This is Page 1 of the Minutes of the Audit Committee Meeting of The Hills Shire. This is Page 3 of the Minutes of the Audit Committee Meeting of The Hills Shire.
AUDIT COMMITTEE MEETING 21 NOVEMBER 2019
October)
Includes an independent review of staff access to the Council's corporate systems (ECM, Pathways and Finance 1). Internal Audit will provide each group/department with a list of authorized users in the corporation's transactional information systems.
April)
The implementation of the agreed action will be followed up and reported for the next internal audit report. The council's response to the audit report is described in appendix 1 to the management audit (see link).
AUDIT COMMITTEE MEETING 21 NOVEMBER, 2019
ITEM-3 AUDIT COMMITTEE COMPARISON THEME: Proactive Leadership
STRATEGY
Ensure Council is accountable to the community and meets legislative requirements and support Council’s elected
MEETING DATE: 21 NOVEMBER 2019
INTERNAL AUDIT COMMITTEE
KERRIE WILSON RESPONSIBLE OFFICER: GENERAL MANAGER
MICHAEL EDGAR
EXECUTIVE SUMMARY
BACKGROUND
To benchmark the operations of these ARICs against the THSC Audit Committee, Internal Audit visited Blacktown, Georges River and Cumberland Council in the period to June 2019.
REPORT
Comparison of the THSC Audit Committee with other Councils
Councils have identified the following as the key benefits of implementing the ARIC
Note: The administration and personnel cost implications within THSC should be minimized as AC-enabled systems have been in place for many years.
OPTIONS
The THSC Audit Committee continues operating as per its current Charter until March 2021 (No change)
Implement an ARIC once the draft discussion paper is finalised (that is, prior to the date that s428A become effective)
CONCLUSION
IMPACTS Financial
Strategic Plan - Hills Future
RECOMMENDATION The report be received
ATTACHMENTS
THSC Audit Charter (5 pages)
S428A Local Government Amendment (Governance and Planning) Act 2016 (1 page) 3. Comparison of Council Audit Committees (3 pages)
AUDIT COMMITTEE CHARTER
Purpose
Terms of Reference/Delegations General
The following are the duties and responsibilities of the audit committee in carrying out its charter:-. Review the scope of the internal audit plan and program and the effectiveness of the function.
Note
Long Title
1 Name of Act
Part 4A – Internal audit
ITEM-4 OLG DRAFT DISCUSSION PAPER: A NEW RISK MANAGEMENT AND INTERNAL AUDIT FRAMEWORK
A risk management framework or ERM (which is ISO compliant) and an internal audit function (meeting the requirements of the IPPF**) to support the work of the committee; And,. Council has an audit committee that does not meet the requirements of the ARIC as set out in the discussion paper.
RECOMMENDATION
Gap Analysis (10 pages) 2. Snapshot Guide (10 pages)
The impact of the discussion paper is summarized in this report and detailed in Appendix 1. It is estimated (based on figures given in the report) that the committee's direct costs will vary between.
A New Risk Management and Internal Audit Framework for Local Councils in NSW (106 pages)
The Audit, Risk and Improvement Committee is set up by the Executive Board. The Charter must be approved by the board's governing body after approval by the Audit, Risk and Improvement Committee.
A NEW RISK
MANAGEMENT AND INTERNAL AUDIT
FRAMEWORK
Snapshot Guide
The New Risk Management and Internal Audit Framework for Local Councils in NSW - A Video Guide 2 THE NEW RISK MANAGEMENT AND INTERNAL AUDIT FRAMEWORK FOR LOCAL COUNCILS IN NSW - A Video Guide. While every effort has been made to ensure the accuracy of the information in this publication, the Local Government Office expressly disclaims any liability to any person in respect of anything done or omitted to be done as a result of the content of the publication or the information provided. .
A NEW RISK MANAGEMENT AND INTERNAL AUDIT FRAMEWORK FOR LOCAL
Current provisions in the Local Government Act
Section 428B (when proclaimed) will also allow a council to establish a joint audit, risk and improvement committee with another council/s, including through joint or regional organizations of councils. Amendments made to the Local Government Act in 2016 prescribed new guidelines for councils and updated the prescribed roles and responsibilities of the governing body (section 223) and chief manager (section 335).
New regulations
Committees to improve and ensure the future establishment of a risk management and internal audit function in each council. The New Risk Management and Internal Audit Framework for Local Councils in NSW - A Snapshot Guide to 5 Committees All Councils Must Adopt and.
New Guidelines
The committee and the council's internal audit function must provide independent assurance on risk management activities x The chief executive must publish in. A new risk management and internal audit framework for local councils in NSW – Snapshot Guide 8 x The chief audit executive must ensure.
Discussion paper
A New Risk Management and Internal Audit Framework for Local Boards in NSW – Discussion Paper 2 A NEW RISK MANAGEMENT AND INTERNAL AUDIT FRAMEWORK FOR LOCAL BOARDS IN NSW – DISCUSSION PAPER. Special arrangements can be made for our publications to be provided in large print or an alternative media format.
