Notice is hereby given that a Meeting of
the Activities Performance Audit Committee will be held on:
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Date:
Time:
Meeting Room:
Venue:
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Wednesday, 15
July 2015
1pm
Council Chambers
15 Forth Street
Invercargill
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Activities Performance Audit Committee Agenda
OPEN
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MEMBERSHIP
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Chairperson
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Lyall Bailey
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Mayor Gary Tong
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Councillors
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Stuart Baird
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Brian Dillon
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Rodney Dobson
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John Douglas
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Paul Duffy
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Bruce Ford
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George Harpur
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Julie Keast
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Ebel Kremer
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Gavin Macpherson
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Neil Paterson
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IN ATTENDANCE
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Chief Executive
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Steve Ruru
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Committee Advisor
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Fiona Dunlop
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Terms of
Reference for the Activities Performance Audit Committee
This committee is a committee of Southland
District Council and has responsibility to:
·
Monitor and review Council’s performance
against the 10 Year Plan
·
Examine, review and recommend changes relating
to Council’s Levels of Services.
·
Monitor and review Council’s financial
ability to deliver its plans,
·
Monitor and review Council’s risk
management policy, systems and reporting measures
·
Monitor the return on all Council’s
investments
·
Monitor and track Council contracts and
compliance with contractual specifications
·
Review and recommend policies on rating, loans,
funding and purchasing.
·
Review and recommend policy on and to monitor
the performance of any Council Controlled Trading Organisations and Council
Controlled Organisations
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Review arrangements for the annual external
audit
·
Review and recommend to Council the completed
financial statements be approved
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Approve contracts for work, services or supplies
in excess of $200,000.
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Activities Performance Audit Committee
15 July 2015
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TABLE OF
CONTENTS
ITEM PAGE
Procedural
1 Apologies 5
2 Leave of
absence 5
3 Conflict of
Interest 5
4 Public Forum 5
5 Extraordinary/Urgent
Items 5
6 Confirmation
of Minutes 5
Reports
7.1 Annual
Report 2014/2015 Timetable 13
7.2 Financial
Report to 31 May 2015 21
At the close of the
agenda no apologies had been received.
2 Leave
of absence
At the close of
the agenda no requests for leave of absence had been received.
3 Conflict
of Interest
Committee Members are
reminded of the need to be vigilant to stand aside from decision-making when a
conflict arises between their role as a member and any private or other
external interest they might have.
4 Public Forum
Notification to speak
is required by 5pm at least two days before the meeting. Further information is
available on www.southlanddc.govt.nz
or phoning 0800 732 732.
5 Extraordinary/Urgent
Items
To consider, and if
thought fit, to pass a resolution to permit the committee
to consider any further items which do not appear on
the Agenda of this meeting and/or the meeting to be held with the public
excluded.
Such resolution is
required to be made pursuant to Section 46A(7) of the Local Government Official
Information and Meetings Act 1987, and the Chairperson must advise:
(i) The
reason why the item was not on the Agenda, and
(ii) The
reason why the discussion of this item cannot be delayed until a subsequent
meeting.
Section 46A(7A) of the Local Government Official Information and Meetings
Act 1987 (as amended) states:
“Where an item
is not on the agenda for a meeting,-
(a)
That item may be discussed at that meeting if-
(i)
That item is a minor matter relating to the general
business of the local authority; and
(ii)
the presiding member explains at the beginning of the
meeting, at a time when it is open to the public, that the item will be
discussed at the meeting; but
(b) no resolution,
decision or recommendation may be made in respect of that item except to refer
that item to a subsequent meeting of the local authority for further
discussion.”
6 Confirmation
of Minutes
6.1 Meeting
minutes of Activities Performance Audit Committee, 24 June 2015
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Activities Performance Audit Committee
OPEN MINUTES
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Minutes of
a meeting of Activities Performance Audit Committee held in the Council
Chambers, 15 Forth Street, Invercargill on Wednesday, 24 June 2015 at 10.39am.
present
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Chairperson
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Lyall Bailey
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Mayor Gary Tong
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Councillors
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Stuart Baird
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Brian Dillon
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John Douglas
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Paul Duffy
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Bruce Ford
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George Harpur
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Julie Keast
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Ebel Kremer
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Gavin Macpherson
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Neil Paterson
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IN ATTENDANCE
Chief Executive Steve Ruru, Group Manager
Environment and Community Bruce Halligan, Group Manager Services and Assets Ian
Marshall, Group Manager Policy and Community Rex Capil, Chief Information
Officer Damon Campbell, Chief Financial Officer Anne Robson, Communications and
Governance Manager Louise Pagan and Committee Advisor Fiona Dunlop.
1 Apologies
Apologies for absence were received from Cr Dobson.
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Resolution
Moved Cr Dillon, seconded Cr Kremer and resolved:
That the Activities Performance Audit Committee accept the apology.
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2 Leave
of absence
There were no
requests for leave of absence.
3 Conflict
of Interest
There were no
conflicts of interest declared.
4 Public
Forum
There was no public
forum.
5 Extraordinary/Urgent
Items
There were no
Extraordinary/Urgent items.
6 Confirmation
of Minutes
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Resolution
Moved Cr
Macpherson, seconded Cr Dillon and resolved:
That the
Meeting minutes of Activities Performance Audit Committee, 3 June 2015 be
confirmed.
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(Cr Duffy
joined the meeting at 10.41am.)
Reports for Resolution
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7.1
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Southern Rural Fire Authority - Draft Statement of Intent
2015-2018
Record No: R/15/5/7953
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Group
Manager Bruce Halligan was in attendance for this item. He advised that
the Southern Rural Fire Authority had provided its draft Statement of Intent
2015-2018 to Southland District Council for consideration and feedback.
The
draft Statement of Intent was approved for circulation by the Southern Rural
Fire Authority Board (SRFA) at its meeting on 10 April 2015. It
outlines key SRFA objectives, key performance areas and goals and future
funding expectations from participant stakeholders/members.
