Agenda of Audit, Risk and Improvement Committee Meeting

CONFLICT OF INTERESTS

What is a “Conflict of Interests” - A conflict of interests can be of two types:

Pecuniary - an interest that a person has in a matter because of a reasonable likelihood or expectation of appreciable financial gain or loss to the person or another person with whom the person is associated.

Non-pecuniary – a private or personal interest that a Council official has that does not amount to a pecuniary interest as defined in the Local Government Act (eg. A friendship, membership of an association, society or trade union or involvement or interest in an activity and may include an interest of a financial nature).

Remoteness – a person does not have a pecuniary interest in a matter if the interest is so remote or insignificant that it could not reasonably be regarded as likely to influence any decision the person might make in relation to a matter or if the interest is of a kind specified in Section 448 of the Local Government Act.

Who has a Pecuniary Interest? - a person has a pecuniary interest in a matter if the pecuniary interest is the interest of the person, or another person with whom the person is associated (see below).

Relatives, Partners - a person is taken to have a pecuniary interest in a matter if:

§ The person’s spouse or de facto partner or a relative of the person has a pecuniary interest in the matter, or

§ The person, or a nominee, partners or employer of the person, is a member of a company or other body that has a pecuniary interest in the matter.

N.B. “Relative”, in relation to a person means any of the following:

(a) the parent, grandparent, brother, sister, uncle, aunt, nephew, niece, lineal descends or adopted child of the person or of the person’s spouse;

(b) the spouse or de facto partners of the person or of a person referred to in paragraph (a)

No Interest in the Matter - however, a person is not taken to have a pecuniary interest in a matter:

§ If the person is unaware of the relevant pecuniary interest of the spouse, de facto partner, relative or company or other body, or

§ Just because the person is a member of, or is employed by, the Council.

§ Just because the person is a member of, or a delegate of the Council to, a company or other body that has a pecuniary interest in the matter provided that the person has no beneficial interest in any shares of the company or body.

Disclosure and participation in meetings

§ A Councillor or a member of a Council Committee who has a pecuniary interest in any matter with which the Council is concerned and who is present at a meeting of the Council or Committee at which the matter is being considered must disclose the nature of the interest to the meeting as soon as practicable.

§ The Councillor or member must not be present at, or in sight of, the meeting of the Council or Committee:

(a) at any time during which the matter is being considered or discussed by the Council or Committee, or

(b) at any time during which the Council or Committee is voting on any question in relation to the matter.

No Knowledge - a person does not breach this Clause if the person did not know and could not reasonably be expected to have known that the matter under consideration at the meeting was a matter in which he or she had a pecuniary interest.

Participation in Meetings Despite Pecuniary Interest (S 452 Act)

A Councillor is not prevented from taking part in the consideration or discussion of, or from voting on, any of the matters/questions detailed in Section 452 of the Local Government Act.

Non-pecuniary Interests - Must be disclosed in meetings.

There are a broad range of options available for managing conflicts & the option chosen will depend on an assessment of the circumstances of the matter, the nature of the interest and the significance of the issue being dealt with. Non-pecuniary conflicts of interests must be dealt with in at least one of the following ways:

§ It may be appropriate that no action be taken where the potential for conflict is minimal. However, Councillors should consider providing an explanation of why they consider a conflict does not exist.

§ Limit involvement if practical (eg. Participate in discussion but not in decision making or vice-versa). Care needs to be taken when exercising this option.

§ Remove the source of the conflict (eg. Relinquishing or divesting the personal interest that creates the conflict)

§ Have no involvement by absenting yourself from and not taking part in any debate or voting on the issue as if the provisions in S451 of the Local Government Act apply (particularly if you have a significant non-pecuniary interest)

RECORDING OF VOTING ON PLANNING MATTERS

Clause 375A of the Local Government Act 1993 – Recording of voting on planning matters

(1) In this section, planning decision means a decision made in the exercise of a function of a council under the Environmental Planning and Assessment Act 1979:

(a) including a decision relating to a development application, an environmental planning instrument, a development control plan or a development contribution plan under that Act, but

(b) not including the making of an order under Division 2A of Part 6 of that Act.

(2) The general manager is required to keep a register containing, for each planning decision made at a meeting of the council or a council committee, the names of the councillors who supported the decision and the names of any councillors who opposed (or are taken to have opposed) the decision.

(3) For the purpose of maintaining the register, a division is required to be called whenever a motion for a planning decision is put at a meeting of the council or a council committee.

(4) Each decision recorded in the register is to be described in the register or identified in a manner that enables the description to be obtained from another publicly available document, and is to include the information required by the regulations.

(5) This section extends to a meeting that is closed to the public.

