audit committee - adelaide hills council · 5/8/2017 · internal audit quarterly update see...

AUDIT COMMITTEE

NOTICE OF MEETING

To: Presiding Member Paula Davies

Members

Peter RobertsonPeter BrassCr Malcolm HerrmannCr John Kemp

Notice is hereby given pursuant to the provisions under Section 88 of the LocalGovernment Act 1999 that the next meeting of the Audit Committee will be held on:

Monday 8 May 20176.00pm

63 Mt Barker Road, Stirling

A copy of the Agenda for this meeting is supplied under Section 88 of the Act.

Meetings of the Council and Committees are open to the public and interestedmembers of this community are welcome to attend.

Andrew AitkenChief Executive Officer

AUDIT COMMITTEE

AGENDA FOR MEETINGMonday 8 May 2017

6.00pm63 Mt Barker Road, Stirling

ORDER OF BUSINESS

Council VisionNurturing our unique place and people

Council MissionDelivering activities and services which build a resilient community, sustain our built andnatural environment and promote a vibrant economy

1. COMMENCEMENT

2. APOLOGIES/LEAVE OF ABSENCE

2.1. Apology

2.2. Leave of Absence

2.3. Absent

3. MINUTES OF PREVIOUS MEETINGS

3.1. Audit Committee Minutes – 13 February 2017

RecommendationThat the minutes of the Audit Committee meeting held on 13 February 2017, assupplied, be confirmed as an accurate record of the proceedings of that meeting.

Audit CommitteeAGENDA

4. DELEGATION OF AUTHORITYThe Audit Committee operates in accordance with the relevant sections of the LocalGovernment Act 1999, and its Terms of Reference.

5. DECLARATION OF INTEREST BY MEMBERS OF THE COMMITTEE

6. OFFICER REPORTS

6.1. Action List and Work Plan Update

6.2. Update on National Disaster Recovery Application

6.3. 2017/18 Draft Annual Business Plan

6.4. 2016/17 Budget – Budget Review 3

6.5. End of Financial Year Reporting Timetable

6.6. Internal Financial Controls Update

6.7. Risk Management Update

6.8. Internal Audit Quarterly Update

6.9. Debtor Reporting

6.10. Draft Model Financial Statements 2017

6.11. Policy Reviews

7. NEXT MEETINGThe next Audit Committee meeting will be held on 14 August 2017 at 63 MountBarker Road, Stirling.

8. CLOSE MEETING

ADELAIDE HILLS COUNCILAUDIT COMMITTEE MEETING

Monday 8 May 2017AGENDA BUSINESS ITEM

Item: 6.1

Originating Officer: Lachlan Miller, Executive Manager Governance & Risk

Responsible Director: Terry Crackett, Director Corporate Services

Subject: Action Report & Work Plan Update

For: Decision

SUMMARY

A formal Audit Committee Action Report is maintained to record the items requiring ‘actioning’ thatresult from each of the Audit Committee meetings.

The Audit Committee Work Plan assists the Committee members and staff in scheduling bothdiscussion and reports to ensure appropriate coverage of the Committee functions over the 12month period.

RECOMMENDATION

That the Audit Committee resolves that the report be received and noted

1. GOVERNANCE

Strategic Management Plan/Council Policy

Goal Organisational SustainabilityStrategy Governance

Monitoring Audit Committee decisions and actions and the Committee’s Work Plan assist inmeeting legislative and good governance responsibilities and obligations

Legal Implications

Section 126 of the Local Government Act 1999 sets out the functions of an audit committee.Management of Committee’s action items and work plan facilitates the achievement ofthese functions.

Adelaide Hills Council – Audit Committee Meeting 8 May 2017Action Report & Work Plan Update

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Risk Management Implications

The management of action items and the work plan will assist in mitigating the risk of:

Poor governance practices occur which lead to a loss of stakeholder (i.e. customerand regulator) confidence and/or legislative breaches.

Inherent Risk Residual Risk Target RiskExtreme (5C) Medium (3D) Medium (3D)

Note that there are many other controls that assist in mitigating this risk.

Financial and Resource Implications

There are no direct financial or resource implications from this item.

Customer Service and Community/Cultural Implications

Not applicable.

Environmental Implications

Not applicable.

Engagement/Consultation with Committee, Regional Subsidiary, Advisory Groupand Community

Consultation has occurred internally with Action and Work Plan responsible officers.

2. BACKGROUND

Action ReportThe Action List tracks the implementation of resolutions of the Audit Committee.

Work PlanThe functions of the Audit Committee are set out in part 7 (Role) of the Committee Termsof Reference.

A Work Plan has been developed to assist the Committee members and staff in schedulingdiscussion and reports to ensure appropriate coverage of the functions over the 12 monthperiod.

The Audit Committee adopted a Work Plan for 2017 at its 31 October 2016 meeting. Minoramendments were agreed at the 13 February 2017 meeting to schedule BR1 for theNovember meeting and to include a quarterly Debtors Report.

Adelaide Hills Council – Audit Committee Meeting 8 May 2017Action Report & Work Plan Update

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3. ANALYSIS

Action Report

There is one (1) outstanding item on the Audit Committee Action Report (Appendix 1) inrelation to the review of the Audit Committee Terms of Reference. Council is in the processof reviewing the Section 41 Committee and Advisory Group structures and the feedbackfrom the Audit Committee will be presented to Council at the appropriate time in thereview process.

Work Plan

As per the 2017 Audit Committee Work Plan (Appendix 2), the following items arescheduled for the May (this) meeting:

Item CommentaryDraft Annual Business Plan See Agenda Item 6.3Budget Review 3 See Agenda Item 6.4End of financial year reporting timetable See Agenda Item 6.5Internal financial controls update See Agenda Item 6.6Risk management plan update See Agenda Item 6.7Internal Audit quarterly update See Agenda Item 6.8Internal Audit Plan review As advised at the February 2017 Audit

Committee meeting, the recasting of theStrategic Internal Audit Plan will beundertaken following the implementation ofthe ControlTrack Risk Module.

External audit actions interim letter (verbalupdate)

To be incorporated in Item 6.5

Debtors Report See Agenda Item 6.9

In addition to the above reports there are a number of additional reports that have beenincluded on the Agenda for consideration by the Committee: Item 6.2 - National Disaster Recovery Program Update Item 6.10 – Draft Model Financial Statements 2017 Item 6.11 – Policy Reviews

4. OPTIONS

The Committee has the following options:

I. To note the status of the Action Report and Work Plan as presented.

II. To alter or substitute elements of the Action Report and/or Work Plan/s.

5. APPENDICES

(1) Audit Committee Action Report(2) 2017 Audit Committee Work Plan

Appendix 1Audit Committee Action Report

Meeting

Date

Item Topic Action Responsible

Officer

Progress Date of

Update

Due Date Comment

13-Feb-17 6.6 Long Term Financial Plan Recommended to Council for adoption for community

consultation

Paul Francis Completed 3/03/2017 LTFP approved at 26 April 2017 Council meeting

42779 6.7 Risk Management Plan Update Recommended to Council for noting Lachlan Miller Completed 2/05/2017 Risk Register noted at 28 February 2017 Council meeting

13-Feb-17 6.10 Audit Committee Terms of

Reference

To advise Council that it considers the current Audit

Committee Terms of Reference to be appropriate

Lachlan Miller In Progress 3/03/2017 Aug-17 To be incorporated into the Section 41 and Advsiory Group

review

13-Feb-17 6.14 Grant Funding Policy Recommend to SPDPC for adoption Terry Cracket Completed 3/03/2017 Policy approved at 14 March 2017 SPDPC meeting

ADELAIDE HILLS COUNCIL AUDIT COMMITTEE - ACTION REPORT

\\teams.ahc.sa.gov.au\DavWWWRoot\governance\Audit Committee\Agendas and Minutes\2017\170508 8 May 2017\170508 Item 6.1 Action Plan - App1.xlsx Page 1

Appendix 22017 Audit Committee Work Plan

ADELAIDE HILLS COUNCIL AUDIT COMMITTEE

2017 Work Plan and Reporting Schedule2017

Feb May Aug Oct Nov

(Woodside)

Long term financial plan forecast economic indicators Annual

Draft Annual Business Plan Annual

Budget Review 1 Annual



Budget Review 4 (s10) Annual

End of financial year reporting timetable Annual

End of financial year update Annual

Final Annual Financial Statements (incl management representation letter) Annual

Draft Annual Report Annual

Placement of Council’s insurance portfolio (for noting) Annual

Internal Financial Controls update Bi-annual

Risk Management Plan update Quarterly

Results of LGA Risk Management Review Annual

Implementation of LGA Risk Management Review Action Plan Bi-annual

Internal Audit quarterly update Quarterly

Internal audit reports As required

Implementation of internal audit actions progress report Bi-annual

Internal Audit Plan review Annual

External audit interim letter Biannual verbal letter

Implementation of external audit actions progress report Bi-annual

External Audit Plan review Annual

Meeting attendance by external auditors Annual in camera

Review of auditor independence and legislative compliance Annual

Balance date audit management letter (Completion Report) Annual draft final

Whistleblowing Policy review Triennial next review 2019

Audit Committee self assessment review Annual

Whistleblowers protection procedure review Biennial N/A

Chairperson’s report Annual

Work Plan and Reporting Schedule Annual

Audit Committee Meeting Dates Annual

Service Improvement Benefits Realisation Report Bi-annual

Debtors Report

Terms of Reference Annual

Version Control: v0.1 - Considered by Audit Committee - 31/10/16

v1.0 - Adopted by Audit Committee - 31/10/16

v1.1 - Addition of Debtors Report - 13/2/17

Terms of Reference

External Audit

Other Business

Financial Reporting

Internal Audit

Internal Control and Risk

Management



Item: 6.2

Originating Officer: Chris Janssan, Manager Open Space

Responsible Director: Peter Bice, Director Built & Natural Assets

Subject: Update on National Disaster Recovery Application

For: Information

SUMMARY

This report is to provide an update on the application process currently being undertaken by Councilto the National Disaster Recovery Fund (NDRF), via State Treasury, as a result of the storm eventsthat occurred in 2016.

As previously advised Council submitted the initial Form 1 requirements which were accepted byState Treasury.

This report outlines the next step in the NDFR application process which is the collation andsubmission of what is referred to as the Form 2. This Form 2 incorporates our total estimated costsfor remediation works and also forms the basis of the claim for funds reimbursement.

RECOMMENDATION

The Audit Committee resolves that the report be received and noted.

1. GOVERNANCE

Strategic Management Plan / Council Policy

Goal 3: Places for People and NatureStrategy 3.5: We will take a proactive approach and a long term view, to infrastructure

maintenance and renewal.

Legal Implications

Not applicable.

Adelaide Hills Council – Audit Committee Meeting 8 May 2017Update on National Disaster Recovery Application

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Submitting the Form 2 as soon as practically possible will reduce the risks that:

A significant number of capital projects (particularly infrastructure based) aredeferred as a consequence of late approval to proceed.

Funding to offset the expenditure being incurred by Council will not be provided, ornot provided in a timely manner, resulting in cash flow implications.

Inherent Risk Residual Risk Target RiskMedium (4D) Low (2E) Low (2E)


As a result of storm event damage, a report was previously provided to Council to deferCapital Works projects in order to mitigate financial and resources implications. This reportand proposed deferrals were approved by Council in November 2016.

Subsequent to this report a large number of Flood Recovery projects have either beencompleted or are currently underway.

In order to recover costs from the NDRF via the Form 2 process, Council has prepared itsapplication to State Treasury. This process allows our claim to be made, in order to pay forthe works.


No consultation is required to the wider community for the submission of the Form 2.


Not applicable.


Not applicable

2. BACKGROUND

In September and October 2016, two (2) major storm weather fronts passed through theAdelaide Hills region (as well as other parts of the State).

These events occurred after a very wet winter with soil reaching saturation point causingrun off of water and quickly swelling water courses. Creeks and rivers flooded causing roadsto be blocked and subsequent damage to Council infrastructure.


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Damage such as land slips occurred as soil reached saturation point and soils began toliquefy and numerous trees fell due to high winds and saturated soils. Subsequent damageto road pavements and other structures were identified in the weeks and monthsthereafter.

Council infrastructure was impacted and requires remediation. The original estimated costof this remediation was $4,259,500, inclusive of $200,000 of estimated operating costs.

Since the recovery project(s) have been underway and more detailed investigation and costestimation has been undertaken this value has been reduced to $3,605,000. Includingseveral ineligible projects and remediation of assets which Council determined it was notresponsible. Revised costs estimates comprise of capital works totalling $2,662,945 andoperating works totalling $813,623.

3. ANALYSIS

As a result of the damage that occurred an analysis of the 2016/17 Capital Works Programwas undertaken taking into account the financial impact of the event and the capacity todeliver the program with available resources.

Subsequently, Council sought funding through the National Disaster Recovery Fund (NDRP)to offset some of the costs incurred by Council, in alignment with our financial forecastsand LTFP.

The formula that is applied to Council’s proportion of the cost through the NDRP is asfollows (based on general rate revenue of $33m):

$660k = 100% of first 2% of general rate revenue $165k = 50% of 2-3% of general rate revenue $750k = 25% of anything over 3% general rate revenue

Summary of Cost & Claim to NDRF (Form 2) – as at 3 May 2017

Estimated cost for works completed = $ 1,749,273 Estimated costs for pending works = $ 1,727,295 Total Estimated costs = $ 3,476,568

Based on the above NDRF funding formula, we expect the following amounts to beprovided by the NDRF and Council respectively.

NDRF Contribution = $ 2,029,926 Council Contribution = $ 1,446,642 Total Estimated Cost = $ 3,476,568


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4. OPTIONS

The Audit Committee has the following options:

1. To receive and note the report

5. APPENDICES

(1) Summary of Claim (Form 2) to NDRF

Appendix 1Summary of Claim (Form 2) to NDRF

Proj # Proposed Project Name Proposed scope of repair works Initial EstimateTOTAL (FORM1)

Revised EstimateCapital

Revised EstimateOperational

RevisedEstimated

TOTAL (FORM2)

Actual Capital(April 2017)

ActualOperational (April

2017) TOTAL ACTUAL

TOTALREMAINING

(Estimate - Actual)

COMPLETEDYES / NO

TENDER/RFQ Photographic

evidencesupplied

NDRRAeligible

3380 Angus Creek Rd -Bridge Rehabilitation Bridge rehab, pavement reconstruction, stormwater reconstruction 150,000.00$ 14,001.00$ -$ 14,001.00$ 14,001.00$ -$ 14,001.00$ -$ YES YES Yes Yes

3381 Blockers Rd, Basket Range - Flood RepairsClean up from flood events, including repair of scouring, water run-off damage,grading.

10,000.00$ 10,000.00$ -$ 10,000.00$ -$ -$ -$ 10,000.00$ NO NO Yes Yes

3382 Burdetts Rd, Basket Range - ReconstructionRoad side embankment reconstruction for road reconstruction due to major slip.Very difficult access and steep incline on slip face. Difficult and expensive repairworks expected. Detailed design using external consultants pending.

200,000.00$ 125,000.00$ -$ 125,000.00$ 104,449.38$ -$ 104,449.38$ 20,550.62$ PARTIAL YES Yes Yes

3383 Corkscrew Rd, Montacute - ReconstructionRoad embankment reconstruction for road due to multiple slips. Works to includeembankment stabilisation, tree removal, road and shoulder reinstatement.

300,000.00$ 129,420.00$ -$ 129,420.00$ 129,420.00$ -$ 129,420.00$ -$ YES YES Yes Yes

3384 Debneys Rd, Basket Range - Flood RepairsMinor slip clean up, tree removal, resheeting of scouring on unsealed road (possibleresheeting).

50,000.00$ 8,500.00$ -$ 8,500.00$ 8,500.00$ -$ -$ 8,500.00$ NO NO Yes Yes

3385 Fernhurst Rd, Cherryville - Reconstruction

Road side embankment reconstruction for road reconstruction due to slip. Whilstslip is not major, the terrain at this location will make access very difficult andexpensive repair works are to be expected. Detailed design using externalconsultants pending.

250,000.00$ 56,256.10$ -$ 56,256.10$ 56,256.10$ -$ 56,256.10$ -$ YES YES Yes Yes

3387 Fox Creek Rd, Cudlee Creek - Major Slip

Rectification of significant slip, at time of inspection a 250mm vertical displacementwas documented. Embankment stabilisation, pavement reconstruction and tree removal likely as aresult of external consultants advice.


3388 Hollands Creek Rd, Cudlee Creek - SlipRock treatment to road embankment creek edge, where slip has occurred. Roadpavement to be reinstated with surface treatment to return to previous condition.

50,000.00$ 10,000.00$ -$ 10,000.00$ 5,944.00$ -$ 5,944.00$ 4,056.00$ NO YES Yes Yes

3389 Hunters Rd, Basket Range - low side slip

Road reconstruction and embankment stabilisation. Steep slope which will havehigh cost of works. Trees laying dangerously on slope.Additional works required to the existing pipe, new head wall treatments, rockpitching

150,000.00$ 38,129.00$ -$ 38,129.00$ 38,129.00$ -$ 38,129.00$ -$ YES YES Yes Yes

3390 Knotts Hill Rd, Marble Hill - low side slipEmbankment stabilisation on low side of embankment. Mass gravity solutionpossibly required, potentially leading to high cost of works. Works to be furtherassessed.

150,000.00$ 80,000.00$ -$ 80,000.00$ -$ -$ 80,000.00$ NO YES Yes Yes

3391 Merchants Rd, Basket Range - Flood Repairs embankment stabilisation due to slip, retaining, backfill. 10,000.00$ 7,862.00$ -$ 7,862.00$ 7,862.00$ -$ 7,862.00$ -$ YES YES No Yes

3392 Merchants Rd, Basket Range - slips embankment stabilisation due to slip, retaining, backfill. 5,000.00$ 15,000.00$ -$ 15,000.00$ 2,255.00$ -$ 2,255.00$ 12,745.00$ NO YES No Yes

3393 Montacute Rd, Montacute - Reconstruction

Earthworks in creek alignment, gabion construction, rock armour, full roadreconstruction including asphalt resurfacing, culvert and drainage alignmentconstruction.possible communication services and services reinstatement. Guard railreinstatement.

Access to gate 18 & 17 for DEWNR (pending agreement with DENRR).Detailed design using external consultants pending. AHC to lead design so desiredoutcomes are achieved, in collaboration with DEWNR.


3394 Mt Barker Rd, Aldgate - Embankment and Footpath Reconstruction Significant slip repair and footpath reinstatement 60,000.00$ 10,000.00$ -$ 10,000.00$ 925.00$ -$ 925.00$ 9,075.00$ YES YES Yes Yes

3395 Old Norton Summit Rd - Stormwater Rectifications 25,000.00$ 38,753.00$ -$ 38,753.00$ 38,753.00$ -$ 38,753.00$ -$ YES YES No Yes

3396 Parralilla Rd, Stirling - damage Stormwater rectification, asphalt repair and pipework 80,000.00$ 60,000.00$ -$ 60,000.00$ 6,650.00$ -$ 6,650.00$ 53,350.00$ NO NO Yes Yes

3397 Raymond's Rd, Basket Range - RepairsTree removal, retaining walls (rock or blocks), detailed and bulk earthworks, roadedge/pavement reinstatement

10,000.00$ 41,350.00$ -$ 41,350.00$ -$ -$ -$ 41,350.00$ NO YES Yes Yes

3398 Ridgeland Drive, Teringie - Slip

Slip within uphill lane of asphalt road, vertical and horizontal shift (40mm) as at 1October.Road pavement reinstatement required, involved bulk and detailed earthworks,road embankment stabilisation and asphalt resurfacing.

80,000.00$ 41,441.64$ -$ 41,441.64$ 41,441.64$ -$ 41,441.64$ -$ YES YES No Yes

3399 Shanks Rd off Aldgate Valley Rd - Bridge ReconstructionReconstruction of bridge wing walls which were damaged in flood event. Possiblereinforced concrete repair works including backfill and reinstatement of upper levelsurfaces present before flood event.

60,000.00$ -$ -$ -$ INSURANCE -$ -$ -$ NA NA No INELIGIBLE

3400 Sprigg Rd, Crafers - Retaining Wall reconstructionReconstruction of low level block retaining wall which failed due to underminingand water overtopping road. Investigation into removal of wall and replacementwith earthen embankment in lieu.

25,000.00$ 24,265.00$ -$ 24,265.00$ 24,265.00$ -$ 24,265.00$ -$ YES YES Yes Yes

3401 Sturt Valley Rd, Stirling - Embankment StabilisationReinstatement of embankment protection, including excavation of existingembankment for installation of mass-block (gravity) retaining wall with shotcreteface finish.


3402 Swamp Rd, Lenswood - Shoulder ReinstatementShoulder reinstatement and new drainage infrastructure , as well as eroded roadpavement/shoulder reinstatement.

50,000.00$ 30,000.00$ -$ 30,000.00$ -$ -$ -$ 30,000.00$ NO NO Yes Yes

3404 Valley Rd, MontacuteTree removal, ford repair, repair of washouts, repair of slip, reinstatement of erodedsection of road pavement and shoulder adjacent lower ford.

50,000.00$ 50,000.00$ -$ 50,000.00$ -$ -$ -$ 50,000.00$ NO NO No Yes

3405 Wyse Rd, Basket Range - Flood Repairs Repair and clean up of slips, repair of road with possible resheeting. 10,000.00$ 10,000.00$ -$ 10,000.00$ -$ -$ -$ 10,000.00$ NO NO No Yes

3406 Horsnells Gully Road - stormwater and flood damage Pavement rectification works, stormwater drainage reinstatements 80,000.00$ 7,588.75$ -$ 7,588.75$ 7,588.75$ -$ 7,588.75$ -$ YES YES Yes Yes

3407 Muellers Road, Birdwood - guard rail repairsReinstate damaged guard rail and concrete repairs to existing ford as a result oferosion from flood waters.

10,000.00$ 4,750.00$ -$ 4,750.00$ 4,750.00$ -$ 4,750.00$ -$ YES YES No Yes

3408 Smith Road, Forrest RangeCulvert reconstruction and new guard rails, reinstatement of pavement over plusasphalt.

150,000.00$ 12,891.00$ -$ 12,891.00$ 12,891.00$ -$ 12,891.00$ -$ YES YES No Yes

3409 Bridgewater Oval - Rectification Works 50,000.00$ -$ -$ -$ -$ -$ -$ -$ NA NA Yes INELIGIBLE

TBC Jungfer rd - shoulder erosionRepair and reinstate eroded shoulders, possible fence repairs and reinstatement ofguard rails.

-$ 4,622.00$ -$ 4,622.00$ 4,622.00$ -$ 4,622.00$ -$ YES YES Yes

TBC Ostigh Rd - shoulder erosionRepair and reinstate eroded shoulders, possible fence repairs and reinstatement ofguard rails.

-$ 8,001.00$ -$ 8,001.00$ 8,001.00$ -$ 8,001.00$ -$ YES YES Yes

3403 Unsealed Roads - region wide Various, to be confirmed. 200,000.00$ 500,000.00$ -$ 500,000.00$ -$ -$ -$ 500,000.00$ NO NO Yes Yes

3386 Ford Damage - region wideVarious damaged section of road fords due to erosion by flood waters. Each fordbeing assessed on case by case basis.

350,000.00$ 100,000.00$ -$ 100,000.00$ -$ -$ -$ 100,000.00$ NO NO Yes Yes

3415 Balhannah Levy Repair, BalhannahRepair/reconstruction of earthen levy damaged in September/October event butunadvised to Council till January 2017.

-$ 250,000.00$ -$ 250,000.00$ -$ -$ 250,000.00$ NO NO No Yes

EMERGENCY SERVICES: Flooding Event: Contract Labour LEDGER147177071 55,346.46$ 55,346.46$ 55,346.46$ 55,346.46$ -$

EMERGENCY SERVICES: Flooding Event: Contractors LEDGER147177072 500,000.00$ 500,000.00$ 428,882.00$ 428,882.00$ 71,118.00$

EMERGENCY SERVICES: Flooding Event: Materials LEDGER147177236 80,000.00$ 80,000.00$ 48,979.00$ 48,979.00$ 31,021.00$

EMERGENCY SERVICES: Flooding Event: Plant/Vehicle LEDGER147177279 -$

Staff Overtime PAYROLL 33,277.00$ 33,277.00$ 33,277.00$ 33,277.00$ -$

Contractors - Project Management LEDGER - (To be Capitalised) 120,000.00$ 120,000.00$ 107,474.00$ 107,474.00$ 12,526.00$

Community Waste Water Management Systems 25,000.00$ 25,000.00$ -$ 25,000.00$

SUB - TOTAL (Exclusive GST) 3,715,000.00$ 2,662,945.49$ 813,623.46$ 3,476,568.95$ 1,075,314.66$ 673,958.46$ 1,749,273.12$ 1,727,295.83$

DEDUCT REMOVED CLAIMS ( IE Insurance, Ineligible) (110,000.00)

SUMMARY ITEMS FOR CLAIM (Ex GST) SUB TOTAL (Exlucisve GST) 3,605,000.00$ 2,662,945.49$ 813,623.46$ 3,476,568.95$ 1,075,314.66$ 673,958.46$ 1,749,273.12$ 1,727,295.83$

GST 360,500.00$ 266,294.55$ 81,362.35$ 347,656.90$ 107,531.47$ 67,395.85$ 174,927.31$ 172,729.58$

TOTAL (including GST) 3,965,500.00$ 2,929,240.04$ 894,985.81$ 3,824,225.85$ 1,182,846.13$ 741,354.31$ 1,924,200.43$ 1,900,025.41$

Significant savings have been achieved for a number of reasons:

Bridgewater Oval deemed inelligble so removed from Disaster Recovery claim.

Estimates quoted at premium rates due to potential lack of contractor availability. This proved to be correct, as non-local contractors werequoting up to 2-3 times the Cost as local Contractors. (There are a number of projects where there was over $100k variation betweenquotes).

Upon further investigation, lower scale Engineering solutions have been able to provide appropriate solutions.

We were able to secure a supply of Recycled Concrete Blocks as opposed to using ROCLA premade blocks. This was not onlyenvironmentally sustainable, but also saved over $450 per block (Over 300 used just on Fox Creek Rd).

CURRENT OPERATIONAL EXPENDITURE

Shanks Rd, claimed via Insurance and thus removed from the Disaster Recovery claim.



Item: 6.3

Originating Officer: Terry Crackett, Director Corporate Services


Subject: 2017/18 Draft Annual Business Plan

For: Information

SUMMARY

This report presents the Draft 2017/18 Annual Business Plan (Appendix 1) for Audit Committeereview and feedback.

The draft Plan has incorporated a 2.25% rate increase (in line with the Long Term Financial Plan),delivers a $161,000 operating surplus and provides for a capital works program that totals $18.4million.

Section 123 of the Local Government Act 1999 states that Council is obliged to consider communityfeedback with respect to its Annual Business Plan prior to its adoption.

