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 28 August 2019

Time:                                   9am

Venue:                                 Council Chambers, Level 2, Civic Offices,
53 Hereford Street, Christchurch

 

 

Membership

Chairperson

Deputy Chairperson

Members

Ms Kim Wallace

Councillor Raf Manji

Councillor Vicki Buck

Councillor Phil Clearwater

Councillor Pauline Cotter

Mayor Lianne Dalziel

Councillor David East

Deputy Mayor Andrew Turner

Mr Mark Russell

Mr Michael Rondel

 

 

21 August 2019

 

 

 

Principal Advisor

Carol Bellette

General Manager Finance and Commercial

 

Mark Saunders

Committee and Hearings Advisor

941 6436

mark.saunders@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:
https://www.ccc.govt.nz/the-council/meetings-agendas-and-minutes/

 


Audit and Risk Management Committee

28 August 2019

 


Audit and Risk Management Committee - Terms of Reference

 

Chair

Kim Wallace (Independent)

Deputy Chair

Councillor Manji as the Chair of the Finance and Performance Committee

Membership

Mayor Dalziel and Deputy Mayor Turner

The Chair of the following committees:

·           Innovation and Sustainable Development Committee

·           Social and Community Development Committee

·           Infrastructure, Transport and Environment Committee

·           Regulatory Performance Committee

2 External Members

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

To be separately considered

Reports To

Council

 

Purpose

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

·           the robustness of the internal control framework;

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

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

·           internal and external audit;

·           accounting policy and practice;

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

·           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; open and effective relationships and no surprises approach.

 

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.

 

Responsibilities

3.1        Internal Control Framework

·           Consider the adequacy and effectiveness of internal controls and the internal control framework including overseeing privacy and cyber security.

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

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

·           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

·           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.

·           Assist the Council to determine its appetite for risk.

·           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.

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

 

3.3        Internal Audit

·           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.

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

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

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

·           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.

·           Monitor compliance with the delegations policy.

 

3.4        External Reporting and Accountability

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

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

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

·         Consider the underlying quality of the external financial reporting, changes in accounting policy and practice, any significant accounting estimates and judgements, 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.

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

·         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.

·         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.

·         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;

·         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.

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

 

3.5        External Audit

·           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.

·           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.

·           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.

·           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

·           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.

 

3.7        Appointment of Independent Members

·           Identify skills required for Independent Members of the Audit and Risk Management Committee.  Appointment panels will include the Mayor or Deputy Mayor, Chair of Finance & Performance Committee and Chair of Audit & Risk Management Committee. Council approval is required for all Independent Member appointments.

·           The term of the Independent members should be for three years.  (It is recommended that the term for independent members begins on 1 April following the Triennial elections and ends 31 March three years later.  Note the term being from April to March provides continuity for the committee over the initial months of a new Council.)

·           Independent members are eligible for re-appointment to a maximum of two terms. By exception the Council may approve a third term to ensure continuity of knowledge.

 

Long Term Plan Activities

4.1             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.

 

 

 


Audit and Risk Management Committee

28 August 2019

 

Part A           Matters Requiring a Council Decision

Part B           Reports for Information

Part C           Decisions Under Delegation

 

 

TABLE OF CONTENTS

 

C          1.        Apologies................................................................................................. 8

B         2.        Declarations of Interest.............................................................................. 8

C          3.        Confirmation of Previous Minutes................................................................. 8

B         4.        Public Forum............................................................................................ 8

B         5.        Deputations by Appointment....................................................................... 8

B         6.        Presentation of Petitions............................................................................ 8

B         7.        Committee-Only Time with Auditors for Public Excluded Items......................... 8 

C          8.        Resolution to Exclude the Public................................................................ 13  

 

 


Audit and Risk Management Committee

28 August 2019

 

 

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 and 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, 18 June 2019  be confirmed (refer page 9).

4.   Public Forum

A period of up to 30 minutes may be available for people to speak for up to five minutes on any issue that is not the subject of a separate hearings process.

5.   Deputations by Appointment

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

6.   Petitions

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

7.   Committee-Only Time with Auditors for Public Excluded Items

The Committee is reminded that under its Terms of Reference, it should meet with the internal and the external auditors without Management present at each meeting where external reporting is approved, and at other meetings if requested by any of the parties.

 

Any Committee-only time with the auditors within the proceedings of the meeting will be held as part of the consideration of a public excluded item. The public will be excluded from this time for the reason set out in the below resolution to exclude the public relating to the relevant item.


Audit and Risk Management Committee

28 August 2019

Unconfirmed

 

 

Audit and Risk Management Committee

Open Minutes

 

 

Date:                                    Tuesday 18 June 2019

Time:                                   1:05pm

Venue:                                 Council Chambers, Level 2, Civic Offices,
53 Hereford Street, Christchurch

 

 

Present

Chairperson

Deputy Chairperson

Members

Ms Kim Wallace

Councillor Raf Manji

Councillor Vicki Buck

Councillor Phil Clearwater

Councillor Pauline Cotter

Mayor Lianne Dalziel

Mr Mark Russell

Mr Michael Rondel

 

 

18 June 2019

 

 

 

Principal Advisor

Carol Bellette

General Manager Finance and Commercial

 

Mark Saunders

Committee and Hearings Advisor

941 6436

mark.saunders@ccc.govt.nz

www.ccc.govt.nz

To view copies of Agendas and Minutes, visit:
www.ccc.govt.nz/the-council/meetings-agendas-and-minutes/

 


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

Part C

Committee Resolved ARCM/2019/00026

That the apologies from Councillor East and Deputy Mayor Turner be accepted.

