Item 12.3 - Attachment 2
Minutes of Audit Committee 26 August 2010
REPORT OF THE MEETING OF THE AUDIT COMMITTEE HELD IN MEETING ROOMS 1 AND 2, GROUND FLOOR, COUNCIL CHAMBER BUILDING ON THURSDAY, 26 AUGUST 2010 AT 6:45 PM
Mr Neil Adams (Chair), Mike Barry and Councillor M McDermott.
Denis Banicevic –
External Auditor (arrived 6.51 pm),
An apology was received and accepted for the absence of Alistair Cochrane – Manager Finance, Councillor J D Finn and Councillor A Wilson.
CONFLICT OF INTEREST DECLARATIONS
No conflict of interest was declared.
18/10 Audit Committee Minutes – 27 May 2010
That the minutes of the Audit Committee Meeting held on 27 May 2010 be received and accepted as a true record of the meeting.
MATTERS ARISING FROM MINUTES
Action 10 and Action 22 – Workshop on Contract/Procurement Review
It was noted that Michael Maclean was in attendance to provide an outline on the procurement process and a workshop would follow, if required (Agenda Item 6).
Mr Adams noted that there had been a misunderstanding on the part of the Committee as to whether a formal procurement report would have been prepared at this time and prior to a procurement workshop for Council managers with Audit Committee members being in attendance. He explained that there had been some correspondence in the matter with Mr Doria and Ms Tang prior to this meeting and that, in lieu of that workshop, Mr Maclean is in attendance to address the issue. He added that whilst members did not have any particular concerns in respect of Council procurement, they certainly had related areas of interest. Ms Tang clarified whilst a formal report was not proposed; Council had been investigating procurements above the $150k threshold.
That Actions 10 and 22 be closed off.
Mr Dennis Banicevic arrived at the meeting at 6.51 pm during consideration of this matter.
Action 17 – Future Meeting Dates
The future meeting dates of the Audit Committee were noted.
Action 17 to be closed.
Action 19 – Investment Audit
This Action remain open pending the appointment of the new Manager Service Audit and Review.
Action 19 to remain open.
Action 20 – Revisiting of Council Resolution Compliance
This Action remain open pending the appointment of the new Manager Service Audit and Review.
Action 20 to remain open.
Action 23 – Exit from Council’s Online Strategy
It was noted that Chief Executive Officer Memorandum dated 10 August 2010 addressing this issue had been circulated with the agenda.
The Chief Executive Officer noted that Stage 1 of the strategy was to bring the systems in house and to replace ‘like with like”. The next stage would consider upgrading of system and software.
Councillor McDermott added that he was happy with the report submitted to Council and noted that the functionality had been well articulated to Councillors Lim, Maitra and himself.
That Action 23 be closed off.
Action 24 – Risk Analysis for Civic Place
A report on this issue will be submitted to the November 2010 meeting of the Audit Committee.
Action 24 to remain open.
Action 25 – Engagement of Short Term Contract Auditors.
The issue had been addressed and accordingly, Action 25 can be closed.
The Chief Executive Officer advised that the Services Review had been placed before the Council on 23 August 2010 and when the matter had been finalised, the appointment of a Manager Service Audit and Review would be revisited.
Dr Lang added that Council was well served at present by IAB Services with Council’s General Counsel overseeing the Department. An update on any proposed appointment would be provided to the Committee at its next meeting.
This matter is addressed at Item 5 of the agenda and accordingly, Action 26 can be closed off.
Actions 27and 28 –Cash Handling Procedures at Pools and Car Parking Stations
This matter is addressed at Item 8 of the agenda and accordingly, Actions 27 and 28 can be closed off.
Action 29 – Circulation of Members’ Details
The information has been circulated and accordingly, Action 29 can be closed off.
Action 30 – GST Certificate
No further comments were made and accordingly, Action 30 can be closed off.
Action 31 – Statistical Report
That a similar report as to the statistical report provided at the Audit Committee held on 27 May 2010 be provided on an annual basis commencing from the first meeting held after the end of the financial year.
Mr Adams advised that the Committee had previously expressed interest in how Council managed its risk (and the relationship of the Internal Audit Plan with those risk assessments) and welcomed Michael Maclean to the meeting to give an overview on Council’s Risk Management Database.
Mr Maclean advised:-
· The database was developed in house in response to the problem of centralising information collected and also to establish a review mechanism. It included high level strategic risks, risks across the whole local government area such as public, staff, assets and parks and also looked at identification of low level operational risks.
· The database included Likelihood Consequence and Risk Matrix tables which were designed to reflect the risk profile and risk tolerance of the organisation.
· Risks, once assessed, were appropriately categorised. Types included asset failure, financial, fraud, legal compliance, personal injury and reputation.
· Should a risk be identified, action was taken to overcome the risk.
· The system had built in reporting and action plan.
· The system had been operational for 2 months. All risk areas are to be reviewed commencing with security.
· An Executive Risk Management Committee has been formed and meets monthly to ensure management of risks.
Councillor McDermott referred to a recent problem facing Councils
Mr Maclean responded that if Council provided full disclosure, it was indemnified. He added that an advantage of being a member of Westpool was that information was also received on possible problems facing other Councils.
The Chief Executive Officer noted that the Risk Management Plan needed to be cognisant of the major risks identified. Major risks from the review process should also be recognised by the Audit Plan and IAB Services should consider this issue.
