HuttCity_TeAwaKairangi_BLACK_AGENDA_COVER

 

 

 

 

Audit and Risk Subcommittee

 

 

10 September 2020

 

 

Order Paper for the meeting to be held in the

Council Chambers, 2nd Floor, 30 Laings Road, Lower Hutt,

on:

 

 

 

 

Thursday 17 September 2020 commencing at 2.00pm

 

 

 

 

Membership

 

 

 Ms Suzanne Tindal (Independent Chair)

Mayor C Barry (Deputy Chair)

Cr D Bassett

Cr J Briggs

Cr C Milne

Cr A Mitchell

Cr N Shaw

 

 

 

 

 

 

 

 

 

 

For the dates and times of Council Meetings please visit www.huttcity.govt.nz

 

Have your say

You can speak under public comment to items on the agenda to the Mayor and Councillors at this meeting. Please let us know by noon the working day before the meeting. You can do this by emailing DemocraticServicesTeam@huttcity.govt.nz or calling the Democratic Services Team on 04 570 6666 | 0800 HUTT CITY


HuttCity_TeAwaKairangi_SCREEN_MEDRES

AUDIT AND RISK SUBCOMMITTEE
Membership:	Independent Chair and 6 Members
	Audit and Risk Subcommittee members should be appointed so that the subcommittee has a diversity of governance skills, experiences and personal qualities. Between them, the members should bring a mix of the following attributes:
1.	Broad governance experience;
2.	Familiarity with risk management disciplines;
3.	Understanding of internal control and assurance frameworks;
4.	 An understanding of financial and non-financial performance reporting;
5.	A good understanding of the roles of internal and external audit; and
6.	A sound understanding of the local government sector.
Use of the matrix below has assisted other councils to consider the best fit for membership of an Audit and Risk Committee.
Quorum:	Half of the members
Meeting Cycle:	Quarterly or as required
Reports to:	Council

PURPOSE

To provide objective advice and recommendations around the sufficiency, quality and results of assurance over the Council Group’s financial management practices, risk management, internal control systems and governance frameworks.

 

Consider and make recommendations to Council:

The effectiveness and robustness of the internal audit, risk management and internal control systems, processes and practices of the Council for each financial year:

        Review and approve the internal audit coverage and annual work plans, ensuring these plans are based on the Council’s risk profile

        Review the adequacy of management’s implementation of internal audit recommendations

        Review the internal audit charter to ensure appropriate organisational structures, authority, access, independence, resourcing and reporting arrangements are in place

        Review whether management has in place a current, comprehensive and effective risk management framework and associated procedures for identifying, assessing and responding to the Council’s significant risks, potential opportunities and adverse effects in accordance with its risk approach

        Monitor whether appropriate action is being taken by management to respond to the Council’s significant risks, potential opportunities and adverse effects

        Review whether management has taken steps to embed a culture that is committed to probity and ethical behaviour

        Review whether management has established and maintains a sound internal control system, policies and procedures so that activities are effectively controlled and carried out as planned towards the achievement of the Council’s objectives and safeguard the Council’s financial and non-financial assets

        Review whether there are appropriate systems, processes and controls in place to prevent, detect and effectively respond to fraud

The integrity and appropriateness of internal and external reporting and accountability requirements:

        Consider the processes for ensuring the completeness, reliability and quality of financial and operational information being provided to the Council, including information provided by Council Controlled Organisations and Council Controlled Trading Organisations 

        Seek advice periodically from internal and external auditors regarding the completeness and quality of financial and operational information that is provided to the Council

        Review the appropriateness of the Council’s existing accounting policies, judgements, treatments and principles and any proposed change

        Enquire of internal and external auditors any information that affects the quality and clarity of the Council’s financial statements and statements of service performance, and assess whether appropriate action has been taken by management in response

        Satisfy itself that the financial statements and statements of service performance are supported by appropriate management signoff on the statements and on the adequacy of the systems of internal control

        Confirm that processes are in place to ensure that financial and non-financial information included in the Council’s Annual Report and Long Term Plan is consistent with the audited financial statements

Oversight of external auditor engagement and outputs:

        At the start of each audit, confirm the terms of engagement, including the nature and scope of the audit, timetable and fees, with the external auditor

        Receive the external auditor’s management letters and monitor action to be taken by management on audit recommendations raised

        Conduct a members’ only session (ie, without any management present) with external auditors to discuss any matters that the auditors wish to bring to the Subcommittee’s attention and/or any issues of independence

Review the effectiveness of systems for monitoring the Council’s compliance with laws, regulations, standards, Council policies, plans, code of conduct and good practice guidelines as appropriate.

Matrix of Experience, Skills and Personal Qualities

Experience, Skills and Personal Qualities

Member A

Member B

Member C

Member D

Independent Chairperson

The recommended combination of experience is:

·           financial reporting

 

 

 

 

 

·           broad governance experience

 

 

 

 

 

·           familiarity with risk management disciplines

 

 

 

 

 

·           understanding of internal control and assurance frameworks

 

 

 

 

 

·           good understanding of the roles of internal and external audit

 

 

 

 

 

·           local government expertise

 

 

 

 

 

For an “advisory-oriented” audit committee, particular emphasis should be placed on:

·           Strategy

 

 

 

 

 

·           Performance management

 

 

 

 

 

·           Risk management disciplines

 

 

 

 

 

In determining the composition of the audit committee, the combined experience, skills, and personal qualities of audit committee members is critical. Members should bring:

·           the ability to act independently and objectively

 

 

 

 

 

·           the ability to ask relevant and pertinent questions, and evaluate the answers

 

 

 

 

 

·           the ability to work constructively with management to achieve improvements

 

 

 

 

 

·           an appreciation of the public entity’s culture and values, and a determination to uphold these

 

 

 

 

 

·           a proactive approach to advising the governing body and chief executive of matters that require further attention

 

 

 

 

 

·           business acumen

 

 

 

 

 

·           appropriate diligence, time, effort, and commitment

 

 

 

 

 

·           the ability to explain technical matters in their field to other members of the audit committee

 

 

 

 

 

 

 

    


                                                                       8                                                                       

 

HUTT CITY COUNCIL

 

Audit and Risk Subcommittee

 

Meeting to be held in the Council Chambers, 2nd Floor, 30 Laings Road, Lower Hutt on

 Thursday 17 September 2020 commencing at 2.00pm.

 

ORDER PAPER

 

Public Business

 

1.       APOLOGIES 

Cr Bassett.

2.       PUBLIC COMMENT

Generally up to 30 minutes is set aside for public comment (three minutes per speaker on items appearing on the agenda). Speakers may be asked questions on the matters they raise.

3.       CONFLICT OF INTEREST DECLARATIONS

Members are reminded of the need to be vigilant to stand aside from decision making when a conflict arises between their role as a member and any private or other external interest they might have.

4.       External audit update - Hutt City Council (20/790)

Report No. ARSC2020/5/202 by the Chief Financial Officer                              9

Chair’s Recommendation:

That the recommendations contained within the report be endorsed.

5.       External Audit Update - The Hutt City Community Facilities Trust (20/898)

Report No. ARSC2020/5/189 by the Senior Management Accountant            68

Chair’s Recommendation:

“That the recommendations contained within the report be endorsed.”

 

 

6.       External Audit Update - Seaview Marina Limited (20/899)

Report No. ARSC2020/5/190 by the Senior Management Accountant          108

Chair’s Recommendation:

“That the recommendations contained within the report be endorsed.”

7.       External Audit Update - Urban Plus Limited (Parent and Group) (20/933)

Report No. ARSC2020/5/191 by the Senior Accountant                                 146

Chair’s Recommendation:

“That the recommendations contained within the report be endorsed.”

