshop by the Beechworth‐based Australian Centre for

Rural Entrepreneurship (ACRE)

Charles Sturt University are offering scholarships to their Entrepreneurs Leadership Program to

equip regionally‐based leaders to drive innovation from within businesses and organisations.

At the end of the initial 12 month project is a pitch fest event, where local startups will share their ideas

publicly in front of a panel of judges for a grand prize and funding from startup investors.


Page 3 of 3

Current Situation

We have the makings of a startup ecosystem ‐ people in the region with experience in startups, plus

several leaders and influencers who are committed to making this happen. We can also draw on three co‐

working spaces (Wangaratta, Beechworth and Yackandandah), the micro‐manufacturing makerspace

(Innovation Hub) at GOTAFE Wangaratta campus, the Australian Centre for Rural Entrepreneurship

(ACRE) in Beechworth and CSU, a new digital makerspace is in development at Wangaratta Library,

adjacent to the GOTAFE micro‐manufacturing makerspace.

To build on this, we need to create general awareness and understanding of what a startup is and the

benefits; a network of investors; and a region‐wide approach to building an ecosystem.

Key points

The project comes after the recent allocation of $400,000 to the consortium of Benalla Rural City

Council, Indigo Shire Council, Mansfield Shire Council and Rural City of Wangaratta, under a grant

from LaunchVic ‐ the independent government agency responsible for developing Victoria's

startup ecosystem. Each Council is also contributing $10,000.

The Startup Shakeup is a newly founded community that will support local startups ‐ businesses

or social enterprises with high impact potential that use innovation to create scalable (global)

tech and non‐tech solutions.

Partner organisations Charles Sturt University, NE Tracks LLEN, and GOTAFE will provide

education and support for the network and will also play a key role in guiding start‐up’s

transition from idea to market reality.

During its first 12 months, Startup Shakeup will create a comprehensive program of events to

drive motivation and build startup capacity in North East Victoria. It is expected that these

startups will contribute to new skills and jobs which regional centres need to thrive, as traditional

jobs face disruption from technology advancements, automation, and a changing world of work.

EMMA JONES

COORDINATOR

0408 246 007

startupshakeup.co



3. 2018/19 Community Sponsorship Program SF/1355

Sheree Brown – Community Development Coordinator Jane Archbold – Manager Community

PURPOSE OF REPORT

The report presents funding applications under the 2018/19 Community Sponsorship Program.

BACKGROUND

The Community Sponsorship Program enables local community groups, clubs and organisations to seek funding to increase their capacity to work in partnership with the Council and others to address local needs and enhance the local community.

The Community Sponsorship Program distributes grants up to $500 on a monthly basis, allowing local clubs, groups and organisations the opportunity to seek funds when the need arises.

DISCUSSION

Applications for consideration under the 2018/19 Community Sponsorship Program is detailed in the table below.

Applicant Details Amount Requested

Proposed Assistance

Benalla Historical Society Inc.

Assist with the purchase of the old witness box from the Benalla Court House. $500 $500

Benalla P -12 College

Assist with the hire of BPACC for the Year 12 Graduation night to be held on 18 December 2018. $500 $500

Benalla Senior Citizens Club Inc.

Assist meet costs associated with catering and entertainment for the Senior Citizens Club’s 60th anniversary celebration event to be held on 28 October 2018. $500 $500

Oak FM (Wangaratta Community Radio Assoc. Inc) as auspice for the Benalla Ballroom Dancers

Assist with the hire of the Benalla Senior Citizens Community Centre for the Benalla Ballroom Dancers to conduct a local Drought Fundraiser dance to be held on 3 November 2018.

$300 $300

Tatong Anglers Group Inc.

Annual family Christmas celebration to be held at Benalla P-12 College Lake Nillahcootie Camp. Funding will assist with the hire of the facility 2018. $500 $500



COUNCIL PLAN 2017-2021 IMPLICATIONS

Connected and Vibrant Community

Strengthen community capacity, emergency management preparedness, resilience and participation.

Improve community connectedness and respect for diversity.

Encourage community members to be healthy, safe and active. Engaging and Accessible Places and Spaces

Improve accessibility and use of community spaces and places for all.

FINANCIAL IMPLICATIONS

The 2018/19 Budget allocates $15,000 to the Community Sponsorship Program. To date $1,383 has been allocated.

To ensure transparency and accountability, where assistance is provided in meeting the cost of Council facility hire, the payment is reflected in relevant ledger accounts via an internal transaction. For example, if the Council agrees to meet the hire cost of the Benalla Town Hall a credit would be made to the Town Hall income ledger account and a debit made to the Community Support Program expense ledger account.

In addition, recipients of support throughout the financial year are detailed in the Annual Report.

Recommendation:

That the Council approve the following grants to be funded from the 2018/19 Community Sponsorship Program:

Benalla Historical Society Inc. $500

Benalla P-12 College $500

Benalla Senior Citizens Club Inc. $500

Oak FM (Wangarattta Community Radio Association Inc.) $300

Tatong Anglers Group Inc. $500



4. BPACC Venue Hire by Schools SF/1800

Jilian Mulally – Manager, Arts, Communications Tourism and Events PURPOSE OF REPORT

The report provides information on the hire of BPACC by local schools.

BACKGROUND

The Schedule of Fees and Charges for the hire of BPACC are set annually by the Council on the recommendation of the BPACC Advisory Committee.

A perception has been raised that the Schedule of Fees and Charges is prohibitive to schools.

DISCUSSION

Schools are defined as public and private education institutions that receive government funding. This report only applies to schools located within Benalla Rural City.

Commercial for-profit schools, such as dance schools, are excluded.

BPACC has been used by both P-12 College and FCJ for school productions, concerts and graduation events.

Below is a summary of use that includes subsidy options of 5 per cent, 10 per cent and 15 per cent.

School 1

Financial Year

Cost 5% subsidy

5% subsidy applied

10% subsidy

10% subsidy applied

15% subsidy

15% subsidy applied

2017/18 $7,985 $399 $7,585 $798 $7,186 $1,198 $6,787

2016/17 $6,999 $350 $6,649 $699 $6,299 $1,050 $5,949

2015/16 $6,465 $323 $6,142 $646 $5,819 $970 $5,496

School 2

Financial Year

Cost 5% subsidy

5% subsidy applied

10% subsidy

10% subsidy applied

15% subsidy

15% subsidy applied

2017/18 $9,536 $476 $9,059 $953 $8,582 $1,430 $8,105

2016/17 $3,837 $191 $3,645 $383 $3,453 $575 $3,261

2015/16 $8,203 $410 $7,792 $820 $7,382 $1,230 $6,972




Thriving and Progressive Economy

Attract, support and strengthen local business.

Strengthen and grow tourism across Benalla Rural City.

Support opportunities for diverse local employment.

High Performing Organisation

Provide quality customer service focused on continuous improvement.

Strengthen community and stakeholder engagement in planning and decision making.


Based on 2017/18 venue hire usage, applying a subsidy to both schools would incur a loss of revenue as detailed in the table below:

Subsidy Cost

5% subsidy $875

10% subsidy $1,751

15% subsidy $2,628

Recommendation:

That the Council approve a subsidy of …. per cent for the venue hire of BPACC by Benalla P-12 College and FCJ College.



5. Benalla Art Gallery Special Committee Terms of Reference SF/1742

Jilian Mulally – Manager, Arts Communications Tourism and Events

PURPOSE OF REPORT

This report presents the Benalla Art Gallery Terms of Reference.

BACKGROUND

Under Section 86 of the Local Government Act 1989, the Council established the Benalla Art Gallery Special Committee to exercise Council’s functions and powers and to perform Council’s duties in relation to the management of the Benalla Art Gallery.

The Committee’s purposes are:

1. Acceptance of works of art, including those in accordance with the Income Tax Assessment Act.

2. Establishment and maintenance of acquisition and deaccession policies.

3. Acquisition of works of art.

4. Nomination of Council representatives on arts affiliated bodies.

5. To do all things necessary or convenient to be done for an in connection with the performance of those functions, duties and powers.

DISCUSSION

The Benalla Art Gallery Special Committee, at its meeting on 25 September 2018, resolved to recommend an amendment to its terms of reference.

The key proposed changes are:

that the Benalla Art Gallery Special Committee be known publicly as the Benalla Art Gallery Committee

adding the Chief Executive Officer of Tourism North East as a member of the Committee

that there be two community representatives rather than three.

The amended Benalla Art Gallery Special Committee Terms of Reference are attached as Appendix 1.





We will support, promote and encourage the long-term growth, diversification and strengthening of our economy as a key contributor to a healthier and more sustainable community.



We will be a high performing, efficient and innovative organisation based on sound financial management, accountability and good governance to provide best value service to our whole community.

Provide quality customer service focused on continuous improvement.

FINANCIAL IMPLICATIONS Costs associated with the administration of the Committee are met from an existing budget allocation.

Recommendation:

That the Council adopt the recommendation of the Benalla Art Gallery Special Committee to approve its proposed Terms of Reference as amended.

