audit committee meeting - the hills shire · minutes of the duly convened audit committee meeting...

Audit Committee Meeting

Thursday, 02 June 2016

THE HILLS SHIRE CO

UNC

IL

AUDIT COMMITTEE MEETING 02 JUNE, 2016 ITEM SUBJECT PAGE ITEM-1 CONFIRMATION OF MINUTES

ITEM-2 INTERNAL AUDIT REPORT 7

ITEM-3 GENERAL MANAGER'S EXPENSES 41

MINUTES of the duly convened Audit Committee Meeting of The Hills Shire Council held in the Council Chambers Baulkham Hills on 17 March 2016 ITEM SUBJECT PAGE ITEM-1 CONFIRMATION OF MINUTES 3

ITEM-2 INTERNAL AUDIT REPORT 3

ITEM-3 GENERAL MANAGER'S EXPENSES 3

ITEM-4 QUESTIONS AND ANSWERS - AUDIT COMMITTEE MEETING - 1 DECEMBER 2015

4

This is Page 1 of the Minutes of the Audit Committee Meeting of The Hills Shire Council held on 17 March 2016

MINUTES of the duly convened Audit Committee Meeting of The Hills Shire Council held in the Council Chambers Baulkham Hills on 17 March 2016

PRESENT

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

IN ATTENDANCE

Mr Dave Walker – General Manager Ms Kerrie Wilson – Internal Auditor Mr Dennis Banicevic – External Auditor, PricewaterhouseCoopers

APOLOGIES

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

TIME OF COMMENCEMENT

7.03pm

TIME OF COMPLETION

7.49pm

DECLARATIONS OF INTEREST

Nil.

ARRIVALS AND DEPARTURES

Nil.

DISSENT FROM COUNCIL'S DECISIONS

Nil.

ADJOURNMENT & RESUMPTION

Nil.


MINUTES of the duly convened Audit Committee Meeting of The Hills Shire Council held in the Council Chambers Baulkham Hills on 17 March 2016 ITEM-1 CONFIRMATION OF MINUTES A MOTION WAS MOVED BY MR TREVOR BLAND AND SECONDED BY MR MICHAEL BLAIR THAT the Minutes of Audit Committee Meeting held on 1 December 2015 be confirmed. THE MOTION WAS PUT AND CARRIED.

RESOLUTION

The Minutes of the Audit Committee Meeting held on 1 December 2015 be confirmed. APOLOGIES A MOTION WAS MOVED BY MICHAEL BLAIR AND SECONDED BY COUNCILLOR THOMAS THAT the apologies from Councillor Dr Lowe, Councillor Hay OAM and Adjunct Professor Jim Taggart OAM be accepted and leave of absence granted. THE MOTION WAS PUT AND CARRIED.

RESOLUTION

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

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

RESOLUTION

The report be received.

ITEM-3 GENERAL MANAGER'S EXPENSES A MOTION WAS MOVED BY MR MICHAEL BLAIR AND SECONDED BY MR TREVOR BLAIR THAT the Recommendation contained in the report be adopted.

RESOLUTION

1. The report be received. 2. The expenses tabled (which outlines a total of $246.90) be noted.


MINUTES of the duly convened Audit Committee Meeting of The Hills Shire Council held in the Council Chambers Baulkham Hills on 17 March 2016 ITEM-4 QUESTIONS AND ANSWERS - AUDIT COMMITTEE

MEETING - 1 DECEMBER 2015

A MOTION WAS MOVED BY COUNCILLOR THOMAS AND SECONDED BY MR TREVOR BLAND THAT the Recommendation contained in the report be adopted.

RESOLUTION

The report be received. The Minutes of the above Meeting were confirmed at the Meeting of the Council held on 12 April 2016.

MAYOR GENERAL MANAGER


AUDIT COMMITTEE MEETING 02 JUNE, 2016

ITEM-2 INTERNAL AUDIT REPORT DOC INFO

THEME: Proactive Leadership

OUTCOME: 3 Sound governance based on transparency and accountability.

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

MEETING DATE: 2 JUNE 2016

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 March 2016 to 1 May 2016. IMPACTS Financial This matter has no direct financial impact upon Council's adopted budget or forward estimates.

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AUDIT COMMITTEE MEETING 02 JUNE, 2016 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 (32 Pages)

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ATTACHMENT 1

Internal Audit Report

At 1 May 2016

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Part A: Executive Summary

Audit Activity to 1 May 2016

From 1 July 2015 Audit has been addressing 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 to 1 May 2016, Internal Audit has completed 89% or 25 of its planned 28 audits.11% or 3 of the planned audits are currently in progress and are discussed at C3. It is expected that the 2015/16 Audit Plan will be completed within budget.

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

Civic Events

Payroll

Cash and Cash Related Activities

Revenue Activities

As outlined in the last Internal Audit Report to the Audit Committee, the Council is currently in the process of delivering code of conduct training to all staff. This training is aimed at reinforcing Councils governance requirements and will be completed by 31 May 2016.

For the Information of the Committee

Amalgamation Activity

On 12/5/2016 it was announced that the Council would not merge with Hawkesbury Council but would be subject to a boundary change that would result in suburbs (including assets) essentially below the M2 being transferred to the City of Parramatta.

The Council is currently in the process of meeting this obligation.

As a result of the boundary change the term of the current Council is extended to September 2017.

ICAC review of Botany Bay Council

As outlined at C1.1 the public enquiry being held as part of this investigation is currently adjourned. It is expected to recommence on 3 June 2016 for approximately one week.

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

The Structure of the Internal Audit Report is as follows:

A: Executive Summary;

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 March 2016;

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

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

B.1 Summary

Within the Hills Shire Plan (Operational Plan 2015-16 – Year 3 of Plan) the output of Internal Audit is to:

Implement the Internal Audit Strategic Plan and the Annual Internal Audit Program adopted by the Audit Committee.

The targeted performance measure is:

Audits Completed in the Annual Audit Program

90%

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

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

To monitor the achievement of the adopted audit plan Table 1 provides the Audit Committee with an overview and comparison of the planned 2015/16 Audit Activity with the actual audit activity undertaken to the date of this report. The current status of each audit is also provided.