Council endorsed the draft Annual Business Plan for consultation on 26 April 2017, with theconsultation period closing on 28 May 2017.

RECOMMENDATION


1. GOVERNANCE


Goal: Organisational SustainabilityStrategy: Financial Sustainability

The Adelaide Hills Council has consistently met its financial sustainability targets and is ontrack to continue this strong trend into the foreseeable future. The draft 2017/18 AnnualBusiness Plan attached to this report is built around the following key principles:

Operating within our means

Adelaide Hills Council – Audit Committee Meeting 8 May 20172017/18 Draft Annual Business Plan

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Managing debt responsibly Reducing the infrastructure asset renewal backlog Keeping rate increases low Funding new or enhanced services through efficiency savings.

Legal Implications

The preparation of an Annual Business Plan is a requirement of Section 123 of the LocalGovernment Act 1999, and the Local Government (Financial Management) Regulations2011.

Section 123(3) of the Act states that before a council can adopt its annual business planthat it must prepare a draft plan and follow the relevant steps set out in its publicconsultation policy (i.e. consultation for at least 21 clear days).

Section 123 (4) of the Act requires that publication of a notice in a newspaper circulating inthe area informing the public of the draft annual business plan and inviting interestedpersons to attend a meeting of the council to ask questions and make submissions for aperiod of at least one hour.


Preparing an Annual Business Plan as required by Regulations will assist in mitigating therisk of:

Inability to discharge role and functions of a local government entity leading to abreach of legislation and loss of stakeholder confidence.

Inherent Risk Residual Risk Target RiskExtreme (5C) High (5E) High (5E)

It ensures that financial resources are deployed in areas that align with Council’s StrategicManagement Plans, are affordable and support Council’s Long Term Financial Plan.


Without an Annual Business Plan, Council risks allocating resources in a manner whichcompromises its financial sustainability.

Council has developed a Long Term Financial Plan (LTFP) that sets income and expendituretargets for the 2017/18 Budget. Any variations against those targets will potentially have animpact on the long term financial position of the Council.

The draft Annual Business Plan does however strongly align to the Year 1 targets that havebeen establish in the LTFP.


Without an Annual Business Plan, Council risks pursuing strategies and projects which fail todeliver acceptable levels of customer service and adversely affect the community.


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The Annual Business Plan incorporates projects and supports ongoing actions to deliverCouncil’s environmental goals as set out in the Strategic Plan.


Section 123 of the Local Government Act 1999 states that Council is obliged to considercommunity feedback with respect to its Annual Business Plan. Engagement in this instancewill be of the ‘consult’ type in the context of the Council’s Community EngagementFramework and will be conducted from 28 April 2017 to 28 May 2016.

Consultation will be publicised in a variety of ways including:

An advertisement in the Courier newspaper and the Weekender Herald newspaper Information in the Council’s newsletter, Hills Voice, distributed by post to all postal

points in the district in early May Information on the Council’s website and online engagement portal Posts through the Council’s social media channels (Facebook and Twitter) Corflute roadside signage around the district.

The draft plan will be available for viewing in a number of ways including:

On the Council’s website and online engagement portal At the Council’s customer service centres, community centres and the mobile library By mail on request.

People can query elements of the plan in person at the Council’s service centres, by phone,by email or using the ‘Question and Answer’ facility on the Council’s online engagementportal.

People will be able to make submissions in a number of ways including:

Through the Council’s online engagement portal In writing by mail or email In person at a public meeting of the Council at 6.30pm on 23 May 2017.

A workshop about the consultation outcomes will be held on 7 June 2017. A report for theCouncil to formally consider the outcomes of the consultation process will be prepared forthe Council Meeting to be held on 27 June 2017.

To maximise the opportunity for community participation in the budget processadvertising for the community consultation has already been booked.


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2. BACKGROUND

The draft 2017/18 Annual Business Plan has been developed to reflect the objectivesendorsed within the Long Term Financial Plan (LTFP), Asset Management Plan (AMP) andStrategic Plan. Council resolutions, staff and community feedback and risk assessmentshave also informed projects and programs included in the Budget.

The budget process including the general parameters and underlying financial assumptionswere discussed with Council Members in early 2017 and have also been incorporated intothe LTFP. Workshops and Planning Sessions were held on 15 February 2017, 1 March 2017,15 March 2017, 31 March 2017 and 1 April 2017 to review the operating programs andcapital works prior to the preparation of this report.

The draft 2017/18 Annual Business Plan seeks to ensure a sustainable balance betweenservice needs, financial responsibility (including infrastructure renewal and additions), andthe capacity of the community to pay. The Annual Business Plan also draws from all areas ofCouncil’s Strategic Management Plans because they present, in financial terms, theactivities of Council as a whole.

The Local Government Act 1999 has a number of requirements relating to the preparationof the Annual Business Plan and the Annual Statements and the setting of Rates. This reportand the activities which it recounts address those requirements.

It should be noted that prior to consultation the draft Plan will incorporate minorrefinements to ensure consistency in formatting, as well as capturing new or amendedpictures.

3. ANALYSIS

Assumptions used in the development of the budget reflect those endorsed within the LTFPand have been outlined within the Draft Annual Business Plan. Key variations within eachmajor program have also been provided.

Operating Position

Council’s 2017/18 draft budget included within the Plan provides for an operating surplusof $161,000, which reflects the careful control of both operating expenses and ratesincome. This result strongly aligns with the recently reviewed LTFP with the proposedOperating Surplus being within $1,000 of the LTFP target in a total income and expenditurebudget of in excess of $40 million.

The operating expenditure budget is projected at $41.4 million, which includes $8 million ofdepreciation. Operating revenue is projected at $41.6 million and includes a proposed2.25% increase in average rates plus anticipated growth from new development of 0.8%.


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It is important to note that there are a range of additional pressures totalling almost$500,000 that have been captured within the budget without necessitating an increase inaverage rates above the levels targeted within the LTFP. These pressures included:

Pump out costs associated with the Community Waste Management Schemes -$50,000

Increased resourcing required within the Governance and Risk area (including acorporate planning and performance resource) - $140,000

Increased postage costs - $20,000 Increased costs for water and electricity (net of consumption savings) - $100,000 Additional asset conditional assessments - $30,000 Increased costs associated with waste to landfill - $70,000 ICT licensing costs (including new equipment) - $50,000.

Key offsets to these pressures totalled over $850,000 and as such provided capacity for arange of new initiatives to be included within the proposed budget without exceeding theLTFP targets established. These offsets included:

Rates growth from new development (0.3% above target) - $100,000 An increase in CWMS charges of 10% - $135,000 Increases in line with cost recover for other fees and charges - $40,000 Removal of once off items that formed part of the 2016/17 budget (i.e. the

representation review) - $80,000 Additional property revenue through improved occupancy and rental rates – 150,000 Projected East Waste costs below LTFP forecasts - $100,000 Other savings initiatives and adjustments (multiple areas) - $265,000.

Capital Expenditure

Total expenditure of $18.4 million, comprising $12.3 million renewals and upgrades, and$6.1 million for new infrastructure and projects has been included. In light of recentassessments of our assets, we have made considered adjustments to the investment levelsacross some asset classes, to ensure infrastructure and key assets continue to support thedevelopment of the region and the needs of our community.

As a consequence of the storms, the investment levels in 2016/17 were approximately $3.9million less than originally planned. That amount will be caught-up by investing anadditional $1.3 million in each of the next three years (including 2017/18). This will ensureour assets are well maintained and that the differed amount does not contribute to anincreased asset renewal backlog. A detailed listing of capital expenditure items is providedas Appendix 2 in the 2017/18 Annual Business Plan with the following key initiatives beingincluded:

Heathfield Rd Pavement reconstruction (Cricklewood Rd to Hender Rd) - $550,000 Valley Rd, Montacute – Ford Works - $50,000 Mt Torrens CWMS Rising Main upgrade- $500,000 Significant Road Resealing/Resurfacing program Increased Shoulder Renewal program region wide - $500,000 AHBTC Master Plan (divestment & activation) - Works to the value of $2.5 million Commitment to developing an annual Playground investment program - $100,000

p/a.


Page 6

New Programs and Initiatives

As discussed with Council Members at the Planning Session held between 31 March 2017and 1 April 2017, the Budget has been developed with the inclusion of a number of newprograms and / or initiatives as summarised in the following table. Importantly, aspreviously highlighted, these new programs and initiatives have been provided for whilststill meeting the operating expenditure targets as set out within the LTFP.

These new initiatives which total in excess of $400,000 are summarised in the followingtable:

Project NameProposed2017/18

Intended2019/20

Intended2020/21

Implementation of the Planning, Development &Infrastructure Act 2016

36,000 18,000 18,000

Ability to hire temporary staff when required inorder to increase resources to ensure compliancewith various legislative changes

0 60,000 0

2018 Local Government Periodic Election Count 0 20,000 0Reconciliation Funding 5,000 5,000 5,0002018 Council Member Induction Training 0 10,000 0Steam Weeding 19,000 30,000 30,000Boundary Reform Provision 0 20,000 0Additional Green Organic Disposal Services 20,000 20,000 20,000Additional Resourcing for Development Servicesand Electronic Development

95,000 95,000 95,000

Implementation of Multi - Cultural Action Plan 10,000 10,000 10,000Adelaide Hills Visitor Information Servicing 50,000 50,000 50,000Sport & Recreation Operational 10,000 10,000 10,000Community Arts Projects + 20 Year 6,000 5,000 5,000Mobile Device Implementation 10,000 10,000 10,000Skytrust Implementation (WHS system) 9,000 0 0Procurement Quote Management 10,000 10,000 10,000Communications resourcing review 65,000 35,000 35,000Roadside Marker System Operational Work Plan 25,000 25,000 25,000Club Development Workshops 4,000 4,000 4,000Federation Park Master Plan, Gumeracha 15,000 0 0Increase community grants budget 20,000 20,000 20,000Customer Experience Survey 0 25,000 0Stirling District Centre Master Plan 0 30,000 0Vehicle Fleet Management 10,000 10,000 10,000


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Rating Policy

A detailed review of Rating Policy was undertaken prior to the adoption of the 2016/17Budget with amendments to Policy, including an increase in the Fixed Charge, beingincorporated into the Annual Business Plan for the current year. This review considered:

Equity Issues Analysis of impacts on the primary production sector Analysis of impacts on commercial and industrial sectors Future infrastructure and service funding requirements.

Given the extent of this review there have been no proposed changes to the structure ofRating Policy for 2017/18.

Fixed Charge

The fixed charge provides a mechanism to recognise that all properties have access to“core” Council services, regardless of valuation, and ought to make a contribution to thecost of those services. In addition, the fixed charge provides a mechanism to adjust therates contributions across high and low valued properties. This redresses the balance andequity of the rate system.

The draft Rating Policy included as Appendix 3 within the Annual Business Plan includes afixed charge of $613.50 which represents a 2.25% increase on the $600 levied for 2016/17.

Commercial and Industrial Rates

Commercial and Industrial properties continue to be rated at 15% above the GeneralResidential rate in the dollar.

Primary Production Rates

Since 2009/10, the primary production General Rate in the dollar has been set at the samelevel as the Residential General Rate in the dollar given the majority of properties zonedPrimary Production are now used only for residential purposes.

A rebate, however, continues to be available to those primary producers that are genuinelyin the business of Primary Production and do not benefit from a Notional Capital Value. Thisrebate provides a 10% lower General Rate for Primary Production relative to Residentialratepayers.

Separate Rates

Stirling Business Separate Rate:

The draft Policy provides for a continuation of the separate rate for businesses in Stirling(Stirling Business Separate Rate). This rate will raise $85,000 (the same amount as 2016/17)and is distributed to the Stirling Business Association to promote Stirling as a destination,the ‘Gateway to the Hills’.


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There are no proposed changes to the structure of the rate in relation to the categories ofland use captured or the level of the ‘top’ and ‘tail’ that have been set in past years.

Verrall Road Separate Rate:

The draft Policy also provides for a continuation of the separate rate for Verrall Road,Upper Hermitage which provided for the sealing of the northern end of the road in2014/15. This rate is levied at a value of $858 per annum on the six properties that use thissection of road.

It should be noted that ongoing concerns have been expressed by one land owner on thelevy of this rate, with a Section 270 currently underway in relation to the levy of theseparate rate.

A full copy of Council’s Draft 2017/18 Annual Business Plan is included as an attachment tothis report (Appendix 1).

4. OPTIONS


1. To receive and note the report2. To provide feedback on the report for consideration as part of the consultation

process.

5. APPENDIX

(1) Draft 2017/18 Annual Business Plan

Appendix 12017/18 Draft Annual Business Plan



Item: 6.4



Subject: 2016/17 Budget – Budget Review 3

For: Information

SUMMARY

Under the requirements of the Local Government Act 1999, a Council must undertake a review of itsBudget at least four times throughout the financial year, with the final review examining the actualresults against budget for the prior financial year.

This report presents Budget Review 3 to the Audit Committee for review. Budget Review 3 coversthe quarter ending 31 March 2017 and reflects proposed adjustments for the period.

Budget Review 3 will be considered by Council on 23 May 2017.

RECOMMENDATION

The Audit Committee resolves to:

1. Receive and note the report.

2. Notes that the Operating Budget variations presented in Budget Review 3 for the periodending 31 March 2017 have no impact on the budget and continue to provide for an adjustedOperating Surplus for the 2016/17 year of $162k.

3. Notes the proposed Capital Program amendments that include $30k of increasedexpenditure that is offset by additional capital grant funding of $30k.

1. GOVERNANCE


Goal Organisational SustainabilityKey Issue Risk and Responsibility

Adelaide Hills Council Audit Committee Meeting 8 May 20172016/17 Budget – Budget Review 3

Page 2

Legal Implications

The undertaking of formal budget reviews is a requirement of the Local Government Act1999 and the Local Government (Financial Management) Regulations 2011.


Conducting the budget review process as required by Regulations will assist in mitigatingthe risk of:

Failure to conduct budget review process as required by Regulations results ininaccurate budgets, unforecasted deficits and inadequate resourcing for current andfuture activities.

Inherent Risk Residual Risk Target RiskMedium (4D) Low (2E) Low (2E)

It ensures that financial resources are deployed in areas that align with Council’s StrategicManagement Plans, are affordable and support Council’s Long Term Financial Plan.


During the quarter, some items were identified that require consideration as part of BudgetReview 3. The variations provide for no net impact on the operating budget, and whilstthere will be an increase of $30k on capital works, this is offset by grant revenue of $30k.


Not applicable.


Not applicable.

Community Engagement/Consultation

Not applicable.

2. BACKGROUND

Section 9(1)(b) of the Local Government (Financial Management) Regulations 2011 requiresquarterly consideration of the Council’s budget for a particular financial year.


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3. ANALYSIS

The budget review and quarterly reports have been prepared in consultation with Directorsand Managers to obtain detailed information for each budget area.

Council’s customary practice is to include Budget Reviews as an agenda item at AuditCommittee meetings. Due to the timing of Audit Committee meetings and the prescribedtimelines required by Section 9(1)(b) of the Local Government (Financial Management)Regulations 2011, it is not always possible for the Audit Committee to receive and note theBudget Review and recommend it to Council prior to adoption.

a. Operating

Key operating variations included in this review are as follows:

Revenue Reduced income of $10 for carking expiations as a result of resources being allocated

to the issue of burning permits as a result of the new EPA requirements.

Expenses Increased costs of $20k associated with the management of green organics as a

result of additional drop off days held early 2017 due to storms. Reduced cost of $20k for fire mitigation (contractors) to offset the cost for the green

organic drop off days. Reduced cost of $40k at the Waste Transfer Station due to improved operational

efficiency and improved income from steel. Increased cost of $15k for legal fees within the public health area based on year to

date expenditure. Reduced cost of $45k associated with the collection of hard waste as a result of the

service not commencing until November 2016. Reduced cost of $20k for contractors associated with the management of DPAs given

work undertaken internally (i.e. by Morgan Georg). Reduced costs of $33k within the organisational development department based on

year to date expenditure and savings achieved in implementation of developmentprograms.

The net impact of the above operating variations have totalled a favourable amount of$113k which has been transferred to the CEO contingency. The balance of this contingencyremains at $132k after accounting for the above variations.

b. Capital

The net impact resulting from proposed variations in the capital works program result in anincreased total expenditure of $30,000 which is offset by an equivalent amount of capitalgrant revenue. As such there will be no net impact on the end of year budget position.

The following sections outline the reasons behind the variations and are also summarised ina table at the end of the section.


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New Projects:

August Street, Birdwood: $ 6,000Following an independent traffic management review and subsequent report to Council, itwas resolved to undertake the works identified. The works will include installation ofkerbing, line-marking and signage along August Street.

Bus Stop 36A Stirling: $ 35,000 (Net impact to Council $ 5,000)This upgrade to Bus Stop 36A (located on Avenue Road near the roundabout with MountBarker Road) is a joint initiative with DPTI to improve bus stop access. DPTI will provide a$30,000 grant to Council to offset the majority of the cost.

Variations to existing projects:

Millbrook Road Upper Hermitage Upgrade of Ford : Additional $ 30,000The initial budget amount of $ 20,000 was for one the completion of ford only. Following areview of the project an additional $30,000 has been provided for to complete an upgradeof both fords at the site to ensure a consistent and safe service level.

Sealed Roads – Surface RenewalsAt this time total expenditure on the program is less than anticipated due to savings againstestimated contract rates. As such a reduction of $41,000 to offset the net costs associatedwith the additional works listed above has been provided for to ensure no net impact onthe budget.

4. OPTIONS

Audit Committee is limited to receiving and noting this report.

5. APPENDICES

(1) Statutory Financial Statements

Appendix 1Statutory Financial Statements

2015/16Actual

2016/17Original BR1 BR2 BR3 2016/17

Revised$'000 $'000 $'000

INCOME 33,811 Rates 34,317 52 34,369 956 Statutory charges 975 (10) 965 1,345 User charges 1,300 5 (35) 1,270 2,789 Grants, subsidies and contributions 3,338 19 15 3,372 58 Investment income 81 81 259 Reimbursements 251 251 462 Other income 267 45 13 325 176 Net gain - equity accounted Council businesses 125 125 39,856 Total Income 40,654 121 (7) (10) 40,758

EXPENSES 14,228 Employee costs 15,161 126 (24) 15,263 17,283 Materials, contracts & other expenses 16,732 25 17 (10) 16,764 7,561 Depreciation, amortisation & impairment 7,781 7,781 883 Finance costs 787 - 787 224 Net loss - equity accounted Council businesses - 40,179 Total Expenses 40,462 151 (7) (10) 40,596

(323) OPERATING SURPLUS / (DEFICIT) 192 (30) - - 162

(1,106) Asset disposal & fair value adjustments 75 75 2,868 Amounts received specifically for new or upgraded assets 1,283 1,382 - 30 2,695

1,439 NET SURPLUS / (DEFICIT)transferred to Equity Statement 1,550 1,352 - 30 2,932

2,683 Changes in revaluation surplus - infrastructure, property, plant &equipment - -

- Other Comprehensive Income - 4 Share of Other Comprehensive Income JV - -

2,687 Total Other Comprehensive Income - - - - -

4,126 TOTAL COMPREHENSIVE INCOME 1,550 1,352 - 30 2,932

Adelaide Hills Council

STATEMENT OF COMPREHENSIVE INCOME2016/17 Budget Review 3

Page 1

2015/16Actual


Revised

$'000 $'000 $'000INCOME

33,811 Rates 34,317 52 - - 34,369 956 Statutory charges 975 - - (10) 965 1,345 User charges 1,300 5 (35) - 1,270 2,789 Grants, subsidies and contributions 3,338 19 15 - 3,372 58 Investment income 81 - - - 81 259 Reimbursements 251 - - - 251 462 Other income 267 45 13 - 325 176 Net gain - equity accounted Council businesses 125 - - - 125 1,530 Adj 41,386 Total Income 40,654 121 (7) (10) 40,758

EXPENSES 14,228 Employee costs 15,161 126 (24) - 15,263 17,283 Materials, contracts & other expenses 16,732 25 17 (10) 16,764 7,375 Depreciation, amortisation & impairment 7,781 - - - 7,781 883 Finance costs 787 - - - 787 224 Net loss - equity accounted Council businesses - - - - - (722) Adj 39,271 Total Expenses 40,462 151 (7) (10) 40,596

2,115 NET BUDGETED SURPLUS / (DEFICIT) BEFORE CAPITALAMOUNTS 192 (30) - - 162

Less: Net Outlays on Existing Assets

5,932 Capital Expenditure on Renewal and Replacement of Existing Assets 9,204 4,334 478 14,016 - Proceeds from Sale of Replaced Assets - - (7,375) Depreciation (7,781) - - (7,781) (1,443) NET OUTLAYS ON EXISTING ASSETS 1,423 4,334 478 - 6,235

Less: Net Outlays on new and Upgraded Assets

2,571 Capital Expenditure on New and Upgraded Assets & Remediationcosts 3,931 (1,991) 30 1,970

(920) Capital Grants and Monetary Contributions for New and UpgradedAssets (1,283) (1,382) (30) (2,695)

(87) Proceeds from Sale of Surplus Assets (75) - (75)

1,564 NET OUTLAYS ON NEW AND UPGRADED ASSETS 2,573 (3,373) - - (800)

Other Comprehensive Income - Joint Ventures - -

1,994 Net Lending/ (Borrowing) for Financial Year (3,803) (991) (478) - (5,272)


BUDGETED FUNDING STATEMENT2016/17 Budget Review 3

Page 2

2015/16Actual


Revised$'000 ASSETS $'000 $'000 $'000 $'000 $'000

Current Assets617 Cash and cash equivalents 1,672 1,672

2,981 Trade & other receivables 4,579 121 (7) (10) 4,683Other financial assets 135 135

7 Inventories 17 173,605 6,403 121 (7) (10) 6,507

- Non-current Assets held for Sale - - -3,605 Total Current Assets 6,403 121 (7) (10) 6,507

Non-current Assets74 Financial assets - -

1,245 Equity accounted investments in Council businesses 1,378 1,378

- Investment property - -298,542 Infrastructure, property, plant & equipment 300,135 2,343 478 30 302,986

3,935 Other non-current assets 4,011 4,011303,796 Total Non-current Assets 305,524 2,343 478 30 308,375307,401 Total Assets 311,927 2,464 471 20 314,882

LIABILITIESCurrent Liabilities

8,583 Trade & other payables 8,148 151 (7) (10) 8,2823,582 Borrowings 9,464 (1,382) - - 8,0821,481 Provisions 1,583 1,583

Other current liabilities 857 85713,646 Total Current Liabilities 20,052 (1,231) (7) (10) 18,804

Non-current Liabilities10,000 Borrowings 10,000 10,000

253 Provisions 408 408- Liability - Equity accounted Council businesses - -

Other Non-current Liabilities 100 10010,253 Total Non-current Liabilities 10,508 - - - 10,50823,899 Total Liabilities 30,560 (1,231) (7) (10) 29,312

283,502 NET ASSETS 281,367 3,695 478 30 285,570

EQUITY130,132 Accumulated Surplus 130,132 3,695 478 30 134,335151,168 Asset Revaluation Reserves 149,119 149,119

2,202 Other Reserves 2,116 2,116283,502 TOTAL EQUITY 281,367 3,695 478 30 285,570

Adelaide Hills CouncilBALANCE SHEET

2016/17 Budget Review 3

Page 3


AccumulatedSurplus

AssetRevaluation

Reserve

OtherReserves

TOTALEQUITY

2016/17 $'000 $'000 $'000 $'000

Balance at end of previous reporting period 130,132 151,168 2,202 283,502Adjustment to give effect to items reported from aprior period - -

Restated opening balance 130,132 151,168 2,202 283,502- -

Net Surplus / (Deficit) for Year 2,932 2,932Other Comprehensive Income - -

Gain on revaluation of infrastructure,property, plant & equipment - -

Transfers between reserves 1,271 (2,049) (86) (864)Balance at end of period 134,335 149,119 2,116 285,570

2015/16 Actual

Balance at end of previous reporting period 128,764 148,485 2,166 279,415Restated opening balanceNet Surplus / (Deficit) for Year 1,439 1,439Other Comprehensive Income -

Changes in revaluation surplus -infrastructure, property, plant & equipment 2,683 2,683

Share of Other Comprehensive Income JV 4 4Transfers between reserves (75) 36 (39)Balance at end of period 130,132 151,168 2,202 283,502

KEY PERFORMANCE INDICATORS2016/17Budget

Review 3Operating Surplus RatioOperating Surplus 0.6%Rates - general & other less NRM levy

Net Financial Liabilities RatioNet Financial Liabilities 61%Total Operating Revenue less NRM levy

Asset Sustainability RatioNet Asset Renewals 163%Infrastructure & Asset Management Plan required expenditure

2016/17 Budget Review 3STATEMENT OF CHANGES IN EQUITY AND KPI'S

Page 4

Adelaide Hills CouncilCASH FLOW STATEMENT

2016/17 Budget Review 3

2015/16Actual


Revised

$'000 CASH FLOWS FROM OPERATING ACTIVITIES $'000 $'000 $'000 $'000 $'000

Receipts33,811 Rates - general & other 34,317 52 - - 34,369

956 Fees & other charges 975 - - (10) 9651,345 User charges 1,300 5 (35) - 1,2702,789 Grants 81 - - - 81

58 Investments 3,338 19 15 - 3,372259 Reimbursements 251 - - - 251462 Other revenues 267 45 13 - 325660 GST Adjustment

Payments(14,228) Employee costs (15,161) (126) 24 - (15,263)(17,283) Materials, contracts & other expenses (16,732) (25) (17) 10 (16,764)

(883) Finance payments (787) - - - (787)GST Adjustment -

7,946 NET CASH USED IN OPERATING ACTIVITIES 7,849 (30) - - 7,819

CASH FLOWS FROM FINANCING ACTIVITIESReceipts -

- Proceeds from Borrowings -85 Proceeds from Aged Care facility deposits -

Payments -(28) Repayment from Borrowings -

- Repayments of Aged Care facility deposits57 NET CASH USED IN FINANCING ACTIVITIES - - - - -

CASH FLOWS FROM INVESTING ACTIVITIES

Receipts2,868 Grants for new or upgraded assets 1,283 1,382 - 30 2,695

18 Sale of replaced/ new assets & other investment 75 7585 Repayment of loans to Community Groups -

167 Distributions received from Equity Accounted Businesses -Payments -

(8,355) Expenditure on new/ upgraded assets (3,931) (3,931)(421) Expenditure on renewal/ replacement of assets (9,204) (2,343) (478) (30) (12,055)

- Payments of borrowed Community Group loans -(224) Capital Contributed to Equity Accounted Businesses

(5,862) NET CASH USED IN INVESTING ACTIVITIES (11,777) (961) (478) - (13,216)

2,141 NET (DECREASE) IN CASH HELD (3,928) (991) (478) - (5,397)(4,974) CASH AT BEGINNING OF YEAR (2,833) (2,833)(2,833) CASH AT END OF YEAR (6,761) (991) (478) - (8,230)

Page 5





Subject: End of Year Financial Reporting Timetable

For: Information

SUMMARY

The Audit Committee has previously received an Audit Plan from external auditors BDO which setsout their scope and responsibilities for the 2016/17 audit at the Audit Committee meeting on13 February 2017.

