Effectiveness of Support for Local Government

Tabled: 26 February 2015

2 Municipal Association of Victoria's legislative and governance framework

At a glance

Background

Governance relates to how organisations are directed, controlled and held to account. The Municipal Association Act 1907 (MA Act) is the statute governing the Municipal Association of Victoria (MAV). To effectively, efficiently and economically support councils, MAV needs a governance framework that is aligned with its legislative requirements and contemporary better practice principles and standards. It is the MAV Board's responsibility to ensure that there are appropriate governance arrangements.

Conclusion

MAV currently performs a broad range of support activities but it is not clear if all of these are within its remit or align with its intended purpose. The MA Act is outdated and does not provide sufficient detail and clarity about governance arrangements. The effectiveness, efficiency and economy of the support provided to councils is significantly compromised by a lack of appropriate legislative and broader governance arrangements applying to MAV. MAV does not have adequate systems and processes for good governance consistent with contemporary standards of public administration.

Findings

  • The MA Act has not been comprehensively reviewed since it was introduced.
  • It is not clear whether all of MAV's existing functions are within its legislated powers.
  • It is arguable that at least one MAV Rule is not within the power set out in the MA Act.
  • MAV has poor controls for fraud, corruption and conflicts.

Recommendations

  • That the Department of Environment, Land, Water and Planning reviews MAV's functions, roles and responsibilities and routinely monitors MAV's compliance with the MA Act.
  • That MAV reviews and updates policies and controls for fraud, corruption and conflicts of interests.

2.1 Introduction

Good governance assists public sector organisations to perform their roles effectively and efficiently and to respond to a changing environment. The Victorian Public Sector Commission (VPSC) defines governance as:

'processes by which organisations are directed, controlled and held to account. That is, the processes whereby decisions important to the future of an organisation are taken, communicated, monitored and assessed. It refers to the authority, accountability, stewardship, leadership, direction and control exercised in the organisation.'

To be effective, efficient and economical in its provision of support to councils, Municipal Association of Victoria (MAV) needs a governance framework based on contemporary better practice principles and standards.

The Municipal Association Act 1907 (MA Act) is the statute governing the responsibilities and powers of MAV. The MA Act also gives MAV the power to make Rules covering a range of governance issues, such as regulating its proceedings and fixing its subscription rates.

MAV has had a role in promoting good governance in the local government sector, and in 2012 it produced a Good Governance Guide to assist councils to govern better, with Local Government Victoria (LGV) and the Victorian Local Governance Association and the Local Government Professionals. The guide outlines the characteristics of good governance:

  • accountable
  • transparent
  • following the rule of law—decisions are consistent with relevant legislation and common law
  • responsive to needs
  • equitable and inclusive.

2.2 Conclusion

The MA Act has not been comprehensively reviewed since its inception in 1907. MAV currently performs a broad range of functions and it is not clear if all of these functions are within its remit or align with its intended purpose. While the intent for MAV to support councils is clear in the MA Act, the scope is open to interpretation. MAV operates in a unique legislative environment and its governance model is unusual in that it is not subject to the range of legislation that applies to many other public sector entities and bodies. While MAV has some external accountability requirements, there has been little or no scrutiny of its activities. This has likely contributed to MAV expanding its focus and service provision to a wide range of activities which may be outside its remit and intended purpose, as discussed in Part 5.

MAV does not have adequate systems and processes for good governance consistent with contemporary standards of public administration. The absence or underdevelopment of these systems and processes undermines MAV's ability to efficiently and effectively support councils. Until recently, MAV did not have formal policies, procedures and processes in place to manage fraud and corruption or conflicts of interest, increasing the risk of fraud or corruption associated with MAV activities, including procurement.

The MAV Board of Management is responsible for MAV's governance and conduct. A lack of good governance is ultimately the responsibility of the MAV Board.

