Audit and Risk Committee

Open Agenda

 

Meeting Date:

Friday 20 March 2020

Time:

1pm

Venue:

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

 

 

Committee Members

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

Officer Responsible

Director Corporate Services

Administration

Governance Team

 

Next Audit and Risk Committee Meeting

Friday 12 June 2020

 

 


Audit and Risk Committee - 20 March 2020 - Open Agenda

ORDER OF BUSINESS

Apologies

Nil

Conflicts of interest

Public forum

Nil

Announcements by the Mayor

Announcements by the Chairperson

Announcements by the management

Confirmation of minutes

Minor matters not on the agenda – discussion (if any)

That the Minutes of the Audit and Risk Committee meeting held on Thursday, 5 December 2019 be taken as a true and accurate record of the meeting............................................................................. 183

 

Agenda items

1      Audit and Risk Charter Review....................................................................................... 3

2      Health and Safety Report.............................................................................................. 11

3      Insurance arrangements............................................................................................... 15

4      Sensitive Expenditure: Mayor and Chief Executive....................................................... 25

5      Internal Audit: Fraud Gap Analysis................................................................................ 35

6      INTERNAL AUDIT:  Payroll policy and procedures....................................................... 74

7      External Accountability - Investment and Debt Report................................................. 107

8      External Accountability: Annual Plan 2020/21 Underlying Documents......................... 109

9      External Accountability - Long Term Plan process update........................................... 173

10    COVID-19 (Coronavirus) and Business Continuity Planning........................................ 178  

Public excluded ........................................................................................................... 181


Audit and Risk Committee - 20 March 2020 - Open Agenda                                                                                                                     Item 1

Agenda Items

 

1.    Audit and Risk Charter Review

Type of Report:

Operational

Legal Reference:

N/A

Document ID:

898773

Reporting Officer/s & Unit:

Caroline Thomson, Chief Financial Officer

 

1.1   Purpose of Report

As set out in the Audit and Risk Committee Charter, the Committee will review this Charter in consultation with the Council at least once a year. Any substantive changes to the Charter will be recommended by the Committee, and formally approved by the Council. The last review of the Charter was undertaken July 2018.

 

 

Officer’s Recommendation

The Audit and Risk Committee:

a.     Review the Audit and Risk Committee Charter

b.     Provide any recommended changes for Council approval

 

 

Chairperson’s Recommendation

That the Committee resolve that the officer’s recommendation be adopted.

1.2   Background Summary

The Officers have reviewed the Audit and Risk Committee Charter and have inserted a section under Risk Management to include the Committee’s responsibility to Health and Safety as recommended at the Audit and Risk Committee meeting on 5 December 2019.

 

 

1.3   Attachments

a     Audit and Risk Committee Charter - revised March 2020   


Audit and Risk Committee - 20 March 2020 - Attachments

 

Item 1

Attachments a

 

 

CHARTER

 

 

 

 

Audit and Risk Committee Charter

Approved by

Council

Department

Corporate Services

Original Approved Date

18 September 2018

Review Approval Date

20 March 2020

Next Review Deadline

18 September 2020

Control Doc ID

325090

Relevant Legislation

Local Government Act 2002

NCC Documents Referenced

Code of Ethics

a.            Objective

The objective of the Audit and Risk Committee (the Committee) is to provide independent, objective assurance and assistance to the Napier City Council (the Council) on the Council’s governance, risk management, internal control and compliance frameworks, and its external accountability responsibilities.

b.            Authority

The Napier City Council, at its meeting on 2 November 2016, re-established the Audit and Risk Committee for the 2016-19 triennial.  The Council authorises the Committee, within the scope of its role and responsibilities, to:

·   obtain any information it needs from any employee and/or external party (subject to their legal obligation to protect information);

·   discuss any matters with the external auditor, or other external parties (subject to confidentiality considerations);

·   request the attendance of any employee, including the Chief Executive, the Director of Corporate Services and the Chief Financial Officer at Committee meetings; and

·   obtain external legal or other professional advice, as considered necessary to meet its responsibilities, at the Council’s expense.

c.             Composition and Tenure

The Committee will consist of five members appointed by the Council.  These must include the Mayor, the Chair of the Finance Committee and the Deputy Chair of the Finance Committee (or other nominated person). The Council will also select two independent members.

The Napier City Council will appoint the chairperson of the Committee.

Members will be appointed for an initial period not exceeding three years after which they will be eligible for extension or re-appointment, after a formal review of their performance.

Council representatives on the Committee will carry out their duties as outlined in the Charter, recognizing the difference in role of the Committee compared to Councillor community advocate.

The Chief Executive, the Director of Corporate Services and the Chief Financial Officer will not be members of the Committee, but may attend meetings as observers as determined by the Chairperson.


 

The members, taken collectively, will have a broad range of skills and experience relevant to the operations of the Council.  At least one independent member of the Committee should have accounting or related financial management experience with an understanding of accounting and auditing standards in a public sector environment.

d.            Role and Responsibilities

The Committee has no executive powers and will conduct itself in accordance with the values and ethics of the Council.

The Committee is directly responsible and accountable to the Council for the exercise of its responsibilities. In carrying out its responsibilities, the Committee must at all times recognise that primary responsibility for management of the Council rests with the Chief Executive.

The responsibilities of the Committee may be revised or expanded in consultation with, or as requested by, the Napier City Council from time to time.

e.            Risk Management

The Committee's responsibilities are to:

·   review whether management has in place a current and comprehensive risk management framework, and associated procedures for effective identification and management of Napier City Council’s financial and business risks, including fraud;

·   review whether a sound and effective approach has been followed in developing strategic risk management plans for major projects or undertakings;

·   review the effect of the Council’s risk management framework on its control environment and insurance arrangements;

·   review whether a sound and effective approach has been followed in establishing the Council’s business continuity planning arrangements, including whether disaster recovery plans have been tested periodically; and

·   review the Council’s internal controls in relation to preventing fraud and satisfy itself that the Council has appropriate processes and systems in place to capture and effectively investigate fraud-related information and to ensure appropriate action is taken against known perpetrators of fraud.

f.              Health and Safety

The Committee’s responsibilities are to:

 

·      review key risks of the Council in the areas of safety, occupational health and environmental issues

 

·      review management’s approach to maintaining and continual improvement to providing a safe working environment is sound and effective

 

·      review compliance of relevant laws, regulations and operational policies and standards

 

·      review the establishment and tracking of measurable workplace health, safety and environment key targets

 

 

g.            Control Framework

The Committee's responsibilities are to:

·   review whether management's approach to maintaining an effective internal control framework, including over external parties such as contractors and advisers, is sound and effective;

·   review whether management has in place relevant policies and procedures, and that these are periodically reviewed and updated;

·   determine whether the appropriate processes are in place to assess, at least once a year, whether policies and procedures are complied with;

·   review whether appropriate policies and procedures are in place for the management and exercise of delegations;

·   consider how management identifies any required changes to the design or implementation of internal controls; and

·   review whether management has taken steps to embed a culture which is committed to ethical and lawful behavior.

h.            External Accountability

The Committee's responsibilities are to:

·   review the financial statements and provide advice to the Council, including whether appropriate action has been taken in response to audit recommendations and adjustments;

·   satisfy itself that the financial statements are supported by appropriate management sign-off on the statements and on the adequacy of the systems of internal controls;

·   review the processes in place designed to ensure that financial information included in the Council’s annual report is consistent with the signed financial statements;

·   review the processes and risk assessment are in place for the development and adoption of the Council’s Long Term Plan;

·   satisfy itself that the Council has appropriate mechanisms in place to review and implement, where appropriate, relevant external audit reports and recommendations; and

·   satisfy itself that the Council has a performance management framework that is linked to organisational objectives and outcomes.

i.              Legislative Compliance

The Committee's responsibilities are to:

·   determine whether management has appropriately considered legal and compliance risks as part of the Council’s risk assessment and management arrangements; and

·   review the effectiveness of the system for monitoring the Council’s compliance with relevant laws, regulations, and associated government policies.

j.              Internal Audit

The Committee's responsibilities are to:

·   act as a forum for communication between the Chief Executive, senior management, and internal and external auditors;

·   review the internal audit coverage and annual work plan, ensure that the plan is based on the Council’s risk management plan, and recommend approval of the plan on behalf of the Council;

·   advise the Mayor and Chief Executive on the adequacy of resources to carry out the internal audit, including completion of the approved internal audit plan;

·   oversee the co-ordination of audit programs conducted by the internal and external auditors and other review functions;

·   review all audit reports and provide advice to the Council on significant issues identified in audit reports and action taken on issues raised, including identification and dissemination of good practice;

·   monitor management's implementation of the internal auditor's recommendations;