Councillor Clearwater/Mayor                                                                                                                             Carried

 

2.   Declarations of Interest

Part B

There were no declarations of interest recorded.

 

3.   Confirmation of Previous Minutes

Part C

Committee Resolved ARCM/2019/00027

That the minutes of the Audit and Risk Management Committee meeting held on Thursday, 30 May 2019 be confirmed.

Mr Rondel/Ms Wallace                                                                                                                                            Carried

 

4.   Public Forum

Part B

There were no public forum presentations.

5.   Deputations by Appointment

Part B

There were no deputations by appointment.

6.   Presentation of Petitions

Part B

There was no presentation of petitions.

 

7.   Committee-Only Time with Auditors for Public Excluded Items

Part B

It was noted that under its Terms of Reference, the Committee should meet with the internal and the external auditors without Management present at each meeting where external reporting is approved, and at other meetings if requested by any of the parties. This Committee-only time with the auditors to be part of the consideration of a relevant item on the public excluded agenda and requested during the consideration of the item.

 

 

8.   Updated Risk Management Policy

 

 

 

Committee Resolved ARCM/2019/00028 (Original Staff Recommendations Accepted without Change)

Part C

That the Audit and Risk Management Committee:

1.         Endorses the updated draft Risk Management Policy.

Deputy Chair Manji/Ms Wallace                                                                                                                         Carried

 

Committee Decided ARCM/2019/00029 (Original Staff Recommendations Accepted without Change)

Part A

That the Audit and Risk Management Committee recommends that the Council:

1.         Approves the updated draft Risk Management Policy.

2.         Requests that a joint briefing with elected members and executive management is scheduled after the 2019 elections to discuss the refreshed expectations set within this policy.

Deputy Chair Manji/Ms Wallace                                                                                                                         Carried

 

9.   Report Back on Weather Tightness

 

 

 

Committee Resolved ARCM/2019/00030 (Original Staff Recommendations Accepted without Change)

Part C

That the Audit and Risk Management Committee:

1.         Receive this report on future claims under the Weathertight Home Resolution Service Act.

Ms Wallace/Mr Rondel                                                                                                                                            Carried

 

 

 

10  Resolution to Exclude the Public

 

Committee Resolved ARCM/2019/00031

Part C

That at 1:35pm the resolution to exclude the public set out on pages 35 to 36 of the agenda be adopted.

Ms Wallace/Mr Rondel                                                                                                                                              Carried

 

The public were re-admitted to the meeting at 1:52pm.

 

   

Meeting concluded at 1:53pm.

 

CONFIRMED THIS 28th DAY OF AUGUST 2019

 

Kim Wallace

Chairperson

 

 


Audit and Risk Management Committee

28 August 2019

 

 

8.      Resolution to Exclude the Public

Section 48, Local Government Official Information and Meetings Act 1987.

 

I move that the public be excluded from the following parts of the proceedings of this meeting, namely items listed overleaf.

 

Reason for passing this resolution: good reason to withhold exists under section 7.

Specific grounds under section 48(1) for the passing of this resolution: Section 48(1)(a)

 

Note

 

Section 48(4) of the Local Government Official Information and Meetings Act 1987 provides as follows:

 

“(4)     Every resolution to exclude the public shall be put at a time when the meeting is open to the public, and the text of that resolution (or copies thereof):

 

             (a)       Shall be available to any member of the public who is present; and

             (b)       Shall form part of the minutes of the local authority.”

 

This resolution is made in reliance on Section 48(1)(a) of the Local Government Official Information and Meetings Act 1987 and the particular interest or interests protected by Section 6 or Section 7 of that Act which would be prejudiced by the holding of the whole or relevant part of the proceedings of the meeting in public are as follows:


Audit and Risk Management Committee

28 August 2019

 

 

 

ITEM NO.

GENERAL SUBJECT OF EACH MATTER TO BE CONSIDERED

SECTION

SUBCLAUSE AND REASON UNDER THE ACT

PLAIN ENGLISH REASON

WHEN REPORTS CAN BE RELEASED

9

Public Excluded Audit and Risk Management Committee Minutes - 18 June 2019

 

 

Refer to the previous public excluded reason in the agendas for these meetings.

 

10

Internal Audit Status Report

s7(2)(e), s7(2)(f)(ii), s7(2)(j)

Prevention of Material Loss, Protection from Improper Pressure or Harassment, Prevention of Improper Advantage

Prevent the use of Internal Audit findings and identified control weaknesses from being used for improper advantage.

When the Chief Executive determines there are no longer any reasons to withhold the information under the Act and the relevant Internal Audit findings have been resolved.

11

Risk Management Status Report

s7(2)(c)(ii), s7(2)(f)(ii)

Prevent Damage to the Public Interest, Protection from Improper Pressure or Harassment

Prevent the improper use and misinterpretation of information

When the Chief Executive determines there are no longer any reasons to withhold the information under the Act.

12

Fraud Status Report

s7(2)(f)(ii)

Protection from Improper Pressure or Harassment

To allow for protected disclosures and the ongoing effective management of concerns raised.

When the Chief Executive determines there are no longer any reasons to withhold the information under the Act.

13

Quarterly Procurement Report - Quarter 4 - 2018/19

s7(2)(c)(ii), s7(2)(h), s7(2)(i)

Prevent Damage to the Public Interest, Commercial Activities, Conduct Negotiations

The following information may prejudice the Council's commercial position.

When the Chief Executive determines there are no longer any reasons to withhold the information under the Act.