This is page 1 of the minutes of the Audit Committee meeting of Hills Shire Council held on 20 June 2019. A MOTION WAS MOVED BY COUNCIL UNO AND MOVED BY COUNCIL THOMAS THAT the minutes of the Audit Committee meeting of Council held on 2 May 2019 be confirmed.
AUDIT COMMITTEE MEETING 20 AUGUST, 2019
Other information
Community Land
Land under Roads
Add back Write Off
Before Adjustment
Deferral of Lease Income
IMPACTS Financial
Strategic Plan - Hills Future
RECOMMENDATION
The presentation from Council’s External Auditor be received
ATTACHMENTS
General Purpose Financial Report for year ended 30 June 2019, Special Purpose Financial Reports for year ended 30 June 2019 and Special Schedules for year ended
Statement required by Section 413 of the Local Government Act, 1993 (1 page)
Statement required by the Local Government Code of Accounting Practice (1 page)
AUDIT COMMITTEE MEETING 20 AUGUST 2019
GENERAL PURPOSE FINANCIAL STATEMENTS
AUDIT COMMITTEE MEETING 20 AUGUST 2019
Understanding Council’s Financial Statements Statement by Councillors and Management
Notes to the Financial Statements
Independent Auditor’s Reports
- The Income Statement
- The Statement of Comprehensive Income Primarily records changes in the fair value of
- The Statement of Financial Position
- The Statement of Changes in Equity
- The Statement of Cash Flows
- Basis of preparation
- Basis of preparation (continued)
- Income from continuing operations
- Income from continuing operations (continued)
The public can make submissions to the Board up to seven days after the public presentation of the financial statements. The financial statements are presented in Australian dollars and are rounded to the nearest thousand dollars.
TOTAL USER CHARGES AND FEES
Other user payments and fees. i) Fees and Charges – Statutory and Regulatory Functions (per s.608) General Administration.
TOTAL INTEREST AND INVESTMENT REVENUE
Expenses from continuing operations
Employees' Leave Entitlement (ELE) Superannuation - defined contribution plans Superannuation - defined benefit plans Workers' Compensation Insurance Fringe Benefit Tax (FBT).
TOTAL EMPLOYEE COSTS EXPENSED
Expenses from continuing operations (continued)
TOTAL MATERIALS AND CONTRACTS
Auditor remuneration
Costs from continuing operations (continued). c) Amortization, amortization and impairment of intangible assets and IPP&E.
TOTAL DEPRECIATION, AMORTISATION AND IMPAIRMENT / REVALUATION DECREMENT FOR INTANGIBLES AND IPP&E
NET GAIN/(LOSS) ON DISPOSAL OF ASSETS
TOTAL CASH ASSETS, CASH EQUIVALENTS AND INVESTMENTS
Receivables
Annual Fees and Charges Interest and Surcharges Accrued Income – Investment Interest Government Grants - RMS Government Grants - Education Government Grants - Other GST Receivable Net Debtors – applications Debtor – City of Parramatta Other Debtors – Bio Banking.
TOTAL NET RECEIVABLES
- Receivables (continued)
- Inventories and other assets
- Inventories and other assets (continued)
- Investment property
- Payables and borrowings
Credit losses are measured as the present value of the difference between the cash flows owed to the entity in accordance with the contract and the cash flows expected to be received. The carrying amount of the asset is reduced and the amount of the loss is recognized in profit or loss.
TOTAL PAYABLES AND BORROWINGS
Provisions
TOTAL PROVISIONS
- Provisions (continued)
- Accumulated surplus, revaluation reserves, changes in accounting policies, changes in accounting estimates and errors
- Accumulated surplus, revaluation reserves, changes in accounting policies, changes in accounting estimates and errors (continued)
- Statement of cash flows – additional information
- Commitments
The same actuarial assumptions are currently used in respect of the employees of each sponsoring employer. The amount of employer contributions to the defined benefit section of the Scheme and recognized as an expense for the year ended 30 June 2019 was.