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Resolution
Moved Cr Kremer, seconded Cr Dillon and
resolved recommendation a:
That the Activities
Performance Audit Committee:
a) Receives
the report titled “Southern Rural Fire Authority - Draft Statement of
Intent 2015-2018” dated 6 May 2015.
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Resolution
Moved Cr Baird, seconded Cr
Duffy and resolved recommendations b – d:
That the Activities
Performance Audit Committee:
b) Determines
that this matter or decision be recognised as not significant
in terms of Section 76 of the Local Government Act 2002.
c) Determines
that it has complied with the decision-making provisions of the Local
Government Act 2002 to the extent necessary in relation to this decision; and
in accordance with Section 79 of the Act determines that it does not require
further information, further assessment of options or further analysis of
costs and benefits or advantages and disadvantages prior to making a decision
on this matter.
d) Provides
any feedback it may have to the Southern Rural Fire Authority Chief Executive.
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7.2
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Finance Report to 30 April 2015
Record No: R/15/6/9839
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Management Accountant Susan McNamara was
in attendance for this item. She advised that the report outlines
the financial results to 30 April 2015 with 83% of the financial year gone. There were no significant issues contained in the report identified
that raised any concerns for Council relating to the end of year financial
position. Overall for the year to date, income is $272,000 under
budget.
As in prior years, all budget managers
have been instructed to have a strong focus on their budget and expenditure
items that they can control in the current economic climate.
The financial commentary centres on the summary sheet
which draws the totals from each of the key sections together. Although
you are able to obtain more detailed key variance explanations from senior
managers in these sections, these will be summarised below, concentrating on
the YTD results.
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Resolution
Moved Cr Macpherson, seconded Cr
Douglas and resolved:
That the Activities
Performance Audit Committee:
a) Receives
the report titled “Finance Report to 30 April 2015” dated 9 June
2015.
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7.3
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Audit Arrangements Letter for the Year Ended 30 June 2015
Record No: R/15/5/8609
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1 Finance
Manager Sheree Marrah was in attendance for this item. She advised that
the report was to provide an overall summary of the audit arrangements letter
for the annual report for the year ended 30 June 2015 recently received from
Audit New Zealand and seek approval for the Mayor to sign this letter on
Council’s behalf.
2 Audit
New Zealand requires Council to confirm the arrangements it makes for the
audit of the 2014/2015 annual report of Council. As part of this
confirmation, Audit New Zealand has provided Council with an audit arrangements
letter for the year ended 30 June 2015.
3 The
letter is required to be signed by the Mayor and returned to Audit New
Zealand to confirm Council’s acceptance of the proposed arrangements.
The report provides a summary of the letter for the Committee’s
information. A copy of this letter is attached to the officers report.
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Resolution
Moved Cr Harpur, seconded Cr Keast and resolved:
That the Activities
Performance Audit Committee:
a) Receives
the report titled “Audit Arrangements Letter for the Year Ended 30 June
2015” dated 24 June 2015.
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Resolution
Moved Cr Ford, seconded Cr
Dillon
That the Activities
Performance Audit Committee:
b) Determines
that this matter or decision be recognised as not significant
in terms of Section 76 of the Local Government Act 2002.
c) Determines
that it has complied with the decision-making provisions of the Local
Government Act 2002 to the extent necessary in relation to this decision; and
in accordance with Section 79 of the Act determines that it does not require
further information, further assessment of options or further analysis of
costs and benefits or advantages and disadvantages prior to making a decision
on this matter.
d) Authorises
the Mayor to sign the audit arrangements letter for the year ended 30 June
2015 on Council’s behalf.
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7.4
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Changes to the Accounting Standards for Public Benefit Entities
Record No: R/15/6/9638
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Finance Manager Sheree Marrah was
in attendance for this item. She advised that the report was to update
Council on the changes to the accounting standards that form the basis of the
financial statements included in the annual report for the year ended 30 June
2015. In the 2015 financial year Council transitioned from using
standards that are used by all reporting entities to those that are
specifically designed for Public Benefit Entities.
2 The
report also outlined the process Audit New Zealand has identified that will
enable a smooth transition between the standards and the areas of the
standards Council staff have identified as impacting on our financial
statements.
3
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Resolution
Moved Cr Macpherson, seconded Cr Keast and
resolved:
That the Activities
Performance Audit Committee:
a) Receives
the report titled “Changes to the Accounting Standards for Public
Benefit Entities” dated 11 June 2015.
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Public Excluded
Exclusion of the Public: Local Government Official Information and
Meetings Act 1987
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Resolution
Moved Cr Douglas, seconded Cr Baird and resolved
That the Activities Performance Audit Committee exclude the public
from the following part(s) of the proceedings of this meeting.
C8.1 Public Excluded Minutes of the Activities Performance Audit
Committee Meeting dated 3 June 2015
The
general subject 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(1) of the Local Government Official Information
and Meetings Act 1987 for the passing of this resolution are as follows:
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General subject of each
matter to be considered
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Reason for passing this
resolution in relation to each matter
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Ground(s) under section
48(1) for the passing of this resolution
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Public Excluded Minutes
of the Activities Performance Audit Committee Meeting dated 3 June 2015
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s7(2)(a) - The
withholding of the information is necessary to protect the privacy of natural
persons, including that of a deceased person.
s7(2)(b)(ii) - The
withholding of the information is necessary to 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.
s7(2)(f)(ii) - The
withholding of the information is necessary to maintain the effective conduct
of public affairs through the protection of such members, officers, employees
and persons from improper pressure or harassment.
s7(2)(h) - The
withholding of the information is necessary to enable the local authority to
carry out, without prejudice or disadvantage, commercial activities.
s7(2)(i) - The
withholding of the information is necessary to enable the local authority to
carry on, without prejudice or disadvantage, negotiations (including
commercial and industrial negotiations).
s7(2)(j) - The
withholding of the information is necessary to prevent the disclosure or use
of official information for improper gain or improper advantage.