MINISTER’S FOREWARD
CONTENTS
BACKGROUND AND PURPOSE 1. Risk
Good governance
A New Risk Management and Internal Audit Framework for Local Councils in NSW - Discussion Paper 6 The Three Lines of Defense Against Risk. 2nd line of defense – management functions implemented by a council to ensure that operational functions manage risks.
RISKS
Purpose of this discussion paper
The Local Government Act also foresees that a risk management framework and internal audit function must be established in each council to support the committee's work. It is envisaged that each council's audit, risk and improvement committee, once established in March 2021, will undertake assurance activities by overseeing each council's internal audit function and risk management framework.
INTRODUCTION TO RISK MANAGEMENT AND INTERNAL AUDIT
- Risk management
- Internal audit
- Audit Committees
- Use of risk management, internal audit and audit committees in the private and government sectors
A new risk management and internal audit framework for local councils in NSW – Discussion Paper 11 Control Standards. A New Risk Management and Internal Audit Framework for Local Councils in NSW – Discussion Paper 17 Local Government.
PROPOSED RISK MANAGEMENT AND INTERNAL AUDIT FRAMEWORK – THE ROAD AHEAD
Risk management and internal audit in NSW local government – the story so far
Findings from various public inquiries and corruption investigations since 2008 have led to growing calls for risk management and internal audit to be devolved to NSW councils. These changes also enable the preparation of future regulations to set out the framework for risk management and internal audit functions in all councils and to set a minimum standard of compliance.
Proposed policy framework
New Risk Management and Internal Audit Framework for Local Councils in NSW - Discussion Paper 20 x Opinions, Research and Recommendations from Risk Management Managers and Practitioners and. For this reason, there are components of the proposed framework that are unique to NSW councils and are not reflected in the resources mentioned above.
Proposed statutory framework
They also include internal audit as a function of the committee under Section 428A(2)(i) of the Local Government Act. To support compliance with the Local Government Act and Regulation, guidelines for NSW Local Government Audit, Risk and Improvement Committees, Risk Management Frameworks and Internal Audit Functions will be issued under Section 23A of the Local Government Act.
CORE REQUIREMENT 1
CORE REQUIREMENT 2
CORE REQUIREMENT 3
CORE REQUIREMENT 4
CORE REQUIREMENT 5
CORE REQUIREMENT 6
CORE REQUIREMENT 7
CORE REQUIREMENT 8
CORE REQUIREMENT 9
Benefits of risk management and internal audit for NSW local government
Risk management will help each board ensure that all risks to the achievement of its strategic goals and objectives are identified and effectively managed. It will also ensure that each board has effective risk management, control and governance processes in place that will help build stakeholder and community confidence in the board's ability to operate effectively.
PROPOSED CORE REQUIREMENTS
Free of any relationships that could be perceived to result in bias or a conflict of interest or interfere with their ability to act independently
Selected from a pool of pre-qualified independent Chairs and Audit and Risk Committee members led by the NSW Government49.
Selected from the panel of prequalified audit and risk committee independent chairs and members administered by the NSW Government 49
The risk management policy is approved by the governing body after approval by the Audit, Risk and Improvement Committee. The governing body must approve the council's risk management plan and any changes to it after approval by the audit, risk and improvement committee.
Define the scope of the council’s risk management activities
A new risk management and internal audit framework for local councils in NSW – Discussion paper 48 x how risk management processes will be implemented and maintained (see below) x resource requirements (people, IT and physical assets). Each council's risk management process should include the following stages to ensure that its risks are managed effectively.
Establish the internal and external context What are the internal and external factors that influence the
Decide performance indicators What can we measure against to tell if it is working?
Define the council’s risk criteria
Conduct risk assessments - risk identification, risk analysis, risk evaluation
Decide risk treatment options What will we do to manage them?
Document and communicate
Develop risk treatment plans
A New Risk Management and Internal Audit Framework for Local Councils in NSW – Discussion Paper 50 Stage 2: Establish the internal and external context. The board must ensure that it understands and documents the internal and external environment or parameters in which it operates and how risk management will affect and be affected by it.
Decide performance indicators
Factors to consider should include internal, political, economic, socio-cultural, technological, legal and environmental trends, as well as factors that affect the world's work environment and may be a source of risk.
Conduct risk assessments
A New Risk Management and Internal Audit Framework for Local Councils in NSW – Discussion Paper 51 Those risks that are outside the levels of risk that the council is willing to tolerate should be proactively managed.
Decide risk treatment options
Develop risk treatment plans
Document and communicate
- Quarterly advice from the Risk Management Coordinator to the senior management group assessing the council’s risk profile and risk registers – this will ensure that risks are being
- An annual self-assessment at the end of each financial year by the senior management group of the quality of the council’s risk management framework – this is to assess the
- Annual internal audit review by the Chief Audit Executive –
- Annual Attestation Certificate prepared by the general manager
- Ongoing monitoring and periodic self-assessments by the Chief Audit Executive 2. An annual review at the end of each financial year by the
- An annual assurance review by the Audit, Risk and Improvement Committee for the governing body of the council which includes
An annual internal audit review by the audit manager for audit, risk and. A New Risk Management and Internal Audit Framework for Local Councils in NSW – Discussion Paper 86 x risk profile for council operations.
