Corporate governance encompasses the processes, protocols, conduct and relationships that guide the Melbourne City Council’s actions and decision-making. Some mechanisms of governance are legislative requirements and others are initiatives of the council.
This section contains information on performance in areas such as councillor information, legislative compliance, risk and audit operations.

Councillor conduct
The council’s Councillor Code of Conduct outlines the role of the council and provides an overview of councillor responsibilities in accordance with the Local Government Act 1989 (Vic). The code includes guidelines for rules of conduct, decision-making and use of the council’s resources. It also includes procedures for disclosure of interests and conflicts of interest that go beyond legislative requirements. There were no known breaches of the code by councillors in 2008–09.

Council meetings

The council generally meets monthly, with a schedule of meeting dates available on notice boards at the Melbourne Town Hall, North Melbourne Library, East Melbourne Library, City Library, Carlton (Baths) Community Centre, the Hub at Docklands and on the City of Melbourne website.

All meetings of the council and its committees are conducted in accordance with the Conduct of Meetings Local Law 2001. While meetings are open to the public and the public is encouraged to attend, the council or special committee may close any meeting to the public to discuss:

• personnel matters
  
• the personal hardship of any resident or ratepayer
  
• industrial matters
  
• contractual matters
  
• proposed developments
  
• legal advice
  
• matters affecting the security of council property
  
• any other matter which the council or special committee considers would prejudice the council or any person
  
• a resolution to close the meeting to members of the public.

Council special committees

As well as council meetings, Melbourne City Council has eight special committees that meet either every one, two or three months. With the exception of the Docklands Coordination Committee, which is co-chaired by a member of the VicUrban Board and Councillor Kevin Louey, and the Inner Melbourne Action Plan Implementation Committee, each committee is made up of and chaired by councillors.

Special committees are:

Connected City Committee (meets every two months)
This committee has delegated powers, duties and functions directly relating or ancillary to transport, traffic engineering, cycling initiatives, pedestrian initiatives, urban freight, transport planning, traffic and parking, smart city driving, and transport connections (regional and global).

Docklands Coordination Committee (meets quarterly)
This committee manages coordination between the City of Melbourne and VicUrban to ensure the best planning and use of public space in this still-developing area. The committee, which includes senior representatives from both the City of Melbourne and VicUrban, meets quarterly to monitor place management services within the coordination area.

Eco-City Committee (meets every two months)
This committee has delegated powers, duties and functions directly relating or ancillary to air quality, enhancing environmental partnerships, greenhouse emissions, climate change, the Sustainable Melbourne Fund, waste management and minimisation, public space (including parklands and trees), parks and waterways (environment), water conservation and quality (including stormwater management) and the International Council for Local Environmental Initiatives.

Economic Development and Knowledge City Committee (meets every two months)
This committee has delegated powers, duties and functions directly relating or ancillary to business attraction and support, business development fund, Global City (including relations, trade and marketing), investment attraction, federal government partnerships, retail and hospitality, conference and convention attraction, international and domestic tourism and visitation, city events, corporate affairs and communication, relationships with universities, learning city, online city, knowledge economy, the Precinct Enhancement Program and information technology.

Finance and Governance Committee (meets monthly)
This committee has delegated powers, duties and functions directly relating or ancillary to the annual budget, Council Works Program and the Four Year Financial Plan, Council Plan, Asset Management Strategy, financial and control systems and reporting, Continuous Improvement – Lean Thinking, Investment Fund and Property Portfolio, rates and valuations, subsidiary companies and associated entities, tender and contract policies, audit, triple-bottom-line processes and reporting, parking operations, local laws, contracts and other matters requiring expenditure beyond the current financial year.

The committee also makes recommendations to council on governance matters including Good Governance Charter, Councillor Travel Policy, Councillor Expenses and Resources Guidelines, councillor travel approval and arrangements and councillor expenses.

Inner Melbourne Action Plan Implementation Committee (meets quarterly)
This committee has delegated powers, duties and functions directly relating or ancillary to overseeing implementation of the Inner Melbourne Action Plan (IMAP) in accordance with the agreed Three Year Implementation Program. The IMAP committee comprises the cities of Melbourne, Port Phillip, Stonnington and Yarra.

People and Creative City Committee (meets monthly)
This committee has delegated powers, duties and functions directly relating or ancillary to children’s, family, aged, youth, disabled and ethnic services, emergency management/services, social and affordable housing, homelessness, Indigenous affairs, libraries and community centres, recreation strategies and services, Safe City and Healthy City, social policy, community sports and community grants, parks and waters (recreation), arts and arts grants, culture and cultural diversity, public space (including streetscapes), place management, waterways, street trading, customer relationship management, and community engagement.

Planning Committee (meets monthly)
This committee has delegated powers, duties and functions directly relating or ancillary to heritage, statutory planning and building control, strategic planning, urban design, planning scheme amendments, 10 Year Infrastructure Plan, noise abatement and Future Melbourne Community Plan.