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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 exists.
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Permit the Chief Executive, Group Manager
Environment and Community, Group Manager Services and Assets, Group Manager,
Policy and Community, Chief Information Officer, Chief Financial Officer,
Communications & Governance Manager and Committee Advisor to remain at this
meeting, after the public has been excluded, because of their knowledge of C8.1 Public Excluded Minutes of the Activities Performance Audit
Committee Meeting dated 3 June 2015. This knowledge, which will be of assistance in relation to the matters
to be discussed, is relevant to that matter because of their specialist
knowledge.
The meeting went into public excluded at
11.36am and returned to open session at 11.37am.
Resolutions in
relation to the confidential items are recorded in the confidential section of
these minutes and are not publicly available unless released here.
The meeting concluded at 11.37am. CONFIRMED
AS A TRUE AND CORRECT RECORD AT A MEETING OF THE Activities Performance Audit Committee HELD ON 24 JUNE 2015.
DATE:...................................................................
CHAIRPERSON:...................................................
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Activities
Performance Audit Committee
15 July 2015
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Annual
Report 2014/2015 Timetable
Record No: R/15/6/10985
Author: Shannon
Oliver, Planning and Reporting Analyst
Approved by: Rex Capil,
Group Manager, Policy and Community
☐
Decision ☐ Recommendation ☒ Information
Purpose
1 The
purpose of the report is to provide the key dates for Annual Report 2014/2015
timetable for information.
Executive
Summary
2 The
Annual Report is the key document for Council. This Annual Report reports
on Council’s performance against the 2014/2015 Annual Plan (which is
based on the third year of the Council’s Long Term Plan
2012-2022).
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Recommendation
That the Activities
Performance Audit Committee:
a) Receives
the report titled “Annual Report 2014/2015 Timetable” dated 2
July 2015.
b) Determines
that this matter or decision be recognised as not significant in terms of
Section 76 of the Local Government Act 2002.
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Content
Background
3 The
Annual Report is the key reporting document for Council. This Annual
Report reports on Council’s performance against the 2014/2015 Annual Plan
(which is based on the third year of the Council’s Long Term Plan
2012-2022).
4 The
Annual Report is a means for Council to account and report to the community on
its performance of the preceding financial year - in this case from 1 July 2014
to 30 June 2015. It reports on outcomes, performance measures (both
financial and non-financial) and provides information on the result achieved
against budgeted results.
5 The
Annual Report is audited by Audit New Zealand which provides the reader with a
level of assurance of the consistency and accuracy of the information
reported.
6 The
purposes of an Annual Report are:
(a) To
compare the actual activities and the actual performance of the local authority
in the year with the intended activities and the intended level of performance
as set out in respect of the year in the Long Term Plan and the Annual Plan;
and
(b) To
promote the local authority's accountability to the community for the decisions
made throughout the year by the local authority.
7 As
with previous years both an Annual Report and a Summary Document are
produced. Similarly, as previously done, the Summary Document will be
distributed to all Council’s offices and made available on request.
Both the Summary Document and full Annual Report will be made available on the
Council’s website. The report availability will be advertised on
the Saturday edition of The Southland Times on 24 October 2015 (the delay is to
allow for the printers to produce the printed versions).
8 Key
dates for Council in relation to the timetable are:
· Council
workshop of the unaudited draft Annual Report – 16 September 2015
· Audit
visit - Monday, 7 September to Friday, 18 September 2015
· Adoption
of the Annual Report - Wednesday, 7 October 2015
· Annual
Report available on Council’s website - Monday, 12 October 2015
· Public
notice on the availability of the Annual Report - Saturday, 24 October 2015
(printed version available).
Factors
to Consider
Legal and Statutory
Requirements
9 Section
98 of the Local Government Act 2002 states that:
(1) A
local authority must prepare and adopt in respect of each financial year an
Annual Report containing in respect of that year the information required by
Part 3 of Schedule 10.
(2) The
purposes of an Annual Report are—
(a) to
compare the actual activities and the actual performance of the local authority
in the year with the intended activities and the intended level of performance
as set out in respect of the year in the Long Term Plan and the Annual Plan;
and
(b) to
promote the local authority's accountability to the community for the decisions
made throughout the year by the local authority.
(3) Each
Annual Report must be completed and adopted, by resolution, within four months
after the end of the financial year to which it relates.
(4) A
local authority must, within one month after the adoption of its Annual Report,
make publicly available—
(a) its
Annual Report; and
(b) a
summary of the information contained in its Annual Report.
(5) The
summary must represent, fairly and consistently, the information regarding the
major matters dealt with in the Annual Report.
(6) A
local authority must, within one month after the adoption of its Annual Report,
send copies of that report and of the summary prepared under subsection (4)(b)
to—
(a) the
Secretary; and
(b) the
Auditor-General; and
(c) the
Parliamentary Library.
10 Information
that must be included can be found in Schedule 10 Part 3 of the Act, and
includes:
· groups
of activities
· capital
expenditure for groups of activities
· statement of
service provision, funding impact statement for groups of activities,
internal borrowing
· council-controlled
organisations
· financial
statements
· rating
base information
· reserve
funds
· remuneration
issues
· employee
staffing levels and remuneration
· severance
payments
· statement
of compliance
· the
activities that the local authority has undertaken in the year to establish and
maintain processes to provide opportunities for Māori to contribute to the
decision-making processes of the local authority.
11 The
Annual Report and Summary Document reports on Council’s performance
against the Annual Plan (which is based on the third year of the
Council’s Long Term Plan 2012-2022) under the Act.
12 As
each Annual Report must be completed and adopted, by resolution, within four months
after the end of the financial year to which it relates, this makes 31 October
the last day available to meet this timeframe.
Community
Views
13 As
the Annual Report is a report on activities undertaken during the year, no
consultation is required as the consultation has already occurred as part of
the Annual Plan process.
