Internal Control Procedure - southernmallee.sa.gov.au · Internal Control Procedure Page 5 of 39 3...

Internal Control Procedure Adopted 21 June 2017 Recommendation Number 13 / 0617 Review Date June 2019

File No:9.63.1/14 Version 1

Southern Mallee District Council

Internal Control Procedure

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Table of Contents

1 Introduction ......................................................................................... …..3

2 Objective of Procedures ...........................................................................3

3 Accounting Control ....................................................................................3

4 Payroll System ..........................................................................................6

5 General Receipts and Debtor Systems .....................................................8

6 Rates ........................................................................................................9

7 Fixed Assets ........................................................................................... 10

8 Stock ....................................................................................................... 12

9 General Ledger ....................................................................................... 13

10 Computer System ................................................................................... 14

11 Registers ................................................................................................. 15

12 Responsible and Authoised Persons ....................................................... 20

13 Permits ................................................................................................... 24

14 Subsidaries ............................................................................................ .25

15 Tenders – Calling of ................................................................................ 26

16 Quotations – for Works, Services & Equipment ....................................... 32

17 Provision of Services ............................................................................... 33

18 Purchasing of Goods Services and Equipment ........................................ 33

19 Sale or Disposal of Land and other Assets .............................................. 34

20 Fees and Charges (not set by statute)..................................................... 34

21 Issue of Purchasing Cards and/or Fuel Cards ......................................... 35

22 Further Information ................................................................................. 39

23 Policy Review ......................................................................................... 39

24 Other Relevant Policies/Procedures ....................................................... 39



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1 Introduction

The system of internal control is the plan of the organisation and all methods and procedures adopted by management to assist in achieving Council's objective of ensuring as far as practicable, the orderly and efficient conduct of its business. This includes the adherence to management policies, the safeguarding of assets, the prevention and detection of fraud and error, the accuracy and completeness of accounting records, and the timely preparation of reliable financial information. The system of internal control extends beyond the matters, which relate directly to the functions of the accounting systems, and relates to every aspect of Council's operations. Internal controls are policies and procedures that Council has established to provide reasonable assurance that its objectives will be achieved. These internal control policies and procedures are prepared pursuant to the requirements of Section 125 (Division 2 of Part 3) of the Local Government Act 1999.

2 Objective of Procedures

The objective of the procedure is to

2.1 Ensure all activities have a clear and logical audit trail and there is a coordinated approach to procedures

2.2 Ensure the policy and Council’s practices and procedures meet the highest level of accountability.

3 Accounting Control Procedures

3.1 Purchase and Payments System

3.1.1 Purchase Orders

3.1.1.1 Purchase orders are to be used for the purchase of all goods and services and signed by a responsible officer as designated by the Chief Executive Officer.

3.1.1.2 Purchase orders are to be pre-numbered and raised in

triplicate to allow copies to be forwarded to the accounts department (yellow) for the committal of goods, the supplier (white) and a copy to be retained in the purchase order book (green).



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3 Accounting Control Procedures….continued

3.1 Purchase and Payments System 3.1.1 Purchase Orders

Purchase orders shall include the following details

3.1.1.1 supplier's name, address and ABN (if available) 3.1.1.2 details of goods ordered 3.1.1.3 agreed prices where available - or an estimate if firm price

is not available and 3.1.1.4 job number or general ledger code 3.1.1.5 Unused purchase order books are to be held by a

responsible officer, with details maintained to whom purchase order books have been issued.

3.1.1.6 All personnel who have the authority to sign purchase orders

are directed to include job numbers or description on all orders and not order any goods or services for which there are no unexpended budget funds.

3.1.1.7 It shall not be necessary to issue an official order for

3.5.3.1.1 Fees or payments imposed under any Act. 3.5.3.1.2 Professional services and insurance. 3.5.3.1.3 Payments pursuant to any court order binding

upon a Council.

3.2 Works Orders

3.2.1 Works orders are to be used for the purchase of all goods and services and signed by a responsible officer as designated by the Chief Executive Officer.

3.2.2 Works orders are to be pre-numbered and raised in triplicate to allow

copies to be forwarded to the accounts department (pink), the supplier (white) and a copy to the retained in the order book (blue).

3.2.3 Works orders shall include the following details

3.2.3.1 suppliers name, address and ABN (if available) details of goods ordered 3.2.3.2 agreed price where available – or an estimate if firm price is

not available 3.2.3.3 job number including cost centre and element type or

general ledger code



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3.2 Works Orders 3.2.4 Unused Works order books are to be held by a responsible officer,

with details maintained to whom the purchase order books have been issued.

3.3 Processing Invoices

3.3.1 Invoices [ over $250 ] are not to be processed unless a purchase

order [ including all details as previously stated ] or direct authorisation is attached and receipt of goods evidenced.

3.3.2 The supplier must provide Council with a tax invoice (for all invoices

over $50.00) in compliance with Goods and Services taxation (GST) legislation. If GST is not applicable to the good or service supplier must supply their ABN (Australian Business Number). An invoice without an ABN will not be processed unless a “Statement by Supplier” has been signed and received stating the reason for not quoting an ABN to Council.

3.3.3 The Chief Executive Officer shall cause all accounts for payment by

Council to be certified as to 3.3.3.1 The receipt of the goods or services being in accordance

with the relevant official order. 3.3.3.2 The prices charged being fair and reasonable. 3.3.3.3 The calculations and additions being correct.

3.4 Payments by EFT and Laser Cheques

3.4.1 All cheques and EFTs are to be printed/written and issued in

sequential order 3.4.2 All cheques are to be crossed "Not Negotiable" 3.4.3 Cheques must be authorised by two authorised signatories 3.4.4 EFT Payments must be authorised by the Manager of Corporate

Services or the Chief Executive Officer



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3.5 Reconciliations

3.5.1 Supplier’s statements are to be reconciled monthly to the creditors ledger; and discrepancies/reconciling items are promptly followed up by the Creditors Officer.