BYRON SHIRE COUNCIL

Staff Reports - General Manager 4.1

Staff Reports - General Manager

Report No. 4.1 2018 Community Survey

Directorate: General Manager

Report Author: Shannon McKelvey, Executive Officer

File No: I2019/106

Summary:

Every 2 years Council contracts an independent expert consultant to conduct a community survey, to get a snapshot from a representative, statistically valid, sample of Byron Shire residents of their views on importance and satisfaction with various services Council provides, how they engage with Council and levels of satisfaction with contact with Council.

The results will be workshopped with Councillors on 7 February 2019 and will be used by staff to develop 2019/2020, and beyond, Operational Plan activities. Information on the Community Survey published on Council’s website will be updated consistent with the outcomes of the Councillor Workshop. Previous Community Survey Reports have been reported to Council directly but with the broadening of the Committee’s functions to include ‘improvement’ there is an opportunity for the Committee, should it want to, to receive and consider them. The 2018 Community Survey Report is attached for the Committee’s information.

RECOMMENDATION:

That the Committee notes the 2018 Community Survey Report.

Attachments:

1 2018 Community Survey Report, E2019/6804 , page 10 ⇩

REPORT

Community surveys are conducted to measure, over time, changes in residents’ views of the importance of a variety of key services Council provides and their levels of satisfaction with those services. Council also takes the opportunity when conducting the survey to get information on levels of satisfaction with customer service provided across different services as well as on methods of engagement with Council.

The survey methodology was reviewed prior to it being carried out, to ensure that the questions and services remained relevant and to identify ways to improve the value and uses of the data to Council.

The 2018 Community Survey Report is attached. With all surveys, it is important to remember that:

1. The data is just a snapshot at a point in time and no matter when a survey is conducted, there is likely to be something occurring in the community that influences the results, positively and/or negatively.

2. The results arise from the combination of the full suite of factors that influence each service area. For example, these results have been influenced by Councillor decisions, staff decisions and current projects but also community member and media influences, State Government decisions and other factors that are not within Council’s control.

3. The data is an important tool Councillors and staff can use to identify potential improvement opportunities. However, it is only one source of information that has to be taken into account when making decisions and it can never be the sole driver of, or justification for, a recommendation.

4. In addition to identifying improvement opportunities, the data is also useful for a variety of other purposes e.g., for advocacy/lobbying, supporting grant applications and guiding policy and strategy development.

5. The survey report uses the word ‘significant’ in the context of ‘statistical significance’ (which means that the result is likely to have not occurred by chance based on a statistical formula).

In discussing the results with staff, Micromex has observed:

a) That some of the results for Byron Shire are more akin to the challenges and priorities faced by metropolitan councils. While they confirmed roads are always important across all council areas, issues such affordability/availability of housing, managing population growth, managing tourism, public transport and traffic management are unusual to see in survey results for a regional/rural council.

b) This survey is the first to be conducted post the extensive awareness campaign that accompanied the 2016 Special Rate Variation Application and this may have been a factor in Financial Management becoming the main barrier to satisfaction, over local roads, for the first time. So, to maintain the community’s increased understanding and awareness of infrastructure needs that came from the SRV campaign and the 2018 Community Solutions Panel on Infrastructure Prioritisation, Council needs to continue to provide information to increase awareness of the actions it is taking to address those infrastructure needs.

There are a number of positives in the 2018 data, for example:

ü 68% of residents were ‘somewhat’ to ‘very’ satisfied with the way their contact with Council was handled.

ü 16 of the 36 services areas had a performance gap of less than 1.0, and 4 of the service areas have satisfaction levels that are exceeding expectations.

ü 4 of the 36 services areas had satisfaction levels at or exceeding the NSW benchmark satisfaction levels.

ü Community consultation/engagement, E-services and the Resource Recovery Centre are positive drivers of satisfaction.

However, the results also include:

- Decline in overall levels of satisfaction with Council performance generally – 2.76 (out of a scale of 0 – 5) down from 2.91 in 2016.

- Decline in levels of satisfaction in most service areas – as shown in the report.

- Increasing performance gaps (difference between importance and satisfaction levels) in some service areas.

The Survey Report provides a statistical analysis of the key barriers to or optimisers of satisfaction, shown below. The 2018 survey shows that Council has more barriers than optimisers and that is

driving the decline in overall satisfaction.

To improve satisfaction staff will recommend Council focusses on:

- maintaining, or increasing, optimisers – these are important to ‘hold the line’ in performance in these areas; and

- develop actions focused on the top few barriers (research shows that spreading the focus too broadly reduces impact across the board whereas focusing on a few items is most efficient.)

