audit committee meeting - the hills shire...audit committee meeting 1 december , 2015 part a:...

Audit Committee Meeting

Tuesday, 01 December 2015

THE HILLS SHIRE CO

UNC

IL

AUDIT COMMITTEE MEETING 01 DECEMBER, 2015 ITEM SUBJECT PAGE ITEM-1 CONFIRMATION OF MINUTES

ITEM-2 INTERNAL AUDIT REPORT 7

ITEM-3 GENERAL MANAGER'S EXPENSES 45

ITEM-4 QUESTIONS AND ANSWERS - AUDIT COMMITTEE MEETING - 18 AUGUST 2015

46

………………………………….. GENERAL MANAGER

MINUTES of the duly convened Audit Committee Meeting of The Hills Shire Council held in the Council Chambers Baulkham Hills on 18 August 2015

This is Page 1 of the Minutes of the Audit Committee Meeting of The Hills Shire Council held on 18 August 2015

ITEM SUBJECT PAGE

ITEM-1 CONFIRMATION OF MINUTES 3

ITEM-2 STATUTORY FINANCIAL STATEMENTS 3

ITEM-3 INTERNAL AUDIT REPORT 3

ITEM-4 GENERAL MANAGER'S EXPENSES 4

QUESTIONS WITHOUT NOTICE 4

MINUTES of the duly convened Audit Committee Meeting of The Hills Shire

Council held in the Council Chambers Baulkham Hills on 18 August 2015

This is Page 2 of the Minutes of the Audit Committee Meeting of The Hills Shire

Council held on 18 August 2015

30 PRESENT

Clr A C Jefferies (Mayor, in the Chair)

Clr A J Hay OAM

Clr M G Thomas

Clr Dr J N Lowe

Mr Trevor Bland

Mr Michael Blair

31 IN ATTENDANCE

Mr Dave Walker – General Manager

Ms Kerrie Wilson – Internal Auditor

Mr Dennis Banicevic – External Auditor, PricewaterhouseCoopers

32 APOLOGIES

Adjunct Professor Jim Taggart OAM

33 TIME OF COMMENCEMENT

7.01pm

34 TIME OF COMPLETION

7.49pm

35 DECLARATIONS OF INTEREST

Nil.

36 ARRIVALS AND DEPARTURES

7.35pm Councillor Hay OAM left the meeting and returned at 7.36pm during

Item 3.

37 DISSENT FROM COUNCIL'S DECISIONS

Nil.

38 ADJOURNMENT & RESUMPTION

Nil.





ITEM-1 CONFIRMATION OF MINUTES

A MOTION WAS MOVED BY MR MICHAEL BLAIR AND SECONDED BY MR TREVOR BLAND

THAT the Minutes of the Audit Committee Meeting of Council held on 25 June 2015 be

confirmed.

THE MOTION WAS PUT AND CARRIED.

39 RESOLUTION

The Minutes of the Audit Committee Meeting of Council held on 25 June 2015 be

confirmed.

APOLOGIES

A MOTION WAS MOVED BY COUNCILLOR HAY OAM AND SECONDED BY COUNCILLOR DR

LOWE THAT the apology from Adjunct Professor Jim Taggart OAM be accepted and leave

of absence granted.


40 RESOLUTION

The apology from Adjunct Professor Mr Jim Taggart OAM be accepted and leave of

absence granted.

ITEM-2 STATUTORY FINANCIAL STATEMENTS

A MOTION WAS MOVED BY COUNCILLOR HAY OAM AND SECONDED BY COUNCILLOR DR

LOWE THAT the Recommendation contained in the report be adopted.


41 RESOLUTION

1. The presentation from PriceWaterhouseCoopers be received.

2. Council’s 2014/15 statutory financial statements (distributed under separate

cover) be referred to the Council meeting on 25 August 2015 and the external

auditor be requested to present his findings at that meeting.

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 25 August 2015.

7.35pm Councillor Hay OAM left the meeting and returned at 7.36pm during

Item 3.

ITEM-3 INTERNAL AUDIT REPORT

A MOTION WAS MOVED BY COUNCILLOR DR LOWE AND SECONDED BY MR MICHAEL

BLAIR THAT the Recommendation contained in the report be adopted.






42 RESOLUTION

The report be received.

ITEM-4 GENERAL MANAGER'S EXPENSES

A MOTION WAS MOVED BY COUNCILLOR DR LOWE AND SECONDED BY MR TREVOR

BLAND THAT the Recommendation contained in the report be adopted.


43 RESOLUTION

1. The report be received.

2. The expenses tabled (which outlines a total of $40.00) be noted.

QUESTIONS WITHOUT NOTICE

44 AUDIT COMMITTEE BUSINESS PAPERS

Mr Michael Blair asked if the External Audit Committee Members could get a more

prompt delivery of the Audit Committee Business Papers as it is quite difficult to read a

complex document when the Business Papers arrived at 5pm yesterday.

The General Manager apologised for the delay and advised that future Audit Committee

Business Papers will be hand-delivered before the meeting.

45 ADVICE FROM OFFICE OF LOCAL GOVERNMENT IN REGARDS TO REMOVING ALL

EXTERNAL AUDITORS FROM CONDUCTING THE AUDITS OF COUNCILS INTO THE

FUTURE

Councillor Hay OAM asked if the General Manager had received any advice from the

Office of Local Government in regards to removal of all External Auditors from

conducting the audits of Councils into the future and about the consultation period

between October and December this year which is to commence on the rewriting of the

Local Government Act and the removal of external auditors.

The General Manager advised that he had not received any advice from the Office of

Local Government regarding this matter.

The Minutes of the above Meeting were confirmed at the Meeting of the Audit Committee

held on 19 November 2015.

MAYOR GENERAL MANAGER

AUDIT COMMITTEE MEETING 01 DECEMBER, 2015 ITEM-2 INTERNAL AUDIT REPORT DOC INFO

THEME: Proactive Leadership

OUTCOME: 3 Sound governance based on transparency and accountability.

STRATEGY: 2.2 Maintain a strong financial position that supports the delivery of services and strategies and ensures long term financial sustainability.

MEETING DATE: 1 DECEMBER 2015

INTERNAL AUDIT COMMITTEE

GROUP: GENERAL MANAGER

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 2015/16; • 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 Internal Audit Report which outlines the audit tasks undertaken by the Internal Audit function in the period from 1 July to 1 November 2015. IMPACTS Financial This matter has no direct financial impact upon Council's adopted budget or forward estimates.

PAGE 7

AUDIT COMMITTEE MEETING 01 DECEMBER, 2015 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 (36 Pages)

PAGE 8

AUDIT COMMITTEE MEETING 1 DECEMBER, 2015

ATTACHMENT 1

Internal Audit Report

At 1 November 2015

PAGE 9


Part A: Executive Summary

Audit Activity to 1 November 2015

From 1 July 2015 Audit has started Year 1 (2015/16) of its Strategic Audit Plan. This plan was adopted by the Audit Committee at its meeting on 25 June 2015.

In the period from 1 July 2015 to 1 November 2015, Internal Audit has completed 32% or 9 of its planned 28 audits. 50% or 14 of the planned audits are currently in progress.

The completed audits are detailed at Part B and C of this report. Completed audits include:

Councils Business Continuity Plan and Emergency Planning (Risk Management)

Councils Fraud and Corruption Mitigation Strategies

Implementation of Councils Resolutions

RMS Drives System usage

Governance Health check

Review of Mobile Phones

In summary the review of Councils Governance Structures (Audit item 1)/ Fraud and Corruption mitigation Strategy (Audit item 4) has identified that awareness programs are required to ensure that the Council activities reflect best practice. As a result ‘Governance Month’ will be reinstated in the Council in February 2016 to reinforce this awareness. Following ‘Governance Month’ audit will revisit the preliminary findings of these reviews to ensure that best practice is in place.

The review of the process concerning the reimbursement of private mobile phone use by staff (Audit item 11), as requested by the Audit Committee, identified that the process in place was inefficient and ineffective and uneconomical. As a result the process has been revised and new practices (as detailed) are to be implemented in November 2015. These results are detailed at C 1.7.

The review of the implementation of resolutions (Audit item 6) and the use of the RMS Drives System (Audit item 14) both showed that Councils required processes were in place. No recommendations resulted from these reviews.

Outstanding audit recommendations have also been followed up by Audit (refer Part D.). As detailed, 98% (Last Audit Committee: 98%) of the agreed audit recommendations have been implemented by management.

Finally, in the period, the audit function has operated within its budget. The number of direct days spent on internal auditing is 96% (Last Audit Committee: 98%) of the total days available.

For the information of the Audit Committee: In October 2015 IPART released its assessment concerning the Councils Fit for the Future proposal. By Christmas 2015 the Council will be informed of the final outcome of the Fit for the Future process. The outcome of this process may impact on the Audit Plan.

Link: http://www.ipart.nsw.gov.au/Home/Industries/Local_Govt/Fit_for_the_Future

The Structure of the Internal Audit Report is as follows:

B: Comparison of the Actual and planned Audit activity undertaken in 2015/16 period;

C: Details of the actual internal audit work undertaken in the period from 1 July to 1 November 2015;

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

Attachment 2: Risk Assessment Matrix

Attachment 3: List of outstanding audit recommendations (including management comments) at the reporting date

PAGE 10


Part B Comparison of the Actual and Planned Audit Activity undertaken in 2015/16 period

B.1 Summary

The Internal Audit Strategic Plan (1 July 2015- December 2016) was adopted by the Audit Committee on 25 June 2015. This document details the planned audit activities to be undertaken in 2015/16.

