Governance Structure & Charter. Risk Management Resource. Strengthening the sector

Transcription

1 Gvernance Structure & Charter Risk Management Resurce Strengthening the sectr

2 Cntrls Mdel Gvernance Structure Cntext A Gvernance Structure and Charter frms part f an rganisatin s cnstitutin, which is a set f rules fr perating the rganisatin determined by its legal structure. The Charter serves as a key guide fr the management f Cmmunity Service Organisatins and utlines bligatins in relatin t Bard and cmmittee respnsibilities, cmpliance, financial stewardship and cnflicts f interest. The Charter als assists an rganisatin t cnduct business in a legal and transparent manner. Adherence t the Charter is crucial fr a cmmunity service rganisatin, as nn-cmpliance with legislatin may impact n all aspects f the rganisatin s activities, including perfrmance, management f risk and reputatin. Under the Disability Act 2006, the Bard f a cmmunity service rganisatin is respnsible fr ensuring that their rganisatin is effective, sustainable, respnsive and capable f delivering high quality services. The Bard is als respnsible fr ensuring cmpliance with relevant legislatin and funding requirements. Diverse legal structures are available t Cmmunity Service Organisatins, including incrprated bdies which are established as Cmpanies Limited by Guarantee r Incrprated Assciatins. The legal structure will determine the titles fr thse with gvernance respnsibilities. Further infrmatin abut the legal bligatins f Bard members is available at: tp:// Members f Bards are ultimately accuntable fr all rganisatinal matters and must carry ut their fiduciary duty, that is, trusteeship n behalf f thers (members and the cmmunity) t achieve apprpriate rganisatinal utcmes, ensure the rganisatin s financial security, and articulate the rganisatin s mral and scial respnsibility. 1 While the cnstitutin specifies sme gvernance prcesses, Bards can adpt a range f prcesses t assist in meeting their respnsibilities. A Gvernance Structure and Charter is ne example f this. Fr a cmprehensive discussin f effective Bard prcesses and practices (including useful links and ther resurces) refer t the Gd Gvernance resurce: Disability Act 2006 A Guide fr Bards f Management f Disability Service Prviders prduced by Natinal Disability Services (2008):

3 Cntrls Mdel Gvernance Structure Purpse The Gvernance Structure and Charter assists in the directin and cntrl f an rganisatin by ensuring that activities are undertaken with due diligence and accuntability. They specify gvernance respnsibilities, utline the criteria fr decisin making and prcesses fr mnitring rganisatinal perfrmance. Chairpersn Secretary Members The Gvernance Structure and Charter relates t the element f the Disability Services Risk and Cntrls Mdel: Element Sub element Gvernance Framewrk Skills f Bard Audit & Cmpliance These guidelines lead the rganisatin and infrm the Strategic Plan, particularly the develpment f the rganisatin s Visin and Missin.

4 Cntrls Mdel Gvernance Structure Develping a Gvernance Structure and Charter Step 1. Gvernance Structure Step 2. Bard Charter Step 3. Delegatins f Authrity Step 4. Cnflict f Interest Step 5. Cmpliance Step 1: Gvernance Structure The gvernance structure will generally cmprise the Bard, Bard sub-cmmittees (e.g. Risk and Audit Cmmittee, Investment Cmmittee), management and emplyees. The vice f peple with a disability and their families/carers shuld be cnsidered when determining the gvernance structure, fr example: Bard Risk & Audit Cmmittee (r equivalent) Emplyees

5 Cntrls Mdel Gvernance Structure Ensuring that the vice f peple with a disability and their families/carers infrms decisin making is imprtant. Peple with a disability may be represented thrugh Bard membership, sub-cmmittee membership r an advisry grup which infrms the Bard. Decisins abut the nature f representatin shuld take int cnsideratin the rganisatin s legal structure. An example f a pssible bard structure is as fllws: Chair Treasurer Secretary Bard Cmpsitin The Bard shuld ensure a range f relevant expertise that will enable the rganisatin t rerient t a mdel f service delivery that is directed by and paid fr by the persn with a disability. Sme rganisatins may seek t develp mre sphisticated business, financial and wrkfrce management practices t respnd t this apprach. The fllwing cmpetencies may be cnsidered t enhance the Bard s gvernance expertise: Management Finance/accunting Administratin Infrmatin technlgy Law Client perspective Risk management including ccupatinal health and safety Disability services Resurce management Cmmunity interest r perspective Public relatins/marketing