3.5.2 Creditors ledger balances are to be regularly reviewed and unusual

items such as debit balances are to be investigated by the Manager Corporate Services.

3.5.3 New credit accounts are not opened without authorisation from the

Manager Corporate Services.

4 Payroll System 4.1 Changes in Employee Details

4.1.1 No employee shall be added to payroll records or paid without receipt of the appropriate forms, including employment declaration forms.

4.1.2 Employee history files are to be maintained for all employees. Files

should contain employment details and contracts, authorisations for payroll or deduction changes, annual leave, long service leave and sick leave entitlements.

4.1.3 No adjustments are made to employee records, i.e., names,

addresses, deduction details without receipt of written authorisation from the employee.

4.1.4 No adjustments are made to salary or wage rates without written

authorisation from the Chief Executive Officer or Manager Corporate Services.

4.1.5 On termination employee files are to be immediately removed from

current records and filed in past employees records. Employee payment details should also be terminated in the computer system.



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4 Payroll System….continued

4.2 Time Recording

4.2.1 All staff are to complete a timesheet, which is signed by the

employee and their supervisor to authorise overtime, sick leave, etc. 4.2.2 Outside staff are to provide daily timesheets while other staff are to

provide fortnightly timesheets 4.2.3 All timesheets are to be marked as evidence of processing. 4.2.4 The Chief Executive Officer shall cause to be maintained records in

respect of each officer and employee showing gross salary or wages and tax and details of all other deductions

4.2.5 A payroll report “compare gross pays to last time paid” to be

reviewed and signed by Payroll Officer or Manager Corporate Services to check for unusual rates, salary amounts or employee names

4.2.6 In respect of all wages paid timesheets shall be maintained recording

4.2.6.1 Hours of attendance. 4.2.6.2 Allocation of time worked to jobs. 4.2.6.3 Sick Leave. 4.2.6.4 Annual Leave taken.

4.3 Leave Entitlements

4.3.1 All employees applying for leave are to complete a Leave Application Form in advance. This form is to be authorised by the appropriate responsible officer and passed on to the payroll clerk.

4.3.2 Leave Application Forms are to be filed in the employee's history file. 4.3.3 Annual leave and long service leave is not to be paid without receipt

of the appropriate authorised form. 4.3.4 Leave entitlements are to be immediately updated to reflect annual,

sick and long service leave taken. 4.3.5 Annual leave entitlements are to be regularly reviewed by the

appropriate supervisors and arrangements made with employees with excessive entitlements to reduce these in accordance with Council policy.



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4 Payroll System….continued

4.4 Payment

4.4.1 Electronic Funds Transfer

4.4.1.1 Certification for receipt of wages is not required if the salaries or wages are paid by electronic funds transfer into the employees nominated bank account or by cheque.

4.4.1.2 Where wages have been rejected and credited to Council’s

general operating bank account efforts will be made to contact the employee to arrange payment.

4.4.1.3 Under special circumstances relating to financial urgency or

hardship of an employee Council delegate the Chief Executive Officer or other responsible officer to make a cash advance from which payments for wages earned but unpaid may be made. No such payment shall exceed the amount of wages earned and the cash advance shall be reimbursed on the next date on which wages are paid.

4.5 Payroll Tax File Numbers

Payroll are the only staff to have access to employee tax file numbers, which are stored and recorded in the payroll personnel files.

5 General Receipts and Debtors System

5.1 Invoices

5.1.1 Ensure that forms/records are maintained detailing all works undertaken which require invoicing. These records should be reviewed regularly to ensure prompt production of invoices, by the Payroll/Debtors Officer.

5.1.2 Debtor invoices are to be sequentially (by computer) numbered and

issued strictly in order. 5.1.3 Standard charges are to be used when printing invoices. 5.1.4 Adequate records of all debtors and the transactions relating thereto

shall be kept. 5.1.5 Account allocations are to be made or authorised by a responsible

officer. 5.1.6 All debtor journals raised shall be reviewed by the Manager

Corporate Services on a monthly basis.



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5 General Receipts and Debtors System

5.2 Receipts/Banking

5.2.1 All cheques shall be crossed "Not Negotiable" on receipt. 5.2.2 A computer listing of all cheques received is to be produced daily. 5.2.3 All moneys received by Council shall be recorded by an entry for

each individual transaction. 5.2.4 The payer shall be issued with a copy of a receipt on request. 5.2.5 The receipt or cash receipt record shall indicate the mode of

payment. 5.2.6 All receipts contained in receipt books or loose-leaf receipts shall be

printer or machine numbered and the receipts issued in numerical sequence.

5.2.7 All unused receipt books and loose-leaf receipts shall be kept in the

custody of the responsible officer who shall maintain a register of such.

5.2.8 Receipt or receipt records contained in books or loose-leaf receipts

shall be so arranged as to provide for the retention of a copy of each receipt issued of the relevant details thereof.

5.2.9 The original of every cancelled receipt shall be retained.

5.2.10 Any reversed receipts are to be independently authorised. 5.2.11 Floats/cashiers' balances are to be counted daily and reconciled to

receipts listing and banking for the day. Receipts listing are to be signed by the appropriate cashier. Discrepancies are to be promptly followed up.

5.2.12 For cash collected off-site regular random independent checks of

cash collection to be undertaken. 5.2.13 Banking is to occur on a daily basis, where practicable and must be

banked if over $500 cash + Float.



