1

INTERNAL AUDIT REPORT VALUE FOR MONEY (Last audit – NA) NOVEMBER 2010

2

Contents Background 3 Executive Summary 5 Overall Internal Control Rating 6 Legislation 6 Objectives 7 Scope 7 Methodology 8 Detailed Audit Findings & Recommendations 9

3

Background

The concept of value for money (VFM) auditing has gained wide acceptance in countries such as the UK, USA and Canada. VFM auditing is also referred to as operational auditing, performance auditing, and management auditing. Although these terms may not be exactly synonymous, they serve the purpose of distinguishing VFM auditing from the conventional audit of financial statements. Central to the concept of VFM in public sector organisations is the principle that public funds should be put to the best possible use and that those who conduct public business should be accountable for the economical, efficient and effective management of the resources entrusted to them. Public sector managers have an obligation to demonstrate that resources such as people, assets and money are used as productively as possible in achieving the intended results. The VFM audit framework was developed after extensive research into council performance measurement in Australia and overseas. Both the CEO and the Process Improvement Auditor also visited the WA Department of Treasury & Finance to gain a better understanding of how the VFM audit should proceed. Some guidance notes were obtained and used during this audit.

This VFM framework is largely based on the VFM model used by the Audit Commission in the UK, which is an independent watchdog with statutory responsibilities (Audit Commission Act 1998) to regulate the audit of local governments and other public services, and to promote improvements in economy, efficiency and effectiveness to deliver better outcomes for all stakeholders. This audit acts as a “health check”, giving confidence about what is being done and helping to focus attention on key priorities. Note: Economy refers to the acquisition of resources in appropriate quality and quantity at minimum cost. E.g. Purchasing Policy Efficiency refers to the minimum inputs for any given quantity and quality of goods or services provided. E.g duplication minimised, costing analysed, alternative delivery options Effectiveness refers to the extent to which any activity achieves the intended outcome. Eg. Objectives set, policy guidance, community consultation, decision based on reliable data, measurement of success-KPI Four Point Scoring Scale The use of resources assessment will use the four point scale from 1 to 4, with 4 being the best. Level 1 - a failure to meet the minimum requirements Level 2 – average performance Level 3 – above average performance Level 4 – excellent performance and best practice

4

Level 2 – average performance

Level 3 – above average performance

Level 4 – excellent performance and best practice

Arrangements, that are consistent with established professional practice and guidance, meet statutory requirements and operate effectively. Arrangements sufficient to address the KLOE demonstrating, for example: organisational leadership & commitment; partnership working; and appropriate capacity & skills informed by priorities with supporting action plans as appropriate. Arrangements that achieve minimum acceptable levels of performance.

Implemented effective arrangements that are: -Forward looking & proactive in identifying & developing opportunities for improvement; and -include more sophisticated measuring and assessment techniques. Outputs and outcomes demonstrate arrangements which are effective and have the intended impact. Where appropriate, the arrangements show evidence of effective partnership working. Evidence of performing consistently above minimum acceptable levels and achieving VFM.

Demonstrating innovation or best practice. Demonstrating strong outcomes for the community including through partnership working. Evidence of performing well above minimum acceptable levels and achieving excellent VFM.

5

Executive Summary Value for Money (VFM) is about obtaining the maximum benefit over time with the resources available. The use of resources assessment considers how well organisations are managing and using their resources to deliver value for money and better and sustainable outcomes for local people. The assessment comprises three themes. These focus on the importance of sound and strategic financial management, strategic commissioning and good governance, and the effective management of natural resources, assets and people. Overall, the COM has scored well above average in all categories in the VFM audit and it will be interesting to compare its results with other major local governments if data were available. VFM Conclusion and Use of Resources Assessment Report (40 KLOE questions in total under 10 headings) KEY LINES OF ENQUIRY (KLOE) Assessment

