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, 26
August 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:
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Monitor and review Council’s performance
against the 10 Year Plan
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Examine, review and recommend changes relating
to Council’s Levels of Services.
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Monitor and review Council’s financial
ability to deliver its plans,
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Monitor and review Council’s risk
management policy, systems and reporting measures
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Monitor the return on all Council’s
investments
·
Monitor and track Council contracts and
compliance with contractual specifications
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Review and recommend policies on rating, loans,
funding and purchasing.
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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
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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
26 August
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 Management
Report from Audit New Zealand for the Long Term Plan 1 July 2015 to 30 June
2025 13
7.2 Financial
Report to 30 June 2015 17
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, 5 August 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, 5 August 2015 at 10.30am.
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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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
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 Financial Officer
Anne Robson, Communications and Governance Manager Louise Pagan and Committee
Advisor Debbie Webster.
1 Apologies
There were no
apologies
2 Leave
of absence
There was a
request for leave of absence from Cr Paterson from 20 August to 2 September
2015, Cr Harpur from 14 August to mid-September and Cr Macpherson from 11
August to 1 September 2015.
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Moved Mayor
Tong, seconded Cr Douglas and resolved that the Activities
Performance Audit Committee accept the request for leave of absence from Crs
Paterson, Harpur and Macpherson.
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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
Baird, seconded Cr Duffy and resolved:
That the
meeting minutes of Activities Performance Audit Committee, held on 15 July
2015 be confirmed.
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Reports
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7.1
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Property File Digitisation Business Case
Record No: R/15/6/11256
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Knowledge
Manager Gillian Cavanagh and Business Process and
Project Analyst Andrew Kinloch were in attendance for
this report.
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Mrs Cavanagh advised that the
purpose of the report was to enable the Committee to review the Property File
Digitisation business case and make a decision to approve the undertaking of
the project as per the Southland District Council 10 Year Plan 2015-2025.
2 The
Committee noted that the in the 10 Year Plan 2015-2025 one of the key
budgeted projects for the Corporate Support activity was the Property File
Digitisation project. The project aims to scan all of Council’s
property records in order to reduce risk, increase statutory compliance,
eliminate physical space demands, provide a platform for future service
delivery improvements eg electronic consent lodgement and processing, and
improve the publics’ and staffs access to Council’s property
files.
3 The
Committee also noted that the Southland District Council currently operates a
paper based property filing system for the storage of its property
records. This system has increased by approximately 239 linear metres
or 58% of its original capacity in the last 10 years and weighs approximately
9 tonnes. As a result in the increase this has placed increasingly high
demands on the storage space available to Council to store these vital
records. With limited options to expand the storage of the property
files without reducing the level of service and increasing risk of loss or
damage, digitisation has become a vital component of being an effective Council.
Mrs Cavanagh advised that the digitisation project will
enable Council staff to work smarter and have access to any property file,
wherever they work and will enable the public to access any public property
information online and from any Council office.
Mrs Cavanagh highlighted to the Committee the project was
specifically relating to property files, with historical files going back to
1942. When queried she also noted that with digitisation there was the
potential to dispose of hard copy records.
Cr Bailey asked if the digitisation would be completed in
incremental blocks? Mr Campbell responded it would be preferred however
would depend on the capacity of the Vendor chosen to undertake the project.
Cr Douglas queried the cost of the project and the value
of the efficiencies to be gained from it. It was responded that from other
Councils experience in similar projects, digitisation helps significantly
with staff efficiency in accessing files and significantly improves records
standards. Cr Keast asked if estimates had been done on the value of
the efficiencies gained, being greater than the cost of the project. Mr
Campbell responded that estimates had not been done however based on other
Councils experiences the efficiencies gained were worth the project
cost. Mrs Cavanagh also noted that on average 250 - 300 property files
were out with staff in the District creating significant risk of loss and
damage to files.
Cr Kremer asked if individuals would be able to access
their electronic property files and how would security around this be
managed? Mr Ruru responded there would be a complex process around the
managing of records confidentiality. Mr Campbell commented a part of
the project was changing the EMDRS system to support this.
