Councils are responsible for the management of public funds, which includes federal and state government grants and ratepayer contributions. The Act requires a council to ensure that resources are used efficiently and effectively and services are provided in accordance with best value principles to meet the needs of the community. The importance of responsible administration by local government of public finances cannot be overstated.
Procurement
Procurement is an important function for council in expending public funds and obtaining best value for the community. Council has an appropriate procurement policy, adopted in March 2018. This review looked at the policy and processes in place and noted gaps where staff did not adhere to the policy.
Issues with general procurement practices were identified, including:
- confusion surrounding the conflict of interest declaration process
- no management level sign-off was required when setting weightings for set evaluation criteria
- no formal training or guidelines provided to new or returning tender evaluation panel members
- council does not have a clearly documented complaints process specific to procurement
- lack of formal contracts entered into.
From a probity perspective, there was a concern that directors were responsible for maintaining procedural integrity but were also routinely part of the evaluation panel. Random reviews should be undertaken by another director to ensure the integrity of the process.
Grass Maintenance, Kaniva
- A contract was extended on several occasions between July 2015 and July 2017, without a formal agreement or evaluation process.
- No signed conflict of interest declarations were provided.
Town Maintenance Services, Kaniva
- No signed conflict of interest declarations were provided.
Street Cleaning and Pit Cleaning Services, Kaniva
- Some concerns about the initial tender process in 2014.
- Subsequent tender process in August 2017 clearly outlined the process and provided adequate justification for the outcome.
- No signed conflict of interest declarations were provided.
Recommendations
- Council must follow its procurement policy.
- All tender evaluation panel members must be aware of their roles and responsibilities and have clear guidelines in regard to the disclosure and management of conflicts of interest.
- All documents must be maintained in the records management system.
- The credentials of each of the panel members be included in the evaluation report to demonstrate knowledge/expertise.
- Where a scoring matrix is completed, include the matrix with the evaluation report, and ensure all tender evaluation panel members sign the matrix to attest that they were part of the process, and support the final ratings.
- Independent members of staff review completed files from a probity perspective, even if only on a random basis, to reinforce the integrity of the process.
- Council develops a defined procurement complaints process to ensure consistency and uniformity when managing complaints about procurement.
- Council should ensure, where appropriate, formal contracts are entered into.
Community grant programs
Councils are responsible for the management of public funds, which include federal and state government grants and ratepayer contributions. The importance of responsible administration of council grants cannot be overstated.
It was confirmed that the council provides two funding opportunities to the community per year, with approximately $40,000 made available. The programs are managed by the Economic Development Manager (EDM), with a grants administration team consisting of the EDM, the Tourism and Communications Manager, and more broadly the Community Strengthening Grants Committee comprising the five councillors.
It was identified that a grants program review was requested by the council and undertaken by Crowe Horwath in 2016. A number of recommendations were made following the review, including the need to improve the advertising/awareness of grant opportunities, provision of information/training sessions, responsibilities and structure of the grants committee, conflict of interest management, acquittal requirements, and the introduction of a formal scoring system.
This review did not seek to confirm that all improvement opportunities had been implemented, however it was advised through discussion that council had made every effort to follow through on its audit commitments, and a review of the external Council Grants Policy most recently reviewed in July 2017. This policy sets out clear guidelines for eligibility, application, assessment and accountability. Application and acquittal forms are available on the council website.
However, it was identified that in recent times the council had experienced difficulties exhausting available grant monies. To increase the opportunity for applicants to access the funds, the communications officer often engaged with prospective applicants, and assisted them to complete their applications. While this is a proactive action that creates greater opportunity within the community, it was advised that the communications officer also acts in an application assessment capacity, thereby creating a clear conflict of interest, and providing an integrity issue for the council.
Recommendation
- Council must ensure that a separation of duty exists where the officer responsible for assisting applicants complete their applications, is not responsible for assessing applications and determining which are to progress to the funding stage.
Councillor expenses/reimbursement
The Councillor Expense Entitlement and Support Policy and the supporting procedural document outlines the support that each councillor will be provided with, and the type of expenses that can be claimed. It also outlines what is required to make a claim, and the authorisation process.
A review of claims made across the 2017 and 2018 periods did not identify any anomalies, either in terms of the value of claims, or the nature of claims, noting that a large percentage of claims were for travel expenses.
There are no recommendations for this component.
Corporate credit cards
The misuse of corporate credit cards can expose councils to potential financial and reputational risks therefore it is important hat internal controls are in place to mitigate this risk.
The review found West Wimmera’s corporate credit card policy provides clear guidelines in terms of credit card usage. Each cardholder is required to sign a cardholder agreement form prior to receiving a card, and the consequences of misuse are clearly set out.
The reconciliation process is comprehensive for the cardholder along with the approval process, where the next level manager must sign off on monthly statements. However, it was noted there were no guidelines in regard to managing disputed transactions.
A review of statements for the period October 2017 to March 2018 revealed that all transactions appeared to be in accordance with the policy/procedural requirements.
Recommendation
- Council may consider including a director in the approval process of CEO expenditure, in addition to the Mayor, to ensure there is sufficient knowledge in regard to what reasonably constitutes council business expenditure.
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