QUOTATION FOR THE PROVISION OF INTERNAL AUDIT …

QUOTATION FOR

THE PROVISION OF INTERNAL AUDIT SERVICES

Quotation No. Q-19-20-54

Close time and date: 2pm Monday 22 June 2020

Supplier Name: _____________________________________________________ Contact Name: _____________________________________________________ Address: _____________________________________________________ Phone Number: _____________________________________________________ Fax Number: _____________________________________________________

Email: _____________________________________________________ Date: _____ / _____ / _____

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Narrandera Shire Council - Quotation No. Q-19-20-54: Provision of Internal Audit Services

PREAMBLE Narrandera Shire is a small general-purpose rural council situated in the Riverina region of South West New South Wales. Council’s consolidated total expenses from continuing operations for the period ending 30 June 2019 was $19.2 million dollars. Council has been very proactive in the area of Internal Audit & Risk Management by implementing an Audit Committee in 2012. The Committee Charter has been reviewed in recent years to encompass the role of Audit, Risk and Improvement. Throughout this period Council has engaged an external entity to undertake internal audits reporting to the Committee. The Committee is supported by Council’s Governance & Engagement Manager and another administrative member of staff. The committee operates on three year rolling audit program with a report provided annually to Council which is then included in Council’s Annual Report. Council is now seeking proposals from suitably qualified respondents for the supply and delivery of Internal Audit Services for Narrandera Shire Council for a period of three years, expiring 30 September 2023. Council is seeking to establish long-term relationships with a supplier who can assist Council in achieving ‘Best Value for Money’ solutions for the acquisition of these services. Best value for money is determined by considering all factors which are relevant to a particular purpose, for example: quality, quantity, reliability, timeliness of services and cost. Best value for money does not necessarily mean ‘the lowest price,’ however the lowest price supplier may offer the best value for money if the quotation meets the other essential criteria. Quotations are called for the provision of internal audit services to Council in accordance with the Scope of Works enclosed. THIS REQUEST FOR QUOTATION COMPRISES FOUR SECTIONS: Section A: Contains this Preamble and the Conditions of Quotation. Section B: Contains the Terms and Conditions of Contract. Section C: Contains the Scope of Works involved. Section D: Contains the Supplier Response to Requirements. Section E: Contains additional attachments to inform the reader.

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Section A CONDITIONS OF QUOTATION

1. Mandatory Requirements for Responding to the Request for Quotation Prospective suppliers must respond to the following requirements to enable the conformation evaluation phase to be conducted by Council. Failure to respond to these requirements may result in a quotation being considered as non-conforming.

1.1 Insurance It is mandatory that the successful Contractor have insurance cover for Public Liability in the amount of $20,000,000 for any one event (Schedule D4). The Contractor must also indemnify the Council and take out and maintain Workers Compensation insurance as required by law.

Each prospective supplier must submit details of their level of Professional Indemnity Insurance cover. 1.2 Statement of Conformance Prospective suppliers must complete the Statement of Conformance (Schedule D5). Where the quotation submission does not comply with any clause as specified in this quotation document, details of such non-conformance must be given in this statement. Non-completion of the above statement or failure to notify Council of any deemed non-conformances may render the whole of the quotation submitted as non-conforming and may be excluded from further consideration.

1.3 Conflicts of Interest and Fair Dealing Council’s policy is to engage in the highest standards of ethical behaviour and fair dealing. Council requires the same standards from those with whom it appoints. Accordingly, potential suppliers are required to complete any disclosures regarding conflicts of interest, (Schedule D2) and include it as part of their submission. This information will be taken into account when evaluating the quotation. 1.4 Form of Quotation All quotations must be executed as indicated below on the Quotation Form (Schedule D1).

1.4.1 in the case of a Corporation;

By signatures of two (2) persons authorised by the Corporation to bind it into a Contract.

1.4.2 in the case of a Firm (including a business or trade name); By signature of each proprietor of such Firm.

1.4.3 in the case of a Partnership;

By signature of each partner.

1.4.4 in the case of an individual. By signature of the individual.

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2. Response Conditions

2.1 Confidentiality

Respondents agree:

2.1.1 Not to use the confidential information other than for the purpose of preparing the relevant response;

2.1.2 Not to disclose any confidential information to any proposed sub-

contractor without first obtaining the consent of Council;

2.1.3 Subject to its obligations under the Local Government Act 1993 and the Government Information (Public Access) Act 2009, Council will treat all quotations as confidential information. Council will not knowingly exchange or transfer commercial-in-confidence information between any of the respondents.

2.2 Alterations, Erasures or Illegibility Quotations containing alterations or erasures, and quotations in which prices are not clearly and legibly stated may be excluded from consideration. Any alteration made to a quotation is to be initialed by the respondent.

2.3 Language and Measurement The submitted quotation, including all attachments and supporting technical data, is to be written in English. Unless otherwise specified, measurement is to be expressed in Australian legal units of measurement.

2.4 Suppliers to Inform Themselves Potential suppliers are required to acquaint themselves with all aspects of the documents. If a supplier has any doubts as to the meaning of any portion of the quotation documents, they shall either: a) Ask Council’s authorised officer (see clause 2.5 below) for clarification, which

clarification shall be valid only if issued in writing. Any clarification given pursuant to this clause may also be issued to all other prospective suppliers.

b) Object to any term. If a prospective supplier does object to any term, they should

submit a price in compliance with the quotation documents, and a price with the removal of the term/clause to which the prospective supplier objects.

