Finance and Audit Committee

 

OPEN MINUTES

 

 

 

Minutes of a meeting of Finance and Audit Committee held in the Council Chambers, 15 Forth Street, Invercargill on Friday, 14 December 2018 at 9am. (9.00am – 9.01am, 10.47am – 12.16pm, 12.55pm – 2.04pm, 2.07pm – 2.40pm)

 

present

 

Chairperson

Ebel Kremer

 

Mayor Gary Tong (9.00am – 9.01am, 10.47am to 12.16pm)

Councillors

John Douglas

 

Paul Duffy

 

Bruce Robertson

 

 

IN ATTENDANCE

Councillor Dillon (9.00am – 9.01am, 10.47am to 12.16pm)

Councillor Keast

Chief Executive

Steve Ruru

Chief Financial Officer

Anne Robson

Group Manager – Services and Assets

Matt Russell

Group Manager – Community and Futures

Rex Capil

People and Capability Manager

Janet Ellis

Group Manager – Customer Delivery

Trudie Hurst

Communications Manager

Louise Pagan

Governance and Democracy Manager

Clare Sullivan

Committee Advisor

Fiona Dunlop

 


Finance and Audit Committee

14 December 2018

 

 

Adjournment of Meeting

The Chair opened the meeting and advised that it would be adjourning until the conclusion of the Around the Mountains Cycle Trail Project Subcommittee.

Resolution

Moved Chairperson Kremer, seconded Mayor Tong and resolved:

That the Finance and Audit Committee adjourns until the conclusion of the Around the Mountains Cycle Trail Project Subcommittee.

 

The meeting adjourned at 9.01am.

 

The meeting reconvened at 10.47am.

 

Mayor Tong and Councillors Dillon, Douglas, Duffy, Keast and Kremer and Bruce Robertson were present then the meeting reconvned.

 

 

1             Apologies

 

There were no apologies.

 

 

2             Leave of absence

 

There were no requests for leave of absence.

 

 

3             Conflict of Interest

 

There were no conflicts of interest declared.

 

 

4             Public Forum

 

There was no public forum.

 

 

5             Extraordinary/Urgent Items

 

There were no Extraordinary/Urgent items.

 

 

6             Confirmation of Minutes

 

Resolution

Moved Chairperson Kremer, seconded External Member Robertson and resolved:

That the Finance and Audit Committee confirms the minutes of the meeting held on 17 October 2018 as a true and correct record of that meeting.

 

Reports

 

 

7.1

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

Record No: R/18/12/27767

 

Planning and Reporting Analyst – Shannon Oliver was in attendance for this item.

 

Miss Oliver advised that 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 which was adopted in June 2018 as part of the 2018-2028 Long Term Plan.

 

 

Resolution

Moved Chairperson Kremer, seconded Cr Douglas and resolved:

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

 

 

7.2

Health and Safety Update

Record No: R/18/11/27114

 

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

 

 

Resolution

Moved Mayor Tong, seconded External Member Robertson and resolved:

That the Finance and Audit Committee:

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

 

 

 

 

 

 

7.3

Risk Management Framework Project

Record No: R/18/11/26857

 

Group Manager, Community and Futures – Rex Capil was in attendance for this item.

 

Mr Capil advised that the report was to update the Committee on Risk Management Framework 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.

 

 

Resolution

Moved Chairperson Kremer, seconded External Member Robertson recommendations a to c, d with a change (as indicated by strikethrough) and e and resolved:

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 with the following change to “What is risk management?”

 

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)

 

 

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

 

 

7.4

Draft Debt Recovery Policy

Record No: R/18/3/5378

 

Finance Manager – Sheree Marrah and Finance Officer – Credit Control - Shirley Carruthers were in attendance for this item.

 

Mrs Marrah advised that the report was to present the draft Debt Recovery Policy to the Committee and recommends to Council the draft Policy be adopted.

 

 

Resolution

Moved Cr Douglas, seconded Cr Duffy and resolved:

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 the officers report.

 

Mayor Tong left the meeting at 12.16pm.

Councillor Dillon left the meeting at 12.16pm.

 

The meeting adjourned for lunch at 12.16pm and reconvened at 12.55pm.

 

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

 

 

7.5

Draft Accounting Position Paper

Record No: R/18/8/19112

 

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

 

Mrs Marrah advised that the purpose of the report was for the Committee to consider recommendations from Audit New Zealand Management Reports for the years ended 30 June 2017 and 2018, recommendations made to Council to consider consolidating Milford Community Trust and revisiting the accounting approach for its various joint venture entities.

 

Resolution

Moved Chairperson Kremer, seconded External Member Robertson and resolved:

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 Venture Southland, Southland Regional Heritage Committee, Southland Regional Development Agency and Emergency Management Southland (associates.

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

·        Equity account for Southland Museum and Art Gallery and Whakamana te Waituna Charitable Trust (associates), recognising that they have no equity share.

