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Essential Services Commission – Local Government

  • JNW provided advice on the development of a regulatory model for local government based on the Minister of Local Governments scope.  Project included an assessment of the local council environment, risks of a cap, assessment constraints and principles, issues with evaluating rate capping variations and financial analysis on all councils.
  • Detailed council financial analysis, including:
    • Determination of baseline information for each council.
    • Identification of the largest expense categories/cost drivers and revenue categories including analysis of percentage of total expenses/revenues, average growth rate per council over the four years and trends across different types of councils.
  • Preliminary construction of a relevant Local Government Cost Index.

Other Local Government work

Manningham City Council

  • Assisted with the acceleration of the procurement enhancement program including procurement structure, roles and responsibilities, financial delegation automation and controls framework. Created a delivery model that provides Procurement Intelligence – balance of operational excellence blended with decision making transparency and accountability.
  • Evaluated the risk management framework and developed a Process Improvement Roadmap.  Subsequently conducted risk identification and risk assessment workshops for both strategic and operating risks and developed treatment plans for high and very high rated risks. Outcomes were a more progressed strategic view of Council’s risks.
  • Prepared a Business Continuity Management framework improvement roadmap on how to update and strengthen the current Business Continuity Plans. The framework design incorporated a Crisis Management Team with clear command and control reporting structures to facilitate an efficient and effective recovery from the disaster event and continuity of critical services.
  • Independent observation of the IT Disaster Recovery Plan (IT DRP) test including test plans, infrastructure for back up processes and evaluation of the governance compared against an IT DRP test maturity matrix. Suggestions strengthened the testing processes.

The following is a typical example of our IT maturity assessment.

IT Maturity

  • Consulting Director Alan Fotheringham is the independent Audit Committee Chairman. This experience gives Alan valuable insights into the challenges facing local governments.

Banyule City Council

Completed a review of the Audit Committee Charter, including benchmarking against better practices guides including:

  1. Audit Committees – A Guide to Good Practice for Local Government by Local Government Victoria, 2011
  2. Audit Committees – A Guide to Good Practice by the Auditing and Assurance Standards Board, Australian Institute of Company Directors and the Institute of Internal Auditors-Australia, second edition, 2012
  3. Peer councils
  4. Review of the Local Government Act 1989 – Act for the future, Directions for a new Local Government Act.

City Of Melbourne

  • Through strong client relationships and quality service, for five years, Jeff successfully led the outsourced internal audit function, including development and delivery of the internal audit plan, conducting assessments of project management, grant funding, event management, business continuity, data interrogation of rates revenue, IT controls, payroll, business continuity, risk management and major contracts.  
  • Mapped the Governance and Assurance Processes against the Deloitte Local Government better practice framework. Other areas assessed included:
    • Strategic risks are matched against the key governance activities
    • There is alignment and integration between the various governance activities and key strategic processes
    • There is ownership and accountability for key control activities
    • Identification of potential duplication or gaps in coverage.
  • Reviewed procurement practices against the policies and procedures and assessed controls to prevent service creep, invoice splitting, conflicts of interest, bids evaluation, record management, approval and transparency of decisions.
  • For numerous major contracts, such as town hall hire, openspace facility management services, tree facility management services, aged care, security and building safety, parking meter coin collection, waste management, evaluated contract management procedures for managing the contracts including annual service plans, monthly contract monitoring meetings, contractor reporting systems used to assess assurance of quality of service and contract compliance, contract payment processes and the determination of compliance with Key Performance Indicators (KPIs) compliance and any bonus payments.
  • For each audit we created better practice tools. We were advised that the outcomes delivered and reports issued were innovative and insightful that strengthened the control environment.
  • Jeff presented all internal audit results to the Audit Committee, providing insight and clarity on issues.

To add value we linked the internal audit focus to risks and organisational value drivers – see below:

Govt Performance Value map

South Gippsland Shire Council

  • Conducted risk maturity benchmarking assessments covering:
    • Risk strategy
    • Risk management policies and procedures
    • Risk register and risks
    • Current risk reports.
  • Benchmarked risk maturity against Baw Baw Shire Council to determine if there was a fit for a shared risk service arrangement.