Costs
and Funding
14 There
is a fee provided to Audit New Zealand to audit the Annual Report.
Policy
Implications
15 There are no
policy implications.
Assessment of Significance
16 Whilst
the Annual Report is an important accountability document for Council this
report merely sets out the associated timetable key dates and is therefore of
low significance.
Next Steps
17 The
project team will provide a draft document to Council at a workshop on 16
September 2015.
Attachments
a Annual
Report 2014/2015 timetable View
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Activities
Performance Audit Committee
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15 July 2015
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Tasks
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Department
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Due date
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MAY
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Executive Leadership team (ELT) approve timetable.
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Strategy
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Monday 25 May
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JUNE
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Meet to discuss approach to summary and content and review content of
previous Annual Report (AR).
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Project Team
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Tuesday 30 June
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JULY
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Book in project team dates and project updates to general staff.
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Strategy
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Wednesday 1 July
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Communication plan/key dates circulated at
Team Leader Forum to all Activity Managers with key
deadlines entered into their diaries
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Strategy
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Friday 3 July
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Finalise AR template. Split into sections for editing.
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Strategy/Finance
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Friday 3 July
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Debtors and creditors cut-off (invoices to be paid and invoices to be
issued with Linda/Colin).
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Finance
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Friday 10 July
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Activity Managers to provide audit file of all base KPI data to
Strategy and Policy.
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Activity Managers and associated Group Manager signoff
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Wednesday 15 July
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Timetable report to APAC.
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Strategy
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Wednesday 15 July
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Circulate spreadsheet of 2014/2015 projects to Finance to complete
actual cost figures.
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Strategy
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Thursday 16 July
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All businesses unit managers meet with Finance rep and balanced up
all business units.
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Staff
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Tuesday 28 July
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Collate performance results for each activity and draft up activity
sections (narrative, projects tables, and performance tables).
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Strategy
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By Friday 31 July
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Draft narrative for Key Highlights, CCOs, Community
Outcomes, Summary Activity Report and Opportunities for Māori to
Contribute to Decision-Making.
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Strategy
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By Friday 31 July
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AUGUST
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Complete actual costs for 2014/2015 projects.
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Finance with
Group Manager signoff
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Monday 3 August
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Issue draft activity sections to staff to complete.
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Strategy
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Monday 3 - 6 August
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All activity sections from Activity Managers due.
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Activity Managers and associated Group Manager signoff
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Friday 7 August
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Activity sections completed and incorporated and link sent to
activity managers.
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Strategy
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Monday 10 August
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Reports due for ELT - review of year end business unit reports and
rough draft of AR.
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Finance
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Wednesday 12 August
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ELT meeting - review year end business unit reports and rough draft
of AR.
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Finance
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Monday 17 August
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Draft financial statements, FIS etc.
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Finance
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Friday 21 August
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Significant variances explanations and Financial Overview completed.
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Finance
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Friday 21 August
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Assemble Annual Report incorporating any changes.
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Strategy
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Monday 17 - 24 August
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Proofreading – Editing and Grammar
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WP
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Monday 24 - 26 August
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Initial proofread of document – Flow check.
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Comms
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Thurs 27 - Fri 28 August
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Document locked down and merged into one document.
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Strategy
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Monday 31 August
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Unaudited AR to ELT to discuss unaudited full AR including KPI
results.
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Strategy
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Monday 31 August
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SEPTEMBER
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ELT feedback.
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ELT
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Thursday 3 September
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Complete “Message from the Mayor and
Chief Executive”.
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Comms
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Friday 4 September
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Put on Hub - APAC - unaudited AR First Cut
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Strategy
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Wednesday 9 September
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APAC workshop 9.00 -10.30 am
Note - draft form only not with audit changes.
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ALL
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Wednesday 16 September
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Audit arrives.
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Audit
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Monday 7 - 18 September
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Send summary text to Auditors.
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Comms
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Monday 14 September
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Final proofing and quality check of highlighted changes.
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WP/Comms
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Week starting 14 - 23 September
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Audit leaves - incorporate changes into AR.
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Audit/Strategy/Finance
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Friday 18 & 21 September
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Give final audit changes on summary to Communications.
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Strategy/Finance
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Friday 18 September
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Send final summary text to graphics designer.
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Comms
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Monday 21 September
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Graphics cover page completed.
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Monday 21 September
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Report and AR due for ELT agenda.
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Strategy/Finance
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Monday 21 September - noon
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ELT agenda check + any changes from audit tabled.
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ELT
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Thursday 24 September
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Agenda finalised and put on the hub.
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Governance
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Monday 28 September
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OCTOBER
|
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Send copy of Council report and outline any final audit changes to
ELT and Audit that are to be tabled.
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Strategy/Finance/Comms
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Monday 5 October
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Adoption of Annual Report, Summary document and Audit opinion.
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Council
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Wednesday 7 October
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AR master completed and added to website, including Audit disclosure.
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Strategy
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Friday 9 October
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Summary and AR documents to be completed and printed.
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Comms
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Tuesday 20 October
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Print AR and Summary and circulate to area offices.
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Strategy/Comms
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Tuesday 20 October
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Advertise availability of report (public notice).
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Strategy
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Saturday 24 October
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Circulate summary and report to relevant persons on corporate mailing
list.
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Strategy
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Monday 26 October
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Debrief/lessons learned session.
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All
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Friday 30 October
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Activities
Performance Audit Committee
15 July 2015
|
|
Financial Report to 31 May 2015
Record No: R/15/6/9971
Author: Susan
McNamara, Management Accountant
Approved by: Anne
Robson, Chief Financial Officer
☐
Decision ☐ Recommendation ☒ Information
|
Recommendation
That the Activities
Performance Audit Committee:
a) Receives
the report titled “Financial Report to 31 May 2015” dated 6 July
2015.
|
Attachments
a Report
to Activities Performance Committee (APAC) - 15 July 2015 - Report to 31 May
2015.
|
Activities
Performance Audit Committee
|
15 July 2015
|
Background
This report outlines the financial results to 31 May
2015.
