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Audit Committee Meeting
Thursday, 02 June 2016
THE HILLS SHIRE CO
UNC
IL
AUDIT COMMITTEE MEETING 02 JUNE, 2016 ITEM SUBJECT PAGE ITEM-1 CONFIRMATION OF MINUTES
ITEM-2 INTERNAL AUDIT REPORT 7
ITEM-3 GENERAL MANAGER'S EXPENSES 41
MINUTES of the duly convened Audit Committee Meeting of The Hills Shire Council held in the Council Chambers Baulkham Hills on 17 March 2016 ITEM SUBJECT PAGE ITEM-1 CONFIRMATION OF MINUTES 3
ITEM-2 INTERNAL AUDIT REPORT 3
ITEM-3 GENERAL MANAGER'S EXPENSES 3
ITEM-4 QUESTIONS AND ANSWERS - AUDIT COMMITTEE MEETING - 1 DECEMBER 2015
4
This is Page 1 of the Minutes of the Audit Committee Meeting of The Hills Shire Council held on 17 March 2016
MINUTES of the duly convened Audit Committee Meeting of The Hills Shire Council held in the Council Chambers Baulkham Hills on 17 March 2016
PRESENT
Clr Dr M R Byrne Adjunct Professor (Mayor, in the Chair) Clr M G Thomas Mr Trevor Bland Mr Michael Blair
IN ATTENDANCE
Mr Dave Walker – General Manager Ms Kerrie Wilson – Internal Auditor Mr Dennis Banicevic – External Auditor, PricewaterhouseCoopers
APOLOGIES
Clr A J Hay OAM Clr Dr J N Lowe Adjunct Professor Jim Taggart OAM
TIME OF COMMENCEMENT
7.03pm
TIME OF COMPLETION
7.49pm
DECLARATIONS OF INTEREST
Nil.
ARRIVALS AND DEPARTURES
Nil.
DISSENT FROM COUNCIL'S DECISIONS
Nil.
ADJOURNMENT & RESUMPTION
Nil.
This is Page 2 of the Minutes of the Audit Committee Meeting of The Hills Shire Council held on 17 March 2016
MINUTES of the duly convened Audit Committee Meeting of The Hills Shire Council held in the Council Chambers Baulkham Hills on 17 March 2016 ITEM-1 CONFIRMATION OF MINUTES A MOTION WAS MOVED BY MR TREVOR BLAND AND SECONDED BY MR MICHAEL BLAIR THAT the Minutes of Audit Committee Meeting held on 1 December 2015 be confirmed. THE MOTION WAS PUT AND CARRIED.
RESOLUTION
The Minutes of the Audit Committee Meeting held on 1 December 2015 be confirmed. APOLOGIES A MOTION WAS MOVED BY MICHAEL BLAIR AND SECONDED BY COUNCILLOR THOMAS THAT the apologies from Councillor Dr Lowe, Councillor Hay OAM and Adjunct Professor Jim Taggart OAM be accepted and leave of absence granted. THE MOTION WAS PUT AND CARRIED.
RESOLUTION
The apologies from Councillor Dr Lowe, Councillor Hay OAM and Adjunct Professor Jim Taggart OAM be accepted and leave of absence granted.
ITEM-2 INTERNAL AUDIT REPORT A MOTION WAS MOVED BY COUNCILLOR THOMAS AND SECONDED BY MR TREVOR BLAND THAT the Recommendation contained in the report be adopted.
RESOLUTION
The report be received.
ITEM-3 GENERAL MANAGER'S EXPENSES A MOTION WAS MOVED BY MR MICHAEL BLAIR AND SECONDED BY MR TREVOR BLAIR THAT the Recommendation contained in the report be adopted.
RESOLUTION
1. The report be received. 2. The expenses tabled (which outlines a total of $246.90) be noted.
This is Page 3 of the Minutes of the Audit Committee Meeting of The Hills Shire Council held on 17 March 2016
MINUTES of the duly convened Audit Committee Meeting of The Hills Shire Council held in the Council Chambers Baulkham Hills on 17 March 2016 ITEM-4 QUESTIONS AND ANSWERS - AUDIT COMMITTEE
MEETING - 1 DECEMBER 2015
A MOTION WAS MOVED BY COUNCILLOR THOMAS AND SECONDED BY MR TREVOR BLAND THAT the Recommendation contained in the report be adopted.
RESOLUTION
The report be received. The Minutes of the above Meeting were confirmed at the Meeting of the Council held on 12 April 2016.
MAYOR GENERAL MANAGER
This is Page 4 of the Minutes of the Audit Committee Meeting of The Hills Shire Council held on 17 March 2016
AUDIT COMMITTEE MEETING 02 JUNE, 2016
ITEM-2 INTERNAL AUDIT REPORT DOC INFO
THEME: Proactive Leadership
OUTCOME: 3 Sound governance based on transparency and accountability.
STRATEGY: 3.1 Ensure Council is accountable to the community and meets legislative requirements and support Council’s elected representatives for their role in the community.
MEETING DATE: 2 JUNE 2016
INTERNAL AUDIT COMMITTEE
GROUP: GENERAL MANAGER
AUTHOR: INTERNAL AUDITOR
KERRIE WILSON
RESPONSIBLE OFFICER: GENERAL MANAGER
DAVE WALKER
EXECUTIVE SUMMARY The Internal Audit report:
• Summarises the work undertaken by the Internal Audit Function and the Audit Committee in the period;
• Highlights areas of improvement within Council’s operations; • Reports the extent to which the work carried out by the function met the
requirements of the approved Internal Audit Plan 2015/16; • Reports the measures taken by The Hills Shire Council (THSC) to implement the
recommendations of the internal audit reports; • Provides an overview to the Audit Committee of the status of Councils internal
control, risk management and governance processes.
The format of the report reflects: • the recommendations made by the Division of Local Government (DLG) in their
report titled: Internal Audit Guidelines, released September 2010; and, • Audit Committee requirements.
REPORT Attached is the Internal Audit Report which outlines the audit tasks undertaken by the Internal Audit function in the period from 1 March 2016 to 1 May 2016. IMPACTS Financial This matter has no direct financial impact upon Council's adopted budget or forward estimates.
PAGE 7
AUDIT COMMITTEE MEETING 02 JUNE, 2016 The Hills Future - Community Strategic Plan This report outlines the results of Audit’s review of Councils high risk activities as identified in the Internal Audit Plan adopted by Council. The recommendations resulting from audit activities are aimed at ensuring that Council stated outcomes are achieved efficiently and effectively and meets the Councils legislative requirements. RECOMMENDATION The report be received. ATTACHMENTS 1. Internal Audit Report (32 Pages)
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AUDIT COMMITTEE MEETING 2 JUNE, 2016
ATTACHMENT 1
Internal Audit Report
At 1 May 2016
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AUDIT COMMITTEE MEETING 2 JUNE, 2016
Part A: Executive Summary
Audit Activity to 1 May 2016
From 1 July 2015 Audit has been addressing Year 1 (2015/16) of its Strategic Audit Plan. This plan was adopted by the Audit Committee at its meeting on 25 June 2015.
In the period to 1 May 2016, Internal Audit has completed 89% or 25 of its planned 28 audits.11% or 3 of the planned audits are currently in progress and are discussed at C3. It is expected that the 2015/16 Audit Plan will be completed within budget.
The completed audits are detailed at Part B and C of this report. Completed audits include:
Civic Events
Payroll
Cash and Cash Related Activities
Revenue Activities
As outlined in the last Internal Audit Report to the Audit Committee, the Council is currently in the process of delivering code of conduct training to all staff. This training is aimed at reinforcing Councils governance requirements and will be completed by 31 May 2016.
For the Information of the Committee
Amalgamation Activity
On 12/5/2016 it was announced that the Council would not merge with Hawkesbury Council but would be subject to a boundary change that would result in suburbs (including assets) essentially below the M2 being transferred to the City of Parramatta.
The Council is currently in the process of meeting this obligation.
As a result of the boundary change the term of the current Council is extended to September 2017.
ICAC review of Botany Bay Council
As outlined at C1.1 the public enquiry being held as part of this investigation is currently adjourned. It is expected to recommence on 3 June 2016 for approximately one week.
Finally, in the period, the audit function has operated within its budget. The number of direct days spent on internal auditing is 96% of the total days available (Last Audit Committee: 96%).Management have implemented 98% of the agreed audit recommendations.
The Structure of the Internal Audit Report is as follows:
A: Executive Summary;
B: Comparison of the Actual and planned Audit activity undertaken in 2015/16 period;
C: Details of the actual internal audit work undertaken in the period from 1 March 2016;
D: Detail of recommendations outstanding at the date of this report and the action taken by Management to implement these recommendations;
E: Internal Audit and Audit Committee Key Performance Measures.