Legend to the Table 1.

Status of the Audit Activity

In progress

Completed

Not yet commenced

Chart 1: Summary of Table 1:

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Table 1: Comparison of Audit Activity with planned Audit activity outlined in the adopted Internal Audit Strategic Plan

RiskStatus of the Audit item

at

2015/16 Audit Plan 1/3/2016

1. Governance Structures/Code Of Conduct HCompleted –17/3/2016Internal Audit Report

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

Completed –17/3/2016Internal Audit Report

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

Completed –1/12/15 Internal Audit Report

4. Risk Management (Fraud and Corruption mitigation strategy) M

Completed –1/12/15 Internal Audit Report.Refer C1.1

5. KPI’s (Enterprise Agreement (EA) implementation) MCompleted –1/12/15 Internal Audit Report

6. Resolutions HCompleted –1/12/15 Internal Audit Report

7. GIPA legislation MCompleted –1/12/15 Internal Audit Report

8. Grants management/ Use of restricted funds MCompleted –17/3/2016Internal Audit Report

Special Projects/Assignment H

9. Special Projects/Assignment 1

Audit Committee 25/6/2015 request:

Review Civic Events Management H Refer C1.2


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. H

Completed –1/12/15 Internal Audit Report


Executive Request:

This audit task was brought forward from the 2016 strategic plan at the request of the Executive (10 September 2015):

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. H

Completed –17/3/2016Internal Audit Report

12. Investigations/Advisory H

13. WHS (OHS)M

Completed –17/3/2016

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Internal Audit Report

14. RMS Drives System MCompleted –1/12/15 Internal Audit Report

15. Grant Financial Statements M Various

16. Information Management H For Status refer C3

17. Information Technology H Refer C2.1

18. Asset management – maintenance H Refer C2.2

19. Acquisition/Disposal and management of plant and equipment M For Status refer C3

20. Stormwater/Flood Mitigation strategies and implementation H Refer C2.4

21. Revenue Activities (implementation of adopted fees and charges document) M Refer C1.3

22. Cash and Cash related activities M Refer C1.4

23. Debtors Management MCompleted –17/3/2016Internal Audit Report

24. Payroll H Refer C1.5

25. Contribution Planning – in kind contributions M For Status refer C3

26. Legislation/Regulation HCompleted –17/3/2016Internal Audit Report

27. Ordinance and enforcement/Inspections H Refer C2.3

28. Use of discretion/DAU HCompleted –1/12/15 Internal Audit Report

Administration

Audit Committee

Liaison with LGIAN/External Auditor

Follow up of reports previously issued

Professional Development/training

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Part C. Details of the Internal Audit Activity undertaken in the period from 1 March 2016 to 1 May 2016

Part C. provides details of the Audit Activity undertaken in the period from 1 March 2016 to1 May 2016.

This Part outlines the:

Internal audit engagements completed or in progressOutcomes of each internal audit engagement undertakenThe scope and methodology applicable to each audit activity undertakenRemedial 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 249 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.

a) Investigations and public enquiries in progress

In the period since the last report to the Audit Committee the ICAC have made public the following investigation. Please note that the following extracts are copied directly from the ICAC website.

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2016

Gandangara LALC - allegations concerning chief executive officer and board members (Operation Greer)The ICAC is investigating allegations concerning the Gandangara Local Aboriginal Land Council (GLALC) (Operation Greer), including that, between February 2007 and March 2014, GLALC board members partially exercised their official functions by agreeing to employment arrangements with GLALC CEO Mark Johnson under which his company, Waawidji Pty Ltd, derived benefits from the GLALC.

It is also alleged that Mr Johnson improperly exercised his public official functions, by: between March 2011 and April 2013, authorising the transfer of GLALC funds to Gandangara Future Fund Ltd; between 2009 and 2013, authorising the payment of GLALC funds for the benefit of Deerubbin, Walgett and La Perouse Local Aboriginal Land Councils, and partly for the benefit of Waawidji Pty Ltd; and between 2010 and 2014, claiming the provision of benefits from GLALC for himself or Waawidji Pty Ltd, including money, to which he knew he was not lawfully entitled.

Casino Boolangle LALC – allegations concerning former chief executive officer and former administrative assistant (Operation Nestor)The ICAC is investigating allegations that former Casino Boolangle Local Aboriginal Land Council (CBLALC) chief executive officer, Linda Stewart, and former CBLALC administrative assistant, Veronica Skinner, defrauded the CBLALC between 1 June 2010 and 12 October 2011 by issuing fraudulent invoices and certifying documentation to enable them to cash cheques drawn on the CBLALC bank account for their own benefit.

It is also alleged that, between 13 October 2011 and 5 September 2012, Ms Stewart defrauded the CBLALC by issuing fraudulent invoices and certifying documentation to enable her to cash cheques drawn on the CBLALC bank account for her own benefit. The alleged fraud totalled close to $80,000.

City of Botany Bay Council – allegations concerning former chief financial officer (Operation Ricco)The ICAC is investigating allegations that former City of Botany Bay Council chief financial officer Gary Goodman, and other Council employees, dishonestly exercised official functions to obtain financial benefits for themselves and others by causing fraudulent payments of more than $4.2 million to be made by the Council through false invoicing to either themselves, or various entities. The ICAC is also investigating allegations that Mr Goodman solicited and received payments as an inducement or reward for showing favourable treatment to contractors. It is also alleged that Mr Goodman and other Council employees dishonestly exercised official functions to obtain financial benefits for themselves and others by using Council resources.

The public inquiry being held as part of this investigation is currently adjourned. It is expected to recommence on Friday 3 June 2016 for approximately one week.

2015

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).

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2014

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.

Operations Credo and Spicer directions - December 2015

Operation Credo - Amended Scope and Purpose - 1 April 2014

Operation Spicer - Amended Scope and Purpose - 27 August 2014

Operation Spicer - Amended Scope and Purpose - 12 September 2014

b) 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 2 investigation reports have been issued.

University of Sydney – allegations concerning ICT contractor recruitment (Operation Elgar)The ICAC investigated 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.

