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Item 12.2 - Attachment 2 |
Minutes of Audit Committee 25 February 2010 |
REPORT OF THE AUDIT COMMITTEE HELD IN MEETING ROOMS 1 AND 2, GROUND
FLOOR, COUNCIL CHAMBER BUILDING ON THURSDAY, 25 FEBRUARY 2010 AT 6:45 PM
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PRESENT
Mr Neil Adams in the
Chair, Mike Barry, Councillor J D Finn (arrived 7.02 pm) Councillor M McDermott
and Councillor A Wilson (arrived 6.49 pm).
IN
ATTENDANCE
Denis Banicevic –
External Auditor,
APOLOGIES
An
apology was submitted by Mr Greg Smith – Group Manager Corporate Services.
CONFLICT
OF INTEREST DECLARATIONS
There were no
conflict of interest declarations at this meeting.
SERVICE
AUDIT AND REVIEW CHANGES
The Committee noted
the recent resignation of Mr Michael Quirk and acknowledged his substantial
efforts and contribution to the Audit Committee. The Committee wished Mr Quirk
well in his future role.
In addition, the
Committee welcomed Emily Tang – Service Auditor, who would be attending the
Audit Committee pending the replacement of Mr Quirk.
Mr Maurice Doria added
that the position description for the Manager, Service Audit and Review had
been reviewed and minor changes made to ensure the position was focussed on the
audit function. It was planned that the position would be advertised in the
near future.
1/10 RESOLVED (Wilson/Adams)
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ACTION 16 That the Chief Executive
Officer report on the possibility of appropriate confidential matters such as
incidents of corruption, Code of Conduct issues and complaints being reported
to the Audit Committee. |
Note
Councillor A Wilson (6.49 pm), Scott Gregg (6.51 pm) and
Councillor J D Finn (7.02 pm) arrived at the meeting during consideration of
this matter.
02/10 Audit
Committee Minutes – 26 November 2009
RESOLVED (Barry/McDermott)
That the minutes of the Audit Committee Meeting held on 26
November 2009 be received and accepted as a true record of the meeting.
MATTERS
ARISING FROM MINUTES
An update was provided on the following Action Items as
arose at the previous meeting:-
Action
2 – Compliance with Council Resolutions
Matter listed as Item 7 on tonight’s agenda.
Action
10 – Workshop on Contract/Procurement Review
The workshop details are not available as yet so this item
to remain open.
Action
11 – IT Systems Contract
Matter listed as Item 8 on tonight’s agenda. A report is
available for distribution to members.
Action 12 – Statistical
Report on ICAC Reports, Protective Disclosures and Section 11 reports etc
The information is not available as yet and will be provided
to the next meeting of the Audit Committee. This item to remain open.
Future
Meeting Dates (Minute 24/09 refers)
The Chairman sought advice as to whether there was any
flexibility in relation to the Special Meeting date proposed for 7 October 2010
due to his need to attend to a personal engagement.
The CEO noted difficulty arose in meeting the deadline for
the Council Meeting agenda should any substantial meeting delay occur.
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ACTION 17 – Possible Change of Special Meeting Date An alteration to the Special Audit Committee date proposed
for 7 October 2010 to the Thursday before or after be explored. |
AGENDA
ITEMS
03/10 Civic Place Risks
Mr
Council had subsequently held a workshop in May where a
number of parameters were set down for agreement with Grocon. By October an
agreement had been reached with 2 minor amendments concerning a changed
delivery date (December 2013 – accepted by Council) and a small negative
financial impact on Council. The financial position was subsequently reassessed
resulting in a minor deterioration in debt position subject to the acceleration
of the project through a staged development. Mr Gregg proceeded to outline the
effects of such a staged process.
Subject to covering off the legal details associated with
the above 2 items, it was considered that the risk was acceptable, with the
primary risk relating to the compulsory acquisition precedent.
The Department of Local Government was currently considering
whether the staged and previous development was substantially the same.
(Council had already sought advice from O’Connor Marsden which had indicated
that there were no probity issues).
The CEO indicated that no decision had been made to proceed
with the variation as yet. Council could proceed with the variation resulting
in the delivery of services at an earlier date and less of a financial impact
or could choose not to proceed. The CEO considered that Council’s biggest risk
was not proceeding with the project.
It was further noted that:-
· The Department of
Planning would be the consent authority;
· Council had prepared
a risk matrix and the document was being updated.
RESOLVED (Barry/Adams)
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ACTION 18 That an update on the current risk assessment for That the Chief Executive Officer consider soliciting comment
on Council’s risk assessment document from the constructor, Grocon. |
Note
Alistair
Cochrane retired from the meeting at 7.30 pm during consideration of this
matter.
