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 15 June 2022

Time:                                    2pm

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

 

 

Membership

Chairperson

Deputy Chairperson

Members

Ms Kim Wallace

Councillor Sam MacDonald

Mayor Lianne Dalziel

Ms Jacqueline Robertson Cheyne

Councillor Pauline Cotter

Deputy Mayor Andrew Turner

 

 

9 June 2022

 

 

 

Principal Advisor

Leah Scales

General Manager - Resources / CFO

Tel: 941 8999

 

Megan Pearce

Manager Hearings and Council Support

941 8140

megan.pearce@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 - Terms of Reference Ngā Ārahina Mahinga

 

Chair

Kim Wallace (Independent)

Deputy Chair

Councillor Sam MacDonald

Membership

Mayor Lianne Dalziel

Deputy Mayor Andrew Turner

Councillor Pauline Cotter

External Members:

Mr Michael Rondel

Ms Jacqueline Robertson Cheyne

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

Quarterly and as required

Reports To

Council

Purpose

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.

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

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

·            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.

·            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.

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

Responsibilities

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.

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.

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.

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.

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.


 

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.

 

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

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 Forward Work Programme 2022

2022

Feb

Apr

Jun

Sep

Annual Report

Dec

Update Reports

 

·    Risk and Assurance

·    Procurement

·    Capital Delivery Risk

·    Cyber Security

·    Fraud

·    Health, Safety & Wellbeing

·    Risk and Assurance

·    Procurement

·    Capital Delivery Risk

·    Health, Safety & Wellbeing

·    Litigation

·    Risk and Assurance

·    Procurement

·    Capital Delivery Risk

·    Cyber Security

·    Fraud

·    Health, Safety & Wellbeing

·    Litigation

 

·    Risk and Assurance

·    Procurement

·    Capital Delivery Risk

·    Health, Safety & Wellbeing

·    Litigation

Other Reports

 

·    Holidays Act Remediation Programme

·    Climate  Change / Resilience

·    Internal Audit Plan

·    Terms of Reference Review

 

 

·  Climate  Change / Resilience

·  Committee Business

Annual Report

·    External Reporting and Audit Programme for 2021/22

·    External Reporting and Audit Programme for 2021/22 Update

·    External Reporting and Audit Programme for 2021/22 Update

·    Audit NZ Management Letter for current year interim audit

·    Update on critical judgments, estimates & assumptions

·    Financial Statements Update - Valuations

· Financial Statements and Annual Report

·  Debenture trust audit report

·  Audit NZ Management Letter from prior year’s audit

Annual Plan

·    Draft Annual Plan

 

·    Final Annual Plan

 

 

 


Audit and Risk Management Committee

15 June 2022

 

 

 


Audit and Risk Management Committee

15 June 2022

 

Part A          Matters Requiring a Council Decision

Part B          Reports for Information

Part C          Decisions Under Delegation

 

 

TABLE OF CONTENTS

 

C         1.       Apologies Ngā Whakapāha......................................... 10

B        2.       Declarations of Interest Ngā Whakapuaki Aronga....... 10

C         3.       Confirmation of Previous Minutes Te Whakaāe o te hui o mua.......................................................................... 10

B        4.       Public Forum Te Huinga Whānui................................. 10

B        5.       Deputations by Appointment Ngā Huinga Whakaritenga........................................................... 10

B        6.       Presentation of Petitions Ngā Pākikitanga................. 10

Staff Reports

C         7.       Consideration of the Council's Annual Plan 2022/23............................................................ 15

C         8.       External Reporting and Audit Programme for 2022 Update............................................................. 61

C         9.       External Reporting and Audit Programme for 2021/22 Update (Carried Forward from 1 April 2022)................................................................ 65

C         10.     Health, Safety and Wellbeing Dashboard January - March 2022....................................................... 95

C         11.     Health, Safety and Wellbeing Dashboard (Carried Forward from 1 April 2022).............................. 111

C         12.     Resolution to Exclude the Public...................... 128

 


 

1.   Apologies Ngā Whakapāha  

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

2.   Declarations of Interest Ngā Whakapuaki Aronga

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 Te Whakaāe o te hui o mua

That the minutes of the Audit and Risk Management Committee meeting held on Monday, 14 February 2022  be confirmed (refer page 11).

4.   Public Forum Te Huinga Whānui

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.

It is intended that the public forum session will be held at <Approximate Time>

 

There were no public forum requests received at the time the agenda was prepared

5.   Deputations by Appointment Ngā Huinga Whakaritenga

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

6.   Petitions Ngā Pākikitanga  

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


Audit and Risk Management Committee

01 April 2022

Unconfirmed

 

 

 

Audit and Risk Management Committee

Open Minutes

 

 

Date:                                    Monday 14 February 2022

Time:                                    2.04pm

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

 

 

Present

Chairperson

Deputy Chairperson

Members

Ms Kim Wallace (by audio-visual link)

Councillor Sam MacDonald

Mayor Lianne Dalziel

Ms Jacqueline Robertson Cheyne (by audio-visual link)

Mr Michael Rondel

Councillor Pauline Cotter

Deputy Mayor Andrew Turner (by audio-visual link)

 

 

 

 

 

 

 

Acting Principal Advisor

Leah Scales

Acting GM Resources/

Chief Financial Officer

 

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 Ngā Whakapāha

Part C

There were no apologies.