Link: http://www.thehills.nsw.gov.au/Council/Meeting-Agendas-Minutes/Audit-Committee/Current-Years-Minutes-and-Agenda

Table 1.: Compares the ‘actual’ 2015/16 internal audit activity undertaken with the planned audit activity and provides the Audit Committee with an overview of the Internal Audit activities undertaken in the period.

The information provided in the Table includes:

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

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

The budgeted days for the identified audit activity;

The actual audit time taken to undertake (or that has been spent on) the audit activity.

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

The ‘risk’ associated with each activity (**). The ‘risk’ reflects the Councils adopted risk assessment matrix which is located at Attachment 2.

Legend to the Table 1.

Status of the Audit Activity

In progress

Completed

Not yet started

Chart 1: Summary of the Status of the 2015/16 Audit Plan at 1 November 2015

PAGE 11


Table 1: Comparison of Actual Audit Activity with Planned Audit Activity for 2015/16

Risk Budgeted Actual Status

** Days Days 1/11/2015 2015/16

1. Governance Structures/Code Of Conduct

Objective: Undertake the annual Governance Health Check to ensure Councils Governance practices meet acceptable standards and comply with recommendations resulting from ICAC/OLG and NSW Ombudsman and other regulatory bodies.

Source: DLG Best Practice Review 2007; Governance Health check developed by the ICAC/DLG 2004; THSC Risk Management Module.

Last Audited: 2014/15 H 10 7.5

Preliminary review undertaken in October 2015. Governance plan developed which is to be implemented by April 2016. The implementation of the improvement plan to be reviewed in April 2016.

2. Governance Structures (including a review of the requirements of the Code Of Conduct and the review of the Councils Delegation Instrument)

Objective:

Review the policies and procedures that support the implementation of the Councils code of conduct to ensure that they remain effective. Focus is to be placed on the governance practices concerning the confidentiality of information and the management of conflict of interests - both identified as ‘high risk’ in the Councils risk assessment. Ensure that the Councils delegation instrument is up to date and complete; Council staff are aware of their delegated responsibilities; and the delegation instrument results in efficient and effective decision making.

Source: DLG Best Practice Review 2007; Governance Health check developed by the ICAC/DLG 2004; THSC Risk Management Module.

Last Audited: 2013/14 H 10 4.4

Preliminary review undertaken – policies and procedures being reviewed. Will be finalised in November

3. Risk Management (Business Continuity Plan and Emergency Planning)

Objective: Ensure that the Councils Business Continuity Plan and emergency planning is up to date, reflects best practice and has been tested, mitigating the risk to Council operations of business interruption.

Source: Internal Audit Guideline, DLG September 2010; THSC Risk Management Module.

Last Audited: 2013/14

H 5 4.5 Completed. Refer C 1.4

4. Risk Management (Fraud and Corruption mitigation strategy)

Objective:

Ensure that the fraud and corruption mitigate strategy is up to date, and reflects best practice.


M 5 4.5 Completed Refer C1.1

PAGE 12


Last Audited: 2014/15 5. KPI’s (Enterprise Agreement (EA)

implementation)

Objective: Ensure that the KPI’s outlined in the Councils Enterprise Agreement are complete, accurate and valid.

Source: THSC Risk Management Module.


M 5 4.8 Completed Refer C2.1

6. Resolutions

Objective: Implementation of Councils Resolutions



H 5 4.2 Completed. Refer C 1.2.

7. GIPA legislation

Objective: Implementation of Councils GIPA requirements


Last Audited: 2013/14 M 5 3.2

Completed. Refer C 1.3

8. Grants management/ Use of restricted funds

Objective: Ensure that Grant funds received are appropriately costed and authorised and Funds are used in accordance with the funding arrangement and the terms of the grant are achieved efficiently and effectively. Effective separation of grant and operational activities and costs.


Last Audited: 2013/14 M 10 1.0

In progress – Grant register reviewed at August 2015 – Further review planned for early 2016.

Special Projects/Assignment

Objective: 20 days was provided to ensure that Internal Audit could provide a comprehensive and proactive service to the Council. At the Audit Committee on 25/6/2015 the Audit Committee raised two topics for review by Audit (refer Audit No. 9 and 10). At the Executive Forum on 10 September 2015 a further audit was identified (refer Audit item 11).

Source: Internal Audit Guideline, DLG September 2010.

H

9. Special Projects/Assignment Audit Committee 25/6/2015 request:

Review Civic Events Management

Source: Audit Committee 25/6/2015

H 5 1.0

Main events are planned for the period from September 2015 to April 2016. Planning undertaken.

10. Special Projects/Assignment H 10 10 Completed

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Audit Committee 25/6/2015 request: Review the efficiency (cost vs benefit) of the current process concerning the reimbursement of private mobile phone use by staff. Source:

Audit Committee 25/6/2015

Refer C2.1

11. Special Projects/Assignment Executive Request: This audit task was brought forward from the 2016 strategic plan at the request of the Executive: Workforce attendance: Ensure that effective controls are in place to monitor workforce attendance. The aim of the review is to ensure that staff is reimbursed for attendance. The Executive have specifically asked that emphasis be placed on reviewing the recording of leave. Source:

Executive 10 September 2015 H 5 2 In progress.

12. Investigations/Advisory

Objective: This time is provided to undertake any investigations that may be required by Councils regulatory bodies etc. This time is also used by Audit to implement proactive strategies/ provide advice/ probity etc. to mitigate the time spent on investigations. This includes time taken to review the Councils statutory financial statements

Source: Internal Audit Guideline, DLG September 2010

H 20 10.5 Undertaken as required

13. WHS (OHS)

Objective: Undertake the annual review of the controls that ensure that the health and safety of Council staff is protected and relevant legislation is complied with. This review will update the WHS Audit Tool 4801 2014.

This review supports the requirements of the Workers Compensations Retro-paid model and is aimed at the continuous improvement of the Councils WHS practices.

Source: Risk Management Processes

Last Audited: 2014 M 5

14. RMS Drives System

Objective: Audit Councils use of the RMS Drives System. This audit is an annual requirement of the RMS agreement which allows the Council to have access to the RMS Drives System required in undertaking Councils regulatory functions.

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

M 5 2.2

Completed.

Refer C1.5

PAGE 14


Last Audited: 2014 15. Grant Financial Statements

Objective:

Where required by the Granting Body. Source:

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

M 5

16. 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: DLG Better Practice Review 2007, ICAC recommendations, THSC Risk Management Module.


H 15 .6 Planning begun

17. 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: 2014

H 5 1.5 Planning

undertaken

18. Asset management – maintenance

Objective: Review the Councils maintenance activities to ensure that information concerning these activities is: complete, accurate and valid; and results in effective and efficient decision making. Maintenance activities should reflect the requirements of the Councils asset maintenance Manual to mitigate Councils risk. Will include a review of work orders.

Source: DLG Better Practice Review 2007, Council Resolution; THSC Risk Management Module.

Last Audited: 2014 H 20 .5

Planning undertaken

19. Acquisition/Disposal and management of plant and equipment

Objective:

Review the Councils acquisition and disposal practices to ensure that they reflect Councils procedures, best practice and result in the best outcome for the community. Ensure that appropriate records are kept of Councils assets (including attractive assets that may be of low value). Ensure that usage reflects the requirements of the Code of Conduct.

Source: THSC Risk Management Module.

Last Audited: 2013 M 10 2.4

Review being undertaken

20. Stormwater/Flood Mitigation strategies and implementation

H 10 0.3 Preliminary discussions

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Objective:

Identified as a high risk in the Councils Risk assessment. Ensure that the Council has a documented flood mitigation strategy and effective implementation plan. Ensure that restricted funds received by Council are being used effectively to support the strategy

Source: THSC Risk Management Module

Last Audited: 2010

undertaken

21. Revenue Activities (implementation of adopted fees and charges document)

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: 2014

M 5

22. 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. As well as the review of the Councils cash handling procedures, this audit will review the management of bonds and bank guarantees

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


M 10 7.5 Testing

undertaken

23. Debtors Management

Objective: Review the Councils debtors Management processes to ensure that this undertaken effectively and efficiently. This audit will include a review of the Review the management of monies collected on behalf of Council -State Debt Recovery Office.


Last Audited: 2013 M 10

24. 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: THSC Risk Management Module , ICAC Guidance and results of ICAC reviews.

Last Audited: 2014

H 5 .3 Reports run.

25. Contribution Planning – in kind contributions

M 10 2

Testing being undertaken

PAGE 16


Objective: Review of the controls that ensure that in kind contributions are correctly valued and approved.


Last Audited: 2013/14 26. Legislation/Regulation

Objective:

Ensure that the Council activities are legislatively compliant. Audit will review high risk activities.


Last Audited: 2013

H 10 1

Preliminary planning

undertaken

27. Ordinance and enforcement/Inspections

Objective: To ensure the integrity of Councils regulatory functions. The power of regulators to grant significant benefits to, or impose restrictions or penalties on, members of the public can increase the risk that they will be exposed to corruption. Identified as a ‘high risk’ activity by the ICAC. Will include the review of PINS etc. Source:

THSC Risk Management Module , ICAC Guidance and results of ICAC reviews

Last Audited: 2012

H 10

28. Use of discretion/DAU Objective:

Ensure that the use of discretion by Councils officers is appropriate and in accordance with their delegated authority. This review will also look at the use of discretion with respect to rezoning or development applications..

