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

 

Date:

Time:

Meeting Room:

Venue:

 

Friday, 14 December 2018

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

 

 

Bruce Robertson

 

 

IN ATTENDANCE

 

Chief Financial Officer

Anne Robson

Committee Advisor

Fiona Dunlop

 

 

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

14 December 2018

 

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

7.1         Interim Performance report - Period one - 1 July to 31 October 2018                             17

7.2         Health and Safety Update                                                                                                                           45

7.3         Risk Management Framework Project                                                                                                53

7.4         Draft Debt Recovery Policy                                                                                                                        87

7.5         Draft Accounting Position Paper                                                                                                        111

7.6         Monthly Financial Report - October 2018                                                                                      131

7.7         Forecasted Financial Position for the year ending 30 June 2019                                     147

7.8         Riskpool Call                                                                                                                                                     159

7.9         Internal Audit Request for Proposal                                                                                                 163

7.10       Finance and Audit Committee work plan up to 30 June 2019                                            171   

Public Excluded

Procedural motion to exclude the public                                                                                                       175

C8.1      Quarterly risk register update - December 2018

C8.2      Procurement Update - Contract 18/18 - Human Resources Information System

 


1             Apologies

 

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

 

2             Leave of absence

 

At the close of the agenda no requests for leave of absence had been received.

 

3             Conflict of Interest

 

Committee Members are reminded of the need to be vigilant to stand aside from decision-making when a conflict arises between their role as a member and any private or other external interest they might have.

 

4             Public Forum

Notification to speak is required by 5pm at least two days before the meeting. Further information is available on www.southlanddc.govt.nz or phoning 0800 732 732.

 

5             Extraordinary/Urgent Items

To consider, and if thought fit, to pass a resolution to permit the committee to consider any further items which do not appear on the Agenda of this meeting and/or the meeting to be held with the public excluded.

Such resolution is required to be made pursuant to Section 46A(7) of the Local Government Official Information and Meetings Act 1987, and the Chairperson must advise:

(i)            the reason why the item was not on the Agenda, and

(ii)          the reason why the discussion of this item cannot be delayed until a subsequent meeting.

Section 46A(7A) of the Local Government Official Information and Meetings Act 1987 (as amended) states:

“Where an item is not on the agenda for a meeting,-

(a)           that item may be discussed at that meeting if-

(i)            that item is a minor matter relating to the general business of the local authority; and

(ii)           the presiding member explains at the beginning of the meeting, at a time when it is open to the public, that the item will be discussed at the meeting; but

(b)          no resolution, decision or recommendation may be made in respect of that item except to refer that item to a subsequent meeting of the local authority for further discussion.”

 

6             Confirmation of Minutes

6.1         Meeting minutes of Finance and Audit Committee, 17 October 2018

 


 

Finance and Audit Committee

 

OPEN MINUTES

 

 

 

Minutes of a meeting of Finance and Audit Committee held in the Council Chamber, 15 Forth Street, Invercargill on Wednesday, 17 October 2018 at 1.02pm to 1.03pm, 2.55pm to 4.16pm, 4.52pm to 5.24pm.

 

present

 

Chairperson

Ebel Kremer

Councillors

John Douglas

 

Paul Duffy

 

Bruce Robertson (1.02pm to 1.03pm, 2.55pm to 3.51pm)

 

APOLOGIES

Mayor Gary Tong

 

 

IN ATTENDANCE

 

Councillor Julie Keast (1.02pm to 1.03pm, 2.55pm to 4.16pm)

Chief Executive – Steve Ruru

Group Manager, Services and Assets – Matt Russell

Chief Financial Officer - Anne Robson

Communications Manager – Louise Pagan

Governance and Democracy Manager – Clare Sullivan

Committee Advisor - Fiona Dunlop

 


 

 

 

Adjournment of Meeting

 

The Chair advised that the meeting would have to open and adjourn until the conclusion of the Services and Assets Committee meeting.

 

Resolution

Moved Chairperson Kremer, seconded Cr Douglas and resolved that the Finance and Audit Committee adjourns until the conclusion of the Services and Assets Committee.

 

The meeting adjourned at 1.03pm.

 

The meeting reconvened at 2.55pm.

 

Councillors Kremer, Douglas, Duffy, Keast and Bruce Robertson (external member) were present when the meeting reconvened.

 

1             Apologies

 

There were apologies from Mayor Tong.

 

Moved Chairperson Kremer, seconded Cr Douglas and resolved:

That the Finance and Audit Committee accept the apology.

 

 

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

 

Resolution

Moved Cr Duffy, seconded External Member Robertson and resolved:

That the Finance and Audit Committee confirms the minutes the meeting held on 24 September 2018 as a true and correct record of that meeting.

 

 

Reports

 

 

7.1

Business Case - Te Anau Wastewater Discharge Method - Kepler Block

Record No: R/18/10/23194

 

Group Manager, Services and Assets – Matt Russell, Management Accountant – Susan McNamara, Community Partnership Leader – Simon Moran and Stantec Consultant Roger Oakley were in attendance for this item.

 

Mr Russell advised that the purpose of the report was to enable the Committee to provide comment on the financial and risk management issues associated with the decision that Council needs to make in regard to the selection of a wastewater discharge method at the Kepler Block based on an updated and peer reviewed business case.

 

(External Member Bruce Robertson left the meeting at 3.51pm.)

 

The Chief Executive addressed the meeting regarding legal advice that he had sought in relation to Section 10 of the Local Government Act 2002.  Section 10 outlines the purpose of local government.  A copy of the legal advice is appended to the minutes as appendix one.

 

(Councillor Keast left the meeting at 4.16pm.)

 

(The meeting adjourned at 4.16pm and reconvened at 4.52pm.)

(Councillors Kremer, Douglas and Duffy were present when the meeting reconvened.)

 

Following the legal advice and more discussion on the matter the chair moved to receive the report but not the rest of the recommendations in the officer’s report.

 

Moved Cr Kremer, seconded Cr Douglas the motion that the Finance and Audit Committee Receives the report titled “Business Case - Te Anau Wastewater Discharge Method - Kepler Block” dated 8 October 2018.

 

The motion was put and declared CARRIED.

 

Moved Cr Kremer, seconded Cr Douglas the motion that the Finance and Audit Committee Recommends to Council that it notes:

•           That it is important for Council to ensure that it meets the relevant legislation requirements including the requirements in section 10 and Part 6 of the Local Government Act 2002

•           That Council needs to ensure that it can, under the Local Government Act 2002, adopt a funding tool that is at variance to its Revenue and Financing Policy if it is to ask the Te Anau and Manapouri community to fund the higher costs associated with option 3 and in this regard asks the Chief Executive to seek legal advice before the matter is referred back to Council for consideration

•           That the Council note that there are risks associated with obtaining, within a tight timeframe the resource consents that are needed for option 3 – subsurface drip irrigation and extension of the current Upukerora discharge

•           That it is important that Council retain centre pivot irrigation as a ‘fall back’ option, should there be delays in obtaining the resource consents needed to proceed with the implementation of option 3

•           That there is a risk that the costs of implementing option 3 could be higher than the estimates indicated in the business case and this could raise questions about the capacity of the Te Anau and Manapouri  communities to fund these increased costs

•           Notes that Council needs to consider the origin of cost increases should they arise in order to ensure that the Te Anau and Manapouri communities are not subjected to cost escalations that arise irrespective of the discharge method, such as those which might be associated with construction of the pipeline to the Kepler block.

 

The motion was put and declared CARRIED.

 

 

 

Final resolution

That the Finance and Audit Committee:

a)        Receives the report titled “Business Case - Te Anau Wastewater Discharge Method - Kepler Block” dated 8 October 2018.

b)        Recommends to Council that it notes:

•           That it is important for Council to ensure that it meets the relevant legislation requirements including the requirements in section 10 and Part 6 of the Local Government Act 2002

•           That Council needs to ensure that it can, under the Local Government Act 2002, adopt a funding tool that is at variance to its Revenue and Financing Policy if it is to ask the Te Anau and Manapouri community to fund the higher costs associated with option 3 and in this regard asks the Chief Executive to seek legal advice before the matter is referred back to Council for consideration

•           That the Council note that there are risks associated with obtaining, within a tight timeframe the resource consents that are needed for option 3 – subsurface drip irrigation and extension of the current Upukerora discharge

•           That it is important that Council retain centre pivot irrigation as a ‘fall back’ option, should there be delays in obtaining the resource consents needed to proceed with the implementation of option 3

•           That there is a risk that the costs of implementing option 3 could be higher than the estimates indicated in the business case and this could raise questions about the capacity of the Te Anau and Manapouri  communities to fund these increased costs

•           Notes that Council needs to consider the origin of cost increases should they arise in order to ensure that the Te Anau and Manapouri communities are not subjected to cost escalations that arise irrespective of the discharge method, such as those which might be associated with construction of the pipeline to the Kepler block.

 

 

 

The meeting concluded at 5.24pm.                      CONFIRMED AS A TRUE AND CORRECT RECORD AT A MEETING OF THE Finance and Audit Committee HELD ON WEDNESDAY 17 OCTOBER 2018.

 

 

 

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

 

 

 

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

 


 

APPENDIX ONE

 

 



 

 

 


 

 

 


Finance and Audit Committee

14 December 2018

 

Interim Performance report - Period one - 1 July to 31 October 2018

Record No:             R/18/12/27767

Author:                      Shannon Oliver, Planning and Reporting Analyst

Approved by:         Rex Capil, Group Manager Community and Futures

 

  Decision                                        Recommendation                                  Information

 

 

 

Purpose

1        The purpose of the report is to provide the Finance and Audit committee with the interim performance report for their review and feedback.

Executive Summary

2        This is the first interim performance report which covers the July to October 2018 reporting period. The interim performance report is part of the corporate performance framework (CPF) which was adopted in June 2018 as part of the 2018-2028 Long Term Plan.

3        The purpose of the CPF is to streamline Council planning and reporting functions. The interim performance report provides a four-month ‘snapshot in time’ record of the status of Council’s key performance indicators (KPIs) for the reporting period.

4        For the reporting period, 54% of the KPI’s are on-track, 26% off-track and 20% had no target. Group manager commentary is provided in the attached report at the start of each group score card to provide further information to the committee regarding these targets.

5        Staff recommend that the committee receive this report and provide any necessary feedback. 

 

Recommendation

That the Finance and Audit Committee:

a)            Receives the report titled “Interim Performance report - Period one - 1 July to 31 October 2018” dated 7 December 2018.

 

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 that the format of the attached report will change for the next period report to an exception-based format.

 

 

Background

6        The corporate performance framework (CPF) aligns Council’s high level direction to its activities and outcomes, and its purpose is to streamline Council planning and reporting functions. As part of the framework, Council produces an interim performance report which is undertaken three times a year – for the four month periods of July-October, November-February and March-June, with the third being produced to inform the annual report of the non-financial performance measure results. 

7        The CPF has been endorsed by Council and incorporated into the 2018-2028 Long Term Plan.  Council measures performance against internal and external targets that are clearly linked to the benefits outlined in the strategic framework and to levels of service. This set of key performance indicators (KPIs) provide a leading indicator of whether a change has occurred.

8        The intended role of the interim performance reports was to provide a touch-point throughout the financial year, for elected members and Council officers to monitor progress against targets and milestones. Interim reporting is a critical element of any performance monitoring framework, keeping high level performance goals relevant to daily operations and enabling early identification of potential issues.

9        The interim performance report, compiled every four months and presented to the Finance and Audit Committee, is a new report which differs from previous interim reporting, due to the following features:

·          reporting by exception – only results or performance that are outside of the expected tolerance for the period and determined by the Finance and Audit Committee should be reported to Council. Performance results which are off track (positively or negatively), and/or which may lead to a departure from Council’s preferred level of service will be highlighted in comparison to those that are on track in the interim performance report.

·          reforecasting process – it is intended each interim performance by activity group report will inform and correlate to the reforecasting process required to be undertaken on the same four monthly basis

·          meaningful narrative and discussion – written commentary/narrative is a critical element of the report. Another important component related to this is for in-person attendance by activity managers at the Finance and Audit Committee meeting to discuss the results and/or performance.

·          feedback loop – the subsequent interim performance report will provide detail on the progress toward corrective actions identified in the previous report, ensuring the ‘loop’ from performance data to decision-making is effectively closed.

10      In order to produce the interim performance report an online reporting tool called CAMMS Strategy was used. The CAMMS Strategy online tool was introduced to activity managers within Council, and those staff who will be inputting the information needed to complete the interim performance report. 

11      A summary of the Council’s overall KPI performance measures as contained in the report is below.

Issues

12      As this report is the first to be completed under the new framework, it contains some reporting gaps due to:

·    the new reporting tool has identified that some KPIs set for the 2018/2028 LTP do not have specific targets set which has caused some issues in the report, and impacts the ability of the KPI to be measured. 

·    an absence of threshold setting for when a measure is amber (i.e. requiring monitoring, but not immediate action) and this has resulted in reduced trend information. The absence of an ‘amber’ status has been noted by staff and will be discussed with activity managers prior to the next interim performance report.

·    an exception-based only report was not produced this time due to some limitations with the reporting tool.  This is being discussed with the administrators based in Australia and will be available for the next interim performance report period.  This delay in reporting as we intend in the future provides an opportunity for the committee to review all KPIs before moving to a reduced form of reporting.

·    where there is an ‘N/A’ present in the comments section, this does not denote that the comment is not appropriate or available, however signifies that no comment has been inputted.

 

Factors to Consider

Legal and Statutory Requirements

13      There are no legal or statutory requirement for this report, however the year end (period 3) report will have information included in the non-financial performance measures in the annual report.

