AGENDA FINANCE & AUDIT COMMITTEE MEETING THURSDAY, … · 4.2 2012 compliance review ... 5 general business nil 6 close of meeting. finance audit committee 17 may 2012 - 4 - finance

AGENDA

FINANCE & AUDIT COMMITTEE MEETING

THURSDAY, 17 MAY 2012

The Finance & Audit Committee Meeting of the Central Desert Shire Council will be held in the Ntyarlke Room, 1 Bagot Road, Alice Springs on Thursday, 17 May 2012 at 10:00am.

FINANCE AUDIT COMMITTEE 17 MAY 2012

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TABLE OF CONTENTS

ITEM SUBJECT PAGE NO

1 PRESENT

2 APOLOGIES

3 CONFLICT OF INTEREST

4 FINANCE AND AUDIT COMMITTEE REPORTS 4.1 Finance and Audit Terms of Reference .......................................................................... 4 4.2 2012 Compliance Review............................................................................................... 8 4.3 Financial Reports for March 2012 ................................................................................ 16 4.4 Letting of Tender - Roads to Recovery......................................................................... 36

5 GENERAL BUSINESS

Nil

6 CLOSE OF MEETING


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FINANCE AND AUDIT COMMITTEE REPORTS

ITEM NUMBER 4.1 TITLE Finance and Audit Terms of Reference REFERENCE \10 - CORPORATE

SERVICES\FINANCIAL MANAGEMENT\COMMITTEES\FINANCE AND AUDIT COMMITTEE\20120510 FAC MEETING 17 MAY 2012 - 152085

AUTHOR Cathryn Hutton, Deputy CEO/Director Corporate Services

RECOMMENDATION: That Finance and Audit Committee adopt the Finance and Audit Committee Terms of Reference.

SUMMARY: The terms of reference sets out the obligations and responsibilities of the committee.

BACKGROUND The Finance and Audit Committee Terms of Reference provides the Council and Committee with a clear statement of the role and responsibilities of the Committee. The draft Terms of Reference has been developed so as to ensure that the Finance and Audit Committee complies with the Local Government Act. ISSUES, CONSEQUENCES AND OPTIONS Nil

ATTACHMENTS: 1 Attachment Draft Terms of Reference - Finance and Audit

Committee v1

Attachment 1

Attachment Draft Terms of Reference - Finance and Audit Committee v1

Attachment 1 Page 5

Finance & Audit Committee Terms of Reference

Introduction The Central Desert Shire Council (hereinafter called the “Council”) hereby establishes a committee under the powers given in Section 54 of the Local Government Act and Section 11 of the Local Government (Accounting) Regulations, such committee to be known as the Finance & Audit Committee (hereinafter called the “Committee”). The Committee is established for the purpose of assisting the Council to undertake its financial functions in the months that the Council does not hold an ordinary meeting. The Committee shall act for and on behalf of Council in accordance with the provisions of the Local Government Act, local laws and policies of the Central Desert Shire Council and this Instrument.

Objectives of Finance & Audit Committee The Finance & Audit Committee will assist the Council to oversee the allocation of the local government's finances and resources. Under the control and direction of the Council, the Finance & Audit Committee will:

1. Ensure the annual budget is aligned with the Shire Plan. 2. Monitor and report on financial performance against the annual budget and

the Shire Plan. 3. Formulate strategies to improve the Council's financial position. 4. Make executive financial decisions on behalf of Council when the matter

cannot be held over until the next ordinary Council meeting. 5. Monitor compliance with appropriate legislative and accounting standards.

Responsibilities

1. Review the monthly income and expenditure reports, monitor progress against the budget and provide advice to Council on implications of these.

2. Approve adjustments to budget and re-allocation of resources after consultation with affected areas.

3. Review and accept or reject Program Funding Agreements or any other offers of funding.

4. Consider and make appropriate recommendations to Council on any matters having a significant financial impact on the Council.

5. Advise Council on the short, medium and long term financial implications of the Council's Shire Plan and any sub-plans.