Percentage of year gone: 92%.
OVERVIEW
Management Accountant May Finance Overview
As in prior years, all budget managers have been instructed
to have a strong focus on their budget and expenditure items.
The financial commentary centres on the summary sheet which
draws the totals from each of the key sections together. Although you are
able to obtain more detailed key variance explanations from senior managers in
these sections, these will be summarised below, concentrating on the YTD
results.
Income
Overall for the YTD, income is 1% ($896K) under
budget.
Key variances are as follows:
The Council and Councillors’ revenue is 1% ($26K) over
budget for the year-to-date, primarily due to unbudgeted internal catering
income of $15K.
Other activities income is 10% ($176K) over budget for the
year-to-date. This is predominantly due to the timing of income received from
interest on investments.
Within the Chief Executive section, income received is 20%
($671K) under budget due to:
• Chief
Executive - 9% ($40K) over budget due to an unbudgeted vehicle sale and the
quarterly application of rates penalties.
• Stewart
Island Visitors Levy - Income is 11% ($16K) under budget. With the cruise
ship period completed, income is expected to be approximately $27K under budget
at year end.
• Around
the Mountains Cycle Trail - 39% ($717K) under budget due to final invoicing to
the Ministry being completed last financial year. This is expected to be
$840K under budget at year end.
Within the Environmental and Community Group, year-to-date
income is 3% ($189K) over budget, this is principally due to increased revenue
in Dog and Animal Control from infringement notices ($68K) and increased
numbers of dog registrations ($20K), as well as increased resource consent fees
($53K) as a result of the invoicing of two significant notified consents.
Within the Financial Services Group, income is 22% ($430K)
under budget. As this activity is internally funded this is due to
reduced expenditure.
Within the Information Management Group, year-to-date income
is $3K over budget, predominantly due to internal computer hire income of $43K
from additional items of hardware and software being provided. This is
offset by lower income in the Knowledge Management and Property and Spatial
Services due to lower expenditure as these activities are internally funded.
Within the Policy and Community Group, year-to-date income
is $5K over budget. As this activity is internally funded this is a
result of increased expenditure.
Within the Roading and Transport section, compared to the
Annual Plan total income is 4% ($324K) under budget. NZTA income is
currently 6% ($826K) under Annual Plan budget and is offset by the timing of
$555K of internal interest income (the internal interest income will realign at
year end). Roading are forecasting NZTA income to be 1% ($151K) under the
Annual Plan budget at the end of year. We are currently finalising the
income relating to the NZTA three year programme of works but it is anticipated
to be slightly under the three year approved budget.
Overall Services and Assets income
(excluding Roading) is tracking 1% ($131K) above
year-to-date budget. This is due to:
• Engineering Consultants being 10% ($76K) under
budget. As this activity is internally funded this is a result of
reduced levels of expenditure.
• Overall
Forestry income received is 6% ($108K) over budget, this is expected to be the
position at the end of the year. This is predominantly due to harvesting
revenues from Waikaia forest being $935K over budget, offset by Dipton and Ohai
forest revenues being under budget ($460K and $366K respectively).
No harvesting was included in the Annual Plan for Waikaia, Dipton is lower than
the amount in the Annual Plan whereas no harvesting occurred at
Ohai.
The
tonnes harvested per hectare were higher at Waikaia than was estimated at the
time harvesting began (559.88 actual versus 556 estimate); at Dipton the tonnes
harvested per hectare was lower than was estimated (476.73 actual versus 495
estimate).
• District Sewerage is 3% ($92K) over budget as income was
received from Landcorp for leasing land at the Kepler site ($60K).
Expenditure
Overall for the year-to-date, expenditure is 7% ($3.09M)
under budget.
The key variances are as follows:
Other activities expenditure is 46% ($645K) under budget as
the calculation and allocation of interest on reserves is completed as part of
the year-end process.
The Chief Executive activity is 5% ($88K) under budget due
to timing of Stewart Island Visitors Levy Grants with $117K being paid in June,
as well as lower payroll costs of $71K, as a result of the CEO position being
vacant for three months. These underspends are offset principally by
internal consenting costs relating to the Around the Mountains Cycle Trail of
$128K.
The Environment and Community Group is 8% ($468K) under
budget. This is predominantly due to expenditure on the District Plan
being lower than anticipated at this stage of the year. The expenditure
on the District Plan is currently $346K under budget and is expected to be
$400K under budget at the end of the year. It is anticipated that
additional costs will be incurred in the Environment Court appeal/mediation
process in the 2015/16 financial year. Dog and animal control is $76K
over budget predominantly as a result of additional payroll related costs for
after-hours work, these additional costs are sufficiently offset by the
additional revenue generated in this activity in the current year.
Within Financial Services, expenditure is 22% ($440K) under
budget, primarily due to the timing of audit costs ($138K) and staff vacancies
($211K). Although some costs will be incurred before the end of the year,
Financial Services is expected to be $300K under budget at the end of the year
after the accrual of audit fees to the end of the year.
Within the Information Management group, overall expenditure
is 5% ($105K) under budget, predominantly due to the weather conditions
impacting the ability for aerial photography to be undertaken ($79K).
Within the Policy and Community Group, expenditure is 2%
($27K) under budget due to no expenditure to date for community outcomes ($41K)
and lower than expected staff costs due to maternity leave, these have been
offset by additional costs relating to the 10 Year Plan.
Roading expenditure is currently 7% ($679K) over Annual Plan
budget. Operations and maintenance costs are forecast to be $904K over
Annual Plan budget at year end. This will be partially offset by
underspends in capital expenditure (estimated at $451K) and underspends in the
previous two years. The forecast three year programme table which details
total expenditure (both capital and maintenance) is shown in the roading
section of this report. This outlines a forecasted underspend of $1.02M
compared to the programme approved by NZTA.
