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

 

Date:

Time:

Meeting Room:

Venue:

 

Tuesday, 10 November 2020

9am

Council Chamber
15 Forth Street, Invercargill

 

Finance and Assurance Committee Agenda

OPEN

 

 

MEMBERSHIP

 

Chairperson

Bruce Robertson

 

 

Mayor Gary Tong

 

Deputy Chair

Ebel Kremer

 

Councillors

Don Byars

 

 

John Douglas

 

 

Paul Duffy

 

 

Julie Keast

 

 

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 Assurance Committee

 

TYPE OF COMMITTEE

Council standing committee

RESPONSIBLE TO

Council

SUBCOMMITTEES

None

LEGISLATIVE BASIS

Committee constituted by Council as per schedule 7, clause 30 (1)(a), LGA 2002.

Committee delegated powers by Council as per schedule 7, clause 32, LGA 2002.

MEMBERSHIP

Mayor, three councillors and one external appointee

FREQUENCY OF MEETINGS

Quarterly or as required

QUORUM

Three members

SCOPE OF ACTIVITIES

The Finance and Assurance 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 and non-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 Assurance 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

            Council’s compliance with its Fraud Policy.

DELEGATIONS

The Finance and Assurance Committee shall have the following delegated powers and be accountable to Council for the exercising of these powers. 

In exercising the delegated powers, the Finance and Assurance 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

•      the approved budgets for the activity.

The Finance and Assurance 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 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 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 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 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 recommendations to 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 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 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 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 $2 million or the value over the term of the contract exceeds $2 million.

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)    recommend to Council treasury policies.

Fraud Policy

a)        receive and consider reports relating to the investigation of suspected fraud

b)        monitor the implementation of the Fraud Policy.

Power to Recommend

The Finance and Assurance 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 Assurance Committee is responsible for considering and making recommendations to the Services and Assets Committee on business cases completed under the ‘Power to Act’ section above.

FINANCIAL DELEGATIONS

Council authorises the following delegated authority of financial powers to Council committees in regard to matters within each committee’s jurisdiction.

Contract Acceptance:

            accept or decline any contract for the purchase of goods, services, capital works or other assets where the total value of the lump sum contract does not exceed the sum allocated in the Long Term Plan/Annual Plan and the contract relates to an activity that is within the scope of activities relating to the work of the Finance and Assurance Committee

            accept or decline any contract for the disposal of goods, plant or other assets other than property or land that is provided for in the Long Term Plan

Budget Reallocation

The committee is authorised to reallocate funds from one existing budget item to another.  Reallocation of this kind must not impact on current or future levels of service and must be:

            funded by way of savings on existing budget items

            within the jurisdiction of the committee

            consistent with the Revenue and Financing Policy.

LIMITS TO DELEGATIONS

Matters that must be processed by way of recommendation to Council include:

•      amendment to fees and charges relating to all activities

•      powers that cannot be delegated to committees as per the Local Government Act 2002 and sections 2.4 and 2.5 of this manual.

Delegated authority is within the financial limits in section 9 of this manual.

RELATIONSHIPS WITH OTHER PARTIES

The committee shall maintain relationships with each of the nine community boards.

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

•      external auditor

•      internal auditor/risk advisor (if appointed)

•      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 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 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.

CONTACT WITH MEDIA

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 Southland District Council.

 


Finance and Assurance Committee

10 November 2020

 

TABLE OF CONTENTS

ITEM                                                                                                                                                                                  PAGE

Procedural

1             Apologies                                                                                                                                                             11

2             Leave of absence                                                                                                                                              11

3             Conflict of Interest                                                                                                                                          11

4             Public Forum                                                                                                                                                      11

5             Extraordinary/Urgent Items                                                                                                                     11

6             Confirmation of Minutes                                                                                                                             11

Reports

7.1         Finance & Assurance Committee Work plan for the year ended 30 June 2021           25

7.2         Draft Annual Report 2019/2020                                                                                                               29

7.3         Analysis of Actual Results to Forecast for the year ended 30 June 2020                     295

7.4         Overall programme for 2020/2021 including projects carried forward 2019/2020 305

7.5         Monthly Financial Report - September 2020                                                                                317

7.6         Finance Transactional Update as at 30 June 2020                                                                     333

Public Excluded

Procedural motion to exclude the public                                                                                                       339

C8.1      Milford Opportunities contract update - 2                                                                                    339  


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 12noon at least one clear day 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 Assurance Committee, 11 September 2020

6.2             Meeting minutes of Extraordinary Finance and Assurance Committee, 20 October 2020


 

Finance and Assurance Committee

 

OPEN MINUTES

 

 

 

Minutes of a meeting of Finance and Assurance Committee held in the Council Chamber, 15 Forth Street, Invercargill on Friday, 11 September 2020 at 9.01am. (9.01am – 10.46am, 11.02am – 12.35pm, 1.05pm – 2.10pm (PE 12.22pm – 12.35pm, 1.05pm – 2.10pm)).

 

present

 

Chairperson

Bruce Robertson

 

Mayor Gary Tong (9.01am – 9.51am, 9.56am – 10.46am, 11.02am – 12.35pm, 1.05pm – 1.54pm))

Deputy Chair

Ebel Kremer (9.01am – 10.46am, 11.02am – 12.35pm, 1.05pm – 1.54pm)

Councillors

Don Byars

 

John Douglas

 

Paul Duffy

 

Julie Keast

 

 

APOLOGIES

Mayor Tong (early departure)

Councillor Kremer (early departure)

 

 

IN ATTENDANCE

Councillor Menzies (9.02am – 9.46am, 10.45am – 11.54am, 12.13pm – 12.35pm)

Chief Financial Officer - Anne Robson

Committee Advisor - Fiona Dunlop

 


1             Apologies

 

Mayor Tong and Councillor Kremer advised that they would be early departures from the meeting.

 

Moved Cr Douglas, seconded Deputy Chairperson Kremer and resolved:

That the Finance and Assurance Committee accept the apologies.

 

 

(Councillor Menzies joined the meeting at 9.02am.)

 

 

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 Deputy Chairperson Kremer, seconded Cr Douglas and resolved:

That the Finance and Assurance Committee confirms the minutes of the meeting held on 22 June 2020 as a true and correct record of that meeting.

 


 

 

Reports

 

 

7.1

Finance & Assurance Committee Work plan for the year ended 30 June 2021

Record No: R/20/9/49837

 

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

 

 

Resolution

Moved Mayor Tong, seconded Cr Keast  recommendations a and b (with changes as indicated with strikethrough and underline) and resolved:

That the Finance and Assurance Committee:

a)            Receives the report titled “Finance & Assurance Committee Work plan for the year ended 30 June 2021” dated 4 September 2020.

 

b)           Notes the changes made to the Finance and Assurance Audit Committee Work plan for the year ended 30 June 2021 since the last meeting.

 

 

7.4

Interim Performance Report - Period three - 1 July 2019 to 30 June 2020

Record No: R/20/8/47187

 

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

 

Miss Oliver advised that the purpose of the report was to provide the Committee with the Interim Performance Report for the period 1 July 2019 to 30 June 2020 for review.

 

(During discussion on the report Mayor Tong left the meeting at 9.51am and returned at 9.56am.)

 

 

Resolution

Moved Chairperson Robertson, seconded Deputy Chairperson Kremer and resolved:

That the Finance and Assurance Committee:

a)            Receives the report titled “Interim Performance Report - Period three - 1 July 2019 to 30 June 2020” dated 7 September 2020.

 

b)           Determines that this matter or decision be recognised as not significant in terms of Section 76 of the Local Government Act 2002.

 

c)            Determines that it has complied with the decision-making provisions of the Local Government Act 2002 to the extent necessary in relation to this decision; and in accordance with Section 79 of the act determines that it does not require further information, further assessment of options or further analysis of costs and benefits or advantages and disadvantages prior to making a decision on this matter.

 

 

7.3

Draft unaudited Annual Report 2019/2020 for Endorsement

Record No: R/20/8/47696

 

Planning and Reporting Analyst – Shannon Oliver and Financial Accountant – Sheree Marrah were in attendance for this item.