In support of this Plan a draft timetable has been prepared to guide the end of year reporting processand included as Appendix 1.

The date of the final external audit visit needs to be agreed before it can be finalised, however itshould be noted that a report preparation period has been provided for to reflect similar timelines tothe previous financial year.

RECOMMENDATION

That the Audit Committee:

1. Receives and notes the report.

2. Endorses the proposed end of year reporting timetable for 2016/17.

1. GOVERNANCE


Goal 5 Organisational SustainabilityStrategies Risk and Responsibility (Legal Compliance)

The Council is committed to open, participative and transparent decision making andadministrative processes.

Item: 6.5

Adelaide Hills Council Audit Committee Meeting 8 May 2017End of Year Financial Reporting Timetable

Page 2

Legal Implications

Council is required to prepare audited annual Financial Statements in accordance with theLocal Government Act 1999, and the Local Government (Financial Management)Regulations 2011.


Failure to complete the year end reporting process within the timetable can result inincreased financial, compliance and reputational risk.

The complete the year end reporting and audit processes within the legislative timeframeswill assist in mitigating the risk of:


Inherent Risk Residual Risk Target RiskExtreme (5C) Medium (3D) Medium (3C)


The end of year financial reporting process ensures the timely production of the AnnualGeneral Purpose Financial Reports. These are required for the Annual Report and canimpact on Council’s ability to secure future grant and loan funding.


Not applicable.


Not applicable.


Council’s audited financial statements are provided to the community in its Annual Report.

2. BACKGROUND

Council’s preparation of the Annual General Purpose Financial Reports on a timely basis isaffected by, but not limited to:

• external audit timelines• resourcing, internal and external• Infrastructure assets validation

Adelaide Hills Council Audit Committee Meeting 8 May 2017End of Year Financial Reporting Timetable

Page 3

BDO’s Audit Plan which was presented to the Audit Committee on 13 February 2017,communicates the approach to be taken by the auditors and their understanding of thescope of work required to express a legitimate opinion on Council’s Financial Statementsand the environment they are composed in.

3. ANALYSIS

The draft timetable has been prepared on the basis of available information and previousexperience with preparation of the Financial Accounts.

The draft timetable allows some scope for slippage during September and October, and isintended to produce the Annual General Purpose Financial Reports for adoption by Councilat its meeting on 24 October 2017.

The statutory limit for adoption of the Annual General Purpose Financial Reports is30 November 2017, but it is considered preferable to leave some time prior to this date toallow for any potential delays and to facilitate the production of the Annual Report.

4. OPTIONS


I. To note the draft timetable as prepared.

II. To make additional comments or suggestions for Finance staff to consider prior tofinalising the timetable and the external audit visit.

1. APPENDICES

(1) 2016/17 End of Year Financial Reporting Timetable

Appendix 12016/17 End of Year Financial Reporting Timetable

ADELAIDE HILLS COUNCILPROPOSED FINANCIAL REPORTING CALENDAR, 2016/17

WeekCommencing

Description

Monday, 26 June 2017Balance Sheet Date 30/06/2017Last payrun for 2016/17 FY,EOY Payment Summaries, YE cut-off

Monday, 3 July 2017 Stock Takes and Petty Cash counts

Monday, 17 July 2017 Accrue Final Pay(s); Bank Reconciliation; High risk control account reconciliations; Commence capitalisation

Monday, 24 July 2017 Close purchase ledger for June Creditors; Accruals; Commence capitalisation

Monday, 31 July 2017ELT Report (3 Aug)Discuss EOY Position - Preliminary

Monday, 7 August 2017Progress Fixed Asset Revaluation, Depreciation and ReconciliationFinalise remaining Balance Sheet Reconciliations

Monday, 14 August 2017Audit Committee Meeting (14 Aug)Revised Timetable

Monday, 21 August 2017 Review and finalise notes to Statutory Accounts; Include subsidiary results

Monday, 28 August 2017 Review reserves accounting (Revaluations and CWMS)

Monday, 4 September 2017Confirmed external audit visitFirst Draft Statutory Accounts

Monday, 11 September 2017 BR4 - Further analytical review and full year budget comparison of operating accounts

Monday, 18 September 2017 Finalisation of Annual Financial Statements

Monday, 2 October 2017 Report preparation for Audit Committee

Monday, 9 October 2017Audit Committee Meeting (9 Oct)Review of BR4 for 2016/17Draft 2016/17 Annual Financial Statements for adoption

Monday, 9 October 2017 Annual Report Preparation

Monday, 16 October 2017 Report preparation for Council - Annual Financial Statements & BR4

Monday, 23 October 2017Council Meeting (24 Oct)2016/17 Annual Financial Statements for adoption for Annual Report inclusion and BR4

Monday, 30 October 2017 Report preparation for Audit Committee - Annual Report and BR1

Monday, 6 November 2017Audit Committee Meeting (6 Nov)Draft 2016/17 Annual Report for Council adoption by 30 NovAnnual report issued to Council for consideration after review by Audit Committee

Monday, 13 November 2017 Annual Report final design amendments

Monday, 20 November 2017Report preparation and issue for Council

Monday, 27 November 2017Council Meeting (28 Nov)2016/17 Annual Report for adoption & BR1

Monday, 27 November 2017 Submit Financial Statements to Minister (by 30 Nov)



Item: 6.6



Subject: Internal Financial Controls Update

For: Information

SUMMARY

As at 30 June 2016, Council’s external auditors, BDO, were required to provide an opinion on internalcontrols in accordance with S125 of the Local Government Act 1999.

This report presents an update to the Committee on progress made by Council towards thedevelopment of the Internal Control Framework following a recent review of all controls.

RECOMMENDATION

That Audit Committee:

1. Receives and notes the report.

2. Notes the further developments that have been undertaken in improving the internalfinancial controls.

1. GOVERNANCE



Updating the internal controls framework assists in meeting legislative and goodgovernance responsibilities and obligations

Legal Implications

Work on the Internal Controls Framework is being undertaken in conjunction with Part 3 –Accounts, Financial Statements and Audit, Local Government Act 1999 and Part 6 – Audit,Local Government (Financial management) Regulations 2011.

Adelaide Hills Council Audit Committee Meeting 1 June 2016Internal Financial Controls Update

Page 2


The implementation of the Internal Financial Control Model will assist in mitigating the riskof:

Internal control failures occur which leads to greater uncertainty in the achievementof objectives and/or negative outcomes.

Inherent Risk Residual Risk Target RiskHigh (4C) Medium (3C) Low (2E)



Satisfactory internal financial controls provide the foundation for all of Council’s financialmanagement and reporting.


Not applicable.


Not applicable.


Not applicable.

2. BACKGROUND

Councils are required to have "appropriate policies, practices and procedures of internalcontrol". In addition, Council audit committees are required to monitor the adequacy of alla Council's "accounting, internal control, reporting and other financial managementsystems and practices".

Like the audit opinion of annual financial statements, the internal controls opinion isprovided to a Council and becomes a public document, to be published with a Council’sfinancial statements along with the financial statements audit opinion.

When forming an internal controls opinion, auditors must refer, as a benchmark, to theBetter Practice Model - Internal Financial Controls which was developed in April 2012 andpublished by the LGA on advice from the SA Local Government Financial ManagementGroup.


Page 3

From the start of the 2015/16 financial year, Adelaide Hills Council, along with all non-metropolitan councils, now has the same obligation (re internal financial controls) as theauditors of metropolitan Councils have had for the previous two years. Council’s externalauditors, BDO, will be required to provide an opinion on internal controls in accordancewith s129(3)(b) of the Act.

3. ANALYSIS

From the start of the 2015/16 financial year, Adelaide Hills Council, along with all non-metropolitan councils, now has the same obligation (re internal financial controls) as theauditors of metropolitan Councils have had for the previous two years. Council’s externalauditors, BDO, were required to provide an opinion on internal controls in accordance withs129(3)(b) of the Act.

Over the course of 2016/17 Council has continued to enhance the internal controlenvironment in order to ensure ongoing compliance with our legislative requirements.

From 3 April 2017 to 5 April 2017 BDO attended Council’s Stirling office to undertake areview of Council’s internal controls assessments and reviews. In preparation for thisreview a full reassessment of the 192 internal controls was undertaken and provided toBDO for consideration. A copy of this assessment has been provided at Appendix 1.

A summary report of the outcomes from this recent review has been provided in Table 1,along with a summary from the previous review undertaken in September 2016 (Table 2).

It is pleasing to note that the most recent assessment has indicated improvements in eachof the five (5) categories, and importantly the assessment of the External Services categoryhas improved substantially.

Table 1: Review – March 2017


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Table 2: Review – September 2016

Future reporting to the Audit Committee will include updates from the Control Tracksystem which is used to monitor our controls and agreed actions.

4. OPTIONS


5. APPENDICES

(1) March 2017 Internal Controls Review

Appendix 1March 2017 Internal Controls Review

Description AssessorAssessor

RatingAssessor Reason Reviewer

Reviewer

RatingReviewer Reason

Access to Budget information and master file is

restricted/limited to appropriately authorised personnel. BPM

Control Type: Core

Paul Francis 4

While the Budget is in a draft preparatory form, it exists in spread sheet form. Budget Managers have access to their

own spread sheet with only their suite of general ledger accounts. The individual spread sheets are linked to a master

spreadsheet held in Finance. Once the draft budget has been consulted and finally adopted by Council the budget is

"uploaded" into Finesse, Council's financial system. Access to budget managers is restricted in the financial system to

those general ledger accounts that the budget manager is responsible for. Budget reviews can also be closed by

finance so that no budget holders can see any accounts for that budget round.

Terry Crackett 4

All amendments to Budgets must be approved by Council and

impact on financial sustainability considered. BPM Control

Type: Core

Paul Francis 4

All Budget Reviews are recommended by Audit Committee and adopted by Council. Part of this process is the

presentation of Statutory Financial Statements that include the amendments of the budget reviews throughout the

year and disclosing the revised total budget.

Terry Crackett 5

As part of the quarterly budget review process

and amendment to the overall budget is

assessed for potential impact on the LTFP.

End of year actual budget compared to original budget;

significant variances explained. BPM Control Type: CorePaul Francis 4

At the end of the Financial year BR4 is reviewed and endorsed by Audit committee and Council meetings. Minutes of

each are available on website.Terry Crackett 5

Budgets approved by appropriate level of management and

adopted by Council in accordance with Local Government Act.

BPM Control Type: Core

Paul Francis 5

In addition to STR-BUD-007, Council's Budget is formally adopted by Councillors at a June Council Meeting immediately

preceding the financial year that the budget is for. . All approvals are in accordance with the Local Government Act.

Weekend workshop held with Elected Members to review budget in detail.

Terry Crackett 5

Budgets based on realistic and achievable assumptions and

validated by facts. BPM Control Type: CorePaul Francis 4

Budgets are created using a bottom up approach. While Budget Managers compose a potential budget with a

commentary that provides some reasoning behind the budget request. The Budget setting process goes through the

following phases to ensure it is understood, realistic and achievable: - Budgets are reviewed by the Director of the

Budget Holders area. - Budgets are reviewed by Finance. Finance checks the alignment of the proposed budget to the

equivalent year in the Long Term Financial Plan (LTFP). As the LTFP is aligned to the Strategic objectives endorsed by

Councillors, this comparison provides comfort that the Budget is representative of the LTFP and the Strategy. - Budget

Holders are also asked to present their Budget bid Senior and Executive management, where they are questions about

their budget. This information sharing session where management from different areas of Council gain a better

understanding of other Budgets within Council

Terry Crackett 5

A detailed review of all budgets are undertaken

at the time the budget is developed. Budget

holders are required to explain in detail key

budget lines to verify requirements.

Council has adopted a budget Framework which is delegated

to the Council administrators who are responsible to put in

place a framework of internal controls over budget

formulation and management. BPM Control Type: Core

Paul Francis 4

Budget process has been split into BAU component for operating items and a bid list that can be included in the

operating. The determination of whether the bid is successful includes a series of criteria including alignment with

policy and strat plan. It was reviewed by exec and councilllors

Terry Crackett 5

Council has a long term financial plan which underpins the

development of the annual budget and aligns with council's

strategic management plans. BPM Control Type: Core

Paul Francis 5

Council's Long Term Financial Plan (LTFP) is continually updated with the Budget Review process, and is used by

management to analyse future years' implications of potential current scenarios. The LTFP is reviewed by Council's

executive, workshopped with Councillors, and then formally endorsed by Councillors at regular intervals. The last

endorsement of Council's LTFP was February 2017 by Audit Committee andFebruary 2017 by Councillors. Both of these

meeting' minutes can be found in AHC website.

Terry Crackett 5

Budget managers are accountable for changes to for their

budgets and responsible for completing budget reviews that

are aligned with strategic plans. BPM Control Type: Core

Paul Francis 4All proposed budget amendments are reviewed by Executive, Audit Committee and Council prior to approval as part of

the quarterly budget review process. Alignment to Strategic Plan is determined by each and all of these reviews.Terry Crackett 5

Establishment of clear links and relationship between budgets

and Strategic Management Plans. BPM Control Type: CorePaul Francis 4

Refer to above comments in Budget control STR-BUD-0001. Additionally, in Feb 2017 the Strategic Leadership Team

(SLT) spent time as a group and reviewed the Strategic Plan and costed its delivery over the next 3 years. The meeting

is minuted (stored on Workspace) and the workings have been retained by the Director Corporate services.

Terry Crackett 5

On-going review by management of actual performance

against budget and ensure consistency of budget in relation to

initiatives/objectives of Annual Business Plan and Strategic

Management Plans. BPM Control Type: Core

Paul Francis 5

Quarterly budget reviews are undertaken and reported to both the audit committee and Council. These reviews

include budget to actual performance for the relevant period as well as year to date. . A monthly financial reporting

framework to budget managers and Executive has been implemented by the Finance Manager. The Exec Group review

these reports on a monthly basis. Minutes for these meetings are available from exec assistants. Regular reporting to

ELT of monthly financial performance has progressed and being discussed in detail.

Terry Crackett 5

Strategic Financial Planning

Budgets

Page 1 of 16



Reviewer


Process to establish the annual budget and ensure that it is

consistent with the Annual Business Plan and Strategic

Management plans.BPM Control Type: Core

Paul Francis 5

The ABP captures all projects identified within the Strategic Plan that are required to be delivered within the financial

year and endorsed by Council. The draft current and proposed 2017/18 budgets included within the ABP directly aligns

with the targets established within the long term financial plan as presented to the community. The LTFP incorporates

outcomes from the current Asset Management Plans, prepared in 2012 and uplifted to 2017/18 dollars. Significant

enhancements in the development of the LTFP as well as the budget templates have enabled a budget to be

established that directly aligns to LTFP targets.

Terry Crackett 5

All updates and changes to General Ledger programmes are

authorised, tested and documented.BPM Control Type: CorePaul Francis 4

All updates and changes are documented in formal release notes for each module provided by the vendor. The release

notes are made available prior to the upgrade of change being developed into a "test" environment. The vendor

provides a comprehensive list of functions for customer testing. The update process is fully coordinated to ensure all

changes are checked and authorised prior to roll over.

Terry Crackett 4

Off-site backup of data, program and documentation. BPM

Control Type: CorePaul Francis 4

Backups are configured to copy data nightly, weekly and monthly. Further data is replicated between Stirling and

Woodside on a Recovery Time Objective RTO basis. A replication of critical business data is done every 15 minutes and

less critical data is replicated less often, out to a scale of weekly. Multiple layers of data are stored offsite. there are

two offsite locations available for data recovery.

Terry Crackett 5

A mirrored system has been developed in the

City Centre to ensure an offsite backup is

available at all times.

Formal disaster recovery plan adopted by Council or Senior

Executive. BPM Control Type: CorePaul Francis 4

A Business Continuity Plan has been reviewed by the Executive and adopted in April 2011. The BCP is on the internal

website, Workspace. However changes have occurred that have not been captured. Executive Team has considered

Council's risk in this area and has authorised the procurement of extra human resources in the Governance section in

2017/18. evidence is in the minuted of ELT meeting and also in the Budget build for 2017/18.

Terry Crackett 4

Access to General Ledger maintenance is restricted to

authorised personnel. BPM Control Type: CorePaul Francis 4 Only administrators of Finesse (GL module) can access the General Ledger maintenance Terry Crackett 5

System does not allow posting of unbalanced journals. BPM

Control Type: CorePaul Francis 5 Open Office Finesse does not allow journals that don't balance to $zero to be posted. Terry Crackett 5

Manual journal entries recorded in the register are authorised

by the officer preparing the journal and an independent

reviewer. BPM Control Type: Core

Paul Francis 5All General Journals are reviewed by a person different to the journal creator. Only Finance team members have the

ability to perform a General Journal entry, Journals are retained on Finance for inspectionTerry Crackett 5

General Ledger reconciliations (including control and clearing

accounts) are prepared on a regular basis; all reconciliations

independently reviewed. BPM Control Type: Core

Paul Francis 5

All General Ledger Reconciliations are performed within the requirement of the Accounts Reconciliation Policy on

Council's external website, under Finance Policies.It was most recently adopted 10/3/2015 and requires review by

March 2018. All Balance Sheet reconciliations are reviewed by a finance officer independently of the finance officer

that performed the reconciliation. All reconciliations are retained in Finance for inspection

Terry Crackett 5

Amendments to the structure of the General Ledger

framework are approved by an authorised officer. BPM

Control Type: Core

Paul Francis 4General Ledger Account codes can only be created and closed by administrators in Open Office Finesse. All

amendments to the structure of the GL are authorised by the Finance Manager.Terry Crackett 4

General Ledger policies and procedures are appropriately

created, updated & communicated to relevant personnel in

the finance department. BPM Control Type: Core

Paul Francis 4

General Ledger Account codes can only be created and closed by administrators in Open Office Finesse. Only Finance

team members have the ability to perform a General Journal entry. All General Journals are reviewed and

countersigned by a Finance Officer different to the journal creator.

Terry Crackett 4

Management review the exception reports on a regular basis

and investigate all significant variances; evidence of review

demonstrated must be provided. BPM Control Type: Core

Paul Francis 5ELT review management accounts, usually in their third "Perform" themed meeting of the month. Evidence is retained

on the minutes, available through the CEO executive assistant.Terry Crackett 5

Management regularly reports on actual performance against

budget. BPM Control Type: CorePaul Francis 5

Management report on actuals against budgets as part of the monthly management reporting process and quarterly

Budget Reviews. Evidence is found in the Minutes of the "Perform" themed ELT meetings. Budget reviews are minuted

in Audit Committee meetings and also Council meetings.

Terry Crackett 5

Management to confirm the accuracy of the information

contained within their respective report. BPM Control Type:

Core

Paul Francis 4

While there is no formal process that ensures a Budget Manager confirms accuracy of information contained in their

financial reports, scrutiny is performed during the monthly reporting process and at Budget Review cycles and

reported to Council. Budget Managers often report back to finance by exception, rather than confirmation of

satisfaction. Any miscoding that the budget holder discovers is rectified by journal entry, performed by Finance, and

based on documentation from the departments concerned.

Terry Crackett 4

Council reviews its financial performance in accordance with

relevant legislative requirements. BPM Control Type: CorePaul Francis 4

Council reviews it's financial performance in the following ways: - Budget Reviews, that are considered by Executive,

Audit Committee and ultimately reviewed and endorsed by Councillors. These are performed quarterly. - Financial

Reports, considered by Executive, Audit Committee and ultimately reviewed and endorsed by Councillors. These are

performed yearly. Exec group review monthly management accounts. This is minuted.

Terry Crackett 5

General Ledger

Management Reporting

Page 2 of 16



Reviewer


Regular reviews of data accuracy & completeness are

performed concurrently with the reporting process through

on-going integrity checks of the Trial Balance, and the known

budget position. Variances and omissions (if any) are dealt

with immediately. BPM Control Type: Core

Paul Francis 4

Whilst budget holders review information regularly to ensure data integrity, a monthly reporting process has been

established to provide appropriate assurance that all areas are being reviewed effectively. The Management

Accountant reviews the Trial Balance monthly to monitor integrity. There is a monthly financial reporting regime

established to provide appropriate assurance that all areas are being reviewed effectively. Reports are reviewed by

ELT, and minuted.

Terry Crackett 4

Ensure that roles and responsibilities are documented and

within Delegations of Authority register and is maintained and

updated. BPM Control Type: Core

Paul Francis 4 The financial Delegations of Authority are reviewed and authorised by the Chief Executive quarterly Terry Crackett 4

The long term financial plan is reviewed regularly and the

performance of KPI's monitored. BPM Control Type: CorePaul Francis 5

Council's Long Term Financial Plan (LTFP) is updated with the Budget Review process, and is used by management to

analyse future years' implications of potential current scenarios. The LTFP model includes KPIs capable of being

monitored. The LTFP is reviewed by Council's executive, reviewed by Audit Committee and then formally endorsed by

Councillors at regular intervals.

Terry Crackett 5

Accounting Policies and Procedures are appropriately created,

updated & communicated to appropriate personnel in the

financial reporting department. Knowledgeable personnel

monitor changes in guidance & regulations that affect the

entity & make the appropriate changes to the entity's

corporate accounting policies & procedures on a timely basis.


Paul Francis 4

Finance Policies are on Council's eternal website : Account Reconciliation, Capitalised Assets, Fees and Charges, Rate

Rebate, Debt Recovery, Rating and Treasury Policies. Any policy that has been reviewed and adopted by Council will be

communicated to staff at the following monthly staff meetings in the Council Agenda items update

Terry Crackett 4

On-going review and reporting of actual performance against

budget by management; management perform on-going

review of consistency of KPI's in relation to Corporate

Objectives. BPM Control Type: Core

Paul Francis 3

KPIs have not been established that indicate progression of Corporate plan objectives. There is a monthly reporting

process of actual performance for review prior to consideration by Executive. Evidence of Exec consideration is in the

minutes

Terry Crackett 3

KPIs have not been established that indicate

progression of Corporate plan objectives. Whilst

there are some levels of reporting against the

Strategic Plan objectives provided to Executive

and Council, as well as measurement of

customer service standards, the reporting of

organisational KPI's is not captured within a

framework.

KPI's are established that are consistent with the Corporate

Objectives. BPM Control Type: CorePaul Francis 3

KPIs have not been established that indicate progression of Corporate plan objectives. Whilst there are some levels of

reporting against the Strategic Plan objectives provided to Executive and Council, as well as measurement of customer

service standards, the reporting of organisational KPI's is not captured within a framework.

Terry Crackett 2

Whilst a framework for the reporting of KPIs has

been developed there is no formal reporting of

all KPIs in place (with the exception of the WHR

KPIs and the CEO KPIs). ELT has recently

endorsed the engagement of a Corporate

Planning and Reporting resource that will be

responsible for the development of the

reporting frame and the reporting of corporate

KPIs.

General Ledger reconciliations (including control and clearing

accounts) are prepared on a regular basis; all reconciliations

independently reviewed. BPM Control Type: Core

Paul Francis 5

All General Ledger Reconciliations are performed within the requirement of the Accounts Reconciliation Policy on

Council's external website, Reconciliations are reviewed by an independent finance officer, evidence retained in

Finance. High risk Balance Sheet Accounts (Current Assets and Current Liabilities) are reconciled monthly and low risk

accounts (NCA and NCL and EQ) are reconciled quarterly. Low risk accounts typically have very few transactions

outside of year end time.

Terry Crackett 5

Financial reports prepared by suitably qualified staff and

reviewed by senior management or Audit Committee. BPM

Control Type: Core

Paul Francis 5See STR-STA-0001 above Audit Committee meet about 5 times annually and are provided with relevant quarterly

updates. Evidence available in minutes.Terry Crackett 5

Actual results compared to budget regularly; management

reviews and investigates significant variances. BPM Control

Type: Core

Paul Francis 5see STR-BUD-0002 Monthly management reports to be issued to Executive. These meetings are minuted so evidence

of discussions are available for perusal. Currently reviews undertaken quarterly in line with Budget Reviews.Terry Crackett 5

Council has a mechanism in place to ensure statutory

reporting deadlines are met. Designated person monitors

compliance with reporting deadlines. BPM Control Type: Core

Paul Francis 5

A Year End timetable is reviewed by Audit Committee each year. Minutes are available on website. The timetable is

monitored by the Financial Controller. the YE timetable is reviewed by Executive group. Minutes are retained and

available as evidence. Officers that have been assigned tasks provide regular feedback on progress.

Terry Crackett 5

Statutory Reporting

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Reviewer


Council has adopted all of the prescribed financial reporting

requirements, such as:- LTFP, AMP, Budgets, Annual Financial

Statements, Annual Business Plan, Strategic Plans and Annual

Reports to ensure compliance with the Local Government Act

and relevant regulations. BPM Control Type: Core

Paul Francis 5

Council has considered and adopted the LTFP, AMP, Budgets, Annual Financial Statements, Annual Business Plan,

Strategic Plans and Annual Reports ensuring compliance with the Local Government Act'. Council meeting minutes are

published on Council's external website.

Terry Crackett 5

Statutory financial reports prepared by suitably qualified staff;

reviewed by senior management and/or Audit Committee.


Paul Francis 5

Statutory Financial Reports are prepared by the Financial Controller and Management Accountant. They are initially

reviewed by the Finance Director, then Executive, then Audit Committee (for recommendation to Council) then

Councillors for adoption. Evidence can be found in minutes of ELT, Audit Committee and Council meetings.

Terry Crackett 5

Authorised officers and/or Council to approve all grants (prior

to funds being received by Council) to ensure that Council will

be able to meet the terms and obligations of the grant, and

that the grant is in line with the Council's Strategic Objectives.


Paul Francis 4Grant Policy adopted December 2016 requires Exec team to review and approve all grants prior to receipt. Grant

Policy is available on websiteTerry Crackett 4

Management performs regular review of all grant income and

to monitor compliance with both the terms of grants and

Council's Grant policy (including claiming and collecting funds

on a timely basis). BPM Control Type: Core

Paul Francis 4

Council does have a Grants Revenue Policy adopted in December 2016.. Monitoring and acquittal of grants is

performed by budget managers with the assistance and knowledge of Finance staff. It is usually a condition of the

grant that a finance officer authorise that the acquittal is valid.

Terry Crackett 4

Management and/or Council to approve all grants (prior to

funds being received by Council) to ensure that Council will be

able to meet the terms and obligations of the grant, and that

the grant is in line with the Council's Strategic Objectives.