No claims that a prospective supplier was disadvantaged by lack of knowledge, or ability to resolve ambiguities, will be considered. Where prospective suppliers have made assumptions in preparing their quotation, these are to be clearly defined in their submitted quotation. 2.5 Further Information For further information regarding this matter please contact Council’s Governance and Engagement Manager, Mr. Craig Taylor, (email preferred) at [email protected] or by telephone 02 6959 5510.

mailto:[email protected]

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2.6 Validity Period of Quotation Council requires that quotations submitted in response to this request remain open for acceptance for a period not less than 90 days after the quotation closing date. 2.7 Ownership of Submitted Documents All submitted documents become the property of Council upon lodgment. This does not affect any intellectual property rights that may exist in a submitted document. 2.8 Goods and Services Tax (GST) Suppliers unit rates for the services/materials quoted are to be shown as “Exclusive of GST”. Upon the allocation of work the amount of GST will be required to be shown separately on the successful supplier’s invoice. All rates and prices are deemed to include all overheads, insurances, delivery and set up costs (where applicable) and statutory charges, small tools and consumables. 2.9 Australian Business Number (ABN) Prospective suppliers are required to provide their GST registered ABN in the Quotation Form (Schedule D1). Withholding tax may be charged on services performed as a result of the winning supplier not having/providing a registered ABN. 2.10 Lodgment of Quotations Quotations close at 2.00 pm on Monday 22 June 2020. Quotations received in accordance with this document, and complete in all respects, may be lodged via the following methods: 1 .Delivered to; Narrandera Shire Council, 141 East Street, Narrandera

NSW 2700. 2. Posted to; Narrandera Shire Council, 141 East Street, Narrandera

NSW 2700.

3. Email preferred to: [email protected] All quotations must be clearly marked with the following reference: “Quotation Number Q-19-20-54: Provision of Internal Audit Services.” Quotations delivered in person or by mail or courier must be in a sealed opaque envelope and lodged in the quotation box located in the Council foyer. Council office hours: 9.00am to 4.30pm – Monday to Friday, excluding public holidays. NOTE: Quotations delivered on the quotation closing date must be lodged by 2.00 pm. Should the supplier become aware of any discrepancy, error or omission in the quotation documents submitted and wish to lodge a correction or additional information, this material is to be in writing and lodged prior to the quotation closing date/time.

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2.11 Late Responses Any quotation received after the specified deadline for the closing of this quotation will not be considered, except in the following circumstances: a) Where the prospective supplier is able to satisfy to Council that formal quotation

documents and all other required essential information were posted or lodged at a post office or other recognised delivery agency in sufficient time to enable the documents to have been received by Council in the ordinary course of business before the specified deadline for the closing of this quotation; and

b) Council actually receives the documents within two (2) days of the deadline for

the closing of this quotation. 2.12 Formulation of Quotations

2.12.1 Statutory and Legal Obligations Prospective suppliers must observe all relevant statutory and other legal requirements in the formulation of their quotations. They must not: a) Enter into any improper commercial arrangements with any other

suppliers, sub-contractors or agents; b) Seek to influence decisions during the quotation process;

c) Accept incentives to provide agreements or services to other suppliers or

sub-contractor; or d) Accept or provide secret commissions.

2.12.2 Competitive Behaviour Per Schedule D3, prospective suppliers must not engage in any uncompetitive behaviour or other practice which denies legitimate business opportunities to other suppliers or other participants in the quotation process, including but not limited to the following matters concerning collusive behaviour. Prospective suppliers must observe all relevant statutory and other legal requirements in the formulation of their quotations. They must not: a) Make agreement between suppliers as to who should be the successful

supplier; b) Attend any meetings of suppliers to discuss quotations prior to the

submission of the quotations if a Council representative is not present;

c) Allow any exchange of information between suppliers about the quotations;

d) Make agreements between suppliers for the payment of money or the securing of reward or benefit for unsuccessful suppliers by the successful supplier;

e) Make agreements between suppliers to fix prices or conditions of quotations;

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f) Give any assistance to any supplier to submit a cover quotation (that is, a quotation submitted as genuine, but which has been deliberately priced in order not to be appointed);

g) Make any agreement between suppliers prior to submission of quotations

to fix the rate of payment of employer or industry association fees where the payment of such fees is conditional upon the supplier being appointed.

2.12.3 Disqualification of Supplier Any prospective supplier who directly or indirectly canvasses support from an elected member or servant of Council will be disqualified.

2.13 STATEMENT OF BUSINESS ETHICS

Narrandera Shire Council has adopted the following Statement of Business Ethics outlining Council's expectations regarding appropriate business behaviour between Council and Goods and Service providers. 2.13.1 Objectives

2.13.1.1 What is Business Ethics? Business Ethics is the application of ethical values to business behaviour. It applies to all aspects of business conduct and applies to the conduct of individuals and the conduct of the organisation as a whole. 2.13.1.2 Key business Principles Council's business ethics statement outlines Council’s expectations on how goods and service providers are to deal with Council and vice versa. This aims to ensure:

• Value for money

• Fair, open and effective competition

• Transparency.

2.13.2 What providers can expect from Narrandera Shire Council Council strives to ensure all of its policies, procedures and practices relating to the purchasing of goods and services are based on best practice and the highest ethical standards.

Council staff are bound by Council's Code of Conduct. When staff do business with the private sector they are expected to:

• Use public resources effectively and efficiently.

• Deal fairly, honestly and ethically with all individuals and organisations.

• Avoid conflicts of interest (whether real or perceived).

Council's procurement activities are guided by the following business principles:

• All potential suppliers will be treated impartially and be given equal access to information and opportunities to submit bids.

• Fully document all procurement activities and decisions to provide an effective audit trail and allow for the effective performance review of agreements.

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• Quotations will not be called unless Council has a firm intention to proceed to award.

• Council (Councillors and staff) will not disclose confidential information.

2.13.3 What Council Expects from Providers Council requires all private sector providers to observe the following principles when doing business with Council:

• Comply with Council's procurement policies and procedures.

• Provide accurate and reliable advice and information when required.

• Declare actual or perceived conflicts as soon as become aware of the conflict.

• Act ethically, fairly and honestly in all dealings with the Council.

• Take all reasonable measures preventing the disclosure of confidential Council information.

• Refrain from engaging in any form of collusive practice, including offering Council staff any incentive, gifts or benefits.

• Refrain from discussing Council business with the media.