Actual operational expenditure for
Services and Assets year-to-date is 12% ($1.97M) under budget.
Key variances are as follows:
• District
Water is 17% ($472K) under budget, predominantly as a result of lower than
planned capital expenditure for the year-to-date ($414K actual capital works
compared to $959K budgeted).
• District
Sewerage is 21% ($936K) under budget, predominantly as a result of lower than
planned capital expenditure for the year-to-date ($1.82M actual capital works
compared to $2.62M budgeted).
• Water
Services is 14% ($180K) under budget predominately due to fewer services of
project consultant costs being required than budgeted.
• Engineering
Consultants is 10% ($76K) under budget due to a lower level of expenditure in
consultants and internal services.
• Forestry
expenditure is 38% ($344K) under budget as a result of lower expenditure across
all operations.
Capital Expenditure
Overall for the year-to-date, capital expenditure is 14%
($2.52M) under budget.
The key variances are as follows:
• Capital
expenditure in the Chief Executive activity is over budget by 12% ($225K)
due to the progress on Stage Two of the Around the Mountains Cycle Trail.
• Environment
and Community is over budget by 39% ($69K) primarily due to an additional
vehicle purchase for Animal Control funded by a loan to be repaid from external
income and the timing of the replacement of an Environmental Health vehicle.
• Information
Management capital expenditure is under budget by 36% ($99K) due to minimal
costs to date being incurred on the Records Improvement Plan. During the year
Info Council and Promapp have been purchased. A vehicle has also been purchased
that has been funded by a loan that is to be repaid from funds budgeted to
lease a vehicle.
• Roading
capital expenditure is under Annual Plan budget by 12% ($1.78M) due to timing
on planned road and pavement renewals. The capital budget at year end is
forecast to be $451K below Annual Plan budget.
• Services
and Assets are under budget by 72% ($942K) with minimal capital expenditure to
date on projects planned in public conveniences, district reserves and
forestry.
Funding Adjustments
Funding adjustments are significantly under budget as
typically ‘balancing’ of business units is not undertaken until the
end of the financial year.
Journals are being processed for reserve transfers,
predominantly in relation to vehicle movements, and loan draw-downs (ie for
project funding), throughout the year at the request of budget managers.
Key Financial Indicators
|
Indicator
|
Target*
|
Actual
|
Variance
|
Compliance
|
|
External Funding:
Non rateable income/Total income
|
> 39%
|
37%
|
-2%
|
x
|
|
Working Capital:
Current Assets/Current Liabilities
|
>1.09
|
3.08
|
1.99
|
a
|
|
Debt Ratio:**
Total Liabilities/Total Assets
|
<0.73%
|
0.53%
|
0.2%
|
x
|
|
Debt To Equity Ratio:
Total Debt/Total Equity
|
<0.01%
|
0.00%
|
0.01
|
a
|
* All
target indicators have been calculated using the 2014/15 Annual Plan
figures.
** Excludes
internal loans.
Financial
Ratios Calculations:
|
Non
Rateable Income
|
|
Total
Income
|
External Funding:
This ratio indicates the percentage of revenue received
outside of rates. The higher the proportion of revenue that the Council
has from these sources the less reliance it has on rates income to fund its
costs.
|
Current
Assets
|
|
Current
Liabilities
|
Working Capital:
This ratio indicates the amount by which short-term assets
exceed short term obligations. The higher the ratio the more comfortable
the Council can fund its short term liabilities.
|
Total
Liabilities
|
|
Total
Assets
|
Debt Ratio:
This ratio indicates the capacity of which the Council can
borrow funds. This ratio is generally used by lending institutions to
assess entities financial leverage. Generally the lower the ratio the
more capacity to borrow.
Debt to Equity Ratio:
It indicates what proportion of equity and debt the Council
is using to finance its assets.
|
Activities
Performance Audit Committee
|
15 July 2015
|
|
Activities
Performance Audit Committee
|
15 July 2015
|
CHIEF EXECUTIVE COMMENTARY
For the year-to-date, income is under budget by 20%
($671K). Expenditure is under budget by 5% ($88K), therefore resulting in
a net year-to-date position of $583K under budget.
Chief Executive
Income in this business unit is 9% ($40K) over budget, this
is due to proceeds on an unbudgeted vehicle sale ($14K) and rates penalties
income ($14K). Expenditure is 10% ($47K) under budget, predominantly due
to staff costs being under budget ($71K). This is offset by project
consultant fees being over budget ($31K).
Civil Defence
Income is on budget. Expenditure is 4% ($10K) over
budget due to the Emergency Management Southland grant being slightly higher
than budgeted. It is anticipated to be $10K over budget at year end.
Human Resources
Income is 4% ($18K) over budget. Expenditure
year-to-date is $2K over budget, due to training costs ($50K) offset by
underspends in survey expenses ($19K), consultant costs ($18K) and staff costs
($17K). As this activity is internally funded, the increased expenditure
impacts directly on income.
Around the Mountain Cycle Trail
Income is 39% ($717K) under budget due to final invoicing to
the Ministry being completed last financial year. It is expected to be
$590K under budget at year end. Capital expenditure is over budget by
$340K with work being undertaken on Stage 2.
Rural Fire Control
Income and expenditure is on budget for the year.
Shared Services Forum
Income is 9% ($5K) over budget due to the timing of
contributions. Expenditure for
year-to-date is under budget by 30% ($15K), with low activity for the
year.
Stewart Island Visitor Levy
Income is 11% ($16K) under budget. With the cruise
ship period completed, income is expected to be under budget at year end.
Expenditure is $162K under budget with grant allocations having been approved
but not yet paid out.
|
Activities
Performance Audit Committee
|
15 July 2015
|
|
Activities Performance
Audit Committee
|
15 July 2015
|
Council and Councillors’ Commentary
For the year-to-date, income is 1% ($26K) over budget.
