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Activities Performance Audit Committee

 

OPEN MINUTES

 

 

Minutes of a meeting of Activities Performance Audit Committee held in the Council Chambers, 15 Forth Street, Invercargill on Wednesday, 9 March 2016 at 10.30am.

 

present

 

Chairperson

Lyall Bailey

 

Mayor

Gary Tong

 

Councillors

Stuart Baird

 

 

Brian Dillon

 

 

Rodney Dobson

 

 

John Douglas

 

 

Paul Duffy

 

 

Bruce Ford

 

 

George Harpur

 

 

Julie Keast

 

 

Ebel Kremer

 

 

Gavin Macpherson

 

 

Neil Paterson

 

 

IN ATTENDANCE

 

Chief Executive, Steve Ruru, Group Manager Environmental Services, Bruce Halligan, Group Manager Community and Futures, Rex Capil, Chief Information Officer, Damon Campbell, Chief Financial Officer, Anne Robson, Communications Manager, Louise Pagan, Team Leader Governance, Chris Dolan, Committee Advisor, Alyson Hamilton, Briar Babbington.

 


Activities Performance Audit Committee

09 March 2016

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1          Apologies

 

There were no apologies received.

 

2          Leave of absence

 

There were no requests for leave of absence received.

 

3          Conflict of Interest

 

            There were no conflicts of interest declared.

 

4          Public Forum

There were no members of the public seeking speaking rights in the Public Forum section of the meeting.

 

5          Extraordinary/Urgent Items

There were no Extraordinary/Urgent items.

 

6          Confirmation of Minutes

 

Resolution

Moved Cr Ford, seconded Cr Keast  and resolved:

That the minutes of Activities Performance Audit Committee, held on 27 January 2016 be confirmed as a true and correct record.

 

7          Reports

 

7.1

Submission on Proposed changes to Vehicle Dimensions and Mass Rule

Record No:         R/16/2/1514

 

Report by Joe Bourque, Strategic Manager Transport, regarding a submission forwarded by Council concerning the Proposed Changes to the Land Transport Rule; Vehicle Dimensions and Mass Rule, was tabled.

 

Strategic Manager Transport, Joe Bourque, Roading Asset Management Engineer, Hartley Hare and John Laskewitz (MWH) were in attendance for this item.

 

1          Mr Hare advised the purpose of the report is to provide a summary of the proposed changes to the Land Transport Rule: Vehicle Dimensions and Mass 2002 and provide this Committee with a summary of the submission lodged with the New Zealand Transport Agency.

2           

3          Mr Hare explained the submission supports some of the changes proposed but opposes those which are expected to adversely impact on the Southland District Council roading network.

4          Mr Hare informed the discussion document focuses on three main areas. These are the general requirements for dimension and mass limits, permitting and access condition, and management of overdimension loads.

5          Mr Hare commented that the Southland District Council generally support the aims of giving operators access to new, safer, more efficient vehicles with hopefully better environmental and safety outcomes.

6          Mr Hare explained how this is done needs to be better balanced against the increased cost to Road Controlling Authorities (RCA) as on local roads, Road User Charges (RUC) only pay for half the damages, ratepayers end up paying for the rest.

7          The Committee was advised the total cost and more specifically the cost to ratepayers in general is a fundamental aspect not addressed by the consultation document.

8          Mr Hare informed the submission drafted by the Transport Team supports some of the proposed changes such as increase in vehicle height and reduction in weight tolerance around enforcement from 1.5 Tonne to 500kg.

9          Mr Hare advised the submission opposes the proposal on increasing the mass limits for front steer axles from 10.8 Tonne to 11 Tonne as these already cause a disproportionate amount of pavement damage.

10        The meeting noted the submission also opposes the removal of 50MAX permitting without inclusion of the standard SDC conditions. The submission does propose that this could be reviewed provided there is an improved mechanism for more accurately collecting and distributing RUC’s based on actual damage caused.

11        Mr Hare advised the consultation paper does recognise the effect on weak roads and structures from vehicles with higher axle mass. The effect on these roads may result in more rapid failure of the pavement.

12        Members were advised a copy of the submission lodged by the Transport Team is provided for the Committee’s information.

 

Mr Bourque commented that favourable feedback has been received from the Council submission.

 

Councillor Dillon queried the reference to agricultural vehicles, tractors, trailers in the submission.