Source: THSC Risk Management Module, ICAC Guidance and results of ICAC reviews

Last Audited: 2012

H 5 4.8 Completed. Refer C1.6

Administration

Audit Committee

Objective: The preparation of reports for the Audit Committee and the attendance at Audit Committee meetings.

Source:

Internal Audit Charter, Audit Committee Charter 8 2.80

Liaison with LGIAN/External Auditor

Objective: Liaison with External Auditor/ LGIAN

Source:

Internal Audit Guideline, DLG September 2010 4 1.3

Follow up of reports previously issued

Objective:

Follow up outstanding recommendations agreed with management.

Source: 8 2.1

PAGE 17


Internal Audit Guideline, DLG September 2010

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 3.7

Total Days 260 90.60

PAGE 18


Part C. Details of the Internal Audit Activity undertaken in 2015/16

Part C. provides details of the Audit Activity undertaken in the period from 1 July 2015 to 1 November 2015.

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 4)

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 236 recommendations (similar recommendations counted as 1) 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. On 28 September 2015 the Independent Commission Against Corruption

Amendment Act 2015 ("the Amendment Act") was assented. The Commission's jurisdiction to commence investigations into allegations of corrupt conduct remains unchanged. At the conclusion of an investigation, however, the Commission can now make findings of corrupt conduct only in cases where it has determined that there is serious corrupt conduct. The duty of principal officers of NSW government agencies to report suspected corrupt conduct in their agencies is not affected by the changes in the Amendment Act.

Other changes to the ICAC's legislation include:

PAGE 19


• extending the definition of corrupt conduct under the new section 8(2A) to include particular conduct of any person (whether or not a public official) that impairs, or could impair, public confidence in public administration and which could involve any of the following matters: (a) collusive tendering, (b) fraud in relation to applications for licences, permits or other authorities under legislation designed to protect health and safety or the environment or designed to facilitate the management and commercial exploitation of resources, (c) dishonestly obtaining or assisting in obtaining, or dishonestly benefiting from, the payment or application of public funds for private advantage or the disposition of public assets for private advantage, (d) defrauding the public revenue, or (e) fraudulently obtaining or retaining employment or appointment as a public official

• enhancing the Commission's advisory, educational and preventive functions, under the new section 13(1)(e) – (j) to include examining and providing advice about ways in which the integrity and good repute of public administration can be promoted

• expanding the Commission's functions to include matters referred by the NSW Electoral Commission under the new section 13A which means the ICAC can now investigate certain possible criminal offences under electoral funding, election or lobbying laws following a referral to it by the NSW Electoral Commission.

a) Investigations and public enquiries in progress

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

ICAC public inquiry into University of Sydney ICT contractor recruitment

Wednesday 28 October 2015

The NSW Independent Commission Against Corruption (ICAC) will hold a public inquiry commencing on Monday 9 November 2015 as part of an investigation it is conducting into allegations concerning information communication technology (ICT) contractor recruitment by Jason Meeth, a public official employed as the Head of Projects, ICT, at the University of Sydney (Operation Elgar).

The Commission is investigating allegations that, between February 2012 and July 2013, Mr Meeth corruptly exercised his official functions for the benefit of IT consulting service Canberra Solutions Pty Ltd.

It is alleged that Mr Meeth acted partially and dishonestly by engaging certain ICT contractors through Canberra Solutions, although this company was not a NSW Government-accredited C100 company as required under the university's directions for the recruitment of ICT contractors.

The public inquiry will start at 10:00 am and will be held in the Commission's hearing room on Level 7, 255 Elizabeth Street, Sydney.

The ICAC Commissioner, the Hon Megan Latham, will preside at the public inquiry, and Counsel Assisting the Commission will be Mr Warwick Hunt.

The inquiry is set down for five days.

PAGE 20


b) The following ICAC Investigations are in progress

2015

University of Sydney – allegations concerning ICT contractor recruitment (Operation Elgar) The ICAC is investigating allegations concerning Jason Meeth, a public official employed as the Head of Projects, ICT, at the University of Sydney. It is alleged that, between February 2012 and July 2013, Mr Meeth corruptly exercised his official functions for the benefit of IT consulting service Canberra Solutions Pty Ltd. Mr Meeth also allegedly acted partially and dishonestly by engaging certain ICT contractors through Canberra Solutions, although this company was not a NSW Government-accredited C100 company as required under the university’s directions for the recruitment of ICT contractors.

Corruption Risk Area: Procurement/Consultants

TAFE South West Sydney Institute – corruption allegations concerning ICT manager (Operation Sonet) The NSW ICAC is investigating corruption allegations that an Acting Information and Communication Technology (ICT) Manager, Ronald Cordoba, dishonestly obtained over $1.7 million from the Department of Education and Communities TAFE South West Sydney Institute.

Corruption Risk Area: Procurement/ Conflict of Interest

Department of Justice – corruption allegations concerning courthouse refurbishment contracts (Operation Yancey) The ICAC is investigating corruption allegations concerning the abuse of procurement processes by Department of Justice Asset Management Branch deputy director capital works, Anthony Andjic, in the awarding of contracts to refurbish NSW courthouses in 2013 (Operation Yancey).

Corruption Risk Area: Procurement/Capital works/ Conflicts of Interest

Rural Fire Service – allegations concerning catering supply and other matters (Operation Vika) The ICAC is investigating allegations concerning alleged corrupt payments related to the supply of catering and other products to the NSW Rural Fire Service (RFS) between 2009 and 2015. The Commission is examining, amongst other matters, whether payments made by the RFS to catering companies controlled by Scott Homsey were induced by representations made by RFS employees Arthur John Hacking and Paul Springett, RFS volunteer Darren Hacking, and Mr Homsey, which they knew to be false or misleading, or by those persons concealing facts from the RFS that they had a duty to disclose.

Corruption Risk Area: Procurement/Conflicts of interest

Mine Subsidence Board – allegations concerning former district manager (Operation Tunic) The ICAC is investigating allegations that former Mine Subsidence Board (MSB) Picton office district manager Darren Bullock received, or may have received, corrupt payments or other benefits as an inducement or reward for showing favourable treatment to building contractor Kevin Inskip of Plantac Pty Ltd and to William Kendall of Willbuilt Homes Pty Ltd. The Commission is also investigating allegations that Mr Bullock revealed confidential MSB tender information to Plantac Pty Ltd, and breached MSB financial delegations, policies and/or procedures relating to the awarding of contracts and the making of payments to that company.

Corruption Risk Area: Procurement

2014

PAGE 21


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) In Operation Credo, the ICAC is investigating allegations that persons with an interest in Australian Water Holdings Pty Ltd (AWH) obtained a financial benefit through adversely affecting the official functions of Sydney Water Corporation (SWC) by: including expenses incurred in other business pursuits in claims made on SWC for work on the North West Growth Centre; drawing from funds allocated for other purposes; and preventing SWC from ascertaining the true financial position, including the level of the executives’ remuneration.

The Commission is also investigating whether public officials and others were involved in the falsification of a cabinet minute relating to a public private partnership proposal made by AWH intended to mislead the NSW Government Budget Cabinet Committee and obtain a benefit for AWH, and other related matters.

In Operation Spicer, the ICAC is investigating allegations that certain members of parliament and others corruptly solicited, received and concealed payments from various sources in return for certain members of parliament and others favouring the interests of those responsible for the payments. It is also alleged that certain members of parliament and others solicited and failed to disclose political donations from companies, including prohibited donors, contrary to the Election Funding, Expenditure and Disclosures Act 1981.

In both of these matters, the Commission is also investigating the circumstances in which false allegations of corruption were made against senior SWC executives.

As there are common elements to both operations Credo and Spicer, the evidence taken in each operation will be taken as evidence in both operations.

c) Investigation Reports issued:

The following is a link to the ICAC reports publically listed:

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

In the period no investigation reports have been issued.

d) Other

On 13 October the ICAC released its 2014/15 Annual Report. This report is available at http://www.icac.nsw.gov.au/. The following provides key information that may be of interest to the Audit Committee: Table 9 (page 17) of the report identifies that Local Government still remains the top government sector that the ICAC receives complaints about. The commission however noted that that there are over 150 local councils in NSW, and that over-representation of local government in the complaints statistics is due to the high level of people’s interaction with local government and the personal interest many take in the decisions of their local council:

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Table 10 (Page 17) of the report identifies the following:

Table 15 (Page 19) of the report outlines that the most complained actions (PID Act) was because of:

From page 34 of the report the Commission identifies and analyses corruption risks of sector-wide significance with a view to making corruption prevention recommendations to government (refer).

At 11 September 2015 the ICAC updated its “prosecutions outcomes” and “ICAC prosecution briefs with DPP” page on its website. These pages are available at the following link: http://www.icac.nsw.gov.au/investigations/prosecution-briefs-with-the-dpp-and-outcomes

e) OLG Reports Issued The results of the ongoing review of Strathfield City Council by the OLG were released in October 2015 refer: http://www.smh.com.au/nsw/investigation-reveals-serious-and-substantial-waste-at-strathfield-council-20151008-gk4zrc.html

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C 1.2 Resolutions

Audit Number

6

Background Decisions made by Council at each Council meeting are recorded as resolutions or action items to be noted or implemented by Council staff. The implementation of Council resolutions is the responsibility of the General Manager and Group Managers.

