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Notice is hereby given that a Meeting of the Finance and Audit Committee will be held on:

 

Date:                      

Time:

Meeting Room:

Venue:

 

Wednesday, 7 June 2017

9am

Council Chambers

15 Forth Street, Invercargill

 

Finance and Audit Committee Agenda

 

OPEN

 

 

MEMBERSHIP

 

Chairperson

Ebel Kremer

 

 

Mayor Gary Tong

 

Councillors

John Douglas

 

 

Paul Duffy

 

 

IN ATTENDANCE

 

Committee Advisor

Fiona Dunlop

 

Chief Financial Officer

Anne Robson

 

 

 

 

Contact Telephone: 0800 732 732

Postal Address: PO Box 903, Invercargill 9840

Email: emailsdc@southlanddc.govt.nz

Website: www.southlanddc.govt.nz

 

Full agendas are available on Council’s Website

www.southlanddc.govt.nz

 

 

 


Terms of Reference – Finance and Audit Committee

 

The Finance and Audit Committee is responsible for:

·                 Ensuring that Council has appropriate financial, risk management and internal control systems in place that provide:

-      An overview of the financial performance of the organisation.

-      Effective management of potential opportunities and adverse effects.

-      Reasonable assurance as to the integrity and reliability of Council’s financial and non-financial reporting. 

·                 Exercising active oversight of information technology systems. 

·                 Exercising active oversight of “Council’s health and safety policies, processes, compliance, results and frameworks”

·                 Relationships with External, Internal Auditors, Banking Institutions and Insurance brokers.

 

The Finance and Audit Committee will monitor and assess the following:

·                 The financial and non-financial performance of Council against budgeted and forecasted outcomes

·                 Consideration of forecasted changes to financial outcomes

·                 Council’s compliance with legislative requirements

·                 Council’s risk management framework

·                 Council’s Control framework

·                 Council’s compliance with its treasury responsibilities.

 

The Finance and Audit Committee shall have the following delegated powers and be accountable to Council for the exercising of these powers and will operate within:

·                 policies, plans, standards or guidelines that have been established and approved by Council;

·                 the overall priorities of Council;

·                 the needs of the local communities; and

·                 the approved budgets for the activity.

 

The Finance and Audit Committee will have responsibility and delegated authority in the following areas:

 

Financial and Performance Monitoring

(a)          Monitoring financial performance to budgets;

(b)          Monitoring service level performance to key performance indicators.

 

Internal Control Framework

(a)          Reviewing whether Council’s approach to maintaining an effective internal control framework is sound and effective;

(b)          Reviewing whether Council has taken steps to embed a culture that is committed to probity and ethical behaviour;

(c)          Reviewing whether there are appropriate systems, processes and controls in place to prevent, detect and effectively investigate fraud.

 

Internal Reporting

(a)          To consider the processes for ensuring the completeness and quality of financial and operational information being provided to the Council;

(b)          To seek advice periodically from internal and external auditors regarding the completeness and quality of financial and operational information that is provided to the Council.

 

 

 

External Reporting and Accountability

(a)          Agreeing the appropriateness of the Council’s existing accounting policies and principles and any proposed change;

(b)          Enquiring of internal and external auditors for any information that affects the quality and clarity of the Council’s financial statements and statements of service performance, and assess whether appropriate action has been taken by management in response to the above;

(c)          Satisfying itself that the financial statements and statements of service performance are supported by appropriate management signoff on the statements and on the adequacy of the systems of internal control (ie, letters of representation), and recommend signing of the financial statements by the Chief Executive/Mayor and adoption of the Annual Report, Annual Plans, Long Term Plans;

 

Risk Management

(a)          Reviewing whether Council has in place a current, comprehensive and effective risk management framework and associated procedures for effective identification and management of the Council’s significant risks;

(b)            Considering whether appropriate action is being taken to mitigate Council’s significant risks.

 

Health and Safety

(a)          Review, monitor and make recommendations to Council on the organisations health and safety risk management framework and policies to ensure that the organisation has clearly set out its commitments to manage health and safety matters effectively.

(b)          Review and make recommendations for Council approval on strategies for achieving health and safety objectives.

(c)          Review and recommend for Council approval targets for health and safety performance and assess performance against those targets.

(d)          Monitor the organisation’s compliance with health and safety policies and relevant applicable law.

(e)          Ensure that the systems used to identify and manage health and safety risks are fit-for-purpose, being effectively implemented, regularly reviewed and continuously improved.  This includes ensuring that the Council is properly and regularly informed and updated on matters relating to health and safety risks.

(f)           Seek assurance that the organisation is effectively structured to manage health and safety risks, including having competent workers, adequate communication procedures and proper documentation.

(g)          Review health and safety related incidents and consider appropriate actions to minimise the risk of recurrence.

(h)          Make recommendation to the Council regarding the appropriateness of resources available for operating the health and safety management systems and programmes.

(i)            Any other duties and responsibilities which have been assigned to it from time to time by the Council.

 

Internal Audit

 

(a)          Approve appointment of the internal auditor, internal audit engagement letter and letter of understanding. 

(b)          Reviewing and approving the internal audit coverage and annual work plans, ensuring these plans are based on the Council’s risk profile;

(c)          Reviewing the adequacy of management’s implementation of internal audit recommendations;

 

(d)          Reviewing the internal audit charter to ensure appropriate organisational structures, authority, access, independence, resourcing and reporting arrangements are in place.

 

External Audit

(a)          Confirming the terms of the engagement, including the nature and scope of the audit, timetable and fees, with the external auditor at the start of each audit;

(b)          Receiving the external audit report(s) and review action(s) to be taken by management on significant issues and audit recommendations raised within;

(c)          Enquiring of management and the independent auditor about significant business, political, financial and control risks or exposure to such risks.

 

Compliance with Legislation, Standards and Best Practice Guidelines

(a)          Reviewing the effectiveness of the system for monitoring the Council’s compliance with laws (including governance legislation, regulations and associated government policies), with Council’s own standards, and Best Practice Guidelines as applicable.

(b)          Conducting and monitoring special investigations, in accordance with Council Policy, and reporting the findings to Council. 

(c)          Monitoring the performance of Council organisations, in accordance with the Local Government Act. 

 

Business Case Review

(a)     Review of the business case of work, services, supplies, where the value of these or the project exceeds $2million or the value over the term of the contract exceeds $2million.

 

Insurance

(a)          Consider Council’s insurance requirements, considering its risk profile

(b)          Approving the annual insurance renewal requirements

 

Treasury

(a)        Oversee the treasury function of Council ensuring compliance with the relevant Council policies and plans

(b)        Ensuring compliance with the requirements of Council’s trust deeds are met

(c)        Recommending to Council treasury policies.

 

 

The Finance and Audit Committee is responsible for considering and making recommendations to Council regarding:

(a)       Policies relating to risk management, rating, loans, funding and purchasing.

(b)       Accounting treatments, changes in generally accepted accounting practice, and new accounting and reporting requirements.

(c)       The approval of financial and non-financial performance statements including adoption of the Annual Report, Annual Plans and Long Term Plans.

 

The Finance and Audit Committee is responsible for considering and making recommendations to the Services and Assets Committee on business cases.

 


Finance and Audit Committee

07 June 2017

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TABLE OF CONTENTS

ITEM                                                                                                                                   PAGE

Procedural

1          Apologies                                                                                                                        7

2          Leave of absence                                                                                                           7

3          Conflict of Interest                                                                                                         7

4          Public Forum                                                                                                                  7

5          Extraordinary/Urgent Items                                                                                          7

6          Confirmation of Minutes                                                                                               7

Reports for Recommendation

7.1       Risk Management Review Project                                                                             21

7.2       Draft Early Payment of Rates Policy                                                                         49

7.3       Draft Health and Safety Plan for 2017/2018                                                              57

Reports

8.1       Financial Report for the month ended 30 April 2017                                               75

8.2       Digitisation Project Update                                                                                        83

8.3       Audit Engagement Letters                                                                                          85

8.4       Interim Management Report from Audit New Zealand for the year ended 30 June 2017                                                                                                                                     117

8.5       Health and Safety                                                                                                       131   

Public Excluded

Procedural motion to exclude the public                                                                            134

C9.1    Risk Register - June 2017 update                                                                            134

C9.2    Corporate Performance Report - February 2017 full report and variance report 134  


 

1          Apologies

 

At the close of the agenda no apologies had been received.

 

2          Leave of absence

 

At the close of the agenda the following request for Leave of Absence was received:

Councillor Duffy

 

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 Finance and Audit Committee, 15 March 2017

6.2         Meeting minutes of Extraordinary Finance and Audit Committee, 26 April 2017

6.3         Meeting minutes of Extraordinary Finance and Audit Committee, 03 May 2017

 


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Finance and Audit Committee

 

OPEN MINUTES (UNCONFIRMED)

 

 

 

Minutes of a meeting of Finance and Audit Committee held in the Council Chambers, 15 Forth Street, Invercargill on Wednesday, 15 March 2017 at 9.02am.

 

present

 

Chairperson

Ebel Kremer

 

 

Mayor Gary Tong

 

Councillors

John Douglas

 

 

Paul Duffy

 

 

IN ATTENDANCE

 

Councillor Julie Keast, Chief Executive Officer – Steve Ruru, Chief Financial Officer – Anne Robson, Group Manager, Services and Assets – Ian Marshall, Group Manager, Environmental Services – Bruce Halligan, Group Manager, Community and Futures – Rex Capil, People and Capability Manager – Janet Ellis, Communications Manager – Louise Pagan and Committee Advisor – Fiona Dunlop.

 


1          Apologies

 

There were no apologies.

 

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

 

There were no minutes to confirm as this is the first meeting of the Committee.

 

Reports

 

 

7.1

Health and Safety

Record No:         R/17/2/2841

 

People and Capability Manager – Janet Ellis was in attendance for this item.

 

 

Mrs Ellis advised that the purpose of the report was to provide an update on Health and Safety activity within the Southland District Council.

 

(Councillor Duffy joined the meeting at 9.04am.)

 

The Committee noted that the Health and Safety Gap Analysis undertaken by Simpson Grierson was circulated separately to the Committee.  A proposed plan on work to be conducted as a result of the Analysis will be presented to the next meeting of the Committee.

 

 

Resolution

Moved Cr Douglas, seconded Cr Duffy  recommendations a to c and d with changes (as indicated with strikethrough and underlining) and resolved:

That the Finance and Audit Committee:

a)         Receives the report titled “Health and Safety” dated 2 March 2017.

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)         Notes the draft findings of the Health and Safety Gap Analysis conducted by Simpson Grierson in February 2017 and agrees to the draft recommendations undertaken by Simpson Grierson in February 2017 (and circulated separately to the Committee) and agrees to the proposed plan to be presented to the next meeting of the Finance and Audit Committee.

 

 

7.2

Financial Report for the month ended 31 January 2017

Record No:         R/17/2/3457

 

Management Accountant – Robert Tweedie was in attendance for this item.

 

Mr Tweedie advised that the report outlined the financial results for the seven months to 31 January 2017 or 58% of the financial year.

 

The Committee noted that the monthly and year-to-date actual results were attached in the Summary Monthly Financial Report and are compared to the Full Year Budget in the 2016/2017 Annual Plan Budget.  The projection values include any carried forward items approved by Council in August 2016 and will include any changes as a result of forecasting that Council approved. The 2016/2017 Annual Plan budget is shown in the Monthly Financial Summary Report as the Full Year Budget.

 

(Councillor Keast joined the meeting at 9.22am.)

 

 

Resolution

Moved Mayor Tong, seconded Cr Duffy  and resolved:

That the Finance and Audit Committee:

a)         Receives the report titled “Financial Report for the month ended 31 January 2017” dated 7 March 2017.

 

 

7.3

Draft Investment and Liability Management Policy

Record No:         R/17/1/1083

 

Policy Analyst – Robyn Rout and Chief Financial Officer – Anne Robson were in attendance for this item.

 

Mrs Rout advised that the report presents the draft Investment and Liability Management Policy for the Committee’s consideration and once approved, the Policy will be open for public consultation from 18 March until 21 April 2017.

 

The Committee noted that the Investment and Liability Management Policy outlines how Council will manage its investments, including what Council will invest in, and how investment risk will be assessed and managed.  The Policy also outlines how Council will manage borrowings.

Mrs Rout also advised that the changes to the draft policy include clarity around the intent of Council in the setting of interest on internal loans, and changes to roles and responsibilities. 

 

Resolution

Moved Cr Duffy, seconded Cr Douglas 

That the Finance and Audit Committee:

a)         Receives the report titled “Draft Investment and Liability Management Policy ” dated 7 March 2017.

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 draft Investment and Liability Management Policy (attached to the officers’ report) for release for public consultation from 18 March until 21 April 2017 with the following changes (as indicated with strikethrough):

4.11     Prudent selection of funding instruments and mix will help the Council achieve its low debt servicing costs and risk minimisation objectives.  Selling interest rate options for the primary purpose of generating income is not permitted, because of its speculative nature.

4.18          The Council may obtain funding utilising the following methods:

·                       Bank debt from New Zealand Registered Banks. which have a minimum Standard and Poor’s long term credit rating of ‘A+’ or the Moody Investors Service or Fitch Ratings equivalents. 

·                       Capital markets issuance comprising Commercial Paper, Fixed Rate Bonds, Medium Term Notes and Floating Rate Notes. 

·                       From the Local Government Funding Agency.

 

 

7.4

Draft Remission and Postponement of Rates Policy

Record No:         R/17/1/1027

 

Policy Analyst – Robyn Rout and Finance Manager – Sheree Marrah were in attendance for this item.

 

 

Mrs Rout and Mrs Marrah advised that the report presented the draft Remission and Postponement of Rates Policy for the Committee’s consideration.  Once approved, the draft Policy will be used for public consultation in accordance with the section 82 of the Local Government Act 2002 from 18 March until 21 April 2017.

 

 

 

 

 

The Meeting noted that the Remission and Postponement of Rates Policy specifies the circumstances where the Council will consider remitting or postponing rates and that the Policy aims to:

·            provide financial assistance and support to ratepayers where it is reasonable;

·            address possible rating anomalies; and

·            provide Council with the ability to act reasonably in administering its rating powers and policies.

