Audit committee steps up scrutiny

THE Audit and Risk Committee (ARIC) has stepped up its scrutiny of the Shire of Toodyay’s governance and finances calling for more meetings and more oversight – in a move that prompted pushback from the chief executive officer.

Under the Local Government Act, ARIC is responsible for the oversight of risk management, internal controls, financial management and compliance.

The committee’s decision to step up its oversight follows the 2024–25 audit’s financial management report, which identified major issues that have persisted across four audits.

Auditors found $242,521 had been mistakenly been paid twice, no monthly bank reconciliations were done for almost an entire financial year and the risk of fraud had increased.

Endorsing an annual work plan and new reporting process

ARIC held a special meeting on March 17 at the shire’s council chambers on Fiennes St to endorse an annual work plan and a new reporting process.

ARIC’s report outlined a plan that included monthly meetings instead of quarterly, and it substantially increased the reporting requirements for finance, governance, risk and operations.

The committee said regular monthly meetings would better help them to detect issues early, monitor trends or intervene before risks escalated.

ARIC also asked for an operational overview summary to inform the committee about key activities and significant incidents that resulted in compliance breaches, reputational harm or the need for corrective action.

A reconciliation status report was also requested, including bank accounts, GST and asset registers to help the committee look at the integrity of the financial records.

ARIC also asked the shire’s CEO Aaron Bowman to provide a formal written statement of assurance each quarter on the effectiveness of the organisations processes and to identify any issues that warranted ARIC’s attention.

Shire CEO flags concerns

In response, Mr Bowman described the discussions ARIC had as ‘secret, behind closed doors meetings’ and discussions that did not promote transparency as he was not told before the special audit meeting that ARIC wanted a more detailed work plan.

Mr Bowman also raised governance concerns, saying the committee’s role was to review reports from the CEO and make recommendations to council.

He said the CEO was responsible for administration, staffing, systems and reporting.

He added that any extra reporting requests would need to be assessed for practicality, staffing and legal requirements before going to council for approval.

Moving to monthly meetings and endorsing a complex reporting schedule would also impose significant workload increases and administrative demands, Mr Bowman said.

ARIC defends its proposed reporting framework

In a statement, ARIC chair Natalie Mills said members meeting to discuss priorities and what reporting was required for proper oversight was not ‘non-compliant’ behaviour — it was the committee simply doing their job.

She said the committee had a responsibility under the Act to decide the information, reporting and assurance it needed to fulfil its statutory functions.

“To meet this obligation, ARIC must establish a structured and predictable reporting framework that ensures it receives the information necessary to monitor financial controls, compliance, risk management and organisational performance throughout the year.”

“The proposed reporting framework sets out a suite of standing reports, delivered at defined intervals to ensure ARIC receives timely, evidence-based information that supports informed decision making and effective oversight.”

ARIC also noted that it had requested the required reports from the CEO in accordance with the committee’s charter and statutory functions.

Mrs Mills said if the reports required by the framework could not be produced, that could pose a serious risk to the shire.

“Identifying such risks is one of the reasons why this committee exists.”

Members of the audit committee unanimously voted to support the annual work plan and to hold monthly meetings at the special audit meeting held last month.

By Rashelle Predovnik