audit committee meeting - the hills shire · recommendations of the internal audit reports; •...

Audit Committee Meeting

Tuesday, 19 August 2014

THE HILLS SHIRE CO

UNC

IL

AUDIT COMMITTEE MEETING 19 AUGUST, 2014

ITEM SUBJECT PAGE ITEM-1 CONFIRMATION OF MINUTES

ITEM-2 STATUTORY FINANCIAL STATEMENTS 7

ITEM-3 INTERNAL AUDIT REPORT 9

ITEM-4 GENERAL MANAGER'S EXPENSES 49

ITEM-5 QUESTIONS AND ANSWERS - AUDIT COMMITTEE MEETING - 3 APRIL 2014

50

MINUTES of the duly convened Audit Committee Meeting of The Hills Shire Council held in the Council Chambers, Baulkham Hills on 3 April 2014

This is Page 1 of the Minutes of the Audit Committee Meeting of The Hills Shire Council held on 3 April 2014

ITEM SUBJECT PAGE ITEM-1 CONFIRMATION OF MINUTES 3

ITEM-2 INTERNAL AUDIT REPORT 3

ITEM-3 GENERAL MANAGERS EXPENSES 3

ITEM-4 QUESTIONS AND ANSWERS – AUDIT COMMITTEE MEETING 5 DECEMBER 2013

4

QUSTIONS WITHOUT NOTICE 4



1 PRESENT

Clr Dr M R Byrne (Mayor, in the Chair) Clr M G Thomas Mr Michael Blair Mr Trevor Bland

2 APOLOGIES

Adjunct Professor Jim Taggart Clr A J Hay OAM Clr Dr J N Lowe

3 IN ATTENDANCE

Mr Dave Walker – General Manager Ms Kerrie Wilson – Internal Auditor Mr Vikash Pillay, Senior Manager, PricewaterhouseCoopers

4 TIME OF COMMENCEMENT

7.26pm

5 TIME OF COMPLETION

7.49pm

6 DECLARATIONS OF INTEREST

Nil.

7 ARRIVALS AND DEPARTURES

Nil.

8 DISSENT FROM COUNCIL'S DECISIONS

Nil.

9 ADJOURNMENT & RESUMPTION

Nil.



ITEM-1 CONFIRMATION OF MINUTES A MOTION WAS MOVED BY MR TREVOR BLAND AND SECONDED BY COUNCILLOR THOMAS THAT the Minutes of the Audit Committee held on 5 December 2013 be confirmed. THE MOTION WAS PUT AND CARRIED.

10 RESOLUTION

The Minutes of the Audit Committee Meeting held on 5 December 2013 be confirmed. APOLOGIES A MOTION WAS MOVED BY COUNCILLOR THOMAS AND SECONDED BY MR TREVOR BLAND THAT the apologies from Councillor Hay OAM, Councillor Dr Lowe and Adjunct Professor Jim Taggart be accepted and leave of absence granted. THE MOTION WAS PUT AND CARRIED.

11 RESOLUTION

The apologies from Councillor Hay OAM, Councillor Dr Lowe and Adjunct Professor Jim Taggart be accepted and leave of absence granted.

ITEM-2 INTERNAL AUDIT REPORT A MOTION WAS MOVED BY COUNCILLOR THOMAS AND SECONDED BY MR TREVOR BLAND THAT the Recommendation contained in the report be adopted. THE MOTION WAS PUT AND CARRIED.

12 RESOLUTION

The report be received.

ITEM-3 GENERAL MANAGERS EXPENSES

A MOTION WAS MOVED BY COUNCILLOR THOMAS AND SECONDED BY MR MIKE BLAIR THAT 1. The report be received. 2. The expenses tabled (which outlines a total of $2,057.25) be noted. THE MOTION WAS PUT AND CARRIED.

13 RESOLUTION

1. The report be received. 2. The expenses tabled (which outlines a total of $2,057.25) be noted.



ITEM-4 QUESTIONS AND ANSWERS - AUDIT COMMITTEE MEETING 5 DECEMBER 2013

A MOTION WAS MOVED BY COUNCILLOR THOMAS AND SECONDED BY MR MIKE BLAIR THAT the Recommendation contained in the report be adopted. THE MOTION WAS PUT AND CARRIED.

14 RESOLUTION

The report be received. QUESTIONS WITHOUT NOTICE

15 COPIES OF COUNCIL’S FINANCIAL ACCOUNTS

Councillor Thomas asked for copies of the Hills Shire Plan and associated quarterly budget reviews to be provided to the three (3) independent Audit Committee Members for their information. The Internal Auditor advised that these will be provided.

16 METHODOLOGY OF INTERNAL AUDITS

Mr Mike Blair advised that the independent Audit Committee Members would like to understand the methodology used in the audits undertaken by the Internal Auditor and requested that this be included in the Internal Audit report. Councillor Thomas also requested that the Audit Committee be provided with a confidential attachment in the business paper of the findings arising from internal audits undertaken and the management responses for the relevant audits. The Internal Auditor replied that this information will be provided to the next Audit Committee Meeting. The Minutes of the above Meeting were confirmed at the Meeting of the Audit Committee held on 19 June 2014.

MAYOR GENERAL MANAGER


PAGE 7

ITEM-2 STATUTORY FINANCIAL STATEMENTS

THEME: Proactive Leadership

OUTCOME: 3 Sound governance based on transparency and accountability

STRATEGY:

3.1 Ensure Council is accountable to the community and meets legislative requirements and support Council’s elected representatives for their role in the community.

GROUP: GENERAL MANAGER

AUTHOR:

MANAGER - FINANCE

MICHAEL SPENCE

MANAGER – CORPORATE & STRATEGIC PLANNING

ANESSH ZAHRA

RESPONSIBLE OFFICER: CHIEF FINANCIAL OFFICER

CHANDI SABA

REPORT The annual financial statements for 2013/14 are currently being audited and will be distributed to the Audit Committee under separate cover. Council’s external auditor Dennis Banicevic (from PriceWaterhouseCoopers) will present the draft financial statements to the Audit Committee at this meeting. The statements (to be distributed under separate cover) are required by Section 413 of the Local Government Act, 1993 to be adopted by Council and signed by the Mayor, Deputy Mayor and the General Manager as required for formal reference to the auditor. IMPACTS Financial This matter has no direct impact upon Council’s adopted budget or forward estimates. The Hills Future - Community Strategic Plan The review and audit of the Councils financial statements ensure that the Council is accountable to the community and meets its legislative requirements. RECOMMENDATION 1. The presentation from PriceWaterhouseCoopers be received. 2. Council’s 2013/14 statutory financial statements (distributed under separate

cover) be referred to the Council meeting on 26 August 2014 and the External Auditor be requested to present his findings at that meeting.


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3. The statements (listed as Attachments 2 and 3 and distributed under separate cover), required by Section 413 of the Local Government Act 1993, be referred to Council on 26 August 2014.

ATTACHMENTS The following information will be distributed under separate cover: 1. General Purpose Financial Report for year ended 30 June 2014, Special Purpose

Financial Reports for year ended 30 June 2014 and Special Schedules for year ended 30 June 2014.

2. Statement required by Section 413 of the Local Government Act, 1993. 3. Statement required by the Local Government Code of Accounting Practice.


PAGE 9

ITEM-3 INTERNAL AUDIT REPORT


OUTCOME: 3 Sound governance based on transparency and accountability.

STRATEGY:



AUTHOR: INTERNAL AUDITOR

KERRIE WILSON

RESPONSIBLE OFFICER: GENERAL MANAGER

DAVE WALKER

EXECUTIVE SUMMARY The Internal Audit report:

• Summarises the work undertaken by the Internal Audit Function and the Audit Committee in the period;

• Highlights areas of improvement within Council’s operations; • Reports the extent to which the work carried out by the function met the

requirements of the approved Internal Audit Plan 2013/14; • Reports the measures taken by The Hills Shire Council (THSC) to implement the

recommendations of the internal audit reports; • Provides an overview to the Audit Committee of the status of Councils internal

control, risk management and governance processes.

The format of the report reflects:

• the recommendations made by the Division of Local Government (DLG) in their report titled: Internal Audit Guidelines, released September 2010; and,

• Audit Committee requirements. REPORT Attached is the Annual Internal Audit Report for 2013/14. The attached report outlines the audit tasks undertaken by the Internal Audit function in the period from 15 March 2014 to 30 June 2014.


PAGE 10

IMPACTS Financial The matter has no direct financial impact upon Council’s adopted budget or forward estimates. The Hills Future - Community Strategic Plan This report outlines the results of Audit’s review of Councils high risk activities as identified in the Internal Audit Plan adopted by Council. The recommendations resulting from audit activities are aimed at ensuring that Council stated outcomes are achieved efficiently and effectively and meets the Councils legislative requirements. RECOMMENDATION The report be received. ATTACHMENTS 1. Internal Audit Report (38 pages)


ATTACHMENT 1

Annual Internal Audit Report

For 2013/14

PAGE 11


Part:

A: Executive Summary

B: Comparison of the Actual and planned Audit activity undertaken in 2013/14 period;

C: Details of the actual internal audit work undertaken in the period from 15 March to 30 June 2014;

D: Detail of recommendations outstanding at the date of this report and the action taken by Management to implement these recommendations;

E: Internal Audit and Audit Committee Key Performance Measures.

Attachment A: Background to the Internal Audit Function, the Audit Committee, and the audit reporting practices at The Hills Shire Council.

Attachment B: Risk Assessment Matrix

Attachment C: List of outstanding audit recommendations (including management comments) at 30/6/2014.

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Part A: Executive Summary

Background

Internal Audit is an independent, objective assurance and consulting activity designed to add value and improve an organisation’s operations.

Internal audit’s role is primarily one of providing independent assurance over the internal controls and risk management framework of the Council. The Internal Audit function was created in June 2005. Within THSC the Internal Audit Unit consists of the Internal Auditor. Projects are often undertaken with the assistance of the Risk Management Coordinator.

The Audit Committee plays a pivotal role in the Councils governance framework. It provides council with independent oversight and monitoring of the council’s audit processes, including the council’s internal controls activities. This oversight includes internal and external reporting, internal and external audit, and compliance.

The Audit Committee within THSC has been in operation since 2004. Councils Audit Committee is unique in Local Government in that the Committee meets in the public forum (times and dates of meetings are advertised on the Councils webpage) and currently has 3 independent community representatives on the Committee to ensure that there is transparency in Councils processes and the Council remains accountable to the community. In 2010 the DLG released the Internal Audit Guidelines: (http://www.dlg.nsw.gov.au/dlg/dlghome/documents/Information/Internal%20Audit%20Guidelines%20-%20September%202010.pdf. This guideline (the guideline) identifies best practice in local government with respect to Internal Audit and the Audit Committee. Action has been undertaken to ensure that the activities of the Internal Audit function and the Audit Committee reflect these guidelines.