·   review the internal audit charter to ensure that appropriate organisational structures, authority, access, and reporting arrangements are in place;

·   provide advice to the Council on the appointment of the Head of Internal Audit (in the case of an in-house internal audit function);

·   recommend the appointment of the internal auditor;

·   periodically review the performance and effectiveness of the internal auditor; and

·   be satisfied that any dismissal of the Head of Internal Audit is based on proper and appropriate reasons, to safeguard the independence of the audit function.

k.            External Audit

The Committee's responsibilities are to:

·   act as a forum for communication between the Chief Executive, senior management, and internal and external auditors;

·   provide input and feedback on the financial statements and the audit coverage proposed by the external auditor, and provide feedback on the audit services provided;

·   review all external plans and reports for planned or completed audits and monitor management's implementation of audit recommendations;

·   oversee the co-ordination of audit programs conducted by the internal and external auditors and other review functions: and

·   provide advice to the Council and Chief executive on action taken on significant issues raised in relevant external audit reports and good practice guides.

l.              Governance

Responsibilities of Committee Members

Members of the Committee are expected to:

·   contribute the time needed to study and understand the papers provided;

·   apply good analytical skills, objectivity, and good judgment; and

·   express opinions frankly, ask questions that go to the core of the issue, and pursue independent lines of enquiry.

Reporting

The Committee will regularly, but at least once a year, report to the Council on its operation and activities during the year. The report should include:

·   a summary of the work the Committee performed to fully discharge its responsibilities during the preceding year;

·   a summary of the Council’s progress in addressing the findings and recommendations made in internal and external audit reports, and the Auditor-General's reports (if applicable);

·   an overall assessment of the Council’s risk, control, and compliance framework, including details of any significant emerging risks or legislative changes; and

·   details of meetings, including the number of meetings held during the relevant period and the number of meetings each member attended.

The Committee may, at any time, report to the Chief Executive or the Council any other matter it deems of sufficient importance to do so.  In addition, at any time an individual Committee member may request a meeting with the Chief Executive or the Council.

m.         Administrative Arrangements

Meetings

The Committee will meet at least four times each year. A special meeting may be held to review the annual report.

The Chairperson is required to call a meeting if requested to do so by the Council, Chief Executive or another Committee member.

A meeting plan, including dates and agenda items, will be agreed by the Committee each year.  The meeting plan will cover all of the Committee's responsibilities as detailed in this charter.

Attendance at Meetings and Quorums

A quorum will consist of a majority of Committee members including at least one independent member.

Meetings can be held in person, by telephone, or by video conference.

The Head of Internal Audit and external audit representatives will be invited to attend each meeting, unless requested not to do so by the Chairperson of the Committee.

The Chief Executive may be invited to attend Committee meetings to participate in specific discussions or provide strategic briefings to the Committee.  The Committee may also ask other employees to attend Committee meetings or participate for certain agenda items.

The Committee will meet separately with both the internal and external auditors at least once a year.

Secretariat

The Chief Executive will appoint a person to provide secretariat support to the Committee. The Secretariat will ensure that the agenda for each meeting and supporting papers are circulated, after approval from the Chairperson, at least one week before the meeting, and ensure that the minutes of the meetings are prepared and maintained. Minutes must be approved by the Chairperson and circulated within two weeks of the meeting to each member and Committee observers, as appropriate.

Conflicts of Interest

Once a year, Committee members will provide written declarations to the Mayor, stating they do not have any conflicts of interest that would preclude them from being members of the Committee.

Committee members must declare any conflicts of interest at the start of each meeting or before discussion of the relevant agenda item or topic. Details of any conflicts of interest should be appropriately recorded in the minutes.

Where any member is deemed to have a real, or perceived, conflict of interest at a Committee meeting, it may be appropriate that they are excused from Committee deliberations on the issue where the conflict of interest exists.

Induction

New members will receive relevant information and briefings on their appointment to assist them to meet their Committee responsibilities.

Assessment Arrangements

The Chairperson of the Committee, in consultation with the Mayor, will initiate a review of the performance of the Committee at least once every two years. The review will be conducted on a self-assessment basis (unless otherwise determined by the Mayor) with appropriate input sought from the Chief Executive, the internal and external auditors, management, and any other relevant stakeholders, as determined by the Mayor in discussion with the chairperson of the Committee.

Review of Charter

At least once every 2 years, the Committee will review this charter. This review will include consultation with the Council. Any substantive changes to the charter will be recommended by the Committee and formally approved by the Council.

 

Policy Review

The review timeframe of this policy will be no longer than every two years.

 

 

 

 

Document Control History

 

Version

Reviewer

Change Detail

Date

1.0.0

Caroline Thomson

Initial publication

14 December 2016

2.0.0

Caroline Thomson

Review process

01 August 2018

3.0.0

Caroline Thomson

Republication (nb: version control issues)

18 September 2018

4.0.0

Raewyn Robertson

Review process and add in Health and Safety

20 March 2020

 


Audit and Risk Committee - 20 March 2020 - Open Agenda                                                                                                                     Item 2

2.    Health and Safety Report

Type of Report:

Operational

Legal Reference:

N/A

Document ID:

908475

Reporting Officer/s & Unit:

Sue Matkin, Manager People & Capability

 

2.1   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 January 2020.

 

 

Officer’s Recommendation

The Audit and Risk Committee:

a.     Receive the Health and Safety report as at  31 January 2020

 

 

Chairperson’s Recommendation

That the Committee resolve that the officer’s recommendation be adopted.

2.2   Background Summary

The Health and Safety report as at 31 January 2020 is shown at Attachment A

 

 

2.3   Attachments

a     Health & Safety Report 31 January 2020   


Audit and Risk Committee - 20 March 2020 - Attachments

 

Item 2

Attachments a

 

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Audit and Risk Committee - 20 March 2020 - Open Agenda                                                                                                                     Item 3

3.    Insurance arrangements

Type of Report:

Operational

Legal Reference:

N/A

Document ID:

908314

Reporting Officer/s & Unit:

Bryan Faulknor, Manager Property

 

3.1   Purpose of Report

To outline Council’s current insurance programme, discuss any issues and to provide the opportunity for the Committee to provide feedback for insurance arrangements for the upcoming financial year 2020/21.

 

 

Officer’s Recommendation

The Audit and Risk Committee:

a.     Resolve to receive the report on current insurance arrangements.

b.     That any feedback from the committee be considered for incorporation into the insurance arrangements for the insurance year commencing 1 July 2020.

 

 

Chairperson’s Recommendation

That the Committee resolve that the officer’s recommendation be adopted.

3.2   Background Summary

Napier City Council is part of the Hawke’s Bay Councils Collective Insurance Group. A number of policies have shared limits. Major policies outside of the Collective are Public Liability and Professional Indemnity, and Underground Infrastructure.

Officers need to place insurance arrangements by 1 July each year. Terms are arranged in conjunction with the group’s insurance broker Marsh Ltd. and after discussions within the collective group of Councils.

 

Summary of current Insurance 1 July 2019 to 30 June 2020:

 

Material Damage

Covering Buildings, Contents, Plant & Machinery and other property as listed in the Insurance Property Schedule. No shared limited with other Councils.

Sum Insured $440.4m.

Excess – Perils $10,000 per claim. Earthquake 2.5% site sum insured and where pre 1936 or earthquake prone 10% of site sum insured.

 

Material Damage – Residential

Covering Residential Dwellings and Community Housing as listed $74.6m. Excess as above. No Shared limit with other Councils.

 

 

Business Interruption

Policy linked to Material Damage.

Loss of Revenue- $12.9m covering - Halls, Pools, Aquarium, Par2, Conference Centre, Municipal Theatre, I-site, Kennedy Park, MTG.

Additional expenses- $20m (shared limit with other Councils).

Indemnity period – Additional expenses 36 months, Loss of revenue 24 months.

 

Motor Vehicle & Third Party

All vehicles, other mobile plant and equipment. Excess $1,000 per claim. No shared limit with other Councils.

 

Crime Insurance

Insures loss of money and property resulting from fraud or dishonesty of Employees. Limit of Indemnity $2m, Excess $25,000. No shared limit with other Councils.

 

Employers Liability

Indemnity in respect of claims made by employees against employer for personal injury falling outside any Workers Compensation legislation. Limit of indemnity $1m. Shared limit with other Councils.

 

Statutory Liability Insurance

Indemnity for Defence costs and fines as a result of an alleged breach of any Act of Parliament other than “Excluded Acts’. Limit of Indemnity $4m (shared limit with other Councils). Excess $5,000.

Cover is included for statutory breaches of the Resource Management Act with an excess of $50,000.