Community Views

14      Community views were sought as part of the 2018-2028 Long Term Plan (LTP) consultation process.

Costs and Funding

15      Council already uses an online software strategic reporting system known as CAMMS, therefore there is no additional cost for producing this report information.

Policy Implications

16      There are no policy implications for this report.

Analysis

Options Considered

Option 1 – receive the interim performance report.

Option 2 – do not receive the interim performance report.

Analysis of Options

Option 1 – receive the interim performance report

Advantages

Disadvantages

·        the committee has a clear understanding of the status of performance measures

·        the committee and staff can identify any issues as early as possible and take corrective actions as required.

·        no known disadvantages

 

Option 2 – do not receive the interim performance report

Advantages

Disadvantages

·        no known advantages

·        non-financial performance information (service level performance to KPIs) is not monitored and assessed as per the terms of reference of the committee.

·        quality and completeness of internal reporting data is not reviewed as per the terms of reference of the committee

·        potential risks to Council are not identified and remedied as early as possible

 

Assessment of Significance

17      This report is not considered significant under the Council’s Significance and Engagement Policy.

Recommended Option

18      Staff recommend that Council receives the interim performance report.

Next Steps

19      Any red status performance measures will be monitored and addressed as appropriate by their relevant activity manager whose responsibility will be to ensure that all corrective actions are implemented.  The next interim performance report will be presented in March 2019. 

20      The project team are working with the CAMMS team to implement the changes in the report formatting for the next interim report.

 

Attachments

a             Interim performance report - 1 July to 31 October 2018    

 


Finance and Audit Committee

14 December 2018

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


Finance and Audit Committee

14 December 2018

 

Health and Safety Update

Record No:             R/18/11/27114

Author:                      Janet Ellis, People and Capability Manager

Approved by:         Steve Ruru, Chief Executive

 

  Decision                                        Recommendation                                  Information

 

 

 

Purpose

1        To provide an update on health and safety related incidents and activity over the last quarter.

Content

Incidents/Near Misses – Southland District Council

2        As part of the Health and Safety Plan for 2018/2019 we are ensuring that we have consistency of reporting on both lead and lag indicators. 

3        Lagging indicators are typically “output” oriented, easy to measure but hard to improve or influence while leading indicators are typically input oriented, hard to measure and easy to influence.

4        Lead indicators include Near Misses, Audits and Inspections and progress against the Health and Safety Plan.  Lag indicators include Medical Treatment Interventions (MTI), Incidents, Lost time due to injury, Worksafe notifications and Number of Incident Investigations completed.

5        Please find below a summary of these indicators for the year from 1 January 2018 to 31 October 2018. 

6        The notable Medical Treatment Incident (MTI) that occurred in October 2018 was a hammer to the mouth that required dental work.  There was no lost time.  An investigation was undertaken and corrective actions included recommended change of technique and advice on tool selection.

7        In addition please find below a summary of the near miss breakdown for the 2018 year to date, as requested in the previous Finance and Audit Committee meeting.  There was a range of near misses with near misses involving vehicles the highest recorded.  A contributing factor to this is the traffic management on Forth Street with the change from a two way to one way system with the development work being undertaken.

8        We have been working closely with Invercargill City Council and Calder Stewart and improvements to the traffic management is ongoing.  It is great to be able to work together with other agencies to improve road safety.

 

 

 

 

 

 

 

Summary of Indicators – 1 January 2018 to 31 October 2018

 

Date

Total Reported Incidents

EDI - Early Discomfort Incident

NMI - Near Miss Incident

MNI - Minor No Treatment Incident

FAI - First Aid Incident

MTI - Medical Treatment Injury

LTI - Lost Time Incident

PDI - Property Damage Incident

HAZ - Hazard Report

Other (ie Medical Event/NWR)

Number of incidents investigated

Number of Corrective Actions set

Number of Corrective Actions achieved

LTI Free Days

Days Lost Time

ACC Claims

Contractors Audited

Contractors Requiring Follow up

Jan-18

7

1

3

1

1

1

0

0

0

0

0

7

6

 

0

1

0

0

Feb-18

2

1

0

1

0

0

0

0

0

0

0

1

1

 

0

0

0

0

Mar-18

8

0

4

1

0

0

1

0

1

1

2

5

5

8

16

1

0

0

Apr-18

3

0

0

0

2

0

0

0

1

0

0

3

2

38

0

0

0

0

May-18

10

1

3

1

2

0

0

1

2

0

3

5

5

69

0

0

0

0

Jun-18

1

0

0

0

0

0

0

0

1

0

1

1

1

99

0

0

0

0

Jul-18

4

0

1

0

0

0

0

0

2

1

1

3

3

130

0

0

2

0

Aug-18

8

0

3

1

0

1

0

1

1

1

4

7

5

161

0

1

2

0

Sep-18

7

0

3

2

0

0

0

2

0

0

7

9

8

191

0

0

0

0

Oct-18

7

1

1

0

1

1

0

0

3

0

7

7

6

222

0

1

3

0

Nov-18

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dec-18

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

57

4

18

7

6

3

1

4

11

3

25

48

42

 

16

4

7

0

 

Other Health and Safety Related initiatives

9        In August 2018 Council approved the Health and Safety plan for 2018/19.  Attached is the update to the Health and Safety Plan as of 27 November 2018.

10      As part of ensuring we met the Health and Safety Plan an operational health and safety implementation plan has been drafted.  The plan is a working document and has been created to enure that there is continued focus on improving health and safety within the organisation.  This is attached for information.

11      Two health and safety contractor audits were completed in October 2018.  The audits included PowerNet in particular SIESA and Te Anau Airport. IFS Forestry is scheduled for early December 2018.  The preliminary findings of these audits are very positive with only minor corrective actions suggested.

12      Safety assessment and audit follow ups are also underway, for example the Rakiura Resource Recovery Centre.  There are also a number of safety observations being completed on our contractors doing work on our community facilities including Winton community housing.  Corrective actions identified in these are recorded in a master worksheet to ensure follow up is completed and progress documented.

13      The pre-approval contract process has been reviewed and updated and will be rolled out in February 2019 when the majority of our contractors are due for a renewal.  Currently we have approximately 200 contractors.  The health and safety contractor subcommittee has been working closely with the health, safety and wellbeing advisor to improve the processes around pre-qualification and contractor management.

14      Health and safety training continues with staff completing the Health and Safety e-learning modules based on the health and safety procedures. 

15      The Health and Safety Committee met in mid-November 2018 and provided feedback and support for the health and safety training.  It is envisioned that the Health and Safety Representatives (HSR’s) will have their role redefined next year with a greater focus on communication and education around safety differently.

16      In December 2018, we are lucky enough again to have Dr Tom Mulholland do some work for us. Dr Tom will be doing some speaking with staff on anxiety, depression and healthy thinking.  In the Invercargill sessions staff, family and friends have been invited.  In the sessions in both Te Anau and Winton the community is also invited. 

17      Ongoing progress has been made on the Health and Safety Control plans with key priorities identified.  The key priorities include GPS monitoring for vehicles, education and defensive driver training, a fatigue management policy, health and safety procurement requirements for contractors, a framework developed for audits and on-site observations, training for people working alone and a review of our processes for dealing with angry customers.

18      There have been a number of solutions sourced for our working alone staff.  We are working through these now with budgets and final solutions being presented to the Executive Leadership team early next year.

19      Significant progress has been made on identifying an appropriate health and safety system.  This is being completed in conjunction with the Human Resources Information System and payroll.  A proposal is to be presented to the Finance and Audit committee next year with suggested solutions and costs.

 

 

Recommendation

That the Finance and Audit Committee:

a)            Receives the report titled “Health and Safety Update” dated 6 December 2018.

 

Attachments

a             Update on Health and Safety Plan 27 November 2018

b             HS Implementation Plan 2018-2019    

 


Finance and Audit Committee

14 December 2018

 


 


Finance and Audit Committee

14 December 2018

 


 


Finance and Audit Committee

14 December 2018

 

Risk Management Framework Project

Record No:             R/18/11/26857

Author:                      Rex Capil, Group Manager Community and Futures

Approved by:         Steve Ruru, Chief Executive

 

  Decision                                        Recommendation                                  Information

 

 

 

Purpose

1        The purpose of this report is to update the Finance and Audit Committee on the Risk Management Framework (RMF) project, seek endorsement of the Risk Management Framework 2018 document and recommend to Council adoption of the Risk Management Framework 2018 document and associated next steps.

Executive Summary

2        Council has been working towards the development of a Risk Management Framework since early 2017.

3        This has involved developing a project brief, refining a project scope and engaging Structured Conversations Ltd to facilitate the process for the framework development.

4        Structured Conversations Ltd has facilitated two workshop sessions involving elected representatives and staff. This process has culminated in the development of the Southland District Council Risk Management Framework 2018 document which is attached to this report.

 

Recommendation

That the Finance and Audit Committee:

a)            Receives the report titled “Risk Management Framework Project ” dated 24 November 2018.

 

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 Southland District Council Risk Management Framework 2018 document.

 

e)            Recommends to Council that it adopt the Southland District Council Risk Management Framework 2018 document.

 

 

 

Background

5        The Finance and Audit Committee at the 15 March 2017 meeting resolved 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.

6        As a result of this the project scope and terms of reference for the Southland District Council risk management review project was endorsed by the Finance and Audit Committee at the 7 June 2017 meeting.

7        The intervening period saw the project scope be further developed and Structured Conversations Ltd was engaged on a preferred supplier basis to undertake the Risk Management Framework project.

8        At its 18 April 2018 meeting, Council resolved to approve unbudgeted expenditure to be allocated to complete the project by engaging Structured Conversations Ltd.

9        Structured Conversations Ltd has facilitated two workshops – on 16 August 2018 being an agenda setting workshop and 9-10 October being an opportunity to provide input in to the development of the RMF. The Southland District Council Risk Management Framework 2018 document attached is the result of this process.

Issues

10      Issues that have previously been highlighted in getting the RMF to this stage include the recognition by Council and staff that a RMF needs to be developed

11      To ensure the success of the implementation of the RMF and embedding it into Council operations, it is important that elected representatives, stakeholders and staff are involved and supported to ensure the objective of assisting Council to better understand and manage risk is achieved.

12      The current Risk Management Policy is currently overdue for review and it has been identified the policy should be reviewed once the RMF project has been undertaken.

13      It is appropriate for the review of the policy to align with the work related to the RMF project, and staff have been preparing for the policy review and alignment to the RMF project process accordingly.

Factors to Consider

Legal and Statutory Requirements

14      There are no specific legal or statutory requirements identified with regards to the development and adoption of the RMF.

Community Views

15      Community views have not been sort in relation to the RMF project.

16      The RMF project relates to organisation wide operational practices.

Costs and Funding

17      The RMF project has been completed as an additional project following Council’s approval for unbudgeted expenditure being allocated to complete the development of the RMF.

18      In terms of implementation of the RMF it is not anticipated to incur any unbudgeted or extraordinary expenditure.

Policy Implications

19      The RMF project has reinforced the need to review the Risk Management Policy which has been identified as being overdue for review.

20      The RMF document supports the approach of reviewing the Risk Management Policy once the RMF is adopted.

21      The current Southland District Council Risk Management Policy was approved and became effective from 29 October 2014.

22      Policy staff have identified the need to review the Risk Management Policy and align it to the RMF document.  This will be completed as the next step in this risk management project development process.

23      It is anticipated the draft Risk Management Policy review will be completed for Council consideration by June 2019.

Analysis

Options Considered

24      The Finance and Audit Committee is requested to consider two options.

Analysis of Options

Option 1 – Endorse the Southland District Council Risk Management Framework 2018 document and recommend to Council to adopt the Southland District Council Risk Management Framework 2018 document.

Advantages

Disadvantages

·        Supports the process and investment to date in the project and allows the project implementation next steps to be advanced.

·        Reinforces the findings of the workshops and project development.

·        Provides clarity and an understanding of the significance of risk management to the organisation – for elected representatives and staff alike.

·        Will allow policy staff to continue with the preparatory work required for the review of the Risk Management Policy which is recognised as being overdue.

·        Will mean the RMF project will need to be reassessed and redeveloped under a new project brief.

·        Will require further resource allocation and time to deliver a redeveloped RMF project.

 

Option 2 – Not endorse the Southland District Council Risk Management Framework 2018 document.

Advantages

Disadvantages

·        There are no advantages.

·        Further delay puts at risk current risk management practice and associated operational requirements.

·        Is inconsistent with the work completed to date and does not reflect the findings from the workshops facilitated as part of the process to date.

·        Creates confusion and a lack of cohesion for a project which has received endorsement and buy in from elected representatives and staff to date.

 

Assessment of Significance

25      This recommendation is not considered significant in relation to Council’s Significance and Engagement Policy.

Recommended Option

26      It is recommended that the Finance and Audit Committee endorse the Southland District Council Risk Management Framework 2018 document and recommend to Council to adopt the Southland District Council Risk Management Framework 2018 document.

Next Steps

27      Staff will follow up and proceed with preparing the necessary report to Council in 2019.

 

Attachments

a             Risk Management Framework November 2018    

 


Finance and Audit Committee

14 December 2018

 

harvey

Contents

Overview.. 3

What is risk management?. 4

About the RMF. 5

Key principles. 5

Scope. 5

Identifying and Assessing Risk. 6

Risk categories. 6

Risk thresholds. 7

Risk tolerance. 9

Risk prioritisation.. 9

Responding to Risk. 10

Risk acceptance and escalation.. 10

Risk treatments and controls. 10

Monitoring Risk. 11

Key responsibilities. 11

Monitoring and reporting.. 14

Integrating Risk Management 15

Implementation and Review.. 16

Appendices. 17

Appendix 1: Definitions. 17

Appendix 2: SDCs highest priority risks as at 10 October 2018. 18

Appendix 3: RMF Implementation Plan as at October 2018. 19

Appendix 4: Finance and Audit Committee Terms of Reference. 20

Appendix 5: Finance and Audit Committee Risk Register Quarterly Update Report (DRAFT) 28

 

Overview

The Risk Management Framework (RMF) is an important strategic document for Southland District Council (SDC). By understanding risk, we can make better decisions and become more dynamic to change by managing uncertainty.

