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Audit, Risk and Finance Committee Kōmiti Arotake Tūraru me Ahumoni
ARF24-3 Tuesday, 3 September 2024, On
conclusion of the
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Audit, Risk and Finance Committee Kōmiti Arotake Tūraru me Ahumoni
ARF24-3 Tuesday, 3 September 2024, On
conclusion of the
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3 September 2024 |
Audit, Risk and Finance Committee
Membership:
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Chairperson |
Cr Murray Grainger |
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Deputy Chairperson |
Cr Tracey Coxhead |
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Members |
Cr Grant Dally Mayor James Denyer Cr Anne Henry Cr Rodney Joyce Cr Margaret Murray-Benge Cr Laura Rae Deputy Mayor John Scrimgeour Cr Allan Sole Cr Don Thwaites Cr Andy Wichers Stuart Henderson – Independent Member |
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Quorum |
Seven (7) |
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Frequency |
Quarterly |
Role:
The main purpose of the Committee is to assist Council in providing oversight of matters relating to the quality and integrity of financial reporting, independence and performance of the external auditors, effectiveness and objectivity of the internal audit programme, and oversight of business risks and compliance activities.
Scope:
Responsibilities:
· Assist Council in fulfilling its responsibilities for financial statements and external financial reporting.
· Monitor the Council’s external and internal audit process and the resolution of any issues that are raised.
· Review key formal external accountability documents such as the Annual Report in order to provide advice and recommendation in respect to the integrity and appropriateness of the documents and the disclosures made.
· Provide a forum for communication between management, internal and external auditors and the governance level of Council.
· Ensure the independence and effectiveness of Council’s internal audit processes, with oversight of the internal audit programme and findings.
· Oversee the development of the Council’s Annual Report.
· Oversee the development and management of financial policies and delegations.
· Monitor existing corporate policies and recommend new corporate policies to prohibit unethical, questionable or illegal activities.
· Support measures to improve management performance and internal controls.
Responsibilities:
Audit (internal and external):
· Ensure appropriate accounting policies and internal controls are established and maintained and
· assist Council in ensuring the effective and efficient management of all business risks.
· Ensure an appropriate framework is maintained for the management of strategic and operational risk (including risk appetite). Review risk including technical insurance matters
· and participation in national risk management practices, health and safety risk management and implementation of risk management processes.
· Review the effectiveness of the Long Term Plan audit or any audit relating to an amendment to the Long Term Plan
· Review the effectiveness of the annual audit.
· Monitor management response to audit reports and the extent to which the external audit recommendations concerning internal accounting controls and other matters are implemented.
· Monitor the delivery of any internal audit work programme and implementation of any significant recommendations including control risk, accounting and disclosure practices.
· Engage with Councils external auditors regarding the external work programme and agree the terms and arrangements of the external audit in relation to the Annual Report.
· Engage with internal and external auditors on any specific one-off audit assignments.
· Review the effectiveness of the control environment established by management including the computer information management systems controls and security. This also includes a review/monitoring role for relevant policies, processes, and procedures.
Risk management:
· Review the Risk Management Framework, and associated procedures to ensure they are current, comprehensive and appropriate for the effective identification and management of Council’s financial and business risks including fraud and cyber security.
· Review the effectiveness of the system for monitoring Council’s financial compliance with relevant laws, regulations and associated government policies.
· Review whether a sound and effective approach has been followed in establishing Council’s business continuity planning arrangements.
· Review Council’s Fraud Policy to determine that Council has appropriate processes and systems in place to capture and effectively investigate fraud related information.
Financial:
· To monitor the operational performance of Council’s activities and services against approved levels of service.
· Monitor financial performance against any Council approved joint contracts with other local authorities.
· Report financial outcomes and recommend any changes or variations to allocated budgets including both operational and capital expenditure.
· Provide oversight of legal risks, claims or proceedings (excluding the approval of any legal settlements).
· Recommend the adoption of the Annual Report and the approval of the Summary Annual Report to Council.
Power to Act:
The Committee is delegated the authority to:
· Receive and consider external and internal audit reports.
· Receive and consider staff reports on audit, internal control and risk management policy and procedure matters as appropriate.
· To approve the Auditors engagement and arrangement letters in relationship to the Annual Report.
Power to Recommend:
To make recommendations to Council and/or any Committee as it deems appropriate.