Terms of Reference

Benalla Art Gallery Special Committee

1. CONSTITUTION

1.1 The Council of the Benalla Rural City (“Council”) has resolved, in accordancewith Section 86 of the Local Government Act 1989, to appoint a Special Committee (“Committee”) to the Benalla Art Gallery.

1.1.1 That the Special Committee be known as the Benalla Art Gallery Committee.

1.2 The Council has resolved in accordance with provision Section 86(1) of the Local Government Act 1989 that the Special Committee shall consist of:

1.2.1 Representatives of Council;

1.2.2 Representatives of the Benalla Rural City Community; and

1.2.3 Other interested persons from the wider community

1.3 The Council has set no time limit on the duration of the establishment of the Special Committee. It shall remain in existence until such time as the Council resolves to revoke its establishment.

2. OBJECTIVES AND FUNCTIONS OF THE COMMITTEE

2.1 To develop the strategic direction of the Committee utilising the Council Plan toinform the process.

2.2 Planning

In conjunction with the relevant Council Officer, as delegated by the CEO or Department Manager, establish and maintain 5-year Strategic Plan for the Gallery, which includes a vision statement and artistic statement.

APPENDIX 1

Terms of Reference – Benalla Art Gallery Special Committee September 20183 October 2018

2.3 Collection Management and Development

2.3.1 Establish and maintain acquisition, conservation and deaccession policies.

2.3.2 Accept works of art as gifts, as informed by the relevant Gallery policies, including those in accordance with the Income Tax Assessment Act.

2.3.3 Approve the acquisition of works of art into the Gallery collection based on the Acquisition Policy and with consideration given to the capacities of the Gallery.

2.4 Exhibition Policy

In conjunction with the relevant Council Officer, and in line with the Strategic Plan, establish and maintain exhibition policies through which the annual Exhibition Schedule is built.

2.5 Benalla Art Gallery Acquisition Trust Fund

Appoint Trustees to administer the Benalla Art Gallery Acquisition Trust Fund as prescribed by the Trust Deed.

2.6 Fundraising

2.6.1 Raise funds and encourage contributions by way of gifts, bequests, grants, sponsorships, personal or public appeals.

2.6.2 Seek innovative ways to proactively raise funds in line with the Benalla Art Gallery Strategic Plan.

2.7 Advice

Act as an advisory source to the Council on matters relating to the Benalla Art Gallery.

3. DELEGATED AUTHORITIES

3.3.1 Acquisition, conservation and deaccession of works of art

3.2 Acceptance of works of art, including those in accordance with the Income Tax Assessment Act.

3.3 Establishment and maintenance of acquisition, conservation and deaccession policies, exhibition policies and the Strategic Plan


4. COMMITTEE MEMBERSHIP

The Council has resolved that the Special Committee shall be comprised of the following members:

4.1.1 Two Benalla Rural City Councillors

4.1.2 The Chief Executive Officer of the Council, or nominee

4.1.24.1.3 The Chief Executive Officer of North East Victoria Tourism Board

4.1.34.1.4 Three Two representatives of the Benalla Rural City community

4.1.44.1.5 One representative of the Friends of the Benalla Art Gallery Inc.

4.1.54.1.6 Four skills-based members

5. TERM OF APPOINTMENT

5.1 Any person, appointed to the Committee as a community representative or

skills-based member shall hold office for a period of three years.

5.2 Any existing member may reapply after a period of three years.

5.3 Any member of the Committee may resign his/her position at any time.

5.4 If the member who resigns is a representative of the community, the Council shall invite the Committee to nominate another person to fill the vacancy.

5.5 Any person appointed to fill a vacancy on the Committee under the provisions of Clause 5.4 shall hold office for the unexpired portion of the previous member’s term of office.

6. NOMINATION OF MEMBERSHIP

Community and Skills-based Representatives

6.1 The Council shall call for nominations for the appointment of two (2) community representatives and four (4) skills-based members by giving public notice in a local newspaper or newspapers not less than two (2) months prior to the date of the termination of the term of office of the representatives.

6.2 Candidates for appointment must lodge written and signed nomination letters or forms with the Chief Executive Officer by the closing date for nominations.

6.3 The Council of the Benalla Rural City shall determine by resolution which of the candidates are to be appointed.

Nominations for Appointment

6.4 The Council may in its absolute discretion decline to appoint to the committee any such person who has been nominated or recommended for appointment.


7. OFFICE BEARERS AND SUB-COMMITTEES OF THE COMMITTEE

7.1 The Committee shall elect the following office bearers:

Chairperson

7.2 The Committee may appoint any sub-committees which it considers

necessary to carry out its functions. 7.3 The role of Chairperson shall be:

7.3.1 To chair all meetings of the Committee

7.3.2 To act as official spokesperson for the Committee

7.4 The Chairperson and any sub-committees shall be elected on an annual basis by the members of the Committee.

8. REPORTING

8.1 The designated Council Officer shall prepare the Agendas and Minutes for

each meeting of the Committee and shall distribute or arrange to be distributed copies of the Agenda and Minutes to members of the Committee and to the Council.

9. INSURANCES

9.1 The Council shall arrange and maintain a portfolio of insurances to cover all possible risks, including a Personal Accident Policy for members, a Voluntary Workers Policy and an Indemnity Policy for members of the Committee.

10. MEETINGS OF THE COMMITTEE

10.1 The meetings of the Committee shall be conducted to ensure an efficient and

effective working Committee and the Committee shall have not less than one meeting every three (3) months.

10.2 The quorum of the Committee will be not less than a majority of the members

for the time being appointed to the Committee.

11. REVIEW

11.1 The Council may carry out a review of the Committee’s Terms of Reference at any time.


11.2 The Council may carry out a special review of the Committee’s Terms of Reference at the request of the Committee.

11.3 The Council shall consult with the Committee prior to the making of amendments or alterations to the Committee’s Terms of Reference.

11.4 The Committee, on an annual basis, shall review its own performance against the Objectives (2) of these Terms of Reference. All Committee members, and those who regularly attend meetings of the Committee, shall participate in this review.

12. CONFLICT OF INTEREST

12.1 Members of the Committee who have a conflict of interest in matters beforethe Committee must declare the nature of their interest at each meeting.

12.2 A Member of the Committee who has a conflict of interest in a matter beforethe Committee must disclose the type and nature of the interest and leave the meeting room and remain outside the meeting room while the matter is discussed and the vote is taken.



6. City Decorations 2018 SF/2457-03

Tony McIlroy – Chief Excecutive Officer PURPOSE OF REPORT

The report provides information on the City Decorations program for the 2018/19 financial year, including Christmas decorations for 2018.

BACKGROUND

Each year the Council installs a program of flags, banners and Christmas decorations across Benalla and the rural townships.

The allocation under the 2018/19 operating budget for City Decorations is $15,000.

Flags and Banners

Flag and banner installation and maintenance is usually $15,000 per year.

Within Benalla’s CBD there are 12 banner poles with 24 bracket arms commencing from the Arundel and Bridge Street intersection through to the Bridge Street/Carrier Street roundabout.

These poles are owned by SP Ausnet and are the responsibility of VicRoads as they are located on a VicRoads managed location. Some of the banner poles conduct power to business outlets. The installation of the vinyl street banners requires approval from SP AusNet and installation by approved electrical contractors. Approval is also required from VicRoads. Installation is generally carried out on a Sunday to alleviate traffic management hazards during weekdays.

The Witt Street/Bridge Street roundabout has seven flag poles which are owned and maintained by the Council. Council staff erect the seven flags during business hours upon request.

Installation and take-down of the current schedule is coordinated where possible with subsequent events to minimise installation/take-down costs. For example when the Benalla Festival banners are taken down the Christmas banners are erected at the same time to save on a separate installation cost.

The accredited contractors carrying out the installation require a four hour minimum service and the installation take down might only require two hours.



Christmas Decorations

Christmas decorations for 2017 cost $12,079 and covered:

130 x Gift boxes - replacement fabric and ribbon

15 x Large Red Bows. 9 for Benalla. 6 for rural townships

2 x Christmas Trees chalk boards

24 x Corflute Bin Panels for rural townships - 75 existing for Benalla

hire of Elevated platform to install decorations

installation of decorations by Council staff

nativity scene refurbishment

20 x Point of Sale flags for businesses

Christmas cards for volunteers

catering at various Volunteer Christmas functions.

DISCUSSION

A proposal to install a Christmas tree on a pontoon on Lake Benalla for Christmas 2018 has been received.

The proposal includes the:

supply and delivery of the pontoon

supply and delivery of the Christmas tree

installation of the Christmas tree onto the pontoon

installation of Christmas tree lights onto the tree*

installation of the pontoon, including moorings, on the Lake

removal of Christmas tree and pontoon from the Lake in January 2019

removal of the Christmas decorations from the Christmas tree for storage for Christmas 2019.

* Christmas tree lights and power to be supplied by the Council.

Christmas Tree Lights

Advice from professional artificial Christmas tree decoration companies is that for a six metre high tree, 3,360 LED lights would be required. This comes in six strings of 560 coloured lights.

Solar lights have also been investigated. Advice is that a solar generation system would not be suitable for continuous use and the required number of lights.