(Scale 1 to 4) Managing Finances 1.1 Planning finances effectively to deliver its strategic priorities

and secure financial health

3.0

1.2 Sound understanding of costs and performance and achieving efficiencies in activities

2.5

1.3 Timely and reliable financial reporting and meeting the needs of various stakeholders

3.0

Governing the business 2.1 Commissioning and procurement of quality services tailored

to local needs

3.0

2.2 Using relevant information to support decision making and managing performance

3.0

2.3 Promoting and demonstrating the principles and values of good governance

3.5

2.4 Managing risks and maintaining a sound system of internal control

3.0

Managing resources 3.1 Making effective use of natural resources

3.0

3.2 Managing assets effectively to help deliver strategic priorities and service needs

3.5

3.3 Planning and developing workforce to support the achievement of strategic priorities

3.5

6

Overall Internal Control Rating

CONTROL OBJECTIVES

Effectiveness and Efficiency of Operations

Reliability of Financial

Reporting

Compliance with Laws

and Regulations

Satisfactory

Satisfactory

Satisfactory

Legislation

Section 3.18 of the Local Government Act 1995 requires a local government to satisfy itself that services and facilities that it provides-

a) integrate and coordinate with any provided by the Commonwealth, the State or any public body;

b) do not duplicate, to an extent that the local government considers inappropriate, services or facilities provided by the Commonwealth, the State or any other body or person, whether public or private; and

c) are managed efficiently and effectively. Section 5(2) of the Local Government (Financial Management) Regulations 1996 requires the CEO of a local government to ensure the resources of the local government are effectively and efficiently managed.

7

Objectives The objectives of the audit were to:

ensure the City has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources such as financial, human and physical;

encourage service areas to improve their performance in achieving value for money; and

identify good practice and suggest ways in which services could be improved.

Scope

The achievement of economy, efficiency and effectiveness depends upon the existence of sound arrangements for the planning, appraisal, authorisation and control of the use of resources. It is the management’s responsibility to establish these arrangements and to ensure that they are implemented and effective. The auditor’s role is to verify independently that these arrangements are in place. This audit also seeks to promote better value for money by highlighting to service areas ways in which they could make improvements to realise financial savings or reduce costs; guard against the risk of fraud, irregularity and impropriety; provide a better quality of service; strengthen and enhance the management, administrative and organisational processes; and achieve the corporate objectives more cost-effectively.

8

Methodology The methodology of the audit comprised of the following:

Conduct a preliminary meeting with Management to obtain an understanding of processes and potential issues.

Interview staff and observe daily operations to identify the current practices

compared with legislative and policy requirements.

Review of documentation of the processes, relevant policy, and identify key controls.

Evaluation of the adequacy of, and testing the effectiveness of, key controls.

Identify strengths and weaknesses of the existing processes.

Develop recommendations for improvement for discussion with Management.

Draft a report of findings and recommendations, and obtain formal management

responses.

Submit final audit report to the CEO for review and approval, and

Table final audit report to the next Financial Management, Audit, Risk and Compliance Committee (FMARC) meeting for scrutiny.

9

Detailed Audit Findings & Recommendations Findings and recommendations were reported to enhance processes and procedures where appropriate. They are given a risk rating in accordance with the City of Melville’s (COM) Risk Assessment Matrix: Risk Rating

Note

Extreme Risk levels monitored by Executive Management Team (EMT) and the Financial Management, Audit, Risk & Compliance (FMARC) Committee. Additional controls are required to be implemented.

High Accept level of risk by EMT and monitored by EMT - additional controls required to be implemented.

Medium Risk accepted by Director – ongoing management review and monitoring.

Low

Risk is acceptable.

10

Managing Finances 1.1 Planning finances effectively to deliver its strategic priorities and secure financial health. (Level 3.0/4.0) What we do well

A Long Term Financial Model, linked to Asset Management Plans, has recently been developed to forecast income and expenditure for the next 10 years;

Corporate Plan has been developed with Elected Members input making sure desired outcomes or goals are achieved;

Corporate/Business Plans set out the desired outcomes, quality, level of services to be provided and how performance is measured;

New projects are approved only if they have linkage to the achievement of strategic goals;

Services are prioritised taking full account of predicted levels of funding and future financial pressures;

The corporate planning and performance management software application Interplan has been an effective tool to link strategic priorities to operational outcomes;

Interplan has been increasingly used by management and staff for planning and reporting purposes. This would assist achievement of strategic objectives;

Financial information such as Monthly Executive Performance Report and Budget Variance Financial Reports are used by senior management to track performance and to address deviation from desired outcomes;

Monthly Financial Statements are reviewed by Council to provide additional reporting and high level scrutiny; and

Comprehensive Purchasing Policy to ensure resources are acquired at minimum cost in appropriate quality and quantity.