In its report on the investigation, made public on 11 May 2016, the Commission makes a finding of serious corrupt conduct against Mr Meeth.

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The Commission is of the opinion that consideration should be given to obtaining the advice of the Director of Public Prosecutions with respect to the prosecution of Canberra Solutions’ Balu Moothedath for various offences.

Mine Subsidence Board – allegations concerning former district manager (Operation Tunic)The ICAC investigated 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 also investigated 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.

In its report on the investigation, made public on 23 March 2016, the Commission makes findings of serious corrupt conduct against Mr Bullock, Mr Inskip, David Salmon of A&DJ Services Pty Ltd and Barbara Inskip. The Commission does not make any findings of serious corrupt conduct in respect of Mr Kendall.

The Commission is of the opinion that consideration should be given to obtaining the advice of the Director of Public Prosecutions with respect to the prosecution of Mr Bullock for various offences.

The ICAC also makes seven corruption prevention recommendations to the MSB to help prevent the recurrence of the conduct exposed in this investigation in the future.

On 17 May the ICAC updated their information concerning Prosecution Briefs and Outcomes. This information is available at the following link:http://www.icac.nsw.gov.au/docman/investigations/general-information-1/4802-icac-prosecution-outcomes-web-table-17-may-2016-fin/file

c) Other

Office of Local Government (OLG) Public Enquiries

The public enquiries that are being undertaken by the OLG are detailed at the following link: http://www.olg.nsw.gov.au/public-inquiries

C 1.2 Civic Events

Audit Number

9

BackgroundThis audit was requested by the Audit Committee (25 June 2015) to be placed on the Audit Program.

On 10/2/2015 Council resolved the following which places into context the strategy undertaken with respect to Councils Civic Events activities:

RESOLUTION

Actions contained in the attached Cultural Action Plan (Summarised above Action 1 to 3) for The Sydney Hills be adopted and funding be considered in the FY 15/16 Budget and forward.

Actions 1 to 3 were:

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ACTION 1

Utilise existing venues to support cultural events.

- Bella Vista Farm

- Balcombe Heights Estate

- Castle Hill Showground

- Castle Grand – Pioneer Room

Bella Vista Farm & Balcombe Heights Estate

Review services and facilities at Bella Vista Farm & Balcombe Heights Estate tobe supportive of cultural events and be listed in the Delivery Program FY 15/16 for consideration.

Castle Hill Showground

In the process of the master planning of the Castle Hill Showground, ensure there are sufficient facilities for cultural events to be held in the precinct.

Castle Grand

Refurbish the Pioneer Room to provide a multi-purpose flexibility of the room while at the same time providing a cultural and theatrical performance venue. The seating capacity is proposed to be 346 (in theatrical mode) and has been estimated at $750,000.

The project will be listed for consideration in the Draft Works program FY 2015– 2016.

ACTION 2

Build Visitor Economy Events

Build Visitor Economy Events to grow the economic return to the shire in slower trading periods. Funding required for this action will be listed for consideration at the March 2015 Strategic Planning Workshop.

ACTION 3

Develop Cultural Experiences

Develop Cultural Experiences through connecting art with our community in spaces where the community are, working with our neighbours in promoting and packaging cultural events and experiences, utilise Main Street and our Heritage precincts for further community engagement in cultural activities. Funding required for this action will be listed for consideration at the March 2015 Strategic Planning Workshop.

Audit Objective Review the management of Civic events provided in the 2015/16 financial year

to date, including the ‘Summer Series’.

Scope Audit reviewed the management of Civic events at March 2016 following the completion of the ‘summer series’ of events. The results were followed up at May 2016.

Method Obtain a complete list of those events provided in the 2015/16 financial year to date, including the ‘Summer Series’;Obtain budget and actual financial information to determine if budgets (expenditure and income) were achieved.Understand the objectives of the Councils Civic Events activitiesReview the contractual arrangements put in place to support the event. Ensure that they are appropriately approved and implemented.Ensure that appropriate documentation is in place concerning the Event.

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Findings The ‘external’ events provided in the 2015/16 financial year (to the date of the review), included:

Australia Day 2016 at the Farm 26/1/2016

Lunar Festival 14/2/2016

Orange Blossom Festival (OBF) 17 and 18/9/2015

1812 Overture Cancelled due to weather

Sydney Country Music Festival 30 and 31 October 2015

Summer Series:

Christmas Sky Show 27/11 to 30/12/2015

Sydney Thunder Fan Day 13/12/2015

Christmas in the Hills Cancelled due to weather

Shakespeare in the Park 19/12/2015 to 5/1/2016 (2 shows cancelled due to weather)

Sydney Hills Water Wonderland 26/12/2015 to 26/1/2016 (5 days closed due to weather)

The Hills City Slider 27/12/2016

NYE Sky Show 31/12/2015

Convict Footprints @ the Farm 8/1/2016 to 17/1/2016

Sydney Hills Outdoor Cinema 15/1/2016 to 14/2/2016

Sydney Hills Twilight Sessions 22/1/2016 – Cancelled due to weather

The budget and actual costs* incurred by council with respect to the Civic Events Program by Council at March and May 2016 was:

JobOriginalBudget

CurrentBudget

(Approved by

Council)

Total ActualTo Date (8/3/16)

Total ActualTo Date (20/5/16)

Australia day-expenses 220,000 220,000 188,377.16 188,426.25Australia Day Contribution & Donation-income (30,001) (10,278) (6,363.64) (10,278.87)Sydney CMF-expenses 450,000 585,000 577,354.33 576,382.19Sydney Country Music Festival-income (250,000) (99,000) (90,228)

(90,228.23)

Summer Series 130,000 149,551 149,767.69149,871.15

Theatre in the Park - expenses 130,000 130,000 90,159.76

90,771.2

Summer Series Marketing 180,000 180,000 73,937.42 140,050.75Events Income-other (30,001) (41737) (39,319)

(58,732.68)

Summer Series- income (50,000) (161416)

(143,285)(161,415.12)

Christmas Projects 400,000 549,941 453,340.92 452,740.92

*Note that these figures refer to external costs incurred (including casuals) only.

