MISSION AND VALUES OF COUNCIL
"A Sustainable Community that is inclusive, attractive, healthy and pleasant to live in, that uses our land so as to preserve our history and environment, respects the rights and equality of our citizens and manages our future growth wisely."
CONFIRMED
MINUTES
OF THE
Audit and risk Committee Meeting
6 December 2017
OUR VISION
"A thriving and friendly community that recognises our history and embraces cultural diversity and economic opportunity, whilst nurturing our unique natural and built environment."
OUR MISSION
“To deliver affordable and quality Local Government services.”
CORE VALUES OF THE SHIRE
The core values that underpin the achievement of the
mission will be based on a strong customer service
focus and a positive attitude:
Communication
Integrity
Respect
Innovation
Transparency
Courtesy
DISCLAIMER
The purpose of Council Meetings is to discuss, and where possible, make resolutions about items appearing on the agenda. Whilst Council has the power to resolve such items and may in fact, appear to have done so at the meeting, no person should rely on or act on the basis of such decision or on any advice or information provided by a Member or Officer, or on the content of any discussion occurring, during the course of the meeting.
Persons should be aware that the provisions of the Local Government Act 1995 (Section 5.25 (e)) establish procedures for revocation or rescission of a Council decision. No person should rely on the decisions made by Council until formal advice of the Council decision is received by that person. The Shire of Broome expressly disclaims liability for any loss or damage suffered by any person as a result of relying on or acting on the basis of any resolution of Council, or any advice or information provided by a Member or Officer, or the content of any discussion occurring, during the course of the Council meeting.
Minutes – Audit and Risk Committee Meeting 6 December 2017 Page 3 of 17
SHIRE OF BROOME
Audit and risk Committee Meeting
Wednesday 6 December 2017
INDEX – Minutes
1. Official OpeninG and election of chairperson and deputy chairperson
3. Declarations Of Financial Interest / Impartiality
5.1 1ST QUARTER FINANCE AND COSTING REVIEW 2017-18
6. Matters Behind Closed Doors
Minutes – Audit and Risk Committee Meeting 6 December 2017 Page 5 of 17
MINUTES OF THE Audit Committee Meeting OF THE SHIRE OF BROOME,
HELD IN THE Council Chambers, Corner Weld and Haas Streets, Broome, ON Wednesday 6 December 2017, COMMENCING AT 3.00pm.
The Chief Executive Officer (CEO) declared the meeting open at 3.02pm and welcomed Committee Members. He advised that he would be presiding over the meeting up until the Office of Chairperson was elected.
At the Ordinary Meeting of Council (OMC) held on 23 November 2017, Council resolved to change the committee to the Audit and Risk Committee.
Councillor representation on Committees was also determined at the OMC. Council resolved to appoint Cr D Male, Cr H Tracey and Cr C Mitchell to the Audit and Risk Committee. Cr B Rudeforth and Cr C Marriott were appointed as Deputies.
The CEO called for nominations for the position of Chairperson. Cr H Tracey nominated Cr D Male to the position of Chairperson. Cr D Male was elected Chairperson and assumed the position.
Cr D Male called for nominations for the position of Deputy Chairperson. Cr H Tracey nominated Cr C Mitchell to the position of Deputy Chairperson. Cr C Mitchell accepted the nomination over the phone prior to the meeting. Cr C Mitchell was elected Deputy Chairperson.