 

Overseas Travel

Covering employees and elected members for overseas travel. No shared limit.

 

Marine Hull

National Aquarium of NZ Boat

 

Hall Hirers Insurance

Public Liability Insurance for uninsured users of Council facilities. No shared limit.

 

Fine Arts Collection Insurance

HB Museums Trust Collection $40.1m. Excess $2,500.

 

Trustee Liability

HB Museums Trust, $5m any one claim and in the aggregate during policy period. Excess $5,000.

 

Public Liability and Professional Indemnity

Current Cover:

$300m any one claim and in the aggregate during the policy period. (Excludes claims against Council in relation to weather tightness issues). Excess $10,000 PI and $5,000 PL. No shared limit.

Future:

At this point Council has received no indications from Insurers that current cover will not continue. However Council’s Insurance Brokers advise that, due to various recent matters surrounding building weather tightness insurance issues, there may still be potential ramifications for Council. These possible effects include any or a combination of significant premium increases, claims arising from Council’s building control function being excluded, or Insurers withdrawing cover all together. Matters will become clearer at renewal time in May/June.

 

Underground Infrastructure

For 2019/20 Council placed cover as per previous years. Cover is based on a Probable Maximum Loss (PML) of $120m based on a total replacement value of underground infrastructure of $587.8m. Actual insurance cover is based on the assumption that Central Government assistance will be available in a major disaster and will provide for 60% of the eligible costs. Council therefore has insurance cover for $40% of $120m with a $10m excess.

See below for further comments under 1.3 Issues.

 

Contract Works Insurance

This is taken out as required for construction projects. In general where a project consists of alterations and improvements to an existing insured asset then Council takes out contract works insurance directly. For green fields construction the contractor is required pursuant to the construction contract to take out cover.

 

Uninsured Assets

Uninsured assets include roads, bridges and associated assets. In the event of a major disaster support is anticipated to come from Central Government to reinstate the roading network.

 

Other uninsured assets consist of land, playground equipment, sports fields and reserves, turf, plants and trees, paved surfaces, associated roads, irrigation and other land improvements. Lagoon Farm livestock, hay, water supply and other improvements. Paved surfaces and roading relating to the Depot, Housing Villages, and Transfer Station.

 

Funding of Uninsured Risks and amounts over and above any insurance recovery and Government support would be provided from a combination of reserve funds, debt, and reprioritisation of Council’s planned capital and operating expenditure.

 

3.3   Issues

Underground Infrastructure: As mentioned above, subject to Cabinet approval, upon a major disaster it is assumed that the Government will provide a 60% subsidy for eligible Infrastructure recovery costs. Council must demonstrate that it is able to meet the remaining 40% through insurance or other financial means. Attached are relevant Government financial support factsheets produced by the Ministry of Civil Defence & Emergency Management, these are also available on the Ministry’s website.

It is obviously important to have an understanding of a Probable Maximum Loss (PML) on which to base Council’s insurance, as not all the infrastructure would be damaged in a major event.

A natural catastrophe modelling exercise in respect of below ground assets was last carried out for Napier City Council in 2015.

As a first step in enabling an updated loss modelling exercise to be carried out the 5 Hawke’s Bay Council’s in conjunction with the Manawatu Councils participated in  a valuation benchmarking exercise in 2019. The exercise revealed potential improvements in the current process adopted by each Council and showed that replacement cost unit rates are inconsistent between Councils.

In response to the benchmarking exercise the Council’s intend to engage professional advice around the process that the Hawke’s Bay Councils should follow in deciding appropriate values for its insurance cover. It is intended that this will occur by the end of May 2020. The focus is to develop accurate and consistent valuation methodologies that form the foundations of our risk financing solutions to:

·     Feed into the loss models

·     Determine financial exposure

·     Optimise the risk transfer programme

·     Reduce insurers uncertainty

·     Enhance claim resolution

3.4   Significance and Engagement

N/A

3.5   Implications

Financial

Insurance premiums are budgeted each year but do fluctuate depending on market conditions.

Social & Policy

N/A

Risk

Insurance is an important aspect of managing Council’s risk. There are no indications that cover will not be available for the 2020/21 year.

3.6   Options

The options available to Council are as follows:

a.     To receive the report

b.     To receive the report and suggest changes to the insurance renewal programme for 2020/21.

3.7   Development of Preferred Option

N/A

 

3.8   Attachments

a     Government financial support factsheets - produced by the Ministry of Civil Defence & Emergency Management   


Audit and Risk Committee - 20 March 2020 - Attachments

 

Item 3

Attachments a

 

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Audit and Risk Committee - 20 March 2020 - Open Agenda                                                                                                                     Item 4

4.    Sensitive Expenditure: Mayor and Chief Executive

Type of Report:

Operational and Procedural

Legal Reference:

N/A

Document ID:

896888

Reporting Officer/s & Unit:

Caroline Thomson, Chief Financial Officer

 

4.1   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.

 

Officer’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.

 

 

Chairperson’s Recommendation

That the Commitee resolve that the officer’s recommendation be adopted.

4.2   Background Summary

The Sensitive Expenditure Policy approved by the Senior Leadership Team on 17 September 2019 requires a report of all sensitive expenditure by the Chief Executive and by the Mayor to Audit and Risk Committee meetings (clauses 6.3 and 6.4). The policy also states that the expenditure items will be reviewed by the Chairperson or the Deputy Chairperson of the Audit and Risk Committee for compliance with this policy.

4.3   Issues

No issues.

4.4   Significance and Engagement

N/A

4.5   Implications

Financial

N/A

Social & Policy

N/A

Risk

N/A

 

 

4.6   Attachments

a     Sensitive  Expenditure item Q2 - Mayor and Chief Executive

b     NCC Sensitive Expenditure Policy   


Audit and Risk Committee - 20 March 2020 - Attachments

 

Item 4

Attachments a

 

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Audit and Risk Committee - 20 March 2020 - Attachments

 

Item 4

Attachments b

 

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Audit and Risk Committee - 20 March 2020 - Open Agenda                                                                                                                     Item 5

5.    Internal Audit: Fraud Gap Analysis

Type of Report:

Operational

Legal Reference:

Local Government Act 2002

Document ID:

823532

Reporting Officer/s & Unit:

Caroline Thomson, Chief Financial Officer

 

5.1   Purpose of Report

To table to the Committee the internal audit on fraud gap analysis undertaken by Council’s internal auditors, Crowe.

 

Officer’s Recommendation

The Audit and Risk Committee:

a.     Receive the report from Crowe titled ‘Fraud Gap Analysis’

 

 

Chairperson’s Recommendation

That the Committee resolve that the officer’s recommendation be adopted.

5.2   Background Summary

Napier City Council is a significant employer serving the Napier Community. Council has a responsibility to ensure that:

·    It maintains good and effective governance: this includes financial responsibility, compliance and a good employer.

·    It identifies and mitigates risks to both Council and staff.  This necessarily extends to the health and safety of all staff.

·    Appropriate policies, procedures, practices and controls are in place and complied with.

·    Legislation and contractual arrangements are complied with.

Council continues to monitor and review its compliance through its Internal Audit programme.

5.3   Issues

A fraud risk analysis was undertaken to assess the effectiveness of the existing fraud risk management strategies in terms of prevention, detection and investigation of fraud.

The review concluded that whilst specific fraud policies and processes specifically designed to prevent, detect and respond to fraud exist, further development of these plans and strategies is required.

There were two recommendations that are considered high priority:

·     Council to perform a full assessment of the risk of fraud, bribery and corruption. These risk assessments should be undertaken on an ongoing periodic basis to ensure that new and merging risk continue to be identified assessed and actioned.

·     Fraud awareness training delivered to appropriate employees on induction and on a regular basis.

 

The report provides a clear action plan on how to deal with identified performance gaps.

Attachment A contains detailed findings and practical recommendations for improvement across the identified areas together with management actions for the 2 high, 3 medium and 5 low risks identified.

 

5.4   Significance and Engagement

N/A

5.5   Implications

Financial

N/A

Social & Policy

N/A

Risk

N/A

 

 

5.6   Attachments

a     Internal Audit - Fraud Gap Analysis

b     NCC Fraud Policy   


Audit and Risk Committee - 20 March 2020 - Attachments

 

Item 5

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Audit and Risk Committee - 20 March 2020 - Attachments

 

Item 5

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Audit and Risk Committee - 20 March 2020 - Open Agenda                                                                                                                     Item 6

6.    INTERNAL AUDIT:  Payroll policy and procedures

Type of Report:

Operational

Legal Reference:

Local Government Act 2002

Document ID:

908898

Reporting Officer/s & Unit:

Raewyn Robertson, Accounting Manager

 

6.1   Purpose of Report

To table to the Committee the internal audit on payroll undertaken by Council’s internal auditors, Crowe.