6 Cntrls Mdel Gvernance Structure Risk and Audit Cmmittee The Risk and Audit Cmmittee is respnsible fr the develpment f a risk management framewrk and prvides the Bard with reprts n risk, related issues and an annual review f perfrmance. It als mnitrs perfrmance management systems and the impact f changes t the risk prfile f the rganisatin. Small rganisatins withut a Risk and Audit Cmmittee will require Bard members t take n this respnsibility, prviding quarterly risk and audit reprts t the Internal Auditr fr review. Specific risk management training may be required t assist Bard members t fulfill this respnsibility.

7 Cntrls Mdel Gvernance Structure Step 2: Bard Charter The Bard Charter defines the rles, respnsibilities and authrities f the Bard and sub-cmmittees. Examples f a Bard Charter, Rles & Respnsibilities and a Risk & Audit Cmmittee Charter are n the fllwing pages. Sample Bard Charter While the Bard has n peratinal invlvement in the rganisatin s business and service delivery activities, it des have a rle in develping and reviewing plicy. A Bard Charter culd include the fllwing: 1. Prvide effective leadership and cllabrate with the executive management team t: articulate the rganisatin s Missin, Visin, Values and Strategies develp strategic plans and rder strategic pririties maintain pen lines f cmmunicatin and raise awareness f Missin, Visin, Values and Strategies thrughut the rganisatin develp and maintain an rganisatinal structure that supprts the achievement f strategic bjectives. 2. Appint the CEO and mnitr his/her perfrmance against agreed perfrmance Indicatrs 3. Review and authrise business (peratinal) plans and the annual budget prpsed by the executive management team. 4. Mnitr the implementatin and achievement f strategic and business plans and annual budget utcmes 5. Establish cmmittees, plicies and prcedures t assist the Bard t meet its bligatins 6. Ensure Bard bligatins and functins are met 7. Initiate a prgram fr self-evaluatin, with fllw up actins t respnd t findings (including develpment f Bard members) 8. Ensure that systems and prcedures are in place fr the rganisatin t run effectively, efficiently and meet all legal and cntractual requirements 9. Ensure that all significant risks are adequately assessed and managed by the executive management team 10. Ensure the rganisatin has apprpriate crprate gvernance structures in place, and that it demnstrates ethical behaviur and encurages crprate and scial respnsibility in the rganisatin s culture 11. Act as steward n behalf f the rganisatin s members and ensure that the rganisatin remains fcussed n its missin.

8 Cntrls Mdel Gvernance Structure Prcedure Rles & Respnsibilities Chairpersn The Chairpersn chairs Bard meetings and ensures that Bard perfrmance is cnsistent with the rganisatin s rules and external bligatins. The authrity f the Chairpersn is derived frm the Bard s gvernance plicies. The Chair is authrised t use any reasnable interpretatin f the prvisins in these plicies. The Chairpersn has n authrity t supervise r direct the executive fficer withut the sanctin f the Bard. The Chairpersn may delegate any authrity but remains accuntable fr its use. Functins f the Chairpersn include: Representing the Bard t external stakehlders and the media Representing the Bard t staff, clients and carers Managing Bard peratins, including Bard prcesses and perfrmance. Skills required f the Chairpersn include: Capacity t gain the respect f the Bard, all internal and external stakehlders, and members Effective interpersnal skills at all levels: gvernment, cmmercial, vlunteer, emplyees, families/carers, peple with a disability and thers Meeting management skills (agenda setting, time management, dispute reslutin, cnsensus building, clsure and dcumentatin) Familiarity with Bard perfrmance issues and slutins. Vice Chairpersn The Vice Chairpersn assumes the rle f the Chairpersn, shuld the Chairpersn be absent frm a meeting r frmal duty. Treasurer (if applicable t the rganisatin s cnstitutin) Functins f the Treasurer include verseeing and keeping the Bard infrmed f the rganisatin s financial psitin. Skills required f the Treasurer include: Excellent management accunting skills Strng treasury skills Strng wrking relatinship with the Finance Manager.