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Contingencies and other liabilities/assets not recognised (continued)
- Other liabilities (i) Insurance
At the reporting date, it was not possible to reliably estimate the value of any potential liabilities (and subsequent land) from such potential acquisitions. Due to the limited information available on the status, value and duration of outstanding reminders, the Council is unable to determine the value of outstanding revenue.
Financial risk management
Financial risk management (continued)
Creditors and loans are both subject to liquidity risk – the risk that insufficient funds may be on hand to meet payment obligations as and when they fall due. Loans are also subject to interest rate risk – the risk that movements in interest rates could adversely affect funding costs and debt service requirements.
Material budget variations
Material budget variations (continued)
Fair value measurement
Inputs for the asset or liability that are not based on observable market data (unobservable inputs)
Fair value measurement (continued)
Level 2
Statement of Developer Contributions (continued) $ '000 S7.11 CONTRIBUTIONS - POWERS A PLAN CONTRIBUTION PLAN NUMBER 6 - Extractive Industries Roads CONTRIBUTION PLAN NUMBER 8 - Rouse Hill Drainage Roads Traffic Facilities Open Space Community Facilities Other1 (Specify. S tatem ent of Developer Contributions (continued) $ '000 S7.11 CONTRIBUTIONS – NOT UNDER A PLAN Drainage Roads Traffic Facilities Parking Open Space Other–.
Local government industry indicators – consolidated
- Operating performance ratio
- Own source operating revenue ratio Total continuing operating revenue (1)
- Unrestricted current ratio Current assets less all external restrictions
- Council information and contact details
Statement of Developer Contributions without Internal B orrowings (continued) $ '000 S7.11 CONTRIBUTIONS - POWERS A PLAN CONTRIBUTION PLAN NUMBER 6 - Extractive Industries Roads CONTRIBUTION PLAN NUMBER 8 - Rouse Hill Drainage Roads Open Space Traffic Facilities Planning Agreement Other. Statement of Developer Contributions without Internal B orrows (continued) $ '000 S7.11 CONTRIBUTIONS - UNDER A PLAN CONTRIBUTION PLAN NUMBER 9 - Castle Hill Town Center Roads Open Space Other CONTRIBUTION PLAN NUMBER 11 - Annangrove Industrial Roads Traffic Facilities -.
SPECIAL PURPOSE FINANCIAL STATEMENTS
Statement by Councillors and Management Special Purpose Financial Statements
Auditor’s Report
Total revenues from regular operations Expenses from regular operations Employee benefits and own expenses Material and contracts.
NET ASSETS
TOTAL EQUITY
PAGE 101
- Significant accounting policies
- Business activities with gross operating turnover more than $2 million a. Child care
- Significant accounting policies (continued)
- Business activities with gross operating turnover less than $2 million Nil
The Council has adopted the principle of "competitive neutrality" in its business activities as part of the National Competition Policy, which is applied across Australia at all levels of government. However, where the Council does not pay certain taxes normally paid by private sector companies, such as income tax, these equivalent tax payments have been applied to all business activities designated by the Council and are reflected in the special purpose financial statements.
PAGE 103
To calculate a debt guarantee fee, the Council has determined what the differential borrowing rate would be between the commercial rate and the Council's borrowing rate for its business activities. As a minimum, the business activities must generate a return equal to the 10-year Commonwealth bond rate which is 3.25% at 30/6/19.
END OF AUDITED SPECIAL PURPOSE FINANCIAL STATEMENTS
Accordingly, 'disclosed subsidies' (in relation to national competition policy) represent the difference between revenue generated at 'rate of return' prices and revenue generated at prices set by the Council in any financial year. The actual rate of return achieved by each business activity is disclosed at the end of each individual income statement.
SPECIAL SCHEDULES
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Special Schedules
Plus (or minus) last year's carryover total less any valuation objections raised in the previous year's subtotal. The OLG will extract these amounts from Council's allowable income from general rates in the Financial Data Report (FDR) to administer this process.