 

Miss Oliver and Mrs Marrah advised that the purpose of the report was for the Committee to provide feedback and endorse the release of the draft unaudited Annual Report for the year ended 30 June 2020 to Audit New Zealand for their review.

 

(During discussion on the report Councillor Menzies left the meeting at 9.46am.)

(During discussion on the report Mayor Tong left the meeting at 9.51am and returned at 9.56am.)

(Councillor Menzies retuned to the meeting at 10.45am.)

 

 

Resolution

Moved Chairperson Robertson, seconded Deputy Chairperson Kremer recommendations a to c, d and e with deletions (as indicated) and e with changes (as indicated with strikethrough and underline) and resolved:

That the Finance and Assurance Committee:

a)            Receives the report titled “Draft unaudited Annual Report 2019/2020 for Endorsement” dated 7 September 2020.

 

b)           Determines that this matter or decision be recognised as significant in terms of Section 76 of the Local Government Act 2002.

 

c)            Determines that it has complied with the decision-making provisions of the Local Government Act 2002 to the extent necessary in relation to this decision; and in accordance with Section 79 of the Act determines that it does not require further information, further assessment of options or further analysis of costs and benefits or advantages and disadvantages prior to making a decision on this matter.

 

d)           Endorses the draft unaudited Annual Report for the year ended 30 June 2020, including any amendments agreed at this meeting.

e)            Approves release of the draft unaudited Annual Report for the year ended 30 June 2020 to Audit New Zealand, once any agreed amendments from this meeting have been incorporated.

f)             Delegate authority to the chief executive/acting chief executive to approve any further amendments to the draft unaudited Annual Report for the year ended 30 June 2020 subsequent to this meeting, and prior to final review by the Committee when it recommends adoption at its meeting on 16 October 2020.

 

 

(The meeting adjourned for morning tea 10.46am and reconvened at 11.02am.)

 

(Mayor Tong, Chair Mr Bruce Robertson, Councillors Byars, Douglas, Duffy, Keast, Kremer and Menzies were present when the meeting reconvened.)

 

 

7.5

Quarterly risk management report - September 2020

Record No: R/20/6/23169

 

Policy Analyst – Jane Edwards and Strategy and Policy Manager – Michelle Stevenson were in attendance for this item.

 

Mrs Edwards advised that the purpose of the report was to advise the of the September 2020 Quarterly Risk Management report for consideration by the Committee

 

 

Resolution

Moved Mayor Tong, seconded Cr Douglas and resolved:

That the Finance and Assurance Committee:

a)            Receives the report titled “Quarterly risk management report - September 2020” dated 7 September 2020.

 

b)           Determines that this matter or decision be recognised as not significant in terms of Section 76 of the Local Government Act 2002.

 

c)            Determines that it has complied with the decision-making provisions of the Local Government Act 2002 to the extent necessary in relation to this decision; and in accordance with Section 79 of the act determines that it does not require further information, further assessment of options or further analysis of costs and benefits or advantages and disadvantages prior to making a decision on this matter.

 

 

7.6

Draft Policy on Development and Financial Contributions

Record No: R/20/8/32315

 

Intermediate Policy Analyst – Carrie Adams and Senior Management Accountant – Susan McNamara were in attendance for this item.

 

Mrs Adams advised that the purpose of the report was for the Committee to consider the draft Policy on Development and Financial Contributions prior to Council agreeing to the draft being released for public consultation.

 

 

Resolution

Moved Deputy Chairperson Kremer, seconded Cr Douglas and resolved:

That the Finance and Assurance Committee:

a)            Receives the report titled “Draft Policy on Development and Financial Contributions” dated 7 September 2020.

 

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)           Considers the draft Policy on Development and Financial Contributions and provides feedback.

 

e)            Endorses the draft Policy on Development and Financial Contributions.

 

f)             Recommends to Council that it release the draft Policy on Development and Financial Contributions for public consultation in accordance with section 82 of the Local Government Act 2002, from 4 November to 4 December 2020.

 

 

7.7

Draft Procurement Policy

Record No: R/20/8/47416

 

Policy Analyst – Robyn Rout and Commercial Infrastructure Manager – Ashby Brown were in attendance for this item.

 

Mrs Rout advised that the purpose of the report was for the Committee to consider the draft Procurement Policy prior to Council agreeing the release for public consultation.

 

(Councillor Menzies left the meeting at 11.54am and returned at 12.13pm.)

 

 

Resolution

Moved Mayor Tong, seconded Cr Duffy and resolved:

That the Finance and Assurance Committee:

a)            Receives the report titled “Draft Procurement Policy” dated 11 September 2020.

 

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)           Considers the draft Procurement Policy and provides feedback.

 

e)            Recommends to Council that it release the draft Procurement Policy for public consultation in accordance with section 82 of the Local Government Act 2002 from 4 November to 4 December 2020.

 

 

7.2

Health and Safety Update

Record No: R/20/8/32317

 

People and Capability Manager – Janet Ellis and Health Safety and Wellbeing Advisor – Teri Black was in attendance for this item.

 

 

Resolution

Moved Chairperson Robertson, seconded Cr Keast and resolved:

That the Finance and Assurance Committee:

a)            Receives the report titled “Health and Safety Update” dated 21 August 2020.

 

 

Public Excluded

 

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

Resolution

Moved Chairperson Robertson, seconded Deputy Chairperson Kremer and resolved:

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

C8.1 Health and Safety Events

C8.2 Milford Opportunities Project contract update

C8.3 Southland District Council Resurfacing Tender Award - Contract 19/54 and 19/55

C8.4 Award of Contact for the Provision of Power Supply to Stewart Island/Rakiura

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

 

Health and Safety Events

s7(2)(a) - The withholding of the information is necessary to protect the privacy of natural persons, including that of a deceased person.

s7(2)(d) - The withholding of the information is necessary to avoid prejudice to measures protecting the health and safety of members of the public.

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.

 

Milford Opportunities Project contract update

s7(2)(b)(ii) - The withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information.

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.

 

Southland District Council Resurfacing Tender Award - Contract 19/54 and 19/55

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.

 

 

Award of Contact for the Provision of Power Supply to Stewart Island/Rakiura

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 – Steve Ruru, Group Manager, Environmental Services – Fran Mikulicic, Group Manager, Community and Futures – Rex Capil, Chief Financial Officer – Anne Robson, People and Capability Manager – Janet Ellis, Group Manager, Communications Manager – Louise Pagan and Committee Advisor – Fiona Dunlop be permitted to remain at this meeting, after the public has been excluded, because of their knowledge of the items C8.1 Health and Safety Events, C8.2 Milford Opportunities Project contract update, C8.3 Southland District Council Resurfacing Tender Award - Contract 19/54 and 19/55 and C8.4 Award of Contact for the Provision of Power Supply to Stewart Island/Rakiura. 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 Health, Safety and Well Being Advisor – Teri Black be permitted to remain at this meeting, after the public has been excluded, because of their knowledge of the item C8.1 Health and Safety Events. 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 the Community Partnership Leader – Simon Moran be permitted to remain at this meeting, after the public has been excluded, because of their knowledge of the item C8.2 Milford Opportunities Project contract update. 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 the Strategic Roading Manager – Hartley Hare be permitted to remain at this meeting, after the public has been excluded, because of their knowledge of the item C8.3 Southland District Council Resurfacing Tender Award - Contract 19/54 and 19/55. 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 the Commercial Infrastructure Manager – Ashby Brown be permitted to remain at this meeting, after the public has been excluded, because of their knowledge of the item C8.4 Award of Contract for the Provision of Power Supply to Stewart Island/Rakiura. 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 12.22pm.

 

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 adjourned for lunch at 12.35pm and reconvened at 1.05pm.

 

(Councillor Menzies left the meeting at 12.35pm.)

(Mayor Tong left the meeting at 1.54pm.)

(Councillor Kremer left the meeting at 1.54pm.)

 

 

The meeting concluded at 2.10pm.                      CONFIRMED AS A TRUE AND CORRECT RECORD AT A MEETING OF THE Finance and Assurance Committee HELD ON FRIDAY 11 SEPTEMBER 2020

 

 

 

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

 

 

 

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


 

Extraordinary Finance and Assurance Committee

 

OPEN MINUTES

 

 

 

Minutes of a meeting of Extraordinary Finance and Assurance Committee held in the Council Chamber, First Floor, 15 Forth Street, Invercargill on Tuesday, 20 October 2020 at 4pm (4pm – 5.39pm).