• Assist Council to prevent unethical practices in our business relationships.

2.13.4 Why Providers Need to Comply AII Council suppliers of goods and services are required to comply with this statement. Failure to comply with this statement can lead to:

• Termination of contracts. • Loss of future work. • Investigation for corruption.

3 Quotation Process

3.1 Acceptance of Quotations Council does not bind itself to accept the lowest or any quotation submitted, nor will it be responsible for any, or pay for, expenses or losses which may be incurred by any supplier in the preparation of their quotation documents. 3.2 Evaluation and Scoring Criteria

In consideration of invitee responses received, the appointed evaluating panel shall take into account all the selection criteria listed in this Request for Quotation. Suppliers should ensure that the prescribed selection criteria are adequately addressed in their responses.

As part of the evaluation process Council or its evaluation panel may ask suppliers to make a personal presentation and provide any further information as required.

3.2.1 Quotations will be evaluated against the following criteria:

A. Indicative rates and pricing submitted for the provision of the stated services;

B. Qualifications relevant to the provision of stated services; C. Demonstrated experience in the provision of the stated services; D. Evidence of Local Government experience;

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E. Evidence of available resources to provide the stated services.

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Section B TERMS AND CONDITIONS OF CONTRACT

a) Term of Contract

The Contract is to be for a term of three years, expiring on 30 September 2023. b) Contractor to Indemnify Council

The selected Contractor shall indemnify the Council in respect of any negligent acts caused by the Contractor whilst undertaking any works that may arise on Council’s behalf.

c) Public Liability Insurance

The selected Contractor must hold Public Liability insurance with a minimum value of $20,000,000 for the whole of the contract period and provide Council with copies of annual certificates of currency in this regard.

d) Professional Indemnity Insurance The selected Contractor must submit details of their level of Professional Indemnity Insurance cover.

e) Workers Compensation Insurance

The selected Contractor must hold adequate Workers Compensation Insurance for the whole of the contract period and provide Council with copies of annual certificates of currency in this regard.

f) Work Health & Safety

The selected contractor acknowledges NSW Work Health and Safety provisions and shall undertake to comply with all the requirements and conditions of the applicable Act and Regulations.

g) Staffing The selected Contractor shall ensure all personnel providing services to Council are suitably qualified to complete such duties.

h) Council reserves the Right to Negotiate

The Council reserves the right to negotiate any or all of the terms of the proposed Contract.

i) Default If a Contractor for this service should become bankrupt or go into liquidation or make default in any of the following respects: (a) if the Contractor wholly suspends the work before completion, or (b) if the Contractor fails to proceed with the service with reasonable diligence or in a competent manner, or (c) if the Contractor commits any breach of agreed service then the Council may, by notice in writing, terminate this Contract and remove that contractor from Council’s preapproved supplier list for this service. But if the matter relates to a deemed defect in the quality of any goods and/or services, or the reliability of supply thereof, or in a manner in which the work is being undertaken then Council can only terminate the Contract after giving to the contractor written notice of such a defect and allow the contractor seven (7) days in which to rectify such matter. Such determination shall not prejudice any right of the Council to recover from the contractor damages for any breach otherwise recoverable under this Contract.

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j) Goods and Services Tax (GST) The selected Contractor unit rates are to be shown as “Exclusive of GST”. Upon the allocation of any work that may arise, the amount of GST will be required to be shown separately on the Contractor tax invoices. All rates are deemed to include all overheads, insurances and statutory charges and consumables.

k) Provision for Payment Council will be only liable to make payments thirty (30) days from the date of receipt of Contractor tax invoices for any services that may arise.

l) Confidentiality

Any information that a Contractor may receive whilst engaging in any works that may arise under this service shall not be disclosed without the approval of the Council. Any press statements relating to the provision of any such services or any incidental matter shall require prior approval by the Council.

m) Assignment The selected Contractor shall not assign or sub-contract this Contract or any part of this Contract without the approval of the Council. The Council may unreasonably withhold that consent. Any approval to assign or sub-contract does not relieve the selected Contractor of any of their responsibilities or obligations under this Contract.

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Section C SCOPE OF WORKS

In accordance with the specification of services, quotations are called for from suitably qualified service providers for the provision of Internal Audit Services for Narrandera Shire Council for a period of three (3) years, expiring 30 September 2023. SPECIFICATION OF SERVICES Note, this is an indicative list only, and is subject to change. The Office of Local Government in September 2019 issued the discussion paper “A new risk management and internal audit framework for local councils in NSW” The outcomes of this will influence the internal audit services required by Council. Possible outcomes from the review of the internal audit framework include: -

• Review of the role and operations of the Audit Risk & Improvement Committee

• A group of Councils jointly engaging in the Audit Risk & Improvement framework

• The Audit Risk & Improvement function being undertaken by a Regional Joint Organisation of Councils. In the case of Narrandera Council, it is RAMJO.

To assist potential vendors in resource allocation and calculating applicable fees and

charges for this quotation, following is a list of requirements for this service.

Suppliers are to provide an outline of how these elements will be delivered in their

submissions.

• The Contractor will be required to conduct the internal audit program of

Narrandera Shire Council, including monitoring / reporting prior internal audit

progress, coordinating the preparation of internal audit reports to Council’s Audit

Risk & Improvement Committee (ARIC).

(The current audit program for the years 2019/20 to 2021/22 is attached)

• The Contractor will be required to provide internal audit services for a minimum

term of 3 years.

• The Contractor will be required to provide a rolling program of internal audits as

directed by Council's Audit Risk & Improvement Committee (ARIC). (The program

for the period ending 2021-2022 is attached)

• The Contractor shall demonstrate the capacity and methodology to implement the

internal audit program remotely where circumstances such as the current COVID-

19 restrictions limit or exclude on site access to Council premises.

• The Contractor will be required to attend a minimum of four (4) ARIC meetings per

year for a minimum duration of 2 hours.

• The Contractor will be required to present both written and oral reports to

the Audit Risk & Improvement Committee (ARIC).