 

2.   Declarations of Interest Ngā Whakapuaki Aronga

Part B

There were no declarations of interest recorded.

3.   Confirmation of Previous Minutes Te Whakaāe o te hui o mua

Part C

Committee Resolved ARCM/2022/00001

That the minutes of the Audit and Risk Management Committee meeting held on Friday, 3 December 2021 be confirmed.

Councillor MacDonald/Ms Wallace                                                                    Carried

 

4.   Public Forum Te Huinga Whānui

Part B

There were no public forum presentations.

5.   Deputations by Appointment Ngā Huinga Whakaritenga

Part B

There were no deputations by appointment.

6.   Presentation of Petitions Ngā Pākikitanga

Part B

There was no presentation of petitions.

 

 

 

 

 

7.   Consideration of the Council's Draft Annual Plan 2022/23

 

Committee Resolved ARCM/2022/00002 (Original Staff Recommendations Accepted without Change)

Part C

That the Audit and Risk Management Committee:

1.          Notes it has reviewed the general checklist and sign-off by management, including significant forecasting assumptions, in respect of the information that provides the basis for the Draft 2022/23 Annual Plan.

2.          Advises the Council that in the Committee’s opinion an appropriate process has been followed in the preparation of this information.

3.          Notes that the Draft 2022/23 Annual Plan will be released when it is published in the Council Agenda for its meeting commencing 24 February 2022.

Deputy Mayor/Ms Wallace                                                                                              Carried

 

 

 

8.   External Reporting and Audit Programme for 2021/22

 

Committee Comment

The Committee accepted the Staff Recommendations and further to its discussion, including with Chantelle Gernetzky and Karina Page of Audit New Zealand (who were present to the meeting via audio-visual link, and provided update from their perspective also in respect of external reporting and the audit programme, referencing their resourcing constraints and dealing with deferrals from last year), the Committee added a resolution to note the potential impact of the local government elections process and resourcing on the timing of this year’s external audit.

 

 Officer Recommendations Ngā Tūtohu

That the Audit and Risk Management Committee:

1.          Receives the information in the External Reporting and Audit Programme for 2021/22 Report.

2.          Requests Council staff to update the Committee on critical judgements, assumptions and decisions made that affect the financial statements of Council at the next ARMC meeting in April.

 

Committee Resolved ARCM/2022/00003

Part C

That the Audit and Risk Management Committee:

1.          Receives the information in the External Reporting and Audit Programme for 2021/22 Report.

2.          Requests Council staff to update the Committee on critical judgements, assumptions and decisions made that affect the financial statements of Council at the next ARMC meeting in April.

3.          Notes the potential impact of the local government elections process and resourcing on the timing of this year’s external audit.

Ms Wallace/Mr Rondel                                                                                                               Carried

 

 

 

9.   Resolution to Exclude the Public

 

Committee Resolved ARCM/2022/00004

Part C

That at 2.42pm the resolution to exclude the public set out on pages 47 to 48 of the agenda be adopted.

Councillor MacDonald/Deputy Mayor                                                                                                                                Carried

 

The public were re-admitted to the meeting at 3.02pm.

 

 

Meeting concluded at 3.03pm.

 

CONFIRMED THIS 1st DAY OF APRIL 2022

 

Kim Wallace

ChairpersoN


 

7.     Consideration of the Council's Annual Plan 2022/23

Reference / Te Tohutoro:

22/653330

Report of / Te Pou Matua:

Peter Ryan, head of Performance Management, Peter.Ryan@ccc.govt.nz

General Manager / Pouwhakarae:

Lynn McClelland, Assistant Chief Executive, Lynn.Mcclelland@ccc.govt.nz

 

 

1.   Brief Summary

1.1       The purpose of this report is to support the Audit and Risk Management Committee (ARMC) in reviewing the process and significant forecasting assumptions, and supporting documentation used in developing the Annual Plan 2022/23, and to subsequently provide advice to Council that, in the Committee’s opinion, an appropriate process has been followed in the preparation of this information.

1.2       Note that approval of the final content of the Annual Plan 2022/23 falls to the Council.

1.3       The draft Annual Plan 2022/23 was adopted by the Council on 24 February 2022.

1.4       The Council completed consultation with the community on the draft Annual Plan 2022/23 via a Consultation Document and underlying information adopted on 24 February 2022.

1.4.1   The Consultation Document and the underlying information were made publicly available and members of the public were given the opportunity to present their views and preferences in response;

1.4.2   Opportunity for members of the public to present at public hearings was available from 4 May to 14 May 2022. 

1.4.3   All submissions, written and oral, have been analysed to identify the matters commented on, the reasons for those comments and the overall themes that emerged from the consultation process;

1.4.4   The result of this work has been provided to elected members to assist with their deliberations. The Thematic Analysis of the Annual Plan 2022/23 Submissions is Attachment C of this report. The Thematic Analysis provides a summary of key issues identified by a significant number of submitters. The first part of the report provides an overview of the key themes and messages that have come through in submissions (including for four special topic consultations that were run in parallel with the Annual Plan). The latter part of the report provides detailed submissions analysis for some of the issues that were most popular with submitters. Also included is a breakdown of the number of submissions received, by Community Board, age and gender.