 

Mrs Rout  and Mrs Marrah also advised that the only significant change to the Policy is the inclusion of remission of rates for natural disasters and emergencies.  Discussion is also included in the report on other areas that Councils include in their policies for your information and consideration.  The remaining changes in the draft Policy attached are clarification of the supporting documentation required and the applicable remission periods for each of the remission and postponement categories.  The responsibilities and financial limits in the roles and responsibilities schedule have also been clarified.

 

 

Resolution

Moved Mayor Tong, seconded Chairperson Kremer  and resolved:

That the Finance and Audit Committee:

a)         Receives the report titled “Draft Remission and Postponement of Rates Policy” dated 1 March 2017.

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 draft Remission and Postponement of Rates Policy (attached to the officers’ report) for release for public consultation.

e)         Undertakes consultation in accordance with section 82 of the Local Government Act 2002 from 18 March until 21 April 2017.

 

Public Excluded

 

Exclusion of the Public: Local Government Official Information and Meetings Act 1987

Resolution

Moved Cr Douglas, seconded Mayor Tong and resolved:

That the public be excluded from the following part(s) of the proceedings of this meeting.

C8.1 Draft Early Payment of Rates Policy

C8.2 Risk Register - Quarterly Update March 2107

 

 

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:

General subject of each matter to be considered

Reason for passing this resolution in relation to each matter

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

Draft Early Payment of Rates Policy

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.

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.

Risk Register - Quarterly Update March 2107

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).

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.

 

That the Chief Executive Officer, Group Manager – Services and Assets, Group Manager – Environmental Services, Group Manager – Community and Futures, Chief Financial Officer, Communications Manager, Committee Advisor, Policy Analyst and Finance Manager be permitted to remain at this meeting, after the public has been excluded, because of their knowledge of the items C8.1 Draft Early Payment of Rates Policy and C8.2 Risk Register - Quarterly Update March 2107. 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 10.08am.

 

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 10.40am.             CONFIRMED AS A TRUE AND CORRECT RECORD AT A MEETING OF THE Finance and Audit Committee HELD ON WEDNESDAY 15 MARCH 2017.

 

 

 

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

 

 

 

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

 


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Extraordinary Finance and Audit Committee

 

OPEN MINUTES (UNCONFIRMED)

 

 

 

Minutes of a meeting of Extraordinary Finance and Audit Committee held in the Council Chambers, 15 Forth Street, Invercargill on Wednesday, 26 April 2017 at 3.05pm.

 

present

 

Chairperson

Ebel Kremer

 

 

Mayor Gary Tong

 

Councillors

John Douglas

 

 

Paul Duffy

 

 

IN ATTENDANCE

 

Councillor Keast

 

 

Group Manager – Services and Assets

Ian Marshall

 

Chief Financial Officer

Anne Robson

 

Committee Advisor

Fiona Dunlop

 

 


1          Apologies

 

There were no apologies.

 

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.

 

 

Public Excluded

 

Exclusion of the Public: Local Government Official Information and Meetings Act 1987

Recommendation

That the public be excluded from the following part(s) of the proceedings of this meeting.

C6.1 Te Anau Wastewater Discharge Project

C6.2 Roading Alliance Contracts

 

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:

General subject of each matter to be considered

Reason for passing this resolution in relation to each matter

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

Te Anau Wastewater Discharge Project

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)(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).

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.

Roading Alliance Contracts

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).

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.

 

That the Group Manager – Services and Assets, Chief Financial Officer, Community Partnerships Leader (S Moran), Communications Manager, Governance and Democracy Manager, Strategic Manager – Water and Waste, Commercial Lead Transport, Roading Asset Management Engineer, Strategic Manager Transport, Management Account and Committee Advisor be permitted to remain at this meeting, after the public has been excluded, because of their knowledge of the items C6.1 Te Anau Wastewater Discharge Project and C6.2 Roading Alliance Contracts.  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 3.06pm.

 

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 4.17pm                CONFIRMED AS A TRUE AND CORRECT RECORD AT A MEETING OF THE Finance and Audit Committee HELD ON Wednesday 26 APRIL 2017.

 

 

 

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

 

 

 

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

 


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Extraordinary Finance and Audit Committee

 

OPEN MINUTES

 

 

 

Minutes of a meeting of Extraordinary Finance and Audit Committee held in the Council Chambers, 15 Forth Street, Invercargill on Wednesday, 3 May 2017 at 11.01am.

 

present

 

Chairperson

Ebel Kremer

 

 

Mayor Gary Tong

 

Councillors

John Douglas

 

 

Paul Duffy

 

 

IN ATTENDANCE

Councillor Julie Keast

Councillor Neil Paterson

Chief Executive - Steve Ruru

Group Manager, Services and Assets - Ian Marshall

Chief Financial Officer – Anne Robson

Group Manager, Community and Futures – Rex Capil

Communications Manager – Louise Pagan

Committee Advisor – Fiona Dunlop

 


1          Apologies

 

There were no apologies.

 

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

 

There were no minutes to confirm.

 

 

Public Excluded

 

Exclusion of the Public: Local Government Official Information and Meetings Act 1987

Resolution

Moved Mayor Tong, seconded Cr Duffy and resolved:

That the public be excluded from the following part(s) of the proceedings of this meeting.

C6.1 Around the Mountains Cycle Trail - Issues and Options

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:

General subject of each matter to be considered

Reason for passing this resolution in relation to each matter

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

Around the Mountains Cycle Trail - Issues and Options.

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).

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.

 

That the Chief Executive, Group Manager - Services and Assets, Chief Financial Officer, Group Manager - Community and Futures, Communications Manager and Committee Advisor be permitted to remain at this meeting, after the public has been excluded, because of their knowledge of the items C6.1 Around the Mountains Cycle Trail - Issues and Options. 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 11.02am.

 

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 11.30am.             CONFIRMED AS A TRUE AND CORRECT RECORD AT A MEETING OF THE Finance and Audit Committee HELD ON WEDNESDAY 3 MAY 2017.

 

 

 

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

 

 

 

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

 

 


Finance and Audit Committee

7 June 2017

sdclogo

 

Risk Management Review Project

Record No:        R/17/4/8727

Author:                 Shannon Oliver, Planning and Reporting Analyst

Approved by:       Rex Capil, Group Manager Community and Futures

 

  Decision                              Recommendation                         Information

 

  

 

Purpose

1        The purpose of this report is to provide a project scope and terms of reference for reviewing council’s risk management practices and to develop a risk management framework and policy review.

Executive Summary

The Finance and Audit Committee recommended at the March meeting that “a risk management review project to be established to develop a project scope and terms of reference to be considered at the June 2017 Finance and Audit Committee meeting.”

2        Council’s approach to risk management is in the development phase and it is acknowledged further work is required. The current Risk Management Policy is due for review. 

3        There have been a number of recent developments in this area that reflect business improvement opportunities.

4        The proposed project scope is attached to this report along with the current Risk Management Policy.

 

Recommendation

That the Finance and Audit Committee:

a)         Receives the report titled “Risk Management Review Project” dated 24 May 2017.

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)         Endorses the project scope and terms of reference for the Risk Management Review Project.

e)         Recommends to Council approval of the project scope and terms of reference for the risk management review project.

 


 

Content

Background

5        Council has currently a number of risk management practices including a risk register and quarterly reporting cycle.  The risk register is reviewed by the Executive Leadership Team and a report is produced for the Finance and Audit Committee.

6        Council has a Risk Management Policy that was adopted in December 2014 but it is now overdue for review. This Policy is attached for information purposes.

7        Council does not operate within a clearly defined risk management framework currently.

Issues

8        The current policy needs to be reviewed. 

9        A risk management framework needs to be developed.

10      The success of the framework will depend on the ability to embed risk management throughout the Council systems and procedure and processes.

Factors to Consider

Legal and Statutory Requirements

11      The Finance and Audit Committee has responsibility for:

“Reviewing whether Council has in place a current, comprehensive and effective risk management framework and associated procedures for effective identification and management of the Council’s significant risks;

“Considering whether appropriate action is being taken to mitigate Council’s significant risks.”

 

12      Section 10 of the Local Government Act 2002 defines the purpose of local government is to enable:

A)  To enable democratic local decision-making and action by, and on behalf of, communities; and

B)  To meet the current and future needs of communities for good-quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost-effective for households and businesses.

Good-quality, in relation to local infrastructure, local public services, and performance of regulatory functions, means infrastructure, services, and performance that are—

(a)  Efficient; and

(b) Effective; and

(c)  Appropriate to present and anticipated future circumstances.

 

13      In order to provide good quality services, appropriate risk management practices need to be in place.

Community Views

14      Community views have not been sought as this project relates to internal operational practices.  There would be an expectation from the community that council adopted a best practice approach as per the Finance and Audit committee terms of reference.

Costs and Funding

15      At this point in time no indication of the proposed budget is available. A project brief will be developed as a result of this project scope being endorsed by the Finance and Audit Committee which will include a project budget.

Policy Implications

16      Any future changes to risk management need to comply with Council policies

Analysis

Options Considered

Analysis of Options

Option 1 – Support the project scope and Terms of Reference to allow the Risk Management Review Project to proceed

Advantages

Disadvantages

·        Best practice principles are adhered to

·        Provides direction and endorsement of the approach to be actioned

·        Require additional resource or reallocation of existing resource once detail is determined.

 

Option 2 – Not support the project scope and Terms of Reference

Advantages

Disadvantages

·        Require additional resource or reallocation of existing resource once detail is determined.

·        Best practice principles are not adhered to

·        Does not provide direction and endorsement of the approach to be actioned

 

Assessment of Significance

17      The report is not considered significant in relation to the Councils Significance and Engagement policy.

Recommended Option

18      Option 1 – Support the project scope and Terms of reference to allow the risk management review project to proceed.

Next Steps

19      Recommend the scope be approved by Council

20      Require officers to develop a project brief and budget to allow the project to proceed to the next stage

 

Attachments

a         Risk Management Policy 2015

b         Risk Management Framework Project Scope and Terms of Reference    

 


Finance and Audit Committee

07 June 2017

 

SOUTHLAND DISTRICT COUNCIL

RISK MANAGEMENT POLICY

 

 

This policy applies to:  Council, Elected members and Council staff. 

 

DOCUMENT CONTROL

 

Policy owner:

Chief Executive

TRIM reference number:

r/14/9/14091

Effective date:

29 October 2014

Approved by:

Activities Performance Audit Committee

Date approved:

29 October 2014

Next review date:

November 2015

 

 

CONTENTS

 

1.           PURPOSE.. 1

2.           DEFINITIONS AND ABBREVIATIONS.. 2

3.           POLICY DETAILS.. 2

3.1        Background. 2

3.2        Overview.. 3

3.3        Establish the Context 5

3.4        Identify Events (risks) 5

3.5        Analyse and Evaluate Risks. 6

3.6        Treat Risks. 7

3.7        Information and Communication. 8

3.8        Monitoring. 8

3.9        Risk Appetite and Tolerance. 8

3.10     Risk Register 8

4.           ROLES AND RESPONSIBILITIES.. 9

5.           REFERENCES.. 10

6.           REVISION RECORD.. 10

7.           APPENDICES.. 11

Appendix 1 - Risk Categories. 11

Appendix 2 - Consequence and Probability Tables. 13

Appendix 3 - Consequence and Probability Tables. 14

 


Finance and Audit Committee

07 June 2017

 

RISK MANAGEMENT POLICY

 

 

1.   PURPOSE

 

The Southland District Council is a territorial authority and governed by the
Local Government Act 2002.  The Council is responsible to the people of the District.

 

Council has a wide-range of obligations such as legal, financial, regulatory, political, social and cultural obligations.

 

Council recognises the need to manage risks for all activities of Council.  In today’s ever-changing environment it is especially important to understand Councils risks in order to be proactive in mitigating our exposure to risks and consequences. Risk assessments result in better more informed decisions.

 

This policy exists to:

·              Make risk management a reality of how we do things,

·              Integrate best practice risk management  into policy, planning and operational decisions based on Joint Australian New Zealand Standard - Risk Management - Principles & Guidelines (AS/NZ ISO 31000:2009),

·              Develop a holistic approach to managing a range of risks facing Council,

·              Develop awareness and common understanding of Council’s risk management expectations,

·              Incorporate risk management  into all key decision-making processes, business planning and reporting,

·              Embed best practice risk management into every day work in a balanced, structured and cost effective way,

·              Provide risk management training and learning opportunities for Council and employees.

 

Council recognises risk management is an integral component of its operations, from the setting of priorities right through to the achievement of goals and milestones.  Risk management occurs not as a one-off management or control exercise but as an on-going requirement for all staff to identify opportunities that should enhance Council’s objectives and address risks that may negatively impact on the achievement of those objectives.

 

 


 

2.   DEFINITIONS AND ABBREVIATIONS

 

Term

Meaning

Acceptable Risk

A risk that is suitable as is given the context in which Council operates.

Effect

An effect is a deviation from the expected.

Objectives

Objectives can have different aspects (such as financial, health and safety, and environmental goals) and can apply at different levels (such as strategic, organisation-wide, project, product and process).

Risk

Risk is the effect of uncertainty on objectives.

·       Risk is often characterised by reference to potential events and consequences, or a combination of these.

·       Risk is often expressed in terms of a combination of the consequences of an event (including changes in circumstances) and the associated likelihood of occurrence.

Risk Appetite

This is the level of risk that Council accepts to be allowed as determined in Section 3.5.

Risk Management

Risk management is the culture, process and structures that are directed towards the effective management of potential opportunities and adverse effects.

Risk Management Process

The risk management process is the systematic application of management policies, procedures and practices to the tasks of establishing the context, identifying, analysing, evaluating, treating, monitoring and communicating risks.

Risk Tolerance

Is the resilience of the Council to overcome the consequences of an event, normally expressed as a financial sum or recovery period.

Tolerable Risk

A risk that is bearable given the context in which Council operates after the risk has been assessed and treated to the best extent given the resources required, but is still not acceptable to Council.