 

present

 

Chairperson

Mr Bruce Robertson (external member)

 

Mayor Gary Tong (4.01pm – 5.39pm)

Deputy Chair

Ebel Kremer

Councillors

Don Byars

 

John Douglas

 

Paul Duffy

 

Julie Keast

 

 

APOLOGIES

Mayor Tong (for lateness)

 

 

IN ATTENDANCE

Chief Financial Officer - Anne Robson

Interim Chief Executive – Ross McNeil

Group Manager Services and Assets – Matt Russell

Group Manager Community and Futures – Rex Capil

Group Manager Customer Support – Trudie Hurst

People and Capability Manager – Janet Ellis

Committee Advisor - Fiona Dunlop

 


1             Apologies

 

There were apologies for lateness from Mayor Tong.

 

Moved Chairperson Robertson, seconded Deputy Chairperson Kremer and resolved:

That the Finance and Assurance 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.

 

(Mayor Tong joined the meeting at 4.01pm.)

 

 

5             Extraordinary/Urgent Items

 

There were no Extraordinary/Urgent items.

 

 

6             Confirmation of Minutes

 

Resolution

Moved Chairperson Robertson, seconded Cr Duffy and resolved:

That the Finance and Assurance Committee confirms the minutes of the meeting held on 11 September 2020 as a true and correct record of that meeting.

 

Reports

 

 

7.1

Draft Revenue and Financing Policy and Rating Review

Record No: R/20/10/60830

 

Finance Development Co-ordinator – Nicole Taylor was in attendance for this item.

 

Miss Taylor advised that the report was for the Finance and Assurance Committee to consider the draft Revenue and Financing Policy.

 

The Committee noted that they were considering the report and making recommendations to Council that the draft policy be endorsed for public consultation.

 

 

Resolution

Moved Deputy Chairperson Kremer, seconded Cr Douglas and resolved:

That the Finance and Assurance Committee:

a)            receives the report titled “Draft Revenue and Financing Policy and Rating Review” dated 15 October 2020

 

b)           determines that this matter or decision be recognised as 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)           has considered the draft Revenue and Financing Policy and rating review (attachment a of the officers report) and provided feedback

 

d)           considers the draft Revenue and Financing Policy and rating review and provides feedback

 

e)            endorses the draft Revenue and Financing Policy and rating review with the following addition:

(i)           inclusion of public consultation on the usage of the general rate (low) to allow for part funding the Te Anau airport

 

f)             agrees to recommend to Council that it release the draft Revenue and Financing Policy and rating review for public consultation in accordance with section 82 of the Local Government Act 2002 from 4 November to 4 December 2020 including any amendments agreed at this meeting in e above.

 

 

 

The meeting concluded at 5.39pm.                      CONFIRMED AS A TRUE AND CORRECT RECORD AT A MEETING OF THE Finance and Assurance Committee HELD ON TUESDAY 20 OCTOBER 2020.

 

 

 

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

 

 

 

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

 


Finance and Assurance Committee

10 November 2020

 

Finance & Assurance Committee Work plan for the year ended 30 June 2021

Record No:             R/20/11/64663

Author:                      Anne Robson, Chief Financial Officer

Approved by:         Anne Robson, Chief Financial Officer

 

  Decision                                       Recommendation                                  Information

 

 

 

Purpose

1        To update the Committee on the status of the work programme discussed and agreed at the 30 April 2020 meeting for the financial year ending 30 June 2021.

2        As noted at the meeting the adoption of the work plan does not preclude the Committee or staff from including additional reports as and when required. 

3        As the year proceeds the work plan will be updated to incorporate the actual dates reports are being presented where that differs to the work plan 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 work plan 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 work plan since it was adopted.

4        The risk report and the health & safety report planned for this meeting were presented in the September meeting. 

5        It was planned to present the Long Term Plan assumptions and the remission and postponement of rates policy to this meeting.  It is now planned to have a workshop over these before presenting the reports to the next meeting in December

6        The audit management report will also be tabled in the December meeting however the Audit Director will talk to the meeting over the key points.

7        The internal audit report on cyber security will be presented to the next meeting

8        In addition to the reports noted in the timetable, this agenda also includes the 

-        Financial Report,

-        Finance Transactional update as at 30 June 2020

-        Milford Opportunities contract update - 2

 

 

Recommendation

That the Finance and Assurance Committee:

a)            Receives the report titled “Finance & Assurance Committee Work plan for the year ended 30 June 2021” dated 5 November 2020.

 

b)           Notes the changes made to the Finance and Audit Committee Work plan for the year ended 30 June 2021 since the last meeting.

 

Attachments

a             Finance & Assurance Meeting Content (Nov 2020)    

 


Finance and Assurance Committee

10 November 2020

 

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Finance and Assurance Committee

10 November 2020

 

Draft Annual Report 2019/2020

Record No:             R/20/10/60155

Author:                      Shannon Oliver, Planning and Reporting Analyst

Approved by:         Rex Capil, Group Manager Community and Futures

 

  Decision                                        Recommendation                                 Information

 

 

 

Purpose

1        To present the draft Annual Report 2019/2020 to the committee for their recommendation to Council that it be adopted on 18 November 2020.

Executive summary

2        Council is required to develop and adopt an Annual Report within four months of the end of a financial year. 

3        The Annual Report is a means for Council to account and report to the community on its performance for the preceding financial year.  It compares and comments on the performance of Council against the budget and operating targets set in the 2019/2020 Annual Plan. 

4        This year, legislation has recently been passed to extend the deadline for annual reports relating to the financial year 1 July 2019 to 30 June 2020. The Annual reports need to be adopted by December 2020 rather than by 31 October 2020.  This extension is to allow for interruptions due to the Covid-19 higher level lockdown restrictions.

5        As noted at the meeting on 11 September, Audit NZ were due to start their audit fieldwork on 14 September but may choose to defer the audit fieldwork dates to a later date and that the proposed adoption date may need to be rescheduled. 

6        Subsequent to the 11 September meeting, the audit dates did change and the length of the Audit was extended so it required seven weeks instead of four weeks to complete.  This has meant that the adoption of the annual report will now be 18 November 2020.

7        The Annual Report had been reviewed by members of the executive leadership team and the Finance and Assurance Committee prior to being audited by Audit New Zealand.  Changes required from these processes have been incorporated into the document.

8        The final draft Annual Report and draft summary document are attached to this report (Attachment A and B). 

9        Please note this document is subject to change as a result of Audit New Zealand’s final review, which is currently being undertaken and is anticipated to be complete by 6 November 2020. If there are any further changes from Audit New Zealand’s final review, these will be advised at the meeting.

10      The Finance and Assurance Committee is asked to consider the Annual Report and make a recommendation as to whether Council should adopt the Annual Report on 18 November 2020 as presented, and incorporating any further changes as necessary.

 

Recommendation

That the Finance and Assurance Committee:

a)            Receives the report titled “Draft Annual Report 2019/2020” dated 5 November 2020.

 

b)           Determines that this matter or decision be recognised as significant in terms of Section 76 of the Local Government Act 2002.

 

c)            Determines that it has complied with the decision-making provisions of the Local Government Act 2002 to the extent necessary in relation to this decision; and in accordance with Section 79 of the Act determines that it does not require further information, further assessment of options or further analysis of costs and benefits or advantages and disadvantages prior to making a decision on this matter.

 

d)           Recommends to Council the adoption of the Annual Report 2019/2020 incorporating any amendments agreed at this meeting.

 

 

Background

11      An Annual Report is intended to outline Council’s actual performance in comparison with its intended performance as outlined in its Annual/Long Term Plan.  The Annual Report details the operating activities of Council and includes financial statements for Council. The report and financial statements have been audited by Audit New Zealand on behalf of the auditor-general.

12      The Local Government Act 2002 requires Council to prepare and adopt an Annual Report within four months of the end of each financial year. 

13      Legislation has recently been passed in June to extend this deadline.  Council annual reports are to be adopted by 31 December 2020 rather than 31 October 2020.  This is to allow for interruptions due to the Covid-19 higher level lockdown restrictions.