1.5       In the time since the conclusion of the Hearings staff have held numerous briefings with councillors (17, 19, 23, 25 and 31 May 2022), provided responses to issues and questions raised, and received direction on all matters raised. The briefing of 25 May was open to the public.

1.6       Guidance provided by Elected Members and the Mayor’s Recommendations is being built into the Annual Plan 2022/23 adoption documents, including expectations for rates increases.

1.7       Changes made largely reflect community feedback on the draft Annual Plan or changes to Council’s operating environment since February.

1.8       The updated adoption documents will made available on the public agenda for Council consideration on 16 June 2022. A working copy of these documents is being made available in advance to the Audit and Risk Management Committee in Attachment D. These documents may differ from the actual documents that will form the report to Council for the adoption of the final Annual Plan 2022/23.

1.9       This is to ensure that the ARMC report does not pre-empt the Council report in terms of public release. The full ARMC report can be made public once the Council agenda goes live.  

1.10    Staff do not anticipate any significant or material changes between the ARMC meeting (15 June) and the expected release date of the Council Annual Plan agenda (16 June).

1.11    The process for preparing information has also been the subject of a series of management sign-offs, including the Executive Leadership Team, that support compliance with the Council’s relevant statutory, financial, and legal obligations. The general checklists and sign-off schedules are in Attachments A and B.

1.12    The Council meeting to adopt the Annual Plan 2022/23 is scheduled for 21 June 2022, with an additional date of 23 June 2022, should it be required.

1.13    The Annual Plan is on track for adoption by Council on 21/23 June, provisional on ARMC advice.

1.14    Following adoption the final Annual Plan document will be published and distributed via the public site, with a select number of hard-copies made available to elected members, for public viewing through our libraries and service centres, and to the Parliamentary Library. Responses to submitters will be prepared and sent, and the responses and Thematic Analysis will be also published to the public site.

 

2.   Officer Recommendations Ngā Tūtohu

That the Audit and Risk Management Committee:

1.          Notes it has reviewed the general checklist and sign-off by management, including significant forecasting assumptions, in respect of the information that provides the basis for the Annual Plan 2022/23.

2.          Advises the Council that in the Committee’s opinion an appropriate process has been followed in the preparation of this information.

3.          Notes that the Annual Plan 2022/23 documents will be released when published in the Council Agenda for its meeting commencing 21 June 2022.

 

 

 

Attachments / Ngā Tāpirihanga

No.

Title

Page

a

Annual Plan 2022/23 - Management Sign-off for Process

18

b

Annual Plan 2022/23 - Management Sign-off for Significant Forecasting Assumptions

28

c

Thematic Analysis of the Annual Plan 2022/23 Submissions

45

d  

Annual Plan 2022/23 adoption documents (Under Separate Cover) - Confidential

 

 

 

In addition to the attached documents, the following background information is available:

Document Name

Location / File Link

Draft Annual Plan 2022/23

Draft Annual Plan 2022/23 : Christchurch City Council (ccc.govt.nz) 

Consultation Document for Annual Plan 2022/23

Consultation document : Christchurch City Council (ccc.govt.nz)

Long-term Plan 2021-31

Long-term Plan 2021-31 : Christchurch City Council (ccc.govt.nz)

 

 

 

Confirmation of Statutory Compliance / Te Whakatūturutanga ā-Ture

Compliance with Statutory Decision-making Requirements (ss 76 - 81 Local Government Act 2002).

(a)  This report contains:

(i)   sufficient information about all reasonably practicable options identified and assessed in terms of their advantages and disadvantages; and

(ii) adequate consideration of the views and preferences of affected and interested persons bearing in mind any proposed or previous community engagement.

(b) The information reflects the level of significance of the matters covered by the report, as determined in accordance with the Council's significance and engagement policy.

 

 

 

Signatories / Ngā Kaiwaitohu

Authors

Boyd Kedzlie - Senior Business Analyst

Amber Tait - Performance Analyst

Johan Jacobs - Senior Business Analyst

Approved By

Peter Ryan - Head of Performance Management

Lynn McClelland - Assistant Chief Executive Strategic Policy and Performance

  












































 

8.     External Reporting and Audit Programme for 2022 Update

Reference Te Tohutoro:

22/69031

Report of Te Pou Matua:

Daisy Yu, Financial Team Leader

General Manager Pouwhakarae:

Leah Scales, General Manager Resources / CFO

 

 

1.   Brief Summary

1.1       The purpose of this report is update the Audit and Risk Management Committee on the reporting and audit programme for 2022.  The report has been written in response to the recommendation in the 1 April 2022 ARMC meeting.

2.   Officer Recommendations Ngā Tūtohu

That the Audit and Risk Management Committee:

1.          Receive the information in the External Reporting and Audit Programme for 2022 Update Report.

2.          Request Council staff to update the committee on critical judgements, assumptions and decisions made that affect the financial statements of Council at the next ARMC meeting in September.