 

 

Officer’s Recommendation

The Audit and Risk Committee:

a.     Receive the report from Crowe, Internal Auditors, titled ‘Payroll Internal Audit’

 

 

 

Chairperson’s Recommendation

That the Committee resolve that the officer’s recommendation be adopted.

6.2   Background Summary

Crowe, Council’s internal auditors, have undertaken a payroll internal audit.  The scope of this audit included review Council’s policy and procedures, access rights, segregation of duties, appropriate approval, payroll processes, reporting. 

6.3   Issues

The report noted that the Council’s current payroll system has limited functionality with a large amount of manual data input required increasing risk of error, and that Council has a high inherent risk of compliance with the Holidays Pay Act 2003 due to the mix of full-time and casual staff. 

The review resulted in five recommendations, one of which was considered high priority:

·     Compliance with Holiday Pay Act 2003

The report provides details of agreed management actions. 

Currently a business case for the implementation for a new payroll system, which includes a timesheet system, has been written and accepted by SLT.  A business analyst is now gathering requirements to write a Request for Proposal in Quarter 4 of 2019/20 financial year, with the earliest expectation of implementation being Quarter 1 of 2020/21financial year.  The requirements will also include advice on compliance with the Holiday Pay Act. 

 

 

Attachment A contains detailed findings and practical recommendations for improvement across the identified areas together with management actions for the 1 high, 2 moderate and 2 low risks identified.

6.4   Significance and Engagement

N/A

6.5   Implications

Financial

N/A

Social & Policy

N/A

Risk

N/A

 

6.6   Attachments

a     Payroll Internal Audit, Crowe   


Audit and Risk Committee - 20 March 2020 - Attachments

 

Item 6

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Audit and Risk Committee - 20 March 2020 - Open Agenda                                                                                                                     Item 7

7.    External Accountability - Investment and Debt Report

Type of Report:

Operational

Legal Reference:

N/A

Document ID:

908476

Reporting Officer/s & Unit:

Caroline Thomson, Chief Financial Officer

 

7.1   Purpose of Report

To consider the snapshot report on Napier City Council’s Investment and Debt as at 29 February 2020.

 

 

Officer’s Recommendation

The Audit and Risk Committee:

a.     Receive the snapshot report on Napier City Council’s Investment and Debt as at 28 February 2020.

 

 

Chairperson’s Recommendation

That the Committee resolve that the officer’s recommendation be adopted.

7.2   Background Summary

The snapshot report on Napier City Council’s Investment and Debt as at 29 February 2020 is shown at Attachment A.

 

 

7.3   Attachments

a     Investment and Debt Report as at 29 February 2020   


Audit and Risk Committee - 20 March 2020 - Attachments

 

Item 7

Attachments a

 

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Audit and Risk Committee - 20 March 2020 - Open Agenda                                                                                                                     Item 8

8.    External Accountability: Annual Plan 2020/21 Underlying Documents

Type of Report:

Operational

Legal Reference:

Local Government Act 2002

Document ID:

909954

Reporting Officer/s & Unit:

Caroline Thomson, Chief Financial Officer

 

8.1   Purpose of Report

That the Committee review and provide feedback to Council on the Annual Plan 2020/21 underlying financial information prior to the final adoption of the reports.

 

Officer’s Recommendation

The Audit and Risk Committee:

a.     Receive the underlying information as the basis for the Annual Plan consultation document 20/21:

i.    Capital plan changes

ii.    10 year revised capital plan

iii.   Financial information

b.     Provide feedback from the review of the draft Annual Plan 20/21 underlying financial information to the Council meeting on 31 March 2020.

 

 

Chairperson’s Recommendation

That the Committee resolve that the officer’s recommendation be adopted.

8.2   Background Summary

The process to develop council’s annual budget for 2020/21 involved a series of workshops with Councillors to set direction on the budget.  These seminars occurred on 27 November, 4 December, 12 December, 23 January, 5 February, 10 February, and 20 February.  Councillors were provided with cost pressures and efficiencies that could be made, and set direction to stay within the financial caps as outlined in the Finance Strategy.

The average rates increase approved in the Long Term Plan 2018-28 was 5.1%. 

The proposed rates increase for 2020/21 will be 6.5% average increase in rate requirement for existing ratepayers.

8.3   Issues

Kerbside rubbish collection 

During December 2017 consultation with the community occurred around the joint Waste Minimisation and Management Plan (WMMP).  Over 7,000 submissions were received by Napier and Hastings as part of this process and the preferred options were adopted by Council 4 September 2018.   The preferred option voiced by the community regarding waste collection, was an option of wheelie bins as a collection receptacle for a Council-provided kerbside waste collection service for residential properties and select commercial properties.  In 2019/20, Council signalled in its Annual Plan that it would go out to tender for a contract for the waste collection service and this contract has now been let and the enhanced service will commence on 1 July 2020.  

Ø For the purposes of the Annual Plan 2020/21, the cost of implementation will be smoothed over two years by utilising Council reserves in Year 1 (20/21).

Ø For 20/21, Average rates will increase by 1.3% to account for the changes associated with WMMP. 

Ø The approximate increase to rates in 21/22 is likely to be 0.8%. 

Ø The enhanced service includes the provision of a 120L Council-owned wheelie-bin for weekly collection of rubbish.  In an effort to incentivise customers to put out less waste, a fortnightly opt-in solution will be available in the future.

Ø In the commercial areas, an ability to have waste collected up to 3 times per week will be provided based on the level of payment per rated unit (if the rates bill for the property has 3 charges, the property will receive 3 collections).

 

        Water Supply 

In the deliberations for the 2019/20 Annual Plan, Council highlighted water is the number one priority.  At that time, Council agreed to a re-calibration of the water supply capital works programme and brought forward $7.8M of projects to improve the water supply.  Since that time, officers developed a Water Supply Model and Water Supply Masterplan for Napier.  The masterplan has led to a review of overall priorities and several new projects have been added.  These tools enable Council to develop the key projects required to deliver a safe, quality, resilient water supply to Napier into the future.  Council are aiming to deliver the following projects in 20/21, with the main goal for Council’s water team to provide low manganese water to the network:

·     2 new bores, treatment and connecting mains into our network to have low manganese water

·     2 x test bores to confirm the quality and flow at our proposed new borefield sites and finalising their location

·     Ongoing investigation into an appropriate site for a replacement reservoir on the Napier hill and potential site purchase (if not already completed)

·     Development of a zone for Tamatea and Parklands to manage dirty water and to start on leakage management

·     Design of the water treatment plants

·     Design of the mains connecting borefields to reservoirs and back to the network

·     Improvements to the network for fireflow

·     More access points to the network for cleaning.

 

A major factor in the delivery of the identified projects is the process of gaining a new “global” resource consent from the Hawke’s Bay Regional Council for Napier’s water supply. A key part of this consent will be understanding where Napier can locate the proposed new borefields, and their impact on the surrounding water users and the local rivers. Water conservation will be a key input into the Resource Consent application as well as assessments around the environmental impacts of Napier’s water takes.

 

Napier’s water take resource consent is due for renewal in 2027. The renewal application will take years to develop supporting documentation so Council will be progressing this with the new borefield projects. This will provide Council with certainty around the community water supply for the next 30 years and the goals that Napier need to achieve around water conservation.

Ø For the purpose of the Annual Plan 2020/21, there is $7.3 million in new requirements, however there is no rates impact to 20/21.  There is a rates impact for 21/22 of 0.6%. 

Ø Councillors have a choice of fully consulting on these new projects or informing the community of this proposal.  Given the level of interest in water Councillors have set direction to inform the public of the water projects.  The public will still have the ability to provide feedback during consultation.

Ø Provide new funding of $200k for the development of a Water Safety Plan, funded from renewals.    

Ø Due to the second major recalibration of the water supply programme since the LTP was adopted in 2018 (the first being in the development of the annual plan 2019/20),  a separate report will be brought to Council on the Water Supply Masterplan, and if adopted, the Water Supply Masterplan will form part of the supporting documentation for the Annual Plan 2020/21 consultation document.  

 

        Safe Chlorine-free drinking water review

In 2019/20, Council commissioned for an independent review to identify the costs and options for developing Napier’s water network into a modern, resilient water supply with either chlorine as a way to manage health risk or going chlorine-free.

The Safe Chlorine Free Drinking Water Review will deliver a business case outlining the two main options for drinking water supply:

1.   Maintaining our current planned service delivery, with residual Chlorine disinfection as the main safety barrier, and implementing the new Water Safety Plan framework and

2.   Developing options for a chlorine free network that the Ministry of Health are likely to approve as an appropriate alternative.