These lights would cost less than $1,000.



Risk management and insurance

The pontoon was made available for use for Christmas 2017. An engineer’s report was required for insurance purposes and it recommended alternations to the pontoon specifications. At the request of Jardine Lloyd Thompson Pty Ltd for it to assess the public liability risk and consider providing insurance for the activity for Christmas 2018 a risk assessment has been completed (refer Appendix 1). Iconic Floating Christmas Tree - City of Greater Geelong

For interest, at its meeting on 8 April 2014, the City of Greater Geelong authorised the procurement of an Iconic Floating Christmas Tree with a budget of $500,000 and an allocation of $135,000 per year for a four year period for installation, maintenance and storage.

The tree is 25 metres high with a total weight of 15 tonnes. It is adorned by a 4 metre star and is moored on a barge on Corio Bay for three months each year.

The project was awarded to an external contractor via a public tender process and was not managed by the Council.

COUNCIL PLAN 2017-2021 IMPLICATIONS Engaging and Accessible Places and Spaces

Beautify open spaces and places throughout the municipality.

Enhance, develop and care for key places of significance.

Improve accessibility and use of community spaces and places for all.








Strengthen community and stakeholder engagement in planning and decision making.

Provide good governance and responsible management and planning.

We are compliant with our legislative and risk management responsibilities.

FINANCIAL IMPLICATIONS $15,000 is allocated for City Decorations in the 2018/19 Budget. In 2017/18, when the allocation was $21,529, the entire Christmas Decorations program cost $12,079.

The pontoon proposal would be covered by the Council’s existing public liability insurance at no extra cost.

The Council’s Property insurance would not cover the pontoon as it is not an asset of the Council.

Recommendation:

That the Council determine the nature of the City Decorations 2018 program.

Benalla Rural City Event Risk Assessment

Council: Benalla Rural Council Department: Arts, Communications, Tourism and Events

Location: Lake Benalla Incident Date: Asses Date: 28 August 2018

Assessment Team: Greg Robertson, MFAC, Janine McMaster, MPP, Jilian Mulally, MACTE, Dean Steegstra, PC, Sharon Geer, EC

Description:

Christmas tree on a floating pontoon on Lake Benalla for Christmas 2018. The pontoon will have a 6 metre high fake Christmas tree secured to it. The tree will have solar lights in it. The pontoon will be anchored in the centre of the Lake by a marine anchoring system. The pontoon would be in place from late November until early January - about 6 weeks.

Risk Analysis and Controls

Hazards/Exposures Controls in Place Risk Rating

Additional Controls Required

Revised Risk Rating

Control to be implemented by:

Who Date

CompletionDate

Pontoon accessed by the general public by swimming in the Lake

Lake water unsafe for swimming

Swimming Not Advised signs installed around Lake

A3 Swimming Not Advised signs installed around Lake and on pontoon

No Public Access Signs installed on pontoon

A3 Signs supplied by the Council and installed by supplier

Prior to installation in Lake

Pontoon accessed by the general public – unsafe for public access

Pontoon not designed for safe public access

Swimming Not Advised signs installed around Lake

A3 No Public Access Signs installed on pontoon

Ladder installed on side of pontoon

Life ring attached to pontoon

A3 Signs supplied by the Council and installed by supplier


APPEN

DIX 1



Revised Risk Rating


Who Date

CompletionDate

Pontoon requires access for Maintenance.

Maintenance access plan at discretion of supplier.

A3 Access by motorised boat to avoid contact with Lake water

Maritime Safety authorisation received for use of a powered boat

A3 Maritime Safety authorisation received by the Council


Public access and interfere lights and electrical equipment installed on tree and pontoon

Risk of tree, pontoon and lights being damaged. Risk of person being injured

Lights, solar unit and electrical equipment to be provided to the supplier to be installed

All electrical equipment to be installed out of sight and reach, with appropriate warning signs. Safety design verbally assured by supplier.

A3 Certificate of electrical safety to be issued if required

Signage to be erected on pontoon

A1 Supplier Prior to installation in Lake

Loading/structural safety of pontoon is inadequate

Pontoon fails to hold weight of tree and falls over. Risk of damage to people, property and reputation

Pontoon supplied and built. Adequacy verbally assured by suppliers

C4 Pontoon is inspected by independent engineer and deemed adequate

D3 Council Prior to installation in Lake

Tree installed in an unstable way on pontoon or falls over completely

Risk of damage to people, property and reputation

Tree supplied and installed. Adequacy verbally assured by suppliers

C4 Tree and installation of tree inspected by independent engineer and deemed adequate




Revised Risk Rating


Who Date

CompletionDate

Pontoon inadequately moored. Risk of it floating out of position and causing damage to people, property and reputation

Mooring system supplied and installed. Adequacy verbally assured by suppliers

D4 Mooring system inspected by independent engineer and deemed adequate


High weather wind event or flood event

Risk of tree falling over causing damage to people, property and reputation

Pontoon, tree, tree installation and mooring adequacy assured by supplier.

D2 Program of BOM monitoring to be in place. Plan for supplier to move the pontoon to a protected bank area enacted when required.

D1 Supplier Ongoing

Pontoon is moored in Lake where falling tree can reach the Bridge or Lake edge

Risk of damage to people, property and reputation

Suitable and appropriate location of pontoon in Lake assured by supplier

E3 Suitable and appropriate location of pontoon in Lake agreed by Council resolution

E3 Council Prior to installation in Lake

Manual handling and OH&S issues relating to the installation and removal of pontoon, tree and decorations

Injury to workers

Capability to install tree, deliver to site, install and remove verbally assured by supplier

D4 Supplier to undergo Contractor Induction

D4 Supplier / Council




Revised Risk Rating


Who Date

CompletionDate

All aspects of the pontoon, tree, installation and lights not compliant with relevant standards

Risk of damage to people, property and reputation. Risk of insurance cover being invalid

All aspects of project verbally assured to be adequate by supplier

B4 Inspections by independent engineers required to determine adequacy and satisfy insurance requirements

B2 Council Prior to installation in Lake

Risk Rating LIKELIHOOD CONSEQUENCES

A Almost Certain 5 Catastrophic B Likely 4 Major C Possible 3 Moderate D Unlikely 2 Minor E Rare 1 Negligible E

1 2 3 4 5

A Medium Medium High Extreme Extreme

B Low Medium Moderate High Exteme

C Low Low Medium High High

D Insignificant Low Medium Medium High

E Insignificant Insignificant Low Medium High



7. Mayoral and Councillor Allowances – allocation of savings SF/1680

Robert Barber – General Manager Corporate

PURPOSE

The report details the savings resulting from a reduction in the Mayoral and Councillor Allowances in the 2017/18 Council Year, to be allocated to a charity or project.

BACKGROUND

At its meeting on 24 May 2017 the Council resolved:

1. That the Mayoral and Councillor Allowances be set at an amount equivalent to a 2.5 per cent reduction to the maximum amount applicable to Category 1 Councils as specified by a notice published in the Victoria Government Gazette on 24 November 2016.

2. That the Mayoral Allowance be fixed at $57,776 per annum and Councillor Allowances at $19,338 per annum, plus amounts equivalent to the superannuation guarantee contribution (currently 9.5 per cent).

3. That annually an amount equivalent to the 2.5 per cent reduction be donated to an appropriate charity or project as determined by the Council.

DISCUSSION

The decision by the Council to set allowances at an amount equivalent to a 2.5 per cent reduction to the maximum amount payable has resulted in an amount of $4,978 being available for allocation to a charity or project nominated by the Council.


Connected and Vibrant Community

Strengthen community capacity, emergency management preparedness, resilience and participation.

High Performing Organisations





Allocation will be made from savings in Mayoral and Councillor Allowances allocation in the 2018/19 Budget.

Recommendation: That the savings of $4,978 resulting from a reduction in the Mayoral and Councillor Allowances in the 2017/18 Council Year be allocated to ………………………………………………………………………………………….



8. Fraud Prevention Policy SF/3506

Robert Barber – General Manager Corporate

PURPOSE OF REPORT

The report presents for consideration a review of the Fraud Prevention Policy.

BACKGROUND

The Local Government Act 1989 requires councils to develop and maintain adequate internal control systems. An effective fraud control framework is widely recognised as a critical element of such systems. The Australian Standard AS8001–2008 on fraud and corruption control and other related good practice guides identify the key elements of an effective fraud control framework. These include:

a fraud control plan documenting an entity’s fraud prevention, detection and response initiatives

periodic and comprehensive assessment of an entity’s fraud risks

documented policies and procedures for dealing with suspected fraud, including protection for whistleblowers

a sound ethical culture supported by a code of conduct

regular fraud awareness training to maintain staff awareness of related policies and procedures

internal audits of the effectiveness of fraud controls and of related procedures

dedicated controls for activities with a high fraud risk exposure.

DISCUSSION

In July 2018, internal auditor RAD Audit completed a review into the Council’s fraud and corruption framework (refer Appendix 1). The report was subsequently reviewed by the Audit Advisory Committee at its meeting on 24 July 2018.

