Finance Policy Committee

Agenda

7 November 2019

Notice is hereby given, in accordance with the provisions of the Local Government Act 1993 that a Finance Policy Committee meeting of ORANGE CITY COUNCIL will be held in the Council Chamber, Civic Centre, Byng Street, Orange on Thursday, 7 November 2019.

David Waddell

Chief Executive Officer

For apologies please contact Administration on 6393 8218.

Finance Policy Committee                                                                      7 November 2019

Agenda

1 Introduction.. 3

1.1 Declaration of pecuniary interests, significant non-pecuniary interests and less than significant non-pecuniary interests. 3

2 Committee Minutes. 5

2.1 Minutes of the Audit and Risk Management Committee Meeting Held on 30 August 2019. 5

Finance Policy Committee                                                                      7 November 2019

1       Introduction

1.1     Declaration of pecuniary interests, significant non-pecuniary interests and less than significant non-pecuniary interests

The provisions of Chapter 14 of the Local Government Act, 1993 (the Act) regulate the way in which Councillors and designated staff of Council conduct themselves to ensure that there is no conflict between their private interests and their public role.

The Act prescribes that where a member of Council (or a Committee of Council) has a direct or indirect financial (pecuniary) interest in a matter to be considered at a meeting of the Council (or Committee), that interest must be disclosed as soon as practicable after the start of the meeting and the reasons given for declaring such interest.

As members are aware, the provisions of the Local Government Act restrict any member who has declared a pecuniary interest in any matter from participating in the discussion or voting on that matter, and requires that member to vacate the Chamber.

Council’s Code of Conduct provides that if members have a non-pecuniary conflict of interest, the nature of the conflict must be disclosed. The Code of Conduct also provides for a number of ways in which a member may manage non pecuniary conflicts of interest.

Recommendation

It is recommended that Committee Members now disclose any conflicts of interest in matters under consideration by the Finance Policy Committee at this meeting.

Finance Policy Committee                                                                     7 November 2019

2       Committee Minutes

2.1     Minutes of the Audit and Risk Management Committee Meeting Held on 30 August 2019

RECORD NUMBER:       2019/2146

AUTHOR:                       Shephard Shambira, Internal Auditor    

EXECUTIVE Summary

The Audit and Risk Management Committee received a verbal report from the Audit Office NSW regarding the external auditor’s Interim Management Letter and a progress report on the audit of Council’s financial statements for the year ended 30 June 2019. A further update on the Auditor General’s Local Government Sector performance audits and completed and those planned for the future was also noted.

The Committee also assessed and noted updates to the Action List. The Acting Director Corporate and Commercial Services advised the Committee that the Council’s insurer has provided funding to support the enhancement of Council’s risk management framework. The Council has identified staff members to progress the task of reviewing and updating operational risk registers and related framework.

A report by the Internal Auditor on the internal audit of the security of Council owned buildings and documentation was also considered and it was noted that management will carry out further assessments and enhancement of certain security arrangements at identified sites.

The Committee noted that the Auditor General’s annual review of related party transactions provides sufficient assurance over the integrity of these transactions and related processes.  Management reports on process improvement initiatives and compliance activities were also acknowledged noting that management did not identify any incidence of non-compliance with legislation, during the period under review.

Link To Delivery/OPerational Plan

The recommendation in this report relates to the Delivery/Operational Plan strategy “17.2 Collaborate - Ensure financial stability and support efficient ongoing operation”.

Financial Implications

The Audit and Risk Management Committee acknowledged a report in which the Council will engage a consultant to facilitate the review of risk registers and the risk management framework at a cost to be partially reimbursed by the Council’s insurer.

Policy and Governance Implications

The Audit and Risk Management Committee recommendations provide assurance on risk management activities of the Council and in some cases they give insight on matters of interest which can inform decisions on policy and governance.

Recommendation

1        That Council acknowledge the reports presented to the Audit and Risk Management Committee at its meeting held on 30 August 2019.

2        That the minutes of the Audit and Risk Management Committee at its meeting held on 30 August 2019 be adopted.

further considerations

Consideration has been given to the recommendation’s impact on Council’s service delivery; image and reputation; political; environmental; health and safety; employees; stakeholders and project management; and no further implications or risks have been identified.

SUPPORTING INFORMATION

The Agenda and minutes of the Audit and Risk Management Committee meeting held on 30 August 2019 are attached.

Attachments

1        Minutes of the Meeting of the Audit and Risk Management Committee held on 30 August 2019

2        Audit & Risk Management Committee Meeting Agenda 30 August 2019, D19/58412⇩

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ORANGE CITY COUNCIL

MINUTES OF THE

Audit and Risk Management Committee

HELD IN Committee Room 3, Civic Centre, Byng Street, Orange

ON 30 August 2019

COMMENCING AT 9:30AM

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1      Introduction

Attendance

Voting Members: Mr P Burgett (Independent Chairperson), Mr B Gillooly AM (Independent Member), Cr J Whitton, Cr J McRae

Non-Voting Members: Mr David Waddell (Acting General Manager), Mrs Samantha Freeman (Acting Director Corporate and Commercial Services), Manager Financial Services, Internal Auditor

Invited: Ms Karen Taylor (Director Financial Audit, Audit Office (NSW)) – via teleconference, Director Community & Recreational Services

1.1     Apologies and Leave of Absence

RECOMMENDATION                                                                  Mr B Gillooly AM/Cr J McRae

That the apologies be accepted from Cr R Kidd (Mayor) for the Audit and Risk Management Committee meeting on 30 August 2019.