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5 General Receipts and Debtors System….continued

5.3 Reconciliations

5.3.1 Debtors ledgers (rates and others) are to be reconciled monthly to the General Ledger Control Accounts. This reconciliation is to be evidenced as reviewed by the Manager Corporate Services and a copy of advice forwarded to the office of Council’s auditor. Any discrepancies are to be immediately investigated.

5.3.2 Aged debtor listings are to be regularly produced and reviewed and

ongoing outstanding debts followed up (note: bad debts, with respect to rates, should only be written off where sale of property would not cover the value of the debt.

5.3.3 Bank reconciliation are to be prepared monthly and evidenced as

reviewed by the Manager Corporate Services. Any unusual/irregular reconciling items are to be immediately investigated.

6 Rates

6.1 Determination of Rates

6.1.1 Rate charges, amounts, minimum values and concessions are to be set by Council.

6.1.2 Amounts to be charged are to be gazetted. 6.1.3 Property values are to be downloaded directly from the disc provided

by the Valuer General's Department onto the Council's system. 6.1.4 All updates received from the Valuer General are to be promptly

processed and capital values re-reconciled. 6.1.5 Parameters entered (i.e. rate/$, minimum rate, concession etc.) are

to be authorised by the Manager Corporate Services. Any changes to these parameters are to be made only by authorised persons.



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6 Rates….continued

6.2 Rate Notices/Generation

6.2.1 A reconciliation is to be performed when valuation supplementaries are updated on the system to check that the total capital value of properties in the Valuer General’s report (printout) equals that contained in Council’s assessment records

6.2.2 Total value of rates generated is to be compared to the value as

budgeted and approved by Council. Large variances should be investigated

6.2.3 Sample of rate notices are to be randomly checked to ensure that

6.2.3.1 correct rates have been used: 6.2.3.2 concessions have been correctly calculated; 6.2.3.3 discounts are correctly calculated; 6.2.3.4 name, address and rate details are correct; 6.2.3.5 correct valuations have been used.

7 Assets

7.1 Additions and Disposals

Fixed assets are only to be purchased in accordance with Council's Procurement Policy

7.1.1 On acquisition

7.1.1.1 assets are to be added to the fixed assets register 7.1.1.2 useful life of the individual asset is to be estimated 7.1.1.3 basis of depreciation (ie straight line or reducing balance

method) is to be decided 7.1.1.4 rate of depreciation is to be calculated 7.1.1.5 asset is depreciated from date first used or held ready for

use 7.1.1.6 above details to be documented in Asset Register



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7 Assets….continued

7.1.2 On disposal

7.1.2.1 asset is to be depreciated to date of disposal

7.1.2.2 accumulated depreciation and cost of the asset are to be written back in the general ledger and removed from the fixed asset register

7.1.2.3 profit/loss on disposal is to be calculated. This calculation should be prepared or authorised by the Manager Corporate Services

7.1.3 Depreciation

Delegated authority has been given to the Manager Corporate Services and Works Manager to determine the appropriate method and rates of depreciation to be used for Council's assets.

7.2 Classification and Capitalisation Policies

7.2.1 Council has set a minimum threshold for recording assets, taking into

consideration their materiality. 7.2.2 Under this threshold, the cost of that item is to be expensed in the

year it was purchased or constructed. 7.2.3 Above this threshold, the item is to be recorded as a capital asset

and depreciated over its useful life. 7.2.4 Council has adopted Asset Thresholds and they are set out in

Councils Asset Accounting Policy.

7.3 Recording/Registers

7.3.1 Assets Registers are to be maintained for all assets controlled by Council, identifying significant asset components. (Refer to Item 8 for details).

7.3.2 Wherever possible assets should be recorded as separate items in

the registers. 7.3.3 A physical count of all fixed assets per the fixed register is to be

undertaken bi annually. All discrepancies are to be investigated and the condition of the assets noted.

7.3.4 Registers are to be regularly reviewed, noting “unusual” items or

items included in fixed assets, which have been sold or scrapped. 7.3.5 Authorisation is to be obtained before any items are deleted from the

registers (due to sale or scrapping).



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7 Assets….continued

7.4 Year End Considerations

7.4.1 Fixed Assets Register should be reviewed to consider:

7.4.1.1 carrying value of assets 7.4.1.2 existence of assets 7.4.1.3 condition of assets 7.4.1.4 relevance of current depreciation rates given the condition

of the assets

7.4.2 All assets shall be revalued at least every five years.

7.5 Other

7.5.1 Security arrangements shall be regularly reviewed and improved where they have become inadequate. Arrangements shall include restricting access and protection from accidental destruction, deterioration, theft or fraudulent or illegal use.

7.5.2 Insurance 7.5.3 The Chief Executive Officer with the consent of Council, is to

commission a revaluation of properties for insurance purposes at least every five years utilising qualified and experienced consultants.

8 Stock

8.1 Stock Records

Stock records are to be kept for bulk fuel/lubricants and quarry stock raised and purchased.

8.2 Issues and Returns

8.2.1 All issues of stock items are to be documented including details of

items issued, when and to which plant issued. 8.2.2 The Works Supervisors are responsible for preparation of fuel issue

sheets required. 8.2.3 Issues are to be monitored to ensure timely ordering of stock items

and to ensure items are not over-stocked, by the Works Supervisors.



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8 Stock….continued

8.3 Stocktakes

8.3.1 Annual stocktakes are to be carried out on fuel and lubricants, supplies and quarry materials on hand, in addition fuel stocks are to be reconciled bi-monthly.

8.3.2 Stocktake to be carried out on the quantity and value of history books

held for sale. 8.3.3 Stocktake is to be supervised by a responsible officer.

8.4 Year End Considerations

8.4.1 Average costing is to be applied to all Stock on hand be reviewed

annually and should reflect average cost or replacement values in valuation.