The need to review the Fraud and Prevention Policy was also identified in the Benalla Rural City Council Interim Management Letter for the year ending 30 June 2018. A key recommendation of the review that the Fraud Prevention Policy be reviewed and approved by the Council. The policy, which has been reviewed and updated by RSD and Council officers, is attached as Appendix 2.



In addition to conducting the audit, RSD senior staff conducted a Fraud Prevention training session for 50 senior and selected Council staff.




We are compliant with our legislative and risk management responsibilities.


The cost of the Fraud and Corruption Framework Internal Audit was $4,000 (GST exclusive).

Recommendation:

1. That the Fraud Prevention Policy be adopted.

2. That the Fraud Prevention Policy be reviewed in October 2020.

Benalla Rural City Council

Internal Audit – Fraud & Corruption Framework Review

Including Presentation from Audit Partner / Fraud Investigator July 2018

CONFIDENTIAL

Prepared for: Audit Committee Prepared by: Kathie Teasdale

APPENDIX 2

1

Contents

Executive Summary .................................................................................................................................................................... 2

1.1 Background .......................................................................................................................................................... 2

1.2 Objective .............................................................................................................................................................. 3

1.3 Scope of Internal Audit ......................................................................................................................................... 3

1.4 Findings and Value Provided by this Report ........................................................................................................ 3

1.5 Acknowledgement ................................................................................................................................................ 5

2. Observations and Recommendations ............................................................................................................................ 6

2.1 Fraud & Corruption Control Plan .......................................................................................................................... 6

2.2 Building Ethical Culture ........................................................................................................................................ 7

2.3 Fraud and Corruption Prevention Techniques ..................................................................................................... 9

3. Contact Details ................................................................................................................................................................ 11

4. Appendix 1 – New Fraud Prevention Policy .....................................................................................................................

5. Appendix 2 - Fraud Prevention Training Slides ...............................................................................................................

This report has been prepared for distribution to Benalla Rural City Council for the purpose of review by the Audit Committee and management. The report is not to be used by any other party for any purpose nor should any other party seek to rely on the opinions, advices, or any information contained within this report without the prior consent of RSD Audit. The report is the property of Benalla Rural City Council. RSD Audit disclaims all liability to any party other than Benalla Rural City Council in respect of, or in consequence of, anything done, or omitted to be done, by any party in reliance, whether whole or partial, upon any information contained in this report. Any party, other than Benalla Rural City Council, who chooses to rely in any way on the contents of this report, does so at their own risk. The information in this report and in any related oral presentation made by RSD Audit is confidential between RSD Audit and Benalla Rural City Council and should not be disclosed, used, or duplicated in whole or in part for any purpose except with the prior consent of RSD Audit.

Liability Limited by a scheme approved under Professional Standards Legislation

2

Executive Summary

1.1 Background In accordance with the Audit Committee’s directions, and as part of the Internal Audit plan for the 2017-19 period, we have been engaged to complete a review of Council’s Fraud and Corruption Framework, including a Fraud Prevention presentation by the Engagement Partner and Fraud Investigator, Kathie Teasdale. Fraud is the crime of obtaining financial or another benefit by deception. The impact of fraud on councils and their communities can be significant. It can disrupt business continuity, reduce the quality and effectiveness of critical services, and threaten the financial stability of a council. It can also damage a council’s public image and reputation. Each year, local government collects $7 billion in operating revenues, expends $6 billion, and manages assets with a total value of $60 billion. These significant resources are at risk if councils are not active, vigilant and effective in dealing with the risk of fraud. The Local Government Act 1989 (the Act) requires councils to develop and maintain adequate internal control systems. An effective fraud control framework is widely recognised as a critical element of such systems. The Australian Standard AS8001–2008 on fraud and corruption control, and other related good practice guides, identify the key elements of an effective fraud control framework. These include:

• a fraud control plan documenting an entity’s fraud prevention, detection and response initiatives

• periodic and comprehensive assessment of an entity’s fraud risks

• documented policies and procedures for dealing with suspected fraud, including protection for whistleblowers

• a sound ethical culture supported by a code of conduct

• regular fraud awareness training to maintain staff awareness of related policies and procedures

• internal audits of the effectiveness of fraud controls and of related procedures

• dedicated controls for activities with a high fraud risk exposure. In performing this review, we met with the following Council Officers:

- Robert Barber (General Manager Corporate and Community) To meet the objectives detailed in part 1.2 we have identified the relevant risks. We have considered whether these risks are being adequately controlled through discussions with the Council Officers listed above. We have identified what processes currently exist to minimise these risks, and whether appropriate policies have been developed and consistently applied. We have completed the Fraud and Corruption Prevention training for approximately 50 council staff. We have attached the presentation information as an appendix to this report.

3

1.2 Objective The purpose of this internal audit project is to provide independent assurance that Council’s risk management, governance and internal control processes are operating effectively in the area of Fraud & Corruption Prevention.

1.3 Scope of Internal Audit As agreed by management, the scope of the internal audit was:

• Reviewing Council’s fraud framework and policies currently in place to ensure adequate guidelines to prevent, detect, report and deter fraud;

• Assessing Council’s fraud control practices against best practice including the Australian Standard for Fraud and Corruption Control (AS8001:2008) including:

o Promoting a sound ethical culture; o Senior management commitment; o Periodic assessment of fraud control risk; o Management and staff awareness; o Fraud and corruption control planning; o Internal control as a fraud and corruption control strategy; o Fraud and corruption detection program;

• Gaining an understanding of Council’s communication and staff training programs in relation to Fraud Management Framework;

• Assessing if the communication and training programs are adequate to create awareness amongst staff members; and

• Conduct a training session (up to 2 hours for senior and selected council staff).

1.4 Findings and Value Provided by this Report We recognise that Benalla Rural City Council is focused on continuously pursuing efficiency, effectiveness, and control enhancements, and the matters raised within this report have been prepared with that focus in mind. The issues raised in Section 2 of this report are considered to add value to the current processes and controls within the Council. This review provides some direction to the Audit Committee and management as to improving the operating efficiency and effectiveness of the Fraud & Corruption Prevention controls. The issues raised are considered to add value to the current procedures, processes and controls in relation to this function.

Risk Ratings

Each issue raised is assigned a risk rating to indicate our assessment of the degree of exposure of the issue

to Council and the urgency of required action.

HIGH - Issue of High risk requiring immediate remedial action MEDIUM - Issue of Medium risk requiring remedial action as soon as possible LOW - Issue of Low risk, which should be considered for future remedial action OPPORTUNITY - Recommendation that would enhance efficiency and effectiveness of processes.

4

Positive Characteristics From our discussion, testing and observations we noted the following positive characteristics surrounding the processes in place:

• The staff who attended the training were knowledgeable and supported the ideas raised.

• The introduction of e-learning will ensure that the updated policy will be read by all staff.

• Although the policy was due for review, Council had a policy which was being used.

Summary of Issues

MEDIUM Fraud & Corruption Control Plan

Observation We reviewed the current Fraud and Corruption Policy and found that it had not been updated for some time and was based on the older Australian Standard. We have updated this policy to reflect the changes in the current standard.

Recommendation

We recommend that the updated policy is reviewed and approved by Council so that it can be shared with all staff and Councillors. We encourage the introduction of e learning so that a record can be maintained of this education and acceptance of the policy.

LOW Building Ethical Culture

Observation Councils have both spoken and unspoken rules and guidelines about how to act within their environments. This includes everything from attire, attitudes expressed, and behaviour towards colleagues and the public. For anyone who has worked at several organizations, they can likely describe how the culture of these organisations differ and sometimes differ radically.

Recommendation

To increase ethical culture, we would suggest the following:

• Pop up messages on staff computers could let staff know if there is a new fraud threat and actions to be completed.

• Add Fraud and Corruption Prevention as an agenda item for team meetings

• Training for staff about how to promote ethical culture (completed)

• Recognition of staff who demonstrate strong ethical culture

• Ensure Councillors are aware of the Fraud and Corruption Policy

• Ensure that there is clear consequences for those who commit fraud

• Senior should be able to clearly define how they how promoted a strong ethical culture at their review

0

0.5

1

1.5

2

2.5

High Medium Low Opportunity

Number of Issues Identified & Risk Ratings

5

MEDIUM Fraud & Corruption Prevention Techniques

Observation Vigilant managers and a strong ethical culture can help minimise the impact of Pressure and Rationalisation but even

if a person is under pressure to commit fraud and has rationalised the idea to the point of no return, it’s impossible to

commit fraud without having the Opportunity.

Recommendation

We recommend that the units are given access to the risk registers and they complete a full review of their fraud risks with their teams

1.5 Acknowledgement

The matters reported in our review report have been discussed with management and management comments have been provided for the issues included in this report. We would like to take this opportunity to thank all the staff involved for their assistance and cooperation during the course of the internal audit. Should you have any questions or queries, please feel free to contact me.