8.       Naenae Pool and Spatial Plan (20/864)

Report No. ARSC2020/5/99 by the Strategic Assets & Project Manager       191

Chair’s Recommendation:

“That the recommendations contained within the report be endorsed.”

9.       Riverlink Update (20/997)

Report No. ARSC2020/5/192 by the Director Economy and Development   213

Chair’s Recommendation:

“That the recommendation contained within the report be endorsed.”

10.     Lower Hutt Events Centre & Hotel (20/972)

Report No. ARSC2020/5/193 by the Head of City Growth                            223

Chair’s Recommendation:

“That the recommendation contained within the report be endorsed.”

11.     Managing Covid-19 Risks, Including Business Continuity (20/968)

Report No. ARSC2020/5/194 by the Risk and Assurance Manager               228

Chair’s Recommendation:

“That the recommendation contained within the report be endorsed.”

 

12.     Risk Management Update (20/969)

Report No. ARSC2020/5/195 by the Risk and Assurance Manager               281

Chair’s Recommendation:

“That the recommendations contained within the report be endorsed.”

13.     Internal Audit Update (20/970)

Report No. ARSC2020/5/196 by the Risk and Assurance Manager               299

Chair’s Recommendation:

“That the recommendation contained within the report be endorsed.”

14.     End of Financial Year Report back on the Mayor’s Donations and Grants (20/990)

Report No. ARSC2020/5/203 by the Head of the Mayor's Office                   303

Chair’s Recommendation:

“That the recommendation contained within the report be endorsed.”

15.     Seismic Performance Register (20/476)

Report No. ARSC2020/5/198 by the Senior Advisor to the Chief Executive 311

Chair’s Recommendation:

“That the Subcommittee:

(i)  receives and notes the information contained in the report; and

 

(ii) asks officers to report back to the Subcommittee every 6 months   unless a matter arose that required immediate reporting.”

16.     Audit and Risk Work Programme 2020 (20/947)

Report No. ARSC2020/5/96 by the Committee Advisor                                 314

Chair’s Recommendation:

“That the recommendation contained within the work programme be endorsed.”

 

 

 

 

 

17.     ADDITIONAL ORDINARY MEETING OF THE AUDIT AND RISK SUBCOMMITTEE

 

“That the Audit and Risk Subcommittee agrees to hold an additional ordinary

meeting on the 21st of October 2020 commencing at 2pm in the Hutt City Council Chambers, 2nd Floor, 30 Laings Road, Lower Hutt for the purpose of considering the project status update on the Naenae Pool and Spatial Plan.”

18.     QUESTIONS

With reference to section 32 of Standing Orders, before putting a question a member shall endeavour to obtain the information. Questions shall be concise and in writing and handed to the Chair prior to the commencement of the meeting.

 

 

 

 

 

Toi Lealofi

COMMITTEE ADVISOR    


                                                                                      14                                               17 September 2020

Audit and Risk Subcommittee

10 August 2020

 

 

 

File: (20/790)

 

 

 

 

Report no: ARSC2020/5/202

 

External audit update - Hutt City Council

 

Purpose of Report

1.    To provide an update on the preparation of the Hutt City Council Group Annual Report for the period 1 July 2019 to 30 June 2020.  This includes:

a.    Information on the audit plan which has been agreed with our external auditors Audit New Zealand; and

b.    The results of the latest interim management report issued by Audit New Zealand.

2.    To provide oversight of the management reports issued by Audit NZ in relation to the recent external audit of the LTP amendment, together with the management report issued after the audit of the LTP 2018-2028.

3.    The Audit New Zealand Audit Director will attend the Subcommittee meeting.

Recommendations

That the Subcommittee:

 

(i)    notes the agreed Audit New Zealand audit plan for the Group Annual Report for the year ended 30 June 2020, attached as Appendix 1 to the report;

 

(ii)   notes Audit New Zealand’s interim management report for the year ended 30 June 2020, attached as Appendix 2 to the report;

 

(iii) notes the progress achieved in addressing the audit recommendations;

 

(iv)      notes Audit New Zealand’s management report for the Long Term Plan 2018-2028; and

 

(v)  notes Audit New Zealand’s management report for the Long Term Plan amendment for the Waste Services Review.

 

 

Audit plans for Group Annual Report 2019/20

4.    The primary purpose of the external audit is to complete checks that enable Audit New Zealand (ANZ) to issue an audit opinion on Council Groups’ performance results for the year end.

5.    The Group Annual Report for the year ended 30 June 2019 was approved and adopted by Council on 9 October 2019. ANZ issued an unmodified audit opinion on this date.

6.    An audit plan for the year ended 30 June 2020 has been agreed and is attached as Appendix 1. This includes information about audit risks and issues, the audit process, reporting protocols, audit logistics and expectations.

7.    The audit plan notes that the main focus areas for the audit include:

The impact of COVID-19 pandemic on the Council (this includes the impact on the control environment, and completeness and accuracy of financial statements and performance information),

Valuation and impairment assessment of property, plant and equipment,

Performance reporting (results provided by Wellington Water),

Risk of management override of internal controls,

Rates,

Elected members remuneration and allowances,

Local Member’s Interest Act,

Funding Impact Statements,

Mandatory performance measures,

Annual Report disclosures,

Information Technology,

Debenture Trust audit.

8.    The high level audit plan and deliverables are summarised in the table that follows:

 

Deliverable

Date

1.

Draft annual report available for Audit NZ

14 September

2.

The final audit by ANZ commences, three weeks in duration

21 September

3.

Final financial statements available for ANZ, with all tax and consolidation adjustments finalised

12 October

4.

Annual Report available for ANZ

14 October

5.

Verbal audit clearance by ANZ

19 October

6.

Policy, Finance and Strategy Committee meet to review the draft Group Annual Report

21 October

7.

Policy, Finance and Strategy Committee review the final Annual Report and recommend to Council the adoption of the Group Annual Report.

30 October

8.

Council adopts the Group Annual Report.

ANZ issue audit opinion.

30 October

 

9.    Wellington Water Limited has confirmed their publication of an audited Annual Report by 30 September 2020.

10.  Information about the Annual Reports for the Council CCO’s Seaview Marina Limited, Urban Plus Limited and Community Facilities Trust are detailed in separate reports on this agenda.  The audit plans for the CCOs align with the overall Group Annual Report timeline and plans.

11.  There are some uncertainties regarding the impact of COVID-19 on the group audit. There may be the need to make some minor amendments to the plan.

Update on the interim audit

12.  As part of the audit process each year, ANZ issue both an interim management report and a final management report. At the Audit and Risk Subcommittee meeting of the 12 March 2020, the final management report for the year ended 30 June 2019 was tabled.

13.  The ANZ interim management report for the year ended 30 June 2020 has been issued and is attached to this report as Appendix 2.  The interim audit was focused on the period prior to the COVID-19 lockdown. 

14.  Over the last year there has been good progress achieved in closing out long-standing audit recommendations.


 

 

Audit NZ recommendation

First raised by ANZ

Date reported as closed per ANZ  

1.

Information and communications Technology Policies require review

2016/17

Dec 2019

2.

Lack of formal documentation of cost allocation percentages

2016/17

Dec 2019

3.

Revenue from the pools and Dowse – reconciliation process

2015/16

Dec 2019

4.

Creditor and payroll Masterfile changes

2018/19

July 2020

5.

Process for reviewing policies

2017/18

July 2020

6.

Annual review of network access rights not performed

2016/17

July 2020

7.

Financial delegations policy and related controls

2015/16

July 2020

8.