 

3.   Status of 2021 deferred audits

3.1       The following 2021 audits are still outstanding.

·      Riccarton Bush Trust

·      Mayors Welfare Fund

·      Civic Building Limited

·      Te Kaha Project Delivery Limited (formerly CMUA Project Delivery Limited)

3.2       All four audits are in their final review stages.

4.   Status of Interim Audit

4.1       The interim audit commenced 2 May 2022 with a focus on review of non-financial performance measures.  This is in keeping with the Office of the Auditor General focus on performance measures outlined in their recent communication to local and central government chief executives.

4.2       No issues were reported back to Council staff after the interim audit.

5.   Update on Critical Estimates, Decisions and Assumptions

Valuation Programme

5.1       We have reviewed the fair value of our property, plant and equipment assets in relation to inflation movement, contract rate changes, and market fluctuations.

5.2       The following classes of assets will be revalued in 2021/22 financial year:

5.2.1   Transport (roads and footpaths)

5.2.2   Artworks (gallery and museums)

5.2.3   Operational land and buildings (or residential land and buildings – refer to 5.3.3)

5.3       We have made special consideration in the following asset classes as part of the fair value analysis:

5.3.1   Three Waters, the fair value review of the water supply, wastewater and storm water assets indicated that there is an increase in commodity costs for these assets, particular the reticulation assets i.e. pipes.  However, the contract price review has noted that with improved data quality being supplied by the Council, contracts are charging less as the need to undertake investigative work has been reduced.  The last independent valuation noted the improvement in data quality between valuation cycles.  The increase in commodity prices has been offset by the decrease in contract prices, resulting in no material change in the value of the three water assets. No valuation is considered required.

5.3.2   Heritage assets, the principal heritage asset is “The Bridge of Remembrance”. This asset was restored and repaired following the earthquake and has not been reassessed for valuation purposes since it was repaired. Heritage assets are held under replacement cost. Although inflation in the past few years does suggest an increase in this asset class, considering its low value and the difficulty of finding a qualified valuer in the current market, no valuation will be undertaken this year. We will review this in 2022/23.

5.3.3   Operational land and buildings, the fair value review of the social housing portfolio has indicated that there has been an increase in residential market prices which has an impact on the overall value of the social housing portfolio. A valuation is therefore required for residential land and buildings. The remaining asset classes within this group include land and buildings for libraries, recreation centres, and service centres. These asset classes are valued on depreciated replacement cost basis, and therefore not believed to have a significant change in their fair value. The Finance team is working with valuer and external auditor to determine if all operational land and buildings require valuation or just the residential land and buildings.

5.4       The remaining asset classes are carried at fair value, their carrying values as at 30 June 2022 are not materially different from their fair value both individually and collectively, and therefore they do not need to be revalued.

Accounting standards changes

5.5       PBE FRS 48 – Service Performance Reporting

5.5.1   PBE FRS 48 is effective for reporting period starting on or after 1 January 2022. This means 2022/23 financial year for Council.

5.5.2   Adopting this standard requires a change to the Council’s activities and services section to incorporate the new requirement of disclosing judgement applied in selection of performance measures.

5.5.3   Considering resourcing constrains in both Audit New Zealand and Council, we are recommending not early adopting this standard this year. 

5.6       IPSAS 41 – Financial Instruments

5.6.1   IPSAS 41 is also effective for reporting period starting on or after 1 January 2022, which is 2022/23 financial year for Council.

5.6.2   This standard is almost identical to PBE IFRS 9 with just a few requirements around public sector specific items, such as concessionary loans. Council adopted PBE IFRS 9 in 2019.

5.6.3   Staff has completed relevant disclosure checklist to ensure compliance to IPSAS 41. Three minor disclosure changes were identified as part of this exercise.

·   Note 20.3 – Additional disclosure that gains and losses recognised in the hedging reserve in equity on interest rate swap contracts will be released to P&L as interest is paid on the underlying debt.

·   Note 20.3 – Additional disclosure on interest rate benchmark reform. There is no impact on Council yet.

·   Note 6.1 – Separate line for impairment losses calculated for Expected Credit Loss.

5.6.4   As these required changes are really minor, we are still recommending early adopting IPSAS 41 in 2021/22 financial year.

 

Attachments Ngā Tāpirihanga

There are no attachments to this report.

 

Additional background information may be noted in the below table:

Document Name

Location / File Link

 

 

 

 

 

Confirmation of Statutory Compliance Te Whakatūturutanga ā-Ture

Compliance with Statutory Decision-making Requirements (ss 76 - 81 Local Government Act 2002).

(a)  This report contains:

(i)   sufficient information about all reasonably practicable options identified and assessed in terms of their advantages and disadvantages; and

(ii) adequate consideration of the views and preferences of affected and interested persons bearing in mind any proposed or previous community engagement.

(b) The information reflects the level of significance of the matters covered by the report, as determined in accordance with the Council's significance and engagement policy.

 

 

 

Signatories Ngā Kaiwaitohu

Author

Daisy Yu - Planning and Performance Advisor

Approved By

Bruce Moher - Acting Head of Finance

Leah Scales - General Manager Resources/Chief Financial Officer

  


 

9.     External Reporting and Audit Programme for 2021/22 Update (Carried Forward from 1 April 2022)

Reference Te Tohutoro:

22/672236

Report of Te Pou Matua:

Leah Scales, Chief Financial Officer, leah.scales@ccc.govt.nz

General Manager Pouwhakarae:

Leah Scales, GM Resources/Chief Financial Officer

 

 

1.   Brief Summary

1.1       The purpose of this report is to update the Audit and Risk Management Committee on the annual report timetable and audit.  The report has been written in response to receiving the 2021/22 audit plan from Audit New Zealand.

