AUDIT COMMITTEE MEETING

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AUDIT COMMITTEE MEETING

Thursday, 20 June 2019

TO STRIVE FOR BETTER THINGS

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AUDIT COMMITTEE MEETING 20 JUNE, 2019

ITEM SUBJECT PAGE

ITEM-1 CONFIRMATION OF MINUTES

ITEM-2 COUNCIL'S COMPLIANCE AND LEGISLATIVE FRAMEWORK

7

ITEM-3 INTERNAL AUDIT REPORT 9

ITEM-4 GENERAL MANAGER'S EXPENSES 41

ITEM-5 STATUS REPORTS - AUDIT COMMITTEE MEETING - 2 MAY 2019

42

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MINUTES of the duly convened Audit Committee Meeting of The Hills Shire Council held in the Council Chambers Norwest on 2 May 2019

This is Page 1 of the Minutes of the Audit Committee Meeting of The Hills Shire Council held on 2 May 2019

ITEM SUBJECT PAGE

ITEM-1 CONFIRMATION OF MINUTES 3

ITEM-2 COUNCIL'S ENTERPRISE RISK MANAGEMENT FRAMEWORK

3

ITEM-3 INTERNAL AUDIT REPORT 3

ITEM-4 GENERAL MANAGER’S EXPENSES 4

ITEM-5 STATUS REPORTS - AUDIT COMMITTEE MEETING 22 NOVEMBER 2018

4

QUESTIONS WITHOUT NOTICE 4

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MINUTES of the duly convened Audit Committee Meeting of The Hills Shire Council held in the Council Chambers Norwest on 2 May 2019

This is Page 2 of the Minutes of the Audit Committee Meeting of The Hills Shire Council held on 2 May 2019

132 PRESENT

Mayor Dr M R Byrne (In the Chair) Clr M G Thomas

Clr A N Haselden Clr S P Uno

Mr Michael Blair OAM

133 IN ATTENDANCE

Mr Michael Edgar – General Manager Ms Kerrie Wilson – Internal Auditor

134 APOLOGIES Clr A J Hay OAM Mr Johnny Teong

Adjunct Professor Jim Taggart OAM

135 TIME OF COMMENCEMENT 7.01pm

136 TIME OF COMPLETION 8.06pm

137 DECLARATIONS OF INTEREST Nil.

138 ARRIVALS AND DEPARTURES Nil.

139 DISSENT FROM COUNCIL'S DECISIONS Nil.

140 ADJOURNMENT & RESUMPTION Nil.

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ITEM-1 CONFIRMATION OF MINUTES

A MOTION WAS MOVED BY COUNCILLOR HASELDEN AND SECONDED BY COUNCILLOR UNO THAT the Minutes of the Audit Committee Meeting held on 22 November 2018 be confirmed.

THE MOTION WAS PUT AND CARRIED.

141 RESOLUTION

The Minutes of the Audit Committee Meeting held on 22 November 2018 be confirmed.

APOLOGIES

A MOTION WAS MOVED BY MR MICHAEL BLAIR OAM AND SECONDED BY COUNCILLOR UNO THAT the apologies from Councillor Hay OAM, Mr Johnny Teong and Adjunct Professor Jim Taggart OAM be accepted and leave of absence granted.

142 RESOLUTION

The apologies from Councillor Hay OAM, Mr Johnny Teong and Adjunct Professor Jim Taggart OAM be accepted and leave of absence granted.

ITEM-2 COUNCIL'S ENTERPRISE RISK MANAGEMENT

FRAMEWORK

A MOTION WAS MOVED BY COUNCILLOR UNO AND SECONDED BY COUNCILLOR HASELDEN THAT the Recommendation contained in the report be adopted.

143 RESOLUTION

The Audit Committee review the Council’s Enterprise Risk Management Framework.

ITEM-3 INTERNAL AUDIT REPORT

A MOTION WAS MOVED BY COUNCILLOR HASELDEN AND SECONDED BY COUNCILLOR UNO THAT the Recommendation contained in the report be adopted.

144 RESOLUTION

The report be received.

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ITEM-4 GENERAL MANAGERS EXPENSES

A MOTION WAS MOVED BY COUNCILLOR HASELDEN AND SECONDED BY COUNCILLOR UNO THAT the Recommendation contained in the report be adopted.

145 RESOLUTION

1. The report be received.

2. The expenses tabled of nil expenses be noted.

ITEM-5 STATUS REPORTS - AUDIT COMMITTEE MEETING 22 NOVEMBER 2018

A MOTION WAS MOVED BY COUNCILLOR UNO AND SECONDED BY COUNCILLOR THOMAS THAT the Recommendation contained in the report be adopted.

146 RESOLUTION

The report be received.

QUESTIONS WITHOUT NOTICE

147 HUMAN RESOURCES RECRUITMENT PRACTICES

Councillor Haselden asked if Council’s Human Resources Recruitment Practices are robust.

The General Manager stated that for all positions, including where the qualifications are essential, the following checks are carried out:

Qualifications are not only sighted, reference/referee checks from institutions and companies are carried out and recorded and kept in the HR File;

Criminal Record/Working with children checks are conducted;

Psychometric Employment Tests; and

Robust Medical Checks

The Minutes of the above Meeting were confirmed at the Audit Committee Meeting held on 20 June 2019.

MAYOR GENERAL MANAGER

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PAGE 7 ITEM-2 COUNCIL'S COMPLIANCE AND LEGISLATIVE

FRAMEWORK

DOC INFO

THEME: Proactive Leadership

OUTCOME: 3 Sound governance that values and engages our customers and is based on transparency and accountability.

STRATEGY:

3.3 Ensure Council is accountable to the community and meets legislative requirements and support Council’s elected representatives for their role in the community.