Property, plant and equipment – policy and procedure improvements

2014/15

July 2020

 

15.  There are nine remaining audit recommendations which are reported by Audit NZ as in progress to be resolved. The table that follows provides an overview of these, together with Officers view of expected status in the final audit report.  

 

Audit NZ recommendation

First raised by ANZ

Officers view on outcome expected for final audit

Officer brief commentary and updates

1.

Accuracy and reliability of Rating Information Database (RID). 

2018/19

Closed

 

Project set-up to address this matter. Process improvement successfully implemented whereby previous manual data entry process has been replaced by electronic transfer of QV data into RID. 

2.

SSP source of information not disclosed appropriately.

2018/19

Closed

Resolved.

3.

High level of manual adjustments in reporting “number of new dwellings”.

2017/18

In progress

Officers are investigating options on how to improve this process.

4.

Outdated procurement policy.

2017/18

Closed

A new policy has been reviewed and approved by the Corporate Leadership Team (CLT).

5.

Sensitive expenditure.

2016/17

Closed

A new policy has been approved by CLT and implemented.

6.

Network and payroll passwords settings can be improved.

2016/17

In progress

We are working through a security review which includes the review of password policies and will also consider whether to implement multi factor authentication. The aim is to finalise our approach by the end of the calendar year.

7.

IT Disaster Recovery Plans require testing.

2016/17

In progress

Reduced risk with move of TechnologyOne system to the cloud in July 2019. We also changed the backup process from tapes to secure cloud storage.  Further work to be progressed in the next year as we work though our Digital Transformation programme.

8.

Independent review of journals.

2015/16

Closed

New policy and process implemented.

9.

Documented procedures for key systems.

2014/15

Closed

There is good progress on this and ongoing updates required as procedures change (e.g. due to Covid-19).

Audit of the Long Term Plan and related amendments

16.  By way of background the audit report issued after the completion of the Long Term Plan 2018-2028 is attached (refer Appendix 3). There are a number of recommendations included in this report with some progress achieved in addressing these matters.

17.  Officers are currently preparing for the Long Term Plan 2021-2031 (LTP), with early decisions and direction from Committees and Council progressing from August 2020. The external audit of the LTP is expected to take place in February 2021. Early discussions on the audit plan have started and are expected to be finalised in the next quarter.

LTP amendments completed in 2020

18.  An LTP amendment audit was completed by ANZ in February/March 2020. This was a wide ranging LTP amendment which included proposed significant changes to the capital works programme (including Three Waters, Naenae pool), Waste Service changes, rating policy changes, increased operational costs as well as changes to the Financial Strategy. The audit was completed successfully and ANZ issued an unmodified audit opinion 18 March 2020. Due to the Covid-19 lockdown a decision was made not to progress the LTP amendment.  A one year emergency Annual Plan for 2020/21 was agreed. There is consequently no ANZ management report in relation to this LTP amendment audit.

19.  A LTP amendment audit was completed by ANZ in July 2020 for the proposed changes to waste services. The audit was completed successfully and an unmodified audit opinion issued. The management report from this audit is attached as Appendix 4. There are no audit recommendations to be addressed in this report.

20.  The external audits undertaken across the two LTP amendments in 2020 have resulted in improved officer understanding and capability across these processes. This is helpful leading into the next LTP.  

Climate Change Impact and Considerations

 

21.  The matters addressed in this report have been considered in accordance with the process set out in Council’s Climate Change Considerations Guide. There are no climate change impacts or considerations arising from this report.

Legal Considerations

22. There are no legal considerations arising from this report.

Financial Considerations

23. The financial considerations are detailed in this report in the relevant areas.

Appendices

No.

Title

Page

1

Appendix 1 - HCC Group Audit Plan agreed with Audit NZ for the year ended 30 June 2020

15

2

Appendix 2 - Audit NZ Interim management report for the year ended 30 June 2020

35

3

Appendix 3 - Audit NZ LTP 2018-2028 Management Report

55

4

Appendix 4 - Audit NZ LTP Amendment waste services review management report

62

 

Author: Jenny Livschitz

Chief Financial Officer

 

Reviewed By: Anna Welanyk

Director Transformation and Resources

 

Approved By: Jo Miller

Chief Executive

 


Attachment 1

Appendix 1 - HCC Group Audit Plan agreed with Audit NZ for the year ended 30 June 2020

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


Attachment 2

Appendix 2 - Audit NZ Interim management report for the year ended 30 June 2020

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


Attachment 3

Appendix 3 - Audit NZ LTP 2018-2028 Management Report

 


 


 


 


 


 


 


Attachment 4

Appendix 4 - Audit NZ LTP Amendment waste services review management report

 


 


 


 


 


 


                                                                                      71                                               17 September 2020

Audit and Risk Subcommittee

13 August 2020

 

 

 

File: (20/898)

 

 

 

 

Report no: ARSC2020/5/189

 

External Audit Update - The Hutt City Community Facilities Trust

 

Purpose of Report

1.    To provide an update on the preparation of the Hutt City Community Facilities Trust (CFT) Annual Report for the period 1 July 2019 to 30 June 2020.  This includes:

a.  Information on the audit plan which has been agreed with our external auditors Audit New Zealand; and

b.  Information on the last management report issued by Audit New Zealand.

2.    The Audit New Zealand appointed auditor will attend the subcommittee meeting.

Recommendations

That the Subcommittee:

 

(i)    notes the agreed audit plan from Audit New Zealand, attached as Appendix 1 to the report; and

(ii)   notes the progress achieved in addressing the audit recommendations.

 

Background

3.    The primary purpose of the external audit is to complete checks that enable Audit New Zealand (ANZ) to issue an audit opinion on The Hutt City Community Facilities Trust (CFT) performance results for the year end.

4.    CFT’s Annual Report for the year ended 30 June 2019 was approved and adopted by Council on 9 September 2019. ANZ issued an unmodified audit opinion on this date.

Audit plans for the Annual Report for the period 1 July 2019 to 30 June 2020

5.    An audit plan for the year ended 30 June 2020 has been agreed and is attached as Appendix 1.  This includes information about audit risks and issues, the audit process, reporting protocols, audit logistics and expectations.

6.    The audit plan notes that the main focus areas for the audit include:

The impact of COVID-19 pandemic on the CFT (this includes the impact on the control environment, and completeness and accuracy of financial statements and performance information),

Valuation and impairment assessment of property, plant and equipment,

Organisational change (assessing the operational and strategic direction of CFT, the impact of changes in CFT’s operations on the management control environment and an assessment of the validity of the going concern assumption),

Risk of management override of internal controls.

7.    The high level audit plan and deliverables are summarised in the table that follows:

 

Deliverable

Date

1.

Interim audit visit

4 May 2020

2.

Draft financial statements and performance  information, including notes to the financial statements

15 July 2020

3.

Final audit

20 July 2020

4.

Listing of audit adjustments provided

21 August 2020

5.

Annual report made available, including final financial statements and performance information (incorporating all agreed amendments) and Chair’s overview report

31 August 2020

6.

Audit opinion issued

21 September 2020

7.

Draft Report to the Board of Trustees issued

21 September 2020

 

Audit NZ management reports

8.    Over the last year there has been good progress achieved in closing out long-standing audit recommendations.

 

Audit NZ recommendation

First raised by ANZ

Date reported as closed per ANZ  

1.

Oversight for retention calculations

 

2017/18

July 2019

2.

Property, plant and equipment impairment assessment

 

2016/17

July 2019

3.

Grant revenue accounting treatment consideration

 

2015/16

July 2019

4.