NEXT STEPS
RESOURCES USED
TIMELINE OF KEY INFLUENTIAL EVENTS
The Office of Local Government has issued internal audit guidelines under section 23A of the Local Government Act. Councils that have not yet established an audit, risk and improvement committee and an internal audit function are mostly rural and county councils (50-60% of rural and county councils are not compliant).
ITEM-5 PROJECT OVERVIEW - WAVES REDEVELOPMENT
MICHAEL EDGAR RESPONSIBLE OFFICER: GENERAL MANAGER
OLGs are satisfied with the review and have effectively suggested that decisions be transparent. Following the Council's decision at the August 27, 2019 meeting, the Council updated the capital expenditure review and forwarded it to the OLG.
HISTORY
All decisions on upgrading the pool constitute a project proposal and commitments are made at ordinary meetings of the open council.
25 September
- Tender T19/20 Aquatic Centre Redevelopment – Architectural Services - Baulkham Hills Memorial Swimming Pool, Baulkham
- Tender T19/21 Aquatic Centre Redevelopment – Project Management Services - Baulkham Hills Memorial Swimming
- Tender T19/22 Aquatic Centre Redevelopment – Quantity Surveyor Services - Baulkham Hills Memorial Swimming Pool,
- Adopt Concept Option C as the Masterplan for the existing site;
- Council proceed with the detailed design and development for Concept Option B;
- A further report will be submitted for the Construction Tender, Budget, and Project program;
- Update the Capital Expenditure Review and forward to the Office of Local Government; and
- Pursue NSW State and Federal Government grant assistance to assist with funding of the facility
Community support for the redevelopment of the existing area of water facilities for this purpose; and. Pursuant to section 47A of the Local Government Act 1993 Council authorizes the general manager to vary the current leases with Belgravia Leisure Pty Ltd for the continued operation of the Baulkham Hills Memorial Swimming Pool, Baulkham Hills and the Bernie Mullane Sports Complex, Kellyville to a monthly basis for a period of 12 years according to the terms and conditions detailed in this report."
Suburb Est Current Pop Est Pop 2036 Change
To cater for community user groups and provide as many activities as possible within the parameters of the redevelopment;. Provide as much open space and green space as possible within the parameters of the redevelopment; and.
ASSET MANAGEMENT PRINCIPLES
The overview prepared by Capital Insight Pty Ltd and the case for change is based on feedback from board members in workshops and is well articulated in the report. Belgravia Leisure Pty Ltd, current operators of Waves, now have over 13 years of expertise and experience at the venue and they have reported similar findings to the leisure advisory from Otium, SGL and others.
Current Position
Concept Designs
Concept A above
Concept B above
Concept B was in keeping with the Design Brief and Scope prepared by Council. The key differences between Concept A and Concept B is the inclusion of underground car parking,
This concept does not provide for maximum use of the site, but is supposed to reflect the limitations of the site and the environment.
Concept C was for the optimal utilisation of all facilities associated with a ‘high end’ aquatic
While this option maximizes the result on the ground, its function is complicated due to the location in an existing residential area; there are limited connecting roads; isolated from the main centers; limited public transport network; and the area's activity can be very intense for the location when the adjacent Athletics sports complex is at capacity.
Basement Floor Plan Concepts B & C above
Concept C Elevations above
Cost Summary
COST SUMMARY
Allowances have been made within industry standards. . g) The Contingency percentages applied to Draft D are slightly higher (about 24% overall) than stated in the Table. Note: Regarding the Professional fees, the Council has already budgeted for the potential expenses of GST Exclusive, including contingencies for the appointment of the.
Note: In respect to the Professional fees, Council has already budgeted for the potential expenditure of $2,718,812 GST Exclusive including contingencies for the appointment of the
Alternative Concept Options
Concept B1 – Concept B with a reduction of the Gym space by 25%;
Concept B2 – Concept B minus the Warm Water Program Pool, Spas and Sauna;
Concept B3 – Concept B with the inclusion of the external 25m x 25m pool; and Concept B4 – Concept B with the inclusion of the Water Slides only
A detailed assessment of the various conceptual options is summarized in the financial impact section of this report.
Financial
Current Operations
If money were set aside annually for planned maintenance and capital replacement of a new asset, the total life cycle cost would have been much higher. Although no money has been set aside for its replacement, there are sufficient funds in the capital reserves to refurbish or replace this asset.
Proposed Options Operating Performance
As this asset is recorded in the Board's books at a net asset value of $3.9M, only $90K p.a. depreciation amount) is set aside in asset replacement reserves. The Council will also need to negotiate a new agreement to manage the facility and it is not known at the time of writing whether the Council will be able to maintain the subsidy at current levels.
Life Cycle Costs
Otium Planning Pty Ltd was unable to model Option D and was based on current operational performance and assumed to be able to break even after refurbishment.
Impact on Recurrent Operations
Impact on Budget
Funding