Expenditure is under budget by
1% ($21K). This resulted in a net year-to-date position of $47K over
budget.
Council and Councillors
Income is 3% ($20K) over budget as a result of unbudgeted
income from internal catering $15K and funding for Leadlab project from
Ministry of Youth Development. Expenditure is under budget by 4% ($27K)
primarily due to Councillors’ salaries of $20K and Youth Council costs
$6K, however we are anticipating higher year-end costs as a result of the
Leadlab project.
Council Contributions/Grants
Income is on budget for the year-to-date. Expenditure
is under budget by 50% ($16K) due to grant payments yet to be requested and
paid and two grants being deferred until next year.
Council Elections
Income is on budget. Expenditure is $15K over budget
due to the Mararoa Waimea Ward Councillor election. No additional costs
are expected this year relating to elections.
Council Water and Sewerage Loans
Income and expenditure is on budget for the year-to-date.
International Relations Committee
Income is on budget for the year-to-date. Expenditure
is $3K over budget with attendance at the Sister Cities Conference in
March. It is expected to be $2K over budget at year end.
Museum
Income is on budget. Expenditure is over budget 6% ($26K)
due to timing of the Museum Trust Board Levy, it is expected to be on
budget at the end of the year.
Regulatory - Non-Recoverable
Income is 7% ($7K) over budget for the year-to-date.
Expenditure is under budget by
29% ($21K) as a result of minimal non-recoverable costs incurred for the year
to date.
Venture Southland
Income and expenditure are on budget. This will be on budget
at the end of the year.
|
Activities
Performance Audit Committee
|
15 July 2015
|
|
Activities
Performance Audit Committee
|
15 July 2015
|
OTHER
ACTIVITIES COMMENTARY
Allocations Committee
Income is 7% ($14K) over budget due to timing of grants
received. Expenditure is under budget by 29% ($78K) due to the timing of
grant payments.
Operating Investments
Currently, the majority of
Council’s reserves are internally loaned by Council or its local
communities for major projects. Council has set the interest rate to be
charged on these loans as part of its 10 Year Plan process and interest is
being charged on a monthly basis on all internal loans drawndown at 30 June
2014.
|
Activities Performance
Audit Committee
|
15 July 2015
|
|
Activities
Performance Audit Committee
|
15 July 2015
|
ENVIRONMENT AND
COMMUNITY COMMENTARY
Overall May 2015 monthly income for the Environment and
Community Group tracked almost exactly to budget at $547K actual v $548K
budget.
Key features of this month’s income were that Alcohol
Licensing and Animal Control income were well ahead of budget by 121% ($14K)
and 99% ($6K) respectively. The Alcohol Licensing result was due to a
correction around ordinary time payments, so is a one-off adjustment. The
Animal Control result was due to income from infringements and the courts being
ahead of budget.
Conversely, Building Control income was 10% ($13K) below
budget, and Resource Consent income was 12% ($8K) below budget, both reflecting
reduced levels of activity.
Overall May 2015 monthly expenditure for the Environment
and Community Group was 13% ($72K) below budget ($477K actual v $549 budget).
Most departments were below budget in expenditure,
reflecting a close focus on spending, with the exception of Animal Control
which incurred some significant additional salary costs for after-hours work.
The Resource Planning/Policy area was underspent by 68%
($39K), with less expenditure than anticipated on the District Plan project
over this period. Mediation processes which were expected to occur in
April to June 2015 have been delayed at the direction of the
Environment Court due to the status of Environment Southland’s Regional
Policy Statement content relating to the biodiversity issues, which is relevant
to several District Plan appeals.
|
Activities
Performance Audit Committee
|
15 July 2015
|
|
Activities
Performance Audit Committee
|
15 July 2015
|
FINANCIAL
SERVICES COMMENTARY
Income is 22% ($430K) under budget. As this activity
is internally funded the reduced expenditure impacts directly on income.
Expenditure is 22% ($440K) under budget. This is primarily
due to the following:
• The
timing of audit costs ($138K)
• Staff
vacancies in the finance team ($211K)
• Visa/MasterCard
charges currently under budget ($19K)
• Material
damage insurance review costs related to insuring water and wastewater above
ground assets, has now been correctly coded to the water and waste business
units. This has resulted in actual costs being less than budgeted by
$45K.
At year end it is expected that
the business unit will remain under budget by approximately $300K due to the
above.
|
Activities
Performance Audit Committee
|
15 July 2015
|
|
Activities
Performance Audit Committee
|
15 July 2015
|
INFORMATION
MANAGEMENT COMMENTARY
For the year-to-date, income is $3K over budget. Overall
expenditure is 5% ($105K) under budget, resulting in a positive variance of
$108K.
Information Management
Income is 4% ($47K) over budget, predominantly due to internal
computer hire relating to additional hardware of $43K. Expenditure is 1%
($10K) over budget. This relates primarily to Software Licence Fees $41K,
which are estimated to be around $45K over budget at year end.
Additionally, consultants costs are $15K over budget as a result of the IM
Strategy Review. This is offset by photocopy user charges $31K.
Knowledge Management
Income is 2% ($13K) under budget. Expenditure is 3%
($19K) under budget, this is due to reduced internal computer hire costs ($13K)
and staff costs ($7K). This is offset by increases in postage costs ($7K)
and software licence fees ($3K). As this activity is internally funded
the reduced expenditure impacts directly on income.
Property and Spatial Services
Income is 9% ($31K) under budget. Expenditure is 20%
($77K) under budget predominantly due to timing on aerial photography costs
($79K). This is as a result of weather conditions not being suitable for
aerial photography and therefore the majority of the work not being
completed. Additionally software licence fees ($9K) and staff costs
($10K) are under budget. This is offset by consultant costs being
overspent by $9K. As this activity is internally funded the reduced
expenditure impacts directly on income.
|
Activities
Performance Audit Committee
|
15 July 2015
|
|
Activities
Performance Audit Committee
|
15 July 2015
|
POLICY AND
COMMUNITY COMMENTARY
Income for the year-to-date is $5K over budget.