Attachment 1: Background to the Internal Audit Function, the Audit Committee, and the audit reporting practices at The Hills Shire Council.
Attachment 2: Risk Assessment Matrix
Attachment 3: List of outstanding audit recommendations (including management comments) at the reporting date
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AUDIT COMMITTEE MEETING 2 JUNE, 2016
Part B Comparison of the Actual and Planned Audit Activity undertaken in 2015/16 period
B.1 Summary
Within the Hills Shire Plan (Operational Plan 2015-16 – Year 3 of Plan) the output of Internal Audit is to:
Implement the Internal Audit Strategic Plan and the Annual Internal Audit Program adopted by the Audit Committee.
The targeted performance measure is:
Audits Completed in the Annual Audit Program
90%
The Internal Audit Strategic Plan (1 July 2015- December 2016) was adopted by the AuditCommittee on 25 June 2015. This document details the planned audit activities to be undertaken in 2015/16 and provides key information concerning the planning.
Link: http://www.thehills.nsw.gov.au/Council/Meeting-Agendas-Minutes/Audit-Committee/Current-Years-Minutes-and-Agenda
To monitor the achievement of the adopted audit plan Table 1 provides the Audit Committee with an overview and comparison of the planned 2015/16 Audit Activity with the actual audit activity undertaken to the date of this report. The current status of each audit is also provided.
Legend to the Table 1.
Status of the Audit Activity
In progress
Completed
Not yet commenced
Chart 1: Summary of Table 1:
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AUDIT COMMITTEE MEETING 2 JUNE, 2016
Table 1: Comparison of Audit Activity with planned Audit activity outlined in the adopted Internal Audit Strategic Plan
RiskStatus of the Audit item
at
2015/16 Audit Plan 1/3/2016
1. Governance Structures/Code Of Conduct HCompleted –17/3/2016Internal Audit Report
2. Governance Structures (including a review of the requirements of the Code Of Conduct and the review of the Councils Delegation Instrument) H
Completed –17/3/2016Internal Audit Report
3. Risk Management (Business Continuity Plan and Emergency Planning) H
Completed –1/12/15 Internal Audit Report
4. Risk Management (Fraud and Corruption mitigation strategy) M
Completed –1/12/15 Internal Audit Report.Refer C1.1
5. KPI’s (Enterprise Agreement (EA) implementation) MCompleted –1/12/15 Internal Audit Report
6. Resolutions HCompleted –1/12/15 Internal Audit Report
7. GIPA legislation MCompleted –1/12/15 Internal Audit Report
8. Grants management/ Use of restricted funds MCompleted –17/3/2016Internal Audit Report
Special Projects/Assignment H
9. Special Projects/Assignment 1
Audit Committee 25/6/2015 request:
Review Civic Events Management H Refer C1.2
10. Special Projects/Assignment 2
Audit Committee 25/6/2015 request:
Review the efficiency (cost vs benefit) of the current process concerning the reimbursement of private mobile phone use by staff. H
Completed –1/12/15 Internal Audit Report
11. Special Projects/Assignment 3
Executive Request:
This audit task was brought forward from the 2016 strategic plan at the request of the Executive (10 September 2015):
Workforce attendance:
Ensure that effective controls are in place to monitor workforce attendance. The aim of the review is to ensure that staff is reimbursed for attendance. The Executive have specifically asked that emphasis be placed on reviewing the recording of leave. H
Completed –17/3/2016Internal Audit Report
12. Investigations/Advisory H
13. WHS (OHS)M
Completed –17/3/2016
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AUDIT COMMITTEE MEETING 2 JUNE, 2016
Internal Audit Report
14. RMS Drives System MCompleted –1/12/15 Internal Audit Report
15. Grant Financial Statements M Various
16. Information Management H For Status refer C3
17. Information Technology H Refer C2.1
18. Asset management – maintenance H Refer C2.2
19. Acquisition/Disposal and management of plant and equipment M For Status refer C3
20. Stormwater/Flood Mitigation strategies and implementation H Refer C2.4
21. Revenue Activities (implementation of adopted fees and charges document) M Refer C1.3
22. Cash and Cash related activities M Refer C1.4
23. Debtors Management MCompleted –17/3/2016Internal Audit Report
24. Payroll H Refer C1.5
25. Contribution Planning – in kind contributions M For Status refer C3
26. Legislation/Regulation HCompleted –17/3/2016Internal Audit Report
27. Ordinance and enforcement/Inspections H Refer C2.3
28. Use of discretion/DAU HCompleted –1/12/15 Internal Audit Report
Administration
Audit Committee
Liaison with LGIAN/External Auditor
Follow up of reports previously issued
Professional Development/training
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AUDIT COMMITTEE MEETING 2 JUNE, 2016
Part C. Details of the Internal Audit Activity undertaken in the period from 1 March 2016 to 1 May 2016
Part C. provides details of the Audit Activity undertaken in the period from 1 March 2016 to1 May 2016.
This Part outlines the:
Internal audit engagements completed or in progressOutcomes of each internal audit engagement undertakenThe scope and methodology applicable to each audit activity undertakenRemedial action taken or in progress
The following legend has been used to provide the Audit Committee with an overall opinion of each Audit Activity undertaken:
Audit Opinion
Opinion Rating Table
Excellent Effective control environment with the business area operating efficiently, effectively and economically
Satisfactory Effective control environment; reporting complies with legislation or outputs/KPI’s being achieved
Improvement Required
Improvement required to: the control environment; reporting (to ensure it complies with legislation) or processes need to be improved to ensure efficiency and effectiveness.
Unsatisfactory Control environment is not effective
C 1.1 Corruption Mitigation Strategy and processes (Audit item 4)
Objective, Scope and Methodology: As identified in the Councils fraud and corruption mitigation strategy, internal audit has:
Reviewed ICAC reports relevant to local government in the period to the date of the Audit Committee;Followed up with Council management those recommendations made by the ICAC that relate to the activities that are undertaken by Council. This follow up is undertaken to ensure that Councils processes are corruption resistant; Worked with management to implement or modify processes where relevant, to mitigate the corruption risk.
For the information of the Committee:
Since 2008 the ICAC has made 249 recommendations (similar recommendations counted as 1) that relate to activities undertaken by Council. Audit has followed up the recommendations made by the ICAC when the relevant reports have been published. Council manages its corruption risks through its risk management system.
a) Investigations and public enquiries in progress
In the period since the last report to the Audit Committee the ICAC have made public the following investigation. Please note that the following extracts are copied directly from the ICAC website.
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AUDIT COMMITTEE MEETING 2 JUNE, 2016
2016
Gandangara LALC - allegations concerning chief executive officer and board members (Operation Greer)The ICAC is investigating allegations concerning the Gandangara Local Aboriginal Land Council (GLALC) (Operation Greer), including that, between February 2007 and March 2014, GLALC board members partially exercised their official functions by agreeing to employment arrangements with GLALC CEO Mark Johnson under which his company, Waawidji Pty Ltd, derived benefits from the GLALC.
It is also alleged that Mr Johnson improperly exercised his public official functions, by: between March 2011 and April 2013, authorising the transfer of GLALC funds to Gandangara Future Fund Ltd; between 2009 and 2013, authorising the payment of GLALC funds for the benefit of Deerubbin, Walgett and La Perouse Local Aboriginal Land Councils, and partly for the benefit of Waawidji Pty Ltd; and between 2010 and 2014, claiming the provision of benefits from GLALC for himself or Waawidji Pty Ltd, including money, to which he knew he was not lawfully entitled.
Casino Boolangle LALC – allegations concerning former chief executive officer and former administrative assistant (Operation Nestor)The ICAC is investigating allegations that former Casino Boolangle Local Aboriginal Land Council (CBLALC) chief executive officer, Linda Stewart, and former CBLALC administrative assistant, Veronica Skinner, defrauded the CBLALC between 1 June 2010 and 12 October 2011 by issuing fraudulent invoices and certifying documentation to enable them to cash cheques drawn on the CBLALC bank account for their own benefit.
It is also alleged that, between 13 October 2011 and 5 September 2012, Ms Stewart defrauded the CBLALC by issuing fraudulent invoices and certifying documentation to enable her to cash cheques drawn on the CBLALC bank account for her own benefit. The alleged fraud totalled close to $80,000.
City of Botany Bay Council – allegations concerning former chief financial officer (Operation Ricco)The ICAC is investigating allegations that former City of Botany Bay Council chief financial officer Gary Goodman, and other Council employees, dishonestly exercised official functions to obtain financial benefits for themselves and others by causing fraudulent payments of more than $4.2 million to be made by the Council through false invoicing to either themselves, or various entities. The ICAC is also investigating allegations that Mr Goodman solicited and received payments as an inducement or reward for showing favourable treatment to contractors. It is also alleged that Mr Goodman and other Council employees dishonestly exercised official functions to obtain financial benefits for themselves and others by using Council resources.