A copy of the presentation, as distributed, will be forwarded to all members not present at the meeting.
Action 32 –
That a 6 monthly report be provided to the Audit Committee on the implementation of the Enterprise Risk Management system including issues that have arisen, lessons learnt and the status of any modifications undertaken.
20/10 Risk Management in Procurement Workshop
Mr Maclean presented to the Committee in relation to procurement practices. He advised that:-
· There are over 250 requisitioners within Council but only Team Leaders or Managers can approve transactions.
· Each requisition was funnelled through the 2 supply officers who reviewed the order.
· Council also had a Procurement Adviser who coordinates works around tenders.
· Council regularly meets with the office of Procurement NSW.
· Council has a strong association with Local Government Procurement including attendance at procurement network meetings where common issues can be discussed.
· Council has been using Tenderlink for over 2 years. All tenders and similar processes are run as eTenders alongside traditional advertising. Council is currently liaising with Tenderlink in relation to the development of a web based assessment process.
· Council attends Supply Manager Groups on a monthly basis and also acts as a liaison between WSROC and related areas in Council.
· All Commercial and Risk staff undergo training with Local Government Procurement or in house training in relation to tender processes and requirements. A staff member sits on each evaluation panel to ensure compliance with necessary guidelines.
· Progress and identification reports are provided on a monthly basis to the Executive Team in relation to probity issues.
· Three (3) written quotations are required for amounts over $10,000, a request for quotation process that runs like a tender for procurement over $50k and less than $150k and procurement over $150k requires an Invitation to Tender process.
· The tender process was outlined and is centralised through Commercial and Risk.
· Whilst there is no formal ‘buy local’ policy, the requirement may form one of the weighted criteria against which the tender may be assessed.
· Staff are trained to ensure they are cognisant of the Government Information Public Access Act (GIPA Act), ICAC guidelines and aware of any probity risks.
The CEO noted that each tender was placed before Council for determination.
Councillor McDermott could not recall Council having overturned a recommendation from staff pertaining to a tender but added that a workshop to Councillors on the procurement process would be beneficial to assist Councillors in having a greater understanding of the process.
Action 33 – Councillors Responsibilities in Decision Making – Tenders
That a memorandum be circulated to all Councillors addressing the issue of procurement, outlining the processes involved in the determination of tenders and the rights and obligations of Councillors in considering tender evaluation reports and offering a workshop to Councillors on the issue.
Action 34 – GIPA Act
That a presentation be made to the November 2010 Audit Committee meeting addressing the implementation of GIPA Act, including disclosure of procurement information to the public.
The Chief Executive Officer retired from the meeting at 8.30 pm.
21/10 2010/2010 Internal Audit Plan
Steve Kent advised that IAB Services were developing a draft plan and, at this stage, had interviewed senior executives, viewed annual reports, the 2010/2011 initial brief and business plans, had discussed the business continuity plan with Michael Maclean and had attended the Road Show of the review of Council services. He also advised that IAB had commenced a procurement audit at the request of Council.
The draft plan will be submitted to Council Management in the next week and will include recommendations on what should be included in the plan and what should be deferred.
Neil Adams requested that a copy of the draft plan be provided to Committee members at the time it is submitted to Council Management.
In response to a question from Mr Adams, Mr
22/10 Report of Internal Audit Activities
Service Auditor Memorandum dated 18 August 2010 addressing this issue had previously been circulated to members with the agenda.
The memorandum and appended reports were taken as read.
Neil Adams noted that an issue relating to cash collection at the car parking stations needed resolution and sought advice on the status of this issue.
Emily Tang noted that there was a discrepancy between revenue figures and vehicles movements in the sample testing. This matter has been raised with the internal auditor for Secure Parking.
Mr Banicevic noted that this matter should be raised with Secure Parking management for an explanation.
Action 35 – Update on Cash Collection at Car Parking Stations
That an update be provided at the November 2010 Audit Committee Meeting outlining the status of the discrepancy between revenue figures and vehicles movements at the car parking stations.
23/10 Financial Statements
Neil Adams referred to the financial statements timetable and asked whether there was any possibility of shortening the timeframe for processing the financial statements to enable sign off in early August.
The Chief Executive Officer advised that he would discuss the matter with the Manager Finance but noted that Council was currently moving to a new financial system and staff were not fully aware at present of its capabilities.
Mr Banicevic further noted that not many councils would have their statements completed by August.
This general business item was raised earlier in the meeting prior to the departure of the CEO.
24/10 Next Meeting
The Committee noted that the next meeting of the Committee would be held on 7 October 2010 and would deal exclusively with Council’s annual financial statements.
It was also noted that Mr Adams would be unavailable for that meeting.
25/10 Business Continuity Process
Councillor McDermott referred to the recent fire at Liverpool City Council and questioned the status of Council’s business continuity process and disaster recovery plan.
Mr Maclean noted that Parramatta City Council was not exposed to the same level of risk ie Council had sprinklers installed in its building but added that Council was currently reviewing its business continuity plan including disaster recovery plan and training staff to be aware of its requirements.
Emily Tang added that Council’s online had it disaster recovery plan and would expect CITSR to have its contingency plan.
Action 36 – Disaster Recovery Plan
That an update be provided at the November 2010 meeting of the Audit Committee on the status of Council’s business continuity plan including advice on its content.
The meeting terminated at 9.00 pm.