6. At least annually, advise Council about the adequacy of the Council's insurance coverage.

7. On a regular basis, review the financial investments of the Council. 8. At least annually, review the Council’s borrowing program. 9. Review financial delegations and policies at least annually. 10. To advise Council on the level of allowances to be paid to Councillors. 11. Review and determine action for any other financial documents that need to

be dealt with prior to the next ordinary Council meeting. 12. Work with CEO and Finance Manager to develop the annual budget, ensure it

aligns with the Shire Plan and present it to Council for adoption. 13. Approve the awarding of any tenders or major contracts.

Attachment 1


Attachment 1 Page 6

14. Determine fees and charges to be made by the Council. 15. Decide which applications for financial aid made to the Council will be

supported. 16. Contribute to the preparation of the annual financial statements. 17. Review the annual audited financial statement and auditor's report and

recommend any necessary follow-up. 18. Ensure there is an adequate internal control system, including a fraud

protection plan, to minimise financial risk. 19. Exercise any general authority delegated by Council. 20. Deal with any tasks that have been delegated from a previous Council

meeting. 21. Consider any matters referred by the CEO or the Council.

Limitations If an issue involves $500,000 or more, the Finance & Audit Committee must make a recommendation to the next ordinary Council Meeting. If an issue involves $500,000 or more, but is urgent and cannot be held over until the next ordinary Council Meeting, the Finance & Audit Committee will make a recommendation, record how each member of the Committee votes on the recommendation and direct the CEO to contact other Council members out of session for their vote on the issue. Membership Members of this Committee include the Shire President or Deputy Shire President and two other Councillors appointed by Council. The CEO or delegate and the Finance Manager are ex officio members. Quorum A quorum for the Finance Committee is two members and must include the Shire President/Deputy Shire President. Chair The Shire President or Deputy Shire President will chair the Finance & Audit Committee. If the Shire President/Deputy Shire President is absent, the remaining members will elect a Chair from amongst themselves. Proxies In order to ensure continuity and a useful level of knowledge and experience, Finance & Audit Committee members are not permitted to send proxies to the meeting. The exceptions are the Shire President/Deputy Shire President, who may act as proxies for each other on the Finance & Audit Committee. Term of office The term of office is for the Local Government electoral term. A newly elected Council will appoint a new Finance & Audit Committee. Should a Councillor be re-elected, he/she may serve multiple terms on the Finance & Audit Committee if appointed by Council. Self-review At least once a year, the Finance Committee will devote part of the meeting to reviewing its own processes and outcomes of the preceding year. Timing The Finance Committee will meet in the months between ordinary Council meetings.

Attachment 1


Attachment 1 Page 7

Minutes Minutes must be kept of the decisions and actions of the Finance & Audit Committee. Minutes will be taken by the Finance Manager or other delegated staff member. Reporting The minutes of the Finance & Audit Committee will be tabled at the next Council Meeting.


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ITEM NUMBER 4.2 TITLE 2012 Compliance Review REFERENCE \10 - CORPORATE


AUTHOR Cathryn Hutton, Deputy CEO/Director Corporate Services

RECOMMENDATION: That the Finance & Audit Committee notes the report from the 2012 Compliance Review undertaken by the Department of Housing, Local Government and Regional Services and the action being taken to address any non-compliance issues.

SUMMARY: The Department undertakes periodic compliance reviews as per section 207(1) of the Local Government Act. This report provides the outcome of the report and identifies actions that the Shire is taken to address the non-compliance issues.

BACKGROUND The Department of Housing, Local Government and Regional Services (the Department) is responsible to the Minister for Local Government for the administration of the Local Government Act (the Act). From time to time the Department undertakes compliance reviews to check that local governments are following the obligations and responsibilities of the Act. A local government compliance review was undertaken in the Central Desert Shire during March 2012. The outcome of the review and the response to the review are provided for the Committees information. The following areas of breach were identified: Breach Response S23 (1) (d) Indicators Key performance indicators were

discussed with the Council at the Shire Plan workshop in May and will be included within the 2012-2013 Shire Plan.

S130 Privacy Policy A policy will be presented to the June Council meeting.

Ministerial Guidelines – Investment A policy will be presented to the


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Policy June Council meeting. Ministerial Guidelines – Borrowing Guidelines

A policy will be presented to the June Council meeting.