PAGE 107
In any year, municipalities can claim the value of the lost income due to valuation objections.
PAGE 109
30 June 2019 (continued) $'000 Notes: aRequired maintenance is the amount identified in Council's asset management plans. Estimated cost agreed service level determined by3costs (GRC) Asset category Net book value maintenancea drainage306,778Subtotal Open space/– Parks Infrastructure.
Infrastructure asset performance indicators * consolidated
Buildings and infrastructure renewals ratio (1) Asset renewals (2)
Infrastructure backlog ratio (1)
Asset maintenance ratio Actual asset maintenance
Cost to bring assets to agreed service level
PAGE 111
PAGE 113
PAGE 115 ITEM-3 SUPPLIER INFORMATION TO 30 JUNE 2019
STRATEGY
Ensure Council is accountable to the community and meets legislative requirements and support Council’s elected
MEETING DATE: 20 AUGUST 2019
INTERNAL AUDIT COMMITTEE
ASHLEIGH SIMPSON
RESPONSIBLE OFFICER
GROUP MANAGER, FINANCE AND ORGANISATIONAL PERFORMANCE
CHANDI SABA
BACKGROUND
REPORT
RECOMMENDATION The report be received
Supplier Information to 30 June 2019 (Distributed under separate cover)
KERRIE WILSON RESPONSIBLE OFFICER: GENERAL MANAGER
MICHAEL EDGAR
EXECUTIVE SUMMARY The Internal Audit report
PAGE 117 Strategic Plan - Hills Future
Internal Audit Report to 22 July 2019 (20 pages)
Internal Audit Report
Period to 22 July 2019 (Quarter 3)
Contents
Section A: Executive Summary
PAGE 119
Some key controls do not exist or are not properly implemented, and there are high-risk improvement opportunities.
B.2 .1 RMS (Terms of Access Agreement)
PAGE 121
Link: https://www.audit.nsw.gov.au/our-work/reports/domestic-waste-management-in-campbelltown-city-council-and-fairfield-city-council. The Audit Office undertook their performance audit to assess how efficiently and economically Campbelltown City Council and Fairfield City Council manage the collection, transport and treatment of domestic kerbside waste.
Recyclable material is effectively recovered from its green-lid and yellow-lid bins,
PAGE 123
Section C. Governance Update
Better practice/Investigation reports etc. and other information released by the Councils regulatory bodies in the period
Balranald Shire Council
PAGE 125
The ICAC investigates allegations regarding the Awabakal Local Aboriginal Land Council (LALC), including whether any public official, being an Awabakal LALC Board Director, has acted dishonestly and/or in breach of their duty as a Councilor in relation to a scheme involving suggestions. from 2014 to 2016 for the sale and development of properties ("the Sale and Development Scheme") owned by the land council. The Commission is also investigating whether any Awabakal LALC Board Director has acted dishonestly and/or in breach of their duty as a Board Member by pretending to retain or retain Knightsbridge North lawyers or anyone else to act for the Land Board in respect of the Sale. and Development Scheme.
PAGE 127
Canterbury City Council - allegations relating to former councilors and other public officials (Operation Dasha) The public inquiry held as part of this inquiry has been completed. ICAC is investigating allegations relating to the former Canterbury City Council, including whether, between 2013 and 2016, public officials including former councilors Michael Hawatt and Pierre Azzi, former general manager Jim Montague and former director of Town Planning, Spiro Stavis, dishonestly and/or partially exercised their official functions in relation to proposals and/or planning applications under the Planning and Environmental Assessment Act 1979 in relation to properties in the Council's local area Mayor of Canterbury.