14      A draft of the unaudited Annual Report was presented to the Finance and Assurance Committee on 11 September 2020. 

15      The audit by Audit New Zealand will be complete by the date of this meeting, and as at the date of this report, a number of adjustments have been made to the document following audit and staff review. 

16      The primary financial changes that have occurred subsequent to the version that was provided to the committee and Audit NZ in September are:

a)   recognition of $855,000 building consent fees as deferred revenue (refer below for further discussion),

b)   $41,000 of internal capital works costs incorrectly coded to operating expenditure, and

c)   $42,000 of various minor corrections identified by Council staff during audit.

17      The Summary Annual Report document is not required to be adopted by Council. The summary of the Annual Report document is currently being audited.  Once the audit is complete and any changes are made, a separate audit opinion will be received and the summary will be approved by the chief executive for distribution.

18      The Annual Report and Summary (once confirmed) will be made available to the public via Council’s website, by placing printed copies in libraries and service centres and having printed copies available for distribution on request.  The availability of the Annual Report will be advertised.  Printed copies of the report and summary will also be sent to those on the mailing list of people who have requested a copy.

 

Status of the report

19      Audit NZ are predominantly finished their fieldwork as at the date of this report.   However, staff are still awaiting notification from Audit NZ that their final audit procedures, including engagement quality control review, are complete.

20      The principal matters outstanding include final audit clearance and finalisation of the summary document, and any final changes as a result of the final audit review process to the full Annual Report.  Any material changes made to the report will be outlined at the meeting.

21      Staff note the draft summary document (Attachment B) is currently being updated for the recommended changes by Audit NZ and hence the some of the financial information and commentary differs from the full Annual Report.

22      As at the date of this report, the draft audit opinion, management letter and representation letter were not available from Audit NZ, however they anticipate that these drafts will be available by 10 November.  Verbal audit clearance is expected to be received on Friday 6 November 2020.

23      To date, the only significant financial change that has occurred as a result of Audit NZ’s fieldwork was:

-     recognition of $855,000 building consent fees as a liability (deferred revenue), refer below for further discussion.

24      During their procedures, Audit New Zealand made a number of recommendations around changes to disclosures, performance measures and classifications and these have all been implemented to date and included in the final draft document attached.  A record of such changes are available if the Committee wish to understand the specific detail, however other than those specified above, they were not significant.

25      Dereck Ollsson, Associate Audit Director of Audit New Zealand will be in attendance via video conference at the Finance and Assurance Committee meeting to present the audit opinion, discuss the management letter and answer any questions regarding the Annual Report and/or associated documents.

26      Additionally, Council staff made the following minor adjustments as a result of corrections that were identified subsequent to the provision of the draft accounts to Audit NZ on 22 September.

-     $41,000 of internal capital works costs incorrectly coded to operating expenditure, and

-     $42,000 of various minor corrections identified by Council staff during audit.

 

Organisational Performance

27      The Annual Report 2019/2020 details performance of the organisation against the key performance targets that were specified in the 10 Year Plan.

28      Managers have reviewed the activities for which they are responsible and have provided commentary of the actual performance against targets, particularly in those instances where the performance targets have not been met. 

29      Of the 81 service performance targets, 54 (67%) achieved, two (2%) not measured and 25 (31%) not achieved. The result shows that just over 30% of the organisations KPIs were not met.  In general, throughout the report there were a variety of reasons why the performance targets were not achieved and these reasons are outlined in more detail in the performance tables within the various activity sections of the Annual Report.  However, some of the reasons include but are not limited to: 

·   that the target was set incorrectly

·   the priorities have changed

·   performance measure results are not available yet (e.g. Drinking Water Assessor report)

·   financial costs exceeded anticipated target

·   improvements are being made but are not yet in place

·   there may be issues with processes or resources

 

 

 

 

Activity group performance results

Achieved

Not measured

Not Achieved

Total

Community services

7

-

4

11

District leadership

14

-

5

19

Emergency management

2

-

-

2

Regulatory services

6

1

4

11

Roads and footpaths

2

1

3

6

Solid waste

4

-

2

6

Stormwater

8

-

2

10

Sewerage

6

-

-

6

Water supply

5

-

5

10

TOTAL

54

2

25

81


 

Capital Expenditure Projects

30      The draft unaudited Annual Report 2019/2020 includes information about projects, their completion status and actual cost versus budget.  The projects include those programmed in the Annual Plan 2019/2020 plus any projects carried forward from previous years or any new projects. This project information excludes the roading programme.

31      Of the 169 projects, overall, 64 (38%) were completed, 17 (10%) were deleted, 9 (5%) were not started, 58 (34%) were in progress and 21 (13%) were deferred. 

32      It should be noted that only about a third were completed within the financial year with 34% still in progress. 

 

Activity Group

Completed

In Progress

Not Started

Deferred

Deleted

Total

Community services

30

18

2

17

10

77

District leadership

2

3

 -

 -

1

6

Emergency Management

 -

 -

 -

 -

 -

 -

Regulatory Services

 -

 -

 -

 -

 -

 -

Roading & transport

10

12

4

2

1

29

Solid Waste

 -

 -

 -

 -

 -

 -

Stormwater

1

1

 -

 -

1

3

Wastewater

7

13

1

1

1

23

Water supply

14

11

2

1

3

31

Total

64

58

9

21

17

169


 

Financial results

Statement of compliance

33      Clause 34 of Schedule 10 of the Local Government Act 2002 requires that a Statement of Compliance be included in the Annual Report indicating whether the statutory requirements in relation to preparation of the Annual Report have been met. The statement is required to be signed by the chief executive and mayor.

34      The main statutory requirements relating to preparation of the Annual Report are outlined in the act under Part 6, Section 98 and Part 3 of Schedule 10. These sections largely require that the statements be prepared in accordance with Generally Accepted Accounting Practice (GAAP) and that certain information be disclosed in the Annual Report. Hence, the Statement of Compliance is confirming that the information that is required to be included in an Annual Report has been included and whether the report itself has been adopted within the four month timeframe and that it has been audited. The representations required in the statement do not extend to confirming, for example, that Council has met all of its statutory responsibilities during previous decision-making processes.

Financial Statements

35      These financial statements have been prepared in accordance with Tier 1 PBE accounting standards.  The accounting policies for the year ended 30 June 2020 were approved at the Finance and Assurance committee meeting in June 2020. Explanations of the variances between actual results and budgeted results for 2019/2020 year can be found in note 36 of the Annual Report.

36     A summary of key financial information is set out below.

Statement of comprehensive revenue and expense

37      The statement of revenue and expense records the revenue received and the expenditure incurred by Council. It also records changes in the value of Council’s assets.  In summary, Council’s financial performance was as follows:

 

Actual 2019/2020

Budget 2019/2020

Actual 2018/2019

Total revenue

$80.5M

$73.1M

$77.1M

Total expenditure

($80.7M)

($76.4M)

($78.5M)

Share of surplus from associates

$0.1M

-

$0.3M

Operating surplus/(deficit)

($0.2M)

($3.3M)

($1.1M)

Gains on assets at fair value

$16.4M

$30.5M

$49.9M

Total comprehensive revenue and expense

$16.2M

$27.2M

$48.8M

38      Total revenue was $7.4 million over budget primarily due to increased NZTA subsidies ($0.9 million), forestry harvesting income ($0.4 million), grants ($2.0 million), forestry revaluation ($1.9 million), vested assets ($0.7 million) and Council’s share of income from WasteNet, not budgeted for ($1.3 million).  These increases were offset by the recognition of outstanding building consent fees as deferred revenue rather than income ($0.9 million).

39      Total expenditure was $4.3 million above budget predominantly due to increased costs associated with emergency roading works as a result of the February 2020 flooding event ($1.3 million); employee-related costs ($1.0 million), primarily due to increases in building control staff to manage workflows and accreditation as well as new positions to enable Council to manage legislative changes, predominantly around water reforms; increased waste management costs ($0.4 million); increased consultants costs, the majority of which are associated with government-funded projects including Milford Opportunities and Stewart Island/Rakiura Opportunities ($2.0 million); and Council’s share of WasteNet expenditure, not budgeted for ($1.1 million).  These costs are offset by Council’s contribution to the Pyramid Bridge rebuild being lower than budgeted ($1.3 million).  As a result of the higher than anticipated infrastructure values, Council’s depreciation also increased ($0.7 million).

