AUDIT COMMITTEE ANNUAL REPORT
LIPSHUTZ: started off by explaining the function of the committee and its duty to report annually to council. “The Audit committee does a great job’. Not an ‘oversight committee’ but ensures that risks ‘are looked at’. The ‘auditors identify areas that can be improved’ so it’s not a question of sitting on one’s laurels and officers implement the suggestions.
MAGEE: stated that Gibbs & McLean have been on the committee for ‘many, many years’ and they are ‘very, very capable and very, very professional’. Gibbs asks ‘pointed’ questions of officers. He’s ‘very straight’ and ‘takes no nonsense’ and if people saw how he operated they’d be very happy. McLean is a ‘very astute accountant’. They’ve been on the committee a long time but that ‘benefits our council’ because they ‘know our history’ and ‘they certainly know where council wants to head’. Magee is ‘very comfortable in working with those two’.
HYAMS: endorsed Magee’s comments since he’s ‘sat in’ on 4 meetings. Said that there had been suggestions that ‘external members had been there for too long’ and ‘getting a too comfortable relationship with our officers’ but if people could see what happens then they would never be ‘under that misapprehension’ because they ‘rigorously examine our officers’. ‘You replace someone if they’re not doing a good enough job….’or if you think’ there’s someone out there who is better. Hyams finished by saying ‘I’m very pleased with the audit committee performance’.
LIPSHUTZ: said he’s been on the committee since 2005 and that both Gibbs and Mclean have a terrific knowledge of council and ‘add value’. They’re ‘doing the job’ and respected and ‘should remain for some time; they are a bonus to council’
COMMENT
When the Minister issues guidelines, 99.9% of councils treat such guidelines as the Holy Bible. Not so in Glen Eira. Even council’s own charter is ignored when it comes to the continual re-appointment of Audit Committee members. Both the charter and the guidelines (plus best practice) recommend that there be a fixed term for members and that regular rotation of members is essential. Gibbs and McLean have been appointed and reappointed numerous times since at least 1998. Lipshutz has been on the committee for what will now be 8 years straight.
Other councils routinely advertise the positions. Glen Eira hides behind the veil of secrecy. These reappointments are made in camera with no public announcements. Why? Could it be that full public disclosure of what is going on might be a tad embarrassing given that the obvious intent of LGA is thus continually abused and perverted? When other councils see nothing wrong in tabling their deliberations on independent membership, then questions need to be asked as to why Glen Eira treats the issue the way it does.
We are not in any way doubting the qualifications, experience, nor professionalism of these members. We do however insist that when guidelines are promulgated they should be adhered to. Secrecy and the perception of cronyism undermines the very principles embedded in the guidelines and the committee’s own charter.
Finally we wish to note that this year at least Council has decided to adhere to the charter by tabling the Committee’s Annual Report at a council meeting. Last year this did not happen and when questioned about it the ‘answer’ was that the report was published in Council’s Annual Report. It had never been presented at a formal council meeting!
AUDITOR GENERAL’S REPORT
LIPSHUTZ: reported on the Auditor General’s visit that not only is Glen Eira the ‘template’ for other councils but in terms of ‘best practice’ it is fabulous. ‘We are outstanding….doesn’t mean we can’t improve’ but Glen Eira is probably the ‘leading council in Victoria’ on issues. Said that council went through a rigorous process on the borrowings for GESAC and council was commended by the Auditor General. The issue of ‘reserves’ doesn’t give ‘any rise for concerns’. Glen Eira is the ‘leading exponent in terms of risk’. About ‘liquidity’ Glen Eira is ‘low risk’. The previous council said ‘we’re high risk’….’problems’…’that’s all poppycock’. Said that ‘this council is doing very well’. A ‘fantastic result’. Other councils come to Glen Eira to see how it’s done and great staff are responsible. ‘We are at the top’.
