Audit and Risk
Subcommittee
24 June 2020
Audit
and Risk Subcommittee Minutes
Meeting held in the Council Chamber
36 Water Street, Whangārei
on Wednesday 24 June 2020,
commencing at 1.00pm
Present:
Chair, Councillor Colin Kitchen
Councillor John Bain
Councillor Amy Macdonald
Councillor Joce Yeoman
Ex officio Councillor Penny Smart
Independent Audit & Risk
Advisor Danny Tuato'o
In Attendance:
Full Meeting
Chief Executive Officer Malcolm
Nicolson
Councillor Rick Stolwerk
GM Environmental Services Bruce
Howse
GM Corporate Excellence Dave Tams
Finance Manager Simon Crabb
Corporate Systems Champion Kym Ace
PA Corporate Excellence Judy Graham
Part Meeting
Rivers and Natural Hazards Manager
Joseph Camuso
Online Services Officer Jalissa
Karena-Lange
Finance Accountant Vincent McColl
River Management Engineer Barney
Brotherhood
The Chair declared the meeting open at 13.01pm.
Apologies (Ngā
whakapahā) (Item 1.0)
Independent
Financial Advisor Geoff Copstick
Declarations
of Conflicts of Interest (Nga whakapuakanga) (Item 2.0)
It was advised that members should make declarations
item-by-item as the meeting progressed.
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Risk Management update (Item 3.0)
ID:
A1329034
Report from Kym Ace, Corporate Systems Champion
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Recommendation
That the presentations:
1 Risk
Management update.
be received.
Corporate
System Champion Kym Ace gave an update on the risk management and a
demonstration on the new risk register management tool (Promapp) that has
been implemented to monitor and manage risks within the organisation.
·
To date twenty-three risks have been entered into the new
Corporate risk register.
·
Detailed reports can be produced within the register to show
risk scores which highlights the high to low residual risk.
·
There is the ability to deep dive for the risk treatment and
who is responsible to sign off.
·
Implementation plan to be completed this includes document
process, training, embedding risk management and formalised reporting.
·
ELT reviews the risk register on a quarterly basis
·
Target date to complete transfer of all risk to the new risk
register is by the first week of August 2020.
·
Risks that have been identified by Councillors can raised at
any council meeting, which is then captured in the minute’s/action
sheet. Can also be noted in the Chief Executive report to chair report under
policy risk management compliance session.
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Awanui River Project
update (Item 4.0)
ID:
A1329037
Report from Joseph Camuso, Rivers & Natural Hazards
Manager
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Recommendation
That the presentations:
1
Awanui River Project update
be received.
Rivers and
Natural Hazards Manager Joseph Camuso gave a presentation update on the
Awanui river project.
·
Works being completed are stopbank benching, flood walls, and spillways.
·
Currently 1 year behind schedule and under budget by $1,626,435
this will change once the project is back on schedule.
·
Top four risk listed are Landowners, Geotechnical, Archaeology
and Resource Consenting.
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Confirmation of Minutes -15 April 2020 (Item 5.1)
ID:
A1327159
Report from Judith Graham, Corporate Excellence P/A
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Moved (Kitchen
/ Bain)
That the minutes of the Audit
and Risk Subcommittee meeting held on 15 April 2020 be confirmed as a true
and correct record.
Carried
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Secretarial Note: 1.47pm Peter Gulliver from
Deloitte join the meeting by Zoom.
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2019-20 Annual Report: Timetable and
Deloitte Planning Report (Item 6.1)
ID:
A1329230
Report from Simon Crabb, Finance Manager
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That the report ‘2019-20 Annual
Report: Timetable and Deloitte Planning Report’ by Simon Crabb, Finance
Manager and dated 18 June 2020, be received.
Auditor Peter Gulliver from
Deloitte spoke to the Subcommittee regarding the Northland Regional Council
planning report for the year ended 30 June 2020, and highlighted key areas of
focus.