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• The Contractor will be required to provide written reports to the Audit Risk &

Improvement Committee detailing the findings of each internal audit review

commissioned. Each report must include (but not limited to) a report background,

objectives, scope, approach, observations, findings, conclusions and

recommendations and management response.

• At the conclusion of each financial year (July-June) the contractor will provide a

written annual report on the reviews undertaken in the year observations, findings,

conclusions and recommendations and management response.

• The Contractor will be required to submit an annual draft internal audit review

program for the Audit Risk & Improvement Committee review.

• The Contractor will be required to liaise with Council's statutory external auditor on

aspects of the internal work undertaken.

• The Contractor will be required to undertake audit assignments that are consistent

with the internal audit review program.

• The Contractor will be required to identify emergent or urgent issues (where

applicable) and provide necessary reporting, detailing the issues identified and any

associated risks. Where required, the Contractor must also reference the Act,

Regulations, Code, Standard, etc. applicable to the issues identified. An

appropriate recommendation, detailing the action/s required to resolve or address

the issue must also be included.

• The Contractor will be required to identify the appropriate areas of 'best practice'

that may apply to the applicable audit or in the absence of a recognised 'best

practice' system; Contractors must provide the appropriate strategic direction.

• The Contractor will be required to identify areas of risk arising from an audit and

shall also provide recommendations on appropriate risk management strategies for

review by the Audit Committee.

• The Contractor must comply with all Standards, Codes of Ethics, etc. stipulated

by the Institute of Internal Auditors Australia at all times during the provision of

services specified in this Quotation.

• The Contractor must comply with all WHS responsibilities applicable to the works

described in this Contract as stipulated by the relevant Act and Regulations 2001.

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Section D SUPPLIER RESPONSE TO REQUIREMENTS Suppliers are to complete and submit the following pages in support of their submission for this Contract.

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D1: QUOTATION FORM To: Narrandera Shire Council 141 East Street NARRANDERA NSW 2700

In accordance with The Request for Quotation (RFQ) Document No. Q-19-20-54: “The Provision of Internal Audit Services.”

(Company/Person and Trading Name) …………….………………………………………………… (ABN) …………………………… of (address) …………………..………………………………..…… ………………………………………………………………………..………………………………………

Hereby submit to supply the goods/services specified in the Quotation Request on the terms contained in the following documents: Section A: Conditions of Quotation Section B: Terms and Conditions of Contract Section C: Scope of Works Requirements Section D: Supplier Response to Requirements Signature of Authorised Person: Signature of Witness: ……………………………………. …………………………………………… Name Name ……………………………………. …………………………………………… Position Position Date: / /

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D2: CONFLICTS OF INTEREST

1.1 Suppliers shall complete this statement as part of their quotation for the provision of goods

and services. 1.2 To the best of the supplier’s knowledge and belief, after due enquiry, no family relationships

exists between;

(i) on the one hand, the supplier or any employee of the supplier directly or indirectly involved in the preparation or submission of the quotation; and

(ii) on the other hand, any official or employee of the Narrandera Shire Council involved in the evaluation of the quotation or administration of the quotation or in possession of confidential information relating to the quotation.

1.3 Disclosure of family relationships with Narrandera Shire Council officials or employees must include details of the nature and extent of the relationship or association.

1.4 The supplier has not engaged in any unethical behaviour or sought and/or obtained an

unfair advantage in obtaining business with Narrandera Shire Council and will not in relation to this quotation.

1.5 The supplier must notify the Narrandera Shire Council in writing immediately should any

provision of this statement becomes incorrect, with full details of the reasons.

THE FOLLOWING INFORMATION IS DISCLOSED FOR THE PURPOSE OF THIS SCHEDULE.

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

SUPPLIER TO ATTACH ANY FURTHER RELEVANT INFORMATION

……………….……………………. .…………………………… …………….. Supplier / Company Name Signed Date

THIS FORM MUST BE SIGNED AND RETURNED WITH THE OFFER,

REGARDLESS OF WHETHER A POTENTIAL CONFLICT EXISTS OR NOT

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D3: DECLARATION I, ………………………………………………………… of ……………………………………………… , New South Wales do solemnly and sincerely declare, in respect of the Request for Quotation No. Q-19-20-54 for the Provision of Internal Audit Services to Narrandera Shire Council or any agreement arising from the Quotation. 1. I hold the position of …………………………………………………. and am duly authorised by

…………………………………………………………………………. (“the Supplier”) to make this declaration on its behalf.

2. Neither the supplier nor any of its officers or agents has entered into any agreement, arrangement or understanding to pay monies to any trade association, apart from the normal amount (annual subscription, turnover or contract fee) imposed by that trade association and/or has agreed to pay a special fee to a trade association if it is successful in the Quotation.

3. Neither the supplier nor any of its officers or agents had any knowledge of the price of any

other supplier prior to submitting its quotation, nor has the supplier or any of its officers or agents disclosed to any rival supplier the supplier’s price prior to the closing date for Quotation.

4. The supplier submitted its quotation in good faith and has not deliberately set its quoted

price above the level of rival suppliers. 5. As at the date of this declaration, the supplier intends to do the work set out in the

Quotation. 6. Neither the supplier nor any of its officers or agents has entered into any agreement,

arrangement or understanding having the result that, in the event that it is successful in the quotation, it will pay to any other unsuccessful suppliers any monies in respect of or in relation to the Quotation or any agreements resulting therefrom.

And I make this solemn declaration conscientiously believing the same to be true. ……………………………………… Signature of Person making declaration

Subscribed and declared at ……………………………………………………………………………… this …………………………………..… day of …….………………………………… , 20 . before me ………………………………… Qualification of Witness

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D4: INSURANCE DETAILS 1. Workers Compensation Insurance

Name of Insurer: ……………………………………………………………………… Policy Number: ……………………………………………………………………… Expiry Date: ……………………………………………………………………… Extent of Coverage: ………………………………………………………………………

2. Public Liability Insurance

Name of Insurer: ……………………………………………………………………… Policy Number: ……………………………………………………………………… Expiry Date: ……………………………………………………………………… Extent of Coverage: ……………………………………………………………………… (Note: Suppliers are to provide Public Liability Insurance coverage of at least $20,000,000).