Compliance with Sensitive Expenditure Policy

 

2017/18

July 2019

 

9.    There are five non-urgent remaining audit recommendations which are reported by ANZ as in progress to be resolved. The table that follows provides an overview of these, together with Officers view of expected status in final audit report.  

 

Audit NZ recommendation

First raised by ANZ

Officers view on outcome expected for final audit

Officer brief updates

1.

Monitoring of building Warrants of Fitness

2017/18

Closed

System for formal monitoring and control established

2.

Compliance with legislation for completion and delivery of CFT Statement of Intent

2017/18

Closed

Final SOI signed off prior to 30 June 2020

3.

Journal review

2015/16

Closed

New journal policy has been implemented.

4.

Maintenance of management arrangements and controls

2015/16

Closed

As CFT has no staff, there is a strong communication line between the Chair of the Committee and Council staff involved in the preparation of annual report.

5.

Conflicts of interest and disclosure of interests

2015/16

Open

Trustees are reminded at each Committee meeting to disclose their interests.

Climate Change Impact and Considerations

 

10.  The matters addressed in this report have been considered in accordance with the process set out in Council’s Climate Change Considerations Guide. There are no climate change impacts or considerations arising from this report.

Legal Considerations

11. There are no legal considerations arising from this report.

Financial Considerations

12.  The financial considerations are detailed in this report in the relevant areas.

Appendices

No.

Title

Page

1

Appendix 1: CFT Audit Plan for the Year Ending 30 June 2020)

72

2

Appendix 2: CFT Report to the Board for the Year Ending 30 June 2019

87

 

 

Author: Sharon Page

Senior Management Accountant

 

Author: Darrin Newth

Financial Accounting Manager

 

Reviewed By: Jenny Livschitz

Chief Financial Officer

 

 

Reviewed By: Anna Welanyk

Director Transformation and Resources

 

Approved By: Jo Miller

Chief Executive

 


Attachment 1

Appendix 1: CFT Audit Plan for the Year Ending 30 June 2020)

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


Attachment 2

Appendix 2: CFT Report to the Board for the Year Ending 30 June 2019

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


                                                                                     111                                              17 September 2020

Audit and Risk Subcommittee

13 August 2020

 

 

 

File: (20/899)

 

 

 

 

Report no: ARSC2020/5/190

 

External Audit Update - Seaview Marina Limited

 

Purpose of Report

1.    To provide an update on the preparation of the Seaview Marina Limited Annual Report for the period 1 July 2019 to 30 June 2020.  This includes:

a.  Information on the audit plan which has been agreed with our external auditors Audit New Zealand; and

b.  Information on the last management report issued by Audit New Zealand.

2.    The Audit New Zealand appointed auditor will attend the subcommittee meeting.

Recommendations

That the Subcommittee:

(i)   notes the agreed audit plan from Audit New Zealand, attached as Appendix 1 to the report; and

(ii)   notes the progress achieved in addressing the audit recommendations attached as Appendix 2 to the report.

 

Background

3.    The primary purpose of the external audit is to complete checks that enable Audit New Zealand (ANZ) to issue an audit opinion on Seaview Marina Limited (SML) performance results for the year end.

4.    SML’s Annual Report for the year ended 30 June 2019 was approved and adopted by Council on 19 September 2019. ANZ issued an unmodified audit opinion on this date.

Audit plans for Annual Report for the period 1 July 2019 to 30 June 2020

5.    An audit plan for the year ended 30 June 2020 has been agreed and is attached as Appendix 1. This includes information about audit risks and issues, the audit process, reporting protocols, audit logistics and expectations.

6.    The audit plan notes that the main focus areas for the audit include:

The impact of COVID-19 pandemic on SML (this includes the impact on the control environment, and completeness and accuracy of financial statements and performance information);

Valuation and impairment assessment of property, plant and equipment;

 

Completeness of revenue;

 

Performance reporting; and

 

Risk of management override of internal controls.

 

7.    The proposed timetable for SML has changed subsequent to ANZ’s original audit plan due to COVID-19.   The Appointed Auditor has provided revised dates.

 

Deliverable

Date

1.

Interim audit work

18 May

2.

Marina visit to complete the stocktake audit work

23 June

3.

Draft financial statements and performance information available for audit (including notes to the financial statements) with actual year-end figures

19 August

4.

Final audit begins

21 September

(previously 20 July)

5.

Listing of audit adjustments provided

2 October

(previously 10 August)

6.

Annual report available, including updated final financial statements and performance information (incorporating all amendments agreed between us), and any Chair and Chief Executive overview reports

9 October

(previously 31 August)

7.

Audit opinion issued

Prior to 30 October

8.

Draft report to Board issued

Prior to 30 October

 

Audit NZ management reports

8.    Over the last year there has been good progress achieved in closing out long-standing audit recommendations.

 

Audit NZ recommendation

First raised by ANZ

Date reported as closed per ANZ  

1.

Independent review of revenue changes

 

2017/18

July 2019

2.

Reconciliation of the fixed asset register to the financial statements

 

2017/18

July 2019

 

3.

Property, plant and equipment impairment assessment

 

2016/17

July  2019

 

9.    There are two remaining audit recommendations which are reported by ANZ as in progress to be resolved. The table that follows provides an overview of these, together with Officers view of expected status in final audit report.  

 

Audit NZ recommendation

First raised by ANZ

Officers view on outcome expected for final audit

Officer brief updates

1.

Legislative compliance

 

2017/18

Closed

 

The entity has met all deadlines in accordance with the requirements of the Local Government Act.

2.

Independent review of journals.

2015/16

Closed

New policy and process implemented.

Climate Change Impact and Considerations

 

10.  The matters addressed in this report have been considered in accordance with the process set out in Council’s Climate Change Considerations Guide. There are no climate change impacts or considerations arising from this report.

 

 

Legal Considerations

11. There are no legal considerations arising from this report.

Financial Considerations

12. The financial considerations are detailed in this report in the relevant areas.

Appendices

No.

Title

Page

1

Appendix 1:SML Audit Plan for Year Ending 30 June 2020

112

2

Appendix 2: SML Report to Governors for Year Ending 30 June 2019

130

    

 

Author: Sharon Page

Senior Management Accountant

 

 

Author: Darrin Newth

Financial Accounting Manager

 

 

Reviewed By: Jenny Livschitz

Chief Financial Officer

 

 

Reviewed By: Anna Welanyk

Director Transformation and Resources

 

 

Approved By: Jo Miller

Chief Executive

 


Attachment 1

Appendix 1:SML Audit Plan for Year Ending 30 June 2020

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


Attachment 2

Appendix 2: SML Report to Governors for Year Ending 30 June 2019

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


                                                                                     150                                              17 September 2020

Audit and Risk Subcommittee

18 August 2020

 

 

 

File: (20/933)

 

 

 

 

Report no: ARSC2020/5/191

 

External Audit Update - Urban Plus Limited (Parent and Group)

 

Purpose of Report

1.    To provide an update on the preparation of the Urban Plus Limited (Parent and Group) Annual Report for the period 1 July 2019 to 30 June 2020.  This includes:

a.  Information on the audit plan which has been agreed with our external auditors Audit New Zealand; and

b.  Information on the last management report issued by Audit New Zealand.

2.    The Audit New Zealand appointed auditor will attend the subcommittee meeting.

Recommendations

That the Subcommittee:

(i)    notes the agreed audit plan from Audit New Zealand, attached as Appendix 1 to the report; and

(ii)   notes the progress achieved in addressing the audit recommendations, attached as Appendix 2 to the report.

 

Background

3.    The primary purpose of the external audit is to complete checks that enable Audit New Zealand (ANZ) to issue an audit opinion on the Urban Plus Limited Parent and Group (UPL) performance results for the year end.