As identified at 3.5 of the guideline, the Internal Audit function within THSC has a strategic plan in place which is supported by annual plans. The Strategic Audit Plan (2011-14) was adopted by the Audit Committee on 20 September 2010.

Audit Activity in 2013/14

In 2013/14 Internal Audit completed 25 or 96% of the planned audits identified in the Internal Audit Strategic Plan.

At 30 June 2014 one (1) audit activity remained outstanding. This activity is planned to be completed by 30 August 2014 and will be reported in the next report to the Audit Committee.

The outcomes of the reviews completed in the period since the last report to the Audit Committee are outlined in Part C of this report. Where identified, the areas of improvement in the Council have been documented. The review of the efficiency, effectiveness and economy of Councils processes are inherent in all audits undertaken.

As outlined in Part C. Internal Audits activities in the period have largely encompassed the Councils procurement activities and systems. Procurement has been identified as one of the four key risks in Council (the other three being recruitment, regulation and asset management).

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http://www.dlg.nsw.gov.au/dlg/dlghome/documents/Information/Internal%20Audit%20Guidelines%20-%20September%202010.pdf





As identified there have been significant changes and improvements made to the Councils procurement activities and reporting. These changes have largely come into effect at 30/6/2014 and will continue to be monitored by internal audit through follow up reviews.

Other audit activities undertaken include review of: Councils governance activities (Health Check); Community Engagement processes; recruitment; payroll; management of community facilities.

As evidenced in this report, the detail included in it has increased at the request of the Audit Committee. Information concerning the methodology used in undertaking the audits and the outstanding recommendations at the time of writing this report are detailed throughout the report.

A conclusion has also been added against each audit activity undertaken to provide the Audit Committee with an initial assessment of the audit and (in some cases a revised assessment based on the actions of management to date or agreed). Hopefully these assessments provide useful information.

With respect to the management of outstanding audit recommendations, the process is: dates for implementation are agreed with management and the implementation of the agreed action is reviewed by Audit at the agreed implementation date. To date (as outlined in Part D of this report) 98% of the agreed recommendations have been implemented by management. The 2% outstanding have not exceeded agreed timeframes.

Looking at these results objectively, the action of management in implementing the agreed recommendations reflects a proactive and continuous improvement focus.

Finally, the audit function in 2013/14 has operated within its budget. The number of direct days spent on internal auditing is 98% of the total days available.

PAGE 14


Part B Comparison of the Actual and planned Audit activity undertaken in 2013/14 period

B.1 Summary

The Internal Audit Strategic Plan (2011-14) was adopted by the Audit Committee on 20 September 2011.

The Strategic Audit Plan (2011-14) details the audit activities to be undertaken in 2013/14 (Year 3).

Link: http://www.thehills.nsw.gov.au/IgnitionSuite/uploads/docs/FINAL%20AGENDA%20-%20AUDIT%20COMMITTEE%2020-9-2011[1].pdf

Table 1. compares the ‘actual’ 2013/14 internal audit activity with the planned activity outlined in the adopted Plan.

This comparison provides the audit committee with an overview of the Internal Audit activities undertaken in the period.

Detail provided in the Table 1 includes:

• The objective of the audit (as identified in the adopted Strategic Audit Plan);

• The source of the audit activity (Risk Management Processes; Councils Executive; DLG Better Practice Review (2007); Legislative; DLG/ICAC recommended activity; Audit Committee; Council Resolution; Award/EBA);

• The actual days budgeted for the identified activities;

• the actual audit time taken to undertake the audit activity.

• The status of the audit activity at the period end (‘complete’/’in progress’ or ‘not yet undertaken’)

Legend to the Table 1.

Status of audit Activity

In progress

Completed

Not yet undertaken

Chart 1: Summary of the Status of the 2013/14 Audit Plan at 30 June 2014

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http://www.thehills.nsw.gov.au/IgnitionSuite/uploads/docs/FINAL%20AGENDA%20-%20AUDIT%20COMMITTEE%2020-9-2011%5b1%5d.pdf





Table 1: Comparison of Actual Audit Activity with Planned Audit Activity

Risk Budgeted Actual

** Days for Days

incurred Status 2013/14 30/6/2014 Council Wide Reviews

1. Governance Structures/Code Of Conduct

Objective: Coordinate the Governance Health check/ Governance Month/ review Councils practices with recommendations resulting from ICAC/DLG and NSW Ombudsman etc. Includes review of Councils delegation instrument. Undertake training and provide advice where required.

Source:

DLG Review 2007; Governance Health check developed by the ICAC/DLG 2004.

Last Audited: 2012/13 H 20 20

Refer Part C. of this report

2. Risk Management/Corruption Control Strategy

Objective:

Internal Audit, in co-ordination with Risk Management, will review the risk management practices that the Council has in place. This will include a review of the Councils Risk Management Module and business continuity plan. Implement Councils Corruption control strategy.

Source: Internal Audit Guideline, DLG September 2010


Refer Internal

Audit Report 3/4/2014

3. Corporate Planning and KPI’s

Objective: Review of the controls that ensure that the Council makes effective corporate and operational decisions, effectively communicates its decisions to staff and other stakeholders and is able to take prompt and effective action in light of changes to its environment or variation from its planned activity. Will also incorporate a review of the rigour and relevance of the performance measures (KPI’s) we are using across the teams for the EBA and other purposes.

Source:

Risk Assessment; and the requirements of the Councils EBA.

Last Audited: 2012/13

H 10 10

Refer Internal

Audit Report 5/12/2013

4. Budget and Management Reporting

Objective: This audit activity will incorporate the review of the controls operating over the corporate and departmental budgeting process to ensure that the Council accurately predicts its financial requirements, sets budgets effectively and adequately manages those budgets.

Source:

Risk Management Processes

M 10 10 Refer Part C. of this report

PAGE 16


Last Audited: 2008

5. Investigations

Objective: This time is provided to undertake any investigations that may be required by Councils regulatory bodies etc.

Source: Internal Audit Guideline, DLG September 2010

H 20 20

Refer Audit reports: 5 December 2013 and 3 April 2014.

6. Special Projects/Assignments

Objective: This time is provided to ensure that Internal Audit can provide a comprehensive and proactive service to the Council. The use of this time is dependent on the issues that may be faced by Council or activities requested by the General Manager/Audit Committee.

Source:

Internal Audit Guideline, DLG September 2010. H 20 20


7. Recruitment

Objective: To ensure that all eligible members of the community have a fair chance to gain a job with the Council, selection is based only on a person's ability to perform the work, the best person is selected, resulting in a quality workforce capable of effectively designing and delivering services and programs to the THSC Community.

Source:

DLG Better Practice Review 2007, ICAC recommendations, Risk Assessment.


H 5 5

Refer Part C of this report.

8. Resolutions

Objective: Implementation of Councils Resolutions

Source:

DLG Better Practice Review 2007, Council Resolution

H 5 5

Refer to Audit Report: 5/12/2013.

9. Community Engagement

Objective: Review the implementation of Councils Community Engagement policy and strategy in line with the Council resolution.

Source:

Council Resolution Last Audited: 2011/12

H 5 5 Detailed in Part C.

10. S355 Committees

Objective: Review the management of Councils committees. Source:

Risk Management Processes

Last Audited: 2011/12 M 5 5

Refer to Audit Report: 3 April 2014.

11. Mobile Phones

Objective: Ensure Councils requirements concerning the reimbursement of personal calls by staff are in place.

L 2 2

Refer Audit report: 5 December 2013

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Source:

Executive Forum Direction

Last Audited: 2012/13 Regulatory Audits

12. RMS Drives System

Objective: Audit Councils use of the RTA/RMS Drives System (requirement of the RTA)

Source:

Requirement of the agreement with the RMS. Compliance with this agreement allows Council to have access to the RMS Drives System.


H 5 5


13. Grants Financial Statements

Objective: Where required by the Granting Body

Source:

Audits of compliance with grant funding is undertaken where required by the granting body.



Audit of Councils Core Systems

14. Revenue Activities

Objective: To ensure that the Council activities are legislatively compliant by ensuring that the Councils fees and charges document is complete and appropriately authorised, reflected in Councils systems, is the basis of Councils revenue activities

Source:

Risk Assessment, Debtors/Accounts Receivable Audit (2010)

Last Audited: 2010


15. Donations and Sponsorship

Objective: Review of Councils procedures to ensure that governance requirements are in place and that the Councils sponsorship and donation activities are appropriately managed.

Source:

Risk Assessment, ICAC Guidance (2006) and results of 2008 Audit.

Last Audited: 2008

M 10 10


16. Procurement (including tendering)

Objective: To ensure that the Councils procurement activities satisfies the Councils purchasing guidelines and its legislative requirements.

Source:

Risk Assessment, ICAC Guidance and results of ICAC reviews


PAGE 18


Last Audited: 2012/13 17. Use of Consultants Objective:

To ensure the effective and efficient use of consultants this satisfies Councils procurement and legislative requirements.

Source:




18. Payroll

Objective: To ensure the integrity of the information on which the payroll is based and the security of information and the manual and electronic processes for transferring money. Will include the review of allowances and overtime payments.

Source:




19. Councillor Facilities Policy

Objective: To ensure the Councillors facility policy reflects the DLG requirements. Facilities provided to Councillors are in line with the Policy.

Source:

Risk Assessment, ICAC Guidance and results of ICAC reviews.



20. Cash and Cash related activities

Objective: Review of the controls that ensure that cash and bank accounts held by the Council are held and used effectively and securely. Review the management of bonds and bank guarantees.

Source:

Risk Assessment, ICAC Guidance and results of ICAC reviews, Accounts Receivable Audit (2010)


Refer Audit report 3 April 2014.

21. Information Technology

Objective: Review of the controls that ensure the computer systems, hardware and installation activity operate in a controlled, secure and managed environment, the network is effective, robust and secure and the PC operating systems are effective, robust and secure.

Source:

Risk Assessment Last Audited: 2012/13


22. Fleet Management

Objective: Review Councils system with respect to its Fleet

M 10 10 Refer Audit report: 5 December

PAGE 19


to ensure that this is appropriately managed. Will include a review of the workshop operations and its relations to car repairers etc.

Source:

Risk Assessment, Fleet Management Audit (2008)

Last Audited: 2008

2013

23. Facilities Management

Objective: To ensure the efficient and effective management of Councils Community facilities and to ensure that Council objectives concerning equity and risk management are in place. Review of the controls and practices that ensure the use of facilities is optimised and that events are efficiently and effectively organised and conducted.