3. Professional Indemnity Insurance

Name of Insurer: ……………………………………………………………………… Policy Number: ……………………………………………………………………… Expiry Date: ……………………………………………………………………… Extent of Coverage: ………………………………………………………………………

The winning contractor is required to provide copies of their certificates of currency for all of the above insurance policies for each year that this Contract remains in force.

Signed (Supplier) ___________________________ Print Name ___________________________

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D5: NON-CONFORMANCE The supplier must provide a statement of non-conformance or partial non-conformance for each clause of each section of the Quotation Request. Details must be provided for all non-conforming or partially non-conforming quotations. The supplier must specify the reasons why it does not conform to any clause, sub-clause or requirement of the Quotation Request. If the supplier has an alternative to the stated requirement, which is not fundamentally different to it, the alternative must be fully described, and explanatory information provided. If a clause is not listed in this statement it will be deemed to have fully conformed to by the supplier.

CLAUSE

SECTION

STATEMENT OF

NON-CONFORMANCE

Signed (Supplier) ________________________ Print Name ________________________

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D6: RESPONSE TO EVALUATION CRITERIA

A: INDICATIVE SCHEDULE OF RATES Complete the Schedule by inserting the hourly rate for each individual that will participate in the provision of the services under AMOUNT. Also please provide any other costs that may relate to the provision of the service.

Description

AMOUNT

Hourly Rate

(GST Exclusive)

1 Director $

2 Partner $

3 Manager $

4 Senior Auditor $

5 Auditor $

6 Junior Auditor $

7 Administration $

8 Audit Committee Meetings $

9 Out of Pocket Expenses $

10 Travel $/km

If required, please provide explanations on an additional page. Note:

1. Reasonable accommodation costs, to be agreed upon prior to a booking being made, will be reimbursed by Council.

2. Cost of flights, if required, will be reimbursed by Council. B: EVALUATION CRITERIA 1. Provide detail of Internal Audit experience, including locations of where experience was

gained; 2. Provide evidence of relevant qualifications for the provision of the stated services, including

any conditions attached to accreditation; 3. Provide evidence of Local Government experience; 4. Provide evidence of available resources to supply the stated services.

Signed (Supplier) ________________________ Print Name ________________________

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Section E

Attachment 1: Audit, Risk and Improvement Committee Charter.

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Review Date:

17 September 2019

Version

3 Audit, Risk and Improvement Committee Charter DOC Page 1 of 11

AUDIT, RISK and IMPROVEMENT

COMMITTEE CHARTER

TABLE OF CONTENTS

1. Introduction ........................................................................................................................................ 2

2. Committee Objectives ....................................................................................................................... 2

3. Authority ............................................................................................................................................ 2

4. Composition and Tenure ................................................................................................................... 3

a. Members (voting).......................................................................................................................... 3

i. Councillors ................................................................................................................................ 3

ii. Independent External Members ............................................................................................... 3

iii. The Chair .................................................................................................................................. 4

b. Attendees (non-voting) ................................................................................................................. 4

5. Roles and Responsibilities ................................................................................................................ 4

a. Risk Management......................................................................................................................... 5

b. Control Framework ....................................................................................................................... 5

c. External Accountability ................................................................................................................. 5

d. Legislative Compliance................................................................................................................. 6

e. Internal Audit ................................................................................................................................ 6

f. External Audit ............................................................................................................................... 6

g. Responsibilities of Members ......................................................................................................... 6

6. Reporting ........................................................................................................................................... 7

7. Administrative Arrangements ............................................................................................................ 8

a. Meetings of the Committee .......................................................................................................... 8

b. Attendance at meetings and quorums .......................................................................................... 8

c. Secretariat .................................................................................................................................... 9

d. Agendas, Minutes, Internal Audit Reports and Supporting Papers .............................................. 9

e. Privacy and Conflicts of Interest ................................................................................................... 9

f. Health and Safety ....................................................................................................................... 10

g. Public comment and media statements ...................................................................................... 10

h. Training ....................................................................................................................................... 10

i. Assessment Arrangements ........................................................................................................ 10

8. Authorisation ................................................................................................................................... 11

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Review Date:

17 September 2019

Version

3 Audit, Risk and Improvement Committee Charter DOC Page 4 of 11

1. INTRODUCTION

Good corporate governance at Narrandera Shire Council (“Council”) ensures and promotes effective

and efficient delivery of services to the community, underpinned by honesty, integrity and

transparency.

The Audit, Risk and Improvement Committee (“Committee”) has a key role in the governance

framework of Council by providing Council with independent oversight, objective assurance and

monitoring of Council’s audit processes, internal controls, external reporting, risk management

activities, compliance with Council’s policies and procedures, and performance improvement activities.

This Charter is based on the guidelines issued by the Office of Local Government (OLG) in

accordance with s.23A of the Local Government Act 1993 (the Act). The Charter is also aligned with

best practice, intended to add value and drive effective local government; through openness,

transparency and accountability. The Committee assists Council to deliver on its objectives by bringing

a systematic, disciplined approach to evaluate and improve the effectiveness of risk management,

control and governance processes.

2. COMMITTEE OBJECTIVES

The objective of the Committee is to provide independent assurance and assistance to the Council on

risk management, control, governance, internal audits, organisational performance and external

accountability responsibilities.

The Committee’s objectives are supported by obligations under s428A of the Act, for keeping under

review the following aspects of the Council’s operations:

• compliance,

• risk management,

• fraud control,

• financial management,

• governance,

• implementation of the strategic plan, delivery program and strategies,

• service reviews,

• collection of performance measurement data by the council, and

• any other matters prescribed by the regulations.