4.    The UPL Annual Report for the year ended 30 June 2019 was approved and adopted by Council on 19 September 2019. ANZ issued an unmodified audit opinion on this date.

Audit plans for the Annual Report for the period 1 July 2019 to 30 June 2020

5.    An audit plan for the year ended 30 June 2020 has been agreed and is attached as Appendix 1. This includes information about audit risks and issues, the audit process, reporting protocols, audit logistics and expectations.

6.    The audit plan notes that the main focus areas for the audit include:

The impact of COVID-19 pandemic on the Council (this includes the impact on the control environment, and completeness and accuracy of financial statements and performance information),

Group consideration and increased level of activity,

Valuation and impairment assessment of property, plant and equipment,

Performance reporting,

Intercompany loan classification,

Revenue recognition,

Risk of management override of internal controls

 

7.    The high level audit plan and deliverables are summarised in the table that follows:

 

Deliverable

Date

1.

Systems audit work

6 July 2020

2.

Draft financial statements and performance information available for audit (including notes to the financial statements) with actual yearend figures

6 July 2020

3.

Final audit begins (one week)

6 July 2020

4.

Listing of audit adjustments provided

27 July 2020

5.

Annual report available, including updated final financial statements and performance information (incorporating all the amendments agreed between us), and any Chair’s and Chief Executive’s overview or reports

17 August 2020

6.

Audit opinion issued

16 September 2020

7.

Draft report to the Board issued

16 September 2020

Audit NZ management reports

8.    Over the last year there has been good progress achieved in closing out long-standing audit recommendations.

 

 

 

Audit NZ recommendation

First raised by ANZ

Date reported as closed per ANZ  

1.

Statement of Intent (SOI) not finalised by 30 June

2017

Dec 2019

2.

Inconsistent compliance with the sensitive expenditure policy

2017

Dec 2019

3.

Changes to the group structure should be considered

2017

Dec 2019

 

9.   There are nine remaining audit recommendations which are reported by Audit NZ as in progress to be resolved. The table that follows provides an overview of these, together with Officers view of expected status in final audit report.

 

Audit NZ recommendation.

First raised by ANZ

Officers view on outcome expected for final audit

Officer brief updates

1.

Performance measures more clearly defined

2019

In progress

The SOI for the 2019/20 year had already been adopted by Council prior to this recommendation being made.  This will be addressed in the 2020/21 SOI.

2.

Preparation of the annual report

2016

Closed

An additional finance team resource has been employed to manage risks in the preparation of the monthly Board reporting and Annual Report. This was necessary given the increased activity and complexity for the group.

3.

Incorrect capitalisation of invoices

2016

Closed

Progress has been made with only one misstatement identified in 2019 resulting from incorrect capitalisation.

4.

Journals

2017

Closed

A journal policy was developed and came into effect during the year.

5.

Legislative compliance

2018

In progress

Work has begun on developing a positive confirmation of legislative compliance process similar to that used by Hutt City Council.

6.

Sensitive expenditure policy

2018

Closed

A sensitive expenditure policy was developed and came into effect during the year.

7.

Conflicts of interest

2018

Closed

The interests register has been extended to include the Chief Executive.

8.

Increased activity and complexity for the group.

2018

Closed

The additional finance team member will help address this recommendation.

9.

Assessment of fair values and impairment.

2018

Closed

As an independent valuation of the Company’s land and buildings was completed as at 31 May 2020, an impairment assessment was not necessary.

 

Climate Change Impact and Considerations

10.  The matters addressed in this report have been considered in accordance with the process set out in Council’s Climate Change Considerations Guide. There are no climate change impacts or considerations arising from this report.

Legal Considerations

11.  There are no legal considerations arising from this report.

Financial Considerations

12.  The financial considerations are detailed in this report in the relevant areas.

Appendices

No.

Title

Page

1

Appendix 1: UPL Audit Plan for the Year Ending 30 June 2020

151

2

Appendix 2: UPL Report to Governors for the Year Ending 30 June 2019

169

 

 

 

Author: Simon George

Senior Accountant

 

 

 

Author: Darrin Newth

Financial Accounting Manager

 

 

 

Reviewed By: Jenny Livschitz

Chief Financial Officer

 

 

 

Reviewed By: Anna Welanyk

Director Transformation and Resources

 

 

 

Approved By: Jo Miller

Chief Executive

 


Attachment 1

Appendix 1: UPL Audit Plan for the Year Ending 30 June 2020

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


Attachment 2

Appendix 2: UPL Report to Governors for the Year Ending 30 June 2019

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


                                                                                     194                                              17 September 2020

Audit and Risk Subcommittee

07 August 2020

 

 

 

File: (20/864)

 

 

 

Report no: ARSC2020/5/99

 

Naenae Pool and Spatial Plan

 

Purpose of Report

To update the Subcommittee on the Naenae Pool and Spatial Plan projects and changes to the way we are managing these going forward. 

 

Recommendation

That the Subcommittee:

(i)    notes the information in this report;

(ii)   notes that officers are bringing the Naenae Pool and spatial plan

       projects together and revisiting the approach to the combined project; and

 

(iii)  notes that a project status update will be considered at an additional         meeting of the subcommittee in October.

 

For the reason that the report is consistent with Council policies and processes around project management and meets the objectives of its key stakeholders and community.

 

Background

2.  In April 2019, Naenae Olympic Pool was closed to the public due to seismic issues.

3.  Following extensive community engagement, in December 2019 Council agreed to progress, subject to funding, a proposal to build a new pool and fitness suite on the site of, or adjacent to, the current pool. This required an amendment to the Long Term Plan and a consultation document was prepared with a project cost of $54M.

 

 

 

4.  Council also directed officers to urgently start work on a spatial plan for the wider Naenae town centre, and agreed to retain the $9M already budgeted for a community hub in Naenae to invest in other facilities, as determined by the spatial plan.

5.  In February 2020 a project initiation document for the pool project was signed off by the Corporate Leadership Team. This is attached as Appendix 1.

6.  Public consultation on funding for the pool was due to start in March 2020 as part of the Annual Plan/LTP amendment process. However due to the COVID 19 pandemic, Council opted instead for an emergency budget for 2020/21 and deferred the decision on funding the pool until the 2021/31 Long Term Plan.

7.  Work on the spatial plan was able to be progressed, however this has now been delayed due to COVID restrictions preventing community workshops.  The proposed date for this to come to Council was pushed out from September to December.

8.  In April, Government launched an initiative seeking infrastructure projects that were ‘shovel ready’ for potential investment to reduce the economic impact of the pandemic.

9.  The Naenae Pool project was successful in receiving a grant of $27M, which will be managed through Crown Infrastructure Projects (CIP).

Current status

10.  In late July officers held a ‘pre-mortem’ workshop on the Naenae Pool project, to identify risks and ensure they were being appropriately managed. A high-level risk register is attached as Appendix 2.

11.  Two of the key risks identified were:

i.     Potential misalignment of the pool and spatial plan projects leading to a less than optimal outcome; and

ii.    Managing the uncertainties around funding (including confirmation of both detailed costs and Council’s contribution, meeting the requirements of crown funding and ongoing uncertain impacts of COVID 19 on the successful constriction, delivery and operation of the pool)

12.  To mitigate these risks a decision was made to bring the pool and spatial plan projects together, and to revisit the approach to the combined project. This work is currently underway and we will provide an updated Project Initiation Document (PID) at a special meeting in October. To inform this we are:

i.    Seeking advice from Audit NZ around best practice guidance for project management and procurement to ensure the public funds involved are used effectively and efficiently; and

ii.   Reaching out to other Councils who have undertaken similar projects in recent years, especially those who have had challenges, to understand lessons learned

13.  We are also re-engaging with Iwi, who were involved in the Voice of the Community workshops last year. Plans for stakeholder and community engagement will be developed as part of the overall project plan. A communication plan gets underway in mid-September with the launch of a digital site for the pool and spatial plan projects. 