Paul Francis 4

There is now a formal management approval process for the application and procurement of grant funding. Exec team

consider the appropriateness of the potential grant in relation to Strategic objectives of Council. Officers have access

to Council's Strategic Plan via intranet, workspace. Grant Policy was adopted in Dec 2016 and requires grant alignment

with strategic direction

Terry Crackett 4

Council has a clear policy on Grant funding detailing

assessment process, recognition, treatment, claim collection,

community expectations and funding period and, disclosure

of any conflicts of interest. BPM Control Type: Core

Paul Francis 4

Grant (revenue) Policy exists, adopted in Dec 2016. See website for Grant Policy. Council recognises Grants in

accordance with Australian Accounting Standards Board (AASB 1004) Grants and Contributions, where any unspent

grant where there is a reciprocity of obligations, is transferred to a liability until the grant is spent.

Terry Crackett 4

Investment transactions at, before, or after the end of an

accounting period are scrutinised and/or reconciled to ensure

complete and consistent recording in the appropriate

accounting period. BPM Control Type: Core

Paul Francis 4Council does not actively invest. Any investment balances would be reconciled on a monthly basis and the

reconciliation is retained in Finance for perusalTerry Crackett 4

Investment income is reconciled to third-party statements

regularly and differences are acted upon. BPM Control Type:

Core

Paul Francis 4

Investment income comes from interest received, and has supporting independent documentation retained by

Finance section. Copies of this independent documents form part of the backup for the accounts reconciliation process

each month

Terry Crackett 5

Payees are provided with a sequentially pre-numbered form

acknowledging receipt of monies and are balanced to cash

deposits. BPM Control Type: Core

Paul Francis 4Payees are provided with a sequentially pre-numbered receipt, generated by Open Office, confirming receipt of

monies and are balanced to cash deposits.Terry Crackett 5

Processes in place to provide an audit trail for cash received

outside Council receipting areas. BPM Control Type: CorePaul Francis 3

Council has outsourced the transfer station (tip) so any receipting at these locations is outside the scope of Council. To

date, the assessor has not seen formal procedures for the collection of HACC customer receipts, Oppe Shoppe receipts

or Community Bus receipts. Recognise this exposure and assess it within materiality level.

Terry Crackett 4

There are some elements of council's activities

that do not process directly through the

electronic systems. There are however

reconciliation processes in place.

Regular review of exempt properties to ensure still valid,

interest flag switched off and rate rebates. BPM Control Type:

Core

Paul Francis 4

Exempt properties are in accordance with Sec 147 of the LG Act and are reviewed at time of sale or change in lease

arrangement. Council raises and remits fines and interest. Rates officers don't switch off an interest flag. Amounts are

manually remitted via a journal.

Terry Crackett 4

Employees responsible for processing rate notices cannot

process payment of their own rates. BPM Control Type: CorePaul Francis 5 Rates officers do not process any rates payments. Council's cashiers process rates receipts. Terry Crackett 5

Revenue

Grants

Investment/Interest Income

Other Revenue

Rates/Rate Rebates

Page 4 of 16



Reviewer


Access to the Property master file is restricted to

appropriately designated personnel, with significant changes

to the Property master file approved by management. BPM

Control Type: Core

Paul Francis 4

Access to the Property master file is restricted to appropriately designated personnel, with significant changes to the

Property master file approved by management. Rates officers can see and update the property master file, and other

staff only have read access.

Terry Crackett 4

Regular independent review of the rates aged receivables

reports and independent check of rates payable by rates staff.


Paul Francis 5

Rates receivables are monitored and reviewed as part of the General Ledger reconciliations process that takes place

for the Rates debtor every month. Council has a Debt Recovery Policy adopted in Dec 2015 located on Council's

external website. Since 2016 The Rates receivable is also included in a Debtor Reporting item that is regularly on the

Audit Committee agendas, so is reviewed at these times. Minutes of Audit committee meetings are on website.

Terry Crackett 5

Council approves rate rebates to rate payers in accordance

with Delegations of Authority and as per the legislation. BPM

Control Type: Core

Paul Francis 4

Finance Officers are delegated the authority to approve a discretionary rebate. Rates Policy development has included

a Councillors review of all rebates awarded to ratepayers, mandatory and discretionary. this review was presented to

Councillors at a workshop in March 2017

Terry Crackett 4

Authorised officers verify all pensioner concession

entitlement information provided annually by government

departments. BPM Control Type: Core

Paul Francis 4The initial Pensioner Concession file for CWMS only is received annually and loaded and balanced. There is no

maintenance carried out by Council throughout the financial year.Terry Crackett 4

Recorded changes to property master file data are compared

to authorised source documents or confirmed with ratepayers

to ensure that they were input accurately. An audit trail is

maintained for all changes. BPM Control Type: Core

Paul Francis 5Written communication (email or letter) is used as a basis for changes to the rates master file. Such correspondence is

TRIMMed.Terry Crackett 5

All software changes to rate modelling functionality fully

tested and reviewed by qualified personnel. BPM Control

Type: Core

Paul Francis 4Rates software are initially loaded into a test arena where the rates officers are able to perform testing. The most

recent upgrade of the rates system was systematically tested prior to upgrade in preparation for rates generation.Terry Crackett 5

Management regularly reviews the calculation methodology

within the rate application system and for a sample of

ratepayers to ensure correct calculation and methodology has

been used. BPM Control Type: Core

Paul Francis 5

Rates officers sample test the rates that have been generated before the final calculation is run. This Rates Team

reviews the validity of the sample. This review includes a comparison to an Excel based rates modelling spread sheet

that mirrors the rates generation. This increases confidence that the rates generated is valid.

Terry Crackett 5

Rates are automatically generated by the rate system,

including the calculation of rate rebates, if applicable. BPM

Control Type: Core

Paul Francis 5

Rates are generated based on Valuer General data. Rates and Rebates are automatically calculated within

Property.Gov. Rates generated are compared to an Excel based rate modelling spreadsheet to give added confidence

in the process

Terry Crackett 5

Officers who create debtors invoices do not have access to

receipting payments and/or reversing receipt transactions.


Paul Francis 4

The Finance officer who raises sales invoices does have access to receipting, because that officer performs the bank

reconciliation. Complete separation of duties is restricted by staffing numbers. this risk is considered minimal by

management.

Terry Crackett 4

Process in place to ensure all monies received are receipted

and recorded in a timely manner. BPM Control Type: CorePaul Francis 4

All mail is received at Woodside Office with Development related receipting/property searches processed at that

office. Other mail receipting is forwarded to Stirling Office with more experienced/higher staffing levels. Staff made

aware of due dates particularly rates where prompt receipting important due to fines/interest accrual. Where a

payment is received for an unknown account, follow-up with Finance Officer occurs.

Terry Crackett 5

Bank statements are reconciled to the general ledger and

banking reports where relevant, on a predetermined basis

and are reviewed authorised person. BPM Control Type: Core

Paul Francis 5Bank statements are reconciled to the general ledger and banking reports where relevant, on a predetermined basis

(monthly) and are reviewed by authorised person. These reconciliations are retained in Finance area for perusalTerry Crackett 5

Receipts are recorded. Service users / customers are provided

with a copy of the register receipt and total daily receipts (per

the register) are balanced to receipts deposited to the bank by

an independent person. BPM Control Type: Core

Paul Francis 5Receipts are issued for all transactions processed. Total daily receipts for each Cashlink Session are reconciled to

cash/cheques/eftpos transactions and subsequently to the Bank Account by a finance officerTerry Crackett 5

Cash is stored securely at all times including the duration of

the cash management process. BPM Control Type: CorePaul Francis 4

Cash is stored securely at all times including the duration of the cash management process. Cash is locked away when

unattended. Cash is banked twice weekly(Tues/Friday) and is recorded and signed for when collected by SecureCash.

Cash awaiting collection is held in a drop-down safe.

Terry Crackett 4

Users are provided with a sequentially pre-numbered form

acknowledging receipt of any cash payments and cash

receipts forms are balanced to cash deposited to the bank.

The numerical sequence of these forms is accounted for. BPM

Control Type: Core

Paul Francis 4

A sequentially pre-numbered receipt is generated by the Open Office system. Cash payments receipts are balanced to

cash deposited to the bank. Cashiers are at several locations and use Cashlink software to receipt. Occasional manual

receipts are given when the system is offline, eg outages or turned off to enable year end processes

Terry Crackett 4

Receipting

User Pay Income - Fee for Service

Page 5 of 16



Reviewer


Amounts charged are in accordance with the Council's Fees

and Charges register. BPM Control Type: CorePaul Francis 4 Most of the fees and charges are loaded as defaults in Open Office each July after the Fees and Charges are adopted. Terry Crackett 5

Fees and Charges register is made available to public. BPM

Control Type: CorePaul Francis 5 The fees and Charges Register is published on the external website Terry Crackett 5

Fees and charges are reviewed annually and adopted by

Council. BPM Control Type: CorePaul Francis 5

Fees and charges are reviewed annually and adopted by Council, usually in a June council meeting. Minutes are on

Council's Website. Additionally, there has been in internal review on Fees and Charges, presented to Councillors at a

workshop in March 2017.

Terry Crackett 5

Formal leases, agreements or contracts are required to cover

use of Council facilities, sporting grounds, etc. Regularly

review conducted to ensure conditions are being met and

payments made on time. BPM Control Type: Core

Paul Francis 4

Formal leases, agreements or contracts that are required to use of Council facilities, sporting grounds, etc. Reviews are

conducted by Council officers. Finance officers reconcile debtors' accounts as part of general ledger reconciliation

process. These reconciliations are reviewed by an independent Finance officer and retained in the Finance area for

inspection

Terry Crackett 4

Separation of accounts payable and procurement duties. BPM

Control Type: CorePaul Francis 5 There is total separation of accounts payable and procurement duties. Terry Crackett 5

Access to the supplier master file is restricted to authorised

officers. BPM Control Type: CorePaul Francis 4 Access to the supplier master file is restricted to authorised officers, and backup is retained in Finance for changes. Terry Crackett 5

Recorded changes to the supplier master file are compared to

authorised source documents to ensure that they were input

accurately. BPM Control Type: Core

Paul Francis 3 No sample testing of supplier master file changes compared to authorised source documents is undertaken. Terry Crackett 2There is currently no process of review of

changes made to the supplier master file.

Payments (Cheques and EFT's) are endorsed by authorised

officers separate to the preparer who ensure that they are

paid to the specified payee. BPM Control Type: Core

Paul Francis 4

Payments (Cheques and EFT's) are endorsed by authorised officers separate to the preparer who ensure that they are

paid to the specified payee. The NAB online banking system requires a Part A and a Part B before transmission of funds

is completed. It is practice within Finance that the officer who creates the batch for payment may not be wither Part A

or Part B of the authorisation for transmission. Records of these transmissions are retained in Finance for inspection

Terry Crackett 5

Individuals who authorise payment of suppliers are

authorised officers who are independent of the processing of

invoices. BPM Control Type: Core

Paul Francis 4

Individuals who authorise payment of suppliers are authorised officers who are independent of the processing of

invoices. Typically they are the budget managers and are also responsible for some General Ledger account codes. It is

costomary practice for the budget manager to write the GL code on the invoice.

Terry Crackett 5

All disbursements must be approved by an authorised officer

in accordance with relevant policies and/or Delegations of

Authority. BPM Control Type: Core

Paul Francis 4

Employee expense claims must be approved by authorised officer and independently verified and include relevant

substantiation. Expense claims are paid by petty cash or via the payroll system. Expense claims are available for

inspection in Accounts payable filing area or Payroll filing area.

Terry Crackett 4

The accounts payable system and/or supplier masterfile

prevents users from making adjustments to supplier accounts

in excess of approved limits or original order amounts. BPM

Control Type: Core

Paul Francis 4

The Open Office accounts payable system has a structure built into it to prevent users making adjustments to supplier

accounts or original order amounts. Supplier details are able to be edited by the Accounts Payable Officer upon

instruction from the supplier and these instructions are kept in the accounts payable area.

Terry Crackett 4

Invoices received are authorised and accompanied by

appropriate supporting documentation. BPM Control Type:

Core

Paul Francis 4 Invoices received are authorised by a relevant and appropriately authorised council officer. Terry Crackett 5

Statements received from suppliers are reconciled to the

supplier accounts in the accounts payable sub-ledger regularly

and differences are investigated. BPM Control Type: Core

Paul Francis 4

Statements received from suppliers are reconciled to the supplier accounts in the accounts payable sub-ledger

regularly and differences are investigated and resolved where applicable. Supplier statements are retained in the

Finance area for 12 months for inspection.

Terry Crackett 4

Authorised officer to review aged payable listing on a

predetermined basis and investigate where appropriate. BPM

Control Type: Core

Paul Francis 4 Management Accountant reviews an aged creditors listing as part of the Financial Year end process. Terry Crackett 5

Employee expense claims must be approved by authorised

officer and independently verified and include relevant

substantiation. BPM Control Type: Core

Paul Francis 5

Employee expense claims must be approved by authorised officer and independently verified and include relevant

substantiation. Expense claims are paid by petty cash or via the payroll system. Expense claims are available for

inspection in Accounts payable filing area or Payroll filing area.

Terry Crackett 5

Cheque usage to be reconciled to stock of cheques on a

regular basis and blank cheques to be held securely. BPM

Control Type: Core

Paul Francis 4

Blank cheques are locked away and the key kept elsewhere. The Accounts Payable Finance Officer takes charge of the

key. The Open Office system keeps a record of the next cheque number to be used and this is reconciled with the

blank cheques upon each usage.

Terry Crackett 4

Liabilities

Accounts Payable

Page 6 of 16



Reviewer


Purchase Orders must be raised for the purchase of goods and

services in line with the Council's Procurement policy or over

a predetermined amount where applicable. BPM Control

Type: Core

Paul Francis 3

Purchase orders that are raised are requisitioned and approved by two independent council officers within their

delegated limits but not all purchases are initiated with a purchase order. There are recognised times were for

administrative efficiency a PO is not seek as necessary. This instances are low risk and usually relate to panel contracts

for such things as temporary engagement of staff, legals, etc.

Terry Crackett 4

Accrued expenses reconciliations are prepared on a regular

basis and are reviewed by an independent person. BPM

Control Type: Core

Paul Francis 4

Accrued expenses reconciliations are prepared on a regular basis by the Management Accountant. Accruals are more

prevalent at Financial year end. The accruals are prepared by the management accountant, reviewed by the Finance

manager and form part of the general ledger account reconciliations that are available to external auditors for testing.

Accruals reconciliations are retained in Finance for perusal

Terry Crackett 4

Debt repayment transactions are scrutinised and/or

reconciled to ensure complete and consistent recording in the

appropriate accounting period. BPM Control Type: Core

Paul Francis 4

Debt repayment transactions are reviewed and reconciled to ensure correct recording in the appropriate accounting

period. Again this is part of the Account Reconciliation process, performed monthly, and these reconciliations are

retained in Finance for perusal

Terry Crackett 5

Management undertake a review to identify unrecorded loan

liabilities at key reporting dates. BPM Control Type: CorePaul Francis 4

Management undertake a review to identify unrecorded loan liabilities at key reporting dates. Unrecorded Loan

Liabilities would be identified by the general ledger account reconciliation process. These reconciliations are retained

in Finance area for inspection

Terry Crackett 5

All additions, deletions, and other changes to the loan register

are independently validated and compared to the loan

agreement to ensure that they were input accurately.

Identified errors are corrected. BPM Control Type: Core

Paul Francis 5

The loan register is reconciled to the documentation supplied by the Local Government Financing Authority (LGFA).

The Loans General Ledger accounts are reconciled quarterly, subject to the Accounts Reconciliation Policy and are

reviewed by an independent Finance Officer, and are retained in Finance for inspection

Terry Crackett 5

Statements received from lenders are reconciled to the loan

register and General ledger and differences are acted upon by

personnel independent from the process of recording the

loan. BPM Control Type: Core

Paul Francis 4

Statements received from LGFA are reconciled to the loan register and General ledger and differences Finance officer.

These statements are also used as independent backup to General Ledger account reconciliations, performed monthly.

The reconciliations are reviewed and authorised by an independent finance officer, and are retained in Finance area

for inspection

Terry Crackett 5

All loans are approved by Council resolution with copy of the

Council resolution held in the loan register. All funding

approvals are minuted by Council. BPM Control Type: Core

Paul Francis 5

All loans are approved by Council resolution with copy of the Council resolution held in the loan register. All funding

approvals are minuted by Council. Further, the Common Seal is required to be used on loan documents. A register is

maintained whenever the Common Seal is used, the reason, and the Council resolution reference number.

Terry Crackett 5

A loan register is maintained containing a copy of Council

resolution approving the loan and a schedule of the loan

liability and the loan repayment from the lender. This also

includes details of any Cash Advanced Debenture. BPM

Control Type: Core

Paul Francis 5

A finance officer maintains a register of loans and debentures, the schedule of repayments is retained. All loan and

debentures require Councillors resolution to set up. Minutes of these resolutions are published on Council's website,

and a register of loans is retained in Finance for inspection.

Terry Crackett 5

Any changes to the payroll master files are approved by

management.BPM Control Type: CorePaul Francis 4

As part of the approved payroll process there is a checklist completed by staff not directly involved in payroll

processing. This check lists includes reconciliation of all key movements that have occurred as well as changes to

employee masterfile records that impact on the quantum of dollars paid. As part of the approved payroll process there

is a checklist completed by staff not directly involved in payroll processing. This check lists includes reconciliation of all

key movements that have occurred as well as changes to employee masterfile records that impact on the quantum of

dollars paid.

Terry Crackett 5

Standard programmed formulas perform employee provision

calculations with management to review to ensure

consistency with statutory reporting requirements. BPM

Control Type: Core

Paul Francis 4Employee Provisions are calculated from a standard suite of formulae, using employees' hours accrued from the Open

Office Payroll system. These provisions are considered low risk and are reconciled quarterly according toTerry Crackett 4

Access to payroll/provision master file is restricted to

authorised officers only. BPM Control Type: CorePaul Francis 4

Access to payroll/provision master file is restricted to authorised officers only, the payroll officer. Pay runs are

reviewed by 2 managers. Any changes to payroll masterfile form part of the review. The reviews are retained by the

Payroll function for inspection.

Terry Crackett 5

Accrued Expenses

Borrowings

Employee Provisions

Taxation

Page 7 of 16



Reviewer


Accounting policies and procedures specify correct treatment

for preparing the fringe benefit tax and goods & services

taxation returns within any given financial year. BPM Control

Type: Core

Paul Francis 4

While no formal Accounting Policy exists in regards of FBT and GST returns, each year Council purchases FBT software

that ensures the FBT return is completed in accordance with contemporary legislation. Further, the Management

Accountant follows a set of instructions released by the Australian Taxation Office.GST returns are performed by

completing monthly BAS statements, with amounts that are generated by the Open Office Accounting system. Council

has acquired a specialised software application to complete the FBT return, and Open Office provides specify reports

to enable the accurate completion of the GST return without the need for associated procedures. Not considered

appropriate to create documentation that would not be referred to.

Terry Crackett 4

All lodgement statements and returns are reviewed and

approved by authorised officer prior to being released. BPM

Control Type: Core

Paul Francis 4

FBT annual return is approved and authorised by an independent officer. The BAS return, that reports the GST payable

or receivable, reviewed and initialled by a senior finance officer. This is retained in Finance for inspection. further the

GST General Ledger account is reconciled as part of the Account Reconciliation process and reviewed by an

independent Finance Officer Senior finance manager reviews and authorises return prior to submission. This review to

confirm GL and paper submission in alignment. these records are retained in finance area for inspection

Terry Crackett 4

Council to maintain a contract register. BPM Control Type:

CorePaul Francis 3

Whilst Council does not maintain a contract register, it does keep a list of contracts. A formal register of contracts is

considered to be appropriate and will be developed. Management recognises that a more robust procurement

program has been identified by its internal control self-assessment. A Contract Register is a part of the procurement

function that has been reviewed in 2016. The necessity for extra resource in this area has been agreed by Council’s

Executive and will be addressed in early 2017

Terry Crackett 3

A contract management system has not been

implemented. An update to the asset

management system is currently underway that

includes a contract management module.

Council does not release milestone payments to suppliers /

contractors until they meet all their associated objectives.


Paul Francis 3Council's current Procurement Policy is silent on milestone payments to contractors, and the deliverables that trigger

such payments.Terry Crackett 4

Policy is silent, but payments are not made prior

to delivery of agreed payment milestones.

Tender Documents are kept locked up when they are not

being viewed for evaluation purposes. BPM Control Type:

Core

Paul Francis 3 Tender documents are generally received electronically, some into TRIM system, some into the email system. Terry Crackett 4

Documentation is held electronically for most

tenders within TRIM and protected from review

until tender close.

Suitably qualified/independent personnel to sit on Selection

Panel to ensure that informed and objective decision is made

when selecting suppliers / contractors. BPM Control Type:

Core

Paul Francis 4The Council Officers that sit on a selection panel are employees of Council and are required to comply with Councils

Code of Conduct for Employees, and that they have subject matter expertise.Terry Crackett 4

Robust and transparent selection processes to ensure

effective and qualified suppliers / contractors are selected by

Council, including compliance with Code of Conduct, Conflict

of Interest and procurement policies. BPM Control Type: Core

Paul Francis 3The Code of Conduct for Council Employees, on the external website, prescribes the requirements for the

management of conflicts of interest. there is an updated Procurement Policy on website. Adopted November 2016Terry Crackett 4

Commitments are not being made without funding being

approved in the budget. BPM Control Type: CorePaul Francis 2 It is possible for Purchase orders to be raised without the necessary budget to accommodate it. Terry Crackett 2

The current system does not prevent a PO where

a budget does not exist.

The Contracts, Tenders and Procurement Policy and

Procedures should be reviewed regularly. BPM Control Type:

Core

Paul Francis 4 Procurement Policy has been reviewed and updated. Adopted November 2016 Terry Crackett 4

All credit card limits are set in accordance with Delegations of

Authority and reviewed by management for operational

efficiency. BPM Control Type: Core

Paul Francis 4All credit card limits are set in accordance with Delegations of Authority and this is reviewed as an ongoing operation

or on a as needed basis.Terry Crackett 5

Access to the Credit Card Register and Credit Card

documentation is restricted to designated person. BPM

Control Type: Core

Paul Francis 5An informal listing of credit card holders and their limits is kept in the finance area. Formal reports can be printed

using FlexiPurchase with card limits and expenditure details for all card holdersTerry Crackett 5

Employees sign a declaration confirming compliance with

Council policy and procedures prior to the Credit Card being

released. BPM Control Type: Core

Paul Francis 5All new credit card holders sign a declaration confirming compliance with Council policy and procedures prior to the

credit card being ordered/released and this is kept in the relevant folder in the finance area.Terry Crackett 5

Council, CEO or other authorised officer approves all issues of

Credit Cards and limits, to employees prior to release. BPM

Control Type: Core

Paul Francis 4The relevant authorised officer approves the issue and limit of credit cards and this approval is kept in the 'purchase

cards' folder in the finance area.Terry Crackett 5

External Services

Contracting

Expenses

Credit Cards

Elected Members Expenses

Page 8 of 16



Reviewer


Where use of public assets by council members is identified

debtors invoice is raised for reimbursement. BPM Control

Type: Core

Paul Francis 4

The Allowances and Benefits Policy describes what Councillors are provided with in order to perform their duties as

Councillors. This Policy is available on Councils external website. Use of public assets, apart from those listed in the

policy, is not allowed and does not occur.

Terry Crackett 5

Register of Allowances and Benefits maintained by designated

person and should be publicly available. Register details level

and nature of expenses reimbursed to Council by Elected

Members, and is reviewed by management on a regular basis.


Paul Francis 4

The register of allowances and benefits is managed by the Executive Assistant of the Chief Executive's office. The

register is on the Council website and is updated quarterly. Register is reviewed by Manager Governance and Risk.

Information is provided in Council's Annual Report according to legislative required.

Terry Crackett 5 A register is in place and is reviewed regularly.

Elected Members must complete and sign a standard

expenses reimbursement form when claiming expenses. The

signing of the form confirms that the Elected Members are

claiming valid expenses and have excluded all items of a

personal nature. BPM Control Type: Core

Paul Francis 5

Elected Members must complete and sign a standard expenses reimbursement form when claiming expenses. The

signing of the form confirms that the Elected Members are claiming valid expenses and have excluded all items of a

personal nature. These forms are retained in Finance. The claim forms are reviewed by the EA to the CEO who reviews

the claim to ensure no unclaimable expenses have been included. Reimbursements are only paid for valid claims

Terry Crackett 5

All Elected Members and other committee's allowances are in

accordance with the remuneration tribunal with delegations

of authority and all claims are agreed to supporting

documentary evidence (i.e. receipts). BPM Control Type: Core

Paul Francis 5All Elected Members and other committee's allowances are in accordance with the remuneration tribunal with

delegations of authority and all claims are agreed to with supporting documentary evidenceTerry Crackett 5

Management select a sample of employee reimbursements

and check them for mathematical accuracy and ensures that

they have been recorded correctly in the ledger. BPM Control

Type: Core

Paul Francis 3No management sampling or reimbursement transactions is currently undertaken. The validity of the reimbursement

is reliant on the manager who reviews and authorises in the first instance.Terry Crackett 3 No regular review is undertaken and could be.

All claims for Employee Reimbursements are submitted for

approval along with supporting documentary evidence (i.e.

receipts) and confirmation of valid expenses. This is approved

by management in accordance with Delegations of Authority.

Management focus on the nature (i.e. type of expense) as well

as the amount of the claim. BPM Control Type: Core

Paul Francis 4Employee reimbursements are reviewed and authorised by a manager to give an assurance that the reimbursement is

for a valid council expense, has supporting receipt and mathematical correctness.Terry Crackett 5

All expenses are authorised as per Procurement and Contracts

policy in accordance with delegated authority. BPM Control

Type: Core

Paul Francis 4Further to EXP OTE 0003 above, the Accounts Payable function requires independent authorisation by a Finance

Officer both prior to and post payment.Terry Crackett 5

Management approves all Other Expenses in accordance with

Delegations of Authority. When approving Other Expenses,

management reviews both the nature and amount of the

expense for reasonableness. BPM Control Type: Core

Paul Francis 4Management approves all Other Expenses in accordance with Delegations of Authority. An independent authorising

officer reviews both the nature and amount of the expense for reasonableness when countersigning.Terry Crackett 5

Relevant staff are required to complete timesheets and/or

leave forms, authorise them and have approved by the

supervisor/manager. BPM Control Type: Core

Paul Francis 4Payroll has a folder for each pay period which contains all t/sheets. These are kept in the Property Manager's office.

Processed leave forms are kept in folders at the payroll officers desk.Terry Crackett 5

All payroll suspense accounts are reconciled and reviewed by

management or other supervisory personnel on a timely

basis. Transactions recorded in the payroll suspense accounts

are proper suspense items; other items are investigated and

resolved in a timely manner. BPM Control Type: Core

Paul Francis 4All Payroll suspense account reconciliations are completed by the management accountant, and reviewed by the

Finance manager. These reconciliations are retained in Finance for perusal.Terry Crackett 4

Establish employee termination policies and procedures,

including statutory regulation and union requirements.