The public inquiry being held as part of this investigation is currently adjourned. It is expected to recommence on Friday 3 June 2016 for approximately one week.
2015
Department of Justice – corruption allegations concerning courthouse refurbishment contracts (Operation Yancey)The ICAC is investigating corruption allegations concerning the abuse of procurement processes by Department of Justice Asset Management Branch deputy director capital works, Anthony Andjic, in the awarding of contracts to refurbish NSW courthouses in 2013 (Operation Yancey).
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AUDIT COMMITTEE MEETING 2 JUNE, 2016
2014
NSW public officials and members of parliament – allegations concerning corrupt conduct involving Australian Water Holdings Pty Ltd (Operation Credo) and allegations concerning soliciting, receiving and concealing payments (Operation Spicer)
In Operation Credo, the ICAC is investigating allegations that persons with an interest in Australian Water Holdings Pty Ltd (AWH) obtained a financial benefit through adversely affecting the official functions of Sydney Water Corporation (SWC) by: including expenses incurred in other business pursuits in claims made on SWC for work on the North West Growth Centre; drawing from funds allocated for other purposes; and preventing SWC from ascertaining the true financial position, including the level of the executives’ remuneration.
The Commission is also investigating whether public officials and others were involved in the falsification of a cabinet minute relating to a public private partnership proposal made by AWH intended to mislead the NSW Government Budget Cabinet Committee and obtain a benefit for AWH, and other related matters.
In Operation Spicer, the ICAC is investigating allegations that certain members of parliament and others corruptly solicited, received and concealed payments from various sources in return for certain members of parliament and others favouring the interests of those responsible for the payments. It is also alleged that certain members of parliament and others solicited and failed to disclose political donations from companies, including prohibited donors, contrary to the Election Funding, Expenditure and Disclosures Act 1981.
In both of these matters, the Commission is also investigating the circumstances in which false allegations of corruption were made against senior SWC executives.
As there are common elements to both operations Credo and Spicer, the evidence taken in each operation will be taken as evidence in both operations.
Operations Credo and Spicer directions - December 2015
Operation Credo - Amended Scope and Purpose - 1 April 2014
Operation Spicer - Amended Scope and Purpose - 27 August 2014
Operation Spicer - Amended Scope and Purpose - 12 September 2014
b) Investigation Reports issued:
The following is a link to the ICAC reports publically listed:
Link: http://www.icac.nsw.gov.au/investigations/past-investigations
In the period 2 investigation reports have been issued.
University of Sydney – allegations concerning ICT contractor recruitment (Operation Elgar)The ICAC investigated allegations concerning Jason Meeth, a public official employed as the Head of Projects, ICT, at the University of Sydney. It is alleged that, between February 2012 and July 2013, Mr Meeth corruptly exercised his official functions for the benefit of IT consulting service Canberra Solutions Pty Ltd. Mr Meeth also allegedly acted partially and dishonestly by engaging certain ICT contractors through Canberra Solutions, although this company was not a NSW Government-accredited C100 company as required under the university’s directions for the recruitment of ICT contractors.
In its report on the investigation, made public on 11 May 2016, the Commission makes a finding of serious corrupt conduct against Mr Meeth.
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AUDIT COMMITTEE MEETING 2 JUNE, 2016
The Commission is of the opinion that consideration should be given to obtaining the advice of the Director of Public Prosecutions with respect to the prosecution of Canberra Solutions’ Balu Moothedath for various offences.
Mine Subsidence Board – allegations concerning former district manager (Operation Tunic)The ICAC investigated allegations that former Mine Subsidence Board (MSB) Picton office district manager Darren Bullock received, or may have received, corrupt payments or other benefits as an inducement or reward for showing favourable treatment to building contractor Kevin Inskip of Plantac Pty Ltd and to William Kendall of Willbuilt Homes Pty Ltd.The Commission also investigated allegations that Mr Bullock revealed confidential MSB tender information to Plantac Pty Ltd, and breached MSB financial delegations, policies and/or procedures relating to the awarding of contracts and the making of payments to that company.
In its report on the investigation, made public on 23 March 2016, the Commission makes findings of serious corrupt conduct against Mr Bullock, Mr Inskip, David Salmon of A&DJ Services Pty Ltd and Barbara Inskip. The Commission does not make any findings of serious corrupt conduct in respect of Mr Kendall.
The Commission is of the opinion that consideration should be given to obtaining the advice of the Director of Public Prosecutions with respect to the prosecution of Mr Bullock for various offences.
The ICAC also makes seven corruption prevention recommendations to the MSB to help prevent the recurrence of the conduct exposed in this investigation in the future.
On 17 May the ICAC updated their information concerning Prosecution Briefs and Outcomes. This information is available at the following link:http://www.icac.nsw.gov.au/docman/investigations/general-information-1/4802-icac-prosecution-outcomes-web-table-17-may-2016-fin/file
c) Other
Office of Local Government (OLG) Public Enquiries
The public enquiries that are being undertaken by the OLG are detailed at the following link: http://www.olg.nsw.gov.au/public-inquiries
C 1.2 Civic Events
Audit Number
9
BackgroundThis audit was requested by the Audit Committee (25 June 2015) to be placed on the Audit Program.
On 10/2/2015 Council resolved the following which places into context the strategy undertaken with respect to Councils Civic Events activities:
RESOLUTION
Actions contained in the attached Cultural Action Plan (Summarised above Action 1 to 3) for The Sydney Hills be adopted and funding be considered in the FY 15/16 Budget and forward.
Actions 1 to 3 were:
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AUDIT COMMITTEE MEETING 2 JUNE, 2016
ACTION 1
Utilise existing venues to support cultural events.
- Bella Vista Farm
- Balcombe Heights Estate
- Castle Hill Showground
- Castle Grand – Pioneer Room
Bella Vista Farm & Balcombe Heights Estate
Review services and facilities at Bella Vista Farm & Balcombe Heights Estate tobe supportive of cultural events and be listed in the Delivery Program FY 15/16 for consideration.
Castle Hill Showground
In the process of the master planning of the Castle Hill Showground, ensure there are sufficient facilities for cultural events to be held in the precinct.
Castle Grand
Refurbish the Pioneer Room to provide a multi-purpose flexibility of the room while at the same time providing a cultural and theatrical performance venue. The seating capacity is proposed to be 346 (in theatrical mode) and has been estimated at $750,000.
The project will be listed for consideration in the Draft Works program FY 2015– 2016.
ACTION 2
Build Visitor Economy Events
Build Visitor Economy Events to grow the economic return to the shire in slower trading periods. Funding required for this action will be listed for consideration at the March 2015 Strategic Planning Workshop.
ACTION 3
Develop Cultural Experiences
Develop Cultural Experiences through connecting art with our community in spaces where the community are, working with our neighbours in promoting and packaging cultural events and experiences, utilise Main Street and our Heritage precincts for further community engagement in cultural activities. Funding required for this action will be listed for consideration at the March 2015 Strategic Planning Workshop.
Audit Objective Review the management of Civic events provided in the 2015/16 financial year
to date, including the ‘Summer Series’.
Scope Audit reviewed the management of Civic events at March 2016 following the completion of the ‘summer series’ of events. The results were followed up at May 2016.
Method Obtain a complete list of those events provided in the 2015/16 financial year to date, including the ‘Summer Series’;Obtain budget and actual financial information to determine if budgets (expenditure and income) were achieved.Understand the objectives of the Councils Civic Events activitiesReview the contractual arrangements put in place to support the event. Ensure that they are appropriately approved and implemented.Ensure that appropriate documentation is in place concerning the Event.
