Dear Beagle Editor,
I am somewhat confused and maybe you can help shine a light on this. In the Council Noticeboard you put up for the 10th of July I took particular interest in the Expressions of Interest section looking for an Internal Auditor.
Council has an External Auditor Council has a the Director Finance and Business Development Council has an Audit Committee which reports to Council Membership of the Audit Committee Member/s (Voting) Two Councillors Three Independent external member/s to be determined by Council. Attendee (non-voting) General Manager or nominee Internal Auditor or person responsible Director Finance and Business Development or nominee External Auditor or nominee Council has nine Councillors in all who can ask any questions they like of the Audit Committee
For clarity my understanding of the Role of an EXTERNAL Auditor is: Council is responsible for the preparation and fair presentation of the financial statements in accordance with Australian Accounting Standards and the statutory requirements under the Local Government Act, 1993, and for such internal control that Council determines is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. The auditors responsibility is to express an opinion on the financial statements based on their audit. The current 2015/2016 Council auditors report states: "Our audit responsibility does not extend to the Original Budget figures disclosed in the Income Statement and Cash Flow Statement, Notes 2(a), and 16 to the financial statements, estimated expenditure in Note 17, additional Council disclosure notes, nor the attached Special Schedules. "Accordingly, no opinion is expressed on these matters. The audits are conducted, according the the Independent Audit Report to the Council General Purpose Financial Statements for the Year ended 30 June 2016: "in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. "In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. "An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements. For clarity the Role of an Audit, Risk and Improvement Committee is: By Council's own documents Council’s Audit, Risk and Improvement Committee presently comprises three independent members, the Deputy Mayor and a Councillor. The Audit, Risk and Improvement Terms of Reference (TOR) allows for the attendance of the General Manager as well as the Director Finance and Business Development. The provision of an internal auditor apparently fulfills "one of the requirements of Eurobodalla Shire Council’s Audit, Risk and Improvement Committee in the continued implementation of an internal audit function and the monitoring and review of its outcomes." Some of the roles of the Audit, Risk and Improvement Committee in Council's paperwork are to: Review whether management has in place a current and comprehensive risk management framework and associated procedures for effective identification and management of business and financial risks including fraud and to review whether a sound and effective approach has been followed in developing strategic risk management plans for major projects or undertakings. My Understanding of an Internal Auditor is to: · Act as a forum for communication between the Council, General Manger, senior management, internal audit and external audit · Review the internal audit coverage and Internal Audit Plan, ensure the plan has considered the Risk Management Plan, and approve the plan · Consider the adequacy of internal audit resources to carry out its responsibilities, including completion of the approved Internal Audit Plan · Review all audit reports and consider significant issues identified in audit reports and action taken on issues raised, including identification and dissemination of better practices · Monitor the implementation of internal audit recommendations by management · Periodically review the Internal Audit Charter to ensure appropriate organizational structures, authority, access and reporting arrangements are in place · Periodically review the performance of Internal Audit There has been much said in The Beagle about the purchase of the Batemans Bay Bowling Club site and how that transaction was "put through the books" and whether the required protocols of determining if such a purchase was financially responsible, having carried out the necessary calculations to prove such a purchase was not speculative which would put the communities money at risk. How is it that with all the auditors all checking on each others work there have been major cock-ups in the officially published financial statements presented around the time of the Special Rate Variation public meetings. How is it that after continued questioning about the purchase of the Bowling Club and questions asking if the Audit, Risk and Improvement Committee were advised of the purchase and given the opportunity to weigh the RISK (as is their function) there has been no public response. Was the purchase a poor risk? - in light of the Batemans Bay CBD as a whole being subject to sea level rise it might not be the best decision as the possible change of use proposed by Council for the site will require a DA that MUST consider sea level rise. - in light of the known construction difficulties of the plaza opposite, specifically in regards to footings and water basins councillors would be aware that there are potential construction difficulties that may see redevelopment costs soar. - in having no plans or purpose at the time while taking out a $2 million loan for an indefinite time many feel that the decision to purchase was ill advised at that the councilors were not sufficiently informed of Council's own procurement processes and the need to consider the "investment" as being responsible use of ratepayers money. - in being advised that the building was in very poor repair one year before purchase and the value of the land was at best $1.4 million - in coming directly after a widely objected to Special Rate Variation was voted in irrespective of 11,000 disapproving signatures indicates an audacity and an extravagance and a Council quite removed from a majority of its residents and ratepayers living in a regulated income economy. It has been noted in the Operational Plan & Budget 2016-2017, that the BBBC acquisition is described in the capital program as “real estate development” and this description is also used for an expenditure item for $106,295 on the same line as the capital expenditure. Was this book keeping ever questioned by the Audit and Risk Committee or by the Internal Auditor or by the External Auditor or has it and the other questions above only ever raised by the general public who are not mentioned once in all the paperwork combined for all three tiers of auditing. Who's auditing the stack of auditors? Is another auditor planned? Name and address withheld on request