MEETING DATE: 20 JUNE 2019

INTERNAL AUDIT COMMITTEE

GROUP: GENERAL MANAGER

AUTHOR: INTERNAL AUDITOR KERRIE WILSON

RESPONSIBLE OFFICER: GENERAL MANAGER MICHAEL EDGAR

REPORT

Best practice indicates that the Internal Audit Committee should have a sound understanding of the Council’s Compliance and Legislative Framework to support the implementation of its duties and responsibilities as outlined in Part 2 (n) of the Audit Committee Charter.

To ensure that the Audit Committee is aware of the Council’s Compliance and Legislative Framework the following documents have been distributed under separate cover (Attachment 1) for information and review:

 Council’s Governance and Compliance Procedure (endorsed by the General Manager, Feb 2018);

 Overview of the legislation applicable to the Council;

 Overview of the Council’s processes that ensure compliance.

IMPACTS Financial

This matter has no direct financial impact upon Council's adopted budget or forward estimates.

Strategic Plan - Hills Future

The Internal Audit Committee is the key governance committee of Council. An understanding of the Councils Compliance and Legislative Framework will support the effective implementation of its duties and responsibilities as outlined in Part (2) of the Audit Committee Charter.

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PAGE 8 RECOMMENDATION

The Internal Audit Committee review the Council’s Compliance and Legislative Framework.

ATTACHMENTS

1. Council’s Compliance and Legislative Framework (Distributed under separate cover).

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PAGE 9 ITEM-3 INTERNAL AUDIT REPORT

DOC INFO

STRATEGY:

AUTHOR: INTERNAL AUDIT

KERRIE WILSON

EXECUTIVE SUMMARY The Internal Audit report:

 Summarises the work undertaken by the Internal Audit Function and the Audit Committee in the period;

 Highlights areas of improvement within Council’s operations;

 Reports the extent to which the work carried out by the function met the requirements of the approved Internal Audit Plan 2019;

 Reports the measures taken by The Hills Shire Council (THSC) to implement the recommendations of the internal audit reports;

 Provides an overview to the Audit Committee of the status of Councils internal control, risk management and governance processes.

The format of the report reflects:

 the recommendations made by the Division of Local Government (DLG) in their report titled: Internal Audit Guidelines, released September 2010;

 Audit Committee requirements; and,

 Recommendations made by the IIA in their external quality assessment of Internal Audit (2018)

REPORT

Attached is the Internal Audit Report which outlines the audit tasks undertaken by the Internal Audit function in the period to 1 June 2019.

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PAGE 10 Strategic Plan - Hills Future

This report outlines the results of Audit’s review of Councils high risk activities as identified in the Internal Audit Plan adopted by Council. The recommendations resulting from audit activities are aimed at ensuring that Council stated outcomes are achieved efficiently and effectively and meets the Councils legislative and governance requirements.

RECOMMENDATION The report be received.

ATTACHMENTS

1. Internal Audit Report to 1 June 2019 (30 pages).

2. Audit Office 2018/19 Annual Engagement Plan (Distributed under separate cover)

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PAGE 41 ITEM-4 GENERAL MANAGER'S EXPENSES

DOC INFO

STRATEGY:

AUTHOR: GENERAL MANAGER

MICHAEL EDGAR

HISTORY

At the Council meeting of 12 October 2004, the Council adopted a Notice of Motion as follows:-

1. The General Manager’s expenses be reviewed and approved by the Mayor prior to payment.

2. After Approval, the expenses be submitted to the Audit Committee for notation.

REPORT

A listing of the expenses incurred by the General Manager, since last reported on 2 May 2019, will be tabled at the Audit Committee Meeting.

Strategic Plan - Hills Future

The disclosure of the General Manager’s expenses ensures that the Council is transparently governed.

RECOMMENDATION 1. The report be received.

2. The expenses tabled of $ Nil be noted.

ATTACHMENTS Nil.

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PAGE 42 ITEM-5 STATUS REPORTS - AUDIT COMMITTEE MEETING - 2

MAY 2019

DOC INFO

STRATEGY:

AUTHOR: INTERNAL AUDITOR KERRIE WILSON

REPORT

Attached to this report are the responses for the Questions Without Notice and Outstanding Resolutions for the Audit Committee Meeting held on 2 May 2019.

The Hills Future - Community Strategic Plan

The Audit Committee of Council ensures that Council maintains sound governance based on transparency and accountability.

RECOMMENDATION The report be received.

ATTACHMENTS

1. Questions & Answers – 2 May 2019 (1 page)

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PAGE 43 ATTACHMENT 1 COUNCILLORS QUESTIONS WITHOUT NOTICE

MEETING 2 MAY 2019

MINUTE NO. QUESTION REFERRED TO

147 HUMAN RESOURCES RECRUITMENT PRACTICES

GENERAL MANAGER

Councillor Haselden asked if Council’s Human Resources Recruitment Practices are robust.

The General Manager stated that for all positions, including where the qualifications are essential, the following checks are carried out:

Qualifications are not only sighted, reference/referee checks from institutions and companies are carried out and recorded and kept in the HR File;

Criminal Record/Working with children checks are conducted;

Psychometric Employment Tests; and

Robust Medical Checks

RESPONSE An internal audit of the Council’s recruitments practices was last performed in June 2018 and the results were reported to the Audit Committee at its August 2018 Meeting. The internal audit concluded that an effective control environment was in place. The internal audit of recruitment is undertaken on an annual basis because of the inherent risk associated with the activity.

As part of the external audit, the Audit Office will also be reviewing Councils recruitment practices in 2019. Any exceptions noted will be referred to the Audit Committee once the review is complete.