Power to sub-delegate:
The Committee may delegate any of its functions, duties or powers to a subcommittee, working group or any other subordinate decision-making body, subject to the restrictions on its delegations and provided any sub-delegation includes a statement of purpose and a specification of task.
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Audit, Risk and Finance Committee Meeting Agenda |
3 September 2024 |
Notice is hereby given that an Audit, Risk and Finance Committee Meeting will be held in the Council Chambers, 1484 Cameron Road, Tauranga on: Tuesday, 3 September 2024 on conclusion of the Projects and Monitoring Committee Meeting starting at 9.30am
10.2 Risk and Assurance Report August 2024
11.1 Emergency Operations Centre Audit
11.2 Bancorp Treasury Update and Presentation
12 Resolution to Exclude the Public
12.1 Litigation Update August 2024
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Whakatau mai te wairua Whakawātea mai te hinengaro Whakarite mai te tinana Kia ea ai ngā mahi
Āe |
Settle the spirit Clear the mind Prepare the body To achieve what needs to be achieved. Yes |
2 Present
Members are reminded of the need to be vigilant and to stand aside from decision making when a conflict arises between their role as an elected representative and any private or other external interest that they may have.
A period of up to 30 minutes is set aside for a public forum. Members of the public may attend to address the Board for up to five minutes on items that fall within the delegations of the Board provided the matters are not subject to legal proceedings, or to a process providing for the hearing of submissions. Speakers may be questioned through the Chairperson by members, but questions must be confined to obtaining information or clarification on matters raised by the speaker. The Chairperson has discretion in regard to time extensions.
Such presentations do not form part of the formal business of the meeting, a brief record will be kept of matters raised during any public forum section of the meeting with matters for action to be referred through the customer relationship management system as a service request, while those requiring further investigation will be referred to the Chief Executive.
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3 September 2024 |
10 Reports
File Number: A6387544
Author: Clint Boyle, Health, Safety and Wellbeing Lead
Authoriser: Adele Henderson, General Manager Corporate Services
Executive Summary
This report provides a summary quarter ending June 2024:
· An overview of our strategic direction; and
· The progress against the health, safety and wellbeing strategy and work programme.
· The health and safety performance across the organisation for the previous quarter.
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That the Health, Safety and Wellbeing Lead’s report dated 3 September 2024 titled ‘Health and Safety Report’ be received.
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Strategic Direction
Our strategic focus continues to include improving health, safety and wellbeing knowledge, behaviours and outcomes for our people by empowering them to actively contribute to, and participate in, safety leadership.
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The work programme is underpinned by the 2024 Strategy. Empowering our people to take direct ownership of Health Safety and Wellbeing for themselves, and anyone they work with by ensuring they have the right knowledge, skills and capability, continues to be our primary focus.
Risk Management
The risk management methodology for reviewing our four critical risks and controls was completed.
Training
During the reporting quarter, the following training courses was offered in relation to Health and Safety.
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Provider |
Course |
Number of Participants |
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FearFree NZ |
Empower Frontline Staff: Conflict Awareness & De-escalation Training |
20 |
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Vertical Horizonz |
Asbestos Awareness |
19 |
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Internal |
Vault Check |
Not tracked. Informal training to teams as required. |
Engagement and Consultation
Our Safety Committee continues to meet monthly to discuss issues raised by our people, the work plan, and to provide feedback on how health, safety and wellbeing is being managed for our people. Performance and review meetings continue to occur with our contractor partners.
Audit and Review
The infrastructure group have engaged a consultant to undertake a review of the health and safety systems and performance within the group. The data and information collection phase took place through the quarter, and the results are expected to be provided in the next quarter.
EVents of note
Our people were not involved in any events of note throughout the quarter.
One contractor sustained a minor injury due to a loss of control of a pump deep within a bore well. Equipment failure was the primary cause, and the contractor has changed its equipment attachment technique as a result.
REVIEW OF PERFORMANCE
Incident reports which aligned to the critical risks of our organisation reduced slightly compared to the previous quarter, however still represented nearly 40% of our overall events for the quarter. Exposure to aggressive/abusive behaviour reduced from 9 to 6 events, and vehicle Incidents reduced from 5 to 3. Both risk factors, along with lone working, are due for review in the July to September quarter.