Audit reviewed the management of the Sydney Country Music Festival (SCMF),

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Sydney Hills Water Wonderland, Convict Footprints and Sport for Jove (Shakespeare in the Park) in detail.

In summary:

Job

Actual Costs incurred per

Council records*

Revenue received

by Council No of Tickets sold

SCMF 576,382.19 (90,228.23)1966 (note a 2 day

pass= 2 tickets)Sydney Hills Water Wonderland

In kind supportonly ($65,298) Approx. 9000

Convict Footprints$25,000 plus in

kind support ($7,700) 225Shakespeare in the Park - income

$90,159 plus in kind support (70,925.70) 1030

The Civic Events program and budget were approved by Council. Budget variations that have been incurred have also been approved by Council through the budget review process.

With respect to the 3 actions resolved by Council on 10/2/2015 it appears that the Civic Events program does utilise Councils existing venues (Action 1); had the potential to build Visitor Economy visits (Action 2); appears to be aimed at developing Cultural Experiences.

The Actions resolved by Council did not direct the Civic Events program to specifically be financially viable or aimed at maximising THSC community involvement – both directions that appear to be the basis of Audit Committee discussions.

Based on the planning for the 2016/17 summer series it appears that the:

Sport for Jove arrangement (Shakespeare) did meet the required KPI’s as this event is continuing although possibly under an altered arrangement

Convict Footprints did meet the required KPI’s as this event is continuing although possibly under an altered arrangement

SCMF did not achieve the required outcomes, however the market place is being tested to determine whether the event can be continued in a format that limits the financial risk to Council

Water Wonderland and Sydney Hills City Slider did not meet the required KPI’s as these events are not planned to continue in 2016/17.

The exceptions to Councils processes noted in this review were:

Agreements need to be authorised by a person with the appropriate financial delegation.

Variations to the Councils purchasing procedure need to be approved by the General Manager.

Fees and Charges with respect to the Civic Events program must be as outlined in the Councils Fees and Charges document.

A policy concerning the issuing of vouchers, client cash or free tickets needs to be developed and appropriately approved. Currently there is no authority to issue these. Queries raised by the Audit Committee have indicated that a caveat should be used where these tickets are offered to ensure that the recipient does not use the tickets to generate income.

Budget information maintained by the Team is comprehensive but

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should be placed into the Council’s Corporate System (for record management purposes).

KPI’s agreed before the event, should be formally revisited so that the success of the event can be determined and documented for future reference.

Management Comments

The management a number of the planned Civic Events (including the SCMF/ Shakespeare in the Park and Convict Footprints) are to be tendered out/subject to an EOI to mitigate the financial risk to Council. This will indicate the market places perception of the viability of the events as well as result in the determination as to whether the events will be supported by Council.

With respect to these events, the acceptance of a tender by Council would address the findings outlined above concerning the application of the Councils purchasing guideline and delegation instrument.

There are KPI’s in place to determine the success of each event which includes attendance/ the number of attendees that stay overnight in the locality and calculated economic benefit to the Shire. It is anticipated that the success of each event in the future will be determined using these criteria.

Conclusion

For the information of the Audit Committee, the assessment of this audit activity wasconsidered satisfactory given that the actions resolved by Council were addressed, and the program included activities that were budgeted and approved by Council (including variations). Issues concerning the SCMF have been addressed in previous audit committee minutes/memorandums.

Satisfactory Activity within parameters approved by Council

C 1.3 Revenue Activities (implementation of adopted fees and charges document)

Audit Number

21

Background Revenue is made up of: Grants contributions received; Lease income; interest income; staff contributions; Fees and Charges (including regulatory charges and hire charges, other contributions).

At May 2016 the break up was:

Account Class

YTD Revised

Budget (p.a.)

Actual

To Date (10 months)

Actual/

Budget %

3000 - Rates & Annual Charges (97,614,370) (97,568,712.77) 100.11

3100 - User Charges (10,882,215) (9,395,905.45) 87.65

3200 - User Charges Regulatory (10,361,336) (9,881,171.77) 93.97

3300 - Interest Income (5,358,933) (5,086,516.09) 94.45

3400 - Other Revenue (4,648,484) (4,317,459.09) 100.74

3600 - Grants (21,294,023) (14,421,737.05) 67.87

3800 - Contributions (1,463,416) (1,250,433.04) 84.81

Total (151,622,777) (141,921,935)

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ObjectiveTo ensure that the Councils activities are legislatively compliant by ensuring that the Councils adopted fees and charges document is: reflected in Councils systems; and is the basis of Councils revenue activities.

MethodUsing a random number generator Audit selected a sample of revenue accounts to ensure that the fees and charges credited to the account reflected Councils adopted fees and Charges document.

ScopeA review of Councils revenue activities for the 2015/16 financial year to May 2016.

Findings Minor discrepancies were identified as a result of the review, including:

Incorrect fees charged with respect to 4 charges.

These observations have been raised with Finance (and/or the relevant team in Council) and have been addressed.

Agreed Management Action Finance undertakes periodic checks to ensure that the correct fees are being

charged within the Council.

Conclusion

For the information of the Audit Committee, the results of the audit activity (including the actions currently being taken) were considered:

Satisfactory Compliance with adopted fees and charges document.

C 1.4 Cash and Cash related activities

Audit Number

22

Background Goods and services that are purchased by an employee on behalf of Council for work related items may be claimed through a reimbursement. There are restrictions as to what staff will and will not be reimbursed for, and where possible purchasing must be through a purchase order.

The current process for reimbursement of Council expenses incurred by staff (including petty cash) was last updated in August 2015 and is due for review in August 2016.

There are 5 petty cash floats across the organisation with amounts varying from $100 to $1,400. The custodians of these floats are responsible for reconciling and safe keeping of the petty cash float, and they are to ensure that the correct procedures are followed.

The Council also has corporate credit cards issued to staff. The purpose and use of the cards are outlined in the Procurement Cards Procedure last reviewed in March 2014.

The vendor and fuel cards are also referred to in the Procurement Cards procedure.

