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C I T Y O F

WHYALLA ‘Whyalla, Where the Outback Meets the Sea’

MEMBERSHIP

Mayor L Breuer Cr C Carter Cr T Breuer Mr J Hayward Mr S Coates

NOTICE OF AUDIT COMMITTEE MEETING

TO HER WORSHIP THE MAYOR & MEMBERS OF COUNCIL NOTICE is hereby given pursuant to Section 126 of the Local Government Act that the Audit Committee Meeting will be held in the Council Chamber, Darling Terrace, Whyalla on MONDAY 26 JUNE 2017 at 1.30 pm. A copy of the Agenda for the above meeting is supplied as required.

CHRIS COWLEY CHIEF EXECUTIVE OFFICER Dated: 22 June 2017

AUDIT COMMITTEE MEETING –26.06.17

AGENDA

AUDIT COMMITTEE MEETING – MONDAY 26 JUNE 2017

1. ATTENDANCE RECORD Apologies – Nil Leave of Absence – Nil DECLARATION OF MEMBERS’ CONFLICT OF INTERESTS

2. MINUTES OF PREVIOUS MEETING

2.1 Confirmation of the Minutes of the Audit Committee Meeting held on Page 3 Friday 12 May 2017

Recommendation That the Minutes of the Audit Committee Meeting held on Friday 12 May 2017, as per copies supplied to Members, be adopted as a true and correct record to that meeting.

3. REPORTS – COUNCIL OFFICERS

3.1 Corporate Department – Ordinary Reports

3.1.1 Action Report Page 7 3.1.2 Operational Efficiency Page 15 3.1.3 Terms of Reference 0 3.1.4 Strategic Risk Profile Page 43 3.1.5 Related Party Disclosures Page 58

3.2 Executive Department – Ordinary Report

3.2.1 Self‐assessment – Governance Audit Page 67

3.3 Infrastructure and Planning Department – Ordinary Report

3.3.1 Asset Management Strategy Page 91

4. INFORMATION REPORTS – Nil 5. CONSIDERATION OF CONFIDENTIAL ITEMS – Nil 6. CLOSURE 7. DATE OF NEXT MEETING – to be advised

MINUTES OF THE AUDIT COMMITTEE MEETING

HELD ON FRIDAY 12 MAY 2017 AT 1.30 PM IN THE COUNCIL CHAMBER

PRESENT: Mr S Coates (Chair), Mayor L Breuer and Cr C Carter

OBSERVERS:

Chief Executive Officer (Mr C Cowley) Group Manager Corporate (Mrs M Hiscock) Senior Finance Officer (Mrs S Vigar)

Attendance Record

Apologies – Mr J Hayward Leave of Absence – Cr T Breuer

Declaration of Members’ Conflict of Interests – Nil

1. Minutes of Previous Meeting – 15 September 2016

1.1 Confirmation of the Minutes of the Audit Committee Meeting held on Thursday15 September 2016

Moved Cr Carter, seconded Mayor Breuer

AC182‐2017

That the Minutes of the Audit Committee Meeting held on Thursday 15 September 2016, as per copies supplied to Members, be adopted as a true and correct record to that meeting.

Carried Unanimously

Minutes of the Audit Committee Meeting – 12.05.17 Page 2

2. Reports – Council Officers 2.1 Corporate Department – Ordinary Reports 2.1.1 Action Report


AC183‐2017

That the Audit Committee receive and note the Action Report.

Carried Unanimously

2.1.2 Auditors Correspondence

Moved Mayor Breuer, seconded Cr Carter

AC184‐2017

That the Audit Committee receive and note the Auditor’s Correspondence report.

Carried Unanimously

2.1.3 Draft Annual Business Plan, Draft Budget and Draft Long Term Financial Plan


AC185‐2017

That, with minor amendments, the Audit Committee recommend to Council the release of the 2017/18 Draft Annual Business Plan, Draft Budget and Draft Long Term Financial Plan for public consultation in accordance with Council’s Public Consultation Policy, subject to the budget remaining in an operational surplus.

Carried Unanimously


2.1.4 Operational Efficiency Report


AC186‐2017

That the Audit Committee receive and note the Operational Efficiency Report.

Carried Unanimously

2.1.5 Draft Fees and Charges Register


AC187‐2017

That the Audit Committee recommend to Council that the Draft Fees and Charges Register 2017/18 (as presented in Annexures “A” and “B”) be released for public consultation in accordance with Councils’ Public Consultation Policy.

Carried Unanimously

2.2 Infrastructure and Planning Department – Ordinary Report 2.2.1 Asset Management Strategy


AC188‐2017

That, subject to minor amendments, the Audit Committee endorse the attached Asset Management Strategy 2018‐2027 in draft form and recommend to Council that the Draft Asset Management Strategy 2018‐2027 be released for public comment in line with Council’s Public Consultation Policy.

Carried Unanimously

3. Information Reports – Nil


4. Other Urgent Business 4.1 Proxy

Discussion was held regarding the appointment of a ‘Proxy’ member on the Audit Committee; for the purpose of a Councillor unable to attend and a quorum cannot be reached. The Terms of Reference currently does not stipulate a Proxy Member.

5. Consideration of Confidential Items – Nil 6. Closure

The Chair declared the meeting closed at 1.50 pm

7. Date of Next Meeting – Monday 26 June 2017

3.1 CORPORATE DEPARTMENT

3.1.1 Action Report Audit Committee 26 June 2017 Author’s Title: Senior Finance Officer Group Manager: Migelle Hiscock Department: Corporate File No.: 0‐159 Annexures:

A Audit Committee Work Program (2016/17) B Audit Committee Action List C Update on Action List Officer Direct or Indirect Conflict of Interest: In accordance with Local Government Act 1999, Section 120

Status: Information classified confidential under Section 90(2) of the Local Government Act

Yes No Yes No

Reason – Not applicable

PURPOSE To allow the Audit Committee to monitor activities within their responsibility by providing accurate and relevant information. SUMMARY This report details the specific actions taken in respect to all motions of the Audit Committee, the Audit Committee Work Program and the Auditors Correspondence Action list. RECOMMENDATION That the Audit Committee receive and note the Action Report.

3.1.1 Action Report REPORT BACKGROUND This report details updates relating to the outstanding actions under the guidance and responsibility of the Audit Committee for the current year. DISCUSSION A summary of actions undertaken relating to the three key action areas for the Audit Committee is provided to assist the Committee in their monitoring of activities within their responsibility. Work Program The Work Program for 2016/17 is attached at Annexure “A” and illustrates the program progress to date. The internal audit program will be reviewed in consultation with the external auditors following the end of year audit. Resolution Action List Information on the actions taken in relation to each resolution of the Audit Committee are summarised in Annexure “B”. Auditors Correspondence Action List There has been no auditor correspondence since the previous audit committee meeting. An update of the action list is provided at Annexure “C”. The table below summarises each of the lists and their progress

Progress Audit Committee Work Program

Audit Committee Resolutions Action

Report

Auditor Correspondence

Action List

Completed 15 1 2

In Progress 2 ‐ ‐

Ongoing 2 1 2

Not Applicable 1 ‐ ‐

Total: 20 2 4

Financial Implications – Nil Strategic Plan Goal – Civic Leadership and Organisational Development Key Issue – 4.7 The Whyalla Community will have confidence in Council’s governance Legislation – Nil Officer Direct or Indirect Interest No officer involved in the preparation of this report has any conflicts of interest. Risk Assessment – Not applicable Social Considerations – Not applicable Community Engagement – Not applicable Environmental Implications – Applicable Communication – Not applicable Conclusion Council are to ensure that the Audit Committee are kept informed of appropriate information within their responsibilities.

CITY OF WHYALLA – AUDIT COMMITTEE WORK PROGRAM

Terms of Reference Proposed Activity

Audit Committee Next Review Date

Follow Up Actions

Date Reviewed / Completed

Responsible Council Officer

Financial Reporting

Review annual financial statements as required by Section 126(4)(a) of the Local Government Act prior to its presentation to Council for adoption

September 2016Completed

September 2016 SFO

Financial Reporting

Monitor integrity of financial reports of the Council including:

Budget Review Long Term Financial Plan Infrastructure Asset Management Plans

May 2017Completed May 2017

SFO

Financial Reporting

Consider and review, where necessary, the consistency of improvement to and / or any changes to accounting policies.


SFO

Financial Reporting

Review and report to Council likely impact of ongoing financial sustainability due to changes in Strategic Management Plans

June 2017 GMCS

Annual Business Plan

Ensure Annual Business Plan conforms to the Local Government Authority (LGA) template

May 2017 Completed May 2017

CEO/EMT/SFO


Comment on draft business plan prior to its formal consideration for adoption by Council

May 2017

Annual Business Plan public consultation process

completed 13 June 2017

Completed June 17

GMCS


Recommend appropriate targets for key performance indicators to Council


SFO


Review budget papers prior to their presentation prior to Council

May 2017 Completed May 2017

GMCS

Annexure "A"


Terms of Reference

Proposed Activity


Follow Up Actions



Internal Audit

Review internal audit program for 2016‐17 to assess extent and relevance to current requirements

Review annual internal audit plan

June 2017

ABA file protection

Completed June 2017

CEO/EMT/SFO

Internal Audit Monitor and review actions arising out of internal audit requirements

As required Ongoing SFO

Internal Audit Regularly review the effectiveness of Councils’ internal controls and risk management and governance systems

As required Ongoing SFO

Internal Audit

Review and recommend the approval, where appropriate, of statements to be included in the annual report concerning internal controls, risk management and governance

September 2016 Completed

December 2016 SFO

External Audit Ensure appointment of external auditor conforms with legislative provisions

Next Due 2020 n/a SFO

External Audit Meet with Councils’ external auditors September 2016 Completed

September 2016 CEO/SFO/GMCS

External Audit Review correspondence with auditors regarding audit findings

As required Completed

April 2017 SFO

External Audit Monitor actions proposed in the correspondence with auditors

As required Completed April 2017

GMCS

External Audit Review outcomes of the Governance Audit June 2017 Refer to report

in current agenda

Completed June 2017

EMT

Risk Management Review Business Continuity Plan and Disaster Management Action Plans

June 2017 EMT


Terms of Reference

Proposed Activity


Follow Up Actions



Risk Management Council Risk Plan

Strategic Risk Plan June 2017

Refer to report in current agenda

Completed June 2017

EMT

Whistle‐Blowing Survey and report to Committee the adequacy and awareness of the current whistle‐blowing arrangements

September 2016 Copy sent to

Stephen Coates

Council Meeting 20 February

2017 EMT

CITY OF WHYALLA – 2016‐17 AUDIT COMMITTEE RESOLUTIONS – ACTION REPORT

Motion Number Resolution Actioned

by

Completed / Ongoing Actions

Expected Completion

Date Comments

AC117‐2013 Operational Efficiency Audit

That a cross‐functional team be set up to undertake a project scoping exercise aimed at identifying those activities to be included in the process and the resources needed to undertake the review and to ultimately design the scope of the internal audit process.

GMCS Ongoing Ongoing Tabular format to be provided to include savings/redirection of

resources

AC124‐2014 Monitor integrity of financial reports of the Council including:

Budget Review Long Term Financial Plan Infrastructure Asset Management

Plans

SFO

GMI&P

GMCS

Senior Finance Officer and Financial

Services Officer

Completed

June 2017

Public consultation process for the 2017/18 Budget, Annual Business Plan

and Long Term Financial Plan completed on Thursday 15 June 2017.

Budget adoption 26 June 2017

Annexure "B"

CITY OF WHYALLA – AUDITOR CORRESPONDENCE ACTION LIST

Number Item / Potential Issue Responsible

Officer Actions Completion

Date

Completed

Y / N

1

Procedures for Internal Controls

Procedures for authorisation, review and checking to be documented

SFO FT

Internal audit procedures

created for tasks 30/06/2017 Y

2 Key Performance Indicators

Receipting, payments and payroll GMCS Completed 30/06/2017 Y

4

YMCA Funding of Operating Losses

Funding to be checked against audited financial statements at end of year

SFO

Audited financials to be received by 30 September 2017

30/09/2017 N

6 Cuttlefish Viewing Platform Grant

Eligible expenditure only to be included in acquittals GMCD&G

Project to be completed and acquitted by 31/12/2017

31/12/2017 N

Annexure "C"


3.1.2 Operational Efficiency Report Audit Committee 26 June 2017 Author’s Title: Sandra Vigar Group Manager: Migelle Hiscock Department: Corporate File No.: 0‐159 Annexures

A – Operational Efficiency Listing

Officer Direct or Indirect Conflict of Interest: In accordance with Local Government Act 1999, Section 120


Yes No Yes No


PURPOSE To update the Audit Committee by summarising operational efficiencies introduced into Council processes. SUMMARY The report contains a departmental analysis of the significant processes introduced to date that have resulted in increased operational efficiency. RECOMMENDATION That the Audit Committee receive and note the Operational Efficiency Report.

3.1.2 Operational Efficiency Report REPORT BACKGROUND This report is presented to demonstrate the progress made in relation to operational efficiency within Whyalla City Council. DISCUSSION Operational efficiency highlights:

where costs can be reduced;

where new ideas can be implemented;

where resources can be assigned or reallocated; and

where activities can be streamlined. Group Managers, Senior Officers and employees will be consulted regularly in an attempt to improve the efficiency and effectiveness of Councils’ processes. The table below summarises the estimated efficiency savings for the current and future year.

Period Approximate monetary value of savings

2016/17 estimated efficiency savings $105,000

Future efficiency savings $ 75,000

Annexure “A” lists the improvements to processes that have resulted in increased operational efficiency and estimated cost/time savings. Future efficiencies

Business Unit Prospective Improvements

Library Investigate the use of volunteers, time and days of service to provide home delivery services to consumers.

Finance Explore the implementation of electronic timesheets and leave applications.

Recruitment Process Review the costs to recruit external consultants.

Energy Usage Council wide process.

Fleet Review To affect future purchases of new vehicles.

Financial Implications – Nil Strategic Plan Goal – Civic Leadership and Organisation Development Key Issue – 4.7 The Whyalla Community will have confidence in Council’s governance Legislation – Not applicable Officer Direct or Indirect Interest No officer involved in the preparation of this report has any conflicts of interest. Risk Assessment ‐ Not applicable Social Considerations ‐ Not applicable Community Engagement ‐ Not applicable Environmental Implications - Not applicable Communication - Not applicable Conclusion Operational efficiency is an ongoing improvement process to ensure Council disburses its funds in a responsible and accountable manner.

CITY OF WHYALLA – 2016‐17 OPERATIONAL EFFICIENCIES

Department Operational Efficiency Process Implemented Savings

Finance Electronic upload of utilities account into creditors – Telephone

March 2016 Approximately 5 hours of manual labour or $200 per month

(reallocation of resources)

Finance Electronic upload of utilities account into creditors – SA Water

May 2016 Approximately 16 hours of manual labour or $639 per quarter


Finance Electronic upload of utilities account into creditors – Electricity

June 2016 Approximately 1 hours of manual labour or $40 per month


Finance Internal Control audit reports to extract relevant data only

February 2017 Savings in printing costs per month from between 100‐200 pages to 4 pages only (approximately $4 per quarter). Reduced internal control checking processes saving 2 hours manual labour or approximately $50 per quarter.


Finance Streamlining of bank statement reconciliation processes

January 2017 Daily statement reconciliation has reduced end of month reconciliation processes from 2‐3 days to 2 hours. No time savings – it enables the process of end of month balancing to be completed in a timely manner.

(reallocation of processing times)

Procurement Introduction of SynergySoft input for requisition and authorisation of purchase orders

2015/16 Processing time savings undetermined

Reduces likelihood of ‘lost’ orders

Records The South Australian Record Keeping Metadata Standards (SARKMS) will lead to a fully functioning electronic system enabling a reduction in processing time and reduced costs in maintaining physical files

June 2018 Future savings

Library Lighting and air‐conditioning timing adjusted at end of day

July 2016 Undetermined savings – possibly up to $1,000

Library Reduced labour costs 2016/17 Librarian wages – 1 x FTE

Annexure "A"

CITY OF WHYALLA – 2016‐17 OPERATIONAL EFFICIENCIES

Department Operational Efficiency Process Implemented

Savings

Planning Basic building rules assessment training has been provided to nominated employees. This has been effective in providing the employees with a better understanding of assessment requirements while providing the building surveyor the opportunity to improve output in relation to the processing of building rules consent applications.

2016/17 Approximately $3.25 per hour utilised

Infrastructure The process for pruning tree branches and disposal has been made more efficient through the purchase of a mobile chipper. Along with the chipper located at the Ada Ryan Gardens employees will now immediately mulch all branches and distribute the mulch to the parks and gardens around the city.

2016/17 Reallocation of resources


3.1.3 Terms of Reference Audit Committee Author’s Title: Sandra Vigar Group Manager: Migelle Hiscock Department: Corporate File No.: 0‐159 Annexures:

A – Terms of Reference – Audit Committee – June 2016 B – Draft Terms of Reference – Audit Committee – June 2017 Officer Direct or Indirect Conflict of Interest: In accordance with Local Government Act 1999, Section 120


Yes No Yes No

Reason – not applicable

PURPOSE To review the Terms of Reference for the Audit Committee. SUMMARY This report outlines the Terms of Reference for the Audit Committee. RECOMMENDATION That the Audit Committee recommend to Council the amendments to the Audit Committee Terms of Reference; as discussed in the Audit Committee Workshop.

3.1.3 Terms of Reference REPORT BACKGROUND The Audit Committee Terms of Reference were last presented to the Audit Committee in June 2016. At the Audit Committee Meeting in May 2017, the possibility of appointing a proxy member was raised. The role and responsibilities of the proxy member, if added to the Terms of Reference, will be discussed in the Audit Committee Workshop on 26 June 2017. DISCUSSION At the last meeting of the Audit Committee, it was noted that there was no allocation of a secondary member (Proxy) to attend meetings in the event that a Council representative was not available. To endorse a proxy member will ensure Audit Committee meetings are able to proceed on schedule. The Terms of Reference will need to be amended if the Committee opt to implement the ability to utilise a proxy member should one of the existing Elected Members be unable to attend an Audit Committee meeting. The current Terms of Reference for the Audit Committee are attached at Annexure “A”. Financial Implications – Nil Strategic Plan Goal – Civic Leadership and Organisational Development Key Issue – 4.7 The Whyalla Community will have confidence in Council’s governance Legislation Local Government Act 1999 Officer Direct or Indirect Interest No officer involved in the preparation of this report has any conflicts of interest. Risk Assessment – Nil Social Considerations – Nil Community Engagement – Nil Environmental Implications – Nil Communication – Nil

Conclusion That the revised and updated Terms of Reference, as attached at Annexure “B” will ensure a quorum at all meetings and will enable members to have proxy’s attend in their absence.

Audit Committee Terms of Reference – June 2016

Name of Committee Terms of Reference Membership Review Date Comments

Audit Committee The following comprise the Terms of Reference for Whyalla Council’s Audit Committee.

Council to report the existence of Section 41 Committees on formation, and Committee to provide annual advice to Council of potential civil liability claims against the committee or its members.

1. Members

1.1 Members of the Committee shall be appointed by the Council. The Committee shall consist on two Independent Members and three Elected Members.

1.2 Independent member(s) of the Committee shall have recent and relevant financial experience. The Presiding Member of the Council (shall) be a member of the Committee.

Note that a person would not be considered independent if he or she was an employee or an Elected Member of that Council. Subject to any codes of conduct adopted by Councils, this does not preclude an Elected Member or an employee of a Council from being a member of an Audit Committee of another Council.

1.3 Only members of the Committee are entitled to vote in Committee meetings, however, (other individuals such as the Chief Executive Officer, Finance Manager and if applicable the heads of risk, compliance and internal audit and representatives from the finance function) may attend any meetings as advisers or be responsible for preparing papers for the Committee. In accordance with the principles of open, transparent and informed decision-making, Committee meetings must be conducted in a place open to the public. The Agenda and Minutes of the Committee meetings, subject to any items that are discussed in confidence under the relevant legislative provisions, are also required to be made available to the public.

Members

1st Independent – Chair

2nd Independent

Mayor or Acting Mayor

Councillor 1 Councillor 2

Staff Observers

Chief Executive Officer

Group Manager Finance and Corporate

Senior Finance Officer

First meeting – TBA The Committee is to meet at least three times per year.

The Committee has power of recommendation only.

Meetings to be held in the Council Chamber.

Administrative support for Agenda, Minutes and correspondence to be provided by the Executive Assistant – Finance and Corporate.

Annexure "A"


Name of Committee Terms of Reference

1.4 Council’s external auditors and internal auditors, may be invited to attend meetings of the Committee.

1.5 Appointments of Elected Members to the Committee shall be for a period until the end of the term of the Council.

1.6 Appointment of the Independent Member(s) shall be across 2 terms of Council but not exceed a period of 4 years without reappointment.

1.7 The Council shall appoint the Independent Committee Chair for the term of Council. 2. Secretarial Resources 2.1 The Chief Executive Officer shall provide sufficient secretarial resources to the Committee to adequately carry out its functions. 3. Quorum 3.1 The quorum necessary for the transaction of business shall be 50% of the number of members of the Committee plus one. A duly convened

meeting of the Committee at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Committee.

4. Frequency of Meetings 4.1 The Committee shall meet at least three times a year at appropriate times in the reporting and audit cycle. 5. Notice of Meetings 5.1 Ordinary meetings of the Committee will be held at times and places appointed by Council or, subject to a decision of Council, the Committee. A

Special Meeting of the Committee shall be called by the Chief Executive Officer at the request of its Presiding Member or any two members of the Committee.

5.2 Unless otherwise agreed, Notice of each meeting confirming the venue, time and date, together with an Agenda of items to be discussed, shall be forwarded to each member of the Committee and observers, no later than three clear days before the date of the meeting. Supporting papers shall be sent to Committee Members and to other attendees as appropriate, at the same time.

6. Minutes of Meetings 6.1 The Chief Executive Officer shall ensure that the proceedings and resolutions of all meetings of the Committee, including recording the names of

those present and in attendance are minuted.

6.2 The Chief Executive Officer shall include on the Agenda the declaration by any Committee member, the existence if any conflicts of interest and minute them accordingly.

6.3 Minutes of a meeting of the Committee shall be presented to the next meeting of the Council.

6.4 Minutes of Committee meetings shall be circulated within five days after a meeting to all members of the Committee and members of the Council.



7. Role of the Committee 7.1 Financial Reporting 7.1.1 The Committee shall monitor the integrity of the financial statements of the Council, including its annual report, reviewing significant financial

reporting issues and judgments which they contain. 7.1.1 The Committee shall review and consider where necessary:

7.1.2.1 the consistency of improvement to and /or any changes to, accounting policies; 7.1.2.2 the methods used to account for significant or unusual transactions where different approaches are possible; 7.1.2.3 whether the Council has followed appropriate accounting standards and made appropriate estimates and judgments, taking into account

the views of the external auditor; 7.1.2.4 the clarity of disclosure in the Council’s financial reports and the context in which statements are made; and 7.1.2.5 all material information presented with the financial statements, such as the operating and financial review and the corporate governance

statement insofar as it relates to the audit and risk management.

7.2 Internal Controls and Risk Management Systems The Committee shall: 7.2.1 Keep under review the effectiveness of the Council’s internal controls and risk management and governance systems; and 7.2.2 Review and recommend the approval, where appropriate of statements to be included in the annual report concerning internal controls, governance

and risk management. Note that it is important that the Audit Committee understand the business of the Council to appreciate the risks it manages on a daily basis, and to

ensure that there are appropriate management plans to manage and mitigate this business risk. This will include insurance matters, financial reporting, legal and regulatory compliance, business continuity, and statutory compliance. This can be facilitated by discussions with the internal and external auditors and by presentations by management on how business risks are managed.