Cr Duffy queried the keeping of hard files that might have
heritage value? Mrs Cavanagh responded they would work with Heritage
New Zealand to identify these.
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Resolution
Moved Cr Dobson, seconded Cr Kremer and resolved:
That the Activities
Performance Audit Committee:
a) Receives
the report titled “Property File Digitisation Business Case”
dated 24 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.
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) Approves
the Property File Digitisation Business Case and to undertake the
digitisation project using the ‘single year digitisation’
option as outlined in the business case document.
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7.2
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Library Activities
Record No: R/15/7/12561
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Library Manager Lynda Hodge was in
attendance for this item. Mr Halligan introduced Mrs Hodge and noted
the positive library activities happening across the District. He also
noted there was an initial service delivery review underway, currently
developing the scope of the review, considering what people want from library
services in the District.
Mrs Hodge
advised that the purpose of the report was to provide the Committee with
an update on recent Library Services trends and activities. She noted
the issues at Southland District Council libraries have increased in the past
year by 12.58%. However the figures are captured from the Symphony
library computer system and have a margin for error as not all libraries are
computerised so the figures are a combination of statistics from the Symphony
system and manual counts from the non-computerised libraries.
Cr Bailey queried the inconsistency
in rating for library services across the District. He asked if there
might be some form of District wide funding? Mr Halligan
responded some Community Boards are querying the variances in what
communities are paying for library services, if there was a District Rate for
library services it would need to be in the District Plan and undergo public
consultation. Further work was required around this as there are
significant disparities across the District.
Mr Halligan noted point 24 on
Mrs Hodges report where it highlights the positive move of staff member
Roslyn Gray stepping into the vacated Team Leader role for Library Services.
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Resolution
Moved Cr Dillon, seconded Cr Macpherson and
resolved:
That the Activities
Performance Audit Committee:
a) Receives
the report titled “Library Activities” dated 24 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.
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.
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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 Baird, seconded Cr Douglas and
resolved:
That the Activities Performance Audit Committee exclude the public
from the following part(s) of the proceedings of this meeting.
C8.1 Recent Building Act Determinations and Other Matters
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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Recent Building Act
Determinations and Other Matters
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s7(2)(g) - The
withholding of the information is necessary to maintain legal professional
privilege.
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).
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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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That the 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 Financial Officer Anne Robson, Communications and Governance
Manager Louise Pagan and Committee Advisor Debbie Webster, be permitted to remain at this meeting, after the public has
been excluded, because of their knowledge of the items C8.1 Recent Building Act Determinations and Other Matters. This knowledge, which will be of assistance
in relation to the matters to be discussed, is relevant to those matters
because of their knowledge on the issues discussed and meeting procedure.
The public were
excluded at 11.10 am.
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 11.27 am CONFIRMED
AS A TRUE AND CORRECT RECORD AT A MEETING OF THE Activities Performance Audit Committee HELD ON WEDNESDAY 5 AUGUST
2015.
DATE:...................................................................
CHAIRPERSON:...................................................
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Activities
Performance Audit Committee
26 August
2015
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Management
Report from Audit New Zealand for the Long Term Plan 1 July 2015 to 30 June
2025
Record No: R/15/6/11244
Author: Sheree
Marrah, Finance Manager
Approved by: Anne
Robson, Chief Financial Officer
☐
Decision ☐ Recommendation ☒ Information
Summary of
Report
1 As
part of the audit process, Audit New Zealand provides Council with a report at
the end of its audit outlining the work that was performed and any recommended
areas for improvement.
2 Attached
is the management report received from Audit New Zealand in relation to the
audit of the 2015-25 Long Term Plan (LTP) (Appendix A).
3 In
the Management Report, Audit NZ noted that Council has 9 groups of activities
and it reports its performance against 111 performance measures. Audit New
Zealand believes there is scope to rationalise the number of measures to better
reflect the Council’s key priorities to the communities. For example,
Council includes 25 measures for community services compared to 6 measures
assessing the performance of its roading activities. Council responded
noting that it is Council’s intention to review its performance framework
prior to its 2018 – 2028 LTP.