Opportunities to improve (Risk Rating – Medium) 1.1.1 The ability or effectiveness of the Long Term Financial Model to forecast accurately depends on accurate inputs from major plans such as the asset management plans which have now been developed, and the corporate workforce plan which has yet to be developed. 1.1.2 Whilst Interplan is a tool for linking objectives with performance, it could be further expanded to enhance its data analysis capability to make it more effective in reporting performance. 1.2 Sound understanding of costs and performance and achieving efficiencies in activities. (Level 2.5/4.0) What we do well

Zero based budgeting encourages thorough examination of actual requirements rather than restating last year’s expenditure in the current year’s budget;

Whole of life costs are always used in asset management model/estimates; Unit costs were calculated for most products/services in 2009 and used in

decision making process where appropriate;

11

Financial impact is required for all project approval, council items, tendering and contract assessment process; and

Review of discretionary services in 2009 involved a community benefit assessment which looked at community needs and delivery options.

Opportunities to improve (Risk Rating – Medium) 1.2.1 Identify and analyse input costs for all major services including mandatory services and use the costing information in decision making process. It may also be used to benchmark performance or efficiency gains from year to year. 1.2.2 Finalise the Community Benefit Assessment Framework which will formalise the requirements to consider various option of service delivery. 1.2.3 Develop some KPIs to measure and monitor efficiency of all major services. These KPIs should be compared with previous year’s performance and with other councils or local governments industry where appropriate. 1.3 Timely and reliable financial reporting and meeting the needs of various stakeholders. (Level 3.0/4.0) What we do well

Experienced and qualified staff are employed to produce reliable financial information for forecasting and decision making. Most financial information is required by the Act or Regulations and they include annual budget, annual financial report (externally audited), monthly reports to Council, and mid year budget review etc.;

Financial information such as Monthly Executive Performance Report and online Budget Variance Financial Reports are used by senior management to track performance for all service areas;

Reliability will also be enhanced as Internal Audit has scheduled to check the accuracy of performance reporting and ensure actions in the Plan for the Future are implemented;

Financials are used by service areas to support their business cases; Financial systems are externally audited once every 4 years to ensure statutory

compliance and identify areas for improvement; Relevant information is provided weekly to elected members via Elected

Member Bulletin and Extranet; and A survey (57 questions) of Elected Members is conducted annually regarding

their ongoing needs as decision makers and the survey results are analysed and actions taken to improve the identified concerns.

Opportunities to improve (Risk Rating – Low) 1.3.1 Financials of major projects/business cases (eg. over $250,000) be independently checked for relevance and reliability and signed off by Finance before directors’ consideration.

12

Governing The Business 2.1 Commissioning and procurement of quality services tailored to local needs. (Level 3.0/4.0) What we do well The City has a clear vision of intended outcomes for local people which shapes its commissioning and procurement, and is based on an ongoing analysis and understanding of needs. Examples are:

Melville Visions - community perspectives on Our City Our Future 2006-2010; People, Places, Participation – a Community Plan for the COM 2007-2017;

The COM’s Plan For The Future 2008-2012; and Local Planning Strategy Community Neighbourhood Workshops in 2008.

