372d6357-5fed-42bf-b7aa-4845c9aea086

PLANNING & ORGANISATION COMMITTEE MEETING AGENDA                              25 FEBRUARY 2014


Communication & Governance

12       ESTABLISHMENT OF INTERNAL AUDIT PROCESSES

Author           Chief of Staff, Debra Iezzi
                 Executive Office

Index            ECM/Subject/Internal Audit & Subject/Audit Committee

Attachments      1.   Audit Committee Charter



PURPOSE

The purpose of this report is to inform Council of the requirement of the Queensland Local
Government Act 2009 (the Act) and the Local Government Regulation 2012 (the Regulation) for
Council to establish an efficient and effective internal audit function and to seek approval for the
establishment of an Audit Committee.

EXECUTIVE SUMMARY

Section 105 of the Local Government Act 2009 provides that each Council must establish an
internal audit function and that large councils must establish an Audit Committee. While Noosa
Council is not a ‘large’ council by definition, the establishment of an Audit Committee is
recognised as an important feature of good governance and is recommended.

Internal audit provides an independent and objective review and advisory service designed to
add value and improve the performance of the organisation by providing assurance to the
Council, Chief Executive Officer (CEO) and management that Council’s financial and operational
controls effectively and efficiently manage Council’s risks and achieve the Council’s objectives.

In the current organisational structure internal audit reports functionally to the CEO, however as
Council does not have a dedicated internal resource to undertake the internal audit function, it is
proposed that Council engages a suitably qualified external auditing firm to act as Council’s
internal audit adviser and representative.

The Audit Committee is an advisory committee that assists Council in fulfilling its oversight
responsibilities relating to accounting and reporting requirements imposed by the Act including
monitoring and reviewing the integrity of financial documents, oversight of the internal audit
function and making recommendations to Council about any matters considered to need action
or improvement.

The Audit Committee is required to meet on a regular basis (at least twice per financial year) and
must report on matters reviewed at the committee to Council. It is proposed that the Audit
Committee meet quarterly and comprise the Mayor, a Councillor and two external members, of
which one must have significant experience and skills in financial matters (an Expression of
Interest will need to be undertaken to attract suitably qualified candidates). A draft Audit Charter
Policy document containing the terms of reference for the Audit Committee has been prepared
for consideration by Council and the Committee, once it is established.




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