4 Audit
New Zealand issued an unmodified opinion on Councils Long Term Plan document on
24 June 2015. This meant that Council’s LTP “met its statutory
purpose and provided an effective basis for public participation in
Council’s decisions about the proposed content of the 2015 – 2025
LTP”. In doing so Audit NZ found the LTP had no
“material” misstatements.
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Recommendation
That the Activities
Performance Audit Committee:
a) Receives
the report titled “Management Report from Audit New Zealand for the
Long Term Plan 1 July 2015 to 30 June 2025” dated 13 August 2015.
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Attachments
a Final
Management letter - Long Term Plan 2015-2025 View
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Activities
Performance Audit Committee
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26 August 2015
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Activities Performance
Audit Committee
26 August
2015
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Financial Report to 30 June 2015
Record No: R/15/6/9979
Author: Susan
McNamara, Management Accountant
Approved by: Anne
Robson, Chief Financial Officer
☐
Decision ☐ Recommendation ☒ Information
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Recommendation
That the Activities
Performance Audit Committee:
a) Receives
the report titled “Financial Report to 30 June 2015” dated 19
August 2015.
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Attachments
a Report
to Activities Performance Audit Committee - 26 August 2015 - Report to 30 June View
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Activities
Performance Audit Committee
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26 August 2015
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Background
This report outlines the interim financial results to 30
June 2015. These reports are based on the financial information as at 10 July
2015, before year end processing was undertaken. Year-end processing primarily
involves balancing up business units using either loans or appropriate
reserves, calculating interest on internal reserves and loans along with a
final depreciation calculation. The process also brings in accruals for
employee benefits and ACC and revaluations relating to infrastructure and forestry
for the year.
This report covers Council’s financial performance for
district wide activities only. Those activities reported to Community
Boards, Community Development Areas, Rural Water Supplies are not included.
This is consistent with reporting throughout the financial year.
Staff will update the committee at the meeting as to the
preliminary year end result.
As part of the year end process staff have also identified a
number of projects that are either in progress or not started that still need
to occur. These projects have been identified and included in a separate
report to Council titled ‘Projects from 2014/2015 to be carried forward
into 2015/2016 Financial Year’.
Percentage of year gone: 100%.
OVERVIEW
Management Accountant June 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, the key variances are summarised below, concentrating on the
YTD results.
Income
Overall for the YTD, income is $216K under budget.
Key variances are as follows:
Other activities income is 37% ($564K) over budget for the
year-to-date. This is predominantly due to the interest being earned from banks
on cash investments ($414K), which was not budgeted for. This is the
result of Council having a higher cash balance than anticipated.
Within the Chief Executive section, income received is 16%
($604K) under budget due to:
• Stewart
Island Visitors Levy - Income is 18% ($29K) under budget.
• Around
the Mountains Cycle Trail - 30% ($593K) due to the budget including monies
invoiced to the Ministry being completed prior to 30 June 2014.
• Human
Resources – 2% ($12K) over budget. As this business unit is
internally funded this is the result of increased expenditure.
Within the Environmental and Community Group, year-to-date
income is 3% ($235K) over budget due to:
• Increased
revenue in Dog and Animal Control principally due to higher infringement
notices than was budgeted ($73K), higher impounding fess than was budged ($17K)
and increased stock recoveries ($8K)
• Increased
internal Resource Consent income ($43K) mainly related to Around the Mountain
Cycle Trail consents.
• Building
Regulation ($27K) over budget due to higher than budgeted income from Building
Inspections (32K), on charging of third party consultancy costs incurred ($31K)
and proceeds from the sale of vehicles ($13K). This has been offset by
lower code of compliance income ($51K) than was budgeted.
• Area
Offices is over budget $27K with unbudgeted income received for advertisements
on Otautau News and Views and photocopying recoveries ($10K) and cemetery
interment fees ($12K).
• Environmental
Health is also over budget ($26K), due to higher income received from the Gore
District Council in relation to the Environmental Health Service Contract
($15K), higher licence fee income ($6K), and the unbudgeted sale of a vehicle
($8K).