8.4.2 Discrepancies are to be investigated and any adjustments to the

value of stock on hand made by appropriate journal entries. 9 General Ledger

9.1 Journals

9.1.1 Journals may be raised only by Council’s accounting staff and checked on a monthly basis by the Manager Corporate Services.

9.1.2 Sequentially numbered journals are to be used.



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9 General Ledger….continued

9.2 General

9.2.1 Control and clearing accounts are to be reconciled monthly, and

clearing and suspense accounts are to be regularly cleared. These reconciliations are evidenced as reviewed by the Manager Corporate Services.

9.2.2 Minutes of Council and Committee meetings are to be promptly

prepared and distributed within five days of each meeting. 9.2.3 The chart of accounts is to be regularly updated to ensure correct

account allocations are made. 9.2.4 Budgets are to be reviewed in compliance with Local Government

Regulation 7, Councils and subsidiaries must reconsider budget at least three times at intervals not less than three months between 30 September and 31 May (both dates inclusive).

9.2.5 Management reports are prepared monthly and reviewed so that

variances to budget are explained and necessary action taken to rectify.

10 Computer System

The following procedures shall be adhered to for the Synergy System.

10.1 Computer Security

10.1.1 Each user of the system be allocated an individual login name, login password and user password to gain access to the system. Users passwords have to meet security protocols agreed to between the Manager Corporate Services and the Councils IT Service Providers.

10.1.2 User passwords and time restrictions [ business hours ] will limit user

access to areas of the system that are necessary only for their work. E.g. Payroll, maintenance systems etc. are not available to most users.

10.1.3 Maintenance of user login names and passwords are under the

control of the Manager Corporate Services. Passwords are not to be shared between employees.

10.1.4 Management of the IT Vision Synergy System is under the control of

the Manager Corporate Services.



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10 Computer System....continued

10.2 Backups

10.2.1 Full backups of all data processing to be conducted every night.

Portable hard drives to be rotated on daily, weekly and monthly basis.

10.2.2 Portable hard drives be kept in the strong room with a weekly backup

(normally scheduled for a Thursday) to be transferred between both Council offices so a backup of no longer than one week old is retained off site.

11 Registers

The following Registers to be maintained

11.1 Leased Road Reserves Register

To record for each lease 11.1.1 Lessee - name and address 11.1.2 Date of lease 11.1.3 Details of annual rental 11.1.4 Particulars of lease 11.1.5 Area leased 11.1.6 Remarks 11.1.7 Minute book reference

11.2 Register of Accountable Documents Including Order Books Receipts,

Receipt Book, Licences and Invoices

To record 11.2.1 Date of receipt of stationery 11.2.2 Number received 11.2.3 Serial numbers 11.2.4 To whom issued 11.2.5 Authority for issue 11.2.6 Signature of person to whom issued 11.2.7 Record of return.



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11 Registers….continued

11.3 Personnel Records

To record

11.3.1 Name and address of employee 11.3.2 Date of birth 11.3.3 Date of commencement of employment 11.3.4 Date of cessation of employment 11.3.5 Award classification 11.3.6 Next of kin 11.3.7 Qualifications 11.3.8 Training courses undertaken 11.3.9 Previous employment with Local Government authorities

11.3.9.1 Council 11.3.9.2 Date commenced 11.3.9.3 Date terminated 11.3.9.4 Amount due from previous employee 11.3.9.5 Entitlements transferred from previous employer

11.3.10 Subsequent employment with Local Government authorities 11.3.10.1 Amount due to subsequent employer 11.3.10.2 Amount paid 11.3.10.3 Date paid 11.3.10.4 Balance due 11.3.10.5 Date paid

11.3.11 Recreation, Special, Sick and Long Service Leave Records are to be recorded on the Synergy System with all the details requested by the System

11.4 Debentures Issued Register

To record for each debenture issued by Council 11.4.1 Series and number of debenture 11.4.2 Date of issue 11.4.3 Name of entity/person issued to 11.4.4 Amount of principal 11.4.5 Rate of interest 11.4.6 Security for loan (state whether general rate or special rate and particulars thereof)

If loan is repayable by periodical instalments of principal and interest Amount of half-yearly instalments 11.4.7 Date of payment of half-yearly instalments 11.4.8 Principal outstanding at beginning of each half-year 11.4.9 Portion of half-yearly instalment applied to interest 11.4.10 Portion of half-yearly instalment applied to principal 11.4.11 Dates of payment of principal 11.4.12 Dates of payment of interest.



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11.5 Use of Council Seal Register

11.5.1 Date of Use/Council Meeting Date 11.5.2 Company – Name and Address 11.5.3 Details of Use 11.5.4 Minute Book Reference/Resolution Number 11.5.5 Remarks

11.6 Contracts & Leases Register

11.6.1 Contractor/Lessee - name and address 11.6.2 Date of lease 11.6.3 Details of annual rental 11.6.4 Particulars of lease 11.6.5 Area leased 11.6.6 Remarks

11.7 Land and Buildings and Leases Register

11.7.1 Location of property 11.7.2 Description of property and improvements 11.7.3 Title deed reference 11.7.4 Vendor - name and address 11.7.5 Date of purchases 11.7.6 Purchase price 11.7.7 Date of details of improvements 11.7.8 Value of improvements 11.7.9 Date of revaluations 11.7.10 Details of revaluations 11.7.11 Book value at end of each financial year 11.7.12 Sale proceeds 11.7.13 Annual depreciation 11.7.14 Depreciation method 11.7.15 Surplus/deficit on disposal 11.7.16 Date of disposal 11.7.17 Date of lease 11.7.18 Lessee - name and address 11.7.19 Term of lease 11.7.20 Rental details 11.7.21 Date of expiry of lease 11.7.22 Remarks on lease clauses 11.7.23 Status of land.