14.  A Community Advisory Group had already been formed for the spatial plan project and there will be ongoing community involvement in all co-design aspects of the combined project.

15.  To further support alignment of Council activity in Naenae in the coming months, the projects will be supported by a Community Co-ordinator from the Neighborhoods and Communities team.

Procurement and Contract management

16. As per the original PID timeline, a procurement process was underway for a project management services company for the pool project. Officers have adapted this to align with the new approach, with the assistance of Council’s Chief Legal Officer and a lawyer from Gibson Sheat who specializes in construction. The October paper will provide an update on this process.

17. The Project Manager, once appointed, will develop options for the procurement approach for the construction and delivery of the overall project. This will be informed by a report we have developed with Akina on procuring for impact to achieve wider outcomes from the project.  (Attached as Appendix 3)

18. The four areas of impact identified in the Akina report are:

·    Health and Wellbeing;

·    Engaging the community;

·    Local economic opportunities; and

·    Environmental efficiency

Climate Change impact and Considerations

19.  The whole life cycle of the Pool project and building are being looked at through an environment lens. Pools are high energy users and the design will be critical not only for just the environmental impact of the built facility, for example the imbedded carbon in the building, but the ongoing operational cost.  The design of this facility is critical in assisting council in achieving its sustainability goal of being carbon natural by 2050.

 

20.  One of the four impact models developed by kina is Environmental Efficiency and they have developed indicators which will be measured as the project progresses.

Communications & Consultation  

21.  Extensive community engagement was carried out to determine which Pool option to progress. There will be further community engagement on the pool and spatial plan design.

Legal & Regulatory  

22.  Currently the only legal agreement entered into is for the Pool with CIP, which has specific requirements for council to meet to receive government funding.

Appendices

No.

Title

Page

1

Appendix 1 Project Initiation Document - Naenae Pool + Fitness New Build

195

2

Appendix 2: Naenae Projects - Risk Register - August 2020

205

3

Appendix 3: Akina Hutt City Report

207

 

Author: Stephen Keatley

Strategic Assets & Project Manager

 

 

Author: Andrea Blackshaw

Director Neighbourhoods and Communities

 

 

Reviewed By: Kara Puketapu-Dentice

Director Economy and Development

 

 

Approved By: Jo Miller

Chief Executive

 

 

 


Attachment 1

Appendix 1 Project Initiation Document - Naenae Pool + Fitness New Build

 


 


 


 


 


 


 


 


 


 


Attachment 2

Appendix 2: Naenae Projects - Risk Register - August 2020

 


 


Attachment 3

Appendix 3: Akina Hutt City Report

 


                                                                                     220                                              17 September 2020

Audit and Risk Subcommittee

28 August 2020

 

 

 

File: (20/997)

 

 

 

 

Report no: ARSC2020/5/192

 

Riverlink Update

 

Purpose of Report

1.    The purpose of this report is to update the subcommittee on progress on the RiverLink Project.

Recommendations

That the Subcommittee notes the contents of this report.

 

Background

2.    RiverLink is a transformational project for Hutt City by improving resilience, connectivity, growth, ecological and wellbeing issues facing the city. It is a project that embraces and celebrates the spirit of its Taonga, Te Awa Kairangi, the Hutt River.

3.    RiverLink is a collaborative partnership between Greater Wellington Regional Council (GWRC), Hutt City Council (HCC), Ngāti toa Rangitira, Taranaki Whānui kit e Upoko o te Ika (Port Nicholson Block Settlement Trust) and Waka Kotahi.

4.    Each partner organisation is currently collaboratively drafting their individual and overall project objectives which are set out below.

 

5.    The draft overall RiverLink project objective is for the integration of flood protection, transport and urban regeneration works between Ewen Bridge and Kennedy Good Bridge, including:

a.    Enhanced flood protection for Lower Hutt's city centre and adjacent residential areas;

b.    Enhanced connections on SH2 at Melling and linkages to local transport connections;

c.     Enhanced amenity and connections so that Te Awakairangi becomes the centre piece of the city; and

d.    The identity of Te Awakairangi and mana whenua within the project area is enhanced through design and the practice of kaitiakitanga.

6.    The draft project objectives for Greater Wellington Regional Council are to increase the level of flood protection to a level of 2,800 cumecs above Ewen Bridge and to Kennedy Good Bridge:

 

a.    Providing a wider river corridor;

b.    Increased stopbank height; and

c.     Improved channel and stopbank resilience.

 

7.    The draft project objectives for Waka Kotahi are enhanced connections on SH2 at Melling and local transport connections through:

 

a.    Enhanced modal accessibility at Melling, and with local transport connections;

b.    Enhanced safety and resilience at Melling, and with local transport connections; and

c.     Improved travel time reliability and connections along SH2 and from SH2 to the Hutt city centre and the Western Hills.

 

8.    The draft project objectives for HCC are that Te Awa Kairangi between [Ewen Bridge and Kennedy Good Bridge] becomes the centre piece of the city by:

 

a.    Enhancing walking and cycling connections to and within the river corridor and between the Hutt city centre and the relocated Melling train station;

b.    Providing a promenade atop new eastern stop-banks; and

c.     Enabling future mixed use development and public space that connects with the promenade and re-orientates the Hutt city centre to the river corridor.

9.    The project is to be completed in the following three phases:

 

·      Phase 1 - the current phase, is the planning, design and consenting phase of the project, and includes all works required to acquire the necessary environmental approvals for the project. It is anticipated to run through to 2021;

 

·      Phase 2 is the delivery of the capital project, including the detailed design and construction stages and is anticipated to run through 2022-2028, and

 

·      Phase 3 is the phase of the project following the conclusion of construction under phase 2, which focusses on urban renewal of the Hutt City riverside and CBD, including the implementation of the post-construction goals.

 

10.  The partners have committed $435M of funding to deliver RiverLink of which $52M is comprised of HCC funding for its objectives as noted above.

 

11.  The RiverLink project office is currently focused on working through a process to optimise the integrated consent design against the outcome of the new GWRC hydraulic model. The result of the new GWRC hydraulic model sees increased heights in stopbanks and widening of the river corridor. This is a significant deviation from the 2017 preliminary stopbank and river corridor design which has been the basis of HCC and Waka Kotahi design components and work to date.

 

12.  As the river design is the primary dependency to the broader project scope, work on a number of workstreams has been put on hold while this is resolved. This process will result in delay to the forecast lodgment date of the project resource consent application for up to possibly six (6) months and also creates implications to the project consenting budget (due to additional programme and technical specialist design inputs). It is also anticipated that further property acquisitions due to the redesign may be required by the project partners.

 

13.  The RiverLink project office will be providing to the project board a revised work programme for approval at the 17 September board meeting. Once the revised work programme is approved, the project board will be in a better position to understand the impact of the river redesign.

 

Discussion

Hutt City Council Focus Areas - Phase 1 – Design and Consenting

Hutt City Edge and Promenade

14.  Workshops are currently underway with GRWC/HCC (including UPL) to agree a stop bank connection detail that provides GWRC comfort in terms of flood resilience, and also allows HCC to enable viable development along the city/stopbank edge. The City Edge MCA work is currently on hold awaiting the outcome of the workshops and wider design optimization associated with the river redesign.