Source:

Risk Assessment Last Audited: 2010

M 10 10 Detailed in Part C.

24. Disposal of Assets

Objective: To ensure that the disposal of Council assets satisfies the requirements of the Councils disposal procedure and its legislative requirements.

Source:


M 5 5


25. Information Management

Objective: Ensure that Councils practices satisfy the requirements of the State Records Act and privacy legislation. Council’s records should also be complete, accurate and valid. Ensure that the Councils corporate records are complete and satisfy legislative requirements.

Source:


M 10 10


Audit of Councils Business Operations

26. Complaints Handling

Objective:

Ensure that there is an effective system in place which allows complaints to be effectively addressed and system satisfies Councils legislative requirements.

Source:

Risk Assessment Last Audited: 2011/12

M 10 10

Refer Audit report: 5 December

2013

Administration

Audit Committee

Objective: The preparation of reports for the Audit 8 8

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Committee and the attendance at Audit Committee meetings.

Source: Internal Audit Charter, Audit Committee Charter

Audit Planning and Reporting

Objective: Development of a 4 year Strategic Audit Plan (including and annual audit plan). The Strategic and annual plans will be reviewed annually to ensure that they continue to cover the key risks facing the Council. A report is produced annually to the General Manager and the Audit Committee giving assurance over the framework of control and reporting on Internal Audit’s in year activity.

Source: Internal Audit Charter, Audit Committee Charter

2 2

Liaison with LGIAN/External Auditor

Objective: Liaison with External Auditor/ LGIAN Source: Internal Audit Guideline, DLG September

2010 4 4

Follow up of reports previously issued

Objective: Follow up Source: Internal Audit Guideline, DLG September

2010 • 6 6

Professional Development/training

Objective: To ensure that Internal Audit continues to maximise the service it provides to the Council the further development of skills and experiences. Development opportunities for the Internal Auditor will be identified and agreed in year.

Source: Internal Audit Guideline, DLG September 2010 5 5

Total Days 260 258

**The ‘risk’ identified in Table 1 has been made in reference to the Councils adopted risk assessment matrix. This is located at Attachment B.

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Part C. Details of the Internal Audit Activity undertaken in 2013/14

Part C. provides details of the Audit Activity undertaken in the period from 15 March 2014 (the date of the last report to Council) to 30 June 2014.

This Part outlines the:

• Internal audit engagements completed or in progress • Outcomes of each internal audit engagement undertaken • The scope and methodology applicable to each audit activity undertaken • Remedial action taken or in progress

The following legend has been used to provide the Audit Committee with an overall opinion of each Audit Activity undertaken:

Audit Opinion

Opinion Rating Table Excellent Effective control environment with the business area operating efficiently, effectively and economically

Satisfactory Effective control environment; reporting complies with legislation or outputs/KPI’s being achieved

Improvement Required Improvement required to: the control environment; reporting (to ensure it complies with legislation) or processes need to be improved to ensure efficiency and effectiveness.

Unsatisfactory Control environment is not effective

C 1.1 Corruption Mitigation Strategy and processes (Audit item 2)

Objective, Scope and Methodology: As identified in the Councils fraud and corruption mitigation strategy, internal audit has:

• Reviewed ICAC reports relevant to local government in the period to the date of the Audit Committee;

• Followed up with Council management those recommendations made by the ICAC that relate to the activities that are undertaken by Council. This follow up is undertaken to ensure that Councils processes are corruption resistant;

• Worked with management to implement or modify processes where relevant, to mitigate the corruption risk.

For the information of the Committee:

• Since 2008 the ICAC has made 227 recommendations that relate to activities undertaken by Council. Audit has followed up the recommendations made by the ICAC when the relevant reports have been published.

• Council manages its corruption risks through its risk management system.

a) Investigations in progress

• In the period since the last report to the Audit Committee the following ICAC investigations have commenced. Please note that the following extracts are copied directly from the ICAC website.

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University of New England – allegations concerning former chancellor (Operation Verdi) The ICAC is investigating allegations including that John Cassidy, the former chancellor of the University of New England (UNE), provided confidential and/or sensitive information, that he acquired in the course of his official functions as chancellor in connection with the sale of the Services UNE Limited-owned Tattersalls Hotel, to his business associate, Darrell Hendry, or otherwise made use of the information, for the benefit of himself and Mr Hendry.

b) The following Investigations, previously reported to the Audit Committee are continuing:

• NSW public officials and members of parliament – allegations concerning corrupt conduct involving Australian Water Holdings Pty Ltd (Operation Credo) and allegations concerning soliciting, receiving and concealing payments (Operation Spicer)

• RailCorp and Department of Family & Community services – allegations of public officials corrupting soliciting funds (Operation Spector)

c) Public Inquiries currently being undertaken:

Operation Spicer public inquiry

This segment of the public inquiry will focus on, among other things, corruption allegations involving the circumstances in which the 2011 state election campaign for the seat of Newcastle was funded by the Liberal Party, and whether funds were solicited and received from prohibited donors, including Buildev Pty Ltd, Nathan Tinkler, Jeff McCloy, Hilton Grugeon and other persons and companies associated with them.

This segment will also examine whether members of Parliament (MPs), including Christopher Hartcher and Michael Gallacher MLC, solicited and received donations from prohibited donors for use in the Liberal Party 2011 state election campaign, including in the seat of Newcastle, and whether parties and persons, including Buildev Pty Lyd, Mr Tinkler, Darren Williams, David Sharpe, Mr McCloy and Mr Grugeon improperly sought to influence certain MPs by making donations during the 2011 state election campaign.

ICAC Commissioner the Hon Megan Latham will continue to preside at the public inquiry, and Counsel Assisting the Commission are Mr Geoffrey Watson SC and Mr Greg O'Mahoney.

d) Investigation Reports issued:

In the period since the last report to the Audit Committee the following ICAC investigation reports have been issued:

Full reports are available at the following Link: http://www.icac.nsw.gov.au/publications-and-resources/list-of-all-current-icac-publications

28 May 2014 (Operation Dewar)

NSW State Emergency Service – allegations concerning SES Commissioner (Operation Dewar) The ICAC investigated allegations that the NSW State Emergency Service (SES) Commissioner, Murray Kear, took detrimental action against Deputy Commissioner Tara McCarthy, including dismissal from her position on 14 May 2013, in reprisal for Ms McCarthy making allegations to Mr Kear that SES Deputy Commissioner Steven Pearce had engaged in corrupt conduct.

The ICAC also examined allegations that Mr Kear

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http://www.icac.nsw.gov.au/investigations/current-investigations/investigationdetail/204














http://www.icac.nsw.gov.au/publications-and-resources/list-of-all-current-icac-publications

http://www.icac.nsw.gov.au/publications-and-resources/list-of-all-current-icac-publications

http://www.icac.nsw.gov.au/investigations/past-investigations/investigationdetail/200





improperly showed favour to Mr Pearce by failing to appropriately investigate allegations made by Ms McCarthy that Mr Pearce had engaged in corruption. It was also alleged that in relation to the above allegations, Mr Kear made false statements or attempted to mislead an officer of the ICAC in their exercise of their functions under the Independent Commission Against Corruption Act 1988.

In its report on the investigation, made public on 28 May 2014, the Commission makes corrupt conduct findings against Mr Kear. The Commission is of the opinion that the advice of the director of public prosecution should be sought with respect to the prosecution of Mr Kear for an offence under the Public Interest Disclosures Act 1994 of taking detrimental action in reprisal for a person making a public interest disclosure.

The ICAC is also of the opinion that the minister for police and emergency services should give consideration to the taking of action against Mr Kear for disciplinary offences of misconduct with a view to his dismissal.

Note: Following these findings Mr Kear resigned from his position as Commissioner. At 12 June 2014 Ms McCarthy was still waiting to find out if she would get her job back.

The Council has an internal Reporting Policy (Policy 4) which encompasses the requirements of the PID Act. Link:

http://www.thehills.nsw.gov.au/Policy-Document.html#.U-BWmZ1--Uk

Training in the requirements has been provided to all staff and this has been reinforced through e-learning tutorials and quizzes. Further training concerning the Councils Code of Conduct is planned for 2014/15.

5 June 2014 (Operation Cyrus, Cabot and Meeka)

NSW Public Sector – allegations concerning Circular Quay retail licences and other matters (Operations Cyrus, Meeka and Cabot) The ICAC investigated allegations that, between 2000 and 2011, then Member of Parliament (MP), the Hon Edward Obeid MLC, misused his position as an MP to attempt to influence other public officials to exercise their official functions with respect to retail leases at Circular Quay, without disclosing that he, his family or a related entity had an interest in some of those leases. It is also alleged that during the same period, certain public officials improperly exercised their official functions, with respect to retail leases at Circular Quay, to benefit Mr Obeid or his family (Operation Cyrus).

The Commission also investigated allegations that, between 2005 and 2008, Mr Obeid misused his position as an MP to attempt to influence other public officials to make decisions favouring Direct Health Solutions Pty Ltd, without disclosing that he, his family or a related entity had an interest in that company (Operation Meeka).

The Commission also investigated allegations that, between 2007 and 2008, Mr Obeid misused his position as an MP to

PAGE 24












influence other public officials to exercise their official functions with respect to the review and grant of water licences at Cherrydale Park, without disclosing that he, his family or a related entity had an interest in the licences. It is also alleged that during the same period, certain public officials improperly exercised their official functions with respect to the review and grant of the water licences at Cherrydale Park (Operation Cabot).

In its report on Operations Cabot and Meeka, released on 5 June 2014, the Commission makes corrupt conduct findings against Mr Obeid. In Operation Cabot, the Commission is of the opinion that consideration should be given to obtaining the advice of the Director of Public Prosecutions (DPP) with respect to the prosecution of Mr Obeid for common law criminal offences of misconduct in public office.

In its report on Operation Cyrus, also released on 5 June 2014, the Commission makes corrupt conduct findings against Mr Obeid, the Hon Joseph Tripodi and Steve Dunn. The Commission is of the opinion that consideration should be given to obtaining the advice of the DPP with respect to the prosecution of Mr Obeid for common law criminal offences of misconduct in public office.

Note: The Council has in place a process concerning the disclosure of pecuniary interests including the completion of pecuniary interest’s forms on a yearly basis. The minimum standards for Council staff are outlined in the Councils Code of Conduct and the Local Government Act, 1993. Training in the requirements has been provided to all staff and this has been reinforced through e-learning tutorials and quizzes. Further training concerning the Councils Code of Conduct is planned for 2014/15.