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11.8 Plant and Machinery Register

To record for each item of plant and machinery for which a hire rate is charged. 11.8.1 Description 11.8.2 Purchase price (gross) 11.8.3 Asset value as per general ledger 11.8.4 Annual depreciation 11.8.5 Book value at end of each financial year 11.8.6 Depreciation method 11.8.7 Sale proceeds 11.8.8 Surplus/deficit on disposal 11.8.9 Asset number

11.9 Office Furniture and Equipment Register

To record for each asset or for each type of asset 11.9.1 Description 11.9.2 Purchase price (gross) 11.9.3 Asset value as per general ledger 11.9.4 Annual depreciation 11.9.5 Book value at end of each financial year 11.9.6 Depreciation method 11.9.7 Sale proceeds 11.9.8 Surplus/deficit on disposal 11.9.9 Date of disposal 11.9.10 Location of asset 11.9.11 Asset number 11.9.12 Serial numbers of computer equipment

11.10 Licences Issued Register

To record for each type of licence 11.10.1 Licensee 11.10.2 Date of issue 11.10.3 Term of licence 11.10.4 Licence fee 11.10.5 Particulars of licence 11.10.6 Remarks 11.10.7 Minute book reference (if applicable).



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11.11 Infrastructure Register

11.11.1 Location of property 11.11.2 Description of property and improvements 11.11.3 Title deed reference 11.11.4 Vendor - name and address 11.11.5 Date of purchases 11.11.6 Purchase price 11.11.7 Date of details of improvements 11.11.8 Value of improvements 11.11.9 Date of revaluations 11.11.10 Details of revaluations 11.11.11 Book value at end of each financial year 11.11.12 Sale proceeds 11.11.13 Annual depreciation 11.11.14 Depreciation method 11.11.15 Surplus/deficit on disposal 11.11.16 Date of disposal 11.11.17 Date of lease 11.11.18 Lessee - name and address 11.11.19 Term of lease 11.11.20 Rental details 11.11.21 Date of expiry of lease 11.11.22 Remarks on lease clauses 11.11.23 Status of land.

11.12 Petty Cash

11.12.1 Cash payments may be made out of a petty cash account

established by Council, and held by the Council’s administration officers of each Council Office and Council’s Child Care Manager/staff.

11.12.2 A cash payment cannot, in respect of any particular docket or

voucher, exceed $100. 11.12.3 Petty cash transactions shall be recorded and supported by

dockets or vouchers and signed by the appropriate authorised officer before reimbursement is made. Petty cash shall not be utilised for I owe yous.

11.12.4 Each transaction is to indicate the specific nature of the

expenditure.



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11.13 Safe - Storage

The following items shall be kept within the safe storage room of the Council offices: 11.13.1 Original copies of all leases, debentures, contracts and

agreements. 11.13.2 C/Titles of properties owned by Council. 11.13.3 All cash not banked from cash register, petty cash and unclaimed

wages. 11.13.4 Original copies of timesheets and documents, for period of twelve

months. 11.13.5 Unused purchase order books, vouchers and cheques. 11.13.6 Minute books of Council. 11.13.7 Original copies of all computer applications and programs. 11.13.8 Daily portable hard drives for main Computer system, PC network

system (disks are to be reused after a week with the exception of Thursday’s disk/tape to be rotated every 4 weeks).

Keys to the safe storage rooms are restricted to the Chief Executive Officer, Manager Corporate Services, Executive Assistant and Administration Officers.



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12 Responsible and Authorised Persons

12.1 Works & Purchase Orders - Signing of Orders

The Chief Executive Officer, or his delegate, has authority to spend the Council approved Budget upon recommendation from the council that it approves and endorses the budget. Managerial delegation limits are set out in the Procurement Policy.

12.2 Cheque Payments, EFT Payments - Signing of Cheques

[ any two of the following officers ] Chief Executive Officer Manager Corporate Services Works Manager Payroll or Creditors Officer Any Council Member

12.3 Reconciliations – Creditors Control Account to General Ledger

Creditors Officer Manager Corporate Services

12.4 Adjustments to Employees Salary/Wage Rates

Chief Executive Officer

12.5 Review of Payroll Reports and Certification Manager Corporate Services

12.6 Leave Application Forms

Chief Executive Officer Manager Corporate Services Works Manager Manager Environmental & Planning Child Care Manager

12.7 Regular Debtors - review all invoices as required

12.7.1 Account Allocations Manager of each relevant Department

12.7.2 Private Works and Hire Rates As per the Fees & Charges Policy, reviewed and adopted by Council Annually

12.7.3 Review Debtor Journals Manager Corporate Services



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12 Responsible and Authorised Persons….continued

12.8 Cash Receipting – Front Counter and Mail System

Administration officers

12.9 Debtors – Reconciliation Control a/c to General Ledger Creditors/Payroll officers Manager Corporate Services

12.9.1 New Debtor a/c Payroll Officer

12.9.2 Bank Reconciliations Creditors Officer

12.10 Rates – Parameters Authorisation

As per Rating Policy adopted by Council Annually

12.10.1 Parameter Changes Rates Officer

12.11 Rates Reconciliation

Manager Corporate Services Rates Officer

12.12 Checking Rate Notices

Rates Officer

12.13 Reconciliation – Asset Register Manager Corporate Services Creditors Officer

12.14 Authorisation to Delete Assets

Manager Corporate Services

12.15 Stocktakes – Supervision By Manager Corporate Services Works Manager

12.16 Journal Authorisation

12.16.1 General Ledger Manager Corporate Services Payroll, Assets and Creditors Officers

12.16.2 Rates Manager Corporate Services Rates Officer

12.17 Minutes – Maintaining Files of Minutes Books

Executive Assistant



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12.18 Investments Repayments/Drawdowns – with Financial Institutions [ any two of the following officers ] Chief Executive Officer Manager Corporate Services Payroll and Creditors Officers