Reviews have been undertaken by Internal Audit in 2007, 2008, 2010, 2011, 2013 and now 2015 to provide assurance resolutions are implemented on a timely basis.

In the period from 13 August 2013 (time of the last audit) to July 2015 the Hills Council met 42 times. These meetings resulted in approximately 557 resolutions / action items (please note that each action item could have up to 4 sub items that must be addressed to satisfy the resolution).

The broad breakdown of the description of action items/resolutions in the period was as follows:

Description Total %

1 Land/COW/Licenses 181

2 Governance – Delegations/Q&A/Structure/PI Returns etc. 26

3 Operational issues – letters of appreciation/ O/S resolutions reports/ legal reports / DA Status Reports / Extractive Industry

100

4 Planning –DCP’s/LEP/VPA’s/Proposals/ Post Exhibition etc. 74

5 DA’s 56

6 Committees – s355/Traffic/Audit/Youth 27

7 Financial – statements/budget reports/s94 quarterly statements/ Hills Shire Plan (Annual Reports)

36

8 Tenders/EOI’s/Purchasing 38

9 Grants/Donations 19

Total 557 100%

Audit Objective

To determine whether resolutions / action items resolved by Council are implemented within appropriate timeframes.

Scope Council Resolutions relating to the period 13 August 2013 to 14 July 2015

Method Internal Audit reviewed 30 randomly selected resolutions / action items (5% of all resolutions) and traced these to the resulting actions undertaken by Council staff to ensure that they were implemented.

Audit also reviewed those resolutions listed as outstanding and reported to Council monthly in the ‘Outstanding Resolutions of Council report’.

Findings The review of the random selection of resolutions and the review of the ‘Outstanding Resolutions of Council report’ found that:

Resolutions were being implemented as soon as practical after the resolution date; and,

The reporting of outstanding resolutions was accurate.

Conclusion

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

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Satisfactory Resolutions selected were implemented on a timely basis

C 1.3 Implementation of the GIPA Legislation

Audit Number

7

Background

The Government Information (Public Access) Act 2009 (NSW), (GIPA Act) was introduced in 2009 (replacing the Freedom of Information Act) and commenced on 1 July 2010.

The objective of the Act is to promote open government information to the public, and fair and effective government in NSW.

Members of the public have a right to access government information. This right is restricted only when there is an overriding public interest against disclosing that particular information.

The aim of the Act is to:

a) authorise and encourage the proactive public release of government information by agencies, and

(b) give members of the public an enforceable right to access government information, and

(c) provide that access to government information is restricted only when there is an overriding public interest against disclosure.

The law applies to all NSW public sector agencies including:

NSW local councils; public officers and courts.

Further information is available at:

http://www.ipc.nsw.gov.au/resources-public-sector-agencies-0

Audit Objective and Method

To determine:

Whether the GIPA legislation is being implemented as required within the Council;

Whether information on our web site concerning GIPA and Councils obligations are correct;

Training and instruction that has been provided to staff processing applications and other staff in general concerning the Act to ensure that it is effectively implemented.

Scope Applications received in the period from commencement of the Act to July 2015.

Findings The following findings resulted from audit processes undertaken:

The number of GIPA applications that the Council received per year was:

Formal: 15 on average.

Informal: approx. 360 (30 on average per month).

The GIPA applications received were dealt with in accordance with the legislation.

Targeted staff training and awareness had not occurred since 2013. As a result training is to be provided to the Councils customer service staff by the Manager Executive Services. Council’s customer service staff have primary contact with the community.

Council’s contract register was out of date.

Agreed Management

Training is to be provided as part of Governance Month (February 2016)

The Contract register was updated at August 2015.

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Action

Conclusion

For the information of the Audit Committee, the results of the audit activity (including the response of the Manager) were considered:

Satisfactory GIPA legislation implemented as required.

C 1.4 Risk Management (Business Continuity Plan and Emergency Planning)

Audit Number

3

Background Emergency planning involves the immediate and urgent movement of people away from the threat or actual occurrence of a hazard. Examples range from the small scale evacuation of a building due to a storm or fire to the large scale evacuation of a district because of a flood, bombardment or approaching weather system.

Emergency evacuation plans are developed to ensure the safest and most efficient evacuation time. Consideration for personal situations which may affect an individual's ability to evacuate is taken into account. Proper planning will implement an all-hazards approach so that plans can be reused for multiple hazards that could exist.

A business continuity plan is a plan to continue operations if a place of business is affected by different levels of disaster which can be localized short term disasters, to days long building wide problems, to a permanent loss of a building. Such a plan typically explains how the business would recover its operations or move operations to another location after damage by events like natural disasters, theft, or flooding. For example, if a fire destroys an office building or data center, the people and business or data center operations would relocate to a recovery site.

Any event that could negatively impact operations is included in the plan, such as supply interruption, loss of or damage to critical infrastructure (major machinery or computing /network resource).

Audit Objective

Ensure that the Councils Business Continuity Plan and Emergency Planning is up to date and reflect current standards and has been tested, mitigating the risk to Council operations of business interruption.

Scope Both the Councils Business Continuity Plan and Emergency Planning were reviewed at September 2015.

Method Compare Councils Business Continuity Plan (and associated processes) with best practice and compare Councils business planning with the relevant Australian Standard (AS 3745 – 2010) and the Work Health and Safety (WHS) Regulation 2011.

Findings The Council management of Business Continuity and Emergency Planning conforms to the requirements of the relevant legislation.

However it appears from the training records provided that the main administration site (Columbia Court) has been the focus on emergency response (evacuation) training since December 2013. The recommendation as per the standard is “each site participates in at least one emergency response exercise in each 12 month period”.

The following recommendations resulted from the review:

For Business Continuity:

1) The Crisis Management Team carry out the annual training exercise

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For Emergency Planning:

1) A Diagram is required for Connie Ave and Building 15 (Hills Community Care at Baulkham Heights Estate).

2) Emergency Management Plans are required for Connie Ave and Building 15 (Hills Community Care at Baulkham Heights Estate). Note – An emergency plan is not required for Gibbon Road as the facility is not under the care & control of THSC.

3) Plan and implement emergency response training for the Child Care Centre, Libraries, Workshop, Connie Ave, Baulkham Heights (HCC) and any other facility where staff are employed.

4) Review the evacuation diagrams in the Council hired facilities and plan and implement to update the existing diagrams to the current standard.

Agreed Management Action

With respect to business continuity:

The Councils Business Continuity Plan has been updated by an external consultant and responds to key phases of a disaster – managing the crisis; recovering critical operations; resuming normal business operations. Annual training exercises are held for the team. Next training is scheduled for the 3/12/15.

With respect to Emergency Planning:

The facilities Operations Manager is to undertake a tender process for the delivery of diagrams and training, estimated completion date February 2016

Conclusion

For the information of the Audit Committee, the results of the audit activity were considered:

Satisfactory Key controls in place however documentation in Councils concerning emergency planning needs to be updated.

C 1.5 Compliance with the RMS Drives System Terms of Access Agreement

Audit Number

14

Background Council has access to the RMS Drives system for its compliance activities. The information in the system is sensitive and confidential. Councils access privileges are outlined in the Term of Access Agreement (TOAA) which requires that an annual audit be undertaken to ensure that the terms of access agreement are in place.

Audit Objective

The objective of the audit was to ensure that the requirements of TOAA were in place for the period ended 30 June 2015. The audit was undertaken in July 2015.

The audit involved a detailed review of randomly selected Council staff that had access to the RMS Drives system for the period 1 March 2015 to 1 June 2015.

Scope Access to the RMS Drives system in the period from 1 July 2014 to 30 June 2015.

Method The audit was conducted in accordance with the requirements of the agreement. The audit approach included:

review of THSC processes against the RMS DRIVES Terms of Access Agreement to ensure THSC compliance with the Agreement;

review of THSC procedures; undertaking interviews and discussions with relevant Council officers to

understand the processes and how they have been complied with; and, obtaining a sample listing of access records from the RMS and reviewing this

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for consistency with Council records. Findings 1. THSC uses the A drives system to record access to the RMS Drives

system. The records from the A drives system satisfy the requirements of 4.1 of the TOAA. In comparing the records in the ‘A drive’ system with RMS records one exception was noted. Upon investigation it was found that the RMS system was accessed on this occasion for legitimate reasons (being a fine issued for disobeying a stop sign in a school zone). It was found that the staff member that had undertaken the search in RMS system had not recorded it in Councils ‘A drive’ system as a search record.

2. The review of ‘A drive’ records identified that Council staff had accessed RMS records for valid reasons and can be supported in accordance with the signed agreement.

3. As required by S4.4 of the TOAA, Quarterly compliance statements for September 2014, December 2014 and March 2015 have been forwarded to the RMS.

Management Action

Not Applicable.

Conclusion


Satisfactory

THSC’s DRIVES database activities policy and procedures comply with the RMS DRIVES Access requirements in all material respects; and, Council records were compared to the records received from the RMS. One exception was noted and was found to be legitimate – appropriate action has since been taken to rectify the omission.