Regularly review and update these policies and procedures.


Paul Francis 4

At this time all terminations are executed in line with the Enterprise Development Agreement ( EDA), and the relevant

award structure where the EDA is silent. To support this approach a checklist has been established. Management

considered the establishment of an Employee Termination Policy and / or Procedure and are happy with the current

approach

Terry Crackett 4

Employee Reimbursements

Other Expenses

Payroll

Page 9 of 16



Reviewer


All original salary sacrifice transactions must be approved by

the relevant employee. Payroll staff must ensure that such

approval has been obtained prior to processing transactions

into the payroll system. BPM Control Type: Core

Paul Francis 5A form for salary sacrifice must be filled in and sent to the appropriate Super fund before it can be processed by

payroll. A copy of this form is placed in the employees personnel file.Terry Crackett 5

Access to the payroll deduction listing is restricted to

authorised officers. BPM Control Type: CorePaul Francis 4

Payroll deduction listing can only be accessed through the payroll module in Open Office. Only myself (Payroll Officer)

and my back up have access to this.Terry Crackett 4

All payroll deductions must be approved by the relevant

employee. BPM Control Type: CorePaul Francis 5

Any payroll deduction is only made if they are approved by the employee, written evidence from them is required. eg

super form, tfn declaration form, email from employee, payroll changes form. This is then placed in their personnel

file.

Terry Crackett 5

Significant changes (supported by adequate audit trail) to the

payroll master files approved by management. BPM Control

Type: Core

Paul Francis 4

Yes the changes are approved by management through the information that is provided to them each fortnight when

they sign off the payroll. Two Managers review and initial the payroll information each fortnight. These reviews are

retained in Payroll for inspection

Terry Crackett 5

Payroll system generates exception reports detailing all

payroll changes that are regularly reviewed by management

who investigate & approve variances. BPM Control Type: Core

Paul Francis 4

At the end of each pay period Audit reports are printed which report on any changes made to the following employee

attributes: Deductions, Pay distribution, position accounts, position allowances, position leave, position rates, position,

superannuation, etc and are reviewed by 2 managers. These reviews are retained in Payroll for inspection

Terry Crackett 4

The transfer of the bank file should be restricted to authorised

officers who are not be involved in the preparation of the pay

run. BPM Control Type: Core

Paul Francis 5The payroll officer uploads the bank file but two separate authorised officers authorise the bank file. An authorisation

details form is printed from NAB connect and signed by the authorised officers once the bank file has been processed.Terry Crackett 5

Overtime hours worked and payments for such overtime are

authorised by management for all eligible employees. BPM

Control Type: Core

Paul Francis 5Overtime hours are recorded on employees t/sheets which is then signed by their people leader/manager. Overtime is

also checked by the two people who check the pay run.Terry Crackett 5

Standard programmed formulae perform payroll calculations.

BPM Control Type: CorePaul Francis 4

Payroll system - Open Office - when installed correct calculations were checked. Tax tables are updated by Open Office

each financial year. EDA calculations are updated using the payroll wizard through Open Office.Terry Crackett 5

The listing of payroll deductions is periodically reviewed by

management for accuracy, compliance with statutory

requirement and ongoing pertinence with changes compared

to authorised source documents to ensure that they were

input accurately. BPM Control Type: Core

Paul Francis 3

I am unaware of payroll deductions ever being reviewed by management. They may be checked every fortnight by 2

managers via the pay run summary checklist but that would just be looking at the overall figure not looking at each

individual deduction.

Terry Crackett 3

No periodic review of each deduction is

currently undertaken, though a fortnightly

review of any variations to deductions is

assessed.

Total of payment summaries for the year is reconciled to

general ledger and payroll. BPM Control Type: CorePaul Francis 4

The payroll officer ensures that the payroll summaries balance. Management Accountant responsible for reconciling

general ledger.Terry Crackett 4

Employees made inactive in payroll records immediately upon

termination. Termination report provided as supporting

documentation with request for an EFT. Comparison of

subsequent current employee listings made by independent

person to verify correctness. BPM Control Type: Core

Paul Francis 4

Any employee once terminated is made inactive in Open Office. There are two sections where this is required. The

termination calcs are done through an external payroll system and are included for signoff when the pay run is

checked. A termination report for the pay period is also printed out and included with the pay run summary checklist.

Terry Crackett 5

Any non-routine payroll queries or queries of a

managerial/strategic nature are investigated by Senior

Management. BPM Control Type: Core

Paul Francis 3 It would be up to the payroll officer to bring this to the attention of management. Terry Crackett 4

A detailed review is undertaken by two senior

managers of every payroll prior to payment. This

process checks all key variations and seeks to

identify any unusual variations.

Officers responsible for originating/preparing payroll

disbursements are precluded from authorising transfer of

same. BPM Control Type: Core

Paul Francis 4The payroll officer prepares and uploads the payroll file but two independent finance officers will authorise the

payment.Terry Crackett 4

Employee records to include employment details and/or

contract terms and conditions, authorisations for payroll

deductions and leave entitlements. BPM Control Type: Core

Paul Francis 4

Personnel files have hard copies of the following: Employee Personal Details, tax file number declaration form,

employment contract, position description. Everything apart from employee personal details and tax file number

declaration form are also put in TRIM. Leave entitlements are accrued and recorded through Open Office.

Terry Crackett 5

All employee deductions must be substantiated with

documented approval provided by employee. BPM Control

Type: Core

Paul Francis 5

Either an email or Employee Advice - Payroll Personnel Changes form is provided to payroll before any changes to a

deduction can be made. This is then filed in the personal file of this employee. Employee deduction audit report is

printed for each pay period which shows any changes to employees that have been made during that pay period. This

is presented with the pay run summary checklist for sign off.

Terry Crackett 5

Page 10 of 16



Reviewer


Employees are not added to the payroll records or paid

without receipt of the appropriate forms duly authorised by

responsible Council Officers. BPM Control Type: Core

Paul Francis 3

Payroll is provided with "New Employee Confirmation From People Leader" form by OD Officer before any employee

can be inputted into the system. Every pay period a report entitled "Commencements with the beginning and end pay

period dates" is included in the pay run summary checklist for sign off.

Terry Crackett 4

Access to the supplier master file is restricted to appropriately

designated personnel. BPM Control Type: CorePaul Francis 4

Access to the supplier master file is restricted to appropriately designated personnel. Changes are made after written

communication to the accounts payable officer and these communications are retained.Terry Crackett 5

Purchase orders are sequentially pre-numbered. Sequence of

purchase orders processed is accounted for. BPM Control

Type: Core

Paul Francis 4

Purchase orders are sequentially pre-numbered. Sequence of purchase orders processed is accounted for. Next

Purchase order number is offered by the Open Office purchase order routine. Manual purchase orders have been

stopped.

Terry Crackett 5

Employees must ensure all purchase orders are approved in

accordance with the Delegations of Authority and relevant

policies. BPM Control Type: Core

Paul Francis 4 Procure has a system control such that the purchase order cannot be authorised above an officers' delegation. Terry Crackett 5

Purchase orders are issued in accordance with the Council's

Purchasing and Procurement Policy. BPM Control Type: CorePaul Francis 4

Purchase orders are issued in accordance with the Council's Purchasing and Procurement Policy. The requisitioner and

the Approver are two independent council officersTerry Crackett 4

Council has a comprehensive Contract and Procurement

Policy that is reviewed regularly. BPM Control Type: CorePaul Francis 3 Council has an endorsed Procurement policy adopted 20/05/2013 which is publically displayed on Council's website. Terry Crackett 4

An updated Procurement Policy was endorsed

by Council in Dec 2016.

Procedures are in place to ensure that all cash collected is

banked and properly recorded. BPM Control Type: CorePaul Francis 5

At end of day, after close-off & reconciliation by the cashier, bank deposit slips are completed and cash/ chqs recorded

on a Secure Cash form which is signed by the collection officer at pick-up. Prior to the pick-up on Tuesdays & Fridays,

and after balancing, completed bank deposit bags are held in a safe.( to which a limited number of people have access -

required due to part-time cashiers & rostered locations) Banking is checked daily to bank statement and cashier’ s

Cashlink Session end of day report which details breakdown of cash / chqs, and credit card payments. Receipted total

also checked to General ledger.

Terry Crackett 5

Cash transfers between bank accounts and investment bodies

are approved by authorised officer. BPM Control Type: CorePaul Francis 5

Council has one trading bank account and multiple accounts with the Local Government Financing Authority (LGFA). All

cash transfers and journal entries between bank and investment accounts are reviewed and authorised by a finance

officer. All transfers are subject to separate email confirmation to the Director Corporate Services from the LGFA

advising that the transfer has occurred. All transfers are subject to separate email confirmation to the Director

Corporate Services, Finance Manager and Management Accountant from the LGFA advising that the transfer has

occurred.

Terry Crackett 5

Bank reconciliations are performed on a predetermined basis

and are reviewed by an authorised officer. Any identified

discrepancies are investigated immediately. BPM Control

Type: Core

Paul Francis 5

Bank reconciliations are deemed to be "high risk" by the Assets Reconciliation Policy on Council's external website. A

high risk account must be reconciled every month. The bank rec is high risk and a reconciliation is to be performed

every month. All reconciliations are reviewed and authorised for completeness and accuracy.

Terry Crackett 5

Access to EFT Banking system restricted to appropriately

designated personnel. BPM Control Type: CorePaul Francis 5

Access to Council's online banking system is restricted to Finance officers. Transmission are uploaded and then

transmitted. There should be always 3 staff members involved in one transaction. The up-loader can not be part of the

transmission. The transmission requires a "part A and part B" authorisation for the transmission to proceed.

Terry Crackett 5

Blank cheques and/or cheque-signing machine are adequately

safeguarded. BPM Control Type: CorePaul Francis 5

Blank Council cheques are kept in a locked cupboard. The cupboard key is located at the contact centre. There is no

signing machine.Terry Crackett 5

All cash held securely in safe/registers with access restricted

to appropriately designated personnel. BPM Control Type:

Core

Paul Francis 5

For Petty Cash at Stirling maximum of $200 reconciled monthly, $50 max claim limit. Duplicate control for Works Dept,

Library, Lobethal, Gumeracha, Nairne Road and Woodside for every petty cash custodian. Cash is receipted at most of

Council's locations. Rates cash receipts are no longer accepted, unless the ratepayer is in arrears and visits a front desk

with a fortnightly instalment. Typically these instalments are about $50. Receipts for fines, dog fees, room hire, keys,

etc are accepted by cash. Again these amount are typically less than $100. Before banking in the afternoon, the cash

balances are kept in a lockable counter drawer, occupied by a customer services officer

Terry Crackett 5

Council maintains a Debt Collection Policy. BPM Control Type:

CorePaul Francis 5

Council has a Debt Recovery policy available on external website. It was adopted in December 2015. Overdue amounts

owed to Council are now reported to Audit Committee for review. (Audit Committee 15/8/2016). Debt Recovery Policy

adopted 15/12/2015

Terry Crackett 5

Purchasing and Procurement

Assets

Banking

Debtors

Page 11 of 16



Reviewer


Access to the debtors master file is restricted to appropriately

designated personnel and is reviewed by management for

accuracy and on-going pertinence. BPM Control Type: Core

Paul Francis 4

Access to the debtors master files is restricted to appropriately designated personnel within the Finance function. The

debtors masterfiles are not subject to independent review by a second management officer. Have a Debtors policy and

associated procedures ensure an appropriate review. Adopted 15/12/2015. Debtors policy can be found on Council

external website

Terry Crackett 4

Recorded changes to debtors master file data are compared

to authorised source documents or confirmed with

customers/ratepayers to ensure that they were input

accurately. BPM Control Type: Core

Paul Francis 4

Debtors master files are separated between sundry debtors and rates debtors. For sundry Debtors a written

communication (usually email) is received by the finance officer who is capable of editing the debtors master file.

Typically the changes requested are for change of addresses. Any modification to the debtors masterfile records the

Date, time and officer's name within the Open Office system. The communication is retained in Finance by the Sundry

Debtors Officer. Changes to Rates Debtor masterfiles are initiated by a written communication from the ratepayer (eg

drivers license or marriage certificate for change of name), Lands Titles office report or Broker reports for change of

ownership. Each of these communications are retained in the Rates area and copies are loaded into TRIM.

Terry Crackett 5

Debtors reconciliation performed on a regular basis to the

General Ledger and reviewed by an independent person. BPM

Control Type: Core

Paul Francis 5

Debtors reconciliations are performed by a Finance officer and independently reviewed by a Finance senior on a

monthly basis. These reconciliations are retained in the Finance area and form part of the suite of reconciliations

presented to auditors for field work testing.

Terry Crackett 5

Management and/or Council review and approve all rebates,

credit notes, bad debt write-offs and movements in the

provision for doubtful debts, in accordance with delegations

of authority and Local Government Act. BPM Control Type:

Core

Paul Francis 4

Management and/or Council review and approve all rebates, credit notes, bad debt write-offs and movements in the

provision for doubtful debts, in accordance with delegations of authority and Local Government Act. Doubtful debt

provisions are taken to accounts as part of the years end review of Debtors. The Doubtful debts provision

reconciliation is reviewed by an independent financial officer. Bed debts are taken to Council prior to being written off.

The last time any debt was written of was September 2015

Terry Crackett 4More regular reporting would improve this

control to 'effective'.

Management reviews debtors ageing profile on a regular basis

and investigates any outstanding items. BPM Control Type:

Core

Paul Francis 4

Debtors are reconciled on a monthly basis. Aged debtors are investigated and notified by a finance officer. Appropriate

action is taken in line with the new Debt Recovery Policy, based on the delinquency and amount outstanding, after an

escalating series of letters have been sent.

Additionally, Audit Committee reviews a Debtors Report regularly. Agendas and minutes are on Council's external

website for perusal.

Terry Crackett 4

Whilst reporting is in place and reviewed by

Audit Committee. Regular reporting to ELT is is

yet to be fully developed.

Credit notes are sequentially pre-numbered and authorised in

line with delegations. BPM Control Type: CorePaul Francis 4

Credit notes are sequential, and recorded as a negative invoice. They are reviewed and authorised by an independent

Finance Officer in accordance with the delegated authorityTerry Crackett 5

Rate notices/invoices are automatically calculated using

standard programmed formulas, including the calculation of

discounts, if applicable. BPM Control Type: Core

Paul Francis 5

Councils rates are generated within Property.Gov which is a module within the Open Office solution. The rates

generation calculation and procedure is usually reviewed by management and a consultant legal opinion is sought just

prior to gazetting." Debtor Invoices are raised manually in accordance with Council's fees & charges manual or upon

written request from various Departments to raise Grant funding or other re-imbursements

Terry Crackett 5

Access and on-going maintenance of the fixed asset register is

performed by authorised officers only. BPM Control Type:

Core

Paul Francis 4Council's Asset Management System, ConQuest has user access controls so that only appropriate council asset officers

are able to use it. Audit trails of revaluation actions are retained by the system.Terry Crackett 5

Council has an asset accounting policy which details

thresholds for recognition of fixed assets which is monitored

to ensure adherence. BPM Control Type: Core

Paul Francis 5 Council has a Capitalised Assets Policy available for review on the external website. Terry Crackett 5

Asset maintenance schedules are prepared, updated, and

monitored by management and activity per the asset

maintenance schedule. Changes to the asset maintenance

history register are compared to source documents to ensure

that they were input accurately. BPM Control Type: Core

Paul Francis 3

A range of Asset Maintenance Plans have been developed. The compliance with these asset Management plans

requires review. High risk assets such as playgrounds have more formal inspections and maintenance regimes where

as a low risk asset (eg a stormwater pipe in a rural area) will not have a maintenance or inspection plan .

Terry Crackett 3Asset Management plans require review and

update

Management undertakes a regular review of useful lives of

Fixed Assets and updates asset management plan to reflect

any significant changes (i.e. expected time-frame for replacing

significant fixed assets). BPM Control Type: Core

Paul Francis 4

Management regularly reviews valuation of fixed assets - methodology and useful lives, to ensure valuation is

appropriate and in accordance with reporting requirements. All infrastructure assets are revalued each year, those

that are not revalued by an external consultant are revalued internally with reference to Tables 17 and 18 of the ABS

website. Where appropriate, Council may engage an expert to perform valuations and condition assessments

(remaining life).

Terry Crackett 4

Asset Management Plan (including plans to obtain sufficient

funding to cover expected capital investment) are prepared.

The capital investment required is reviewed regularly for

appropriateness. BPM Control Type: Core

Paul Francis 4Asset management plans for key asset categories are an input into the review of the LTFP. Long Term plans will be

updated following Asset Management Plan review.Terry Crackett 3

Asset Management Plans require a review and

update

Fixed Assets

Page 12 of 16



Reviewer


Management reviews depreciation rates and methodology (at

least annually) to ensure that methods used to value fixed

assets are still appropriate. BPM Control Type: Core

Paul Francis 4

Standard Useful lives of categories of assets are reviewed by engineering and finance officers and where appropriate

an independent engineering consultant prior to revaluation of asset categories. Individual assets' remaining lives are

reviewed as part of the external revaluation process. Depreciation method used is "straight line" and management

continues to be happy with this method.

Terry Crackett 5

Management regularly reviews valuation of fixed assets -

methodology and useful lives, to ensure valuation is

appropriate and in accordance with reporting requirements.

Where appropriate, Council may engage an expert to perform

valuations. BPM Control Type: Core

Paul Francis 5

Management regularly reviews valuation of fixed assets - methodology and useful lives, to ensure valuation is

appropriate and in accordance with reporting requirements. All infrastructure assets are revalued each year, those

that are not revalued by an external consultant are revalued internally with reference to Tables 17 and 18 of the ABS

website. Where appropriate, Council may engage an expert to perform valuations and condition assessments

(remaining life).

Terry Crackett 5

Where appropriate, fixed assets such as plant and machinery

are located in an appropriately secured areas, where access is

restricted to authorised personnel. BPM Control Type: Core

Paul Francis 4

Plant and Equipment assets are located in secure areas when unattended. Furniture and fittings that are office or

depot based are locked. Motor vehicles are either parked in Council depot sites capable of being secured or taken

home by employees. Heavy plant is secured at depot sites. There are some circumstances that heavy equipment is left

on a job site due to cost and time to return it to a depot, in these cases the plant is locked and/or contained in a

secured temporary site compound.

Terry Crackett 5

All fixed asset acquisitions and disposals are approved in

accordance with Delegation of Authority and relevant

Procurement and Fixed Asset Policies. BPM Control Type: Core

Paul Francis 4

Fixed Asset acquisitions and disposals are performed by Council Officers who possess the appropriate delegated

authority. Fixed assets that are sold for cash are Plant and Equipment, and occasionally land and buildings. A building

sale would require Councillors' endorsement.

Terry Crackett 5

Recorded changes to the FAR and/or masterfile are approved

by management, compared to authorised source documents

and General Ledger to ensure accurate input. BPM Control

Type: Core

Paul Francis 4

Changes to the FAR include, revaluations, depreciation, renewals and disposal are made by an assets officer on behalf

of the Manager Built and Natural Assets and with consultation of the Management Accountant and Financial

Controller. All movements in the FAR are manually journalled to the General Ledger and are independently raised and

authorised. Signed Journal vouchers are retained. Trust this occurs in conjunction with the Finance team.

Terry Crackett 4

Regular verification of fixed assets are conducted and

reconciled to the FAR. BPM Control Type: CorePaul Francis 4

Consultants and Council's officers are utilised to perform a physical verification of assets, and their condition on a

rolling 5 year program. Field work assessing the count and condition of Stormwater assets has been performed in

2015/16. Road network and building assets condition assessments are scheduled for 2016/17.

Terry Crackett 4

The annual review of assets includes reviewing the

appropriateness of categories of assets and Impairment

testing. BPM Control Type: Core

Paul Francis 4

The annual review of assets includes reviewing the appropriateness of categories of assets and Impairment testing.

Council has 17 classes of infrastructure assets. Management is happy with the number of classes, because it enables a

rotational basis of revaluations. Impairment inspections are performed by Council's outside workers who are best

placed to make a determination on an asset's condition because they regularly maintain the portfolio of assets.

Terry Crackett 5

Asset Management Plans exist for all major asset classes and

all changes to the asset management plan must be approved

by Council. BPM Control Type: Core

Paul Francis 4

Asset Management Plans were initially adopted in 2012. The AMP separates expenditure into the main classes of

infrastructure assets. The current AMP has been indexed into today's dollars and is used in the Long Term Financial

Plan LTFP Asset Management Plans are due for Review in the following year's budget. AMP used for LTFP can be found

on website, also in agenda for Council meetings where LTFP is endorsed by Audit Committee and adopted by Council.

Terry Crackett 3

Asset Management Plans require update to

enable more detailed consideration in the

update of the LTFP and also in considering

projects for inclusion in the annual budget.

Reconciliation of fixed assets to the General Ledger is

performed regularly. BPM Control Type: CorePaul Francis 5

Reconciliation of fixed assets to the General Ledger is performed regularly. This is performed quarterly as part of the

quarterly and Year End processes. These reconciliations are retained for perusal in the Financial reporting area.Terry Crackett 5

Asset revaluations and depreciation reviews are performed in

accordance with Australian Accounting Standards. BPM

Control Type: Core

Paul Francis 4Asset revaluations and depreciation reviews are performed in accordance with Australian Accounting Standards. All

asset revaluations and depreciations are subject to testing by Council's external auditors.Terry Crackett 5

Depreciation charges are calculated in accordance with the

accounting policy, including the useful life, depreciation

method and calculation formulas. BPM Control Type: Core

Paul Francis 5

Depreciation charges are calculated in accordance with the accounting policy, including the useful life, depreciation

method and calculation formulas. Depreciation amounts are tested by external auditors at each year end, as part of

their field work on testing the validity of assets.

Terry Crackett 5

Stock held in properly secured locations with access restricted

to authorised personnel. BPM Control Type: CorePaul Francis 4

Small items of stock are kept in a locked store with limited access Store area is protected by an alarm system Bigger

items are held in the depot which is fenced and locked when unattendedTerry Crackett 5

The usability of inventory and level of inventory is assessed

regularly including a review during physical inventory counts.


Paul Francis 4When orders are done for replacement products it is checked to ensure that it is fit for purpose and appropriate levels

are held in stockTerry Crackett 4

All inventory write-offs and provisions for obsolescence to be

approved by management in accordance with delegations of

authority. BPM Control Type: Core

Paul Francis 4

Any inventory write offs form part of the General Ledger reconciliation performed by a finance officer who is

independent of the stores officer (who has day to day control of recording the inventory) and are reviewed and

authorised by an independent finance officer. These reconciliations form part of the suite of general ledger

reconciliations that are available for inspection and retained in the finance area.

Terry Crackett 4

Inventory

Page 13 of 16



Reviewer


Physical inventory is counted regularly by persons

independent of day-to-day custody or recording of inventory.

Inventory counts are reconciled to inventory records and

inventory records are reconciled to the general ledger. BPM

Control Type: Core

Paul Francis 4

Stocktakes are performed by a finance officer who is independent of the employee with day to day custody or

recording of inventory annually. Typically the total amount invested in inventory is expected to be approximately $25k

These physical counts are undertaken yearly and are recorded in the general ledger inventory accounts

Terry Crackett 4

Goods and services are approved for order within the

Delegations of Authority and in line with formal Tender and

Procurement policy. BPM Control Type: Core

Paul Francis 4 All orders are ordered as per the policy using Open Community Terry Crackett 4

Subject to the relevant Council Procurement policy, a

purchase order must be raised prior to ordering the goods

from a supplier. BPM Control Type: Core

Paul Francis 4Some minor items are purchased by credit card & petty cash system Some items are bought online We also have

running/monthly orders with frequent suppliers when there is an emergencyTerry Crackett 4

Council has clear and comprehensive Conflict of Interest

policy and Code of Conduct (disseminated to employees).


Paul Francis 4

Council has clear and comprehensive Conflict of Interest policy and Code of Conduct (disseminated to employees). S

110 of the Local Government Act is mandatory for Council employees. Employees Code of 'conduct is on Councils

intranet, Workspace

Terry Crackett 5

Investment transactions at the end of an accounting period

are scrutinised and/or reconciled to ensure complete and

consistent recording. BPM Control Type: Core

Paul Francis 4Reconciled quarterly to LGFA advices and retained in Finance for perusal. Annual Audit Certificate from LGFA detailing

funds held, which forms part of the external auditor bank confirmations.Terry Crackett 5

Investment transactions are reconciled/compared to third-

party statements documents and discrepancies are

investigated. BPM Control Type: Core

Paul Francis 4Reconciled quarterly to LGFA advices and retained in Finance for perusal. Annual Audit Certificate from LGFA detailing

funds held, which forms part of the external auditor bank confirmations.Terry Crackett 5

Council reviews investment performance at least annually.

BPM Control Type: CorePaul Francis 3 Council has not investment Policy. Council does not engage in investment transactions. Terry Crackett 3 Council has no investment Policy at this time.

Delegations are in place for approving and making investment

decisions. BPM Control Type: CorePaul Francis 3 Council has not investment Policy. Council does not engage in investment transactions. Terry Crackett 3 Council has not investment Policy.

Council has a clear and comprehensive investment policy to

assist when making any decisions to invest funds. BPM

Control Type: Core

Paul Francis 3 Council has not investment Policy. Council does not engage in investment transactions. Terry Crackett 3

An investment policy has not been developed at

this time given the approach that is used to draw

down funds when required from the drawdown

facility (essentially a line of credit) that is swept.

All investments are to be held in the name of the Council or

associated entities in accordance with the source of funds.


Paul Francis 4Investments are held with LGFA, for which a quarterly listing detailing a/c Names, Interest & a/c balance is forwarded

quarterly. These funds are held for specific projects and are drawn down from time to time as requiredTerry Crackett 5

Cash transfers between bank accounts and investment bodies

are approved by authorised officer. BPM Control Type: CorePaul Francis 4

Whilst Council does not hold "Investments" with other bodies, we do have some funds from time to time on 24hr call

with the LGFA which are not required for Debenture repayments. These funds are used to top-up our main Bank a/c to

cover Creditor payments. Other Investments with LGFA are in separate a/cs for specific projects and are drawn down

as needed. LGFA do not require a form to be signed but an email forwarded to their Money Market area requesting

transfer to our bank a/c and for which an acknowledgement is received. Subsequently the Dept. Director, Financial

Controller & Management Accountant receive a notice of the funds transferred. Council does not transact with

investment bodies. The amounts transacted with the LGFA is within the scope of daily treasury management.

Terry Crackett 5

Receivers of grants are required to acquit the funds spent in

line with funding agreement. BPM Control Type: CorePaul Francis 4

Community grants are contributions that don't require an acquittal. Typically these amounts are $100 each. Sport and

Recreation grants a provided on the understanding that receipts are supplied by the community/sporting group.

Typically the grants are given out after council receives copies of the receipts that demonstrate the work has been

done.

Terry Crackett 5

Bad-debt write-offs for loans receivable are approved by

Management and/or Council in line with relevant delegations.