40      Gains on assets at fair value was $14.1 million less than budget due to the increase in the roading and three waters valuations not being as high as budgeted as a result of current market conditions (compared to market conditions at the time the budget was established).

Statement of financial position

41      The statement of financial position (also referred to as the balance sheet) records the assets Council owns, and how those assets are financed.  Total assets refers to what Council owns, for example infrastructure assets.  Total liabilities are finance from third parties, for example accounts payable.  Total equity is the net community assets (total assets less total liabilities).  Key items in the statement of financial position are:

 

Actual 2019/2020

Budget 2019/2020

Actual 2018/2019

Total assets

$1,619M

$1,598M

$1,600M

Total liabilities

$16.5M

$9.0M

$13.4M

Total equity

$1,603M

$1,589M

$1,586M

42      Total assets are over budget primarily due to cash and trade and other receivables being more than budgeted, principally as a result of the higher than budgeted cash balance as a result of additional income received, investments being converted to short term deposits and delays in capital works.

43      At 30 June 2020, Council also had $2.5 million of external borrowings.  This was a short term utilisation of Council’s overdraft facility due to operational cashflow requirements. It was repaid in full in July 2020.

Statement of cash flows 

44      The statement of cash flows records the cash that Council received and disbursed.  Broadly cash, under financial reporting rules is recorded in three separate categories:

·   operating cash flows - the cash flow related to day-to-day operating activities

·   investing cash flows - the cash flow received from sale of assets and cash spent on capital assets

·   financing cash flows - the cash flow received from any borrowings and the cash flow disbursed in repaying borrowings.

45      Overall, Council’s cash position decreased from June 2019 by $3.9 million to $11.8 million at 30 June 2020.  In summary, the cash flows recorded within these categories are as follows:

 

Operating cash flows

Actual 2019/2020

Budget 2019/2020

Actual 2018/2019

Cash surplus/(deficit)

$23.6M

$21.2M

$23.1M

 

Investing cash flows

Actual 2019/2020

Budget 2019/2020

Actual 2018/2019

Cash surplus/(deficit)

($28.3M)

($37.6M)

($20.0M)

 

Financing cash flows

Actual 2019/2020

Budget 2019/2020

Actual 2018/2019

Cash surplus/(deficit)

$0.8M

-

$1.7M

 

46      Council’s net operating cashflows were higher than budgeted predominantly due to $1.8 million more receipts from Waka Kotahi NZ Transport Agency for subsidies towards emergency works; as well as additional government grants for various projects.  Net cash outflows from investing activities were $9.3 million lower than budgeted due delayed progress on Te Anau wastewater project as well as other capital works as a result of COVID-19. 

 

Issues

47      As at the date of this report the only significant unresolved issue in relation to the Annual Report is regarding a performance measure for three waters customer complaints, specifically those received via the Palmerston North after hours call centre. This matter has been referred to Audit NZ’s technical department for consideration and the outcome is yet to be received.  An unfavourable outcome could give rise to a modification of Council’s audit opinion.  Mr Ollsson will give an update on this matter at the meeting.

48      There are also some further matters that have arisen during the audit which the committee need to be aware of.

 

Building consent liability outstanding

49      To date, Council have not recognised in its balance sheet the liability associated with building consent inspections that have not been undertaken given the difficulty in ascertaining accurate data to support a value.

50      Given the significant work that has been done in this area by the Building Solutions team in the last 12 months, staff now have more confidence in the data and the associated value that should be recognised in the balance sheet.  Based on data extracted from Council’s building control systems, it is estimated that there are approximately 3,288 consents outstanding at an estimated value of $0.9 million (GST exclusive) at 30 June 2020.

51      In the 11 September report to the committee on the draft annual report, staff advised that this liability had been recognised in the draft 2019/2020 Annual Report as a prior period error, and as a result, comparative information for the prior period (2018/2019) financial statements had been amended in the 2019/2020 Annual Report. 

52      Subsequently Audit NZ have reviewed this matter and the supporting information and have indicated that in their opinion this matter is a change in estimate rather than a prior period error.  After further investigations and discussions with Audit NZ, staff accept Audit NZ’s position and have amended the accounting treatment in the final draft Annual Report to align with Audit NZ’s expectation.  The impact of this change was to revert 2018/2019 financial results to the match the published Annual Report, consent fee revenue was reduced by $0.9 million in 2019/2020 and the balance sheet now includes deferred revenue of $0.9 million. Disclosure on this matter is included in Note 20 of the Annual Report.

 

Management report from Audit NZ

53      Due to resource constraints, Audit NZ are not in a position to provide Council with its draft management letter for consideration at this meeting.  Staff are, however aware that Audit NZ are proposing to include the following matters in their report, and that Mr Ollsson may speak to these at the meeting:

-     Accounting for outstanding building consents

-     Palmerston North call centre data capturing process

-     Infrastructure asset data quality

-     Unadjusted audit differences (regarding impairment of 15 Forth Street building and timing of recognition of grant revenue)

 

Emphasis of matter opinion

54      It should be noted that staff have been advised that Council’s audit opinion will be unqualified, however it will include an emphasis of matter paragraph in relation to the impact of Covid-19.

55      Audit NZ informed staff that the Office of the Auditor General has requested an emphasis of matter paragraph be included in all audit opinions of financial statements with a balance date of 30 June 2020.  This is to bring to the readers’ attention the uncertainties in regards to the impact of Covid-19.

 

Risks

56      There is a risk that Audit NZ may not be able to provide their audit opinion by the planned adoption date (18 November).  At this stage, Audit NZ have not indicated an issue with completing the necessary work within the required timeframe.

Factors to Consider

Legal and Statutory Requirements

57      Section 98 of the Local Government Act 2002 requires Council to adopt an Annual Report within four months of the end of the financial year. Legislation has recently been passed to extend the deadline for 30 June 2020 Council annual reports to be adopted by December 2020 rather than 31 October 2020.  This is to allow for interruptions due to the Covid-19 higher level lockdown restrictions.

58      The Act also requires that Council publishes a summary of the Annual Report within one month of the Annual Report being adopted.  Officers are currently finalising the summary document which will be released in November.

59      Part 3 of Schedule 10 also outlines a number of disclosures that are required to be included in the Annual Report.

60      Amendments to the Local Government Act 2002 provide the inclusion of wellbeing’s.  In relation to annual reporting an amendment to Schedule 10 (3, 23), - Groups of activities now includes “(d) describe any identified effects that any activity within the group of activities has had on the social, economic, environmental, or cultural well-being of the community.”  This had been reflected throughout the annual report document.

Community Views

61      The community expects Council to adopt an Annual Report in accordance with the requirements of the Local Government Act 2002.  The report is an important accountability document in terms of explaining the actual performance of the organisation relative to the objectives that were set via the Long Term Plan and Annual Plan.

62      No specific community views have been sought on the Annual Report.

63      The Annual Report and summary (once confirmed) will be made available to the public via Council’s website, by placing printed copies in libraries and service centres and having printed copies available for distribution on request.  Availability of the report will be advertised.  Printed copies of the report and summary will also be sent to those who have requested a copy.

Costs and Funding

64      The audit fee for the Annual Report is $120,124 (excluding GST) plus associated disbursements.

65      There are no additional financial considerations associated with making a decision on whether to adopt the Annual Report.

Policy Implications

66      Council’s policies relating to the basis upon which the Annual Report is prepared are outlined in the Statement of Accounting Policies contained in the report itself.

Analysis

Options Considered

67      Under the Local Government Act 2002, the Council must prepare and adopt an
Annual Report in respect of each financial year, no other options are available. 

Analysis of Options

Option 1 – Recommend adoption of the Annual Report 2019/2020, including any adjustments agreed by the committee at this meeting

Advantages

Disadvantages

·        compliance with Council’s legislative requirements and Council’s committee delegations

·        the committee has an opportunity to review the report and satisfy itself that the report is complete and that it has been prepared on an appropriate basis

·        the document provides information to the public on the performance to budget and against key performance indicators.