12.19 Petty Cash – Authorised Officers

Administration Officers Child Care staff

12.20 Registration of Dogs

Administration Officers

12.21 Property Searches Chief Executive Officer Manager Corporate Services.

12.22 Receiving Goods and Checking off Order

Originator of Order

12.23 Access to Administrator System

12.23.1 Full System Access Manager Corporate Services Creditors or Payroll Officer

12.23.2 Full Access to Payroll

Payroll Officer Manager Corporate Services

12.23.3 Payroll Timecard Entry


12.23.4 Full Creditor Access

Creditors Officer Manager Corporate Services



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12.23.5 Full Debtor Access


12.23.6 Full Rates/Property Access

Rates Officer Manager Corporate Services

12.23.7 Full Development Access

Development Support Officer Manager Environment & Planning

12.23.8 Financial Modelling Access

Chief Executive Officer Manager Corporate Services Rates Officer

12.23.9 Building System

Development Support Officer Manager Environment & Planning

12.23.10 Stores System

Creditors Officer Rates Office

12.23.11 Dog Control

Full access by all users 12.23.12 Cemeteries

Full access by all users 12.23.13 Assets System Access

Manager Corporate Services Creditors or Payroll Officer

No users, other than listed above, have any access to the payroll module (including enquiries). Other than listed above, access to all maintenance areas is barred to all other users. Access to enquiries, reports, listings etc. is available to all users. Access to all modules that are not being used is available to all users.



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13 Permits

13.1 Removal of Timber from Roadsides (Sec 374) Permit Chief Executive Officer Works Manager Manager Corporate Services

13.2 Hall Hire Permit

Chief Executive Officer Manager Corporate Services

13.3 Street Stall/Raffle Permit


13.4 Special Event Permit


13.5 Overweight/Size Vehicle Permit

Chief Executive Officer

13.6 Outdoor Café Permit Chief Executive Officer Manager Corporate Services

13.7 Swimming Pool Permit


13.8 Dirt Bike Facility Permit


14 Subsidiaries

14.1 Audit to Council

Audited financial accounts of subsidiaries – Section 42 be submitted to Council by 30 September each year; other than those whose accounts are managed through Council’s Accounting System (Section 41 Committees).



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15 Tenders - Calling Of

Tenders shall be invited where the cost [ or net cost after trade-in allowances ] is likely to exceed $100,000.

15.1 Tenders invitation, receipt and evaluation procedures

15.1.1 General

Tendering can be initiated by one of the three basis

tendering procedures 15.1.1.1 Public Tenders - All interested parties are invited through open public advertisement to tender on a

common basis; 15.1.1.2 Selected Competitive Tenders [ can only be used if under

$100,000 ] - A limited number of organisations are directly selected because of their proven experience or recognised ability to undertake particular work. Tenders will be on a common basis

15.1.1.3 Public Tenders - Where Council may wish to utilise the

State Government Tender process for major construction or works

15.1.2 Invitation of Tenders

15.1.2.1 Public Advertisement

Consistency in advertising should apply

There should be a set day for advertising and set day for closing of tenders

The tender closing time must be 12 noon or later on a week day but not on the day following a weekend or a public holiday

Advertisements shall show

15.1.2.1.1 An adequate description to allow tenderers to judge their interest

15.1.2.1.2 Centres where tender documents are available

15.1.2.1.3 Place of lodgement and closing date and time

Advertisements should be inserted in the most appropriate papers.



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15 Tenders - Calling Of

15.1.2 Invitation of Tenders 15.1.2.2 Selected Competitive Tenders and Negotiated

Tenders Selected competitive and negotiated tenders are invited when it is impractical to invite public tenders;

Where public tenders have been invited and no tender has been received or any tender received is not acceptable, selected or negotiated tenders may be invited.

15.1.2.3 Pre-Registration of Tenderers

The objective of pre-registration is to pre-qualify tenderers in respect of their capacity and ability to undertake Works and so reduce the time taken for investigation after tenders have closed. Pre-registration should only be used when it can be demonstrated that it has advantages to the Council over the invitation of public tenders. Advance notice can lead to a shortening of the tendering period. Because registrations may be construed as an understanding to accept a tender from the lowest tenderer it is essential that investigation of applicants be thorough. Any registered firm which subsequently submits the lowest tender should be able to be confidently recommended for acceptance unless the circumstances, under which the firm was registered, have changed substantially.

Those firms regarded as unsuitable for registration must be informed accordingly, with reasons. When tender documents are ready, tenderers who have been registered should be invited in writing to tender.

15.1.2.4 Tendering Period

The tender period must allow for the urgency of the work, with sufficient time for tenderers to visit the site, to study the tender documents, and prepare an offer.



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15 Tenders - Calling Of….continued

15.1.2 Invitation of Tenders

15.1.2.5 Clarification of Documents during the Tender Period Requests for clarification shall be referred to a single officer nominated in the tender documents. Where considered necessary, all explanations and/or clarifications given should be confirmed in writing and issued to all prospective tenderers to ensure that all tenders submitted are on a common basis.

15.1.2.6 Pre-tender Meetings

Pre-tender meetings may be called. The objective is to clarify intent and any uncertainties that tenderers may have relating to the tender documents.

15.1.2.7 Extension of Tendering Period

It is essential all tenderers who obtained documents are notified of any extension to the tendering period.