9 Cntrls Mdel Gvernance Structure Risk & Audit Cmmittee Charter The Risk and Audit Cmmittee is respnsible fr the develpment f a risk management framewrk and prvides the Bard with reprts n risk, related issues and an annual review f perfrmance. It als mnitrs perfrmance management systems and the impact f changes t the risk prfile f the rganisatin. The Risk and Audit Cmmittee supprts the versight f financial management respnsibilities by ensuring cst-effective internal audit and evaluatin cverage f peratins. The Cmmittee prvides a quality assurance review f the efficiency and effectiveness f the rganisatin s financial management and the peratins f its business. This is undertaken by reviewing internal audit / evaluatin reprts and audited financial statements, prmting prper crdinatin with ther internal and external review activities, and reviewing the scpe and quality f wrk perfrmed by audit and evaluatin services. The Cmmittee versees: Operatin and implementatin f the risk management framewrk Financial plicies, perfrmance and the financial reprting prcesses Internal Auditr perfrmance External Auditr (Victrian Auditr-General s Office r his appinted agent) perfrmance Matters f accuntability and internal cntrl affecting the peratins f the rganisatin Effectiveness f management infrmatin systems (infrmatin technlgy) and ther systems f internal cntrl Mnitring f cmpliance with laws and regulatins, its wn Cde f Cnduct and Cde f Financial Practice.

10 Cntrls Mdel Gvernance Structure Step 3: Delegatins f Authrity Delegatins f Authrity utline authrity fr expenditure, as demnstrated in the example belw. Sample Delegatins f Authrity The Bard is respnsible fr the stewardship and prper accunting f the rganisatin s incme and expenditure, assets and liabilities. The financial guidelines fr purchases by disability service rganisatins fllw. Fr purchases up t $100,000 The Bard shuld prepare a dcument utlining its requirements befre seeking qutes. In general Bards require the fllwing fr purchases: Purchases f up t $5000 require three verbal qutes. Purchases $5,000 - $15,000 require at least three verbal r written qutes. Purchases $15,000 - $100,000 require three written qutes. When develping r reviewing a Client Service Charter, the fllwing steps shuld be cnsidered: Purchases shuld be apprved by fficers with apprpriate financial delegatin, by the Bard r a delegated Cmmittee f the Bard. Fr purchases ver $100,000 Public tenders shuld be called by means f advertisement in the lcal press. If tenders are called, the Bard must prvide a prcedure, facilities and safeguards t ensure secrecy and security f tenders received until the date and time when they are t be fficially pened in accrdance with the Bard s requirements. If the Bard wishes t seek further infrmatin n apprpriate purchasing prcedures guidelines can be fund at VGPB (Victrian Gvernment Purchasing Bard) at

11 Cntrls Mdel Gvernance Structure ACTIVITY AUTHORISING PERSON Refunds/cancellatins up t $1,000 Refunds/cancellatins ver $1,000 Petty cash Invice/credit ntes Cheque signing Bank accunts EFT prcessing Investments Payrll transactins Finance Manager & CEO apprval. CEO apprval. CEO. Manager with delegated authrity. CEO & Finance Manager. 2 signatures required n all cheques up t $20k. Over $20k CEO & Finance Manager. Opening & clsing f bank accunts & transfer between bank accunts CEO nly. Opening & clsing f bank accunts and transfer between bank accunts CEO nly. Finance Manager and CEO r anther authrised signatry. All EFT payments must pre-apprved by tw authrised signatries. CEO t review payments n a regular basis. Bard nly. HR Officer after apprval frm HR Manager. Fr any single transactin, (e.g. additinal payment), apprval is needed frm the Finance Manager. This includes payments such as terminatins and superannuatin payments.