• Alcohol
Licencing is over budget ($16K) with higher income from application fees ($12K)
and annual fees ($16K). This is offset by lower income from Managers
Certificate Fees ($9K).
Within the Financial Services Group, income is 17% ($379K)
under budget. As this activity is internally funded this is due to
reduced expenditure.
Within the Policy and Community Group, year-to-date income
is 5% ($89K) 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 1% ($335K) under budget. NZTA income is 3%
($463K) under Annual Plan budget. It is under the NZTA approved programme by
$1.045M for the three year period.
Overall Services and Assets income
(excluding Roading) is tracking 1% ($208K) above
year-to-date budget. This is due to:
• Area
Engineers being 4% ($42K) over budget and Engineering
Consultants 5% ($41K) under budget. As these business units are
internally funded this is a result of increased expenditure.
• Overall
Forestry income received is 5% ($87K) over budget. 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).
These variances are as a result of changes to the planned harvesting activities
for the year.
• District Sewerage is 3% ($85K) over budget, due to the
receipt received from Landcorp for the leasing land at the Kepler site
($60K).
Expenditure
Overall for the year-to-date, expenditure is 4% ($1.75M)
under budget.
The key variances are as follows:
Council & Councillors
Expenditure is 1% ($24K) under budget due to non-recoverable regulatory work
required throughout the year being lower than budgeted.
Other activities expenditure is 43% ($675K) under budget as
the calculation and allocation of interest on reserves is completed as part of
the year-end process.
The Environment and Community Group is 5% ($335K) under
budget. This is predominantly due to expenditure on the District Plan
being lower than anticipated during the year. With District Plan charges $230K
under budget of which $100K is proposed to be carried forward to the 15-16
year. Other variances are:
• Alcohol
licencing is under budget $35K due to lower Councillor and Board Member salary
costs ($30K) than was anticipated when the new structure was set up.
• District
Libraries is $60K under budget predominantly due to lower staff costs ($31K)
and slightly lower expenditure across a number in other areas.
• Area
Offices are also under budget $42K due to internal interest costs processed
through the Otautau office being completed as part of the year end process.
• Dog
and animal control is $96K over budget predominantly as a result of additional
payroll related costs for after-hours work required, these additional costs are
offset by the additional revenue generated in this activity in the current
year.
Within Financial Services, expenditure is 17% ($379K) under
budget, primarily due to the timing of audit costs ($88K), staff vacancies
($188K) and material damage insurance costs ($44K). Audit costs will
realign to within $10K of budget with the accrual of costs relating to the June
2015 audit being included as part of the year-end process.
Within the Information Management group, overall expenditure
is 5% ($124K) under budget, predominantly due to the weather conditions
impacting the ability for aerial photography to be undertaken ($84K) as well as
lower consultant costs in Property and Spatial Services ($19K).
Within the Policy and Community Group, expenditure is 4%
($58K) over budget due to consultants used for the LTP due to vacancies in
staff ($32K) and unbudgeted costs relating to the new position of Group
Manager - Policy and Community ($61K).This is offset by no expenditure to date
for community outcomes $45K and also savings from vacancies in Financial
Services.
Roading expenditure is currently 8% ($928K) over
budget. Operations and maintenance costs are $887K over budget at year
end due to sealed pavement maintenance ($253K), unsealed pavement maintenance
($309K), network and asset management ($219K) and Emergency reinstatement
($336K). This is offset by routine damage maintenance ($254K).
Actual operational expenditure for
Services and Assets year-to-date is 7% ($1.20M) under budget.
Key variances are as follows:
• District Water is 11% ($349K) under budget, predominantly
as a result of lower than planned capital expenditure for the year-to-date
($622K actual capital works compared to $1.05M budgeted). There are two
projects at Riverton that are proposed to be carried forward to the 2015-16
financial year where work has been started. There has also been
reticulation renewal two projects at Tuatapere deferred until further testing
is completed, likely to be in 2018-19; along with lateral replacements at
Ohai/Nightcaps that have been deferred for additional testing in 2016-17.