2.3 Municipal Association Act 1907

2.3.1 Requirements under the Act

MAV currently performs a broad range of functions, however, is not clear if all its functions are within its remit or align with its intended purpose. Under the MA Act, MAV's functions can be derived from three sources:

  • Explicit powers—for example, section 2(3) in the MA Act which allows MAV to lease property, section 4 enabling MAV to establish a Fidelity Guarantee Fund and section 14 to establish and keep a local government investment service fund.
  • Implicit powers—for example, powers arising from the context of the passage of the MA Act such as the preamble in the MA Act, and the 1907 second reading speech to the Municipal Association Bill.This would include the power to act as a representative of the municipal councils to protect their rights and interests.
  • Other implicit powers—for example, powers that are implied as necessary to enable the MAV to carry out its explicit functions under the MA Act.

The MA Act contains few explicit powers, except for requiring MAV to establish and manage public liability and professional indemnity insurance, a Fidelity Guarantee Fund and to establish and keep the Local Government Investment Service Fund. There is no explicit power under the MA Act for it to undertake a range of its existing activities. It therefore becomes necessary to consider whether individual activities fall within the statutory objects of the MA Act, which can be a difficult question of characterisation. For example, in order to be valid, any professional development activity undertaken by MAV must have the purpose of building local government capacity or improving efficiency.

The MA Act sets out the objectives of MAV in the preamble which itself forms part of the Act rather than in a separate 'objects' clause of the Act as is now standard drafting practice. Section 3(1) of the MA Act allows MAV to establish Rules that relate to its internal management, and these Rules include a statement of the MAV's objectives. The objectives of MAV as described in Rule 1 include such activities as to 'promote local government and improve community awareness of the capacity of local government throughout Victoria to act effectively and responsibly' (Rule 1.1.1). MAV also aims to provide 'targeted advocacy to governments and relevant organisations' (Rule 1.1.4.1). It is not clear how many of these objectives in the Rules fall within the power in the MA Act which is discussed in Part 2.3.2 of this report.

The MA Act requires the separation of accounts for MAV's insurance scheme and fidelity fund, the certification of all accounts by the treasurer of MAV—a position abolished in 1996 by a change to the Rules—and the independent audit of those accounts. MAV's only external reporting requirement is tabling these accounts in Parliament, although MAV has chosen to table an annual report covering all of its activities in Parliament each year. From our evaluation of MAV support activities, the current reporting provided does not provide a measure of performance against its stated objectives.

MAV also currently provides insurance services to Tasmanian councils and water authorities, and this role is not explicitly defined in the MA Act. MAV has advised that it believes the provisions in the MA Act are broad enough to cover this function.

In response to this audit, MAV sought written legal advice in November 2014 about whether its existing support activities and 2013 Rules are within the powers set out in the MA Act. It has not sought general advice on the MA Act, its role, purpose and activities since 1998, despite taking on a range of new functions, including group procurement. For example, MAV recently established a $240 million Local Government Funding Vehicle to establish a municipal bond market in Australia which provides councils access to fixed rate, interest only loans.

MAV received written legal advice in December 2014, which raised doubts about whether some of MAV's specific activities are authorised under the MA Act. The advice suggests that this may be an error in amending the Act. Prior to 1971, there was a general power in the Act. This power was removed by amendments that year. The advice further recommends that MAV take steps to seek amendment to ensure all of its current activities are expressly provided for within the MA Act.

In April 2013, LGV provided advice to the government that noted that MAV had taken on additional and wider functions that are not included in the current MA Act, including:

  • providing group commercial services, including for procurement
  • providing the sector with policy positions supporting council priorities and needs
  • providing capacity building for councillors
  • facilitating communication and networking between councils, and between councils and other tiers of government.

This advice also noted that the MA Act has never been comprehensively reviewed since its enactment and that it was therefore outdated in both its drafting and key content around MAV's role and functions. This advice was not provided to or discussed with MAV.