Kathie Teasdale

Partner

RSD Audit

6

2. Observations and Recommendations

2.1 Fraud & Corruption Control Plan MEDIUM

Observation We reviewed the current Fraud and Corruption Policy and found that it had not been updated for some time and was based on the older Australian Standard. We have updated this policy to reflect the changes in the current standard. Management have reviewed those changes and this policy is attached to this report. We found that staff generally had knowledge of the policy and it is included in the induction of every new staff member. With a view to improving the staff education and therefore the staff ethical culture, the early introduction of this policy to staff is essential. We discuss other methods to increase staff awareness at Finding 2.2. Council is introducing e-learning and will apply this application to all policies. It is important that as part of the understanding and acceptance of the policy that staff are given the opportunity to ask questions and that the policies are reviewed again periodically throughout employment. Recommendation We recommend that the updated policy is reviewed and approved by Council so that it can be shared with all staff and Councillors. We encourage the introduction of e-learning so that a record can be maintained of this education and acceptance of the policy.

Management Comment Agreed.

Responsible Officer General Manager Corporate

Due Date 30 September 2018

7

2.2 Building Ethical Culture LOW

Observation Councils have both spoken and unspoken rules and guidelines about how to act within their environments. This includes everything from attire, attitudes expressed, and behaviour towards colleagues and the public. For anyone who has worked at several organizations, they can likely describe how the culture of these organisations differ and sometimes differ radically.

These rules and guidelines include the following:

1. Clear Expectations for What is Okay and Not Okay - This may be as simple as clearly defining accepted behaviour such as ‘personal photocopying is limited to 5 sheets. However, many of the cultural norms and expectations of an organisation are never expressed in writing but are inferred once you closely observe the environment of the organisation for some duration. Some organisations highlight ethical values and decision making more than others. Clear expectations for behaviour among all members of Council is the first step towards a more ethical organizational culture.

2. Modelling Desired Behaviour - Research conducted by well-known Stanford psychologist, Al Bandura, among others have made clear that people tend to model the behaviour of others (especially well thought of and desirable others) and that leaders within any organization act as models for those below them in the organizational chart. Thus, any organizational leaders must be mindful that they are being watched very closely and that others in the organization will likely follow their lead when it comes to ethical behaviour and attitudes.

Thus, Councillors and Executive must practice what they preach and be sure that they model for others the desired behaviours that they wish to nurture within the Council. Their actions often will speak louder than their words when it comes to helping to create a more ethical environment within Council.

3. Reinforce the Behaviour You Want, and Don’t Reinforce the Behaviour that You Don’t Want - Organizations must be mindful and intentional about what behaviours they want to reinforce and what behaviours they do not want reinforced. Ethical behaviour must be clearly reinforced so that it will continue to occur. Problematic unethical behaviour should not be reinforced if the organization wishes to extinguish these undesirable behaviours.

Offering opportunities for recognition, awards, and social reinforcements for desirable ethical behaviours can go a long way to promote the types of ethical culture desired in any organization. Certainly, these rewards or reinforcements must be thoughtfully considered and delivered with careful attention to both intended and unintended consequences of using them

Recommendation To improve ethical culture, we would suggest the following:

• Pop up messages on staff computers could let staff know if there is a new fraud threat and actions to be completed.

• Add Fraud and Corruption Prevention as an agenda item for team meetings.

• Training for staff about how to promote ethical culture (completed as part of this review).

• Recognition of staff who demonstrate strong ethical culture.

• Ensure Councillors are aware of the Fraud and Corruption Policy.

• Ensure that there is clear consequences for those who commit fraud.

• Senior should be able to clearly define how they how promoted a strong ethical culture at their review.

https://www.psychologytoday.com/au/basics/decision-making

8

Management Comment Agreed.


Due Date 30 September 2018

9

2.3 Fraud and Corruption Prevention Techniques MEDIUM

Observation People need certain motivations to be driven to steal from their workplace. The Fraud Triangle present the three

factors that can make an employee consider fraud being Pressure, Rationalisation and Opportunity.

Vigilant managers and a strong ethical culture can help minimise the impact of Pressure and Rationalisation but even

if a person is under pressure to commit fraud and has rationalised the idea to the point of no return, it’s impossible

to commit fraud without having the Opportunity.

While we can’t do much about a fraudster’s personal drivers, we can limit opportunities to commit employee crimes

and create a work environment that actively acts to prevent fraud. Methods include:

• Controls

• Monitor

• Oversight

• Protect Disclosures

Councils are required to develop and maintain adequate internal control systems. An effective fraud control

framework is recognised as a critical element of such systems.

Council’s risk register is having a review currently. The risks that are being assessed can be grouped into

strategic, operational, fraud and OH&S. As the responsibility for risk has been decentralised, the operational, fraud

and OH&S should be able to be accessed by the individual units. They could then assess risks including fraud with

their teams and enter changes directly into the risk register. This would ensure that all controls are captured and can

be reviewed.

Monitoring and oversight techniques and discussions about protected disclosures could all be incorporated into the

team activities.

Recommendation

We recommend that the units are given access to the risk registers and they complete a full review of their fraud risks with their teams.

10

Management Comment Agreed. The Council’s risk management processes are currently the subject of an external review. This recommendation will be included in review outcomes then implemented.


Due Date 31 December 2018

11

3. Contact Details

NAME OF FIRM: RSD Audit ENTITY TYPE: Company ABN: 85 619 186 908 (registered Victoria 3550)

REGISTERED / OFFICE LOCATION RSD Audit

41A Breen St

Bendigo Victoria 3550

POSTAL ADDRESS RSD Audit

PO Box 448

Bendigo Victoria 3552

CONTACTS

Kathie Teasdale

Engagement Partner

Ph: (03) 4435 3500

Mob: 0447 305 343

Email: [email protected]

mailto:[email protected]

Council Policy – 4 Fraud Prevention Policy Page 1 of 15

CP 4 Fraud Prevention Policy Responsible Officer: Chief Executive Officer Document type: Council Policy Reference: CP 4 Approved by: Council Date approved: 10 October 2018 Date of next review: October 2020

Introduction The following fraud prevention and management plan is derived to limit the prevalence of fraud and corruptive behaviour within the Benalla Rural City Council. Recent studies and events, Australia wide have revealed a strong connection between fraudulent behaviour and fundamental governance at senior levels.

Whilst not every entity has this such behaviour it is critical to have such a prevention and management plan ready for use, should the problem arise or the consequences may be dire and long lasting.

Policy Objective The purpose of this policy is to give clear notice to persons within and outside Council that fraud against Benalla Rural City Council will not be tolerated and will be dealt with to the maximum extent of the law. It is the objective of Council to provide a broad framework for establishment of an effective fraud prevention program across Benalla Rural City Council.

Purpose Council staff have to be trusted and permitted to operate autonomously if Council is to operate efficiently. Council believes in the integrity and honesty of their staff. There will, however, be instances where advantage will be taken of the trust that is conferred. Implementation of effective Fraud Prevention Procedures as described in the Fraud Prevention Plan will assist in minimising the risks that result from the empowerment of staff.

The basic elements of the Fraud Prevention Plan are careful recruitment of staff, a culture of integrity and loss prevention within the organisation and accountability through a documented fraud review process.

APPENDIX 2


Council’s fraud prevention plan raises the awareness of fraud and its prevention and gives guidance to both the reporting of suspected fraud and how the investigation of that report will proceed. The plan focuses on improving systems and procedures, changing the attitudes of staff and improving the overall integrity and performance of Council. Scope of Procedure These procedures apply to all staff and Councillors of the Benalla Rural City Council. Procedure

Background Fraud is generally defined as wilful deceit or trickery. It covers a wide range of activities from such minor transgressions as the misappropriation of office stationery by a staff member to more serious crimes such as misrepresentations by senior management and misuse of confidential information. Along with this corruption is defined as dishonest activity in which a director, executive, manager, employee or contractor of an entity acts in an unethical way, without the best interests of the entity, thus abusing their positional power. There are three main types of fraud and corruption. Those which benefit the: organisation, perpetrated by management individual, perpetrated by the employee vendor, supplier or client. Typical fraud techniques include: theft of inventory, false invoicing, credit card abuse, payroll fraud, theft of equipment, theft of cash, kickbacks, assets purchased for personal use, improper use of position or information and forgery of documents and cheques. Approximately 79 per cent of detected fraud is exposed by internal resources. Fraud prevention is about changing organisational features that allow these events to occur and possibly go unnoticed or unreported. Fraud control is an essential element of sound corporate governance and is integral to internal risk control. The need for entities to develop and to implement effective fraud control policies has been affirmed with the publication of Australian Standard No. AS 3806-98 Compliance Programs, which provides guidelines for both private and public-sector organisations on the establishment, implementation and management of effective compliance programs. Other Council policies which should be used in conjunction with the Fraud Prevention Policy include Council’s Staff Code of Conduct, Counselling and Discipline Policy, which details staff disciplinary actions and Council’s Protected Disclosure Policy. The General Manager Corporate (GMC) is Council’s delegated Protected Disclosure (PDC) Coordinator under the Protected Disclosure Act. The PDC’s role is to receive reports of improper conduct and determine whether they should be referred to IBAC as potential protected disclosure complaints. PDCs play an important role in instilling confidence and providing guidance and support to those who may be considering reporting improper conduct.