The City involves local people, other government departments, staff & suppliers in designing services and in the decision making process. Examples are:

The Community Wellbeing survey; The Community and Business Perceptions survey; 4 Neighbourhood Plans (North East, North West, South East & South West)-a

collection of community thoughts and ideas about our Neighbourhood and its future;

“Perceptions 2010 How You See Your City”; Leeming Recreation Centre delivery options investigation and Canning Bridge

Precinct development; Neighbourhood Champions Workshops to facilitate collection of community

thoughts and ideas about their neighbourhood; Safer Melville Partnership Agreement between WA Police and the COM

commits both parties to working together to provide improved safety and crime prevention programs to the local community;

Safer Melville Advisory Committee (SMAC) is made up of Community members, State Government Agencies and City of Melville Staff and Elected Members. The SMAC investigates and develops joint strategies between the partners to address local issues;

“We’re Listening Melville” is a new online community engagement tool to find out the community’s preferences and areas of interests that significantly informed the development of our Cultural Vitality Plan;

Partnership with Department for Communities to promote the World Health Organisations Age-Friendly framework to the WA local government sector; and

Memorandum of Understanding with Youthcare to deliver services to young people through secondary schools.

The City seeks to improve the customer experience, quality, and VFM of services through service redesign, making effective use of IT. Examples are:

The COM’s main drivers are ‘customer satisfaction’, ‘community wellbeing’ and ‘success and sustainability’. As customer service is an overarching goal, it is incorporated into everything the City does. The City has achieved Certified Customer Service Organisation - Substantial Implementation Level from the Customer Service Institute of Australia;

Internal customers now have a formal means of providing suggestions known as Opportunities for Improvement (OFI). All OFI are tracked to ensure their completion, and also the person making the OFI is informed of the end result;

The introduction of a Customer Knowledge Base that enables staff to answer as many questions as possible without passing the call around;

13

Following customer and staff feedback, a new electronic lodgement and processing system for Planning and Building applications/approvals was launched to improve process efficiencies and customer service standards;

Within the Business Management System, all frameworks, policies, procedures and work instructions are stored for easy reference for staff;

Survey of youth in the City has informed how the City will prioritise and customise programs for these current and future customers-eg. “Directions from Young People-2010-2013”;

The inclusion in the dog registration notices a list of all veterinaries in the COM along with contact details, locations and opening time to assist the community-Murdoch University Veterinary Clinic accepts all the costs for doing this;

The community can register for CSS holiday watch patrols using the COM website now instead of just calling the service;

The community can sign up to E-news where they will receive fortnightly Community Safety and Crime Prevention tips from the Mayor and local Police; and

The creation of a new account code specifically for costs attributable to addressing customer complaints - a means of tracking improvements in customer service.

The City also evaluates different options for delivering services. Examples are:

Outsourcing Leeming Recreation Centre to alternative provider that delivers indoor sports which includes cricket coaching;

Outsourcing the performance swimming squad to external expertise. Outsourcing children services (Vacation Care and Out of School Care), Home and Community Care Services (meals on wheels and centre based day respite services) and verge collection as there are other competent providers in the market place;

Reviewed and considered delivery options for security service but decided to keep it in-house for better customer service and better control; and

Has undertaken a strategic review of how the Waste Disposal Services is provided within the current operational parameters, and continue to investigate alternate models for collection and disposal to meet the ongoing financial and environmental challenges.

The City reviews the competitiveness of services and the example of this is the use of mystery shoppers with an aim to benchmark the COM against the council sector and other key sectors. Opportunities to improve (Risk Rating – Medium) 2.1.1 Finalise the Stakeholder Engagement Framework which will formalise and standardise the community engagement and consultation process with an aim to develop an outcome beneficial to the community. 2.1.2 Include in the Complaints Register regarding how lessons learnt from the complaint are shared with relevant staff and how processes are improved as a result of those complaints. 2.1.3 Further consider different delivery options for all services and products including the mandatory ones.

14

2.1.4 Communicate improvement actions resulting from customer feedback to both staff and external customers. 2.2 Using relevant information to support decision making and managing performance. (Level 3.0/4.0) What we do well The COM produces relevant and reliable data and works with other government departments to ensure the quality of partnership data. All reports and statements are checked before they are submitted to government departments and the examples are: Department of Local Government (DLG)

Compliance Audit Returns are checked by internal audit before submitting to DLG;

Annual Report is checked by external auditors before submitting to DLG; and Budget is checked by the Senior Management Accountant before submitting to

DLG. Australian Taxation Office (ATO)

Business Activity Statement is checked by the Financial Accountant and Senior Financial Accountant before submitting to ATO;

Fringe Benefits Tax return is checked by the Financial Accountant, Senior Financial Accountant and Director Corporate Services before submitting to ATO;

PAYG is checked by HR Coordinator and Senior Management Accountant before submitting to ATO; and

Fuel Tax Credit is checked by Financial Accountant and Senior Financial Accountant before submitting to ATO.