SDC looks after critical community assets and services, which need to be safeguarded. Understanding and mitigating risk will make it possible for us to do that. As guardians of community money, it is important that we allocate spending in the right places.

Risk management is an important part of this, helping us to make progress toward our strategic goals with clear and informed decisions that make the best use of these funds.

We operate in an uncertain environment. As things change and different options become available, we need a clear way to compare relative choices and options that aligns with our big picture objectives and represents consistent response to risk. 

Our goal is to create a framework that supports risk thinking across Council, so we can understand, plan for and mitigate risk across all levels and activities.

The RMF has been designed to:

§ Provide the basis of a consistent, structured approach for SDC to identify and manage risk

§ Support the achievement of SDC’s strategic and operational objectives, by helping us to manage risks that that would otherwise impede success

§ Encourage an open and transparent organisational culture, where conversations about risk are supported and understood

§ Facilitate good decisions, by helping SDC to prioritise actions and distinguish between potential options

§ Provide assurance to Council, the Southland District community and stakeholders that critical risks are being identified and managed effectively.


 

What is risk management?

Risk management is the approach that we take to understanding, assessing and mitigating risk.

As a cycle, it looks like this:

What risk management is

What risk management is not

A valuable way to be prepared for uncertainty

100% accurate

A decision-making tool

Predictive

A way to direct resources

A compliance exercise

Big picture

All encompassing

Long-term and strategic.

A way to justify bad or risk-averse decisions

An inexact science

 

Forward-looking – (with backwards data)

 

 


 

About the RMF

The development of the RMF has been a team effort, including the input of activity managers and elected members from the outset. First, we set the foundation through senior level engagement – and then we collaborated at all levels of the organisation to identify areas for improvement.

We surveyed key staff and elected members and held facilitated workshops to understand the way that risk is currently managed and identify areas for improvement. Staff and elected members partnered on a journey to understand and identify risk, building a common understanding of how risk management can add value to our organisation.

Key principles

§ Create value

§ Be an integral part of organisational processes

§ Be part of decision making

§ Explicitly address uncertainty

§ Be systematic and structured

§ Be based on the best available information

§ Be tailored

§ Take into account human factors

§ Be transparent and inclusive

§ Be dynamic, iterative and responsive to change

§ Be capable of continual improvement and enhancement.

Scope

This framework has been developed to support organisation-wide risk management, with a particular focus on SDC’s most critical risks.

However, the principles and processes outlined in this framework can and should be applied at a group, team, project and individual level – with required adjustments to thresholds and guidelines made accordingly.

Identifying and Assessing Risk

Risk categories

Providing common categories or types of risks is a useful way to manage risk information. By categorising risk into several common groups, we can see where concentrations of risk are the greatest, identify common causes and develop better risk responses.

We have categorised potential risks in to six common categories, based on the main threat or impact. Many risks will touch several categories. These categories should be applied according to ‘which area is most affected’.

Category

Description

Strategic

Usually addresses external changes. The risk that Council’s strategy is no longer relevant or effective. Could be due to technological changes, social and demographic change, customer expectations. Also covers governance-related issues, reputational risk.

Operational

A risk to Council operations or the delivery of service. Includes corporate and management functions, product or service failure, IT, customer service interruption. This also covers people and capability risks, as well as access to resources and materials.

Financial

A risk that primarily threatens financial loss – might also include credit rating, access to finance.

Health, Safety and Wellbeing

Internal and external health and safety threats, which might cause illness, injury or death. This includes public health and safety, and employee/ contractor health and safety.

Social, Cultural and Environmental

A risk to the community or environment, such as natural hazards, emergency management, environmental protection. Includes community impact, both social and economic.

Regulatory and Compliance

A risk of non-compliance with statues and regulations which may or may not result in penalty.


Finance and Audit Committee

14 December 2018

 

Risk thresholds

Impact

Insignificant

Minor

Moderate

Major

Catastrophic

Strategic

No significant adverse public comment

No impact on achievement of LTP objectives

Key stakeholder relationships unaffected

Adverse comment in local or social media

Letters to CEO, complaints to Crs

May slow achievement of LTP objectives

Minor impact on key stakeholder relationships

National media coverage

Will impact achievement of one or more LTP objectives

Negative impact on key stakeholder relationships

National media coverage 2-3 days

Will significantly impact the achievement of multiple LTP objectives

Significant impact on multiple key stakeholder relationships

Coverage in national media 3+ days

Commission of Inquiry/ Parliamentary questions

Stakeholder relations irreparably damaged

Cannot deliver on most LTP objectives

Operational

No loss of operational capability

Minimal change to service levels

Minimal loss of internal capacity

Loss of operational capability in some areas

Some disruption to service levels

Internal capacity lost for up to 1 week

Serious loss of operational capability for over 6 weeks and/or

Disruption to service levels for 4-6 weeks

Loss of internal capacity 1-3 weeks

Serious loss of operational capability for over 8 weeks and major disruption to service levels and/or

Loss of internal capacity 4-6 weeks

Serious loss of operational capability for 3-4 mths and serious disruption to service levels and

Loss of internal capacity for more than 6 weeks

Financial

No impact on financial targets

Up to 1% impact on financial targets

Up to 5% impact on financial targets

Up to 10% impact on financial targets

More than 10% impact on financial targets

Health, Safety and Wellbeing

No medical treatment required

Issue noted, no action required

Minimal personal injury and/or sickness AND

Less than 2 weeks incapacitation

H&S issue noted by Worksafe

Personal injury and/or sickness with up to 3mths incapacitation OR

H&S issue to court

Significant public health impact OR

Personal injury and/or sicknesss with 3+ months incapacitation or long term disability OR

H&S issue to court and fine imposed

Permanent severe disability or loss of life OR

H&S issue taken to court resulting in imprisonment OR

Widespread community sickness

Social, Cultural, Environmental

No significant community impact

Localised short-term reversible environmental, economic or social impact

Single community affected

Localised short-term reversible environmental, economic or social damage

Multiple communities affected

Localised medium term (1 month +) reversible damage or disruption (environmental, economic, social or cultural)

Many communities affected

Localised or widespread long term (3-6m) reversible damage or disruption (environmental, economic, social or cultural)

Most or all communities affected OR

Extensive or irreversible damage or disruption (environmental, economic, social or cultural)

Regulatory and Compliance

Fine/ liability less than $10K

Fine/ liability $10-100K

Fine/ liability $100-250K

Fine/liability $250K - $1M

Fine/ liability $1M+

 

 


Finance and Audit Committee

14 December 2018

 

These thresholds determine, based on the impact of a potential risk event, the consequence level of a particular risk event. This assessment, along with an assessment of likelihood, form this basis of identifying which risks require further attention.

Risk tolerance

Council is willing to accept a low to medium level of risk in pursuit of its objectives. If a risk is assessed as high or very high, then we need to take action to reduce the likelihood or impact.

Likelihood

Consequence

 

Insignificant

Minor

Moderate

Major

Catastrophic

Highly likely

Low

Medium

High

Very High

Very High

Likely

Low

Medium

High

Very High

Very High

Possible

Low

Medium

Medium

High

Very High

Unlikely

Low

Low

Medium

Medium

High

Rare

Low

Low

Low

Medium

Medium

Risk prioritisation

Decisions about the treatment of high and very high priority risks need to consider the relative importance of each risk in relation to the resources available. The following weighted priority criteria should be applied by Council, the Finance and Audit Committee and the ELT in determining the relative priority of high-level risks.

Criteria

Weighting

Potential for at-fault death

30%

Potential for financial disaster

25%

Threat to LTP objectives

20%

Level of influence over drivers or outcomes

15%

Immediate impact of treatment or control

10%

 


 

Responding to Risk

Risk acceptance and escalation

Risk Level

Escalation

Very High

Immediate and ongoing action required. Only the Chief Executive and/or Council can accept this level of risk.

High

Council and ELT attention required. Group Managers can accept this level of risk.

Medium

Group Manager attention advised. Activity and project managers can accept this level of risk, with the approval of Group Managers.

Low

Manage by standard operational practice. Activity and project managers can accept this level of risk.

Risk treatments and controls

Risk treatment options need to consider a reasonable assessment of potential outcomes and only applied if the impact or benefit outweighs the potential cost.

Treatments are generally based on one (or a combination) of the following options.

Avoid: Avoid the event that would lead to the risk occurring. This might include not endorsing a particular option, entering a contract or undertaking a specific project.

Mitigate: Develop a plan to reduce the likelihood and/or consequence of a risk occurring. This involves pre-emptive action and should include:

§ Identification of a full range of mitigation options

§ Select the most effective options(s) based on timeliness, cost and feasibility

§ Assigning each a treatment owner

§ Development of a treatment plan, or incorporation into existing project, risk management or asset plans

§ Development of contingency responses if necessary.

Retain: Accept the likelihood and consequence of the risk occurring.

Transfer: Transfer all or some risk, usually through insurance or by contractual agreement.

Treatments and controls must then be monitored regularly, to ensure that they are having the intended effect and reducing risk.

Monitoring Risk

Risk management is the responsibility of everyone at SDC. All staff should be empowered to identify risks and have the tools to bring risk to the attention of managers and Council.

The mandate for risk management comes from Council and the Executive Leadership Team (ELT). Together, these groups lead the agenda for managing risk at SDC and drive commitment across the organisation. This responsibility transcends individual functional areas, with Council and the ELT committed to an organisation-wide view and approach.

Council and the ELT lead this commitment by:

§ Endorsing and implementing the RMF

§ Championing the value added by risk management to staff and stakeholders

§ Aligning risk management activities with organisational objectives

§ Ensuring legislative and regulatory compliance

§ Assigning accountabilities and responsibilities for risk management at appropriate levels within the organisation

§ Ensuring the independence of the Finance and Audit Committee

§ Creating and supporting an organisational culture which encourages transparent identification and open discussion of risks

§ Monitoring the effectiveness of the risk management system and ensuring actions are taken to continually improve it.

Key responsibilities

Council

Council’s risk responsibilities include:

§ Evaluating risks to the delivery of SDC’s Long Term Plan and other strategies

§ Determining SDC’s strategic approach to risk

§ Setting a clear risk threshold

§ Establishing structures and practices for risk management

§ Understanding the most significant risks facing SDC

§ Setting and reviewing risk policies

§ Reviewing the quality of risk information, reports and effectiveness of risk assurance practices.

 

Figure 1 - SDC Risk Responsibility Summary

Finance and Audit Committee

The Finance and Audit Committee provides monitoring and oversight of risk management at SDC and support Council staff to manage risk effectively – but does not absolve the responsibility of individuals.

The Finance and Audit Committee is responsible for: administering the RMF, monitoring risk assessments and internal controls, as well as approving or recommending approval of risk related policies.

The Committee oversees the corporate risk register and actively monitors the management of top priority risks. The full Terms of Reference for is in the Appendices.

Executive Leadership Team

SDC’s ELT jointly own the top 10 priority risks for Southland District Council. Each priority risk will also be assigned a primary Risk Lead within the ELT. The ELT are responsible for overseeing key risk management controls across the organisation, including but not limited to:

§ Financial and management accounting

§ Property

§ Insurance

§ Contractual liabilities

§ Business continuity

§ People related, and other operational risk controls

§ Assessment of strategic risk within their areas of responsibility.

Role

Responsibility

Risk Owner

Responsible for coordinating management of risk, including:

§ Ensuring controls are effective

§ Monitoring implementation of treatments

§ Monitoring the environment

§ Providing updates for risk reporting

Risk Lead

Usually an Activity or Group Manager.

Responsible for maintaining oversight of risks identified in their area, in consultation with Risk Owner/s. This includes providing status updates on risk and controls.

Control/ Treatment Owner

Responsible for ensuring controls are effective through ongoing operation and improvement.

Responsible for designing and implementing risk treatments to agreed timeframes and quality.

Executive Leadership Team

Responsible for maintaining oversight of SDC risks, controls and treatments. This includes:

§ Reporting risk to the Finance and Audit Committee

§ Facilitating the risk management process

§ Reporting on emerging risk issues

§ Monitoring the internal and external environment for their area of responsibility and Council in general.

Monitoring and reporting

Risk monitoring

Assigned risk owners should monitor their project, team or group level risk registers at least 6-monthly. Changes should be considered as part of this review, in respect of:

§ The maturity and effectiveness of existing treatments or controls

§ New or emerging risks presenting because of change in the internal or external environment.

Identified risks should be reported to the appropriate level on a regular or as required basis, using the below table as a guide.

Risk Level

Reporting To

Frequency

Very High

Council

Finance and Audit Committee

ELT

12 weekly (Council)

Quarterly (Finance and Audit Committee)

Monthly - ELT

High

 

Council

Finance and Audit Committee

ELT

 

12 weekly (Council)

Quarterly (Finance and Audit Committee)

Monthly - ELT

Medium

Group Manager

As required

Low

Activity Manager

As required

Risk reporting

Risk reports are prepared quarterly for Finance and Audit Committee, detailing:

§ Changes and emerging trends relating to risk

§ Updates to controls, treatments and mitigation strategies for priority risks

§ The effectiveness of current controls, treatments and mitigation strategies

§ Material changes to the internal or external operating environment

§ Policy recommendations and concerns.