·        none identified.

 

Option 2 – Do not recommend adoption of the Annual Report 2019/2020, including any adjustments agreed by the committee at this meeting

Advantages

Disadvantages

·        there are no advantages of this option.

·        Council will not be compliant with the legislation if the Annual Report is not audited and adopted by Council by 31 December 2020.

 

Assessment of Significance

68      The Annual Report 2019/2020 is considered significant under Council’s Significance and Engagement Policy because the performance of Council is of wide community interest.

69      It is important to the public that Council meets both its financial and non-financial commitments to ensure it delivers its services efficiently and effectively.  To do this the public relies on the information provided in the Annual Report to give it assurance that Council is undertaking its responsibilities and how well it is performing these.

70      Along with the processes and procedures Council undertakes to track and record the information provided in the Annual Report, to ensure that the public can rely on the information provided an independent review is undertaken by auditors (Audit New Zealand).  In general, Audit New Zealand provides an opinion as to whether Council has complied with Generally Accepted Accounting Practice (GAAP) and that the Annual Report fairly reflects Council’s financial position, results of operations and cashflows, and levels of service and reasons for any variance.

Recommended Option

71      The recommended option is Option 1 – Recommend adoption of the Annual Report 2019/2020 including any adjustments agreed by the committee at this meeting.

Next Steps

72      The Annual Report will be presented to Council for adoption at its meeting on 18 November 2020.                                            

73      Once the Annual Report and summary are adopted, and the signed representation letter has been provided to Audit NZ, the final audit opinion(s) will be issued to Council.  The audit opinion will be finalised in the Annual Report and the graphically designed version of the full document and summary including an online and printed version of the Annual Report will be made available to the public in late November.

 

Attachments

a             Final Draft 2019/2020 Annual Report

b             Draft 2019/2020 Annual Report summary document    

 


Finance and Assurance Committee

10 November 2020

 


 

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Finance and Assurance Committee

10 November 2020

 

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Finance and Assurance Committee

10 November 2020

 

Analysis of Actual Results to Forecast for the year ended 30 June 2020

Record No:             R/20/8/48220

Author:                      Joanie Nel, Management Accountant

Approved by:         Anne Robson, Chief Financial Officer

 

  Decision                                        Recommendation                                  Information

 

 

 

Background

1.      The 2019/2020 annual report compares the actual results to the approved Annual Plan budget.

2.      During the year Council considered and approved changes to the 2019/2020 Annual Plan budget as part of forecasting the year-end position.

3.      This report compares the actual results of both district and local activities to the approved forecast for the financial year.

4.      The comparison is made using the same reporting layout as the annual report. This reflects Council’s groups of activities supported by the funding impact statements included in Attachment A.

Overview

5.      The headings in the funding impact statements attached relate to the following:

·    2019/2020 actual is the actual result

·    2019/2020 forecast is the 2019/2020 Annual Plan adjusted for the 2018/2019 carried forward items approved by Council on 27 September 2019 and any budget adjustments as a result of the October 2019 and March 2020 forecasting periods.

·    2019/2020 budget is the 2019/2020 Annual Plan. 

6.      The below table is a summary of the actual results compared to forecast for the year. A summary of the detail contained in the appendix is noted below in the report.

7.      The presentation of the statement of comprehensive income aligns with Council’s annual report. The annual report is based on approved accounting standards. These standards require us to eliminate internal transactions. Council is also required to report by activities. A number of Council functions relate to a number of activities, eg finance. To share these costs, an internal transaction is generated between the finance business unit and the activity business units. Whilst these internal transactions are eliminated from the below table, they are included in the information provided in paragraphs 8 to 29 of this report.

Income

8.      Overall operating income is $4,285,000 (6%) more than forecast ($80.5 million actual vs $76.2 million forecast). 

9.      Community services is $419,793 over forecast.  Council received $207,709 in the form of proceeds on the sale of abandoned land.  Council also received $68,710 from of insurance recoveries and the Stewart Island Electricity Supply Authority received $87,913 more than forecasted in income from electricity charges.

10.    District leadership came in at $3,802,669 over forecast. Forestry income exceeded projection by $198,058 at $3,122,066 versus a forecasted income of $2,924,008, with a full year volume of 28,163 tonnes. $118,513 was also received in additional emission trading units as well as $1,929,954 from the increase in the value of the forest for the year.  $300,345 was received from government grants for Milford and Stewart Island/Rakiura Opportunities projects. With a higher cash balance than expected an additional $287,489 was received from on interest on bank investments.

11.    Roads and footpath income was below forecast by $782,056 due to the timing of work, particularly capital works.  The capital works programme directly affects the level of income from NZTA.  The work programme not completed will be undertaken in 2020/2021 as part of the final year of the agreed three year work programme.

12.    Income for the solid waste activity is $148,799 ahead of forecast at year-end with increased fees received from the transfer stations and recoveries from additional wheelie bins.

13.    Wastewater income is ahead of the forecast by $1,041,994. Due to the timing of the work being completed, $1million has been received in the current financial year which had been budgeted for next year (2020/21).

14.    Water supply income is below forecast by $34,968 at year-end as a result of lower than budgeted income received from meter charges.

15.    Regulatory services income is below forecast ($771,423) largely due to a year end adjustment which resulted in $845 thousand of outstanding building consent revenue being recognised as deferred revenue on the balance sheet.  To date, Council have not recognised in its balance sheet the liability associated with building consent inspections.  This is because of the difficulty in ascertaining accurate data to support a value.  Given the significant work that has been done in this area by the Building Solutions team in the last 12 months, staff have the systems in place to establish the value that should be recognised in the balance sheet. Going forward staff will adjust the accounts through the year to reflect the movement in the liability. 

Operating expenditure

16.    Operating expenditure is $490,000 (1%) less than forecast ($80.7 million actual vs $81.2 million forecast). 

17.    Community services expenditure is $563,369 under forecasted spend. 

·     cemeteries are $86,697 under forecast due to less internments than budgeted for. Also included is and underspend in operational maintenance budgets as well as the purchase of new beams which were budgeted under operational expenditure but incurred under capital expenditure

·     community centres are $107,625 underspend due to the Clifden Hall water connection project not being completed due to a delay in the supply of materials for the project, and the Mokoreta Hall painting project not being undertaken due to on-going negotiations with the hall committee about the future of the hall

·     library services are $172,780 under forecasted spend due to Covid-19 and the closure of the Winton library

·     parks and reserves are $222,798 underspent due to the delay of a number of projects due to the Covid-19 outbreak

·     SIESA is $159,599 below forecast.  The fuel price decrease resulted in lower fuel costs. Additionally, less capital work completed than planned in previous financial years has resulted in lower depreciation charges.

·     The Te Anau Airport Manapouri is $61,606 underspent.  In review of business operations post Covid-19, a decision was made to defer the work associated with CAA compliance

·     Council facilities are overspent by $176,504.  This is mainly due to the fit out of the leased Council offices in Invercargill. Council had approved the unbudgeted expenditure after the February forecasting round and thus it had not been included in the final forecasted numbers compared to actuals for the year.

18.    District leadership expenditure is $1,121,234 lower than forecasted.  The under spend has occurred over a number of the district business units that are included in this activity and across a large number of expense codes. Items of note are:

·    Forestry is $248,107 under forecasted spend due to silviculture activities not undertaken due to Covid-19

·    Council and Councillors are $173,985 under forecasted spend with various costs being under forecast including travel, training, strategic retreat costs, youth council and general projects.  The budget for the removal of the Ouvea premix is being carried forward to the 20/21 financial year

·    Investments Operating Account – less internal interest on reserves of $209,926 was transferred to reserves.

19.    Regulatory services expenditure was $527,344 below forecast due to staff vacancies not filled during the year, and the scheduled expenditure on regional planning projects in the areas of landscapes, climate change and biodiversity being deferred. Within building regulation demolition costs, legal costs, software and motor vehicle lease costs have been underspent.

20.    Roading and footpath expenditure was $585,995 over forecast due to costs associated with the emergency repairs as a result of the February flooding.