The COM understands the needs of its decision makers and provides them with information that is fit for purpose and is used to support decision making. All council decisions are based on a recommendation from officer experienced in their field. A survey (57 questions) of Elected Members is conducted annually regarding their ongoing needs as decision makers and the survey results are analysed and actions taken to improve the identified concerns. The COM ensures corporate data is secure and chances of them being corrupted is minimised. The COM installs industry standard computer security measures and examples are:

Double firewalls to minimise unauthorised external access-hacking; External security threats assessment conducted once every 3 years to minimise

hacking and ensure best practice is followed; User ID and password control on all relevant applications and systems; Email spam, anti-virus and phishing filters are continuously updated; and Offsite production environment (ie primary server environment is located offsite

and data loss is minimised if the Civic Centre were destroyed). The COM has processes in place to ensure compliance with statutory requirements and the examples are:

Comprehensive compliance calendar to monitor and assist statutory compliance;

15

Detailed corporate training matrix to ensure training adequacy hence enhancing the likelihood of statutory compliance; and

Ongoing audits (both external and internal) to ensure statutory compliance. The COM monitors performance against its priorities and targets, and addresses under-performance openly without covering up or ignoring failures. The processes are:

Monthly Performance Reporting to EMT/OMT includes progress status of top 10 projects;

Quarterly Directorate Performance Reporting to EMT/OMT; Data accuracy of performance reporting will be audited; Format of performance reporting is continuously reviewed by EMT to ensure

relevance; and Annual performance evaluation as part of the Personal Development Plan

process. A survey (29 questions) of Elected Members is conducted annually regarding

the performance of the CEO and the survey results are analysed and acted upon.

Opportunities to improve (Risk Rating – Medium) 2.2.1 Include financial (actual against budget etc) in progress status monitoring/reporting to give fuller picture. 2.2.2 Consider the use of Cause and Effect KPI in performance reporting to give early warning signs of major projects. 2.2.3 Improve performance measurement at maintenance and capital plans. 2.3 Promoting and demonstrating the principles and values of good governance. (Level 3.5/4.0) What we do well Quality management is part of good governance and the City has recently obtained ISO certification to its quality management system, occupational safety and health management system, and environmental management system. Quality management system includes understanding customer needs, leading staff to achieve organisation’s objectives, utilising staff to their full potential for the benefit of the organisation, continuing review and improve processes and performance, making informed decisions based on reliable and relevant data, and developing mutual beneficial relationship with suppliers to create value for both organisations. Examples are good governance are: All Council plans, policies and other corporate documents including minutes, code of conduct and annual reports are available to the public - openness and transparency is a measure of good governance.

16

All core processes are regularly reviewed and Continuous Improvement Teams (CIT) have been formed to drive improvement activities within the City. Progress of CIT is regularly monitored by EMT. Another improvement activity is that the Business Support Officers (BSO) are scheduled to receive process review training in June 2011 and they will commence process review on an ongoing basis. The City is committed to continuous development of their employees to enable them to perform and achieve high results in their current and future work roles.

Code of Conduct provides guidance on expected behaviour of Elected Members, staff and third parties including contractors. Key sections of the Code of Conduct are explained with examples in the monthly team brief. A comprehensive compliance calendar assists staff to achieve full legislative compliance. Detailed frameworks, policies and local laws assist staff and the community to understand the COM’s approaches and expectations. Mechanisms to assist Council and senior management to discharge their oversight responsibilities:

Internal audit-the reporting line of internal audit gives it the independence it requires to make this function effective;

External audit-it fulfils an important governance role to ensure the City’s financial statements show a true and fair view as required by the Act; and

Two committees (FMARC and Governance Committee)-engage external experts to assist the Committees to consider audit and governance matters.