·
Key areas in annual report include investment property
revaluations uncertainties, level of provisioning for debtors and rates
receivables, wage subsidies claimed & grants received disclosed in the financial
statement.
·
Officer of the Auditor General required all audit report
for public entities to make reference to Covid 19, and in particular draw
attention to the disclosure made in the annual report through an
“emphasis of matter” paragraph to be included in the audit
report. Deloitte to work with management to ensure an appropriate level of
disclosure.
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$10M Loan Repayment (Item 6.2)
ID:
A1328789
Report from Simon Crabb, Finance Manager
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Moved (Bain / McDonald)
That the report ‘$10M Loan
Repayment’ by Simon Crabb, Finance Manager and dated 17 June 2020, be
received.
Endorsed recommendation to take
to council. It is proposed that the $10M corporate loan is repaid and a
subsequent loan of $5.2M is taken with the Local Government Funding Agency
(LGFA). The borrowing reduction of $4.8M represents the net funds held by
council that are dedicated to repaying debt.
Carried
Finance
Manager Simon Crabb made note that every loan debt council has there is a
corresponding funding source scheduled for repayment of the principal amount.
·
Report will be revised once goes to full council due to
charitable donation of $549,000 in May 2019.
·
Average Cost of borrowing is currently 4.24% will drop to 3.87%
locked in until 2032
Chair
acknowledged the great work done by finance team working remotely during the
Covid 19 lockdown very much appreciated.
·
Further discussion around each loan/repayment to be had at Long
term plan stage as requested by Ex officio Councillor Penny Smart.
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Local Government
Funding Agency: Becoming a Guaranteeing Member
(Item 6.3)
ID:
A1328791
Report from Simon Crabb, Finance Manager
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1. That
the report ‘Local Government Funding Agency: Becoming a Guaranteeing
Member’ by Simon Crabb, Finance Manager and dated 17 June 2020, be
received.
2. That
a legal review is undertaken on the legal documents required to be executed
to
become a guaranteeing member of the LGFA.
3. That,
subject to a satisfactory legal review, the Subcommittee endorse a
recommendation to full council that Northland Regional Council becomes a
guaranteeing member of the LGFA.
Finance
Manager Simon Crabb explained to the Subcommittee regarding becoming a
Guaranteeing member of the Local Government Funding Agency.
·
Full risk assessment completed by PricewaterhouseCooper dated
18 June 2020
·
Northland Regional Council are considering raising additional
external debt with the LGFA once pass threshold of $20 million of borrowing
through the LGFA they are required to become a guaranteeing member of the
LGFA as per the Foundation Policy requirement of the LGFA.
All Subcommittee member agreed to take to points 2
& 3 to full council.
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Interest Rate for
Special Reserves in Surplus (Item 6.4)
ID:
A1289797
Report from Vincent McColl, Financial Accountant
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1. That
the report ‘Interest rate for special reserves in surplus’ by Vincent
McColl, Financial Accountant and dated 18 June 2020, be received.
2. That
the Audit and Risk Subcommittee endorse a recommendation to full council that
the 90-day bank bill rate plus 3% per annum will be used to calculate the
interest attributable to special reserves with balances in excess of $50,000,
reset annually on 1 July.
Recommendation
to be from 1 July 2020 due to administrative impact two weeks before audit.
All subcommittee members agreed.
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New Regional Rating
Collection Reporting (PowerBi Demo) (Item 6.5)
ID:
A1328939
Report from Simon Crabb, Finance Manager
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That the report ‘New Regional
Rating Collection Reporting (PowerBi Demo)’ by Simon Crabb, Finance
Manager and dated 17 June 2020, be received.
Finance
Manager Simon Crabb gave the Subcommittee an update on the rates collection
and noting in better shape than expected will know more after the first
quarter. Demonstration given on the (PowerBI tool) on the Regional Rates
Collection
·
Quarterly report will be issued to full council.
·
Detailed report can be produced for each of the three districts.
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Conclusion
The meeting concluded at 14.37pm.