Integrating Risk Management

Risk management needs to be part of the way we make decisions and operate across Council on a day to day basis.

It is particularly important that we consider risk implications in processes like:

Long term and annual planning and budgeting: Within each group of Council, risk identification should inform planning and budgeting for the following year or LTP period. The cost of implementing annual plans, including any controls or treatments required need to be incorporated into the budgeting process.

Project management: As part of good project management practice, risks must be actively identified, managed, escalated and reported throughout the lifetime of the project.

Policy development: Council policies outline how we should manage a wide variety of risks, including those associated with legislative compliance, asset management, public health and safety, environmental impact, service quality and finance.

Procurement and asset management: Risk management must be factored into decision making for significant procurement and asset management related processes.

Making risk management a core part of our business requires behaviours and support that facilitate this. Key areas for organisational development we have identified include:

§ Working across borders to take a Council-wide view

§ Delegations that empower staff to identify risk and be solution-focused

§ Strong leadership – senior leaders to model good practice

§ Encouraging challenge and questioning in the operational and strategic arenas

§ Clear priorities and alignment to the bigger picture

§ Conversation, culture and collaboration to support good practice

§ Technology and system support to automate risk management.


 

Implementation and Review

The RMF will come into operation in April 2019[1], following Council adoption. It will be reviewed annually and redeveloped every three years. In the meantime, the RMF will be a living document that changes and adapts as required.

The SDC Corporate Risk Register review will be undertaken by the Finance and Audit Committee formally every six months (with other changes and updates made on an as-required basis).

 


 

Appendices

Appendix 1: Definitions

Term

Definition

Risk

The effect of uncertainty on strategic or operational objectives

 

Risk management

Coordinated activities to direct and control an organisation with regard to risk.

Risk owner

A person or entity that has the accountability and authority to manage a risk

Control

A process, device, practice or other action that is intended to modify the likelihood or impact of risk

Treatment

An agreed approach to a specific risk.

This might include:

§ Avoiding risk

§ Accepting risk

§ Removing the source of risk

§ Changing the likelihood or impact of risk

§ Sharing risk.

 


 

Appendix 2: SDCs highest priority risks as at 10 October 2018

These risks form the basis of the Finance and Audit Committee Corporate Risk Register. A living document, this will be reviewed formally every 6 months and on an as required basis.

Rank

Risk

1

Underinvestment in infrastructure

2

Inaccurate data leads to bad decisions/ asset failure

3

Infrastructure not fit for purpose to withstand climate change

4

Health and safety controls threatening staff and contractor safety

5

Overcommitment and work programme

6

Financial conservatism constrains progress

7

Key people leave with organisational knowledge, impacting business continuity

8

Difficulty retaining or recruiting staff affects service levels

9

Growth dependent model makes it hard to fund new infrastructure

10

Population decline will impact the viability of small communities

11

Funding mechanisms limiting ability to make change

12

Economic change impact on delivering capital programme

13

Coastal communities unprepared for climate change will be affected

14

Natural or biosecurity event impacts economy/ industry

15

Increasing compliance costs make rates less affordable

16

Potential LG reform - instability

17

Ageing population can no longer afford rates

Appendix 3: RMF Implementation Plan as at October 2018

Timeframe

Action

Responsibility

By January 2019

Change Finance and Audit committee name

Clare

Build buy-in with Council

Gary + Steve

Communicate framework at staff forum

ELT

Change ELT agenda

Matt

Risk report to be elevated to Council

Michelle

By April 2019

Internal communications and support

Louise

Council report template changes

Clare + Michelle

By October 2019

Induction designed to include risk

Clare + ELT

Job descriptions changed to incorporate risk

Janet

 


 

Appendix 4: Finance and Audit Committee Terms of Reference

SOUTHLAND DISTRICT COUNCIL

FINANCE AND AUDIT COMMITTEE

TERMS OF REFERENCE

 

Authorising body

Council

Approval date

16 November 2016 (amended 27 April 2017)

1.            SCOPE OF ACTIVITIES

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.

 

2.            MEMBERSHIP

The Finance and Audit Committee will comprise of five members. 

Membership will be the Mayor, three Councillors and one external appointee.

External appointees have full speaking and voting rights on the Finance and Audit Committee. 

 

Chairperson

The Chairperson is responsible for:

1.            The efficient functioning of the Committee;

2.            Setting the agenda for Committee meetings in conjunction with the
Chief Financial Officer; and

3.            Ensuring that all members of the Committee receive sufficient timely information to enable them to be effective Committee members.

The Chairperson will be the link between the Committee and Council staff. 

 

3.         MEETING SCHEDULE

Quarterly or as required.  Meetings outside of the regular meeting schedule shall be called by the Chairperson. 

 

4.         QUORUM (amended 27 April 2017)

 

The quorum at any meeting of the Finance and Audit Committee shall be three members.

 

5.         DELEGATION

5.1      Power to Act

The Finance and Audit Committee shall have the following delegated powers and be accountable to Council for the exercising of these powers.[2] 

In exercising the delegated powers, the Finance and Audit Committee 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.

6.            Power to Recommend

6.1         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.

6.2         The Finance and Audit Committee is responsible for considering and making recommendations to the Services and Assets Committee on business cases completed under section 5.1 (above).

7.         RELATIONSHIPS WITH OTHER PARTIES

The Chief Executive is responsible for servicing and providing support to the Committee in the completion of its duties and responsibilities.  The Chief Executive generally appoints the Chief Financial Officer to provide these functions on his/her behalf.

Professional advisors to the Committee shall be invited to attend all meetings of the Committee:

·              External auditor;

·              Internal auditor/risk advisor (if appointed); and

·              Chief Financial Officer. 

At each meeting, the Chairperson will provide the external auditor and the internal auditor/risk advisor (if appointed) with an opportunity to discuss any matters with the Committee without management being present.  The Chairperson shall request the Chief Executive and staff in attendance to leave the meeting for the duration of the discussion.  The Chairperson will provide minutes for that part of the meeting.

The Chief Executive Officer and the Chief Financial Officer shall be responsible for drawing to the Committee’s immediate attention any material matter that relates to the financial condition of Council, material breakdown in internal controls and any material event of fraud.

The Committee shall provide guidance and feedback to the Council on financial performance, risk and compliance issues.

The Committee will report to Council as it deems appropriate but no less than twice a year.

7.1         Public Access and Reporting

Notification of meetings to the public and public access to meetings and information shall comply with Standing Orders, but it should be noted that:

·              At any meeting of the Committee at which no resolutions or decisions are made, the provisions of Standing Orders relating to public access do not apply.

·              Workshop meetings solely for information and discussions and at which no resolutions or decisions are made may be held in accordance with Standing Orders.

·              Extraordinary meetings of the Committee may be held in accordance with Standing Orders.

·              The public may be excluded from the whole or part of the proceedings of the meeting and information withheld on one or more of the grounds specified in the Local Government Official Information and Meetings Act 1987 s.48.

The Committee shall record minutes of all its proceedings and present the minutes to the next available Council meeting following the Committee meeting.

7.2         Contacts with Media and Outside Agencies

The Committee Chairperson is the authorised spokesperson for the Committee in all matters where the Committee has authority or a particular interest.

Committee members, including the Chairperson, do not have delegated authority to speak to the media and/or outside agencies on behalf of Council on matters outside of the Committee’s delegations.

The Chief Financial Officer will manage the formal communications between the Committee and its constituents and for the Committee in the exercise of its business.  Correspondence with central government, other local government agencies or other official agencies will only take place through Council staff and will be undertaken under the name of the Southland District Council.

8.            CONDUCT OF AFFAIRS

The Committee shall conduct its affairs in accordance with the Local Government Act 2002, the Local Government Official Information and Meetings Act 1987, the Local Authorities (Members’ Interests) Act 1968, Council’s Standing Orders and Code of Conduct.

In fulfilling their role on the Finance and Audit Committee, members shall be impartial and independent at all times.

9.            REMUNERATION

Elected members will be reimbursed in accordance with the current
Local Government Elected Members’ Determination

External members and advisors to the Committee will be reimbursed in accordance with their standard business rates, including disbursements.

10.         FUNDING AND BUDGETS

Funding for the Committee will align with Council’s Revenue and Financing Policy.

The Committee shall only expend funding on purposes for which that funding was originally raised and in accordance with the budgets approved by Council through its Long Term Plan and Annual Plan. 

Remuneration and expenses will be funded from the Leadership activity budget.

11.      REPORTING

Minutes of all meetings of the Finance and Audit Committee will be provided to the Council. 

12.         Review of the Committee

The Committee shall undertake an annual self-review of its objectives and responsibilities.

Such objectives and responsibilities shall also be reviewed by the Council, the Chief Executive Officer and the Chief Financial Officer and any other person the Council considers appropriate.


Finance and Audit Committee

14 December 2018

 

Appendix 5: Finance and Audit Committee Risk Register Quarterly Update Report (DRAFT)

Risk #

Risk

Risk Lead

Risk Owner

Changes and Updates

1

Underinvestment in infrastructure

 

 

 

2

Inaccurate data leads to bad decisions/ asset failure

 

 

 

3

Infrastructure not fit for purpose to withstand climate change

 

 

 

4

Health and safety controls threatening staff and contractor safety

 

 

 

5

Overcommitment and work programme

 

 

 

6

Financial conservatism constrains progress

 

 

 

7

Key people leave with organisational knowledge, impacting business continuity

 

 

 

8

Difficulty retaining or recruiting staff affects service levels

 

 

 

9

Growth dependent model makes it hard to fund new infrastructure

 

 

 

10

Population decline will impact the viability of small communities

 

 

 

 


Finance and Audit Committee

14 December 2018

 

Draft Debt Recovery Policy

Record No:             R/18/3/5378

Author:                      Sheree Marrah, Finance Manager

Approved by:         Anne Robson, Chief Financial Officer

 

  Decision                                        Recommendation                                  Information

 

 

 

Purpose

1        This report presents the draft Debt Recovery Policy (the draft Policy) to the Finance and Audit Committee (the Committee).  The draft Policy is included as Attachment A.  It is requested that the Committee recommends to Council that it adopts the draft Policy.

Executive Summary

2        To assist with collection of Council debt it is desirable that Council establish a policy which outlines the approaches for recovery of Council debt.  Council has not previously had a formal policy, however many of the recommendations in the policy have been informally applied.

3        The objective of this policy is to ensure that overdue debts are collected promptly, efficiently and consistently.

4        Staff are requesting the Committee recommends the draft Policy, which is included with the report as Attachment A, for adoption by Council.

5        Council debt types and the primary recovery approaches available are as follows:

 

Legal collection methods

Other collection methods

Rates (including water rates)

Payment from Mortgagee, sale of property under a rating sale, sale of property as abandoned land (Local Government (Rating) Act 2002)

Payment arrangements

Debt recovery agency

SIESA electricity charges

Disconnection of supply (Electricity Industry Act 2010)

Short term payment arrangements

Debt recovery agency

Other revenue – including resource management fees, building consent fees, hall hire fees, airport landing fees, interim wheelie bin charges, rental income from community housing, property licences, food licences, animal registration fees, infringements

Varies depending on relevant legislation and associated revenue

Short term payment arrangements

Debt recovery agency

 

 

Recommendation

That the Finance and Audit Committee:

a)            Receives the report titled “Draft Debt Recovery Policy” dated 6 December 2018.

 

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)           Recommend to Council that it adopts the draft Debt Recovery Policy as attached to this report, including any amendments agreed at this meeting.

 

Background

6        Council currently has no formal policy or process outlining the requirements for collection of Council debts.  Historically, staff have applied various approaches to collection of debt, however it has never been formally documented from a Council wide perspective.

7        The objective of this policy is provide guidance to the staff as to the approach to be taken for debt collection, to ensure that debts are collected promptly, efficiently and consistently.

8        This policy will inform the public of Council’s approach to debt as Council is committed to providing an equitable and transparent approach where debt is owed to Council. 

9        In preparing this draft Policy (Attachment 1) staff documented the current approach, identified areas for improvement and streamlined the approach across the various debt types where possible.  Staff also checked relevant legislation and consulted with Council’s legal advisors as required.  These matters are discussed further below. 

10      In addition to the draft Debt Recovery Policy, Council staff have also established a draft Debt Recovery Guidance document, which is an internal policy established to provide guidance to Council staff in relation to the recovery of debt.   

11      It is important to note that in this draft Policy there is a number of references to recovery agencies, however staff note that in the future this activity may be undertaken by Council staff.

12      The draft Debt Recovery Policy is attached.  Below is a summary of the points of this policy.

Rates and Water Rates (including metered water)

13      Collection of rates and water rates are governed by the Local Government (Rating) Act 2002. 
No formal collection action is taken in relation to current year’s rates because in accordance with the legislation they are not technically overdue until 1 July of the following year. 

14      Staff have developed this draft Policy on the basis that Council will use all remedies available to it to recover rates debt in accordance with the legislation which allows for recovery of arrears from mortgagee, seeking judgement from the Court, rating sale/lease or abandoned land sale/lease.

15      In relation to water rates, historically Council have collected these in a manner similar to other sundry debt, however given that they are actually rates, they should be collected in accordance with the legislation.  Additionally Council is proposing to include restriction of water supply as a tool for recovery of arrears.  This draft Policy has therefore been developed to seek to collect water rates consistent with other rates as well as restricting supply.

Sundry Debts

16      For the purpose of this draft policy, sundry debts are all other debts excluding rates, water rates and SIESA electricity tariffs.  The guidelines for write-offs (discussed in detail below), are particularly relevant to these revenue streams.

17      It is important to note that for some sundry debt types, such as infringements and dangerous/insanitary buildings, legislation exists which governs the collection of outstanding debt, and therefore these are noted as exceptions to this policy. 