21.    Solid waste is over forecast by $60,245 largely due to increased costs associated with wheelie bins supplied.

22.    Wastewater costs are $79,509 more than forecast due to the acceptance of a variation claim submitted by Downer and unplanned maintenance expense relating to two significant repairs at the Te Anau rising main and vegetation clearance costs at Monowai.

23.    Water supply is over forecast by $257,750 with maintenance costs in district water being overspent following acceptance of a variation request and additional costs associated with maintaining a water supply to Curio Bay.


 

Capital expenditure

24.    Capital expenditure is $4,004,000 (12%) less than forecast ($28.4 million actual v $32.4 million forecast).

 

25.    Community services is $135,942 lower than forecast due to the following:

·    Library services are $62,662 under forecasted spend due to Covid-19.

·    water structures are underspent by $98,472 due to the projected amount of $100,000 for the replacement of the Ulva Island wharf being deferred to 2020/21.

·    public conveniences are $280,971 underspent due to the following projects not being undertaken.  These have been forward to the 2020/21 financial year:

-      the disposal field project at Athol, due to a temporary alternative solution found

-      the Monkey Island project has been delayed whilst awaiting finalisation of the land exchange for the project

-      the Wyndham toilet project not commencing due to the delays caused by Covid-19

·    parks and reserves is over forecast due to the land acquisition at Curio Bay ($324,476).

26.    District leadership capital expenditure is $798,525 over forecast.   

·    district support is $175,769 below forecast due to unspent budget for vehicles renewals for the Water services department and unspent budget for sealed roads in the Mararoa Waimea ward area

·    information management is $527,879 under forecasted spend due to the delay of the hardware renewal program due to the disruption caused by Covid-19 as well as the core systems project being carried forward to the 2020/21 financial year

·    the forestry revaluation was forecasted as a negative in capital expenditure in the forestry business unit, whereas the actual revaluation accounted for directly in the balance sheet, resulting in a misrepresentation in the graph above.

27.    Overall roading and footpath capital expenditure is $1,993,211 less than forecasted at the end of June due to the following:

·     Around the Mountains Cycle Trail – underspend of $211,235 relates to the various works that are still to be undertaken to bring the trail up to NZ Cycle Trail standard.  The remaining budget has been carried forward to the 2020/2021 financial year as the work has been deferred until the remedial work associated with the February flooding event has been completed

·     roading district wide is $1,278,711 below forecast. Work (and NZTA funding) not completed this year will be transferred through to the third year of the NZTA funding cycle.  Items of interest are bridges and reseals, with work already programmed or in completion

·     bridge renewal including structures component is $551,000 behind on forecast, though not as far behind as initially expected following the delay of the start of construction due to Covid-19.

28.    Water supply is $2,883,216 less than forecast.  No work has commenced on the Te Anau Watermain project.  All uncompleted works are included in the budgets carried forward to 2020/21.

Projects

29.    The following table and graphs are based on the actual spend on projects for the year and their status as of 30 June 2020 and does not include the roading department. 

30.    Specific details of the projects in progress, not started and deferred are included in the “Projects from 2019/2020 to be carried forward into the 2020/2021 financial year” report presented to Council on 21 October 2020.

31.    The graphs below show graphically the actual project spend for the year-ended 30 June 2020 compared to the forecast spend by activity.  The attached funding impact statements commentary explains the variances.

32.    There are a number of projects that have been split as part of the February forecasting round to occur over multiple years and are thus reflected in the number of projects with the status “in progress”.

33.    The total actual spend for all projects was $12.4 million against a forecast budget of $19.2 million.

   

34.    District leadership projects include the following projects to be carried forward to the 2020/2021 financial year:  $316,430 for the core systems review project, $155,570 for the computer equipment renewal project and $29,659 for the upgrades to the phone system.

 

Statement of comprehensive income

35.    The actual versus forecast comparative statement of comprehensive income for the year-ending 30 June 2020 is detailed below:

 

 

Recommendation

That the Finance and Assurance Committee:

a)            receives the report titled “Analysis of Actual Results to Forecast for the year ended 30 June 2020” dated 5 November 2020.

 

Attachments

There are no attachments for this report.  

 


Finance and Assurance Committee

10 November 2020

 

Overall programme for 2020/2021 including projects carried forward 2019/2020

Record No:             R/20/11/64324

Author:                      Susan McNamara, Management Accountant

Approved by:         Anne Robson, Chief Financial Officer

 

  Decision                                        Recommendation                                  Information

 

 

 

Purpose

1        To inform the Committee of the overall programme for the 2020/2021 financial year. This includes a comparison to the two prior financial years.

 

Content

2        Every year as part of the Annual Report processes staff are provided with an opportunity to carry forward work not completed or started into the new financial year. Any work carried forward is added to the items planned in the Long Term Plan/Annual Plan (LTP/AP) to form the work program for the next year.

3        Items to be carried forward from 2019/2020 to 2020/2021 were approved by Council on 21 October 2020. The full list can be found in Attachment A.

4        There were 96 items, totalling $9,077,044 approved by Council to be carried forward. This includes operational items and motor vehicles.

5        A comparison to the two previous years is shown in the table below:

Year

Number of carry forwards

Value of carry forwards

2019/2020 to 2020/2021

96

$9,077,044

2018/2019 to 2019/2020

87

$2,861,114

2017/2018 to 2018/2019

58

$7,078,304

 

6        The carry forward from 2019/2020 to 2020/2021 includes 29 items for roading totalling $2,541,331. For Te Anau wastewater there is one item totalling $1,565,490. There is also one water pipeline renewal for $946,674. This represents $5,053,495 or 55.67% of the total amount approved to be carried forward. This compares to nine items for roading and Te Anau wastewater totalling $1,012,226 or 35.38% of the items approved to be carried forward from 2018/2019 to 2019/2020.

7        Negative carry forwards are used to ensure that the original project budgets are maintained. In 2019/2020 there were $23,146 negative carry forwards approved compared to $832,956 in2018/2019.


 

8        A breakdown, by activity, is shown in the graph below of the total number of items carried forward combined with projects in the published LTP/AP document. To avoid any projects being counted twice, where there was an existing budget in the relevant LTP/AP the carry forward is counted as part of the LTP/AP.


 

9        The dollar value of the projects in the LTP/AP combined with the amounts carried forward is shown below:

10      As there is a significant amount of capital expenditure that is not included in the LTP/AP as a project the graph above does not reflect the entire work programme each year. Capital expenditure not included as a project is the majority of the roading programme, library books, and furniture and fittings.


 

11      The programme of capital expenditure and all projects (some of which are classified as operational expenditure) is shown below. This is a combination of the Annual Plan and the carry forwards, but does not include any unbudgeted expenditure that has been approved for the year.

12      The budgeted programme shown above and the actual result for the year is:

Year

Budgeted program

Actual capital expenditure

2020/2021

$48,278,337

 

2019/2020

$40,038,474

$27,523,833

2018/2019

$36,606,298

$23,399,554

 

13      As it is year three of the funding cycle from Waka Kotahi NZTA, roading are expecting to complete all work subject to Waka Kotahi NZTA funding. Te Anau wastewater construction is also expected to be completed this year.

14      There are several factors that are important to consider in relation to the works programme:

·    The flooding events and inclement weather in February 2020 impacted the works programme in the 19/20 financial year;

·    Covid-19 similarly impacted progress on the capital works programme through what is traditionally the construction season;

·    The SDC committed works programme is ramping up in terms of scale and the team is still coming to terms with resource capacity (internal/external), and scale of commitment;

·    The way in which projects are delivered is seeing significant improvement with greater clarity around project scope, information and workflow tracking. In year 3 of the 2018 LTP, we are on the tail-end of legacy projects subject to delays due to scoping and approvals;

·    There is work to be done to improve the way we track and forecast multi-year projects, particularly in relation to a tightening regulatory and consenting framework in some areas of delivery;

·    As we progress through the first three years of the LTP the carry forwards compound delivery commitments in the respective year; and

·    The growing works programme and three waters stimulus funding will pose significant challenges for the industry on top of ‘business as usual’ commitments

15      There is currently no allowance included in the work programme for 2020/2021 for the three water reform stimulus package. At the time of writing this report Council was still waiting on final approval from the Department of Internal Affairs for the proposed package of work.