C 1.6 Use of Delegations/Discretion in the Development Assessment Process (Including DAU)

Audit Number

28

Background A development application is an application made to Council to carry out development including subdivision and demolition.

Legally for any building, demolition or subdivision works and for any development requiring consent under The Hills Local Environmental Plan (The Hills LEP) 2012 a development application must be submitted to the Council. The Hills Local Environmental Plan (The Hills LEP) 2012 outlines, among other things, the land uses permissible within different zones of the Hills Shire. Development Control Plans (DCP) or guidelines outline permissible development. These documents are available from Council and are referred to in assessing DA’s received.

Once lodged with Council, an application is assessed and then determined by one of the following decision making processes:

1. Under Delegated Authority (through Councils adopted delegation instrument).

2. By Council’s Development Assessment Unit (DAU) meeting. Development applications determined by the DAU are those which do not comply with the relevant planning regulations/ policies, and/or where an objection has been submitted (the DA’s referred to the DAU are as required by the delegation instrument adopted by Council).

3. By an Ordinary Meeting of the Council. Development applications determined by the elected Council are those of a controversial nature that may have been referred by the DAU or as requested by the Council

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(in accordance with the mechanism within the Delegation instrument) or attracted a large volume of objection (follow up with PO).

4. NSW Government Joint Regional Planning Panels (JRPPS).

Audit Objective

To ensure that the use of discretion by Council Officers is appropriate and in accordance with their delegated authority. The review also looked at the use of discretion with respect to rezoning.

Scope The approval processes for DA’s received in the period in the 2014/15 financial year.

Method a) Identify the DA’s approved in the period of audit. b) Identify the delegations in place in the period of audit. c) Use a random number generator to select a sample of DA’s to test. d) Identify the method implemented to approve the relevant DA. e) Ensure that the method implemented reflects the approved delegation

instrument.

Findings Audit used a random number generator to select a sample of DA’s applicable to 2014/15. DA’s received and authorised in 2014/15: 1853 Each DA file selected was reviewed as to:

Cost of the development; Submissions received concerning the development; Variations to the requirements of the Councils LEP and relevant DCP’s; Delegation under which the DA was approved;

Comparison of the circumstances of the DA (submissions/ Variations etc.) with the relevant delegation instrument to ensure that the DA was appropriately approved. Based on the review of the random sample of DA’s received in the period, DA’s were approved in accordance with Councils delegation instruments.

Management Action

Not Applicable.

Conclusion


Satisfactory Effective control environment; DA’s approved in accordance with Councils delegation instruments and legislation

C 1.7 Efficiency (Cost Vs Benefit) Of The Current Process Concerning The Reimbursement Of Private Mobile Phone Use By Staff.

Audit Number

10

Background Mobile phones and associated data services are provided to authorised Council employees and Councillors to support the efficient communication and access to information such as email and calendars. These devices are provided to enable timely decision making. At September 2015 the Council had: 31 Mobile Phones managed through Telstra (including 9 for Councillors); 279 Mobile Phones through Optus* (*net of sim only services) The direct cost to Council of providing mobile phones to staff/Councillors is

PAGE 29


$14,000 per month ($168,000 pa). The total reimbursement to Council concerning mobile phones from 1 July 2014 to present is approx. $10,500. This does not include the cost of the actual handset (which varies considerably from $90 (Nokia) to $1040 (IPhone Plus). The average cost of the handsets owned by Council was $358. To ensure that staff do not acquire a personal benefit from the Council provided phone, a process is undertaken monthly whereby staff:

review the monthly bill received by Council from the service provider concerning their Council phone;

identify their private usage; and, then reimburses the Council for the private usage.

At the 26 May 2015 Audit Committee Meeting the Audit Committee requested that Audit review the efficiency (cost vs benefit) of the current process concerning the reimbursement of private mobile phone use by staff.

Audit Objective

Audit reviewed the process concerning the reimbursement of private mobile phone use by staff to determine whether it was economical (implementation is cost effective), efficient (input compared to output) and effective (achieved the required outcome).

Scope Audit reviewed the process concerning the reimbursement of private mobile phone use by staff at September 2015.

Method Audit reviewed the following to determine the completeness, accuracy, validity and efficiency of the current process:

The process of managing Councils mobile phones (including reimbursements) in Council (staff involved/time taken to process payments/cost of process to identify reimbursements);

Council’s asset records/other relevant records concerning mobile phones;

Purchasing and disposal practices; Bills received from the service providers - comparing these to Councils

asset records to determine the completeness of Councils records; Bills received for July and August 2015 to determine if usage is

appropriate; Staff reimbursements at August 2015; Supporting documentation maintained in the Councils Corporate Record

(Mobile Phone & Mobile Computing Device Usage Agreement). Findings Economy: The staff time in managing Councils mobile phone records and

reimbursement process was found to be excessive and the process is uneconomical. For Example: Staff in Finance/Fleet Management and IT are involved in maintaining the necessary records concerning the mobile phones (each maintained their own records). Finance staff is also involved in maintaining the debtor and receipting details and ensuring that staff contact details are correct. IT staff are involved in allocating the relevant bills to relevant staff. Customer service staff is involved in processing payments received from staff. All Council staff allocated a mobile phone are responsible for reviewing the monthly statements received and the reimbursing their private usage. At the time of audit there was no cap on the individual bills per phone. Overall, the average time taken by staff to review and reimburse their private usage per month is ½ hour per phone per month (estimated cost $2500 per month). The average contribution paid by staff member per phone was approx $2 per month. The average invoiced cost per phone at June 2015 per was calculated at $21. Efficiency: The actual process was found to be inefficient. As indicated above the records maintained by the various teams involved in the process were not consistent. Private usage was/is not followed up on a regular basis. Reliance is placed on Audit to undertake a regular review. Effectiveness: Due to inaccuracies in the records maintained and the lack of monthly independent review the process was not found to be effective in

PAGE 30


ensuring that private usage was identified and reimbursed in all cases. Having said this it was noted that the majority of staff that received monthly records were diligent in reimbursing their usage (though the time taken to reimburse was not always commensurate with the amount reimbursed). However also identified was a minority of transactions that were obvious private usage (sometimes excessive) that was not reimbursed. Following these findings the General Manager agreed that a more cost effective process needed to be introduced. Although the most cost effective process would be to provide an allowance to all relevant staff(in lieu of a Council owned phone) it was identified that the allocation of a Council owned phone on a capped plan would ensure that satisfactory and consistent communication methods was in place. Based on the above Finance have spent time in updating Council records, redistributing the mobile phone bills for the 2014/15 to October 2015 and processing the resulting reimbursements to ensure that Councils records are accurate. Information Technology have renegotiated a capped mobile phone plan with Optus at a lower cost per phone than the actual cost currently incurred by Council (this plan allows 1gb of data download). This plan will come into effect from November 2015. Audit is reviewing the reimbursements to ensure that private usage is reimbursed until October 2015. With the new capped plan Audit will regularly review usage to ensure that data allowances are not exceeded.

Management Action

It has been agreed with Management that:

Costs incurred concerning mobile phones would be budgeted centrally rather than allocated to individual teams (costs distributed to teams were found to be inaccurate);

Private use reimbursement would be followed up to October 2015.

With the introduction of the new capped plan, supporting procedural and usage agreements would be updated and distributed.

One set of records will be maintained of the mobile phones owned by Council

Audit will review the phone bills monthly to ensure that data usage is not exceeded.

Audit will review the economy of the new process one introduced and report the findings to the General Manager and Audit Committee.

Conclusion

With the implementation of the agreed actions by Management the following rating should be applicable:

Satisfactory Process will be efficient, economical and effective

C.2. Other Audit Activities under in the period since 1 July 2015.

C2.1 Audits completed in the 2015/16 adopted Internal Audit Program

Review of Councils Financial Statements (presented to the Audit Committee in August 2015)

Satisfactory Reporting complies with legislation

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KPI’s (Enterprise Agreement (EA) implementation)

Audit reviewed the achievement of the Individual staff members KPI’s concerning sick leave in August 2015 and presented the findings to the General Manager.

Satisfactory The calculation of KPI’s were found to be accurate.

Governance Health Check In September 2015 a preliminary review was undertaken of the Councils Governance processes using the Governance Health check developed by the LGMA/ICAC. This process has resulted in the development of an action plan that will be implemented in the period to April 2016 to reflect best practice. Part of the implementation of this plan is the reinstatement of ‘Governance Month’ in February 2016 which is aimed at raising the awareness of Council staff concerning their governance obligations as public sector employees. Once the action plan is implemented Audit will revisit the preliminary review results (April 2016). The final results will be reported to the audit committee.

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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.

The Audit recommendations outstanding (including Management Comments) at 30 June 2015 are listed at Attachment 3.

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 or follow up to ensure that key controls remain in place.

D1.1 Reports issued to 1 November 2015 where recommendations are still to be implemented:

Reports Year Report Issued Expected Closure Timeframe

IT 2014/15 1/12/2015 (revised)

Long Day Care 2015 31/1/2016

Library 2015 31/12/2015

Assets (2015) 2014/15 31/12/2015 (Revised)

WHS (2015) 2014/15 30/11/2015 (Revised)

Mobile Phones (2015) 2015 31/12/2015

Governance Health Check (2015)

2015 30/4/2016

Risk Management 2015 28/2/2016

D1.2 Reports issued where recommendations have been implemented in the period to 1 November 2015:

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

Reports Year Report Issued Closure Timeframe

Project Management 2015 30/8/2015

Purchasing and Contract Management (2015)

2015 30/8/2015

Governance Health Check (2015)

2014/15 30/6/2015

Cemetery 2014/15 30/6/2015

IT Disaster Recovery Plan testing

2014/15 30/6/2015

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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.

