In this edition of Voluntary Committees of Management News
- Thanks for your feedback
- Crown land reserves in action!
- Using the Crown Land Kiosk
- New laws for contaminated land
- Committee Financial Controls Audit: Report Summary
- Contacting DELWP
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Thanks for your feedbackThanks for your feedback on the June edition of Voluntary Committee of Management News. It was mostly complimentary! A few constructive suggestions as well. All feedback is welcome. The more we hear from you about what you do and don't want in this news bulletin, the more useful it will be. Email your feedback to: voluntary.committees@delwp.vic.gov.au
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Bert Rae OAM, committee member from the Narre Warren North Public Hall committee, with DELWP staff member Jasmine Collard at a recent volunteer recognition event.
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| Crown land reserves in action!
Thanks to people who have sent through stories and photos about Crown land reserves in action.
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All committee members are eligible to register and use the Kiosk. The registration process requires both an email and mobile number.
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| Crown Land Kiosk
There has been a very encouraging response to the recommendation that all committees make sure they have at least two members registered and using the Crown Land Kiosk. Thanks to everybody who has already registered.
Getting registered for the Kiosk will soon become more critical for committees as this year's Annual Financial Return is designed to be filled out on-line through the Kiosk.
It's easy to register:
- Email:CLIP@delwp.vic.gov.au or
- Contact a staff member from the DELWP Land and Built Environment (LBE) team in your part of the state (see details at end of this news bulletin)
In your communication, please specify:
- Your full name
- Name of committee
- Your email and mobile phone number
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The Contaminated Land Fact Sheet (No. 10) is one of 25 Good Governance Facts Sheets available for committees of management.
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Contaminated land
The Environment Protection Act 2017 (EP Act) came into force in Victoria on 1 July 2021.
The Act aims to protect human health and the environment from pollution and waste. It includes a range of measures to address pollution and waste by businesses, organisations and individuals.
Of particular relevance to committees of management are the measures in the EP Act relating to contaminated land.
As part of a series of fact sheets for committees of management, the Contaminated Land Fact Sheet provides a summary of the key aspects of the EP Act and links to further information. For copies of the Fact Sheets, go to the committees of management section of the DELWP website and follow the link to the "slide out page" for the Good Governance Fact Sheets and model policies for committees of management.
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Good governance is ...
Governance is one of those words that gets used often, but with different meanings. The definition of “good governance” for Victorian public entities* is:
- Enabling our organisations to achieve their intended purpose efficiently and effectively, while meeting community expectations of transparency, accountability and participation (Premier’s Circular 2015/02).
Part of DELWP's support role for your committee is to assist with information and advice about governance matters. The remainder of this news bulletin is dedicated to a detailed look at a range of governance concerns raised in a recent audit of committee of management financial controls. The audit covered financial management and other governance issues such as leases/licences and conflicts of interest.
* All committees of management incorporated through the Crown Land (Reserves) Act 1978 are public entities.
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Committee of Management Financial Controls Audit
Background
In 2020, DELWP’s auditors Ernst and Young (EY) audited key financial and operational processes for a sample of committees of management.
The aim of this review was to support DELWP to identify what was working well and how DELWP could better support committees.
On behalf of DELWP, we would like to thank the committees who dedicated their time to participate in this audit, as their cooperation has enabled us identify further improvement opportunities.
The information below provides a summary of key findings and actions which DELWP will implement to support committees.
EY identified two key areas of improvement to strengthen committese's financial and governance processes:
- DELWP should provide greater support to committees in implementing financial and governance practices; and
- Some committee financial and governance processes could be improved.
Next Steps
DELWP recognises the dedication of all volunteers and employees who are involved in the management of Crown land and is committed to providing increased support for voluntary committees of management on financial and governance matters.
Recent initiatives include:
- A new series of Good Governance Fact Sheets for committees of management, published on the committees of management section of the DELWP website together with an updated set of model policies for committees.
- The Fact Sheets include a detailed summary of DELWP's expectations of committees regarding financial management (Fact Sheet. No. 15). The model policies include an Excel file "Financial management system optional proforma". This file is available for committees to use to assist with day-to-day financial management, including financial reporting and regular bank reconciliations.
- Clarification that the Code of Conduct for Directors of Victorian Public Entities (the Code) applies to all voluntary committees of management. For further details, see Good Governance Fact Sheet No. 6 (published on the committees of management section of the DELWP website) which includes an Appendix with a summary of the Code.
An update of the Committee of Management Guidelines is also being undertaken to include all the new material arising from the EY Audit.
DELWP's expectations of committees
The following information is informed by the EY Audit and outlines DELWP's expectations of committees regarding various financial and governance issues.
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Gifts, benefits and hospitality
DELWP expectations of committees
- A Gifts, benefits and hospitality policy is established which outlines what is considered a ‘gift’, ‘benefit’ and ‘hospitality’ (including donations). Committee members should avoid accepting any gifts, benefits or hospitality, however where it is deemed appropriate by the committee, these situations should be recorded in a Register of gifts, benefits and hospitality.
Example: A local has offered to gift their old lawn mower valued at $250 to a committee to help manage the reserve. The committee should consider the appropriateness of the offer (i.e. does the local expect something in return) and record whether the gift is accepted or not in its Gifts, Benefits and Hospitality Register.
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Conflicts of interest
DELWP expectations of committees
- Conflicts of interest policy is established which outlines types of conflicts that may arise as part of the day-to-day management of the committee and how actual or perceived conflicts should be managed by committee members. All actual or perceived conflicts should be recorded on a Conflicts of Interest Register. Conflicts may include, but are not limited to, hiring of employees/contractors, engaging in leasing arrangements, sourcing revenue, etc.
