Audit Committee 6 24 February 2021
6.1 2020 ANNUAL COMPLIANCE AUDIT RETURN
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6. LEADERSHIP Visionary, collaborative, accountable |
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STRATEGIC OBJECTIVE |
6.1 Governance systems, process and practices are responsible, ethical and transparent. |
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SUBJECT INDEX |
Compliance Audit Return |
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BUSINESS UNIT |
Governance Services |
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REPORTING OFFICER |
Governance Coordinator - Emma Heys |
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AUTHORISING OFFICER |
Director Finance and Corporate Services - Tony Nottle |
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NATURE OF DECISION |
Legislative: adoption of “legislative documents” such as local laws, local planning schemes and local planning policies |
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VOTING REQUIREMENT |
Absolute Majority |
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ATTACHMENTS |
Attachment a 2020
Compliance Audit Return⇩ |
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Committee RECOMMENDATION and Officer Recommendation AU2102/047 Moved Councillor J Barrett-Lennard, seconded Councillor G Henley That the Council, having received the 2020 Compliance Audit Return (Attachment A), adopt the 2020 Compliance Audit Return and authorises the Mayor and Chief Executive Officer to sign in joint the Certificate. |
EXECUTIVE SUMMARY
The Compliance Audit Return (CAR) is a statutory reporting tool that evaluates the City’s compliance with targeted sections of the Local Government Act 1995 (the Act) during the period 1 January 2020 to 31 December 2020.
The City has completed the 2020 CAR and it is included in this report (Attachment A) for the Audit Committee’s consideration. The 2020 CAR is recommended for adoption by Council, after which it will be lodged with the Department of Local Government, Sport and Cultural Industries (the Department), as required, by 31 March 2021.
BACKGROUND
Between 1 January 2021 and 31 March 2021 local governments are required to carry out an audit of compliance covering the period 1 January 2020 to 31 December 2020. The City’s responses to the 2020 CAR are to be reviewed by the Audit Committee and then adopted by Council. The certified CAR, together with an extract of the Council Minutes of the meeting in which the 2020 CAR is adopted, is to be lodged with the Department via the online SmartHub portal by 31 March 2021.
OFFICER COMMENT
In completing the 2020 CAR, designated officers have undertaken an audit of the City’s activities, practices and procedures in line with the Act and associated Regulations.
The Audit results are summarised in the Table below:
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Compliance Area |
Number of Questions |
Compliant |
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Commercial Enterprises by Local Government |
5 |
YES - 100% |
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Delegation of Power/Duty |
13 |
YES - 100% |
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Disclosures of Interest |
21 |
YES - 100% |
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Disposal of Property |
2 |
YES - 100% |
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Elections |
3 |
YES - 100% |
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Finance |
11 |
YES - 100% |
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Integrated Planning and Reporting |
3 |
YES - 100% |
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Local Government Employees |
6 |
YES - 100% |
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Official Conduct |
4 |
YES - 100% |
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Tenders for Providing Goods and Services |
24 |
YES - 100% |
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Optional Questions |
10 |
COMPLETED |
There are two optional questions where we have been unable provide a positive response. Optional Question #1 refers to Financial Management Regulation 5(2)(c) and whether the CEO reviewed the appropriateness and effectiveness of the local government’s financial management systems and procedures within the three years prior to 31 December 2020. The City engages an independent Auditor to undertake its Financial Management Systems Review (FMSR) every three years. The FMSR was due to occur in November 2020. Due to COVID-19 however, the Auditor was unable to come down and complete the Audit. As opposed to doing the Audit internally, a decision was made to postpone the Audit to February 2021. The FMSR has since been completed.
Optional Question #9 refers to section 5.127 of the Act, requiring a local government (the CEO) to prepare a report detailing the training completed by Council Members in each financial year. This report is required to be published on the City’s website within one month of the end of each financial year. This is the first year in which this requirement has been in place. A comprehensive list of the training undertaken by each Council Member has been published to the City’s website since the 2019 Local Government Ordinary Elections, and officers were of the understanding this information met the requirements of section 5.127. A separate consolidated report (of the same information) has therefore not been compiled or published. A report is now available to view on the Elected Members Training page on the City’s website and relevant governance procedures have been amended to ensure this requirement is met in the future.
Overall and on review, the 2020 CAR represents a high level of compliance by the City.
Statutory Environment
Regulation 13 of the Local Government (Audit) Regulations 1996 prescribes the statutory requirements for which the compliance audit is needed.
Regulations 14 and 15 state the following:
14. Compliance audits by local governments
(1) A local government is to carry out a compliance audit for the period 1 January to 31 December in each year.
(2) After carrying out a compliance audit the local government is to prepare a compliance audit return in a form approved by the Minister.
(3A) The local government’s audit committee is to review the compliance audit return and is to report to the council the results of that review.
(3) After the audit committee has reported to the council under subregulation (3A), the compliance audit return is to be –
(a) presented to council at a meeting of the council; and
(b) adopted by council; and
(c) recorded in the minutes of the meeting at which it is adopted.
15. Certified copy of compliance audit return and other documents to be given to Departmental CEO
(1) After the compliance audit return has been presented to the council in accordance with regulation 14(3) a certified copy of the return together with -
(a) a copy of the relevant section of the minutes referred to in regulation 14(3)(c); and
(b) any additional information explaining or qualifying the compliance audit,
is to be submitted to the Departmental CEO by 31 March next following the period to which the return relates.
(2) In this regulation – certified in relation to a compliance audit return means signed by –
(a) the mayor or president;
(b) and the CEO.
Relevant Plans and Policies
There are no relevant plans or policies to consider in relation to this matter.
Financial Implications
There are no financial implications associated with the officer recommendation.
Stakeholder Consultation
The City has consulted with the Department of Local Government, Sport and Cultural Industries in relation to the impacts of COVID-19 on aspects of compliance, such as the completion of the FMSR. The Department have indicated that they understand COVID-19 will have had some impacts and that we should indicate where this is the case.
No other external stakeholder consultation was required or undertaken in relation to this matter.
Risk Assessment
An assessment of the potential implications of implementing the officer recommendation has been undertaken using the City’s risk management framework, with risks assessed taking into account any controls already in place. No risks of a medium or greater level have been identified.
Options
As an alternative to the proposed recommendation the Council may choose to request further information from officers prior to adopting the 2020 CAR. It is however a statutory requirement that the 2020 CAR is endorsed by Council and submitted to the Department prior to 31 March 2021.
CONCLUSION
It is recommended that the Council adopts the 2020 CAR for submission to the Department prior to 31 March 2021.
TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION
The 2020 CAR will be lodged with the Department prior to 31 March 2021.