Paul Francis 5

Council has not had an experience of a loan to a community group being written off. Because of the nature of the

funding, where Council would continue to pay the equivalent loan to the LGFA, Councillors endorsement would be

sought to write off amounts lent to community groups.

Terry Crackett 5

All loans must be approved by Council in accordance with

Delegations of Authority. BPM Control Type: CorePaul Francis 5

All loans provided to community groups are taken to Council Meeting for Councillors to endorse. Minutes of these

Council Meetings are retained on Council's external websiteTerry Crackett 5

Loan receivable reconciliations are prepared on a regular basis

and reviewed by an independent person. BPM Control Type:

Core

Paul Francis 4Balances on Loan accounts being "low risk" are reconciled quarterly in accordance with the Accounts Reconciliation

Policy. These reconciliations are reviewed and authorised by an independent finance officer.Terry Crackett 5

Investments

Loans/Grants to Clubs and Community Groups

Page 14 of 16



Reviewer


Management monitors the compliance and issuing of money

to Clubs / Community Groups in accordance with funding

arrangements on a regular basis. BPM Control Type: Core

Paul Francis 4

o policy exists for the provision of loans to clubs and community groups. Each loan request is assessed by

management. Loan requests are taken to Council Meeting for endorsement by Councillors. Successful loan requests

are then funded by equivalent "back to back" fixed interest rate loans, over similar term, so that the Council is no

better nor no worse off as a result of providing the loan. Council has a Minor Grants policy and a Sport and Recreation

Policy. Both provide rigour around the provision of contributions (grants paid out) to individuals, sporting clubs, and

community groups"

Terry Crackett 4

Council establishes clear policy for issuing funds to Clubs /

Community Groups. Policy details appropriate approval of

funds issued in accordance with Delegations of Authority and

compliance with Conflict of Interest Policy. BPM Control Type:

Core

Paul Francis 3

No policy exists for the provision of loans to clubs and community groups. Each loan request is assessed by

management. Loan requests are taken to Council Meeting for endorsement by Councillors. Successful loan requests

are then funded by equivalent "back to back" fixed interest rate loans, over similar term, so that the Council is no

better nor no worse off as a result of providing the loan. Council has a Minor Grants policy and a Sport and Recreation

Policy. Both provide rigour around the provision of contributions (grants paid out) to individuals, sporting clubs, and

community groups. Successful loan requests are recorded in the minutes of the Council Meeting and kept on website.

Terry Crackett 4

Whilst no Policy exists there is a requirement for

any loans to be reported directly to Council. This

ensures no loans issued without full

consideration.

Petty Cash amounts to be authorised Officers having regard to

both the amount and guidance provided in the relevant

Council policy. BPM Control Type: Core

Paul Francis 4

Currently no petty cash policy exists. Current practice is that $50 is the maximum to be paid through the petty cash

mechanism. Higher amounts are reimbursed through payroll or a cheque requisition. The authorising officer checks

the amounts and the business purpose of the claim. Once satisfied on both counts the chit is authorised to be

reimbursed, with the receipt forming an attachment. AHC follows the Imprest system.

Terry Crackett 5

All petty cash disbursements are independently approved

within financial delegations and supported by receipts. BPM

Control Type: Core

Paul Francis 5

Council's petty cash operates under the "imprest" model. The basic characteristic of an imprest system is that a fixed

amount is reserved, which after a certain period of time or when circumstances require, because money was spent, it

will be replenished. No petty cash is given without a voucher that has been authorised and a supporting receipt(s). The

signature is usually the line manager whose signature warrants that the expense is valid and for business purpose.

Amounts over $50 are reimbursed through the payroll system. Receipts are retained in the Finance AP invoices area.

Terry Crackett 5

A register for cash floats and petty cash and custodians is

maintained by authorised officers to record all movements.


Paul Francis 4Authorised petty cash officers have access to storage cupboards and tins. a register of authorised petty cash officers is

kept in FinanceTerry Crackett 4

Access (i.e. passwords or keys) to the cash floats and petty

cash safes/registers is limited to authorised officers. BPM

Control Type: Core

Paul Francis 4Authorised petty cash officers have access to storage cupboards and tins. a register of authorised petty cash officers is

kept in FinanceTerry Crackett 4

Cash floats and petty cash are stored in secured facilities (e.g.

safes, registers) when not in use. BPM Control Type: CorePaul Francis 5

Petty Cash tins are lockable, and locked. They are also stored away in a lockable cupboard when not in use. Floats are

assigned to individual council officers who is responsible for the imprest method of tallying.Terry Crackett 5

Incoming cash to be signed for and mechanism in place to

ensure independent verification. BPM Control Type: CorePaul Francis 5

The cash cheque is signed TWICE by any two signatories, once as a signatory to the cheque and once to authorise the

"please pay cash instruction. At the Bank counter, the council officer not only signs for the cash, but provides each

time, identification, for example a drivers licence and its details are written on the back of the cheque by the bank

teller. Upon return to Council offices, the cash is counted by the petty cash tin officer.

Terry Crackett 5

Prepayments are authorised and accounted for by Authorised

Officer only. Periodic checks of prepayments to occur

frequently as end-of-year approaches. BPM Control Type:

Core

Paul Francis 4

Prepayments are recorded as per AAS-PRE-0002. Checks of prepayments are performed monthly by the independent

Finance Officer that reviews the Prepayments Reconciliation. Evidence of these checks are the signed reconciliations

that are retained in the Financial Reporting area. Reconciled, reviewed and authorised on a monthly basis.

Reconciliations are available for inspection in the Finance area.

Terry Crackett 4

Procedures document providing clear and comprehensive

guidance as to the recognition, treatment and recording of

prepayments. BPM Control Type: Core

Paul Francis 4

No formal prepayment policy currently exists. The Accounts Payable Finance officer and Management accountant's

payment reviews look for expenses that are able to be prepaid. Usually its the wording on the invoice that determines

the creation of a prepayment. In practice invoices with a from and to date spanning greater than a month, and greater

than a value of $1k are recorded as prepayments. A schedule of prepayments is kept as backup for the General ledger

journal and reconciliation each month. Prepayment reconciliations are retained in the Finance area for inspection.

Terry Crackett 4

Rigorous process for establishing budgets for projects. Project

budgets must be approved in accordance with Delegations of

Authority. BPM Control Type: Core

Paul Francis 4

A process for establishing budgets for projects. Project budgets must be approved in accordance with Delegations of

Authority. A list of possible projects is compiled by council officers, which is workshopped to Councillors. Ultimately

the projects are endorsed and adopted by Councillors as well as any significant variations during the life of the project.

Minutes of the adoption of original budgeted agenda items are on Council's website

Terry Crackett 4

Prepayments

Project Costing

Petty Cash

Page 15 of 16



Reviewer


Actual project costs are regularly compared to budgets;

significant variances are investigated by management. BPM

Control Type: Core

Paul Francis 4

As part of quarterly Budget Review process, Actual project costs are regularly compared to budgets; significant

variances are investigated by management. Budget Reviews are reviewed by Audit Committee and endorsed by

Council. Minutes of these meetings are published on Council's external website.

Terry Crackett 4

Improvements could be made to the level of

review applied to variations in project

expenditure.

Page 16 of 16



Item: 6.7



Subject: Risk Management Update

For: Decision

SUMMARY

This report provides the Audit Committee with an update on Risk Management activities includingthe current status of the Strategic Risk Profile and Management Plan.

In relation to the Strategic Risk assessments, there has been no change to the risk ratings from thelast (February 2017) assessment.

In relation to the implementation of Mitigation Actions to manage the Strategic Risks, the followingresults have been achieved which is an improvement on the February 2017 results – Completed: 51%(38) up from 46% (33) and In Progress: 46% (34) down from 48% (34). Three new mitigationinitiatives were created and commenced in this quarter.

RECOMMENDATION


1. GOVERNANCE


Update the risk management framework, which addresses workplace health and safety,emergency management, business continuity, public liability and legislative accountabilityassists in meeting legislative and good governance responsibilities and obligations

Adelaide Hills Council – Audit Committee Meeting 8 May 2017Risk Management Update

Page 2

Legal Implications

A number of sections of the Local Government Act 1999 require councils to identify andmanage the risks associated with its functions and activities. Further, s125 requires councilto have appropriate internal controls.

Similarly the Work Health & Safety Act 2012 is structured around the protection of workersand others against harm to their health, safety and welfare through the elimination orminimisation of risk arising from work or specified substances or plant.


Improvements in the implementation of the risk management framework s will assist inmitigating the risk of:

A lack of effective risk management occurs which leads to greater uncertainty in theachievement of objectives and/or negative outcomes.




While there are no direct financial or resource implications from this report, a number ofStrategic Risk Profile and Management Plan treatments are impacted by fundinglimitations.


There is a high expectation that Council has appropriate corporate governance processes inplace including an effective corporate risk management system.


Environmental matters have been considered within the development of the Strategic RiskProfile and Management Plan.


Consultation has occurred internally with the directors who are the owners of strategicrisks and with managers and other relevant officers in the development of the risk profileand mitigating actions.


Page 3

2. BACKGROUND

Council adopted the revised Risk Management Policy at its 25 February 2014 Councilmeeting. The Audit Committee considered the key elements of the Corporate RiskManagement Framework at its May 2014 meeting and suggested a number ofenhancements. The revised Framework was adopted by Council at its 24 June 2014meeting.

A Strategic Risk Profile and Management Plan was developed documenting eleven strategicrisks (SR), with SR 9 broken into three sub risks.

The Strategic Risk Profile and Management Plan, including controls and treatment plansagainst each strategic risk, was received by the Audit Committee at its meeting on22 February 2016 and subsequently by Council at its ordinary meeting on 23 February 2016.

A February 2017 Audit Committee report was provided for the Council's consideration ofthe Strategic Risk Profile at its 28 February 2017 Ordinary Council meeting.

The Executive Leadership Team reviewed the ownership of the strategic risks in February2017 to more appropriately align the risks with functional responsibilities, as shown below.

No. Strategic Risk Pre-Feb 2017Owner

Post-Feb 2017Owner

1 Failure to plan at the local and regional level forthe future development and futurerequirements of the area. (F)

DirectorStrategy &Development


2 Failure to deliver projects, programs andservices in accordance with plans (time, budget,quality)

DirectorEngineering &Assets


3 Failure to provide for the welfare, well-beingand interests of the community (F)

DirectorCommunity &CustomerServices

DirectorCommunity &CustomerServices

4 Failure to take measures to protect thecommunity from natural and other hazards (F)


ExecutiveManagerGovernance &Risk

5 Failure to manage, develop, protect, restore ,enhance and conserve the environment in anecologically sustainable manner and to improveamenity. (F)



6 Failure to provide appropriate infrastructure forthe community (F)

DirectorCorporateServices



Page 4

No. Strategic Risk Pre-Feb 2017Owner

Post-Feb 2017Owner

7 Failure to promote the Council area andprovide an attractive climate and locations forthe development of business, commerce,industry and tourism (F)



8 Failure to manage and develop public areasvested in, or occupied by the Council (F)



9a Failure to manage, improve and develop thehuman resources available to the Council. (F)

Exec ManagerOrg Dev

Exec ManagerOrg Dev

9b Failure to manage, improve and develop theinformation resources available to the Council.(F)

Exec ManagerOrg Dev


9c Failure to manage, improve and develop thefinancial resources available to the Council. (F)

Exec ManagerOrg Dev


10 Failure to act as a representative, informed andresponsible decision-maker in the interests ofthe community. (PR)

Exec ManagerGovernance &Risk


11 Failure to exercise, perform and discharge thepowers, functions and duties under legislation,contracts, leases and policies (PR)



As a result of the reallocation, the first round of assessments was conducted by the newrisk owners for the May 2017 assessment (below).

3. ANALYSIS

Strategic Risk Profile

The Strategic Risks are regularly reviewed by the risk owners responding to triggers in therisk environment, changes in causation or impact, changes in the control environment andon the completion of mitigation actions (which then form part of the control environment)which collectively can impact the likelihood and/or consequence of the risk.

The Strategic Risks were recently reassessed and the following diagrams depict theInherent, Residual and Target ratings. There were no changes to the ratings from theprevious assessment in February 2017.


Page 5


Page 6

Notwithstanding the absence of change in the risk ratings, the implementation ofMitigation Actions has been progressing steadily. The current status is:

Status October 2016 February 2017 May 2017Completed 35% (24 actions) 46% (33 actions) 51% (38 actions)In Progress 46% (31 actions) 48% (34 actions) 46% (34 actions)Not Commenced 19% (13 actions 6% (4 actions) 3% (2 actions)New Initiatives(in above totals)

Nil 1 actions 3 actions

This is shown diagrammatically below:

4. OPTIONS


I. To note the update on the Strategic Risk Profile as presented (recommended),

II. To determine not to note either or both updates and/or identify additional actions tobe undertaken.



Item: 6.8



Subject: Internal Audit Quarterly Update

For: Information

SUMMARY

This report provides the Audit Committee with an update on progress of internal audits nominated inthe Strategic Internal Audit Plan as approved at the February 2017 meeting.

The internal audits programmed for 2016/17 are currently being procured and are expected to becommenced (if not completed) by financial year end.

RECOMMENDATION


1. GOVERNANCE



Monitoring the implementation of the Strategic Internal Audit Plan assists in meetinglegislative and good governance responsibilities and obligations.

Legal Implications

Section 125 of the Local Government Act 1999 requires councils to ensure that appropriatepolicies, practices and procedures of internal controls are implemented and maintained inorder to assist the council to carry out its activities in an efficient and orderly manner toachieve its objectives, to ensure adherence to management policies, to safeguard Council’sassets, and to secure (as far as possible) the accuracy and reliability of Council records.

The Internal Audit program is an important tool to provide an objective appraisal of theadequacy on internal controls in managing our risk and supporting the achievement ofcouncil objectives.

Adelaide Hills Council – Audit Committee Meeting 8 May 2017Internal Audit Quarterly Update

Page 2


The implementation of the internal audit program will assist in mitigating the risk of:

Internal control failures occur which lead to greater uncertainty in the achievement ofobjectives and/or negative outcomes.

Inherent Risk Residual Risk Target RiskHigh (4C) Medium (3C) Medium (3C)


The Internal Audit budget for this financial year includes funding to resource the proposedaudits and enable them to be outsourced under the oversight of the Executive ManagerGovernance and Risk. Given the range of demands on this role, and the specialised natureof a number of the audits, it is not possible to undertake audits internally.

The recently approved structural changes in the Governance & Risk Department will assistwith the management of the internal audit program.


There is a high expectation that Council has appropriate corporate governance processes inplace including an effective internal control environment.


Not applicable


Internal consultation occurs in the preparation of an internal audit scopes, in finalising auditreports and in the development and implementation of actions to address the auditfindings. External consultation was not applicable.

2. BACKGROUND

Strategic Internal Audit Plan (SIAP)

At its 13 February 2017 meeting, the committee considered and approved changes to theStrategic Internal Audit Plan (v1.4) at Appendix 1. The changes involved deferring a numberof current year audits and conducting audits of the Customer Service Standards,Development Assessment processes Delegations, Budgetary Management and a MajorProjects Review (Montacute Road Reconstruction).

Adelaide Hills Council – Audit Committee Meeting 8 May 2017Internal Audit Quarterly Update

Page 3

3. ANALYSIS

Strategic Internal Audit Plan (SIAP)

The Development Assessment process audit has been delayed due to the ManagerDevelopment Services being on extended leave and will be commencing in late May 2017.

The audits of Customer Service Standards and Delegations are currently being procured andare expected to be commenced (if not completed) by financial year end.

Budgetary Management and the Major Projects Review are scheduled for the first half of2017/18.

4. OPTIONS


I. To note the status of the Strategic Internal Audit Update report as presented; or

II. To identify additional actions to be undertaken.

III. To provide any feedback on specific areas of focus for the upcoming internal auditassignments.

5. APPENDICES

(1) Strategic Internal Audit Plan v1.4

Appendix 1Strategic Internal Audit Plan v1.4

Audit Engagement Scope

Year 1

2014

Year 2

2015

Year 3

2016

Year 4

2017

Asset Operation Focussing on Asset operation, processes, activities, controls, risk, service levels, planned

work, maintenance programs, monitoring performance, asset registers and reporting.

May-14

Procurement Focussing on Tender and Contract processes, activities, controls, risk, compliance through

stages of the function, including planning, assessment, selection, authorisation, reporting,

contractor payments, monitoring effectiveness.

May-14

Emergency

Management

Focussing on Emergency Management Plans, identification of risks associated with various

types of disasters and the controls and processes to mitigate those risks, status of

preparedness in the event of an emergency, recovery process and association with the

Community and other Emergency Services.

Y Deferred

Business Continuity

Plan

Focussing on the review of Business Continuity Plan (Disaster Recovery and Disruption) to

key activities of Council including the identification, development, implementation of

recovery plans and testing of conditions in the event of a disaster.

Y Deferred

Customer Service

Standards

Focussing on the Customer Management processes, activities, contacts, risks, collection

and measurement of data, and decision making. Includies Ombudsman enquiries,

investigation, analysis, reporting, action plans, continuous improvement processes

management.

Y May-17

Credit Card

Operations

Focussing on the processes, activities, controls, risk associated with the use of Credit

Cards, including user training, spending limits, purchases, review and testing of invoices,

potential fraud and corruption and improper activity.

Jul-15

Payroll Function Focussing on the payroll operation, including a review of the processes, systems, activities,

controls and risks. The extent to the audit engagement will consider aspects from

commencement of employment to termination of individuals, including payment of

wages, leave, changes to position security, administration and payroll reporting.

May-14

Development

Assessment

Focussing on the Development and Assessment practices, processes, controls, risk,

compliance through the various stages of planning, evaluation, assessment relating to

Residential, Commercial, Industrial, Recreational facilities to ensure they meet Legislative

requirements.

Y May-17

Compliance Process Focussing on the Compliance Process, practices, activities, controls, risk, compliance and

meet with Legislative and regulatory requirements.

Y

Delegations Focussing on the Delegations of Council, including a review of the processes, activities,

controls and management or records, and compliance to Legislative requirements.

Y Jun-17

Environmental

Sustainability

Focussing on the Environmental Sustainability of Council, including a review of the

processes, activities, controls and compliance to Legislative requirements.

Y

(defer)

Knowledge

Management and

Information Services

Focussing on Knowledge and Information Services (KIS) processes, activities, controls, risk,

compliance, records management practices. It would include testing of policies and

procedures, and security of the IT processes, systems, controls, risk, including hardware,

software, updates, storage devices and operating systems.

Deferred

to Year 3

Y

Budgetary

Management

Focussing on Financial planning, control and reporting. Relationship of budget with LTFP,

legislative and regulatory compliance.

Nov-17

Good Governance -

Regulatory

Focussing on the use of the LGA self assessment tool to: Assess the comprehensiveness of

the statutory compliance that Council has, identify the current governance processes of

regulatory services and their effectiveness, highlight core issues affecting good governance

practices, provide guidance for adopting better practice for Council.

May-16

Cash Handling Focussing on the review of cash handling processes, controls, activities, corruption risk,

record management, authority levels, training and reporting.

Deleted

Inventory

Management

Focussing on the Inventory management process, from inventory budget, purchasing of

attractive and stock assets, receipt, asset register, monitoring and control of assets,

stocktaking, reporting and responsibility.

Y

Major Projects

Review

Focussing on processes, activities associated with the project, including scoping, planning,

implementation, monitoring, post project review, risk management, development of

maintenance program and operations.

Deferred Y Y Jul-17

Petty Cash Focusing on the policies, procedures and complaince around the use of petty cash as a

procurement method.

Jul-15

Cyber Security Focussing on the systems, processes and controsl associated with securing and protection

Council's IC&T network from pentration and data corruption/denial of service from

external parties

Mar-15

Strategic Internal Audit Plan

Date Adopted Version Comments No.

11/02/2013 Intial plan adopted by Audit Committee 1.0

19/05/2014 Defer the conduct of the Year 1 Major Projects Review. 2. Delay the implementation of the

Year 2 Strategic Internal Audit Plan until the completion of the first round of Enterprise

Risk Assessments, with the exception of the Development Assessment Internal Audit

1.1

1/12/2014 Defer the Knowledge Management and Information Services audit until Year Three and to

insert a Cyber Security audit in the Year One Plan.

1.2

12/08/2015 Added review of Petty Cash and updates the dates for the Credit Card, Cyber Security and

Development Assessment audits

1.3

6/02/2017 Inclusion of comments column proposing various actions in relation to Audit Plan 1.4a

13/02/2017 Audit Committee approved proposed changes to SIAP v1.4a 1.4

Version Control



Item: 6.9



Subject: Debtor Reporting

For: Information

SUMMARY

The Audit Committee has previously requested and received a list of outstanding debtors. Asdiscussed at the last meeting it is proposed that a regular debtors report will be provided to enableongoing review of outstanding balalnces.

This report covers the period ending 31 March 2017.

RECOMMENDATION


1. GOVERNANCE


Goal Organisational SustainabilityKey Issue Risk and Responsibility

Legal Implications

Council may obtain funds by recovering fees, charges, penalties or other money payable toit under S133 Local Government Act 1999.

Council also has obligations specified within the current Community WastewaterManagement Scheme (CWMS) licence that require an endorsed hardship policy forcustomers. Failure to establish this policy will result in Council breaching current licenceconditions.

Adelaide Hills Council - Audit Committee Meeting 8 May 2017Debtor Reporting

Page 2


Monitoring the balances of Debtors through regular reporting will assist in mitigating therisk of:

Poor debt recovery practices which lead to increased levels of overdue debtors willnegatively impact on Council’s current cashflow as well as reduce the likelihood offuture debt recovery.

Inherent Risk Residual Risk Target RiskExtreme (4B) Medium (3D) Medium (3D)


Close monitoring of debt supported by an agreed Policy will ensure that any cashflowimpact on Council is minimised.


Nil


Nil


Nil

2. BACKGROUND

Council generates income from a variety of sources including rates, grants, fines(infringements), development applications and fees and charges for the provision of goodsand services to individuals, businesses and other organisations in the community. Thisincome is managed using financial management systems which also enables recording ofamounts owing to Council and information relating to amounts paid. Appropriate actioncan be taken to collect amounts owing where they are not paid in a timely manner.

A Debt Recovery Policy adopted in December 2015 supports the sale of land for unpaidrates where arrears are in excess of the 3 year requirement outlined within s184 of theLocal Government Act 1999.

The Debtors report was last presented to Audit Committee on 23 February 2017.


Page 3

3. ANALYSIS

The table below compares Council’s debtor balances, over the most recent three year ends,summarised by category. It shows the size of the debtors, but not the age.

Three Year Debtors Comparision, $0,000Debtors June 2014 June 2015 June 2016Rates General 1,629 1,908 1,539Rates Postponed 22 20 25Debtors General 357 490 262Other Government 155 152 107GST Recoupment 197 202 200

2,360 2,772 2,133

Rates Debtors

Council's rates debtor is dominated by rates that are struck in full in July, then quarterlyfluctuations of receipts, which makes comparison of rates debtors within the year difficultto understand. As such, and as previously advised, it is intended that this debtor is reportedin detail on an annual basis with interim updates on amounts outstanding.

Sale of Land for Non Payment of Rates Update

A further S184 Sale of Property for Non Payment of Rates process for 11 propertiestotalling $107k was endorsed by Council on 25 October 2016. Since then 8 have been paidin full totalling $76,500.

The remaining 3 properties continue in the Sale of Land process. Each of these propertiesare occupied and have now been listed for sale with the following status:

Property 1 – ratepayer has made 2 payments totalling $9,000 and we anticipatepayment in full prior to the Auction date ($4,132 remaining)

Property 2 - mortgagee has indicated they will pay the arrears and as such anadditional 12 weeks has been provided before auction on 7 July 2017 to enable thatto occur. Balance owing $13,154.

Property 3 - although ratepayer indicated to our Agent that they will sort it outimmediately, we have not heard from them ($15,112 owing). This property isprogressing to auction on 24 May 2017 at this time.

Sundry Debtors

A summary of the Aged Debtors as at 31 March 2017 has been provided within Table 1 ofthis report.

As can be seen from this table the total Sundry debtors outstanding continues to decreasefrom $481k in November 2015 to $235k in March 2017.

It is important to note that at this time the level of debtors listed as overdue by in excess of150 days in the miscellaneous category is currently being reviewed to correct the balance ofAHBTC accounts. This is due to the need to reconcile the balances held between thedebtors system of Pope Nitske (the commercial tenant manager) and Council’s debtors


Page 4

system. This reconciliation will be finalised within the next few weeks and any adjustmentcaptured within the next report to the Audit Committee.

Table 1 – Aged Debtors Summary as at 31 March 2017

4. OPTIONS

Audit Committee is limited to receiving this report.

Description TOTAL<30

Days<60

Days<90

Days<120Days

<150Days

>150Days

Additional Bins 12,963 430 0 0 706 80 11,747Burial Fees 21,006 6,951 370 2,612 507 0 10,566Fire HazardReduction 1,435 0 179 0 0 0 1,256Food PremisesInspection 9,913 1,302 0 0 0 210 8,401GrantsReceivable 8,662 8,662 0 0 0 0 0Miscellaneous(incl. AHBTC) 174,803 81,270 59 69 2,955 90,450Private Works 195 0 0 0 0 0 195Road Rents 6,308 0 0 0 0 2,635 3,673TOTAL:31/3/2017 235,285 98,615 608 2,612 1,282 5,880 126,288

TOTAL:31/12/2016 264,684 88,943 11,508 3,221 22,118 8,226 130,668TOTAL:30/9/2016 295,149 121,555 9,053 69,335 6,290 13,671 75,245TOTAL:30/6/2016 369,569 160,809 63,538 36,181 7,055 20,976 81,011TOTAL:30/11/2015 481,456 131,857 181,985 27,707 (3,288) 1,434 141,761



Item: 6.10



Subject: Draft Model Financial Statements 2017

For: Information

SUMMARY

Under the Local Government (Financial Management) Regulations 2011, the annual financialstatements of Councils must be prepared in accordance with the Model Financial Statements.

A review of the Model Financial Statements has recently been undertaken followed by consultationwith the Local Government sector.

This report provides a summary of the findings as well as a link to the proposed Model FinancialStatements.

RECOMMENDATION


1. GOVERNANCE


Goal 5 Organisational SustainabilityStrategies Risk and Responsibility (Legal Compliance)

Governance

The Council is committed to open, participative and transparent decision making andadministrative processes. Our Audit Committee considers risk and efficiency measures inaddition to financial controls.

Adelaide Hills Council – Audit Committee Meeting 8 May 2017Draft Model Financial Statements 2017

Legal Implications

Under the Local Government (Financial Management) Regulations 2011, the annualfinancial statements of Councils must be prepared in accordance with the Model FinancialStatements.


A review of changes to the Model Financial Statements will assist in mitigating the risk of:

Failure to complete the Annual Financial Accounts in accordance with LocalGovernment (Financial Management) Regulations 2011 and potential qualification ofthe accounts following audit.