Structured information programme to assist elected members to discharge their responsibilities and it includes:

Candidate Information Session and Inductions; Continuous development programs to keep abreast of latest development on

relevant subjects; Monthly Agenda Briefing Forum to obtain relevant information; Standing Orders to guide the conduct of council proceedings; and Monthly Council papers-Financial Statements, Common Seal, Investment

Statement, and Schedule of Accounts so the elected members are fully informed of the major activities.

The City has shown to maintain its focus on its objectives and vision by the following:

Weekly EMT meetings on strategic issues; Fortnightly OMT meetings on operational issues; Quarterly Performance Reporting meetings-ensure objectives are achieved and

address deviation; Regular staff meeting on key operational issues; and Staff training regarding the COM’s policies and procedures is covered in the

corporate training calendar following the annual assessment by managers using the training matrix.

The City has a strong ethical framework and culture and examples are as follows:

Senior management has zero tolerance to misconduct;

17

The workplace culture encourages staff to accept responsibility for behaving according to the City’s values and in the public interest;

Managing misconduct risks is a key part of the City’s overall misconduct resistance approach and is essential to good corporate governance; and

Grievance Procedure, Code of Conduct, Public Interest Disclosure Procedure, and Fraud Control Plan are designed to address various types of misconduct and to encourage reporting.

Opportunities to improve (Risk Rating – Medium) 2.3.1 Finalise the Governance and Integrity Framework and communicate its importance to relevant stakeholders. 2.3.2 Consider promoting the Code of Conduct to external stakeholders highlighting the City’s commitment to integrity and no tolerance to misconduct. 2.3.3 The City’s training and induction programmes for both new and existing employees, and other forms of communication should be used to promote higher standards across all business activities. It should be featured in the City’s publications and recognised in documentation such as contracts with suppliers. 2.3.4 Review the Governance Committee Charter and ensure its requirements are adhered to. 2.4 Managing risks and maintaining a sound system of internal control. (Level 3.0/4.0) What we do well The City has a risk management framework which includes policy, procedure and a risk register which currently focuses on Health Safety Environmental (HSE) risks only. Other key business risks such as financial risks (interest rates, investments, fraud and corruption, compliance), infrastructure risks (IT security risks, business interruption, climate change, pandemic, people skills, recruitment), marketplace risks (technological changes, economic environment, competition, merger activity, customer demand), reputational risks (control environment, service standard, regulatory enforcement) will be considered and added in the Risk Register in 2011/2012. The City has recently approved a Fraud Control Plan to manage risk of fraud and corruption and these risks are also reviewed by both the internal and external auditors as part of their works. The 4 year financial management audit also covers these risks amongst other financial controls and a Continuous Improvement Team has recently been formed to review and improve the fraud control framework.

18

The City has a sound system of internal control including an internal audit function. Examples of good internal controls are:

Key controls are regularly reviewed by both the internal and external auditors and recommendations are made to improve them;

Annual reports including financial reporting are audited by external auditors every year;

Financial management systems are audited by external consultants every 4 years to ensure adequacy and appropriateness;

ISO Certification processes include review of internal controls by external consultant;

Internal quality assurance systems are reviewed by the City’s internal quality audit team;

Organisational Self Assessment (OSA) is conducted annually based on the Australian Business Excellence Framework;

Annual audit is conducted by Customer Service Institute of Australia (CSIA); and

All audit recommendations are tracked to ensure full implementation. Opportunities to improve (Risk Rating – Medium) 2.4.1 Finalise the business continuity plan-a proactive planning method used to rapidly resume business operations once a disaster strikes. It includes who will be doing what and from where and how critical services can continue to be available. 2.4.2 Expand the Risk Register to include other key business risks and their mitigating actions corresponding to the City’s objectives. 2.4.3 Present the Risk Register to EMT and FMARC for review. 2.4.4 Provide risk training or refresher course to relevant staff and Elected Members at an appropriate interval. Managing Resources 3.1 Making effective use of natural resources. (Level 3.0/4.0) What we do well The COM is committed to promote a culture of ecological sustainability and managing its business in a manner that minimises its environmental impacts. It also raises community awareness and participation through programmes run out of Piney Lakes Environmental Education Centre. The outcome of this is the efficient utilisation of resources and the focusing of renewable and recycling resources.