The business case will include the technical considerations of both options and likely costs. These options will then form the basis of consultation with our community on the preferred option.

The review/business case will need to be developed in conjunction with the New Zealand Ministry of Health (MoH) The MoH has indicated that residual disinfection may become compulsory for New Zealand water supplies unless a demonstrably safe alternative is provided. This project will investigate what the safe alternative could be, and the time and cost to implement it. Working with the MoH will help to ensure that any option proposed through the review/business case is likely to be accepted as an alternative to residual disinfection.

Ø For the purpose of the Annual Plan 2020/21, Council has prioritised the review and allocated extra funds because the cost of the review is unknown until the tender process is complete. 

Ø Extra funding for the Chlorination Review of $200k, funded from loans-rates which will impact on rates in 21/22.

 

Wastewater Outfall Pipeline   

Officers have identified a need to repair a seepage and are carrying out additional monitoring to assess effects upon the environment.  No repair method has been able to be carried out to date.   Council has added an extra $4 million to enable repair or replacement of the current outfall pipeline – this will be integrated into investigations and capital works to not only repair but to enable improved treatment methodologies, increase storage, and improve conveyance and diffusion of wastewater to the ocean or via alternative methods of disposal. 

Ø For the purpose of the Annual Plan 2020/21, an extra $4 million has been added to the capital plan from renewals.   

Ø It is currently unknown how much funding will actually be needed until investigations are further underway.  Fixing the outfall has been highlighted as a risk in the risk section and officers will bring back to Council any further costings once the investigation process is further underway. 

 

        Library site selection

Officers have investigated site options for a new Napier Library, which included a long list of 17 site options, where three were identified as being strongly aligned to the best site criteria requirements, and were investigated in more detail.  Two of the three sites have subsequently been deemed to be unsuitable for a variety of reasons.  The remaining option being a refit or rebuild on the original site, has been identified as the proposed option. 

A separate report will be brought to Council detailing analysis of the three options with the proposed engagement and consultation approach on the preferred option.  It should be noted that the consultation is limited to the site selection and is not about the options for the construction and development of any building at this time.  Options around the build will be brought to Council and the community in a separate process once further investigations and analysis has been undertaken. 

Ø The proposed library site option will be consulted on with the community as part of the Annual Plan 20/21 consultation process subject to Council adopting the current library site as its proposed option.  Legal advice is being sought on whether this matter require a separate special consultative procedure or whether it can be undertaken through the Annual Plan consultation process.

 

        Te Awa Development

Officers have identified the requirement to provide infrastructure now to support private development at Te Awa.  In the LTP it was not anticipated that development would occur at such a rate.  Council needs to ensure that it provides adequate infrastructure to enable development and deliver to its requirements under the National Policy Statement for Urban Development Capacity for areas zoned for residential development. 

Ø For the purpose of the Annual Plan 20/21, new requirements of $2.3 million have been identified to support the Te Awa Structure Plan. Of which, $500k is for wastewater, $1 million for stormwater, and $800k for transport.   There is no rates impact as it will be funded by development contributions.  

Ø Officers are developing a Masterplan for Te Awa (Structure Plan) and this will be presented to Council once complete.  

 

        Major Projects/Shared Service/Internal Delivery of services

As part of Council’s ongoing review of the delivery of services, Council has considered its personnel requirements for the delivery of both its internal operations and capital works programme for 2020/21.

Key drivers for improved internal delivery of services:

ü Increased level of capital projects

ü Stormwater Bylaw implementation

ü Water programme implementation

ü Increased compliance and environmental requirements e.g. water testing

ü Central government minimum wage adjustments and Remuneration Authority

ü Statutory and legislative requirements (H&S).

ü Community Engagement

ü Long Term Plan additional resourcing requirements

ü Governance support for professional development, resourcing and meeting Local Government requirements for Elected Members. 

 

        Street Management

Council’s Street Management Programme provides patrols in the CBD, supports a CCTV network in Ahuriri, CBD, Taradale, Maraenui and Marewa shopping centres, and supports the Outreach Programme (for the homeless).

       

The CBD patrols were implemented as a temporary measure in 2016 to help curb the rising issue of begging and rough sleeping in the CBD.

 

The Street Management Programme was reviewed last year and officers are currently investigating the option to change the patrols into ambassador roles and to bring the CCTV network in-house.  In the meantime, the CCTV network, currently managed by an external Trust is failing and in need of replacement.

 

Ø For the Annual Plan 20/21, Council has allocated $500k to replace and expand the network using the latest technology and will manage the network itself.  This capital investment will enable the network to add cameras with the ability to include mobile technology and to add further cameras easily.  Council will work with Police, incorporating data and feedback from the community on camera locations.

Ø A future operating model for patrols is still under consideration.

 

        Community Housing

Council provides 376 housing units across 12 villages, with the majority (304) being retirement flats. This housing supports people on a low income with low assets and a special housing need.

 

The housing stock is old and while it has been maintained, there has been little improvement or renewal work done on the units. There is limited accessibility, space and facilities. The new healthy homes standards require Council to heavily invest in heating, ventilation and insulation in the units.

 

Income from the subsidised rents is used to maintain the units and provide the service. This year, for the first time in over a decade, Council reviewed the subsidy levels for rent.  While there were increases applied, the current income from rent will not cover the projected costs to maintain the housing over the next 10 years.

 

Officers have investigated several options for the provision of housing and are currently undertaking a detailed analysis of two shortlisted options. One option is to sell or lease  all of the housing portfolio to another entity and the other is to retain part or all of the housing but reconfigure the stock (i.e. remove and rebuild and/or sell some of the units).  Consultation will occur with the community, including our current tenants, before any decision is made.

 

Ø For the Annual Plan 20/21, existing renewal funds have been utilised to start funding the new heathy homes requirement of $1.6 million. 

 

        Te Pihinga

Te Pihinga (a new horizon) is an urban redevelopment project focussed on growing economic and social prosperity in Maraenui. Officers are working with a number of agencies including, Kāinga Ora to utilise land for housing development and community facilities that will encourage a thriving community where people live to their full potential.

 

Officers are working with the community currently to create a concept design for a community facility that will support employment, training, and entrepreneurship with a focus on Rangatahi as well as whanau development. The facility will act as an incubator and will provide access to digital technology.

       

Ø For the Annual Plan 20/21, there is some capital funding allocated of $1 million, and $1 million for 21/22, with additional funding being sought from other funding providers.

 

Whakarire Revetment

A revetment is a rock structure on the shoreline that prevents erosion from king tides and storm events. Council have a resource consent to build a revetment that will protect the reserve and properties on Whakarire Avenue. As well as providing protection to the land, the project will reinstate the public’s access to the reserve. This project is included in Council’s Long Term Plan 2018-28 as funded by general rates. Council then undertook a LGA Section 101 (3) review to ascertain the public/private benefit resulting from the project. Officers provided recommendations to Council on 16 October 2018.  On 11 December 2018, Council agreed to a 3% private benefit, to the residents of Whakarire Ave properties, from the resulting project and targeted consultation was undertaken as a result of the project being included in the Annual Plan 2019/20. In 2019/20 annual plan consultation, on a targeted rate, feedback from general community of 107 submitters, was 14% disagreed, 33% agreed, and 53% neutral. Of Whakarire Residents, 86% disagreed, and 14% were neutral.

In the Annual Plan deliberations 2019/20 Council decided more consultation with affected residents as to the necessity, final form and funding options of the proposed revetment before project proceeds. $1.7m was allocated in 20/21 budget (including inflation) during Annual Plan 2019/20 deliberations. Funding source was to remain as a loan from reserves paid through general rates, until such time that Council makes a formal decision on a targeted rate for Whakarire. Since that time, Officers have undertaken further consultation with residents and residents were asked to provide their feedback by 31 January 2020.  Officers have also reviewed the timing of the project and project costs, with revised costs of an estimated $2.2 million.  Council will be provided with residents feedback, payment options for residents, information on costings and project timing at the 31 March Council meeting for decision.     

Ø For the Annual Plan 20/21, the private contribution will be held at the same amount as the 2019/20 contribution, resulting in a recommended change to the public/private split to 2.5% private/97.5% public. 

Ø As per the 2019/20 Annual Plan deliberations, Council acknowledges that this funding split would not form any basis for the work that is being undertaken by the Coast Hazards Working group in determining their future work and allocation of costs to the community. 

Ø Council will need to update the Revenue and Financing Policy to include the targeted rate for residents of Whakarire Ave.  As this has already been consulted on in the Annual Plan 2019/20 with both residents and general public, and further consultation has been undertaken with residents, the policy can be updated. 