30 June 2014 (Operation Cavill)

Ryde City Council – allegations concerning the City of Ryde Mayor, Councillor Ivan Petch (Operation Cavill)

The ICAC investigated a number of allegations involving the former Mayor of the City of Ryde, Ivan Petch, and others, including the alleged release of confidential council information by Mr Petch on many occasions for various reasons, including in an attempt to undermine council employees, such as the former General Manager, Mr John Neish.

In its report on the investigation, made public on 30 June 2014, the Commission makes corrupt conduct findings against Mr Petch, John Goubran and Richard Henricus. The Commission is of the opinion that consideration should be given to obtaining the advice of the Director of Public Prosecutions (DPP) with respect to the prosecution of Mr Petch, Mr Goubran, Anthony Stavrinos, John Booth and Mr Henricus for various offences.

The ICAC is of the opinion that consideration should be given to obtaining the advice of the DPP also with respect to the prosecution of Mr Petch, councillors Justin Li, Jeffrey Salvestro-Martin, Terry Perram and former councillor Victor Tagg for offences under the Election Funding, Expenditure and Disclosures Act 1981 in relation to advertising published in The Weekly Times in August and September

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2012. The Commission also recommends that the Office of Local Government gives consideration to disciplinary action against Mr Petch, with a view to his dismissal.

Note: Cr Petch was subsequently suspended by the Local Government Minister following the ICAC findings. Mr Petch has now launched a case in the Supreme Court to overturn the ICAC’s findings against him.

e) Corruption Prevention Activities undertaken in Council:

In May 2014 the ICAC presented a practical workshop for Council Managers concerning corruption prevention. This was the first step in the update of the Councils corruption prevention plan and was aimed at assisting managers identify the key corruption risks and controls relating to their individual areas. The results of this process will be recorded in the Councils risk management module to allow the ongoing management of the risks identified. It should be noted that all of Councils Unit Managers (or their nominated representative) attended this training. C 1.2 Governance Structures/ Code of Conduct

Audit Number

1

Background In June 2004 the Independent Commission against Corruption (ICAC) and the Local Government Managers Association (LGMA) developed and released a Governance Health Check manual to:

• assist Councils to better understand the elements of governance; and, • to provide a simple tool for Councils to measure their progress in relation to each of the elements on a continuous improvement scale. The Governance Health Check lists 26 elements under four broad categories of: ethics and values; risk management and internal control; decision making processes; and monitoring and review.

The governance health check is a self-assessment based on a five point continuous improvement scale aimed at the continuous improvement of Councils Governance practices.

The following is a link to the Governance Health Check:

http://www.bing.com/search?q=governance+health+check&form=IE10TR&src=IE10TR&pc=DCJB

Since 2005 the Council has accessed its practices using the Governance Health Check on a regular basis.

The findings resulting from this audit activity has been reported to the Audit Committee on an annual basis and is reported in the Community Annual Report, as a Quality of life Indicator.

Audit Objective

To monitor Councils Governance activities against identified best practice and to identify improvements and implement these through a documented improvement plan.

Scope Council’s governance processes at 30 June 2014.

Method At 30 June 2014 the Manager, Governance compared the Councils governance processes with the best practice identified in the governance health check and provided audit with evidence to support the rating that he had allocated to

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each element. This assessment was reviewed by Internal Audit.

Findings Overall the comparison of results over the period from 2006 to 2014 identify that the Councils governance processes are improving – the result of events such as ‘Governance Month’, improved induction processes and on-going training. In 2014/15 significant improvements should occur as a result of the Councils Human Resources Team including on-going governance training into their training calendar. This activity was previously coordinated by Internal Audit/Risk Management through Governance Month.

The following ratings (Table 2.) were agreed with respect to each element based on the evidence provided. Improvements identified as a result of this activity have been included in a Governance Improvement Plan which will be implemented throughout 2014/15.

Table 2 (Ratings for Each Element are as outlined in the Governance Health Check. This table provides a comparison with prior years).

Topic 2005 2008 2009 2010 2012 2013 2014

Ethics and Values

1.1 Code of Conduct 3 3 3 3.5 3.53 3.5 3.5

1.2 Internal reporting 3 3 3 3 3 3 3.5

1.3 Statement of adopted values 3 3

3 3 2.76 3 3

1.4 Statement of Business Ethics for external parties 2 4

4 4 3 3.5 4

1.5 Conflicts of interest 3 3 3 3.5 3.15 3.5 3.5

1.6 Gifts and Benefits 3 3 4 4 3.46 3.5 3.5

1.7 Councillors access to information and interactions with staff

3 3 4 4 3.46 3.5 3.5

Risk Management and Internal Control

2.1 Risk Management 3 3 3 3.5 3.23 3 3

2.2 Internal Controls and Audit 3 3 3 3 3.38 3.5 3.5

2.3 Fraud Control Plan 2 3 3 3.5 3.07 3 3.5

2.4 Process for legislative compliance 3 4

4 4 3.3 3.3 3.5

2.5 Privacy 3 3 3 3.5 3.38 3.5 3.5

2.6 Secondary Employment 3 4 4 4 3.23 3.5 3.5

2.7 Payment of expenses and provision of facilities to Councillors

3 4 4

4 3.38 4 4

2.8 Procurement and disposal procedures

3 3 3 3 3.07 3 3.5

Decision-making Processes

3.1 Code of meeting practice 3 4

4 4 3.69 4 4

3.2 Committee System 3 3 3 3 2.92 3.5 4

3.3 Involvement of stakeholders 3 3

3 3 3 3 3

3.4 Delegations of authority 3 3 3 4 3.46 3.5 4

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3.5 Management Plan 3 3

4 4 3.5 4 4

3.5 Policies and Procedures 3 3 3 3 3.53 3 3.5

Monitoring and Review

4.1 Annual Report 4 4

4 4 3.53 4 4

4.2 Performance Management 4 4 4 3 3.23 3.5 3.5

4.3 Complaints Handling 3 3 3 3.5 3.3 3.5 3.5

4.4 Registers 3 4 4 4 3.15 3.5 3.5

4.5 Access to documents 3 4

4 4 3.53 4 4

Total 78 88 88 93 85.24 90 93.5

The resulting score card is:

Councils Governance Scorecard 2005 2008 2009 2010 2012 2013 2014

Total of all 26 Elements (Table 1) 78 88 89 93 85.2 90 93.5

Maximum Score of all 26 Elements 104 104 104 104 104 104 104

% of THSC total to Maximum total 75% 85% 86% 89% 82% 87% 90%

Elements multiplied by 4.5 (QOL factor) 351 396 400 418.5 369 405 421

Conclusion

For information of the Audit Committee, the overall audit assessment of this audit activity was:

Satisfactory Effective control environment

C 1.3 Budget and Management Reporting

Audit Number

4

Background On 13 May 2014 the General Manager provided a report to Council with respect to the management of contract (T06/16) which concerned the development of Bruce Purser Reserve.

As part of this process, audit reviewed the budget and reporting to the General Manager and Council concerning the management of this contract and subsequent legal case. Also Councils purchasing processes were reviewed to ensure that were complied with and whether improvements to the process could be implemented.

Audit Objective

Ensure that the Council accurately predicts its financial requirements, sets budgets effectively and adequately manages those budgets.

Scope T06/16 and the legal expenses incurred concerning this contract (to May 2014).

Method As outlined in the report to Council.

Findings The following findings were identified in the General Managers Report to

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Council

Apart from matters raised in this report, Councils monthly budget review report has been modified to include more details in the body of the report as opposed to the attachments.

Whilst there have been no significant similar issues to the Casbee matter, substantial changes have been made to Council’s Purchasing, Procurement Contract Management processes, seeking of legal advice and possible litigation, further changes will be made to the requirement of the external legal panel.

Conclusion

For information of the Audit Committee, the overall audit assessment of this audit activity initially was:

Improvement Required Improvement required to: the control environment; reporting (to ensure it complies with legislation) or processes need to be improved to ensure efficiency and effectiveness.

Follow up

Council’s monthly budget review report has been modified to include more details in the body of the report as opposed to the attachments.

Substantial changes have been made to the Council’s Purchasing Guidelines, Contract Management processes, Legal advice and possible litigation management.

Revised Conclusion

With the implementation of the action identified by Management the assessment of this audit activity will be revised to Satisfactory

Satisfactory Effective control environment

C 1.4 Community Engagement

Audit Number

9

Background At its meeting on 12 August 2008 the Council adopted the Community Engagement Policy (No 20).

Link: http://www.thehills.nsw.gov.au/IgnitionSuite/uploads/docs/POLICY%2020%20-%20COMMUNITY%20ENGAGEMENT.pdf

This policy was developed to ensure that the Council provides a coordinated and structured approach in involving the community in its planning and decision making processes.

To ensure that the policy is put in place a procedure and toolkit was developed in 2009 to be implemented by staff.

As part of its resolution the Council has requested that an internal audit be undertaken to ensure that Policy No. 23 is in place across Council and is being supported by the use of the procedures/toolkit.

Since 2009, Audit has reviewed the use of the engagement strategy on a biannual basis. The last review undertaken was in March 2011.

Audit Review the implementation of Councils Community Engagement policy and

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http://www.thehills.nsw.gov.au/IgnitionSuite/uploads/docs/POLICY%2020%20-%20COMMUNITY%20ENGAGEMENT.pdf





Objective strategy in line with the Council resolution.

Scope Audit reviewed the community engagement plans created and implemented with respect to capital works projects undertaken in 2012/13.

Method With respect to the 2012/13 yearend 205 capital works projects were listed as undertaken in the June 2012/13 Budget Review presented to Council.

Audit randomly select 10% of the capital work projects listed and reviewed the relevant project files maintained in Councils corporate records to ensure that community engagement plans had been created and implemented in accordance with the policy and procedure adopted by Council.

In total audit reviewed 21 capital works projects.

Findings Although advertised in the Annual Operations Plan, of the capital works selected, it was noted that formal documentation concerning community engagement (plans) as required by the Policy was not in place. Information in Councils corporate record however did indicate that consultation was occurring – often at the operational level (when the work was being done) rather than at the planning level.

Based on these findings Audit will review the community engagement strategies undertaken in 2013/14 to determine whether the Councils policy is now in place. Where not in place investigations will be undertaken to find out why this is not occurring – e.g. complexity of the document/ lack of training etc., including if there is a need to review the policy as many projects are programmed up to four years in advance.

Conclusion

For information of the Audit Committee, the overall assessment of this audit activity was:

Improvement Required Improvement required to the control environment

C 1.5 Revenue Activities

Audit Number

14

Background As outlined in the adopted Internal Audit Program, a review has been performed of the Councils revenue and debtor management practices. In 2011 Audit undertook a comprehensive review of the Councils debtors and revenue activities.