2.3.2 Rules

Section 3 of the MA Act enables MAV to establish Rules that can cover:

  • the management of MAV (section 3(2)(a))
  • the regulation of its proceedings (section 3(2)(b))
  • fixing the amount to be paid for subscription annually to MAV by each municipality (section 3(2)(c))
  • the regulation and management of, and fixing the rate of contributions to, the Municipal Officers Fidelity Guarantee Fund and the terms and conditions upon which the benefit of such fund shall be available (section 3(2)(d))
  • generally all matters whatsoever affecting the management of MAV so long as it is not inconsistent with the laws of Victoria (section3(2)(e)).

These Rules have been used to amend MAV's governance structure in the past and the current version is endorsed through the State Council. The most recent amendments to the Rules were in 2013, 2008 and 2006. Through the Rules the role of State Council, positions of MAV Board representatives and chief executive officer (CEO) have been established.

The Rules can be revised at any time with the approval of a 60 per cent majority of council members at State Council and become Rules of the Association following Governor in Council approval. There is otherwise limited external scrutiny or oversight of the Rules as they are neither 'statutory Rules' nor 'legislative instruments' and therefore not of a legislative character. For example, changes to MAV's Rules are not required to be reviewed by the Parliament's Scrutiny of Acts and Regulations Committee which is responsible for scrutinising bills introduced into Parliament, as well as regulations and other legislative instruments to ensure that they meet certain minimum standards. These instruments must be within power and not adversely impact certain rights. Subordinate legislation is ordinarily reviewed by this committee. MAV's written legal advice from December 2014 states that the Rules do not fall within the meaning of 'statutory Rules' or 'legislative instruments' and that the requirements, as detailed above, of the Subordinate Legislation Act 1994 do not apply to the MAV Rules.

MAV's legal advice also suggests the MAV Rules are unique, and are not of a legislative character as they relate to the internal management of MAV. This advice also suggests that Rule 1.2, which allows MAV to 'exercise functions and powers which are necessary or convenient for it to carry out its objectives', may go beyond the management of MAV and may arguably be outside the MA Act.

Rule 1.2 is a type of power usually found in legislation, rather than in an instrument such as the MAV Rules.

Some of MAV's existing support activities are found in the objectives set out in the Rules, such as its role to 'act as the representative body of local government for the purpose of promoting effective inter-government cooperation'. MAV's legal advice states that whether a particular activity is within the MA Act depends on its character. The advice also confirms that the Rules cannot confer additional powers where they are otherwise absent from the MA Act.

Given MAV's limited external accountability and reporting requirements, it is important that LGV provide effective support and advice to the Minister for Local Government regarding responsibility for the MA Act. LGV's role in monitoring compliance with the MA Act is discussed in Part 5.

2.4 Applicability of other relevant Acts

MAV is a public statutory authority and a 2004 case in the Supreme Court of Victoria determined that it was a body established for public purposes. There are several Acts that would ordinarily apply to public bodies but most of these do not appear to apply to MAV. MAV has not sought written formal legal advice on this matter. Regardless, MAV should be subject to similar best practice governance arrangements, either in its legislation or its own established governance arrangements.

Public Administration Act 2004

A key purpose of the Public Administration Act 2004 (PAA) is to provide a framework for good governance in the Victorian public sector and in public administration generally in Victoria. The PAA does not apply to MAV as it does not fall within its definition of a 'public entity'. As such, MAV Board members are nominated from among the elected representatives of member councils. Alternatively, under the PAA at least half of these positions, equivalent to a Board of Directors, would be nominated by either the Governor in Council or the minister.

Financial Management Act 1994

The purposes of the Financial Management Act 1994 (FMA) are to:

  • improve financial administration of the public sector
  • make better provision for the accountability of the public sector
  • provide for annual reporting to Parliament by departments and public sector bodies.

