Audit and Risk Management Committee

Agenda

 

 

Notice of Meeting:

An ordinary meeting of the Audit and Risk Management Committee will be held on:

 

Date:                                     Wednesday 7 December 2016

Time:                                    1pm

Venue:                                 Committee Room 1, Level 2, Civic Offices,
53 Hereford Street, Christchurch

 

 

Membership

Chairperson

Deputy Chairperson

Members

Chair Sue Sheldon

Raf Manji

Mayor Lianne Dalziel

Councillor Vicki Buck

Councillor Jamie Gough

Councillor Jimmy Chen

Councillor David East

Mr Mark Russell

Mr Michael Rondel

 

 

2 December 2016

 

 

 

Principal Advisor

Peter  Gudsell

General Manager Finance and Commercial

Tel: 941 8528

 

Margaret Henderson

Committee Advisor

941 8185

margaret.henderson@ccc.govt.nz

www.ccc.govt.nz

Note:  The reports contained within this agenda are for consideration and should not be construed as Council policy unless and until adopted.  If you require further information relating to any reports, please contact the person named on the report.
To view copies of Agendas and Minutes, visit:
www.ccc.govt.nz/Council/meetingminutes/agendas/index

 


Audit and Risk Management Committee

07 December 2016

 

Audit and Risk Management Committee - Terms of Reference

 

Membership:

Six Councillors and three Independent members.

Council members are to include The Mayor and The Chair of the Finance Committee.

The Committee is to be chaired by one of the independent members.

Chair:

Sue Sheldon

Membership:

Cr Manji (Deputy Chair), The Mayor, Cr Buck, Cr Chen, Cr East, Cr Gough, Messrs Russell and Rondel

Quorum:

Half of the members if the number of members (including vacancies) is even, or a majority of members if the number of members (including vacancies) is odd.

Meeting Cycle:

Meetings will be held at least quarterly

Reports To:

Council

 

1.      Purpose and Role

1.1.    To assist the Council to discharge its responsibility to exercise due care, diligence and skill in relation to the oversight of:

o     the robustness of the internal control framework;

o     the integrity and appropriateness of external reporting, and accountability arrangements within the organisation for these functions;

o     the robustness of risk management systems, process and practices;

o     internal and external audit;

o     accounting policy and practice;

o     compliance with applicable laws, regulations, standards and best practice guidelines for public entities; and

o     the establishment and maintenance of controls to safeguard the Council’s financial and non-financial assets.

1.2.    The foundations on which this Committee operates, and as reflected in this Terms of Reference, includes: independence; clarity of purpose; competence; and open and effective relationships.

 

2.      Procedure

2.1.    In order to give effect to its advice the Committee should make recommendations to the Council and to Management.

2.2.    The Committee should meet the internal and the external auditors without Management present as a standing agenda item at each meeting where external reporting is approved, and at other meetings if requested by any of the parties.

2.3.    The external auditors, the internal audit manager and the co-sourced internal audit firm should meet outside of formal meetings as appropriate with the Committee Chair.

2.4.    The Committee Chair will meet with relevant members of Management before each Committee meeting and at other times as required.

 

3.      Responsibilities

3.1.    Internal Control Framework

o     Consider the adequacy and effectiveness of internal controls and the internal control framework.

o     Enquire as to the steps management has taken to embed a culture that is committed to probity and ethical behaviour.

o     Review the processes or systems in place to capture and effectively investigate fraud or material litigation should it be required.

o     Seek confirmation annually and as necessary from internal and external auditors, attending Councillors, and management, regarding the completeness, quality and appropriateness of financial and operational information that is provided to the Council.

3.2.    Risk Management

o     Review and consider Management’s risk management framework in line with Council’s risk appetite, which includes policies and procedures to effectively identify, treat and monitor significant risks, and regular reporting to the Council.

o     Assist the Council to determine its appetite for risk.

o     Review the principal risks that are determined by Council and Management, and consider whether appropriate action is being taken by management to treat Council’s significant risks. Assess the effectiveness of, and monitor compliance with, the risk management framework.

o     Consider emerging significant risks and report these to Council where appropriate.

3.3.    Internal Audit

o     Review and approve the annual internal audit plan, such plan to be based on the Council’s risk framework. Monitor performance against the plan at each regular quarterly meeting.

o     Monitor all internal audit reports and the adequacy of management’s response to internal audit recommendations.

o     Review six monthly fraud reporting and confirm fraud issues are disclosed to the external auditor.

 

o     Provide a functional reporting line for internal audit and ensure objectivity of internal audit.

o     Oversee and monitor the performance and independence of internal auditors, both internal and co-sourced. Review the range of services provided by the co-sourced partner and make recommendations to Council regarding the conduct of the internal audit function.

3.4.    External Reporting and Accountability

o     Consider the appropriateness of the Council’s existing accounting policies and practices and approve any changes as appropriate.

o     Contribute to improve the quality, credibility and objectivity of the accounting processes, including financial reporting.

o     Consider and review the draft annual financial statements and any other financial reports that are to be publicly released, make recommendations to Management.

o     Consider the underlying quality of the external financial reporting, changes in accounting policy and practice, any significant accounting estimates and judgments, accounting implications of new and significant transactions, management practices and any significant disagreements between Management and the external auditors, the propriety of any related party transactions and compliance with applicable New Zealand and international accounting standards and legislative requirements.

o     Consider whether the external reporting is consistent with Committee members’ information and knowledge and whether it is adequate for stakeholder needs.

o     Recommend to Council the adoption of the Financial Statements and Reports and the Statement of Service Performance and the signing of the Letter of Representation to the Auditors by the Mayor and the Chief Executive.

o     Enquire of external auditors for any information that affects the quality and clarity of the Council’s financial statements, and assess whether appropriate action has been taken by management.

o     Request visibility of  appropriate management signoff on the financial reporting and on the adequacy of the systems of internal control; including certification from the Chief Executive, the Chief Financial Officer and the General Manager Corporate Services that risk management and internal control systems are operating effectively;

o     Consider and review the Long Term and Annual Plans before adoption by the Council.  Apply similar levels of enquiry, consideration, review and management sign off as are required above for external financial reporting.

o     Review and consider the Summary Financial Statements for consistency with the Annual Report.