As reported to the Audit Committee at that time the audit found that: Councils debtors and revenue practices:

• did not ensure that Council records/receives all of the revenues that it is entitled to receive; and,

• Did not result in the efficient or effective management of revenues recorded as outstanding (debtors). Therefore not all revenues are received or they are not received on a timely basis.

As a result of this review the 2011-14 Audit plan has included a time allocation in each year to review key aspects of the Councils revenue and debtors process. In 2013/14 Audit reviewed the implementation of the Councils adopted fees and charges document; and the follow up of the resulting debt.

Audit To ensure that the Council activities are legislatively compliant by ensuring that the Councils fees and charges document is complete and appropriately

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Objective authorised, reflected in Councils systems, is the basis of Councils revenue activities

Scope Council’s revenue activities/adopted fees and charges document at 30/5/2014.

Review the Councils delegation document and procedural documentation to ensure that it is up to date and appropriate.

Method Compare the fees charged by the Councils community facilities team with the adopted fees and charges document at 30/5/2014. Ensure that invoicing is consistent by reviewing selected invoicing and comparing this to the adopted fees and charges document and review outstanding charges to ensure that they are followed up and receipted by the Council on a timely basis.

Findings Councils adopted fees and charges document was identified as complex resulting in inefficiencies with respect to invoicing, credit note management, and general bookings management.

Recommendations included:

1. Streamlining of the Fees and Charges Schedule by decreasing the number of different charges and subjective judgements in the document to provide clarity to users and allow the efficient management of invoicing and debtors management

2. Reviewing and implementing payment methods available to the Community that make it easier for bookings to be made and decreases cash handling/debtors management/ invoicing.

3. Councils Sundry Debtors procedure and delegations instrument required updating.

Agreed Management Action

The 3 recommendations were agreed by Management.

The Fees and Charges document is currently being reviewed by a task group to decrease its complexity. This task group is also looking at the Councils current booking system and payment methods. It is expected that these activities will be completed by 31/12/2014.

Council’s Sundry debtor’s procedure and the associated delegations are being reviewed. It is expected that this activity will be completed by 31 August 2014.

Conclusion


Satisfactory However the implementation of the agreed management action will result in significant efficiencies

C1.6 Procurement (tendering and use of consultants)

Audit Number

16 and 17

Background S55 of the Local Government Act 1993 and Division 2 of the Local Government (General) Regulation 2005 outline the legislative requirements applicable to Council concerning tendering. In 2009 the DLG released the Tendering Guidelines. Within Council, only the General Manager can approve the use of Consultants in Council. Council has in place the Purchasing Guideline which embodies the above legislation and guideline which outlines to staff the Councils requirements concerning tendering and the

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use of consultants. Since 2005/06 Audit has undertaken a number of reviews of Councils tendering procedures (2009, 2011). Over this time Councils procedures has steadily become more complex as governance requirements have increased (following numerous ICAC investigations).

Audit Objective

To determine whether Councils tendering arrangements satisfy the requirements of the act and associated regulation. To determine whether Councils requirements concerning the employment of consultants is in place. Identify where efficiencies can be introduced to the process. Determine whether Councils governance requirements are being met.

Scope Councils purchasing activities in 2013/14.

Method Review Councils purchasing activities for 2013/14 – in particular review the creditors where purchasing was greater than $150,000 and determine if the contracting arrangements reflect Council requirements for a random sample of these arrangements.

Findings In the 2013/14 period the Council incurred expenditure of $108 million with respect to 105 creditors (not including government charges, property purchases etc.) where expenditure exceeded $150k. These arrangements will be reported to the Community in the Annual Community Report as part of the Councils normal reporting procedures.

The review of 50% of these arrangements identified that the Councils tendering requirements were in place however the purchasing procedures were identified as cumbersome and complex. Contract management procedures also require improvement.


In response to the findings the Council has:

Restructured the Councils supply management function to include a ‘contracts management officer’ whose responsibility is to overview Councils contractual arrangements to ensure that agreed contract conditions (including pricing) is in place.

Set up catalogues that reflect contractual arrangements (with regards to panels) to be used by Council staff to ensure appropriate pricing is in place.

The use of the Councils financial ‘contract’ software to manage all contracts greater than $50,000. Contracts less than $50,000 are still managed through the Councils ‘purchasing’ software. Both systems have inherent delegation and key controls in place.

Introduced a software system (called the purchasing master) to replace the previous manual system concerning the compiling and distribution of quote and tendering documentation.

Included the Supply Management Function as part of Councils Finance Team – streamlining the Financial functions of Council.

Include the Manager-Finance as the probity officer on all tenders and EOI’s. The Manager ensures that Councils governance processes are in place and can attest to the independence of decision making.

Reviewed in detail the ‘use of Council created panels’ and the requirements of the Act. This is currently subject to legal opinion. Dependent on this opinion Councils use of the panels may be subject to more rigorous quoting and reporting processes.

Conclusion

For information of the Audit Committee, the initial assessment of this audit activity was:

Improvement Required Improvement to ensure efficiency and effectiveness.

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However with the implementation of the agreed management action – the assessment will be improved to Satisfactory.


C 1.7 Facilities Management (Community)

Audit Number

23

Background The Hills 2013/14 Operational Plan identified that the Community Facilities Team (CFT) responsibilities are to:

• Manage & Hire Council Facilities: Effectively manage Council Facilities bookings and initiate strategies that will increase utilisation.

• Manage Parks & Club Bookings: Effectively manage parks/club bookings and initiate strategies that will increase utilisation of Council's parks/reserves.

• Manage Tennis Venues: Effectively manage tennis venues bookings and initiate strategies that will increase utilisation.

• Manage Major Venues: Effectively manage major venues bookings and initiate strategies that will increase utilisation.

With the identified Performance measures /Targets for 2013/2014 of: • Customer Satisfaction with Booking Process (Community Facilities)

85% • Utilisation of Council Managed Facilities 75%

At May 2014 Council had:

• 29 community halls and function Centre’s,

• 87 sporting facilities (340 parks)

• 26 tennis courts located at 7 sites

• Bella Vista Farm Park and Showground Bookings (Source: Pamphlet CFT 2014)

These facilities are available to hire for a variety of purposes including weddings and receptions, sporting events, birthday parties, exhibitions, business functions, dramas and musicals, club and group meetings, dances, conferences and cultural and religious events.

The fees charged by the CFT are outlined in the Councils adopted fees and charges document. The Community Facilities team (CFT) is located at Castle Grand.

Over the last 3 years the number of facilities managed by the CFT has increased by over 25% as a result of the transfer to it of facilities previously managed by s355 committees and/or Lessees.

Audit Objective Ensure the efficient and effective management of Councils facilities and ensure

that Council objectives concerning equity and risk management are in place.

Scope CFT operations were reviewed at May 2014.

Method The audit reviewed:

• Financial/Utilisation aspects of the CFT operations/ objectives and responsibilities

• The Bookings system

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• Asset management/maintenance • Interaction with other teams in Council • Income, credit notes and debtors management • Marketing and initiatives undertaken

Findings The CFT was commended for the activities that they were undertaking and the initiatives that they implemented.

In comparison the responsibilities of the CFT outlined in the Operations Plan 2013/14 the actual responsibilities of the Team far exceeded those outlined in the Councils adopted Operations Plan.

The hours worked by the team appeared unsustainable and it was identified that a number of the responsibilities currently undertaken by it could be more effectively and efficiently undertaken by other teams in Council which have the financial and staff resources to support those activities.

Transferring responsibilities would provide the team with the opportunity to implement improvements which could result in more efficient bookings management and increased utilisation.


Overall 10 recommendations resulted from the review.

In July 2014, a restructure occurred which has resulted in the Community Facilities Team being transferred to Councils Operations Team. This transfer addressed a number of Audits observations concerning consultation and communication (between the two teams).

In addition audit observations and recommendations concerning regular facility inspections, contractor performance, the complexity of Councils fees and Charges document, the efficiency of Councils booking system/ invoicing processes and facility utilisation reporting are currently being addressed by Management.

Conclusion

For information of the Audit Committee, the overall assessment at the completion of the audit activity (taking into consideration the restructure) was:

Satisfactory However the implementation of the agreed management action will result in significant efficiencies

C 1.8 Councillor Facilities Policy

Audit Number

19

Background Policy Number 1: Payment of Expenses and Provision of Facilities to Mayor and Councillors was originally adopted on the 12 April 1994 and has reviewed and adopted as recently as the 26 November 2013.

Link: ADOPTION OF POLICY FOR THE PAYMENT OF EXPENSES AND PROVISION OF FACILI…

The Facility Policy is designed to promote accountability and transparency in the payment of expenses and provision of facilities to the Mayor and Councillors to meet community expectations.

Clause 217 of The Local Government (General) Regulation 2005 outlines the details that must reported in the Councils Annual Community Report to ensure transparency.

In 2011 the then Division of Local Government (DLG) reviewed 47 councillor expenses and facilities policies across the Local Government sector to assess compliance with the legislation and guideline. The findings and

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recommendations resulting from this report are at the following link and were addressed by Council in its review of Policy 1 in November 2013.

Link: Cover email Circular to Councils 11/27 - Findings from Review of Counc…

Audit Objective

To ensure the Councillors facility policy reflects the DLG requirements. Facilities provided to Councillors are in line with the Policy.

Scope Audit reviewed: Expenses reimbursed to Councillors for the period financial year 2012/2013 and Council reporting in the 2012/13 Annual Report.

Method Audit reviewed:

Council process for adopting the policy (Policy adopted 26/11/13).

Expenses reimbursed to Councillors for the period financial year 2012/2013 as recorded in the Councils financial system, and Council reporting in the 2012/13 Annual Report.

Findings The audit found that the information presented to the Community in the 2012/13 annual report did not satisfy all of the requirements of CL 217 (1) (A1). The audit recommendation is that the requirements of CL 217 (1) (A1) be complied with to ensure transparency in reporting and compliance with the regulation.


Reporting deficiencies to be rectified in the 2013/14 Annual Community Report.

Conclusion


Improvement Required Improvement required to reporting (to comply with legislation)

However with the implementation of the agreed management action – the assessment will be improved to Satisfactory.


C 1.9 Information Technology

Audit Number

21

Background Audit has in place a four year, on-going program to review the high risk aspects of the Councils IT systems.

To date Audit has reviewed the following with respect to IT: access arrangements; training; tendering and purchasing arrangements; use of systems outside Councils corporate systems (Cloud technology); privacy; security arrangements.

The outstanding activity for 2013/14 was the review of the Councils IT disaster recovery plan.