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AUDIT COMMITTEE MEETING 2 JUNE, 2016
Findings The ‘external’ events provided in the 2015/16 financial year (to the date of the review), included:
Australia Day 2016 at the Farm 26/1/2016
Lunar Festival 14/2/2016
Orange Blossom Festival (OBF) 17 and 18/9/2015
1812 Overture Cancelled due to weather
Sydney Country Music Festival 30 and 31 October 2015
Summer Series:
Christmas Sky Show 27/11 to 30/12/2015
Sydney Thunder Fan Day 13/12/2015
Christmas in the Hills Cancelled due to weather
Shakespeare in the Park 19/12/2015 to 5/1/2016 (2 shows cancelled due to weather)
Sydney Hills Water Wonderland 26/12/2015 to 26/1/2016 (5 days closed due to weather)
The Hills City Slider 27/12/2016
NYE Sky Show 31/12/2015
Convict Footprints @ the Farm 8/1/2016 to 17/1/2016
Sydney Hills Outdoor Cinema 15/1/2016 to 14/2/2016
Sydney Hills Twilight Sessions 22/1/2016 – Cancelled due to weather
The budget and actual costs* incurred by council with respect to the Civic Events Program by Council at March and May 2016 was:
JobOriginalBudget
CurrentBudget
(Approved by
Council)
Total ActualTo Date (8/3/16)
Total ActualTo Date (20/5/16)
Australia day-expenses 220,000 220,000 188,377.16 188,426.25Australia Day Contribution & Donation-income (30,001) (10,278) (6,363.64) (10,278.87)Sydney CMF-expenses 450,000 585,000 577,354.33 576,382.19Sydney Country Music Festival-income (250,000) (99,000) (90,228)
(90,228.23)
Summer Series 130,000 149,551 149,767.69149,871.15
Theatre in the Park - expenses 130,000 130,000 90,159.76
90,771.2
Summer Series Marketing 180,000 180,000 73,937.42 140,050.75Events Income-other (30,001) (41737) (39,319)
(58,732.68)
Summer Series- income (50,000) (161416)
(143,285)(161,415.12)
Christmas Projects 400,000 549,941 453,340.92 452,740.92
*Note that these figures refer to external costs incurred (including casuals) only.
Audit reviewed the management of the Sydney Country Music Festival (SCMF),
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AUDIT COMMITTEE MEETING 2 JUNE, 2016
Sydney Hills Water Wonderland, Convict Footprints and Sport for Jove (Shakespeare in the Park) in detail.
In summary:
Job
Actual Costs incurred per
Council records*
Revenue received
by Council No of Tickets sold
SCMF 576,382.19 (90,228.23)1966 (note a 2 day
pass= 2 tickets)Sydney Hills Water Wonderland
In kind supportonly ($65,298) Approx. 9000
Convict Footprints$25,000 plus in
kind support ($7,700) 225Shakespeare in the Park - income
$90,159 plus in kind support (70,925.70) 1030
The Civic Events program and budget were approved by Council. Budget variations that have been incurred have also been approved by Council through the budget review process.
With respect to the 3 actions resolved by Council on 10/2/2015 it appears that the Civic Events program does utilise Councils existing venues (Action 1); had the potential to build Visitor Economy visits (Action 2); appears to be aimed at developing Cultural Experiences.
The Actions resolved by Council did not direct the Civic Events program to specifically be financially viable or aimed at maximising THSC community involvement – both directions that appear to be the basis of Audit Committee discussions.
Based on the planning for the 2016/17 summer series it appears that the:
Sport for Jove arrangement (Shakespeare) did meet the required KPI’s as this event is continuing although possibly under an altered arrangement
Convict Footprints did meet the required KPI’s as this event is continuing although possibly under an altered arrangement
SCMF did not achieve the required outcomes, however the market place is being tested to determine whether the event can be continued in a format that limits the financial risk to Council
Water Wonderland and Sydney Hills City Slider did not meet the required KPI’s as these events are not planned to continue in 2016/17.
The exceptions to Councils processes noted in this review were:
Agreements need to be authorised by a person with the appropriate financial delegation.
Variations to the Councils purchasing procedure need to be approved by the General Manager.
Fees and Charges with respect to the Civic Events program must be as outlined in the Councils Fees and Charges document.
A policy concerning the issuing of vouchers, client cash or free tickets needs to be developed and appropriately approved. Currently there is no authority to issue these. Queries raised by the Audit Committee have indicated that a caveat should be used where these tickets are offered to ensure that the recipient does not use the tickets to generate income.
Budget information maintained by the Team is comprehensive but
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AUDIT COMMITTEE MEETING 2 JUNE, 2016
should be placed into the Council’s Corporate System (for record management purposes).
KPI’s agreed before the event, should be formally revisited so that the success of the event can be determined and documented for future reference.
Management Comments
The management a number of the planned Civic Events (including the SCMF/ Shakespeare in the Park and Convict Footprints) are to be tendered out/subject to an EOI to mitigate the financial risk to Council. This will indicate the market places perception of the viability of the events as well as result in the determination as to whether the events will be supported by Council.
With respect to these events, the acceptance of a tender by Council would address the findings outlined above concerning the application of the Councils purchasing guideline and delegation instrument.
There are KPI’s in place to determine the success of each event which includes attendance/ the number of attendees that stay overnight in the locality and calculated economic benefit to the Shire. It is anticipated that the success of each event in the future will be determined using these criteria.
Conclusion
For the information of the Audit Committee, the assessment of this audit activity wasconsidered satisfactory given that the actions resolved by Council were addressed, and the program included activities that were budgeted and approved by Council (including variations). Issues concerning the SCMF have been addressed in previous audit committee minutes/memorandums.
Satisfactory Activity within parameters approved by Council
C 1.3 Revenue Activities (implementation of adopted fees and charges document)
Audit Number
21
Background Revenue is made up of: Grants contributions received; Lease income; interest income; staff contributions; Fees and Charges (including regulatory charges and hire charges, other contributions).
At May 2016 the break up was:
Account Class
YTD Revised
Budget (p.a.)
Actual
To Date (10 months)
Actual/
Budget %
3000 - Rates & Annual Charges (97,614,370) (97,568,712.77) 100.11
3100 - User Charges (10,882,215) (9,395,905.45) 87.65
3200 - User Charges Regulatory (10,361,336) (9,881,171.77) 93.97
3300 - Interest Income (5,358,933) (5,086,516.09) 94.45
3400 - Other Revenue (4,648,484) (4,317,459.09) 100.74
3600 - Grants (21,294,023) (14,421,737.05) 67.87
3800 - Contributions (1,463,416) (1,250,433.04) 84.81
Total (151,622,777) (141,921,935)
PAGE 21
AUDIT COMMITTEE MEETING 2 JUNE, 2016
ObjectiveTo ensure that the Councils activities are legislatively compliant by ensuring that the Councils adopted fees and charges document is: reflected in Councils systems; and is the basis of Councils revenue activities.
MethodUsing a random number generator Audit selected a sample of revenue accounts to ensure that the fees and charges credited to the account reflected Councils adopted fees and Charges document.
ScopeA review of Councils revenue activities for the 2015/16 financial year to May 2016.
Findings Minor discrepancies were identified as a result of the review, including:
Incorrect fees charged with respect to 4 charges.
These observations have been raised with Finance (and/or the relevant team in Council) and have been addressed.
Agreed Management Action Finance undertakes periodic checks to ensure that the correct fees are being
charged within the Council.
Conclusion
For the information of the Audit Committee, the results of the audit activity (including the actions currently being taken) were considered:
Satisfactory Compliance with adopted fees and charges document.
C 1.4 Cash and Cash related activities
Audit Number
22
Background Goods and services that are purchased by an employee on behalf of Council for work related items may be claimed through a reimbursement. There are restrictions as to what staff will and will not be reimbursed for, and where possible purchasing must be through a purchase order.
The current process for reimbursement of Council expenses incurred by staff (including petty cash) was last updated in August 2015 and is due for review in August 2016.
There are 5 petty cash floats across the organisation with amounts varying from $100 to $1,400. The custodians of these floats are responsible for reconciling and safe keeping of the petty cash float, and they are to ensure that the correct procedures are followed.
The Council also has corporate credit cards issued to staff. The purpose and use of the cards are outlined in the Procurement Cards Procedure last reviewed in March 2014.
The vendor and fuel cards are also referred to in the Procurement Cards procedure.
Audit Objective and Method
The objective of the audit was to determine whether:
a) Authorised staff are approving staff reimbursements and an appropriate segregation of duties is in place
b) Reimbursed expenses are appropriate and in line with the Council policy/procedure
c) Councils purchasing guidelines are met
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AUDIT COMMITTEE MEETING 2 JUNE, 2016
The method employed was to review the financial records in Councils finance system concerning reimbursements/office expense accounts/credit and vendor/procurement cards.
Scope Records were reviewed for the financial year to April 2016.
Findings The amount of expenditure across the organisation for staff reimbursements (including petty cash) was consistent for the 2014 and 2015 calendar years. The 2010 figures have been included for reference:
2010 2014 2015
Managers Reimbursements
$60,095 $18,686.96 $10,957.10
Petty Cash $105,535 $15,884.85 $15,913.51
There is however room for improvement with staff understanding their delegated authority and the restrictions around making a claim.
Office expenses accounts appear to be used for its intended purpose.
Councils Corporate Credit cards are issued across the organisation and the expenditure appears in line with the purchasing guideline/procedure for procurements cards. The procedure for procurement cards has not been updated by Finance since 2014.
Purchases using the vendor card were randomly reviewed. There were some instances of Vouchers/invoices were they were not signed/authorised.
Councils fuel cards; motor pass/Caltex were being used as intended.