15.1.2.8 Highest or Lowest Tender

All tender documents shall include the following statement “Neither the Highest nor the Lowest Tender will be necessarily accepted”.



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15.1.3 Receipt of Tenders

15.1.3.1 Lodgement of Tenders

Tenders must be lodged at the Council Office listed in the tender documents. Tenders will only be accepted if received before the closing time and date. The tender box is to be locked with the keys held by responsible Officers. Where it is not possible to place all tenders and supporting pages in the tender box, special and secured storage facilities, will be provided in advance of the tender closing date. Tender papers not placed in the tender box, shall be endorsed by the receiving Officer with details of receipt and placed in the secured storage. The organisation’s electronic media shall be attended before the time at which tenders close. The media shall be stamped with the time of receipt. Where a price received by electronic media through official Australia Post services differs from the price submitted on the tender form, the former price will prevail unless it can be established that the Postal Authority made an error in transmission. Tenders received through the post must be endorsed with the exact time of receipt. When envelopes containing tenders have been opened due to lack of identification, they should be immediately resealed, the envelope suitably endorsed and referred to the Responsible Officer. The tender box shall be closed to prevent lodgements of late tenders in the box. No tender price offered orally will be accepted.



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15.1.3.2 Tender Opening Procedure Pursuant to council’s Statutory Resolutions and the provisions contained in the Local government Accounting Regulations the following are authorised to open any formal tenders received after the appointed closing date

Chief Executive Officer Manager Corporate Services Works Manager Manager Environment & Planning

In all instances any two of the above authorised persons or their nominees, must be in attendance when opening any tenders received and shall sign an endorsement to the schedule of the tenders received including the time of opening of the respective tenders and shall submit a report and recommendations to the appropriate Standing Committee or Council meeting. [Refer to Local Government Accounting Regulations 14]

15.1.3.3 Late Tenders

A tender received after the nominated closing time that is

Delivered by hand “over the counter” Delivered by electronic media Received through the mail

Shall be deemed late and shall be endorsed with the exact time of receipt. A person presenting a tender “over the counter” shall be asked to initial the endorsement. A late tender is to be opened and scheduled and the schedule endorsed with the time and circumstances of receipt. The envelope enclosing a late tender is to be attached to the tender. A late tender delivered by hand “over the counter” shall not be admitted.



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15 Tenders - Calling Of….continued 15.1.3.3 Late Tenders

A late tender submitted through official Australia Post services or electronic media will not be admitted unless it can be clearly established to the satisfaction of the Opening Committee that they were posted or transmitted before the date and time for closing tenders and in the advertisement or other invitation for submission of tenders by that date and time. No other form of transmission will be considered for tenders received after the date and time for closing tenders. As the time required for delivery or transmittal varies significantly between different points of dispatch and delivery, the onus is on the tenderer to ascertain what is sufficient time in the particular circumstances for the service selected. Franking machine impressions are not acceptable evidence of timely posting or dispatch nor are the times indicated on electronic media transmitted through private channels. A tenderer whose tender is rejected as being late must be advised promptly. Adequately safeguards should be used to ensure the preservation of the confidentiality of tenders which are received late and are not admitted for consideration.

15.1.4 Evaluation of Tenders

15.1.4.1 Qualifications – Formality of Tender A tender which does not comply with the tender documents is liable to be rejected. The tenderer may be given reasonable opportunity to comply with the tender documents but only without alterations to the submitted tender price. Where a tenderer claims an error has been made in calculating the tender or has omitted to include a provisional sum the tenderer shall not be permitted to amend the tender price. In such situations, the tenderer has the options of adhering to or withdrawing the tender price, or being passed over.



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15.1.4.2 Alternative Offers

Alternative offers are not considered unless provided for in the documents. Where an alternative is offered by a tenderer, that alternative cannot be priced by any other tenderer.

15.1.4.3 Negotiations There are occasions where negotiation of a tendered price may have to be considered before a tender is accepted, e.g. significant errors and omissions in documents, insufficient funds to cover tenders received. In such instances negotiations of a price for the amendments to the tender documents will be concluded prior to acceptance with the lowest acceptable tenderer only, notwithstanding that the estimate or the price received for the amendment when added to the lowest acceptable tender may exceed other tenders. If the value of the amendment in relation to the tender price is significant and a satisfactory price cannot be negotiated with the lowest acceptable tenderer, it may be necessary to recall tenders.

15.1.4.4 Equal Tenders

Where two or more tenders are acceptable and the prices are identical, preference will be given to the tender opened first, subject to consideration of Evaluation of Tenderers (See (5) below).

15.1.4.5 Evaluation of Tenderers

Evaluation should consider tenderers:

Technical, management, physical and financial capacity

Current commitments

Standing within the Industry

Record of Performance

Ability to perform the Works



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15 Tenders - Calling Of….continued 15.1 Tender invitation, receipt and evaluation procedures

15.1.4.6 Re- Tendering

Re-tendering should be avoided unless the tender documents have been amended or a substantial period of time has elapsed since tenders were initially invited. Should it be decided following public tenders to recall tenders on a selected basis, opportunity should be given to each original tenderer to submit a price unless there are good reasons for not doing so.

15.1.4.7 Security Adequate safeguards must apply to ensure the confidentiality of tenders.

15.1.4.8 Confidentiality

The Council or Standing Committee may consider tenders in accordance with Section 90 of the Local Government Act.

15.2 Tender Consideration

All tenders are to be submitted to a Standing Committee or Council for consideration. The appropriate officer shall prepare a report on the tenders received and shall make a recommendation as to the tender to be accepted. All unsuccessful tenders are to the notified of the decision of Council.