Under the Act the Committee is also to provide information to the Council for the purpose of improving

the Council’s performance of its functions.

3. AUTHORITY

The Committee is established in accordance with Council’s authority granted by s. 355(d) of the Act.

The Committee has no executive powers, except those expressly provided by the Council. In carrying

out its responsibilities, the Committee must at all times recognise that primary responsibility for

management of Council rests with the Council and the General Manager as defined by the Act.

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The Council authorises the Committee as a whole (but not individual members of the Committee)

within the scope of its role and responsibilities, to:

• Obtain any information it needs from any employee or external party (subject to their legal

obligations to protect information).

• Discuss any matters with the internal or external auditor and/or other external parties (subject to

confidentiality considerations).

• Request the attendance of any employee at Committee meetings.

• Request – via the General Manager – any external legal or other professional advice

considered necessary to meet its responsibilities.

This Charter will be reviewed and adopted at least once by each term of Council at an open meeting

of Council.

2. COMPOSITION AND TENURE

A. MEMBERS (VOTING)

The Committee will consist of up to six voting members.

• A Councillor;

• Up to 5 independent External Members (one of whom to be the Chairperson)

If any voting is needed at a Committee meeting, it is to be by open means (such as by voice or by

show of hands).

The members of the Committee, taken collectively, will have a broad range of skills and experience

relevant to their responsibilities as outlined in this Charter. At least one member of the Committee shall

have accounting or related financial management experience, with understanding of accounting and

auditing standards in a public sector environment.

i. Councillors

The Councillor member of the Committee will be appointed by resolution of the Council, as part of the

annual committee selection process. The Mayor will not be appointed as the Councillor member. The

Council may also resolve to appoint an alternate Councillor member to the Committee to attend

meetings in the absence of the Councillor member. The alternate Councillor member will have the

same voting rights as the Councillor member being replaced.

ii. Independent External Members

Up to six external members will be appointed, by resolution of the Council, for a term of three years or

such additional time as determined by Council, provided that the external members shall retire on a

rotation basis in the interests of continuity and succession. The independent external members can

also be removed by resolution of Council. In this regard, written notice shall be provided to the

member of Council’s intention and an opportunity provided – upon request from the member - to be

heard at a Council meeting that is open to the public.

Expressions of Interest as an independent member of the Committee are to be invited by public

advertisement and/or written invitation from persons eligible to be members of the Committee as

outlined by this Charter. Any such nominations will be received and reviewed by a panel comprising

an existing or outgoing independent Committee member, the Mayor and the General Manager who

will prepare a report for Council’s consideration.

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The recruitment of those members of the Committee is to be based on merit, and it is important that

the selection process used is transparent and accountable. Committee members must decline any

request to act as referee to any applicants for vacant positions on the Committee.

Once the independent external member(s) is/are appointed, they will receive a letter of appointment

clearly detailing the terms of their appointment and allowance details (as determined in Narrandera

Shire’s Councillors Payment of Expenses and Provision of Facilities Policy), as well as a copy of this

Charter.

As the Committee members are formally appointed by Council, any changes in membership will be

subject to Council’s approval. If and only if any special circumstances exist especially in respect of the

collective skills and knowledge of the Committee, Narrandera Council may consider and by a

resolution vary the above composition of Committee membership.

If for any reason a vacancy in the Committee membership occurs, the position(s) shall be filled in

accordance with this Charter.

i. The Chair

The Chairperson will be elected by the majority of the Committee’s voting members and must be one

of the independent external members. Whenever the voting on a motion put to a meeting of the

Committee is equal, the Chair of the Committee is to have a casting vote as well as an original vote.

If the elected Chair is not present at a meeting of the Committee, the first business of that meeting is

for the Committee’s voting members to elect a Chair from the independent external members present.

A. ATTENDEES (NON-VOTING)

Meetings of the Committee may, at the discretion of the Committee and with the consent of the

General Manager, be attended by the following individuals;

• Mayor – as ex officio,

• General Manager or nominated delegate,

• Other Council employees (for specific agenda items), including the Finance Manager, Deputy

General Manager Corporate & Community or nominated delegates

• Internal Auditor or nominated delegate(for specific agenda items), and

• External Auditor or nominated delegate (for specific agenda items).

2. ROLE

In addition to the Committee’s objectives as outlined in section 2 the Committee has a number of key

responsibilities consistent with those outlined in the OLG model charter for Audit Committees as set

out in the Internal Audit Guidelines issued by the OLG. These include;

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A. RISK MANAGEMENT

Risk management is an essential part of effective corporate governance. It is defined as “the culture,

processes and structures that are directed towards realising potential opportunities whilst managing

adverse effects.”(Risk Management – Principles and Guidelines” ISO 31000:2009(E)). Enterprise Risk

Management is the holistic management of all risks within Council, not just insurable risks or work

health and safety.

The Committee is responsible for:

• Reviewing 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;

• Reviewing whether a sound and effective approach exists for developing strategic risk

management plans for major projects or undertakings;

• Reviewing the risks, progress, controls, finances and performance surrounding those major

projects;

• Reviewing the impact of the risk management framework on its control environment and

insurance arrangements;

• Reviewing whether a sound and effective approach exists for establishing business continuity

planning arrangements, including whether plans have been tested periodically;

• Reviewing whether a sound and effective approach has been established in relation to

technological related risks issues that present a threat to the operations of Council, and

• Considering, and recommending to the General Manager, improvements in relation to Council

risk management approaches, activities, systems and processes

B. CONTROL FRAMEWORK


• Reviewing whether management has adequate internal controls in place, including over

external parties such as contractors and advisors;

• Reviewing whether management has in place relevant policies and procedures, and these are

periodically reviewed and updated;

• Reviewing whether appropriate policies and procedures are in place, including for the

management and exercise of delegations;

• Progressively reviewing whether appropriate processes are in place to assess compliance with

policies and procedures; and

• Reviewing whether management has taken steps to embed a culture which is committed to

ethical and lawful behaviour.