Uncertainty

Uncertainty is the state, even partial, of deficiency of information related to, understanding or knowledge of an event, its consequence, or likelihood.

 

 

3.   POLICY DETAILS

 

3.1 Background

 

Within the Council, a formal approach to risk management is in its establishment phase - beginning with this policy and the implementation of a formal risk register and reporting process.

 

Risk management best practice has shifted from the traditional operational focus into enterprise-wide risk management. Council needs to reflect this shift in its practices. The Council recognises the need to develop and apply a Risk Management Policy to all its objectives and across all organisational levels of the Council.

Risk management is an iterative process. As risks are identified and reviewed/managed periodically, this information becomes more accurate and therefore resulting in more informed decision-making.

 

The Council is a complex and diverse organisation that is increasingly aware that to meet its long term objectives risks should be managed.

          3.2     Overview

 

The Council recognises that risk management is not an isolated activity, nor a yearly compliance activity.  To be truly effective, risk management must integrate into the organisational structure and the objectives of the Council.  The integrated framework below visually represents the inter-relationship between:

 

·       Risk management process 

·       Focus

·       Organisational Structure Organisational
Structure

,Internal Environment,Reporting and compliance,Projects,Operations,Department,Group,Organisation,Area,StrategicFocus

 

 

 

 

 

 

 

 


Objective Setting                                                                                                                                                    

Risk Management Process
Event Identification,Information and Communication,Risk Assessment,Control Activities,Risk Response,Monitoring
 

 

 

 

 

 

 

 

 

 

 

 

 


This matrix shows that the risk management process applies to all the objectives of the Council and penetrates down through from the highest level of the Council organisational structure to the very lowest level. In turn, it should also be clear that objectives do not sit in isolation at each level in the organisation structure but that each part of the Council structure works to support the strategic objectives. 

 

               

 

 


 

The risk management process is illustrated below:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

3.3 Establish the Context

 

Southland District Council is a territorial local authority. The internal environment, governance structure, powers, duties, authorities, codes of conduct, values and ethics and responsibilities are primarily determined by the Local Government Act (2002).

 

In the same way that commercial enterprises are accountable to their shareholders, Council is accountable to the people of Southland District.  Most citizens expect Council to have higher standards than the private sector of stewardship and prudence in safeguarding and spending the public purse.

 

A focus on risk management will reflect a new organisational culture and in turn influences the setting of strategies and objectives.

 

The recent amendments to the LGA 2002 have changed the focus of Council from:

 

Section 10(b) ‘to promote the social, economic, environmental, and cultural
well-being of communities, in the present and for the future
.’

 

to -

 

‘to meet the current and future needs of communities for good-quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost-effective for households and businesses.’

 

Council is moving towards the formal management of its risks to compliment this new focus.

 

Objectives of Council

The strategic objectives of the Council are set out in the Long Term Plan and these establish the basis of the Council activities and operations, in particular the discrete projects the Council will undertake to meet the wants and expectations of people of the District.  In addition to the strategic objectives, the Council has operational objectives to meet the demand for both statutory and non-statutory Council services. Setting objectives drives the operational activities required and sets the reporting requirement for monitoring to ensure alignment with objectives.  In setting objectives, it is essential that consideration is given to the Council’s risk appetite and tolerance.

 

3.4 Identify Events (risks)

 

Once objectives are set then events that may stop, delay or otherwise hinder the achievement of objectives are considered.  To assist in identifying events it can be useful to categorise these.  The categories below are not an exhaustive list but a guide to assist in identifying what can happen.

 

Internal (direct influence):

·       Governance,

·       Delivery of commitments,

·       Customers,

·       Operations,

·       People,

·       Processes,

·       Technology,

·       Information management,

·       Financial,

·       Legal and regulatory compliance,

·       Assets.

 

External (indirect, limited or no influence):

·       Reputation,

·       Partners,

·       Election outcomes,

·       Statutory changes,

·       Socio cultural,

·       Environment,

·       Economic.

 

Definitions of the above risk categories are in Appendix 1.

 

3.5 Analyse and Evaluate Risks

 

By identifying what events can happen we can now consider what effect the occurrence would have on achieving the objective(s).  To assess what the affect would be Council needs to consider the likelihood, or probability, that the event will occur and the impact, or consequence(s), of the occurrence.

 

Please refer to the tables in Appendix 2.  

 

Score

Consequence

Probability

1

Insignificant

Rare

2

Minor

Unlikely

3

Moderate

Moderate

4

Major

Likely

5

Extreme

Almost Certain

 

The Executive Leadership Team is responsible for assessing risk.

 

Council will plot the probability against the consequence to create a risk profile that helps to prioritise risks based on their probability and consequence.  This in turn assists in determining the most appropriate actions to respond to the prioritised risks.

 

When assessing the probability of a risk, consideration will be given to the risks occurrence (risk velocity).  A risk may occur as a sudden event or due to a series of events over time.  A risk that requires a series of events is less probable of occurring than an event that can occur in an instant.


 

The following table demonstrates the actions required given the assessment:

 

Guide

Action Required

Acceptable

Risk is insignificant. To be managed by operational staff/managers.

Unacceptable but tolerable

Risk may be unacceptable.  Department Manager to manage risk to ensure risk is tolerable.  Executive staff need to be informed.

Unacceptable

Risk is unacceptable.  Requires a formal assessment and managed by the Executive Leadership Team to mitigate.

Intolerable

Risk is too great.  Requires a formal assessment and details of all possible treatments.  To be managed by the Executive Leadership Team with the Activities Performance Audit Committee being informed.

 

3.6 Treat Risks

 

In considering the best way to manage a risk, the Council will consider the following options:

 

Response

Description

Avoid

 

Avoiding the risk by deciding not to start or continue with the activity that gives rise to the risk.

Accept

Taking or increasing risk in order to pursue an opportunity.

Remove Source

Removing the risk source.

Change Likelihood

Changing the likelihood.

Change Consequence

Changing the consequence.

Share

Sharing the risk with another party or parties (including contracts and risk financing).

Retain

Retaining the risk by informed decision.

 

There are no set rules in applying these options, although generally low risk activities are acceptable and higher risk activities are only undertaken if there is a statutory duty or if there are significant rewards.  In considering the identified risks, one must firstly consider the context of the activity that creates the risk to decide whether an option is available.  Equally, the options are not mutually exclusive and for some identified risks, the optimum solution will be a combination of the options.

 

All treatments recorded against a risk will be assigned an owner.  That owner will be responsible to ensure that the treatment is working as expected or to report any concerns or failures of the treatment.

 


 

3.7 Information and Communication

 

To be effective, risk management requires a reporting structure that ensures that data and information be captured and communicated at an appropriate level to enable decisions.

 

There is a continual process of event identification, assessment and response that requires the best information available.

·                      All staff responsible for risks will receive a quarterly report of their risks to manage.

·                      All staff will inform the Assurance Officer of potential new risks and any changes to a risk or their treatments.

·                      All staff responsible for a risk will ensure that all other parties (internal and external) are informed of the risk and treatments in place.

·                      The Activities Performance Audit Committee will receive a KPI report on the risks of Council at every meeting with commentary from the Assurance Officer.

·                      Every year after 30 June the Activities Performance Audit Committee will report to Council on the risk management process.

·                      The risk register and policy will be able to be accessed via the intranet (to view).

 

3.8 Monitoring

 

The Activities Performance Audit Committee is responsible for monitoring the management of Council risks. (effectively the governing body to risk management).

 

All staff are responsible for monitoring the risks and controls in their various areas.

 

The Assurance Officer is responsible for monitoring staff compliance to risk management.

 

The Executive Leadership Team will ensure all staff comply with this policy and instigate disciplinary action if/when required.

 

3.9 Risk Appetite and Tolerance

 

Council accepts that each group/department/area can set its own appetite and tolerance, but must use as a very minimum the colour‑coding of the risk matrix as highlighted in Section 3.5 as a proxy for appetite and tolerance.

 

The Council recognises the limitations of risk matrices as a guide to appetite and tolerance, particularly in relation to high consequence/low probability and high probability/low consequence risks.

 

3.10          Risk Register

 

The Council uses risk register to record identified risk, consequences, probability, controls to be used, and ownership (responsibility).

 

To ensure consistency, use of a standard template, (Appendix 3), is required. 

 


 

4.   ROLES AND RESPONSIBILITIES

 

Risk performance measures will be developed for staff and management to complement their work/function performance measures.

 

1.         Council

Elected Councillors have a responsibility to the local community to govern the Council.  Proper governance requires that members know and understand the risks to attaining the strategic objectives of the Council.  Members are accountable for their policy decisions and should ensure decisions appropriately balance the risks and rewards.

 

2.         Activities Performance Audit Committee

The Activities Performance Audit Committee is responsible for ensuring that Council has appropriate risk management and internal control systems in place, monitoring organisational performance in managing risk and forming a view on the overall risk profile and its acceptability.

 

3.         Chief Executive

The Chief Executive is accountable to the Council and is responsible for the implementation of the Risk Management Policy approved by the Council and for ensuring that an appropriate risk reporting mechanism exists between officers and Council.

 

4.         Executive Leadership Team

The Executive Leadership Team is responsible for the management of risks that affect the attainment of strategic objectives or that are a material threat to the operational capacity or reputation of the Council. 

 

5.         Executive Staff

Executive Staff are responsible for the management of operational risks that affect the attainment of their objectives or that are a material threat to the operational capacity or reputation of their group.

 

6.         Managers

Managers are responsible for the management of operational risks that affect the delivery of their objectives or that are a material threat to the operational capacity or reputation of their area.

 

7.    Assurance Officer

            Create and implement processes required to successfully implement the policy. Provide training for affected parties. Administer processes and compile reports as required.

 

8.    Staff

Staff are responsible for the day to day management of risks that affect the performance of their duties with the Council and subject always to the policies, plans and procedures of the Council.

 


 

9.    Treatment Owners

All staff assigned the responsibility of managing a treatment will be responsible to ensure that the treatment is working as expected or to inform the Assurance Officer when the treatment has failed or concerns they have in its effectiveness.

 

 

5.   REFERENCES

 

Joint Australian New Zealand International Standard - Risk Management - Principles and Guidelines AS/NZS ISO 31000:2009

 

 

6.   REVISION RECORD

 

Date

Version

Revision Description

 

 

 

 

 

 

 

 

 

 


 

7.   APPENDICES

 

Appendix 1 - Risk Categories

1.         Internal (Direct influence)

 

Governance

Risk arising from the performance of duties of officers and elected representatives. Propriety/compliance with relevant requirements/ethical considerations.

Delivery of commitments

Risks to the development, planning and delivery of political commitments within the Long Term Plan (LTP). Consultation and communication, project management and project delivery issues.

Customers

Meeting needs, wants and expectations of customers in respect of Council facilities, service standards and service provision. 

Operations

Risk arising from the day-to-day operations of Council groups and project teams. Risks that affect service delivery standards and best practice. The ability of the Council to compete and provide best value to in the provision of services. Opportunities to reduce waste and inefficiency.

People

Risks related to people and their well-being. Staff talent, recruitment and retention issues, including market competitiveness. Management protocols, training, development and capacity issues. Health and safety, disability and discrimination issues. Resilience and ability to change.

Processes

Risk associated with internal processes and how they relate to each other. The adequacy, efficient and effectiveness of these processes. The interface with other processes.

Technology

Risks arising from current provision of technology and changing demand/capacity. Use or misuse/security of new or existing technology. Obsolescence of current systems; opportunities arising from new technology.

Information management

Risks that affect the Council’s ability to store, retrieve and use data and information, including adequacy for decision-making and protection of privacy.

Financial

Risks that affect the finances or financial planning of the Council.  Includes fraud, management, control and ability to meet financial commitments and support strategies and objectives.

Legal and Regulatory compliance

Risk from failing to comply with statutory or common law, delegations, regulations, consents and contractual obligations, including failure to address changes to law in policy and procedures.

Assets

Risks that cause loss or damage to assets owned or operated by the Council to provide services. Includes land, property, equipment, information.

 


 

2.       External (Indirect, limited or no influence)

Reputation

Confidence and trust stakeholders have in the organisation. Risks that may directly, or indirectly, damage the reputation of the Council or any of its elected members or key personnel.

Partners

Risk relating to partnerships, alliances, new ways of working, stakeholder management.

Election outcomes

Change of government (central and local), cross‑cutting policy decisions, machinery of government changes. Includes the exertion of political influence to set or change policy, direction, objective, strategy, etcetera. Potential ratepayer dissatisfaction and/or change in direction.

Statutory changes

New or changed statutory environment.

Socio cultural

Social and cultural demographic changes that effects demand for services. Stakeholder expectation changes over time.

Environmental

Environmental changes such as climactic changes and Acts of God.

Economic

Risk relating to the economic environment. Changes in the demand for Council services, production, distribution, and consumption of goods and services.

 


 

Appendix 2 - Consequence and Probability Tables

Consequence Table

Score

Consequence

Description

1

Insignificant

Event will have little, or no, effect on the objective(s).

2

Minor

Event will have some effect on achieving the objective(s), but well within tolerable limits.

3

Moderate

Event will affect the achievement of the objective(s), but within tolerable limits.

4

Major

Event will affect the achievement of objective(s), beyond tolerable limits.  Remedial action will be required.

5

Extreme

Event will affect the viability of the objective(s), may be too late or too costly to take remedial action.

 

Probability Table

 

Score

Probability

Description

1 (0-20%)

Rare

Will only happen within a year if Council is unfortunate.

2 (20-40%)

Unlikely

Is unlikely to occur within a year given all considerations.

3 (40%-60%)

Moderate

Is likely to occur within a year given all considerations.

4 (60%-80%)

Likely

Will happen within a year unless Council is fortunate.

5 (80%-100%)

Almost Certain

Will happen within a year.

 

 

SUMMARY RISK PROFILE

(enter each risk number on this table)

Consequence

5

 

#2

 

 

 

4

 

#4, #10

#1

 

 

3

 

 

#9, #5, #7, #8

 

#3

2

 

 

#6

 

 

1

 

 

 

 

 

 

1

2

3

4

5

Probability

 

The above graph is coloured to reflect the likely risk responses described in Section 3.5.  Responses range from Accept (green) to Avoid (deep red).