Audit Objective and Method

The objective of the audit was to determine whether:

a) Authorised staff are approving staff reimbursements and an appropriate segregation of duties is in place

b) Reimbursed expenses are appropriate and in line with the Council policy/procedure

c) Councils purchasing guidelines are met

PAGE 22


The method employed was to review the financial records in Councils finance system concerning reimbursements/office expense accounts/credit and vendor/procurement cards.

Scope Records were reviewed for the financial year to April 2016.

Findings The amount of expenditure across the organisation for staff reimbursements (including petty cash) was consistent for the 2014 and 2015 calendar years. The 2010 figures have been included for reference:

2010 2014 2015

Managers Reimbursements

$60,095 $18,686.96 $10,957.10

Petty Cash $105,535 $15,884.85 $15,913.51

There is however room for improvement with staff understanding their delegated authority and the restrictions around making a claim.

Office expenses accounts appear to be used for its intended purpose.

Councils Corporate Credit cards are issued across the organisation and the expenditure appears in line with the purchasing guideline/procedure for procurements cards. The procedure for procurement cards has not been updated by Finance since 2014.

Purchases using the vendor card were randomly reviewed. There were some instances of Vouchers/invoices were they were not signed/authorised.

Councils fuel cards; motor pass/Caltex were being used as intended.

Agreed Management Action

1) An audit of all petty cash floats is undertaken annually by the Finance Team. Last audit by Finance was undertaken in July 2015 – another should occur in the next 3 months.

2) The procedure concerning the Reimbursement of Council expenses incurred by Staff (including Petty Cash) be distributed to Managers for discussion at their team meetings - in particular discussion should focus on delegations and expenses that require pre approval from the General Manager.

3) Procurement cards procedure (section 8.0) does not reflect the current practice regarding the verification of purchases by the Group Manager/Manager. Procedure last updated March 2014 and needs to be reviewed and updated.

4) Staff who are issued with the procurement card be advised of the requirements of use; the procedure may need updating to reflect the use of the card.

5) Consider increasing the daily spend limit and deleting the monthly spend limit on the vendors card as these are currently not being met in all cases (current limits do not cover legitimate expenditure).

6) Finance actively reviews the petty cash vouchers presented to it to ensure that they satisfy the relevant procedure and are signed by an appropriately delegated officer.

7) Finance to follow up the reimbursement of advances made and floats made available to the Civic Events team.

Conclusion

For the information of the Audit Committee, the results of the audit activity (taking into account the recent action by Management) were considered:

Satisfactory Deficiencies identified in the system were being addressed.

PAGE 23


C 1.5 Payroll

Audit Number

24

Background In the period from 1 April 2015 to 22/3/2016:

Gross Salaries (including payments to Councillors): $46,755,620 Overtime paid: $1,483,649There were approx. 33,251 payroll transactions processed;In the period there were 82 new recruits and 80 terminations.

Audit Objective Ensure:

the integrity of the information on which the payroll is based the security of information, Payments accurately reflect the terms and conditions of employment and Council records are complete, accurate and Council only pays valid employees.Review allowances and overtime paymentsThere is no conflict of interest between Council employees and suppliers (Council employees do not authorise payments where there may be a conflict of interest).

Scope The Audit reviewed Council payroll records for the year from 1 April 2015 to 22 March 2016.

Method Review compliance with key controls within the payroll system.

Tests:

Employees and Vendors

1. Identify matching vendors and employees by bank account2. Identify matching vendors and employees by address

Employee Master

3. Identify employees with missing hire date.4. Identify active and casual employees with hire date older than 12

months.5. Identify duplicate employees by name6. Identify duplicate employees by address7. Identify duplicate employees by TFN8. Identify duplicate employees by bank account

Payroll

9. Identify basic pay changes in the last 12 months (per month) – hourly rate, base salary

10. Identify multiple payments (weekly payments)11. Identify payments to non-employees12. Identify possible duplicate payments13. Identify employees with negative accrued leave.

Other

Long term higher dutiesOvertime payments

Findings Minor exceptions were noted concerning payroll. Further testing of Overtime will be undertaken should it be required.

Agreed Management Action

All matters identified addressed

PAGE 24


Conclusion

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

Satisfactory Compliance issues addressed.

C.2. Other: Audit Activities under in the period since 1 March 2016.

Audits completed:

C2.1 Information Technology (Audit item 17)

Councils IT procedures were reviewed to ensure they were up to date. Minor changes required. All IT procedures are to be reviewed at 30/6/2016.

Business Continuity Testing with respect to Councils IT systems has been undertaken. No issues noted.

C2.2 Asset Management - maintenance (Audit Item 18)

As a result of audit procedures undertaken in 2014/15 the inaccurate and incomplete state of the operations maintenance manual was considered a significant risk to Council.

In December 2015 the Infrastructure Operations team reviewed and updated the maintenance manual which has been progressively implemented since this date. The manual currently incorporates roads and footpaths and is progressively being updated. Training is currently being provided.

C2.3 Ordinance and enforcement/Inspections

As required in the 2015/16 Internal Audit plan a review has been undertaken with the 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.

In December 2015 the NSW Ombudsman released their guidelines ‘Enforcement Guidelines for Councils’. These guidelines were accompanied by a comprehensive model enforcement policy that has been compiled from best practice examples from a number of councils and other relevant agencies.

Once received the guidelines were referred to the Councils compliance area and Councils procedural guidelines were updated by the various teams in April 2016. The updated procedures are available on the Councils website at:

PAGE 25


http://www.thehills.nsw.gov.au/General-Pages/Search-Results?dlv_SC%20CL%20Public%20Site%20Search=(keyword=enforcement%20procedure)

The NSW Ombudsman’s guidelines are available at:

http://www.ombo.nsw.gov.au/__data/assets/pdf_file/0003/29856/Enforcement-Guidelines-for-councils.pdf

To address the governance requirements, the Council is currently undertaking Code of Conduct training that encompasses staff obligations concerning conflicts of interest/ gifts register/secondary employment. This is to be completed by the end of May 2016.

Audit also reviewed the fees received concerning regulatory services to ensure that they are in accordance with legislation/the Councils adopted fees and charges document.

Results

Council’s enforcement guidelines have been updated to reflect better practice. Governance training is now being provided to reinforce with compliance staff Councils requirements concerning the Code of Conduct.