 

Council is proposing to amend the Revenue and Financing Policy and Council’s rating policies. A separate report will be brought to Council at the 31 March Council meeting.  Council has undertaken a first principles approach to the review of the Revenue and Financing Policy including rates, and held a series of seminars with Elected Members on 6 December, 12 December, 31 January, 10 February, 17 February, 25 February for Elected Members to set direction. 

 

8.4   Significance and Engagement

An assessment of the significance of the changes from the Long Term Plan 2018-28 was undertaken as part of the development of the Annual Plan 2020/21.  This included both operational and capital expenditure changes. 

The following matters have been included in the Consultation Document 2020/21 for feedback from the community

1.     Library site selection

2.     Water related projects

3.     Waste minimisation

4.     Major projects update

5.     Community Housing

6.     Te Pihinga

7.     Whakarire Revetment

8.     Street Management

9.     Capital plan

10.   Amendment to Revenue and Financing policy (note this is a separate consultation with the community)

 

The consultation and submission period for the Annual Plan 2020/21 is from 7 April 2020 to noon 13 May 2020.  Submissions can be made online on the Council website.  A flyer will be sent to all households outlining the process and how they can feedback.

Councillors will engage with the community via two community meetings on the Annual Plan 2020/21.  A video series will be launched with the Mayor to advise the community on the Annual Plan.   There will be a formal hearing and deliberation process on 8 June.  Council will consider all feedback from the community both online and from the meetings when making its final decisions on the Annual Plan 2020/21.  The high level consultation plan is attached.  

 

The introduction of a targeted rate to residents of Whakarire Avenue has been assessed as triggering high significance as this group is particularly affected.  As such, targeted engagement with residents of Whakarire Avenue has occurred in the development of the Annual Plan 2019/20 and further engagement subsequently to that to ensure those residents are encouraged and have opportunity to provide feedback. 

The changes to fees and charges has been assessed as low significance because they have a small impact on a large population.

Council is proposing to amend the Revenue and Financing policy and Council’s rating policies (refer to ‘changes to policies’ section in this report).

Consultation on these policies is a legal requirement under the Local Government Act 2002.

 

8.5   Implications

Financial

When considering the changes to the Annual Plan 2020/21 from the Long Term Plan 2018-28, Council officers reviewed its compliance against the Councils Financial Strategy and its Financial Prudence benchmarks. 

As part of the Long Term Plan 2018-28 Council approved a LGCI + 5% as its cap for rates increases.  The proposed Annual Plan rates increase is within this level at 6.5% (including the waste collection level of service adopted as part of WMMP)

Another key benchmark for Council is the Rates limit Benchmark, which is a measure of the rates income limits.  The Council budget complies with this requirements.

In addition, the Balanced Budget Benchmark has been met.

 

Social & Policy

N/A

Risk

The following risks were noted as part of the development of the Annual Plan 2020/21:

        Infrastructure

•     Outfall degradation

•     Costs associated with review of water network including dechlorination

•     Faraday Centre earthquake strengthening costs

•     Construction cost escalations (including pool)

•     Inner Harbour quantum of work required

•     LTP Library assumption 2,000 sqm (Strategy seeking 2,500 sqm)

Funding

•     Increased capital cost for new pool due to delays (if project goes ahead)

•     Parklands net profit - Parklands margins impacted by increased costs

•     Parklands timing of sections

•     No capital reserve

•     Triennial agreed initiatives with HB regions Mayors

•     Potential revenue impacts of name change for War Memorial 

•     Length of time to complete property scanning project (dependent on level of resourcing)

•     Street management operational activity

•     Napier Inner City Marketing – request to increase targeted rate

•     PGF Funding  - Aquarium

•     Funding of initial scope work for Civic complex work (no capital project available) - non project related costs associated with due diligence for Civic site

•     Health monitoring costs for staff

•     Moving to the Living Wage and cost impacts

•     Additional resources for stormwater bylaw outcomes

•     Insurance cost increase

•     Faraday Centre level of service and management change

•     Loan funding impact of waters projects and war memorial

•     Street cleaning costs, public toilets cleaning

•     Traffic management costs relating to cruise ships

•     Climate Change direction from Council - Climate change initiatives - increased focus and legislative changes for Climate change responsibilities

•     Funding for Civic Building next steps (contingent on decision on library site options)

•     Coastal Hazards working group are considering a funding model for a contributory fund

•     Council approved water is our Number 1 Priority – additional costs are being incurred - water related costs including flushing

•     Initial work will be carried out on a replacement ERP and Asset Management System.

•     Hawke’s Bay Museums Trust temporary library relocation 3 year mark ends September 2020

•     Regional archives

•     3 Waters review and business case development and costs (including revaluations)

•     No funding has been provided for in the 20/21 budget for the definition and development of a sustainability strategy. 

 

        Regulatory

•     Weather tight claim and associated legal costs

•     Minimum wage movements

•     Well-being implementation - change in the purpose of Local Government to include Well-being

•     Housing – long term sustainability of Council’s housing portfolio

•     Rates database review and impact on rate payers

•     LTP amendments requiring increased resource e.g. 3 Waters, chlorination, Civic, Coastal Hazards.

 

8.6   Development of Preferred Option

Provide feedback from the review of the draft Annual Plan 20/21 underlying financial information to the Council meeting on 31 March 2020.

 

 

8.7   Attachments

a     Financial Information 20/21

b     Capital Plan changes for 20/21

c     20/21 Capital Plan including revision to remaining years of LTP   


Audit and Risk Committee - 20 March 2020 - Attachments

 

Item 8

Attachments a

 

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Audit and Risk Committee - 20 March 2020 - Attachments

 

Item 8

Attachments b

 

Changes to the capital works programme

 

The capital works programme outlined in the LTP includes a substantial investment in a variety of projects. For the Annual Plan 2020/21 there have been several changes where projects have been re-phased. There have also been requirements that have been identified since the LTP and some projects which are no longer required. The tables below outline key changes made to 2020/21.

 

Table one: Variation between LTP Y3 and Annual plan 2020/21

Activity names as used in the LTP

LTP

2020/21

$000

Annual Plan

2020/21

$000

Change between LTP Y3 and Annual Plan 2020/21

$000

City Strategy

592

1,067

475

Community and Visitor Experiences

72,624

19,717

(52,907)

Other Infrastructure

2,164

2,070

(94)

Property Assets

3,889

7,533

3,644

Stormwater

6,675

3,361

(3,314)

Transportation

15,048

13,290

(1,758)

Wastewater

3,795

8,036

4,241

Water Supply

4,955

14,604

9,649

Support Units

2,493

2,538

45

Total ($000)

112,235

72,216

(40,019)

 

 


 

Changes over $500,000 to a project between LTP year 3 and Annual Plan 2021/22

Activity Group

Details of changes over $500,000 to 2020/21 

Water Supply

·    Borefield No.1 Rising Main (New project), $5 million from [funding source] for new bore as a requirement to remove manganese from the water supply network. 

·    New Water Treatment Plan, $2 million has been moved from 2019/20 as there are two treatment plants to be built and the timing of the second plant will be outside of 20/21 and identified in the LTP budgets.   

·    Borefield No.2 Land purchase, $1.5 million has been moved from new Taradale borefields to fund this project.  

·    Replacement of Enfield Reservoir – $1.5 million has been moved from 2019/20 as this allocation will be used to start the design and land designation process once land is secured.   

·    New Bores in Awatoto - $1.5 million – additional funding requirement arisen out of Water Supply Model and Water Supply Masterplan.   

·    Awatoto Industrial and Philips Road Bore - $800K additional requirement due to growth.   

·    District Monitoring Project - $560K additional budget approved as part of the 2019/20.   

·    New Reservoir Western Hills - $500K has been deferred as this funding is part of the Mission development and timing is subject to the progress of the subdivision.  

Stormwater

·    Ahuriri Masterplan project 11 – Pandora catchment improvements – 800K moved to 21/22 because stormwater modelling is still underway.    

·    Ahuriri Masterplan project 3 – Improve Direct Outfalls - $800K moved to 21/22 because stormwater modelling is still underway.    

·    New Pump Station in Bay View – $2.6 million deferred to 21/22 because stormwater modelling and masterplanning needs to occur first.     

·    Te Awa Structure Plan – new requirement - $1 million additional funding to fund infrastructure to enable development in Te Awa, funded by development contributions.     

Wastewater

·    Wastewater Treatment Plant Upgrade – new requirement - additional funding of $2 million is required for urgent repairs.   

·    Wastewater Outfall replacement – additional $1.9 million is required for investigations and design to address the outfall leak issue. 

·    Sewer pipe renewal budget – moved to waste water outfall repairs budget - 500K 

·    Pandora Industrial Main – 700K moved from 2019/20 because further investigation is  required before work can be specified and programmed.   