7.3 Whistle Blowing

The Committee shall review the Council’s arrangements for its employees to raise concerns, in confidence, about possible wrongdoing in financial reporting or other matters. The Committee shall ensure these arrangements allow independent investigation of such matters and appropriate follow-up actions and are referred to Whyalla City Council’s Whistleblowers Protection Policy.



7.4 Internal Audit

The Committee shall: 7.4.1 Monitor and review the effectiveness of the Council’s internal audit function in the context of the Council’s overall risk management systems; 7.4.2 Consider and make recommendation on the programme of the internal audit function and the adequacy of its resources and access to information to

enable it to perform its function effectively and in accordance with the relevant professional standards. Note that this may include the review of the areas that have been identified for review and the frequency of review. The Committee should also

monitor whether the function of internal audit has adequate standing and is free from management or other restrictions. Whilst internal audit focuses on a Council’s systems and procedures, it is important that internal audit retains its independence and is not subject to any influence from management or Council that impedes its ability to report objectively.

7.4.3 Review all reports on the Council’s operations from the internal auditors; Note that the reports to the Audit Committee need not be the detailed reports that are presented to management for their review. Ordinarily a high

level review report is all that is required detailing the work undertaken, the findings and management response. 7.4.4 Review and monitor management’s responsiveness to the findings and recommendations of the internal auditor; and 7.4.5 Where appropriate, meet the officer who undertakes the internal audit (internal or outsourced) at least once a year, without management being

present to discuss any issues arising from the internal audits carried out. In addition, the officer / agent undertakes the internal audit shall be given the right of direct access to the Presiding Officer of the Council and to the Chairperson of the Committee.

7.5. External Audit

The Committee shall: 7.5.1 Develop and implement a policy on the supply of non-audit services by the external auditor, taking into account any relevant ethical guidance on the

matter; 7.5.2 Consider and make recommendations to the Council, in relation to the appointment, re-appointment and removal of the Council’s external auditor.

The Committee shall oversee the selection process for new auditors and if an auditor resigns the Committee shall investigate the issues leading to this and decide whether any action is required;

7.5.3 Oversee Council’s relationship with the external auditor including, but not limited to:

7.5.3.1 recommending the approval of the external auditor’s remuneration, whether fees for audit or non-audit services, and recommending whether the level of fees is appropriate to enable an adequate audit to be conducted;



7.5.3.2 recommending the approval of the external auditor’s terms of engagement, including any engagement letter issued at the

commencement. 7.5.3.3 assessing the external auditor’s independence and objectivity taking into account relevant professional and regulatory requirements and

the extent of Council’s relationship with the auditor, including the provision of any non-audit services. 7.5.3.4 satisfying itself that there are no relationships such as family, employment, investment, financial or business between the external auditor

and the Council other than in the ordinary course of business; 7.5.3.5 monitoring the external auditor’s compliance with legislative requirements on the rotation of audit partners; and 7.5.3.6 assessing the external auditor’s qualifications, expertise and resources and the effectiveness of the audit process which shall include a

report from the external auditor on the Audit Committee’s own internal quality procedures;

7.5.4 Meet as needed with the external auditor. The Committee shall meet the external auditor at least once a year, without management being present; to discuss the external auditor’s report and any issues arising from the audit;

7.5.5 Review and make recommendations on the annual audit plan, and in particular its consistency with the scope of the external audit engagement; 7.5.6 Review the findings of the audit with the external auditor. This shall include, but not be limited to, the following:

7.5.6.1 a discussion of any major issues which arose during the external audit; 7.5.6.2 any accounting and audit judgments; and 7.5.6.3 levels of errors identified during the external audit.

7.5.7 The Committee shall review the effectiveness of the external audit. 7.5.8 Review any representation letter(s) requested by the external auditor before they are signed by management; Note that these representation letters are a standard practice of any audit and provide the auditor confirmation from management, (in particular the

Senior Financial Officer) that, amongst other matters, accounting standards have been consistently applied, that all matters that need to be disclosed have been so disclosed and that the valuation of assets has been consistently applied.

7.5.9 Review the management letter and management’s response to the external auditor’s findings and recommendations. 7.6 Economy and Efficiency Audits 7.6.1 To monitor and review any report resulting from the exercise of powers under Section 130A of the Local Government Act. To examine any matter

relating to financial management, or the efficiency and economy with which the Council manages or uses its resources to achieve its objectives and make recommendations to Council regarding outcomes and proposed actions.



8. Reporting Responsibilities 8.1 The minutes of the proceedings of the Audit Committee will be circulated to all Council members. If requested by Council, the Committee Chair

shall report to the Council, either in writing as a Presiding Member’s report or verbal. 8.2 The minutes will also, after confirmation, be made available to the public: 8.3 The Presiding Member may attend a Council meeting at any time that the Presiding Member sees fit to discuss any issue or concern relating to the

Audit Committee’s responsibilities. Depending on the nature of the matter, this may be held in confidence in accordance wit Section 90 of the Local Government Act 1999 and staff may be requested to withdraw from the meeting.

The Committee shall: 9.1 Have access to reasonable resources in order to carry out its duties; Note that this is subject to any budget allocation being approved by Council. 9.2 Be provided with appropriate and timely training, both in the form of an induction programme for new members and on an ongoing basis for all

members; 9.3 Give due consideration to laws and regulations of the Local Government Act, 1999; 9.4 Make recommendations on co-ordination of the internal and external auditors; 9.5 Oversee any investigation of activities which are within its terms of reference; and 9.6 Oversee action to follow up on matters raised by the external auditors; 9.7 At least once a year, review its own performance, constitution and terms of reference to ensure it is operating at maximum effectiveness and

recommend changes it considers necessary to the Council for approval. 9.8 Independent members of the committee are entitled to a sitting fee, as set by Council, where the presiding member is an independent member, a

higher sitting fee, as set by Council, will apply. 10. Authority 10.1 To seek any information it requires from any employee of the Council (after advising the CEO) in order to perform its duties; 10.2 To obtain, at the Council’s expense, (after consultation with the CEO) outside legal or other professional advice on any matter within its terms of

reference.



Audit Committee The following comprise the Terms of Reference for Whyalla Council’s Audit Committee.

Council to report the existence of Section 41 Committees on formation, and Committee to provide annual advice to Council of potential civil liability claims against the committee or its members.

1. Members

1.1 Members of the Committee shall be appointed bythe Council. The Committee shall consist on twoIndependent Members and three ElectedMembers. Council may appoint a proxy in theevent that an Elected Member cannot attend ameeting.

1.2 Independent member(s) of the Committee shallhave recent and relevant financial experience. ThePresiding Member of the Council (shall) be amember of the Committee.

Note: That a person would not be consideredindependent if he or she was an employee or anElected Member of that Council. Subject to anycodes of conduct adopted by Councils, this does notpreclude an Elected Member or an employee of aCouncil from being a member of an AuditCommittee of another Council.

Members

1st Independent – Chair

2nd Independent

Mayor

Councillor 1 Councillor 2 Proxy

Staff Observers

Chief Executive Officer

Group Manager Corporate

Senior Finance Officer

First meeting – TBA The Committee is to meet at least three times per year.

The Committee has power of recommendation only.

Meetings to be held in the Council Chamber.

Administrative support for Agenda, Minutes and correspondence to be provided by the Executive Assistant – Elected Body / Executive.

Annexure "B"



1.3 Only members of the Committee are entitled to

vote in Committee meetings, however, (other individuals such as the Chief Executive Officer, Finance Manager and if applicable the heads of risk, compliance and internal audit and representatives from the finance function) may attend any meetings as advisers or be responsible for preparing papers for the Committee. In accordance with the principles of open, transparent and informed decision‐making, Committee meetings must be conducted in a place open to the public. The Agenda and Minutes of the Committee meetings, subject to any items that are discussed in confidence under the relevant legislative provisions, are also required to be made available to the public.

1.4 Council’s external auditors and internal auditors, may be invited to attend meetings of the Committee.

1.5 Appointments of Elected Members to the Committee shall be for a period until the end of the term of the Council.

1.6 Appointment of the Independent Member(s) shall be across 2 terms of Council but not exceed a period of 4 years without reappointment.

1.7 The Council shall appoint the Independent Committee Chair for the term of Council.



2. Secretarial Resources 2.1 The Chief Executive Officer shall provide sufficient

secretarial resources to the Committee to adequately carry out its functions.

3. Quorum 3.1 The quorum necessary for the transaction of

business shall be 50% of the number of members of the Committee plus one. A duly convened meeting of the Committee at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Committee.

4. Frequency of Meetings 4.1 The Committee shall meet at least three times a

year at appropriate times in the reporting and audit cycle.

5. Notice of Meetings 5.1 Ordinary meetings of the Committee will be held

at times and places appointed by Council or, subject to a decision of Council, the Committee. A Special Meeting of the Committee shall be called by the Chief Executive Officer at the request of its Presiding Member or any two members of the Committee.



5.2 Unless otherwise agreed, Notice of each meeting

confirming the venue, time and date, together with an Agenda of items to be discussed, shall be forwarded to each member of the Committee and observers, no later than three clear days before the date of the meeting. Supporting papers shall be sent to Committee Members and to other attendees as appropriate, at the same time.

6. Minutes of Meetings 6.1 The Chief Executive Officer shall ensure that the

proceedings and resolutions of all meetings of the Committee, including recording the names of those present and in attendance are minuted.

6.2 The Chief Executive Officer shall include on the Agenda the declaration by any Committee member, the existence if any conflicts of interest and minute them accordingly.

6.3 Minutes of a meeting of the Committee shall be presented to the next meeting of the Council.

6.4 Minutes of Committee meetings shall be circulated within five days after a meeting to all members of the Committee and members of the Council.



7. Role of the Committee

7.1 Financial Reporting

7.1.1 The Committee shall monitor the integrity of the financial statements of the Council, including its annual report, reviewing significant financial reporting issues and judgments which they contain.

7.1.2 The Committee shall review and consider where necessary:

7.1.2.1 the consistency of improvement to and /or any changes to, accounting policies;

7.1.2.2 the methods used to account for significant or unusual transactions where different approaches are possible;

7.1.2.3 whether the Council has followed appropriate accounting standards and made appropriate estimates and judgments, taking into account the views of the external auditor;

7.1.2.4 the clarity of disclosure in the Council’s financial reports and the context in which statements are made; and

7.1.2.5 all material information presented with the financial statements, such as the operating and financial review and the corporate governance statement insofar as it relates to the audit and risk management.



7.2 Internal Controls and Risk Management Systems

The Committee shall:

7.2.1 Keep under review the effectiveness of the Council’s internal controls and risk management and governance systems; and

7.2.2 Review and recommend the approval, where appropriate of statements to be included in the annual report concerning internal controls, governance and risk management.

Note that it is important that the Audit Committee understand the business of the Council to appreciate the risks it manages on a daily basis, and to ensure that there are appropriate management plans to manage and mitigate this business risk. This will include insurance matters, financial reporting, legal and regulatory compliance, business continuity, and statutory compliance. This can be facilitated by discussions with the internal and external auditors and by presentations by management on how business risks are managed.

7.3 Whistleblowing

The Committee shall review the Council’s arrangements for its employees to raise concerns, in confidence, about possible wrongdoing in financial reporting or other matters. The Committee shall ensure these arrangements allow independent investigation of such matters and appropriate follow‐up actions and are referred to Whyalla City Council’s Whistleblowers Protection Policy.



7.4 Internal Audit

The Committee shall: 7.4.1 Monitor and review the effectiveness of the

Council’s internal audit function in the context of the Council’s overall risk management systems;

7.4.2 Consider and make recommendation on the

programme of the internal audit function and the adequacy of its resources and access to information to enable it to perform its function effectively and in accordance with the relevant professional standards.

Note: That this may include the review of the

areas that have been identified for review and the frequency of review. The Committee should also monitor whether the function of internal audit has adequate standing and is free from management or other restrictions. Whilst internal audit focuses on a Council’s systems and procedures, it is important that internal audit retains its independence and is not subject to any influence from management or Council that impedes its ability to report objectively.



7.4.3 Review all reports on the Council’s operations from

the internal auditors; Note: That the reports to the Audit Committee

need not be the detailed reports that are presented to management for their review. Ordinarily a high level review report is all that is required detailing the work undertaken, the findings and management response.

7.4.4 Review and monitor management’s

responsiveness to the findings and recommendations of the internal auditor; and

7.4.5 Where appropriate, meet the officer who

undertakes the internal audit (internal or outsourced) at least once a year, without management being present to discuss any issues arising from the internal audits carried out. In addition, the officer / agent undertakes the internal audit shall be given the right of direct access to the Presiding Officer of the Council and to the Chairperson of the Committee.



7.5. External Audit

The Committee shall: 7.5.1 Develop and implement a policy on the supply of

non‐audit services by the external auditor, taking into account any relevant ethical guidance on the matter;

7.5.2 Consider and make recommendations to the

Council, in relation to the appointment, re‐appointment and removal of the Council’s external auditor. The Committee shall oversee the selection process for new auditors and if an auditor resigns the Committee shall investigate the issues leading to this and decide whether any action is required;

7.5.3 Oversee Council’s relationship with the external

auditor including, but not limited to:

7.5.3.1 recommending the approval of the external auditor’s remuneration, whether fees for audit or non‐audit services, and recommending whether the level of fees is appropriate to enable an adequate audit to be conducted;

7.5.3.2 recommending the approval of the

external auditor’s terms of engagement, including any engagement letter issued at the commencement.



7.5.3.3 assessing the external auditor’s independence and objectivity taking into account relevant professional and regulatory requirements and the extent of Council’s relationship with the auditor, including the provision of any non‐audit services.

7.5.3.4 satisfying itself that there are no

relationships such as family, employment, investment, financial or business between the external auditor and the Council other than in the ordinary course of business;

7.5.3.5 monitoring the external auditor’s

compliance with legislative requirements on the rotation of audit partners; and

7.5.3.6 assessing the external auditor’s

qualifications, expertise and resources and the effectiveness of the audit process which shall include a report from the external auditor on the Audit Committee’s own internal quality procedures;

7.5.4 Meet as needed with the external auditor. The

Committee shall meet the external auditor at least once a year, without management being present; to discuss the external auditor’s report and any issues arising from the audit;



7.5.5 Review and make recommendations on the annual

audit plan, and in particular its consistency with the scope of the external audit engagement;

7.5.6 Review the findings of the audit with the external

auditor. This shall include, but not be limited to, the following:

7.5.6.1 a discussion of any major issues which

arose during the external audit; 7.5.6.2 any accounting and audit judgments;

and 7.5.6.3 levels of errors identified during the

external audit.

7.5.7 The Committee shall review the effectiveness of the external audit.

7.5.8 Review any representation letter(s) requested by

the external auditor before they are signed by management;

Note: That these representation letters are a

standard practice of any audit and provide the auditor confirmation from management, (in particular the Senior Financial Officer) that, amongst other matters, accounting standards have been consistently applied, that all matters that need to be disclosed have been so disclosed and that the valuation of assets has been consistently applied.



7.5.9 Review the management letter and management’s

response to the external auditor’s findings and recommendations.

7.6 Economy and Efficiency Audits

7.6.1 To monitor and review any report resulting from the exercise of powers under Section 130A of the Local Government Act. To examine any matter relating to financial management, or the efficiency and economy with which the Council manages or uses its resources to achieve its objectives and make recommendations to Council regarding outcomes and proposed actions.

8. Reporting Responsibilities

8.1 The minutes of the proceedings of the Audit Committee will be circulated to all Council members. If requested by Council, the Committee Chair shall report to the Council, either in writing as a Presiding Member’s report or verbal.

8.2 The minutes will also, after confirmation, be made available to the public:

8.3 The Presiding Member may attend a Council meeting at any time that the Presiding Member sees fit to discuss any issue or concern relating to the Audit Committee’s responsibilities. Depending on the nature of the matter, this may be held in confidence in accordance with Section 90 of the Local Government Act 1999 and staff may be requested to withdraw from the meeting.



The Committee shall: 9.1 Have access to reasonable resources in order to

carry out its duties; Note That this is subject to any budget allocation

being approved by Council. 9.2 Be provided with appropriate and timely training,

both in the form of an induction programme for new members and on an ongoing basis for all members;

9.3 Give due consideration to laws and regulations of

the Local Government Act, 1999; 9.4 Make recommendations on co‐ordination of the

internal and external auditors; 9.5 Oversee any investigation of activities which are

within its terms of reference; and 9.6 Oversee action to follow up on matters raised by

the external auditors; 9.7 At least once a year, review its own performance,

constitution and terms of reference to ensure it is operating at maximum effectiveness and recommend changes it considers necessary to the Council for approval.



9.8 Independent members of the committee are

entitled to a sitting fee, as set by Council, where the presiding member is an independent member, a higher sitting fee, as set by Council, will apply.

10. Authority 10.1 To seek any information it requires from any

employee of the Council (after advising the CEO) in order to perform its duties;

10.2 To obtain, at the Council’s expense, (after

consultation with the CEO) outside legal or other professional advice on any matter within its terms of reference.


3.1.4 Strategic Risk Profile Audit Committee 26 June 2017 Author’s Title: Group Manager Corporate Group Manager: Migelle Hiscock Department: Corporate File No.: 0‐159 Annexures:

A Strategic Risk Profile Officer Direct or Indirect Conflict of Interest: In accordance with Local Government Act 1999, Section 120


Yes No Yes No


PURPOSE To receive and note the Strategic Risk Profile for July 2015 – June 2018. SUMMARY As part of ongoing risk management practices, the Strategic Risk Profile has recently been subject to a review. The document has been updated to reflect the current status of controls that are to be implemented to mitigate risk. RECOMMENDATION That the Audit Committee endorse and recommend to Council the updated Strategic Risk Profile July 2015 – June 1018.

3.1.4 Strategic Risk Profile REPORT BACKGROUND Risk is inherent in everything Council undertakes. As part of Council governance and stewardship roles, risk is something Council is charged to manage and control in a variety of ways. The attached Annexure “A” describes the areas of risk that Council has and the existing controls that are in place to manage the risk. The document also outlines the additional controls to be implemented to further reduce Councils exposure. DISCUSSION The Council, for a number years, has sought to build a risk management culture and establish a more formalised, integrated and visible process to identify risk exposure across all of the varied activities of the organisation. The aim has been to take a systems approach to risk management in order to provide Council with an assurance that these exposures are adequately controlled and any gaps are rectified. Monitoring and review are essential to the process, and as part of this review the Strategic Risk Profile, has been presented to the Executive Management Team for endorsement and is now presented to the Audit Committee for ratification. The table below summarises the level of risk identified within the Strategic Level Risk Profile (refer to Annexure “A” for further detail).

Risk Level Number of Risks

Extreme 1

High 6

Medium 10

Low 7

Financial Implications – Nil Strategic Plan Goal – Civic Leadership and Organisational Development Key Issue – 4.7 The Whyalla Community will have confidence in Council’s governance Legislation – Nil Officer Direct or Indirect Interest Executive Management Team

Risk Assessment – Ongoing Social Considerations – Not applicable Community Engagement – Not applicable Environmental Implications – Not applicable Communication – Not applicable Conclusion That the Strategic Risk Profile, as reviewed and endorsed by the Executive Management Team, is now presented to the Audit Committee for ratification.

STRATEGIC LEVEL RISK PROFILE : 1 JULY 2015 -30 JUNE 18 Version 3 : June 2017

G:\Governance\Meetings\Audit Committee\2017\26 June 2017\gmc report - strategic risk profile - annexure a.docx Page 1

Context of Risk, eg

WHS, Financial,

Environmental etc

Risk Description – what and how (trigger

factors) Description of Existing Controls

Likeli- hood

Rating

Conse-quence Rating

Risk Level Green = Low Yellow = Med

Orange = High Red = Extreme

Additional Controls to be Implemented

Likeli-hood

Rating

Conse-quence Rating

Residual Risk

Rating Responsible

Officer

Accountable Officer (Group

Manager)

Implementation Timetable with Estimated End

Date

Mitigation Milestone Achieved

WHS 1. Death/serious injury(industrial accident).

1. WHS “One-System” Policiesand Procedures in place.2. Hazard/Risk Profilesdetermined.3. Corrective and preventativeaction computerised reportsmechanism.4. Computerised Risk Register.5. WHS Training in place

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ikel

y

Cat

astr

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c

Ext

rem

e

1. JSA to be completed prior toundertaking works

Rar

e

Cat

astr

ophi

c

Hig

h

HR CEO 30/06/2015 Yes

WHS 2. Death (- even overlong term injury/illnessas a result of exposureto hazardoussubstances byemployees and public(inhalation, absorption,chemical burns).

1. Chemicals inventory on registerand audited on annual basis.2. Safety Data Sheets in place ateach worksite.3. Hazardous substancesidentified, assessed and eliminated/controlled through centralised process using ChemAlert. 4. Chemicals purchased,controlled by Procurement.5. Hazardous Work Policy andHazardous Chemicals Procedurein place.6. Annual hazardous chemicalsaudit conducted.7. Asbestos annual auditconducted.8. Targets set to reduce asbestosin Council properties.9. Weeds Spray Operators haveCert III Weed spray.10. Training conducted on relevantpolicies/procedures.

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1. Contaminated sites such as formerLandfill Depot to bemonitored/managed to avoid toxicwaste/gas as per EPA requirements.2. Contract cleaners to have regularaudits by Council Officer to ensure compliant with contract terms. 3. Non-conformances from annualaudit to be addressed through CAPA processes

Rar

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ophi

c

Hig

h

GM Infrastructure & Planning

Project Control Officer

HR

CEO 30/06/2016

30/6/2017

Ongoing

Yes

Yes

Yes

WHS 3. Death, maiming as aresult of vehicle/plantaccidents (vehiclecollisions/plantmechanism failures,safety guards not inplace, lack ofmaintenance onbrakes, playgroundequipment etc.

1. Plant Assessment/ MaintenancePolicy and Procedures in place.2. Workers properly trained,licensed/competent to useequipment provided (refer trainingrecords)3. Workers consulted on plantpurchases. 3. Maintenance/ inspection/monitoring regimes and records inplace.4. Plant assessment systemaudited regularly.5. Plant/playground equipmentregisters in place.

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1. Plant purchase specifications to beenhanced/procurement processreviewed and training provided.2. Playground equipment to be on aregister (not just on Assets listing). 3. Playground inspections to bescheduled, recorded and crossreferenced to a Register.

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e

Cat

astr

ophi

c

Hig

h

GM Infrastructure & Planning GM Infrastructure & Planning GM Infrastructure & Planning

CEO 31/09/2015

31/09/2015

31/09/2015

Yes

Yes

Yes

Annexure "A"



Context of Risk, eg

WHS, Financial,

Environmental etc



Likeli- hood

Rating

Conse-quence Rating




Likeli-hood

Rating

Conse-quence Rating

Residual Risk

Rating Responsible

Officer


Manager)


Date


WHS 4. High Risk work causing accidents/ injury/ death (entrapment in confined space, remote work, employee injured without timely assistance, roadside work can entail vehicle collision and injury/death of employees, trenching can result in collapse of heavy materials/ entombment etc.).

1. System of Job Safety Analysis/Risk Assessments in place. 2. Relevant templates to be completed, employees trained in their use. 3. Permits/special licences/ training in place for high risk work. 4. Where employees lack competence specialist contractors retained, eg asbestos removal, confined space etc. 5. Hazardous Work Policy and Procedures in place and regularly audited. 6. Relevant safe work instructions in place and regularly revised in consult with employees where risk assessments indicate. 7. Relevant employees trained with appropriate licences updated. 8. Contractors checked and monitored for relevant capability/licences.

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Hig

h

1. Audit non-conformance in this area. These are to be strictly dealt with and closed out asap on the CAPA system. 2. Contractor management controls as per revised “One System” doc to be strictly enforced. 3. Project audits to be conducted in regard to contractor management requirements. Audit process and selection process to be developed.