The fees received concerning regulatory services were reviewed to ensure that they are in accordance with legislation/the Councils adopted fees and charges document. No exceptions were noted.

It is proposed, following the completion of governance training, that specific audits of individual areas be incorporated into the future audit plans. Areas to be included include Development Monitoring/ Environmental Health Services and Compliance. The aim of the process will be to review the use of discretion and to ensure that appropriate review is in place.

Conclusion

Procedures in place reflect better practice.

Fees and charges reflect the adopted fees and charges schedule.

Governance training is being provided as required.

C2.4 Storm water /Flood Mitigation Strategies and implementation

The audit reviewed the status and implementation of the Councils flood mitigation strategy at March 2016. It included the review of the balance in the Councils storm water levy account to ensure that funds are being spent in accordance with the levy.

The audit findings included:

Council’s storm water /Flood mitigation strategies and implementation are correctly identified as a high risk to Council.

Council is charged with functional responsibilities for its natural waterwaysand floodplains under a myriad of differing legislations which includes: the Local Government Act (1993); EP&A Act (1979); POEO Act 1997; and the Rivers and Foreshores Improvement Act 1948.

PAGE 26


At the time of review the Waterways team, which is largely responsible for ensuring that the requirements of the legislation are met, had only 2 of its 6 positions filled with the Principal Systems Coordinator resigning and leaving in April 2016.

Documentation indicates that currently the Council is aware of the hydrologic service for approximately 48% of the storm water network, which are primarily in the newer suburbs. It is assumed that based on past engineering practice and impacts from past storm water events, that these unknown networks do not meet the Councils current standards. A strategic plan is not in place to indicate how the remaining 52% of the network is being investigated.

Given the recent boundary change, a significant portion of the Council storm water system relating to the older areas of Council will be transferred to the City of Parramatta. The impact of this boundary change will need to be assessed by the Waterways team once all implications of the boundary change are addressed.

Given the recent changes in both the Waterways team and the effect of theboundary change on the Councils storm water network, Internal Audit will follow up this review in December 2016.

C3 Audits near Completion:

Contribution Planning – in kind contributions

Acquisition/disposal and management of plant and equipment

Information Management

PAGE 27


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 1 May2016 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.

D1.1 Reports issued to 1 May 2016, where recommendations are still to be implemented:

Reports Year Report Issued Expected Closure Timeframe

Library 2015 30/6/2016

WHS (2016) 2016 30/6/2016

Grants Administration 2016 31/5/2016

Governance Structures 2016 30/4/2016

Cash and Cash related activities

2016 30/7/2016

Civic Events 2016 30/6/2016

Revenue 2016 30/6/2016

D1.2 Reports issued where recommendations have been implemented in the period to 1May 2016:

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

Reports Year Report Issued Closure Timeframe

IT 2015 30/6/2016

Governance Health Check (2015)

2015 30/4/2016

PAGE 28


Part E Internal Audit Key Performance Measures

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

E.1 Service Delivery Benchmarks.

25 or 89% of the audits listed in the Strategic Internal Audit Annual Plan for

2015/16 has been ‘completed’ to date (refer Part B, Table 1 and Chart 1).

Number of findings implemented to date as a % of items raised in the Audit reports.As discussed at Part D and Attachment 3., of the 1006 Audit recommendations agreed with Management 98% (or 986) 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: 10 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 May 2016, 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. 260days have been budgeted in the Internal Audit Strategic Plan.

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 three times. The meeting times were:

18 August 2015

1 December 2015

17 March 2016

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

Mr M. Blair: 3

Mr T Bland: 3

Mayor: 3

Clr A. J. Hay OAM: 2

Clr Dr J. N. Lowe: 2

Adjunct Professor Jim Taggart OAM: 1

Clr M. G. Thomas: 3

PAGE 29


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.

PAGE 30


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.

PAGE 31


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

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Consequence Definition Risk Factors Likelihood

DefinitionFinancial Reputation Business

OperationsWork Health Safety Environment

Project Management

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1Single minor injury to one person – no lost timeORInsignificant environment issues

1Project close to time, budget and quality

1RareThe event is only expected to occur in exceptional circumstances

BMinorThe event may threaten a part of the organisation

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

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

2Minor disruption to services or operations up to one day

2Medically treated injury to one person, less than 5 days lost timeORMinor environment issues

2Project has minor issue with time, budget or quality

2UnlikelyThe event is not likely to occur

CModerateThe event may threaten many parts of the organisation

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

3Some cessationto services and operations up to several days

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

3Project has issues with time, budget or quality

3PossibleThe event may occur

DSignificantThe event may threaten achievement of business objectives

4Financial loss –$50kto$200k

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

4Total cessation to services and operations up to one week

4Single death, or long term disabling injuries to one or more peopleORSubstantial environment issues

4Project has substantial issues with time, budget or quality

4LikelyThe event is likely to occur

ESevereThe event may stop achievement of business objectives

5Financial loss –> $200k

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

5Total cessation to services and operations greater than one week

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

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

5Almost certainThe event is already occurring or is expected to occur

PAGE 32


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ondu

ct

Trai

ning

is

to

be

pr

ovid

ed in

Apr

il 20

16.

Rei

nfor

ce

the

requ

irem

ents

of

th

e Cod

e of

Con

duct

. M

itiga

te f

raud

and

co

rrup

tion

risk

M

Trai

ning

to

be

im

plem

ente

d

.

Hum

an

Res

ourc

es30

June

2016

In p

rogr

ess

Gra

nts

Ad

min

istr

atio

n

6Fo

llow

up

on

id

entif

ied

‘unc

omm

itted

’ Fun

ds.

Con

ditio

ns

of

Gra

nt

Fund

ing

achi

eved

.M

Unc

omm

itted

Fu

nds

be

refle

cted

in

the

Cou

ncils

op

erat

ions

.