16      Council staff will have the opportunity through forecasting in February to make adjustment to work that is not expected to be completed. The three waters team have already identified projects in the Annual Plan totalling $2,583,493 that will not occur in the current year. $2,429,680 relates to three multi-year projects where the costs have been reallocated into the Long Term Plan 2021-31 to better reflect the timing of when costs are expected to occur in the project cycle.

 

 

Recommendation

That the Finance and Assurance Committee:

a)            Receives the report titled “Overall programme for 2020/2021 including projects carried forward 2019/2020” dated 5 November 2020.

 

 

Attachments

a             2019 2020 carried forward into 2019 2020    

 


Finance and Assurance Committee

10 November 2020

 

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Finance and Assurance Committee

10 November 2020

 

Monthly Financial Report - September 2020

Record No:             R/20/11/64798

Author:                      Lesley Smith, Management Accountant

Approved by:         Anne Robson, Chief Financial Officer

 

  Decision                                        Recommendation                                  Information

 

 

 

Summary

1.       The purpose of this report is to provide Council with an overview of the financial results to date by the nine activity groups of Council, as well as the financial position, and the statement of cash flows.

2.       This report summaries Council financial results for the three months to 30 September 2020.

 

Recommendation

That the Finance and Assurance Committee:

a)            Receives the report titled “Monthly Financial Report - September 2020” dated 5 November 2020.

 

Attachments

a             Monthly Financial Report September 2020    

 


Finance and Assurance Committee

10 November 2020

 

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Finance and Assurance Committee

10 November 2020

 

Finance Transactional Update as at 30 June 2020

Record No:             R/20/8/47674

Author:                      Shelley Dela Llana, Accountant

Approved by:         Anne Robson, Chief Financial Officer

 

  Decision                                        Recommendation                                  Information

 

 

 

Overview

1       This report provides a summary of the activities of the finance transactional team during the financial year to 30 June 2020.

2       Going forward the Finance team will provide the committee with an annual update on the status of the outstanding balances of each revenue stream and details of any system improvements planned or occurring.

3       Council’s balances as at 30 June 2020 (sundry debt includes building consent, licencing fees, rentals etc) are noted below along with the comparative year. All figures included in this report are GST inclusive and include any credit balances.

 

30 June 2019

30 June 2020

Variance

 

$

No’s

$

No’s

$

No’s

Rates

$1,437,349

2,768

$1,566,207

3,254

$128,858

18%

Water charges^

$91,853

159

$22,139

33

-$69,714

-79%

SIESA Electricity

$123,644

434

$132,530

403

$8,886

-7%

Sundry

$1,156,860

538

$922,712*

476

-$234,148

-12%

Total

$2,809,706

3,899

$2,643,588

4,166

-$166,118

7%

* This excludes $5,433,750 invoiced to Ministry of Innovation & Employment invoiced on 30 June 2020

^ Water has decreased due to the realignment of invoicing to rate payment dates.

4        Further analysis of each of these outstanding debt types is outlined below.

Rates

5        The rates amount at the 30 June 2020 of $1,566,207 (2019:$1,437,349) is the net amount owing.  The gross amount is $2,354,728, (2019: $2,189,494) after adding back revenue received in advance of $788,521 (2019:$752,145). We have written to customers whose credit exceeds the total amount of rates owing this financial year, to refund their credit or adjust their automatic payments.

 

Of the $2,354,728 outstanding, $886,080 relates to previous financial years debt. An analysis of the status of the debt is shown in the graph below.

 

6        Abandoned land: Land can only be deemed abandoned after 3 years of no payment, and the ratepayer can’t be found or the ratepayers has given us notice to abandon.

7        During the year, 11 properties went through the abandoned land process and were sold. Not all rates are recovered during this process. A substantial amount of work goes into identifying the whereabouts of these ratepayers including electoral roll review, online searches, contacting neighbours etc, with no success. We have refined the process with the property department and will continue to progress abandoned land in a timely manner

8        Rates rebates: The number of properties obtaining the rates rebate has remained steady as noted below, the maximum of the rates rebate has increased to $655 and the thresholds of income/rates have also adjusted. Changes to legislation mean the rebate forms will no longer need to be witnessed and new forms will come out soon. This should encourage more people to fill in the forms and post rather than come in to get it witnessed. Finance Officers are also working towards a promotion of the scheme for the start of 2021.  Currently officers are working with community groups to identify the best places and times to go out to communities.  We will advise councillors when we are in your areas.

 

Years

17/18

18/19

19/20

Amount Outstanding

604

646

627

 

9        Emailing rates: The number of ratepayers on email is 20% (3,421) with only a third of our overseas ratepayers on posted invoices. Each year we have been contacting these ratepayers via email to promote this service, for a faster invoice delivery for the customer and a reduced cost to Council. We are still continuing to promote direct debit and email with a $500 prezzy card and we get about 150 responses each August

10      Direct debit: We continue to actively promote direct debit as the preferred form of payment for our ratepayers.  The staff and ratepayer time it saves from ensuring the payments go to the correct place from the start is considerable.  Currently we have 37% on direct debit. A survey of 24 Councils in 2018 showed an average of 40% of ratepayers are on direct debit (ranging from 25% - 55%). To further improve our uptake, last year we started sending a welcome to the district letter with rating information and a direct debit form on the purchase of a property, this has definitely been well received.

11      Solicitors portal: A major milestone this year was getting a shared solicitors portal with Environment Southland working. For every sale in the district a solicitor does an enquiry to Council to see how much rates is outstanding, this was a manual process that involves a review of the property, compilation of a report and email response to the solicitor. As a result of introducing this, officers are now able to spend more time looking for further system improvements and it has given solicitors a better quality service for any time of the day or night, especially when they can access Environment Southland rates information as well. ICC and GDC have been approached by Environment Southland to see if they would be keen to join as well.

Water charges

12     Water charges outstanding at 30 June 2020 are summarised in the table below:

Last instalment (April 2020)

Older debt

Total

Amount outstanding

$6,307

$15,832

$22,139

Number of debtors

33

10

33

13    Water invoicing occurs quarterly and has now been realigned with rates due dates so invoices go out July, October, January and April. After each instalment a 10% penalty goes on the outstanding instalment and we also send out a reminder letter after each penalty is applied to follow up payments. In July 2021 a second arrears penalty of 10% on total outstanding will go on for the first time. At the end of the financial year water rates arrears will be progressed through debt recovery processes exactly like rates.

14    In 2018 we started offering direct debit and emailing of invoices and 38% of customers are now receiving there notices via email and 22% are on direct debit.

15    Electricity charges (SIESA)

16      Electricity charges outstanding at 30 June 2020 are summarised in the table below:

 

June-current

May

April

March

Feb and earlier

Total

Amount outstanding

$112,255

$18,235

$3,007

$286

-$1,253

$132,530

Number of debtors

388

57

14

5

6

403

17      Council staff are following policy and actioning disconnection notices to arrears older than 60 days. No disconnections have been required in the last financial year as most customers pay up on notice. The debt currently relating to March and most of April is one consumer with multiple properties having allocation and payment issues that are currently being worked on.

18      Emailing invoices for electricity is at 44% and 35% of customers are on direct debit.

Sundry debt

19     Sundry debt outstanding at 30 June 2020 is summarised in the table below:

June-current

May

April

March

Feb

Jan and earlier

TOTAL

Amount Outstanding

$268,913

$67,065

$542,229

$29,649

$6,201

$8,655

$922,712

Number of Debtors

210

71

18

3

16

30

476

 

The debt also includes $91thousand of credit balances that also get followed up each month to allocate or refund.

20      We are actively progressing debt collection and resolving outstanding issues.

21      A project we are currently undertaking is the ability to email invoices/statements and thanks to the Council Information Technology team it is progressing well.

 

 

Recommendation

That the Finance and Assurance Committee:

a)            receives the report titled “Finance Transactional Update as at 30 June 2020” dated 5 November 2020.

 

 

Attachments

There are no attachments for this report.  

 


Finance and Assurance Committee

10 November 2020

 

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   Milford Opportunities contract update - 2

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

Milford Opportunities contract update - 2

s7(2)(b)(ii) - The withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information.

 

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.