 


Finance and Audit Committee

07 June 2017

 

Appendix 3 - Consequence and Probability Tables

Risk #

Risk Description

Classification

Risk Type

Activity

Consequences

Objective(s) affected

Consequence ranking

Probability

Current Treatments (with owner)

Consequence ranking (after treatments)

Probability (after treatments)

Planned Mitigations
(Treatments)

Consequence ranking (after planned treatments)

Probability (after planned treatments)

Owner

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Finance and Audit Committee

07 June 2017

 

 

 

 

 

 

 

Project Scope and Terms of Reference

 

Southland District Council

Review of the Risk Management Framework and Policy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Version Control

 

Version

Date updated

Document

By Who

Draft

26 April 2017

Project Scope

Shannon Oliver

For comment

 

Project Scope

Rex Capil

F&A committee  adopted

June 2017

Project Scope

Shannon Oliver

 

 

 

 

 

Table of Contents

 

PROJECT OVERVIEW... 1

Project Purpose. 1

Objectives. 2

Definitions. 2

Project Scope. 2

Key Deliverables. 4

Reporting and Monitoring. 4

Stakeholder engagement and consultation. 4

Conclusion. Error! Bookmark not defined.

 


Finance and Audit Committee

07 June 2017

 

PROJECT OVERVIEW

Project Sponsor:

Rex Capil - Community and Futures Group Manager

Project Coordinator:

To be appointed

Project Name:

Risk Management Review Project

Project Start Date:

To be confirmed

Project End Date:

To be confirmed

 

Project Purpose

At the March Finance and Audit committee meeting it was agreed that council officers be directed to: Requests a risk management review project to be established to develop a project scope and terms of reference to be considered at the June 2017 Finance and Audit committee meeting.

The purpose of the Risk Management Review Project work is to:

·              Develop a comprehensive, robust and effective risk management framework, policy and associated procedures.

·              Ensure best practice models are used.

At a recent Society of Local Government Managers Risk Management forum held in February 2017, best practice suggested that the risk management journey should be a three year planned process.

YEAR ONE

Focusing on the development of the risk policy and framework, developing a top down risk profile, integration into Audit and Risk committee reporting, communicating within the organisation and training. 

YEAR TWO

Focusing on aligning with strategy timelines, articulating the risk appetite, integrate into decision making and reporting, drill down risk profiles e.g. H&S, Development of a risk based internal audit programme, embedding the risk culture.

YEAR THREE

Includes reviewing technology options and a risk culture survey.

This review project relates to the work to develop a risk management framework and a review of the current policy.

The Risk Management framework and policy will assist to:

·              Provide effective identification and management of the Councils significant risks.

·              Ensure appropriate action is being taken to mitigate Council’s significant risks.

·              Ensure there are associated procedures for effective identification and management of the Council’s significant risks.


 

Background

The Southland District Council has recently formed a Finance and Audit Committee. As part of the terms of reference for the Committee it states that it is responsible for:

(a)        “Reviewing whether Council has in place a current, comprehensive and effective risk management framework and associated procedures for effective identification and management of the Council’s significant risks;

(b)         Considering whether appropriate action is being taken to mitigate Council’s significant risks.”

Council’s approach to risk management is still in the establishment and development phase with further work required. The current policy is due for review.  There have been a number of recent developments in this area and work is required to improve the systems we have in place so they reflect best practice and are fit for purpose of what we require in the future.

Work in the risk management area is a work in progress and will require a priority focus as deemed appropriate in the coming years.

As part of this process and as per the Finance and Audit committee terms of reference it is intended that this committee will play an integral part in the establishment and development phase of risk management work.

This project will focus on the work required in year one of the risk management journey.

Objectives

Objectives for this project are:

·              To establish the scope, schedule and requirements for development of risk management work within Council.

·              To ensure the process meets statutory requirements and best practice.

·              To ensure that councillors and other elected representatives are involved and kept updated throughout development of the project

Definitions

Risk management is about identifying events that might happen in the future that will have an impact on Councils objectives, then working out what further action, if any, is appropriate (and cost-effective) to manage and mitigate the risk. 

Risks are uncertain future events that could impact on the organisations ability to achieve its objectives. 

Compliance refers to refers to adhering with the company's policies, procedures, laws and regulations.

Project Scope

Risk management is a planned approach to identify, analyse and manage the risks within the council.

The scope of work includes:

·           Development of a risk management framework.

·              Review and update the Council policy and procedures relating to risk.

·              Presenting the recommendation report to the Finance and Audit Committee and Council.

·              Developing an action plan including estimate of budget, human resource requirements and timeframes for implementation.

·              Developing an internal communications and engagement plan for the project.

 

WITHIN THE SCOPE

The project to give consideration to:

·      Risk management framework

·      Risk management policy

·      Risk management register

·      Risk system and processes

·      Risk reporting

·      Team plan – risk register

·      Office of the Audit General - Three lines of defence model

·      Incorporation into Asset Management Plans

·      Risk treatment planning (with owners and timeframes for implementation)

·      Uses the principles of risk management in developing the framework.

OUTSIDE OF THE SCOPE

The project does not include:

·      Integration with current business processes and training to staff

·      Ongoing implementation of risk and compliance

·      Legal compliance framework

·      Programme to manage legal compliance including a legal spend register – set up register for purchase of legal advice and register legal opinions.

Project Context

Background

Council’s Risk Management systems need to be updated to align to support business improvement objectives.  The current policy is now out of date.  A comprehensive risk framework needs to be developed and our approach to risk management practices.

Delivery

A consultant will be used to develop the framework and review and recommend appropriate systems be put in place for risk management within council.

What do we need to take into account?

·    Statutory requirements

·    Current systems and processes

·    Future projects

·    Budget

·    Existing resources

·    Future resources

·    That we create an approach that is robust but not unwieldy to implement and monitor

·    Fit for purpose for the local government environment


 

How to get an integrated system?

·    Create an approach that is robust but not unwieldy to implement, monitor or report on

·    Fit for purpose for the local government environment

·    Ensure the approach will fit within our current reporting structures

What are the interdependencies?

·      Procurement policy

·      Asset Management Plans

·      Project machine

·      Long Term Plan

·      Organisational projects – digitisation, core systems, remuneration, performance framework, internal audit

Standards

Ensure all risk management is to the latest best practice standards (AS/NZS ISO 31000:2009).

 

 

 

Consultant Requirements

Experience of Consultant in:

·    Local Government

·    Risk Management

Key Deliverables

The key deliverables for the project are:

·    Risk Management Framework

·    Updated Risk Management Policy

Reporting and Monitoring

Reports will be provided to ELT on the progress of the project and will address the following information:

·              Stage of the process.

·              Key milestones met or missed.

·              Gaps in information.

·              New information.

·              Recommendations for the next stage of the project.

Stakeholder engagement and consultation

A stakeholder engagement plan and communications plan will be developed to support the risk management review process.

The Stakeholder Engagement Plan and Communications Plan will use communications channels and the processes that best meet the needs of stakeholders and state clear timeframes.


Finance and Audit Committee

7 June 2017

sdclogo

 

Draft Early Payment of Rates Policy

Record No:        R/17/5/9921

Author:                 Robyn Rout, Policy Analyst

Approved by:       Anne Robson, Chief Financial Officer

 

  Decision                              Recommendation                         Information

 

  

 

Purpose

1        This report requests that the Finance and Audit Committee (the Committee) endorses the draft Early Payment of Rates Policy and recommends to Council that the draft Policy be adopted.

 

Executive Summary

2        The draft Early Payment of Rates Policy allows ratepayers connected to some sewerage and water schemes to make full payments of loan rates early, to reduce their overall costs.

3        In March this year the Committee endorsed the draft Policy. The draft Policy included some minor changes to the liability and payment sections, to staff roles/responsibilities, and some other changes were made to improve clarity. The draft Policy was put out for consultation in accordance with the Special Consultative Procedure in March and April this year. No submissions were received through the consultation process and no changes have been made to the draft Policy.

4        This report recommends that the Committee endorse the draft Policy and recommend to Council that the draft Policy be adopted (with any other desired amendments).

 

Recommendation

That the Finance and Audit Committee:

a)         Receives the report titled “Draft Early Payment of Rates Policy” dated 24 May 2017.

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)         Endorses the draft Early Payment of Rates Policy.

e)         Recommends to Council that the draft Early Payment of Rates Policy be adopted.

 


 

Content

Background

5        The Southland District Council has undertaken a number of capital projects connecting houses to sewerage and water schemes. At the time of establishing the schemes, ratepayers were given the option to pay their share of the cost of connecting their property as a lump sum or by way of a loan over a specified period of time. These loans are repaid back to the Council as specified rates.

6        The draft Policy allows ratepayers connected to these schemes to make an early repayment of the total balance remaining of the specified rate, rather than making annual payments. Making an early repayment offers ratepayers the opportunity to reduce their overall interest cost. The Policy also clarifies the position of Southland District Council on the early payment of other types of rates.

7        The draft Policy includes some minor changes to the previous Policy. These include:

·    correcting staff roles/responsibilities

·    minor changes to the liability and payment parts of the draft Policy

·    minor changes to improve clarity

·    removing the table outlining the outstanding liability for each loan rate from the draft Policy.

 

8        The specified rates liability values change annually (in July) depending on the internal interest rate set by Council as part of the Annual Plan/Ten Year Plan process. After the specified rates are adopted, ratepayers will have access to this information via Council’s website or Council offices. The information will be in a schedule, which will outline the liability outstanding for each specified rate.  

9        The draft Policy was endorsed by the Committee and released for consultation in accordance with the Special Consultative Procedure from 18 March until 21 April 2017.

Issues

10      No submissions were made on the draft Policy, so officers are not aware of any concerns or changes that need to be made.

Factors to Consider

Legal and Statutory Requirements

11      Under section 55 of the Local Government (Rating) Act 2002 (LGRA), a local authority may adopt a policy for the payment of some or all rates that are identified in the rates assessment, before the due date(s) for those rates in the current financial year. A policy adopted under this section allows the local authority to discount the amount of the rates if payment is made by a specified date before the due date or dates.

12      Under section 56 of the Local Government (Rating) Act 2002 (LGRA), a local authority requires a policy for the early repayment of rates where they offer ratepayers the option of paying rates in anticipation of rates being set for future years ie: loan rate repayments.

13      There is no legislative requirement for the draft policy to be included in the Long Term Plan.
The Statement of Proposal allows the Early Payment of Rates Policy to be released for public consultation in compliance with the SCP.

Community Views

14      People in the District have had an opportunity to present their views through the consultation process that was run through March and April this year. No submissions were received. It was anticipated that there would not be a high level of community interest in this matter.

15      When the current Early Payment of Rates Policy was put out for consultation in 2015, Council received four submissions indicating support for the policy. The submissions did not provide any further comment.

 

Costs and Funding

16      There are no significant costs associated with adopting the draft Policy.

 

Policy Implications

17      The draft Policy will not be included in the Long Term Plan 2018-2028. It does not impact significantly on other financial issues or rating.

Analysis

Options Considered

18      The Committee could choose:

·      Option 1:  To endorse the Early Payment of Rates Policy (with any desired amendments); or

·      Option 2:  To not have an Early Payment of Rates Policy.

 

19     If Option 2 is chosen, Council will not legally be able to accept the early payment of rates under Section 55 of the Local Government (Rating) Act (2002).

 

Analysis of Options

Option 1 – To endorse the Early Payment of Rates Policy (with any desired amendments)

Advantages

Disadvantages

·        Provides flexibility for ratepayers to make payments in an appropriate manner.

·        Reduced overall cost to ratepayers as a result of saving on interest.

·        Allows Council to continue receiving early payment of rates in compliance with legislation.

·        Higher level of administration required.

 


 

Option 2 –

Advantages

Disadvantages

·        Less administration involved for Council officers.

·        Rates would need to be collected on an annual basis and as such ratepayers would pay more annually as a result of interest.

·        There is no flexibility available in how individuals wish to make payments.

 

Assessment of Significance

20      The adoption of an Early Payment of Rates Policy has not been assessed as significant.
The draft Policy does not impact significantly on other financial issues or rating.

Recommended Option

21      It is recommended that the Committee select Option 1 and endorse the Early Payment of Rates Policy (with any desired amendments).

Next Steps

22      If the Committee endorses the draft Policy and recommends it is adopted, the draft Policy will then be presented to Council to be formally adopted.

 

Attachments

a         Draft Early Payment of Rates Policy    

 


Finance and Audit Committee

07 June 2017

 

SOUTHLAND DISTRICT COUNCIL

EARLY PAYMENT OF RATES POLICY

 

 

This policy applies to:  Ratepayers who pay specified rates.

 

DOCUMENT CONTROL

 

Policy owner:

Chief Financial Officer

TRIM reference number:

r/16/10/17873

Effective date:

1 July 2017

Approved by:

Council

Date approved:

To be confirmed

Next review date:

2020

 

 

CONTENTS

 

1.            PURPOSE.. 1

2.            DEFINITIONS.. 1

3.            BACKGROUND.. 1

3.1         Paying specified rates for subsequent financial years. 1

3.2         Paying other rates for subsequent financial years. 2

3.3         Paying rates for the current financial year 2

4.            POLICY DETAILS.. 2

            Paying specified rates for subsequent financial years. 2

4.1         Conditions and criteria. 2

4.2         Liability per unit 2

4.3         Payment 2

5.            ROLES AND RESPONSIBILITIES.. 3

6.            ASSOCIATED DOCUMENTS.. 3

7.            REVISION RECORD.. 3

 

 

 


Finance and Audit Committee

07 June 2017

 

EARLY PAYMENT OF RATES POLICY

 

 

1.   PURPOSE

 

This Policy is to provide ratepayers with the opportunity to extinguish their liability to pay specified rates sooner than under a long term rating option, and at a discount to the amount payable over time.  This policy also clarifies the position of
Southland District Council (Council) on the receipt of other rates as early payments.