Man

ager

Fi

nanc

e31

May

201

6In

pro

gres

s

Deb

tors

Man

agem

ent

PAGE 35


Au

dit

Ob

serv

atio

ns

Effe

ctR

isk

Rat

in

g

Rec

omm

end

atio

n

and

ag

reed

Act

ion

Pla

nR

esp

on

sib

le

Man

ager

To

be

imp

lem

ente

d

by

dat

e:S

tatu

sat

1

M

ay2

01

6

7Im

prov

emen

ts

to

proc

esse

s ou

tline

d in

th

e ‘fi

ndin

gs’

conc

erni

ng

follo

w

up

of

debt

an

d lia

ison

with

oth

er t

eam

s in

Cou

ncil

cont

inue

s.

This

is

to

en

sure

th

e ef

fect

ive

man

agem

ent

of

debt

be

ing

incu

rred

and

out

stan

ding

deb

t.

Min

imis

e Bad

Deb

t

M

Follo

w u

p of

out

stan

ding

de

bt

.

Man

ager

Fi

nanc

eAug

ust

2016

In p

rogr

ess

8Rev

iew

s to

be

unde

rtak

en b

y th

e Fi

nanc

e te

am o

n a

period

ic

basi

s to

id

entif

y ‘b

ad

debt

s’.

Whe

re

appl

icab

le,

repo

rts

requ

irin

g th

e w

rite

off

of

‘bad

de

bt’ b

e pr

ovid

ed t

o Cou

ncil

on

a tim

ely

basi

s.

Deb

tors

bal

ance

ref

lect

deb

t th

at w

ill

be r

ecei

ved

by t

he C

ounc

ilM

Rev

iew

an

d re

port

ba

d de

bts

period

ical

lyM

anag

er

Fina

nce

Aug

ust

2016

In p

rogr

ess

Civ

ic E

ven

ts

9Agr

eem

ents

w

ere

auth

oris

ed

by s

taff

who

did

not

hav

e th

e ap

prop

riat

e fin

anci

al

dele

gatio

ns

Ensu

re

that

ag

reem

ents

ar

e ap

prop

riat

ely

auth

oris

edM

Agr

eem

ents

nee

d to

be

auth

oris

ed by

a

pers

on

with

th

e ap

prop

riat

e fin

anci

al d

eleg

atio

n.

Man

ager

Com

mun

ity

and

Econ

omic

D

evel

opm

ent

June

201

6In

pro

gres

s

PAGE 36


Au

dit

Ob

serv

atio

ns

Effe

ctR

isk

Rat

in

g

Rec

omm

end

atio

n

and

ag

reed

Act

ion

Pla

nR

esp

on

sib

le

Man

ager

To

be

imp

lem

ente

d

by

dat

e:S

tatu

sat

1

M

ay2

01

6

10

Var

iatio

ns

to

agre

ed

fees

(c

ontr

actu

al

arra

ngem

ents

) w

ere

appr

oved

by

st

aff

who

di

d no

t ha

ve

the

appr

opriat

e fin

anci

al d

eleg

atio

ns

Ensu

re

that

Cou

ncils

pu

rcha

sing

pr

oced

ure

is in

pla

ce

M

Var

iatio

ns

to

the

Cou

ncils

pu

rcha

sing

pr

oced

ure

need

to

be

ap

prov

ed b

y th

e G

ener

al

Man

ager

.

Man

ager

Com

mun

ity

and

Econ

omic

D

evel

opm

ent

June

201

6In

pro

gres

s

11

Fees

and

cha

rges

diff

ered

fro

m

that

ou

tline

d in

th

e ad

opte

d fe

es a

nd c

harg

es d

ocum

ent

Fees

and

Cha

rges

are

aut

hori

sed

M

Fees

an

d Cha

rges

w

ith

resp

ect

to

the

Civ

ic

Even

ts p

rogr

am m

ust

be

as

outli

ned

in

the

Cou

ncils

Fe

es

and

Cha

rges

doc

umen

t.

Man

ager

Com

mun

ity

and

Econ

omic

D

evel

opm

ent

June

201

6In

pro

gres

s

12

Cur

rent

ly t

here

is

no a

utho

rity

to

iss

ue v

ouch

ers,

clie

nt c

ash

or f

ree

ticke

ts.

Que

ries

rai

sed

by t

he A

udit

Com

mitt

ee h

ave

indi

cate

d th

at a

cav

eat

shou

ld

be

used

w

here

th

ese

ticke

ts

are

offe

red

to e

nsur

e th

at t

he

reci

pien

t do

es

not

use

the

ticke

ts t

o ge

nera

te in

com

e.

Ensu

re

that

ag

reem

ents

ar

e ap

prop

riat

ely

auth

oris

ed

M

A p

olic

y co

ncer

ning

the

is

suin

g of

vo

uche

rs,

clie

nt

cash

or

fr

ee

ticke

ts

need

s to

be

de

velo

ped

and

appr

opriat

ely

appr

oved

.

Man

ager

Com

mun

ity

and

Econ

omic

D

evel

opm

ent

June

201

6In

pro

gres

s

PAGE 37


Au

dit

Ob

serv

atio

ns

Effe

ctR

isk

Rat

in

g

Rec

omm

end

atio

n

and

ag

reed

Act

ion

Pla

nR

esp

on

sib

le

Man

ager

To

be

imp

lem

ente

d

by

dat

e:S

tatu

sat

1

M

ay2

01

6

13

Com

plet

enes

s of

inf

orm

atio

n in

th

e Cor

pora

te R

ecor

dEn

sure

th

at

all

key

info

rmat

ion

is

mai

ntai

ned

in t

he c

orpo

rate

rec

ord

M

Bud

get

info

rmat

ion

mai

ntai

ned

by t

he T

eam

is

co

mpr

ehen

sive

bu

t sh

ould

be

pl

aced

in

to

ECM

(f

or

reco

rd

man

agem

ent

purp

oses

).

Man

ager

Com

mun

ity

and

Econ

omic

D

evel

opm

ent

June

201

6In

pro

gres

s

14

KPI

’s a

re n

ot a

lway

s in

pla

ce t

o de

term

ine

the

succ

ess

of

an

even

t.

Prov

ide

a cl

ear

indi

cato

r as

to

w

heth

er

an

even

t is

su

cces

sful

or

no

t. T

hese

KPI

’s s

houl

d re

fer

to a

ll re

leva

nt p

aram

eter

s.M

KPI

’s a

gree

d be

fore

the

ev

ent,

sh

ould

be

fo

rmal

ly r

evis

ited

so t

hat

the

succ

ess

of t

he e

vent

ca

n be

de

term

ined

an

d do

cum

ente

d fo

r fu

ture

re

fere

nce.

Man

ager

Com

mun

ity

and

Econ

omic

D

evel

opm

ent

June

2016

In p

rogr

ess

Cas

h a

nd

cas

h r

elat

ed a

ctiv

itie

s

15

Inde

pend

ent

Che

cks

of

the

Pett

y ca

sh a

re n

ot u

nder

take

n re

gula

rly

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re

that

ca

sh

held

is

ap

prop

riat

ely

acco

unte

d fo

r.

M

An

audi

t of

all

pett

y ca

sh

float

s is

un

dert

aken

an

nual

ly b

y th

e Fi

nanc

e Te

am.

Last

au

dit

by

Fina

nce

was

und

erta

ken

in J

uly

2015

–an

othe

r sh

ould

occ

ur i

n th

e ne

xt

3 m

onth

s.

Man

ager

Fi

nanc

eJu

ly 2

016

In p

rogr

ess

PAGE 38


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dit

Ob

serv

atio

ns

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ctR

isk

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in

g

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omm

end

atio

n

and

ag

reed

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ion

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nR

esp

on

sib

le

Man

ager

To

be

imp

lem

ente

d

by

dat

e:S

tatu

sat

1

M

ay2

01

6

16

The

requ

irem

ents

of

th

e Cou

ncils

pr

oced

ure

was

no

t al

way

s in

pla

ce

Ensu

re t

hat

staf

f ar

e aw

are

of t

he

requ

irem

ents

of

the

proc

edur

e

M

The

proc

edur

e co

ncer

ning

th

e Rei

mbu

rsem

ent

of

Cou

ncil

expe

nses

in

curr

ed

by

Sta

ff

(inc

ludi

ng

Pett

y Cas

h)

be

dist

ribu

ted

to

Man

ager

s fo

r di

scus

sion

at

th

eir

team

m

eetin

gs

in

part

icul

ar

dele

gatio

n an

d ex

pens

es

that

re

quire

pre

appr

oval

fr

om

the

Gen

eral

M

ana g

er.

Man

ager

Fi

nanc

eJu

ne 2

016

In p

rogr

ess

17

Proc

urem

ent

card

s pr

oced

ure

(sec

tion

8.0)

doe

s no

t re

flect

th

e cu

rren

t pr

actic

e re

gard

ing

the

verific

atio

n of

pur

chas

es b

y th

e G

roup

M

anag

er/M

anag

er.

Proc

edur

e la

st u

pdat

ed M

arch

20

14.

Proc

edur

e is

out

of

date

and

doe

s no

t pr

ovid

e ad

equa

te

guid

ance

. Pu

rcha

sing

ac

tiviti

es do

no

t sa

tisfy

th

e Cou

ncils

pur

chas

ing

proc

edur

e.M

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urem

ent

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d Pr

oced

ure

be

upda

ted

and

dist

ribu

ted

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ager

Fi

nanc

eJu

ne 2

016

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rogr

ess

18

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ff w

ho a

re i

ssue

d w

ith t

he

proc

urem

ent

card

be

advi

sed

of t

he r

equi

rem

ents

of

use;

the

pr

oced

ure

may

nee

d up

datin

g to

ref

lect

the

use

of

the

card

.

Sta

ffs

are

awar

e of

the

lim

itatio

ns in

havi

ng a

pro

cure

men

t ca

rd.

Cou

ncil’

s go

vern

ance

re

quirem

ents

ar

e in

pl

ace.

M

Sta

ff t

o si

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ff o

n th

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nditi

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n th

e ca

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ed.

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ager

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nanc

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rogr

ess

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rcha

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etim

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d th

e am

ount

ou

tline

d in

the

pro

cedu

re

Purc

hase

s do

no

t m

eet

the

requ

irem

ents

of

th

e pr

oced

ure

alth

ough

the

y ar

e re

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for

the

co

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uity

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M

Con

side

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ven

to

incr

easi

ng

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daily

sp

end

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ting

the

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thly

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imit

on t

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rs c

ard.

Man

ager

Fi

nanc

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ne 2

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rogr

ess

PAGE 39


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dit

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atio

ns

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ctR

isk

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in

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end

atio

n

and

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reed

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nR

esp

on

sib

le

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ager

To

be

imp

lem

ente

d

by

dat

e:S

tatu

sat

1

M

ay2

01

6

20

Pett

y ca

sh

vouc

hers

w

ere

sign

ed

by

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f w

ho

did

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have

the

app

ropr

iate

fin

anci

al

dele

gatio

n

Ensu

re

that

ag

reem

ents

ar

e ap

prop

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ely

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pett

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ers

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ente

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at

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e an

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ager

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nanc

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ne 2

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rogr

ess

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acco

unte

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r.

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nce

to f

ollo

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p th

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imbu

rsem

ent

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nces

m

ade

and

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s m

ade

avai

labl

e to

th

e Civ

ic E

vent

s te

am.

Man

ager

Fi

nanc

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ne 2

016

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rogr

ess

Rev

enu

e

22

Inst

ance

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utho

rise

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es

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char

ges

bein

g ac

cept

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ncil

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and

cha

rges

do

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ct t

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fees

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rges

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umen

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Fina

nce

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ic

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ks

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at th

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ithin

the

Cou

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Man

ager

Fi

nanc

eJu

ne 2

016

In p

rogr

ess

PAGE 40


PAGE 41

ITEM-3 GENERAL MANAGER'S EXPENSES DOC INFO

THEME: Proactive Leadership

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.

MEETING DATE: 2 JUNE 2016

INTERNAL AUDIT COMMITTEE

GROUP: GENERAL MANAGER

AUTHOR: GENERAL MANAGER

DAVE WALKER

RESPONSIBLE OFFICER: GENERAL MANAGER

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 17 March 2016 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 $386.00) be noted. ATTACHMENTS Nil.

audit committee meeting - the hills shire · minutes of the duly convened audit committee meeting...

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