SIESA

18      The Stewart Island/Rakiura Community Board have given staff the direction that they wanted a stronger stance taken in relation to electricity arrears and instructed staff to issue disconnection notices if payment is not received within 60 days of due date.  Staff have formalised this request by incorporating this requirement into this policy.  Recent issuance of disconnection notices has resulted in full payment in the majority of cases, and a few mutually acceptable short term payment arrangements.

Issues

Set off

19      Often Council has instances where a debtor has a credit balance (ie over payment) in one revenue area and arrears in another (ie rates arrears and overpaid building consent fees).  Currently these transactions are considered separately and the building consent fees would be refunded to the customer. 

20      Set off proposes that where a person makes an overpayment to Council or is due a refund, and that same person also owes money to Council, Council may recover arrears by way of setting off the overpayment against the arrears.

21      The policy has been drafted to allow set off of overpayments, refunds and creditor payments against all outstanding debt types where these are not restricted by contractual agreement or legislation and are agreed to in writing.

Application of interest charges/penalties

Rates

22      In accordance with section 57 and 58 of Local Government Rating Act (“the Act”), Council can apply penalties to rates that are not paid by the due date. An annual resolution is made in June by Council, establishing the penalties and this policy will reflect any changes made by this resolution.

Water rates (metred water only)

23      Council currently does not impose any penalties on water rates.

24      Consistent with rates as noted above, in accordance with section 57 and 58 of the Act, Council can apply penalties to water rates that are not paid by the due date.  An annual resolution is made in June by Council, establishing both the due dates and the penalties.  Council will be asked to consider including penalties on water rates as part of this resolution in June, in line with penalties charged on other rates.

SIESA electricity tariffs

25      Council is not proposing to apply any penalty or interest charges on SIESA electricity tariffs. 

26      The primary collection method for SIESA electricity charges is the enforced disconnection after 60 days.  The application of interest or penalties may not entice people to pay earlier and they may still end up being disconnected.

Other debt

27      Council currently does not apply any penalty or interest charges on other debt, however Council terms and conditions do provide for interest of 2.5% above Council’s bank’s unsecured overdraft rate.

28      The policy has been drafted to continue to not apply penalty or interest charges to other debt due to the current inability to automatically apply this, however this will be reviewed periodically.

Restriction of supply

Water rates (metred water only)

29      Currently Council does not use restriction of supply as a method of encouraging payment for water arrears.  The draft policy includes the potential use of water restrictions as a tool for encouraging payment of arrears.

30      Section 193 of the Local Government Act 2002 and section 69S of the Health Act 1956 allows Council to restrict a customer's water supply in certain circumstances (including non-payment of use charges) and limits around the level of restriction (ie continue to provide an adequate supply of drinking water).

31      Council recently updated its Water Supply Bylaw in 2017 and this notes, failure to pay the appropriate charges by the due date, is a breach of conditions of supply (section 5.1(d)(i)).  Additionally it notes Council’s right to reduce the flow rate of water to the customer after a defect notice has been served (section 5.1.2).  In restricting supply, consideration would need to be given to when a restriction cannot be applied (children under 5, elderly, residents with health concerns, stock etc).  Currently it is the Strategic Manager of Water and Waste who has delegated authority to approve a restriction.

32      It is also important to note that to physically restrict supply, Council will be required to install restrictors on each individual property’s supply and this comes at a cost to Council for both parts and labour. 

33      Before implementing water restrictions as a tool for enforcing payment of arrears, Council staff need to develop the appropriate processes and terms and conditions and notify the customers accordingly.  Consideration should also be given to the minimum level of arrears required before a restriction is put in place (giving consideration to the cost associated with installation and removal of restrictors).

SIESA electricity tariff

34      The disconnection process occurs 60 days from the end of the month associated with the invoice.  The Electricity Authority advise that disconnection typically happens 48 days after a bill has been issued, so the proposed 60 days is slightly more lenient.  The Stewart Island/Rakiura Community Board are in support of this approach.  Council must issue a disconnection notice at least 7 days before the disconnection takes place in accordance with our terms and conditions of supply.

35      Staff have implemented this approach over the last 10 months and it has assisted with more efficient collection of outstanding electricity charges.

36      Council must be aware that disconnection of medically dependent consumers is prohibited in accordance with the Electrical Authority guidelines.

 Other debt

37      Council currently does not restrict supply of services to customers where they have outstanding debt. 

38      Council sought legal guidance in relation to which Council services it could restrict supply to customers with outstanding arrears.  This advice has indicated that Council could take a stronger stance than it currently does.  Staff will continue to work on this and bring back to the Committee its findings and recommended approach before implementing.

39      The policy has been drafted to include restriction of services to customers with outstanding arrears where it is not restricted by legislation.

Collection via demand on mortgagee

Rates and Water rates (including metered water)

40      Where an owner defaults in paying rates or water rates on a property with a mortgage, Council can recover the arrears from the first mortgagee in accordance with Section 62(1) of the Act. 

41      As this is a collection tool prescribed by legislation this policy reflects the use of this in all instances possible.  Historically this process has resulted in the full recovery of rates arrears and associated penalties in nearly 100% of all requests.  Historically Council has not sought payment of water arrears from mortgagees, however this will take place going forward.

42      A minimum of three months’ notice is required to be issued before formal demand for payment can be requested.  Formal demand for payment cannot be requested until at least 1 November for arrears at 30 June of the same year.

Collection via rating sale or lease

Rates and Water rates (including metered water)

43      Where Council or a recovery agency have no success in recovering the rates or water rates arrears on properties without mortgage, then legal action can commence, the final step, of which, is a rating sale or lease, in accordance with section 67(1) Act. 

44      As this is a collection tool prescribed by legislation Council staff believe that it should be progressed in all instances possible, without having to seek approval from Council.  Where judgement does not result in payment of arrears, staff will notify Council, for their information only, via a confidential report for information, of the intention to progress to rating sale.

45      Staff anticipate that this process will result in a significant recovery of rates and water rates arrears, penalties and costs, however the level of recovery is dependent on the age of the arrears, how quickly they have been progressed and the value and condition of the property in question.

46      The first steps in the legal process are to lodge a statement of claim, followed by seeking judgement from the Court for rates and water rate arrears.  Where judgement does not result in payment of arrears, staff will notify Council via a confidential report, of the intention to progress to rating sale.  Please note - this process could take approximately two years, in accordance with legislative timeframes set in the Act.  

Collection via abandoned land sale or lease

Rates and Water rates (including metered water)

47      This policy is written to seek declaration of land as abandoned where, in accordance with section 77(1) of the Act, Council or a recovery agency have no success in locating a property owner and no rates or water rates payments have been received for at least three years, Council can have the land declared as abandoned. Alternatively, property owners may give written notice to Council that they intend to abandon the property.

48      Staff will inform Council via a confidential report, of the properties they are intending to pursue declaration as abandoned land.

49      Over the past two years, Council have sought declaration of abandoned land for up to 20 properties per annum in relation to rates arrears.  Typically Council sell abandoned land rather than leasing. 

Write off of bad debts

Rates and Water rates (including metered water)

50      Under legislation, rates are attached to a property, therefore where a rating sale or abandoned land sale occurs, and the full recovery of the arrears is not achieved, the outstanding rates can remain with the property.  To date, Council have written off the outstanding rates after sale to enable the new property owner to commence with a clean slate.

51      In accordance with section 65(1) of the Act, Council is limited to a period of 6 years that it can commence legal proceedings to seek repayment of rates and water rates arrears.  However, if the legal proceedings continue to rating sale, full recovery of arrears from the sale proceeds can occur.  As such, Council staff are not writing off debt until repayment is completed. 

52      This policy recommends that Council continue with the current approach of writing off arrears after rating sale or abandoned land sale has taken place.

SIESA electricity tariffs

53      This policy proposes that SIESA debts will only be written off when all reasonable attempts to recover outstanding amounts have been made or the cost of recovery is likely to equal or exceed the amount to be recovered. In some instances the cost (in both staff time and lodgement fees) doesn’t justify proceeding to a collection agency.

54      Unless it is a debt associated with a vulnerable customer, Council has the ability to disconnect supply where a customer does not pay their account, however long outstanding arrears typically arise where a customer has discontinued their supply, moved away from the island and are unable to be located.  As a relatively transient/seasonal community this often occurs.  These debts are typically forwarded to a recovery agency for collection and remain against that debtor until paid.

55      All write-offs will be reported to the Stewart Island/Rakiura Community Board on a six monthly basis and will include the amount written off, description of the invoice and reason for write-off.

Other debt

56      Debts will only be written off when all reasonable attempts to recover outstanding amounts have been made or the costs of recovery are likely to equal or exceed the amount to be recovered. 
In some instances the cost (in both staff time and lodgement fees) doesn’t justify proceeding to a collection agency.  Staff are proposing in the draft debt recovery guidelines that all debt under $50 and more than 120 days past due be written off without progressing to external collection agencies. 

57      The draft policy has been prepared to actively write off debt for all revenue streams when it is considered uncollectable or the costs of recovery are likely to equal or exceed the amount to be recovered.

Factors to Consider

Legal and Statutory Requirements

58      As this policy covers the majority of revenue streams across Council, there is a significant amount of inter-related legislation that may be relevant.  Section 101 of the Local Government Act requires Council to manages its finances prudently and provide for current and future interests of the community.  Section 103 of the Act also requires Council to have a revenue and financing policy which must outline the income sources to offset expenditure.  It is critical that ratepayers and service users pay towards the services.

59      Council staff have engaged Simpson Grierson to provide guidance over key issues in relation to the compilation of this policy and the associated recommendations.  Simpson’s Grierson’s advice has been incorporated into this draft policy and report.

Community Views

60      Council staff have not specifically sought community views, however we believe that the public will be in support of the intent of the policy and the actions in order to ensure that Council arrears are collected in a prompt, efficient and consistent manner, given that the overarching impact of overdue debt falls on those who pay their accounts as required.

61      Once the draft Debt Recovery Policy has been approved by Council, it will be made available to the public for their information on Council’s website alongside Council’s various other policies.

Costs and Funding

62      There is no specific cost with the establishment of this policy, however, the final policy will affect Council’s approach to outstanding debt, and may result in additional interest and penalties being charged to customers and ratepayers and/or increased provisions and write-off of doubtful debts.  It is expected that it will assist in reducing the level of long standing arrears.

Policy/Risk Implications

63      Council staff have considered this draft Policy in conjunction with other Council policies as outlined in section seven of the draft Debt Recovery Policy. 

64      The main risk associated with this policy is that Council may not collect arrears in accordance with the relevant legislation/policy, particularly the Local Government (Rating) Act 2002.  In order to mitigate this risk, Council staff engage independent experts/lawyers to assist with recovery of significant arrears.

65      Additionally Council are exposed to risk if they do not collect arrears in accordance with other relevant legislation as outlined throughout this report.  This risk has been mitigated by having Simpson Grierson provide legal guidance on key areas of the policy and seeking further guidance as necessary as we implement this policy.

66      Additional risks include:

·   Reputational risk - taking a strong position on recovery of arrears, or making an error in our recovery process.

·   Potential financial risk – inability to recover some debt.

·   Legal risk – if we do something contrary to legislation we could be challenged in court or fined.

67      Staff consider these additional risks are not significant, and can be managed on a case-by-case basis.  With the implementation of the policy and support from experienced professionals as required, these risks should be mitigated.   

Analysis

Options Considered

68      Two reasonably practicable options have been identified regarding how the Committee could proceed. These are:

·   Option 1         That the Committee recommends to Council that it adopts the draft Debt Recovery Policy, including any amendments agreed at this meeting;

·   Option 2:        That the Committee recommends changes to the draft Debt Recovery Policy.

Analysis of Options

Option 1 – That the Committee recommends to Council that it adopts the draft Debt Recovery Policy, including any amendments agreed at this meeting

Advantages

Disadvantages

·   The draft Policy considers the various Council revenue streams and debt recovery approaches and is good practice in the local government sector to have Council’s approaches documented in a policy.

·   Provides Council staff, ratepayers, and customers with information on its approach to debt collection and the options available to address outstanding debt.

·   Delay in implementing/actioning the approaches outlined in the policy.

 

Option 2 – That the Committee recommends changes to the draft Debt Recovery Policy

Advantages

Disadvantages

·   No advantages have been identified.

·   If the Committee would like to recommend changes to the draft Policy (that are more than minor wording changes), it will delay the adoption of this policy to a later date.

Assessment of Significance

69      This policy is not considered significant in terms of Council’s Significance and Engagement policy because this policy will not have a large impact on or consequence to the whole District, or people affected by or interested in this matter.  As a consequence community feedback is not being sought on this policy.

70      However although consultation is not being undertaken, Council is still required to give consideration to the views and preferences of people likely to be affected by or have an interest in the matter, as required by Local Government Act 2002 section 78(1).

71      Upon reflecting on Council’s level of arrears at 30 June 2017 and 30 June 2018, approximately 10% of Council’s revenue is outstanding at balance date, of which approximately 50% relates to rates.  This figure includes a portion which are current debt and are anticipated to be paid within 30 days of balance date.

72      What this illustrates is that the majority of Council’s ratepayers/customers actually pay their debts as and when they fall due and therefore this draft Policy will not affect or impact a significant portion of the community.  Council consider that the majority of the population who are compliant with paying their debt will be in support of Council taking a proactive approach and formalising its approach to collecting arrears.

73      Additionally a large proportion of this policy, primarily in relation to rates and water rates, is based on legislative requirements and therefore community views have no ability to influence these aspects of the policy.

Recommended Option

74      It is recommended that the Committee recommends to Council that it adopts the draft Debt Recovery Policy, including any amendments agreed at this meeting (Option 1).

