SOUTH Gippsland Shire Council’s independent audit and risk committee reported on its 2019/2020 activities and findings to the municipality’s administration panel at a public virtual briefing held on Wednesday October 28, 2020.
Presented by the committee’s interim chair Chris Badger, the report advised that “for yet another year an unqualified audit was obtained with no matters of concern identified”.
The objective of the audit and risk committee is to “provide appropriate independent advice and recommendations to [the] council on matters relating to the committee’s charter to facilitate decision-making by [the] council in relation to [the] council’s accountability requirements.”
Also guided by an audit policy, this committee “does not have executive powers or authority to implement actions in areas over which management has responsibility” nor does it have any “delegated financial responsibility,” according to the report’s introduction.
Also serving on the audit and risk committee is Homi Burjoree, who, like Mr Badger, is independent of the council.
A third independent member, John Purcell, served from February 2017 until July 2020 when he resigned as the committee’s chair to accept a new job in his own field.
In August 2019 shire panel administrator Rick Brown was appointed to the committee as the sole councillor member and will sit until municipal elections are held in South Gippsland in October 2021.
Administration panel chair Julie Eisenbise also attends the committee’s meetings as an observer and has the right to speak.
Also present at the meetings is the council’s appointed internal auditor, accounting firm Richmond Sinnott and Delahunty (RSD), and external auditors from the Victorian Auditor General’s Office (VAGO) also attended two of the meetings last year.
RSD specialises in in the audit of rural and regional councils.
The newly-gazetted Victorian Local Government Act 2020 required all councils in the state to approve their first audit and risk committee charter and to establish the committees themselves by September 1, 2020, and the panel acting as the council adopted South Gippsland’s charter on August 26, 2020.
Broadly, the charter sets out the committee’s objectives, authority, composition and tenure, roles and responsibilities as well as reporting, administrative and governance arrangements.
Under the Act, the committee must now not only provide an annual report to the council but also bi-annual audit and risk reports and will also supply the minutes of the relevant minutes of the most recent quarterly audit and risk committee meetings.
The committee’s highlights in 2019/2020 include reviewing the council’s annual reports for 2018/2029 and 2029/2020, its quarterly performance reports, and risk management approach, staffing processes, and the outcome of the shire’s internal audit function.
The committee also considered the shire’s insurance coverage and continued to oversee its fiduciary duty and fraud internal control system, and the municipality’s business continuity plan.
Its members reviewed the findings of the VAGO’s audit, including the shire’s financial, standard and performance statements for the financial year ending June 30, 2020, as well as the application of new accounting standards and practices.
Two reviews were conducted as part of the 2019/2020 Internal Audit Plan, which covered budget maintenance, capital works and major projects, along with occupational health and safety, and returning to work.
Mr Badger reported that the committee’s “overall assessment is … based on information received by the committee including from VAGO and the council’s appointed internal auditors.
“The council is continuing to enhance its identification, monitoring and management of its key strategic and operational risks in a constrained operational (COVID-19 impacted) and financial environment,” he stated.
“It is the independent view of the committee that the governance culture of the council is supporting the development of a robust risk, control and compliance framework, which continues to strengthen and adapt to changes in the council’s operations.”
Mr Badger said, “administrators should note that during the in-committee meetings held with internal and external auditors, no significant matters of concern were raised.”
He thanked the members of the management team for “their support and diligence in running the committee” as well as “my colleagues, the independent members and administrator Mr Brown for their contribution to a strong internal audit committee.”
A new chair for 2021 will be appointed at the shire audit committee’s December 2020 meeting.