1.2       This report will also include discussion on material risks that have arisen since the last meeting and an assessment of the critical judgements, estimates and assumptions likely to impact the financial statements that will be included in the 2021/22 Christchurch City Council Annual Report.

 

2.   Officer Recommendations Ngā Tūtohu

That the Audit and Risk Management Committee:

1.          Receive the information in the External Reporting and Audit Programme for 2021/22 Update Report.

2.          Receive the audit plan for 2021/22 from Audit NZ.

3.          Request Council staff to update the committee on critical judgements, assumptions and decision made that affect the financial statements of Council at the next ARMC meeting in June.

 

3.   Audit Plan for 2021/22

3.1       The Audit Plan is issued each year outlining audit issues, audit timetable and audit process (Attachment A).

3.2       The main audit issues for 2020/21 include:

3.2.1   COVID-19 pandemic. Review financial performance for any ongoing impacts of the pandemic.

3.2.2   Valuation of property, plant and equipment.  Roads and footpaths and art works are due to be revalued this year on a triennial cycle. Emphasis will be placed on the more material assets in the transport infrastructure class.

3.2.3   Fair value assessment of non-revalued property, plant and equipment.  Asset categories that are outside of the revaluation cycle this year will be reviewed to determine whether there is a material difference with the carrying values of these asset categories, these include three waters and roading.

3.2.4   Valuation of equity investment in council-controlled organisations (CCOs) subsidiaries.

3.2.5   Capital asset additions and work in progress. Review of classifications and disclosures.

3.2.6   The risk of management override of internal controls. Audit New Zealand will perform targeted audit procedures to minimise this inherent risk.

3.3       Other ongoing accounting issues to be reviewed that are included in this plan are:

3.3.1   Procurement and contract management and project governance.

3.3.2   Prudent expenditure decisions (the Council and group).

3.3.3   Setting of rates.

3.3.4   Derivatives.

3.3.5   Group Issues.

3.3.6   Three waters reform. Discuss implications and potential impact on financial disclosures.

3.3.7   Software as a Service (SaaS). Discuss the extent to which Council is exposed to cloud based SaaSs.

3.4       The following materiality apply for the financial statements.

$ million

Parent

Group

Overall materiality (applies to fair value of PPE)

800

1,200

Lower specific materiality (applies to other financial statement items)

17.6

32.5

Clearly trivial threshold

0.88

1.6

3.5       Non-financial reporting thresholds for three waters and transport range from 1% (for DWSNZ disclosures) to 8% (for reported crashed on the transport network).

3.6       The audit plan works toward the approval of the draft annual report by Audit NZ on 29 September 2022. 

The intention is that we will work to have audit clearance on the Annual Report for this date, however it is likely adoption will not occur until after the Election.  Noting there is a further extension to legislation requirements to 31 December this year.

In order to meet this key milestone, the follow items will support the team in meeting this date:

3.6.1   Interim audit in April 2022 to ensure testing of control environment is completed in advance of the final visit;

3.6.2   Use of the audit dashboard to transfer information between Council and the audit team; and

3.6.3   Prioritisation of the Council in the Audit New Zealand work programme for 2022.

3.7       The June 2022 audit of the Council’s financial statements will see the introduction of Audit NZ’s AuditDashboard as a file sharing platform and client engagement and delivery monitoring tool for audit management.

3.8       Council has used the AuditDashboard for the audit of financial statements for directly managed CCOs for the 2020/21 year.  Feedback has been positive from the accounting staff.

 

4.   Update on Critical Estimates, Decisions and Assumptions

Valuation Programme

4.1       We are still on track to value the Art Collection and Roads and Footpaths for the 2022 financial statements.  Subject to the availability of a suitably qualified valuer, we are also looking to add historical structures to the 2022 list, the main asset in this class is the Bridge of Remembrance.

4.2       Land, buildings and three water asset classes are also being reviewed.

Accounting standards

4.3       Council is required to adopt revised Public Benefit Entity accounting standards in the preparation of financial statements.  Standards with changes that will be adopted in the 2021/22 financial statements are as follows.

PBE FRS 48 – Service Performance Reporting

4.4       The Council will be adopting the changes to PBE FRS 48 – Service Performance Reporting as part of the 2021/22 Annual Report preparation process.

4.5       This standard establishes requirements for service performance reporting for Tier 2 PBEs and formalises the process described in PBE IPSAS 1 preparation of financial statements.

4.6       The finance and performance management teams will work together on what changes are needed to activities and services summary to accommodate these changes.

PBE IPSAS 41 – Financial Instruments

4.7       The Council will be adopting PBE IPSAS 41 – Financial Instruments which supersedes PBE IFRS 9 - Financial Instruments and supersedes most of PBE IPSAS 29 - Financial Instruments: Recognition and Measurement as part of the 2021/22 Annual Report preparation process.