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Audit Objective

Review Councils IT disaster recovery plan to ensure that it is up to date and will ensure that the Councils IT systems can be accessed on a timely basis in the event of a disaster.

Scope Councils IT disaster recovery plan at 30/6/2014.

Method Obtain and review the Councils IT disaster recovery plan. Engage specialist consultants to review and test the plan.

Findings Specialist consultants have been engaged to review and test the Councils IT recovery plan. Due to timing considerations, this review will not be complete to the end of August 2014.


Audit will inform the Audit Committee of the results of the review and testing once completed.

Audit Conclusion:

Audit Outstanding at 30/6/2014.

C 1.10. Payroll and Recruitment

Audit Number

18 and 7

Background Payroll Comprehensive audits of Councils Payroll system have been undertaken in 2009 and 2011. Each year high risk aspects of the system are reviewed to ensure that appropriate systems are in place to ensure the validity, completeness and accuracy of salary and related payments. In 2013/14 Audit reviewed the payment of allowances and overtime payments.

For the information of the Audit Committee:

2013/14 2012/13

Salary and Wages $39,589k (est) $38,347k

Total FTE staff 577 580

Establishment TBA (Financial Stmts) TBA (Financial Stmts)

Recruitment

Review of Councils recruiting processes are undertaken on an annual basis.

Recent ICAC and other investigations have highlighted that recruitment is a major risk to any organisation including Council.

In the period from 1 July 2013 to 30 May 2014 the Council undertook 88 recruitment processes. Of these processes 53 (60%) were advertised internally reflecting restructures in Hills Community Care (15), Finance (4), and movements in Long Day Care – between centres (9).

Audit Objective Payroll

Ensure that allowances and overtime paid is in accordance with Councils procedures (and legislative requirements) and is appropriately approved. Recruitment To ensure that: all eligible members of the community have a fair chance to

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gain a job with the Council; selection is based only on a person's ability to perform the work; the best person is selected, resulting in a quality workforce capable of effectively designing and delivering services and programs to the THSC Community; the use of internal and external advertising is appropriate.

Scope Allowances and overtime was reviewed for 2013/14.

Recruitment processes undertaken in the period from 1/7/2013 to 30/5/2014 were reviewed.

Method Payroll - Allowances Allowance and overtime records were obtained from the Councils financial system for the year end 30/6/2014. For a random sample (10%), audit reviewed the supporting paperwork to ensure that the payment was appropriately authorised and calculated. Recruitment Using a random number generator, 10% of the recruits (1/7/2013 to 30/5/2014) were selected and supporting paperwork was reviewed, and the process undertaken was compared to best practice and Councils approved processes. With respect to these recruits, documentation maintained in Councils corporate system (ECM) was reviewed to ensure that the Council undertook appropriate checks to: identify the staff employed (they are who they say they are); verify necessary qualifications (e.g. education, professional membership, relevant licences); check criminal history/children checks where necessary; and have the necessary experience( reference checks – talk with direct line manager)

Findings Payroll - Allowances

Based on the random sample reviewed it appears that overtime paid was appropriately authorised and calculated. Recruitment

Based on the random sample reviewed it was noted that there was a significant improvement in the paperwork maintained in Councils corporate record to support the checks performed in the recruitment process. However it was noted that:

Data maintained in the software that supports the recruitment process (talent propeller) was not being retained in the corporate system;

Training had not been provided for staff on evaluation panels for a significant period of time. Training is required to ensure that Councils governance requirements are met;

Guidance in place required updating to reflect the current use of the talent propeller software.


Management agreed to address the 3 recommendations raised with respect to recruitment.

These recommendations will be implemented by 31 August 2014.

Conclusion



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C.2 Other Audit Activities completed in the period to 30 June 2014.

In the period since the last report to the Audit Committee, other activities undertaken by the Unit included:

• Review of the Councils outstanding purchase orders at 30 May and 30 June 2014. This was followed up in July 2014;

• Review of the Councils petty cash procedures; • Follow up of Leases. • Review of the Councils Purchasing Guideline and Variation procedure • Presented training aimed at increasing awareness and compliance with

Councils purchasing guidelines, contract management and financial delegation requirements. Training included: The use of Consultants; Variation Management; Councils requirements concerning operational agreements; Management of Contract – Contract Management Module; Councils quotation and tendering requirements; Councils purchasing guideline requirements.

• Review of the Councils Corporate Wide KPI’s; • Review of the security and access of DRIVES information in the Compliance

Area; • Review of the sponsorship procedure • Governance and probity officer where required.

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Part D: Details of recommendations outstanding at the date of this report and the action taken by Management to implement these recommendations

Internal Audit monitors all the recommendations raised and agreed with management to ensure that they are implemented within agreed timeframes.

At 30 June 2014 the Council had addressed 98% (last report 96%) of the agreed recommendations satisfactorily.

The Audit recommendations outstanding (including Management Comments) at 30 June 2014 are listed at Attachment C.

D.1 Status of Recommendations

The following is a summary of the status of Internal Audit Reports issued.

It should be noted that although the following audit reports may be listed as ‘finalised’ the area/audit item will still be the subject of future audits, where required.

D1.1 Reports issued to 30 June 2014 where recommendations are still to be implemented:

Reports Year Report Issued Expected Closure Timeframe

Governance Health Check 2013014 30/12/2014

Revenue 2013/14 30/12/2014

HCC Client Assessment Testing 2013/14 31/8/2014

ICAC Recommendation and Community Facilities Management

2013/14 30/12/2014

Recruitment 2013014 30/9/2014

Councillors Facilities Policy 2013/14 30/9/2014

Budget and Management Reporting

2013/14 31/8/2014

Community Engagement 2013/14 30/9/2014

Community Facilities Management

2013/14 30/12/2014

Leases 2013/14 30/9/2014

D1.2 Reports issued where recommendations have been implemented in the period to 30 June 2014:

The following lists the audits where all agreed recommendations have been addressed in the time period.

Reports Year Report Issued Closure Timeframe

Information Management 2013014 30/6/2014

Donations and Sponsorship 2013/14 30/6/2014

Disposal of Assets 2013/14 30/6/2014

Review of Petty Cash 2013/14 30/4/2014

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Part E Internal Audit Key Performance Measures

The following indicators have been developed to measure the performance of Internal Audit and the Audit Committee:

E.1 Service Delivery Benchmarks.

• 25 or 96% of the audits listed in the Strategic Internal Audit Annual Plan

for 2013/14 has been ‘completed’ to date (refer Part B, Table 1.1 and

Chart 1).

• Number of findings implemented to date as a % of items raised in the Audit reports. As discussed at Part D., of the 920 Audit recommendations agreed with Management 98% (or 904) have been implemented. Timeframes for the remaining 16 outstanding recommendations are currently being followed up and have not been exceeded.

• On average the number of days between the end of fieldwork to the issue of the final audit reports is approximately 11 working days (Prior report: 11 days). This time includes the drafting of the audit report/finalisation of report; discussion of audit findings; and agreement of management action.

E.2 Cost Control benchmarks

• The actual costs of the Internal Audit function to date have been made up of the salary and on costs of the Internal Auditor and the Risk Coordinator. In the period to 30 June 2014, the budget of the Internal Audit function was not exceeded.

• The number of direct days spent on internal auditing (excluding hours spent on professional development and training) is 98% of the total days available.

E.3 Key Information to be reported in the Annual Community Report

Concerning the Audit Committee

In the 2013/14 period the Audit Committee met 3 times. The meeting times were:

• 20 August 2013

• 5 December 2013

• 3 April 2014

The Audit Committee membership and the number of meetings attended are as follows (in alphabetical order):

Mr M. Blair: 3

Mr T Bland: 3

Clr Dr M. R. Byrne (Mayor, Chair): 3

Clr A. J. Hay OAM: 2

Clr Dr J. N. Lowe: 1

Adjunct Professor Jim Taggart: 2

Clr M. G. Thomas: 3

PAGE 40


Attachment A.: Background to the Internal Audit Function; the Audit Committee; and the audit reporting practices at The Hills Shire Council.

Background

Internal Audit is an independent, objective assurance and consulting activity designed to add value and improve an organisation’s operations.

Internal audit’s role is primarily one of providing independent assurance over the internal controls and risk management framework of the council. It should be noted that Management has primary day-to-day responsibility for the design, implementation, and operation of internal controls.

Within THSC the functions, powers, and accountabilities of Internal Audit are set out in the Internal Audit Charter which has been adopted by Council. Internal audit’s core competencies are in the area of internal control, risk and governance. Internal audit’s scope includes the following areas:

• Reliability and integrity of financial and operational information

• Effectiveness and efficiency of operations and resource usage

• Safeguarding of assets

• Compliance with laws, regulations, policies, procedures and contracts

• Adequacy and effectiveness of the risk management framework. The Internal Audit function was created in June 2005. Within Local Government Internal Audit, is typically made up of 1 or 2 members (where in place). Within THSC the Internal Audit Unit consists of the Internal Auditor. Projects are often undertaken with the assistance of the Risk Management Coordinator.

The Audit Committee plays a pivotal role in the Councils governance framework. It provides council with independent oversight and monitoring of the council’s audit processes, including the council’s internal controls activities. This oversight includes internal and external reporting, internal and external audit, and compliance. Given the key role of the Audit Committee, for it to be most effective it is important that it is properly constituted of appropriately qualified independent members.

In Audit Committee within THSC has been in operation since 2004. Councils Audit Committee is unique in Local Government in that the Committee meets in the public forum (times and dates of meetings are advertised on the Councils webpage) and currently has 3 independent community representatives on the Committee to ensure that there is transparency in Councils processes and the Council remains accountable to the community. Current members of the Audit Committee include: Clr Dr MR Byrne (Mayor, Chair), Clr AJ Hay, Clr Dr JN Lowe, Clr MG Thomas, Mr Michael Blair, Mr Trevor Bland and Adjunct Professor Jim Taggart. Every 4 years the Council undertakes an EOI to obtain interests from suitably qualified community members to be part of the Audit Committee.

PAGE 41


The functions, powers and accountabilities of the Audit Committee is outlined in the Audit Committee Charter that has been adopted by Council. Best Practice In 2010 the DLG released the Internal Audit Guidelines (http://www.dlg.nsw.gov.au/dlg/dlghome/documents/Information/Internal%20Audit%20Guidelines%20-%20September%202010.pdf. This guideline (the guideline) identifies best practice in local government with respect to Internal Audit and the Audit Committee. As outlined in the introduction, the guidelines were developed to encourage the creation of Internal Audit and Audit Committees in those Councils that did not have the function and to outline how the function should be developed (note: that at the time of the guideline only approximately 20% of Councils had an Internal Audit function). The Strategic Audit Plan

As identified at 3.5 of the guideline, the Internal Audit function within THSC has a strategic plan in place which is supported by annual plans.