Fraud Prevention Plan The Fraud Prevention Plan includes the following sections: 1. Risk Management 2. Staff Training/Promoting an Ethical Culture 3. Audit and Detection 4. Investigation 5. Enforcement 6. Responsibility and Reporting This plan is used to define how the entity controls fraud and corruption within the Council, with the hope that this will help minimise the overall prevalence of these unethical behaviours as much as possible. 1. Risk Management Risk management is about the identification, evaluation and minimisation of identifiable risks. Council’s fraud risk assessment process will be on-going, iterative and be sufficiently robust to enable all key fraud risks to be identified. Risk assessments will address both the internal and external environments of Council and they will cover all functions and operations to establish the level, nature, form and likelihood of risk exposure. To accomplish the above Council’s Leadership Team is responsible for the: identification of specific fraud risks that may be present within each department (some

examples of fraud risks are presented in the Appendix A) assessment of the effectiveness of internal controls in force that would tend to impact

on the risks identified determination of an overall risk rating for each risk identified development of strategic measures to counter the impact of each fraud risk in light of

the risk ratings. Step 1 The GMC is to oversee the compilation of fraud risk assessments agreed by Department Managers. The GMC is to assist Managers in identifying and rating the exposures and risk factors relevant to systems, functions and operations in their department. Step 2 Department Managers are to review their area of responsibility to identify risks in their systems, functions and operations. One Fraud Risk Assessment Score Sheet (Refer Appendix B) is to be completed for each risk identified. Each identified risk is then rated using the Risk Matrix (Refer Appendix C).


Major fraud risks are those risks that are either very likely to occur or have a high consequence. Moderate risks are either likely to occur or could have a medium impact on Council. Minor risks are both unlikely to occur and have a low consequence. Minor fraud risks are usually accepted or ignored. Suitable control strategies need to be developed by department managers for major and moderate risks. The completed fraud risk assessment highlights the main vulnerabilities of Council and recommends any additional controls required to minimise the risk of fraud becoming a reality. Management should not rely on relatively brief, periodic visits of auditors to identify areas where controls are not in place or where exposure to the risk of fraud remains. Whilst the overall responsibility lies with the Chief Executive Officer and General Manager Community, department managers have the responsibility to identify and rate these risks according to the impact they may have on the council and then pass this information on to the appropriate authorities. An example of a fraud risk assessment score sheet is detailed below.

Theft of Council Assets This involves the theft of Council assets which may include computers, vehicles, tools, stationery.

Existing Controls in Place Items of computer equipment are recorded in the asset register. A code device is attached to each asset. A register of lap top computers is maintained and any overnight borrowing is recorded. Regular asset inventory checks are undertaken by Unit Managers.

When staff terminate their employment with Council a check is carried out to ensure equipment is returned and accounted for. Tools are labelled with Council’s name and random stock takes of selected items are conducted.

Likelihood of Fraud Occurring: Likely Consequence of Fraud Occurring: Medium Direct cost burden in the replacement of the asset. Indirect cost of increased insurance premiums if claims against Council’s insurance policy are made. Reflects poorly on Council image.

Overall Fraud Risk Rating: Moderate Proposed Additional Fraud Prevention Controls The stationery room and tool cabinet should be kept locked.

Step 3 The completed fraud risk assessment sheets are to be returned to the GMC who is to collate and then forward fraud risk assessments to the Risk Management Working Group for their review. The Risk Management Working Group is to review the identified areas of risk to ensure that they appear complete and reasonable. The Risk Management Working Group will also review proposed additional risk controls for appropriateness.


Step 4 This process and the outcomes are to be fully documented by the GMC. A three-month timeframe from the start to the end of the review should be set every two years. 2. Staff Training/Promoting an Ethical Culture The Fraud Control Policy of the Commonwealth Government states: “The Government recognises that fraud prevention goes beyond monitoring the effectiveness of financial control. It also requires the maintenance of an ethical climate Chief Executives must foster and develop within agencies the highest standards of ethical behaviour”. The CEO, GMC and department managers have a responsibility, through their words and actions, to set ethical standards in their work area and provide their staff with guidance and support. If that support is not evident it could severely affect the implementation and effectiveness of any fraud strategy. There will be a combination of both internal and external fraud and corruption training. Staff training will be periodically conducted by the managers for their teams and to further improve this training a qualified external provider will hold sessions for staff every two years. Staff must be trained in their roles in the risk management process and instructed on the extent they will be accountable for their actions. Accountability is the key to providing a deterrent to fraud and theft. Training conveys the organisational culture to the staff and gives them sufficient confidence and direction to implement the policies and procedures. Training also limits the opportunity for staff to claim ignorance when policies are being enforced. Simply sending a message is inadequate. Repeated reinforcement in a variety of ways is required. Unless actual attitudes and behaviours change then success cannot be claimed. Council conducts induction training that includes information on values and ethical conduct for all new staff and some continuing training that is directed to fraud awareness. Council will ensure that the fraud awareness information, introduced during the induction process, is effective and records are maintained of the training provided. All new employees must complete fraud awareness training and review this policy during induction. Before staff perform this training an employment screening test is necessary. Employment screening involves verifying, with consent, the identity, integrity and credentials of an individual within the firm. This needs to be within relevant legislation and should be performed on all new employees to the entity, along with all employees that have gained a promotion or been transferred.


With consent of the individual, the following may me checked and investigated: professional references National Police check educational credentials employment history.

Once these are investigated, it can then be determined whether or not the individual is a fraudulent or corruptive risk to the entity. The provision of training for managers in relation to fraud control is important because of the supervisory responsibilities they must exercise and the example that is set by managers to other employees. All managers must complete fraud control training periodically. Fraud awareness training should also be provided to existing staff periodically. The training will be specific to identified high risk tasks. Every staff member should have a general awareness of unethical behaviour and how they should react to the situation. On this basis, the Council needs to ensure that the message about fraudulent or corrupt behaviour is unacceptable. Staff need to also be aware in the authenticity of the suppliers and customers of the Council, both the current and the new. If the result of this inquest results in a high fraud risk associated, it would be within the Council’s best interest to end this relationship. Council’s performance reviews include the requirement that all staff be involved in risk management.

What Training? Who Undertakes? Why? How

Often?

Roles and Accountability

All staff Staff must be trained in their roles in the risk management process and instructed on the extent they will be accountable for their actions. Accountability is the key to providing a deterrent to fraud and theft. Training conveys the organisational culture to the staff and gives them sufficient confidence and direction to implement the policies and procedures. Training also limits the opportunity for staff to claim ignorance when policies are being enforced.


Values and Ethics

All Staff Council conducts induction training that includes information on values and ethical conduct for all new staff and some continuing training that is directed to fraud awareness. Council will ensure that the fraud awareness information, introduced during the induction process, is effective and records are maintained of the training provided. All new employees must complete fraud awareness training and review this policy during induction.

Employee Screening

New, promoted or transferred staff

Before the staff perform this training however, an employment screening test is necessary. Employment screening involves verifying, with consent, the identity, integrity and credentials of an individual within the firm. This needs to be within relevant legislation and should be performed on all new employees to the entity, along with all employees that have gained a promotion or been transferred. With consent of the individual, the following may me checked and investigated: professional references National Police check educational credentials employment history. Once these are investigated, it can then be determined whether or not the individual is a fraudulent or corruptive risk to the entity.

Fraud supervision

Managers The provision of training for Managers in relation to fraud control is important because of the supervisory responsibilities they must exercise and the example that is set by Managers to other employees. All Managers must complete fraud control training periodically.

Communication and Awareness

All Staff Fraud awareness training should also be provided to existing staff periodically. The training will be specific to identified high risk tasks. Every staff member should have a general awareness of unethical behaviour and how they should react to the situation. On this basis, the Council needs to ensure that the message about fraudulent or corrupt behaviour is unacceptable.


Supplier and customer vetting

All Staff Staff need to also be aware in the authenticity of the suppliers and customers of the Council, both the current and the new. If the result of this inquest results in a high fraud risk associated, it would be within the Council’s best interest to end this relationship.

3. Audit and Detection In-house audit and detection act as a deterrent to fraud. Appropriate use of exception reporting available from the computer system, monitoring activities and staff rotation are some of the techniques to ensure that policies and procedures are adhered to. Management’s role is to implement appropriate monitoring or checking mechanisms, both overtly and covertly, to ensure compliance with the policies and to detect fraud at the earliest opportunity. Management needs to ensure they understand the operations they are reviewing. They need to question responses from staff and they should seek further documentation for support. Most monitoring processes focus on asset records and financial records – as fraud usually affects assets and Council’s financial result. Listed below are monitoring activities that include a focus on asset records, financial records and personnel behaviour. Managers also need to monitor any other operating activity reports to identify unfavourable trends or anomalies. Monitoring ensures that the system is operating as expected. Monitoring activities include: investigating and following up on complaints, rumours or allegations spot checks of transactions to ensure compliance with policies and procedures review of financial reports review of ledger and related reconciliations review of outstanding money owed review of high risk accounts or records evaluation of trends identifying where assets are and what condition they are in review supporting documentation. When reviewing procedures or documentation management need to be aware of ‘red flags’. These are details that alert management that more investigation than usual may be necessary.