3.5.    External Audit

o     Annually review the independence and confirm the terms of the audit engagement with the external auditor appointed by the Office of the Auditor General. Including the adequacy of the nature and scope of the audit, and the timetable and fees.

o     Review all external audit reporting, discuss with the auditors and review action to be taken by management on significant issues and recommendations and report to Council as appropriate.

o     The external audit reporting should describe: Council’s internal control procedures relating to external financial reporting, findings from the most recent external audit and any steps taken to deal with such findings, all relationships between the Council and the external auditor, Critical accounting policies used by Council, alternative treatments of financial information within Generally Accepted Accounting Practice that have been discussed with Management, the ramifications of these treatments and the treatment preferred by the external auditor.

o     Ensure that the lead audit engagement and concurring audit directors are rotated in accordance with best practice and NZ Auditing Standards.

3.6.    Compliance with Legislation, Standards and Best Practice Guidelines

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

 


Audit and Risk Management Committee

07 December 2016

 

Part A        Matters Requiring a Council Decision

Part B         Reports for Information

Part C         Decisions Under Delegation

 

 

TABLE OF CONTENTS

 

C       1.       Apologies.......................................................................................................................... 6

B       2.       Declarations of Interest................................................................................................... 6

C       3.       Confirmation of Previous Minutes................................................................................. 6

B       4.       Deputations by Appointment........................................................................................ 6

B       5.       Presentation of Petitions................................................................................................ 6   

 

 


Audit and Risk Management Committee

07 December 2016

 

 

1.   Apologies

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

2.   Declarations of Interest

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

3.   Confirmation of Previous Minutes

That the minutes of the Audit and Risk Management Committee meeting held on Tuesday, 27 September 2016 be confirmed (refer page 7).

4.   Deputations by Appointment

There were no deputations by appointment at the time the agenda was prepared. 

5.   Presentation of Petitions

There were no petitions received at the time the agenda was prepared.  


Audit and Risk Management Committee

07 December 2016

 

 

 

Audit and Risk Management Committee

Open Minutes

 

 

Date:                                     Tuesday 27 September 2016

Time:                                    8.00am

Venue:                                 Committee Room 1, Level 2, Civic Offices,
53 Hereford Street, Christchurch

 

 

Present

Chair

Members

Ms Sue Sheldon

Mayor Lianne Dalziel

Deputy Mayor Vicki Buck

Councillor Jimmy Chen

Councillor David East

Mr Mark Russell

Mr Michael Rondel

 

 

26 September 2016

 

 

 

Principal Advisor

Diane Brandish

Head of Finance

Tel: 941 8454

 

Margaret Henderson

Committee Advisor

941 8185

margaret.henderson@ccc.govt.nz

www.ccc.govt.nz

To view copies of Agendas and Minutes, visit:
www.ccc.govt.nz/Council/meetingminutes/agendas/index

 


Part A        Matters Requiring a Council Decision

Part B         Reports for Information

Part C         Decisions Under Delegation

 

 

 

The agenda was dealt with in the following order.

 

1.   Apologies

 

Committee Resolved ARCM/2016/00019

It was resolved on the motion of Chair Sheldon, seconded by Councillor East that the apologies for absence from Councillors Manji and Gough and the apology for lateness from Deputy Mayor Buck, be accepted.

 

Mayor/Councillor East                                                                                                                                               Carried

 

The Committee noted that the Council’s Chief Executive and General Manager Finance and Commercial (via telephone) were in attendance.

 

2.   Declarations of Interest

Part B

There were no declarations of interest recorded.

 

3.   Confirmation of Previous Minutes

Part C

Committee Resolved ARCM/2016/00020

Committee Decision

That the minutes of the Audit and Risk Management Committee meeting held on Tuesday, 13 September 2016 be confirmed.

Mr Russell/Councillor East                                                                                                                                       Carried

 

4.   Deputations by Appointment

Part B

There were no deputations by appointment.

 

5.   Presentation of Petitions

Part B

There was no presentation of petitions.

 

6     Resolution to Exclude the Public

 

Committee Resolved ARCM/2016/00021

Part C

That at 8.06 am the resolution to exclude the public set out on pages 10 to 11 of the agenda be adopted.

That Julian Tan and Andrew Timlin of Audit New Zealand and David Seath of Deloitte  remain after the public have been excluded for Items 8 and 9 of the public excluded agenda as they have knowledge that is relevant to that item and will assist the Committee.

 

Chair Sheldon/Mayor                                                                                                                                                  Carried

 

The public were re-admitted to the meeting at 9.34 am.

The Mayor thanked the Chair Sue Sheldon and independent members Mike Rondel and Mark Russell for their work and support on the Committee.

   

Meeting concluded at 9.36 am.

 

 

Confirmed by the Chairperson of the Committee and the Principal Advisor pursuant to Standing Order 3.18.2

 

 

CONFIRMED THIS 29TH DAY OF SEPTEMBER 2016

 

Sue Sheldon

Chair

 

 

 

Diane Brandish

Principal Advisor