Attendance: Cr H Tracey Shire President
Cr D Male Deputy Shire President
Cr B Rudeforth
Leave of Absence: Nil
Apologies: Cr C Mitchell
Officers: Mr S Mastrolembo Chief Executive Officer
Mr J Watt Director Corporate Services
Ms A Nugent Director Development and Community
Mr S Harding Director Infrastructure
Mr A Santiago Manager Financial Services
Mr L Dodds Senior Finance Officer
Ms R Piggin Manager Governance
Ms V Glanville Senior Administration and Governance Officer
|
Committee Member |
Item No |
Item |
Nature of Interest |
|
Nil. |
|||
|
Moved: President D Male Seconded: Cr B Rudeforth That the Minutes of the Audit Committee held on 16 October 2017, as published and circulated, be confirmed as a true and accurate record of that meeting. |
Minutes – Audit and Risk Committee Meeting 6 December 2017 Page 10 of 17
|
SUMMARY: The Audit Committee is requested to consider results of the 1st Quarter Finance and Costing Review (FACR) of the Shire’s budget for the period ended 30 September 2017, including forecast estimates and budget recommendations to 30 June 2018. |
BACKGROUND
Previous Considerations
OMC 29 June 2017 Item 9.4.4
OMC 19 Oct 2017 Item 9.4.3
Quarter 1 Finance and Costing Review
The Shire of Broome has carried out its 1st Quarter Finance and Costing Review (FACR) for the 2017/18 Financial Year. This Review of the 2017-2018 Annual Budget is based on actuals and commitments for the first three months of the year from 1 July 2017 to 30 September 2017, and forecasts for the remainder of the financial year.
This process aims to highlight over and under expenditure of funds for the benefit of Executive and Responsible Officers to ensure good fiscal management of their projects and programs.
Once this process is completed, a report is compiled identifying budgets requiring amendments to be adopted by Council. Additionally, a summary provides the financial impact of all proposed budget amendments to the Shire of Broome’s adopted end-of-year forecast, in order to assist Council to make an informed decision.
It should be noted that the 2017/2018 annual budget was adopted at the Ordinary Meeting of Council on 29 June 2017 as a balanced budget. There have been further amendments adopted by Council as part of the Annual Financial Statements for the use of additional carried forward surplus. The result of all amendments prior to the first quarter FACR is a nil impact upon the Shire of Broome’s forecast end of year position.
COMMENT
The 1st Quarter FACR commenced on 25 October 2017. The FACR process has identified a surplus of $1,866 and organisational savings of $45,467, attributed predominantly to increased rates interest income on instalments.
The results from this process indicate a deficit forecast financial position to 30 June 2018 of $43,601 should Council approve the proposed budget amendments. This deficit is predominantly associated with Council resolutions to increase expenditure on the BRAC 1 Youth Precinct ($45,130).
It is recommended that the surplus funds identified throughout the FACR process be quarantined to reserve however this will carry a deficit of $43,601 forward to the next FACR meetings to be held in January 2018.
It should also be noted that this figure represents a budget forecast should all expenditure and income occur as expected. It does not represent the actual end-of-year position which can only be determined as part of the normal Annual Financial processes at the end of the financial year.
A comprehensive list of accounts (refer to Attachment 1) has been included for perusal by the committee and summarised by Directorate.
A summary of the results follows:
|
BUDGET IMPACT |
|||||||
|
2017/18
Adopted Budget |
FACR Q1 |
FACR Q1 |
FACR Q1 |
YTD
Impact |
|||
|
Executive – Total |
0 |
10,000 |
10,000 |
0 |
0 |
||
|
Corporate Services – Total |
0 |
(40,000) |
(40,000) |
0 |
0 |
||
|
Economic & Development - Total |
0 |
63,601 |
20,000 |
43,601 |
43,601 |
||
|
Infrastructure Services – Total |
0 |
(35,467) |
(35,467) |
0 |
0 |
||
|
Impact of Council approved budget amendments |
0 |
0 |
0 |
0 |
0 |
||
|
Net impact of Organisation Savings/Expenditure |
0 |
0 |
0 |
0 |
0 |
||
|
|
|
|
0,000* |
(1,866) |
(45,467) |
43,601 |
43,601 |
CONSULTATION
All amendments have been proposed after consultation with Executive and Responsible Officers at the Shire.
STATUTORY ENVIRONMENT
Local Government (Financial Management) Regulation 1996
r33A. Review of Budget
(1) Between 1 January and 31 March in each financial year a local government is to carry out a review of its annual budget for that year.