 

 

2.   DEFINITIONS

 

“Specified rates” means any one of the following targeted rates:

 

•      Edendale Sewerage Loan - 10 years (including connection cost),

•      Edendale Sewerage Loan - 15 years (including connection cost),

•      Edendale Sewerage Loan - 25 years (including connection cost),

•      Edendale Sewerage Loan - 10 years (excluding connection cost),

•      Edendale Sewerage Loan - 25 years (excluding connection cost).

 

•      Edendale Water Loan - 10 years,

•      Edendale Water Loan - 15 years,

•      Edendale Water Loan - 25 years.

 

•      Gorge Road Sewerage Loan.

 

•      Oban Sewerage - Loan Charge Extension.

 

•      Sandy Brown Road Utility Loan.

 

•      Tuatapere Sewerage Loan Charge - 15 years,

•      Tuatapere Sewerage Loan Charge - 25 years.

 

•      Wallacetown Sewerage Loan Charge - 15 years,

•      Wallacetown Sewerage Loan Charge - 25 years.

 

•      Wyndham Sewerage Loan - 10 years (including connection cost),

•      Wyndham Sewerage Loan - 15 years (including connection cost),

•      Wyndham Sewerage Loan - 25 years (including connection cost),

•      Wyndham Sewerage Loan - 10 years (excluding connection cost),

•      Wyndham Sewerage Loan - 15 years (excluding connection cost),

•      Wyndham Sewerage Loan - 25 years (excluding connection cost).

 

•      Wyndham Water Loan - 10 years,

•      Wyndham Water Loan - 15 years,

•      Wyndham Water Loan - 25 years.

 


 

3.   BACKGROUND

 

3.1       Paying specified rates for subsequent financial years

 

Under Section 56 of the Local Government (Rating) Act 2002, councils may adopt a policy on the payment of rates for subsequent financial years. Council has decided to adopt this Policy for the specified rates listed in section 2 above. 

 

3.2       Paying other rates for subsequent financial years

 

Under Section 56 of the Local Government (Rating) Act 2002, councils may adopt a policy on the payment of rates for subsequent financial years.

 

In accordance with Section 55 of the Local Government (Rating) Act 2002, which empowers councils to accept early payment of rates, Council will accept payment of rates, other than specified rates, for subsequent financial years.  However, early payment of these rates will attract neither a discount, nor interest on the sum paid.

 

3.3     Paying rates for the current financial year

 

In accordance with Section 55 of the Local Government (Rating) Act 2002, which empowers councils to accept early payment of rates, Council will accept payment in full of all rates assessed in the current year on or before the due date for the first instalment of the year.  Early payment of these rates will attract neither a discount, nor interest on the sum paid.

 

 

4.   POLICY DETAILS

 

Paying all specified rates for subsequent financial years

 

4.1     Conditions and criteria

 

            As long as a Rating Unit is subject to one of the specified rates, the ratepayer may, at any time before the due date for the last instalment of rates payable in that financial year, pay an amount calculated in accordance with this Policy to clear the rating unit’s liability for the specified rate for all future years.

 

            The sum to clear the Rating Unit’s liability will equal principal outstanding amount (excluding GST) applying to that specified rate, divided by the number of rating units liable for the targeted rate in the financial year (plus GST).

 

4.2       Liability per unit

 

Each financial year, the amount of the payment to clear a Rating Unit's liability will be updated to reflect the Council’s current interest rate charged in accordance with the relevant Annual Plan/10 Year Plan.  A schedule outlining the liability outstanding for each specified rate will be updated annually and adopted as part of the 10 Year Plan/Annual Plan process. 

 

4.3       Payment

 

Elections to pay specified rates early must be notified verbally or in writing to a Council Finance Officer or the Finance Manager. This will ensure Council can appropriately allocate the payments against the relevant liability.  Failure to notify Council of an early payment of a specified rate will result in the payment being allocated to an appropriate rates account.

 

The discount offered by electing to make a payment in accordance with this Policy equals the Council's estimate of the cost of interest (plus GST) over the remaining term of the specified rate.

 

5.   ROLES AND RESPONSIBILITIES

 

Party/Parties

Roles and Responsibilities

Finance Officer

Accept notifications/requests for early repayment of rates on behalf of Council.

Calculate and update the schedule of specified rates on an annual basis.

Finance Manager, Chief Financial Officer

Accept notifications/requests for early repayment of rates on behalf of Council.

Oversee the early payment of specified rates.

 

6.   ASSOCIATED DOCUMENTS

 

•           Early Payment of Specified Rates - Liability Schedule for the year ending
30 June 2017 (R/17/1/1614)

•      Local Government (Rating) Act 2002

          •        Southland District Council Revenue and Financing Policy.

 

7.   REVISION RECORD

 

Date

Version

Revision Description

20 May 2015

2015-2025 LTP

r/15/4/7632

 

2018-2028 LTP

r/16/10/17873

 

 


Finance and Audit Committee

7 June 2017

sdclogo

 

Draft Health and Safety Plan for 2017/2018

Record No:        R/17/5/11030

Author:                 Janet Ellis, People and Capability Manager

Approved by:       Steve Ruru, Chief Executive

 

  Decision                              Recommendation                         Information

 

  

 

Purpose

1        To seek approval for the draft Health and Safety Governance Framework and draft Health and Safety Plan for 2017/2018 to be presented to Council for formal approval.

 

Executive Summary

2        In February 2017, Council contracted Simpson Grierson to undertake a Health and Safety Gap Analysis.  The analysis identified a number of improvement opportunities which will be reflected in a formal Action Plan to be reported to a future meeting of the Committee.

3        As part of the improvement recommendations officers have progressed development of a draft Health and Safety Governance Framework and a draft Health and Safety Plan for 2017/18. These are presented to the Committee their endorsement prior to seeking formal approval from Council.

4        Southland District Council has an obligation to manage the safety of workers under Health and Safety legislative requirements.  The Health and Safety Framework, containing a single policy with clear standard procedures will enable a risk based approach to managing health and safety.

5        The Health and Safety Plan details a draft Health and Safety Commitment statement.  In addition the plan contains a review of previous performance and objectives and identifies key elements to deliver improvement. 

 

Recommendation

That the Finance and Audit Committee:

a)         Receives the report titled “Draft Health and Safety Plan for 2017/2018” dated 27 May 2017.

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)         Recommends to Council that it approves the draft Health and Safety Commitment statement that details Southland District Council’s intent and direction.

e)         Recommends to Council that it approves the draft Health and Safety Plan for 2017/18 and recommends Council approve the Health and Safety Plan and notes that there will be ongoing financial implications for implementing the plan.

f)          Recommends to Council that it approves the Health and Safety Management System Governance Framework.

 


 

Content

Background

Health and Safety Gap Analysis

6        In February 2017, Council contracted Simpson Grierson to undertake a Health and Safety Gap Analysis.  The analysis included a review of Southland District Councils Health and Safety Management System, discussions with key operational leaders, visits to operational locations and discussions with workers and key contractors.  The result of the Gap Analysis was a written report detailing findings and recommendations for improvement.  The report was presented to the March 2017 Finance and Audit Committee meeting.

7        The Gap Analysis determined that Council had a “developing maturity” in Health and Safety, some processes had been developed and good work had been undertaken in identifying and the managing the key risks.  However, there were a number of recommendations made that indicated that our Health and Safety systems were more reactive and that we had significant opportunity to further develop our overall health and safety systems.

8        The recommendations made included:

·        That the Executive Leadership Team needed to develop a statement of intent for Health and Safety that expressed their ambition and direction in this area

·        The Executive Leadership Team needed to look for opportunities to express their support and leadership of Health and Safety, including site visits and more interaction with key contractors

·        The Executive Leadership Team should consider Health and Safety Leader training to support them and their direct reports in their roles.  The training should cover key aspects of health and safety culture development, safety observations and conversations and behavioural safety elements

·        Development of a Health and Safety Plan that details specific improvement initiatives for the following year. It was also recommended that the plan be approved by the Executive and ratified by both Council and the Finance and Audit Committee.

·        Establishment of a health and safety Governance Framework

·        Review current procedural gaps and draft new procedures to ensure a full management system over time

·        Ensure employees are involved in the change process and development of new procedures

·        Create clarity on critical risks and what these are.  In addition create control plans that indicate how we control risk and who is responsible, using a ‘bow tie’ methodology

·        Review hazard and risk procedures to create one process for management of risks and the risk registers

·        Develop a reporting process that conveys how Council will report its Health and Safety performance, set targets and who details, who receives this information and when they receive the information

·        Ensure measures include lead and lag indicators and provide a view of actual performance, so that Council can measure its progress.

9        Following the March Finance and Audit committee meeting, a plan, including objectives and targets was to be developed and presented.

Health and Safety Commitment Statement

10      The Executive Leadership Team undertook Health and Safety Leader training on 16 May 2017.  The training covered key aspects of legislation, Health and Safety responsibilities and culture development.

11      As part of the training the Leadership Team drafted a Health and Safety Commitment Statement.

 

We are committed to caring for the wellbeing and safety of our people and those who interact with us.

 

Our goal is for our people to actively think about their own and others safety and wellbeing, so that we deliver safe and effective services to our community and that everyone gets home safe and well.”

12      We seek the Finance and Audit Committee feedback on this statement prior to it being finalised as part of the Health and Safety Plan 2017/2018. 

 

Health and Safety Plan 2017/2018

13      A Health and Safety Plan for 2017/2018 has been drafted. The plan contains a review of previous performance and objectives and spells out proposed improvement measures and targets.  It identifies key elements to deliver improvement and allocates sponsors to ensure momentum is maintained.

14      Work needs to be undertaken on resourcing of the plan to ensure not only development of the new procedures but ensure that it is communicated effectively, resourced effectively and implemented throughout the whole of the organisation. 

15      The plan is the start of fundamental change to ‘how we do things’ to ensure we meet legislative requirements and that people get home safe and healthy. It is important to recognise that that the implementation of this plan and the recommended procedures will lead to increased costs which will need to be reflected in future Annual and Long Term Plans. The extent of these additional costs will become clear as we go through the process of implementing the plan. 

 

Health and Safety Framework

16      A Draft Health and Safety Framework is attached for your feedback and sign off.

17      The document forms the overarching governance document that provides the context, structure and overview of the unified health and safety management system utilised across the organisation.

18      The purpose of the Framework is to document how Health and Safety will be managed throughout Council and its operations; provide information on the hierarchy of documentation to be used, define document types and define the document control process. 

19      To ensure that the Finance and Audit Committee and Council have assurance that the policy and procedures are being implemented Audit and Assurance Procedures will be drafted as part of the framework.  The Audit and Assurance Procedures will outline how Southland District Council will evaluate the implementation of its policies and identify ongoing improvement opportunities.

20      Officers are seeking the Committees feedback on the Health and Safety Framework.

Factors to Consider

Legal and Statutory Requirements

21      Council has an obligation to manage the safety of workers under Health and Safety legislative requirements in New Zealand. 

22      The Health and Safety Framework, containing a single policy with clear standard procedures will enable a risk based approach to managing health and safety based within its undertakings.

23      The Health and Safety at Work Act (2015) provides guidance that if cost is the reason for not implementing a safety system, the provision of safety equipment or the changing of a process, to enable work to be done safely, then that cost must be something deemed to be grossly disproportionate to the risk being managed.

24      There is no further guidance in the Act on what grossly disproportionate means however it does give us an indication that we need to be very clear if we limit taking action or providing equipment or implementing improvements based on costs that there is significant risk to breaching the Act.

Costs and Funding

25      Indicative costs from Simpson Grierson for the development of the procedures and the critical risks and bowties is $15,000.

26      Once these procedures are developed it is expected that there will be ongoing additional costs to meet the recommendations and the implementation requirements of the procedures.  This could include additional equipment needed, education costs, health and safety system costs and recruitment of additional resources to ensure compliance with the Health and Safety framework and health and safety legislation.  Examples of additional costs include $15,000 per annum for Audit and Assurance requirements; $10,000 per annum for a Health and Safety system; $10,000 for education and training on health and safety.

27      It is also inevitable that additional costs with, for example, mitigating some of the risks will be incurred once the risks are clearly defined and control plans are put in place.  For example the cost of GPS in vehicles to ensure the safety of our workers is estimated to be an additional $20,000 per annum and the cost of security cameras in our area offices is an estimated $10,000.

28      The above costs are indicative only to give the Finance and Audit Committee an understanding of some of the costs associated with implementing the Plan and the Framework.  Costs will need to be budgeted as part of the Long Term Plan and Annual Plan process.

 

Policy Implications

29      The current Health and Safety Policy will need to be amended following finalisation of the Plan.

Analysis

Options Considered

30      The options considered are to recommend to Council for approval the Governance Framework and Health and Safety Plan as presented (Option 1), recommend them subject to some minor amendments (Option 2) or Do Nothing (Option 3).

Analysis of Options

Option 1 – Agree to the draft Health and Safety Framework and Plan for 2017/18

Advantages

Disadvantages

·        Robust framework

·        Improvement of Health and Safety Culture

·        Illustration that Council and ELT are committed to caring for the wellbeing and safety of our people

·        Decline in the number of injuries

·        Meet legislative requirements

·        Financial implications

 

 

Option 2 – Modifies the Health and Safety Framework and Plan

Advantages

Disadvantages

·        Save some initial costs in the short term

·        Inconsistency in procedures

·        No clear guidelines

·        Health, safety and wellbeing of our people in jeopardy

·        May not be consistent with legislative obligations.

 

 

Option 3 – Do nothing

Advantages

Disadvantages

·        Avoids short term cost implications

·        Inconsistency in procedures

·        No clear guidelines

·        Health, safety and wellbeing of our people in jeopardy

·        Not consistent with legislative obligations.

 

Assessment of Significance

31      The matter being considered is of an administrative matter and hence is not considered to be significant in terms of section 76 of the Local Government Act 2002.

Recommended Option

32      Agrees to recommend to Council adoption of the draft Health and Safety Governance Framework and Health and Safety Plan for 2017/18.