4.8       Council staff do not consider there to be any material impacts on the presentation of the financial statements with the adoption of PBE IPSAS 41.

4.9       PBE IAS 12 Treatment of Income Tax standard includes consequential changes as a result of the change to IPSAS 41.

 

Attachments Ngā Tāpirihanga

No.

Title

Page

a

Christchurch City Council Audit Plan for 2021/22

69

 

 

Additional background information may be noted in the below table:

Document Name

Location / File Link

Not applicable

Not applicable

 

 

 

Confirmation of Statutory Compliance Te Whakatūturutanga ā-Ture

Compliance with Statutory Decision-making Requirements (ss 76 - 81 Local Government Act 2002).

(a)  This report contains:

(i)   sufficient information about all reasonably practicable options identified and assessed in terms of their advantages and disadvantages; and

(ii) adequate consideration of the views and preferences of affected and interested persons bearing in mind any proposed or previous community engagement.

(b) The information reflects the level of significance of the matters covered by the report, as determined in accordance with the Council's significance and engagement policy.

 

 

 

Signatories Ngā Kaiwaitohu

Author

Len Van Hout - Technical Financial Advisor

Approved By

Bruce Moher - Acting Head of Finance

Leah Scales - General Manager Resources/Chief Financial Officer

  




























 

10.  Health, Safety and Wellbeing Dashboard January - March 2022

Reference / Te Tohutoro:

22/633788

Report of / Te Pou Matua:

Duncan Sandeman; Manager Health, Safety & Wellbeing; duncan.j.sandeman@ccc.govt.nz

General Manager / Pouwhakarae:

Leah Scales, General Manager Resources

 

 

1.   Brief Summary

1.1       The purpose of this report is forward to the Committee the Christchurch City Council Health, Safety and Wellbeing Dashboard January – March 2022, which was received and considered by the Health, Safety and Wellbeing Committee (HSWC) of Council at its last meeting on 6 May 2022.

 

2.   Officer Recommendations Ngā Tūtohu

That the Audit and Risk Management Committee:

1.        Notes the Christchurch City Council Health, Safety and Wellbeing Dashboard January – March 2022 as received and considered by the Health, Safety and Wellbeing Committee (HSWC).

2.        Notes that the Council has tasked the HSWC with assisting it to discharge its due diligence responsibilities as a Person Conducting a Business or Undertaking (PCBU), and the Audit and Risk Management Committee does not replicate HSWC’s task, but notes that there are risk management and assurance processes in place.

3.   Health, Safety & Wellbeing Dashboard

3.1       The HSW dashboard for the quarterly period 1 January – 31 March 2022 is included at Attachment A.

3.2       Key items to note:

3.2.1   Dashboard format.  At the 4 February 2022 meeting of the Health and Safety Committee of Council the Committee expressed their frustration with the dashboard that had been provided.  This was a format that had been in use for some time and it is acknowledged that it was no longer fit for purpose.  A new dashboard was provided to the meeting of 6 May 2022 that provided an enhanced level of information.  A monthly version of this dashboard is provided to ELT and is well received.  The Committee approved of the new format and the information it contained, noting that it will be the subject of continuous improvement. 

3.2.2   Show visible leadership of HSW practices.

·      There have been limited officer HSW engagement activities reported over the past three months.  However it is assessed that this paints an inaccurate picture of officer visible leadership.  Discussions with ELT member officers make it clear that HSW is a frequent, but informal, topic in one-on-one meetings with direct reports and subordinate managers.

·      The first Health & Safety Network Committee meeting, chaired by the Chief Executive, was held during the period.  This provided a forum for the CE to engage directly with health and safety representatives on a variety of topics.  Feedback from workers from this meeting has been extremely positive.

3.2.3   Support competent and committed workers.

·      Completion of health and safety training is currently the only enterprise-wide metric set by ELT.  The targets set are 90% of employees completing the H&S staff assessment and 95% of managers having completed the Health and Safety Management Responsibilities Training.

·      Heads of service and ELT receive a month-end report on training completion to help inform them in setting their monthly performance report.  This has been effective in allowing heads of service to follow up on those people who had yet to complete training.

·      There has been a significant improvement in managers completing the residential Health and Safety Management Responsibility Training.  At the end of February this had reached 99% of managers, exceeding ELT’s goal of 95% and up from 93% in October last year.  However in March, due to staff churn, this level has subsided to 94%.

·      The completion of the staff H&S assessment has remained constant with a slight improvement to 91% organisation-wide.  The Resources Group, and Strategic Policy and Performance Group statistics are more affected due to the smaller numbers in each group.

·      There is a good number of health and safety representatives across the organisation, however work needs to be undertaken to ensure the maximum number are trained in order to get the best from them.  It is acknowledged that the representatives are all volunteers undertaking this work in addition to the own workloads.

3.2.4   Effectively manage risk.  This is the most important piece of work that needs to be completed in order for the organisation to improve our health and safety performance.

·      Good progress has been made over the quarter in progressing the development and completion of unit HSW risk registers.  At the start of the period there were only eight HSW risk registers that had been completed with controls being monitored that were able to be sighted by the HSW team.  All of these were in the Recreation, Sports and Events Unit.  In the operational side of the organisation in Citizen’s and Community and Infrastructure, Planning and Regulation most business units have commenced a risk identification, however these are at varying levels of completion.  There are a small number of business units across the organisation where there is no evidence of a risk assessment having commenced.