 

In response Mr Laskewitz advised that the VDAM review needs to look at bringing all heavy vehicles which use the public roads under the RUC system as currently very large agricultural vehicles, trailers carry large loads over significant distances without having to pay for the costs they impose on the network. He added it is not so much the weight of the vehicles but the width of the vehicles being the issue.

 

 

Resolution

Moved Cr Dobson, seconded Cr Kremer  and resolved:

That the Activities Performance Audit Committee:

a)         Receives the report titled “Submission on Proposed changes to Vehicle Dimensions and Mass Rule” dated 25 February 2016.

 

b)         Endorses the submission on the Submission on Proposed changes to Vehicle Dimensions and Mass Rule.

 

 

 

 

7.2

Contract Extension - Southland Streetlight Maintenance Contract 09/42

Record No:         R/16/2/1561

 

Report by Joe Bourque, Strategic Manager Transport, regarding an extension to the Southland Streetlight Maintenance Contract 09/42, was tabled.

Strategic Manager Transport, Joe Bourque and Roading Asset Management Engineer, Hartley Hare were in attendance for this item.

Mr Hare advised the purpose of the report is to seek Committee consideration to extend the Southland District Council’s Streetlight Maintenance Contact (09/42) with Council’s current contractor to cover all maintenance aspects of the streetlight and pole network across the Southland region.

13        Mr Hare explained Otago Power Services was awarded the Southland District Council’s Streetlight Maintenance Contract (09/42) on 28 January 2010 with a commencement date of 1 March 2010. 

14        He added the contract was for an initial period of three years (expiring 12.00 midnight, 28 February 2013).  The contract made provision for a two-year rollover, which was adopted in March 2013.

15        Mr Hare advised the two-year rollover expired at midnight 28 February 2015.  A 12 month extension of this contract was negotiated with the contractor and approved by NZTA.  This current extension will expire on 1 March 2016.

16        The meeting was advised throughout the six year period to date, communication between Council and Otago Power Services has been excellent.  Where service delays were inevitable or on the rare occasion timeframes could not be met, Council was notified accompanied by a valid explanation.

17        Mr Hare commented that Otago Power Services has adequately delivered on the requirements as set out in the contract and on this basis the Strategic Transport Department recommend the implementation of a further 12 month extension.

18        Members noted Council have been notified by Otago Power Services that they have been purchased by Powernet Ltd. Otago Power Services will be amalgamated into the Powernet business at the end of March 2016. It is expected this amalgamation will have no effect to the service being provided.

19        Councillor Keast commented on the Light Emitting Diode (LED) technology and whether Council is keeping up with overseas technology.

Mr Hare responded advising Council are investigating the current LED market to determine best products.

 

 

 

Resolution

Moved Cr Kremer, seconded Cr Duffy  and resolved:

That the Activities Performance Audit Committee:

a)            Receives the report titled “Contract Extension - Southland Streetlight Maintenance Contract 09/42” dated 1 March 2016.

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 extension of the Southland Streetlight Maintenance Contract 09/42 contract to Otago Power Services effective from 29 February 2016 to 1 March 2017.

 

7.3

Foveaux Alliance Contract Number 06/26 Extension to July 2017

Record No:         R/16/1/1386

 

Report by Joe Bourque, Strategic Manager Transport, regarding the Foveaux Contract Number 06/26 Extension to July 2017, was tabled.

Strategic Manager Transport, Joe Bourque and Roading Asset Management Engineer, Hartley Hare were in attendance for this item.

Mr Bourque advised the purpose of the report is to seek the Committee’s consideration to a one year extension of the current Foveaux Road Maintenance Alliance Contract (number 06/26).

Mr Bourque advised this report outlines the recommendation to offer Fulton Hogan a one year extension on the current Foveaux Alliance Contract and aligning the contract expiry dates of all three Alliance Maintenance Contracts.

3        Mr Bourque explained this will create the opportunity to potentially reduce the number of contracts from three to two and allow due consideration of potential contract boundaries.

 

 

 

Resolution

Moved Cr Dillon, seconded Cr Dobson  and resolved:

That the Activities Performance Audit Committee:

a)         Receives the report titled “Foveaux Alliance Contract Number 06/26 Extension to July 2017” dated 25 February 2016.

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 one year extension of contract number 06/26, known as the Foveaux Alliance contract with Fulton Hogan effective from 1 July 2016.

