Audit and Risk
Subcommittee
30 March 2022
Audit and Risk
Subcommittee Minutes
Meeting held in the Held remotely
on Wednesday 30 March 2022, commencing at 10.00am
Tuhinga/Present:
Chairperson, Colin Kitchen
Councillor Amy Macdonald
Councillor Joce Yeoman
Councillor Rick Stolwerk
Ex-Officio Penny Smart
Independent Audit & Risk Advisor Danny Tuato'o
Independent Finance Advisor Stuart Henderson
I
Tae Mai/In Attendance:
Full Meeting
Pou Taumatua - GM Corporate Services – Bruce Howse
Tumuaki – Chief
Executive Officer – Malcolm Nicolson
Finance Manager –
Simon Crabb
Personal Assistant
Corporate Services – Judy Graham
Part Meeting
Human Resources Manager
– Beryl Steele
Corporate Systems
Champion – Kym Ace
Corporate Strategy
Manager – Kyla Carlier
Deloitte Partner –
Peter Gulliver
Deloitte Forensic l Risk
Advisory – Ian Tuke
Deloitte Associated
Director l Forensic l Risk Advisory – Dominic Salmon
The Chair declared the meeting open at 10.03am with a
Karakia by Independent Audit & Risk Advisor
Ngā Mahi Whakapai/Housekeeping (Item 1.0)
Ngā
whakapahā/Apologies (Item
2.0)
There were no apologies.
Nga
whakapuakanga/Declarations of Conflicts of Interest (Item 3.0)
It was advised that members should make declarations
item-by-item as the meeting progressed.
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Confirmation of Minutes - 24 November 2021 (Item 4.1)
Report from Judith Graham, Corporate Services P/A
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Moved(Smart / Yeoman)
That the minutes of the Audit
and Risk subcommittee meeting held on 24 November 2021 be confirmed as a true
and correct record.
Carried
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Internal Audit Schedule (Item 5.1)
Report from Judith Graham, Corporate Services P/A
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Moved
(Kitchen / Macdonald)
That the report ‘Internal
Audit Schedule’ by Judith Graham, Corporate Services P/A and dated 11
January 2022, be received.
Carried
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Secretarial Note: Item 5.2 Audit Fee Proposal For
Year Ending 30 June 2022 and 30 June 2023 was
addressed following Item 5.3 Deloitte -Fraud and Corruption Risk Assessment
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Audit Fee Proposal
For Year Ending 30 June 2022 and 30 June 2023
(Item 5.2)
Report from Bruce Howse, Pou Taumatua – Group
Manager Corporate Services
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Moved
(Stolwerk / Smart)
1. That
the report ‘Audit Fee Proposal For Year Ending 30 June 2022 and 30 June
2023’ by Bruce Howse, Pou Taumatua – Group Manager Corporate
Services and dated 11 February 2022, be received.
2. That
the subcommittee recommend to council the approval of base audit
fees of $156,300 for FY22 and a further $15k in audit fees for the Enterprise
Project implementation workstream.
3. That
the subcommittee recommend to council the approval of base
audit fees of $178,800 for FY23 and a further $25k in audit fees for the
Enterprise Project implementation workstream.
4. That
the subcommittee recommend to council the agreement in principle to the
approach outlined in the attached Deloitte proposal for the setting of
audit fees for FY24 and FY25.
Carried
Northland Regional Council
counteroffer 2023 audit fees was accepted by Deloitte and approved by the AOG.
Fee proposal for 2023 has now
been included.
Setting principles and
guidelines on fees going forward 2024 and 2025.
Deloitte
Partner Peter Gulliver advised the Subcommittee that he would be stepping
down at the end of this year due to the rotation rule.
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Deloitte - Fraud and
Corruption Risk Assessment (Item 5.3)
Report from Simon Crabb, Finance Manager
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Moved
(Stolwerk / Smart)
1. That
the report ‘Deloitte - Fraud and Corruption Risk Assessment’ by Simon
Crabb, Finance Manager and dated 11 January 2022, be received.
