Wollondilly Shire Council is on the Southern outskirts of Sydney. As a rapidly growing community, Wollondilly Shire Council is dedicated to providing quality building, infrastructure, tourism and community services for their nearly 46,000 local residents.
In 2010, the Office of Local Government, (at that time called the Department of Local Government) issued guidelines for Internal Audit. While the document was referred to as ‘guidelines’ the Office of Local Government had stated that in order for councils to meet best practice standards, all councils should have an internal audit function.
During this time, the Office of Local Government was reviewing local councils’ governance procedures and providing recommendations. For Wollondilly Shire Council, one recommendation was to introduce an internal audit function.
Manager of Governance, John Sproule, and Council’s management team were eager to enhance Wollondilly Shire Council’s risk management framework by adding an internal audit function to meet best practice standards.
But where to start?
For the relatively small but rapidly growing Wollondilly Shire Council, employing a full time auditor was not going to be cost effective and would not have allowed for the specific skills and depth required to audit a council with such a diverse range of functions.
Wollondilly Shire Council wanted high quality, thorough, flexible and skilled internal audit services delivered cost effectively by an organisation with the experience and expertise that would allow it to ‘hit the ground running’. That way audits could be completed on time and on budget to maximise value to ratepayers.
Wollondilly Shire Council selected InConsult to undertake their internal audits because of our ability to deliver a cost effective solution, conducted by experienced consultants with the depth and specialisation Council required. “It came down to finance and resourcing. We wanted the flexibility of a tailored approach that would meet our specific needs while staying within a modest budget.” said Mr Sproule.
InConsult was engaged to support Wollondilly Shire Council with the initial planning and implementation of an internal audit function, developing the strategic audit plan and conducting audits over a three year period.
InConsult started by obtaining a good understanding of the organisation and conducting meetings and discussions with management, staff and key stakeholders, to develop a risk based Strategic Audit Plan. Once the Strategic Audit Plan was approved by Council, InConsult began conducting a series of internal audits to review and evaluate Council’s key internal controls to test their effectiveness and appropriateness. After each audit, InConsult produces an internal audit report highlighting good work Wollondilly Shire Council is already doing and making recommendations for any improvement required in the internal control framework. Each recommendation is discussed with the auditee and prioritised for attention, based on the level of risk.
The main benefit to Wollondilly Shire Council from outsourcing the internal audit function has been having an experienced team with specialised skills completing the audits to give Council a value for money services that meets best practice standards. “Having our audits outsourced means we get the depth and expertise we were looking for within a modest budget so rate payer funds can be channelled into community projects and services.” Mr Sproule explained.
Additionally, Council has benefited from InConsult’s expertise and recommendations for improving policies and procedures, which has further strengthened Wollondilly Shire Council’s strong risk management framework and culture. “The audits have really engaged our staff, councillors and audit committee members. Whilst they were always supportive of creating a strong internal control framework, having an external party review or processes has resulted in more transparency and generated genuine interest in audit reports and recommendations.” said Mr Sproule.
By adding an internal audit function, Wollondilly Shire Council is now operating within best practice standards. The introduction of an internal audit function has added an extra level of assurance to Council’s activities and acts as a monitoring exercise for processes and policies, all of which enhances the already strong risk management culture. Outsourcing the audits to a professional, expert and experienced organisation offered Council an in-depth, targeted and value for money internal audit function.