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16 Quotation – For Works, Services and Equipment

The procedure to be followed in the calling, receipt and consideration of quotations to be as follows

16.1 Quotations may be invited where the cost (or net cost after any trade-in

allowances) is likely to be between $5,000 and $100,000. 16.1 Tenders in lieu of quotations may be called at the discretion of the Chief

Executive Officer. 16.2 Quotations are to be obtained (from at least three local suppliers or

distributors where possible) for purchasing supplies for works, services and equipment.

16.3 The Chief Executive Officer or nominated person may negotiate with all

those involved in the quotation process and purchase any single item by way of a quotation provided;

16.3.1 The net cost does not exceed $100,000 and 16.3.2 Such work service and or equipment is within budget or 16.3.3 The cost (or net cost after any trade-in allowances) does not

exceed the adopted (or varied) Budget by more than 10%.

16.4 A written record shall be kept of all quotations received, and it the lowest price was not accepted, the relevant reasons shall be stated.

16.5 It is not necessarily a requirement of this policy that public notification be

given for the inviting of quotations. 17 Provision of Services

A Key Goal of Council aims for “continuous improvement in the efficient and cost-effective delivery of services through the incorporation of modern management practices”. 17.1 Policy Statement

Council will provide quality services that meet customer needs by utilising resources (physical, financial and human) efficiently and effectively.



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17 Provision of Services…..continued

17.2 Principles

In accordance with this policy the following principles will be adopted in determining core and non-core services which are to be used as a basis in determining the most appropriate method of delivering Council services.

17.2.1 Strategic and corporate planning goals and objectives are to be met

17.2.2 Services are to be provided at minimal risk to Council

17.2.3 Services are to be provided within Council’s existing resource levels

17.2.4 There is to be no negative effect on disadvantaged groups

17.2.5 All statutory obligations are to be met

17.2.6 There must be sufficient competitors in the market place

17.2.7 Council’s ability to respond to emergency services must not be put at risk

17.2.8 Council’s may compete externally for work as long as Council and Council’s services are not at risk.

18 Purchasing – of Goods, Services and Equipment

18.1 Value Under $5,000

18.1.1 Best price to be obtained, taking into account quality of goods and services, delivery time, past experience, freight costs involved, urgency of delivery etc.

18.1.2 To be authorised by Purchasing Officer.

18.2 Value Over $5,000 less than $100,000

18.2.1 At least three quotations or tenders to be obtained, purchase form to be completed and kept on file.

18.2.2 Supplier to be selected as per 1 above. 18.2.3 Purchase to be authorised by department Manager.

18.3 Value Over $100,000

18.3.1 Tenders to be authorised by Council. 18.3.2 Tenders to be retained on file.

18.4 Approved Budget

All goods and services ordered must be within budget parameters for that Department.



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18 Purchasing – of Goods, Services and Equipment.., continued

18.5 Stock Levels

Stock supplies should be kept to reasonable levels based on past usage.

18.6 Local Providers

Local providers of goods and services will be given preference where practicable and competitive with other providers and they comply with Council requirements

19 Sale or Disposal of Land or Other Assets

19.1 Land In sale or disposal of land, Council will comply with the community lands provisions of Chapter 11 of the Local Government Act 1999. In negotiating sale of land above the value of $20,000, Council shall have reference to an independent valuation of the land. Where Council initiates sale of land which is surplus to its requirements to parties other than the adjoining owner, it shall normally publicly list the land for sale at a price determined by Council with reference to an independent valuation with one or more local real estate agents.

19.2 Other Assets

In the case of other assets including plant and equipment

19.2.1 Under $2,000 – May negotiate best price with interested parties. 19.2.2 $2,000 - $5,000 – Advertise locally for tenders or sale at price fixed

by responsible manager based on asset value. 19.2.3 Above $5,000 – advertise for sale by tender.



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20 Fees and Charges (not set by statute)

A schedule of fees and charges shall be prepared by the Manager Corporate Services in liaison with other Council Managers. The schedule shall include, but not be restricted to, such items as gate fees – public waste facilities, swimming pool fees, moiety fees, lease of road reserve fees and cemetery burial fees.

21 Issue of Purchasing Cards and/or Fuel Cards

The Chief Executive Officer may make available purchasing cards to Council Managers, Council Mechanic and Works Supervisor Council Managers with approval of the Chief Executive Officer may issue fuel cards to Council staff.

21.1 Register

A register of purchasing cards and/or fuel cards issued will be maintained by Council’s Manager Corporate Services and a copy of this authority is to be provided to the Chief Executive Officer.

21.2 Agreement by Staff:

I ___________________________ , hereby agree to adhere to the following (Full name) conditions in the use of the Councils purchasing and/or fuel card (whichever is appropriate) issued to me; 1. To only use the purchasing card and/or fuel card for the Council authorized

purchases under my responsibility.

2. To only use the fuel card in this vehicle(s) for authorised Council use and travel as required in the course of my duties unless otherwise varied in terms of this agreement (section 3) or as authorised by my Manager.

3. Special Conditions ___________________________________________ ______________________________________________________________ ______________________________________________________________ Signed ____________________________ Dated ___/___/___ Authorised by ______________________ Manager



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22 Further Information

Members of the public may inspect this Policy on Council's website www.southernmallee.sa.gov.au and at the principal office of the Southern Mallee District Council at Day Street, Pinnaroo SA 5083. On payment of a fee, a copy of this Policy may be obtained from the Council, or otherwise may be downloaded for free from the Council’s website. Any queries in relation to this Policy should be directed to the Chief Executive Officer contactable on the principal office on 8577 8002.

23 Policy Review

This policy will be reviewed after a General Local Government Election. The Council may at any time alter this policy, or substitute a new policy.

24 Other Relevant Policies/Procedures

Internal Control Policy Employees Code of Conduct Employees individual Job Descriptions

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