04/10 Report of Internal Audit Activities
A copy of Manager, Service Audit and Review Memorandum dated
18 February 2010 outlining the report of the Internal Audit Activities as at 18
February 2010 had previously been circulated to members.
Note
Mr
Scott Gregg retired from the meeting at 8.02 pm during consideration of this
matter.
Procurement
Audit
Neil Adams noted that the Procurement Audit had been delayed
and sought advice as to why the scope of the audit had been enhanced.
The CEO indicated that initial investigations had revealed
an extremely large number of suppliers and accordingly it had been decided that
an increased sample would be required. The audit was near completion and the
results would be available at the next meeting.
Investments
Audit
Neil Adams sought advice on the delay in the Investments
Audit.
Ms Tang responded that due to the complexity of the
investment requirements and the departure of the Manager, it was planned for the
audit to be contracted externally.
Mr Banicevic noted the 40 mandays seemed excessive to carry
out such an audit as much of Council’s investments were term deposits and
Council’s investment policy was very conservative. He suggested the
investigation should focus more upon Council’s borrowing exposure.
The CEO responded that mandays referred more to duration rather
than actual working days.
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ACTION 19 That the Investments Audit be deferred pending the
appointment of the new Manager, Service Audit and Review and upon his
appointment, the officer reassess the risk profile and adjust the program
accordingly. |
Cash
Control – Swimming Pools – Additional Audit Commenced
Mr Adams questioned whether the additional audit had been
prompted by a particular event.
The CEO responded that a review of cash controls had been
carried out previously where a number of concerns had been raised. The concerns
were addressed and the additional audit was simply to ensure that all was now
proceeding well.
Council’s
Online Syndicate Audits
Mr Banicevic noted that the subject audit had been varied.
He suggested that the audit was no longer relevant if Council was replacing its
IT systems.
The
CEO agreed and suggested that ‘ceased’ may be a better description for the
audit rather than ‘varied’.
Council
Resolution Compliance
Councillor Finn disputed the results of the Council
Resolution Audit and considered that a sample of 10 was too small.
Councillor Finn further sought a detailed breakdown of the
data pertaining to the implementation of Council resolutions in a timely manner
together with advice on what actually was considered an ‘actioned’ resolution.
Councillor Finn suggested that Councillors could be notified
when actions were ‘closed off’.
Councillor McDermott agreed, referred to a motion pertaining
to Christmas Decorations and noted that portions of resolutions seemed to be
ignored.
The CEO outlined the process undertaken in the audit and
added that a table of data would be supplied. He further added that resolutions
were certainly not ignored.
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Action 20 That the issue of Council Resolution Compliance be
revisited as a matter of priority by the new Manager, Service Audit and
Review, once appointed, with a view to addressing the broader issues raised
by Councillors to ensure performance meets the expectation of Councillors. Further, that a report be provided on this issue to a
future meeting of the Audit Committee. |
5/10 IT Systems Replacement and Contract
A copy of Group Manager Corporate Services Confidential
Report as considered at the Council Meeting held on 24 August 2009 was
distributed to all members. The report outlined developments in the Council’s
Online Contract, with paragraph 11 outlining the relevant financial details.
The CEO noted that a Project Manager had been appointed for
this contract and the incumbent would be reviewing and refreshing the figures
contained in the report over the next month.
RESOLVED (McDermott/Barry)
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ACTION 21 That an update of the information contained in paragraph
11 of Group Manager Corporate Services Report be provided to the next meeting
of the Audit Committee. |
6/10 Proposed
Changes to Committee Charter
Manager, Service Audit and Review Memorandum dated 18
February 2010 regarding proposed changes to the Charter had previously been
circulated to members.
A general discussion was held on the possibility of each
independent representative having access to the Internal Auditor. It was
subsequently agreed that the Charter remain as is, with private meetings
between the Internal Auditor and the Chairperson being permitted.
RESOLVED (Barry/McDermott)
(a) That the proposed amendments to the Audit Committee Charter as
outlined in the Memorandum dated 18 February 2010 be adopted subject to the
following changes:-
1. That the composition of the Audit Committee remain as 2
independent persons and 3 Councillors with the Chair to be an independent
member as elected by the Committee.
2. That the reference to all Councillors being entitled to
attend meetings be deleted
3. Further, that Councillors’ and Senior Staff participation be
sought at meetings, as necessary, on specific items.
(b) Further, that a copy of the final draft Charter be provided to
the Chairman for review prior to being sent to the Council for consideration
and approval.
GENERAL BUSINESS
7/10 Depot Management Improvement Program
Councillor Wilson advised that there had been much progress
made in relation to the Depot.
The Committee noted the comprehensive update which had been
provided at the previous meeting (Minute 22/09), a further copy of which would
be sent to Councillor Wilson.
8/10 Next Meeting
The next meeting of the
Committee is scheduled for 27 May 2010.
The meeting terminated at 9.02 pm.