 

 

 

7.4

Annual Report 2015/2016 Timetable

Record No:         R/16/2/2532

 

Report by Shannon Oliver, Planning and Reporting Analyst, regarding the Annual Report 2015/2016 Timetable, was tabled.

Ms Oliver, Planning and Reporting Analyst, was in attendance for this item.

Ms Oliver advised the purpose of the report is to provide the key dates for the Annual Report 2015/2016 timetable.

2        Ms Oliver advised the Annual Report is the key planning document for Council which  reports on Council’s performance against the 2015-2025 Long Term Plan.

Ms Oliver informed the timetable has been prepared so that adoption of the Annual Report occurs on 28 September 2016.  The project team will consist of staff from the Finance, Strategy and Policy and Communications teams.

 

3       Ms Oliver explained 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 2015 to 30 June 2016.

Ms Oliver added it reports on outcomes, performance measures (both financial and non-financial) and provides information on the result achieved against budgeted results.

The meeting was informed the Annual Report is audited by Audit New Zealand which provides with a level of assurance of the consistency and accuracy of the information reported.

 

 

 

Resolution

Moved Cr Macpherson, seconded Cr Paterson  and resolved:

That the Activities Performance Audit Committee:

a)         Receives the report titled “Annual Report 2015/2016 Timetable” dated 25 February 2016.

 

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.

 

7.5

Financial Report for the period ended 30 November 2015

Record No:         R/16/1/1086

 

Report by Susan McNamara, Management Accountant, regarding the financial report for the period ended 30 November 2015, was tabled.

 

Ms McNamara, Management Accountant, was in attendance for this item.

 

 

 

Resolution

Moved Cr Paterson, seconded Cr Dillon  and resolved:

That the Activities Performance Audit Committee:

a)         Receives the report titled “Financial Report for the period ended 30 November 2015” dated 25 February 2016.

 

7.6

Financial Report for the period ended 31 December 2015

Record No:         R/16/2/2595

 

Report by Susan McNamara, Management Accountant, regarding the financial report for the period ended 31 December 2015, was tabled.

 

Ms McNamara, Management Accountant, was in attendance for this item.

 

1.         It was pointed out to the Committee 50% of the financial year is complete and that no issues have been identified that raise any concerns for Council.

2.          

Ms McNamara then spoke on matters relating to the income, operating expenditure, capital expenditure, forestry revenue, roading and transport, chief executive account and the balance sheet.

 

In regards to the balance sheet Councillor Douglas queried the loan to Rural Fire of $700,000 in the month of December 2015 in relation to a fire incident in the Dipton area.

 

Ms McNamara responded that payment is currently being discussed between the Insurance Company and property owner.

 

Councillor Douglas reported that in regards to harvesting of the Council’s forest in the Dipton area it is anticipated returns could be better than predicted.

 

 

Resolution

Moved Cr Baird, seconded Cr Keast  and resolved:

That the Activities Performance Audit Committee:

a)         Receives the report titled “Financial Report for the period ended 31 December 2015” dated 25 February 2016.

 

7.7

Internal Audit

Record No:         R/16/2/1790

 

Report by Sheree Marrah, Finance Manager, regarding an Internal Audit, was tabled.

 

Sheree Marrah, Finance Manager, was in attendance for this item.

 

Mrs Marrah reported that the purpose of this report is to outline to Council the benefits of implementing an internal audit function within Southland District Council and the options available for delivering this service, including participation in a shared internal audit pilot programme being offered by Deloitte.

 

 

Mrs Marrah advised the internal audit is good practice and is designed to add value and improve an organisation’s operations.

 

Mrs Marrah informed the process of internal audit involves a systematic disciplined approach to evaluate the effectiveness of risk management, internal controls and processes. An internal audit also adds value to the organisation by providing recommendations on where improvements can be made.

 

The meeting was informed Council have been approached by Deloitte to participate in a shared internal audit pilot programme to be rolled out across a number of local authorities across the South Island, which staff are recommending that Council participate in.

 

Mrs Marrah explained the potential use of Deloitte is only one part of a proposed internal audit programme.  Council staff are working to compile a draft internal audit plan for consideration by APAC at a future meeting.  This plan will address Council’s specific areas of internal audit focus for the future and the planned approach for undertaking the internal audit function for each area of focus (ie whether we will use internal, external or a combination of resources).