·      In order to learn from health & safety events with a view to preventing the same event from happening in the future, events need to be reported and investigated.  All events must be reviewed by the one up manager who will confirm the actual and potential severity of the event.  If that assessment is medium or high a further investigation is warranted and the event must be signed off by the head of service.  One up reviews should be completed within 30 days.  There are still too many events that have yet to be reviewed by the one-up manager that are over 90 days.  Work has been undertaken in some parts of the organisation to reduce this, but it remains an ongoing task.

3.2.5   Continuously improve performance.

·      H&S events for this period did not deviate from the trends from the past 12 months.

·      Human behaviours accounts for the largest source of events both for the reporting period and for the previous 12 months.  All employee high confirmed potential events of the reporting period stemmed from human behaviours where staff were either subjected to abuse from members of the public or in close proximity to a significant altercation between members of the public.

·      Furniture, fixtures and fittings is the second highest source and this accounted for three citizen high confirmed potential events which resulted in slip, trip or fall hazards.

·      Both medical conditions and water and liquid are the source of events predominantly for visitors to our facilities.  There were no water and liquid events related to any employee over the past 12 months.

·      Vehicles remain a major source of events for both employees and contractors.  One confirmed contractor high potential event over the reporting period pertained to a near miss from an unattended vehicle the rolled down the Te Hononga Civic Office forecourt that narrowly missed a number of pedestrians.  This event has been the subject of a detailed investigation by the contractor and the Facilities Unit.

3.2.6   Promote employee wellbeing.

·      Total number of injury claims for FY 21/22 is well down from last year.  This is reflected in the medical and weekly compensation cost that have been paid out and employee days lost.

·      Workplace support for the period is reflective of the past 12 months.

·      The staff vacancies by FTE does not provide the total picture.  This shows vacancies against the current organisational structure as opposed to reflecting changes made over the past 12 months and the additional workload required to be undertaken by fewer employees.

 

 

Attachments / Ngā Tāpirihanga

No.

Title

Page

a

Health, Safety & Wellbeing Dashboard January - March 2022

99

 

 

In addition to the attached documents, the following background information is available:

Document Name

Location / File Link

<enter document name>

<enter location/hyperlink>

<enter document name>

<enter location/hyperlink>

 

 

 

Confirmation of Statutory Compliance / Te Whakatūturutanga ā-Ture

Compliance with Statutory Decision-making Requirements (ss 76 - 81 Local Government Act 2002).

(a)  This report contains:

(i)   sufficient information about all reasonably practicable options identified and assessed in terms of their advantages and disadvantages; and

(ii) adequate consideration of the views and preferences of affected and interested persons bearing in mind any proposed or previous community engagement.

(b) The information reflects the level of significance of the matters covered by the report, as determined in accordance with the Council's significance and engagement policy.

 

 

 

Signatories / Ngā Kaiwaitohu

Author

Duncan Sandeman - Manager Health and Safety

Approved By

Nicholas Hill - Head of Risk & Assurance

Leah Scales - General Manager Resources/Chief Financial Officer

  














 

11.  Health, Safety and Wellbeing Dashboard (Carried Forward from 1 April 2022)

Reference / Te Tohutoro:

22/672214

Report of / Te Pou Matua:

Duncan Sandeman, Manager Health and Safety, duncan.j.sandeman@ccc.govt.nz

General Manager / Pouwhakarae:

Leah Scales, Acting General Manager Resources, leah.scales@ccc.govt.nz

 

 

1.   Brief Summary

1.1       The purpose of this report is to forward to the Committee the Christchurch City Council Health, Safety and Wellbeing Dashboard (Attachment A), which was received and considered by the Health, Safety and Wellbeing Committee (HSWC) of Council at its last meeting.

1.2       At the 4 February 2022 meeting the Committee expressed a strong desire for the dashboard to be completely revamped to provide better lead and lag indicators to assist them in their oversite duties.  A revamped dashboard is to be presented to the Executive Leadership Team on 23 March.  This dashboard is attached (Attachment B) for the Audit and Risk Management Committee’s reference.

2.   Officer Recommendations Ngā Tūtohu

That the Audit and Risk Management Committee:

1.        Notes the Christchurch City Council Health, Safety and Wellbeing Dashboard as received and considered by the Health, Safety and Wellbeing Committee (HSWC).

2.        Notes that the Council has tasked the HSWC with assisting it to discharge its due diligence responsibilities as a Person Conducting a Business or Undertaking (PCBU), and the Audit and Risk Management Committee does not replicate HSWC’s task, but notes that there are risk management and assurance processes in place.

 

 

 

 

Attachments / Ngā Tāpirihanga

No.

Title

Page

a

HSW Dashboard October - December 2021

113

b

Health, Safety and Wellbeing Dashboard January-February 2020

115

 

 

In addition to the attached documents, the following background information is available:

Document Name

Location / File Link

Not Applicable

Not Applicable

 

 

 

Confirmation of Statutory Compliance / Te Whakatūturutanga ā-Ture

Compliance with Statutory Decision-making Requirements (ss 76 - 81 Local Government Act 2002).