(2A) The review of an annual budget for a financial year must —
(a) consider the local government’s financial performance in the period beginning on 1 July and ending no earlier than 31 December in that financial year; and
(b) consider the local government’s financial position as at the date of the review; and
(c) review the outcomes for the end of that financial year that are forecast in the budget.
(2) Within 30 days after a review of the annual budget of a local government is carried out it is to be submitted to the council.
(3) A council is to consider a review submitted to it and is to determine* whether or not to adopt the review, any parts of the review or any recommendations made in the review.
*Absolute majority required.
(4) Within 30 days after a council has made a determination, a copy of the review and determination is to be provided to the Department.
Local Government Act 1995
6.8. Expenditure from municipal fund not included in annual budget
1) A local government is not to incur expenditure from its municipal fund for an additional purpose except where the expenditure —
(a) is incurred in a financial year before the adoption of the annual budget by the local government;
(b) is authorised in advance by resolution*; or
(c) is authorised in advance by the mayor or president in an emergency.
(1a) In subsection (1) —
“additional purpose” means a purpose for which no expenditure estimate is included in the local government’s annual budget.
POLICY IMPLICATIONS
2.1.1 Materiality in Financial Reporting
It should be noted that according to the materiality threshold set in Policy 2.1.1 Materiality in Financial Reporting, should a deficit achieve 1% of Shire’s operating revenue ($376,296) the Shire must formulate an action plan to remedy the over expenditure.
FINANCIAL IMPLICATIONS
The net result of the 1st Quarter FACR estimates is a budget deficit position of $43,601 to 30 June 2018 should the organisation savings of $45,467 be transferred to the Drainage Reserve.
RISK
The Finance and Costing Review (FACR) seeks to provide a best estimate of the end-of-year position for the Shire of Broome at 30 June 2018. Contained within the report are recommendations of amendments to budgets which have financial implications on the estimate of the end-of-year position.
The review does not, however, seek to make amendments below the materiality threshold unless strictly necessary. The materiality thresholds are set at $10,000 for operating budgets and $20,000 for capital budgets. Should a number of accounts exceed their budget within these thresholds, it poses a risk that the predicted final end-of-year position may be understated.
In order to mitigate this risk, the CEO enacted the FACRs to run quarterly and executive examine each job and account to ensure compliance. In addition, the monthly report provides variance reporting highlighting any discrepancies against budget.
It should also be noted that should Council decide not to adopt the recommendations, it could lead to some initiatives being delayed or cancelled in order to offset the additional expenditure associated with running the Shire’s operations.
STRATEGIC IMPLICATIONS
Our People Goal – Foster a community environment that is accessible, affordable, inclusive, healthy and safe:
Effective communication
Affordable services and initiatives to satisfy community need
Our Prosperity Goal – Create the means to enable local jobs creation and lifestyle affordability for the current and future population:
Affordable and equitable services and infrastructure
Key economic development strategies for the Shire which are aligned to regional outcomes working through recognised planning and development groups/committees
Our Organisation Goal – Continually enhance the Shire’s organisational capacity to service the needs of a growing community:
An organisational culture that strives for service excellence
Sustainable and integrated strategic and operational plans
Responsible resource allocation
Improved systems, processes and compliance
VOTING REQUIREMENTS
Absolute Majority
|
Moved: Cr H Tracey Seconded: Cr B Rudeforth That the Audit Committee recommends that Council: 1. Receive the 1st Quarter Finance and Costing Review Report for the period ended 30 September 2017; 2. Adopts the operating and capital budget amendment recommendations for the period ended 30 June 2018 as attached; 3. Transfers $45,467 of identified Organisational Savings to the Drainage Reserve; and 4. Notes a forecast end-of-year position to 30 June 2018 of a $43,601 deficit position. |
|
QUARTER 1 FINANCE AND COSTINGS REVIEW REPORT 2017-18 |
Minutes – Audit Committee Meeting 6 December 2017 Page 17 of 17
Nil
There being no further business the Chairperson declared the meeting closed at 3.29pm.