Carried
Secretarial Note: additional recommendation added to
item 5.3
Moved (Kitchen / Smart)
2. Subcommittee support
the implementation of the recommendation outlined in the fraud and corruption
report by Deloitte.
Carried
Deloitte Forensic l Risk
Advisory Ian Tuke and Deloitte Associated Director l Forensic l Risk Advisory
Dominic Salmon went through the fraud and corruption risk assessment
presentation with the subcommittee which included the fraud gap analysis,
survey and workshops outcomes.
Actions:
· Councillors
to receive fraud awareness training 2-3 hour workshop
· Complete
review of strengthen the Fraud limitation officer role – and who they
report to in the organisation.
· Continue
with implementation of the whistle blower independent phone line.
· GM
Corporate Services to start implementing recommendations from the Deloitte
fraud and corruption risk assessment report outlined on pages 34-36 of the
report.
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Internal Audit Update
- Kaipara District Council Rating Review (Item
5.4)
Report from Simon Crabb, Finance Manager
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Secretarial
Note: Subcommittee confirms receiving via email Tuesday 29 March updated
Rates review – Kaipara District Council.
Moved (Stolwerk / Kitchen)
That the report ‘Internal
Audit Update - Kaipara District Council Rating Review ’ by Simon Crabb,
Finance Manager and dated 4 March 2022, be received.
Carried
Deloitte
Partner – Peter Gulliver spoke to the subcommittee on the finding
of the recent Kaipara District Council review.
Finding
were consistent to that of Far North District Council is that far to many
people had access to the rating system. Deloitte has recommended and Kaipara
District Council has agreed to reduce the number of staff having access to
the rating system.
Deloitte
Partner – Peter Gulliver highlighted to the Subcommittee the
issue with the Kaipara District Council Rating system on the allocation of
part payments, with part payments first allocated to Kaipara District
Council.
Action:
·
GM Corporate Services to follow up on Far North District
Council on the progression on modifying their rating system.
·
Rating service agreements to be modified to include appropriate
allocation methodology for 2022/2023 of all Territorial Authorities.
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Internal Audit
Maturity Assessment (Item 5.5)
Report from Bruce Howse, Pou Taumatua – Group
Manager Corporate Services
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1. That
the report ‘Internal Audit Maturity Assessment’ by Bruce Howse,
Pou Taumatua – Group Manager Corporate Services and dated 12 January
2022, be received.
Subcommittee have agreed not to
accept item 5.5 Internal Audit Maturity Assessment report as general
consensus of the Subcommittee felt there was missing information that would
have likely alter the outcome of the assessment.
Moved (Stolwerk/Smart)
Internal Audit Maturity
Assessment (item 5.5) to remain laid on the table until a further review has
been completed.
Carried
Action: GM Corporate
Services, Chief Executive Officer, Independent Audit & Risk Advisor
Independent Finance Advisor to meet with Deloitte Partner – Peter
Gulliver for future discussion and tightening up the wording on the report.
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Investment Policy
Revision - Incorporate Protocols for Reporting Investment Fund Gains/Losses (Item 5.6)
Report from Simon Crabb, Finance Manager
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Moved (Kitchen
/ Stolwerk )
1. That
the report ‘Investment Policy Revision - Incorporate Protocols for
Reporting Investment Fund Gains/Losses’ by Simon Crabb, Finance Manager
and dated 15 March 2022, be received.
2. That
the subcommittee endorse that the proposed changes presented in this report
are incorporated into councils Investment Policy
Carried
Action:
·
Gains and losses to be explained to whole Council for a better
understanding on the long term investment.
·
More thinking to be done around the amount of reserve to be transferred
– historical gains last 3 to 5 year and report back to the
subcommittee.
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Local Government
Funding Agency (LGFA) Presentation & Funding Strategy Considerations (Item 5.7)
Report from Simon Crabb, Finance Manager
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Moved
(Kitchen /Stolwerk)
That the report ‘Local
Government Funding Agency (LGFA) Presentation & Funding Strategy
Considerations’ by Simon Crabb, Finance Manager and dated 17 March 2022,
be received.