9 or 32% of the audits listed in the Strategic Internal Audit Annual Plan for

2015/16 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 988 Audit recommendations agreed with Management 98% (or 967) have been implemented. Timeframes for the remaining outstanding recommendations are currently being followed up. These outstanding recommendations are detailed at Attachment 3.

On average the number of days between the end of fieldwork to the issue of the final audit reports is approximately 10 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 1 November 2015, 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 96% of the total days available.

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

In the 2015/16 period to date the Audit Committee has met once. The meeting time was:

18 August 2015

The Audit Committee membership and the number of meetings attended in 2015/16 (to date) are as follows (in alphabetical order):

Mr M. Blair: 1

Mr T Bland: 1

Mayor: 1

Clr A. J. Hay OAM: 1

Clr Dr J. N. Lowe: 1

Adjunct Professor Jim Taggart OAM: 0

Clr M. G. Thomas: 1

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Attachment 1

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

Background

1. 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, where in place, the Internal Audit unit is typically made up of 1 or 2 members. Within THSC the Internal Audit Unit consists of the Internal Auditor. Projects are often undertaken with the assistance of the Risk Management Coordinator.

2. 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.

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 he community.

The current members of the Audit Committee are: The Mayor, Clr AJ Hay (OAM), Clr Dr JN Lowe, Clr MG Thomas, Mr Michael Blair, Mr Trevor Bland and Adjunct Professor Jim Taggart (OAM). Every 4 years the Council undertakes an EOI to obtain interests from suitably qualified community members to be part of the Audit Committee. The functions, powers and accountabilities of the Audit Committee are outlined in the Audit Committee Charter that has been adopted by Council.

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3. 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 release only approximately 20% of Councils had an Internal Audit function).

4. The Strategic Audit Plan

As identified at 3.5 of the DLG Internal Audit 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 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 18 month Strategic Plan (2015 – 2016) was adopted by the Audit Committee on 25 June 2015. The audit plan covers the period from 1 July 2015 to 31 December 2016 to allow the plan to align with the term of Council.

5. 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.

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Attachment 2

THSC Risk Matrix

The Councils 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 37


Att

ach

men

t 3

List

an

d S

tatu

s of

Ou

tsta

nd

ing

Au

dit

Rec

omm

end

atio

ns

agre

ed w

ith

Man

agem

ent

at 1

Nov

emb

er 2

01

5:

Rat

ing

s fo

r A

ud

it R

ecom

men

dat

ion

s

Ver

y H

igh

Ris

k (E

xtre

me)

Com

plet

e re

med

ial a

ctio

n w

ithin

2 w

eeks

or

earlie

r as

req

uire

d.

Hig

h Ris

k

Com

plet

e re

med

ial a

ctio

n w

ithin

1 c

alen

dar

mon

ths

or a

s ag

reed

Mod

erat

e Ris

k

Com

plet

e re

med

ial a

ctio

n w

ithin

3 c

alen

dar

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

mon

ths

or a

s ag

reed

Rec

onci

liati

on

of

Ou

tsta

nd

ing

Au

dit

Rec

omm

end

atio

ns

at 1

No

vem

ber

20

15

Dat

e of

In

tern

al

Au

dit

Rep

ort

Tot

al

Rec

omm

end

atio

ns

rais

ed b

y A

ud

it s

ince

20

05

(B

rou

gh

t Fo

rwar

d)

Rec

omm

end

atio

ns

Rai

sed

in

th

e p

erio

d

To

tal

Tot

al

Rec

omm

end

atio

ns

imp

lem

ente

d

by

Man

agem

ent

sin

ce 2

00

5

(Bro

ug

ht

Forw

ard

)

Rec

omm

end

atio

ns

Imp

lem

ente

d

in t

he

per

iod

T

otal

B

alan

ce

Ou

tsta

nd

ing

-

bei

ng

m

onit

ored

b

y In

tern

al A

ud

it

30 J

une

2014

92

0

90

4 16

30 S

epte

mbe

r 20

14

920

11

931

904

18

922

9

31 M

arch

201

5 93

1 26

95

7 92

2 20

94

2 15

30 M

ay 2

015

957

10

967

942

13

955

12

30 J

une

2015

96

7 11

97

8 95

5 6

961

17

1 N

ovem

ber

2015

97

8 10

98

8 96

1 6

967

21

Attachment 3

PAGE 38


Au

dit

Ob

serv

atio

ns

Eff

ect

Ris

k R

atin

g

Rec

omm

end

atio

n

and

ag

reed

Act

ion

Pla

n

Res

pon

sib

le

Man

ager

To

be

imp

lem

ente

d b

y d

ate:

S

tatu

s at

3

0

Jun

e 2

01

5

W

HS

1-4

Imp

lem

enta

tio

n

of

agre

ed

acti

ons

con

cern

ing

th

e:

Up

da t

e o

f W

HS

Pol

icy

av

aila

ble

to

the

Com

mun

ity

and

Sta

ff o

n th

e W

eb a

nd I

ntra

net.

P

lan

nin

g,

Iden

tifi

cati

on

of

h

azar

ds,

as

sess

men

t an

d

con

tro

l (P

IAC

) of

ris

ks V

olun

teer

an

d C

ontr

acto

r in

duct

ion

chec

klis

ts

conc

erni

ng t

he P

IAC (

of r

isks

) ha

s no

t be

en fin

alis

ed a

nd im

plem

ente

d.

Leg

al

and

O

ther

R

equ

irem

ents

Th

e C

ounc

il is

in

th

e pr

oces

s of

im

plem

entin

g a

new

in

tern

et

and

intr

anet

. U

ntil

the

new

sy

stem

is

im

plem

ente

d,

the

info

rmat

ion

avai

labl

e in

th

e cu

rren

t sy

stem

is

not

bein

g up

date

d.

Man

agem

ent

of

Lice

nce

s/

cert

ific

ates

of

cu

rren

cy/

re

gis

trat

ion

Key

req

uire

men

ts a

re n

ot l

inke

d to

Rol

e st

atem

ents

(st

aff)

or

cont

ract

s.

Not

act

ivel

y m

anag

ed.

Info

rmat

ion

prov

ided

to

C

ontr

acto

rs,

Vol

unte

ers

and

staf

f on

the

Web

may

be

differ

ent

to t

hat

avai

labl

e by

Sta

ff (

Intr

anet

) w

hich

may

cau

se c

onfu

sion

and

inco

nsis

tent

pr

actic

es t

o be

put

in p

lace

.

Prac

tices

im

plem

ente

d by

Con

trac

tors

and

Cou

ncils

Vol

unte

ers

may

not

be

cons

iste

nt

with

C

ounc

ils

requ

irem

ents

, ex

posi

ng

Cou

ncil

and

the

Con

trac

tor/

Vol

unte

er

to

unne

cess

ary

risk

s an

d im

prop

er c

ontr

ol.

In

effe

ctiv

e pr

actic

es

conc

erni

ng

upda

ting

docu

men

tatio

n ap

pear

to

be in

pla

ce.

Qua

lific

atio

ns m

ay b

e ou

t of

dat

e

M

Upd

ate

the

Cou

ncils

pol

icy.

C

ompl

ete

and

impl

emen

t th

e Vol

unte

er

and

Con

trac

tor

indu

ctio

n ch

eckl

ists

. Im

plem

ent

the

intr

anet

and

en

sure

th

at

info

rmat

ion

on

the

intr

anet

is u

p to

dat

e.

Man

age

Lice

nces

/ ce

rtifi

cate

s of

cu

rren

cy/

regi

stra

tion.

WH

S

Coo

rdin

ator

30 J

une

2015

Exte

nded

to

30 S

epte

mbe

r 20

15

as C

ounc

ils i

ntra

net

has

not

been

im

plem

ente

d at

30

June

201

5.

Exte

nded

to

30

N

ovem

ber

as

Cou

ncils

in

tran

et

has

not

been

fu

lly im

plem

ente

d.

In p

rogr

ess*

A

ud

it:

Ass

ets

PAGE 39


Au

dit

Ob

serv

atio

ns

Eff

ect

Ris

k R

atin

g

Rec

omm

end

atio

n

and

ag

reed

Act

ion

Pla

n

Res

pon

sib

le

Man

ager

To

be

imp

lem

ente

d b

y d

ate:

S

tatu

s at

3

0

Jun

e 2

01

5

5

The

key

refe

renc

e m

ater

ial

conc

erni

ng m

aint

enan

ce o

pera

tions

is

th

e m

aint

enan

ce

oper

atio

ns

man

ual.

This

w

as

last

up

date

d in

20

04

and

refe

rs

to

prac

tices

th

at

the

Cou

ncil

no lo

nger

has

in p

lace

.

No

cons

iste

nt

up

to

date

an

d ac

cura

te

info

rmat

ion

mad

e av

aila

ble

to

the

oper

atio

ns t

eam

mea

ning

tha

t in

cons

iste

nt

deci

sion

mak

ing

is o

ccur

ring

– i

ncre

asin

g th

e pu

blic

liab

ility

ris

k of

Co u

ncil.

