Agenda of Audit and Finance Working Party

Audit and Finance Working Party

7 August 2019

Audit and Finance Working Party Agenda

Meeting to be held in the Whale Bay Room

36 Water Street, Whangārei

on Wednesday 7 August 2019, commencing at 12.00pm

Please note: working parties and working groups carry NO formal decision-making delegations from council. The purpose of the working party/group is to carry out preparatory work and discussions prior to taking matters to the full council for formal consideration and decision-making. Working party/group meetings are open to the public to attend (unless there are specific grounds under LGOIMA for the public to be excluded).

MEMBERSHIP OF THE Audit and Finance Working Party

Chairman, Councillor David Sinclair

Independent Financial Advisor, Mr Geoff Copstick

Councillor Bill Shepherd

Councillor Joce Yeoman

Item Page

1.0 apologies

2.0 declarations of conflicts of interest

3.0 Reports

3.1 Review of the 2018/19 Year-end Financial Agenda Items 3

Audit and Finance Working Party item: 3.1

7 August 2019

TITLE:	Review of the 2018/19 Year-end Financial Agenda Items
ID:	A1224966
From:	Simon Crabb, Finance Manager

Executive summary/Whakarāpopototanga

The purpose of this report is to present seven financial agenda items to the working party for review, prior to these agenda items going to Council in August.

The August council meeting is scheduled for 20 August 2019. The Deloitte audit team arrive the day before on 19 August. A full set of financial statements based upon the recommendations in the attached agenda items will be provided to the auditors on 19 August. Should any changes to the financial statements arise from council decisions made on the 20^th August it may cause delays and inefficiencies to the planned audit programme.

In summary, the attached agenda items communicate, and/or seek council approval of the following:

· An operating result of $0 after surplus PRF and IIF gains of $1.12M are transferred to the Operating Costs Reserve.

· An expense of $820K is incorporated in the $0 result to represent the unlikely collection of the Resource Enterprises Loan.

· Operational carry forwards of $72K are incorporated in the $0 result.

· Total managed fund gains exceeded budget by $217K. June produced gains of $915K - the second biggest month of the year

· Community Investment fund gains of $854K are reinvested back into the fund (budget $993K), and no CIF gains are used as general funding.

· Property Reinvestment Fund gains of $161K are reinvested back into the fund (budget $272K), $350K are used as general funding (budget $954K) and the residual $605K is allocated to the OCR.

· Infrastructure Investment Fund gains of $704K (budget 809K) are used as general funding and the residual $512K is allocated to the OCR. No reinvestment of IIF gains.

· The balance of the OCR is $1.12M, noting the general funding required from council’s managed fund portfolio in 2019/20 is forecasted to be $2.1M.

· The statutory financial statements in the annual report will include non-cash revaluation gains of $2.2M and transfer the impact of the reserve transfers to the balance sheet, consequently reporting a surplus for 2018-19 of $5.7M.

Recommended actions

· That the working party supports the content and recommendations in the attached draft agenda items.

· That the attached draft agenda items are finalised and presented to Council at the August 2019 meeting

Attachments/Ngā tapirihanga

Attachment 1: Resource Enterprises Limited (REL) - Loan impairment (Draft Report) ⇩