·    Te Awa Structure Plan – 500K new requirement to fund infrastructure to enable development in Te Awa, funded by development contributions.   

Transportation

·    Te Awa Structure Plan – new requirement - $800K additional funding to fund infrastructure to enable development in Te Awa, funded by development contributions.   

·    Te Awa Avenue (Ellison to NBHS) - $1.2 million has been moved from 2019/20, as the project is deferred until NZTA funding is secured.   

·    Intersection safety improvement projects - $820K moved from 2019/20 as the work on Kennedy Road/Marewa Shops upgrade was unable to be completed this year.  

·    CBD Development – $4 million deferred until 21/22 and 22/22 for the Marine Parade Piazza and Emerson Street Upgrade to give adequate time to develop a comprehensive masterplan for the CBD and to develop detailed designs for the individual projects.   

Property Assets

·    Ahuriri Masterplan – Iron Pot Public Access - $4 million has been moved to 20/21.  In the 2019/20 Annual Plan design costs remained in 2019/20 with the remainder of the allocation to be moved to 20/21.  The draft Inner Harbour Masterplan has developed high level designs for the Iron Pot, and this plan will be brought to Council for consideration and then consultation with the community prior to adoption.  There is a high level of risk involved with undertaking a detailed design ahead of this process.   

·    Inner Harbour Facilities I.A.R (renewals) - $2 million moved to 21/22 while Inner Harbour Masterplan is finalised and asset condition assessments undertaken.  The Masterplan will then inform what works and funding allocation is required.  Some budget has been retained to replace the pontoons at the Nelson Quay ramp.    

·    Property Holdings – Property Purchase – new requirement - $1.8 million for property purchase.   

Community and Visitor Experiences

·    Reserves Activity – Whakarire Ave Rock Revetment – $1.7 million has been moved from 2019/20 as the project was delayed due to further consultation with residents being required.  An additional $500K has been added to the budget due to increased cost estimates, so the allocation is $2.2 million.   

·    Napier Conference Centre Activity – War Memorial build - $1 million moved from 2019/20 to reflect timing of new concept design.   

·    Kennedy Park Activity – Main Ablution Block - $650K moved from 2019/20 as not all construction will be underway in 2019/20.   

·    MTG Activity – New Collection Shelving - $500K deferred until 21/22 as the collection shelving is only needed once there is new storage (under the collection storage facility project).     

·    Library Activity – Napier Library Rebuild - $3.8 million deferred to 21/22 as Council are considering the location of the library as part of the wider project to address the Civic precinct.    

·    Aquatic Centre Activity – Napier Aquatic Centre Expansion - $19.3 million moved out of 20/21 due to project delay.   

·    National Aquarium of NZ Activity – Expansion project - $33 million moved out of 20/21 due to project delay.   

 


 

Overview of changes to Capital Programme

 

The following charts show overall changes made to 2020/21 and how that impacts across the LTP programme

 

Chart 1: Comparison of total capital spend between LTP and revised budgets based on changes to 2020/21

 

Chart 2: Comparison of total capital spend between LTP and revised budgets for Water Supply


 

Chart 3: Comparison of total capital spend between LTP and revised budgets for Wastewater

Chart 4: Comparison of total capital spend between LTP and revised budgets for Stormwater 


Audit and Risk Committee - 20 March 2020 - Attachments

 

Item 8

Attachments c

 

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Audit and Risk Committee - 20 March 2020 - Open Agenda                                                                                                                     Item 9

9.    External Accountability - Long Term Plan process update

Type of Report:

Operational

Legal Reference:

Local Government Act 2002

Document ID:

910182

Reporting Officer/s & Unit:

Adele Henderson, Director Corporate Services

 

9.1   Purpose of Report

To update the Committee on the processes and risk assessment for development of the Long Term Plan.

 

Officer’s Recommendation

The Audit and Risk Committee:

a.     Note current risk assessment and note next steps in the process as outlined in the report.

 

Chairperson’s Recommendation

That the Committee resolve that the officer’s recommendation be adopted.

9.2   Background

The purpose of the LTP Development project is to pull together the complex pieces of the 'LTP jigsaw' to produce an integrated LTP with a complete and accurate base of underlying information. It will provide alignment between council's key strategies, policies and plans and its funding envelope.

Project Objectives:

·     To develop a fit for purpose LTP that:

-     reflects Council's strategic direction

-     complies with legislation

-     receives an unqualified audit report

-     is a living document used by NCC staff and provides ‘line of sight’ for staff

-     is a robust 3 year plan (unlikely to need amending each year and remains a relevant reference document for its three year life)

-     is a useful document for other agencies (e.g. NZTA, interest groups)

-     informs residents and ratepayers generally. 

·     To develop a fit-for-purpose consultation that:

-     is an easy, interesting and relevant read for residents and ratepayers

-     engages the community

-     articulates the ‘right debate’ i.e. provides policy and service delivery choices for genuine consultation

-     is strategic (only includes major matters)

-     complies with legislation.

·     To complete the project on time and within budget.

·     To ensure elected members have been involved at all steps of the process and in particular that the Mayor leads the project as per the Mayoral powers of the Local Government Act.  The process is not simply about informing elected members, but about empowering them, as they will own the final document.

·     To ensure that Council staff are well informed about the project; the consultation options and the final decisions.

 

Timeline

The figure below provides a high-level overview of project stages. Additional resourcing is required to finalise the project plan (including detailed schedule, stakeholder analysis, communication plan, risk assessment, budget and quality criteria). 

 

Actions to date:

·     Project Plan (draft) – awaiting resourcing 

·     Environment Scan (draft) – to be reviewed by elected members

·     Strategy Stocktake (draft) – to be reviewed by elected members

·     Council Strategy Day One: Strategic Context, Engagement (26 Feb)

·     Council Strategy Day Two: Pre-engagement, Investment Needs, SWOT Analysis (4 Mar)

·     Commenced design of Activity Management Plan template

·     Working group established and commenced requirements gathering for project prioritisation tool

 

Next actions:

·     Council report - Project Plan, Environment Scan, Strategy Stocktake

·     Finalise Activity Management Plan template

·     Finalise requirements and develop project prioritisation tool

·     Agree, plan and commence pre-engagement

·     Complete Direction Setting - Mission, Vision, Community Outcomes & Strategic Goals

·     Commence development of Activity Management Plans, Financial Strategy, Infrastructure Strategy and supporting documentation

9.3   Issues

The project has slipped due to lack of staff resources and delayed direction setting.

Two additional corporate planning resources have been approved and recruitment commenced. To mitigate risk of further slippage a contractor will be engaged from 16 March for 8 weeks.  

Without defined Community Outcomes and Strategic Goals, development of strategies and Activity Management Plans is constrained. However, staff can commence development of background information during pre-engagement and further direction setting activities.

9.4   Significance and Engagement

Community engagement to be programmed as part of project planning. 

9.5   Implications

Financial

Additional funding for LTP resources (staff and other) included in the draft 20/21 Annual Plan.

Social & Policy

New Financial Strategy, Infrastructure Strategy and other supporting policies and documents to be developed for inclusion in the 2021-2031 Long Term Plan.

Risk

The table below identifies current risks and mitigating actions. A full risk analysis will be undertaken in the next period.

Risk

Likelihood

Impact

Rating

Mitigation

Lack of strategic direction from Council

Moderate

Major

High

Ensure Council has adequate seminar time to discuss and finalise

Unstable major projects for consultation and inaccurate costings

Moderate

Major

High

NCC Project Management Framework implementation and support

No permanent CE for leadership of the project for the next 6-9 months

Almost certain

Moderate

High

Ensure the Mayor and SLT are fully engaged and informed

Staff resourcing impacted by other commitments and lack of experience

Moderate

Major

High

Develop business case for additional resources

Ensure availability and funding for consultants to cover the gap

Activity Management Plans not completed in a timely manner for input into the LTP

Unlikely

Major

Significant

Develop fit-for-purpose template and communicate use and timelines to activity managers

LTP is not aligned with our strategies, plans & policies

Moderate

Moderate

Significant

Engage appropriate stakeholders

Finalise strategies and assumptions in a timely manner

Project drift

Likely

Moderate

Significant

Recruit resource to manage the project and ensure project reporting is robust

Local Government Reform e.g. change in central government, CCOs for 3 Waters

Likely

Moderate

Significant

Regular environmental scanning

Engage 3 Waters Programme Manager

Elected members do not vote for adoption of the Consultation document and/or LTP

Unlikely

Extreme

Significant

Involve elected members at all stages

Non-compliance with  audit

Unlikely

Moderate

Low

Develop quality criteria and assessment

 

 

 

 

 

9.6   Attachments

Nil


Audit and Risk Committee - 20 March 2020 - Open Agenda                                                                                                                   Item 10

10.  COVID-19 (Coronavirus) and Business Continuity Planning

Type of Report:

Operational

Legal Reference:

N/A

Document ID:

911815

Reporting Officer/s & Unit:

Antoinette Campbell, Director Community Services

 

10.1 Purpose of Report

To inform the Audit and Risk Committee of Napier City Council’s planned response to the COVID-19 global pandemic.