Example: John is part of a committee which has a leasing agreement with Amy’s store. Amy’s store is owned by John’s wife. John must declare this potential/actual conflict with the committee and record in the Conflicts of Interest Register how the conflict will be managed e.g. John is excluded from decision-making where it relates to Amy’s store.
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Code of Conduct
A Code of Conduct assists people within an organisation to understand the standards of behaviour and conduct they will be expected to uphold when interacting with each other and others outside the organisation.
DELWP expectations of committees
Note: All committees of management incorporated through the Crown Land (Reserves) Act 1978 are public entities. VPSC references to "Directors" apply to committee of management members.
Example: Section 3.6 of the Code on Proper Use of Position states: "Directors (committee members) use their position to promote the best interests of the public entity. They do not use their position to seek an advantage for themselves or another person or to cause detriment to the public entity."
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Meetings and decisions policy
DELWP expectations of committees
- All committees are expected to have a Meetings and Decisions Policy that sets out how committee meetings are conducted. This includes the requirement for minutes of meetings to formally record all decisions.
Example: Committees should ensure that the financial details and other input to the Annual Financial Return is noted and approved by the committee before it is submitted to DELWP, with this approval noted in committee minutes.
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Dispute resolution policy
A committee’s approach to internal (within the committee) dispute resolution should be based on an acceptance of normal differences of opinion that may occur in the context of all members taking a considered, courteous and constructive approach to decision-making.
DELWP expectations of committees
- All committees are expected to have a Dispute Resolution policy. This will ensure that if a dispute ever arises within the committee, there will be clarity on how to proceed.
Example: If a dispute cannot be resolved on an informal basis, the Chairperson (or Acting Chairperson) may place the matter on the agenda of the next committee meeting. Depending on circumstances, an urgent committee meeting may be called to address the issue. At the meeting, the committee may invoke the formal mediation process involving a suitably qualified independent mediator.
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Bank reconciliations
DELWP expectations of committees
- Committes should perform regular bank reconciliations (ideally monthly but at least quarterly) for all committee bank accounts to confirm that bank balances are aligned to financial records. Reconciliations should be prepared by someone with the required financial skills, e.g. committee Treasurer, then approved by someone independent of the preparer, e.g. another committee member, with the overall financial report noted and approved by the full committee.
Example: A committee starts the month with $2,000 in the bank and during the month the accounting system records total income of $500 and expenditure of $1,000. It would be expected there would be an accounting deficit of $500 for the month and the bank account would reduce correspondingly by $500 to $1,500. If the bank account does indeed have a $1,500 balance, then the accounts are reconciled – the accounting records and the bank statements match up. But imagine if the bank account had a balance of $1,400. There’s $100 missing, the figures don’t reconcile. In that case, an investigation would be required to explain the difference; maybe $100 in cash collected from a fundraiser had been included in the accounts but hasn’t yet been banked; or perhaps the accounts mistakenly recorded $200 income from a fundraiser when it was actually $100. After the reasons for any discrepancies are identified and with appropriate oversight from committee members, the accounts would be corrected and the bank reconciliation completed.
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Segregation of duties for financial administration
The principle of Segregation of Duties (sometimes known as Separation of Duties) is based on shared responsibilities of a key process that disperses the critical functions of that process to more than one person.
DELWP expectations of committees
- In relation to committee finances, the "segregations of duties" principle translates into the idea that more than one person must be responsible for the chain of financial management processes. In the era when payments by cheque were common, it was always assumed that committees would have two people to sign each cheque (and that blank cheques were never signed). The same principal applies to electronic payments. At least two people should be involved in the chain of approval and payment, mirroring the two signatures on a cheque.
Example: Receiving, authorising and paying an invoice. If only one person from a committee is involved in the chain of receiving, authorising and paying an invoice, this would not meet the expected standards for segregation of duties. Expected practice would involve clear policy on who is delegated with authority to authorise payment of the invoice, and then at least one other committee member involved in the chain to oversee the actual payment.
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Assets register
An accurate and up-to-date assets register has a range of benefits, including for insurance and transparency associated with the disposal of assets, be it by sale or an asset reaching the end of its useful life.
There is no standard format for asset registers, although all asset registers contain similar information. Commercially available finance system software will usually include an asset register format. An example assets register format for committees is included with Good Governance Fact Sheet No. 15 and the model policy "Financial management system optional proforma." The type of asset register used will depend on whether accounting is being done on a "cash" or "accrual" basis, with "accrual" requiring an accurate record of "depreciation." This is explained in more detail in the Fact Sheet.
DELWP expectations of committees
- All committees are expected to maintain a register of assets. There is some discretion regarding the range of assets to include in an assets register. Any asset with a purchase price of $1,000 or more must be included. It is recommended committees consider including assets of lesser value.
Example: A committee buys two lap-top computers for use by volunteers. After a year or so, it is clear the volunteer team only needs one computer. A volunteer expresses an interest in buying the other computer. Amongst the issues for consideration by the committee, it would be a helpful starting point if an up-to-date asset register exists with clear details of purchase date and price and agreed current value.
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Contacting DELWP about committee of management matters
DELWP Land and Built Environment (LBE) teams are responsible for supporting committees of management in each region. Relevant offices for committees of management include Geelong, Hamilton, Traralgon, Bairnsdale, Ballarat, Horsham, Seymour, Wodonga, Bendigo, Mildura, Knoxfield (for all of Melbourne Metro).
You can also phone the DELWP Customer Contact Centre on 136 186 (ask to be put through to the LBE Team in your part of the State) or email: customer.service@delwp.vic.gov.au (and it will be forwarded to the public land email in your region).
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