C. EXTERNAL ACCOUNTABILITY


• Establishing that the annual financial statements are in accordance with applicable Australian

Accounting Standards and are supported by appropriate management sign-off on the

statements and the adequacy of internal controls;

• Reviewing the external audit opinion, including whether appropriate action has been taken in

response to audit recommendations and adjustments;

• Considering contentious financial reporting matters in conjunction with Council’s management

and external auditors;

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• Reviewing the processes in place designed to ensure financial information included in the

annual report is consistent with the signed financial statements;

• Satisfying itself there are appropriate mechanisms in place to review and implement, where

appropriate, relevant State Audit Office and Government reports and recommendations;

• Satisfying itself there is a performance management framework linked to organisational

objectives and outcomes; and

• Reviewing information on performance of Council against the objectives/actions/indicators

documented in the strategic plan, delivery program and operational plan.

A. LEGISLATIVE COMPLIANCE


• Determining whether management has appropriately considered legal and compliance risks as

part of risk assessment and management arrangements; and

• Reviewing the effectiveness of the system for monitoring compliance with relevant laws,

regulations and associated government policies.

B. INTERNAL AUDIT


• Acting as a forum for communication between the Council, General Manager, Senior

Management, Internal Audit and External Audit;

• Reviewing the resourcing for internal audit and Internal Audit Plan, ensure the plan has

considered the Risk Management Plan, and approve the plan;

• Considering and advising Council on the adequacy of internal audit resources to carry out its

responsibilities, including completion of the approved Internal Audit Plan;

• Reviewing all audit reports and consider significant issues identified in audit reports and action

taken on issues raised, including identification and dissemination of better practices;

• Monitoring the implementation of internal audit recommendations by management;

• Periodically reviewing the Internal Audit Charter and

• Periodically reviewing the performance of Internal Audit.

C. EXTERNAL AUDIT


• Providing input and feedback on the financial statement and performance audit coverage

proposed by external audit, and provide feedback on the external audit services provided;

• Reviewing all external plans and reports in respect of planned or completed external audits, and

monitor the implementation of audit recommendations by management; and

• Considering significant issues raised in relevant external audit reports and better practice

guides, and ensure appropriate action is taken.

2. COMMITTEE RESPONSIBILITIES

In carrying out its responsibilities, the Committee must at all times recognise that primary responsibility

for financial and other reporting, internal controls, compliance with laws, ethical behaviour, the

management of Council, risk management and organisational improvements, rests with the elected

Council and the General Manager in accordance with the Act.

Members of the Committees must not act in a way that contravenes the Act in this regard, members

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are required to comply with Council’s adopted Code of Conduct and Code of Meeting Practice, any

other relevant Acts, as well as any other relevant policies and procedures of the Council.

The General Manager will ensure that adequate resources are available to allow for the proper

functioning of the Committee. The Committee may also, at Council’s expense, request the General

Manager to obtain such legal, accounting or other professional advice as it reasonably considers

necessary for the performance of its duties. The General Manager will give appropriate consideration

to all such requests.

All members of the Committee are expected to:

• Have a high level of personal integrity and ethics, as well as acting honestly and in good faith;

• Perform their duties in a manner that engenders public trust in the integrity, objectivity, and

impartiality of the Committee;

• Comply with this Charter;

• Have strong interpersonal skills;

• Have strong skills in oral and written communication;

• Broadly be aware of and understand the relevant legislative and regulatory requirements

appropriate to Narrandera Shire Council, particularly as these pertain to individual matters

under consideration by the Committee;

• Contribute the time needed to study and understand the papers provided, and to devote to their

responsibilities as a Committee Member;

• Apply good analytical skills, objectivity and with good judgment;

• Express opinions frankly and ask questions that go to the fundamental core of issues;

• Have an understanding of management principles required recognising and evaluating the

materiality and significance of deviations from good business practices;

• Have recent and relevant knowledge and experience in areas such as;

o Accounting or related Financial management

o Risk management experience

o Auditing experience in a public sector environment

o Performance improvement

o The local government framework

o Council services, activities and operations

o Governance, risk and compliance

o Community services.

2. REPORTING

Committee proceedings and recommendations will be provided for consideration by the Council in

accordance with legislative provisions). At the last Committee meeting prior to 30 June each year, the

Internal Auditor will provide a report to the Committee outlining the approved internal audit plan of

work for that financial year showing the current status of each audit.

The Committee will provide an annual report on internal audit, risk management and internal control to

Council at the conclusion of each financial year. The report will summarise the Committee’s activities

for the past year, along with the strategic internal audit plan for the forward period (covering the

following year and an indicative plan for the further two out years) Council may request the Chair of the

Committee to address Council and to answer any enquiries about the operation of the Committee.

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Some or all of the Committee’s annual report will form part of Council’s Annual Report.

The Committee may also report more regularly to Council on the internal audit function, on the

management of risk and on internal controls as and when required. The Committee may also make

recommendations to Council and the General Manager.

1. ADMINISTRATIVE ARRANGEMENTS

A. MEETINGS OF THE COMMITTEE

The Committee is bound by Council’s Code of Conduct and Code of Meeting Practice. All Committee

meetings must be run fairly and the procedures used should ensure effective decision making and not

be used for personal or political advantage. All matters should be considered consistently, fairly,

promptly, and on their individual merits.

A forward meeting plan for the coming year, including meeting dates and agenda items, will be agreed

by the Committee each year. The forward meeting plan will cover all Committee responsibilities as

detailed in this Charter.

The Committee will meet at least four times per year and at least once each quarter. Additional

meetings will be convened as required which may include to review and endorse the annual financial

reports and external audit opinion.

The need for any additional meetings will be determined by the Chair or by resolution of the

Committee. Such resolutions do not bind the Council to commit additional resources to the conduct of

those meetings unless the General Manager or the Council, by resolution, agrees to those additional

meetings. Meetings of the Committee are closed to the public.