1.2     Acknowledgement of Country

1.3     Declaration of pecuniary interests, significant non-pecuniary interests and less than significant non-pecuniary interests

2       Previous Minutes

RECOMMENDATION                                                                  Mr B Gillooly AM/Cr J McRae

That the Minutes of the Meeting of the Audit and Risk Management Committee held on 31 May 2019 (copies of which were circulated to all members) be and are hereby confirmed as a true and accurate record of the proceedings of the Audit and Risk Management Committee meeting held on 31 May 2019.

3       General Reports

3.1     External Audit
- Interim Management Letter
- Report on Progress of the Financial Statement Audit
- Current External Audit Matters - Audit Office (NSW)

TRIM Reference:        2019/1830

Recommendation                                                                  Mr B Gillooly AM/Cr J McRae

1 That the verbal report by the Director Financial Audit – Audit Office (NSW) on the following topics be noted.

• External Audit Interim Management Letter
• Special focus on audit of credit cards and
• Legislative compliance frameworks
• Year-end audit confirmed to commence on 23 September 2019
• An update on Local Government Sector performance audits completed and planned by the Auditor General

2 That management will issue a response to the Auditor General regarding the Interim Management Letter.

Ms Karen Taylor left the meeting at 09:52 am.

3.2     ARMC Action List
- Review of Action List Arising from Previous Meeting
- ARMC Action List as at August 2019

TRIM Reference:        2019/1622

Recommendation                                                                          Cr J Whitton/Cr J McRae

1        That the report by the Internal Auditor on ARMC Action List as at August 2019 be acknowledged.

2        That the Committee confirm the responses to the Action List Review detailed in  Attachment 2 noting that certain action items have been consolidated to streamline the list and remove duplicated items and group similar items, including a request that Standing Action Items (items marked IA1) be recorded as tasks in Pulse and be removed from the Action List.

3        That action items marked as completed be deleted from the ARMC Action List.

4        That the update by the Manager Financial Services regarding the meeting on defined    benefit super fund funding deficits be noted, with the issue being diarised for a        further update to the committee in 2021.

5        That specific items raised for clarification and amendment by the Internal Auditor be     noted.

3.3     Verbal Update on ERM Project by the Acting Director Corporate & Commercial Services

TRIM Reference:        2019/1824

Recommendation Mr B Gillooly AM/Cr J McRae

That the verbal report by the Acting Director Corporate & Commercial Services regarding the status of the ERM Project outlining the following points be noted:

· Funding has been received from the insurer to support the engagement of a consultant to assist with training, review and re-structuring of the risk registers and related framework.

· That an internal Committee which includes the Internal Auditor has been established to work with the external consultant.

· That a further update on progress of the review is to be submitted to the next meeting.

3.4     Internal Audit Review Report - Security of Council Owned Buildings and Documentation

TRIM Reference:        2019/1621

Recommendation                                                               Mr B Gillooly AM/Cr J Whitton

1 That the report by the Internal Auditor on Internal Audit Review – Security of Council Owned Buildings and Documentation be acknowledged.

2 That management review and assess the adequacy of the CCTV monitoring protocols over Council owned properties including the Civic Centre precinct.

3 That management should consider updating the land and property register with a view to recording whether alarms or CCTV is in place and if not, include a risk assessment to support the status quo or determine if it is necessary to install an alarm system or CCTV on each of the properties listed.

3.5     Internal Audit Review report - Related Party Transactions

TRIM Reference:        2019/1631

Recommendation                                                                  Mr B Gillooly AM/Cr J McRae

1        That the report by the Internal Auditor dated 31 July 2019 on related party transactions be acknowledged.

2        That the Committee acknowledge that the Auditor General’s annual review of processes and transactions regarding related parties be deemed adequate to provide assurance to the General Manager and the Audit and Risk Management Committee.

3.6     Internal Audit Review - Asset Management Plans

TRIM Reference:        2019/1760

Recommendation                                                               Cr J Whitton/Mr B Gillooly AM

1    That the Committee approve the removal of the audit of asset management planning processes from the approved internal audit programme.

2    That a report be provided to be to the Committee outlining outcomes of the external consultant’s assessment of Council’s asset management planning processes.

3.7     Internal Audit Programme Status Report as at July 2019

TRIM Reference:        2019/1601

RecommendationS                                                             Cr J Whitton/Mr B Gillooly AM

1 That the report by the Internal Auditor on internal audit programme status report as at July 2019 be noted.

2 That the Internal Audit Plan for 2019-20 be updated to reflect the changes agreed (Items 3.5 and 3.6 above) and the additional available capacity following the departure of Dubbo Regional Council from joint arrangements, to document how the time available to Council will be utilised.

3.8     Process Improvements - 2019/20 Financial Year - Quarter 1 Update

TRIM Reference:        2019/1794

Recommendation                                                                  Cr J McRae/Mr B Gillooly AM

1 That the update on process improvements be acknowledged.

2 That the list be reviewed and updated, deleting some items which do not directly relate to process improvement initiatives being implemented by management. 

3.9     Compliance Activities - 2019/20 Financial Year - Quarter 1 Update

TRIM Reference:        2019/1795

Recommendation                                                               Mr B Gillooly AM/Cr J Whitton

That the update on compliance activities be acknowledged.

The Meeting Closed at 11:15AM.

Finance Policy Committee                                                                                              7 November 2019

Attachment 1      Audit & Risk Management Committee Meeting AGENDA 30 August 2019