Of particular note, the FMA requires particular entities to prepare, and have audited general-purpose financial statements in accordance with applicable Australian Accounting Standards. These financial statements provide an acquittal of an entity's stewardship of its finances. Although not required, MAV annual reports have been prepared in accordance with Australian Accounting Standards. MAV also reports compliance with Australian financial services licence requirements as a business providing financial services. MAV Insurance is not subject to the Insurance Act 1993 or the Australian Prudential Regulation Authority (APRA). Consequently it is not subject to the oversight which ordinarily applies to insurance companies.

MAV has not sought written formal legal advice as to whether it is subject to the FMA. LGV should liaise with the Department of Treasury and Finance to consider whether MAV should be subject to the FMA.

Public Records Act 1973

In August 2005, MAV sought advice from the Public Record Office of Victoria (PROV) as to whether it was required to comply with the Public Records Act 1973 (PRA). PROV advised that MAV is not considered to be a public office in accordance with the PRA and therefore falls outside the jurisdiction of PROV.

In 2014 MAV established a records management policy. Prior to this, a documentation policy and procedures manual was in place from 2006. Throughout this audit MAV has been unable to locate and provide information on a timely basis.

2.4.1 MAV governance

MAV Board

The MAV Board's key responsibilities include:

  • defining the detail of policies, objectives and strategies determined by State Council
  • setting and evaluating directions, priorities and performance standards
  • appointing the CEO and monitoring his or her performance
  • liaising with MAV representatives from their regions.

The Rules also state that the MAV Board is responsible for conducting the affairs of MAV in accordance with the Rules.

While the PAA does not apply to the MAV Board it is an indicator of best practice. It requires relevant public sector Boards to have adequate procedures in place for:

  • assessing the performance of individual directors
  • dealing with poor performance by directors
  • resolving disputes between directors.

MAV has no policy or procedures to assess the MAV Board's performance. The MAV Board is not subject to any external oversight of its performance more broadly.

MAV established a code of conduct for the MAV Board, last reviewed in November 2014, which commits members to behaviours that will 'enhance the leadership and governance of the organisation'. We assessed the MAV Management Board Code of Conduct against the Victorian Public Sector Commission's Directors Code of Conduct and Guidance Notes, and found it addresses most elements of better practice.

Common law

As a public body with a governing Board, MAV Board members are subject to a range of common law duties—to act honestly and in the best interests of MAV—and they can incur liability for decisions as a Board. In addition, Board members are ultimately responsible for major decisions around employment, finance, and audit and risk management which may expose MAV to liability. As one of MAV's income sources is public funds, good governance and accountability for the MAV Board's actions is paramount.

MAV audit committee

MAV established an audit committee in 2004 responsible for monitoring financial and risk controls, internal and external audit activities and organisational performance, and for advising the MAV Board on its governance framework. The MAV Board is ultimately responsible for MAV's governance framework.

The MA Act requires MAV to appoint a registered company auditor to undertake an audit of the financial report on its fidelity (crime) insurance scheme. This obligation was extended in 1961 to require all MAV accounts to be certified by the treasurer of MAV and the auditor. MAV's external audit activities have addressed these provisions in the MA Act. The MAV 2012–13 Annual Report states that in addition to the requirements of the MA Act and Rules, MAV must comply with relevant regulations and obligations applicable to statutory and public bodies. This includes provisions of its Australian Financial Services Licence, and compliance is audited annually by the MAV's independent, external auditor with findings reported to both the MAV Insurance Committee and the MAV Board. MAV's internal audit function has focused on the internal control environment and targeted risks associated with MAV's business performance.

Figure 2A
Internal audit coverage

Audit topics

2009–10

2010–11

2011–12

2012–13

2013–14

MAV procurement

Risk assessment—MAV Insurance Committee

Grants

Events and training

Event credit card payments security

Local government health plan

Records management

Procurement

Business continuity planning

Conflict of interest management

Source: Victorian Auditor-General's Office based on information from MAV.