ISSUES, CONSEQUENCES AND OPTIONS The breaches identified are relatively minor and will be addressed in a timely manner.

ATTACHMENTS: 1 Attachment - Letter from Department2 Attachment - Response

Attachment 1 Attachment - Letter from Department

Attachment 1 Page 10







Attachment 2 Attachment - Response


Attachment 2 Attachment - Response



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ITEM NUMBER 4.3 TITLE Financial Reports for March 2012 REFERENCE \10 - CORPORATE


AUTHOR Muhammad Waqas, Finance Manager RECOMMENDATION: That the Finance and Audit Committee note the financial reports for the period ending 31 March 2012.

SUMMARY: The Finance & Audit Committee received reports in the months that the full Council does not meet. The agenda item provides the financial reports and explanations of the various items.

BACKGROUND 1. Actual income and expenditure of the Council for the period 1

July 2011 to 31 March 2012 Summary actual income and expenditure report (Annex – A) along with graphs and detailed actual income and expenditure report (Annex – A1) have been included for the analysis of the Committee. Actual income and expenditure report for the Council for the period ending 31 March 2012 shows an operating surplus of $8,844,430.00. The budgeted operating surplus for the same period amounts to $7,349,145.00. The report further shows that the Council has a surplus of $4,732,233.00 after deducting capital expenditure and the budgeted surplus for the same period amounts to $2,262,417.00. The Council has total income of $29,841,036.00 while the budgeted income for the same period is $33,009,874.00. Out of the total amount, the Council has grants income of $23,218,725.00 while the budgeted grants income for the same period was $23,302,775.00. The Council has total operating expenditure of $20,996,606.00 while the budgeted expenditure for the same period is $25,660,729.00. Employees’ salaries, on-costs and other related expenses total $11,491,850.00. Materials and contracts related costs total is


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$6,397,486.00. The budgeted Employees’ and Materials and contracts costs were $14,167,831.00 and $7,522,686.00. The Council has total capital expenditure of $4,732,233.00 while the budget capital expenditure for the same period amounts to $5,086,728.00. While the actual year to date total income is less than the budgeted income, the actual year to date operating expense is also less than the budgeted operating expenditure. This has resulted in higher operating surplus than the budgeted amount.

2. Balance Sheet of the Council as at 31 March 2012 The Balance sheet (Annex – B) has been included for the analysis of the Committee. The Balance Sheet of the Council as at 31 March 2012 shows that the Council has total assets of $64,459,933.00 and total liabilities of $7,440,274.00. The Balance Sheet further shows that the Council has current assets of $18,858,356.00 while the total current liabilities of the Council amount to $6,243,166.00. The Net Assets of the Council as on 31 March 2012 amount to $57,019,659.00. The Balance Sheet does not include period accumulated depreciation and other period provisions for employee entitlements. These are recorded at the end of the financial year. 3. Details of all cash and investments held by the Council as at 31

March 2012 As at 31 March, the Council has total Cash on hand and Bank deposits of $3,687,736.00. The Council has total investments of $13,448,715.00. Following is a summary of all the bank accounts:

Operating Account 38,446.00 Trust Account 1,967,055.00 ICC Account 1,595,208.00 Cash on hand 80,740.00 Petty Cash 6,287.00

Total 3,687,736.00


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Following is the summary of all the investments: Sr. No.

Bank Principal $ Rate of Interest

Maturity Date

1 WESTPAC 5,190,230.35 5.29% 14-05-20122 WESTPAC 644,755.04 5.29% 14-05-20123 SUNCORP 1,526,993.93 5.56% 18-05-20123 WESTPAC 1,513,211.10 5.78% 19-06-20124 WESTPAC 1,528,683.46 5.78% 19-06-20125 SUNCORP 3,044,841.56 5.57% 03-04-2012Total 13,448,715.44