Table 1. Council and Committee meeting attendance: 1 July 2008 to 30 November 2008

Councillor allowances

Councillors are paid an allowance set by the Victorian Government. This allowance is paid in recognition of the demands placed on councillors in carrying out their civic and statutory duties, and for their work on policy development, as spokespeople on community matters and as representatives of the Melbourne City Council and Melbourne, both in Australia and overseas.

The allowances are:

• Lord Mayor: $147,900
• Deputy Lord Mayor: $60,500
• councillors: $33,600.

Expenses
Councillors incur expenses in the course of fulfilling their roles. Expenditure is regulated by the Councillor Expenses and Resources Guidelines, as endorsed by the Finance and Governance Committee and consistent with Section 75 of the Local Government Act 1989 (Vic). Councillor expenses are reported in detail every quarter on the City of Melbourne website.

Legislative compliance

Freedom of Information
The Freedom of Information Act 1982 (Vic) gives any individual or organisation the right to access information held by the City of Melbourne unless that information is deemed exempt under the Act.

In 2008–09 the City of Melbourne received 50 valid applications seeking documents about building and planning matters, parking infringements and the costs and activities of councillors and officers. The number of requests received was comparable with the previous financial year (51).

There was one request in 2008–09 for internal review in which the decision was varied. No applicant appealed to the Victorian Civil and Administrative Tribunal and no complaints were received by the Ombudsman.

The Act specifies a 45-day statutory time limit to process requests. The average process time for requests received by the City of Melbourne is 41 days.

National Competition Policy compliance
The City of Melbourne complied with the requirements of the Local Government Improvement Incentive Program in 2008–09 in respect to National Competition Policy, which covers compliance in trade practices, local laws and competitive neutrality.

Privacy Act
Standards set out by the Information Privacy Act 2000 (Vic) and the City of Melbourne’s Privacy Policy Statement control how we manage personal information. Privacy compliance is included in our staff induction program. We have a dedicated privacy officer within our Governance Services branch to assist staff and members of the public with privacy-related queries or issues.

The City of Melbourne received two privacy complaints from members of the public during 2008–09. Both complaints were resolved.

Whistleblowers Protection Act 2001 (Vic)
Complaints about the improper conduct of any council officer can be made confidentially, under the Whistleblowers Protection Act 2001 (Vic), to the Victorian Ombudsman or to any one of the following council officers appointed to receive disclosures:

• Dr Kathy Alexander, Chief Executive Officer
  
• Linda Weatherson, Director Community and Culture
  
• Jane Sharwood, Manager Business and International.

In 2008–09, there were no disclosed matters referred to the council by, or from the council to, the Ombudsman.

Risk management

The City of Melbourne manages its risks to maximise opportunity and minimise loss. Risk management planning is done as an organisation-wide exercise, but is also part of the daily business activities of individual branches and contractors.

Risk management strategy update, fraud awareness and training
The Risk Management Strategy 2007–2010 guides the City of Melbourne’s approach to risk management. In 2008–09, risk exposures were updated and revised for all but two of the City of Melbourne’s branches and recorded in the corporate risk register database. A major review of the top strategic risks was undertaken by the CEO and directors, and these were reported to the Audit Committee along with the wider risk profile.

A major risk project during the year was the specification and development of a new risk and audit module for the organisation’s integrated business planning software. This module will be tested and launched early in 2009–10. It will replace two existing databases, eliminate the need for a third, and bring together planning, risk management and audit functions in a single application.

More than 900 City of Melbourne staff attended fraud awareness sessions in 2008–09, which was merged with a session on improper conduct. A range of other courses were conducted, such as an introduction to risk management, event risk management and trade practices in local government.

Insurance and risk financing
Two new claims were submitted to the City of Melbourne’s insurers during 2008–09 for the major insurance classes of public liability and professional indemnity or property.

The cost of insurances to the City of Melbourne continued to reduce during 2008–09. This, in part, reflects the organisation’s proactive approach to managing risks and controlling any losses that arise.

Business continuity planning and influenza pandemic
In 2008–09 the City of Melbourne continued to review the Corporate Business Continuity Plan. We also updated our business continuity recovery plans, the Information Technology Disaster Recovery Plan, and Business Impact Analysis for each branch. The Corporate Business Continuity Plan was partly tested and applied during the H1N1 influenza (Swine Flu) outbreak in 2009. Planning proceeded for staff training and full testing of the plans under a variety of scenarios, including the impact of an influenza pandemic.

Audit operations

Audit Committee
In line with good governance practices and in accordance with Section 139 of the Local Government Act 1989 (Vic), the City of Melbourne has operated an Audit Committee since 1996. Appointed by the Melbourne City Council, the committee oversees the activities of the City of Melbourne’s external and internal auditors, and gives independent advice to the Finance and Governance Committee on appropriate accounting, auditing, internal control, business risk management, compliance and reporting systems, processes and practices within the organisation.