The Audit Committee membership and the number of meetings attended in the 2018/19 financial
PAGE 129
D4 Status of the Annual Internal Audit Plan 2019 From 1 January 2019, Internal Audit addresses Year 3 (2019) of its 4 year Strategic Audit Plan. Timing (Quarterly) Internal Audit Assignments 1. HQ1 2. Risk Management H Q1 3. Fraud and Corruption Mitigation Strategy/Related Processes H Q1 4. a) KPIs - Hills Shire Plan H Q2 b) KPIs - Enterprise Agreement (EA) implementation HQ2 5. Financial Statement Review H K3 6. a) Special Projects/Assignments – ARICS H KW2 b) Special Projects/Assignments – Review of staff access to systemsHQ1 -Q2 7. a) Investigations/Other –GAP analysis ICAC March 2019 Conflict of Interest / AO reports H Q2 b) Investigations/Other – Implementation of Team Meetings HQ1 - Q4 8. a) Information Technology/Systems – Data Loss and Privacy H Q1 - Q4 b) Information Technology/Systems – Software and IT asset management HQ1 - Q4 c) Information Technology/Systems – Use of mobile computing devices H Q1 – Q4 9. Asset management – maintenance M/H Q4 10. Project management/CWP HQ3 – K4 11. Business/system review – procurement HQ3 a) Procurement – use of panels H Q3 b) Procurement – Purchases below the tender limit HQ3 c) Procurement – use of consultants H Q3 d) Procurement – Exceptions HQ3 e) Procurement – comparison with best practice H Q3 12.
Task Planned Work Risk Rating
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IIA Std Annual self-assessment & 5-year external quality assurance according to IIA Standards for Internal. Annual Report - The Committee reports annually to the Board summarizing the activities of the Committee during the previous financial (or calendar) year.
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Summary: Reconciliation of outstanding internal audit recommendations to the date of this report Date of internal audit report Total number of internal audit recommendations since 2005 (raised) Recommendations raised in the period Total Total number of recommendations implemented by management since 2005 (raised). Recommendations Implemented in the period Total Outstanding Balance - Monitored by Internal Audit Forwarded - June 20 Reconciliation of Outstanding External Audit Recommendations as at the date of this report Date of Internal Audit Report Total Recommendations made by the AO - External Audit.
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Updated to June 2019 (currently being monitored) 8 Currently IT devices that are not in use appear to be kept in a number of locations/desks. Manager - IT Implemented by August 30, 2019 Expected timing for implementation of audit recommendations Extreme Complete remedial actions within 2 weeks or sooner if required.
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Minor changes to access privileges have been identified and resolved (these were primarily related to staff who transferred between teams in the Council where there was a delay in changing access privileges associated with their previous position). Access may not be appropriate and exposes the Council to the following risks: • Unauthorized release of company information • Sale, leakage or misuse of information • Manipulation of company and customer data • Unauthorized access to office records, including sensitive or confidential information and customer data L. High Risk Complete corrective actions in 1 calendar month or as agreed Moderate risk Complete corrective actions in 3 calendar months or as agreed Low risk Complete corrective actions in 4 calendar months or as agreed Legend: Status as of report date Overdue Not yet due.
MICHAEL EDGAR RESPONSIBLE OFFICER: GENERAL MANAGER
HISTORY
After Approval, the expenses be submitted to the Audit Committee for notation
RECOMMENDATION 1. The report be received
The expenses tabled of $24 be noted
Memo to Audit Committee (1 page)
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The Hills Future - Community Strategic Plan
Questions & Answers – 20 June 2019 (3 pages)
PAGE 141 ATTACHMENT 1
JUNE 2019
164 SUPPLIER ARRANGMENTS FINANCE AND ORGANISATIONAL
ORGANISATIONAL PERFORMANCE
SERVICES AND TECHNOLOGY
When staff attempt to remotely connect to our secure server via their laptop/desktop, there is 2-factor authentication to stop unauthorized access (network username and password + code password where a work phone number is required for sending code code). For iPads, laptops or tablets, only Council supplied devices with specific configuration can connect to our domain network and internal systems.
167 OPAL BUILDING AND MASCOT TOWERS
DEVELOPMENT AND COMPLIANCE
168 DEVELOPMENT APPLICATIONS – PRIVATE CERTIFIERS
PAGE 143 Certificate. The PCA will conduct a final inspection and issue an