Rar

e

Cat

astr

ophi

c

Hig

h

HR CEO GM Infrastructure & Planning

CEO Ongoing – complete action within 2 months of identification of non-conformance 31/12/2015 30/12/2017

Ongoing Yes

WHS 5. Failure by Return to Work SA at a RTW Audit – impacting on LGAWCS status on Exempt Insurer (failure and non-compliance rating for critical aspects of One System, WHS Act and Regulation requirements).

1. Legislative Audits conducted every two years by LGAWCS. WCE compliant or any non-conformance addressed stat. 2. Annual KPI audit conducted by LGAWCS personnel and report/rating produced. 3. Senior Management and WHS monitor WHS system and receive regular reports and updates. 4. System of WHS internal audits implemented. 5. WHS Plan consulted on, adapted and implemented annually.

Unl

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y

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e

Med

ium

1. Executive Management to be updated and aware of their responsibility and to drive PSSI and legal compliance within their areas of responsibility. 2. Quarterly WHS Reports on compliance status to be produced for Management. 3. CAPA close-outs to be promptly achieved by Management.

Rar

e

Mod

erat

e

Med

ium

Executive Management Team HR Executive Management Team

CEO 30/06/2018 Ongoing Ongoing

Yes – Training provided Ongoing Ongoing



Context of Risk, eg

WHS, Financial,

Environmental etc



Likeli- hood

Rating

Conse-quence Rating




Likeli-hood

Rating

Conse-quence Rating

Residual Risk

Rating Responsible

Officer


Manager)


Date


WHS 6. Contractors, non-employment persons, public at Council events/venues harmed, injured, e.g. volunteers, work experience persons, public children, disabled etc. [- inexperienced persons most likely to have accidents be at risk according to statistics - public events can pose liability issues for Council in regard to loss/injury of third parties/public - contractors act as agent of Council and can cause loss]

1. Non employment/volunteers process, policy, procedures and template records in place. 2. Event Management Policy, procedures etc. in place. 3. WHS and Project Management contractor requirements and superintending of such in place. 4. Safe Environments Policy, procedure and relevant Police checks/mandatory reporting requirements in place. 5. Audits on above conducted regularly. 6. Risk assessments re above conducted prior to events, intake of non-employees, projects commencement.

Unl

ikel

y

Min

or

Low

No additional Controls required

Executive Management Team

CEO Yes

Environment 1. Force majeure events, e.g. flood, fire, tempest etc. (severe weather event)

1. Disaster/Emergency Management Plans in place. 2. Liaison/integration with State Disaster protocols and processes in place. Membership of LG Functional Support Group. 3. Relevant Council personnel competent and trained. 4. Relevant insurance in place and updated regularly. Conditions complied with. 5. Iresponda procedures in place and training provided.

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Hig

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1. WCC to integrate and comply with CERNS plan for State Plans Western Area. 2. WCCs Business Continuity Plan to be revised annually. R

are

Maj

or

Hig

h

CEO HR

CEO In accord with LGA MLS project requirements. Ongoing

Yes Yes

Environment 2. Climate change factors impinge on Council area and service/capital work, provision etc. [- sea level, coastal degradation, tree failures, loss of native flora/fauna re over-run/ decimated by introduced weed species/risk factors - failure by WCC to consider impact of climate change on its strategic objectives - loss of amenity for city as trees fall, die off etc.]

1. Tree Plan in place. 2. Tree audits undertaken by employees and arborists on regular basis. 3. Coastcare Plan in place and being implanted. 4. Climate Change Adaptation Report and recommendations received. 5. Development Plan considers climate change impacts and strategies.

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Hig

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1. Develop and implement objective assessment criteria for street/parks, trees that balance needs for watering, extreme events and public safety. (Tree Audit). 2. Consider climate change sensitive initiatives in Future Planning Policy (refer Climate Change Adaptation Report). 3. Implement strategies in Section 5 of Climate Change Adaptation Report. R

are

Min

or

Med

ium

GM Infrastructure & Planning GM Infrastructure & Planning GM Infrastructure & Planning

CEO 31/12/2017 30/06/2018 30/06/2018



Context of Risk, eg

WHS, Financial,

Environmental etc



Likeli- hood

Rating

Conse-quence Rating




Likeli-hood

Rating

Conse-quence Rating

Residual Risk

Rating Responsible

Officer


Manager)


Date


Environment 3. Lack of water, drought conditions, reduction in reliance on Murray water [- less water (recycled and Murray) leads to compromised service delivery for construction activities and loss of aesthetics and amenity - loss of trees, vegetation etc impact on amenity - increased management and resources to undertake monitoring and review of identified tree issues (from Arborist reports)]

1. Project Plan for implementation of Sport and Recreation Master Plan to integrate facilities and reduce water needs. 2. Waterproofing Whyalla (Federally funded) project developing capacity to provide recycled water and forecast of potential amenities for city, amenity and stakeholder use. 3. Implementing sub surface irrigation projects throughout city as need/opportunity arises. 4. Arborist inspections occurring. 5. Tree Management Plan in place and revised regularly.

Pos

sibl

e

Mod

erat

e

Hig

h

1. Consider and/or further the development of an integrated Water Management Plan with SA Water and key stakeholders (Recycled Water Program) 2. Investigate further options for water savings and storm water capture and re-use.

Pos

sibl

e

Min

or

Med

ium

GM Infrastructure & Planning GM Infrastructure & Planning

CEO 30/06/2016 Ongoing

Yes Ongoing

Environment 4. Carbon emissions, toxic gas damage, degradation/ contamination issues, breaches of EPA etc. licence requirements [- contaminated sites, eg Ayliffe Street Depot, former Newton Street landfill etc. - pollution increases due to carbon and other greenhouse gas emissions - breaches of EPA requirements, loss of licence etc.]

1. Toxic or potential toxic sites within Council jurisdiction have management plans in place and are regularly monitored. 2. Install Green Energy systems on to Council Buildings 3. Waste and Recycle Centre Plan to reduce landfill via waste recycling strategies education program etc.

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y

Mod

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Med

ium

1. Plan for further energy savings at Council to be developed and implemented. 2. Landfill Waste and Recycle Centre future operations to be considered.

Unl

ikel

y

Min

or

Low

Executive Management Team GM Infrastructure & Planning

CEO CEO

Ongoing Ongoing

Ongoing Ongoing

Environment 5. Native vegetation destruction loss of natural and built heritage native title issues give rise to Council liability, conservation requirements not met. [- native vegetation areas reduced - heritage sites/buildings lost or in decline]

1. Mt Laura Management Plan in place. 2. Heritage Assets Register in place. 3. Heritage Preservation Policy and procedure. 4. Heritage Adviser consulted as required. U

nlik

ely

Min

or

Low

1. Draft Local Heritage Plan Amendment to be completed.

Unl

ikel

y

Min

or

Low

GM Infrastructure & planning

CEO 31/03/2016 Yes



Context of Risk, eg

WHS, Financial,

Environmental etc



Likeli- hood

Rating

Conse-quence Rating




Likeli-hood

Rating

Conse-quence Rating

Residual Risk

Rating Responsible

Officer


Manager)


Date


Finance 1. Rate revenue base decline, population reduction, loss or reduction of Government grants, fees etc. [- Council does not raise the correct level of rate income - Council loses recurrent grant funding to provide existing service levels - grant funding not claimed, received by Council on a timely basis or not at all - fee charges not reflective of value of services provided]

1. Rates automatically generated by rate system, regularly reviewed by Management for correct application methodology, payment % paid etc. 2. Actual rate revenue and rate rebates compared to budget regularly; management reviews and investigates significant variations. 3. Property master file data periodically reviewed for accuracy and ongoing pertinence. 4. Management and/or Council to approve all grants prior to funds being received by Council to ensure all terms and obligations can be met and that grant is in line with Council’s Strategic Plan objectives. 5. Council has process in place to review services where grant funding has or may cease. 6. Management regularly reviews all grant income and monitors compliance with terms of grant and alignment with strategic objectives. 7. Fees and charges based on cost recovery/user pays reviewed annually and adopted by Council. 8. Formal leases, agreements, contracts in place and regularly updated to cover use of Council facilities. Reviewed regularly to ensure terms, conditions etc being met.

Unl

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y

Maj

or

Hig

h

Council to have a clear Policy on grant funding detailing assessment process, recognition, treatment, claim collection, community expectations and funding period and disclosure of conflicts of interest. Rate Base monitored and Rating Strategy to be reviewed annually Long Term financial Plan to be reviewed annually Pricing Strategy to be put in place including user pays and cost recovery principles

Unl

ikel

y

Mod

erat

e

Med

ium

GM Corporate CEO 30/06/2015 Yes



Context of Risk, eg

WHS, Financial,

Environmental etc



Likeli- hood

Rating

Conse-quence Rating




Likeli-hood

Rating

Conse-quence Rating

Residual Risk

Rating Responsible

Officer


Manager)


Date


Finance Financial Internal controls are not sufficient to prevent Fraud or misstatement of financial information [- Council does not comply with statutory reporting requirements and deadlines - Council reporting is inaccurate] could result in qualified audit opinion

1. Relevant Policies and Procedures adopted, on Unity, regularly reviewed and revised and relevant employee training conducted. 2. Risk identification and assessments undertaken in regard to procedures. 3. Controls self-assessment conducted regularly, with any non-conformances addressed promptly. 4. Internal finance audits conducted, listed on Integrated Audit Schedule and reported to Audit Committee, EMT, Council. 5. Authorisations/delegations made appropriately and reviewed regularly. 6. Segregation of duties in place as appropriate and reviewed regularly. 7. Implement LGA’s Better Practice Model – Financial Internal Control for SA Councils’ recommendations where applicable.

Unl

ikel

y

Min

or

Low

No additional controls needed

GM Corporate CEO ongoing



Context of Risk, eg

WHS, Financial,

Environmental etc



Likeli- hood

Rating

Conse-quence Rating




Likeli-hood

Rating

Conse-quence Rating

Residual Risk

Rating Responsible

Officer


Manager)


Date


Finance 3. Excessive expenditure exceeding budget provisions [- budgets not reflecting strategic objectives - unrealistic budgets, opportunity cost ‘principle not’ considered - budgets are inaccurately reported with differences in budget adopted by Council and that exercised by Council administration - Project/Cost Centre over-runs]

1. Budget Policy and Procedure in place to ensure annual budget is consistent with annual Business Plan and Strategic Management Plan. 2. Ongoing review by Management/Audit Committee of actual performance against budget and to monitor alignment with strategic objectives. 3. Audit Committee established with appropriate terms of reference membership with relevant capability and with suitable work program in place. 4. Budget managers accountable for appropriate expenditure and responsible for completing budget reviews aligned with strategic objectives. 5. Long term financial plan (10 years) in place to underpin annual budgets alignment with long term strategic plans. 6. Council administration responsible for framework of internal controls over budget formation and management. 7. Project Management Policy, procedure and work instructions in place to ensure actual project costs are regularly compared to budget and significant variances investigated by Management.

Unl

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y

Mod

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e

Med

ium

1. Specifications and budgets for capital projects to be improved. Ensure procedure compliance. 2. Project Management Policy, procedure and work instructions to be enforced consistently for all projects over $100,000.

Rar

e

Min

or

Low

GM Corporate CEO

CEO ongoing ongoing

Yes Yes



Context of Risk, eg

WHS, Financial,

Environmental etc



Likeli- hood

Rating

Conse-quence Rating




Likeli-hood

Rating

Conse-quence Rating

Residual Risk

Rating Responsible

Officer


Manager)


Date


Finance 4. Fraud, corruption, financial mismanagement, misappropriation of funds [- laissez-faire culture apparent within organisation - lack of enforcement of policies, procedures, internal contracts etc - knowledge, skills, experience and attitude of employees declining - inappropriate culture evident within Council organisation - structure of the Council organisation lacks coherence and clear lines of demarcation and accountability - Elected Members’ allowances and benefits unclear]

1. Anti-Fraud and Corruption Policy adopted by Council, reviewed and revised regularly. 2. Whistle Blower Protection Policy and procedure adopted, regularly reviewed. 3. Whistle blower in place as a result of Audit Committee resolution. 4. Role segregation as per LGA financial internal controls recommendations in place re Finance Officer at WCC. 5. Annual Audit(s) conducted as per LG Act requirements. 6. Audit Committee in place with appropriate Terms of Reference, competent membership and a work program for committee adopted and reported on regularly. 7. Elected Members’ Allowances and Benefits Policy in place and revised as per LG Act’s requirements. 8. Elected Members and Employees Code of Conduct in place and regularly reviewed.

Pos

sibl

e

Min

or

Med

ium

1. Whistle blower process to be evaluated. 2. LGA Financial Internal Controls recommendations to be implemented as required and framework adopted. 3.Audit re amendments to LG Act re Financial Internal Audit to be implemented. 4. System of internal audits to be implemented and reported on to Audit Committee. 5. Whistle Blower Officer to be identified and have relevant training as per Act, amendment as (and when) specified by the Minister.

Governance Officer GM Finance & Corporate GM Finance & Corporate GM Finance & Corporate CEO

CEO 30/12/2017 30/6/2017 30/6/2017 30/3/2017 30/6/2018

Yes Yes Yes

Finance The level of risk to Council revenue from the Arrium sale. Under the current arrangement with Onesteel, Council receives an ex-gratia payment of approximately $700,000 in lieu of rates as the indentured land is not rateable;

1.Agreement with Administrators – Korda Mentha to continue to pay the ex gratia payment

poss

ible

mod

erat

e

med

ium


Assets Management

1. Damage to assets as result of severe/terminal events or incidents [- flood, fire, explosion, extreme weather event - climate change events impacting on assets, eg seawall failure as a result of higher than normal king tides]

1. Appropriate insurances in place meeting LGA MLS guidelines and stipulations. 2. Relevant leases, licences, warranties, contracts in place for Council assets. 3. Maintenance management and risk assessment regimes are in place. 4. Assets register regularly maintained and updated. 5. Long Term Assets Management Council Plan to be implemented.

Unl

ikel

y

Mod

erat

e

Med

ium

1. LGA MLS Climate Change Report recommendations be implemented as relevant to assets, ie sea level rise risks.

Rar

e

Min

or

Low

CEO / GM Infrastructure & Planning

CEO Ongoing

Ongoing



Context of Risk, eg

WHS, Financial,

Environmental etc



Likeli- hood

Rating

Conse-quence Rating




Likeli-hood

Rating

Conse-quence Rating

Residual Risk

Rating Responsible

Officer


Manager)


Date


Assets Management

2. Failure to adequately depreciate, account for and maintain assets.

1. Pavement management system in place to record maintenance requirements re roads etc. Snowy Mt Engineer (SMEC) or similar condition reports undertaken regularly. 2. Inventory Policy and procedures in place to ensure non fixed assets are secured, stock-takes and maintenance regimes in place and recorded. 3. Adequate year end considerations undertaken to ensure consistent valuation policies are adopted and applied. 4. Employees with access to Assets Register segregated from those with accountability for maintenance and management of assets.

Pos

sibl

e

Mod

erat

e

Hig

h

1. Whole of life costing for assets created upgraded to be included in projects business cases. 2. Plan for depreciation ratio to be met by maintenance upgrade regimes to extend life of assets. 3. Assets Management (long term plan) to be reviewed annually

Unl

ikel

y

Mod

erat

e

Med

ium

CEO/ GM Infrastructure & Planning Finance Manager


Yes Ongoing Ongoing

Assets Management

Assets fail to meet service needs of the community. [-deterioration and failure due to inadequate renewal and replacement regime - assets incorrectly disposed of - assets purchases are inappropriate, or irregularly purchased, acquired and/or disposed of ]

1. Assets maintenance and inspection regime in place. 2. Risk assessments conducted on deteriorating assets and those posing a risk to public and/or liability to Council, eg playgrounds. 3. Vehicle/Plant Risk Assessment Policy/Procedure and templates in place with maintenance regime and required reporting in place. 4. Procurement and Disposal Policy and procedures in place and adhered to in regard to purchase, acquisition and disposal of assets.

Pos

sibl

e

Min

or

Med

ium

1. Implement a Playgrounds Register, separate to Assets Register and note condition reports and inspection incidences on it. 2. Assets review to occur on regular basis to assess/evaluate asset/liability ratios and action disposal where liability, under-utilisation aspects indicate. 3. Plant risk assessments, maintenance and commissioning reviewed regularly.

Unl

ikel

y

Min

or

Low

GM Infrastructure & Planning Assets officer GM Infrastructure & Planning


Yes Ongoing Ongoing

Assets Management

Poor property management [- inadequate licences and leases in place, not reviewed regularly - tenant damage, loss of condition - disputes in regard to property management/ maintenance etc]

1. Leases and licence, using relevant standard templates (legally scrutinised) in place and signed prior to occupancy. Any special terms, conditions clearly spelled out in lease, contract etc. No lease etc to exceed 5 years. 2. Leases/licences/contracts etc reviewed in a timely manner with relevant CPI rent adjustments made. 3. All Council leases to be upgraded onto approved lease, licence template as come up for renewal.

Unl

ikel

y

Min

or

Low

1. Appropriate property management and inspection regime to be undertaken.

Unl

ikel

y

Min

or

Low

GM City Growth & Delivery

CEO 30/6/2018



Context of Risk, eg

WHS, Financial,

Environmental etc



Likeli- hood

Rating

Conse-quence Rating




Likeli-hood

Rating

Conse-quence Rating

Residual Risk

Rating Responsible

Officer


Manager)


Date


Records/ Information Management

Data/Records loss/corruption [- loss/corruption of IT files - physical loss/damage/ omission to retain physical/cyber documents - inability to produce relevant records for court hearings, legal actions, etc.]

1. Access to Computer Network & Systems Policy in place, enforced and regularly revised. 2. Records Management Policy and procedures in place, enforced and regularly reviewed. Training provided. 3. Compliance with State Records Act requirements implemented and regularly audited. 4. IT systems and use risk assessed and regularly audited. Firewalls/security devices and upgrades. 5. Appropriate back up protocols in place for IT system. 6. Gas suppression bounded storage, State archiving etc. in place for records reliability and preservation. 7. 10 year inspection and re-gassing process in place. 7. Appropriate exit processes in place to remove access/data etc. from IT system.

Unl

ikel

y

Min

or

Low

No additional controls required.


Service Provision

Loss of reputation [- increase in number of complaints to Council re service provision - unfavourable media articles/items re Council service provision/project delivery - rise in number of Ombudsman queries being made - Rate Payers’ Association increasing numbers of questions, queries etc to Council - Elected Members’ queries in regard to reasons for service lapses, quality decline etc on the rise]

1. Computerised Customer Request System on Synergy Soft in place, tracked and analysed. 2. Complaints recorded, tracked and analysed on Synergy Soft Complaints Handling System. 3. Ombudsman’s Audit recommendations of audit report being implemented. 4. Service Standards and KPIs and Customer Service Charter being reviewed and revised. 5. Appropriate Community Engagement, survey processes etc being conducted in regard to projects, new or changed service provision. 6. Customer surveys undertaken and analysed, evaluated etc. 7. Media plans in place for projects and proactively managed in conjunction with stakeholders.

Unl

ikel

y

Min

or

Low

1. Community services to provide monthly report on service standards

Unl

ikel

y

Min

or

Low

GM Corporate Ongoing Yes



Context of Risk, eg

WHS, Financial,

Environmental etc



Likeli- hood

Rating

Conse-quence Rating




Likeli-hood

Rating

Conse-quence Rating

Residual Risk

Rating Responsible

Officer


Manager)


Date


Service Provision

Services Interruption/Failure [- complaints by residents cluster in regard to specific issues/projects - Council employees/ contractors cause service disruption incidents, e.g. recent gas outage - penalties, fines, legal action, insurance claims when analysed indicate problems/bottlenecks, poor delivery etc.]

1. Job Safety Analysis and Risk Assessments System in place to identify/mitigate risk to service delivery prior to work/project commencing. 2. Contractor Management Policy, procedures and work instructions in place, followed, audited, evaluated and revised regularly. 3. Procurement/Projects, systems and contracts have appropriate clauses in place re insurance, indemnity, penalty clauses etc. to protect service delivery standards. 4. Work instructions in place for standard service delivery tasks at Council. Reviewed each five years. 5. Resources – employees, equipment, budget, contractors engaged, services adequate for current, specified service delivery levels. 6. Relevant employee training in place to ensure competent service delivery. 7. Residents/customer surveys undertaken by Council from time to time and findings assessed and evaluated.

Pos

sibl

e

Min

or

Med

ium

1. Contract specification writing enhanced, e.g. training for Project/Procurement staff. LG Works contract document to be reviewed and implemented. 2. Procurement, contractor management processes and protocols to ensure competent service delivery, e.g. non-conformances by contractors/service providers to be recorded, evaluated on contractor register annually. 3. Project Management and Procurement Procedures/work instructions to be reviewed/revised. 4. BCP, Disaster and Emergency Management Plans to be reviewed annually.

Unl

ikel

y

Min

or

Low

Senior Procurement Officer Senior Procurement Officer Senior Procurement Officer EMT

GM Corporate GM Corporate GM Corporate CEO

31/10/2016 31/10/2016 31/03/2017 Ongoing

Yes Yes Yes Ongoing

Legal Compliance

1. Council being sued, Ministerial interventions, contract failures [- legal disputes in regard to contract specifications/terms etc. - objections/complaints in regard to Council (or officer/agent) decisions - Safework SA prosecutions

1. Project Management Policy, procedures and work instructions in place. 2. Procurement utilise LG Works Contract template and relevant Council templates. 3. Procurement and Disposal Policy and Procedures in place and enforced. 4. Public complaints and Grievance Policy in place to meet LG Act (1999) Section 270 requirements adopted by Council and available to public. 5. Synergy Soft complaints handling tracking system in place and being utilised. 6. WHS One System implemented, audited, reviewed and revised regularly.

Pos

sibl

e

Min

or

Med

ium

1. Project Management Policy, procedure and work instructions to be reviewed/revised. 2. Project Management templates and process to be followed and enforced. 3. Project Management Training to be held including superintending of projects/contracts, contract specification writing. 4. Latest, revised version of LG Works Contract to be implemented. 5. Procurement and Disposal Policy and procedures to be reviewed and revised. 6. Council’s Complaints, S270 Review etc. policies to be reviewed in light of LGA model policies and adopted by Council. 7. Employees to receive complaints S270, customer service training re systems and processes.

Unl

ikel

y

Min

or

Low

Senior Procurement Officer Strategic Procurement Officer Senior Procurement Officer Senior Procurement Officer Senior Procurement Officer Executive Management Team Executive Management Team

GM Corporate GM Corporate GM Corporate GM Corporate GM Corporate CEO CEO

31/10/2016 Ongoing Ongoing 31/10/2016 31/03/2016 31/12/2016 31/12/2017 31/12/2018

Yes Yes Yes Yes Yes Yes



Context of Risk, eg

WHS, Financial,

Environmental etc



Likeli- hood

Rating

Conse-quence Rating




Likeli-hood

Rating

Conse-quence Rating

Residual Risk

Rating Responsible

Officer


Manager)


Date


Legal Compliance

2. Council non-compliant with relevant Acts, in breach of statutory requirements [- Ombudsman, Ministerial reviews occurring - audit findings (internal and external) indicating unacceptable level of non-conformance - Council, committees and officers acting “ultra vires” in regard to specific powers assigned to them by relevant legislation, delegations, authorisations etc. - flawed delegations, sub delegations and authorisations occurring - Safework SA prosecutions]

1. Council Policies and Procedures as required by relevant legislation are in place, regularly reviewed/revised, consulted upon as required and adopted by Council/Senior Management Team respectively. 2. Governance self-assessment audit conducted regularly. 3. Delegations review conducted annually as per LG Act requirements and compliant sub delegations process followed. 4. System of integrated schedule of audits in place and conducted as required to monitor compliance by Audit Committee. 5. Elected Members and employee training programs in place to ensure awareness of legislative requirements. 6. Section 41 committees are listed on a register annually (no delegations are made to any committees at WCC) and LG MLS informed of membership etc. 7. Terms of Reference (written are in place for Council committees and inductions held for external public members as to obligations). 8. WHS One System in place etc.

