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Central Highlands Regional Council Audit Committee Report 2021-2022
The Central Highlands Regional Council Audit Committee is established in accordance with Section 105, Local Government Act 2009, and Section 210, Local Government Regulation 2012. By any objective measurement, the council and the committee, professionally, enthusiastically and proactively meet the objectives of the legislation and council policies. The committee does not have executive powers and operates within the adopted council authority, objectives and the Audit Committee Charter to promote good corporate governance through the provision of independent assurance, oversight and advice to council on matters relating to: internal and external audit
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financial statements and reporting risk management internal controls
legislative and organisational compliance.
Membership
I was appointed chair of the committee in 2018 for a 3-year term starting in 2019. On 8 December 2021, council resolved to extend this for a further 12 months to 28 February 2023. Independent member Geoff King’s term was also extended for a further 12 months, with Geoff’s term to end on 16 December 2022. The charter provides for a maximum term of 6 years, and therefore Geoff’s outstanding contribution to the committee will conclude in December 2022.
The committee membership remained unchanged for the 2021-2022 financial year, with a composition of 4 members: 2 external members appointed by council – Graham
Webb (chair) and Geoff King 2 internal members – Councillors Christine Rolfe and
Janice Moriarty. Mayor Kerry Hayes, as permanent invitee and ex-officio, continues to maintain his interest in attending our meetings. As a former member, Cr Charlie Brimblecombe has attended our meetings as an observer. Acting CEO Michael Parker attended the first 2 audit committee meetings of 2021-2022. After this, the incoming CEO Sharon Houlihan attended the balance of meetings for the financial year. Other permanent invitees provided recommendations and assisted the committee in decisions reported to council through their comprehensive reports. Throughout the year, council managers and officers also reported on governance, financial management, risk management, compliance with the Audit Committee Work Plan, valuation and asset management processes, people and culture, safety and wellness, disaster management and business continuity. On behalf of the committee, I extend my appreciation for the excellent reporting and professional guidance provided by the CEO, council management and Crowe Australasia, and representation, reporting and oversight by BDO and the QAO.
Meetings and key milestones
The committee held 5 meetings during the year. Meetings were held in Emerald or virtually via Microsoft Teams. Meetings were held on 3 September 2021, 27 October 2021, 3 December 2021, 11 March 2022 and 13 May 2022. The committee considered well-presented reports from the CEO, management and internal and external auditors, as well as QAO briefing papers on a range of topics. Agenda topics were expansive, although consistent within the responsibilities of the charter. The committee’s role is not limited to the traditional paths of accounting compliance and fraud prevention. Over the year, the committee continued to review reports on information systems upgrades, business continuity plans, and oversight of procedures followed in council’s disaster management. In early 2021, the committee adopted the report and recommendations by Crowe for the Strategic Internal Audit Plan for 2019-2020, 2020-2021 and 2021-2022.
The committee maintains a clear and transparent commitment to impartiality, objectivity and thoroughness in carrying out its work. Accountability for the actions of our independent committee were further measured by the comprehensive minutes and recording of each audit committee meeting. Once received by the council, these were posted to council’s public website.
As chair of the committee, I participated in the half-yearly briefings of audit committee chairs by the Auditor General and other Senior QAO Executives in December 2021 and May 2022. Information discussed at these forums included:
information systems that are vulnerable and open to cyber-attacks
a need to strengthen local government internal controls and governance processes improving valuation and asset management practices financial sustainability, particularly in rural, remote and indigenous areas.
Response to cyber security risks
To ensure council has appropriate internal controls, governance and risk management processes, a Cyber Security Master Plan was endorsed in June 2021. At the September 2021 committee meeting, and subsequent meetings, progress reports were tabled on the master plan actions and planned steps, including rolling out a cyber awareness program. agreed council’s assessment of risks and controls is reliable.
Council performance measured against other Queensland local governments
Local government annual reports and audited financial statements identify statutory compliance, financial reporting and long-term financial sustainability. As well, the QAO reports annually to Parliament on the audit results for Queensland’s 77 local governments and the entities they control. Key performance measures for Central Highlands Regional Council revealed:
council received an unqualified audit controlled entities, CHDC received an unqualified audit and the Central Highlands (Qld) Housing Company Ltd an (E) Emphasis of matter council received an effective and low financial sustainability relative risk assessment there is a lower risk of concerns about financial sustainability based on current income, expenses, assets, investments and debt financing policies on financial governance, assessment of internal controls rated as effective with no significant (high risk) deficiencies. With the many competing priorities and challenges facing Queensland local governments, the above results represented a positive outcome for council.
Audit committee self-evaluation Appreciation
As a committee we continually look for opportunities to gain experience about our craft. The QAO is a fundamental stakeholder in the field and source of valuable intelligence. Issues raised in QAO annual reports to Parliament, QAO blog postings and circulars provide guidance to the committee beneficial in addressing gaps or weaknesses in our own environment and ensuring compliance with our legislative responsibilities. The committee’s role and responsibilities are assisted greatly by the commitment and focus of the mayor, councillors, CEO, management and an organisation committed to long-term financial sustainability, the need for good asset management, project procurement and procurement culture, actively and successfully pursuing grant funding for operational and capital works from state and federal sources, with accountability a key value for council. All wisdom does not rest with the committee. The support provided, as recognised here, against a backdrop of challenges over the last year, including the COVID-19 crisis, is appreciated.
At the December 2021 committee meeting, in accordance with the charter, it was decided to undertake a selfevaluation process under the guidance of the audit committee chair. The self-evaluation is conducted at least The chair presented the results of the self-evaluation process to the 11 March 2022 committee meeting. Four committee members and the mayor (ex-officio) considered the assessment of the committee activity and all respondents: strongly agreed that the audit and risk mandate is appropriate agreed or strongly agreed that the audit activities cover key priorities, risks and areas of concern agreed or strongly agreed the information and reports meet the needs of the audit committee