12 Cntrls Mdel Gvernance Structure The Bard delegates the fllwing Bard Officers t apprve purchases and stre external requisitins t the value f: Bard All ver $100,000 (cheque signing ver $20,000) Manager - IT Up t $5,000 CEO Up t $100,000 Finance Manager Up t $20,000 Senir Accuntant Up t $5,000 Human Resurces Manager Up t $5,000 Maintenance Supervisr Up t $2,000 Please nte that nminated amunts listed fr Delegatins f Authrity are examples nly. An rganisatin s Delegatins f Authrity plicy will be determined by the Bard.

13 Cntrls Mdel Gvernance Structure Step 4: Cnflict f Interest The Bard is cmmitted t high standards f ethical cnduct and accrdingly places great imprtance n making clear any existing r ptential cnflict f interest. Belw is an utline f actin t avid cnflicts f interest. All cnflicts f interest in relatin t the cnduct f Bard members shuld be declared by the member cncerned and fficially dcumented in the Bard s Cnflict f Interest Register. Accrdingly, any business r persnal matter which is, r culd be, a cnflict f interest invlving the individual and his/her rle and relatinship with the rganisatin shuld be declared and fficially registered. Entries in the Register are presented t the Bard and minuted at Bard meetings. Where a cnflict f interest is identified, the Bard member cncerned is excluded frm vting n that issue. Only with the unanimus agreement f all ther members present may the member cncerned participate in any Bard discussin n that tpic. Failing such agreement, the individual shall either refrain frm participatin r leave the rm. When the Chairpersn is aware f a real r ptential cnflict f interest invlving ne r mre members, he/she shuld take the necessary steps t ensure the cnflict is managed apprpriately. Members wh becme aware f a real r ptential cnflict f interest f anther member are respnsible fr ntifying the Bard. Examples f cnflicts f interest are as fllws: When a member, r his/her immediate family r business interests, stands t gain financially frm any business dealings, prgrams r services f the rganisatin When a member ffers a prfessinal service t the rganisatin When a member stands t gain persnally r prfessinally frm any insider knwledge if that knwledge is used t his/her persnal r prfessinal advantage.

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22 Acknwledgement Natinal Disability Services wuld like t thank prject cnsultant Enhance Slutins ( and Victrian disability service prviders fr their participatin and genersity thrughut the prject. Natinal Disability Services wishes t thank prject partners: Karyn Spencer - Manager, Systemic Imprvement Unit, the Department f Human Services (DHS); Karen Stewart - Quality and Sectr Develpment, DHS; Debrah Stenning - Client Relatinship Manager, the Victrian Managed Insurance Authrity (VMIA); Patrick Ow - Risk Management Advisr, VMIA; and Rhan Braddy CEO, Mamburin Enterprises. Resurces A wide range f resurces and learning pprtunities are available t assist cmmunity service rganisatins t undertake effective risk management: NDS Victria: VMIA: DHS: Funded Agency Channel (FAC). A resurce guide, tls and links t supprt Cmmunity Sectr Organisatins. Cntact the FAC Helpdesk - Ph: fac@dhs.vic.gv.au DHS: Resurces Guide fr cmmunity service rganisatins in the Victrian disability services sectr, Funding VMIA and the DHS prvided prject funding. Disclaimer The infrmatin prvided in this dcument is intended fr general use nly. It is nt a definitive guide t the law and best practice, des nt cnstitute frmal advice, and des nt take int cnsideratin the particular circumstances and needs f yur rganisatin. Every effrt has been made t ensure the accuracy and cmpleteness f this dcument at the date f publicatin. NDS cannt be held respnsible and extends n warranties as t the suitability f the infrmatin in this dcument fr any particular purpse and fr actins taken by third parties. Natinal Disability Services 2010 This publicatin is cpyright. N part may be reprduced by any prcess except in accrdance with the prvisins f the Cpyright Act ISBN Published: January 2010 Review date: January 2011 Abut Natinal Disability Services NDS is the natinal peak bdy fr disability services. Its membership includes mre than 650 nt-fr-prfit rganisatins that cllectively perate several thusand services fr Australians with a disability. NDS prvides a wide range f advice and infrmatin t the disability services sectr and gvernments regarding all significant disability matters. Natinal Disability Services Victria Level 10, 369 Ryal Parade, Parkville VIC 3052 Australia P: (03) l W: