Audit and Risk Committee

Open Minutes

 

Meeting Date:

Thursday 5 December 2019

Time:

1.00pm – 1.02pm

2.30pm – 3.23pm

Venue

Council Chamber
Hawke's Bay Regional Council
159 Dalton Street
Napier

 

 

Present

John Palairet (In the Chair), Mayor Kirsten Wise, David Pearson, Councillor Nigel Simpson and Councillor Graeme Taylor

In Attendance

Councillor Sally Crown, Councillor Api Tapine

Stephen Lucy – Audit New Zealand

Chief Executive, Director Corporate Services, Director Infrastructure Services, Director Community Services, Manager Communications and Marketing, Manager People and Capability, Chief Financial Officer

Administration

Governance Team

 


Audit and Risk Committee - 05 December 2019 - Open Minutes

 

Apologies

Nil

Conflicts of interest

Nil

Public forum

Nil

Announcements by the Mayor

Nil

Announcements by the Chairperson

Nil

Announcements by the management

Nil

Confirmation of minutes

Councillor Palairet / Mayor Wise

That the Minutes of the meeting held on 13 September 2019 were taken as a true and accurate record of the meeting.

 

 

 


Audit and Risk Committee - 05 December 2019 - Open Minutes

Agenda Items

 

1.    Health and Safety Report

Type of Report:

Operational

Legal Reference:

N/A

Document ID:

871748

Reporting Officer/s & Unit:

Sue Matkin, Manager People & Capability

 

1.1   Purpose of Report

The purpose of the report is to provide the Audit and Risk Committee with an overview of the health and safety performance as at 31 October 2019.

 

At the Meeting

The Manager People and Capability spoke briefly to the report, noting that the annual targets are established looking for improvements from the previous year. It is difficult to benchmark against other local authorities due to the range of facilities Council oversees.

The Committee commended the continuing positive trend.

 

Committee's recommendation

The Audit and Risk Committee:

a.     Receive the Health and Safety report as at 31 October 2019.

 

 


 

2.    Risk Management Report November 2019

Type of Report:

Information

Legal Reference:

N/A

Document ID:

873301

Reporting Officer/s & Unit:

Ross Franklin, Consultant

 

2.1   Purpose of Report

To provide the Audit and Risk Committee with an update on progress with risk management work and to report on the highest paid risks.

 

At the Meeting

The Director Corporate Services spoke to the report, advising that the Manager Business Excellence and Transformation role has been filled, and that the risk role will be re-advertised as the first round did not result in a successful appointment.

Following further more details assessment the Bluff Hill fence risk has been adjusted down to “high”. The work will start soon, but will need to be undertaken in stages due to availability of some of the required product. 

In response to questions from the Committee it was confirmed that Committee members can raise risks through the Manager business Excellence and Transformation, or one of Council’s risk champions, as well as via the Committee Chair. Committee members can also initiate a line  of enquiry if there are areas they are concerned about or wish to assure themselves on.

ACTION Cr Taylor requested a report be prepared on any reputational and financial risk as a result of removing the Conference Centre branding from the War Memorial Hall; this is to include any financial risk to the facility and any financial and reputational risk to staff. The report is to be circulated to Audit and Risk for comment via email, then taken to Council.

 

 

Committee's recommendation

The Audit and Risk Committee:

a.     Note the Risk Management Work being undertaken by Napier City Council staff and management.

b.     Note the current Major risks.

c.     Receive the Risk Report dated 22 November 2019.

 

 

 

3.    Audit and Risk Committee Charter

Type of Report:

Procedural

Legal Reference:

N/A

Document ID:

873943

Reporting Officer/s & Unit:

Adele Henderson, Director Corporate Services

 

3.1   Purpose of Report

The purpose of this report is to advise the incoming committee of the committee charter and of the recommendation for the charter to be reviewed over the next 12 months.

 

At the Meeting

The Director Corporate Services spoke briefly to the report, noting that with the re-establishment of this Committee with changes in membership it was timely to ensure continued visibility of the Charter, and of the role and mandate of Committee members.

ACTION A specific Health and Safety section is to be included in the Charter as per the Chair’s recommendation earlier this year

ACTION Any further Charter update requests to be provided to the Chair and Director Corporate services by email; an updated document will be brought to the March 2020 Audit and Risk Committee meeting for consideration.

 

Committee's recommendation

The Audit and Risk Committee:

a.     Note and discuss the current Audit and Risk Committee Charter and make any recommended changes

 

 


 

4.    Proposed Audit and Risk Committee 2020 meeting calendar

Type of Report:

Operational

Legal Reference:

N/A

Document ID:

871747

Reporting Officer/s & Unit:

Caroline Thomson, Chief Financial Officer

 

4.1   Purpose of Report

To consider the proposed timetable of meetings for the Audit and Risk Committee in 2020, as detailed below.

 

At the Meeting

It was noted that the meeting dates proposed for the Audit and Risk Committee have been aligned with the wider governance schedule adopted by Council at its meeting on 5 December 2019.

 

Committee's recommendation

The Audit and Risk Committee:

a.     Receive the proposed timetable of meetings for the Audit and Risk Committee for 2020.

 

 


 

5.    Financial Delegation

Type of Report:

Legal and Operational

Legal Reference:

Local Government Act 2002

Document ID:

869923

Reporting Officer/s & Unit:

Adele Henderson, Director Corporate Services

 

5.1   Purpose of Report

To review and approve the Chief Executive’s financial and non-financial delegation

 

At the Meeting

The Director Corporate Services spoke to the report, noting that the Audit and Risk Charter outlines that it is good practice to regularly review the delegations to the Chief Executive, but this has not been undertaken for some time. The current delegation of $500k has been in place at least 10 years; it was suggested that in meeting the balance between facilitating Council operations (particularly in the infrastructure space) with ensuring Council oversight a delegation of $1M may be more fit for purpose in the current procurement environment.