DELAHUNTY: ‘a fantastic report’ and commented on Lipshutz’s statement on risk and said that when she attended the Audit Committee and saw the Operational Risk Framework that had been done by officers she thought it was ‘exceptional’, ‘I’ve never seen anything as quite as detailed’….’something to behold’
HYAMS: congratulated officers and ‘decisions’ taken by previous councils. ‘Good news…..for all the residents of Glen Eira’. People should be happy that ‘their council is regarded so highly by the Auditor General’. Unable to help himself, Hyams then said that some people would ‘scuttle off home after this meeting and portray this as negatively as they can’ but for everyone else who really cares about ‘how the council is perceived and performs’ then this is great news.
COMMENT
Corporate memory, or Lipshutz’s memory is indeed a worry. Particularly so when less than a month ago Delahunty herself referred to the Auditor General’s classification of Glen Eira as ‘high risk’! Yes, council is now deemed ‘low risk’ but the initial grading did happen. ‘Risk’ is still risk, isn’t it?
We also raise the question that why shouldn’t this ‘exceptional’ Operational Risk Framework’ be public? If it is indeed ‘something to behold’, then shouldn’t the public see it? After all, it is only a ‘framework’ – figures, names, etc. could be removed and thus confidentiality maintained.
Our final comment pertains to the efforts that go into self-promotion and self congratulations. If a fraction of the time and expense that was expended on such exercises was actually put into listening and responding to residents’ concerns then we have no doubt that this municipality would be a far better place and organisation.
Glen Eira Debates 
December 21, 2012 at 12:56 PM
Lipshutz’s comments if accurately reported are frankly mind boggling. His ignorance is inexcusable for someone who has been a member of this committee for years and whose professional qualifications are in the legal fraternity.
Lipshutz has allegedly said that the role of the Audit Committee is not one of “oversight”. The Victorian Auditor General has defined the role of such a committee in this way – “a committee comprising a majority of independent/non-executive members of the governing body of an entity to which it has been assigned, amongst other functions, the oversight of financial reporting and auditing process”. If Lipshutz does not understand his role then he should not be on the committee.
December 21, 2012 at 3:38 PM
If these people truly believe what they say then they’re even bigger fools than I thought they were and explains why governance is the pits in Glen Eira. If it’s for public show, then that makes it worse.
December 21, 2012 at 5:10 PM
Has anyone thought of asking Delahunty if it is something to behold when will the residents get a chance to behold.
It’s called an “Operational Risk Framework” document and should outline the various items that need to be considered when reviewing something – shouldn’t include anything confidential. So ain’t it time we got a chance to behold rather than just hearing about it
December 22, 2012 at 7:59 AM
My guess on why residents can’t see this wonderous document is that residents would object to the emphasis placed on some of the factors to be considered.
First and foremost the focus will be $’s – the intangibles such as personal safety for residents will get little mention, the $’s focus will be on the cheapest rather than the best long term solution. The recently approved 2nd GESAC carpark expansion is a classic example of what I am talking about. Don’t get me wrong $’s are important but they are not paramount.
December 23, 2012 at 10:28 PM
Since Council isn’t forthcoming, I’ll fill in one of the gaps. On 31 January 2011, Jeanette Powell (Minister for Local Government) published “Audit Committees—A Guide To Good Practice For Local Government” in the Government Gazette Special Edition 34. The document explains that “Audit Committees” are misnamed since they now deal with much more than financial matters, and that “periodic rotation of the members of the audit committee is encouraged”. The document also points out the importance of getting the “right membership balance”, which I take to mean a diversity of skills so that the committee can respond effectively to 21st Century challenges around risk, IT, compliance, ethics etc.
Its no secret that I don’t believe Council has tackled risk, IT, compliance or ethics challenges seriously. Financial issues should be well-managed given that’s the skill-set of the independent members. Reading through the reported comments about the AG’s visit, I’m puzzled how the AG could leap from being comfortable with Glen Eira’s financial management, to all the non-financial stuff. Best Value Reporting for example is not something that our Audit Committee could be proud of. I’ve not seen any evidence that the Committee tackles ethics either. When the chairperson asks “whether any person present was aware of any breaches of any Act or any other irregularity which should be brought before the Committee” he or she is asking a very narrow and tightly restricted coterie. This in itself represents a risk, which apparently the Committee is responsible for self-assessing.