The Strategic plan is based on a risk assessment of the council’s key strategic and operational areas to determine the appropriate timing and frequency of coverage of each of these areas. The plan includes audit judgment of areas that will also be reviewed despite not appearing as a high priority in the council’s risk profile. The plan is developed on a rolling four year cycle to reflect the terms of Council. The plan is also reviewed annually to ensure that it still aligns with the council’s risk profile. The current Strategic Plan (2011 – 2014) was adopted by the Audit Committee on 20 September 2011. Reporting

Internal audit regularly communicates its findings and recommendations to the Audit Committee, General Manager and management of the areas audited through the Internal Audit Report.

The Internal Audit report normally includes background information, the audit objectives and scope, observations/findings/conclusions, key recommendations/ agreed management actions.

Detailed audit working papers are not distributed to the Audit Committee as they are intended for internal use only. Where audit working papers have findings that are useful to other areas of council, internal audit will share this information on a limited basis. Internal audit working papers are shared with the council's external auditor, where requested, to assist them in the course of their work. Councillors and the community have access to the minutes of the Audit Committee (and the Internal Audit Report) as these are published on the Councils web page. The Internal Audit Report (and Audit Committee papers) is also referred to the Council for adoption to provide greater transparency and accountability.

PAGE 42






Attachment B

The Organisations Risk Matrix (below) reflects the requirements of ASNZS ISO 31000 and has been developed in accordance with this standard.

Risk Matrix Table

Consequence Rating

A B C D E

Like

lihoo

d R

atin

g

5 M H H E E

4 L M H H E

3 L M M H H

2 L L M M H

1 L L L M H

L = Low Risk M = Moderate Risk H = High Risk E = Extreme Risk

(Severe/Very High) Consequence Definition Risk Factors Likelihood

Definition Financial

Reputation Business

Operations Work Health Safety Environment

Project Management

A Insignificant The event is of low consequence

1 Financial loss – Small increase in costs not in line with budget $500 or less

1 Unsubstantiated, low profile media exposure OR no media attention

1 No disruption to services or operations

1 Single minor injury to one person – no lost time OR Insignificant environment issues

1 Project close to time, budget and quality

1 Rare The event is only expected to occur in exceptional circumstances

B Minor The event may threaten a part of the organisation

2 Financial loss – Minor financial impact $501 to $10k

2 Substantiated, low impact, low media profile (not front page news)

2 Minor disruption to services or operations up to one day

2 Medically treated injury to one person, less than 5 days lost time OR Minor environment issues

2 Project has minor issue with time, budget or quality

2 Unlikely The event is not likely to occur

C Moderate The event may threaten many parts of the organisation

3 Financial loss – > $10k to $50k

3 Substantiated, public embarrassment, moderate media profile (front page, one day)

3 Some cessation to services and operations up to several days

3 Minor or medically treated Injury to several people, less than 10 days lost time OR Some environment issues

3 Project has issues with time, budget or quality

3 Possible The event may occur

D Significant The event may threaten achievement of business objectives

4 Financial loss – $50k to $200k

4 Substantiated, public embarrassment, high impact, major media attention (national for 1 week or more)

4 Total cessation to services and operations up to one week

4 Single death, or long term disabling injuries to one or more people OR Substantial environment issues

4 Project has substantial issues with time, budget or quality

4 Likely The event is likely to occur

E Severe The event may stop achievement of business objectives

5 Financial loss – > $200k

5 Substantiated, public embarrassment, multiple impacts, long lasting widespread media coverage, prosecution of Council or Officers

5 Total cessation to services and operations greater than one week

5 Multiple losses of life or permanent disability, plus extensive injuries to several people OR Severe environment issues

5 Large project has severe issues with time, budget or quality

5 Almost certain The event is already occurring or is expected to occur

PAGE 43


Att

ach

men

t C

Li

st o

f O

utst

andi

ng R

ecom

men

dation

s at

30

June

201

4:

Rat

ings

for A

udit

Rec

omm

enda

tions

Very

H

igh

Ris

k (E

xtre

me)

Com

plet

e re

med

ial a

ctio

n w

ithin

2 w

eeks

or e

arlie

r as

requ

ired.

Hig

h R

isk

C

ompl

ete

rem

edia

l act

ion

with

in 1

cal

enda

r mon

ths

or a

s ag

reed

Mod

erat

e R

isk

C

ompl

ete

rem

edia

l act

ion

with

in 3

cal

enda

r mon

ths

or a

s ag

reed

Low

Ris

k

Com

plet

e re

med

ial a

ctio

n w

ithin

4 c

alen

dar m

onth

s or

as

agre

ed

Audi

t Obs

erva

tions

Ef

fect

R

isk

Rat

ing

Rec

omm

enda

tion

and

agre

ed A

ctio

n Pl

an

Res

pons

ible

M

anag

er

To

be

impl

emen

ted

by d

ate:

G

over

nanc

e H

ealth

Che

ck

1.

Impl

emen

t the

201

4 A

ppro

ved

Gov

erna

nce

Pla

n

Incr

ease

th

e lik

elih

ood

that

th

e C

ounc

il w

ill

achi

eve

its

goal

s by

ap

plyi

ng

trans

pare

nt

and

unbi

ased

dec

isio

n m

akin

g.

M

Impl

emen

t th

e 20

14

appr

oved

G

over

nanc

e P

lan

Exe

cutiv

e M

anag

er/

HR

Man

ager

Dec

embe

r 201

4.

PAGE 44


Audi

t Obs

erva

tions

Ef

fect

R

isk

Rat

ing

Rec

omm

enda

tion

and

agre

ed A

ctio

n Pl

an

Res

pons

ible

M

anag

er

To

be

impl

emen

ted

by d

ate:

Au

dit:

Rev

enue

2

Cou

ncils

S

undr

y D

ebto

rs

proc

edur

e an

d de

lega

tions

in

stru

men

t re

quire

d be

revi

ewed

and

upd

ated

.

Ens

ure

a co

nsis

tent

pr

oces

s ac

ross

C

ounc

il w

ith

resp

ect

to

debt

ors

iden

tific

atio

n an

d m

anag

emen

t

M

Upd

ate

docu

men

tatio

n

Fina

nce

31 A

ugus

t 201

4

3

Rev

iew

and

impl

emen

t pay

men

t met

hods

ava

ilabl

e to

the

Com

mun

ity

that

mak

e it

easi

er f

or b

ooki

ngs

to b

e m

ade

and

decr

ease

s ca

sh

hand

ling/

debt

ors

man

agem

ent/

invo

icin

g.

Rev

iew

th

e bo

okin

gs

syst

em to

det

erm

ine

if a

mor

e ef

ficie

nt s

yste

m c

an b

e im

plem

ente

d.

Effi

cien

t m

anag

emen

t of

C

ounc

ils

com

mun

ity

faci

litie

s m

anag

emen

t.

M

Task

G

roup

se

t up

lo

okin

g at

op

tions

av

aila

ble

conc

erni

ng

book

ings

man

agem

ent.

Cus

tom

er S

ervi

ce

31

Dec

embe

r 20

14

4

Bet

ter

Pra

ctic

e R

ecom

men

datio

n: S

tream

linin

g of

the

Fee

s an

d C

harg

es S

ched

ule

by d

ecre

asin

g th

e nu

mbe

r of

diff

eren

t ch

arge

s an

d su

bjec

tive

judg

emen

ts in

the

docu

men

t to

prov

ide

clar

ity to

use

rs

and

allo

w

the

effic

ient

m

anag

emen

t of

in

voic

ing

and

debt

or’s

m

anag

emen

t.

Pro

vide

s cl

arity

co

ncer

ning

ch

arge

s -

exte

rnal

ly

and

inte

rnal

ly

and

allo

w

the

effic

ient

m

anag

emen

t of

inv

oici

ng

and

debt

ors.

M

Task

G

roup

se

t up

ai

med

at

st

ream

linin

g th

e fe

es a

nd c

harg

es

docu

men

t and

pay

men

t opt

ions

.

Cus

tom

er S

ervi

ce

31

Dec

embe

r 20

14

Au

dit:

HC

C C

lient

ass

essm

ent t

estin

g

5

Freq

uenc

y an

d va

lidity

of C

lient

Ass

essm

ents

H

CC

im

plem

ent

a pr

oced

ure

that

ens

ures

tha

t as

sess

men

ts a

re

follo

wed

up

on

a

year

ly

basi

s an

d en

sure

s th

at

asse

ssm

ents

do

cum

ente

d re

mai

n va

lid.

Clie

nts

rece

ivin

g se

rvic

es

are

appr

opria

te.

M

Pro

cess

be

impl

emen

ted

to e

nsur

e th

at c

lient

ass

essm

ents

are

val

id

Man

ager

- H

CC

31 A

ugus

t 201

4

IC

AC R

ecom

men

datio

n (C

ity o

f Can

ada

Bay

) and

Com

mun

ity F

acili

ties

Man

agem

ent

PAGE 45


Audi

t Obs

erva

tions

Ef

fect

R

isk

Rat

ing

Rec

omm

enda

tion

and

agre

ed A

ctio

n Pl

an

Res

pons

ible

M

anag

er

To

be

impl

emen

ted

by d

ate:

6

Con

tract

or

Per

form

ance

M

anag

emen

t an

d br

iefin

gs

conc

erni

ng

Sta

tem

ent o

f Bus

ines

s E

thic

s re

quire

men

ts

Intro

duce

Con

tract

or p

erfo

rman

ce m

anag

emen

t to

ensu

re th

at p

anel

pr

ovid

ers

and

cont

ract

ors

used

by

Cou

ncil

prov

ide

valu

e fo

r mon

ey –

in

clud

ing

a qu

ality

pro

duct

on

time.

E

nsur

e th

at C

ontra

ctor

s ar

e aw

are

of t

he C

ounc

ils S

tate

men

t of

B

usin

ess

Eth

ics

and

Cod

e of

Con

duct

res

pons

ibili

ties

and

thro

ugh

brie

fings

with

new

sup

plie

rs.

Con

tract

ors

prov

ide

the

Cou

ncil

with

va

lue

for

mon

ey.

Add

ress

es c

orru

ptio

n ris

k as

soci

ated

w

ith

proc

urem

ent

M

Per

form

ance

M

anag

emen

t an

d br

iefin

gs

for

new

co

ntra

ctor

s cu

rrent

ly b

eing

intro

duce

d.