• District
Sewerage is 22% ($1.07M) under budget, predominantly as a result of lower than
planned capital expenditure for the year-to-date ($1.94M actual capital works
compared to $2.86M budgeted). There are six projects that have been
proposed to carry forward to the 2015-16 financial year, where work has been
started. A project at Ohai for treatment upgrade has been deferred for
additional condition assessment and testing.
• Water Services is 21% ($211K) under budget predominately
due to fewer project consultant costs being required than budgeted.
• Engineering Consultants business unit is 10% ($76K) under
budget due to less expended in consultants this is offset by internal services
$8K.
• Area
Engineers is 4% ($42K) over budget primarily due to
one budgeted position only filled part way through the year.
Capital Expenditure
Overall for the year-to-date, capital expenditure is 5%
($907K) under budget.
The key variances are as follows:
• Capital
expenditure in the Chief Executive activity is over budget by 59% ($1.22M)
due to the timing of work completed on Stage Two of the Around the Mountains
Cycle Trail compared to the budget prepared.
• Environment
and Community is over budget by 40% ($77K) 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 31% ($93K) due to the
deferral of the Records Improvement Plan to be included as part of the Property
file Digitisation project. During the year Info Council and Promapp have been
purchased and funded from the District Operations Reserve. A vehicle has
been replaced by purchase rather than lease (funded by a loan to be repaid from
vehicle lease cost budgeted).
• Roading
capital expenditure is under budget by 8% ($1.2M) primarily due to timing on
planned roading, structural component and pavement renewals.
• Services
and Assets are under budget by 63% ($899K) with minimal capital expenditure to
date on projects planned in public conveniences and district reserves. A public
convenience at Mossburn has been completed with a revised scope ($149K actual
versus $423K budget) and one at Garston is still in progress and is proposed to
be carried forward. As part of year end processing the revaluation for
forestry will be included in capital, this has a budget of $400K.
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
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Indicator
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Target*
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Actual
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Variance
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Compliance
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External Funding:
Non rateable income/Total income
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> 39%
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37%
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-2%
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x
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Working Capital:
Current Assets/Current Liabilities
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>1.09
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2.11
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1.02
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a
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Debt Ratio:**
Total Liabilities/Total Assets
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<0.73%
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0.76%
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0.03%
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a
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Debt To Equity Ratio:
Total Debt/Total Equity
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<0.01%
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0.00%
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0.01
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a
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* All
target indicators have been calculated using the 2014/15 Annual Plan
figures.
** Excludes
internal loans.
Financial
Ratios Calculations:
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Non
Rateable Income
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Total
Income
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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.
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Current
Assets
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Current
Liabilities
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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.
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Total
Liabilities
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Total
Assets
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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.
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Activities
Performance Audit Committee
|
26 August 2015
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Activities
Performance Audit Committee
|
26 August 2015
|
CHIEF EXECUTIVE COMMENTARY
For the year-to-date, income is under budget by 16% ($604K).
Expenditure is on budget. The year-to-date position is $597K under budget.
Chief Executive
Income in this business unit is 1% ($6K) over budget, this
is due to proceeds on an unbudgeted vehicle sale ($14K). Expenditure is
8% ($43K) under budget, predominantly due to staff costs being under budget
($61K). This is offset by project consultant fees being over budget
($31K).
Civil Defence
Income is on budget. Expenditure is 4% ($11K) over budget
due to the Emergency Management Southland grant being slightly higher than
budgeted.
Human Resources
Income is 2% ($12K) over budget. Expenditure
year-to-date is 10% ($60K) under budget due to underspends in survey expenses
($22K), consultant costs ($21K), relocation costs ($15K) and staff costs
($9K). This is offset by training costs ($45K). As this activity is
internally funded, the increased expenditure impacts directly on income.
Around the Mountain Cycle Trail
Income is 30% ($593K) under budget due to final invoicing to
the Ministry being completed last financial year. Capital expenditure is over
budget by 60% ($1.2M) with work being undertaken on Stage 2.