 

Officer’s Recommendation

The Audit and Risk Committee:

a.   Note Napier City Council’s response to the worldwide Novel Coronavirus pandemic (COVID-19) to ensure potential disruption to business operations are minimised as far as practicable.

 

 

Chairperson’s Recommendation

That the Committee resolve that the officer’s recommendation be adopted.

 

10.2 Background Summary

On 11 March, the World Health Organisation (WHO) declared Novel (new) Coronavirus (COVID-19) a global pandemic for two main reasons;

1.   The speed and scale of transmission with 153,648 cases reported to WHO from 146 countries and territories as of 16 March 2020, and

2.   Despite frequent warnings, concern that some countries are not approaching the threat with the level of political commitment required to control it.

New Zealand has had eight confirmed cases and two probable cases (at 16 March).  The Ministry of Health’s stance has been for some weeks now to plan for a pandemic despite the recent declaration, and continue to plan and respond at pace.

On 14 March 2020, Prime Minister Jacinda Ardern announced new border measures, a ban on cruise ships entering New Zealand waters and other provisions. Many of these took effect from 1am on Monday 16 March.

10.3 Issues

This is a highly dynamic international event where the situation and impacts can change very quickly.  Civil Defence Emergency Management (CDEM) Groups are a consortium of local authorities in a region working in partnership with emergency services, lifeline utilities and government departments to manage hazards and risks across the four R’s (reduction, readiness, response and recovery).

The role of the CDEM Groups in the New Zealand Influenza Pandemic Plan (NZIPAP) in the response phase, in support of the health led response, is to “prioritise and coordinate the regional CDEM interagency responses to the consequences of pandemic [influenza] necessary to support communities”.

NZIPAP provides direction to CDEM Groups on initial actions they are expected to undertake while New Zealand remains in the “Keep It Out / Stamp It Out” phase. It also includes readiness activity for actions identified within the “Manage It Phase” in order to ensure these can be undertaken.

These actions support stated aims to flatten the pandemic curve, reducing the overall surge in demand across all sectors and will prepare agencies and communities for a sustained response.

Napier City Council has escalated its ‘readiness’ phase in planning for a pandemic response.  This has included reviewing and updating Business Continuity Plans (BCPs) for all areas of the business and identifying essential and priority services in the event of an emergency.  This work is being overseen by the Business Continuity Planning Committee, represented by staff members across the organisation.

A Pandemic Response Plan is being prepared in accordance with the Ministry of Health Pandemic Management Strategy, which will provide guidance on how the organisation will deal with staff leave in the event of sickness, caring for dependents, and for staff requiring or opting to self-isolate.  Planning is also underway for redeploying well staff who are not required at their usual place of business due to event cancellations etc.

Over the last fortnight, a number of event cancellations have been made with the Napier Conference Centre, the Municipal Theatre and the i-SITE business units, as well as some large accommodation bookings with Kennedy Park Holiday Resort. 

Due to the nature of the event, the Hawke’s Bay District Health Board is the lead agency with coordination provided by the Hawke’s Bay Civil Defence Emergency Management Group.  The Group Emergency Coordination Centre (GECC) has been activated in monitoring mode, and has established a sustainable Coordinated Incident Management System (CIMS) based structure, led by the Group Controller. During the response phase of the COVID-19 event, Council will activate its Incident Management Team led by the Local Controller, which will coordinate and monitor the implementation of Council’s BCPs.

All public information is being coordinated and released by the Ministry of Health and locally by the Hawke’s Bay District Health Board.  Global information can be sourced from the World Health Organisation.  Within Council, information is being provided to staff by email updates from the Chief Executive and a dedicated page on the Intranet provides updated information and answers to frequently asked questions.

10.4 Significance and Engagement

This matter does not trigger Council’s Significance and Engagement Policy or other consultation requirements.

10.5 Implications

Financial

While the full financial implications of the COVID-19 event are not known, the Napier City Council is already adversely impacted by a number of cancellations of events and bookings at its revenue generating facilities.  At the time of writing, the direct cost to Council of these cancellations is estimated to be over $300,000.  The indirect costs have not been quantified.

 

Social & Policy

N/A

Risk

A full risk profile assessment is yet to be carried out, however it will cover at least the following:

·     Employee absenteeism due to sickness and domestic leave and self-isolation – it is estimated that 20% to 60% of the workforce could be away from work over an eight week period.

·     Closure of customer-facing facilities and temporary withdrawal of services resulting in redeployment of well staff

·     Ability to deliver essential services may be compromised due to absenteeism.  Priority services have been identified as;

Water supply

Wastewater

City Cleaning

Environmental Health

Cemeteries and Crematorium

Solid Waste

Animal Control

Building Consents

Call Centre - including after hours

Finance Accounts Payable

Internal services - Information Management & Business Transformation, Health & Safety, Payroll.

·     International staff travel for work or personal purposes. A register of all planned travel is being collated to inform managers of potential risks.  Work-related travel will be reviewed closer to the time of it being scheduled.

10.6 Options

The options available to the Committee are as follows:

a.     Receive the report on Council’s planned response to the COVID-19 pandemic for information.

 

10.7 Development of Preferred Option

N/A

 

10.8 Attachments

Nil      


Audit and Risk Committee - 20 March 2020 - Open Agenda

PUBLIC EXCLUDED ITEMS

 

That the public be excluded from the following parts of the proceedings of this meeting, namely:

AGENDA ITEMS

1.         Legal Update

2.         Appointment Process

3.         Revera Lead Agency IaaS Status Report

 

The general subject of each matter to be considered while the public was excluded, the reasons for passing this resolution in relation to each matter, and the specific grounds under Section 48(1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution were as follows:

General subject of each matter to be considered.

 

Reason for passing this resolution in relation to each matter.

 

Ground(s) under section 48(1) to the passing of this resolution.

 

1.  Legal Update

7(2)(b)(ii) Protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information

7(2)(g) Maintain legal professional privilege

7(2)(i) Enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations)

48(1)A That the public conduct of the whole or the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist:
(i) Where the local authority is named or specified in Schedule 1 of this Act, under Section 6 or 7  (except 7(2)(f)(i)) of the Local Government Official Information and Meetings Act 1987.

2.  Appointment Process

7(2)(f)(ii) Maintain the effective conduct of public affairs through the protection of such members, officers, employees and persons from improper pressure or harassment

48(1)A That the public conduct of the whole or the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist:
(i) Where the local authority is named or specified in Schedule 1 of this Act, under Section 6 or 7  (except 7(2)(f)(i)) of the Local Government Official Information and Meetings Act 1987.

3.  Revera Lead Agency IaaS Status Report

7(2)(c)(i) Protect information which is subject to an obligation of confidence or which any person has been or could be compelled to provide under the authority of any enactment, where the making available of the information would be likely to prejudice the supply of similar information or information from the same source and it is in the public interest that such information should continue to be supplied

48(1)A That the public conduct of the whole or the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist:
(i) Where the local authority is named or specified in Schedule 1 of this Act, under Section 6 or 7  (except 7(2)(f)(i)) of the Local Government Official Information and Meetings Act 1987.

 

 


Audit and Risk Committee - 20 March 2020 - Open Agenda

 

 

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

 

 


 

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.

 

Carried

 

 


 

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

DW Pearson / Councillor Simpson

The Audit and Risk Committee:

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

 

Carried

 


 

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

Councillor Palairet / Mayor Wise

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.

 

Carried

 

 

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

DW Pearson / Councillor Taylor

The Audit and Risk Committee:

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

 

Carried

 


 

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

Councillors Taylor / Simpson

The Audit and Risk Committee:

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

 

Carried

 


 

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

Councillor Taylor / Mayor Wise

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

 

Carried

 


 

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

DW Pearson / Councillor Taylor

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.

 

Carried

 


 

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

DW Pearson / Councillor Simpson

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.

 

Carried

 


 

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

Councillors Taylor / Simpson

The Audit and Risk Committee:

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

 

Carried

 


 

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

DW Pearson / Councillor Simpson

The Audit and Risk Committee:

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

 

Carried

  

 The meeting closed at 3.23pm

 

 

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

 

 

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

 

 

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