The resources, coverage and scope of the internal audit activity have been limited in addressing the gaps in policy and process identified through this audit. There is scope for MAV to improve its coverage of risks and controls relating to the governance and management issues highlighted in this report, which as a public statutory entity are fundamental to MAV. This would also provide assurance that MAV is effectively and economically supporting councils.

Conflict of interest

Conflict of interest, whether actual, potential or perceived, can undermine good governance and the effective and economical provision of support to councils, through perceptions of unfair treatment and a lack of process transparency. In extreme cases it may constitute corruption or other criminal behaviour. Although the PAA does not apply to MAV, section 81(1)(f) provides useful guidance, which includes some basic requirements for managing conflicts of interest. Similar requirements are included in Managing Conflicts of Interest, a guide developed in consultation with the Victorian Ombudsman, VAGO and the Independent Broad-based Anti-Corruption Commission (IBAC).

In March 2014 MAV's internal audit recommended a review of the employee Code of Conduct policy, which they referenced as a draft copy dated September 2011. An MAV Staff Code of Conduct policy, marked as established in June 2014 refers to procedures for conflicts in relation to personal interests. There has been a single conflict of interest declaration by MAV staff since the code was developed. The code of conduct does not address potential conflicts of interest. MAV's internal audit of conflict of interest earlier in 2014 relied on the 2011 code of conduct and noted the absence of formal conflict of interest training for staff.

In the absence of a policy or procedure prior to the 2011 references in the code of conduct, it is not evident how MAV could have effectively managed any potential conflicts of interest in the past, including any related to activities designed to benefit councils. MAV advised it has a range of practices and controls in place to manage the risks of conflicts, fraud and corruption including:

  • covering these issues in staff induction
  • segregating duties such as accounting and payroll functions
  • having internal controls for managers regarding financial approval limits
  • controls around sponsorship for organisations tendering for services to MAV
  • internal and external audit.

Given MAV staff, consultants and contractors are not required to declare any conflicts of interest for procurements they are involved in, except instances where they are panel members, further controls around procurement processes are required.

Staff Code of Conduct

We assessed MAV's code of conduct against the VPSC's Code of Conduct for VPS Employees. MAV's policy does not adequately address several of the characteristics of the VPS code of conduct. MAV should review and update its policy to more comprehensively reflect better practice as reflected in Figure 2B, which shows several gaps in MAV's code of conduct.

Figure 2B
MAV Staff Code of Conduct compared to VPS Code of Conduct

VPS Code of Conduct

Elements addressed

Defined purpose

Links to relevant legislation

Consequences of breach

Conflict of interest

Partial

Pecuniary interest

Intellectual property

Gifts and bribery

Integrity

Demonstrating impartiality

Demonstrating accountability

Demonstrating respect

Demonstrating leadership

Demonstrating commitment to human rights

Source: Victorian Auditor-General's Office.

Corruption and fraud policies

Corruption and fraud damage an organisation's governance and its capacity to operate transparently and economically. The PAA states that a Board of a public entity must ensure that there are adequate fraud controls in place.

A July 2013 internal audit of MAV Procurement's key fraud and corruption controls found that there was 'limited reference specifically to fraud and corruption' and that MAV's practices are not consistent with the formal fraud and corruption framework often found in local government. It also found there was no structured training program aimed at ensuring all MAV Procurement staff have a clear and consistent understanding of the risks of fraud and corruption.

The documented response from MAV to the internal audit recommendations to develop a structured fraud and corruption control framework and train all staff was that 'the existence of a framework does not specifically mitigate the risk of corruption. However am happy to work on the development of a corruption control framework and reference this in the declaration of confidentiality and interest if this is agreed with our Corporate Counsel.' MAV provided fraud awareness training for all staff for the first time in October 2014.