This will be supported by actions targeted at:

i) Performance e.g., projects, programs and actions to deliver improved services.

ii) Information and communication generally as well as about actions to improve performance because it is critical that residents have all the necessary information to make informed judgments about importance and delivery of services.

With the barriers and optimisers in mind, Micromex has recommended a focus on:

1. Financial Management

2. Development Assessment, Future Planning and Local Roads

3. Communication and engagement.

Staff from Micromex will attend the Councillor workshop on 7 February 2019 to present the results and provide their expert advice to Councillors on interpretation and use of data. They will also provide recommendations for focus areas based on their expertise.

The 2019/2020 Operational Plan is currently under development and staff will use the results to include specific actions aligned with the recommendations in the Survey Report. For example, staff will look at activities to improve transparency and availability of financial information and ‘The Byron Model’ project will deliver a framework for future engagement that will result in Operational Plan actions

Finally, for the first time in 2018, a requirement for the supply of the raw (depersonalised) data was included in the consultancy contract. This means that the raw data can now be interrogated to produce additional data, over and above that which is supplied in the Report, increasing its value to Council for no additional cost.

For example, pages 29 – 33 of the Community Survey Report include the analysis of the customer service results that are included in the standard costs for this type of work. Council staff can now at no additional cost, look at a number of additional matters, such as correlations between levels of satisfaction with service received from Council and overall satisfaction, or levels of satisfaction with resolution of contact with Council and the number of times it took to get that resolution – both of which are shown below.

Council has been increasingly using data analysis to drive evidence-based performance decisions. This survey contract is just one of many examples of how Council is improving its access to and use of data in cost efficient ways.

STRATEGIC CONSIDERATIONS

Community Strategic Plan and Operational Plan

CSP Objective

CSP Strategy

DP Action

OP Activity

Community Objective 5: We have community led decision making which is open and inclusive

5.1

Engage and involve community in decision making

5.1.1

Facilitate inclusive community consultation and stakeholder engagement to inform Council decision making (SP)

5.1.1.5

Deliver customer satisfaction survey

Legal/Statutory/Policy Considerations

Not applicable

Reviewed by Legal Counsel: ☐

Financial Considerations

None. The Community Survey, including the workshop with Councillors, will be delivered within the allocation budget.

Reviewed by Manager Finance: ☐

Consultation and Engagement

A communication and engagement plan was prepared and actions delivered to inform community about the survey and encourage resident involvement. For the first time Council included a mechanism in the survey to identify people who wanted to be informed of the outcome of their involvement and 43% of residents who participated asked for feedback. Council will now thank them and email a copy of the report to those residents, together with information on how Council will use the results. Community and online information will also be updated following the Councillor workshop.

BYRON SHIRE COUNCIL

Staff Reports - General Manager 4.1 - Attachment 1

PDF Creator

BYRON SHIRE COUNCIL

Staff Reports - Corporate and Community Services 4.2

Staff Reports - Corporate and Community Services

Report No. 4.2 Credit Card audit

Directorate: Corporate and Community Services

Report Author: Anna Vinfield, Manager Corporate Services

James Brickley, Manager Finance

File No: I2019/138

Summary:

The NSW Government announced Credit Card expenditure reforms in November 2018 in response to alleged misuse of a corporate credit card by the former General Manager of Hay Shire Council.

The Minister for Local Government announced measures including requiring councils to have an Audit, Risk and Improvement Committee and mandating the NSW Auditor General to undertake a performance audit of credit card usage at local councils.

This report to the Audit, Risk and Improvement Committee outlines Council’s credit card processes and notes that Council will participate in the NSW Auditor General’s performance audit.

RECOMMENDATION:

That the Audit, Risk and Improvement Committee:

1. Notes the status of the Credit Card reforms as announced by the NSW Government in November 2018

2. Notes that the NSW Auditor General will undertake an audit of Council’s Credit Card processes (as outlined in their external audit plan)

3. Receives further updates as the audit progresses

Attachments:

1 Local Government Minister media release "Council Credit Card Use Crackdown" 20 November 2018, E2019/8540 , page 100 ⇩

2 Confidential - Management Procedure - Purchase of Goods and Services by Credit Card, DM582424

3 Confidential - Management Procedure - Purchase Cards, E2019/6971

REPORT

Background

The NSW Government announced Credit Card expenditure reforms in November 2018 in response to alleged misuse of a corporate credit card by the former General Manager of Hay Shire Council – refer to attachment 1.