Inherent Risk Residual Risk Target RiskHigh (4C) Medium (3D) Low (3E)



The are no financial or resource implications associated with this report.


Not applicable


Not applicable


Not applicable

2. BACKGROUND

Under the Local Government (Financial Management) Regulations 2011, the annualfinancial statements of Councils must be prepared in accordance with the Model FinancialStatements.

A review of the Model Financial Statements has recently been undertaken followed byformal consultation with the Local Government sector.

This review was informed by a well-attended workshop of finance professionals fromCouncils conducted by the Local Government Financial Management Group (FMG) inDecember 2016, consideration by the SA Local Government Auditors' Group, feedback fromindividual Councils on issues arising from preparation of their 2015-16 financial statementsand specialist advice from a reference group of senior representatives from the FMGExecutive, the Local Government Auditors' Group, and the Office of Local Government.

Adelaide Hills Council – Audit Committee Meeting 8 May 2017Draft Model Financial Statements 2017

3. ANALYSIS

Apart from assisting Councils to comply with Australian Accounting Standards, theextensive use of the Model Financial Statements since 2006 has resulted in materialimprovements in the reliability, consistency and comparability of data made publiclyavailable on Council finances.

A one-page summary of the changes proposed since the 2016 edition has been included atAppendix 1 for the information of the Committee. Paul Francis, Council’s previous ManagerFinance, was a member of the Local Government Financial Management Group (FMG) atthe time these changes were reviewed and was fully supportive of the amendments. Assuch Adelaide Hills Council has not provided a further response to the consultation draft.

The consultation draft is available via the following link if members of the Audit Committeeare interested in the detail that supports the summary that has been attached:Consultation Draft Model Financial Statements 2017. This consultation draft has not beenincluded with the agenda given it is in excess of 250 pages.

4. OPTIONS


5. APPENDICES

(1) Summary of Changes – Model Financial Statements 2017

Appendix 1Summary of Changes – Model Financial Statements 2017

SOUTH AUSTRALIAMODEL STATEMENTS 2017

CH

AN

GES

FR

OM

201

6 M

OD

EL

STA

TEM

ENTS

SOU

TH A

UST

RA

LIA

MO

DEL

STA

TEM

ENTS

201

7

Prepared for the Local Government Association of South Australia.Page i

The following are the principal changes that have been made to the 2016 Model Statements duringthe course of the preparation of the Model Statements 2017. Page references are to the pagenumbering in the Model Statements 2017.

Other minor amendments have also been made, including the updating of references to reportingyears.

Page # Section Reference Details of Changes

3 Contents Add Note 23 - Related Party Transactions

17 Changes in Equity No changes from new Standards expected

24 Note 1 Basis of accounting paragraph revised.

24 Note 1 Early adoption - AASB 2016-4

32 Note 1 Impairment policy wording revised.

34 Note 1 Policy re carbon tax removed

44, 45 Note 2 Clean Energy Future revenues removed

44, 47 Note 2 Clean Energy Future grants removed

85 Note 7 Transition to AASB 13 deleted

101 Note 7 Residual value transition wording revised

102 Note 7 Impairment - early adoption of AASB 2016-4

103 Note 7 Reinstatement costs - additional commentary

108, 113 Note 8 Provision for Carbon Tax removed

149 - 151 Note 17 New Standard - AASB 16 Leases

161, 169, 170 - 172

Note 19 Amended for AASB 124 disclosures

180 - 184 Note 23 AASB 124 Related Party disclosures

Index Updated

Appendix A Accounting Standards Updated

Appendix B Supp. Return minor definitional changes codes 31, 3, 8, 60. 77, 78, 79 & 69.



Item: 6.11



Subject: Policy Reviews

For: Decision

SUMMARY

Council has developed a range of policies over time, some of these have direct relevance to the roleand specific functions of the Audit Committee. As such it is prudent for the Audit Committee toconsider the proposed revisions to these policies and make comments/changes (if appropriate) priorto them being presented to the Strategic Planning & Development Policy Committee for adoption inJune 2017.

RECOMMENDATION

The Audit Committee resolves:

1. That the report be received and noted2. To recommend to the Strategic Planning & Development Policy Committee to approve the

revised Fraud & Corruption Prevention Policy, Internal Audit Policy, Risk Management Policyand Prudential Management Policy as contained in Appendices 1 - 4.

1. GOVERNANCE



Council’s Policy Framework is a key component of the wider Governance Framework.

Adelaide Hills Council – Audit Committee Meeting 8 May 2017Policy Reviews

Page 2

Legal Implications

Section 48 of the Local Government Act 1999 (the Act) requires councils to develop andmaintain prudential policies, practices and procedures for the assessment of projects toensure that the council:a) acts with due care, diligence and foresight; andb) identifies and manages risks associated with a project; andc) makes informed decisions; andd) is accountable for the use of council and other public resource.

Section 125 of the Act requires councils to ensure that appropriate policies, practices andprocedures of internal controls are implemented and maintained in order to assist thecouncil to carry out its activities in an efficient and orderly manner to achieve its objectives,to ensure adherence to management policies, to safeguard Council’s assets, and to secure(as far as possible) the accuracy and reliability of Council records. The Fraud & CorruptionPrevention Policy and the Internal Audit Policy are important policy pieces in thesearrangements.

The Fraud & Corruption Prevention Policy has also been formulated to capture therequirements of the following legislation:

Whistleblowers Protection Act 1993 Criminal Law Consolidation Act 1935 Independent Commissioner Against Corruption Act 2012 Local Government Act 1999 Local Government (Elections) Act 1999 Development Act 1993)

A number of sections of the Act require councils to identify and manage the risks associatedwith its functions and activities. There are additional risk management responsibilitiesunder the Work Health & Safety Act 2012 and Emergency Management Act 2004. The RiskManagement Policy provides a process to facilitate compliance with these requirements.


Maintenance of a contemporary and legislatively compliant Policy Framework will assist inmitigating the risk of:





There is no specific budget for the development and implementation of the Programhowever this is provided for in the Governance budget.

Adelaide Hills Council – Audit Committee Meeting 8 May 2017Policy Reviews

Page 3


There is a high expectation that Council has appropriate corporate governance processes inplace including an effective suit of policies.


Not applicable.


Consultation has occurred internally.

2. BACKGROUND

Council has developed a range of policies on matters such as fraud and corruptionprevention, risk management, internal audit and prudential management over a number ofyears. The current policies are approaching their respective review dates.

3. ANALYSIS

In undertaking the policy review, the requirements of applicable legislation, LocalGovernment Association guidance/templates and the policies of key councils (Onkaparinga,Marion, Charles Sturt and Playford) were reviewed to determine any required/desirablechanges to ensure Council’s polices are complaint and contemporary.

The policies have served Council well and the Administration has not identified anyshortcomings or potential improvements that require significant change.

Minimal changes were made to the policies and these have been shown in mark-up form inAppendices 1 – 4.

4. OPTIONS


I. Recommend to the SPDPC to adopt the revised policies (Recommended)II. Provide comments/suggestions for revisions to the policies prior to consideration by

the SPDPC

5. APPENDICES

(1) Fraud & Corruption Prevention Policy(2) Internal Audit Policy(3) Risk Management Policy(4) Prudential Management Policy

Appendix 1Fraud & Corruption Prevention Policy

COUNCIL POLICY

FRAUD & CORRUPTION PREVENTION

Policy Number: GOV-02

Responsible Department(s): Governance & Risk

Other Relevant Policies:

Whistleblower Protection PolicyEmployee Code of ConductCouncil Member Code of ConductCouncil Members Allowances & Benefits PolicyProcurement PolicyRisk Management PolicyInternal Audit Policy

Relevant Procedure(s): Risk Management & Internal Control Procedures

Relevant Legislation:

Whistleblowers Protection Act 1993Criminal Law Consolidation Act 1935Independent Commissioner Against Corruption Act 2012Local Government Act 1999Local Government (Elections) Act 1999Development Act 1993)

Policies and Procedures Supersededby this policy on its Adoption: Item 12.2, 1, 8 April 2014

Adoption Authority: Strategic Planning & Development Policy Committee

Date of Adoption: To be updated administratively

Effective From: To be updated administratively

Minute Reference for Adoption: To be updated administratively

Next Review: No later than April 2020 or as required earlier bylegislation or changed circumstances.

Fraud & Corruption Prevention Policy Page 2

FRAUD & CORRUPTION PREVENTION

1. INTRODUCTION

1.1 The Adelaide Hills Council ("the Council") is committed to acting in the bestinterest of the community and to upholding the principles of honesty, integrityand transparency, which are all key components of good governance.

1.2 The Council recognises that Fraud and Corruption in Public Administration havethe potential to cause significant financial and non-financial harm and that,therefore, the prevention and control of Fraud and Corruption should featurepredominantly within the systems and procedures of a responsible Council.

2. POLICY STATEMENT

2.1 This Policy is designed to protect public funds and assets and the integrity,security and reputation of the Council.

2.2 This Policy outlines the Council's approach to the prevention, detection andcontrol of fraudulent and/or corrupt activity and summarises the associatedresponsibilities of Council Members and Council Employees.

2.3 The Council will not tolerate fraudulent or corrupt activity and is committed to itscontrol and prevention by:

complying with the requirements of the Independent Commissioner AgainstCorruption Act 2012 (ICAC Act);

establishing and maintaining an effective system of internal controls andenforcing compliance with those controls;

regularly undertaking risk assessments to identify circumstances in whichfraud and corruption could potentially occur;

implementing fraud and corruption prevention and mitigation strategies inits day to day operations;

establishing formal procedures for the investigation of allegations relatingto fraudulent and/or corrupt activity;

taking appropriate action in response to allegations of fraudulent and/orcorrupt activity including, reporting allegations in accordance with the ICACAct and the reporting system established by the IndependentCommissioner Against Corruption (ICAC) under section 20 of the ICAC Actand where allegations are substantiated, in addition to applicable criminalsanctions, may take disciplinary action in accordance with the Codes ofConduct for Council Members and Council Employees or , if relevant, aCouncil Employee’s contract of employment with the Council;

ensuring all Council Employees and Council Members are aware of theirobligations in regard to the prevention of fraud and corruption within theCouncil;

active participation in education and evaluation of practices relevant toFraud and Corruption;

fostering an ethical environment in which dishonest and fraudulentbehaviour is actively discouraged; and


generating community awareness of the Council's commitment to theprevention of fraud and corruption.

3. SCOPE

3.1 This Policy is intended to complement and be implemented in conjunction withother Council policies, including:

Whistleblower Protection Policy; Risk Management Policy; and Internal Control Procedures; Code of Conduct for Council Employees; Council Member Conduct Policy; Council Members Allowances and Benefits Policy. Procurement & Purchasing Policy

This Policy applies to all disclosures that relate to the actual or suspectedoccurrence of fraud and corruption within the Council.

4. DEFINITIONS

For the purposes of this Policy the following definitions apply:

4.1 Corruption in public administration means:

a) an offence against Part 7 Division 4 (Offences relating to public officers) of theCriminal Law Consolidation Act 1935, which includes the following offences:

(i) bribery or Corruption of public officers;

(ii) threats or reprisals against public officers;

(iii) abuse of public office;

(iv) demanding or requiring benefit on basis of public office;

(v) offences relating to appointment to public office.

b) any other offence (including an offence against Part 5 (Offences ofdishonesty) of the Criminal Law Consolidation Act 1935) committed by apublic officer while acting in his or her capacity as a public officer or by aformer public officer and related to his or her former capacity as a publicofficer, or by a person before becoming a public officer and related to his orher capacity as a public officer, or an attempt to commit such an offence (seeAppendix 1 for examples of offences under the Local Government Act 1999,Local Government (Elections) Act 1999 and Development Act 1993); or


c) any of the following in relation to an offence referred to in a precedingparagraph:

(i) aiding, abetting, counselling or procuring the commission of theoffence;

(ii) inducing, whether by threats or promises or otherwise, the commissionof the offence;

(iii) being in any way, directly or indirectly, knowingly concerned in, orparty to, the commission of the offence;

(iv) conspiring with others to effect the commission of the offence.

4.2 Directions and Guidelines is a reference to the Directions and Guidelines issuedpursuant to section 20 of the ICAC Act, which are available on the Commissioner’swebsite (www.icac.sa.gov.au).

4.3 An Employee is any person who is employed by the Council, but also includes anycontractors, volunteers and consultants undertaking work for, or on behalf of theCouncil.

4.4 A False Disclosure is a disclosure of information relating to Fraud or Corruptionthat is made by a person who knows the information to be false or, who isreckless as to whether it is false.

4.5 Fraud is an intentional dishonest act or omission done with the purpose ofdeceiving.

Note: unlike ‘Corruption’ there is no statutory definition of ‘Fraud’. Fraud is astyle of offending. The offences addressed under Part 5 and Part 6 of the CriminalLaw Consolidation Act 1935 are considered to constitute Fraud offences.

4.6 Independent Commissioner Against Corruption (Commissioner) means theperson holding or acting in the office of the Independent Commissioner AgainstCorruption.

4.7 Manager People Leader means any Employee of the Council who is responsiblefor the direct supervision of other Employees, and/or, for the management of aCouncil Department.

4.8 Office for Public Integrity (OPI) is the office established under the ICAC Act thathas the function to:

(a) receive and assess complaints about public administration from members ofthe public;

(b) receive and assess reports about Corruption, misconduct andmaladministration in public administration from the Ombudsman, the Counciland public officers;

(c) make recommendations as to whether and by whom complaints and reportsshould be investigated;

(d) perform other functions assigned to the Office by the Commissioner.


(e) 4.9 Public administration defined at section 4 of the ICAC Act 2012 meanswithout limiting the acts that may comprise public administration, anadministrative act within the meaning of the Ombudsman Act 1972 will betaken to be carried out in the course of public administration.

4.10 Public Officer defined under the ICAC Act 2012 includes:

a Council Member; a member of a Local Government body (including a subsidiary of a Council

established under the Local Government Act 1999); and an Employee or Officer of the Council.

4.11 A Responsible Officer is a person (or persons) appointed by the Council pursuantto section 302B of the Local Government Act 1999 who is (are) authorised toreceive and act upon disclosures of public interest information reported tohim/her under the Whistleblowers Protection Act 1993.

5. PREVENTION

5.1 The Council recognises that:

the occurrence of Fraud and Corruption will prevail in an administrativeenvironment where opportunities exist for waste, abuse andmaladministration; and

the most effective way to prevent the occurrence of Fraud and Corruption isto promote an ethical environment in which internal control mechanismshave been implemented.

5.2 In general, the Council expects that Public Officers will assist in preventing Fraudand Corruption within the Council by:

understanding the responsibilities of their position; familiarising themselves with the Councils policies and procedures and

adhering to them; understanding what behaviour constitutes fraudulent and/or corrupt

conduct; maintaining an awareness of the strategies that have been implemented by

the Council to minimise Fraud and Corruption; being continuously vigilant to the potential for Fraud and/or Corruption to

occur; and reporting suspected or actual occurrences of Fraud or Corruption in

accordance with Part 7 of this Policy.


5.3 Specific Responsibilities

5.3.1 Collectively, as the decision making body of the Council, Council Membersare responsible for ensuring that the Council:

o promotes community awareness of the Council's commitment to theprevention of Fraud and Corruption;

o provides adequate security for the prevention of Fraud andCorruption. This includes the provision of secure facilities for storageof assets, and procedures to deter fraudulent or corrupt activity fromoccurring;

o provides mechanisms for receiving allegations of Fraud or Corruption,including by ensuring a Responsible Officer is appointed;

o ensures that, where appropriate, proper investigations are conductedinto allegations that involve Fraud or Corruption;

o makes reports in accordance with Part 7 of this Policy and facilitatescooperation with any investigation undertaken by an externalauthority (such as SAPOL or the Commissioner);

o ensures that all Employees are aware of their responsibilities inrelation to Fraud and Corruption through the provision of appropriateand regular training;

o promotes a culture and environment in which Fraud and Corruption isactively discouraged and is readily reported should it occur; and

o undertakes a Fraud and Corruption risk assessment on a regular basis.

5.3.2 Managers People Leaders are responsible for:o the conduct of any Employees whom they supervise and, will be held

accountable for such;o any property under their control and, will be held accountable for

such;o reporting in accordance with Part 7 of this Policy;o creating an environment in which Fraud and Corruption is

discouraged and readily reported by Employees. Such anenvironment shall be fostered by the Manager's own attitude andbehaviours to Fraud and Corruption and, by the accountability andintegrity they both display and encourage from other Employees;

o ensuring that new Employees for whom they are responsible areaware of their responsibilities in relation to Fraud and Corruptionand, of the standard of conduct expected from all Employees asoutlined in the Code of Conduct for Council Employees and thisPolicy;

o identifying potential Fraud and Corruption risks; ando leading by example to promote ethical behaviour.


5.3.3 Employees are responsible for:o performing their functions and duties with care, diligence, honesty

and integrity;o conducting themselves in a professional manner at all times;o adhering to these guidelines and other Council procedures that have

been established to prevent Fraud or Corruption;o taking care for Council's property which includes avoiding the waste

or misuse of the Council's resources;o maintaining and enhancing the reputation of the Council;o remaining scrupulous in the use of Council information, assets, funds,

property, goods or services; ando reporting in accordance with Part 7 of this Policy.

6. FRAUD AND CORRUPTION RISK ASSESSMENT PROCESS

6.1 The Council’s main objective in the prevention and control of Fraud andCorruption is to minimise the occurrence of Fraud and Corruption within theCouncil. This objective is generally achieved by:

identifying Fraud and Corruption Risks; determining strategies to control those risks; and defining responsibility for and, the time frame within which the strategies will

be implemented.

6.2 Managers must be alert to the potential of Fraud and Corruption to occur andremain wary of factors which may leave the Council vulnerable to Fraud andCorruption, including:

changes to Council delegations; implementation of cost cutting measures; contracting out and outsourcing; the impact of new technology; and changes to risk management practices.

7. REPORTING FRAUD AND CORRUPTION

Reporting Corruption in Public Administration to the OPI

Reports by Employees or Council Members to the OPI

7.1 Any Employee or Council Member who has or acquires knowledge of actual orsuspected Corruption in public administration must report this information to theOPI as soon as practicable.

7.2 Where an Employee or Council Member suspects Corruption in publicadministration, that suspicion must be reasonably held. Section 6 of theDirections and Guidelines address what is required to form a reasonablesuspicion. In this regard it is to be noted that suspicion is a state of mind that isdistinct from a belief. It is not necessary for the Employee or Council Member tobelieve the relevant conduct amounts to Corruption in public administration. Allthat is required to make a report to the OPI is a reasonable suspicion based upon


a proper consideration of the available facts (i.e. there must be a factual basis forthe suspicion).

7.3 Reports to the OPI by an Employee or Council Member must be made inaccordance with the reporting obligations contained in section 11 of theDirections and Guidelines. In particular, the following information must beincluded in the report:

7.3.1 the Employee or Council Member identity; and

7.3.2 the identity of the Council;

7.3.3 the Employee’s or Council Member’s Council address, telephone numberand email.

7.4 In addition, the report must:

7.4.1 identify the matter by reference to the conduct that the Employee orCouncil Member suspects is Corruption in public administration; and

7.4.2 expressly identify that the Employee or Council Member suspects theconduct to be Corruption; and

7.4.3 identify any public officer or other person suspected of having engaged inthe conduct; and

7.4.4 be accompanied by:

7.4.4.1 a statement as to how the Employee or Council Member becameaware of the conduct; and

7.4.4.2 the evidence known to the Employee or Council Memberincluding any documentation relevant to the conduct; and

7.4.4.3 a list of those persons who the Employee or Council Memberbelieves can give evidence relevant to the conduct.

7.5 A report to the OPI by an Employee or Council Member must be made on theonline report form available at www.icac.sa.gov.au.

7.6 Where the Employee’s or Council Member’s knowledge of Corruption has arisendue to a complaint/report he/she has received from another person (theinformant), the Employee or Council Member should not include the informant’sdetails in the report to the OPI if:

7.6.1 the report/complaint was made under the Whistleblowers Protection Act1993; and

7.6.2 the informant has not consented to the informant’s identity beingdivulged; and


7.6.3 it is not necessary to divulge the identity of the informant to ensure thatthe matters to which the report to the OPI relates are properlyinvestigated.

7.7 Nothing in this section is intended to prevent an Employee or Council Memberfrom reporting Corruption in public administration internally to a ResponsibleOfficer in accordance with the Council’s Whistleblowers Protection Policy. Wherean internal report relating to Corruption in public administration is received byanother under the Whistleblowers Protection Policy the Responsible Officer mustreport the matter to the OPI in accordance with this Policy.

Reports by the Council to the OPI

7.8 Where the Council (i.e. Council Members collectively) has or acquires knowledgeof actual or suspected Corruption in public administration it must report thisinformation to the OPI as soon as practicable after the Council becomes aware ofthe matter. The Chief Executive Officer is responsible for preparing a report to theOPI on behalf of the Council for these purposes. The Chief Executive Officer mustprepare the report immediately upon receiving direction from the Council (suchas via the Mayor) to do so.

7.9 Any suspicion the Council has regarding conduct that constitutes Corruption inpublic administration must be reasonably held. Section 6 of the Directions andGuidelines address what is required to form a reasonable suspicion. In this regardit is to be noted that suspicion is a state of mind that is distinct from a belief. It isnot necessary for the Council to believe the relevant conduct amounts toCorruption in public administration. All that is required to make a report to theOPI is a reasonable suspicion based upon a proper consideration of the availablefacts (i.e. there must be a factual basis for the suspicion).

7.10 The report must:

7.10.1 identify the matter by reference to the conduct that the Council suspectsis Corruption; and

7.10.2 expressly identify that the Council suspects the conduct to be Corruptionin public administration; and

7.10.3 identify any public officer or other person suspected of having engaged inthe conduct; and

7.10.4 be accompanied by:

7.10.4.1 a statement as to how the Council became aware of theconduct; and

7.10.4.2 the evidence known to the Council including anydocumentation relevant to the conduct; and

7.10.4.3 a list of those persons who the Council believes can giveevidence relevant to the conduct.

7.11 A report to the OPI by the Chief Executive Officer on behalf of the Council must bemade on the online report form available at www.icac.sa.gov.au.


7.12 Where the Council’s knowledge of Corruption has arisen due to acomplaint/report it received from another person (the informant), the ChiefExecutive Officer should not include the informant’s details in the report to theOPI if:

7.12.1 the report/complaint was made under the Whistleblowers Protection Act1993; and

7.12.2 the informant has not consented to the informant’s identity beingdivulged; and

7.12.3 it is not necessary to divulge the identity of the informant to ensure thatthe matters to which the report to the OPI relates are properlyinvestigated.

7.13 Any consideration by the Council of information relating to Corruption in publicadministration or a Council report to the OPI during a Council meeting must beconsidered in confidence. The grounds under section 90(3)(f) and (g) of the LocalGovernment Act 1999 may be relied upon to move into confidence for thesepurposes.

Reporting Fraud

7.14 Any Employee or Council Member that has or acquires knowledge of actual orsuspected Fraud that:

7.14.1 does not constitute Corruption in public administration;1 and

7.14.2 impacts or causes detriment (or has the potential to impact or causedetriment) to the Council -

must report such information to the Responsible Officer or the Anti-Corruptionbranch of SAPOL.

7.15 A report made under clause 7.14 may be made under the WhistleblowersProtection Act 1993 and managed in accordance with the Council’s WhistleblowerProtection Policy.

8. ACTION BY THE CHIEF EXECUTIVE OFFICER FOLLOWING REPORT AND/ORINVESTIGATION INTO FRAUD OR CORRUPTION

8.14 Following any report to the OPI or SAPOL under this Policy (or the WhistleblowerProtection Policy as the case may be) of which the Chief Executive Officer hasknowledge and, subject to the finalisation of any investigation undertaken by theCommissioner or SAPOL, the Chief Executive Officer will undertake a review intothe area in which the Fraud or Corruption occurred to determine the cause forthe breakdown in controls and, will report the findings of the review and providerecommendations (if any) to the Council. In undertaking any review, the ChiefExecutive Officer will have regard to any recommendations received from theCommissioner or the Ombudsman.

1 Such conduct may, for example, relate to persons who are not a public officer such as a non-electedmember of a Council Committee and/or a member of a Development Assessment Panel.


8.2 In the event that allegations of Fraud and/or Corruption are substantiated, theCouncil may take disciplinary action against any Employee who was involved.

9. FALSE DISCLOSURE

9.1 A person who knowingly makes a false or misleading statement in a complaint orreport under the ICAC Act or makes a false or misleading disclosure, under theWhistleblowers Protection Act 1993, is guilty of an offence.

9.2 An Employee who makes a false disclosure, in addition to being guilty of anoffence, may face disciplinary action that may include dismissal.

9.3 Council Members who make a false disclosure, in addition to being guilty of anoffence, may face disciplinary action pursuant to the Council’s Council MemberCode of Conduct Policy.

10. EDUCATING FOR AWARENESS

10.1 The Council recognises that the success and credibility of this Policy will largelydepend upon how effectively it is communicated throughout the organisation andbeyond.

10.2 The Council will, therefore, from time to time take proactive steps towardsensuring that the wider community is aware of the Council's zero-tolerancestance towards Fraud and Corruption.

10.3 The Council will increase community awareness by: promoting the Councils initiatives and policies regarding the control and

prevention of Fraud and Corruption on the Councils website and at theCouncil's offices;

make reference to the Council's Fraud and Corruption initiatives in theCouncil's Annual Report; and

facilitating public access to all of the documents that constitute the Council'sFraud and Corruption framework.

11. DELEGATION

11.1 The CEO has the delegation to approve, amend and review any procedures thatshall be consistent with this Policy.

121. AVAILABILITY OF THE POLICY

121.1 This Policy will be available for inspection at the Council's Offices during ordinarybusiness hours and via the Council's website www.ahc.sa.gov.au. Copies will alsobe provided to the public upon request, and upon payment of a fee in accordancewith the Council's Schedule of Fees and Charges.


APPENDIX 1OFFENCES

Local Government Act 1999

(a) Council Members

Member duties (sections 62(3) & (4))

A member of a Council must not, whether within or outside the State, make improper useof information acquired by virtue of his or her position as a member of the Council to gain,directly or indirectly, an advantage for himself or herself or for another person or to causedetriment to the Council.

Maximum Penalty: $10,000.00 or imprisonment for two years.

A member of a Council must not, whether within or outside the State, make improper useof his or her position as a member of the Council to gain, directly or indirectly, anadvantage for himself or herself or for another person or to cause detriment to the Council.

Maximum Penalty: $10,000.00 or imprisonment for two years.

Provision of false information (section 69)

A member of a Council who submits a return under Chapter 5 Part 4 (Register of Interest)and Schedule 3 of the Local Government Act 1999, that is to the knowledge of the member,false or misleading in a material particular (whether by reason of information included in oromitted from the return) is guilty of an offence.