Pos

sibl

e

Min

or

Med

ium

1. System of Policies etc. to be revised, made more user friendly etc. 2. System of internal audits to be enhanced and ensure they are being implemented. 3. Legislative Compliance Self-Assessment (with LGA tool) to be undertaken. 4. Implement outcomes/ recommendations from the Ombudsman audit of Local Government Internal Review of Council Decisions Procedure.

Unl

ikel

y

Min

or

Low

IT Manager HR (WHS audits) Finance Manager (Finance audits)

CEO Ongoing Ongoing Ongoing 30/12/2017

Ongoing Ongoing Yes Yes

Legislative Compliance

3. Fraud and corruption charges levied, loss of Council reputation [- Ombudsman investigations increasing in regard to serious matters - whistle blower notifications increased and of serious nature - media carry repeated stories, allegations in regard to Council lack of transparency - Ministerial questions asked to regard to lack of good governance - Audit results indicate areas of systems weakness or lack of compliance]

1. Anti-Fraud and Corruption Policy in place as per LG Act requirements and regularly reviewed via Self-Assessment Audit. 2. Whistle Blower Protection Officer appointed by Audit Committee/Council. 3. Elected Member training in regard to good governance and LG Act requirements conducted by Wallmans’ Lawyers. 4. Employee training in regard to relevant training held annually as part of Mandatory Training program. 5. Elected Member/Employee Codes of Conduct in place consulted on and regularly reviewed. 6. Elected Members and Officers Duty of Disclosure completed annually and sent to LGAMLS.

Unl

ikel

y

Min

or

Low

1. Regular training to be provided to Elected Members (i.e. code of conduct)

Unl

ikel

y

Min

or

Low

CEO CEO Ongoing Ongoing


3.1.5 Related Party Disclosures Audit Committee 26 June 2017 Author’s Title: Senior Finance Officer Group Manager: Migelle Hiscock Department: Corporate File No.: 0‐159 Annexures:

A Related Party Disclosure for Key Management Personnel template Officer Direct or Indirect Conflict of Interest: In accordance with Local Government Act 1999, Section 120


Yes No Yes No


PURPOSE To communicate the introduction of AASB 124 Related Party Disclosure and its impact on Financial Statement Reporting and Key Management Personnel of Council. SUMMARY This report details the required disclosure in Councils’ financial statements to ensure compliance with the implementation of Australian Accounting Standard AASB 124 Related Party Disclosures. RECOMMENDATION That the Audit Committee recommend Council adopt the Related Party Disclosures for Key Personnel Management template and note that this is now a requirement of the Australian Accounting Standards Board under AASB 124 Related Party Disclosures.

3.1.5 Related Party Disclosures Report REPORT BACKGROUND This report details the financial statement disclosure required in relation to key management personnel and related party transactions. DISCUSSION For periods commencing on or after 1 July 2016, the requirements of AASB 124 Related Party Disclosures will apply to General Purpose Financial Statements. To comply, Councils must disclose related party relationships, transactions and outstanding balances, including commitments for key management personnel in the annual financial statements. Key management personnel may include the Mayor, Councillors, Chief Executive Officer, Executive and Senior Officers. Related parties include close family members and any entities that are controlled or jointly controlled. Any transactions between Council and these parties, whether monetary or not, may need to be identified and disclosed. Disclosure will generally be made where a transaction has occurred between Council and a related party. The transaction must be material in size or nature. Council, in determining significance, should consider:

the size of the transaction;

whether the transaction was conducted at arm’s length;

whether the transaction was outside the normal day‐to‐day Council operations;

whether the transaction was subject to Council approval;

whether a financial benefit not available to the general public was provided; and

whether the transaction is likely to influence the decisions of users of financial statements.

The total remuneration paid to key management personnel must be disclosed. A Related Party Disclosure From has been developed and is presented at Annexure “A”. This form will be issued to all identified Key Management Personnel annually to ensure the disclosure in the financial statements is reported accurately. Financial Implications – Nil

Strategic Plan Goal – Civic Leadership and Organisational Development Key Issue – 4.7 The Whyalla Community will have confidence in Council’s governance Legislation – Nil Officer Direct or Indirect Interest No officer involved in the preparation of this report has any conflicts of interest. Risk Assessment – Not applicable Social Considerations – Not applicable Community Engagement – Not applicable Environmental Implications – Applicable Communication – Not applicable Conclusion Council are to ensure that the Audit Committee are kept informed of appropriate changes to Accounting Standard requirements.

RELATED PARY DISCLOSURE FOR KEY MANAGEMENT PERSONNEL Template: xxx‐xxx

GDS Category: Financial Management Public Document? NO

Date: June 2017 Page 1 of 6 Version: 1

Review Date: June 2019

Electronic version on the Intranet is the controlled version. Printed copies are considered uncontrolled. Before using a printed copy, verify that it is the current version.

Note:

1. respond with N/A or Nil for any sections which are non‐applicable; and2. read instructions and notes below before completing this disclosure.

SURNAME: GIVEN NAMES:

POSITION TITLE:

Registrable Interests Details

Transactions between Council and you as an individual

1 Describe the nature of any amounts you paid to Council, other than amounts you paid in your capacity as a ratepayer or resident (e.g. rates, swimming pool entry fees, etc.) during the return period, or any amounts you owe to Council as at the end of the financial year.

Examples include contributions for fringe benefit tax purposes, planning and building application fees, rentals for Council property.

2 Provide details (description and value) of any amounts you received from Council, other than ‘compensation’ as defined below (see ‘definitions’).

3 Provide details of any community, e.g. sporting and other not‐for‐profit organisations of which you are a member of the management or a committee.

Provide details (description and value) of any amounts the organisation received from Council during the reporting period.

Annexure "A"






Transactions between Council and related parties in which you or a family member has an interest

4 State the name of any company or other body in which you held, or a member of your family held any office during the return period that entered into financial transactions with Council or Council‐owned entities or subsidiaries during the return period.

Provide details of:

amounts received, receivable or committed from Council to the related party and the nature of each transaction; and

amounts paid, payable or committed from the related party to Council and the nature of each transaction.

5 Provide the number of close members of your family employed by Council during the return period.

6 Provide the number of planning and building applications made to Council during the return period by you, members of your close family or related parties in which you or a family member has an interest in.

Provide the amount of fees paid for these applications.

SIGNATURE: DATE:






DEFINITIONS Compensation includes all employee benefits (as defined in AASB 119 Employee Benefits) including employee benefits to which AASB 2 Share‐based Payment applies. Employee benefits are all forms of consideration paid, payable or provided by the entity, or on behalf of the entity, in exchange for services rendered to the entity. It also includes such consideration paid on behalf of a parent of the entity in respect of the entity. Compensation includes: 1. short‐term employee benefits, such as wages, salaries and social security contributions, paid annual

leave and paid sick leave, profit‐sharing and bonuses (if payable within twelve months of the end of the period) and non‐monetary benefits (such as medical care, housing, cars and free or subsidised goods or services) for current employees;

2. post‐employment benefits such as pensions, other retirement benefits, post‐employment life insurance and post‐employment medical care; Federal Register of Legislative Instruments F2015L01621;

3. other long‐term employee benefits, including long‐service leave or sabbatical leave, jubilee or other long‐service benefits, long term disability benefits and, if they are not payable wholly within twelve months after the end of the period, profit‐sharing, bonuses and deferred compensation;

4. termination benefits; and

5. share‐based payment. Council refers to the City of Whyalla. Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity. A related party is a person or entity that is related to the entity that is preparing its financial statements (in this Standard referred to as the ‘reporting entity’). 1. A person or a close member of that person’s family is related to a reporting entity if that person:

a) has control or joint control of the reporting entity; b) has significant influence over the reporting entity; or c) is a member of the key management personnel of the reporting entity or of a parent of the

reporting entity.

2. An entity is related to a reporting entity if any of the following conditions applies:

a) The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).

b) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).






WHO ARE KMP’S?

KMP’s are persons having authority and responsibility for planning, directing and controlling the activities of Council, directly or indirectly.

For Council, KMP’s include:

Mayor;

Councillors;

Chief Executive Officer; and

Managers.

WHO ARE CLOSE FAMILY MEMBERS OF A KMP PERSON?

Close family members, or close members of the family, of a KMP are family members who may be expected to influence, or be influenced by, that person in their dealings with Council and include:

a) that person’s children and spouse or domestic partner; b) children of that person’s spouse or domestic partner; and c) dependants of that person or that person’s spouse or domestic partner.

Under AASB 124, close family members could include extended members of a family (such as, without limitation, a parent, grandparent, siblings, etc.) if they could be expected to influence, or be influenced by, the KMP in their dealings with Council.

The following table may assist you in identifying your close family members:

Definitely a Close Family Member Maybe a Close Family Member

Your spouse / domestic partner Your brothers and sisters, if they could be expected to influence, or be influenced by, you in their dealings with Council

Your children Your aunts, uncles and cousins, if they could be expected to influence, or be influenced by, you in their dealings with Council

Your dependants Your parents and grandparents, if they could be expected to influence, or be influenced by, you in their dealings with Council

Children of your spouse / domestic partner Your nieces and nephews, if they could be expected to influence, or be influenced by, you in their dealings with Council

Dependants of your spouse / domestic partner Any other member of your family if they could be expected to influence, or be influenced by, you in their dealings with Council






WHAT IS AN ENTITY THAT I, OR MY CLOSE FAMILY MEMBER, CONTROL OR JOINTLY CONTROL? Entities include companies, trusts, incorporated and unincorporated associations such as clubs and charities, joint ventures and partnerships. CONTROL You control an entity if you have: a) power over the entity; b) exposure, or rights, to variable returns from your involvement with the entity; and c) the ability to use your power over the entity to affect the amount of your returns. i Example of Control Fred is the Mayor of Sunny Shire Council and owns 100% of the ordinary shares in Sunny Development Company Pty Ltd (the company). The ordinary shares are the only shares in the company that have voting rights. Fred controls the company because he has the power to affect the company’s decision and the return that he will get from the company. Fred will need to include the company on this related party disclosure. JOINT CONTROL To joint control an entity, there must be contractually agreed sharing of control of the entity, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. ii Example of Joint Control Fred is the Mayor of Sunny Shire Council and owns 50% of the ordinary shares in Sunny Development Company Pty Ltd (the company). Fred’s brother, Stan, owns the other 50% of the ordinary shares. Fred and Stan are the only Directors of the company and have equal voting rights on the board. Fred and Stan have joint control of the company because any decisions require the unanimous consent of them both. Fred will need to include the company on this related party disclosure and the entity’s related party relationship with Fred and Stan.






In some cases, it will be obvious that you or a family member control or have joint control over an entity. In other cases, it will be less clear. If you are unsure whether you, or a close family member, has control or joint control of an entity then you should contact the Responsible Accounting Officer for a confidential discussion.

i AASB 10 Consolidated Financial Statements, paragraphs 5 to 18, and Appendices A (Defined Terms)

and B (Application Guidance) ii AASB 128 Investments in Associates and Joint Ventures, paragraph 3 (Definitions)

3.2 EXECUTIVE DEPARTMENT

3.2.1 Self‐Assessment – Governance Audit Audit Committee 26 June 2017 Author’s Title: Executive Officer Chief Executive Officer Chris Cowley Department: Executive File No.: 1‐0 Annexures:

A Internal Governance Audit results Officer Direct or Indirect Conflict of Interest: In accordance with Local Government Act 1999, Section 120


Yes No Yes No

Reason: Nil

PURPOSE For Council to undertake a self‐assessment of its legislative compliance. SUMMARY The Local Government Association of South Australia has developed a self‐assessment tool which covers Sections of the Local Government Act 1999; Local Government (Financial Management) Regulations 2011; Local Government (Procedures at Meetings) Regulations 2013 and Code of Conduct for both Council Members and Council employees. In conjunction with the review and consideration by relevant Council departmental groups the self‐assessment has been completed and is submitted to the Audit Committee Meeting of 26 June 2017 for their deliberation. RECOMMENDATION That the Audit Committee receive and note the Internal Governance Audit – June 2017, as at Annexure “A”.

3.2.1 Self‐Assessment – Governance Audit REPORT BACKGROUND / DISCUSSION Council has completed a self‐assessment audit of its legislative compliance. The Local Government Association of South Australia (LGASA) has developed a self‐assessment audit tool which was used during this process. The audit tool focusses on the Local Government Act 1999 and related Regulations. It is noted at the outset that there are a number of matters of legal compliance in the Local Government Act 1999 that could be subject to a separate, more detailed audit. This Audit tool targets:

Local Government Act 1999

Local Government (Financial Management) Regulations 2011

Local Government (Procedures at Meetings) Regulations 2013

Code of Conduct for Council Members, and

Code of Conduct for Council Employees. The completed Audit, as at Annexure “A” is provided to Councils by the LGA SA to identify whether they are:

fully compliant

partially compliant, or

non‐compliant. It is noted in the completed internal audit, as at Annexure “A”:

Council is compliant for all, except one item, under sections of the Local Government Act 1999, Local Government (General) Regulations 2013, Local Government (Financial Management) Regulations 2011, and Local Government (Procedures at Meetings) Regulations 2013.

In reference to the above, Council is partially compliant for one item under S80A(1) of the Local Government Act 1999 which addresses the adoption of a training and development policy for Elected Members. Council’s current policy addressing this matter is due for review.

Four items under the Code of Conduct for Councillors and Code of Conduct for Employees are partially compliant. Clauses 3.10 from both Codes addresses the maintenance of an Allowance and Gift Register(s). Both Registers are currently under review to be uploaded onto Council’s website.

Seven (7) items under S42 of the Local Government Act regarding Subsidiaries are not applicable to Council.

Financial Implications – Nil Strategic Plan Goal – Civic Leadership and Organisation Development Key Issue – Civic Leadership and Organisational Development

4.2 Council’s operations are effective, efficient and customer‐focused. Legislation – Nil Officer Direct or Indirect Interest – Nil Risk Assessment – Nil Social Considerations – Nil Community Engagement – Not applicable Environmental Implications – Not applicable Communication – Not applicable Conclusion Council has reviewed its Governance practices and assessed its compliance under the Model LGASA Governance Legislation Self‐Audit Tool (2016).

Whyalla City Council – Internal Governance Audit – June 2017 1

ANNEXURE ‘A’

GOVERNANCE AUDIT RESULTS Local Government Act 1999

Section What is required Compliant/Non‐compliant

Comment

12(4) Council must ensure that all aspects of its composition are reviewed at least once in the relevant period

Compliant Elector Representation currently being undertaken – completed by October 2017.

37 Contracts are entered into either under the common seal of the Council or by an officer, employee or agent authorised by the Council to enter into the contract on its behalf

Compliant

38(1) Common seal is not affixed to a document except to give effect to a resolution of the Council

Compliant

38(2) Affixation of the common seal is attested to by the principal member and the Chief Executive Officer

Compliant

41(2) Council committees are established by resolution of the Council within the purposes allowed by the Act

Compliant

41(3) Membership of committees has been determined by the Council Compliant

41(4) The Council has either appointed a presiding member for a committee or made provision of appointment

Compliant

41(8) Council has determined the reporting and other accountability requirements that are to apply in relation to the committee

Compliant

41(9) Committees performing regulatory activities report at least quarterly to the Council

Compliant

42(1) Council has established subsidiaries within the purposes allowed by the Act Not applicable

42(2) Subsidiaries established by the Council do not perform regulatory activities Not applicable



Comment

42(3) Ministerial approval has been obtained for the establishment of subsidiaries Not applicable

43(1) Council has resolved to establish regional subsidiaries with at least one other Council for the purposes allowed under the Act‐

Not applicable

43(2) Regional subsidiaries performing a regulatory activity do not perform any significant and related service activity

Not applicable

43(3) Ministerial approval has been obtained for the establishment of regional subsidiaries

Not applicable

44(2) Delegations have only been made to persons allowed under the Act Compliant Review of Delegations to June 2017 Council meeting.

44(3) Council has not delegated any of the powers under this section (which now includes power to revoke the classification of land as community land)

Compliant

44(6) A separate record is kept of all delegations under this section and is reviewed at least once in every financial year

Compliant Review of Delegations to June 2017 Council meeting.

44(7) The record of delegations is available for inspection (without charge) at the principal office of the Council during normal business hours

Compliant

44(8) A person is entitled on payment of a fee fixed by the Council to an extract from the record of delegations under s44(6)

Compliant

45(1) Council has nominated a place as its principal office for the purposes of this Act Compliant

45(2) The principal office of the Council is open to the public for the transaction of business during hours determined by the Council

Compliant

45(3) Council has consulted with its local community about the manner, places and times at which its offices will be open to the public for the transaction of business, and about any significant changes to those arrangements

Compliant Resolution of Council – November 2014

47(1) Council has not participated in the formation of a company or acquired shares in a company except as allowed in s47(2)

Compliant



Comment

48(aa1) Council has developed and maintained prudential management policies, practices and procedures in accordance with the section.

Compliant

48(a1) The prudential management policies, practices and procedures are consistent with the regulations

Compliant

49(a1) Council must develop and maintain procurement policies, practices and procedures in accordance with this section

Compliant

49(1) Council must prepare and adopt policies on contracts and tenders in accordance with this section

Compliant

49(2) The policies must cover the matters set out in this subsection Compliant

49(4) A policy of the Council under this section must be available for inspection at the principal office of the Council during ordinary office hours

Compliant

49(5) A copy of a policy under this section must be available for purchase on payment of a fee fixed by the Council

Compliant

50(1) Council must prepare and adopt a public consultation policy Compliant Public Consultation Policy is due for review by Council.

50(2) The policy must cover the matters identified in subsections (2), (3) and (5) Compliant

50(6) Council has followed the steps in this subsection before adopting, altering or substituting its public consultation policy (unless Council determines the change is only of minor significance that would attract little (or no) community interest – s50(7))

Compliant


Compliant


Compliant



Comment

51(3) The deputy mayor (if any) has been appointed by resolution Compliant Resolved by Council in November 2016. (Annual election for Deputy Mayor position).

51(4) The deputy mayor (if any) was chosen by the member of Council from amongst their own number and holds office for a term determined by the Council

Compliant

60 Members have made an undertaking in the prescribed manner and form at or before the first meeting attended

Compliant

65 Each member of the Council has submitted to the Chief Executive Officer a primary return within six weeks after election or appointment

Compliant

66 Each member of Council has submitted to the Chief Executive Officer an ordinary return on or within 60 days after 30 June each year

Compliant

68(1) The Chief Executive Officer maintains a Register of Interests and has caused to be entered in the Register all information furnished pursuant to this Division and Schedule 3

Compliant

70(a1) Council has published on the website the required details from the register as set out in this section,

Compliant

70(1) The Register is available for inspection without charge at the principal office of the Council during ordinary office hours

Compliant

70(2) &(3)

A copy of a Register under this section must be available for purchase on application in writing and payment of a fee fixed by the Council

Compliant

72(1) Council committee members submit returns if resolved by the Council Compliant

76(8) Allowances commence on the conclusion of the relevant periodic election and conclude on certification of the last results of the next periodic election.

Compliant

76(9) Allowances are adjusted on the first, second and third anniversaries of the relevant periodic elections

Compliant

76(12) An allowance is paid in accordance with the regulations Compliant



Comment

77(1)(b) & 77(2)

Council has approved, either specifically or under a policy approved by the Council to reimburse expenses of a kind prescribed by the regulations since the last periodic election

Compliant Elected Members’ Allowances and Benefits Policy – endorsed by Council in September 2015


Compliant Available in Governance Register


Compliant

78(2) Council has specifically resolved the provision of facilities and support in accordance with this section

Compliant

79(1) A register of allowances and benefits is kept by the Chief Executive Officer in accordance with this section

Compliant

79(2) An appropriate record is made in the Register of the matters contained in this section

Compliant

79(3) The Register under this section must be available for inspection at the principal office of the Council during ordinary office hours

Compliant

79(4) An extract of the Register under this section must be available for purchase on payment of a fee fixed by the Council

Compliant

80 Council has in place a policy of insurance for every member of the Council, and a spouse domestic partner or another person who may be accompanying a member of the Council, against risks associated with the performance or discharge of official functions and duties by members

Compliant

80A(1) Council has prepared and adopted a training and development policy for its members

Partially Compliant Elected Member’s Training and Development Policy – review is to be undertaken

80A(2) The policy is aimed at assisting members in the performance and discharge of their functions and duties and complies with any requirements prescribed by the regulations

Compliant



Comment

80A(4) A policy of the Council under this section must be available for inspection at the principal office of the Council during ordinary office hours

Compliant

80A(5) A copy of a policy under this section must be available for purchase on payment of a fee fixed by the Council

Compliant

81(1) Council has resolved the times and places for the holding of ordinary Council meetings

Compliant Resolution of Council – November 2014

81(2) The resolution provides for at least one ordinary meeting in each month Compliant Resolution of Council – November 2014

81(5) Ordinary meetings are not held on Sundays, or on public holidays Compliant

81(6) Ordinary meetings are not held before 5pm unless the Council resolves otherwise by a resolution supported unanimously by all members of the Council

Compliant

83(1) Each member of Council is given at least three clear days’ notice of an ordinary meeting

Compliant

83(2) In the case of a special meeting, Council members are given at least four hours’ notice of the meeting

Compliant

83(3) Notice of a meeting of the Council complies with the requirements of this section

Compliant

83(4) The Chief Executive Officer provides an agenda to members with items that are described with reasonable particularity and accuracy, and supplies a copy of any documents or reports that are to be considered at the meeting (as far as this is practicable)

Compliant

83(6)& (7)

Notice is given to Council members in accordance with this requirements of this section

Compliant

83(8) The Chief Executive Officer maintains a record of all notices of meetings given under this section to members of the Council

Compliant



Comment

84(1) The Chief Executive Officer gives notice to the public of the times and places of meetings of the Council

Compliant

84(1a) The Chief Executive Officer gives notice in accordance with this subsection Compliant

84(2) The notice is given at least three clear days before the date of the meeting for ordinary meetings, and as soon as practicable after the time that notice of the meeting is given to members in the case of special meetings

Compliant

84(3) A copy of a notice and agenda under this section must be available for purchase on payment of a fee fixed by the Council

Compliant

84(4) The notice and agenda are kept on public display and on the website until completion of the relevant meeting

Compliant Available in the Civic Building, Whyalla Library, Council website and Facebook page.