Some ‘red flags’ are: income decreasing, operating costs increasing excessive inventory excessive year-end adjustments break in sequential numbering system of receipts and other control documents missing documents excessive refunds no supporting documentation. As well as reviewing procedures, management need to be aware of staff behaviour which may indicate problems. There are several early warning signs to be aware of relating to potential fraudulent behaviour. These include: staff refusing to take leave staff resigning suddenly or failing to attend work for no apparent reason drugs or alcohol abuse an unusual interest in certain elements of the organisations business staff who override internal controls excessive complaints from the public or other staff members habitual gambling persistent anomalies in work practices excessive generosity towards other staff borrowing from other staff character changes. Internal fraud controls should be proactive – meaning they should be in place from the beginning, before an incident occurs, rather than after – and they should be cost effective. A good system of internal fraud controls will lessen the chance of misuse of funds and resources, through appropriate documentation and procedures and will help to identify the cause of a problem. 4. Investigation Correct investigation techniques ensure that any matters highlighted through stakeholder reporting, or through audit and detection methods are handled in an unbiased, professional manner. Matters need to be handled having regard to Industrial Relations guidelines to minimise the risk of claims for unfair dismissal should this course of action be taken. The requirements of the Protected Disclosure Act 2012 must also be considered. All suspicions or complaints are to be documented or reviewed by a General Manager or the Chief Executive Officer. Similar instances or patterns will then be recognised.


Management must ensure that staff members are aware that all suspected frauds being committed against Council are to be reported. The staff member making the complaint should put that complaint in writing or provide sufficient detailed information to enable a comprehensive summary to be prepared. All complaints should be made to the staff member’s Department Manager or directly to their general manager. The GMC must be informed immediately of all cases of suspected fraud and act as the action officer. An action officer ensures that all documentation is maintained and the issues are being investigated by a manager, general manager or the CEO. The reporting of each issue to the GMC by the investigating party not only provides the opportunity to retain relevant documentation of the issue, but also to analyse the causes of it and its wider implications. The GMC will analyse the issue to identify similar instances or patterns of behaviour. It is important that these instances are discussed, as even if the suspected fraud is not substantiated, the fraud risk has been identified. The identification of the risk and actions taken to improve controls to minimise the fraud risk, may be useful to other Department Managers in their relevant work areas. The GMC is to establish a fraud risks register. The register should be periodically examined by the Risk Management Working Group to identify trends and obtain strategic information. In order to avoid damaging the reputations of innocent persons initially suspected of wrongful conduct and to protect Council from the potential civil liability, the results of investigations will be disclosed or discussed only with those persons who require knowledge of the investigation. Where possible privacy will be observed at all times. Council’s policies will also adhere to the Protected Disclosure Act of 2012, which states that if an individual encourages or facilitates the disclosures of any improper conduct by public officers, bodies or other persons, they will be protected against any detrimental retaliation. If any unethical behaviour has been spotted by one of the employees, it is expected that they report the incident they have seen to the appropriate authorities and as such no detrimental actions will be enforced upon them. If initial investigations by management, internal or external auditors, or other consultants, confirms that a significant fraud against Council has been committed, the matter must be referred to the Victorian Police. When a fraud is detected and referred to police, the following is required: accurate reconstruction of where the fraud has taken place accounting schedules indicating the ‘money trail’ details of time, dates, places and misappropriation preservation of original documents including computer hard drives and disks suspect documents should be preserved in a plastic sheet as soon as possible.


In the event of a significant loss, the GMC is to identify the controls required to mitigate the risk of a similar fraud occurring again. This analysis is to be reported to Risk Management Working Group for review. 5. Enforcement After the matter is investigated fully and evidence obtained there must be a fair, consistent and visible application of the policy to deal with staff who commit fraud. Without this application, staff will realise they can breach policies with relative immunity. Council’s discipline actions are detailed in Council’s Counselling and Discipline Policy. Proving criminal intent in relation to fraudulent behaviour is often difficult. Consequently, the availability and use of remedies, other than prosecution, is in many cases appropriate and can be more cost-effective than undertaking criminal proceedings for minor offences. When deciding on the action that is to be taken, a balance needs to be maintained between the costs of the action and the deterrent effects that prosecution can achieve. Given the difficulties in prosecuting fraud, there has been increasing reliance in recent years placed on civil remedies as a complement, or as an alternative to criminal prosecution. In contrast to the criminal law, which requires proof beyond reasonable doubt on intent to defraud, civil remedies only require proof on the balance of probabilities. When conducting initial investigations into fraud allegations, where a prima facie case of fraud is found to exist, the most appropriate course of action should be determined using guidance provided in this Policy and legal advice. If an individual is proved to have committed fraudulent or corruptive behaviour and the correct procedures have been followed, the individual will be immediately dismissed from their roles and duties within Council and the matter reviewed to the Victorian Police If in the case that the entity loses a significant amount of money, Council is covered by Crime insurance. 6. Responsibility and Reporting Fraud prevention strategies must be generated by management. The CEO, GMC and department managers must have a commitment to fraud prevention and understand how it may be achieved; this will provide a foundation for other employees to support the notion of fraud control. All serious fraud matters that they are aware of should be reported to the Council through the Audit Advisory Committee. The GMC is responsible for overseeing Council’s Fraud Prevention Strategy.


All suspected fraud is to be reported to the GMC whose role includes the following objectives: coordinate the overall approach to fraud control formulate fraud control strategies and reporting procedures managers to identify major areas of risk recommend how investigations should be handled recommend to managers fraud control initiatives ensure such initiatives are promulgated throughout Council receive reports of fraud, review and report in accordance with the Policy stated at

section 4, with recommended disciplinary action if appropriate develop policies to protect staff reporting fraud or subject to allegations of fraud approve documentation on fraud control. The GMC is responsible for updating the key objectives of the Fraud Prevention Policy for review by the Risk Management Working Group.


Appendix A EXAMPLES OF COMMON FRAUD RISKS 1. Assets Unauthorised use of Council assets. Theft of tools, IT equipment, consumables or inventory. Misappropriation of cash. Cancellation/alteration of debtors. Failure to raise an invoice for services provided.

2. Information and Confidentiality Confidentiality of information is critical. Not only is confidentiality important from a privacy perspective, but misuse of information could enable an officer (including Councillors) or an employee to obtain an inappropriate economic benefit. Similarly, misrepresentation of information can be fraudulent in its intent. Areas of risk include: tendering planning obtaining/presenting information in a selective manner, thereby misleading decision

makers, with the objective of supporting a proposal that may present benefits to Council officers or staff

inflating favourable financial or operating performance indicators to obtain bonuses or favourable salary reviews

inappropriate provision of database information to others. 3. Purchasing Purchasing products/services/assets for private use. Inappropriate relationships with particular suppliers providing favours or kickbacks. Tendering and quotation objectivity. Credit card misuse. Payment of forged or altered invoices.

4. Personnel/Payroll Inappropriate use of sick leave provisions. Unauthorised amendment of payroll rates, tax deductions, superannuation

contributions, FBT calculations. Phantom employees on the payroll. Terminated employees retained (even for a short time) on the payroll.

5. Other Amending rate records of family/associates. Staff access to residents’ properties (supervised or not) presents opportunities for

theft from residents. Siphoning interest from investment accounts. Taking or giving bribes. Falsifying log books, timesheets etc.


Appendix B Fraud Risk Assessment Score Sheet

Fraud Risk Insert a description of how a fraud may occur

Existing Controls in Place Describe the controls currently in place which mitigate the risk of fraud occurring Likelihood of Fraud Occurring: Very Likely/Likely/Unlikely

Insert level of likelihood the fraud will occur Consequence of Fraud Occurring: High/Medium/Low

Insert the impact of the fraud to Council Overall Fraud Risk Rating: Major/Moderate/Minor Insert the level of risk of fraud to Council Proposed Additional Fraud Prevention Controls List the proposed controls required to minimise the recognised risk of a fraud occurring


CO

NSE

QU

ENC

E

(< $

5,00

0)

Appendix C Risk assessment of the Likelihood and Consequence of Fraud

Hig

h (>

$10

0,00

0)

Major

M

ediu

m

Moderate

Low

Minor

Unlikely Likely Very Likely

LIKELIHOOD

Additional risk controls are required if the risk of a fraud occurring is Likely or Very Likely and of Medium to High consequence.



9. Procurement Policy Review SF/1506

Cathy Fitzpatrick – Manager Finance

PURPOSE OF REPORT

The report presents the Procurement Policy for annual review.

BACKGROUND

The Local Government Act 1989 requires the Council to prepare, approve and comply with a Procurement Policy encompassing the principles, processes and procedures applied to all purchases of goods, services and works.

The Council must review its Procurement Policy (refer Appendix 1) annually.

The purpose of the policy is to:

provide guidance, consistency and control over procurement activities

demonstrate accountability to rate payers

ensure compliance with legislation

provide guidance on ethical behaviour in purchasing

ensure openness and transparency of the decision making process.