In response to questions from the Committee it was advised that Hastings District Council Chief Executive holds a financial delegation of $5M. Multi-year contracts still require visibility of Council. It was noted that the Hearings Committee has reviewed tenders well above $1M previously but their mandate is to exercise financial delegation not to make a completely different selection of tenderer. It was agreed that there was opportunity to bring procurement plans through to Council as part of good transparency.

The independent members of the Committee strongly supported an increase in the delegation, stating that $500k is far too low and EIT had recently increased their CE delegated authority to $1M from a functionality perspective.

The Mayor noted that her preference was to maintain status quo from a political perspective.

It was noted that using Council and or the Hearings Committee for approvals has impacts on time frames, due to the report drafting and agenda production requirements.

 

Officer’s Recommendation

The Audit and Risk Committee:

a.     Approve an increase of the financial delegation to the Chief Executive from $500k to $1m

b.     Approve the Delegation to the Chief Executive document dated 5 December 2019

 

 

 

 

Committee's recommendation

The Audit and Risk Committee:

a.     Note the recommendation of the report to increase the financial delegation to the Chief Executive from $500k to $1M, and provide feedback that the independent members support this recommendation while the Mayor’s preference is to retain the current delegation 

b.     Approve the Delegation to the Chief Executive document dated 5 December 2019 subject to Council financial delegation approval

 

 


 

6.    Sensitive Expenditure: Mayor and Chief Executive

Type of Report:

Operational and Procedural

Legal Reference:

N/A

Document ID:

871750

Reporting Officer/s & Unit:

Caroline Thomson, Chief Financial Officer

 

6.1   Purpose of Report

To provide the information required for the Committee to review Sensitive Expenditure of the Mayor and Chief Executive for compliance with Council’s Sensitive Expenditure Policy.

 

At the Meeting

It was noted that the expenditure of the Mayor and Chief Executive must be provided to Audit and Risk Committee for review in the open agenda to comply with Council’s Sensitive Expenditure Policy and to maintain transparency.

 

Committee's recommendation

The Audit and Risk Committee:

a.     Receive the report of Sensitive Expenditure for the Mayor and Chief Executive and review for compliance with the Sensitive Expenditure Policy.

 

 


 

7.    External Accountability: Audit New Zealand Management Report

Type of Report:

Information

Legal Reference:

Local Government Act 2002

Document ID:

871746

Reporting Officer/s & Unit:

Caroline Thomson, Chief Financial Officer

 

7.1   Purpose of Report

To consider the Audit NZ management report to the Council on the audit of Napier City Council for the year ended 30 June 2019 (to be tabled at the meeting).

 

At the Meeting

The Chief Financial Officer tabled the final Audit New Zealand management report, which is unmodified. Mr Lucy of Audit NZ confirmed that they had found that the financial and non-financial statements are materially correct and further that the latter accurately capture and reflect Council’s activities appropriately. He noted that Audit NZ had been happy with how the weathertightness claims were handled, that a lot of consideration had been given to the condition and value of assets, and that the conversation in relation to tax continued.

It was confirmed that Karen Young will be taking over from Mr Lucy in 2020, and the Chair extended thanks and acknowledgment to Mr Lucy for the productive relationship with Council over his tenure and the input he has provided in that time. 

ACTION It was agreed that for those recommendations in the Audit NZ management report which were not annual in nature, an update would be provided to the next Audit and Risk Committee meeting in March 2020.

 

Committee's recommendation

The Audit and Risk Committee:

a.     Receive the Audit NZ management report to the Council on the audit of Napier City Council for the year ended 30 June 2019.

 

 


 

8.    External Accountability: Investment and Debt Report

Type of Report:

Operational

Legal Reference:

N/A

Document ID:

871749

Reporting Officer/s & Unit:

Caroline Thomson, Chief Financial Officer

 

8.1   Purpose of Report

To consider the snapshot report on Napier City Council’s Investment and Debt as at 31 October 2019.

 

At the Meeting

The Chief Financial Officer spoke briefly to the report, noting that a large amount is currently on deposit as it is expected it may be required in the new year.

 

Committee's recommendation

The Audit and Risk Committee:

a.     Receive the snapshot report on Napier City Council’s Investment and Debt as at 31 October 2019.

 

 


 

9.    Internal Audit: Community Grants Management

Type of Report:

Operational

Legal Reference:

Local Government Act 2002

Document ID:

872363

Reporting Officer/s & Unit:

Caroline Thomson, Chief Financial Officer

 

9.1   Purpose of Report

To table to the Committee the internal audit on community grants management undertaken by Council’s internal auditors, Crowe Horwath.

 

At the Meeting

The Chief Financial Officer spoke briefly to the report, noting that the review had found that practices overall were appropriate; of the two minor matters raised through the review, one has already been addressed, and the second is underway and due for completion by 30 June 2020.

 

Committee's recommendation

The Audit and Risk Committee:

a.     Receive the report from Crowe Horwath titled ‘Community Grants Management’.

 

  

 The meeting closed at 3.23pm

 

 

Approved and adopted as a true and accurate record of the meeting.

 

 

Chairperson .........................................................................................................................

 

 

Date of approval ..................................................................................................................