84(5)& (6)

The Chief Executive Officer ensures that a reasonable number of copies of any document or report supplied to members of the Council for consideration at a meeting of the Council are available for inspection by members of the public in accordance with this section

Compliant

87(1) Ordinary meetings of Council committees are held at times and places appointed by the Council or, subject to a decision of the Council, the Council committee

Compliant

87(2) The Council or committee has taken into account that matters in this subsection when appointing a time for the holding of an ordinary meeting of a committee

Compliant

87(4) Notice is given to each member of a Council committee of an ordinary meeting at least three clear days before the date of the meeting

Compliant

87(7) Notice is given to each member of a Council committee of an special meeting at least four hours before the commencement of the meeting

Compliant

87(8) Notice of a committee meeting meets the requirements of this section Compliant



Comment

87(9) The Chief Executive Officer provides an agenda to members of a Council committee with items that are described with reasonable particularity and accuracy, and supplies a copy of any documents or reports that are to be considered at the meeting (as far as this is practicable)

Compliant

87(11)& (12)

Notice is given to members of a Council committee in accordance with this requirements of this section

Compliant

87(13) The Chief Executive Officer maintains a record of all notices of meetings given under this section

Compliant

88(1) The Chief Executive Officer gives notice to the public of the times and places of meetings of a Council committee

Compliant

88(1a)& (2)

The Chief Executive Officer gives notice in accordance with these subsections Compliant

88(3) A copy of a notice and agenda under this section must be available for purchase on payment of a fee fixed by the Council

Compliant

88(4) The notice and agenda are kept on public display and on the website until completion of the relevant meeting

Compliant

88(5)& (6)

The Chief Executive Officer ensures that a reasonable number of copies of any document or report supplied to members of the Council for consideration at a meeting of the Council are available for inspection by members of the public in accordance with this section

Compliant

90(1) Subject to this section, meetings of a Council or Council committee are conducted in a place open to the public

Compliant

90(7) If an order is made under s90(2), a note is made in the minutes of the making of the order and the grounds on which it is made; the basis on which the order falls within each ground; and, if relevant, the reason why the dealing with the matter in the open is not in the public interest

Compliant



Comment

90(8a) (a) & (b)

Council has adopted a policy on the holding of informal gatherings and the informal gatherings held comply with the policy

Compliant Council endorsed Policy in November 2016

90(8b) The policy made under s90(8a) complies with any regulations1 Compliant

90(8d) The policy made under s90(8a) is available for inspection without charge at the principal office and on the council website

Compliant

91(1)& (2)

Minutes are kept of the proceedings at every meeting of the Council or a Council committee and, where relevant, contain the information specified under sections 74 and 75A

Compliant

91(3) Each member of the Council is provided with a copy of all minutes of the proceedings of the meeting kept under this section within five days after the meeting of Council or a Council committee

Compliant

91(4) Minutes of a meeting of the Council are placed on public display in the principal office of the Council within five days after the meeting and kept on display for a period of one month

Compliant

91(5) Documents required to be available for inspection at the principal office of the Council under this section are available

Compliant

91(6)& (7)

A copy of documents under s91(5) must be available for purchase on payment of a fee fixed by the Council

Compliant

91(8) Council has not made confidentiality orders in relation to matters contained in this subsection

Compliant

91(9) All confidentiality orders comply with this subsection Compliant

91(9) (ab)

In the case of an order of specified duration, the duration is not extended after the expiry date or trigger; and no delegation has been given by the council to extend the duration of an order of specified duration

Compliant

1 No Regulations in existence at 31 March 2016.



Comment

92(1) Council has prepared and adopted a code of practice in accordance with this section

Compliant Code of Practice – Access to Council and Committee Meetings and Documents – adopted by Council May 2016

92(2) Council has reviewed its code of practice within 12 months of the last periodic election

Compliant

92(4) Council’s code of practice includes any mandatory requirements prescribed by the regulations

Compliant

92(5) Council has complied with the requirements of this subsection before it has adopted, altered or substituted its code of practice and has mode a copy of the code available on the website

Compliant

92(6) A code of practice of the Council under this section must be available for inspection at the principal office of the Council during ordinary office hours

Compliant

92(7) A copy of a code of practice under this section must be available for purchase on payment of a fee fixed by the Council

Compliant

94A The Chief Executive Officer has made available (so far as is reasonably practicable) for inspection in the internet an up‐to‐date schedule of the dates, times and places set for meetings of the Council and Council committees

Compliant

96(1) Council has a Chief Executive Officer Compliant

105(1)& (2)&(5)

The Register of Salaries is kept in accordance with this section Compliant

105(3) The Register under this section is be available for inspection at the principal office of the Council during ordinary office hours

Compliant

105(4) An extract from the Register under this section is available for purchase on payment of a fee fixed by the Council

Compliant



Comment

111(b) Council has resolved whether any other officers or class of officers of Council are subject to the requirements of Chapter 7, Part 4, Division 2

Compliant

116(1) The Register of Interests is maintained and includes all information furnished pursuant to this Division

Compliant

116(2) Where a person has not provided a return in the time allowed, the Chief Executive Officer has notified any person, in writing, of that fact as soon as practicable

Compliant

118 The Register must be available for inspection at the request of a member of Council

Compliant

122(1), (1b),(2), (3)

Council has developed and adopted strategic management plans in accordance with this section, including having financial projections in the long term financial plan consistent with those in the infrastructure and asset management plan

Compliant Council’s Strategic Plan adopted by Council at Council meeting held in June 2017.

122(1a) The Council has developed and adopted a long term financial plan for a period of at least 10 years and an infrastructure and asset management plan for a period of at least 10 years

Compliant Adopted by Council on 26 June 2017.

122(4), (4a)

Council has undertaken a review in accordance with the requirements of this subsection

Compliant

122(6) Council has adopted a process or processes to ensure members of the public are given a reasonable opportunity to be involved in the development and review of its strategic management plans

Compliant Review in accordance with Council’s Public Consultation Policy and processes.

122(7) The strategic management plans under this section are available for inspection and purchase at the principal office of the Council during ordinary office hours

Compliant

122(8) Council has specifically declared which plans constitute the strategic management plans of the Council

Compliant

123(1) Council has, for each financial year, an annual business plan and a budget Compliant



Comment

123(2) Council’s annual business plan meets the requirements of this subsection Compliant

123(3)& (4)

Before adoption of the annual business plan, Council prepared a draft annual business plan and followed the steps of its public consultation policy and subsection (4)

Compliant Consultation undertaken as per Council’s Public Consultation Policy.

123(5) Copies of the draft annual business plan are available at the meeting and for inspection and purchase at the principal office of the Council at least 21 days before the date of that meeting and a copy of the draft is placed on the website

Compliant

123(5a) Provision is made for the asking and answering of questions and the receipt of submissions on the Council website during the public consultation period

Compliant

123(6) Council has adopted the annual business plan after considering the matters in this subsection

Compliant

123(7) The budget has been considered in conjunction with the Council’s annual business plan, is consistent with that plan is adopted after adoption of the annual business plan

Compliant

123(8) The annual business plan and budget is adopted after 31 May and before 31 August

Compliant

123(9), (11)

After adoption of the annual business plan and budget, a summary has been prepared and is available in accordance with this subsection, and a copy of the annual business plan and the budget (as adopted) is available on the website

Compliant

123(10) The preparation, form and content of the annual business plan, summary and budget meet the requirements of the regulations

Compliant

123(13) Council has reconsidered the annual business plan or budget as required by the regulations

Compliant

124(1) Accounting records are kept in accordance with this section Compliant



Comment

124(2) Council has determined the form and places for the keeping of accounting records

Compliant

125 Council has implemented and maintained appropriate policies, practices and procedures of internal control in accordance with this section

Compliant

126 Council has an audit committee Compliant

126(2) Membership of Council’s audit committee complies with the requirements of this subsection

Compliant

127(1), (2)

Council has prepared for each financial year financial and other statements required by this section and the regulations

Compliant

127(3) The statements prepared for each financial year must be audited by the Council’s auditor

Compliant

127(4) A copy of the audited statements have been submitted by the Council to the persons or bodies prescribed by the regulations on or before the day prescribed

Compliant

127(5) The audited statements are available for inspection and purchase at the principal office of the Council during ordinary office hours

Compliant

128(1) Council has appointed an auditor Compliant

128(2) Council’s auditor has been appointed on the recommendation of the Council’s audit committee

Compliant

128(2a) The audit committee has taken into account the matters in the regulations when making a recommendation for appointment

Compliant

128(3) The auditor is a registered company auditor or a firm comprising at least one registered company auditor

Compliant

128(4) The auditor is not a member of Council or a nominated candidate for election as a member of Council

Compliant



Comment

128(5) The term of appointment of the auditor does not exceed 5 years Compliant

128(6) The auditor is not disqualified from holding office due to the conditions under this subsection

Compliant

128(7) The appointment of the auditor is subject to the terms and conditions prescribed in the regulations

Compliant

128(8) The Council and Council’s auditor are compliant with the requirements prescribed in the regulations regarding the auditor’s independence

Compliant

128(9) Council’s annual report contains the information required by this subsection Compliant

129(1) Council’s audit includes the matters contained in this subsection Compliant

129(2) Council’s audit has been carried out in accordance with the standards prescribed by the regulations

Compliant

129(3), (4), (5)

The auditor has provided to the Council an audit opinion in accordance with these subsection

Compliant

129(5a) The audit opinions and advice are provided to members of the Council and the audit committee in accordance with this subsection

Compliant

129(5b), (5c)

The audit opinion and advice are placed on the agenda for consideration in accordance with these subsections

Compliant

129(9) The opinions provided under s129(3) accompany the financial statements of the Council

Compliant

131(1) Council has prepared and adopted an annual report relating to the operations of the Council for the financial year ending on the preceding 30 June by 30 November

Compliant

131(2) The annual report includes the material and matters specified in Schedule 4 as amended by regulation

Compliant



Comment

131(3) The annual report complies with the regulations Compliant

131(4) The annual report has been provided to each member of the Council Compliant

131(5) The annual report has been submitted in accordance with the subsection Compliant

131(8) Copies of the annual report are available for inspection and purchase at the principal office of the Council during ordinary office hours

Compliant

132(1), (2)

The documents referred to in Schedule 5 are available for inspection and purchase at the principal office of the Council during ordinary office hours

Compliant

132(3) The documents required by this subsection are available for inspection on the website within a reasonable time after they are available at the principal office of the Council

Compliant

132A Council has implemented and maintained appropriate polices, practices and procedures to ensure compliance with any statutory requirements and to achieve and maintain standards of good public administration

Compliant

140 Council, at least once in every year, reviews the performance (individually and as a whole) of its investments

Compliant

142(1) Council has taken out and maintained insurance to cover its civil liabilities at least to the extent prescribed by regulation

Compliant

143(2) Bad debts are not written off unless the Chief Executive Officer has made the certification required under this subsection

Compliant

143(3) The delegation to write off debts include an amount above which the delegation will not apply

Compliant

172(1) The Assessment Record is kept by the Chief Executive Officer in accordance with the subsection

Compliant

172(2) The Chief Executive Officer has determined the manner and form for an occupier of land to make an application under this subsection

Compliant



Comment

172(3) The Chief Executive has entered occupier’s names in the assessment record where an application has been made

Compliant

172(4), (5)

Suppression of names and addresses from the assessment record have been done in accordance with these subsections

Compliant

173(2) The Chief Executive Officer has determined the manner and form for application to alter the assessment record

Compliant

173(5) The Council has determined a procedure for the review of decisions under this section

Compliant

174(1) The assessment record is available for inspection at the principal office of the Council during ordinary office hours

Compliant

174(2) A copy of an entry made in the assessment record is available on payment of a fee fixed by the Council

Compliant

174(3) A person who inspects the record is advised that the information contained in the record must not be used for a commercial purpose

Compliant

196(1), (7)

Council has prepared and adopted management plans for its community land where required by the section

Compliant

196(3), (5)

The Council’s management plans meet the requirements of this subsection Compliant

199 Community land is managed in accordance with any management plan for the relevant land

Compliant

200(2) Council has not approved the use of community land for a business purpose contrary to a management plan

Compliant

202(4) Leases and licences over community land have not been granted for a term exceeding 42 years

Compliant

202(6) Leases and licences are consistent with any relevant management plan Compliant



Comment

207(1) Council has a register of all community land in its area Compliant

207(2) The register contains the information set out in this subsection Compliant

207(3) The register is available for inspection (without charge) by the public at the principal office of the Council during ordinary office hours

Compliant

207(4) An extract of the register is available for purchase on payment of a fee fixed by the Council

Compliant An extract can be printed, however a set fee does not exist in the fees and charges register

219(5)& (7)

Council has prepared and adopted a policy relating to the assigning of names under this section and a notice of the adoption or alteration to the policy has been published on the website

Compliant Review of existing policy being undertaken by Nomenclature Committee prior to public consultation and adoption – scheduled for October 2017.

231(1) Council has a register of public roads in its area Compliant Council’s register is held within is Corporate GIS and Asset Management Data within Conquest

231(2) The register contains the information required by this subsection Compliant


Compliant Held electronically within the Infrastructure and Planning Section and can be viewed organisation wide via exponare


Compliant An extract can be printed, however a set fee does not exist in the fees and charges register

234A(1), (3) & (6)

Council’s decisions to close a road have been made by an absolute majority of the council; resolutions only operate to close the road for 30 days or less in a year; and the resolution did not take effect before it had met the procedures set out in subsection (6).

Compliant Closure of roads for temporary/event purposes are enacted via Section 33 of the Road Traffic Act, or alternatively via Section 59 of the Summary Offences Act

252(1) Council has a register of all by‐laws made or adopted by the Council Compliant

252(2) The register includes the matters contained in this subsection Compliant



Comment


Compliant


Compliant

259(1) Council has taken reasonable steps to prepare and adopt policies concerning the operation of Chapter 12, Part 2

Compliant

259(6) The policy is available for inspection (without charge) by the public at the principal office of the Council during ordinary office hours

Compliant

259(7) The policy is available for purchase on payment of a fee fixed by the Council Compliant

260(3) Council has issued identify cards to all authorised persons in accordance with this subsection

Compliant

270(a1), (a2), (1), (2), (4a)

Council has developed and maintained policies, practices and procedures as required by these subsections

Compliant

270(5) A document concerning the policies, practices and procedures is available for inspection (without charge) and purchase by the public at the principal office of the Council during ordinary office hours

Compliant

270(8) Council considers a report on an annual basis in accordance with this subsection Compliant

302B Council has a member of staff designated as a responsible officer in accordance with this section

Compliant

Local Government (General) Regulations 2013 Nil


Local Government (Financial Management) Regulations 2011

Reg What is required Compliant/Non‐compliant

Comment

9(1), (2) Council has considered financial reports in accordance with this regulation

Compliant

10(1), (2) Council has considered a report showing the audited financial results in accordance with this regulation

Compliant

14 Council’s financial statements have been certified in accordance with this regulation

Compliant

21(4) The Chief Executive Officer has laid any audited financial statements of a subsidiary before the council in accordance with this regulation

Not applicable

22(3), (4) The relevant persons have provided an annual statement that provides a certification in accordance with this regulation

Compliant

Local Government (Procedures at Meetings) Regulations 2013

Reg What is required Compliant/Non‐compliant

Comment

6(1) Council has adopted a code of practice for varied meeting procedures that has been passed by a two‐thirds majority

Compliant

6(2) Council has reviewed its code of practice at least once in the financial year

Compliant

6(5) The code of practice is available for inspection without charge at the principal office of the Council during ordinary business hours

Compliant

6(6) The code of practice is available to purchase for a fee from the Council Compliant


12(20) The Chief Executive Officer provided a report to the Council on each question that has lapsed at the first ordinary meeting of the Council after the general election

Compliant

Other matters Code of Conduct for Council Members

Clause What is required Compliant/Non‐compliant

Comment

1 Council has provided training and education opportunities to assist Members to meet their responsibilities under the Local Government Act

Compliant

2 Council has adopted a process for the handling of breaches of Part 2 Compliant

2 The process has been reviewed within 12 months of a general local government election

Compliant

3.10 A gifts and benefits register is maintained and updated quarterly by the Chief Executive Officer

Partially Compliant Undertaking review

3.10 The register is available for inspection at the principal office of the Council and on the Council website



Code of Conduct for Council Employees

Clause What is required Compliant/Non‐compliant

Comment

1 Council has provided training and education opportunities to assist employees to meet their responsibilities under the Local Government Act

Compliant

3.10 A gifts and benefits register is maintained and updated quarterly by the Chief Executive Officer


3.10 The register is available for inspection at the principal office of the Council and on the Council website


3.3 INFRASTRUCTURE AND PLANNING DEPARTMENT

3.3.1 Asset Management Strategy Audit Committee Meeting 26 June 2017 Author’s Title: Project Manager Assets

and Programming Group Manager: Michelle Tucker

Department: Infrastructure and Planning File No.: 3‐172 Annexure

A – Asset Management Strategy Officer Direct or Indirect Conflict of Interest: In accordance with Local Government Act 1999, Section 120


Yes No Yes No

Reason – Nil

PURPOSE To present the Amended Draft Asset Management Strategy to the Audit Committee for consideration prior to presentation to Council. SUMMARY This report seeks endorsement from the Audit Committee of the attached Amended Asset Management Strategy, prior to its presentation to Council. Once endorsed by the Audit Committee the strategy will be presented to Council to seek resolution on the release of the Draft Strategy for public consultation. RECOMMENDATION That the Audit Committee endorse the attached Asset Management Strategy 2018‐2027 in draft form and recommend to Council that the Draft Asset Management Strategy 2018‐2027 be released for public consultation in line with Council’s Public Consultation Policy.

3.3.1 Asset Management Strategy REPORT BACKGROUND As Members would be aware and in line with the National Asset Management Policy Framework, Council is required to produce and adopt sound Asset Management Plans (AMP’s) to ensure all assets are managed to promote defined serviceability levels in a financially sustainable manner. Prior to adoption by Council, public consultation is required to ensure that the community is given adequate opportunity to comment on Council’s Asset Management Strategy. Once public consultation is completed and any amendments from this process incorporated into the Strategy, the document will be presented to Council for final approval and adoption. A draft Asset Management Strategy was presented to the Audit Committee on 12 May 2017 to initiate this process. DISCUSSION The Asset Management Strategy (the ‘Strategy’), as outlined in the following extract from the Executive Summary, is prepared to assist Council in improving the way it delivers services from infrastructure including road and transport related infrastructure, buildings, open space and land improvements, stormwater, irrigation, plant and equipment. The combined replacement value for all Council Assets is $361,604,000. The Strategy has been compiled to combine all asset classes into one summarised document. Adopting the Strategy will assist Council in meeting the requirements of the National Sustainability Framework, the Local Government Act 1999, the Financial Audit and Management Act 2012; and provide services needed by the community in a financially sustainable manner. Asset Management Plans (AM Plans) for specific asset categories are held as operational documents and are reviewed regularly to underpin the implementation of the Strategy. The Strategy ensures:

the asset portfolio will meet the service delivery needs of the community into the future;

Council’s Asset Management Policy can be achieved; and

integration of Council’s Asset Management with its long term strategic and financial plans.”

The Strategy compares projected funding requirements against budget expenditure as shown in the following graph extracted from the Executive Summary. This demonstrates the shortfall.

During the Audit Committee Meeting of 12 May 2017 it was recommended (AC188‐2017) “That, subject to minor amendments, the Audit Committee endorse the attached Asset Management Strategy 2018‐2027 in draft form and recommend to Council that the Draft Asset Management Strategy 2018‐2027 be released for public comment in line with Council’s Public Consultation Policy.” Amendments to the document has been made to reflect the implications and management of the expected funding shortfall with considerable expansion of the executive summary to cover this issue and Council’s options going forward. Additional items addressed within the document include;

What will we do?

What we cannot do

Why is there a funding shortfall?

What options do we have?

What happens if we don’t manage the shortfall?

What can you do?

Please find the amended Asset Management Strategy attached to this report as Annexure “A”. The document is largely unchanged with the exception of: 1. the contents listed above and correspondingly highlighted within the documents table

of contents; and 2. the valuation program which has been corrected due to an error noted. Members are requested to provide comments and consider endorsing the amended document for Council ratification and public consultation. Strategic Plan Goal – 5.0 Sound Financial and Asset Management Key Issue – 5.1 Infrastructure is appropriately planned, maintained and managed

5.2 Council will be recognised for being financially responsible 5.3 Council is inclusive in its financial governance

Legislation Local Government Act 1999 Officer Direct or Indirect Interest – Nil Risk Assessment Managing risks are included within the attached document. Risk Assessments related to Asset Management are reviewed at each iteration of the AM Plans Social Considerations – Nil Community Engagement Public Consultation will be undertaken once endorsement for release of the Asset Management Strategy is received from the Audit Committee and from Council. Environmental Implications – Nil Communication – not applicable Conclusion Adoption of the attached Asset Management Strategy will provide strategic direction for Council to achieve an advanced level of asset management maturity and optimisation of assets delivered to the Community while adhering to sounds whole of life principles and defined framework.

"[ Enter Organisation Name ]"

Insert Organisation Logo

Asset Management Strategy

2018 – 2027

The Corporation of the City of Whyalla

Revision 1.0

May 2017

Annexure "A"

THE CORPORATION OF THE CITY OF WHYALLA – ASSET MANAGEMENT STRATEGY 2018-2027

Document Control

Document ID: Asset Management Strategy_S1_V1

Rev No* Date Revision Details Author Reviewer Approver

1.0 01.05.2017 1st Draft PMAP GMIP

1.1 15.06.2017 Draft - Amendment as per AC188-2017 PMAP GMIP

AC – Audit Committee; GMIP – Group Manager Infrastructure & Planning; PMAP – Project Manager Assets & Programming; WCC – Whyalla City Council

*Supersedes previous Revision 3 adopted by Council 6 July 2015

© Copyright 2014 – All rights reserved.

The Institute of Public Works Engineering Australasia.

www.ipwea.org/namsplus

Formatted: Left

http://www.ipwea.org/namsplus


TABLE OF CONTENTS

1. EXECUTIVE SUMMARY ......................................................................................................................... 1 Context ................................................................................................................................................ 1 Strategic Outlook ................................................................................................................................. 1 What is covered? ................................................................................................................................. 1 What does it cost? ............................................................................................................................... 2 What will we do? ................................................................................................................................. 2 What we cannot do ............................................................................................................................. 2 Why is there a funding shortfall?......................................................................................................... 3 What options do we have? .................................................................................................................. 3 What happnes if we don’t manage the shortfall? ............................................................................... 3 What can you do? ................................................................................................................................ 3

Managing the Risks ............................................................................................... 2Managing the Risks 3 Confidence Levels ................................................................................................... 3Confidence Levels 4 The Next Steps ............................................................................................................. 4The Next Steps 4

2. INTRODUCTION ................................................................................................................................. 42. INTRODUCTION 5 2.1 Background ............................................................................................................................. 42.1 Background 5 2.2 Resourcing Strategy ................................................................................................................ 52.2 Resourcing Strategy 6 2.3 Goals and Objectives of Asset Management .......................................................................... 62.3 Goals and Objectives of Asset Management 7 2.4 Framework ............................................................................................................................. 92.4 Framework 7 2.5 Core and Advanced Asset Management ..................................................................................... 9 2.6 Community Consultation ............................................................................................................. 9

3. LIFECYCLE MANAGEMENT PLAN ....................................................................................................... 93. LIFECYCLE MANAGEMENT PLAN 10 3.1 Asset Valuations ..................................................................................................................... 93.1 Asset Valuations 10 3.2 Infrastructure Risk Management Plan .................................................................................... 93.2 Infrastructure Risk Management Plan 10 3.3 Routine Operations and Maintenance Plan ......................................................................... 103.3 Routine Operations and Maintenance Plan 11 3.4 Renewal/Replacement Plan ................................................................................................. 133.4 Renewal/Replacement Plan 14 3.5 Creation/Acquisition/Upgrade Plan ..................................................................................... 163.5 Creation/Acquisition/Upgrade Plan 17 3.6 Disposal Plan ........................................................................................................................ 173.6 Disposal Plan 18

4. FINANCIAL SUMMARY .................................................................................................................... 174. FINANCIAL SUMMARY 18 4.1 Financial Statements and Projections .................................................................................. 174.1 Financial Statements and Projections 18 4.2 Asset Management Financial Indicators .............................................................................. 194.2 Asset Management Financial Indicators 20 4.3 Projected expendicture for LTFP .......................................................................................... 214.3 Projected expendicture for LTFP 22 4.4 Valuation Forecast ................................................................................................................ 214.4 Valuation Forecast 22 4.5 Key Assumptions made in Financial Forecasts ..................................................................... 224.5 Key Assumptions made in Financial Forecasts 23 4.6 Forecast Reliability and Confidence ..................................................................................... 224.6 Forecast Reliability and Confidence 23

5. STRATEGIC AND CORPORATE GOALS .............................................................................................. 245. STRATEGIC AND CORPORATE GOALS 25 5.1 Alignment to Strategic Plan .................................................................................................. 245.1 Alignment to Strategic Plan 25 5.2 Legislative Requirements ..................................................................................................... 265.2 Legislative Requirements 27

6. PLAN IMPROVEMENT AND MONITORING ...................................................................................... 286. PLAN IMPROVEMENT AND MONITORING 28 6.1 Asset Management Improvement Program ......................................................................... 276.1 Asset Management Improvement Program 28 6.2 Monitoring and Review Procedures ..................................................................................... 316.2 Monitoring and Review Procedures 31 6.3 Performance Measures ............................................................................................................. 31 6.4 Status of Asset Management Practices ................................................................................ 316.4 Status of Asset Management Practices 32

7. REFERENCES .................................................................................................................................... 337. REFERENCES 33 8. APPENDICES ....................................................................................................................................... 34

Appendix A Budgeted Expenditures Accommodated in LTFP ..................................... 35Appendix A Budgeted Expenditures Accommodated in LTFP 35 Appendix B Abbreviations........................................................................................... 41Appendix B Abbreviations 41 Appendix C Glossary ................................................................................................... 42Appendix C Glossary 42

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1. EXECUTIVE SUMMARY

Context

This Asset Management Strategy (‘the Strategy’) is prepared to assist Council in improving the way it delivers services from infrastructure including road and transport related infrastructure, buildings, open space and land improvements, stormwater, irrigation, plant and equipment. The combined replacement value for all Council Assets is $361,604,000.

The Strategy has been compiled to combine all asset classes into one summarised document. Adopting the Strategy will assist Council in meeting the requirements of the National Sustainability Framework, the Local Government Act 1999, the Financial Audit and Management Act 2012; and provide services needed by the community in a financially sustainable manner.

Asset Management Plans (AM Plans) for specific asset categories are held as operational documents and are reviewed regularly to underpin the implementation of the Strategy. The Strategy ensures;

• the asset portfolio will meet the service delivery needs of the community into the future. • Council’s Asset Management Policy can be achieved, • integration of Council’s Asset Management with its long term strategic and financial plans. Strategic Outlook

1. Council is able to continue to improve the level of service provided by its assets and to meet optimal levels of service identified in condition surveys.

2. Council must consider strategies to fund the projected asset renewal expenditure over next 10 years.

3. Council’s current asset management maturity is considered at ‘core’ level. Continued investment is required to ensure that data verification, system management and evaluation continues to mature towards an ‘advanced’ system level.

4. Council endeavours to optimise the life of assets at the most economic cost over time (lifecycle approach) including the development of new technologies to support optimisation.

5. Reducing the demand for new assets through demand management techniques and consideration of alternative service delivery options.

What is Covered?

Council is responsible for managing its assets at a level that ensures the desired standards of service are achieved and maintained in a cost effective and timely manner.

The assets included within this strategy are;

• Transport Assets • Stormwater Assets • Irrigation • Plant and Equipment • Recreation and Open Space • Building Assets

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What does it Cost? The projected outlays necessary to provide the services covered by this Strategy, includes operations, maintenance, renewal and upgrade of existing assets over the 10 year and is calculated at $122,367,000 or $12,237,000 on average per year for the planning period (2018-2027).

Estimated available funding for this period is $110,799,000 or $11,080,000 on average per year which is 91% of the cost to provide the service. This is a funding shortfall of -$1,157,000 on average per year.

The graph below demonstrates projected and budget expenditure for transport assets. Projected Expenditure for year 2018 (2017/18 financial year) includes those assets with are expired or due to expire within the first year of this planning period.

What we will do

We plan to provide Infrastructure services for the following: • Operation, maintenance, renewal of Council’s transport network to meet service levels set by Council in annual

budgets while addressing renewal backlog. • Building categorisation to quantify the funding levels required for optimal operation, maintenance, renewal of

Building infrastructure. • Replacement and commissioning of Jetty. • Continued implementation of landscape masterplan. • "[ Enter summary of major renewals/upgrades ]" Continued implementation of playspace strategy; within the 10

year planning period.

What we cannot do We do not have enough funding to provide all services at the desired service levels or provide new services. Works and services that cannot be provided under present funding levels are: • "[ Enter what cannot be done under the plan ]" • "[ Enter what will not be done under the plan ]" Extension of stormwater network for mitigation purposes

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A Stormwater Management Plan is being developed to seek additional funding for the development of additional stormwater infrastructure through the State Government’s Stormwater Management Authority.

Why is there a funding shortfall? Most of the Council’s Assets were constructed by the previous Commission, by developers or from government grants, often provided and accepted without consideration of ongoing operations, maintenance and replacement needs.

Many of these assets are approaching the later years of their life and require replacement. Services from the assets are decreasing and maintenance costs are increasing.

Our present funding levels are insufficient to continue to provide existing services at current levels in the medium term.

What options do we have? Resolving the funding shortfall involves several steps: 1. Improving asset knowledge so that data accurately records the asset inventory, how assets are performing and

when assets are not able to provide the required service levels, 2. Improving our efficiency in operating, maintaining, renewing and replacing existing assets to optimise life cycle

costs, 3. Identifying and managing risks associated with providing services from infrastructure, 4. Making trade-offs between service levels and costs to ensure that the community receives the best return from

infrastructure, 5. Identifying assets surplus to needs for disposal to make saving in future operations and maintenance costs, 6. Consulting with the community to ensure that Infrastructure services and costs meet community needs and are

affordable, 7. Developing partnership with other bodies, where available to provide services, 8. Seeking additional funding from governments and other bodies to better reflect a ‘whole of government’ funding

approach to infrastructure services.

What happens if we don’t manage the shortfall? It is likely that we will have to reduce service levels in some areas, unless new sources of revenue are found.

We can develop options, costs and priorities for future services, consult with the community to plan future services to match the community service needs with ability to pay for services and maximise community benefits against costs.

What can you do? • We will be pleased to consider your thoughts on the issues raised in this asset management plan and suggestions on how we may change or reduce its mix of services to ensure that the appropriate level of service can be provided to the community within available funding.

Managing the Risks

The following have been identified as major risks: • Limitation of data, particularly those categories which require componentisation to optimise forward planning

and renewal; and, discrepancy in data where full componentisation is not achieved. • Gifted assets once handed to Council are fit for purpose with any damage rectified and brought to standard. • Responding to reactive maintenance through Council’s Customer Request system to alleviate and manage risk of

increased asset deterioration. • Reliance on historical data and knowledge available for asset categories which are below a ‘core’ level of

maturity. • Compliance with legislative requirements on limited resources.

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Council will endeavour to manage these risks by: • Ensuring continuous improvement of Council’s Conquest Asset Management System and systematic

componentisation of assets to ensure optimum performance. • Identifying assets most at risk and undertake necessary testing to quantify function and condition. • Develop and maintain a 10 year asset renewal program across all asset classes, with continued analysis prior to

compiling annual works program. • Undertake conditioning surveys every five years to rectify any data deficiencies over the 10 years period. • Continue planned and some reactive maintenance through Council’s maintenance programs. • Record, inspect, repair and finalise specific concerns through the customer service system. • Investigate additional sources of funding to offset funding shortfall

Confidence Levels This Strategy, on balance, is based on a medium level of confidence in information. Data pertaining to categories with the majority value, including Transport, Buildings and Stormwater is provided with a high level of confidence. However, continued investment is required to achieve similar validation of data in those categories that carry the least value, namely Irrigation, Plant and Equipment.

The Next Steps The actions resulting from this Strategy are: • Complete revision of AM Plans for all Asset classes to ensure effective management of Assets. • Investigate and implement innovative cost effective treatment methods and solutions to extend the life of Council

Assets. • Compile a 10 year forward works program in line with treatments and/or recommendations. • Undertake testing on key assets where details are unknown or assumed. • Implement the Asset Management Policy in line with national framework requirements. • Refine the existing Asset Management System to comply with Asset Management Policy and ensure that the

Conquest data is suitably componentised and inclusive of all asset categories. • Enact the asset management improvement program (Table 6.1) which details a program of tasks to be completed

and resources required to bring Council to an ‘advanced’ level of asset maturity and competence.

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2. INTRODUCTION

2.1 Background

This Strategy is designed to;

• demonstrate responsive management of assets (and services provided from assets), compliance with regulatory requirements, and to communicate funding needed to provide the required levels of service over a 20 year planning period.

• follow the format recommended in Section 4.2.6 of the International Infrastructure Management Manual1.

• be read with the organisation’s Asset Management Policy, Whyalla City Council Strategic Plan and the Long Term financial Plan.

This infrastructure assets covered by this Strategy are shown in Table 2.1. These assets are used to provide a range of services to the community.

Table 2.1: Assets covered by this Plan

Asset category Category Components Transport Assets Road Pavement (Base)

Road Surface (Seal) Kerb and Channel

Footpaths

Building Assets Community Facilities Council Operational Facilities

Public Toilets Sporting Facilities Community Halls

Recreation and Open Space Land Improvements Playgrounds and Open Space

Stormwater Stormwater Pits (above ground infrastructure) Stormwater Pipe (below ground infrastructure)

Plant and Equipment Minor Plant Major Plant

Irrigation Recycled Water Network Irrigation pipework

Valves and miscellaneous fittings

Key stakeholders in the preparation and implementation of this Strategy are shown in Table 2.1.1.

1 IPWEA, 2011, Sec 4.2.6, Example of an Asset Management Plan Structure, pp 4|24 – 27.

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Table 2.1.1: Key Stakeholders in the AM Strategy

Key Stakeholder Role in Asset Management Strategy Elected Members and Mayor • Represent needs of community/stakeholders,

• Ensure organisation is financial sustainable.

Chief Executive Officer • Allocate resources to meet the organisation’s objectives in providing services while managing risks,

• Ensure organisation is financial sustainable.

Group Manager Infrastructure and Planning

• Overall responsibility for Engineering and Infrastructure Department. • Ensuring compliance of Strategic Plan Objectives • Guidance and leadership based on expertise within asset management

category.

Manager Engineering Services • Responsibility for ensuring asset management tasks and improvement plan are undertaken in line with objectives set out in Asset Management Strategy

• Guidance and leadership based on expertise within asset management category.

• Direct Responsibility of Project Manager Assets and Programming • Capital works projects

Asset Management Engineer, Project Manager Landscape, Graduate Project Manager

• Capital works projects • Report of any asset defects or deficiencies noted during inspections

Depot Coordinator/Civil Supervisor and Work Teams

• Responsible for reactive and planned maintenance schedules • Completion of customer requests relating to asset maintenance issues • Report of any asset defects or deficiencies noted during inspections

Project Manager Assets and Programming/Technical Assistant

• Responsible for Data integrity, storage and retrieval • Drafting of Asset Management related plans for approval • Capital works projects

The Community (residents, businesses, property owners)

• Provide feedback on Level of Service and the implications on revenue and budget expenditure

• Reporting of any asset defects or deficiencies through Council’s Customer Service System

State and Federal Government • Liaise for funding opportunities through various Government Agencies • Reporting body for any issues or service deficiencies for DPTI infrastructure

2.2 Resourcing Strategy

Council’s asset management strategy is aligned with the vision and objectives set in Council’s strategic plan. Central to this is forecasting the service delivery needs and the capacity to meet them on a short, medium and long term basis.

Cost occurs in all phasis of an asset’s life. It is important to attribute the costs to each phase of an asset’s life cycle so that the total life cycle costs can be determined to enable better management decision making. There are four key phasis of the asset management lifecycle of a council’s asset: acquisition, operation and maintenance, renewal and disposal. These phases are interrelated.

The cost of implementing the asset management plan has been incorporated within councils delivery program and financial estimates and LTFP. However it should be noted that this strategy reflects council’s intention at the time of publication. As with any plan or budget the actual results may vary from that forecast.

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2.3 Goals and Objectives of Asset Management

Council exists to provide services to the community. Some of these services are provided by public infrastructure assets. We have acquired infrastructure assets by ‘purchase’, by contract, construction by our staff and by donation of assets constructed by developers and others to meet increased levels of service.

Our goal in managing infrastructure assets is to meet the defined level of service (as amended from time to time) in the most cost effective manner for present and future consumers. The key elements of infrastructure asset management are:

• Continuous improvement in asset management practices, • Providing a defined level of service and monitoring performance, • Managing the impact of growth through demand management and infrastructure investment, • Taking a lifecycle approach to developing cost-effective management strategies for the long-term

that meet the defined level of service, • Identifying, assessing and appropriately controlling risks, and • Having a long-term financial plan which identifies required, affordable expenditure and how it will be

financed.2

2.4 Framework

Key elements of the Strategy are:

• Life cycle management – how Council will manage its existing and future assets to provide defined levels of service,

• Financial summary – what funds are required to provide the defined services, • Asset management practices, • Monitoring – how the plan will be monitored to ensure it is meeting organisation’s objectives, • Asset management improvement plan.

A road map for preparing an AM Plan is shown over page.

2 Based on IPWEA, 2011, IIMM, Sec 1.2 p 1|7.

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Road Map for preparing an Asset Management Plan Source: IPWEA, 2006, IIMM, Fig 1.5.1, p 1.11.

IS THE PLAN AFFORDABLE?

CORPORATE PLANNINGConfirm strategic objectives and establish AM policies, strategies & goals. Define responsibilities & ownership.Decide core or advanced AM Pan.Gain organisation commitment.

REVIEW/COLLATE ASSET INFORMATIONExisting information sourcesIdentify & describe assets.Data collectionCondition assessmentsPerformance monitoringValuation Data

ESTABLISH LEVELS OF SERVICEEstablish strategic linkagesDefine & adopt statementsEstablish measures & targetsConsultation

LIFECYCLE MANAGEMENT STRATEGIESDevelop lifecycle strategiesDescribe service delivery strategyRisk management strategiesDemand forecasting and managementOptimised decision making (renewals, new works, disposals)Optimise maintenance strategies

FINANCIAL FORECASTSLifecycle analysisFinancial forecast summaryValuation DepreciationFunding

IMPROVEMENT PLANAssess current/desired practicesDevelop improvement plan

ITERATIONReconsider service statementsOptions for fundingConsult with CouncilConsult with Community

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2.5 Core and Advanced Asset Management

This Strategy is prepared as a ‘core’ asset management plan over a 20 year planning period in accordance with the International Infrastructure Management Manual3. It is prepared to meet minimum legislative and organisational requirements for sustainable service delivery and long term financial planning and reporting. Core asset management is a ‘top down’ approach where analysis is applied at the ‘system’ or ‘network’ level.

The Strategy provides an approach to asset management based on:

• Best available current information

• Current level of service

• Contrasting existing management strategies with opportunities for improvement.

• A long term financial plan for 10 years with an advanced approach, resulting from financial needs prediction through particular asset’s economic life span.

• Prioritising work for rolling forward programming focusing in detail on capital, operational and maintenance requirements.

• A life cycle approach

This Strategy is based on the best information available at the time of preparation. The plan will be regularly reviewed and updated with the level of sophistication improving incrementally to an optimum level that is appropriate to the needs of council and the community.

Future revisions of this Strategy and the associated operational plans will move towards ‘advanced’ asset management using a ‘bottom up’ approach for gathering asset information for individual assets to support the optimisation of activities and programs to meet agreed service levels.

An advanced asset management approach contains optimisation of activities and programs to meet agreed service standards, through the development of management tactics based on the collection and analysis of key information on asset condition, performance, lifecycle costs, risk costs and treatment options.

2.6 Community Consultation

This ‘core’ asset management strategy is prepared to facilitate community consultation initially through feedback on public display of the draft prior to adoption by Council. Future revisions of the Strategy will incorporate community consultation on service levels and costs of providing the service. This will assist Council and the community in matching the level of service needed by the community, service risks and consequences with the community’s ability and willingness to pay for the service.

3 IPWEA, 2011, IIMM.

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3. LIFECYCLE MANAGEMENT PLAN

3.1 Asset valuations

The value of assets recorded in the asset register as at 30 June 2016 covered by this asset management strategy is shown below.

Current Replacement Cost $361,604,000

Depreciable Amount $352,265,000

Depreciated Replacement Cost4 $193,822,000

Annual Depreciation Expense $6,791,000

Key assumptions made in preparing the valuations were:

• Asset Data available at time of audit is accurate and based on sound methodology • Depreciation being calculated using a straight line method • Current depreciated value based on standard life

Various ratios of asset consumption and expenditure have been prepared to help guide and gauge asset management performance and trends over time.

Rate of Annual Asset Consumption 1.9% (Depreciation/Depreciable Amount)

Rate of Annual Asset Renewal 1.4% (Capital renewal exp/Depreciable amount)

In 2018 the organisation plans to renew assets at 75% of the rate they are being consumed and will be increasing its asset stock by 0.4% in the year.

3.2 Infrastructure Risk Management Plan

An assessment of risks5 associated with service delivery from infrastructure assets has identified critical risks that will result in loss or reduction in service from infrastructure assets or a ‘financial shock’ to the organisation. The risk assessment process identifies credible risks, the likelihood of the risk event occurring, the consequences should the event occur, develops a risk rating, evaluates the risk and develops a risk treatment plan for non-acceptable risks.

Critical risks, being those assessed as ‘Very High’ - requiring immediate corrective action and ‘High’ – requiring prioritised corrective action identified in the Infrastructure Risk Management Plan, together with the estimated residual risk after the selected treatment plan is operational are summarised in Table 3.1. These risks are reported to management and Council.

4 Also reported as Written Down Current Replacement Cost (WDCRC). 5 Council’s Risk Management Policy

Residual Value

Depreciable Amount

Useful Life

Current Replacement

Cost

End of reporting period 1

Annual Depreciation

Expense

End of reporting period 2

Accumulated Depreciation

Depreciated Replacement

Cost

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Table 3.1: Critical Risks and Treatment Plans

Service or Asset at Risk

What can Happen Risk Rating (VH, H)

Risk Treatment Plan Residual Risk *

All assets Errors in data analysis based on existing historical data resulting in inaccurate calculations for useful life, renewal costs and asset depreciation

VH Componentisation of all asset classes and the uploading of this data into Conquest for programming and reporting

L

All assets Further deterioration compounding existing back log

VH Ensure capital renewal expenditure exceeds annual depreciation

L

Footpaths and Kerb & Channel

Future deterioration of network resulting in excessive capital outlay

VH Investigate alternative treatments to reduce estimated cost to provide assets at an agreed level of service.

L

Stormwater Management

Interruption of services, road network etc as a result of flooding

H Completion of stormwater study to identify areas at risk

M

Open Space Limitation to available water H Identify alternative methods of water supply. Reuse of stormwater being a plausible option

M

Note * The residual risk is the risk remaining after the selected risk treatment plan is operational.

3.3 Routine Operations and Maintenance Plan

Operations include regular activities to provide services such as public health, safety and amenity, eg cleansing, street sweeping, grass mowing and street lighting.

Routine maintenance is the regular on-going work that is necessary to keep assets operating, including instances where portions of the asset fail and need immediate repair to make the asset operational again.

3.3.1 Operations and Maintenance Plan

Operations activities affect service levels including quality and function through street sweeping and grass mowing frequency, intensity and spacing of street lights and cleaning frequency and opening hours of building and other facilities.

Maintenance includes all actions necessary for retaining an asset as near as practicable to an appropriate service condition including regular ongoing day-to-day work necessary to keep assets operating, eg road patching but excluding rehabilitation or renewal. Maintenance may be classified into reactive, planned and specific maintenance work activities.

Reactive maintenance is unplanned repair work carried out in response to service requests and management/supervisory directions.

Planned maintenance is repair work that is identified and managed through a maintenance management system (MMS). MMS activities include inspection, assessing the condition against failure/breakdown experience, prioritising,

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scheduling, actioning the work and reporting what was done to develop a maintenance history and improve maintenance and service delivery performance.

Specific maintenance is replacement of higher value components/sub-components of assets that is undertaken on a regular cycle including repainting, replacing air conditioning units, etc. This work falls below the capital/maintenance threshold but may require a specific budget allocation.

Actual past maintenance expenditure is shown in Table 3.3.1.

Table 3.3.1: Maintenance Expenditure Trends

Year Maintenance Expenditure

Planned and Specific Unplanned Transport Assets $372,000 $373,000

Building Assets $242,000 $242,000

Recreation and Open Space $1,961,000 $654,000

Stormwater Assets $80,000 $46,000

Plant and Equipment $170,000 $57,000 Planned and specific maintenance work is currently 67% of total maintenance expenditure.

Assessment and prioritisation of reactive maintenance is undertaken by Council staff using experience, judgement and feedback from the community through Council’s Customer Service System and through further refinement of Council’s inspection regime.

3.3.2 Operations and Maintenance Strategies

The organisation will operate and maintain assets to provide the defined level of service to approved budgets in the most cost-efficient manner. The operation and maintenance activities include:

• Scheduling operations activities to deliver the defined level of service in the most efficient manner, • Undertaking maintenance activities through a planned maintenance system to reduce maintenance costs and

improve maintenance outcomes. Undertake cost-benefit analysis to determine the most cost-effective split between planned and unplanned maintenance activities (50 – 70% planned desirable as measured by cost),

• Maintain a current infrastructure risk register for assets and present service risks associated with providing services from infrastructure assets and reporting Very High and High risks and residual risks after treatment to management and Council/Board,

• Review current and required skills base and implement workforce training and development to meet required operations and maintenance needs,

• Review asset utilisation to identify underutilised assets and appropriate remedies, and over utilised assets and customer demand management options,

• Maintain a current hierarchy of critical assets and required operations and maintenance activities, • Develop and regularly review appropriate emergency response capability, • Review management of operations and maintenance activities to ensure Council is obtaining best value for

resources used.

3.3.3 Asset hierarchy

An asset hierarchy provides a framework for structuring data in an information system to assist in collection of data, reporting information and making decisions. The hierarchy includes the asset class and component used for asset planning and financial reporting and service level hierarchy used for service planning and delivery. Council is developing a hierarchy system to assist with asset management strategies into the future (refer to improvement plan).

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3.3.4 Critical Assets

Critical assets are those assets which have a high consequence of failure but not necessarily a high likelihood of failure. By identifying critical assets and critical failure modes, Council can target and refine investigative activities, maintenance plans and capital expenditure plans at the appropriate time.

Operations and maintenances activities may be targeted to mitigate critical assets failure and maintain service levels. These activities may include increased inspection frequency, higher maintenance intervention levels, etc. Critical assets failure modes and required operations and maintenance activities are detailed in Table 3.3.4.

Table 3.3.4: Critical Assets and Service Level Objectives

Critical Assets Critical Failure Mode Operations & Maintenance Activities Footpaths Unserviceable for use with

particular risk to the elderly or those who rely on mobility aids

Undertake planned and reactive maintenance in line with Council’s customer service charter and internal schedules and policies.

Roads Unserviceable for vehicular traffic due to failure

Undertake planned and reactive maintenance in line with Council’s customer service charter and internal schedules and policies.

Culverts and similar road structures Failure/Collapse Continued inspection procedures to identify and complete maintenance as required

Sporting facilities Unserviceable for use by community and/or sporting clubs.

Undertaken planned and reactive maintenance in line with Council’s customer service charter and internal schedules and policies.

Playgrounds Unserviceable for use due to failure

Undertaken planned and reactive maintenance in line with Council’s customer service charter and internal schedules and policies.

Public furniture/structures Failure/Collapse Continued inspection procedures to identify and complete maintenance as required

3.3.5 Standards and specifications

Maintenance work is carried out in accordance with the following Standards and Specifications.

• SAA HB81 parts 1-9: Field Guide for Traffic Control at Works on Roads

• AS 1472 parts 1-13: Manual of Uniform Traffic Control Devices

• Ministers Notice to Council – 9 September 2013

• Various internal policies – asphalt and spray seal reinstatement Policy.

• Approved maintenance schedules

3.3.6 Summary of future operations and maintenance expenditures

Future operations and maintenance expenditure is forecast to trend in line with the value of the asset stock as shown in Figure 1. Note that all costs are shown in current 2016/17 dollar values (ie real values).

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Figure 1: Projected Operations and Maintenance Expenditure

Deferred maintenance, ie works that are identified for maintenance and unable to be funded are to be included in the risk assessment and analysis in the infrastructure risk management plan.

Maintenance is funded from the operating budget where available.

3.4 Renewal/Replacement Plan

Renewal and replacement expenditure is major work which does not increase the asset’s design capacity but restores, rehabilitates, replaces or renews an existing asset to its original or lesser required service potential. Work over and above restoring an asset to original service potential is upgrade/expansion or new works expenditure.

3.4.1 Renewal plan

Assets requiring renewal/replacement are identified from one of three methods provided in the ‘Expenditure Template’.

• Method 1 uses Asset Register data to project the renewal costs using acquisition year and useful life to determine the renewal year, or

• Method 2 uses capital renewal expenditure projections from external condition modelling systems (such as Pavement Management Systems), or

• Method 3 uses a combination of average network renewals plus defect repairs in the Renewal Plan and Defect Repair Plan worksheets on the ‘Expenditure template’.

Achieving an asset maturity to allow for the use of Method 2 across all categories is Council’s preference. To develop this strategy a mix of Method 1 and Method 2 was used subject to information available for each asset category.

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3.4.2 Renewal and Replacement Strategies

Council will plan capital renewal and replacement projects to meet level of service objectives and minimise infrastructure service risks by:

• Planning and scheduling renewal projects to deliver the defined level of service in the most efficient manner, • Undertaking project scoping for all capital renewal and replacement projects to identify:

o the service delivery ‘deficiency’, present risk and optimum time for renewal/replacement, o the project objectives to rectify the deficiency, o the range of options, estimated capital and life cycle costs for each options that could address the

service deficiency, o and evaluate the options against evaluation criteria adopted by the organisation, and o select the best option to be included in capital renewal programs,

• Using ‘low cost’ renewal methods (cost of renewal is less than replacement) wherever possible, • Maintain a current infrastructure risk register for assets and service risks associated with providing services

from infrastructure assets and reporting Very High and High risks and residual risks after treatment to management and Council/Board,

• Review current and required skills base and implement workforce training and development to meet required construction and renewal needs,

• Maintain a current hierarchy of critical assets and capital renewal treatments and timings required , • Review management of capital renewal and replacement activities to ensure Council is obtaining best value

for resources used.

3.4.3 Asset Improvement Program & Revaluation Schedule

AM Plans will be prepared in accordance with this Strategy and the International Infrastructure Management Manual. They will be prepared to meet minimum legislative and organisational requirements for sustainable service delivery and long term financial planning and reporting.

Further revisions of the AM Plans will move towards ‘advanced’ asset maturity and further develop ‘bottom up’ approach for gathering asset information for individual assets to support the optimisation of activities and programs to meet agreed service levels. Objectives provided in the Asset Improvement Program (see Table 6.1) will be incorporated in to the AM Plans to provide operational direction and underpin the implementation of this Strategy.

AM Plans will be based on refined data that Council has available with each iteration. It is anticipated that the AM Plans will be significantly revised and enhanced regularly in line with the Asset Revaluation Schedule provided in table 3.4.3 below with the emphasis being using the latest technology to collect and store data for all asset classes.

Table 3.4.3 - Asset Revaluation Schedule

Asset Class

Asset Type

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Transport Road Network

DeskCond CondDesk Desk Desk Desk DeskCond CondDesk Desk Desk Desk

Transport Kerbs DeskCond CondDesk Desk Desk Desk DeskCond CondDesk Desk Desk Desk

Transport Footpaths DeskCond CondDesk Desk Desk Desk DeskCond CondDesk Desk Desk Desk

Transport Signs DeskCond CondDesk Desk Desk Desk DeskCond CondDesk Desk Desk Desk

Stormwater Pits DeskCond CondDesk Desk Desk Desk DeskCond CondDesk Desk Desk Desk

Stormwater Pipes DeskCond CondDesk Desk Desk Desk DeskCond CondDesk Desk Desk Desk

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Table 3.4.3 - Asset Revaluation Schedule (Cont.)

Asset Class

Asset Type 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Buildings Level 2 Desk DeskCond CondDesk Desk Desk Desk DeskCond CondDesk Desk Desk

Buildings Level 3 Desk CondDesk CondDesk Desk Desk Desk DeskCond CondDesk Desk Desk

Open Space

Land Improvements

Desk DeskCond CondDesk Desk Desk Desk DeskCond CondDesk Desk Desk

Open Space

Playgrounds Desk DeskCond CondDesk Desk Desk Desk DeskCond CondDesk Desk Desk

Irrigation Recycled Water Network

Desk Desk CondDesk CondDesk Desk Desk Desk CondDesk CondDesk Desk

Irrigation Other Desk Desk CondDesk CondDesk Desk Desk Desk CondDesk CondDesk Desk

Cond – Condition Assessment; Desk – Desktop Valuation

3.4.4 Summary of future renewal and replacement expenditure

Projected future renewal and replacement expenditures are forecast to increase over time as the asset stock increases from growth. The expenditure is summarised in Fig 2. Note that all amounts are shown in real values.

Fig 2: Projected Capital Renewal and Replacement Expenditure

Formatted Table

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Deferred renewal and replacement, ie those assets identified for renewal and/or replacement and not scheduled in capital works programs are to be included in the risk analysis process in the risk management plan.

Renewals and replacement expenditure in the organisation’s capital works program will be accommodated in the long term financial plan. Further data validation will provide strategies to address unfunded renewals over the life of the Strategy.

3.5 Creation/Acquisition/Upgrade Plan

New works are those works that create a new asset that did not previously exist, or works which upgrade or improve an existing asset beyond its existing capacity. They may result from growth, social or environmental needs. Assets may also be acquired at no cost to the organisation from land development.

Any asset upgrade or Asset creation will require a project plan and to be tested against the LTFP.

3.5.1 Capital Investment Strategies

The organisation will plan capital upgrade and new projects to meet level of service objectives by:

• Planning and scheduling capital upgrade and new projects to deliver the defined level of service in the most efficient manner,

• Undertake project scoping for all capital upgrade/new projects to identify: o the service delivery ‘deficiency’, present risk and required timeline for delivery of the upgrade/new

asset, o the project objectives to rectify the deficiency including value management for major projects, o the range of options, estimated capital and life cycle costs for each options that could address the

service deficiency, o management of risks associated with alternative options, o and evaluate the options against evaluation criteria adopted by Council, and o select the best option to be included in capital upgrade/new programs,

• Review current and required skills base and implement training and development to meet required construction and project management needs,

• Review management of capital project management activities to ensure Council is obtaining best value for resources used.

Standards and specifications for new assets and for upgrade/expansion of existing assets are the same as those for renewal shown in Section 3.4.2.

3.5.2 Summary of future upgrade/new assets expenditure

Projected upgrade/new asset expenditures are summarised in Fig 3. The projected upgrade/new capital works program is shown in Appendix C. All amounts are shown in real values.

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Fig 3: Projected Capital Upgrade/New Asset Expenditure

Expenditure on new assets and services in the organisation’s capital works program will be accommodated in the long term financial plan. This is further discussed in Section 6.2.

3.6 Disposal Plan

Disposal includes any activity associated with disposal of a decommissioned asset including sale, demolition or relocation. Further investigation regarding assets identified for possible decommissioning and disposal, together with estimated annual savings from not having to fund operations and maintenance of the assets require further reinvestigation to determine the required levels of service and see what options are available for alternate service delivery, if any.

4. FINANCIAL SUMMARY This section contains the financial requirements resulting from all the information presented in the previous sections of this asset management plan. The financial projections will be improved as further information becomes available on desired levels of service and current and projected future asset performance.

4.1 Financial Statements and Projections

The financial projections are shown in Fig 4 for projected operating (operations and maintenance) and capital expenditure (renewal and upgrade/expansion/new assets). Note that all costs are shown in real values.

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Fig 4: Projected Operating and Capital Expenditure

4.1.1 Sustainability of service delivery

There are four key indicators for service delivery sustainability that have been considered in the analysis of the services provided by this asset category, these being the asset renewal funding ratio, long term life cycle costs/expenditures and medium term projected/budgeted expenditures over 5 and 10 years of the planning period.

Asset Renewal Funding Ratio

Asset Renewal Funding Ratio6 0.92

The Asset Renewal Funding Ratio is the most important indicator and reveals that over the next 10 years, Council is forecasting that it will have 92% of the funds required for the optimal renewal and replacement of its assets.

Long term - Life Cycle Cost

Life cycle costs (or whole of life costs) are the average costs that are required to sustain the service levels over the asset life cycle. Life cycle costs include operations and maintenance expenditure and asset consumption (depreciation expense). The life cycle cost for the services covered in this asset management plan is $12,516,000 per year (average operations and maintenance expenditure plus depreciation expense projected over 10 years).

6 AIFMG, 2012, Version 1.3, Financial Sustainability Indicator 4, Sec 2.6, p 2.16

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Life cycle costs can be compared to life cycle expenditure to give an initial indicator of affordability of projected service levels when considered with age profiles. Life cycle expenditure includes operations, maintenance and capital renewal expenditure. Life cycle expenditure will vary depending on the timing of asset renewals. The life cycle expenditure over the 10 year planning period is $10,168,000 per year (average operations and maintenance plus capital renewal budgeted expenditure in LTFP over 10 years).

A shortfall between life cycle cost and life cycle expenditure is the life cycle gap. The life cycle gap for services covered by this asset management plan is -$2,347,000 per year (-ve = gap, +ve = surplus).

Life cycle expenditure is 81% of life cycle costs.

The life cycle costs and life cycle expenditure comparison highlights any difference between present outlays and the average cost of providing the service over the long term. If the life cycle expenditure is less than that life cycle cost, it is most likely that outlays will need to be increased or cuts in services made in the future.

Knowing the extent and timing of any required increase in outlays and the service consequences if funding is not available will assist organisations in providing services to their communities in a financially sustainable manner. This is the purpose of the asset management plans and long term financial plan.

Medium term – 10 year financial planning period

This asset management plan identifies the projected operations, maintenance and capital renewal expenditures required to provide an agreed level of service to the community over a 10 year period. This provides input into 10 year financial and funding plans aimed at providing the required services in a sustainable manner.

These projected expenditures may be compared to budgeted expenditures in the 10 year period to identify any funding shortfall. In a core asset management plan, a gap is generally due to increasing asset renewals for ageing assets.

The projected operations, maintenance and capital renewal expenditure required over the 10 year planning period is $11,019,000 on average per year.

Estimated (budget) operations, maintenance and capital renewal funding is $10,168,000 on average per year giving a 10 year funding shortfall of -$851,000 per year. This indicates that Council expects to have 92% of the projected expenditures needed to provide the services documented in the asset management plan.

Medium Term – 5 year financial planning period

The projected operations, maintenance and capital renewal expenditure required over the first 5 years of the planning period is $10,133,000 on average per year.

Estimated (budget) operations, maintenance and capital renewal funding is $9,716,000 on average per year giving a 5 year funding shortfall of -$417,000. This indicates that Council expects to have 96% of projected expenditures required to provide the services shown in this asset management plan.

4.2 Asset Management Financial Indicators

Figure 5 shows the asset management financial indicators over the 10 year planning period and for the long term life cycle.

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Figure 5: Asset Management Financial Indicators

Providing services from infrastructure in a sustainable manner requires the matching and managing of service levels, risks, projected expenditures and financing to achieve a financial indicator of approximately 1.0 for the first years of the asset management plan and ideally over the 10 year life of the Long Term Financial Plan.

Figure 8 shows the projected asset renewal and replacement expenditure over the 20 years of the AM Plan. The projected asset renewal and replacement expenditure is compared to renewal and replacement expenditure in the capital works program, which is accommodated in the long term financial plan

Figure 6: Projected and LTFP Budgeted Renewal Expenditure

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4.3 Projected Expenditures for Long Term Financial Plan

Table 4.3 shows the projected expenditures for the 10 year long term financial plan.

Expenditure projections are in 2017 real values.

Table 4.3: Projected Expenditures for Long Term Financial Plan ($000)

Year Operations ($000)

Maintenance ($000)

Projected Capital Renewal ($000)

Capital Upgrade/ New ($000)

Disposals ($000)

2018 $661 $4,622 $6,053 $2,500 $0

2019 $664 $4,839 $5,367 $2,200 $0

2020 $666 $4,980 $3,603 $1,035 $0

2021 $668 $5,036 $3,578 $660 $0

2022 $669 $5,038 $4,221 $935 $0

2023 $670 $5,079 $9,967 $935 $0

2024 $672 $5,121 $8,261 $1,660 $0

2025 $673 $5,266 $4,274 $660 $0

2026 $674 $5,269 $6,575 $935 $0

2027 $676 $5,310 $1,035 $660 $0

4.4 Valuation Forecasts

Asset values are forecast to increase as additional assets are added to the asset stock from construction and acquisition by Council and from assets constructed by land developers and others and donated to Council. Table 4.4 (refer below) shows the projected replacement cost asset values over the planning period in real values and depreciation expense values forecast in line with asset values.

The depreciated replacement cost will vary over the forecast period depending on the rates of addition of new assets, disposal of old assets and consumption and renewal of existing assets. Forecast of the assets’ depreciated replacement cost is shown in Table 4.4. The depreciated replacement cost of contributed and new assets are shown in separate columns.

Table 4.4: Valuation Forecasts ($000)

Year Projected Asset

Values ($000)

Projected Depreciation Expense

($000)

Projected Depreciated Replacement Cost ($000)

Existing Assets New Assets

2018 $ 364,168 $ 6,791 $ 193,154 $ 2,716

2019 $ 366,368 $ 6,861 $ 192,007 $ 4,846

2020 $ 367,403 $ 6,911 $ 188,717 $ 5,761

2021 $ 368,063 $ 6,933 $ 185,264 $ 6,279

2022 $ 368,998 $ 6,944 $ 184,027 $ 7,061

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Table 4.4: Valuation Forecasts ($000) – Cont.

Year Projected Asset

Values ($000)

Projected Depreciation Expense

($000)

Projected Depreciated Replacement Cost ($000)

Existing Assets New Assets

2023 $ 369,933 $ 6,963 $ 186,939 $ 7,824

2024 $ 371,593 $ 6,982 $ 189,597 $ 9,293

2025 $ 372,253 $ 7,024 $ 188,682 $ 9,720

2026 $ 373,188 $ 7,035 $ 188,278 $ 10,411

2027 $ 373,848 $ 7,054 $ 182,900 $ 10,808

4.5 Key Assumptions made in Financial Forecasts

This section details the key assumptions made in presenting the information contained in this asset management plan and in preparing forecasts of required operating and capital expenditure and asset values, depreciation expense and carrying amount estimates. It is presented to enable readers to gain an understanding of the levels of confidence in the data behind the financial forecasts.

Key assumptions made in this asset management plan and risks that these may change are shown in Table 4.5.

Table 4.5: Key Assumptions made in AM Plan and Risks of Change

Key Assumptions Risks of Change to Assumptions Asset Data available at time of audit is accurate and based on sound methodology

Asset data is based on historical data that is incomplete. Further testing is required to confirm assumptions made from visual inspection.

Current depreciated value based on standard life Actual service life may vary, resulting in reduced or increased life of assets.

Growth is estimated at 1% per year for an initial two year period, are further growth predictions are not included

Growth exceeding this estimation may result in unplanned/unbudgeted maintenance and renewal.

4.6 Forecast Reliability and Confidence

The expenditure and valuations projections in this AM Plan are based on best available data. Currency and accuracy of data is critical to effective asset and financial management. Data confidence is classified on a 5 level scale7 in accordance with Table 4.6.1.

7 IPWEA, 2011, IIMM, Table 2.4.6, p 2|59.

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Table 4.6.1: Data Confidence Grading System

Confidence Grade Description A Highly reliable Data based on sound records, procedures, investigations and analysis, documented properly and recognised

as the best method of assessment. Dataset is complete and estimated to be accurate ± 2% B Reliable Data based on sound records, procedures, investigations and analysis, documented properly but has minor

shortcomings, for example some of the data is old, some documentation is missing and/or reliance is placed on unconfirmed reports or some extrapolation. Dataset is complete and estimated to be accurate ± 10%

C Uncertain Data based on sound records, procedures, investigations and analysis which is incomplete or unsupported, or extrapolated from a limited sample for which grade A or B data are available. Dataset is substantially complete but up to 50% is extrapolated data and accuracy estimated ± 25%

D Very Uncertain Data is based on unconfirmed verbal reports and/or cursory inspections and analysis. Dataset may not be fully complete and most data is estimated or extrapolated. Accuracy ± 40%

E Unknown None or very little data held.

The estimated confidence level for and reliability of data used in this AM Plan is shown in Table 4.6.2.

Table 4.6.2: Data Confidence Assessment for Data used in AM Plan

Data Confidence Assessment Comment Demand drivers B Demand drivers are based on historical trends and are not

expected to vary significantly. Growth projections C Growth projections are based historical trends over the

previous 20 year period and although population growth is generally steady, peaks of substantial infrastructure development are present and challenging to predict.

Operations expenditures B Are expected to remain steady Maintenance expenditures B Are expected to remain steady Projected Renewal exps. - Asset values

A Values are based on latest contract values for correspondence asset subcategories to reflect current market

- Asset residual values B Asset residual values are based on straight line depreciation over standard life. Revised life is not considered.

- Asset useful lives B Asset useful lives are based on visual inspection applied to historical information to revise the expiry.

- Condition modelling B Conditions are based on visual inspections undertaken in in line with the inspection schedule

- Network renewals B Network renewals are based analysed after a sample visual inspection methodology is expected to be accurate.

- Defect repairs B Treatments in line with Asset Audit Deliverables Upgrade/New expenditures B With the exception of Council Concrete Footpath Upgrade

Program, new road and stormwater assets are contributed following the handover of subdivisions.

Disposal expenditures C Written down value (accumulated depreciation) is based on standard life estimations. In reality actual residual value may be greater if actual useful like exceeds standard useful life.

Over all data sources, the data confidence is assessed as medium to high confidence level for data used in the preparation of this Strategy.

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5. STRATEGIC AND CORPORATE GOALS

5.1 Alignment to Strategic Plan

This Strategy is prepared under the direction of the organisation’s vision, mission, goals and objectives.

Our vision is:

Whyalla will be vibrant, attractive City offering our community a diverse range of sustainable economic, social, environmental and cultural opportunities.

Our mission is:

We will provide access to quality infrastructure, services and facilities, capitalising on and protecting our attractive coastal and outback landscapes.

We will be home to an energetic, harmonious, integrated community actively involved in shaping Whyalla for current and future generations.

Relevant organisational goals and objectives and how these are addressed in this asset management plan are:

Table 5.1: Organisation Goals and how these are addressed in this Plan

Goal Objective How Goal and Objectives are addressed in AM Plan

Infrastructure is appropriately planned, maintained and managed.

Plan, Maintain and Enhance Council’s infrastructure assets to meet, as far as practicable, the community’s economic, social, environmental and financial needs.

Develop annual work programs and long-term projects to reflect maintenance and investment priorities, risk and available resources and be proactive and link them to Council’s annual budgeting and long term financial plan.

By ensuring that expenditure reflect both the current requirement to bring transport assets to a suitable standard in conjunction with a commitment to ensure capital renewal exceeding annual depreciation.

Asset management plans will define outcomes, service standards, condition, performance, maintenance and investment requirements.

Asset Management Plan and system will outline for optimised maintenance cost through next 3-5 years by looking at best mixture of reactive and planned maintenance, asset rehabilitation and renewal interventions.

Asset management plan will outline the projected future funding requirements and funding gaps for the next 20 years.

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Table 5.1: Organisation Goals and how these are addressed in this Plan (Cont.)

Goal Objective How Goal and Objectives are addressed in AM Plan

Council will be recognised for being financially responsible.

Ensure the provision of appropriate services and maintenance of assets by:

- Cost containment - Income generation - Rate setting policy

review - Adopting a flexible and

sustainable rating structure

- Exploring cost recovery mechanisms

Use financial risk management strategies and take appropriate action to manage these risks across the organisation.

Identify long term funding gaps, discuss strategies to minimise those gaps as ongoing.

Prepare Long term financial plans and funding forecasts for long term sustainability of transport assets.

Continue to work in partnership with State and Federal Government organisations and funding bodies.

Prepare maintenance and rehabilitation plans, identify interventions to provide agreed service levels at a minimum life cycle cost.

Maintain a collaborative and interactive relationship with Audit Committee.

Assess the suitability of current Asset Management System to meet the current and future requirements of the council and community.

Asset Management Plans for all assets evolve from core Asset Management Plans, i.e Generation 1 towards advance Asset Management Plans following current international Asset Management principals and guidelines.

Council is inclusive in its financial governance

Involve the Whyalla community early in the annual budget and rate-setting process.

Proactively inform the Whyalla community on developments with Council’s finances and communicate and explain the rate-setting and services-provision processes in as open and transparent way.

By linking ability to pay to level of service and setting the level of service to a price the community are willing to pay.

As a part of new Asset Management Policy the Council will undertake customer satisfaction surveys on an annual basis so quantifiable information can be gathered, this will then be implemented in future iterations of this Asset Management Plan.

Continue engagement with community to ensure assets providing services are still required to be held by council, i.e. divest certain assets if deemed appropriate.

The community understand what we are doing and how we are doing it.

The organisation will exercise its duty of care to ensure public safety is accordance with the infrastructure risk management plan prepared in conjunction with this Strategy (refer to Asset Management Improvement Program).

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5.2 Legislative Requirements

The organisation has to meet many legislative requirements including Australian and State legislation and State regulations. These include:

Table 3.3: Legislative Requirements

Legislation Requirement Local Government Act Sets out role, purpose, responsibilities and powers of local governments

including the preparation of a long term financial plan supported by asset management plans for sustainable service delivery.

Road Traffic Act Sets out the requirements for public consultation and notification requirements for road events, road closures etc.

Work Health and Safety Act 2012 & Regulations

Set out roles and responsibilities to secure the health, safety and welfare of persons at work.

Native Vegetation Act Sets out the requirements under the Act to protect and preserve native vegetation.

Highways Act A reference for legislation relating to state roads

AS 1742 Manual of uniform traffic control devices

Standards in relation to traffic control devices for general use and works on roads, speed control, street names, service and tourist signs, railways crossings, freeways, bicycle facilities, pedestrian controls, parking controls, bus transit and truck lanes and local area traffic management

Australian Road Rules Ensure that Transport facilities satisfy the requirements of Road rules for example road marking to be consistent with legal requirements

AS/NZS 2890 Parking Facilities Sets out parking requirements in various forms (Off-street parking, on-street parking, etc)

AS1428 Design for access and mobility

Reference for access requirements relating to transport (ie ramps, parking, pedestrian ways, etc)

Austroads Design Guidelines Ensure that transport facilities satisfy the requirements of guidelines.

Development Act 1993 Sets our parameters for Developments, including what developments required Development Approval (Planning Consent/Building Rules Consent) and the process required to obtain such consents.

Building Codes Australia Sets out Technical requirements relating to building works.

Disability Discrimination Act 1993 Set outs requirements for equality of access to services and facilities.

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6. PLAN IMPROVEMENT AND MONITORING

6.1 Improvement Program

The asset management improvement plan generated from this Strategy is shown in Table 6.1.

Table 7.2: Asset Management Improvement Plan

Task No Task Responsibility Resources Required

Timeline

Transport Assets 1 Further Development Asset Management System

(for modelling purposes) GMIP Staff

time/consultant In progress

2 Update of Asset Registers and upload into Conquest for surface and pavement

PMAP Staff/consultant Completed

3 Validation and upload into Conquest of data pertaining to airport infrastructure, laneways, unsealed roads and carparks

PMAP Staff/consultant June 2018

4 Community Satisfaction Survey and desired level of service identification

GMIP Staff time/consultant

June 2018

5 Asset Condition Surveys and desktop valuations GMIP/PMAP Staff time/Consultant

As per schedule

6 Identification of gaps within data and sourcing of required data

GMIP/PMAP Staff time annually

7 Development and review of 10 year capital roads program

PMAP Staff time Completed and review annually

8 Development of 10 year capital programs for kerbing, footpath and signage renewal

PMAP Staff time June 2018

9 Review of useful life projections at valuation GMIP/PMAP Staff time/consultant

annually

10 Conduct association maturity Assessment in line with national framework

PMAP Staff Time December 2016

11 Risk Management Plans, AM Plans and other various operation documents as required.

MCS/PMAP Staff Time annually

12 Maintenance Response Levels of Service GMIP Staff Time Ongoing

13 Update of data on Exponare PMAP Staff Time/consultant

annually

Buildings 1 Further Development Asset Management System


time/consultant Ongoing

2 Validation of data collected on Buildings Plus PMAP Staff time June 2018

3 Update of Asset Registers and upload into Conquest PMAP Staff/consultant In line with condition assessment schedule

4 Development of Asset Hierarchy GMIP/PMAP Staff time/consultant

June 2018



June 2018

6 Asset Condition Surveys GMIP/PMAP Staff Time/Consultant

2017/18

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GMIP/PMAP Staff annually

8 Renewal/Replacement Plans and annual review of 10 year capital programs

PMAP Staff Time annually

9 Review of useful life projections at valuation GMIP/PMAP Staff time annually



11 Risk Management Plans and AM Plans for operational purposes



13 Conduct Utilisation Study and fit for purpose/functionality of assets and present recommendations for consideration by Council


December 2018


annually

Recreation and Open Space 1 Further Development Asset Management System



2 Validation of data collected on Buildings Plus PMAP Staff time June 2018


4 Development of Asset Hierarchy GMIP/PMAP Staff time/consultant

June 2018



June 2018


2017/18





6 Further testing to verify historical pavement data GMIP/PMAP Staff Time/NAATA Accredited laboratory

2017/18

7 Risk Management Plans MCS/PMAP Staff Time Every six months



9 Review of useful life projections at valuation GMIP/PMAP Staff time June 2018



11 Risk Management Plans MCS/PMAP Staff Time Every six months


13 Conduct Utilisation Study and fit for purpose/functionality of assets and present recommendations for consideration by Council


December 2018


annually

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Stormwater 1 Further Development Asset Management System



2 Update of Asset Registers and upload into Conquest PMAP Staff/consultant Completed



June 2018


As per schedule








7 Risk Management Plans and AM Plans for operational purposes




annually

Plant and Equipment 1 Further Development Asset Management System



2 Update of Asset Registers and upload into Conquest PMAP Staff/consultant June 2019


2017/18








8 Risk Management Plans and operational AM Plans MCS/PMAP Staff Time annually


Irrigation 1 Further Development Asset Management System






June 2018


2017/18





7 Review of useful life projections at valuation GMIP/PMAP annually

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9 Risk Management Plans and operational AM Plans MCS/PMAP Staff Time annually



annually

6.2 Monitoring and Review Procedures

This asset management plan will be reviewed during annual budget planning processes and amended to recognise any material changes in service levels and/or resources available to provide those services as a result of budget decisions.

The AM Plan will be updated annually to ensure it represents the current service level, asset values, projected operations, maintenance, capital renewal and replacement, capital upgrade/new and asset disposal expenditures and projected expenditure values incorporated into the Council’s long term financial plan.

The AM Plan has a life of 4 years (Council election cycle) and is due for complete revision and updating within 2 years of each Council election.

6.3 Performance Measures

The effectiveness of the asset management plan can be measured in the following ways:

• The degree to which the required projected expenditures identified in this asset management plan are incorporated into the organisation’s long term financial plan,

• The degree to which 1-5 year detailed works programs, budgets, business plans and organisational structures take into account the ‘global’ works program trends provided by the asset management plan,

• The degree to which the existing and projected service levels and service consequences (what we cannot do), risks and residual risks are incorporated into the organisation’s Strategic Plan and associated plans,

• The Asset Renewal Funding Ratio achieving the target of 1.0.

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6.4 Status of Asset Management Practices

6.4.1 Accounting and financial systems

Financial records are maintained within the Synergy Soft system and Asset Management within the Conquest Asset Management System. This system provides links to Asset Maintenance, Records, Property Files and other services provided by Council. Project Manager Assets & Programming is responsible for regular up-dating of asset data on Conquest. Finance Manager, provides supervision for Finance staff in the regular up-dating of Synergy Soft. Technical support is provided by IT Vision and Tonkin Consulting. Council maintains records and reports financial information in accordance with AASB standards, The Local Government Act 1999 and the Financial Regulations. 6.4.2 Accounting standards and regulations

IPWEA, 2011, “ International Infrastructure Management Manual”, Institute of Public Works Engineering Australia, Sydney, www.ipwea.org.au IPWEA, August 2007, “A Guided Pathway to Asset Management Planning”, Institute of Public Works Engineering Australia Limited. IPWEA, December 2009, “Australian infrastructure Financial Management Guidelines”, Institute of Public Works Engineering Australia Limited.

6.4.3 Asset management system

Council currently records asset details for the Transport Category within Conquest Asset Management System. Records are updated as and when required by Finance (in Synergy Soft) and Engineering and Infrastructure Staff (in Conquest). Procedures assist with timely flow through of information between the Asset Register and Accounting system. Group Manager Corporate Services is responsible for the management of financial data, Group Manager for Engineering and Infrastructure is responsible for Asset Management Systems. Civil Works Supervisor is responsible for the Planned and reactive maintenance of Transport Assets. The key information flows into this infrastructure and asset management plan are:

• The asset register data on size, age, value, remaining life of the network;

• The unit rates for categories of work/material;

• The adopted service levels;

• Projections of various factors affecting future demand for services;

• Correlations between maintenance and renewal, including decay models;

• Data on new assets acquired by council.

http://www.ipwea.org.au/

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The key information flows from this asset management plan are: • The assumed Works Program and trends; • The resulting budget, valuation and depreciation projections; • The useful life analysis.

These will impact the Long Term Financial Plan, Strategic Business Plan, annual budget and departmental business plans and budgets. Annual Maintenance and renewal requirements are used for the purpose of budgeting for expenditure. New assets are recognised and recorded at the date on which they are available for use. This usually occurs on 30 June of each year. Assets are depreciated from the date of recognition.

7. REFERENCES

IPWEA, 2006, ‘International Infrastructure Management Manual’, Institute of Public Works Engineering Australasia, Sydney, www.ipwea.org/IIMM

IPWEA, 2008, ‘NAMS.PLUS Asset Management’, Institute of Public Works Engineering Australasia, Sydney, www.ipwea.org/namsplus.

IPWEA, 2009, ‘Australian Infrastructure Financial Management Guidelines’, Institute of Public Works Engineering Australasia, Sydney, www.ipwea.org/AIFMG.

IPWEA, 2011, ‘International Infrastructure Management Manual’, Institute of Public Works Engineering Australasia, Sydney, www.ipwea.org/IIMM

Sample Council, ‘Strategic Plan 20XX – 20XX’,

Sample Council, ‘Annual Plan and Budget’.

http://www.ipwea.org/IIMM



http://www.ipwea.org/AIFMG

http://www.ipwea.org/IIMM

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8. APPENDICES

Appendix A LTFP Budgeted Expenditures (Category Specific)

Appendix B Abbreviations

Appendix C Glossary

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Appendix A Budgeted Expenditures Accommodated in LTFP

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Appendix E Abbreviations

AAAC Average annual asset consumption

AM Asset management

AM Plan Asset management plan

ARI Average recurrence interval

ASC Annual service cost

BOD Biochemical (biological) oxygen demand

CRC Current replacement cost

CWMS Community wastewater management systems

DA Depreciable amount

DRC Depreciated replacement cost

EF Earthworks/formation

IRMP Infrastructure risk management plan

LCC Life Cycle cost

LCE Life cycle expenditure

LTFP Long term financial plan

MMS Maintenance management system

PCI Pavement condition index

RV Residual value

SoA State of the Assets

SS Suspended solids

vph Vehicles per hour

WDCRC Written down current replacement cost

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Appendix F Glossary

Annual service cost (ASC) 1) Reporting actual cost The annual (accrual) cost of providing a service

including operations, maintenance, depreciation, finance/opportunity and disposal costs less revenue.

2) For investment analysis and budgeting An estimate of the cost that would be tendered,

per annum, if tenders were called for the supply of a service to a performance specification for a fixed term. The Annual Service Cost includes operations, maintenance, depreciation, finance/ opportunity and disposal costs, less revenue.

Asset A resource controlled by an entity as a result of past events and from which future economic benefits are expected to flow to the entity. Infrastructure assets are a sub-class of property, plant and equipment which are non-current assets with a life greater than 12 months and enable services to be provided.

Asset category Sub-group of assets within a class hierarchy for financial reporting and management purposes.

Asset class A group of assets having a similar nature or function in the operations of an entity, and which, for purposes of disclosure, is shown as a single item without supplementary disclosure.

Asset condition assessment The process of continuous or periodic inspection, assessment, measurement and interpretation of the resultant data to indicate the condition of a specific asset so as to determine the need for some preventative or remedial action.

Asset hierarchy A framework for segmenting an asset base into appropriate classifications. The asset hierarchy can be based on asset function or asset type or a combination of the two.

Asset management (AM) The combination of management, financial, economic, engineering and other practices applied to physical assets with the objective of providing the required level of service in the most cost effective manner.

Asset renewal funding ratio The ratio of the net present value of asset renewal funding accommodated over a 10 year period in a long term financial plan relative to the net present value of projected capital renewal expenditures identified in an asset management plan for the same period [AIFMG Financial Sustainability Indicator No 8].

Average annual asset consumption (AAAC)* The amount of an organisation’s asset base consumed during a reporting period (generally a year). This may be calculated by dividing the depreciable amount by the useful life (or total future economic benefits/service potential) and totalled for each and every asset OR by dividing the carrying amount (depreciated replacement cost) by the remaining useful life (or remaining future economic benefits/service potential) and totalled for each and every asset in an asset category or class.

Borrowings A borrowing or loan is a contractual obligation of the borrowing entity to deliver cash or another financial asset to the lending entity over a specified period of time or at a specified point in time, to cover both the initial capital provided and the cost of the interest incurred for providing this capital. A borrowing or loan provides the means for the borrowing entity to finance outlays (typically physical assets) when it has insufficient funds of its own to do so, and for the lending entity to make a financial return, normally in the form of interest revenue, on the funding provided.

Capital expenditure Relatively large (material) expenditure, which has benefits, expected to last for more than 12 months. Capital expenditure includes renewal, expansion and upgrade. Where capital projects involve a combination of renewal, expansion and/or upgrade expenditures, the total project cost needs to be allocated accordingly.

Capital expenditure - expansion Expenditure that extends the capacity of an existing asset to provide benefits, at the same standard as is currently enjoyed by existing beneficiaries, to a new group of users. It is discretionary expenditure, which increases future operations and maintenance costs, because it increases the organisation’s asset base, but may be associated with additional revenue from the new user group, eg. extending a drainage or road network, the provision of an oval or park in a new suburb for new residents.

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Capital expenditure - new Expenditure which creates a new asset providing a new service/output that did not exist beforehand. As it increases service potential it may impact revenue and will increase future operations and maintenance expenditure.

Capital expenditure - renewal Expenditure on an existing asset or on replacing an existing asset, which returns the service capability of the asset up to that which it had originally. It is periodically required expenditure, relatively large (material) in value compared with the value of the components or sub-components of the asset being renewed. As it reinstates existing service potential, it generally has no impact on revenue, but may reduce future operations and maintenance expenditure if completed at the optimum time, eg. resurfacing or resheeting a material part of a road network, replacing a material section of a drainage network with pipes of the same capacity, resurfacing an oval.

Capital expenditure - upgrade Expenditure, which enhances an existing asset to provide a higher level of service or expenditure that will increase the life of the asset beyond that which it had originally. Upgrade expenditure is discretionary and often does not result in additional revenue unless direct user charges apply. It will increase operations and maintenance expenditure in the future because of the increase in the organisation’s asset base, eg. widening the sealed area of an existing road, replacing drainage pipes with pipes of a greater capacity, enlarging a grandstand at a sporting facility.

Capital funding Funding to pay for capital expenditure.

Capital grants Monies received generally tied to the specific projects for which they are granted, which are often upgrade and/or expansion or new investment proposals.

Capital investment expenditure See capital expenditure definition

Capitalisation threshold The value of expenditure on non-current assets above which the expenditure is recognised as capital expenditure and below which the expenditure is charged as an expense in the year of acquisition.

Carrying amount The amount at which an asset is recognised after deducting any accumulated depreciation / amortisation and accumulated impairment losses thereon.

Class of assets See asset class definition

Component Specific parts of an asset having independent physical or functional identity and having specific attributes such as different life expectancy, maintenance regimes, risk or criticality.

Core asset management Asset management which relies primarily on the use of an asset register, maintenance management systems, job resource management, inventory control, condition assessment, simple risk assessment and defined levels of service, in order to establish alternative treatment options and long-term cashflow predictions. Priorities are usually established on the basis of financial return gained by carrying out the work (rather than detailed risk analysis and optimised decision- making).

Cost of an asset The amount of cash or cash equivalents paid or the fair value of the consideration given to acquire an asset at the time of its acquisition or construction, including any costs necessary to place the asset into service. This includes one-off design and project management costs.

Critical assets Assets for which the financial, business or service level consequences of failure are sufficiently severe to justify proactive inspection and rehabilitation. Critical assets have a lower threshold for action than non-critical assets.

Current replacement cost (CRC) The cost the entity would incur to acquire the asset on the reporting date. The cost is measured by reference to the lowest cost at which the gross future economic benefits could be obtained in the normal course of business or the minimum it would cost, to replace the existing asset with a technologically modern equivalent new asset (not a second hand one) with the same economic benefits (gross service potential) allowing for any differences in the quantity and quality of output and in operating costs.

Deferred maintenance The shortfall in rehabilitation work undertaken relative to that required to maintain the service potential of an asset.

Depreciable amount The cost of an asset, or other amount substituted for its cost, less its residual value.

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Depreciated replacement cost (DRC) The current replacement cost (CRC) of an asset less, where applicable, accumulated depreciation calculated on the basis of such cost to reflect the already consumed or expired future economic benefits of the asset.

Depreciation / amortisation The systematic allocation of the depreciable amount (service potential) of an asset over its useful life.

Economic life See useful life definition.

Expenditure The spending of money on goods and services. Expenditure includes recurrent and capital outlays.

Expenses Decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or increases in liabilities that result in decreases in equity, other than those relating to distributions to equity participants.

Fair value The amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties, in an arms length transaction.

Financing gap A financing gap exists whenever an entity has insufficient capacity to finance asset renewal and other expenditure necessary to be able to appropriately maintain the range and level of services its existing asset stock was originally designed and intended to deliver. The service capability of the existing asset stock should be determined assuming no additional operating revenue, productivity improvements, or net financial liabilities above levels currently planned or projected. A current financing gap means service levels have already or are currently falling. A projected financing gap if not addressed will result in a future diminution of existing service levels.

Heritage asset An asset with historic, artistic, scientific, technological, geographical or environmental qualities that is held and maintained principally for its contribution to knowledge and culture and this purpose is central to the objectives of the entity holding it.

Impairment Loss The amount by which the carrying amount of an asset exceeds its recoverable amount.

Infrastructure assets Physical assets that contribute to meeting the needs of organisations or the need for access to major economic and social facilities and services, eg. roads, drainage, footpaths and cycleways. These are typically large, interconnected networks or portfolios of composite assets. The components of these assets may be separately maintained, renewed or replaced individually so that the required level and standard of service from the network of assets is continuously sustained. Generally the components and hence the assets have long lives. They are fixed in place and are often have no separate market value.

Investment property Property held to earn rentals or for capital appreciation or both, rather than for: (a) use in the production or supply of goods or services

or for administrative purposes; or (b) sale in the ordinary course of business.

Key performance indicator A qualitative or quantitative measure of a service or activity used to compare actual performance against a standard or other target. Performance indicators commonly relate to statutory limits, safety, responsiveness, cost, comfort, asset performance, reliability, efficiency, environmental protection and customer satisfaction.

Level of service The defined service quality for a particular service/activity against which service performance may be measured. Service levels usually relate to quality, quantity, reliability, responsiveness, environmental impact, acceptability and cost.

Life Cycle Cost * 1. Total LCC The total cost of an asset throughout its

life including planning, design, construction, acquisition, operation, maintenance, rehabilitation and disposal costs.

2. Average LCC The life cycle cost (LCC) is average cost to provide the service over the longest asset life cycle. It comprises average operations, maintenance expenditure plus asset consumption expense, represented by depreciation expense projected over 10 years. The Life Cycle Cost does not indicate the funds required to provide the service in a particular year.

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Life Cycle Expenditure The Life Cycle Expenditure (LCE) is the average operations, maintenance and capital renewal expenditure accommodated in the long term financial plan over 10 years. Life Cycle Expenditure may be compared to average Life Cycle Cost to give an initial indicator of affordability of projected service levels when considered with asset age profiles.

Loans / borrowings See borrowings.

Maintenance All actions necessary for retaining an asset as near as practicable to an appropriate service condition, including regular ongoing day-to-day work necessary to keep assets operating, eg road patching but excluding rehabilitation or renewal. It is operating expenditure required to ensure that the asset reaches its expected useful life. • Planned maintenance

Repair work that is identified and managed through a maintenance management system (MMS). MMS activities include inspection, assessing the condition against failure/breakdown criteria/experience, prioritising scheduling, actioning the work and reporting what was done to develop a maintenance history and improve maintenance and service delivery performance.

• Reactive maintenance Unplanned repair work that is carried out in response to service requests and management/ supervisory directions.

• Specific maintenance Maintenance work to repair components or replace sub-components that needs to be identified as a specific maintenance item in the maintenance budget.

• Unplanned maintenance Corrective work required in the short-term to restore an asset to working condition so it can continue to deliver the required service or to maintain its level of security and integrity.

Maintenance expenditure * Recurrent expenditure, which is periodically or regularly required as part of the anticipated schedule of works required to ensure that the asset achieves its useful life and provides the required level of service. It is expenditure, which was anticipated in determining the asset’s useful life.

Materiality The notion of materiality guides the margin of error acceptable, the degree of precision required and the extent of the disclosure required when preparing general purpose financial reports. Information is material if its omission, misstatement or non-disclosure has the potential, individually or collectively, to influence the economic decisions of users taken on the basis of the financial report or affect the discharge of accountability by the management or governing body of the entity.

Modern equivalent asset Assets that replicate what is in existence with the most cost-effective asset performing the same level of service. It is the most cost efficient, currently available asset which will provide the same stream of services as the existing asset is capable of producing. It allows for technology changes and, improvements and efficiencies in production and installation techniques

Net present value (NPV) The value to the organisation of the cash flows associated with an asset, liability, activity or event calculated using a discount rate to reflect the time value of money. It is the net amount of discounted total cash inflows after deducting the value of the discounted total cash outflows arising from eg the continued use and subsequent disposal of the asset after deducting the value of the discounted total cash outflows.

Non-revenue generating investments Investments for the provision of goods and services to sustain or improve services to the community that are not expected to generate any savings or revenue to the Council, eg. parks and playgrounds, footpaths, roads and bridges, libraries, etc.

Operations Regular activities to provide services such as public health, safety and amenity, eg street sweeping, grass mowing and street lighting.

Operating expenditure Recurrent expenditure, which is continuously required to provide a service. In common use the term typically includes, eg power, fuel, staff, plant equipment, on-costs and overheads but excludes maintenance and depreciation. Maintenance and depreciation is on the other hand included in operating expenses.

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Operating expense The gross outflow of economic benefits, being cash and non cash items, during the period arising in the course of ordinary activities of an entity when those outflows result in decreases in equity, other than decreases relating to distributions to equity participants.

Operating expenses Recurrent expenses continuously required to provide a service, including power, fuel, staff, plant equipment, maintenance, depreciation, on-costs and overheads.

Operations, maintenance and renewal financing ratio Ratio of estimated budget to projected expenditure for operations, maintenance and renewal of assets over a defined time (eg 5, 10 and 15 years).

Operations, maintenance and renewal gap Difference between budgeted expenditures in a long term financial plan (or estimated future budgets in absence of a long term financial plan) and projected expenditures for operations, maintenance and renewal of assets to achieve/maintain specified service levels, totalled over a defined time (e.g. 5, 10 and 15 years).

Pavement management system (PMS) A systematic process for measuring and predicting the condition of road pavements and wearing surfaces over time and recommending corrective actions.

PMS Score A measure of condition of a road segment determined from a Pavement Management System.

Rate of annual asset consumption * The ratio of annual asset consumption relative to the depreciable amount of the assets. It measures the amount of the consumable parts of assets that are consumed in a period (depreciation) expressed as a percentage of the depreciable amount.

Rate of annual asset renewal * The ratio of asset renewal and replacement expenditure relative to depreciable amount for a period. It measures whether assets are being replaced at the rate they are wearing out with capital renewal expenditure expressed as a percentage of depreciable amount (capital renewal expenditure/DA).

Rate of annual asset upgrade/new * A measure of the rate at which assets are being upgraded and expanded per annum with capital upgrade/new expenditure expressed as a percentage of depreciable amount (capital upgrade/expansion expenditure/DA).

Recoverable amount The higher of an asset's fair value, less costs to sell and its value in use.

Recurrent expenditure Relatively small (immaterial) expenditure or that which has benefits expected to last less than 12 months. Recurrent expenditure includes operations and maintenance expenditure.

Recurrent funding Funding to pay for recurrent expenditure.

Rehabilitation See capital renewal expenditure definition above.

Remaining useful life The time remaining until an asset ceases to provide the required service level or economic usefulness. Age plus remaining useful life is useful life.

Renewal See capital renewal expenditure definition above.

Residual value The estimated amount that an entity would currently obtain from disposal of the asset, after deducting the estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life.

Revenue generating investments Investments for the provision of goods and services to sustain or improve services to the community that are expected to generate some savings or revenue to offset operating costs, eg public halls and theatres, childcare centres, sporting and recreation facilities, tourist information centres, etc.

Risk management The application of a formal process to the range of possible values relating to key factors associated with a risk in order to determine the resultant ranges of outcomes and their probability of occurrence.

Section or segment A self-contained part or piece of an infrastructure asset.

Service potential The total future service capacity of an asset. It is normally determined by reference to the operating capacity and economic life of an asset. A measure of service potential is used in the not-for-profit sector/public sector to value assets, particularly those not producing a cash flow.

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Service potential remaining A measure of the future economic benefits remaining in assets. It may be expressed in dollar values (Fair Value) or as a percentage of total anticipated future economic benefits. It is also a measure of the percentage of the asset’s potential to provide services that is still available for use in providing services (Depreciated Replacement Cost/Depreciable Amount).

Specific Maintenance Replacement of higher value components/sub-components of assets that is undertaken on a regular cycle including repainting, replacement of air conditioning equipment, etc. This work generally falls below the capital/ maintenance threshold and needs to be identified in a specific maintenance budget allocation.

Strategic Longer-Term Plan A plan covering the term of office of councillors (4 years minimum) reflecting the needs of the community for the foreseeable future. It brings together the detailed requirements in the Council’s longer-term plans such as the asset management plan and the long-term financial plan. The plan is prepared in consultation with the community and details where the Council is at that point in time, where it wants to go, how it is going to get there, mechanisms for monitoring the achievement of the outcomes and how the plan will be resourced.

Sub-component Smaller individual parts that make up a component part.

Useful life Either: (a) the period over which an asset is expected to be

available for use by an entity, or (b) the number of production or similar units expected

to be obtained from the asset by the entity. It is estimated or expected time between placing the asset into service and removing it from service, or the estimated period of time over which the future economic benefits embodied in a depreciable asset, are expected to be consumed by the Council.

Value in Use The present value of future cash flows expected to be derived from an asset or cash generating unit. It is deemed to be depreciated replacement cost (DRC) for those assets whose future economic benefits are not primarily dependent on the asset's ability to generate net cash inflows, where the entity would, if deprived of the asset, replace its remaining future economic benefits.

Source: IPWEA, 2009, Glossary

Additional and modified glossary items shown *