M

Man

ual

to

be up

date

d an

d di

stribu

ted

to

rele

vant

te

ams

and

Ris

k M

anag

emen

t

Exec

utiv

e In

fras

truc

tur

e M

anag

er

30 J

une

2015

Exte

nded

to

30 S

epte

mbe

r 20

15

as

curr

ently

a

rest

ruct

ure

is

occu

rrin

g in

the

Ope

ratio

ns T

eam

w

hich

is

re

spon

sibl

e fo

r th

e m

aint

enan

ce m

anua

l.

Mai

nten

ance

man

ual

has

upda

ted.

Tr

aini

ng

and

impl

emen

tatio

n of

th

e M

anua

l is

now

occ

urring

. Th

is

shou

ld

be

com

plet

ed

by

31

Dec

embe

r 20

15.

In p

rogr

ess

In

form

atio

n T

ech

nol

ogy/

Man

agem

ent

6

Cou

ncil

does

not

hav

e in

pla

ce a

n in

form

atio

n m

anag

emen

t st

rate

gy

to e

nsur

e th

at t

he C

orpo

rate

rec

ord

is c

ompl

ete.

The

inc

reas

ed u

se o

f au

xilia

ry

syst

ems

resu

lts

in

a gr

eate

r am

ount

of

co

rpor

ate

info

rmat

ion

bein

g st

ored

in

th

ese

syst

ems

whi

ch

may

no

t be

in

tegr

ated

w

ith

the

corp

orat

e sy

stem

.

Cou

ncils

co

rpor

ate

reco

rds

may

no

t be

co

mpl

ete

M

Dev

elop

an

in

form

atio

n m

anag

emen

t st

rate

gy

and

ensu

re

that

it

is

impl

emen

ted

Man

ager

IT

30 J

une

2015

Exte

nded

to

30 S

epte

mbe

r 20

15

as

a re

stru

ctur

e is

cu

rren

tly

occu

rrin

g in

th

e in

form

atio

n m

anag

emen

t te

am r

espo

nsib

le f

or

info

rmat

ion

man

agem

ent.

1/12

/201

5

Res

truc

ture

cu

rren

tly

bein

g im

plem

ente

d an

d re

crui

tmen

t pr

oces

ses

bein

g un

dert

aken

. W

ill

follo

w

up

as

part

of

th

e In

form

atio

n M

anag

emen

t re

view

In p

rogr

ess

P

urc

has

ing

7

Min

or

upda

tes

requ

ired

to

th

e pu

rcha

sing

gu

idel

ine

and

variat

ion

wor

kflo

w

to

ensu

re

that

th

ey

are

accu

rate

an

d re

flect

th

e cu

rren

t st

ruct

ure

in C

ounc

il.

Will

en

sure

co

nsis

tent

pr

actic

es

are

in

plac

e ac

ross

Cou

ncil.

L

Upd

ate

the

Purc

hasi

ng

Gui

delin

e an

d va

riat

ion

wor

kflo

w

Chi

e f

Fina

nce

Offic

er

30 J

une

2015

–

Exte

nded

to

30 A

ugus

t 20

15.

Com

plet

ed A

ugus

t 20

15

PAGE 40


Au

dit

Ob

serv

atio

ns

Eff

ect

Ris

k R

atin

g

Rec

omm

end

atio

n

and

ag

reed

Act

ion

Pla

n

Res

pon

sib

le

Man

ager

To

be

imp

lem

ente

d b

y d

ate:

S

tatu

s at

3

0

Jun

e 2

01

5

Li

bra

ry

8

-1

2

Sec

uri

ty

revi

ews

for

the

Libr

ary

(and

Lon

g D

ay C

are)

out

lined

dra

ft

reco

mm

enda

tions

to

be

add

ress

ed

by t

he C

ounc

il. A

t th

e tim

e of

aud

it th

e re

com

men

datio

ns w

ere

still

to

be

agre

ed

by

man

agem

ent/

impl

emen

ted.

Aud

it to

und

erta

ke a

sep

arat

e ca

sh

han

dli

ng

re

view

du

e to

de

ficie

ncie

s id

entif

ied

in

the

cash

ha

ndlin

g pr

oced

ures

at

th

e Li

brar

ies.

Aud

it to

re

view

th

e pr

ojec

t m

anag

emen

t of

th

e re

pla

cem

ent

AM

LIB

sys

tem

to

ensu

re t

hat

key

defic

ienc

ies

with

the

cur

rent

sys

tem

ar

e ad

dres

sed

by t

he r

epla

cem

ent

syst

em.

Aud

it to

rev

iew

the

agr

eem

ent

with

th

e ex

tern

al

even

t bo

okin

g co

mpa

ny

and

follo

w

up

on

the

cour

ier

qu

otat

ion

pro

cess

tha

t is

cu

rren

tly b

eing

und

erta

ken.

Aud

it to

rev

iew

the

upd

ated

lib

rary

st

rate

gic

pla

n,

once

com

plet

ed.

The

impl

emen

tatio

n of

ap

prop

riat

e se

curity

pro

cess

es i

s a

key

aspe

ct o

f th

e C

ounc

ils r

isk

miti

gatio

n st

rate

gy.

Det

erm

ine

the

frau

d risk

con

cern

ing

cash

ha

ndlin

g.

Ensu

re t

hat

the

defic

ienc

ies

in t

he c

urre

nt

syst

em

(inc

ludi

ng

inef

ficie

ncy)

ar

e ad

dres

sed

in t

he r

epla

cem

ent

syst

em.

Ensu

re

that

th

e ag

reem

ent

is

appr

opriat

ely

appr

oved

an

d m

itiga

te

Cou

ncils

con

trac

t risk

. En

sure

tha

t st

rate

gic

docu

men

tatio

n is

in

plac

e.

M

Aud

it to

un

dert

ake

agre

ed

Act

ions

Rel

evan

t se

rvic

e M

anag

ers,

In

tern

al

Aud

it.

Libr

ary

Coo

rdin

ator

, In

tern

al

Aud

it Li

brar

y C

oord

inat

or

Libr

ary

Coo

rdin

ator

, In

tern

al

Aud

it Li

brar

y C

oord

inat

or

31 D

ecem

ber

2015

31 D

ecem

ber

2015

31 D

ecem

ber

2015

30 A

ugus

t 20

15 (

Com

plet

ed)

30 J

une

2016

In p

rogr

ess

Lo

ng

Day

Car

e

13

Reg

ular

con

dit

ion

rev

iew

s do

not

ap

pear

to

be

un

dert

aken

of

to

ys

and

asse

ts.

Toys

and

ass

ets

may

req

uire

mai

nten

ance

or

rep

lace

men

t. P

oor

cond

ition

may

be

a in

crea

se

the

risk

of

in

jury

to

st

aff

and

child

ren.

M

Rev

iew

s to

be

un

dert

aken

an

nual

ly.

Man

ager

, Lo

ng

Day

C

are

and

Hill

s Com

mun

ity

Car

e.

31 J

anua

ry 2

016.

In P

rogr

ess

PAGE 41


Au

dit

Ob

serv

atio

ns

Eff

ect

Ris

k R

atin

g

Rec

omm

end

atio

n

and

ag

reed

Act

ion

Pla

n

Res

pon

sib

le

Man

ager

To

be

imp

lem

ente

d b

y d

ate:

S

tatu

s at

3

0

Jun

e 2

01

5

14

Con

flic

t of

In

tere

st

docu

men

tatio

n ne

eded

to

be

up

date

d.

Cou

ncils

cod

e of

con

duct

req

uire

men

ts n

ot

i n p

lace

.

M

Sta

ff

mem

ber

to

com

plet

e C

OI

docu

men

tatio

n M

anag

er,

Long

D

ay

Car

e an

d H

ills

Com

mun

ity

Car

e.

30 A

ugus

t 20

15.

Com

plet

ed –

Con

trac

tor

no lo

nger

use

d

15

The

Ser

vice

s S

trat

egic

P

lan

w

as

not

revi

ewed

by

Aud

it as

the

pla

n is

cu

rren

tly b

eing

upd

ated

.

Str

ateg

ic d

irec

tion

not

clea

r or

aut

horise

d.

M

Upd

ate

the

serv

ices

st

rate

gic

plan

M

anag

er,

Long

D

ay

Car

e an

d H

ills

Com

mun

ity

Car

e.

31 J

anua

ry 2

016.

C

ompl

eted

– S

epte

mbe

r 20

15

16

Gra

nts

Man

agem

ent:

Dur

ing

the

period

th

e se

rvic

e ha

s re

ceiv

ed a

gran

t fr

om t

he D

epar

tmen

t of

Soc

ial

Ser

vice

s re

latin

g to

the

Lon

g D

ay

Car

e Pr

ofes

sion

al

Dev

elop

men

t Pr

ogra

mm

e.

The

revi

ew

of

the

expe

nditu

re i

n Fi

nanc

e 1

does

not

ap

pear

to

cl

early

iden

tify

fund

s sp

ent

conc

erni

ng

gran

t vs

op

erat

iona

l exp

endi

ture

.