Agreed Management Action
1) An audit of all petty cash floats is undertaken annually by the Finance Team. Last audit by Finance was undertaken in July 2015 – another should occur in the next 3 months.
2) The procedure concerning the Reimbursement of Council expenses incurred by Staff (including Petty Cash) be distributed to Managers for discussion at their team meetings - in particular discussion should focus on delegations and expenses that require pre approval from the General Manager.
3) Procurement cards procedure (section 8.0) does not reflect the current practice regarding the verification of purchases by the Group Manager/Manager. Procedure last updated March 2014 and needs to be reviewed and updated.
4) Staff who are issued with the procurement card be advised of the requirements of use; the procedure may need updating to reflect the use of the card.
5) Consider increasing the daily spend limit and deleting the monthly spend limit on the vendors card as these are currently not being met in all cases (current limits do not cover legitimate expenditure).
6) Finance actively reviews the petty cash vouchers presented to it to ensure that they satisfy the relevant procedure and are signed by an appropriately delegated officer.
7) Finance to follow up the reimbursement of advances made and floats made available to the Civic Events team.
Conclusion
For the information of the Audit Committee, the results of the audit activity (taking into account the recent action by Management) were considered:
Satisfactory Deficiencies identified in the system were being addressed.
PAGE 23
AUDIT COMMITTEE MEETING 2 JUNE, 2016
C 1.5 Payroll
Audit Number
24
Background In the period from 1 April 2015 to 22/3/2016:
Gross Salaries (including payments to Councillors): $46,755,620 Overtime paid: $1,483,649There were approx. 33,251 payroll transactions processed;In the period there were 82 new recruits and 80 terminations.
Audit Objective Ensure:
the integrity of the information on which the payroll is based the security of information, Payments accurately reflect the terms and conditions of employment and Council records are complete, accurate and Council only pays valid employees.Review allowances and overtime paymentsThere is no conflict of interest between Council employees and suppliers (Council employees do not authorise payments where there may be a conflict of interest).
Scope The Audit reviewed Council payroll records for the year from 1 April 2015 to 22 March 2016.
Method Review compliance with key controls within the payroll system.
Tests:
Employees and Vendors
1. Identify matching vendors and employees by bank account2. Identify matching vendors and employees by address
Employee Master
3. Identify employees with missing hire date.4. Identify active and casual employees with hire date older than 12
months.5. Identify duplicate employees by name6. Identify duplicate employees by address7. Identify duplicate employees by TFN8. Identify duplicate employees by bank account
Payroll
9. Identify basic pay changes in the last 12 months (per month) – hourly rate, base salary
10. Identify multiple payments (weekly payments)11. Identify payments to non-employees12. Identify possible duplicate payments13. Identify employees with negative accrued leave.
Other
Long term higher dutiesOvertime payments
Findings Minor exceptions were noted concerning payroll. Further testing of Overtime will be undertaken should it be required.
Agreed Management Action
All matters identified addressed
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AUDIT COMMITTEE MEETING 2 JUNE, 2016
Conclusion
For the information of the Audit Committee, the results of the audit activity were considered:
Satisfactory Compliance issues addressed.
C.2. Other: Audit Activities under in the period since 1 March 2016.
Audits completed:
C2.1 Information Technology (Audit item 17)
Councils IT procedures were reviewed to ensure they were up to date. Minor changes required. All IT procedures are to be reviewed at 30/6/2016.
Business Continuity Testing with respect to Councils IT systems has been undertaken. No issues noted.
C2.2 Asset Management - maintenance (Audit Item 18)
As a result of audit procedures undertaken in 2014/15 the inaccurate and incomplete state of the operations maintenance manual was considered a significant risk to Council.
In December 2015 the Infrastructure Operations team reviewed and updated the maintenance manual which has been progressively implemented since this date. The manual currently incorporates roads and footpaths and is progressively being updated. Training is currently being provided.
C2.3 Ordinance and enforcement/Inspections
As required in the 2015/16 Internal Audit plan a review has been undertaken with the objective:
to ensure the integrity of Councils regulatory functions. The power of regulators to grant significant benefits to; or impose restrictions or penalties on; members of the public can increase the risk that they will be exposed to corruption.
In December 2015 the NSW Ombudsman released their guidelines ‘Enforcement Guidelines for Councils’. These guidelines were accompanied by a comprehensive model enforcement policy that has been compiled from best practice examples from a number of councils and other relevant agencies.
Once received the guidelines were referred to the Councils compliance area and Councils procedural guidelines were updated by the various teams in April 2016. The updated procedures are available on the Councils website at:
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AUDIT COMMITTEE MEETING 2 JUNE, 2016
http://www.thehills.nsw.gov.au/General-Pages/Search-Results?dlv_SC%20CL%20Public%20Site%20Search=(keyword=enforcement%20procedure)
The NSW Ombudsman’s guidelines are available at:
http://www.ombo.nsw.gov.au/__data/assets/pdf_file/0003/29856/Enforcement-Guidelines-for-councils.pdf
To address the governance requirements, the Council is currently undertaking Code of Conduct training that encompasses staff obligations concerning conflicts of interest/ gifts register/secondary employment. This is to be completed by the end of May 2016.
Audit also reviewed the fees received concerning regulatory services to ensure that they are in accordance with legislation/the Councils adopted fees and charges document.
Results
Council’s enforcement guidelines have been updated to reflect better practice. Governance training is now being provided to reinforce with compliance staff Councils requirements concerning the Code of Conduct.
The fees received concerning regulatory services were reviewed to ensure that they are in accordance with legislation/the Councils adopted fees and charges document. No exceptions were noted.
It is proposed, following the completion of governance training, that specific audits of individual areas be incorporated into the future audit plans. Areas to be included include Development Monitoring/ Environmental Health Services and Compliance. The aim of the process will be to review the use of discretion and to ensure that appropriate review is in place.
Conclusion
Procedures in place reflect better practice.
Fees and charges reflect the adopted fees and charges schedule.
Governance training is being provided as required.
C2.4 Storm water /Flood Mitigation Strategies and implementation
The audit reviewed the status and implementation of the Councils flood mitigation strategy at March 2016. It included the review of the balance in the Councils storm water levy account to ensure that funds are being spent in accordance with the levy.
The audit findings included:
Council’s storm water /Flood mitigation strategies and implementation are correctly identified as a high risk to Council.
Council is charged with functional responsibilities for its natural waterwaysand floodplains under a myriad of differing legislations which includes: the Local Government Act (1993); EP&A Act (1979); POEO Act 1997; and the Rivers and Foreshores Improvement Act 1948.
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AUDIT COMMITTEE MEETING 2 JUNE, 2016
At the time of review the Waterways team, which is largely responsible for ensuring that the requirements of the legislation are met, had only 2 of its 6 positions filled with the Principal Systems Coordinator resigning and leaving in April 2016.
Documentation indicates that currently the Council is aware of the hydrologic service for approximately 48% of the storm water network, which are primarily in the newer suburbs. It is assumed that based on past engineering practice and impacts from past storm water events, that these unknown networks do not meet the Councils current standards. A strategic plan is not in place to indicate how the remaining 52% of the network is being investigated.
Given the recent boundary change, a significant portion of the Council storm water system relating to the older areas of Council will be transferred to the City of Parramatta. The impact of this boundary change will need to be assessed by the Waterways team once all implications of the boundary change are addressed.
Given the recent changes in both the Waterways team and the effect of theboundary change on the Councils storm water network, Internal Audit will follow up this review in December 2016.
C3 Audits near Completion:
Contribution Planning – in kind contributions
Acquisition/disposal and management of plant and equipment
Information Management
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AUDIT COMMITTEE MEETING 2 JUNE, 2016
Part D: Details of recommendations outstanding at the date of this report and the action taken by Management to implement these recommendations
Internal Audit monitors all the recommendations raised and agreed with management to ensure that they are implemented within agreed timeframes.
The Audit recommendations outstanding (including Management Comments) at 1 May2016 are listed at Attachment 3.
D.1 Status of Recommendations
The following is a summary of the status of Internal Audit Reports issued.
It should be noted that although the following audit reports may be listed as ‘finalised’ the area/audit item will still be the subject of future audits.
D1.1 Reports issued to 1 May 2016, where recommendations are still to be implemented:
Reports Year Report Issued Expected Closure Timeframe
Library 2015 30/6/2016
WHS (2016) 2016 30/6/2016
Grants Administration 2016 31/5/2016
Governance Structures 2016 30/4/2016
Cash and Cash related activities
2016 30/7/2016
Civic Events 2016 30/6/2016
Revenue 2016 30/6/2016
D1.2 Reports issued where recommendations have been implemented in the period to 1May 2016:
The following lists the audits where all agreed recommendations have been addressed in the time period.