19

The City understands and adopts environmental practices that minimise adverse environmental impacts. A good example of this is the implementation of ISO14001:2004 Environmental Management Systems. Other examples are:

Initial Environmental Review (IER) conducted in 2008/2009 provided a snapshot of the current environmental management status. The purpose of the IER was to understand and provide an overview of the environmental aspects of the City and identify any gaps where environmental management practices were not evident. The IER was the means by which the City establishes its current position with regards to the environment;

Environmental Policy provides an overarching view on environmental issues; Environmental Improvement Plan 2010-2011 address high environmental risks

(water, biodiversity, pollution & climate change) across the City and set targets and actions for the next 12 months;

Environmental Aspects and Impacts Register is used to identify and record all environmental risks and their mitigating actions to reduce those risks; and

Finance One has been modified to measure units of energy (fuel, gas and electricity), waste and water and to provide greenhouse gas reporting from July 2010 - allows high use facilities or service areas to be identified including fuel use for vehicles.

The City manages performance to reduce its impact on the environment. Examples are:

3 main KPIs for Environmental Coordinator to measure success and effectiveness-(a) CO2 emissions recorded in Finance One, (b) number of environmental programs for schools and community, and (c) customer satisfaction survey;

Participation in the International Council for Local Environmental Initiatives (ICLEI) Water Campaign which assists the City in managing its water use, addressing high use areas and implementing reduction strategies and programs across the City. The program also looks at water quality initiatives;

The City has been accredited as a Waterwise council for meeting a number of criteria and working on increasing corporate water efficiency;

The City’s Light Vehicle Replacement Policy ensures consideration for fuel efficiency in the purchasing of replacement vehicles;

Waste management through SMRC Regional Resource Recovery Facility-recycling and waste recovery for domestic and commercial waste services;

Other sustainability programs-waterless urinals, more water efficient toilets, solar panels at the Civic Centre (planned), energy efficient globe replacement program etc implemented to reduce impact on the environment; and

Induction provided to all contractors covers environmental issues. The City manages the environmental risks it faces, working effectively with other government departments or stakeholders. Examples are:

Environmental Emergency Response Plan establishes preventative actions re potential incidents that can adversely impact the environment;

Participation in ‘Days of Change’ is an example of the City’s commitment to sustainability;

Piney Lakes Environmental Education Centre holds regular workshops including worm farm workshops, Living Smart, Great Gardens Climate Watch program, building tours, solar workshops and school excursion programs (around waste, energy, biodiversity, building design and water) to raise environmental awareness;

20

Some informal relationships with Dept of Environment and Conservation, Swan River Trust etc. and formal representation through WALGA, various committees, forums etc. to manage the environment;

Living Smart program is run twice a year for the community to raise awareness of environmental issues;

Travel Smart program is run for schools and community to reduce car trips and increase public and active transport alternatives;

The City’s printers are defaulted to double sized, and swipe card printing will minimise paper wastage;

The City has gradually replaced old desktop computers with energy efficient thin client terminals; and

Tips on green activities are regularly disseminated to staff through the monthly team brief.

Opportunities to improve (Risk Rating – Medium) 3.1.1 Develop stricter purchasing policies to ensure that the COM will only purchase sustainable products that are recyclable at the end of their useful life at local facilities wherever appropriate and give preference to suppliers who have quality and environmental management systems in place. 3.1.2 Better coordination/understanding between Environmental Services and Planning Services and Waste Services in order to educate community to design more energy and water efficient homes and about recycling wastes. 3.1.3 Modify the City’s website to be more user friendly for connecting environmental issues with different services. 3.1.4 Develop and communicate more structured KPI’s to monitor environmental performance. 3.2 Managing assets effectively to help deliver strategic priorities and service needs. (Level 3.5/4.0) What we do well The City has a whole of organisation and strategic approach to asset management based on an analysis of strategic drivers such as service plans, financial capacity, life-cycle requirements and future demand. Key strengths identified are as follows:

