Annual Report 2014–15

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Risk management

The City of Melbourne has four policies to help guide our risk management approach: the Risk Management Policy, Business Continuity Policy, Crisis Management Policy and Fraud and Corruption Policy. These are enacted through the Risk Management Framework and various processes and procedures. They also detail the objectives and key responsibilities and timeframes for the review, reporting and approval of risks. Our risk management approach is based on the international standard for risk management, AS/NZS ISO 31000:2009.

Risk management planning is done as an organisation-wide exercise, covering the top strategic risks as well as operational and project risks. It also is part of the daily business activities of individual branches and contractors. Integrated quarterly and annual reporting of strategic risks is undertaken by the Chief Executive Officer and Directors; key risks are reported to the Audit Committee throughout the year.


Adapting to climate change

The City of Melbourne has done substantial work on climate change adaptation, including the release of the City Of Melbourne Climate Change Adaptation Strategy in 2009. This strategy identified four key risks facing Melbourne including extreme heat and bushfires, sea level rise, reduced rainfall and drought and intense rainfall and storms.

We are working to further understand what our future climate might look like, and how this could affect the City of Melbourne's environment, people, and economy.

Adaptation is a combination of measures that a) reduce risk from climate hazards and b) build resilience to climate change. These are two quite different lenses that operate in the same system, binding the city's people, environment and economy.

As a city, failure to respond to climate could have the following potential consequences:

Consequences for the organisation


  • Inability of our workforce to provide community services

  • Increased severity and frequency of floods, drought and fires may cause major damage or the loss of key uninsured assets and infrastructure: parks and gardens, roads, drains, infrastructure and buildings valued below the excess level. Assets may be uninsured due to a financial justification (for example we do not insure our trees or roads) or because certain classes of insurance protection are unavailable

  • Reputational issues and potential liability exposure

  • Adverse effects on economic investments

Consequences for the municipality


  • Negative impact on public health, wellbeing and mortality

  • Negative impact on the liveability, livelihoods, connectedness and economic prosperity of Melbourne and its community

  • A community not adequately prepared for flood, extreme heat and rainfall events

  • Community concern if we fail to respond

  • Interruption to critical infrastructure such as transport, utilities, and health and emergency services

  • Increased impacts to biodiversity and the ecosystems services they provide

Managing climate change risks


Our actions in response to these risks and consequences fall in four main areas:

  1. Working with the environment

  2. Preparing the community

  3. Improving infrastructure and planning

  4. Sharing knowledge and learning.

Broader environmental sustainability is addressed at a strategic and operational level across the organisation. It is central to the way we work.

In 2015 we will review and update our Climate Change Adaptation Strategy. By working collaboratively and engaging with stakeholders, internal and external, including residents, visitors, businesses, workers and vulnerable communities, we will create a clear understanding of what climate change means to them and how they can adapt.

Financial implications and costs of climate change


The City of Melbourne has identified many adaptation projects to help manage our future climate risks. Diversity in projects and actions make it difficult to compare and prioritise their contribution to our adaptation efforts.

To support decision-making, we developed an adaptation cost curve framework that provides a better basis for understanding and comparing the benefits of our actions. The framework offers a consistent way of thinking about the value of adaptation benefits and a model for assessing the financial value and cost-effectiveness of our actions.

We will use this framework to assess the value of potential future actions, and use these outputs to make better informed decisions.

Audit operations

Audit Committee


In line with good governance practices and in accordance with section 139 of the Local Government Act 1989, the City of Melbourne has operated an Audit Committee since 1996. The committee oversees the activities of our external and internal auditors and gives us independent advice on appropriate accounting, auditing, internal control, business risk management, compliance and reporting systems, processes and practices within the organisation.

The Audit Committee met five times during 2014–15 and considered issues including our:



  • risk profile

  • statement of annual accounts and performance report as well as reports on our wholly owned subsidiaries

  • occupational health and safety risks

  • information technology risks

  • fraud and corruption risks
  • business continuity planning and exercises


  • governance responsibilities applicable to associated entities and trusts in which we have either an indirect interest or stake

  • legal action reports

  • internal audit reports.

