Structured to add value

Key committees provide leadership and guidance

LIGHTHOUSE PRINCIPLE: STRUCTURE

(based on ASX Principle 2)

The Audit Office has a well-defined governance structure consisting of the Office Executive, independent Audit and Risk Committee and Remuneration Committee, as well as an external audit function and an internal audit function (see independent assurance and corporate reporting).

 

Office Executive

The Office Executive, with the Auditor-General as Chair, directs the affairs of the Audit Office and is responsible for:

  • setting and monitoring progress against the Audit Office’s vision, values, mission and strategic goals
  • setting direction on key changes to standards, legislation and machinery of government change that have a whole-of-office consequence
  • ensuring the Audit Office is compliant with relevant laws, directions, codes and practices, ensuring key policies are regularly reviewed, up-to-date and relevant, as well as role-modelling and embedding a culture of ethical and lawful behaviour
  • operating in accordance with the Audit Office’s values
  • overseeing the Audit Office’s financial performance and sustainability.

In 2016–17, the structure of the Office Executive and frequency of meetings was reassessed. This resulted in the Auditor-General joining the committee and becoming Chair, and the Executive Manager Governance and Chief Financial Officer permanent attendees at each monthly meeting. The Office Executive also includes the Deputy Auditor-General, Assistant Auditors-General from Financial Audit and Performance Audit, and the Executive Director Corporate Services.

The Office Executive has a broad level of experience, skills, and diversity to fulfil its oversight role. This includes disciplines in economics, accounting, law and business administration, experience in local and State government and the private sector, and diversity in gender and age consisting of four women and three men (at 30 June 2017) within a diverse age range. Further details on the skills and experience of members of the Office Executive can be found here.

Key focus areas for the Office Executive during 2016-17 included:

Our governance framework

Our Governance Framework

 

Audit and Risk Committee

The Audit and Risk Committee assisted the Auditor-General in 2016–17 by providing oversight and review of:

  • the risk management framework including review of our strategic risk register, project risk management, fraud framework, and business continuity and disaster recovery plans
  • the internal audit plan, and internal and external audit reports
  • Audit Office annual financial statements
  • compliance with relevant applicable laws and regulations, relevant government policies and directions, and Audit Office policies
  • the internal control framework.

The Governance Unit assessed the committee’s activities in 2016–17 to confirm compliance with Treasury Policy Paper 1503 Internal Audit and Risk Management Policy for the NSW Public Sector (TPP 15-03). For a copy of the attestation statement see appendix nine. The committee’s charter is also in line with the requirements of TPP 15-03 and can be found on our website.

The Audit and Risk Committee consists of three independent members – Dianne Hill (Chair), Greg Fletcher and new member Bruce Turner AM who joined on 17 February 2017. Brian Suttor completed his term as Chair on 27 November 2016. Brian made a strong contribution to the ARC and we are thankful for all his excellent work on this committee. The independence, integrity, and experience of the Audit and Risk Committee members are key strengths, providing insight and enhancing our operations.

Dianne Hill was appointed on 12 December 2016 as Chair for a final term until 28 August 2021. Dianne brings considerable experience having been an independent non-executive director for over 20 years at several organisations, and currently sits on several boards and audit and risk committees for both NSW public sector agencies and public companies. Her background is in chartered accounting, financial services and project management.

Greg Fletcher was reappointed on 4 December 2013 for a second and final four-year term. Greg brings considerable experience as a former partner in a major accounting firm where he specialised in external audit, internal audit and risk management. He is an audit and risk committee Chair for several NSW public sector agencies and a director of several publicly listed companies.

Bruce Turner AM was appointed on 17 February 2017 for a four-year term. Bruce brings extensive experience sitting on audit and risk committees within the State government and not-for-profit sectors, as well as governance committees in the local government sector. Bruce has also been involved through Chief Audit Executive roles in large and diverse state and federal government agencies. He sits on several Boards, including that of the Institute of Internal Auditors (Australia).

The Auditor-General, Chief Audit Executive, internal and external auditors, and management representatives attend committee meetings. The committee also met independently, without management, with the internal and external auditors, Chief Audit Executive and Auditor-General. Committee members also provided annual written conflict of interest declarations to the Auditor-General which were verbally confirmed at the start of each meeting. There were no conflicts of interest declared that prohibited the continuing engagement of the members of the Audit and Risk Committee.

 

Remuneration Committee

Please see our ‘Disclosure’ section for information on the Remuneration Committee.

 

Formal Office Executive meetings attended

  • A total of 18 formal meetings held (fortnightly until April 2017 and thereafter informally each week and formally each month)

* Departed the Audit Office 29 December 2016
** Departed the Audit Office 13 April 2017
*** Departed the Audit Office 6 April 2017

Audit and Risk Committee meetings attended

  • A total of five meetings held

– Including one special meeting to review the annual financial statements

* Independent Chair
** Independent Member
*** Term ended 27 November 2016
**** Independent Member appointed 17 February 2017