Next Steps

33      Seek final approval of the plan from Council and begin working on the procedures and the implementation plan.

 

Attachments

a         Health and Safety Plan 2017-2018

b         Southland District Council Health and Safety Management System Governance Framework    

 


Finance and Audit Committee

07 June 2017

 

 

Our H&S Commitment - developed by the Leadership Team 16 May 2017

 

We are committed to caring for the wellbeing and safety of our people and those who interact with us.

Our goal is for our people to be bold and actively think about their own and others safety and wellbeing, so that we deliver safe and effective services to our community and that everyone gets home safe and well.

 

Current State

We feel we have made good progress on H&S over the last few years and there are definite signs that our people believe we take accountability for their safety and want them to go home safe and well at the end of the day.

 

We have reviewed our progress using an external organisation and have used this to refocus our intentions and develop this plan to continue our H&S Journey.  While we do not experience a large number of significant injuries, we know our people are managing and working with risk every day that has potential to cause a significant injury. Our aim is to ensure we manage and control these risks and work with our people to continually improve and learn.

As an Executive Leadership Team we have discussed our current culture in H&S against the Hearts and Minds culture ladder developed by Hudson. 
The diagram below shows what our belief in our current organisational culture.  To move up this ladder towards a more PROACTIVE culture we need to have a plan that will deliver a different focus on H&S.  We have developed this plan, as a way to ensure we measure and progress our H&S journey.

The table below shows our current injury rates since 2012.  This is based on the hours worked by our 135 FTE workforce and the numbers of injuries come from our ACC data.  While most of the injuries recorded here are minor in nature, we accept this doesn’t guarantee a serious injury cannot occur at any time.  We can also see an increase in the number of work injuries in the last two years, with 2016-17 not yet completed. Contemporary organisations use a less than 5 frequency rate as a benchmark target.

 

Currently, we are limited in the information we capture for H&S, and there is inconsistency with our definitions and reporting. We will begin to capture more, including our contractors, with a focus on three levels of incident information.  These are Serious Injuries – those requiring hospital admittance and treatment (and would be notifiable to Worksafe), ACC Claims - all work injuries with medical treatment accepted as ACC claims, and near-miss and first aid level incidents.  We will begin to collate this information using a frequency rate to indicate our performance.

 

We will continue to track and use incident information along with other measures identified to track our progress.

Action Plan

As part of our commitment as a Leadership Team we will co-sponsor a key activity within the H&S plan, this sponsorship commitment is to supporting the roll-out of the initiative or objective and keep each other and our teams honest in undertaking the objectives within SDC. The focus areas were identified at the Executive Leadership Team H&S Workshop on the 16 May 2017.

 

Key Focus Areas for H&S

Steps to complete

Sponsor

 Complete by date

Complete implementation of H&S Framework

In February Terry Johnson from Simpson Grierson completed a review of our current H&S processes and provided recommendations. 

Terry has since helped us develop a framework and governance process for H&S, this will include the development of key procedures and review of some current process to ensure we have a robust and clearly documented H&S framework to move forward with.

Drafting of procedures, including consultation with workers.

SR

August 2017

Develop education on our key H&S processes and ensure our people are trained in what we are doing.

Nov

 2017

New framework implemented.

Dec

2017

Critical Risk

Prioritise the development of the Risk and Hazard Management Procedure above, and progress work on critical risk already underway.  Educate and train our people on risk and hazard management.

Prioritise Critical Risks and allocate resources based on the priorities.  Complete the development of control plans, and assessment of effectiveness of the controls for the risks.

On-going monitoring and management of critical risks seen as part of the audit and assurance process.

Development of Risk and Hazard procedure, including prioritisation of critical risk.

IM

July

2017

Development of critical risk control plans (bowties) and approval from ELT sponsor.

August 2017 – June

2018

Assess the effectiveness of the controls for the each of the control plans and create corrective actions for any deemed not effective.

Dec

2018

Monitor closing out of corrective actions in Monthly reporting.

August 2017 onwards

H&S Participation an HSC Committee Review

Consider current arrangements for participation and ensure that the Leadership and Participation Procedure reflects our HS Policy intentions.

Review the role of the H&S Committee, including the make- up of the Committee and the overall consultation and participation arrangements for SDC.

Rewrite the terms of reference for the HSC and move the focus of the HSC towards more proactive advocacy of H&S.

Draft procedure and undertake consultation.

BH

Aug 2017

Review terms of reference with HSC

Aug 2017

Transition and monitor progress.

From Oct 2017.

Incident Management

Escalation process for ensuring notification of events is clear and occurs.  Define what level of investigation is required determined by the potential of the event, ensuring all have corrective actions and these are monitored to completion.

Ensure this process is an important input into our monitoring and measuring and our audit and assurance.  It provides our lag measures and opportunity to improve our systems.

Draft procedure and undertake consultation.

JE

June 2017

Educate our people and train resources (as required).

Implement new processes.

Sep 2017

Measuring & Monitoring

Seek understanding of elected representatives’ requirements for information that supports their due diligence obligations.

Develop consistent and accurate reporting processes that measure progress and enable future decision making on H&S initiatives.

Define lead and lag measures that enable the delivery of our H&S objectives, and demonstrate progress against these.

RC

Aug 2017

Draft procedure and undertake consultation. 

 

Educate our people and implement.

Sept 2017

 

Dec 2017

 


Finance and Audit Committee

07 June 2017

 

Health and Safety Management System Governance

 

Document Name and Number:	HSMS Governance – r/17/5/10807
Document Owner and Approver	Manager People and Capability
Original Issue Date:	May 2017	Date Issued:	May 2017
Version No.	One	Review Date:	May 2019

Procedure Owner
Group General Counsel & Company Secretary

Contents

1.         Background and Purpose............................................................................................... 3

2.         Scope.............................................................................................................................. 3

3.         Governance Process...................................................................................................... 3

3.1       Overview............................................................................................................ 3

3.2       Document Hierarchy…………………………………………………………….... 3

3.3       H&S Policy………………………………………………………………………… 4

3.4       SDC Standards............................................................................................ ….. 4

3.5       SDC Core H&S Procedures............................................................................... 5

3.6       Location H&S Procedures……….………………………………………………... 5

3.7       Numbering System............................................................................................. 5

3.8       Document Control.............................................................................................. 5

3.9       Approval Level.................................................................................................... 5

3.10     Document Review Periods................................................................................. 6

4.         Responsibilities................................................................................................................ 6

5.         Other information............................................................................................................ 7


 

1.     Background and Purpose

This document forms the overarching governance document which provides the context, structure and overview of the unified Health and Safety Management System (HSMS) utilised across Southland District Council (SDC).

 

The purpose of this unified HSMS is to:

 

·              Set out the Health and Safety (H&S) framework for SDC and document how H&S will be  consistently managed throughout Council and its operations;

·              Provide information on the hierarchy of documentation to be used and define the document types;

·              Determine and document the numbering system used within the unified HSMS; and

·              Define the document control process.

 

The above framework ensures SDC has a system that is unified, robust, meets organisational needs, and supports the goal of creating an inclusive business-wide safety culture.

 

 

2.     Scope

This document applies to all businesses and subsidiaries, which collectively form SDC.

 

 

3.     Governance Process

3.1      Overview

SDC is a territorial authority as defined by the Local Government Act (xxxx).

 

SDC has undertaken to manage the health and safety of workers and others under H&S safety legislative requirements in New Zealand, and has determined that a HSMS framework, containing a single Policy with clear standard procedures, will enable a risk based approach to managing H&S based within its undertakings. 

 

This document sets out the governance process and the expectations for all SDC businesses.

 

3.2      Document Hierarchy

The model below defines the structure of the HSMS Framework within SDC and the expected minimum documentation associated with H&S.

 

3.3      H&S Policy

One H&S Policy will exist for SDC and this will be developed in consultation with our workers and their representatives.  The H&S Policy will be approved by Council.  The Chief Executive will sign the Policy.

 

3.4         SDC H&S Procedure

Procedures will be written to ensure SDC clearly documents what is expected in order to manage the different elements of H&S.  The procedures will be approved by the Chief Executive.  Each procedure will contain the following sections:

 

1.         Background and Purpose.

2.         Scope.

3.         Procedure.

4.         Responsibilities.

5.         Other information.

 

The table below calls out the procedures to be contained within the SDC HSMS and describes them below:

 

Title

Description of Procedure.

HS01

HSMS Governance

Our overarching document that sets out the intent of the HSMS and how the documents which collectively create the HSMS are designed to be used. It includes any approval process and document control requirements.

HS02

Leadership and Participation in H&S

This procedure outlines how our leaders and people will be involved in H&S at SDC.  It will provide the framework for our H&S Committee to work within and call out our processes for interacting with our contractors and their workers.

HS03

Planning and Review

This procedure supports the Identification of key H&S objectives, goals and targets.  It sets out how methodical planning will be used to deliver these objectives.  It includes regular reviews and supports keeping the H&S Plan alive and on track.

HS04

H&S Training

This Procedure outlines how the organisation will determine what training is required to support H&S and the organisations objectives.  Training requirements will be based on the risks associated with the work undertaken by SDC and its workers, and include training required by regulation such as first aid training requirements,  training requirements for H&S Representatives etc. 

This procedure will also call out the requirement for Elected Members and Leadership to be kept informed and up to date with H&S developments internally and externally to SDC.

HS05

Incident Management

This Procedure enables the organisation to record how it reports and investigates events, including the escalation of events, and process to determine causation.  It includes the need to ensure any appropriate preventative measures and associated corrective actions are identified as part of investigations.

It includes how to meet statutory requirements in relation to notifiable events and participation with regulatory bodies in such situations.

It also contains how corrective actions will be monitored to ensure completion.

HS06

Risk and Hazard Management

This Procedure outlines how the organisation will identify and manage its most critical risks, including the development of control plans, and assessment against the effectiveness of these controls.

Hazards will managed through local hazard registers, when exposure to a hazard cannot be eliminated in a timely manner.

HS07

Injury Management

This Procedure outlines how the organisation supports and cares for its people to recover and rehabilitate from work and non-work injuries and return to their pre-injury roles.

HS08

Wellbeing

This procedure will provide the organisation with a proactive approach to managing the wellbeing of our people.  It will determine what health related risks are present in the work undertaken by SDC.  It will also ensure where risk assessment determines it, and actual exposure is present, what on-going health monitoring is required.

The wellbeing procedure will also be used to support positive outcomes from other potential health risk issues such as work pressure, mental health or fatigue, and acknowledges that these can be exacerbated by other influences such as factors such physical health, relationship issues or financial uncertainty. 

HS09

Safe Systems of work

The purpose of this Procedure is to specifically outline how key activities which have a significant risk are to be controlled. Typically this Procedure will include arrangements for access to sensitive/restricted areas, issuing of permits, management of critical risks such as Work at Height, Electrical Safety and Confined Spaces.

HS10

Contractor and Procurement Management

This Procedure will outline arrangements in place to ensure that each PCBU can fulfil its individual and overlapping duties. It can include specific pre-qualification processes, tendering information and selection of competent providers.

It should also include the processes for ensuring that goods and services procured for use within SDC are suitable for purpose and are fit for purpose.  It should call out the need for the design and manufacturing of items for supply to SDC (eg. playground equipment or infrastructure) to meet any necessary design regulations and include H&S Risk Assessments as part of the design requirements in SDC bid documents.

HS11

Emergency Management

This Procedure does not replace Business Continuity Arrangements but often aligns with and supports those arrangements that are already in place. It identifies relevant emergency situations which the organisation and its people may face and outlines how these are best managed should they occur and are periodically tested to ensure, should the need arise, the arrangements will be effective on the day.

The treatment of visitors within the organisation (eg. those present on site for the purposes of visiting SDC locations other than completing work) will be covered by this procedure to ensure emergency arrangements are in place to support visitors in an emergency situation.

HS12

Measuring and Monitoring

The process for periodic monitoring of the effectiveness of the agreed HSMS and achievement of targets and goals is contained within this Procedure. In addition, it includes how that information will be disseminated (upwards and downwards) in the organisation to inform on progress or any roadblocks.  This particular Procedure is useful for evidencing due diligence obligations.

HS13

H&S in Event Management

This procedure will cover the H&S process SDC will use when managing a public event or when members of the public are in charge of our facilities or council controlled locations (including halls, reserves and other amenities).

HS14

Audit and Assurance

An effective HSMS is only beneficial if it works in practice.  This Procedure outlines how the organisation will undertake its own internal evaluation of the implementation of those processes and identify ways to improve or focus on any gaps.

 

These procedures have been determined as necessary to ensure the safe and healthy operations of SDC locations and operational activities as they currently exist.  Further procedures may be added in the future should the risk profile of SDC change.

 

Prior to publishing H&S Procedures, contents will be discussed and feedback sought, through the use of the SDC H&S Committee and Contractors Engagement Processes.

 

3.5      Numbering System

Each Procedure will have its own document reference number, which will correspond to the relevant supporting documents using a sub-numbering system.  For example, H&S Governance Procedure will be the first document in the System and will be called HS01, any documents used to support this procedure will have the suffix after them, the first being HS01-01 with the suffix increasing each time a sub-document is added.

 

3.6      Document Control

Each document will have a document control table embedded in the footer of the document prior to publication.  This footer table will be as follows:

 

Document Name & Number:

Management of Change - HS04

Document Owner and Approver

Manager People and Capability

Original Issue Date:

May  2017

Date Issued:

May 2017

Version No.

One

Review Date:

May 2019

 

3.7      Approval Level

For SDC issued documentation, the document owner and approver will be Manager People and Capability

 

3.8      Document Review Periods

SDC will review its H&S Procedures every two years, and other key H&S documents such as risk registers or risk control plans must also be reviewed every two years at a minimum.  The review will occur prior to the completion of the month shown in the review date box.

 

Reviews may also be undertaken at any time should the following occur:

·              A change to the SDC structure, business model or general undertaking that necessitates a review;

·              A significant event occurs that determines a change to a standard or procedure is necessary;

·              Legislation or regulation change occurs necessitating review, and where necessary, changes to current HSMS contents;

·              At the request of the Council or Chief Executive; or

·              Where an audit or self-Assurance process has determined that a change is required and this change is agreed to by the Manager People and Capability and
Chief Executive.

