The absence of any serious discussion about performance reporting at council’s November Ordinary meeting, or on the Audit Committee reports at the same meeting, call into question council’s commitment to a robust performance reporting regime.
In fact, the Audit Committee report (itself a misnomer) was waved through with no comment, no questions, and no observations.
Just moments earlier, Cr Amelia Lorentson’s well-intentioned but ill-fated motion seeking to push for better accountability and transparency in the council’s use of consultant and contractor expenditure, was defeated six votes to one. You don’t need a crystal ball to see – In three years time – Councillor Lorentson campaigning for Mayor on the issue of transparency…a platform handed to her by fellow Councillors.
So much for accountability and transparency. So much for good governance.
Noosa Council’s audit responsibilities are largely set out in its Charter and its Audit Policy. Both documents reference its statutory obligations under the Local Government Act and its relevant Regulations and were last updated and endorsed by Council at its Ordinary meeting on 17 March 2022. It is not clear from the minutes of that meeting the extent of the update.
Taking that date as a baseline – close on three years ago – there have been thirteen audit committee “reports” presented to council for endorsement. It appears councillors vote blindly on the recommendations because none of the reports or findings of the Audit Committee are appended to the agenda. This might partly explain why each of the thirteen Audit Committee reports are waved through with no questions asked.
This is quite an extraordinary abrogation of councillor’s responsibilities for ensuring that, on behalf of ratepayers, the council is operating in an efficient, effective, and economical way.
The Queensland Audit Office (QAO) provides a range of reports and updates, including briefing papers, to the Audit Committee, yet none of these appear to be available for community scrutiny. Council refuses to make them available to ratepayers citing confidentiality. While there may be some matters that could be considered confidential, the QAO confirms there is no impediment to their reports being made publicly available. Such matters are at the discretion of Council.
The failure to provide reports for public scrutiny seems at odds not only with the ethos of the QAO but also contrary to the principles enshrined in Council’s own Audit & Risk Committee Charter and its Internal Audit Policy.
Probably the most significant omission is the absence of any documentation relating to performance reporting.
Performance audits might be a somewhat dry subject for most residents but, as advised by the QAO, they go to the heart of ensuring that Council operations are carried out economically, efficiently, and effectively.
There are any number of projects and programs that could be subject to performance audits.
Areas which the Audit Committee could profitably review is Council’s compliance methods with respect to the enforcement of STAs and the veracity of accountability and acquittal mechanisms with respect to the various partnership agreements entered into by Council.
Good governance is more than mere compliance. Stakeholders, including ratepayers, need to be confident that programs and projects meet community expectations in terms of effectiveness and efficiency as well as through sound financial management.
Interestingly, one of the most common recommendations made by the QAO between 2015 and 2023 fall into the category of performance monitoring and reporting. Amongst the most common findings were a lack of appropriate performance indicators, targets that focused solely on outputs (rather than outcomes), and irregular performance reporting.
So, what needs to be done?
In addition to ensuring that the annual audit workplan includes a program of performance audits there are a number of other issues around the operation of the Audit Committee that need to be reviewed including its failure to publish the annual internal audit plan; the effectiveness (or lack of) of its reporting via the Council’s annual report; and the way it communicates with the wider community.
Council should ensure that all committee reports, reviews, and audit plans are made publicly available (except for those rare occasions where confidentiality demands).
The Audit Committee should encourage the community to make suggestions for performance audits. The QAO encourages public contributions to its audit process and there is no reason why a similar process couldn’t be followed by Noosa Council. In accordance with its Charter, the Audit Committee should communicate and bring awareness of the Committee to council and to the community. The CEO should present an audit report to councillors and not delegate the presentation to a staff member.
These initiatives would go a long way to making the Audit Committee more responsive to the expectations of ratepayers.
Currently the QAO has an audit underway into “effective audit committee practices in local government.” It is anticipated that the QAO report will be tabled in the first quarter of this year.
The findings of that review should provide interesting insights into the operation of local government audit committees and their processes and procedures.
Some lessons for Noosa Council perhaps.