Mechanism of Event – Previous Quarter
Contractor Events
Contractor events decreased compared the previous quarter, and continue in the overall downward trajectory, down by 40% compared to the same quarter last year.
Lead Indicators
Inspections completed by our people remain higher than the same period last year, though did experience a slight drop compared to the previous quarter (63 down to 52).
Inspections
Inspections completed by month – last 12 months
Near Miss Reporting
Lag Indicators (Accident/Incident Frequency Rates)
Total Recordable Injury Frequency Rate (TRIFR) increased through the quarter, due to one medical treatment injury, which was sustained by a volunteer. The TRIFR remains at an acceptably low rate however, and still lower than 12 months ago.
Lost Time Injury Frequency Rate (LTIFR) remains at 0.00.
WELLBEING
We continued with mental health and wellbeing strategy and implementation plan and began on our implementation. An internal group continue to meet to progress activities to support the wellbeing of our people. Of note we have developed behaviours/expectations of how we work together, and we are in the market for a leadership programme.
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3 September 2024 |
10.2 Risk and Assurance Report August 2024
File Number: A6426724
Author: Pieter Labuschagne, Risk and Assurance Manager
Authoriser: Adele Henderson, General Manager Corporate Services
Executive Summary
The Risk and Assurance report is to provide the committee with information on the risk management and internal audit activities since the last Audit, Risk and Finance Committee meeting held on 4 June 2024. Council needs to consider the emerging risks and potential impacts for both the current financial year and the Long-Term Plan 2024-34 during its development.
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That the Risk and Assurance Manager’s report dated 3 September 2024 titled ‘Risk and Assurance Report August 2024’ be received. |
1. The Risk and Assurance Report August 2024 provides an update on:
· Western Bay of Plenty District Council Strategic Risk Register;
· Emerging Risks and it’s linkage to Council Strategic Risks;
· Council‘s Corporate Assurance Framework; and
· the rolling 3-year risk-based Internal Audit Work Plan FYE 2025 to FYE 2027.
2. The executive leadership team (ELT) and elected members (EM) formally completed an annual review of Council’s strategic risks and the acceptable level of those risks (risk appetite).
Recently Council engaged KPMG to facilitate the annual review and refresh of Council’s Strategic risks to align with Council’s recently refreshed strategy, including a strategic risk comparison with other councils on emerging risks as well as a refresh of council’s risk appetite.
The Council’s Strategic Risk Register was reviewed at recent ELT risk workshop which was facilitated by KPMG on 9 July 2024. The revised strategic risk register and appetite statement was put forward to the EMs at the Audit, Risk and Finance (ARF) workshop held on 1 August 2024 as a basis for the EM’s annual strategic risk register refresh facilitated by KPMG.
3. As part of the governance process the senior leadership team regularly takes a deep dive into a particular risk. For this period, we are updating you on strategic risks amended with:
(a) Changes to how the Local Water Done Well legislative changes will be managed and the potential to establish stand alone entities.
(b) Considerations made to the impact of Financial Contributions allocations.
(c) The proposed amendments to the local electoral act regarding Māori wards.
(d) The proposed treaty principles bill.
(e) Aging workforce and the potential loss of institutional knowledge impacting sustained organisational performance.
(f) Inflation rates and interest rates put pressure on Council’s financial sustainability and capacity to deliver essential services, budgets and required careful financial planning and resource allocation.
4. Other heightening risks of note include:
- The ongoing uncertainty around government reforms.
- Limited engagement from Central Government with the local government sector.
- Significant number of legislative changes signalled in the resource management space including National Policy Statements, Housing, Granny Flats and associated impacts and requirements for changes to the District Plan. This also has implications for Council’s infrastructure decisions, the development code and the funding policy.
- Recruitment and retention of people with the future required skills and capability to delivery strategic outcomes and initiatives is challenging.
- Unknown financial implications of responding to changes and duplication of effort and processes e.g. further engagement with our community, specialist and expert advice to support decision-making,
5. Across the risks there are a few key themes:
a) Change in government priorities and anticipated changes to government reforms (including resource management and three waters). These may have significant impacts on Council operations and decisions.
b) Affordability concerns for our ratepayers due to rising inflation, increasing interest rates, and deterioration of the economy. These factors impact ratepayers directly and our rates that need to be levied.
c) The deliverability of programmes, which are being impacted by a wide range of factors including increasing costs, staff capacity and capability, availability of skilled contractors and the distraction from potential reforms.