Gra

nt

requ

irem

ents

no

t in

pl

ace

whi

ch

may

res

ult

in t

he r

etur

n of

gra

nt m

onie

s

M

Mai

ntai

n ac

cura

te r

ecor

ds o

f th

e us

e of

the

gra

nt m

onie

s an

d en

sure

th

at

tran

sfer

s ar

e un

dert

aken

pe

riod

ical

ly

betw

een

rest

rict

ed

and

oper

atio

nal f

unds

Man

ager

, Lo

ng

Day

C

are

and

Hill

s Com

mun

ity

Car

e.

30 S

epte

mbe

r 20

15

Com

plet

ed –

Sep

tem

ber

2015

P

roje

ct M

anag

emen

t

17

Doc

umen

tatio

n in

Cou

ncils

co

rpor

ate

syst

em

conc

erni

ng

proj

ects

was

not

com

plet

e.

Sup

port

ing

docu

men

tatio

n an

d Cou

ncils

co

rpor

ate

reco

rd is

not

com

plet

e

M

All

rele

vant

do

cum

ents

be

pl

aced

in

th

e C

ounc

ils

Cor

pora

te R

ecor

d.

Rel

evan

t Pr

ojec

t M

anag

ers

30 A

ugus

t 20

15.

Com

plet

ed

– re

leva

nt

docu

men

tatio

n pl

aced

in

to

the

corp

orat

e sy

stem

G

over

nan

ce H

ealt

h C

hec

k

PAGE 42


Au

dit

Ob

serv

atio

ns

Eff

ect

Ris

k R

atin

g

Rec

omm

end

atio

n

and

ag

reed

Act

ion

Pla

n

Res

pon

sib

le

Man

ager

To

be

imp

lem

ente

d b

y d

ate:

S

tatu

s at

3

0

Jun

e 2

01

5

18

A p

relim

inar

y re

view

of

the

Cou

ncils

go

vern

ance

pro

cess

es h

as id

entif

ied

gaps

in

dica

ting

that

be

st

prac

tice

curr

ently

not

in

plac

e. B

est

prac

tice

requ

irem

ents

are

doc

umen

ted

in a

n ac

tion

plan

tha

t w

ill b

e im

plem

ente

d in

ear

ly 2

016.

Gov

erna

nce

stru

ctur

es

supp

ortin

g th

e C

ounc

ils a

ctiv

ities

may

not

be

effe

ctiv

e.

M

Impl

emen

t th

e ag

reed

20

15/1

6 go

vern

ance

ac

tion

plan

Rel

evan

t Pr

ojec

t M

anag

ers

Apr

il 20

16

In p

rogr

ess

M

ob

ile P

ho

nes

19

- 23

The

proc

esse

s an

d pr

actic

es

invo

lved

in

th

e m

anag

emen

t of

m

obile

ph

ones

an

d th

e re

imbu

rsem

ent

of

priv

ate

usag

e w

as

unec

onom

ical

, in

effic

ient

an

d in

effe

ctiv

e

New

pr

oces

ses

and

proc

edur

es

impl

emen

ted

from

Oct

ober

201

5.

M

Priv

ate

use

reim

burs

emen

t be

fol

low

ed u

p to

Sep

tem

ber

2015

.

With

the

int

rodu

ctio

n of

the

ne

w c

appe

d pl

an,

supp

ortin

g pr

oced

ural

an

d us

age

agre

emen

ts

wou

ld

be

upda

ted

and

dist

ribu

ted.

One

se

t of

re

cord

s w

ill

be

mai

ntai

ned

of

the

mob

ile

phon

es o

wne

d by

Cou

ncil

Aud

it w

ill r

evie

w t

he p

hone

bi

lls m

onth

ly t

o en

sure

tha

t da

ta u

sage

is n

ot e

xcee

ded.

Aud

it w

ill

revi

ew

the

econ

omy

of t

he n

ew p

roce

ss

one

intr

oduc

ed

and

repo

rt

the

findi

ngs

to t

he G

ener

al

Man

ager

an

d Aud

it C

omm

ittee

.

Fina

nce,

In

form

atio

n tech

nolo

gy

and

Inte

rnal

Aud

it

31 D

ecem

ber

2015

.

In p

rogr

ess

R

isk

Man

agem

ent

(Bu

sin

ess

Co

nti

nu

ity

Pla

n a

nd

Em

erg

ency

Pla

nn

ing

)

PAGE 43


Au

dit

Ob

serv

atio

ns

Eff

ect

Ris

k R

atin

g

Rec

omm

end

atio

n

and

ag

reed

Act

ion

Pla

n

Res

pon

sib

le

Man

ager

To

be

imp

lem

ente

d b

y d

ate:

S

tatu

s at

3

0

Jun

e 2

01

5

24

- 29

For

Bus

ines

s Con

tinui

ty:

1)

The

Crisi

s M

anag

emen

t Te

am

carr

y ou

t th

e an

nual

tr

aini

ng

exer

cise

For

Emer

genc

y Pl

anni

ng:

1) A

Dia

gram

is

requ

ired

for

Con

nie

Ave

an

d Bui

ldin

g 15

(H

ills

Com

mun

ity

Car

e at

Bau

lkha

m

Hei

ghts

Est

ate)

.

2)

Emer

genc

y M

anag

emen

t Pl

ans

are

requ

ired

fo

r Con

nie

Ave

an

d Bui

ldin

g 15

(H

ills

Com

mun

ity C

are

at B

aulk

ham

Hei

ghts

Est

ate)

. N

ote

– An

emer

genc

y pl

an is

not

req

uire

d fo

r G

ibbo

n Roa

d as

the

fac

ility

is n

ot

unde

r th

e ca

re &

con

trol

of TH

SC.

3) P

lan

and

impl

emen

t em

erge

ncy

resp

onse

tra

inin

g fo

r th

e Chi

ld C

are

Cen

tre,

Lib

raries

, W

orks

hop,

Con

nie

Ave

, Bau

lkha

m H

eigh

ts (

HC

C)

and

any

othe

r fa

cilit

y w

here

st

aff

are

empl

oyed

.

4) R

evie

w t

he e

vacu

atio

n di

agra

ms

in

the

Cou

ncil

hire

d fa

cilit

ies

and

plan

and

im

plem

ent

to u

pdat

e th

e ex

istin

g di

agra

ms

to

the

curr

ent

stan

dard

.

Ensu

re

that

th

e C

ounc

ils

Bus

ines

s Con

tinui

ty P

lan

and

Emer

genc

y Pl

anni

ng is

up

to

date

and

ref

lect

cur

rent

sta

ndar

ds

and

has

been

tes

ted,

miti

gatin

g th

e risk

to

Cou

ncil

oper

atio

ns

of

busi

ness

in

terr

uptio

n.

M

1).

Ann

ual

Trai

ning

sc

h edu

led

for

3/12

/201

5

2) T

he F

acili

ties

Ope

ratio

ns

Man

ager

is

to

und

erta

ke a

te

nder

pr

oces

s fo

r th

e de

liver

y of

di

agra

ms

and

trai

ning

.

Bus

ines

s Con

tinui

ty

Team

Fa

cilit

ies

Ope

ratio

ns

Man

ager

31 D

ecem

ber

2015

.

28/2

/201

6

In p

rogr

ess

PAGE 44


PAGE 45

ITEM-3 GENERAL MANAGER'S EXPENSES DOC INFO


OUTCOME: 2 Prudent management of financial resources, assets and people to deliver the community outcomes

STRATEGY: 2.2 Maintain a strong financial position that supports the delivery of services and strategies and ensures long term financial sustainability.




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 18 August 2015 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 $2,190.44) be noted. ATTACHMENTS Nil.

AUDIT COMMITTEE MEETING 01 DECEMBER, 2015 ITEM-4 QUESTIONS AND ANSWERS - AUDIT COMMITTEE

MEETING - 18 AUGUST 2015


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 18 August 2015. 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 of Council ensures that Council maintains sound governance based on transparency and accountability. RECOMMENDATION The report be received. ATTACHMENTS 1. Questions & Answers – Audit Committee 18 August 2015.

PAGE 46


ATTACHMENT 1

COUNCILLORS QUESTIONS WITHOUT NOTICE

MEETING 18 AUGUST 2015

MINUTE NO.

QUESTION REFERRED TO

44 AUDIT COMMITTEE BUSINESS PAPERS

GENERAL MANAGER

Mr Michael Blair asked if the External Audit Committee Members could get a more prompt delivery of the Audit Committee Business Papers as it is quite difficult to read a complex document when the Business Papers arrived at 5pm yesterday. The General Manager apologised for the delay and advised that future Audit Committee Business Papers will be hand-delivered before the meeting.

RESPONSE Answered at meeting. MINUTE NO.

QUESTION REFERRED TO

45 ADVICE FROM OFFICE OF LOCAL GOVERNMENT IN REGARDS TO REMOVING ALL EXTERNAL AUDITORS FROM CONDUCTING THE AUDITS OF COUNCILS INTO THE FUTURE

GENERAL MANAGER

Councillor Hay OAM asked if the General Manager had received any advice from the Office of Local Government in regards to removal of all External Auditors from conducting the audits of Councils into the future and about the consultation period between October and December this year which is to commence on the rewriting of the Local Government Act and the removal of external auditors. The General Manager advised that he had not received any advice from the Office of Local Government regarding this matter.

RESPONSE Copy received from Clr Hay.

PAGE 47

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