AUDIT COMMITTEE MEETING 15 AUGUST, 2017
Ibrahim Beydoun engaged in serious corrupt conduct by, from 2015, being a party to an agreement whereby he paid $10,000 to Mr Kabite with the intention that Mr Kabite would share the money with a Liverpool Council Officer in return for that officer improperly exercising his official functions as described above.
The Commission also found that there were oversight weaknesses that created opportunities for corrupt conduct, and they have recommended a tighter regulatory response to illegal dumping, aided by the creation of a standalone offence for asbestos dumping and the establishment of a single entity to oversee asbestos waste.
The recommendations outlined in the report are aimed at strengthening the strategic oversight and governance framework for the WS RID squad; address problems associated with the incentives and motivations driving illegal dumping; and ensure a tighter
regulatory response to illegal dumping.
The ICAC is of the opinion that the advice of the Director of Public Prosecutions should be obtained with respect to the prosecution of Mr Izzard, Mr Kabite and Mr Beydoun for various offences.
The Commission has made 15 corruption prevention recommendations to improve the regulatory response and to address other issues and concerns raised in this investigation.
For the information of the Audit Committee: This full report was referred to Council on 8 August 2017. Although the activities investigated did not involve the Hills Shire Council area or its activities (no complaint or request for further information has been received), the report was distributed to inform the Council of the investigations findings and recommendations as the Hills Shire Council has been a member of the Western Sydney RID Squad (WS RID Squad) since 1 December 2002.
The full ICAC report is located at: http://www.icac.nsw.gov.au/investigations/past- investigations/investigationdetail/222.
The implementation of the recommendations relating to Council will be monitored through the Councils Audit Committee. Please note that the response to the recommendations raised in the report will be published on the ICAC website.
c) ICAC: Other relevant corruption prevention publications released
No other relevant corruption prevention publications have been released in the period.
d) Office of Local Government (OLG) Public Enquiries
The public enquiries that are being undertaken by the OLG are detailed at the following link: http://www.olg.nsw.gov.au/public-inquiries
No public enquiries were undertaken by the OLG in the period.
AUDIT COMMITTEE MEETING 15 AUGUST, 2017
C 1.2
PayrollAudit
Number 12
Background The review of payroll is undertaken twice a year to ensure timeliness. The last review undertaken was to 16 August 2016. This review was undertaken in the period from 16 August 2016 to 30 May 2017. Payroll activity in this time consisted of:
Gross Salaries (including payments to Councillors): $37,751,500
Overtime paid: $1,070,184 (15,954 hours) There were approx. 25654 payroll transactions processed.
Audit Objective
Ensure:
The integrity of the information on which the payroll is based;
The security of payroll information;
Payroll payments accurately reflect the terms and conditions of employment and Council records are complete, accurate and Council only pays valid employees.
Review allowances and overtime payments
There is no conflict of interest between Council employees and suppliers.
Scope The review was conducted in June 2017.
Method Review compliance with key controls within the payroll system by using computer assisted audit techniques to undertake the following tests.
Tests:
A. Employees and Vendors
1. Identify matching vendors and employees by bank account 2. Identify matching vendors and employees by address B. Employee Master
3. Identify employees with missing hire date.
4. Identify active and casual employees with hire date older than 12 months.
5. Identify duplicate employees by name 6. Identify duplicate employees by address 7. Identify duplicate employees by TFN
8. Identify duplicate employees by bank account C. Payroll
9. Identify basic pay changes per month – hourly rate, base salary 10. Identify multiple payments (weekly payments)
11. Identify payments to non-employees 12. Identify possible duplicate payments D. Other
Long term higher duties
Overtime payments
Review the classification of payroll information in the Councils systems to ensure that it is appropriately classified and is secure
AUDIT COMMITTEE MEETING 15 AUGUST, 2017
Findings At the time of the review:
Tests A and B: No exceptions were noted.
Test C: All changes to payroll were supported by appropriately approved documentation. No payments were noted to non-employees listed on the payroll system; no duplicate payments were identified.
Test D: Staff on longer term higher duties was identified in both the Community Buildings Hall Hire (3) and Place Management Teams (8).
These positions are currently being reviewed by the Councils HR area.
Overtime: The total overtime hours paid in the time period was
$1,070,184 (15,954 hours – equivalent to 10 F/T staff). On average 49 hours of overtime was paid to the relevant staff (equivalent to 1.5 hours a week). 250 hours or more was paid to 6 staff, predominantly in infrastructure/place management (relating to night/on call work) as well as the PA to the Mayor and Councillors. Management is currently reviewing the level of overtime being incurred across Council and identifying strategies to reduce amounts incurred.
Classification of payroll information: No exceptions noted.
Agreed Management Action
Staff on longer term higher duties be addressed.
Current levels of overtime being incurred across Council be reviewed. The Councils procedure requiring that ‘overtime must be approved in advance of making a claim’ be reinforced and managed.
Conclusion
For the information of the Audit Committee, the results of the audit activity were considered as satisfactory:
Satisfactory Effective system is in place.
C 1.3
RMS (Drives Audit) AuditNumber 17
Background Council has access to the RMS Drives system for its compliance activities. The information in the system is sensitive and confidential. Councils access privileges are outlined in the Term of Access Agreement (TOAA) which requires that an annual audit be undertaken to ensure that the terms of access agreement are in place.
Objective
The objective of the audit was to ensure that the requirements of TOAA were in place for the period ended 30 June 2017. The audit was undertaken in July 2017.
The audit involved a detailed review of randomly selected Council staff that had access to the RMS Drives system for the period 1 March 2017 to 1 June 2017.
Method The audit was conducted in accordance with the requirements of the agreement.
The audit approach included:
- review of THSC processes against the RMS DRIVES Terms of Access Agreement to ensure THSC compliance with the Agreement;
- review of THSC procedures;
- undertaking interviews and discussions with relevant Council officers to
AUDIT COMMITTEE MEETING 15 AUGUST, 2017
understand the processes and how they have been complied with; and, - comparing a sample listing of access records received directly from the
RMS to Council A drive records to ensure completeness and consistency Scope Access to the RMS Drives system in the period from 1 July 2016 to 30 June
2017.
Findings 1. THSC uses the ‘A drives’ system to record access to the RMS Drives system. The records from the ‘A drives’ system satisfy the requirements of 4.1 of the TOAA. In comparing the records in the ‘A drive’ system with RMS records, exceptions were noted being errors that occurred in transcribing information concerning RMS searches into the ‘A drives’ system. These exceptions were identified in the quarterly compliance review of the ‘A drives’ system and have been addressed.
The review of the searches undertaken in the RMS system were found to be correct and undertaken for legitimate reasons.
2. The review identified that Council staff had accessed RMS records for valid reasons and can be supported in accordance with the signed agreement.
3. As required by S4.4 of the TOAA, Quarterly compliance statements for September 2016, December 2016, March 2017 and June 2017 have been forwarded to the RMS.
Conclusion
For the information of the Audit Committee, the results of the audit activity were considered as satisfactory:
Satisfactory The terms of the TOAA is in place