Next Steps

75      If the Committee proceed with Option 1, staff will make any agreed amendments from this meeting and present the draft Debt Recovery Policy to Council at its meeting on 7 February 2019, for adoption.

 

 

Attachments

a             DRAFT Debt Recovery Policy    

 


Finance and Audit Committee

14 December 2018

 


 


 


 


 


 


 


 


 


 


 


 


 


Finance and Audit Committee

14 December 2018

 

Draft Accounting Position Paper

Record No:             R/18/8/19112

Author:                      Sheree Marrah, Finance Manager

Approved by:         Anne Robson, Chief Financial Officer

 

  Decision                                        Recommendation                                  Information

 

 

 

Purpose

1        In the Audit New Zealand (Audit NZ) Management Reports for the years ended 30 June 2017 and 2018, recommendations were made to Council to consider consolidating Milford Community Trust (MCT) and revisiting the accounting approach for its various joint venture entities.

2        This report provides the Committee with the draft accounting position paper in response to Audit NZ’s recommendations for the year ending 30 June 2019 and beyond. 

Executive Summary

3        The draft position paper (Attachment A) has been prepared to provide to Council’s auditors, Audit NZ, with an outline of Council’s position in relation to accounting for Venture Southland (VS), Southland Regional Heritage Committee (SRHC), Emergency Management Southland (EMS), WasteNet, Milford Community Trust (MCT), Southland Museum and Art Gallery Trust (SMAG), Southland Regional Development Authority (SRDA) and Whakamana Te Waituna Charitable Trust in the Annual Report for the year ended 30 June 2019 and beyond.

4        The draft position paper considers the application of PBE IPSAS 6 Consolidated and Separate Financial Statements, PBE IPSAS 7 Investments in Associates, and PBE IPSAS 8 Interests in Joint Ventures which will be superseded by PBE IPSAS 35 Consolidated Financial Statements, PBE IPSAS 36 Investments in Associates and Joint Ventures and PBE IPSAS 37 Joint arrangements for reporting periods beginning on or after 1 January.  The overall conclusion of the draft position paper is that Council will for the financial year ended 30 June 2019 and beyond:

·    Equity account for VS, SRHC, SRDA and EMS (associates).

·    Account for Council’s share of revenue/expenses, assets and liabilities for WasteNet (a jointly controlled operation)

·    Equity account for SMAG and WTWCT (associates), recognising that they have no equity share.

·    Disclose summary financial information for MCT and SMAG in the CCO section of the Annual Report.

1    

5        In compiling the Annual Report for the year ending 30 June 2019, staff will review and amend the necessary accounting policies in support of the recommendations of this report and present to the Committee.

 

Recommendation

That the Finance and Audit Committee:

(a)  Receives the report titled “Draft Accounting Position Paper ” dated 7 December 2018.

 

(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)       Confirms the content and the proposed conclusions of the attached draft        accounting position paper, being that for the Financial Year ended 30 June 2019             and beyond Council will:

·    Equity account for VS, SRHC, SRDA and EMS (associates).

·    Account for Council’s share of revenue/expenses, assets and liabilities for WasteNet (a jointly controlled operation)

·    Equity account for SMAG and WTWCT (associates), recognising that they have no equity share.

·    Disclose summary financial information for MCT and SMAG in the CCO section of the Annual Report.

 

(e)  Approves Attachment A – Draft Accounting Position Paper to be sent to Audit NZ incorporating any changes from this meeting to support the Annual Report for the year ended 30 June 2019 and subsequent financial years.

 

Background

6        Audit NZ noted as part of its last two management reports to Council that it should consider revisiting the accounting treatment of Councils entities in view of the changes to the accounting standards under which Councils annual report, annual plans and long term plan are prepared. Audit NZ also suggested Council revisit it’s accounting treatment of its other Council joint ventures and council controlled entities, being:

·    Southland Regional Heritage Committee (“SRHC”).

·    Emergency Management Southland (“EMS”).

·    WasteNet Southland.

·    Milford Community Trust (“MCT”).

·    Southland Museum and Art Gallery Trust Board Inc (“SMAG”)

·    Southland Regional Heritage Authority (SRDA)

·    Whakamana Te Waituna Charitable Trust (“WTWCT”).

7        Currently Council accounts for its entities under IPSAS8: Interests in Joint Ventures and IPSAS6: Consolidated and Separate Financial Statements. IPSAS8 is being replaced with IPSAS37: Joint Arrangements and IPSAS36: Investments in Associated and Joint Ventures

8        Currently under IPSAS8: Interests in Joint ventures, Council has the option to equity account (where Councils share of net surplus/deficit and equity are added to councils accounts at year end) or proportionately consolidate (add into councils accounts its ownership share line by line in the profit and loss and balance sheet).  Council has been proportionately consolidating Venture Southland to date, under IPSAS 36 joint controlled entities such as Venture can only be accounted for by equity accounting.

9        Additionally to date Councils reporting of other entities has not always been in line with accounting standards.  The reason Council chose to differ from accounting standards is the materially of Councils share of these entities compared to Council and the work to account for them.  As such information on these entities was more by way of disclosure in the notes or CCO section of Councils accounts.  This stance has not affected Audit NZ audit opinion of Councils accounts, given the materiality level, but as noted they continue to raise the issue in their management accounts.  

Issues

10      Audit NZ have asked for Council to establish a formal position in relation to accounting for its interest in joint ventures and CCOs, and upon receipt of this they will consider Council’s approach and advise if they concur with Council’s position.  It has requested this due to changes occurring in accounting standards as well as a lack of clarity around the type and equity share of Councils CCO’s.

11      Staff have prepared a draft position paper on these matters for the Committee’s consideration (Attachment A).  If the Committee confirm the approach, this paper will be provided to Audit NZ.

12      In determining the accounting treatment of each entity, staff have considered the requirements of the standards and developed a decision tree.  Refer to Attachment B for a copy of this decision tree.

13      Additionally Attachment C provides an overview of each entity, Council’s current accounting approach, and the proposed approach under the new accounting standards, which Council are proposing to early adopt and apply for the year ended 30 June 2019.

Factors to Consider

Legal and Statutory Requirements

14      Section 98 of the Local Government Act 2002 requires the Council to prepare and adopt an Annual Report within four months of the end of the financial year.

15      Section 111 of the Local Government Act states that any information to be prepared must be in accordance with generally accounting practice where the information is of a form or nature for which generally accepted accounting practice has developed standards. 

Community Views

Costs and Funding

16      There are no direct cost implications of Council adopting accounting policies.

Policy Implications

17      Council has by way of Section 6.1 of the Finance and Audit Committee’s terms of reference delegated to the Committee to consider and make recommendations to Council in regards to accounting treatments, changes in generally accepted accounting practice and new accounting and reporting requirements.

Analysis

Analysis of Options

18      Option 1 – Accept the proposed accounting approach for the year ended 30 June 2019 and beyond for Council’s various associated entities, including any amendments agreed at the meeting, as follows:

·    Equity account for VS, SRHC, SRDA and EMS (associates).

·    Account for Council’s share of revenue/expenses, assets and liabilities for WasteNet (a jointly controlled operation)

·    Equity account for SMAG and WTWCT (associates), recognising that they have no equity share.

·    Disclose summary financial information for MCT and SMAG in the CCO section of the Annual Report.

 

Advantages

Disadvantages

·        Compliant with incoming PBE IPSAS 36 and 37.

·        Accounting policy is consistent between annual report and budget for 30 June 2019 year and beyond.

·        Equity accounting is easy to administer.

·        Financial statements may be easier for the reader to understand.

·        Financial results of all SDC CCOs are disclosed in the annual report to 30 June 2019 and beyond.

·        Non-compliance with the relevant accounting standards

·        Proposed approach to accounting for MCT is different to what Audit NZ recommended.

 

 


 

Option 2 – Seek further advice from an independent expert to confirm Council’s proposed approach.

 

Advantages

Disadvantages

·        Independent verification of the approach prior to providing our position paper to Audit NZ.

 

 

·        Potential cost associated with an independent review.

·        Risk associated with the accounting treatment is not considered significant as the values individually and in aggregate are immaterial.

 

Assessment of Significance

19      In terms of Council’s Significance and Engagement Policy, the accounting policies which form part of the Annual Report are not considered significant.

Recommended Option

20      Council’s recommended approach is Option 1 – Accept the proposed accounting approach for the year ended 30 June 2019 and beyond for Council’s various associated entities, including any amendments agreed at the meeting, as follows:

·    Equity account for VS, SRHC, SRDA and EMS (associates).

·    Account for Council’s share of revenue/expenses, assets and liabilities for WasteNet (a jointly controlled operation)

·    Equity account for SMAG and WTWCT (associates), recognising that they have no equity share.

·    Disclose summary financial information for MCT and SMAG in the CCO section of the Annual Report.

2               Next Steps

21      If the Committee approves the draft position paper, it will be finalised and provided to Audit NZ for their consideration.

22      Council’s accounting policies will be updated to reflect the proposed approach to accounting for joint ventures and CCOs as required for the year ending 30 June 2019 and beyond. This will be presented to the committee before commencing the annual report.

23      Council will early adopt PBE IPSAS 37 Joint arrangements and PBE IPSAS 36 Investments in Associated and Joint Ventures for its Annual report for the year ended 30 June 2019 as the proposed approach in this report meets the requirements of these upcoming standards.

 

Attachments

a             Draft Accounting Position Paper

b             Flowchart - Accounting entities

c             Overall Summary    

 



 


 


 


 


 


 


 


 


 


 



Finance and Audit Committee

14 December 2018

 


Finance and Audit Committee

14 December 2018

 

Monthly Financial Report - October 2018

Record No:             R/18/11/27498

Author:                      Kate Westenra, Graduate Accountant

Approved by:         Anne Robson, Chief Financial Officer

 

  Decision                                        Recommendation                                  Information

 

 

 

Summary

1.   The purpose of this report is to provide Finance and Audit with an overview and to provide financial information around the results of our operations within our nine groups of activities, the Financial Position, and the statement of Cash Flows.

2.   This report summaries Council financial results for the four months to 31 October 2018.

 

 

Recommendation

That the Finance and Audit Committee:

a)            Receives the report titled “Monthly Financial Report - October 2018” dated 5 December 2018.

 

Attachments

a             Monthly Council Financial Report - October 2018    

 


Finance and Audit Committee

14 December 2018

 

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Finance and Audit Committee

14 December 2018

 

Forecasted Financial Position for the year ending 30 June 2019

Record No:             R/18/11/26807

Author:                      Joanie Nel, Management Accountant

Approved by:         Anne Robson, Chief Financial Officer

 

  Decision                                        Recommendation                                  Information

 

 

 

 Purpose

1        To inform the committee of the expected year-end financial result compared to the published 2018/2019 Annual Plan and seek the committee’s recommendation to Council to approve the resulting forecasted position. 

Executive Summary

2        Forecasting the financial position for the year ended 30 June 2019 is intended to provide information about what has changed since the budget was approved, why it has occurred and what the result is expected to be at the end of the year.  In considering the final position staff consider what they planned to do in the Annual Plan, the projects carried forward from 2017/18 that were approved by Council on 25 September 2018, unbudgeted expenditure requests approved by Council during the year and the expected year end position as a result of operational decisions and information.

3       Forecasting enables the organisation to understand the anticipated year end position at all levels.  It will also assist with decisions and priorities for spending across Council.

4       The budgeted expenditure included in the Annual Plan for the 2018/2019 year was adopted in June 2018.  Forecasting allows a formal process to communicate to the Executive Leadership Team (ELT), Finance and Audit Committee and Council any known or expected changes.  The net amount by business units is shown in Appendix A.

5       The effect of the forecast changes on the Statement of Comprehensive Revenue and Expenditure and Statement of Financial Position is shown in Appendix B and C.

6       As part of the resolutions the Committee is asked to recommend to Council a number of unbudgeted expenditure requests that have not been advised to Council previously.  Additionally there are a number of projects that have been identified as needing to be deferred to future years.  A detailed list of these projects can be found in Appendix D.

7       This report is included in the Council agenda for the meeting on 18 December 2018. Council staff will update Council on any discussions and recommendations made by this committee.

 

 


 

Recommendation

That the Finance and Audit Committee:

a)            Receives the report titled “Forecasted Financial Position for the year ending 30 June 2019” dated 4 December 2018.

 

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 forecasted changes to Council’s year-end financial performance and position as detailed in appendix B and C.

 

e)            Recommends Council approve the changes as detailed in appendix A.

 

f)             Recommends to Council that it notes the projects or partial costs of projects indicated to be deferred to next year as part of the year end carry forward process, as detailed in appendix D.

 

g)           Recommends Council approve the following projects to be deleted from the 2018/19 financial year:

 

Business Unit

Project

Amount

Details

Stewart Island

Streetworks Stewart Island

$80,000

Being completed by the Department of Conservation

Stewart Island

Peterson Hill footpath upgrade

$94,649

Funding source no longer available

Stewart Island

Oban sign

$4,000

Upgrade done by community

Lumsden Balfour

Water supply upgrade

$86,600

Project already deferred to 19/20

Riversdale

Street lighting project 815

$5,000

CDA requested project be deleted

 

h)           Recommends Council approve the following unbudgeted expenditure for the 2018/19 financial year:

 

Business Unit

Expense

Amount

Funding Source

Dipton Forest

Forestry charges

 $10,534

Forestry Reserve

Finance

Insurance costs

$10,902

District Operating Reserve

Ohai Forest

Forestry charges

$15,259

Forestry Reserve

Manapouri

Playground project change to a flying fox and removal of trees

$17,500

Manapouri General Reserve

Chief Executive

Riskpool Insurance claim

$31,321

District Operations Reserve

Gowan Hills Forest

Forestry charges

$43,552

Forestry Reserve

District Sewerage

Expected increase in monitoring costs for the year due to additional costs from ES and monitoring required from consents

 $57,181

District Sewerage Reserve

 

SIESA Operations

 

Increase in operating costs

 $249,905

 

SIESA Operations

Reserve

Waikaia Forest

Forestry charges

$695,443

Forestry Reserve

 

 

Background

8        Forecasting enables transparency and Council to be informed of the anticipated year-end financial result. Forecasting is not intended to involve the time and effort undertaken in the annual budgeting process. 

