FNQROC Update - October 2013
The State Overlay – Hon David Crisafulli
The Minister stressed the Department of Local Government was there to assist Councils in any matters. He gave an example of assisting a Council to resolve some Ergon Energy issues. His department exists to aide Councils to resolve issues whether it is within the department or not. (We will certainly be informing the department of our issues with Ergon Energy!)
Innovation is a State of Mind – James O'Loghlin
Three things innovators do:
1. They think. How much is spent reacting? How many times have you said "I haven't had a moment to think." Are you over prioritising today at the expense of tomorrow? They think about where the opportunities are, not where they are not. Thinking is not easy to - you need to be persistent.
2. They value ideas. If you have an idea record it immediately - they are fleeting. How many times have you thought of a new idea or solution and have forgotten it?
3. They use their ideas and take them to the next step.
How can organisations grow/incorporate innovation?
A significant number of organisations outsource the good bits to consultants due to either lack of confidence or time.
1. Harvest ideas from your staff.
2. Make it part of the job...a KPI.
3. Make time for staff to pitch ideas ie. 3pm to 4pm every Wednesday. (If a staff members provides a bad idea - still thank them, make them feel like they could come back again – they will get a good one!)
4. Implement good ideas promptly.
Innovation should be core business. You need to invest time money and resources to implement them. You will get the return on investment.
Many Councils have 'improved efficiencies' in their strategic plans / budget statements etc. They are asking staff to be innovative but is there a culture of supporting and implementing innovative ideas?
The myth of Financial Sustainability in LG - David Spearritt (ORION Consulting Network Pty Ltd)
(How could I possibly miss this one?!)
Myths:
1. Bigger is more sustainable. Brisbane City Council has been bankrupt three times (last time in the early 1950's). Detroit went bankrupt in July 2013.
Note: QTC has shielded Councils from problems of the past. Previously Councils needed to source their own loans and when liquidity was low (due to war/depression etc Councils would default on loans).
2. QTC FSR Ratings. These are subjective assessments based on single 10 year forecast. Assumptions are just accepted. (Might be better to move to stress testing based on various scenarios.
3. Depreciation. Depreciation = consumption for assets. Nothing to do with replacement needs. Focus should be on funding replacement/renewals needed.
4. Capital funding. Reality - borrowing is not a source of revenue - it consumes a future resource.
Complaints management in Local Government – Craig Allen – Assistant Ombudsman
Audits - seven key elements against legislative requirements and good practice indicators.
Areas of concern:
• Internal complaints reporting and analysis and
• Review/monitoring of CMP effectiveness.
Contributing factors:
• understanding scope of CMP / definition of AAC
• problems recognising and recording AACs, particularly in frontline areas
• no structure to classify complaints
• system unable to record or report on complaints
Suggested internal review format:
• executive summary clearly stating the outcome
• introduction/background
• complaint issue(s) and any relevant background material
• assessment of the complaint and issues selected for review
• outline of the investigation process
• relevant information obtained and considered
• relevant facts established
• laws, policies, standards and relevant research
• analysis of complaint issues, including findings on questions of fact and law
• whether the complaint is sustained and the reasons for that finding
• if the complaint is sustained, any recommendations(s) for redress and systemic improvements to prevent similar complaints.
(I have a note here that Jeff Jenkins (Yarrabah) has a checklist from the conference which he is going to send me a copy of...)
Graphing the LG Audit - Andrew Greaves, Auditor General
• New audit; performance audit in addition to financial audit.
• The Performance audit will assess organisations, program's, services, projects. Are Councils delivering these services efficiently, effectively and economically? This goes down to organisational effectiveness which cannot be ascertained from looking at Councils' bottom line.
• They will do nine or 10 (within LG and or State) across the year due to limited funding available. Each one costs approximately $350,000.
• Over the next five years benchmarking data will start to be included in the reporting back to Councils. How do other (like) Councils do it and how much does it cost?
He would prefer to lessen focus on financial audit and move resources across to performance audit.
Financial audit findings:
1. Reliability of reporting
a. The valuation of infrastructure assets remains the most significant financial reporting issue.
b. High levels of volatility in valuations experienced across councils from one year to the next. For 2011-12:
i. 49 councils reported valuation increments of $3.0 billion
ii. 11 councils reported valuation decrements of $1.4 billion
iii. eight Councils reported no movement in the fair values of their infrastructure assets.
2. Timeliness of reporting
a. Councils continue to be the least timely of the three tiers of government. Only 49 Councils had their financial statements audited by the (then) legislative deadline.
b. Primarily the result of:
i. Poor system and financial report preparation processes
ii. Inadequate planning for financial system implementations
iii. Non-availability of key staff/poor succession planning
c. Had the new 31 October deadline been in place, only nine councils would have achieved this date.
d. Councils can significantly improve their reporting processes, particularly the:
i. Timing of annual asset valuations
ii. Presentation of a complete, quality set of financial statements for audit
iii. Implementation and change management strategies when changing financial systems
iv. Use of early 'hard closes'
v. Succession planning and training strategies for staff in key positions
3. Internal Control over financial reporting
a. 10 Councils did not have an internal audit function during 2011-12
b. A further seven Councils spent $5,000 or less on internal audit services during 2011-12
c. One Council failed to establish an audit committee.
4. Financial Sustainability
a. 16 of the 68 Councils audited are at higher risk of becoming unsustainable
Strategic Audit Plan 2013-2016:
Financial emphasis:
• Wireless security (2013-14)
• Asset valuations (2013-14)
• Travel expenditure (2014-15)
• Impairment of asset (2015-16)
Performance emphasis:
• Security of traffic management systems (2013-14)
• Forecasting long term sustainability (2014-15)
• Fraud Management (2015-16)
From Organisational Restructure: Boon or Bogey Monster? The top time-wasters are:
a. Emails – average figures given: 306 per week, checked 36 times and hour (the 'ping' factor)
b. Interruptions – 56 interruptions a day (80% are trivial – two hours per day wasted here alone) and approximately 16 minutes refocussing after each interruption.
c. Meetings – 62 meetings per month
d. Switching tasks – every three minutes
e. Office Politics – 48% of us spend time dealing with office politics
Less than 60% working time is productive!
LGMA Qld Presentations
Wednesday 4 September
The State Overlay – Hon. David Crisafulli
Innovation is a State of Mind – James O'Loghlin
Mapping your Skills – Kathy Kelly
The Confidence to Manage – Jack de Flamingh
Future Proofing Against the Stress Epidemic – Robyn McNeil
Planning – Infrastructure – Economic Development: What comes first? – Ashley Page
Big Black Hole or Money Train? – Chris Mills, Cale Dendle and Catherine Swift
Harnessing the Opportunities – Adam Saddler
Balancing the Service Level Seesaw – Jason Linnane and Stephen Bunting
Organisational Restructure: Boon or Bogey Monster? – Peter Irvine
Changing Tack – Brett de Chastel
Thursday 5 September
The Legal Buzz – Tim Fynes-Clinton
Closing the Loop – Alice Sherring
Wellbeing Pulse Points for Local Government – Janice Moriarty and Lyn Hopewell
Radar on Complaints – Craig Allen
Demystifying Credit Reviews – Neil McMahon
Factoring in the Demographics – Sandi Van Roo
Managing Cost Pressures in the Current Economic Environment – John Peters
Graphing the LG Audit – Andrew Greaves
The Findings – Townsville Management Challenge Team