The Audit Committee met five times during 2008–09. It considered and made recommendations to the council and City of Melbourne management on many issues and internal audits including:

• internet security
  
• occupational health and safety
  
• business continuity planning procedures
  
• risk profile and legislative compliance frameworks
  
• statement of annual accounts and performance report for the council, and reports on its wholly-owned subsidiaries
  
• governance responsibilities applicable to associated entities and trusts in which the City of Melbourne has either an indirect interest or stake
  
• legal action reports
  
• parking and traffic
  
• IT disaster recovery planning
  
• budgeting and strategic planning
  
• crisis management
  
• the HR Framework review.

Audit Committee members – Independent
John Warburton – Chair
John Warburton was re-appointed for three years as a member of the Audit Committee in June 2006 and retired from the committee in June 2009. He served as Chair of the committee for 10 years, contributing expertise and leadership.
Qualifications:

• Certified Practising Accountant
  
• experienced director of many private and public sector organisations and their audit committees
  
• appointed to the Audit Committee in June 1999.

Theresa Glab
Theresa Glab was appointed to the Audit Committee for a three-year period in September 2008.
Qualifications:

• Partner/Associate Director, Risk Management and Internal Audit, Moore Stephens, Melbourne
  
• Bachelor of Economics; Graduate Diploma in Banking and Finance; Master of Accountancy
  
• experienced senior internal audit manager and financial controller.

Claire Filson
Claire Filson was re-appointed as a member of the Audit Committee for a further three-year period, starting August 2007.
Qualifications:

• Bachelor of Law; Masters of Business Administration
  
• experienced director and company secretary of both private and public organisations
  
• Director of the Southern Cross Station Authority where she chairs the Audit Committee
  
• Director of Emergency Services & State Superannuation Board and Audit Committee member.

Audit Committee members – council representatives
Due to council elections in November 2008, councillor representation on the Audit Committee changed during 2008–09:

• Lord Mayor John So (July 2008 – November 2008)
  
• Deputy Lord Mayor Gary Singer (July 2008 – November 2008)
  
• Councillor Brian Shanahan (Chair of the Melbourne City Council Finance and Governance Committee) (July 2008 – June 2009)
  
• Lord Mayor Robert Doyle (February 2009 – June 2009)
  
• Deputy Lord Mayor Susan Riley (February 2009 – June 2009)

Internal audit
The internal audit service helps the City of Melbourne, its management, and the management of its subsidiary companies, perform their responsibilities by assisting to maintain strong, relevant and effective internal controls.

The City of Melbourne’s internal auditor reports to the Audit Committee. The service was contracted to Ernst & Young, which started its second three-year term in March 2005 and continued on an exercised extension until the end of June 2009.

A strong internal control environment ensures systems are in place to manage our operations effectively. Services provided by the internal audit service include:

• risk assessment
  
• development and management of an audit program
  
• conducting audits and reviews
  
• reporting audit opinions, findings and recommendations
  
• presenting, discussing and providing advice on important issues.

External audit
The Victorian Auditor-General is responsible for the external audit of the City of Melbourne and its subsidiary companies. Our external audit focuses on three areas:

• strategic planning
  
• detailed audit system testing
  
• review of financial statements.

Documents available for inspection
Regulations attached to the Local Government Act 1989 (Vic) require the City of Melbourne to keep certain statutory registers and documents, which can be viewed on request, or in certain cases, on application. Available documents include:

• council and committee meeting agendas and minutes
  
• list of special committees established or abolished
  
• agreements to establish regional libraries
  
• list of contracts valued at $150,000 or more which the council entered into outside the competitive process, except Section 186(5) contracts
  
• names of councillors and City of Melbourne officers required to submit a return of interest and the date returns were submitted
  
• details of interstate and overseas travel by councillors and City of Melbourne officers
  
• details of senior officers’ total salary packages
  
• details of all property, finance and operating leases involving land, buildings, plant, computer equipment or vehicles entered into by the City of Melbourne (as lessor or lessee)
  
• list of donations and grants made by the council
  
• list of organisations of which the council is a member, and details of membership fees
  
• mayoral and councillor allowances
  
• register of authorised officers
  
• register of delegations
  
• Whistleblowers Protection Act 2001 (Vic) procedures
  
• submissions received under Section 223 of the Local Government Act 1989 (Vic)
  
• election campaign donation returns
  
• records of assemblies of councillors.

Leading-edge service improvement

The City of Melbourne is dedicated to the continuous improvement of its services and projects to ensure best value for the community. In 2000, the Local Government Act 1989 (Vic) was amended to incorporate six Best Value principles to ensure high quality and value-for-money services that respond to the community’s needs.

The principles of Best Value are applied by the City of Melbourne in our day-to-day assessment of services and, in late 2008, we furthered our commitment to value and quality by implementing the Lean Thinking approach to service improvement.

Lean Thinking is a business method that aims to create value for internal and external customers by eliminating waste and duplication. In service industries, ‘Lean’ means the right service, in the right place, at the right time, provided by the right person and done right the first time.