15.  The RiverLink project office is also undertaking an assessment of alternatives to identify whether additional property purchase along Daly Street is a feasible option to allow for enhanced development opportunities and greater flood resilience.

Geotechnical Investigations

16.  Geotechnical investigations commenced along Daly St and were completed on 24 August. The information will be used to inform ground improvement design, costs and development viability along the City Edge. An interpretative report of the geotechnical findings is due in mid-September.

Marsden Street

17.  In order to avoid the need for 4+m high retaining walls along Marsden Street, traffic modelling is being completed to explore the realignment of Marsden St (part of Preliminary Design), which would form part of the “Western Access Route”. Any realignment of Marsden St will cause an increase in the project scope and may also require the acquisition of further properties.

 

 

New Melling Bridge 

18.  Current modelling suggests that the bridge will land approximately 2.7m higher than the current level of Rutherford Street. Engineering design investigations are underway with Waka Kotahi, GWRC to identify practical opportunities to reduce the height, consequential effect on surrounding properties including access, and urban design considerations. This is a significant issue for the RiverLink project office to address and ensure that from HCCs perspective that the bridge acts as an elegant and functional gateway to the city.

Development Opportunity

19.  In order to further understand the development potential and needs for Hutt City within the wider RiverLink project, officers are currently developing a brief which will inform the basis of a property and development plan for the city edge and wider Hutt City centre. An initial meeting with Isthmus (who are currently leading the RiverLink work on behalf of the partners) has been had. Officers will undertake further conversation with other providers and suppliers.

Project Milestones

 

Milestone

Date

Commence briefing of Assessment of Alternatives

24th August 2020

Board endorsement of assumptions and alternatives (and design scope freeze 1)

14 October 2020

Commence Assessment of Environmental Effects drafting

18th November 2020

Lodgement of consents

2nd Quarter 2021 (TBC)

Commencement of construction

-    Melling Transport Improvements, Flood Protection works)

-    *early works packages are being considered by GWRC

Late 2022

 

20.  It is anticipated that the project milestones will be amended once the revised work programme has been approved by the project board.

 

 

Key Contracts

 

Contractors/Consultants

Commentary

Isthmus

Design and Lead consultant

Tonkin and Taylor

River engineering - Sub-Consultant to Isthmus

GHD

RMA and planning - Sub-Consultant to Isthmus

Holmes

Construction Design engineering - Sub-Consultant to Isthmus

Buddle Findlay

Legal Counsel

WSP

Discreet contract on a wind assessment

Vitruvius

Procurement

Project Governance

Financials

21.  The total approved budget for RiverLink of $52M includes the costs for the Phase 1 Project Partnership Agreement (PPA), property purchases and remaining required CAPEX costs as noted in the above image. However, an additional $21M was approved in principle in March 2020, bringing the total in principle approved budget to $73M. This additional funding has yet to be consulted on through LTP process and consists of $19M for Melling Bridge and $2M for the pedestrian bridge. The budget is not currently sufficient to deliver all elements of the project scope, and current discussions regarding optimising the design suggest that additional funding may be required to acquire property.

22.  A further $27M was sought as a part of the LTP amendment in 2019 for contingencies and ongoing project costs, however this was not included as a part of the approved in principle of $73M. 

23.  The RiverLink project office manages the budget for Phase 1 for all partners. The total project budget (including Waka Kotahi, Greater Wellington Regional Council and Hutt City Council) is $14,242,000. Expenditure as at the end of July 20 is $2,081,576. The costs are apportioned to each funding partner as per the apportionments in the Project Partner Agreement. Hutt City Council is apportioned $4,453,471 of the total costs for Phase 1. The process for agreement of project cost sharing will have implications to the project budget.

24.  The HCC budget (uninflated) to date is set out below:

25.  Notes on the table above:

·      There is a forecast gap to approved budget of $27M that is needed for contingencies and ongoing project costs and the project office will report through to the LTP Sub-committee on 30 November 2020 when further information regarding forecast costs will be available.

Partners and Stakeholders

26.  A high level external stakeholders and partners list has been developed:

Iwi Partners

Taranaki Whānui; and

Ngāti Toa

Stakeholders

Residents and business alongside the river edge;

Hutt City rate payers and residents;

General public regional/national;

Local Schools; and

Media.

27.  At its July meeting, the project board approved the Stakeholder and Engagement Plan for RiverLink.

Procurement and Contracts

28.  Workshops with participants from all partner agencies have been held in the preceding months in order to start the discussion on the delivery model for Phase Two. Waka Kotahi has been engaged to provide technical advice around delivery and procurement models. A draft report (taking outcomes of initial workshop) is being prepared and will be provided to HCC (and all Partners) for comment.

29.  Once the discovery phase is completed it is expected that a work programme will be developed and implemented with RiverLink project board oversight. Final decisions will be elevated to the appropriate governance levels within HCC.

30.  The RiverLink project office has been working with the Ākina Foundation and the Infrastructure Sustainability Council of Australia (ISCA) to help inform the procurement approach and model to ensure broader social, cultural and environmental outcomes are considered in procurement.

31.  All contracts are managed through the RiverLink Project Director and Project Manager with reporting through to the RiverLink project board.

Climate Change Impact and Considerations

32.  The matters addressed in this report have been considered in accordance with the process set out in HCC’s Climate Change Considerations Guide.  

Legal Considerations

33.  There are no legal considerations at this time.

Financial Considerations

34.  There are no further financial considerations beyond what has been noted in the body of this report.

Appendices

No.

Title

Page

1

Appendix 1: RiverLink - Risk Register - August 2020

221

 Author: Kara Puketapu-Dentice

Director Economy and Development

 

 

Author: Anna Welanyk

Director Transformation and Resources

 

 

Approved By: Jo Miller

Chief Executive

 


Attachment 1

Appendix 1: RiverLink - Risk Register - August 2020

 


 


                                                                                     225                                              17 September 2020

Audit and Risk Subcommittee

25 August 2020

 

 

 

File: (20/972)

 

 

 

 

Report no: ARSC2020/5/193

 

Lower Hutt Events Centre & Hotel

 

Purpose of Report

1.    To update the subcommittee on the Events Centre and Hotel and report on the associated project risks.

Recommendations

That the subcommittee notes and receives the report.

 

Background

2.    The report entitled “Report of Events Centre and Hotel Development Contracts for Hutt City Council” by D.G. Dewar and reported to this subcommittee at its meeting of 16 June 2020 gives a comprehensive background to this project, however in brief:

3.    In 2009 Council adopted the Making Places 2030, a plan to transform the CBD. A key element of the plan was the improvement/replacement of the Civic Administration building and adjoining Town Hall and Horticultural Hall.

4.    In 2013 Council was presented with reports for the refurbishment/replacement of the Civic Administration building, Town Hall and Horticultural Hall and at about the same time sought a report from Horwath HTL, specialist consultant, on the prospect of establishing a hotel in the CBD.

5.    During 2014 Council approved the refurbishment of the Town Hall and construction of a new purpose built events centre, in combination referred to as the Events Centre.

6.    A subsequent EOI process saw USAR Commercial Assets Limited (“USAR”) engaged by Council to lease and manage the new Events Centre and develop a 4-Star hotel of 60 rooms on a separate site previously identified and purchased by Council for this purpose.

7.    The entire arrangement was approved by Council in April 2015.  The intention was that the Events Centre and Hotel be open contemporaneously as the Hotel was integral to the performance of the Events Centre, enabling the hosting of multi-day events.