Sup

ply

man

agem

ent

Coo

rdin

ator

30

Sep

tem

ber

2014

R

ecru

itmen

t

7

The

Tale

nt

prop

elle

r sy

stem

co

ntai

ns

all

info

rmat

ion

rega

rdin

g ap

plic

ants

. T

his

info

rmat

ion

is n

ot d

ownl

oade

d an

d m

aint

aine

d in

the

Cou

ncils

cor

pora

te s

yste

m r

esul

ting

in

Cou

ncils

cor

pora

te r

ecor

ds b

eing

inco

mpl

ete.

Cou

ncil

does

not

hav

e a

com

plet

e co

rpor

ate

reco

rd. A

cces

s to

this

dat

a is

on

ly

avai

labl

e fo

r as

lo

ng

as

the

curre

nt

arra

ngem

ent i

s in

pla

ce

M

Cou

ncil

data

is

to b

e do

wnl

oade

d on

a p

erio

dic

basi

s.

HR

Dep

artm

ent

Dec

embe

r 201

4.

8

Trai

ning

be

pr

ovid

ed

to

Sta

ff

mem

bers

ac

ting

on

empl

oym

ent

pane

ls

to

ensu

re

that

Cou

ncils

go

vern

ance

re

quirem

ents

are

in

plac

e or

an

appr

opriat

ely

trai

ned

HR

offic

er w

ill b

e pr

esen

t on

all

empl

oym

ent

pane

ls.

Ens

ure

that

C

ounc

ils

gove

rnan

ce

requ

irem

ents

ar

e in

pla

ce.

M

An

appr

opriat

ely

trai

ned

HR

offic

er w

ill b

e pr

esen

t on

all

empl

oym

ent

pane

ls.

HR

Dep

artm

ent

Sep

tem

ber 2

014.

B

udge

t and

Man

agem

ent R

epor

ting

9

Ensu

re t

hat

mod

ifica

tions

to

the

mon

thly

bud

get

revi

ews

agre

ed b

y th

e G

ener

al M

anag

er i

n hi

s re

port

to

Cou

ncil

on

13/5

/201

4 ar

e in

pla

ce.

The

com

mitm

ent

by t

he G

ener

al

Man

ager

is

that

mor

e de

tails

will

be

prov

ided

in

the

body

of

the

repo

rt a

s op

pose

d to

the

att

achm

ents

.

Tran

spar

ent r

epor

ting

M

Mon

thly

Bud

get R

evie

ws

to p

rovi

de

mor

e de

tails

in

th

e bo

dy o

f th

e re

port

as o

ppos

ed to

atta

chm

ents

Chi

ef F

inan

cial

Offi

cer

30

June

20

14

Bud

get

revi

ew (

to

be

rele

ased

A

ugus

t 201

4)

C

omm

unity

Eng

agem

ent

PAGE 46


Audi

t Obs

erva

tions

Ef

fect

R

isk

Rat

ing

Rec

omm

enda

tion

and

agre

ed A

ctio

n Pl

an

Res

pons

ible

M

anag

er

To

be

impl

emen

ted

by d

ate:

10

Ensu

re t

hat

the

requ

irem

ents

of

Polic

y N

o 20

(Com

mun

ity

Enga

gem

ent)

are

in p

lace

. D

eter

min

e if

ther

e is

a n

eed

to r

evie

w t

he p

olic

y as

man

y pr

ojec

ts a

re p

rogr

amm

ed u

p to

fou

r ye

ars

in a

dvan

ce.

Tran

spar

ent r

epor

ting

M

Dev

elop

a s

trate

gy a

nd id

entif

y th

e re

ason

s w

hy P

olic

y 20

is

not

in

plac

e.

Man

ager

–

infra

stru

ctur

e an

d Tr

ansp

ort P

lann

ing

30

Sep

tem

ber

2014

Pr

ocur

emen

t

11

Rev

iew

ed i

n de

tail

the

‘use

of

Cou

ncil

crea

ted

pane

ls’

and

the

requ

irem

ents

of

the

Act

. Th

is is

cur

rent

ly s

ubje

ct t

o le

gal

opin

ion.

D

epen

dent

on

th

is

opin

ion

Cou

ncils

us

e of

th

e pa

nels

m

ay

be

subj

ect

to

mor

e rigo

rous

qu

otin

g an

d re

port

ing

proc

esse

s.

Com

plia

nce

with

le

gisl

ativ

e re

quire

men

ts

M

Obt

ain

lega

l adv

ice,

and

bas

ed o

n th

is

advi

ce

ensu

re

that

th

e re

quire

men

ts

of

the

Act

ar

e in

pl

ace

Chi

ef F

inan

cial

Offi

cer

30 A

ugus

t 201

4

C

omm

unity

Fac

ilitie

s M

anag

emen

t

12

Util

isat

ion

Rep

orts

sho

uld

be c

orre

cted

to

ensu

re t

hat

they

pr

ovid

e an

acc

urat

e pi

ctur

e of

util

isat

ion.

The

bud

get

shou

ld

refle

ct t

he r

equi

red

utili

satio

n in

com

e.

Tran

spar

ent R

epor

ting

M

Cor

rect

th

e U

tilis

atio

n R

epor

ting

func

tion

Com

mun

ity H

alls

and

Fa

cilit

ies

Man

agem

ent

30 A

ugus

t 201

4

13

Act

ions

be

un

dert

aken

to

in

crea

se

utili

satio

n (r

efer

to

re

com

men

datio

ns

thro

ugho

ut

this

re

port

).

Idea

lly

thes

e ac

tions

sho

uld

be r

ecor

ded

in a

str

ateg

ic p

lan

or m

arke

ting

plan

.

Incr

ease

co

mm

unity

ut

ilisa

tion

and

Cou

ncil

reve

nue

M

Cre

ate

a m

arke

ting

stra

tegy

C

omm

unity

Hal

ls a

nd

Faci

litie

s M

anag

emen

t

30

Sep

tem

ber

2014

Le

ases

(Fol

low

up)

14

An

info

rmal

sy

stem

is

in

pl

ace

to

man

age

the

Cou

ncils

le

ases

incl

udin

g co

mpl

ianc

es,

rene

wal

, le

ase

cond

ition

s C

ompl

ete

repo

rting

an

d ef

ficie

ncy

in

man

agin

g C

ounc

ils

leas

e ar

rang

emen

ts

M

Cre

ate

a re

gist

er i

n th

e C

ounc

ils

corp

orat

e sy

stem

. Org

anis

e fo

r key

re

ports

to

be r

un p

erio

dica

lly a

nd

appr

opria

tely

dis

tribu

ted

to e

nsur

e tim

ely

actio

n is

ta

ken

whe

re

requ

ired.

Man

ager

–

Spe

cial

P

roje

cts/

Pro

perty

30

Aug

ust 2

014

PAGE 47


Audi

t Obs

erva

tions

Ef

fect

R

isk

Rat

ing

Rec

omm

enda

tion

and

agre

ed A

ctio

n Pl

an

Res

pons

ible

M

anag

er

To

be

impl

emen

ted

by d

ate:

15

Dev

elop

and

im

plem

ent

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ch

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ager

–

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Req

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ual

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cer

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Sep

tem

ber

2014

.

PAGE 48


PAGE 49

ITEM-4 GENERAL MANAGER'S EXPENSES


OUTCOME: 3 Sound governance based on transparency and accountability.

STRATEGY:



AUTHOR: GENERAL MANAGER

DAVE WALKER


DAVE WALKER

HISTORY At the Council meeting of 12 October 2004, the Council adopted a Notice of Motion as follows:- 1. The General Manager’s expenses be reviewed and approved by the Mayor prior to

payment. 2. After Approval, the expenses be submitted to the Audit Committee for notation. REPORT A listing of the General Manager’s expenses incurred since last reported on 3 April 2014 will be tabled at the Audit Committee Meeting. IMPACTS Financial This matter has no direct financial impact upon Council's adopted budget or forward estimates. The General Managers expenses are met from Councils adopted budget. The Hills Future - Community Strategic Plan The disclosure of the General Managers expenses ensures that the Council is transparently governed. RECOMMENDATION 1. The report be received. 2. The expenses tabled (which outlines a total of $XX) be noted. ATTACHMENTS Nil


PAGE 50

ITEM-5 QUESTIONS AND ANSWERS - AUDIT COMMITTEE MEETING - 3 APRIL 2014


OUTCOME: 1 Value our customers, engage with and inform our community and advocate on their behalf

STRATEGY:

1.1 Facilitate strong two way relationships and partnerships with the community, involve them in local planning and decision making and actively advocate community issues to other levels of government.


AUTHOR: INTERNAL AUDITOR

KERRIE WILSON


DAVE WALKER

REPORT Attached to this report are the responses for the questions asked at the Audit Committee Meeting held on 4 April 2014.. IMPACTS Financial This matter has no direct financial impact upon Council's adopted budget or forward estimates. The Hills Future - Community Strategic Plan The Audit Committee Meetings ensures that Council maintains sound governance based on transparency and accountability. RECOMMENDATION The report be received. ATTACHMENTS 1. Questions & Answers – Audit Committee 3 April 2014 (1 page).


PAGE 51

ATTACHMENT 1

QUESTIONS WITHOUT NOTICE

AUDIT COMMITTEE MEETING

3 APRIL 2014

MINUTE NO.

QUESTION REFERRED TO

15 COPIES OF COUNCIL’S FINANCIAL ACCOUNTS

GENERAL MANAGER

Councillor Thomas asked for copies of the Hills Shire Plan and associated quarterly budget reviews to be provided to the three (3) independent Audit Committee Members for their information. The Internal Auditor advised that these will be provided.

RESPONSE The monthly budget reviews and the Hills Shire Plan have been forwarded to the three (3) independent Audit Committee Members. This will continue on an ongoing basis.

MINUTE NO.

QUESTION REFERRED TO

16 METHODOLOGY OF INTERNAL AUDITS

GENERAL MANAGER

Mr Mike Blair advised that the independent Audit Committee Members would like to understand the methodology used in the audits undertaken by the Internal Auditor and requested that this be included in the Internal Audit report. Councillor Thomas also requested that the Audit Committee be provided with a confidential attachment in the business paper of the findings arising from internal audits undertaken and the management responses for the relevant audits. The Internal Auditor replied that this information will be provided to the next Audit Committee Meeting. For transparency, the findings that remain outstanding at the date of the audit committee (arising from internal audits undertaken and the management responses for the relevant audits) have been attached to the Internal Audit Report and will not be distributed under separate cover.

RESPONSE The ‘methodology’ used in the audits undertaken, and the outstanding recommendations (including management responses), will be presented at the Audit Committee through the Internal Audit Report.

audit committee meeting - the hills shire · recommendations of the internal audit reports; •...

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