Below is an example of the key risk management elements we assess with our maturity assessment.

Maturity elements

Surf Coast Shire

  • Managed the outsourced internal audit program for six years including reporting to the Audit Committee.
  • Assisted the Council with project risk management of building a $45 million Community and Civic Precinct, including business case, risk identification and treatment and transition plans.
  • Consulting Director Mark Davies was the CEO for four years, up until 2012.

City of Monash

  • Jeff was an independent Audit Committee member on the Audit Committee for six years.  Through the management of the internal and external auditors, influenced the risk journey and framework adopted by the Council. This has led to a more mature, effective risk management culture.
  • During this period he chaired a number of Audit Committee meetings.  As such, he has a sound understanding of how to assist and support Management and the Councillors from a governance perspective, both financially and operationally.

City of Boroondara

  • Conducted a risk culture assessment which included facilitating a risk questionnaire survey and culture assessment workshops. The report provided guidance on how to further strengthen the risk culture.  Some of the key elements identified that assisted the embedding of risk management were:

risk culture pic

Mitchell Shire Council

Conducted a strategic risk identification workshop to enable the Council meet its requirements under the Local Government Performance Framework. Due to tight budgetary constraints and resource limitations, Jeff created a risk training workshop that not only provided information on how to implement their risk framework, but also facilitated the identification of Directorate operational risks as well as strategic risks.   

Of significance was providing a methodology to link strategic risks with operational risks.  See table below:

Strat Risk Linkage

Baw Baw Shire Council

  • Facilitated the review of their risk management framework including development of a risk management policy, creation of risk definitions and appetite statement and conducting ELT workshops. The risk assessment workshops have provided increased transparency of the high level risk issues facing the Council, as well as highlighting emerging hazards.
  • Conducted risk maturity benchmarking assessments covering:
    • Risk strategy
    • Risk management policies and procedures
    • Risk register and risks
    • Current risk reports.
  • Benchmarked risk maturity against South Gippsland Council to determine if there was a fit for a shared risk service arrangement
  • Prepared a shared services diagnostic that identified alignment factors such governance, resourcing and systems.  Evaluated the benefits / costs / synergies/ risks / cultural fit and developed a Roadmap to Shared Services.

 

Mornington Peninsula Shire Council

  • JNW was the interim internal audit provider for six months.  We assisted the Council transition from an in-house function to an outsourced internal audit provider. 
  • We completed a number of internal audits including Competitive Neutrality Compliance, Volunteer Risks, Library Controls and a Follow Up of Audit Recommendations.  Presented all reports and their findings to the Audit Committee.

Frankston City Council

JNW has just developed an improvement roadmap for Frankston City Council to implement a Customer Focused Service Planning & Costing framework. The service costing methodology will provide vital operational cost intelligence to strategically position the Council to take advantage of different service delivery models.  Furthermore, by being customer focused it can structure itself to meet the Community’s future expectations efficiently and effectively and positively influence their experience.

costingframework.pdf

Assisted the Council with a major acquisition.  This role included conducting a financial risk due diligence on key assumptions and building financial models in order to provide the Council with comfort around the financial risks, commercial viability and sustainability of this revenue generating opportunity.

To provide perspective, our typical approach is to map the risks onto a heat map – see below:

DD financial risks

Bayside City Council

  • Jeff managed the delivery of the outsourced internal audit program for six years, including reporting to the Audit Committee. During this period Jeff assessed leading edge areas such as service driven asset management and ticket machine revenues, had impact with procurement and contract management and identified issues with event management.  Annually completed the audit plan on time and met all of the Audit Committee reporting timeframes.
  • JNW continues to provide assurance support to the Council.  It has recently conducted:
    • A procurement and contract management assessment
    • A number of cash handling evaluations to ensure cash takings are appropriately recorded, reconciled and banked and that any occupational health and safety issues are mitigated.

Victorian Local Governance Association

  • Provided advice on the rate capping regime, including transition timeline, summary of rate capping issues, summary of stakeholders and their potential issues, governance risks and potential strategies and tools. The aim was to assist the industry body provide guidance to the Minister for Local Government.