6. The rolling 3-year Internal Audit Work Plan aligned to the Council’s strategic risks and Corporate Assurance Framework will be presented at the December 2024 meeting. The Internal Audit Work Plan will be governed by the Internal Audit Charter that is contained within the Work Plan.
1. Risk
and Assurance Report August 2024 ⇩ 
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3 September 2024 |
11 Information for Receipt
11.1 Emergency Operations Centre Audit
File Number: A6405805
Author: Jo Lynskey, Team Lead Emergency Management
Authoriser: Kerrie Little, Operations Manager
Executive Summary
1. The purpose of this information report is to provide Council with an activity update on the Civil Defence Emergency Management function including its current capacity and capability.
Background
2. Prior to 2021 the Emergency Operations Centre for Western Bay of Plenty was a combined centre with staff from both Tauranga City Council and Western Bay of Plenty District council working together and operating from the Western Bay of Plenty District Council chambers.
In July 2021, both Tauranga City Council and Western Bay of Plenty District Council agreed to operate their Emergency Operations Centres separately and staff them with their own staff respectively.
Regionally set key performance indicators for the number of staff required and the required level of training was determined by the Bay of Plenty Civil Defence Group, which consists of membership from the seven councils across the Bay of Plenty.
Western Bay of Plenty District Council is required to plan for three rostered shifts of thirty staff.
The number of roles each council is required to fill will increase over time; this can be seen in the table below
Current position of Western Bay of Plenty District Council
86 roles filled on the roster
69 of those staff have received training to the required level within the Nationally recognised Integrated Training Framework
External Audit of the Emergency Operations Centre
1. Overview
The Bay of Plenty Civil Defence Emergency Management (CDEM) Group Annual Plan (2023/2024) sets out the CDEM Group’s key operational work programmes linked to the delivery of the strategic objectives as set out in the Bay of Plenty CDEM Group Plan 2024-2029 (the CDEM Group Plan). The conduct of a regional auditing process is key in the operational work programmes.
The purpose of the regional auditing process to ensure that there is local and regional capability (Emergency Operations Centre and Emergency Coordination Centre) to activate and effectively establish a response capability; as well as develop the capacity and capability of the Bay of Plenty CDEM Group. The audit process assesses the ability to contact and activate staff and access to appropriate facilities and infrastructure and equipment to support an emergency to enable an effective and efficient response.
Emergency Management Bay of Plenty (EMBOP) coordinated an audit of the Western Bay of Plenty District Councils Emergency Operations Centre on 19 June 2024.
2. Method
The audit undertook an evidence-based approach to ensure consistency in the auditing process between the Emergency Coordination Centre (ECC) and Emergency Operation Centres (EOC). Documentation was provided in the lead up to the audit for review as evidence that key documents had been developed. Documentation and technical demonstrations were also provided during the day of the audit as supporting evidence where processes, procedures, equipment, or technological capability were required.
3. Summary
The audit of Western Bay of Plenty District Councils Emergency Operations Centre demonstrated that the Council clearly has the capability and capacity to respond to events and has continued with their ongoing progress to address the previously identified corrective actions and development of response operating procedures. This has been achieved through a combination of knowledgeable, experienced staff and a continual enthusiasm of EOC staff to engage in training and exercising. Despite having a well-grounded response capability there are always opportunities to ensure that the council can further enhance its response capability.
Key recommendations from this audit have been incorporated into the work plan for the coming year.
11.2 Bancorp Treasury Update and Presentation
File Number: A6453250
Author: Jackson Jury, Financial Analyst
Authoriser: Adele Henderson, General Manager Corporate Services
Executive Summary
1. Bancorp Treasury will present an overview of market trends and forecasts, along with their implications for Council. Specifically, their presentation will focus on:
· Trends and forecasts for domestic inflation;
· Forecasts for market interest rates; and
· How Council has positioned itself within its treasury strategy to mitigate interest rate risks.
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3 September 2024 |
12 Resolution to Exclude the Public
RESOLUTION TO EXCLUDE THE PUBLIC
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That the public be excluded from the following parts of the proceedings of this meeting. The general subject matter of each matter to be considered while the public is excluded, the reason for passing this resolution in relation to each matter, and the specific grounds under section 48 of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution are as follows:
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