Rural Fire Control
Income and expenditure is on budget for the year.
Shared Services Forum
Income is on budget. Expenditure for year-to-date is under
budget by 2% ($1K).
Stewart Island Visitor Levy
Income is 18% ($29K) under budget. Expenditure is 20% ($46K)
under budget with $117K in grants being approved during the period.
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Activities
Performance Audit Committee
|
26 August 2015
|
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Activities
Performance Audit Committee
|
26 August 2015
|
Council and Councillors’ Commentary
For the year-to-date, income is on budget. Expenditure is
under budget by
1% ($24K). The year-to-date position is $40K over budget.
Council and Councillors
Income is on budget. Expenditure is under budget by 1%
($10K) primarily due to Councillors’ salaries of $9K and Youth Council
costs $6K. This is offset by office consumables ($12K).
Council Contributions/Grants
Income and Expenditure is on budget for the
year-to-date.
Council Elections
Income is on budget. Expenditure is $15K over budget
due to the Mararoa Waimea Ward Councillor election.
Council Water and Sewerage Loans
Income and expenditure is on budget for the year-to-date.
International Relations Committee
Income is 7% ($1K) under budget for the year-to-date with
the calculation of interest on reserves yet to occur. Expenditure is $2K
over budget with attendance at the Sister Cities Conference in March.
Museum
Income is 2% ($9K) over budget. Expenditure is under budget
2% ($9K) due to General Expenses $5K, Staff Costs $2K and Training Costs $1K.
Regulatory - Non-Recoverable
Income is 7% ($7K) over budget for the year-to-date as the
result of invoicing for the demolition of a dangerous building. It is likely
this will not be recovered. Expenditure is under budget by 21% ($21K) as
a result of minimal non-recoverable costs incurred for the year.
Venture Southland
Income and expenditure are on budget.
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Activities
Performance Audit Committee
|
26 August 2015
|
|
Activities
Performance Audit Committee
|
26 August 2015
|
OTHER
ACTIVITIES COMMENTARY
Allocations Committee
Income is 17% ($44K) under budget due to the timing of
interest on reserve calculations. Expenditure is under budget by 18%
($57K) predominantly due to a lower level of grants from the Ohai Railway Fund
($59K) than was budgeted.
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.
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Activities
Performance Audit Committee
|
26 August 2015
|
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Activities
Performance Audit Committee
|
26 August 2015
|
ENVIRONMENT AND
COMMUNITY COMMENTARY
Overall June 2015 monthly income for the Environment and
Community Group tracked slightly ahead of budget at $601K actual v $555K
budget.
Key features of June’s monthly income were Building
Control and Customer Services income ahead of budget by $27K (21%) and $22K
(80%) respectively. As Customer Services are internally funded this is a result
of increased expenditure for the month. Conversely, Dog and Animal Control
income is $14K under budget due to an adjustment for registration income
received in advance.
Overall June 2015 monthly expenditure for the Environment
and Community Group was $133K (23%) over budget ($700K actual v $567K budget).
All departments were over budget expenditure-wise, with the
exception of Resource Planning.
The key features for the month are Customer Services $22K
over due to training costs and staff costs. Resource Consent Processing $26K
and Building Regulation $36K were also over budget due $26K and $36K
respectively due to the timing of staff costs. Staff costs are higher for the
month due to an additional pay compared to the budget phasing.
Overall YTD Income at the
end of June 2015 for the 14/15 financial year is $235K (3%) ahead of budget, at
$7.28M actual versus $7.05M budget.
Animal Control income is $87K
(24%) ahead of budget due to infringement fees $73K and impounding fees $17K.
Resource Consent processing $43K over budget due to higher internal resource
consent charges $97K (mainly relating to Around the Mountain Cycle Trail). Income
was also over budget for Building Regulation ($27K), Area Offices ($27K) and
Environmental Health ($26K).
Overall YTD Expenditure at
the end of June 2015 of the 14/15 financial year is $335K (5%) below budget at
$6.35M actual versus $6.69M budget.