9        This is the first round of forecasting for the financial year with the second to be completed in March 2019.

10      Budget managers were requested to undertake forecasts for their business units where the expected overall outcome would vary from the budget in the Annual Plan by specified tolerance levels.  These net levels are set at:

-           $1,000 for Council-owned halls;

-           $1,000 to $10,000 for townships depending on their operational expenditure in the current year;

-           $10,000 for all District business units.  The maximum limit of $10,000 was set in line with the delegation held by the Chief Executive in relation to him approving unbudgeted expenditure.

11      No changes have been made to wages costs, depreciation or the revaluation of fixed assets.

12      Changes due to forecasting have been included in the attachments as follows. 

·   Attachment A, provides details of changes to revenue and operating expenditure and capital      

expenditure for each business unit with commentary from the budget manager.

 

·   Attachment B, shows the net effect of the changes to the Statement of Comprehensive

          Revenue and Expenditure for the year ended 30 June 2019.

 

·   Attachment C, shows the effect of changes to the Statement of Financial Position for the year

ending 30 June 2019.

 

·   Attachment D, provides details of the specific projects being deferred to future years. The

recommendation to Council is that these planned deferrals be included in the carry forward process at year end.

 

13      A breakdown of the movement of capital projects as a result of carry forwards and forecasting for the 2018/2019 year is as follows:

Financial Activity

Amount

Capital projects as per the 2018/2019 Annual Plan

$19,916,188

Carried forward from 2017/2018

$7,078,304

October Forecasting movement

$602,265

Expected project costs for 2018/19

$27,596,757

 

14      Major changes due to forecasting are shown below. Details can be found in Appendix A.

Revenue - Changes in revenue from the budget has increased by $1.1M (Appendix B).

This is principally due to the increased tonnage and sale price of forest harvesting at Waikaia.

 

Operating Costs – Operating expenditure has increased from the budget by $1.2M.

Major changes are:

·    Approved unbudgeted Expenditure for Consultants fees of $250,000 re business case and assessment of SDC Invercargill Office

·    Harvesting costs for Dipton, Gowan Hills, Ohai & Waikaia $775,690 increase.

·    An increase in the operating costs for SIESA operations, $249,905.

 

Capital

·    The forecast capital expenditure has decreased by $602K.

     

15      The total forecast net deficit for the year is $4.5M which is $140K less than the original Annual Plan budget.

Issues

16      The roading team indicated no forecast changes to be included in the October round of forecasting as some of the projects are still in development stage or early construction and it is too early to tell what the effect on the budget will be.

17      Forecasting is part of the ongoing process to encourage better financial behaviours across the organisation.  This includes early identification of projects that will not be completed by the end of the current financial year.  The intention is that where projects will not be completed this year, these will be included in the Carry forward process.  The Carried Forward report is provided to Council after the end of a financial year to request that the work not completed during a year is carried into the next financial year’s budget.  The current works programme will be reviewed again in the next forecasting round (March 2019), to ensure that the 18/19 Projects will be delivered on time.

18      Forecasting also provides an opportunity to approve anticipated unbudgeted expenditure during the year.  This should reduce the number of individual requests needed to be handled by Council.  Council will still need to approve some expenditure items separately where the expenditure is large enough to require individual approval or where unbudgeted expenditure has been identified between the two rounds of forecasting. 

19      It is expected that forecasting will improve as the process is refined and it becomes part of the yearly process.  In 2017/18, $19M of projects were moved to 2018/19 as part of the Annual Plan consultation process.  An additional $7M was carried forward into 2018/19 at year end as a carry forward.  This year $3.4M is proposed to be deferred to the 2019-2020 Annual Plan (Appendix D). 

20      Budget managers were asked if projects being deferred would impact on delivery of the currently planned 2018-19 projects.  Of special note is;

·       Council’s decision regarding the Te Anau Wastewater Business Case on the 23rd of October which has created additional work to be done by Council in the form of two new consents to be applied for.  This additional work has resulted in the deferral of the Winton sewerage scheme. 

·       The new Land and Water Regulation from Environment Southland have not been finalised yet but it will have an impact on Council financially.  The regulations state that any discharge to fresh water doesn’t comply with the new regulations.  Tokanui, as part of a test case, has been advised by Environment Southland to attend a Commissioner Hearing in order to apply for consent, which we will be appealing. During the next Forecasting round we will have a better indication of the cost implications in order to get consent approval for Tokanui and what the implications are for other CB’s/CDA’s affected by the new regulation.

21      The SIESA Management fee has increased by $249,905 as part of the contract renewal process.  Work is underway to assess the long-term sustainability of this contract in its current form and work to identify cost-saving mechanisms in the delivery of this service.  This includes a contract and levels of service review including opportunities for further automation and resilience.

Factors to Consider

Legal and Statutory Requirements

22      There are no legal or statutory requirements in regards to forecasting Council’s end of year position.

Community Views

23      Consultation was held with the community for the expenditure included in the 2018/2019 budget as part of the Annual Plan process and estimates meetings.

24      Changes proposed to capital and operational expenditure for townships will have been or will be reported to the relevant Community Board or Community Development Area Subcommittee.  There are no new significant projects planned for 2018/19.

Costs and Funding

25      Forecasting completed shows that overall net operating income and expenditure is expected to decrease by $140K.  This is shown by business unit in Attachment A.

26      Overall net Capital Expenditure is expected to decrease by $602,265 with the main item being the new telephone system.  Council is requested to approve the expenditure, not included in resolutions, shown in Attachment A.

27      The impact on the budgeted Statement of Comprehensive Revenue and Expenditure for 2018/2019 is a net operating deficit of $140K from the original Annual Plan as shown in Attachment B.

Policy Implications

28      Council staff must ensure that all expenditure is carried out within approved delegations. 
The current financial delegations only allow the Chief Executive to approve unbudgeted expenditure up to $10,000. 

Analysis of Options

The options are to approve or not to approve, in full or part, the forecasted adjustments to the expenditure in the Annual Plan.

Option 1 - Approve the changes in income and expenditure in Attachment A

Advantages

Disadvantages

·        The Committee and Council is informed of anticipated changes from the Annual Plan for 2018/2019.

·        Council has had the opportunity to prioritise expenditure to be incurred in the current financial year.

·        Council staff are able to purchase services as required to provide services to the community in the most appropriate manner.

·        Deferral of projects which are going to be completed later and/or costing more than previously indicated.

 

Option 2 - Approve the forecast changes recommended 

Advantages

Disadvantages

·        Council is informed of anticipated changes from the Annual Plan for 2018/2019.

·        Council has had the opportunity to prioritise expenditure to be incurred in the current financial year

·        Council considers that the additional expenditure is not a current priority and does not need to be incurred.

·        Processes may be delayed where further approval needs to be sought from Council before committing to additional expenditure.

Option 3 – Do not approve, in part or in full, the forecast changes recommended 

Advantages

Disadvantages

·        Council is informed of anticipated changes from the Annual Plan for 2018/2019.

·        Council has had the opportunity to prioritise expenditure to be incurred in the current financial year

·        Processes may be delayed where further approval needs to be sought from Council before committing to additional expenditure.

 

Assessment of Significance

The content of this report is not deemed significant under the Significance and Engagement Policy. 

Recommended Option

29      Option 1 to receive the forecasted adjustments to the financial statements and approve the expenditure in Attachment A not included in the Annual Plan for 2018/2019.

Next Steps

30      To advise managers of the approval of unbudgeted expenditure for the 2018/2019 financial year.

31      Ensure that deferred projects are included in the proposed 2019-2020 Annual Plan.

 

Attachments

a             Forecasting Financial Report - October 2018 - Attachment A (V6)

b             Forecasting Financial Report - October 2018 - Attachment B (V4)

c             Forecasting Financial Report - October 2018 - Attachment C (V2)

d            Forecasting Financial Report - October 2018 - Attachment D (V2)    

 


Finance and Audit Committee

14 December 2018

 


Finance and Audit Committee

14 December 2018

 

 


Finance and Audit Committee

14 December 2018

 

 


Finance and Audit Committee

14 December 2018

 

 

 


Finance and Audit Committee

14 December 2018

 

Riskpool Call

Record No:             R/18/10/24661

Author:                      Anne Robson, Chief Financial Officer

Approved by:         Steve Ruru, Chief Executive

 

  Decision                                        Recommendation                                  Information

 

 

 

Purpose

1        Council has received correspondence from Riskpool advising of a monetary call they are going to make to Council on the 1 July 2019.

 

Background

2        Council was a member of Riskpool up until the 1 July 2017 when due to declining membership by the local government sector, it made the decision to not offer any new insurance covers.

3        Riskpool was a trust providing public liability and professional indemnity cover to the local government members of the scheme for 20 years. The trust deed established that where there was insufficient funds to cover the claims in the related year, members would need to make additional contributions to meet the shortfall.  Any additional contribution will be based on the same proportion as the initial contribution paid by the member for the related fund year.

4        Council has previously contributed $193,802.18 (GST incl) in calls

5        As at 30 June 2018, Riskpool had paid out a total of $175 million over its life, $90 million of which had come from its reserves and a further $85 million from reinsurance payouts.  The estimated claims provision at the 30 June 2018 was $7.7 million.  Financially, in this year, Riskpool had a deficit of $7.4million and loans with Civic Financial Services Ltd of $5.4 million at commercial interest rates.

6        Although no further claims can be made on the fund, a number of those notified to Riskpool over the years are still to be settled. At 30 June 2018, Riskpool had 50 open claims down from 109 at the 30 June 2017. 

7        The total additional contribution requested from members is $6 million, payable on 1 July 2019.  The portion of this for Council is $31,321.46.  Riskpool have indicated one further call, anticipated to be likely in 2022 or 2023.  Indications are this will be around $1.5 million in total from all members.

8        Riskpool is now in the process of winding down over the next three to ten years.  During this period they hope to settle as many claims as possible.  To wind up they will need to come back to members to get agreement as to when.  The consequences of windup means that claims unsettled will then fall back on the Councils concerned.

 

 

Recommendation

That the Finance and Audit Committee:

a)            Receives the report titled “Riskpool Call” dated 6 December 2018.

 

b)           Acknowledges the payment of $31,321.46 to be payable to Riskpool on or before 1 July 2019.

 

 

Attachments

a             Riskpool Call for 1 July 2019    

 


Finance and Audit Committee

14 December 2018

 

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Finance and Audit Committee

14 December 2018

 

Internal Audit Request for Proposal

Record No:             R/18/12/27532

Author:                      Anne Robson, Chief Financial Officer

Approved by:         Steve Ruru, Chief Executive

 

  Decision                                        Recommendation                                  Information

 

 

 

Purpose

1        The purpose of this report is to seek the committee’s approval to put out to the market a request for proposal for internal audit services.

Executive Summary

2        The committee has previously indicated its desire to seek internal audit services to assist it with meeting its responsibilities under its terms of reference.

3        The attached Request for Proposal sets out the terms of the engagement and also outlines the services Council requires from the potential internal audit provider.

4        After releasing the Request for Proposal to the market, it is proposed that the chairman of the committee, the independent member and the chief financial officer, evaluate and shortlist the proposals received.  After shortlisting it is proposed to ask for presentations before choosing and entering into a contract for service with a preferred supplier for three years.

 

Recommendation

That the Finance and Audit Committee:

a)            Receives the report titled “Internal Audit Request for Proposal” dated 5 December 2018.

 

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 internal Audit Request for Proposal for release.

 

e)            Delegates authority to the Chairman of the Finance and Audit Committee, the independent member on the committee and the Chief Financial Officer to shortlist and appoint an internal auditor for a term of three years commencing the 1 July 2019 with a further two year extension at the sole discretion of council.

 


 

Background

5        Council has never had a regular formal internal audit programme.  Previously, Council has had specific pieces of work completed as part of a wider Council internal audit programme or had specific audits completed due to funding or statutory requirements such as NZTA audits or building accreditation audits. 

6        To fulfil its responsibilities under the committee’s terms of reference, delegated from Council, the committee recognises the need to seek independent and objective assurances of the Council’s systems and processes to ensure they are efficient, effective, economical and ethical.  The appointment of an internal auditor will help manage these responsibilities.

7        Internal auditing can add value and improve Councils operations, helping organisations to accomplish objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of:

-     Risk management

-     Control

-     Governance processes

 

8        This report seeks approval to release to the market a request for proposal from interested parties.

Issues

9        As part of the committee’s terms of reference, Council has delegated to the Finance & Audit committee the responsibility of ensuring that it has appropriate financial, risk management and internal control systems in place.  As part of the control measures to achieve this, Council has delegated to the committee the responsibility to oversee Internal Audit functions. 

10      In appointing an internal audit service provider, the committee will be looking for someone that

-        Works with the committee and staff and is committed to continuous improvement by adding value through the internal audit process

-        Has the capacity and capability to develop and deliver a tailor made risk based internal audit programme

-        Understands local government and delivers value by

          -        utilising their network and capabilities

          -        participating in wider risk and assurance conversations

          -        providing insights on market trends and emerging risks, and

          -        providing independent and trusted advice

-        Understands the importance of knowledge sharing and communication and demonstrates this constantly in dealing with all areas of Council.