Maximum Penalty: $10,000.00.

Restrictions on publication of information from Register of Interests (section 71)

A Council member must not publish information, or authorise publication of information,derived from a Register unless the information constitutes a fair and accurate summary ofthe information contained in the Register, and is published in the public interest, orcomment on the facts set forth in a Register, unless the comment is fair and published inthe public interest and without malice.


(b) Council Employees

Provision of false information (section 117)

A Council employee who submits a return under Chapter 7 Part 4 Division 2 (Register ofInterest) and that is to the knowledge of the employee false or misleading in a materialparticular (whether by reason of information included in or omitted from the return) isguilty of an offence.



Restrictions on disclosure (section 119(1))

A Council employee must not disclose to any other person any information furnishedpursuant to Chapter 7 Part 4 Division 2 (Register of Interests) unless the disclosure isnecessary for the purposes of the preparation or use of the Register by the Chief ExecutiveOfficer or is made at a meeting of the Council, a Council Committee or a Subsidiary of thecouncil.


Conflict of Interest (section 120(1), (2) & (4))

The Chief Executive of a Council who has an interest in a matter in relation to which he orshe is required or authorised to act in the course of official duties must disclose the interestto the Council and must not, unless the Council otherwise determines during a Councilmeeting that is open to the public, act in relation to the matter.


An employee of the Council (other than the Chief Executive Officer) who has an interest in amatter in relation to which he or she is required or authorised to act in the course of officialduties must disclose the interest to the council and must not, unless the council otherwisedetermines during a council meeting that is open to the public, act in relation to the matter.


If an employee is entitled to act in relation to a matter and the employee is providing adviceor making recommendations to the Council or a Council Committee on the matter, theemployee must also disclose the relevant interest to the Council or Council Committee.


CEO to Assist Auditor (section 130)

The Chief Executive Officer must, at the request of the auditor of the Council, produce tothe auditor for inspection the accounts, accounting records and other documents relatingto the financial affairs or internal controls of the Council, or to any other matter that isbeing examined or considered by the auditor. The Chief Executive Officer must, at therequest of the auditor of the Council, provide to the auditor explanations or informationrequired by the auditor. A Chief Executive Officer must not, without reasonable excuse, failto comply with subsection (1) or (2).



Other Investigations (section 130A(4))

The Chief Executive Officer must, at the request of a person conducting an examinationunder section 130A(1) produce to the person for inspection any documents relevant to theexamination, and provide to the person explanations or information required by theperson.


Powers under this Act (section 261(10))

An authorised person, or a person assisting an authorised person, who addresses offensivelanguage to any other person; or without lawful authority hinders or obstructs or uses orthreatens to use force in relation to any other person, is guilty of an offence.


Local Government (Elections) Act 1999

Conduct of officers (section 65)

An electoral officer must not fail, without proper excuse, to carry out his or her official duties inconnection with the conduct of an election or poll.

Maximum Penalty: $2,500.00 or imprisonment for six months

Offences (section 85)

A person who fails to furnish a return that the person is required to furnish under Part 14 Division1 within the time required is guilty of an offence.

Maximum Penalty: $10,000.00

A person who furnishes a return or other information that the person is required to furnish underDivision 1; and that contains a statement that is, to the knowledge of the person, false ormisleading in a material particular, is guilty of an offence.


Elected person refusing to act (section 91)

A duly qualified person who, having been duly appointed or elected as a member of a councilrefuses to assume office and to act in it; or neglects to assume the office and to act in it for thefirst three ordinary meetings of the council (without leave of the council), is guilty of an offence.

Maximum Penalty: $750.00


Development Act 1993

Powers of authorised officers to inspect and obtain information (section 19(11))

An authorised officer, or a person assisting an authorised officer, who addresses offensivelanguage to any other person; or without lawful authority hinders or obstructs or uses orthreatens to use force in relation to any other person, is guilty of an offence.


Delegations (section 20(4))

Subject to section 20(7), a delegate must not act in any matter pursuant to the delegation inwhich the delegate has a direct or indirect private interest.

Maximum Penalty: $8,000.00 or imprisonment for two years

Investigations (section 31A(4))

An investigator may, for the purposes of an investigation require a member or employee of thecouncil to answer, orally or in writing, questions put by the investigator to the best of his or herknowledge, information and belief; require a person to whom questions are put under paragraph(a) to verify the answers to those questions by declaration; require a person to produce forexamination by the investigator books, papers or other records relevant to the subject matter ofthe investigation; retain books, papers or other records produced under paragraph (c) for suchreasonable period as the investigator thinks fit and make copies of any of them or of any of theircontents.

Subject to subsection (8), a person who refuses or fails to comply with a requirement undersection 31A(4) is guilty of an offence.


Conflict of Interest (Regional Development Assessment Panel) (section 34(7))

A member of a regional development assessment panel who has a direct or indirect personal orpecuniary interest in a matter before the regional development assessment panel (other than anindirect interest that exists in common with a substantial class of persons) must, as soon as he orshe becomes aware of his or her interest, disclose the nature and extent of the interest to thepanel; and must not take part in any hearings conducted by the panel, or in any deliberations ordecision of the panel, on the matter and must be absent from the meeting when anydeliberations are taking place or decision is being made.



Investigation of development assessment performance (section 45A(3))

An investigator may, for the purposes of an investigation require a member or employee of therelevant authority, or a public sector employee or council employee assigned or engaged to assistthe relevant authority, to answer, orally or in writing, questions put by the investigator to the bestof his or her knowledge, information and belief; require a person to whom questions are putunder paragraph (a) to verify the answers to those questions by declaration; require a person toproduce for examination by the investigator books, papers or other records relevant to thesubject matter of the investigation; retain books, papers or other records produced underparagraph (c) for such reasonable period as the investigator thinks fit and make copies of any ofthem or of any of their contents.

Subject to section 45A(7), a person who refuses or fails to comply with a requirement undersection 45A(3) is guilty of an offence.


Conflict of interest (Council Development Assessment Panel) (section 56A(7))

A member of a council development assessment panel who has a direct or indirect personal orpecuniary interest in a matter before the council development assessment panel (other than anindirect interest that exists in common with a substantial class of persons) must, as soon as he orshe becomes aware of his or her interest, disclose the nature and extent of the interest to thepanel; and must not take part in any hearings conducted by the panel, or in any deliberations ordecision of the panel, on the matter and must be absent from the meeting when anydeliberations are taking place or decision is being made.


Declaration of interest (section 88B)

If a person commences any relevant proceedings; or becomes a party to any relevantproceedings; and the person has a commercial competitive interest in the proceedings, then theperson must disclose the commercial competitive interest.

If a person commences any relevant proceedings; or becomes a party to any relevantproceedings; and the person receives, in connection with those proceedings, direct or indirectfinancial assistance from a person who has a commercial competitive interest in the proceedings,then both the person referred to in section 88B and the person who provided the financialassistance referred to in paragraph (b) must disclose the commercial competitive interest.

A disclosure must be made to the Registrar of the relevant court and to the other parties to therelevant proceedings in accordance with any requirements prescribed by the regulations.

A person who fails to make a disclosure in accordance with the requirements of this section isguilty of an offence.



Interactions with a private certifier (section 97)

A person who improperly gives, offers or agrees to give a benefit to a private certifier or to a thirdperson as a reward or inducement for an act done or to be done, or an omission made or to bemade, by the private certifier in the performance of a function under this Act is guilty of anoffence.


In this section— benefit does not include a benefit that consists of remuneration or any conditionof appointment or employment properly attaching or incidental to the work of a private certifierunder this Act.

Confidential Information (section 102)

A person performing any function under this Act must not use confidential information gained byvirtue of his or her official position for the purpose of securing a private benefit for himself orherself personally or for some other person.


A person performing any function under this Act must not intentionally disclose confidentialinformation gained by virtue of his or her official position unless the disclosure is necessary forthe proper performance of that function; or the disclosure is made to another who is alsoperforming a function under this Act; or the disclosure is made with the consent of the personwho furnished the information or to whom the information relates; or the disclosure is authorisedor required under any other Act or law; or the disclosure is authorised or required by a court ortribunal constituted by law; or the disclosure is authorised by the regulations.


Disclosure of financial interests – Compliance with Schedule (Schedule 2 (4))

A prescribed member of an assessment panel who fails to comply with a requirement underSchedule 2 is guilty of an offence.


A prescribed member of an assessment panel who submits a return under this Schedule that is tothe knowledge of the member false or misleading in a material particular (whether by reason ofinformation included in or omitted from the return) is guilty of an offence.



Restrictions on publication (Schedule 2 (5))

A person must not publish information derived from a register under Schedule 2 unless theinformation constitutes a fair and accurate summary of the information contained in the registerand is published in the public interest; or comment on the facts set forth in a register underSchedule 2 unless the comment is fair and published in the public interest and without malice.

If information or comment is published by a person in contravention of Schedule 2 clause 5(1), theperson, and any person who authorised the publication of the information or comment, is guiltyof an offence.


NOTE: This is not an exhaustive list of offences that may be committed by a public officer and fallwithin the definition of ‘corruption’ in accordance with section 5(1)(c) of the ICAC Act.

Appendix 2Internal Audit Policy

COUNCIL POLICY

INTERNAL AUDIT



Other Relevant Policies:

Risk Management PolicyFraud & Corruption Prevention PolicyWhistleblower PolicyWHS and IM Policy

Relevant Procedure(s): Internal Audit Manual

Relevant Legislation: Local Government Act 1999

Policies and Procedures Supersededby this policy on its Adoption: Item 12.1, 3, 25 February 2014






Internal Audi Page 2

INTERNAL AUDIT

1. INTRODUCTION

1.1 Internal controls are essential to assist the Council to carry out its activities in anefficient and orderly manner to achieve its objectives, to ensure adherence tolegislation and council policies, to safeguard the Council’s assets, and to securethe accuracy and reliability of council records

1.2 This policy includes a definition of internal audit as it applies to the Council, a setof internal audit principles and states the responsibilities for Council Members,the Audit Committee, the Leadership team and the Governance & Risk Unit.

1.3 The policy should be read in conjunction with the Internal Audit Manual.

2. POLICY STATEMENT

2.1 The Council is committed to maintaining a robust and integrated GovernanceFramework that assures stakeholders that it is pursuing its objectives and fulfillingits responsibilities with due diligence and accountability.

2.2 A fundamental component of this Framework is the operation of an objectiveassurance function that evaluates the adequacy and effectiveness of the systemsof internal control within the Council.

2.3 The purpose of this policy is, through the establishment of an internal auditfunction, to support better decision-making through a good understanding of theadequacy and effectiveness of the systems of internal controls to mitigateCouncil’s risks.

3. DEFINITION OF INTERNAL AUDIT

3.1 Internal auditing is an independent, objective assurance and consulting activitydesigned to add value and improve the Council’s operations. It helps the Councilaccomplish objectives by bringing a systematic, disciplined approach to evaluateand improve the effectiveness of risk management, control and governanceprocesses.

3.2 The Executive Manager Governance & Risk (EMGR) is responsible for themanagement of the internal audit function within Council. Internal audits are tobe conducted by suitably qualified and experienced personnel and may beinsourced, cosourced or outsourced.


4. POLICY PRINCIPLES

4.1 The principles of the Council’s approach to internal audit are:

4.2 Independence

4.2.1 Independence is essential to the effectiveness of the internal auditfunction.

4.2.2 The internal audit function has no direct authority or responsibility forthe activities it reviews. The internal audit function has no responsibilityfor developing or implementing procedures or systems and does notprepare records or engage in original line processing functions oractivities (except as noted below). The work of internal audit does not inany way relieve managers of their responsibilities for the development,implementation and maintenance of management control systems intheir areas.

4.2.3 The EMGR is responsible, on a day to day basis, for the internal auditfunction of Council. In achieving operational independence of theinternal audit function the CEO has ensured that the EMGR has dualreporting lines.

4.2.4 These reporting lines require that the EMGR must:

report administratively to the CEO to facilitate day to dayoperations of the internal audit function and

report to the Audit Committee for strategic direction andaccountability of the internal audit function.

4.2.5 The EMGR has direct access to the Mayor, the Presiding Member of theAudit Committee and the CEO. Periodic ‘in camera’ meetings may beheld between the Manager Governance & RiskEMGR and the AuditCommittee.

4.2.6 Where the EMGR has responsibility for an activity that is scheduled forreview, the Audit Committee will ensure that the internal auditassignment will be managed by another employee within Council andthe independence of the function is not compromised.

4.3 Authority and Confidentiality

4.3.1 Subject to compliance with Council’s security policies, internal auditorsare authorised to have full, free and unrestricted access to all functions,premises, assets, personnel, records, and other documentation orinformation that the EMGR or the CEO considers necessary to enable theinternal auditors to undertake the audit assignment.


4.3.2 All records, documentation and information accessed in the course ofundertaking internal audit activities are to be used solely for the conductof these activities. The EMGR is responsible and accountable formaintaining the confidentiality of the information the internal auditorsreceive during the course of their fieldwork.

4.3.24.3.3 Where necessary, EMGR may consult with and disclose auditmatters to other local government entities, normally this will only occurwhere these matters affect other entities, or as directed by the AuditCommittee or the CEO.

4.4 Standards

4.4.1 Internal audit activities will be conducted in accordance with intent ofrelevant professional standards deemed appropriate and applicableincluding:

International Professional Practices Framework issued by theInstitute of Internal Auditors

Standards relevant to internal audit issued by the AustralianSociety of Certified Practising Accountants and the Institute ofChartered Accountants in Australia

The Statement on Information Systems Auditing Standards issuedby the Information Systems and Control Association, and

Standards issued by Standards Australian and the InternationalStandards Organisation.

4.4.2 In the conduct of internal audit work, internal auditors will:

comply with relevant professional standards of conduct

possess the knowledge, skills and technical proficiency relevant tothe performance of their duties

be skilled in dealing with people and communicating audit, riskmanagement and related issues effectively and

exercise due professional care in performing their duties.

4.5 No Surprises

4.5.1 Council’s approach to internal audit is that there should be ‘no-surprises’at the conclusion of the audit assignment. To this end, on-goingdiscussions will be held with management as findings emerge andconclusions are developed. At the mid point of the audit, a formalmeeting may be sought with the audit sponsor to discuss the audit andany emerging issues. If necessary, EMGR will communicate significantmatters of concern to the CEO and/or the Audit Committee prior to thecompletion of the final report.

5. SCOPE


5.1 Internal audit reviews cover all programmes and activities of the Council togetherwith associated entities as provided for in relevant business agreements,memorandum of understanding and contracts. Internal audit activityencompasses the review of all financial and non-financial policies and operationsas required.

6. RESPONSIBILITIES

6.1 The Council has ultimate responsibility that appropriate policies, practices andprocedures of internal control are implemented and maintained in accordancewith s125 of the Local Government Act 1999.

6.2 The Audit Committee is responsible for (as per the Audit Committee Terms ofReference):

monitoring and reviewing the effectiveness of the internal audit functionin the in the context of the Council’s overall risk management system;

consider and make recommendation on the program of the internal auditfunction and the adequacy of its resources and access to information toenable it to perform its function;

review all reports on the Council’s operations from the internal auditors;

review and monitor management’s responsiveness to the findings andrecommendations of the internal auditor.

6.3 The Chief Executive Officer is responsible for ensuring that an internal auditfunction is established, implemented and maintained in accordance with thisPolicy.

6.4 The Leadership Team membersEmployees are accountable for assisting internalauditors in the conduct of their work through the provision of accurate and timelyinformation to audit requests, providing responses to audit reports and updateson the implementation status of actions arising from audits.

6.5 The Governance & Risk Unit Department is responsible for the development andcontinuous improvement of the Council’s internal audit systems and processes;the development of internal audit plans, the engagement and management ofinternal audit providers; the monitoring of the implementation status of auditactions; and reporting to the Chief Executive Officer and Audit Committeeregarding the Council’s internal audit function.

7. RELATIONSHIP TO RISK MANAGEMENT

7.1 Internal audit provides an independent appraisal of key internal controls withinthe organisation. These controls are key mitigators of inherent risk and thereforeinform the risk management process and the calculation of residual risk.


8. DELEGATION


8.9. AVAILABILITY OF THE POLICY

9.1 This Policy will be available for inspection at the Council's Offices during ordinarybusiness hours and via the Council's website www.ahc.sa.gov.au. Copies will alsobe provided to the public upon request, and upon payment of a fee in accordancewith the Council's Schedule of Fees and Charges.

Appendix 3Risk Management Policy

COUNCIL POLICY

RISK MANAGEMENT



Other Relevant Policies:Internal Audit PolicyFraud & Corruption Prevention PolicyWork Health and Safety and Injury Management Policy

Relevant Procedure(s): Risk Management Framework

Relevant Legislation:Local Government Act 1999Emergency Management Act 2004Work Health & Safety Act 2012

Policies and Procedures Supersededby this policy on its Adoption: Item 12.1, 3, 25 February 2014






Risk Management Page 2

RISK MANAGEMENT

1. INTRODUCTION

1.1 There is always uncertainty associated with the decisions and actions Counciltakes to achieve its objectives.

1.2 The effect of uncertainty on objectives is known as ‘risk’. The international riskmanagement standard ISO 31000:2009 uses this definition of risk and elaboratesthat:

1.2.1 An effect is a deviation from the expected – it can be positive and/ornegative

1.2.2 Risk is often characterised by reference to potential events andconsequence or a combination of the two

1.2.3 Risk is often expressed in terms of a combination of the consequences ofan event and the associated likelihood of the occurrence of the event

1.2.4 Uncertainty arises due to a deficiency of information, knowledge orunderstanding of an event, its consequences, or likelihood.

1.3 This policy provides a definition of risk as it applies to the Council, a clear riskpolicy statement and principles and sets down the responsibilities for CouncilMembers, the Audit Committee, managers, employees, volunteers andcontractors.

1.4 The policy should be read in conjunction with the risk management frameworkand associated guides.

2. POLICY STATEMENT

2.1 The Council is committed to maintaining a robust and integrated GovernanceFramework that assures stakeholders that it is pursuing its objectives and fulfillingits responsibilities with due diligence and accountability.

2.2 A fundamental component of this Framework is the effective management of theCouncil’s risks in order to provide greater certainty and security for all itsstakeholders. In doing so, Council will be better informed, more decisive andfunction with increased confidence to achieve its objectives.

2.3 To provide consistency and confidence, Council will undertake these riskmanagement activities in accordance with ISO 31000:2009.


2.4 Council aims for high-quality risk management activities to be integrated with allits critical processes, so that before events occur or if there is a change incircumstances that might enhance or prevent Council achieving its objectives, theorganisation is able to recognise and respond to the risk in a consistent, proactiveway. Equally, when events occur, Council will use systematic processes to learnthe lessons from its successes, failures and near misses. In this way Council willdrive service improvement and organisational learning and growth.

3. POLICY PRINCIPLES

3.1. The principles of the Council’s approach to managing risk are to:

3.1.1. Embed systematic and effective processes to identify, prioritise andmanage existing and emerging risks;

3.1.2. Ensure linkages to strategic goals and objectives;

3.1.3. Develop a risk management methodology that supports and defines theCouncil’s risk appetite;

3.1.4. Foster a culture that encourages employee participation in the riskmanagement process;

3.1.5. Build a reporting framework that facilitates and enhances the disclosureof potential risk to appropriate levels of management;

3.1.6. Demonstrate that a proper level of due diligence is undertaken indecision-making;

3.1.7. Create an environment where all Council employees take responsibilityfor managing risk.

4. SCOPE

4.1. This policy encompasses every member of the organisation, including CouncilMembers, Chief Executive Officer, Leadership Team, employees, volunteers andcontractors given that each has responsibility for the effective management ofrisk with their area(s) of responsibility.

5. RESPONSIBILITIES

5.1. The Council has ultimate responsibility for risk management across theorganisation, adopting the risk management policy and determining an acceptablelevel of risk (risk appetite)

5.2. The Audit Committee is responsible for monitoring strategic risk managementand the adequacy of internal controls established to manage identified risks andto provide advice to the Chief Executive Officer on these and related matters asrequired.


5.3. The Chief Executive Officer is responsible for ensuring that a risk managementframework is established, implemented and maintained in accordance with thisPolicy, allocating risk management responsibilities and monitoring the overall riskprofile and mitigating strategies.

5.4. The Leadership Team members are accountable for the implementation,maintenance and evaluation of risk management within their areas ofresponsibility in accordance with the risk management framework. They areresponsible for creating an environment where each staff member is responsiblefor and actively involved in managing risk.

5.5. Employees, Volunteers and Contractors are responsible for identifying potentialrisks and for the effective management of risk as part of their employment orcontractual obligations with the Council.

5.6. The Governance & Risk Unit Department is responsible for the development andcontinuous improvement of the Council’s risk management systems andprocesses; the development of information resources, training, tools andtemplates; the monitoring of risk registration; and reporting to the Chief ExecutiveOfficer and Audit Committee regarding the Council’s risk profile and mitigationstrategies.

5.7. A Risk Owner (an employee to whom responsibility for the management of aspecific risk has been allocated) is responsible for ensuring that they manage theirdesignated risk in accordance with the Risk management Framework.

6. RELATIONSHIP TO INTERNAL AUDIT

6.1. One of the key determinants for the selection of activities, systems and processesto be reviewed by the Internal Audit function is the level of risk they pose to theachievement of the Council’s objectives.

6.2. Risk assessment information will be a key input in the selection of activities,systems and processes to be included in the Council’s Internal Audit Plan. Theoutcomes of these audits/reviews will be entered into the Risk Register to furtherrefine the risk information.

7. DELEGATION


7.8. AVAILABILITY OF THE POLICY

7.1.8.1. This Policy will be available for inspection at the Council's Offices duringordinary business hours and via the Council's website www.ahc.sa.gov.au. Copieswill also be provided to the public upon request, and upon payment of a fee inaccordance with the Council's Schedule of Fees and Charges.

Appendix 4Prudential Management Policy

COUNCIL POLICY

PRUDENTIAL MANAGEMENT


Responsible Department(s): Corporate Services

Other Relevant Policies: Procurement PolicyRisk Management Policy

Relevant Procedure(s): Nil

Relevant Legislation: Local Government Act 1999

Policies and Procedures Supersededby this policy on its Adoption: Item 12.2, 42, 8 July 2014






Prudential Management Page 2

PRUDENTIAL MANAGEMENT

1. INTRODUCTION

1.1 This document sets out the policy of the Adelaide Hills Council for meeting theprudential management requirements set out in Section 48 of the LocalGovernment Act 1999.

1.2 Section 48 (aa1) prescribes that :

A council must develop and maintain prudential policies, practices and proceduresfor the assessment of projects to ensure that the council:

a) acts with due care, diligence and foresight; andb) identifies and manages risks associated with a project; andc) makes informed decisions; andd) is accountable for the use of council and other public resources

1.3 Prudential management attempts to foresee what adverse financial consequencesmight arise from any project that the Council is contemplating, and requiresmanaging the project in such a manner as to capture the proposed benefits, whileminimising, offsetting or otherwise taking into account of the foreseeablefinancial risks.

1.4 Prudential management can be seen as a subset of risk management in that theprudential management process is predominantly concerned with financial issuesarising from a project.

2. PROJECT DEFINITION

2.1 A project may be defined as

“a new and discrete undertaking or activity that would involve theexpenditure of money, deployment of resources, incurring or assuming aliability, or accepting an asset”

2.2 This should not be interpreted to mean that all Council activities are “projects”.Regular, ongoing deliveries of Council services are not “new and discrete”activities so therefore are not included within this definition. A project is atemporary endeavour with a defined beginning and end. The temporary nature ofprojects stands in contrast to business as usual (or operations) which arerepetitive, ongoing functional activities to produce products or services.


3 POLICY STATEMENT

3.1 The Council is committed to maintaining a robust and integrated GovernanceFramework that assures stakeholders that it is pursuing its objectives and fulfillingits responsibilities with due diligence and accountability

3.2 An important element of this due diligence is the effective conduct of prudentialmanagement reviews of projects which fall within the requirements set down inSection 48 (1) of the Local Government Act 1999.

3. SCOPE

3.1. This policy covers the prudential review requirements when consideration is beinggiven to a project that falls within the requirements of Section 48(1).

These requirements are:

A council must obtain and consider a report that addresses the prudential issues(set out in clause 4 of this Policy) before the council engages in any project(whether commercial or otherwise and including through a subsidiary orparticipation in a joint venture, trust, partnership or other similar body):

a) where the expected expenditure of the council over the ensuing five yearsis likely to exceed 20% of the council’s average operating expenses overthe previous five financial years (as shown in the council’s financialstatements); or

b) where the expected capital costs of the project over the ensuing five yearsis likely to exceed $4,000,000 (indexed); or

c) Where the council considers that it is necessary or appropriate.

3.2. In accordance with Section 48(3), a report is not required in relation to3.2.1. road construction or maintenance; or3.2.2. drainage works

4. PRUDENTIAL REPORT REQUIREMENTS

4.1. In accordance with Section 48(2) of the Local Government Act 1999 , the followingissues to be addressed in a report required under Clause 3 above:

4.1.1. the relationship between the project and relevant strategic managementplans;

4.1.2. the objectives of the Development Plan in the area where the project is tooccur;

4.1.3. the expected contribution of the project to the economic development ofthe local area, the impact that the project may have on businesses carriedon in the proximity and, if appropriate, how the project should beestablished in a way that ensures fair competition in the market place;


4.1.4. the level of consultation with the local community, including contact withpersons who may be affected by the project and the representations thathave been made by them, and the means by which the community caninfluence or contribute to the project or its outcomes;

4.1.5. if the project is intended to produce revenue, revenue projections andpotential financial risks;

4.1.6. the recurrent and whole-of-life costs associated with the project includingany costs arising out of proposed financial arrangements;

4.1.7. the financial viability of the project, and the short and longer termestimated net effect of the project on the financial position of the council;

4.1.8. any risks associated with the project, and the steps that can be taken tomanage, reduce or eliminate those risks (including by the provision ofperiodic reports to the chief executive officer and to the council);

4.1.9. the most appropriate mechanisms or arrangements for carrying out theproject.

4.2. The report must be prepared by a person whom the council reasonably believesto be qualified to address the prudential issues set out in clause 4.1.

4.3. The report must not be prepared by a person who has an interest in the relevantproject (but may be prepared by a person who is an employee of the council).Sections 48(6a), (6b) and (6c) set out the tests for whether a person has aninterest in a project.

4.4. A report must be available for public inspection at the principal office of thecouncil once the council has made a decision on the relevant project (and may beavailable at an earlier time unless the council orders that the report be keptconfidential until that time).

4.5. The council must give reasonable consideration to a report

5. DELEGATION


6. AVAILABILITY OF THE POLICY

6.1. This Policy will be available for inspection at the Council's Offices during ordinarybusiness hours and via the Council's website www.ahc.sa.gov.au. Copies will alsobe provided to the public upon request, and upon payment of a fee in accordancewith the Council's Schedule of Fees and Charges.