Reports Year Report Issued Closure Timeframe
IT 2015 30/6/2016
Governance Health Check (2015)
2015 30/4/2016
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AUDIT COMMITTEE MEETING 2 JUNE, 2016
Part E Internal Audit Key Performance Measures
The following indicators have been developed to measure the performance of Internal Audit and the Audit Committee:
E.1 Service Delivery Benchmarks.
25 or 89% of the audits listed in the Strategic Internal Audit Annual Plan for
2015/16 has been ‘completed’ to date (refer Part B, Table 1 and Chart 1).
Number of findings implemented to date as a % of items raised in the Audit reports.As discussed at Part D and Attachment 3., of the 1006 Audit recommendations agreed with Management 98% (or 986) have been implemented. Timeframes for the remaining outstanding recommendations are currently being followed up. These outstanding recommendations are detailed at Attachment 3.
On average the number of days between the end of fieldwork to the issue of the final audit reports is approximately 10 working days (Prior report: 10 days). This time includes the drafting of the audit report/finalisation of report; discussion of audit findings; and agreement of management action.
E.2 Cost Control benchmarks
The actual costs of the Internal Audit function to date have been made up of the salary and on costs of the Internal Auditor and the Risk Coordinator. In the period to 1 May 2016, the budget of the Internal Audit function was not exceeded.
The number of direct days spent on internal auditing (excluding hours spent on professional development and training) is 96% of the total days available. 260days have been budgeted in the Internal Audit Strategic Plan.
E.3 Key Information to be reported in the Annual Community Report Concerning the Audit Committee
In the 2015/16 period to date the Audit Committee has met three times. The meeting times were:
18 August 2015
1 December 2015
17 March 2016
The Audit Committee membership and the number of meetings attended in 2015/16 (to date) are as follows:
Mr M. Blair: 3
Mr T Bland: 3
Mayor: 3
Clr A. J. Hay OAM: 2
Clr Dr J. N. Lowe: 2
Adjunct Professor Jim Taggart OAM: 1
Clr M. G. Thomas: 3
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AUDIT COMMITTEE MEETING 2 JUNE, 2016
Attachment 1
Background to the: Internal Audit Function; the Audit Committee; and the audit reporting practices at The Hills Shire Council.
Background
1. Internal Audit is an independent, objective assurance and consulting activity designed to add value and improve an organisation’s operations.
Internal audit’s role is primarily one of providing independent assurance over the internal controls and risk management framework of the council. It should be noted that Management has primary day-to-day responsibility for the design, implementation, and operation of internal controls.
Within THSC the functions, powers, and accountabilities of Internal Audit are set out in the Internal Audit Charter which has been adopted by Council. Internal audit’s core competencies are in the area of internal control, risk and governance. Internal audit’s scope includes the following areas:
Reliability and integrity of financial and operational information
Effectiveness and efficiency of operations and resource usage
Safeguarding of assets
Compliance with laws, regulations, policies, procedures and contracts
Adequacy and effectiveness of the risk management framework.
The Internal Audit function was created in June 2005. Within Local Government, where in place, the Internal Audit unit is typically made up of 1 or 2 members.Within THSC the Internal Audit Unit consists of the Internal Auditor. Projects are often undertaken with the assistance of the Risk Management Coordinator.
2. The Audit Committee plays a pivotal role in the Councils governance framework. It provides council with independent oversight and monitoring of the council’s audit processes, including the council’s internal controls activities. This oversight includes internal and external reporting, internal and external audit, and compliance. Given the key role of the Audit Committee, for it to be most effective it is important that it is properly constituted of appropriately qualified independent members.
The Audit Committee within THSC has been in operation since 2004. Councils Audit Committee is unique in Local Government in that the Committee meets in the public forum (times and dates of meetings are advertised on the Councils webpage) and currently has 3 independent community representatives on the Committee to ensure that there is transparency in Councils processes and the Council remains accountable to he community.
The current members of the Audit Committee are: The Mayor, Clr AJ Hay (OAM),Clr Dr JN Lowe, Clr MG Thomas, Mr Michael Blair, Mr Trevor Bland and Adjunct Professor Jim Taggart (OAM).
Every 4 years the Council undertakes an EOI to obtain interests from suitably qualified community members to be part of the Audit Committee. The functions, powers and accountabilities of the Audit Committee are outlined in the Audit Committee Charter that has been adopted by Council.
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AUDIT COMMITTEE MEETING 2 JUNE, 2016
3. Best Practice
In 2010 the DLG released the Internal Audit Guidelines (http://www.dlg.nsw.gov.au/dlg/dlghome/documents/Information/Internal%20Audit%20Guidelines%20-%20September%202010.pdf. This guideline (the guideline) identifies best practice in local government with respect to Internal Audit and the Audit Committee.
As outlined in the introduction, the guidelines were developed to encourage the creation of Internal Audit and Audit Committees in those Councils that did not have the function and to outline how the function should be developed (note: that at the time of the guideline release only approximately 20% of Councils had an Internal Audit function).
4. The Strategic Audit Plan
As identified at 3.5 of the DLG Internal Audit Guideline, the Internal Audit function within THSC has a strategic plan in place which is supported by annual plans.
The Strategic plan is based on a risk assessment of the council’s key strategic and operational areas to determine the appropriate timing and frequency of coverage of each of these areas. The plan includes audit judgment of areas that will also be reviewed despite not appearing as a high priority in the council’s risk profile.
The plan is developed on a rolling cycle to reflect the terms of Council. The plan is also reviewed annually to ensure that it still aligns with the council’s risk profile.
The 18 month Strategic Plan (2015 – 2016) was adopted by the Audit Committee on 25 June 2015. The audit plan covers the period from 1 July 2015 to 31 December 2016 to allow the plan to align with the term of Council.
5. Reporting
Internal audit regularly communicates its findings and recommendations to the Audit Committee, General Manager and management of the areas audited through the Internal Audit Report.
The Internal Audit report normally includes background information, the audit objectives and scope, observations/findings/conclusions, key recommendations/ agreed management actions.
Detailed audit working papers are not distributed to the Audit Committee as they are intended for internal use only. Where audit working papers have findings that are useful to other areas of council, internal audit will share this information on a limited basis. Internal audit working papers are shared with the council's external auditor, where requested, to assist them in the course of their work.
Councillors and the community have access to the minutes of the Audit Committee (and the Internal Audit Report) as these are published on the Councils web page. The Internal Audit Report (and Audit Committee papers) is also referred to the Council for adoption to provide greater transparency and accountability.
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AUDIT COMMITTEE MEETING 2 JUNE, 2016
Attachment 2
THSC Risk Matrix
The Councils Risk Matrix (below) reflects the requirements of ASNZS ISO 31000 and has been developed in accordance with this standard.
Risk Matrix Table
Consequence Rating
A B C D E
Like
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atin
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5 M H H E E
4 L M H H E
3 L M M H H
2 L L M M H
1 L L L M H
L = Low Risk M = Moderate Risk H = High Risk E = Extreme Risk(Severe/Very High)
Consequence Definition Risk Factors Likelihood
DefinitionFinancial Reputation Business
OperationsWork Health Safety Environment
Project Management
AInsignificantThe event is of low consequence
1Financial loss –Small increase in costs not in line with budget$500 or less
1Unsubstantiated, low profile media exposureOR no media attention
1No disruption to services or operations
1Single minor injury to one person – no lost timeORInsignificant environment issues
1Project close to time, budget and quality
1RareThe event is only expected to occur in exceptional circumstances
BMinorThe event may threaten a part of the organisation
2Financial loss –Minor financial impact$501to$10k
2Substantiated, low impact, low media profile (not front page news)
2Minor disruption to services or operations up to one day
2Medically treated injury to one person, less than 5 days lost timeORMinor environment issues
2Project has minor issue with time, budget or quality
2UnlikelyThe event is not likely to occur
CModerateThe event may threaten many parts of the organisation
3Financial loss –> $10k to $50k
3Substantiated, public embarrassment, moderate media profile (front page, one day)
3Some cessationto services and operations up to several days
3Minor or medically treated Injury to several people, less than 10 days lost timeORSome environment issues
3Project has issues with time, budget or quality
3PossibleThe event may occur
DSignificantThe event may threaten achievement of business objectives
4Financial loss –$50kto$200k
4Substantiated, public embarrassment, high impact, major media attention (national for 1 week or more)
4Total cessation to services and operations up to one week
4Single death, or long term disabling injuries to one or more peopleORSubstantial environment issues
4Project has substantial issues with time, budget or quality
4LikelyThe event is likely to occur
ESevereThe event may stop achievement of business objectives
5Financial loss –> $200k
5Substantiated, public embarrassment, multiple impacts, long lasting widespread media coverage, prosecution of Council or Officers
5Total cessation to services and operations greater than one week
5Multiple losses of life or permanent disability, plus extensive injuries to several peopleORSevere environment issues
5Large project has severe issues with time, budget or quality
5Almost certainThe event is already occurring or is expected to occur
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AUDIT COMMITTEE MEETING 2 JUNE, 2016
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PAGE 33
AUDIT COMMITTEE MEETING 2 JUNE, 2016
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PAGE 34
AUDIT COMMITTEE MEETING 2 JUNE, 2016
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atio
ns
Effe
ctR
isk
Rat
in
g
Rec
omm
end
atio
n
and
ag
reed
Act
ion
Pla
nR
esp
on
sib
le
Man
ager
To
be
imp
lem
ente
d
by
dat
e:S
tatu
sat
1
M
ay2
01
6
4A
prel
imin
ary
revi
ew
of
the
Cou
ncils
gov
erna
nce
proc
esse
s ha
s id
entif
ied
gaps
in
dica
ting
that
bes
t pr
actic
e cu
rren
tly n
ot
in
plac
e.