(a)  This report contains:

(i)   sufficient information about all reasonably practicable options identified and assessed in terms of their advantages and disadvantages; and

(ii) adequate consideration of the views and preferences of affected and interested persons bearing in mind any proposed or previous community engagement.

(b) The information reflects the level of significance of the matters covered by the report, as determined in accordance with the Council's significance and engagement policy.

 

 

 

Signatories / Ngā Kaiwaitohu

Authors

Mark Saunders - Community Board Advisor

Duncan Sandeman - Manager Health and Safety

Approved By

Duncan Sandeman - Manager Health and Safety

  















 


 

12.   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

15 June 2022

 

 

 

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

7.

Consideration of the Council's Annual Plan 2022/23

 

 

 

 

 

Attachment d - Annual Plan 2022/23 adoption documents

s7(2)(b)(ii)

Prejudice Commercial Position

The information in the current version of the Council's Annual Plan remains subject to change. Premature release of this information could prejudice those people and entities that may be affected by any changes made.

When the agenda for the Council meeting on 21 June 2022 to consider the Annual Plan is published.

13.

Cyber Security Programme Update (Carried Forward from 1 April 2022)

s7(2)(c)(ii)

Prevent Damage to the Public Interest

Disclosure of our approach to cyber security will increase the risk of Council being a target, resulting in potential service disruptions and / or information breaches that will not be in the public interest.

The Cyber Security Programme update report may only be released if the Chief Executive has determined that there are no longer any reasons under the Local Government Official Information and meeting Act to withhold the information.

14.

Holidays Act Remediation Programme (Carried Forward from 1 April 2022)

s7(2)(b)(ii), s7(2)(i)

Prejudice Commercial Position, Conduct Negotiations

The information in this report relates to remuneration of past and current employees. The final position is still to be determined therefore this information should not be made public until this occurs.

At the completion of the Holidays Act Remediation Project when all payments have been made.

15.

Fraud Management Update (Carried Forward from 1 April 2022)

s7(2)(j)

Prevention of Improper Advantage

To ensure that fraud detection techniques are not circumvented

Due to the nature and sensitivity of this information, it is not anticipated that there be a specific date or event that allows for the release of this information.
The information will be released in full or part as appropriate upon periodical review by the Head of Risk and Assurance to confirm when it is no longer deemed to require public exclusion for the applicable reasons above.

16.

Quarterly Procurement Report

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

Prejudice Commercial Position, Commercial Activities, Conduct Negotiations

To prevent information being released that could be used for improper commercial advantage or that needs to be withheld to avoid prejudice to the Council’s or its supply chain’s commercial position.

Due to the nature and sensitivity of this information, it is not anticipated that there will be a specific date or event that allows for the release of this information.
The information will be released in full or part, as appropriate upon periodical review by the Head of Procurement and Contracts, when it is no longer deemed to identify sensitive commercial information for the Council or its supply chain.

17.

Quarterly Procurement Report (Carried Forward from 1 April 2022)

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

Prejudice Commercial Position, Commercial Activities, Conduct Negotiations

To prevent information being released that could be used for improper commercial advantage or that needs to be withheld to avoid prejudice to the Council’s or its supply chain’s commercial position.

Due to the nature and sensitivity of this information, it is not anticipated that there will be a specific date or event that allows for the release of this information.
The information will be released in full or part, as appropriate upon periodical review by the Head of Procurement and Contracts, when it is no longer deemed to identify sensitive commercial information for the Council or its supply chain.

18.

Risk and Assurance Update

s7(2)(c)(ii), s7(2)(e), s7(2)(f)(ii), s7(2)(g), s7(2)(i), s7(2)(j)

Prevent Damage to the Public Interest, Prevention of Material Loss, Protection from Improper Pressure or Harassment, Maintain Legal Professional Privilege, Conduct Negotiations, Prevention of Improper Advantage

The content of this report is legally priviledged.
To prevent improper use or misinterpretation of risk information.
To prevent the use of Internal Audit findings and identified control
weaknesses from being used for improper advantage.

Due to the nature and sensitivity of this information, it is not anticipated that there be a specific date or event that allows for the release of this information.
The information will be released in full or part as appropriate upon periodical review by the Head of Risk and Assurance to confirm when it is no longer deemed to require public exclusion for the applicable reasons above.

19.

Risk and Assurance Update (Carried Forward from 1 April 2022)

s7(2)(c)(ii), s7(2)(e), s7(2)(f)(ii), s7(2)(g), s7(2)(i), s7(2)(j)

Prevent Damage to the Public Interest, Prevention of Material Loss, Protection from Improper Pressure or Harassment, Maintain Legal Professional Privilege, Conduct Negotiations, Prevention of Improper Advantage

The content of this report is legally priviledged.
To prevent improper use or misinterpretation of risk information.
To prevent the use of Internal Audit findings and identified control
weaknesses from being used for improper advantage.

Due to the nature and sensitivity of this information, it is not anticipated that there be a specific date or event that allows for the release of this information.
The information will be released in full or part as appropriate upon periodical review by the Head of Risk and Assurance to confirm when it is no longer deemed to require public exclusion for the applicable reasons above.