 

 

4.     Responsibilities

 

The following roles have an active part to play in ensuring effective governance of the agreed SDC HSMS Framework: 

 

Chief Executive

·              Ensures SDC maintains a HSMS that is able to provide assurance to Council that the system is resourced, robust, used, and delivers the intent of the SDC H&S Policy.

·              Ensures the Executive Leadership Team have personal H&S objectives each year which support implementation of the agreed HSMS and H&S Plan.

·              Signs and approves the H&S Policy.

 

Manager People and Capability

·              Approves the H&S Procedures and ensures resourcing is available to support the HSMS Framework, its implementation and ongoing management.

 

Executive Leadership Team

·              Are accountable for ensuring that appropriately documented procedures specified in this governance process are implemented and used across their area of responsibility.

·              Be aware of the contents of the HSMS and actively encourage its use.

 

Operational Leaders

·              Actively encourage implementation of all approved procedures, monitor compliance, and if necessary, address any areas of non-conformance as appropriate.

·              Holds to account those with responsibility for requirements within the agreed procedures.

·              Participate in the review of, and where relevant, improvements to the contents of the local procedures to ensure they remain relevant and easily understood. 

 

Workers under SDC's influence and/or control

·              Comply with the H&S Policy, Standards and procedures of SDC.

·              When requested, actively participate in the review and creation of local procedures, guidelines and checklists.

 

 

5.     Other information

 

·              SDC H&S Policy

·              H&S Definitions

·              Add other links as necessary.

 


Finance and Audit Committee

7 June 2017

sdclogo

 

Financial Report for the month ended 30 April 2017

Record No:        R/17/5/10630

Author:                 Robert Tweedie, Management Accountant

Approved by:       Anne Robson, Chief Financial Officer

 

  Decision                              Recommendation                         Information

 

  

 

Background

1.         This report outlines the financial results for the ten months to 30 April 2017 or 83% of the financial year.

2.         The Monthly and YTD Actual results are compared to the Full Year Budget (Projection) in the attached Summary Monthly Financial Report.  The projection values include any 2015/2016 carried forward items approved by Council in August 2016 and any changes as a result of October 2016 forecasting that Council approved. The 2016/2017 Annual Plan budget is shown in the Monthly Financial Summary Report as the Full Year Budget (Budget).

3.         The forecast changes approved by Council in its May meeting will be reflected in the May Financial Report.

Overview

4.         The Summary Monthly Financial Report consolidates the business units within each of the key areas of the Executive Leadership Team (ELT) responsibility.  The following commentary focuses on the year to date (YTD) results excluding GST.

5.         The Detailed Monthly Financial Report includes more detailed explanations and commentary on variances by the Executive Leadership Team.  Commentary generally focuses on the year to date (YTD) results and, where specified, monthly results. 

6.         In the Council Summary and Detailed Reports, the values in the columns for:

·              The Monthly Budget is phased, where appropriate, and includes forecasting.

·              The YTD Budget is the Annual Plan, carry forwards and forecasting year to date. 

·              The Full Year Budget is the LTP budget for the year.

·              The Full Year Projection is the forecasted year end result

7.         Phasing of budgets occurs in the first 2 months of the financial year, at forecasting and when one-off costs have actually occurred. This should reduce the number of variance explanations due to timing.

8.         Where phasing of budgets has not occurred, one twelfth of annual budgeted cost is used to calculate the monthly budget.

9.         The first round of forecasting for the first four months has been adopted. The revised budgets are included in the monthly, year to date budgets and projection.

10.       Council staff will continue to refine the format of this report to enhance the financial information reported.  We welcome any feedback or suggestions on further improvements that could be made to this report.

 


 

11.       The Council Summary Report (actuals vs phased and forecast budget) year to date are as follows:

 

 

Income

12.       Operating Income is $3.0M (5%) under budget year to date ($57.7M actual vs $60.7M budget).

13.       Other Activities is over budget due to:

-        A grant of $105K was returned from the Edendale-Wyndham Community board for the Edendale Hall project which is now no longer proceeding. This monies will be returned to the specific Fonterra Contributions Reserve.  The $105k grant was from two financial contributions received from Fonterra, as it is now named.  Both consents spoke generally about the use of the monies being in Edendale, its environs or the district generally.  The Community and Policy committee will have the discretion as to where the funds are granted in line with the District Plan and the consent.

-        External interest income on operating investments is higher than budgeted.  Annual budget assumptions were made based on the level of cash reserves of projected capital works that were going to be undertaken.  Cash reserves which would have been applied to these projects have resulted in higher cash reserves than budgeted earning additional interest income.

 

14.       Services and Assets are over budget. 

-           To date, forestry sales are ahead of projection by $506K. Dipton sales are forecast to be ahead of target by year end due to better sale prices and greater than expected volumes.  Additionally the creation of some access tracks have also resulted in additional harvesting occurring.

-           Community Engineers and Engineering Consultants business units are internally funded and under budget year to date.  The costs are lower for both these business units against budget but forecast to be on target by the end of the year.

 

15.         Transport and Roading income is below budget year to date.  This year’s capital works programme has commenced but is still behind the planned schedule which directly affects the level of income from NZTA.  The work programme and NZTA funding is still planned to be on budget by year end. In order to fully utilise the budget the Strategic Roading team have instructed SDC’s Alliance partners to pull forward some unsealed road metalling and complete additional unsealed road drainage renewals.  These works have been confirmed by the Alliance partners and should be completed by 30th June, weather dependant.

Operating Expenditure

16.       Operating Expenditure is $1.8M (4%) under budget for the year to date ($41.1M actual vs $42.9M budget).

 

17.       Environmental Services is below budget.  This is due to reduced staffing levels particularly in resource consents and planning and less costs being incurred in relation to the district plan than budgeted. It is expected that this area will continue to be under budget at year end.

18.       Overall, Financial Services is $236K below budget year to date. This is principally due to lower insurance and valuation roll costs as well as savings due to staff vacancies. It is expected that the business unit will continue to be under budget at year end.

19.       Services and Assets are under budget by $422K. Forestry expenditure is $366K below budget mainly due to harvesting costs. Harvesting costs are expected to be on target by year end.

20.       Transport and Roading operational maintenance costs are slightly behind budget but are expected to be in line with budget by year end.

Capital Expenditure

21.       Capital Expenditure is $9.9M (41%) under budget year to date ($14.0M actual v $23.9M budget).

 

22.       Community and Futures capital expenditure relates to office furniture purchased in the Policy and Governance areas. This will be funded from savings in the business unit or the district operating reserves. 

23.       Due to a current review of the vehicle policy, vehicles within a number of areas have not yet been replaced.  The capital budget above for Environmental services is for vehicle replacements.

24.       Additionally, Financial Services has not yet replaced the Council pool. The office upgrade commenced in April and was completed in May. It will be within the forecast budget.

 

 

25.         Capital expenditure for Services and Assets is overall $4M below budget.  Projects in Water ($2.1M behind budget) and Sewerage ($1.3M behind budget) are still in the design and tender phase and yet to commence.  Work on the Winton Water Main replacement has begun and will continue through until June.  At this stage it is anticipated that the Riversdale Sewerage Treatment upgrade will not be undertaken.  The majority of the total Annual plan cost has been removed as part of the last forecasting round, some funds have been retained from the consent process. Water and Waste projects to the value of $1.4M (including Riversdale and funds relating to Te Anau) have been moved to 2017/2018 as part of the submission process to the 2017/2018 Annual Plan.

26.       Overall roading capital expenditure is $5.7M less than budgeted for the year to date due to weather conditions. The resealing programme and tendered projects have commenced and are expected to meet the target by year end.

Balance Sheet

27.       Council’s financial position as at 30 April 2017 is detailed below and is for the activities of Council only.  The balance sheet as at 30 June 2016 represents the audited balance sheet for activities of Council and includes SIESA and Venture Southland.

28.       Current Assets (Other Financial Assets) at 30 June 2016 includes cash reserves in Venture and SIESA when the year-end accounts were consolidated.  An additional amount of $10M in term deposits was disclosed under Other Financial Assets. This is in line with reporting standards for deposits with a term of 90 days or more at year end.

29.       At 30 March 2017, Council had $11M invested in three term deposits ranging from three to seven month maturities as follows:

30.       Funds on call: 

 

31.       The movement in Property, Plant and Equipment is the budgeted depreciation for the year to date.

32.       The reduction in internal loans are the repayment of loans. These are loans to the local communities raised in June each year.

33.       The increase in Non-Current Assets (Intangible Assets) is the acquisition costs for the Council’s digitisation software.

 

 

 

 

 

 

 

 

 

 

Recommendation

That the Finance and Audit Committee:

a)         Receives the report titled “Financial Report for the month ended 30 April 2017” dated 29 May 2017.

 

Attachments

There are no attachments for this report.  

 


Finance and Audit Committee

7 June 2017

sdclogo

 

Digitisation Project Update

Record No:        R/17/5/9446

Author:                 Gillian Cavanagh, Team Leader - Knowledge Management

Approved by:       Damon Campbell, Chief Information Officer

 

  Decision                              Recommendation                         Information

 

  

 

Introduction

1        The purpose of this report is to provide an update to the Finance and Audit Committee on the status of the Property File Digitisation Project.

2        The figures outlined in the table below are for the months of January to April which provides the committee an interim report while staff finalise details of the ongoing reporting requirements with Power Business Services.

January to April Reporting

3        The following table provides details of files prepared, average A4 pages and large format (LF) pages scanned and average metadata/pdf compilation for the months of January to April.

 

File

Preparation

Average

A4 Scanned

Average

LF Scanned

Average

Metadata/PDF

January

1,687

231

4.5

20

February

1,613

220

5.3

20

March

2,161

217

5.4

19

April

1,910

147

2.5

12

Average

1,843

203

4.4

18

4        These details have been extracted from the vendor invoices for this particular report.  The numbers on the invoices are manually entered by the vendor and we are working with them to generate reporting in a way that enables us to confirm these each month.

5        This new reporting will be used to update the Chief Executive and Chair of the Finance and Audit Committee each month with a formal update report being presented to each Finance and Audit committee meeting for the remainder of 2017 whilst this project is running.

6        Council officers at the time of writing this report were finalising the last large shipment to PBS.  This last shipment will be approximately 5,000 property files and will equate to approximately 95% of Council’s property files being sent away. The remaining 5% are actively being used by staff and will be shipped as part of the final wash-up.

7        Council will send the Fonterra collection as a separate shipment so that it will be processed as one complete set.  This will be completed in the new financial year.

8        Kiosk devices will progressively be setup to allow members of the public to view the digital property files from Council offices. With this work progressing this information will also be made available via the Council website.

9        The project is progressing well and is on track with the project being completed by December 2017.

10      The current fixed price is based on 274.8 A4 pages and 6.91 large format pages and 24,000 files.  By the end of June we will have confirmation of the final number of files that will be processed as part of the overall project.

11      After the June processing period the numbers received will be reviewed in conjunction with the vendor to discuss in particular the average pages numbers and the impact on the overall costs for the remaining files.

12      At the end of April the updated forecast for the entire project is $1.987m, compared to the approved budget of $2.0m.

 

 

Recommendation

That the Finance and Audit Committee:

a)         Receives the report titled “Digitisation Project Update” dated 27 May 2017.

 

 

 

Attachments

There are no attachments for this report. 

 


Finance and Audit Committee

7 June 2017

sdclogo

 

Audit Engagement Letters

Record No:        R/17/5/9727

Author:                 Jacobus Meyer, Finanacial Accountant

Approved by:       Anne Robson, Chief Financial Officer

 

  Decision                              Recommendation                         Information

 

  

Purpose

1        To seek formal approval for the proposed audit arrangements for the three years to 30 June 2019, an audit engagement letter for three years to 30 June 2019 and an audit arrangements letter for the Annual Report for the year audit to 30 June 2017.

2        These documents are required to be approved by Council. 

Executive Summary

3        Audit New Zealand requires Council to counter-sign the proposal for them to conduct the attest audit on behalf of the Auditor-General for the 2017, 2018 and 2019 years. This letter will then form the basis for a recommendation to the Auditor-General on the audit fee that should be set.

4        Audit New Zealand requires Council to sign the audit engagement letter sent on behalf of the Auditor-General, who is the auditor of all “public entities”, including Southland District Council under section 14 of the Public Audit Act 2001.

5        Audit New Zealand requires Council to confirm the audit arrangements for the 2016/2017 Annual Report of Council. 

6        Once Council has confirmed its acceptance of the proposal, engagement and audit arrangements letters, they will need to be signed by the Mayor and returned to Audit New Zealand.

7        This report provides a summary of the letters for the Committee’s information.  A full copy of the letters are attached to this report for your information.

 

 

Recommendation

That the Finance and Audit Committee:

a)         Receives the report titled “Audit Engagement Letters” dated 3 May 2017.

b)         Determines that these matters 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)        Accepts the terms, conditions, arrangements and fees as set out in the letters attached.

e)         Authorises the Mayor to sign the following letters received from Audit NZ.

-     Proposal to conduct the audit of Southland District Council on behalf of the Auditor General for the 2017, 2018 and 2019 financial years

-     Audit engagement letter

-     Audit arrangements letter for the year ending 30 June 2017

 

Content

Background

8        The purpose of this report is to provide an overall summary of the three audit letters recently received from Audit NZ. 

9        The Auditor General has appointed Audit NZ to carry out the audit of the Southland District Council for the 2017, 2018 and 2019 years.  The purpose of the proposal letter is to provide information on:

·                      The statutory basis for the audit and how the audit fees are set

·                      The entities covered by the proposal

·                      The key members of the audit team

·                      The hours Audit NZ plan to spend on the audit and the reasons for any change in hours

·                      The proposed fees for the audit of the financial years ending 30 June 2017, 2018 and 2019 and the reasons for any change

·                      Assumptions relating to the proposed audit fees, including what they expect of Council

·                      What the OAG overhead charge provides

·                      The certification required by the Auditor General

·                      Their commitment to conduct the audit in accordance with the Auditor-General’s Auditing Standards.