MAV developed a draft Fraud and Corruption Policy in October 2014, which details roles and responsibilities for staff, and protocols and practices for making a disclosure. We assessed MAV's draft policy against IBAC's Controlling fraud and corruption: a prevention checklist as shown in Figure 2C.

The draft policy does not include all the necessary provisions of a robust fraud and corruption policy framework. In particular, it does not include fraud risk strategies, fraud control governance arrangements, detection and prevention strategies, or the application of a recognised standard. MAV's draft policy should be amended to better reflect the requirements needed to decrease the risk of fraud and corruption incidents. MAV advised it had developed a draft Fraud and Corruptions Framework in November 2014 for approval by the MAV Audit Committee in December 2014. MAV further advised that it plans for the framework to be approved by the MAV Board in February 2015 and that the framework is based on Australian Standards.

The absence of any training or controls for both fraud and corruption and conflicts of interest until recently is concerning given MAV manages large, high-value procurement contracts both for itself and on behalf of councils. Our assessment of a selection of MAV procurements, discussed in Part 3, indicates there are probity concerns and perceived or potential conflicts of interests, which were neither declared nor managed. MAV's revised fraud and corruption policy should be supported by a regular program of training for staff.

Figure 2C
MAV draft Fraud and Corruption Policy compared to IBAC guidelines

IBAC Guidelines for public sector agencies and local councils

Elements addressed

Based on Standards Australia AS 8001-2008

Includes the use of internal controls (internal auditor)

Avenues and processes for reporting suspected incidents

Protections for disclosers

Line management accountability and responsibility

Strategies to prevent or detect fraud or corruption

Assessing fraud risk strategies

Implementing and maintaining an integrity framework

Fraud control governance arrangements

Management commitment to controlling the risks of fraud

Employee awareness, client and community awareness (fraud prevention activities)

Partial

Pre-employment screening

Supplier and client vetting

Overarching fraud prevention checklist

Source: Victorian Auditor-General's Office.

Gifts, benefits and hospitality

The provision of gifts or benefits to an agency's staff or board members can give rise to perceptions of favouritism, conflict of interest and in extreme cases, could be a component of corrupt conduct, all of which severely damage agency governance and transparency.

MAV developed its Gifts, Benefits and Hospitality Policy in June 2014, and updated it in August 2014. Prior to this, gifts and bribery were briefly mentioned in MAV's Staff Code of Conduct policy (2011). The policy applies to any instances where gifts, benefits or hospitality are offered to or received by MAV Board members and employees, and immediate family where applicable, if it raises an actual, potential or perceived conflict of interest. MAV's Register of Gifts, Benefits and Hospitality records eight items since June 2014—no items have been registered prior to this. Records include individual's attendance at conferences or dinners, and gift vouchers associated with points earned on catering, which are listed to be for MAV use.

Given the inherent risks faced by MAV in relation to the support activities it provides—particularly with its procurement activities on behalf of councils—it is critical for MAV to have policies and levels of assurance at least as rigorous as those councils it supports. While the development of further detail in the Gifts, Benefits and Hospitality Policy is a positive step, MAV's policy should be amended to include the elements of better practice included in Figure 2D.

Figure 2D
MAV Gifts, Benefits and Hospitality Policy compared to better practice

VPSC Gifts, benefits and hospitality policy framework

Elements addressed

Provides guidelines on accepting or declining gifts, benefits or hospitality

Links to relevant legislation

✔*

Includes basis for policy

Sets nominal value threshold for reporting gifts

Policy for small gifts of appreciation

Examples of potential scenarios

Procedures for declining gifts

Policy for staff and external catering

Policy for providing gifts to external organisations/individuals

Providing gifts to staff

Providing alcohol at events

Policy on repeated gifts and attempted bribery

Note: * Although MAV refers to Crimes Act 1954 not PAA or FMA.
Source: Victorian Auditor-General's Office.