4. Aged Analysis as on 31 March 2012 of debts owed to the

Council The aged summary (Annex - C) shows that the Council has receivables of $1,571,212.50 as at 31 March 2012. The aged analysis shows that the Council has $368,578.00 current receivables, receivables aged 30 days amount to $686,584.00, receivables aged 60 days amount to $15,232.00 and receivable aged more than 90 days amount to $500,818.00. Territory Housing (Debtor# 00096) is the biggest debtor with receivable amount of $659,695.17. Department of Housing, Local Govt. and Regional Services (Debtor# 00005) is the second biggest debtor with outstanding amount of $535,654.50. The amount relates to the invoices raised for housing management program funding agreement. Out of more than 90 days amount of $500,818.00, $418,455.01 is receivable from funding bodes. Out of this $339,492.17 is receivable from Territory Housing (Debtor# 00096). 5. Budgeting for financial year 2012-13 Draft Budget for the financial year 2012-13 has been finalised and work is in progress for the Long Term Financial Plan for presentation to the Council in the special meeting. Executive Management Team including Finance Manager had two full day meetings for discussion of the various budget components. The first meeting was held in the third week of April 2012. The final meeting was


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held in the first week of May were the budget for the financial year 2012-13 was finalised.

6. Financial System Upgrade The Council had its financial system upgrade from version 11.6 to 11.9 of TechOne. Initially there were some minor issues regarding operations; most which have been resolved. ISSUES, CONSEQUENCES AND OPTIONS Nil

ATTACHMENTS: 1 ANNEX A - Summary Profit and Loss March 20122 ANNEX A1 - Detailed Profit and Loss March 20123 ANNEX B - 2012 Balance Sheet March 2012 4 ANNEX C - 2012 Aged Debtor March 2012 5 CHART 1 - Budget vs Actual Income 6 CHART 2 - Budget vs Actual Expenditure

Attachment 1 ANNEX A - Summary Profit and Loss March 2012


Attachment 2 ANNEX A1 - Detailed Profit and Loss March 2012
















Attachment 3 ANNEX B - 2012 Balance Sheet March 2012


Attachment 3 ANNEX B - 2012 Balance Sheet March 2012


Attachment 4 ANNEX C - 2012 Aged Debtor March 2012






Attachment 5 CHART 1 - Budget vs Actual Income


Attachment 6 CHART 2 - Budget vs Actual Expenditure



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ITEM NUMBER 4.4 TITLE Letting of Tender - Roads to Recovery REFERENCE \10 - CORPORATE


AUTHOR Glenn Marshall, Director Works RECOMMENDATION: That the Finance & Audit Committee endorse the entry into contract following public tender for Roadworks on Yuelamu Access Road, Yuelamu Community Internal Roads and Nyirripi Access Road with D & C Dehne Constructions at a total tender price of $579,778.00 (ex GST).

SUMMARY: Public tenders were called on 20 April 2012 for Roadworks on Yuelamu Access Road, Yuelamu Community Internal Roads and Nyirripi Access Road. Four (4) prospective contractors submitted tenders. Tender prices varied considerably. It is proposed to enter into contract with the second lowest tenderer, D & C Dehne Constructions, who can start the job one month earlier than the lowest tenderer and will finish within 8 weeks compared to 11 weeks for the lowest tenderer. D & C Dehne Constructions price is 5% higher than the lowest tender, and this is considered acceptable for completing the work 6 weeks earlier.

BACKGROUND Public tenders for upgrades to Roadworks on Yuelamu Access Road, Yuelamu Community Internal Roads and Nyirripi Access Road were called on 20 April 2012. These roadworks were packaged as one tender. Four (4) tender responses were received. This is considered to be a good response to the public tender. Pricing was within budget and it is recommended to enter into contract with the second lowest tenderer, D & C Dehne Constructions. The lowest tender was from Lyndavale Pty Ltd, being 5% lower than Dehne Constructions. However, Lyndavale Pty Ltd cannot start until a month later (mid July) and not finish for 11 weeks (end September) compared to Dehne Construction who can finish by mid August.


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ISSUES, CONSEQUENCES AND OPTIONS D & C Dehne Constructions have committed to engaging with local CDEP teams to provide training opportunities during the roadworks contract.

ATTACHMENTS: There are no attachments for this report.

Documents

AGENDA FINANCE & AUDIT COMMITTEE MEETING THURSDAY, … · 4.2 2012 compliance review ... 5 general business nil 6 close of meeting. finance audit committee 17 may 2012 - 4 - finance