·        Disclose summary financial information for Milford Community Trust and Southland Museum and Art Gallery in the Council Controlled Organisations section of the Annual Report.

 

e)       Approves Attachment A (of the officers report) – 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.

 


 

 

7.6

Monthly Financial Report - October 2018

Record No: R/18/11/27498

 

Project Accountant – Dipal Patel was in attendance for this item.

 

 

Resolution

Moved Cr Duffy, seconded Cr Douglas and resolved:

That the Finance and Audit Committee:

a)            Receives the report titled “Monthly Financial Report - October 2018” dated 7 December 2018.

 

 

7.7

Forecasted Financial Position for the year ending 30 June 2019

Record No: R/18/11/26807

 

Management Accountant - Joanie Nel was in attendance for this item.

 

Mrs Nel advised that the report was to inform the Committee of the expected year-end financial result compared to what was finalised for the 2018/2019 Annual Plan and to seek approval for recommendation to Council for final approval.

 

During discussion on the report the meeting wished to discuss the Stewart Island Electrical Supply Authority “forecasting” in more depth.  As the details to be discussed were of a commercial nature and involving negotiations it was agreed that the meeting would go into public excluded to allow for discussion on the matter.

 

 

Public Excluded

 

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

Resolution

Moved Chairperson Kremer, seconded Cr Douglas and resolved:

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

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

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

 

Forecasted Financial Position for the year ending 30 June 2019

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.

 

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.

 

That the Chief Executive, Group Manager – Services and Assets, Group Manager, Community and Futures, Chief Financial Officer, People and Capability Manager and Committee Advisor be permitted to remain at this meeting, after the public has been excluded, because of their knowledge of the items 7.7 Forecasted Financial Position for the year ending 30 June 2019, C8.1 Quarterly risk register update - December 2018 and C8.2 Procurement Update - Contract 18/18 - Human Resources Information System. This knowledge, which will be of assistance in relation to the matters to be discussed, is relevant to those matters because of their knowledge on the issues discussed and meeting procedure.

 

That the Management Accountant be permitted to remain at this meeting, after the public has been excluded, because of their knowledge of the item 7.7 Forecasted Financial Position for the year ending 30 June 2019.  This knowledge, which will be of assistance in relation to the matters to be discussed, is relevant to those matters because of their knowledge on the issues discussed.

 

That Policy Analyst – Jane Edwards be permitted to remain at this meeting, after the public has been excluded, because of their knowledge of item C8.1 Quarterly risk register update - December 2018. This knowledge, which will be of assistance in relation to the matters to be discussed, is relevant to those matters because of their knowledge on the issues discussed.

 

That Digital Solutions Manager be permitted to remain at this meeting, after the public has been excluded, because of their knowledge of item C8.2 Procurement Update - Contract 18/18 - Human Resources Information System. This knowledge, which will be of assistance in relation to the matters to be discussed, is relevant to those matters because of their knowledge on the issues discussed.

 

The public were excluded at 1.21pm.

 

The meeting returned to open meeting at 1.42pm.

 

 

7.7

Forecasted Financial Position for the year ending 30 June 2019 (CONTINUED)

Record No: R/18/11/26807

 

Resolution

Moved Chairperson Kremer, seconded Cr Duffy and resolved:

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 appendices B and C of the officers report.

 

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

 

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 of the officers report.

 

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

 

 

7.8

Riskpool Call

Record No: R/18/10/24661

 

Chief Financial Officer – Anne Robson will be attendance for this item.

 

Miss Robson advised that the purpose of the report was to inform the Committee off the receipt of correspondence from Riskpool advising of a monetary call that is to be made to Council on 1 July 2019.

 

 

Resolution

Moved Cr Douglas, seconded Chairperson Kremer and resolved:

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.

 

 

7.9

Internal Audit Request for Proposal

Record No: R/18/12/27532

 

Chief Financial Officer – Anne Robson will be attendance for this item.

 

Miss Robson advised that the purpose of the report was to seek the Committee’s approval to “go to market” for the provision of internal audit services.

 

 

Resolution

Moved Chairperson Kremer, seconded External Member Robertson and resolved:

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.

 

 

7.10

Finance and Audit Committee work plan up to 30 June 2019

Record No: R/18/9/22743

 

Chief Financial Officer – Anne Robson was in attendance for this item.

 

 

Resolution

Moved Chairperson Kremer, seconded External Member Robertson and resolved:

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 work plan from the last meeting.

 

 

 

The meeting returned to public excluded at 2.02pm.

 

The meeting adjourned at 2.04pm and reconvened at 2.07pm.

 

 

Resolutions in relation to the confidential items are recorded in the confidential section of these minutes and are not publicly available unless released here.

 

 

The meeting concluded at 2.40pm.                      CONFIRMED AS A TRUE AND CORRECT RECORD AT A MEETING OF THE Finance and Audit Committee HELD ON FRIDAY 14 DECEMBER 2018.

 

 

 

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

 

 

 

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