Audit Committee members


Our Audit Committee comprises three Council representatives and four independent members. For 2014–15 they were: Chair Richard Moore, Theresa Glab, Therese Ryan, Stuart Hall, Deputy Lord Mayor Susan Riley, Future Melbourne (Finance and Governance) Committee Chair Councillor Stephen Mayne and Councillor Rohan Leppert. Information about our independent Audit Committee members is below:

Richard Moore – appointed July 2009, and as Committee Chair from July 2009


Richard, a Fellow of the Institute of Chartered Accountants in Australia, served as a Partner of PricewaterhouseCoopers for 23 years and more recently as Group Manager, Audit for the ANZ Banking Group. Richard is now a professional non-executive director who sits on a number of boards and not-for-profit committees. Richard holds a Bachelor of Arts, Honours, (Economics) from Liverpool University and a Graduate Diploma in Accounting from RMIT.

Therese Ryan – appointed July 2013

Therese is a professional non-executive director who sits on a number of listed, government and not-for-profit boards. Therese was Vice President and General Counsel of General Motors International Operations and has over 35 years’ experience as a business executive and commercial lawyer. She is a graduate of the Australian Institute of Company Directors and holds a law degree from Melbourne University.

Theresa Glab – appointed July 2007, reappointed July 2014


Theresa is an experienced risk management, finance, governance and compliance consultant, sits on a number of public and private sector boards and is the independent member for several Local Government Audit Committees. Theresa holds a Bachelor of Economics, Graduate Diploma in Banking and Finance, Master of Accountancy and is a graduate of the Australian Institute of Company Directors.

Stuart Hall – appointed August 2013


Stuart is an independent mining consultant with over 33 years of experience in corporate roles in the mining industry, most recently as Chief Executive Officer at Crosslands Resources. Prior senior management positions included roles at Marathon Resources, BHP Billiton and WMC Resources. Stuart is a graduate of the Australian Institute of Company Directors and holds a Masters of Arts from Lancaster University and a Bachelor of Science from Sussex University.

Internal audit


Our internal audit service helps us, and our subsidiaries, Citywide Service Solutions Pty Ltd and Queen Victoria Market Pty Ltd, maintain strong, relevant and effective internal controls. Last year we completed a tender process for a new contract for the Provision of Internal Audit Services, which was awarded to Oakton Services Pty Ltd from July 2014 for a period of three years.

External audit


The Victorian Auditor-General’s Office is responsible for our external audit and that of our subsidiary companies. It focuses on three key areas: strategic planning, detailed audit system testing and financial statements.

Audit Committee meeting attendance

Attendee


Role

8/08/14

Quarterly



29/08/14

Special


21/11/14

Quarterly



20/02/15

Quarterly



15/05/15

Quarterly



Richard Moore

Chair

Yes

Yes

Yes

Yes

Yes

Theresa Glab

Member

Yes

Yes

Yes

Yes

Yes

Therese Ryan

Member

Yes

Yes

No

Yes

Yes

Stuart Hall

Member

Yes

Yes

Yes

Yes

Yes

Deputy Lord Mayor Susan Riley

Council Representative

Yes

Yes

No

No

Yes


Cr Stephen Mayne

Council Representative

Yes

Yes

Yes

Yes

Yes

Cr Rohan Leppert

Council Representative

Yes

Yes

Yes

Yes

Yes


: SiteCollectionDocuments
SiteCollectionDocuments -> Year one progress report
SiteCollectionDocuments -> City of Melbourne Annual Report 2012–13
SiteCollectionDocuments -> Year one key achievements Melbourne Music Symposium 2015
SiteCollectionDocuments -> City of Melbourne Annual Report 2015-16
SiteCollectionDocuments -> We are pleased to present to you the City of Melbourne’s annual report for 2012–13
SiteCollectionDocuments -> World War One memorials in the City of Melbourne by Dr Michael Cathcart
SiteCollectionDocuments -> Learning Objective Activities Areas of Learning
SiteCollectionDocuments -> Queen mary 2 Fact Sheet
SiteCollectionDocuments -> Discussion Paper on Ecosystem Services for the Department of Agriculture, Fisheries and Forestry Final Report
SiteCollectionDocuments -> Transport/movement re theme: leaders


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