B. ATTENDANCE AT MEETINGS AND QUORUMS

The quorum for a meeting of the Committee will be the majority of the voting members of the

Committee, including at least one independent member. If it is determined two days prior to the

Committee meeting that a quorum will not be achieved, the committee meeting is to be reconvened to

a later date. If for any reason a quorum is not present within half an hour of the scheduled

commencement of the meeting, the meeting shall be rescheduled.

A Committee member will be deemed to have relinquished their membership of the Committee if they

do not attend two consecutive meetings of the Committee without notice or satisfactory (as determined

by the Chair – or in the case of the Chair the majority of the Committee) explanation.

The Committee will meet separately with the Internal Auditor and/or External Auditor(s) in the absence

of management on at least one occasion per year.

The Committee may also request any other Council Official to participate in meetings should the

Committee deem this necessary. All employees of Council are subject to the direction of the General

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Manager and not the Committee or any of its members. In this regard, all correspondence or contact

with staff is to be through the Chair of the Committee addressed to the General Manager.

A. SECRETARIAT

The General Manager is to ensure adequate administrative support to the Committee is provided,

including preparation and distribution of the agenda and supporting papers for each meeting at least

one week before the meeting, and ensuring minutes of the meetings are prepared, maintained,

approved and distributed as required.

B. AGENDAS, MINUTES, INTERNAL AUDIT REPORTS AND SUPPORTING PAPERS

The agenda for meetings of the Committee will be agreed by the Chair (in consultation with the

General Manager and the Internal Auditor) at least one week before a meeting. The agenda must

specify the time and place at which, and the date on which, the meeting is to be held and the business

proposed to be transacted at the meeting. If a Committee member wishes to raise an urgent/late item

that is not on the agenda, the Chair shall determine the appropriate manner for dealing with the matter

in accordance with Council’s adopted Code of Meeting Practice.

All Councillors shall receive a copy of the agenda for each meeting. External audit should also be

provided with the meeting papers.

Full and accurate minutes of the proceedings of Committee meetings will be maintained by Council

management in accordance with the Code of Meeting Practice required of Council Committees. In

particular, the following matters should be recorded (at a minimum) in the minutes:

• a date and time of meetings, attendees and any apologies;

• the endorsement (or otherwise) of the minutes from previous the meeting;

• whether there was business arising from previous minutes;

• notation of reports or correspondence;

• motions moved and resolutions agreed;

• Committee recommendations; and

• the time meeting closed, date and venue for next meeting.

Minutes shall be approved by the Chair and circulated to all Committee members within three weeks

of the meeting being held and are to be confirmed at the next Committee meeting. The minutes of

each meeting shall also be reported to Council as part of the next available meeting cycle.

All Committee agendas and minutes (once approved) are to be recorded in Council's electronic

document management system.

C. PRIVACY AND CONFLICTS OF INTEREST

The Committee Charter will comply with Council policies and the Act in relation to confidentiality,

privacy and reporting. Members of the Committee will not disclose matters dealt with by the

Committee to third parties except with the express approval of the Committee.

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A conflict of interest exists where a reasonable and informed person would perceive that members of

the Committee could be influenced by a private interest when carrying out their public duty. All

members of the Committee must avoid or appropriately manage any conflict of interests. The onus is

on members of the Committee to identify a conflict of interest and take appropriate action to manage

the conflict in favour of their public duty. All members of the Committee must always comply with

Council’s Code of Conduct.

Committee members, attendees, invitees, observers and Council Officials must declare any conflicts

of interest at the start of each meeting or before discussion of a relevant agenda item or topic. Details

of any conflicts of interest should be appropriately minuted and be dealt with in accordance with

Council’s adopted Code of Conduct.

Where Committee members, attendees, invitees, observers or Council Officials at Committee

meetings are deemed by the Chair (or in the case of the Chair by the majority of the Committee) to

have a real or perceived conflict of interest, they will be excused from Committee deliberations on the

issue where the conflict of interest may exist in accordance with Council’s adopted Code of Conduct.

A. HEALTH AND SAFETY

Council is responsible for providing a safe work environment and gives priority to the health, safety

and welfare of Council Officials and of Committee members. Committee members should protect their

safety and that of others in the work environment and public areas as required. All safety concerns

should be reported immediately to Council Officials.

B. PUBLIC COMMENT AND MEDIA STATEMENTS

All public comments and media statements representing Narrandera Shire Council must be approved

by the General Manager.

C. TRAINING

It is a condition of Committee membership that all members undertake Code of Conduct and

Protected Disclosure training. The General Manager will ensure that all new Committee members

receive all relevant information, training and briefings on their appointment to assist them to meet their

Committee responsibilities.

D. ASSESSMENT ARRANGEMENTS

The Chairperson with the support of Council management will initiate a review of the performance of

the Committee on an annual basis. The review will be conducted on a self-assessment basis (unless

otherwise determined by the Chair), having regard to the objectives and responsibilities identified in

this Charter. Appropriate input may be sought from Council’s Senior Management and any other

relevant stakeholders, as determined by the Chair.

The review will also consider and report to Council on this Charter and it is to be included in the

Committee’s annual report to Council.

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1. AUTHORISATION

Owner Directorate Executive Services

Responsible Officer

Authorisation Adopted Council – Resolution 18/047

RESOLUTION 18/047

Moved: Cr Wesley Hall

Seconded: Cr Narelle Payne

1. That the Minutes of the Audit, Risk and Improvement Committee held on Wednesday 7 March 2018 be received and noted.

2. That Council adopt the Audit, Improvement and Risk Committee Charter.

3. That Council endorse the allocation of $2,000 to extend the current engagement of Internal Auditor to perform a risk based strategic internal audit plan for the next 12 months 2018-19 and indicatively for the following two out-years 2019-2021 (and to advance drafting of the AR&IC annual report 2017-18).

CARRIED

Review Date August 2021 – or sooner if new OLG or Audit Office best practice models are

promulgated

Register MagiQ record number - 386521

Record of

Amendments