Bes
t pr
actic
e re
quirem
ents
ar
e do
cum
ente
d in
an
actio
n pl
an t
hat
will
be
impl
emen
ted
in e
arly
201
6.
Gov
erna
nce
stru
ctur
es
supp
ortin
g th
e Cou
ncils
ac
tiviti
es
may
no
t be
ef
fect
ive.
M
Impl
emen
t th
e ag
reed
20
15/1
6 go
vern
ance
ac
tion
plan
Rel
evan
t Pr
ojec
t M
anag
ers
30Apr
il 20
16Com
plet
e
Gov
ern
ance
Str
uct
ure
s
5Fa
ce t
o Fa
ce C
ode
of C
ondu
ct
Trai
ning
is
to
be
pr
ovid
ed in
Apr
il 20
16.
Rei
nfor
ce
the
requ
irem
ents
of
th
e Cod
e of
Con
duct
. M
itiga
te f
raud
and
co
rrup
tion
risk
M
Trai
ning
to
be
im
plem
ente
d
.
Hum
an
Res
ourc
es30
June
2016
In p
rogr
ess
Gra
nts
Ad
min
istr
atio
n
6Fo
llow
up
on
id
entif
ied
‘unc
omm
itted
’ Fun
ds.
Con
ditio
ns
of
Gra
nt
Fund
ing
achi
eved
.M
Unc
omm
itted
Fu
nds
be
refle
cted
in
the
Cou
ncils
op
erat
ions
.
Man
ager
Fi
nanc
e31
May
201
6In
pro
gres
s
Deb
tors
Man
agem
ent
PAGE 35
AUDIT COMMITTEE MEETING 2 JUNE, 2016
Au
dit
Ob
serv
atio
ns
Effe
ctR
isk
Rat
in
g
Rec
omm
end
atio
n
and
ag
reed
Act
ion
Pla
nR
esp
on
sib
le
Man
ager
To
be
imp
lem
ente
d
by
dat
e:S
tatu
sat
1
M
ay2
01
6
7Im
prov
emen
ts
to
proc
esse
s ou
tline
d in
th
e ‘fi
ndin
gs’
conc
erni
ng
follo
w
up
of
debt
an
d lia
ison
with
oth
er t
eam
s in
Cou
ncil
cont
inue
s.
This
is
to
en
sure
th
e ef
fect
ive
man
agem
ent
of
debt
be
ing
incu
rred
and
out
stan
ding
deb
t.
Min
imis
e Bad
Deb
t
M
Follo
w u
p of
out
stan
ding
de
bt
.
Man
ager
Fi
nanc
eAug
ust
2016
In p
rogr
ess
8Rev
iew
s to
be
unde
rtak
en b
y th
e Fi
nanc
e te
am o
n a
period
ic
basi
s to
id
entif
y ‘b
ad
debt
s’.
Whe
re
appl
icab
le,
repo
rts
requ
irin
g th
e w
rite
off
of
‘bad
de
bt’ b
e pr
ovid
ed t
o Cou
ncil
on
a tim
ely
basi
s.
Deb
tors
bal
ance
ref
lect
deb
t th
at w
ill
be r
ecei
ved
by t
he C
ounc
ilM
Rev
iew
an
d re
port
ba
d de
bts
period
ical
lyM
anag
er
Fina
nce
Aug
ust
2016
In p
rogr
ess
Civ
ic E
ven
ts
9Agr
eem
ents
w
ere
auth
oris
ed
by s
taff
who
did
not
hav
e th
e ap
prop
riat
e fin
anci
al
dele
gatio
ns
Ensu
re
that
ag
reem
ents
ar
e ap
prop
riat
ely
auth
oris
edM
Agr
eem
ents
nee
d to
be
auth
oris
ed by
a
pers
on
with
th
e ap
prop
riat
e fin
anci
al d
eleg
atio
n.
Man
ager
Com
mun
ity
and
Econ
omic
D
evel
opm
ent
June
201
6In
pro
gres
s
PAGE 36
AUDIT COMMITTEE MEETING 2 JUNE, 2016
Au
dit
Ob
serv
atio
ns
Effe
ctR
isk
Rat
in
g
Rec
omm
end
atio
n
and
ag
reed
Act
ion
Pla
nR
esp
on
sib
le
Man
ager
To
be
imp
lem
ente
d
by
dat
e:S
tatu
sat
1
M
ay2
01
6
10
Var
iatio
ns
to
agre
ed
fees
(c
ontr
actu
al
arra
ngem
ents
) w
ere
appr
oved
by
st
aff
who
di
d no
t ha
ve
the
appr
opriat
e fin
anci
al d
eleg
atio
ns
Ensu
re
that
Cou
ncils
pu
rcha
sing
pr
oced
ure
is in
pla
ce
M
Var
iatio
ns
to
the
Cou
ncils
pu
rcha
sing
pr
oced
ure
need
to
be
ap
prov
ed b
y th
e G
ener
al
Man
ager
.
Man
ager
Com
mun
ity
and
Econ
omic
D
evel
opm
ent
June
201
6In
pro
gres
s
11
Fees
and
cha
rges
diff
ered
fro
m
that
ou
tline
d in
th
e ad
opte
d fe
es a
nd c
harg
es d
ocum
ent
Fees
and
Cha
rges
are
aut
hori
sed
M
Fees
an
d Cha
rges
w
ith
resp
ect
to
the
Civ
ic
Even
ts p
rogr
am m
ust
be
as
outli
ned
in
the
Cou
ncils
Fe
es
and
Cha
rges
doc
umen
t.
Man
ager
Com
mun
ity
and
Econ
omic
D
evel
opm
ent
June
201
6In
pro
gres
s
12
Cur
rent
ly t
here
is
no a
utho
rity
to
iss
ue v
ouch
ers,
clie
nt c
ash
or f
ree
ticke
ts.
Que
ries
rai
sed
by t
he A
udit
Com
mitt
ee h
ave
indi
cate
d th
at a
cav
eat
shou
ld
be
used
w
here
th
ese
ticke
ts
are
offe
red
to e
nsur
e th
at t
he
reci
pien
t do
es
not
use
the
ticke
ts t
o ge
nera
te in
com
e.
Ensu
re
that
ag
reem
ents
ar
e ap
prop
riat
ely
auth
oris
ed
M
A p
olic
y co
ncer
ning
the
is
suin
g of
vo
uche
rs,
clie
nt
cash
or
fr
ee
ticke
ts
need
s to
be
de
velo
ped
and
appr
opriat
ely
appr
oved
.
Man
ager
Com
mun
ity
and
Econ
omic
D
evel
opm
ent
June
201
6In
pro
gres
s
PAGE 37
AUDIT COMMITTEE MEETING 2 JUNE, 2016
Au
dit
Ob
serv
atio
ns
Effe
ctR
isk
Rat
in
g
Rec
omm
end
atio
n
and
ag
reed
Act
ion
Pla
nR
esp
on
sib
le
Man
ager
To
be
imp
lem
ente
d
by
dat
e:S
tatu
sat
1
M
ay2
01
6
13
Com
plet
enes
s of
inf
orm
atio
n in
th
e Cor
pora
te R
ecor
dEn
sure
th
at
all
key
info
rmat
ion
is
mai
ntai
ned
in t
he c
orpo
rate
rec
ord
M
Bud
get
info
rmat
ion
mai
ntai
ned
by t
he T
eam
is
co
mpr
ehen
sive
bu
t sh
ould
be
pl
aced
in
to
ECM
(f
or
reco
rd
man
agem
ent
purp
oses
).
Man
ager
Com
mun
ity
and
Econ
omic
D
evel
opm
ent
June
201
6In
pro
gres
s
14
KPI
’s a
re n
ot a
lway
s in
pla
ce t
o de
term
ine
the
succ
ess
of
an
even
t.
