Item 14.6 - Attachment 1

Draft Minutes of Audit Committee 5 February 2009








Councillor Andrew Wilson, Councillor Michael McDermott and Pamela Fynan – Community representative.




Denis Banicevic – External Auditor, Jenny Fett – Manager Finance, Dr Robert Lang, Chief Executive Officer, Michael Quirk - Manager Service Audit & Review and Grant Davies – Minute Clerk.




An apology was received and accepted for the absence of Councillor Julia Finn.






There were no conflict of interest declarations at this meeting.



1/09         Audit Committee Minutes – 6 November 2008


RESOLVED  (Wilson/McDermott)


That the minutes of the Audit Committee Meeting held on 6 November 2008 be received and accepted as a true record of the meeting.


2/09         Appointment of Chairperson

Guidelines had recently been received from the Department of Local Government recommending that the Chair of the Audit Committee be a person who is independent of and external to the Council.


The sole Community Representative declined to take the Chair on this occasion and agreement was reached to hold over appointment of the Chair at this stage.


Councillor Wilson also questioned the length of time members had been appointed to the Committee. Mr Quirk replied from the Audit Committee Charter that community members had been appointed for 2 years with Councillors’ membership subject to the direction of Council.








3/09         Department of Local Government Guidelines for Internal Audit

                 Mr Quirk advised that Internal Audit Guidelines had been issued by the Department of Local Government. The purpose of the guidelines was to bring local government into line with the requirements for internal audit and risk management in existence for State and Federal Governments. A copy of the guidelines had been distributed with the Committee Agenda.


                 He added that Parramatta City Council was generally in compliance with the guidelines and that the guidelines should be placed before Council for adoption.


                 Dr Lang added that the guidelines clearly indicated that the GM of a Council should not be a voting member of the Committee and he supported this requirement. He emphasised his intention to continue being present at meetings unless otherwise requested by the Committee.


                 Mr Banicevic stated that the guidelines were not regulations or part of the Act and, subject to justification, Council could choose not to comply with certain sections if it so wished.


                 The Committee agreed that the recommended guidelines should be adopted with decisions being made in the future should it wish to not comply with certain recommendations.



4/09         Report of Internal Audit Activities

A memorandum had been distributed to all members advising of the audit related activities for the period 1 November 2008 to 31 January 2009. A copy of the memorandum had been provided to all members with the Agenda.


Mr Quirk indicated that the following 4 audits had been completed and were awaiting management response prior to finalisation and added that a number of smaller audits were near completion:-


1.         Council’s Online Trim (awaiting approval of the Syndicate Steering Committee).

2.         Councils Online Privacy Management (awaiting approval of the Syndicate steering Committee).

3.         Section 94 Contributions.

4.         Concrete and Bitumen Laying Problems.


The results of the Councils Online Syndicate Audits would be referred to the Syndicate Steering Committee and following that, referred to the Audit Committee. Other completed audits would also be referred to the next Audit Committee meeting.


Councillor Wilson expressed his desire for the Audit Committee to give consideration to all the major council contracts such as Civic Place and Council Online and to the manner in which council tendered for such contracts. He added that he would also like to see numeric controls on the risks, size of audits and man hours involved.


Mr Quirk responded that this forms part of the standard Internal Audit Planning process. Mr Quirk would provide background information to the new Audit Committee members in relation to this matter.


Dr Lang advised that presently Council was carrying out a large number of audits and it may be beneficial to carry out less, more focussed audits per year.


Councillor McDermott advised that he saw huge benefits in monitoring operational performance.


Mr Banicevic suggested that monitoring operational performance was where benchmarking could be beneficial and could indicate whether the Council was under performing in certain areas together with areas of possible savings.


Dr Lang added that whilst not an easy task, benchmarking was currently being undertaken on certain depot operations.


Councillor Wilson advised that he would also like to see benchmarks and timeframes for audits. He believed that such benchmarks would enable Council to build a culture of compliance. Mr Quirk advised that revised audit benchmarks and improved Internal Audit Reporting would be developed and provided to the Audit Committee for consideration in the Internal Audit Charter.


Mr Quirk advised that Audit had also completed work in the corruption prevention area and work had commenced on a review of the Code of Conduct and the corruption prevention strategy.


The Committee discussed potential risks around planning controls including development and changes to zonings. Dr Lang responded that ICAC had developed guidelines on dealing with developers and Mr Banicevic suggested that such guidelines should be built into the Code of Conduct. It was agreed that these guidelines would be obtained and circulated to members.


A general discussion was then held on fraud detection. It agreed that the audit role was not specifically to detect fraud (managers should detect) but rather to aid in the prevention of fraud.


5/09         Review of Audit Committee Operations

                 Councillor Wilson invited input into the future operation of the Audit Committee.


Mr Banicevic advised that the Committee should operate in accordance with its charter.


Ms Fynan added that the role of the Committee had been set out clearly in the previously circulated documents.





6/09         Next Meeting

                 Mr Quirk suggested that it may be beneficial to hold meetings of the Audit Committee in conjunction with the presentation of the financial statements and the management plan.


                 Mr Banicevic noted that consideration of the Management Plan would be more relevant to the Council than an Audit Committee. Should there be a breakdown in the Management Plan process, then the Committee should look at that breakdown.


                 It was then agreed that Mr Quirk would circulate suggested meeting dates, generally on a quarterly basis, for consideration of members.   


                 The meeting terminated at 7.55 pm.