DISCUSSION

The current Procurement Policy has served the Council well in recent years, however, there has been discussion on the merits of amending the Local Content component of the policy.

For the information of the Council, a briefing memo on the issue was distributed in January 2018 (refer Appendix 2).

In summary, while the inclusion of a Local Content or Local Economic Benefit weighting has potential economic and social benefits for the Benalla Rural City community, the following issues need to be considered:

Contractors from outside the “local” definition already have a cost disadvantage, for example, costs associated with establishment, travel, freight and accommodation.

Additional cost to the Council in the event the lowest price is not awarded due to a Local Economic Benefit weighting.

A limited number of local businesses will have access to the benefits, i.e. only providers that undertake business with the Council.



Additional administrative burden on tenders in providing evidence of local economic benefit.

How will “local” be defined, for example, is the head office of a tenderer registered in Benalla Rural City.

At what level of procurement will the criteria be applied?

Increasing procurement thresholds

In addition to considering the support of the local economy when considering advertised tenders ($150,000 goods and services and $200,000 construction works) there is an opportunity to increase procurement thresholds to help engagement with the local market.

Other advantages of increasing thresholds include the measure’s easy implementation, reduction of market fatigue from responding to low amount quotations and decreased administration.

Quotes could still be obtained if there was more than one local provider.

Existing procurement thresholds

From To Procurement Requirement

$0 $5,000 Minimum of one verbal quotation, documented on the Purchase Order. To be sourced from a local supplier if possible

$5,001 $10,000 Minimum 3 verbal quotes, best value in writing. At least one from local supplier

$10,001 $50,000 Minimum 3 written quotes. At least 1 quotation from local supplier. Can be open to the public or sent to min of 3 suppliers

$50,001 $150,000 (Goods and Services) OR $200,000 (Construction Works)

Minimum of 3 suppliers to be invited via the E-tender portal. Can also be open to the public

Greater than $150,000 (Goods and Services) Or $200,000 (Construction Works)

Advertised as Public Tender via E-Tender portal



Potential procurement thresholds


$0 $10,000 Minimum of one verbal quotation, documented on the Purchase Order. To be sourced from a local supplier if possible.

$10,001 $50,000 Minimum 3 written quotes. At least 1 quotation from local supplier. Can be open to the public or sent to minimum of 3 suppliers.


Minimum of 3 suppliers to be invented via the E-tender portal. Can also be open to the public.


Advertised as Public Tender via E-Tender portal.

Demonstration of local economic benefit

A sophisticated method of assessing local economic benefit would be to ask all respondents to demonstrate in their tender submissions how they will support the local economy, for example, documented spend within Benalla Rural City and local employment opportunities.

Data Analysis

In the period between 2016 and 2018, 14 ‘single-award’ tenders have been considered by the Council. Of these 14 tenders, 10 had both local and regional respondents. Of these 10, eight tenders were awarded to local respondents.





Our Organisation

Provide quality customer service focussed on continuous improvement.


Demonstrate strong leadership and advocacy on key local issues on behalf of our community.

We are compliant with our legislative and risk management responsibilities and accountable to our community.




Preferencing local suppliers over highest scoring value for money non-local tenders will have a negative financial impact, however, this impact is dependent on the nature and amount of future tenders.

Options

Option 1 That the Procurement Policy be left unchanged.

Option 2 That Procurement Thresholds be increased to:


$0 $10,000 Minimum of one verbal quotation, documented on the Purchase Order. To be sourced from a local supplier if possible.

$10,001 $50,000 Minimum 3 written quotes. At least 1 quotation from local supplier. Can be open to the public or sent to minimum of 3 suppliers.


Minimum of 3 suppliers to be invented via the E-tender portal. Can also be open to the public.


Advertised as Public Tender via E-Tender portal.

Option 3 All respondents (local and otherwise) be asked to detail in their tender responses how they will support the local economy through all or some the following examples:

promotion of the social, economic and environmental viability and sustainability of the municipal district

efficient and effective use of resources to best meet the needs of the local community

improvement of the overall quality of life of people in the local community

promotion of appropriate business and employment opportunities

provision of services and facilities that are accessible and equitable

documented spend with businesses within Benalla Rural City over the term of the contract, including stated and confirmed spend for goods and services used for the delivery of the contract.



Option 4 For tenders in excess of $150,000 (Goods and Services) or $200,000 (Construction Works) the Council give preference to suppliers based in Benalla Rural City (based on registered Australian Business Number address or business has a head office in the Rural City) if their price is within 5 per cent of the highest value for money offer and the tenderer has demonstrated they can meet the Council’s requirements with minimal risk.

Option 5 For tenders in excess of $150,000 (Goods and Services) or $200,000 (Construction Works) the Council give preference to suppliers based in Benalla Rural City (based on registered Australian Business Number address or business has a head office in the Rural City) if their price is within 10 per cent of the highest value for money offer and the tenderer has demonstrated they can meet the Council’s requirements with minimal risk.

Council Policy – 16 Procurement Policy Page 1 of 3

CP 16 Procurement Policy

Responsible Officer: Manager Finance Document type: Council Policy Reference: CP 16 Approved by: Council Date approved: Date of next review:

Purpose

The purpose of the Procurement Policy is to:

Provide guidance, consistency and control over procurement activities Demonstrate accountability to rate payers Ensure compliance with legislation Provide guidance on ethical behaviour in purchasing Ensure openness and transparency of the decision making process

Objective

Section 186a of the Local Government Act 1989 requires the Council to prepare, approve and comply with a Procurement Policy encompassing the principles, processes and procedures applied to all purchases of goods, services and works by the Council. The Council must review its Procurement Policy annually and make it available for public inspection.

Scope

The Policy covers all procurement activities of Council and is binding upon Council Staff, contractors and consultants while engaged by the Council.

Standards

The Council’s procurement activities will be carried out to the professional standards required by best practice and in compliance with the:

Local Government Act 1989 Council policies Council Code of Conduct

APPENDIX 1


Local Government Procurement Best Practice Guideline other relevant legislative requirements such as, but not limited to the Trade

Practices Act, Goods Act and the Environmental Protection Act Policy Statement

The Council recognises that a procurement policy and supporting administrative procedures will support the achievement of the Council’s strategic objectives. The Council is committed to ensuring its purchasing practices are sustainable, efficient and deliver value for money, while encouraging a competitive environment amongst its suppliers and ensuring a safe working environment for its staff and contractors.

Principles

The Council’s purchasing practices are based on the following principles:

Delegation of Procurement Authority - Delegations Reserved for the Council

Only the Council can award contracts that are greater than: - $150,000 for goods and services - $200,000 for works - Delegation of Authority to Council Staff

Council procurement activities are undertaken using a Delegation of Procurement Authority allowing authorised and trained, Council staff to approve certain purchases, quotation, tender and contractual processes without prior referral to the Council. Council staff procurement delegations will be documented and communicated within an administrative procedures manual.

Value for Money The Council’s procurement activities will be carried out on the basis of obtaining value of money. Value for money means minimising the total cost of ownership over the lifetime of the requirement consistent with acceptable quality, reliability, delivery and risk considerations. Section 186(4) of the Local Government Act provides that the Council is not required to accept the lowest tender or accept any tender.

Fair and Honest Dealing

All prospective suppliers will be afforded an equal opportunity to tender or quote. Impartiality will be maintained in selecting suppliers so that no action is taken that could evoke criticism of Council.

Conduct of Councillors and Council Staff

Council’s procurement activities will be performed with unquestionable integrity and in a manner able to withstand the closest possible scrutiny. Councillors and Council


staff will at all times conduct themselves in ways that are, and are seen to be, ethical and of the highest integrity.

Accountability and Transparency

Accountability in procurement means being able to explain and provide evidence of what has happen during the process. The test of accountability is that an independent third party must be able to see clearly that a defined process has been followed and that the process is fair and reasonable.

The processes by which all procurement activities are conducted will be in accordance with the Council’s Procurement Policy and supporting administrative procedures which ensure fairness and impartiality towards suppliers, consistency and transparency in the competitive process and provide security and confidentiality for the commercial interests of existing and potential suppliers. The Council must be able to account for all procurement decisions made over the lifecycle of all purchased goods, services and works and provide feedback on them.

Sustainability

Council is committed to adopting a green procurement approach by supporting the principles of sustainable procurement within the context of purchasing on a value for money basis.

Local Content

Consistent with the value for money principle and taking all factors into consideration, where equivalent value can be sourced both locally and elsewhere, the goods or services should be procured from the local supplier.

Operations and Process Improvement

The Council will seek continual operational and process improvement including innovative and technological initiatives with the objective to reduce overall activity costs and achieve best practice.

Dispute Resolution Any dispute arising from the application of this policy will be referred to the Chief Executive Officer for investigation and resolution.

Review This policy is required to be reviewed at least once in each financial year as per section 186A (7) of the Local Government Act 1989.

APPENDIX 2



Closure of Meeting

agenda - finance and operations committee 3 october 2018 · 10/3/2018 · agenda – finance and...

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