The Minister for Local Government announced a number of measures and Council’s status is noted in the below table:

Minister for Local Government reform:	Management comments
· Requesting the Office of Local Government to launch a formal investigation into Hay Shire Council’s credit card expenditure and accounting practices	· Noted
· Requiring every council in NSW to have an audit, risk and improvement committee	· Complete
· Asking the NSW Auditor-General to undertake a State wide performance audit of credit card usage at local councils	· Welcome audit as outlined in external audit report as a separate item to this business paper
· Updating the standard employment contract and guidelines for the appointment of General Managers by Councillors to strengthen rules on their credit card usage	· Noted and will update as required
· The Office of Local Government calls on all NSW councils to review their fraud prevention control	· As per 15 November 2018 meeting of ARIC, Council Fraud and Corruption Policy and Strategy endorsed outlining prevention controls

Key issues

Council currently has seven corporate credit cards and 46 purchase cards.

The cardholders include:

· Mayor

· General Manager

· Director Corporate and Community Services

· Director Infrastructure Services

· Director Sustainable Environment and Economy

· Fleet and Depot team leader

· Manager Finance

The total facility is $185,000. This is broken down as follows:

· Six corporate cards with a facility of $65,000 – Mayor, GM, Directors and Team Leader Fleet

· One corporate card with facility of $20,000 – issued to Manager Finance for the purposes of renewing pay parking permits received at front counter for people not wanting to use or have a credit card. This card is only for this purpose.

· Forty Six purchase cards with a facility of $100,000

A management procedure (attachment 2, DM582424 and attachment 3, E2019/6971) outlines the approved process. It is noted that the credit card procedure was last reviewed in 2006 and is therefore due to be reviewed.

Council's corporate credit card may be used to purchase goods and services when;

· cheaper rates for airfares and other approved items are available on the internet,

· payment in advance for accommodation or other services is required,

· payment in a foreign currency is required.

· Payment of out-of-pocket expenses on approved travel.

The Executive Assistant of each Department is responsible for ensuring the security of the Council credit card, and controlling its usage. Usage must be authorised by the General Manager or relevant Director for purposes other than approved travel and accommodation.

Next steps

Management welcomes the audit and will participate as part of the external audit plan.

STRATEGIC CONSIDERATIONS

Community Strategic Plan and Operational Plan

CSP Objective

CSP Strategy

DP Action

OP Activity

Community Objective 5: We have community led decision making which is open and inclusive

5.6

Manage Council’s resources sustainably

5.6.7

Develop and embed a proactive risk management culture

5.6.7.3

Implement Internal Audit, Risk and Improvement Committee functions and reporting across all business units

Community Objective 5: We have community led decision making which is open and inclusive

5.5

Manage Council’s finances sustainably

5.5.2

Ensure the financial integrity and sustainability of Council through effective planning and reporting systems (SP)

5.5.2.1

Internal financial controls maintained/improved

Legal/Statutory/Policy Considerations

Purchase of goods and services by credit card management procedure (attachment xx, DM582424) outlines the process for using corporate credit cards.

The Fraud and Corruption Control Policy (E2018/71390) outlines Council’s position towards fraud and corruption control, provides a definition and examples of each, and explains the documents relation to relevant legislation and Council’s Community Strategic Plan.

Financial Considerations

Council’s participation in the audit will be accommodated within existing budgets.

Consultation and Engagement

Staff will be consulted as part of the audit.

BYRON SHIRE COUNCIL

Confidential Reports - Corporate and Community Services 5.2

Report No. 5.2 Confidential - 2018 End of Year Audit Management Letter

Directorate: Corporate and Community Services

Report Author: James Brickley, Manager Finance

File No: I2019/139

Summary:

Council has received the 2018 End of Year Audit Management Letter from the External Auditor, the Audit Office of NSW, relating to the 2017/2018 financial year audit. The End of Year Audit Management Letter details ten items for management to consider and provides recommendations to improve internal controls and financial reporting processes.

Each of the audit matters raised in the 2018 End of Year Audit Management Letter has been identified in this report for consideration by the Audit, Risk and Improvement Advisory Committee.

RECOMMENDATION:

1. That pursuant to Section 10A(2)(f) of the Local Government Act, 1993, Council resolve to move into Confidential Session to discuss the report 2018 End of Year Audit Management Letter.

2. That the reasons for closing the meeting to the public to consider this item be that the report contains:

a) details of systems and/or arrangements that have been implemented to protect council, councillors, staff and Council property

3. That on balance it is considered that receipt and discussion of the matter in open Council would be contrary to the public interest, as:

as the report contains details of systems and/or arrangements that have been implemented to protect Council, Cuncillors, Staff and Council Property

Attachments:

1 Confidential - 2018 End of Year Audit Management Letter from Audit Office of NSW, E2019/8563

Venue	Conference Room, Station Street, Mullumbimby
Date	Thursday, 14 February 2019
Time	11.30am