Carried
Finance
Manger spoke to the Subcommittee and highlighted it would be more prudent for
Council to consider using own council money to fund project instead of
borrowing funds from the Local Government Funding Agency when interest rates
hit a certain threshold.
Action:
Workshop and work with the
Investment and Property Subcommittee to look at a new long term strategy on
how we fund projects in a changing environment.
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Risk Management
Activity Update (Item 5.8)
Report from Kym Ace, Corporate Systems Champion
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Moved (Stolwerk
/ Macdonald)
1. That
the report ‘Risk Management Activity Update’ by Kym Ace,
Corporate Systems Champion and dated 2 December 2021, be received.
2. That changes
to the Risk Management Policy and Framework be approved
Carried
Corporate Systems
Champion spoke to the subcommittee about the Risk management activity.
Action:
·
Review item 5 Investment portfolio financial risk.
·
Councillor Smart to meet with Independent Audit & Risk
Advisor Danny Tuato'o and Chief Executive Office to do more work on overview
of the inherit risk and residual risks and take back to Council.
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Risk Deep Dive on
workload and Capability and Operational capacity to manage events and
directives (Item 5.9)
Report from Kym Ace, Corporate Systems Champion
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Moved
(Stolwerk / Smart )
12.261. That
the report ‘Risk Deep Dive on workload and Capability and Operational
capacity to manage events and directives’ by Kym Ace, Corporate Systems
Champion and dated 11 January 2022, be received.
Carried
Corporate Systems Champion
advised that the two deep dive completed were amalgamated together due to overlap.
GM Corporate Service advised the
Subcommittee on work the Executive leadership team is doing around staff
workloads as this again has been identified as one of the top staff stress
indicated in the all staff stress survey.
Subcommittee support the work
and treatment that has been noted in the report.
Action: Executive
leadership team to bring back to council to workshop on what work has been
identify that potentially staff can stop, pause, defer.
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Health and Safety
Update (Item 5.10)
Report from Beryl Steele, Human Resources Manager
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Moved
(Macdonald / Stolwerk )
1. That
the report ‘Health and Safety Update’ by Beryl Steele, Human
Resources Manager and dated 2 December 2021, be received.
Carried
Human
Resources Manager gave an update regarding the replacement of Health and
Safety Advisor role currently unable to find person who is the right
fit for the organisation.
Action:
Human Resources Manager to relook
at risk ranking Extended workload/stress as noted as a residual score 9.
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Insurance Summary
2021/2022 (Item 5.11)
Report from Judith Graham, Corporate Services P/A
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Moved (
Stolwerk / Macdonald)
That the report ‘Insurance
Summary 2021/2022’ by Judith Graham, Corporate Services P/A and dated 11
January 2022, be received.
Carried
GM Corporate Service advise the
subcommittee that there has been an 8.1% increase in the insurance premium.
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Kaupapa ā Roto/Business with Public Excluded (Item 6.0)
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Moved ( Stolwerk / Macdonald )
1.
That the public be excluded from the proceedings of this meeting to
consider confidential matters.
2.
That the general subject of the matters to be considered whilst the
public is excluded, the reasons for passing this resolution in relation to
this matter, and the specific grounds under the Local Government Official
Information and Meetings Act 1987 for the passing of this resolution, are as
follows:
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Item No.
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Item Issue
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Reasons/Grounds
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6.1
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Confirmation
of Confidential Minutes - 24 November 2021
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The public
conduct of the proceedings would be likely to result in disclosure of
information, as stated in the open section of the meeting -.
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6.2
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Cyber
Security update
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The public
conduct of the proceedings would be likely to result in disclosure of
information, the withholding of which is necessary to protect information
where the making available of the information would be likely unreasonably
to prejudice the commercial position of the person who supplied or who is
the subject of the information s7(2)(b)(ii) and the withholding of which is
necessary to prevent the disclosure or use of official information for
improper gain or improper advantage s7(2)(j).
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3.
That the Independent Advisors be permitted to stay during business
with the public excluded.
Carried
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Whakamutunga (Conclusion)
The meeting concluded at 12.29pm led by a Karakia by
Independent Audit & Risk Advisor Danny Tuato'o .