Performance management practices

MAV does not have an established process for assessing the performance of the MAV Board. Other than for the CEO, a well-documented staff performance system has not been demonstrated. MAV provided a performance and professional development review template from 2012 and although MAV advised staff are subject to annual performance reviews, evidence that reviews occur was not provided.

It is not clear from the evidence supplied how staff and managers are held to account for their performance in relation to the in the delivery of intended objectives and outcomes of the organisation.

Project management framework

MAV does not have a project management framework. This is despite MAV managing multiple projects—including projects for which it has received state government grant funding—and providing project support to other organisations. Project management is inconsistent. For example, emergency management project plans were incomplete and inconsistent, limiting the ability to effectively attribute project design and delivery activities to the associated support provided to councils. In addition, the financial reporting and acquittals associated with these projects could not reliably be traced to individual project activities. Similarly staff expenses which were fully reimbursed by LGV could not reliably be attributed to projects.

Procurement and payments

An internal audit report undertaken in May 2014 focused on MAV's procurement and payments for goods and services for internal use, excluding MAV Procurement. The report highlighted the lack of documented policies and procedures regarding procurement and payments and the absence of requirements for obtaining quotations when making large purchases. The report recommended that MAV develop a policy and procedure manual regarding purchases and payments including, among other things:

  • roles and responsibilities
  • declarations of pecuniary interests
  • approval requirements
  • quotation and tendering procedures
  • delegations
  • review and authorisation requirements.

MAV has not adequately addressed all of these recommendations, although it has recently developed a fraud and corruption framework—discussed in Part 2.4. A policy and procedure manual is yet to be developed despite the indicated completion date of 31 October 2014 reported by management in their response to its recommended development.

Records management

Better practice records management, as detailed in VAGO's 2008 Records Management Checklist, includes consideration of:

  • objectives
  • management and oversight
  • strategic planning and resource allocation
  • operational procedures
  • practices and systems
  • allocation of responsibilities
  • communications
  • monitoring and reporting.

MAV established a Record Management Policy in April 2014 and last updated it in November 2014. Prior to this, a Document Management Policy and Procedure Manual served as an interim measure until the development and release of a records management policy. While the 2014 policy lacks sufficient detail to provide assurance that the organisation is effectively managing records it does contain elements of better practice, including allocation of responsibilities, a purpose, policy and procedure for archiving, and relevant systems for electronic document management. The policy also requires staff to undergo records management training, and is to be reviewed biannually.

Despite the existence of a Record Management Policy, MAV had difficulty supplying some documents which underpin MAV's business decisions and which it had relied on to support its claims—for example Australian Tax Office exemptions, business cases for National Procurement Network activities and endorsed project plans for emergency management project work.

Recommendations

That the Department of Environment, Land, Water and Planning:

  1. as a priority, reviews and determines the Municipal Association of Victoria's functions, roles, responsibilities, powers and obligations through an analysis of its existing legal framework and:
  • ensures this is reflected in the Municipal Association Act 1907
  • ensures contemporary standards of governance and accountability are met, including the the role,function and make-up of the the Municipal Association of Victoria's Board
  • consults with relevant departments to consider whether the Public Administration Act 2004, Financial Management Act 1994 and Public Records Act 1973 should apply to the Municipal Association of Victoria either directly or through its enabling legislation
  • assures itself, following any review, that all activities undertaken by the Municipal Association of Victoria are clearly within its power.

That the Municipal Association of Victoria:

  1. reviews its policies and controls relating to conflict of interest, corruption and fraud, and gifts, benefits and hospitality to align with better practice, and trains its staff accordingly and proactively monitors the application of these policies and controls
  2. develops and implement a performance management framework for its Board and staff that is aligned with better practice
  3. develops and implements a project management framework aligned with better practice covering all project phases from initiation to completion
  4. reviews and updates its records management policy to align with better practice
  5. reviews its internal audit program and ensures it routinely covers all key procedures and controls associated with all aspects of procurement, conflict of interest and fraud and corruption.

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