The Resource Planning/Policy area was underspent by $352K
(51%), with less expenditure than anticipated on the District Plan project over
this period. Mediation processes which were expected to occur in April
and May 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. Alcohol licencing is under budget $35K due to lower Councillor & Board
Member salary costs ($30K). District Libraries is $60K under budget
predominantly due to lower staff costs ($31K) and lower expenditure in other
areas. Area Offices are also under budget $42K due to lower internal interest
costs for the Otautau and Lumsden offices. Dog and animal control is $96K 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.
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Activities
Performance Audit Committee
|
26 August 2015
|
|
Activities
Performance Audit Committee
|
26 August 2015
|
FINANCIAL
SERVICES COMMENTARY
Income is 17% ($379K) under budget. As this activity
is internally funded the reduced expenditure impacts directly on income.
Expenditure is 17% ($379K) under budget. This is primarily
due to the following:
• The
timing of audit costs ($88K); this will align closer to budget after year end
processing has occurred.
• Staff
vacancies in the finance team ($188K)
• Visa/MasterCard
charges currently under budget ($15K)
• Material
damage insurance review costs related to insuring water and wastewater above
ground assets, have now been correctly coded to the water and waste business
units. This has resulted in actual costs being less than budgeted by
$44K.
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Activities
Performance Audit Committee
|
26 August 2015
|
|
Activities
Performance Audit Committee
|
26 August 2015
|
INFORMATION
MANAGEMENT COMMENTARY
For the year-to-date, income is on budget. Overall
expenditure is 5% ($124K) under budget. The year-to-date position is $116K over
budget.
Information Management
Income is 3% ($38K) over budget, predominantly due to
internal computer hire relating to additional hardware of $51K.
Expenditure is 1% ($8K) over budget. This relates primarily to Software
Licence Fees $42K. Additionally, consultants costs are $16K over budget as a
result of the Information Strategy Review. This is offset by photocopy
user charges $35K.
Knowledge Management
Income is on budget. Expenditure is 1% ($5K) under
budget, this is due to reduced operational leases ($9K) along with a number of
expenses slightly under budget. This is offset by increases in postage
costs ($10K) and staff costs ($6K). As this activity is internally funded the
reduced expenditure impacts directly on income.
Property and Spatial Services
Income is 13% ($48K) under budget. Expenditure is 26%
($111K) under budget predominantly due to timing on aerial photography costs
($84K). This is as a result of the original vendor going into
receivership and by the time a replacement was appointed weather conditions not
being suitable for aerial photography and therefore the majority of the work
not being completed. This is offset by consultant costs being overspent by
$19K. As this activity is internally funded the reduced expenditure
impacts directly on income.
|
Activities
Performance Audit Committee
|
26 August 2015
|
|
Activities
Performance Audit Committee
|
26 August 2015
|
POLICY AND
COMMUNITY COMMENTARY
Income for the year-to-date is 5% ($89K) over budget.
Expenditure for the year-to-date is 4% ($58K) under budget. The net
result for the year-to-date is a surplus of $55K against a forecasted surplus
of $24K, a positive variance of $31K.
Community Outcomes
Income is on budget. Expenditure is under budget by
$45K as no projects relating to the
Our Way Southland Outcomes have been identified in the current period.
Corporate Planning
Income is 20% ($95K) over budget. Expenditure is 24% ($110K)
over budget due to
increased costs associated with the Long Term Plan ($32K) and unbudgeted costs
relating to the Policy and Community business unit ($31K). This is offset
by employee costs ($28K). As this activity is internally funded the
increased expenditure impacts directly on income.
Secretarial Services
Income is 1% ($3K) under budget. Expenditure is 1%
($3K) under budget predominately due to Internal Photocopying ($11K). This is
offset by Staff Costs ($13K). As this activity is internally funded, the
reduced expenditure impacts directly on income.
