|
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
_________________________________________________________
PRESENT
Mr Neil Adams
(Chair), Mike Barry and Councillor M McDermott.
IN
ATTENDANCE
Denis Banicevic –
External Auditor (arrived 6.51 pm),
APOLOGIES
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.
MINUTES
18/10 Audit
Committee Minutes – 27 May 2010
RESOLVED (Barry/Adams)
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.
Note
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.
Action
26 –
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. |
AGENDA
ITEMS
19/10
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
in
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. |
Note
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. |
GENERAL
BUSINESS
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.
Note
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.