One of the key strategies of the City is “manage and maintain all assets (buildings, roads, drainage, paths, irrigation, parks and playgrounds) so that they remain fit for use for current and future generations without disproportionate financial burden being placed on any generation”;

The COM has an Asset Management Framework which identifies the key drivers and outlines the approach on asset management;

21

The COM has an Asset Management Policy which commits to providing agreed levels of service for all asset classes in an economically sustainable manner. It will also ensure that budgeting priority is given to the maintenance and renewal of existing assets, and assets are regularly reviewed to ensure ongoing relevance and community need;

EMT has recently endorsed an Asset Management Continuous Improvement Strategy which reviewed our current approach and established an action plan to continuously improve our processes. It also includes an Asset Management Long Term (20 years) Financial Plan which supports the City's Long Term Financial Plan; and

An Asset Management Continuous Improvement Team has been established to ensure an organisational approach to implementation.

The City manages its asset portfolio to ensure that assets are fit for purpose and provide VFM. It has asset management plans in place for all major assets (buildings, roads, drainage, paths and parks) and undertakes regular condition audits and preventative maintenance on these assets as well as replacing and upgrading them at the optimal time. The City works with partners and community groups to maximise the use of its assets for the benefit of the local community. Examples are:

The Strategic Property Management Group which has been set up to rationalise property assets based on community needs;

Community and lessees are consulted to maximise the use of the City’s assets; and

The Asset Management Plans document current levels of service and utilise the community perceptions survey to monitor customer satisfaction.

Opportunities to improve (Risk Rating – Medium) 3.2.1 Benchmark the City with other local governments when data is available. A National Asset Management Framework (for local governments) is currently being developed and this will assist this comparison. 3.2.2 Improve monitoring (eg. Less than 20 complaints per year) of levels of service against desired targets. 3.2.3 Integrate asset management with risk management and link mitigating actions to capital and maintenance programs. 3.2.4 Improve quality of asset data including conditions audits, age, physical description and performance, to allow for analysis and establishment of trends. 3.2.5 The current Asset Management Plans are 'core' plans, which manage assets on a portfolio basis, and the City will move towards advanced asset management over the coming years where appropriate. This will involve managing assets separately, and developing optimised decision making processes to maximise value for money.

22

3.3 Planning and developing workforce to support the achievement of strategic priorities. (Level 3.5/4.0) What we do well The City has a productive and skilled workforce. Key strengths identified are as follows: A healthy workforce is a productive workforce. Examples are:

Employee Wellness Program (eg. cholesterol and skin cancer checks, blood tests and health assessments, ergonomic assessments and free gym membership etc);

Employee Wellbeing Annual Leave Balance Program-ensure staff have adequate rest, recreation and respite from the workforce;

Work Environment Assessment (WEA) – on-line evaluation by employees on their service area performance against the People objectives of the Corporate Plan;

Organisational Self Assessment (OSA) – by managers and staff against the Business Excellence Framework; and

An active social club that contributes to the engagement and well being of staff. A skilled workforce is achieved by the following:

Clearly defined recruitment processes-ensure employing people with the required skills and cultural fit;

3 months probation-facilitate 2-ways discussion re the mutual expectation of the role;

Position description-enhance the chance of selecting the right people for the job;

Annual competency survey-identify training gaps and the areas the employee wants to improve; and

Training and development is offered to staff via annual PDP process. The City has developed workforce planning template and methodologies to support managers. The City engages and supports staff in organisational change and examples are as follows:

6 months leadership program to develop staff with leadership potential; Study support through leave and cost reimbursement; Mentoring programme-provides career, personal and skill development and

lifelong learning opportunities; Monthly team briefs to share information; Town Hall sessions to allow staff to ask questions and to hear directly from

EMT; and Fireside meetings between EMT and OMT to facilitate open discussion at

management level. The City’s people strategy and HR practices have received national recognition. The COM won the People category for its Human Resources practices at the Australian Business Excellence Awards and Gold Award recognition status through Local Government Insurance Services for our Occupational Safety. It has demonstrated its