Strategy/Communication
Income is on budget. Expenditure is underspent by 1%
($4K) predominately due to staff costs ($19K) and first edition costs ($18K)
being below budget. This is offset by overspending on radio advertising ($12K)
and unbudgeted costs relating to the Policy and Community business unit
($31K). As this activity is internally funded the reduced expenditure
impacts directly on income.
|
Activities
Performance Audit Committee
|
26 August 2015
|
|
Activities
Performance Audit Committee
|
26 August 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" has
been a challenge over the last year. This has been primarily driven by
the significant drop in the bitumen index.
While the roading activity is over the Annual Plan in
maintenance and operations expenditure this is offset with being under in
capital expenditure.
It is under the NZTA approved programme by $1.045M over
three years. As discussed above it was a primarily objective to spend of
the NZTA approved programme.
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Key
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Largely on Track
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Monitoring
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Action Required
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Maintenance and Operations (excluding Special Purpose
Roads):
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Financial Tracking vs Plans
|
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YTD
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Forecast
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Annual Plan
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NZTA Approved
|
|
100%
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100%
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105%
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98%
|
- The majority of
overhead expenses are in line with budget; apart from the professional services
budget and staff costs. This was driven by the employment of a Road
Safety Engineer and the review of the roading rate model.
- 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 is over budget
primarily driven by bringing forward our high speed data collection from the
2015/2016 year this decision was driven for commercial and availability of
resources reasons.
Emergency Works
- These projects are
unbudgeted due to their unforeseeable nature. These are considered and
managed within the Local Share budgets.
2014/2015 Costs
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Project
|
Expenditure 2014/2015
|
|
Horseshoe Bay/Leask Bay (Stewart Island)
|
$
119,224
|
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Ohai Clifden Slip
|
$
169,686
|
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Lower Hollyford Slip (special purpose road)
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$
46,704
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Renewals and Minor Improvements
Commentary
|
Financial Tracking vs Plans
|
|
YTD
|
Forecast
|
Annual Plan
|
NZTA Approved
|
|
100%
|
100%
|
92%
|
92%
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Renewals and Minor Improvement Commentary
As at the end of the year Transport has achieved expenditure
of 92% of the Annual Plan budget. This is partially offset with
maintenance and operations expenditure been over the Annual Plan budget.
A strong push was done to complete as many bridges as possible to optimise the
NZTA Funding Assistance Rate.
Preventive Maintenance
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Expenditure 2014/2015
|
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Mullet Road
|
$
379,019
|
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Golden Bay Road /Thule Road
(Stewart Island)
|
$
70,484
|
- These
projects are unbudgeted due to their
unforeseeable nature. These are considered and managed within the Local
Share budgets.
Three Year Programme
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Activities
Performance Audit Committee
|
26 August 2015
|
|
Activities
Performance Audit Committee
|
26 August 2015
|
SERVICES AND
ASSETS (Excluding Roading)
COMMENTARY
Income
Overall Services and Assets
(excluding Roading) actual income is 1% ($208K) over budget for the year
($16.97M v $16.76M).
Key highlights are:
• Area
Engineers is 4% ($42K) over budget. As income is fully recovered and driven by expenditure levels the
increased expenditure impacts directly on income.
• Engineering Consultants is 5% ($41K) under budget. As
income is fully recovered and driven by
expenditure levels the reduced expenditure impacts directly on income.
• Overall
Forestry income received is 5% ($87K) over budget. 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% ($85K) 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 7% ($1.20M) under budget.
Key highlights are:
• District Water is 11% ($349K) under budget, predominantly
as a result of lower than planned capital expenditure for the year-to-date
($622K actual capital works compared to $1.05M budgeted).
• District
Sewerage is 22% ($1.07M) under budget, predominantly as a result of lower than
planned capital expenditure for the year-to-date ($1.94M actual capital works
compared to $2.86M budgeted).
• Water Services is 21% ($211K) under budget predominately
due to fewer project consultant costs being required than budgeted.
• Engineering Consultants business unit is 5% ($41K) under
budget due to under expenditure in consultants this is offset by internal
services $8K.
• Area
Engineers is 4% ($42K) over budget primarily due to
staff costs.
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
30 June 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.
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Susan McNamara
MANAGEMENT ACCOUNTANT
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