 

Councillor Kremer requested that the following items be included in relation to specific areas of the internal audit focus:

 

    project management, receiving information in timely manner and reporting of internal targets

 

Mr Ruru requested staff to note these items to be included in the risk assessment areas.

 

 

 

Resolution

Moved Member Tong, seconded Cr Douglas  and resolved:

That the Activities Performance Audit Committee:

a)         Receives the report titled “Internal Audit” dated 26 February 2016.

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)         Acknowledges the benefit of an internal audit function for Council.

e)         Requests Council staff to prepare a draft internal audit plan for consideration at a future meeting.

f)          Agrees to participate in the Deloitte shared internal audit pilot programme, and authorises the Chief Executive to sign the engagement letter dated 18 December 2015 on Council’s behalf.

g)         Approves unbudgeted expenditure of up to $12,000 + disbursements (GST exclusive) on the shared internal audit pilot programme, to be funded from underspends in the financial services budget.

 

7.8

Follow-up on Strong Recommendations and Recommendations from 2015 IANZ Reaccreditation Audit of Southland District Council

Record No:         R/16/2/1927

 

Report by Kevin O’Connor, Manager, Building Control regarding the follow-up on Strong Recommendations and Recommendations from 2015 IANZ Reaccreditation Audit of Southland District Council, was tabled.

 

Bruce Halligan, Group Manager, Environment and Community was in attendance for this item.

Mr Halligan advised this report provides follow-up on the actions taken in response to the strong recommendations and recommendations resulting from International Accreditation New Zealand (IANZ) March 2015 reaccreditation audit of the Southland District Council (SDC) Building Control section.

Mr Halligan informed IANZ undertakes an intensive audit process of all Building Control Authorities (BCAs) on a two yearly basis.  This audit process involves not only a thorough review of relevant documentation and processes, but also on-site inspections where IANZ assessors accompany staff to observe inspection processes.

Members noted that for Council to be able to issue building consents and code compliance certificates under the Building Act 2004, it must be accredited.

Mr Halligan advised reaccreditation was granted for a further two years, with no Corrective Actions Required (known as CARs) being necessary.

Mr Halligan explained IANZ has made a number of strong recommendations and recommendations for future improvement.  Strong recommendations need to be actioned or they are likely to turn to CARs at the next re-assessment and recommendations are considered for continuous improvement actioning, but are optional as to whether they are adopted or not.

 

Mayor Tong commented on the good work from the Building Control Team.

 

 

Resolution

Moved Cr Ford, seconded Cr Baird  and resolved:

That the Activities Performance Audit Committee:

a)         Receives the report titled “Follow-up on Strong Recommendations and Recommendations from 2015 IANZ Reaccreditation Audit of Southland District Council” dated 25 February 2016.

 

7.9

Southland Museum and Art Gallery Quarterly Report Against Statement of Intent

Record No:         R/16/2/2530

 

Report by Bruce Halligan, Group Manager, Environment and Community, regarding the Southland Museum and Art Gallery Quarterly Report Against Statement of Intent, was tabled.

Bruce Halligan, Group Manager, Environment and Community was in attendance for this item.

 

Mr Halligan advised that the Invercargill City Council’s Manager of Building Assets and Museum, Mr Paul Horner, has supplied a report relating to the operations of the Southland Museum and Art Gallery (SMAG) for the second quarter of the 2015/2016 financial year.

 

Mr Halligan advised the report was also recently considered by the Invercargill City Council’s Finance and Policy Committee and outlines levels of performance against the SMAG Statement of Intent.

20        The meeting was informed Mr Horner has requested that this report be forwarded to the Council’s APAC Committee for its information.

21        Members noted that the futures section of the Invercargill City Council report refers to the proposed increase in the Regional Heritage rates to cover proposed additional cataloguing activities.

 

 

Resolution

Moved Cr Kremer, seconded Cr Paterson  and resolved:

That the Activities Performance Audit Committee:

a)         Receives the report titled “Southland Museum and Art Gallery Quarterly Report Against Statement of Intent” dated 25 February 2016.

 

 

The meeting concluded at 11.40am       CONFIRMED AS A TRUE AND CORRECT RECORD AT A MEETING OF THE Activities Performance Audit Committee HELD ON 9 MARCH 2016.

 

 

 

     DATE:...............................................................

 

 

 

CHAIRPERSON:..............................................