Expenditure for the year-to-date is 2% ($27K) under budget. The net
result for the year-to-date is a surplus of $50K against a forecasted surplus
of $19K, a positive variance of $32K.
Community Outcomes
Income is on budget. Expenditure is under budget by
$41K as no projects relating to the
Our Way Southland Outcomes have been identified in the current period.
Corporate Planning
Income is 12% ($52K) over budget. Expenditure is 16%
($65K) over budget due to
increased costs associated with the Long Term Plan ($40K) and unbudgeted costs
relating to the Policy and Community business unit $41K. This is offset
by increased employee costs ($6K). As this activity is internally funded
the increased expenditure impacts directly on income.
Secretarial Services
Income is 4% ($17K) under budget. Expenditure is 4%
($17K) under budget predominately due to training costs ($5K) and Internal
Photocopying ($7K). As this activity is internally funded, the reduced
expenditure impacts directly on income.
Strategy/Communication
Income is 5% ($30K) under budget. Expenditure is
underspent by 6% ($34K) predominately due to staff costs ($15K) and first
edition costs ($11K) being below budget. This is offset by overspending on
radio advertising ($12K). As this activity is internally funded the
reduced expenditure impacts directly on income.
|
Activities
Performance Audit Committee
|
15 July 2015
|
|
Activities
Performance Audit Committee
|
15 July 2015
|
STRATEGIC
TRANSPORT
Overall Financial Performance
A continued strong focus on making sure we fully utilise
NZTA approved funding along with optimising "value for money" remains
a challenge.
It is forecasted that our operations and maintenance costs
will be over budget at year end. This will be partially offset by
underspends in capital expenditure and underspends in the previous two
years. The forecasted overspend can also be attributed to unbudgeted
emergency works projects for the Stewart Island Slips and the Ohai Clifden
Slip, as well as forecasted overspends in sealed, unsealed road maintenance and
Network and Asset Management.
Transport capital expenditure is under budget and is
forecasted to be under budget at year end. As we are coming to the end of
the construction season some projects will be deferred into the new financial
year. This is primarily due to weather restrictions.
The significant reduction in the bitumen index over the construction period has
also contributed to the forecasted underspend. This is illustrated below:
|
Key
|
|
|
Largely on
Track
|
|
|
Monitoring
|
|
|
Action
Required
|
Maintenance and Operations (excluding Special Purpose
Roads):
|
Financial Tracking vs Plans
|
|
YTD
|
Forecast
|
Annual Plan
|
NZTA Approved
|
|
92%
|
91%
|
96%
|
89%
|
- A
holistic approach to maintenance management has seen sealed pavement and
unsealed pavement maintenance being over budget but offset with underspends in
other activities. Network and Asset Management costs will be over budget
primarily driven by bringing forward our high speed data collection from the
2015/2016 year.
- It
is expected that we will be well within NZTA’s approved maintenance
budgets.
* Note that Council can only claim 30% of urban
drainage. Unsubsidised work has being excluded from this forecast.
Renewals and Minor
Improvements:
|
Financial Tracking vs Plans
|
|
YTD
|
Forecast
|
Annual Plan
|
NZTA Approved
|
|
92%
|
85%
|
80%
|
81%
|
Renewals and Minor Improvement Commentary:
As we are coming to the end of the
construction season, work is starting to be finalised before year end.
This will have an impact on completing some of our rehabilitation
projects. It is expected that most of the bridging work will be completed
this year, as Transport are pushing to get this work done to maximise the NZTA
Funding Assistance Rate for this category before it drops next year.
Recent weather events will likely impact on where these projects finish at year
end.
Three Year Programme:
|
Activities Performance
Audit Committee
|
15 July 2015
|
|
Activities
Performance Audit Committee
|
15 July 2015
|
SERVICES AND
ASSETS (Excluding Roading)
COMMENTARY
Income
Overall Services and Assets
(excluding Roading) actual income is 1% ($131K) over year to date budget
($15.47M). This is primarily driven by Forestry income $108K over budget.
Key highlights are:
• Engineering Consultants is 10% ($76K) under budget.
As income is fully recovered and driven by
expenditure levels the reduced expenditure impacts directly on income.
• Overall
Forestry income received is 6% ($108K) over budget, this is expected to be the
position at the end of the year. This is predominantly due to harvesting
revenue from Waikaia forest being $935K over budget, offset by Dipton and Ohai
forests revenue being lower than expected ($460K and $366K).
• District Sewerage is 3% ($92K) over budget as a payment
was received from Landcorp for leasing land at the Kepler site ($60K).
Operating Expenditure
Actual operational expenditure for
Services and Assets year-to-date is 12% ($1.97M) under budget.
Key highlights are:
• District Water is 17% ($472K) under budget, predominantly
as a result of lower than planned capital expenditure for the year-to-date
($414K actual capital works compared to $959K budgeted).
• District
Sewerage is 21% ($936K) under budget, predominantly as a result of lower than
planned capital expenditure for the year-to-date ($1.82M actual capital works
compared to $2.62M budgeted).
• Water Services is 14% ($180K) under budget predominately
due to fewer project consultant costs being required than budgeted.
• Engineering Consultants business unit is 10% ($76K) under
budget due to under expenditure in consultants and internal services.
• Forestry
expenditure is 38% ($344K) under budget as a result of lower expenditure across
all forests and associated operations.
Statement of Financial Position
COMMENTARY
The balance sheet as at 30 June
2014 represents the audited balance sheet for activities of Council (ie
excludes SIESA and Venture Southland). The financial position at
31 May 2015 is before year-end adjustments and only for the activities of
Council.
External borrowings have still not
been required, with internal funds being used to meet obligations for the
year-to-date.
|
|
|
|
|
Susan McNamara
MANAGEMENT ACCOUNTANT
|
|
|
|
|
|