 

11      The scope of this request for proposal is for the provision of expert internal audit services to mitigate organisational risks across the Council, enabling it to address internal audit and other services on a continuous, consistent and independent basis.

12      Council staff have drafted a proposed Internal Audit Request for Service, Attachment A.  The key components of this are

-     Outlining the qualities of a service provider

-     Noting that the successful respondent will become the preferred supplier

-     Acknowledging the preferred supplier may need to subcontract parts of the service out.

-     That Council reserves the right to engage other internal audit providers where there is a benefit in doing so.

-     That the anticipated contract commencement will be 1 July 2019. 

-     Establishing the internal audit service for an initial period of three years with an opportunity to extend the contract for a further two years at Councils sole discretion.

-     That the contract between Council and the preferred supplier will outline the scope of services, costs and requirements for internal audit activities.

 

13      The key services to be provided include

-     Establishing in conjunction with the Finance and Audit Committee a programme of works to be delivered over the term of the contract.

-     Delivery of an internal audit programme tailored for Council.

-     Reporting in writing and/or in person to the Finance & Audit Committee at least twice a year.

-     Providing the Finance and Audit Committee with a report of findings, areas of improvement and suggested approaches for each completed piece of work.

-     Delivery of added value through the leverage of their wide knowledge base and specialist skills that enables opportunities for improvement including the management of risk based on national and international best practice.

-     The demonstration of value for money

 

14      After releasing the Request for Proposal to the market, it is proposed that the chairman of the committee, the independent member and the chief financial officer, evaluate and shortlist the proposals received.  After shortlisting it is proposed to ask for presentations before choosing and entering into a contract for service with a preferred supplier for three years.

Factors to Consider

Legal and Statutory Requirements

15      Under section 14 of the Local Government Act 2002, a local authority must ensure that it conducts its business in an open, transparent and democratically accountable manner and give effect to its identified priorities and desired outcomes in an efficient and effective manner as well as ensure that commercial transactions are made in accordance with sound business practices.

Community Views

16      No community views have been sought on this issue.  Having said that the community expects that Council runs efficiently and effectively.

Costs and Funding

17      Council’s budget for Internal Audit services is $30,000 annually.

Policy Implications

18      The objectives under Councils procurement policy include ensuring purchases are made in an open, fair and transparent manner, that the service delivers best value for money and that there is open and effective competition.  Undertaking a request for proposal is the first steps in achieving this.

19      Procurement decisions over $20,000 are generally made on a competitive tender basis.  As part of the selection criteria, the track record with Council or other councils needs to be considered along with an assessment of the ability of the provider to meet the standards required and the sustainable practices used by the supplier.

20      Councils financial delegations allow the chief financial officer or the chief executive to enter into contracts let in line with estimates set within the Annual Plan or Long Term Plan.

21      Council has delegated the committee under its terms of reference to undertake the following in regards to Internal Audit

-     Approve appointment of the internal auditor, internal audit engagement letter and letter of understanding.

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

-     Reviewing the adequacy of management’s implementation of internal audit recommendations

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

Analysis

Options Considered

22      The two options considered were the release or not of the Internal Audit Request for Proposal to the market.

Analysis of Options

Option 1 –  Approve the release of the internal Audit Request for Proposal to the market incorporating any amendments agreed at the meeting.

Advantages

Disadvantages

·        Enables the process to recruit an internal audit provider to proceed.

·        Enables amendments to be incorporated into the Request for Proposal

·        If the committee has significantly different views than what can be amended to this report they will not be incorporated.

 

Option 2 – Do not approve the release of the Internal Audit Request for Proposal for release.

Advantages

Disadvantages

·        If the committee has significantly different views on the process they can be incorporated

·        Slows down the process to recruit an Internal Audit provider.

 

Assessment of Significance

23      This matter is not considered significant under Councils significance and engagement policy.

Recommended Option

24      Option One – approve the release of the Internal Audit Request for proposal to the market incorporating any amendments agreed at the meeting.

Next Steps

25      If approved, release the Internal Audit Request for Proposal to the market.

26      Evaluate and shortlist the received proposals.

27      Receive presentations from those shortlisted.

28      Choice a preferred supplier and enter into a contract of service.

 

Attachments

a             Request for Proposal of Internal Audit Services    

 


Finance and Audit Committee

14 December 2018

 

Request for Proposal for Internal Audit Service

 

Overview

1.      Southland District Council

1.1       The Southland District Council (main office) is located at 15 Forth Street, Invercargill.  It covers 11% of New Zealand’s land mass and the approximately 30,000 residents are connected by 4,967km of roads managed by the Council.  Being a rural community the district has a large farming base but additionally tourism is a growing sector within the province.  Overall, Council has $1.5billion in assets, eight offices and 151 fulltime equivalent staff.

2.      Purpose of Request for Proposal

2.1       The purpose of this Request for Proposal (RFP) is to invite proposals for the provision of Internal Audit services to the Council.

2.2       The Council recognises that Internal Audit and Risk Management are essential responsibilities and wish to appoint an external provider that is able to develop and deliver internal audit work programmes that provide independent and objective assurance on the financial and operational controls of the Council to ensure they are efficient, effective, economical and ethical.

2.3     The Council are seeking an Internal Audit Service Provider that:

·    Has the capacity and capability to develop and deliver a tailor made risk based internal audit programme.

·    Works with the Committee and Council staff and is committed to continuous improvement by adding value through the internal audit process.

·    Understands local government and delivers value by:

-     Utilising your network and capabilities

-     Participating in wider risk and assurance conversations

-     Providing insights on market trends and emerging risks; and

-     Providing independent and trusted advice.

-     Understands the importance of knowledge sharing and communication and demonstrates this constantly in dealing with all areas of Council.

2.4       The successful respondent will become the preferred supplier for the provision of Internal Audit Services.

3       Background

3.1       This procurement relates to the delivery of Internal Audit Services.  Council has previously obtained these services in an ad-hoc basis and is now looking to formalise an approach through the engagement of a preferred supplier.  In developing the programme of works, Council though its Finance and Audit Committee are looking to develop a programme to provide assurance as to the current systems, identify areas of improvement and also undertake value add services.

3.2       Although the Council is seeking to select a single provider to provide Internal Audit Services it does reserve the right to engage other internal audit providers where there is a benefit to the Council in doing so. 

4.      Contract

4.1       The anticipated contract commencement date is 1st July 2019. 

4.2       The contract will be established for an initial period of three years with an opportunity to extend the contract for a further two years.  The right of extension is exercisable at the Council’s sole discretion.

4.3       Council covers a number of activities, it is expected that the supplier of the internal audit services will be able to service the internal audit needs of these areas.  As part of this, the supplier may need to subcontract parts of the service out, Council acknowledges this and requests that the proposed supplier incorporates this into its request for proposal.  Ongoing, any service relationship with the subcontractor will be with the supplier not Council.

4.4       The successful respondent will be the preferred supplier for the provision of internal audit services to Council.  The expectation is that the successful supplier will be the first choice for the provision of internal audit services however there may be occasions where an alternative service provider is engaged to provide one-off audits due to their specific experience or background with Council.  For this reason the arrangement with the preferred service provider is not exclusive.

5.      Statement of Works

5.1       The contract will outline the overarching scope of services, costs and requirements for internal audit activities.  For specific activities/audits the Council will prepare and submit to the service provider a draft Statement of Works/Terms of Reference outlining the specific requirements of the engagement/audit.  The Council may request that the service provider prepares and submits the Statement of Works to Council.

5.2       The Statement of Works must consider the scope, outcomes, deliverables; and timeline which outlines key activities including the:

(a)  Staff involved and likely input (including staff experience/seniority)

(b)  Breakdown of all costs including disbursements.

6       Scope of Services

6.1       The scope of this request for proposal is for the provision of expert internal audit services to mitigate organisational risks across the Council, enabling Council to address internal audit and other services on a continuous, consistent and independent basis.

6.2       Internal auditing can add value and improve an organisations operations, helping organisations to accomplish objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of:

·    Risk management

·    Control

·    Governance processes.

6.3       As part of the request for proposal, the provider will outline the process it will go through to work with the committee to establish the three year programme of works.

6.4     The services are to include:

·    Establishing in conjunction with the Finance and Audit Committee a programme of works to be delivered over the term of the contract.

·    Delivery of an internal audit programme tailored for Council.

·    Reporting in writing and/or person to the Finance & Audit Committee at least twice a year.

·    Providing the Finance & Audit Committee with a report of findings, areas of improvement and suggested approaches for each completed piece of work.

·    Delivery of added value through leverage of your wide knowledge base and specialist skills that enables opportunities for improvement including the management of risk, based on national and international best practice.

·    The demonstration of value for money.

7       Other Information

7.1     Council’s annual budget for the service is $30,000 plus GST.        

7.2     New intellectual property arising as a result of the contract will be the property of the Council.

7.3     The preferred supplier will adhere to all Health & Safety directives of the Council.

 


Finance and Audit Committee

14 December 2018

 

Finance and Audit Committee work plan up to 30 June 2019

Record No:             R/18/9/22743

Author:                      Anne Robson, Chief Financial Officer

Approved by:         Steve Ruru, Chief Executive

 

  Decision                                        Recommendation                                  Information

 

 

 

Purpose

1        To update the Committee on the status of the work programme discussed and agreed at the 14 June 2018 meeting.

2        As noted at the meeting the adoption of this work plan does not preclude the Committee or staff from including additional reports as and when required.  It is expected that the work plan will be refined further as time goes by.

3        This workplan has been updated to incorporate the actual dates reports are being presented where that differed to the workplan adopted.  For the Committees information the “X” in red shows the date the report was presented, where this differs from what was approved in the workplan or if it is a new report that will be presented on an annual basis.  If there is a black “X” on the same line as a red “X”, the black “X” indicates the date agreed by the committee.  The “X” in green reflects changes identified to the ongoing workplan since the workplan was adopted.

4        This meeting includes all the reports indicated in this plan for this meeting date except the Fraud system report and the Insurance Policy report.  Due to changes in staff and workflow commitments these papers have been delayed and are now expected to come to the meeting in March 2019.  The workshop on the annual plan is now at the end of Council on the 18th December.

5        In addition to the reports noted in the timetable this agenda also includes a report on a Riskpool call, the completed work in regards to the risk management framework project and the internal audit request for proposal.

 

 

Recommendation

That the Finance and Audit Committee:

a)            Receives the report titled “Finance and Audit Committee work plan up to 30 June 2019” dated 5 December 2018.

b)           Notes the changes made to the workplan from the last meeting

 

 

Attachments

a             Finance & Audit Committee workplan up to 30 June 2019 (to Dec 18 meeting)    

 


Finance and Audit Committee

14 December 2018

 

Finance and Audit Committee Workplan to 30 June 2019

 

Content

26 March 2018

14 June 2018

30 August 2018

24 September 2018

14 December 2018

January 2019

March 2019

18 June 2019

LTP – Recommend LTP for adoption

 

X

 

 

 

 

 

 

LTP – Final Mgmt Report

 

 

X

 

 

 

 

 

LTP – 2021-2031 LTP Planning sessions

 

 

 

 

 

 

 

 

Annual Plan – Timetable

 

 

X

 

 

 

 

 

Annual Plan – Assumptions, policies and principles

 

 

 

X

 

 

 

 

Annual Plan – Workshop

 

 

 

 

X

 

 

 

Annual Plan – recommend draft to Council for consultation

 

 

 

 

 

X

 

 

Annual Plan – draft financials and draft document

 

 

 

 

 

 

X

 

Annual Plan – Recommend final to Council

 

 

 

 

 

 

 

X

Risk Report

X

X

 

X

X

 

X

X

Health & Safety Report

X

X

 

X

X

 

X

X

Financial Report

X

X

 

X

X

 

X

X

Fraud System Report

 

 

 

 

X

 

X

 

Annual Report – Audit Arrangements Letter

X

 

 

 

 

 

X

 

Annual Report - Timetable

 

X

 

 

 

 

 

X

Annual Report – Acctg entities position paper

 

 

X

 

X

 

 

 

Annual Report - Policies & Principles

 

X

 

 

 

 

 

X

Annual Report – Interim audit Report

 

X

 

 

 

 

 

X

Annual Report – Agree report ready for audit

 

 

X

 

 

 

 

 

Annual Report – Final audit mgmt report

 

 

 

X

 

 

 

 

Annual Report – Recommend adoption by Council

 

 

 

X

 

 

 

 

Comparison Actual to Forecast

 

 

 

X

 

 

 

 

2018/19 Programme of projects

 

 

 

X

 

 

 

 

Forecast Financial Position

X

 

 

 

X

 

X

 

Interim Performance Report

X

 

X

 

X

 

X

 

Internal Audit

Will be updated when the Internal Audit Programme is approved

Insurance - Insurance policy approval

 

 

 

 

X

 

X

 

Insurance – Renewal Approval

 

X

 

 

 

 

 

X

Determine Finance & Audit Meeting Content

 

X

 

 

 

 

X

 

Financial and Risk Policies – Debt Recovery Policy

 

 

 

X

X

 

 

 

Other – Reports on projects over $2million

Reports will be included on agenda as appropriate

Other External Audits – Building Control & Roading etc

Reports included on the agenda as appropriate

           

  

 


Finance and Audit Committee

14 December 2018

 

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.

C8.1   Quarterly risk register update - December 2018

C8.2   Procurement Update - Contract 18/18 - Human Resources Information System

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

Quarterly risk register update - December 2018

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.

Procurement Update - Contract 18/18 - Human Resources Information System

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.

 

 

    



[1] Projected. Depends on Council approval

[2] Local Government Act 2002, Schedule 7, Clause 32