REVIEW OF THE AUDIT AND RISK COMMITTEE CHARTER & REVIEW OF THE INTERNAL AUDIT POLICY · Report

SERVICES & ORGANISATION COMMITTEE MEETING                                      9 SEPTEMBER 2025


The Charter has also been amended to include recommendations from the Internal Audit Review of
the Effectiveness of the Audit and Risk Committee. In addition, research was undertaken into various
professional standards for the development of Charters and Audit and Risk Committee functions.
Reflective of the internal audit recommendations and research, the following changes were
implemented:

   •   Increasing the term for independent members from two years to three years which is
       considered better practice (section 10).
   •   Amending the quorum from three to two members in line with section 211 of the Local
       Government Regulation 2012 (section 12).
   •   Expanding responsibilities of the Committee (section 6) for the review and oversight of:
           1. Corporate culture;
           2. Performance management and reporting;
           3. The security of Council systems and information;
           4. Significant projects & outsourcing;
           5. Business continuity planning.
   •   Strengthened wording, including sections dealing with confidentiality (section 8), conflict of
       interest (section 9), and internal controls (section 6).
   •   Definitions were expanded to assist the reader in interpreting the Charter (section 14).


   2. Internal Audit Policy (Attachment 2)
The Internal Audit Policy establishes the strategic framework for the delivery of Council’s internal
audit function, as endorsed by the Audit and Risk Committee. As a key component of Council’s
governance framework, the internal audit function provides an independent, objective, and risk-
based assessment of Council’s internal control environment. Section eight of the Internal Audit Policy
requires that this policy be reviewed annually.

As part of the review, some sections have been reformatted and brought in line with Council’s
updated branding. Further, while there is effectively no change to the content of the policy section,
responding to recommendations of the Internal Audit Review of the Effectiveness of the Audit and
Risk Committee, several changes to the Terms of Reference have been implemented:
   •   Internal audit methodology (section 7) - highlighting the various methodologies to be applied
       in the audit process depending on the particular audit.
   •   Internal audit reporting process (section 8) - to improve how audit recommendations are
       structured and actioned.
   •   Responsibilities (section 9) - to clarify CEO, ARCO and Council responsibilities.
   •   Management actions (section 13) - to clarify responsibilities for implementing internal audit
       recommendations.
   •   Evaluating Internal Audit performance (section 14) - to monitor Internal Audit performance
       and client satisfaction.
Conclusion
The revised Audit and Risk Committee Charter and Internal Audit Policy provide a strengthened
framework for Council’s governance, risk management, and internal control environment. Together,
these documents reflect contemporary best practice, incorporate recommendations from the recent
review of the Audit and Risk Committee’s effectiveness, and ensure ongoing alignment with
legislative requirements. Their adoption will enhance clarity of roles, strengthen accountability, and