10      The audit engagement letter for the 2017, 2018 and 2019 years outlines:

•        The terms of the audit engagement and the nature, and limitations of the annual audit

•        The respective responsibilities of the District Council and Audit NZ as the Appointed Auditor for the financial statements and performance information.

11      The audit arrangement letter outlining the audit of the Annual Report for the year ending
30 June 2017 covers the specific arrangements of three key areas as follows:

•           Business risks/issues and the audit response

•           Areas of interest for all District Councils

•           Logistics (ie audit team, timing and fees). 

Estimated audit hours

12     Audit NZ estimate the following hours will be required to carry out the audits (compared to budgeted and actual data from the previous financial year):

Audit team members

2016 budget

2016 actual

2017

2018

2019

Appointed Auditor

64

78

55

55

55

Audit Manager

105

84

95

95

95

Other Staff

484

622

550

550

550

Sector specialist support

8

8

8

8

8

Information Systems

8

14

8

8

8

Total audit hours

669

806

716

716

716

13     The major reasons for 47 hours increase in audit hours relate to:

•           A change in the audit team mix which has resulted in an increase of 32 hours overall. The cost implications of this, in 2017, is a reduction of $1,671 due to less increase in hours by junior staff being offset by a reduction in hours by the senior staff;

•           Changes to mandatory auditing procedures resulting from increased disclosure requirements in local government. It is estimated that an additional 15 hours audit work will be required.  This has been costed at an additional $2,161 for 2017.


 

Proposed audit fees

14     The proposed fees for the next three audits (compared to budgeted and actual data from the previous financial year) are:

Structure of audit fees

2016 budget

$

2016 actual

$

2017 proposed

$

2018 proposed

$

2019 proposed

$

Net audit fee (excluding OAG overhead and disbursements)

103,490

103,490

105,154

106,328

107,436

OAG overhead charge

9,767

9,767

10,286

10,595

10,913

Total audit fee (excluding disbursements)

113,257

113,257

115,440

116,923

118,349

Estimated disbursements

9,000

7,534

8,500

8,500

8,500

Total billable audit fees and charges

122,257

120,791

123,940

125,423

126,849

GST

18,339

18,119

18,591

18,813

19,027

Total (including GST)

140,596

138,910

142,531

144,236

145,876

15     Apart from the reasons discussed in point 14 above, the main reason for the increase in the fees between years is the predicted annual staff salary cost movements. 

Annual Audit for the year ended 30 June 2017

16     The audit fee proposed for the 2016/2017 annual report is $115,440 (GST exclusive) plus disbursements, an increase of 2.61% on the 2015/2016 fee. 

17     The audit of the 2016/2017 Annual Report is proposed to be carried out in the following stages:

April 2017

Interim audit visit to:

•         Understand the control environment.

•         Review and test systems.

•         Review the systems and process supporting the new mandatory Department of Internal Affairs performance measures.

May 2017

Draft Interim Management Report issued by Audit New Zealand

September 2017

•         Audit New Zealand final visit to audit the Annual Report and supporting work papers.

•         Verbal audit clearance given by Audit New Zealand.

•         Audit New Zealand issue final audit opinion.

•         Final Management Report issued by Audit New Zealand.

Issues

18      Council staff have no issues with the content of the audit engagement and arrangement letters attached.

19      The purpose of an audit is to provide an objective independent examination of the financial statements, which increases the value and credibility of the financial statements produced by management and the public, thus increasing user confidence in the financial statements.  As such, it is in Council’s interest for Audit NZ to define the audit programme of work.

Factors to Consider

Legal and Statutory Requirements

20      Section 98(1) of the Local Government Act 2002 requires the Council to prepare and adopt an Annual Report each financial year.  Section 99(1) requires the Annual Report to include an Auditor’s Report.

21      In accordance with Section 14(1) of the Public Audit Act 2001, the Council’s Annual Report must be audited by the Office of the Auditor-General.  Audit New Zealand is the authorised audit service provider on behalf of the Auditor-General.

Community Views

22      No consultation is required as the Annual Report reflects the actual results of activities undertaken during the year compared to the LTP/Annual Plan budgets that where consulted on.

Costs and Funding

23     The cost associated with the audit of 2016/2017 Annual Report is $115,440 (GST exclusive) plus disbursements.  Audit Fees of $125,313 have been budgeted in the 2016/2017 Annual Plan.

Policy Implications

24      There are no policy implications 

Analysis

Options Considered

Option 1 - Accept and sign the audit letters as provided

Advantages

Disadvantages

·        Allows the Annual Report process to continue as proposed.

·        Confirms Councils auditors for the next three years and the key details around the engagement.

·        None, unless Council requires clarification and this is not sought before signing.

Option 2 - Request clarification or inclusion of any issue that Council wants included in the audit letters before accepting them

Advantages

Disadvantages

·        Council is able to seek the clarification it requires or discuss the inclusion of any issue it would like incorporated into the audit.

·        Could delay the audit process if Council and Audit New Zealand cannot agree to appropriate arrangements.

Assessment of Significance

25      The decision being made in this report is whether Council should agree to the audit engagement and arrangement proposals presented by Audit NZ. Given the administrative nature of this matter it is not considered significant in terms of Council’s Significance Policy.

Recommended Option

26      Option 1, Accept and sign the audit arrangements letters as provided.

Next Steps

27      If accepted, arrange for the Mayor to sign.

28      Council staff will compile the 2016/2017 Annual Report to enable the final audit to be undertaken and adoption to occur on the 27 September 2017.

 

Attachments

a         Proposal to conduct the audit of Southland District Council for 2017, 2018 and 2019 financial years

b         Audit New Zealand Arrangement Letter 2017

c         Audit NZ Engagement Letter 2017    

 


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Finance and Audit Committee

7 June 2017

sdclogo

 

Interim Management Report from Audit New Zealand for the year ended 30 June 2017

Record No:        R/17/5/9859

Author:                 Jacobus Meyer, Finanacial Accountant

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 conclusion of the interim stage of its Annual Report audit, outlining the work that was performed and any recommended areas for improvement.

2        Attached is the management letter received from Audit New Zealand (Audit NZ) in relation to the interim audit (Appendix A) for the year ended 30 June 2017. 

3        Audit New Zealand did not identify any significant or material issues during Council’s interim audit for the year ended 30 June 2017.

4        However, during the process Audit NZ did identify a number of areas for improvement.

5        The table below outlines the recommendations made by Audit NZ in these reports, in the form of an action list.

6        Council staff will work to implement/resolve the recommendations identified by Audit NZ, in accordance with the self-imposed timelines.  April 2017 is the primary self-imposed deadline as this is the anticipated date that Audit NZ will visit to undertake their interim procedures for the 2017 audit.

 

Matters from Interim Management Report

Responsibility

Status

Due Date

Policy development and review

·      implement the recommendations from the Deloitte Shared Business Process Review;

·      continue to implement a formal programme of review for policies; and

·      ensure staff are able to locate key polices, and are aware of their contents.

Strategy and Policy Manager

In progress

December 2017

Property, plant and equipment reconciliation

Complete a monthly reconciliation between the fixed asset register and general ledger. The reconciliation should be reviewed by an independent person on a one-up basis.

Sheree Marrah

In progress

June 2017

 


 

Matters from Previous Management Reports

Responsibility

Status

Due Date

Purchase order system

Complete an independent review of purchase orders raised and authorised by the same person.

Review core data changes made by administration users.

Sheree Marrah

Complete

 

Creditor masterfile changes

All masterfile changes should be independently reviewed and signed off.

Sheree Marrah

Complete

 

Policies

Ensure all policies are up to date and periodically reviewed.

Strategy and Policy Manager

In progress

Ongoing

Contract management

Develop a formal approach to contract management.

Develop a contract management policy.

Ian Marshall

In progress

June 2017 (framework)

 

December 2017 (policy)

Legislative compliance

Develop a formal system for legislative compliance.

Strategy and Policy Manager

In progress

 

Super user accounts

The list of users with access to the domain administrator group should be reviewed and limited only to those system and user accounts that require this access to perform their function. In addition, the built in administrator account password should be changed and usage of the account limited. Good practice is for the password to be changed when IT staff leave or every six months.

Damon Campbell

In progress

 

Formal IS Agreement

Develop a formal agreement with Invercargill City Council should the Council retain the IS services provided by the Invercargill City Council.

Damon Campbell

Not started

 

 

 

Recommendation

That the Finance and Audit Committee:

a)         Receives the report titled “Interim Management Report from Audit New Zealand for the year ended 30 June 2017” dated 24 May 2017.

 

 

Attachments

a         Auditor's Interim Management Report year ending 2017    

 


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Finance and Audit Committee

7 June 2017

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Health and Safety

Record No:        R/17/5/10791

Author:                 Janet Ellis, People and Capability Manager

Approved by:       Steve Ruru, Chief Executive

 

  Decision                              Recommendation                         Information

 

  

Purpose

To provide an update on Health and Safety activity within the Southland District Council

Recommendation

That the Finance and Audit Committee:

a)         Receives the report titled “Health and Safety” dated 27 May 2017.

Content

Finance and Audit Committee Responsibilities and Delegated Authority

1        The Finance and Audit Committee has responsibility for:

·        Reviewing, monitoring and making recommendations to Council on Southland District Council’s health and safety risk management framework and policies to ensure Council has clearly set out its commitments to manage health and safety matters effectively.

·        Reviewing and making recommendations to Council for achieving health and Safety objectives.

·        Reviewing and recommending for Council approval targets for health and safety performance and assessing performance against those targets.

·        Monitoring Council compliance with health and safety policies and relevant applicable law.

·        Ensuring that the systems used to identify and manage health and safety risk are fit-for-purpose, being effectively implemented, regularly reviewed and continuously improved.

·        Seeking assurance that Council is effectively structured to manage health and safety risks.

·        Reviewing health and safety related incidents and consider appropriate actions to minimise the risk of recurrence.

·        Making recommendations to Council regarding the appropriateness of resources available for operating the health and safety management systems and programmes.

Due Diligence Responsibilities

2        In addition to the responsibilities of the Finance and Audit Committee all Councillors have due diligence requirements. Councillors are required to keep up to date with health and safety matters, understand the nature of the business, audit its hazards and risks, ensure there are appropriate reporting and investigation processes in place and monitor and verify that appropriate actions are being taken.

Health and Safety Gap Analysis

3        In February 2017, Council contracted Simpson Grierson to undertake a Health and Safety Gap Analysis.  The analysis included a review of Southland District Council’s Health and Safety Management System, discussions with key operational leaders and visits to operational locations and discussions with workers and key contractors.  The result of the Gap Analysis was a written report detailing findings and recommendations for improvement.  The report was tabled at the March 2017 Finance and Audit Committee Meeting.

4        Following the March Finance and Audit committee meeting, a plan, including objectives and targets has been developed and presented.

5        A formal Action Plan identifying all of the improvement initiatives identified and outlining a programme of work to address these is under development and will be presented to a future meeting of the Committee. 

Review of Health and Safety related incidents

Accidents/Incidents/Near Misses

6        As part of the Health and Safety Plan for 2017/2018 we will be ensuring that we have consistency of reporting on both lead and lag indicators. In the meantime please find below a summary of the accidents/incidents/near misses for the first four months of the year from 1 January 2017 to 31 April 2017.

 

Key Performance Indicator

1 January 2017 – 30 April 2017

Medical Treatment  intervention required

2

Lost time due to injury

1

Near Misses

4

 

7        The Lost time incident was the serious motor vehicle accident in January 2017 where an Animal Control Officer suffered a broken arm and had an overnight stay in hospital.

8        Also as part of the putting together the Health and Safety Plan 2017/2018 analysis was done with the Health and Safety Consultant from Simpson Grierson, Terry Johnson.

9        His recommendation was that we use current injury rates as a consistent lag indicator.  The information comes from ACC data supplied to Southland District Council and is a measure that can be used to benchmark against contemporary organisations.

10      Please find below injury rates since 2012.  While most of the injuries recorded are minor in nature we can see an increase in the number of work injuries in the last two years.  The majority of contemporary organisations, such as Fonterra use a less than 5 frequency rate as a benchmark target.

11      It is expected that with the implementation of the plan and framework a decrease in the number of ACC claims would be seen.

Critical Risks

12      Work continues on managing our critical risks at Southland District Council.  This will also be reviewed as part of the update in the Governance Framework.  The new Risk and Management procedure will outline clearly how Southland District Council will identify and manage its most critical risks, including the development of a control plan and assessment against the effectiveness of these controls.

13      Currently, contractors who have been on the pre-approved list for over two years are being asked to supply updated health and safety information to us.  Information will include statistics from them on their health and safety incidents and what their key risks are.  This will help us to clearly articulate what the biggest risks are for our contractors.

14      Work is underway with a review of the Motor Vehicle policy. As part of this policy review a focus is being placed on ensuring that health and safety is a predominant factor in the procurement of vehicles.

15      The process and how Southland District Council handles its more difficult customers is being reviewed and updated.

 

Attachments

There are no attachments for this report.  

  

 


Finance and Audit Committee

07 June 2017

sdclogo

 

Exclusion of the Public: Local Government Official Information and Meetings Act 1987

 

Recommendation

 

That the public be excluded from the following part(s) of the proceedings of this meeting.

C9.1  Risk Register - June 2017 update

C9.2  Corporate Performance Report - February 2017 full report and variance report

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:

General subject of each matter to be considered

Reason for passing this resolution in relation to each matter

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

Risk Register - June 2017 update

s7(2)(e) - The withholding of the information is necessary to avoid prejudice to measures that prevent or mitigate material loss to members of the public.

 

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).

 

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.

General subject of each matter to be considered

Reason for passing this resolution in relation to each matter

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

Corporate Performance Report - February 2017 full report and variance report

s7(2)(c)(i) - The withholding of the information is necessary to protect information which is subject to an obligation of confidence or which any person has been or could be compelled to provide under the authority of any enactment, where the making available of the information would be likely to prejudice the supply of similar information or information from the same source and it is in the public interest that such information should continue to be supplied.

 

s7(2)(h) - The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities.

 

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.