Audit Committees

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Audit Committees

• Allen Bolaffi
• Partner- Local Government
• UHY Haines Norton Adelaide

2
Whats an Audit Trail?

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Audit Committees- What For?

• The Journey to Sustainability
• Governance Tool
• Only one such tool
• Bridge between EMs and management
• Professional approach to decision making
• Integrity of audit processes
• Forum for external advisers

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How best constituted

• At least three members
• Two members independent
• Quorum of two
• Chairman from the independents
• One member from elected members
• Terms of reference to be set
• Term of office to be set to coincide with council
  terms

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Whats on the agenda?

• Internal audit activity
• External audit relationship
• Economy and efficiency reviews
• Concept of best value auditing
• Budget parameters
• Risk assessment and management
• Financial statements overview

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Do they have any authority?

• No undelegated authority
• Advisory capacity only
• Monitoring role included
• Committee can ask questions
• Committee can question policies
• Committee can make recommendations

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How can it add value

• Add value means dont be a burden
• Setting of goals for sustainability
• Monitoring the journey there
• Benchmarking performance and trends
• Advising on suitability of assumptions eg growth,
  revenue and parameters in forecasts.

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The Monitoring Process

• If you cant measure it you can manage it.
• The importance of monitoring.
• What happens if we dont measure.
• The legislative threat of non performance.
• Audit committees role in monitoring process.

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Regional Audit Committees

• Three optional models
• Go Solo Model
• The Trilogy Model
• The Collaborative Model
• Each has benefits and disadvantages
• Legislative issues to be dealt with.

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Go Solo

• Expensive for small councils
• No regional approach to issues
• Possible lack of suitable experienced independent
  talent for membership.

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The Trilogy

• Not so expensive
• No structured regional approach to issues
• Three consecutive meetings may be difficult to
  manage.
• Efficient for a region.
• Administration may be cumbersome.

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Collaborative Regional Model

• The Rolls Royce for regions
• Regional approach to issues
• Cost efficient solution to committees creation
• Has legislative intent but not the delivery-
  legislative issues.
• Benefits of broad based solutions to issues

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Summary

• Audit Committee is a great innovation for Local
  Government
• It is an Essential Governance tool
• It poses no threat to management or Elected
  Members
• Effective management of all the audit functions
  and risk profile
• Bridge of Comfort

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The Accountants Dilemma