Prov
ide
a cl
ear
indi
cato
r as
to
w
heth
er
an
even
t is
su
cces
sful
or
no
t. T
hese
KPI
’s s
houl
d re
fer
to a
ll re
leva
nt p
aram
eter
s.M
KPI
’s a
gree
d be
fore
the
ev
ent,
sh
ould
be
fo
rmal
ly r
evis
ited
so t
hat
the
succ
ess
of t
he e
vent
ca
n be
de
term
ined
an
d do
cum
ente
d fo
r fu
ture
re
fere
nce.
Man
ager
Com
mun
ity
and
Econ
omic
D
evel
opm
ent
June
2016
In p
rogr
ess
Cas
h a
nd
cas
h r
elat
ed a
ctiv
itie
s
15
Inde
pend
ent
Che
cks
of
the
Pett
y ca
sh a
re n
ot u
nder
take
n re
gula
rly
Ensu
re
that
ca
sh
held
is
ap
prop
riat
ely
acco
unte
d fo
r.
M
An
audi
t of
all
pett
y ca
sh
float
s is
un
dert
aken
an
nual
ly b
y th
e Fi
nanc
e Te
am.
Last
au
dit
by
Fina
nce
was
und
erta
ken
in J
uly
2015
–an
othe
r sh
ould
occ
ur i
n th
e ne
xt
3 m
onth
s.
Man
ager
Fi
nanc
eJu
ly 2
016
In p
rogr
ess
PAGE 38
AUDIT COMMITTEE MEETING 2 JUNE, 2016
Au
dit
Ob
serv
atio
ns
Effe
ctR
isk
Rat
in
g
Rec
omm
end
atio
n
and
ag
reed
Act
ion
Pla
nR
esp
on
sib
le
Man
ager
To
be
imp
lem
ente
d
by
dat
e:S
tatu
sat
1
M
ay2
01
6
16
The
requ
irem
ents
of
th
e Cou
ncils
pr
oced
ure
was
no
t al
way
s in
pla
ce
Ensu
re t
hat
staf
f ar
e aw
are
of t
he
requ
irem
ents
of
the
proc
edur
e
M
The
proc
edur
e co
ncer
ning
th
e Rei
mbu
rsem
ent
of
Cou
ncil
expe
nses
in
curr
ed
by
Sta
ff
(inc
ludi
ng
Pett
y Cas
h)
be
dist
ribu
ted
to
Man
ager
s fo
r di
scus
sion
at
th
eir
team
m
eetin
gs
in
part
icul
ar
dele
gatio
n an
d ex
pens
es
that
re
quire
pre
appr
oval
fr
om
the
Gen
eral
M
ana g
er.
Man
ager
Fi
nanc
eJu
ne 2
016
In p
rogr
ess
17
Proc
urem
ent
card
s pr
oced
ure
(sec
tion
8.0)
doe
s no
t re
flect
th
e cu
rren
t pr
actic
e re
gard
ing
the
verific
atio
n of
pur
chas
es b
y th
e G
roup
M
anag
er/M
anag
er.
Proc
edur
e la
st u
pdat
ed M
arch
20
14.
Proc
edur
e is
out
of
date
and
doe
s no
t pr
ovid
e ad
equa
te
guid
ance
. Pu
rcha
sing
ac
tiviti
es do
no
t sa
tisfy
th
e Cou
ncils
pur
chas
ing
proc
edur
e.M
Proc
urem
ent
Car
d Pr
oced
ure
be
upda
ted
and
dist
ribu
ted
Man
ager
Fi
nanc
eJu
ne 2
016
In p
rogr
ess
18
Sta
ff w
ho a
re i
ssue
d w
ith t
he
proc
urem
ent
card
be
advi
sed
of t
he r
equi
rem
ents
of
use;
the
pr
oced
ure
may
nee
d up
datin
g to
ref
lect
the
use
of
the
card
.
Sta
ffs
are
awar
e of
the
lim
itatio
ns in
havi
ng a
pro
cure
men
t ca
rd.
Cou
ncil’
s go
vern
ance
re
quirem
ents
ar
e in
pl
ace.
M
Sta
ff t
o si
gn o
ff o
n th
e co
nditi
ons
of
use
of
proc
urem
ents
ca
rds
whe
n th
e ca
rds
are
issu
ed.
Man
ager
Fi
nanc
eJu
ne 2
016
In p
rogr
ess
19
Proc
urem
ent
card
s pu
rcha
ses
som
etim
es e
xcee
d th
e am
ount
ou
tline
d in
the
pro
cedu
re
Purc
hase
s do
no
t m
eet
the
requ
irem
ents
of
th
e pr
oced
ure
alth
ough
the
y ar
e re
quired
for
the
co
ntin
uity
of
serv
ice
M
Con
side
ratio
n be
gi
ven
to
incr
easi
ng
the
daily
sp
end
limit
and
dele
ting
the
mon
thly
spe
nd l
imit
on t
he v
endo
rs c
ard.
Man
ager
Fi
nanc
eJu
ne 2
016
In p
rogr
ess
PAGE 39
AUDIT COMMITTEE MEETING 2 JUNE, 2016
Au
dit
Ob
serv
atio
ns
Effe
ctR
isk
Rat
in
g
Rec
omm
end
atio
n
and
ag
reed
Act
ion
Pla
nR
esp
on
sib
le
Man
ager
To
be
imp
lem
ente
d
by
dat
e:S
tatu
sat
1
M
ay2
01
6
20
Pett
y ca
sh
vouc
hers
w
ere
sign
ed
by
staf
f w
ho
did
not
have
the
app
ropr
iate
fin
anci
al
dele
gatio
n
Ensu
re
that
ag
reem
ents
ar
e ap
prop
riat
ely
auth
oris
ed
M
Fina
nce
activ
ely
revi
ews
the
pett
y ca
sh v
ouch
ers
pres
ente
d to
it t
o en
sure
th
at
they
sa
tisfy
th
e re
leva
nt
proc
edur
e an
d ar
e si
gned
by
an
ap
prop
riat
ely
dele
gate
d of
ficer
.
Man
ager
Fi
nanc
eJu
ne 2
016
In p
rogr
ess
21
Floa
ts
mad
e av
aila
ble
whe
re
not
appr
opriat
ely
acco
unte
d fo
rM
onie
s un
acco
unte
d fo
r.
M
Fina
nce
to f
ollo
w u
p th
e re
imbu
rsem
ent
of
adva
nces
m
ade
and
float
s m
ade
avai
labl
e to
th
e Civ
ic E
vent
s te
am.
Man
ager
Fi
nanc
eJu
ne 2
016
In p
rogr
ess
Rev
enu
e
22
Inst
ance
s of
una
utho
rise
d fe
es
and
char
ges
bein
g ac
cept
ed b
y Cou
ncil
Fees
and
cha
rges
do
not
refle
ct t
he
adop
ted
fees
and
cha
rges
doc
umen
tM
Fina
nce
unde
rtak
es
period
ic
chec
ks
toen
sure
th
at th
e co
rrec
t fe
es
are
bein
g ch
arge
d w
ithin
the
Cou
ncil.
Man
ager
Fi
nanc
eJu
ne 2
016
In p
rogr
ess
PAGE 40
AUDIT COMMITTEE MEETING 02 JUNE, 2016
PAGE 41
ITEM-3 GENERAL MANAGER'S EXPENSES DOC INFO
THEME: Proactive Leadership
OUTCOME: 2 Prudent management of financial resources, assets and people to deliver the community outcomes
STRATEGY: 2.2 Maintain a strong financial position that supports the delivery of services and strategies and ensures long term financial sustainability.
MEETING DATE: 2 JUNE 2016
INTERNAL AUDIT COMMITTEE
GROUP: GENERAL MANAGER
AUTHOR: GENERAL MANAGER
DAVE WALKER
RESPONSIBLE OFFICER: GENERAL MANAGER
DAVE WALKER
HISTORY At the Council meeting of 12 October 2004, the Council adopted a Notice of Motion as follows:- 1. The General Manager’s expenses be reviewed and approved by the Mayor prior to
payment. 2. After Approval, the expenses be submitted to the Audit Committee for notation.
REPORT A listing of the General Manager’s expenses incurred since last reported on 17 March 2016 will be tabled at the Audit Committee Meeting. IMPACTS Financial This matter has no direct financial impact upon Council's adopted budget or forward estimates. The General Managers expenses are met from Councils adopted budget. The Hills Future - Community Strategic Plan The disclosure of the General Managers expenses ensures that the Council is transparently governed. RECOMMENDATION 1. The report be received. 2. The expenses tabled (which outlines a total of $386.00) be noted. ATTACHMENTS Nil.