8.    The Events Centre, constructed by Council, opened in late June 2018.  The Hotel development encountered a number of delays and cost escalations which have been covered in detail previously.  The Hotel is approximately 50% complete with a due completion date by June 2021.  The construction is funded by the operator, USAR.

9.    The Events Centre has run at a loss over the first 2 years, underwritten by Council for this period of operation.  From 1 July 2020 the Events Centre operation is now at the full commercial risk of the operator USAR, under its lease of the Events Centre which has an initial term of 20 years and 2 ROR each of 10 years.

10.  Covid-19 restrictions have further impaired the performance of the Events Centre.

Key Stakeholders & Partners

11.  Key stakeholders and partners include:

·      Council as owner of the Events Centre;

·      USAR as developer of the Hotel and lessee of the Events Centre; and

·      Raman Sarin as guarantor under the lease agreement.

12.  Key external advisors to Council include:

·      Thomas Dewar (lawyers); and

·      Cambridge Assets Management Limited (commercial advisor).

Key Contracts

13.  Key contracts include:

Key contract

Dated

Agreement to Lease Events Centre and Develop Hotel

14 May 2015

Agreement to Vary Agreement to Lease Events Centre and Develop Hotel

22 December 2016

Deed of Lease – Events Centre

21 February 2019

 

 

Climate Change Impact and Considerations

14.  There are no specific climate change impacts.

Procurement & Contract Management

15.  There is no procurement activity planned

16.  Contract management includes:

·        Owner/Operator relationship – CE and Head of City Growth

·        Manager relationship -  Acting Head of Promotion and Events

·        Facilities management – Acting Facilities Manager

Project Governance

17.  The Events Centre is complete and operating under lease to USAR.

18.  The Hotel development contract is separate to Council who monitor progress with the operator USAR.

Communications and Consultation

19.  No community consultation is intended.

Legal and Regulatory

20.  Current ongoing issues have been reported to this subcommittee on 16 June 2020 and Council on 28 July 2020.

Financials

21.  The FY2020-21 budget does not allow for any funding of the Events centre underwrite as this commitment expired as at 30 June 2020.  The costs incurred for the Event Centre underwrite for FY2018-19 was $726K and for FY2019-20 is estimated to be $542K (pending an independent audit).

Project Risks Summary

22.  Refer to Appendix 1 attached to the report.

Appendices

No.

Title

Page

1

Events Centre and Hotel - Risk Register - August 2020

226

 

Author: Gary Craig

Head of City Growth

 

Approved By: Kara Puketapu-Dentice

Director Economy and Development


Attachment 1

Events Centre and Hotel - Risk Register - August 2020

 


 


                                                                                     233                                              17 September 2020

Audit and Risk Subcommittee

24 August 2020

 

 

 

File: (20/968)

 

 

 

 

Report no: ARSC2020/5/194

 

Managing Covid-19 Risks, Including Business Continuity


Purpose of Report

1.    To confirm Hutt City Council has in place a methodology for continuous service delivery to seamlessly transition between alert levels 1, 2 and 3, to manage and minimise the risk of COVID-19 novel coronavirus disease.

2.    A further update will be provided to this Subcommittee on 25 November 2020, having experienced two cycles of COVID-19 alert level changes. This will include a report back on the results from an all staff COVID-19 debrief survey and service enhancements.

Recommendations:

That the Subcommittee receives and notes the information contained in the report.

For the reason that this update provides the Subcommittee with information to support its governance and oversight role.

 

 

Background

3.    On 25 March 2020, Government declared a state of national emergency due to the global COVID-19 pandemic.

4.    New Zealand moved quickly into Alert Level 4 lock-down to contain the spread of the virus to prevent New Zealand’s health care system being overwhelmed, as had occurred in other countries.

5.    New Zealand’s five weeks at Alert Level 4 involved mass home quarantine, wide spread testing, contact-tracing and reporting of cases and the closure of New Zealand’s borders to most travellers. Central and local government announced a range of support packages for businesses, health and welfare. A range of local response actions were reported to each full Council meeting. Details can be found in the Mayor and Chief Executive statements to Council.

6.    The Department of Internal Affairs, LGNZ, SOLGM, NEMA and other relevant government agencies established a Covid-19 Local Government Response Unit to provide advice to work through the immediate and longer-term challenges posed by the pandemic.

7.    Throughout the various stages of lockdown, Council followed this advice to provide essential services and adapt our business to continue to provide as many other services as possible where this could be done safely.

8.    Council also activated its Emergency Operations Centre, with a focus on the provision of welfare. Most Council facilities were closed to the public from Level 3, and some were made available for pandemic response including food preparation and distribution, and as venues for programmes for the children of essential service workers.

9.    As New Zealand came back down through alert levels, work got underway to ensure learnings were captured. EOC leaders reviewed the performance of the emergency response function and work started on a Recovery Plan for Lower Hutt which will come to Council in the next meeting cycle. Council’s Pandemic Plan and individual business unit’s business continuity plans were updated. Additionally we have recently developed a COVID Resurgence Plan to assist with future changes in response level.

10.  This report summarises how Council is managing the risks associated with the ongoing Pandemic, in particular relating to business continuity. The recent return to Level 2 for most of the country, and Level 3 in Auckland, reinforces the importance of this.

Discussion

Risk Reporting

11.  Risks resulting from COVID-19 are listed in the updated HCC Risk Registers, as attached to the Risk Management Update paper to the Subcommittee at this meeting.

12.  Recent HCC risk review workshops captured the changing and emerging risks and possible impacts resulting from COVID-19, such as rates affordability, reduced Council revenue and possible additional costs for service delivery, increasing debt, interrupted project delivery, health, safety and wellbeing of staff amongst others.

COVID-19 Resurgence Action Plan

13.  Attached as Appendix 1 is the COVID-19 Resurgence Action Plan – August 2020. Developed by Council’s Covid Response Team, it aims to move the business to a resilient, seamless and de-centralised way of shifting levels, and avoid any unnecessary loss in productivity, duplicated effort or gaps.

14. The plan outlines the organisational response action required when alert levels change, and points to relevant documents. It also shows who is responsible for which actions, priorities and checklists.

15.  This plan is informed by the latest information and local government advice which is attached as Appendix 2 - Council services and operations through alert levels 2 3 and 4 - 24 August 2020. The latest version includes new advice around the wearing of masks which is now compulsory in some circumstances and advised in others in Level 2.

Planning

16.  The HCC Pandemic Response Plan 2020 outlines guidance and actions required based on scenarios tailored to the specifics, severity and phasing of the pandemic event. The Pandemic Response Plan was reviewed and updated in August 2020.

17.  Business continuity plans (BCP) were updated in March 2020 prior to lockdown. All BCPs were reviewed again in August 2020 to ensure details are up to date, fit for purpose and capture lessons learned should alert levels rise again, or other events occur in the future.

18. Results from the all staff COVID-19 debrief survey that closes on 6 September 2020 will be an important input into the work Council is doing around recovery, business continuity planning, emergency operations activities, HR practices and for general business process improvements. A summary of the results will be provided to this Subcommittee.

Operations and Service Delivery

19.  During the initial move to Level 3, activating a remote Contact Centre took several days, due to lack of an appropriate software system, licence and equipment. While all Contact Centre staff are now located back on the premises, they are all equipped to switch to working remotely within a few hours if needed. Palmerston North’s after hours services continues to be used as a back-up.

20.  The Customer Services team continue to operate the front counter under Level 2 health and safety guidelines, however we are continuing to encourage people to switch to online services where possible, to future proof these services and limit cash transactions.

21.  Most Council services have returned to a new normal in Levels 1 and 2, however the earlier lockdown has created delays and backlogs in some areas, which we are actively managing.

Cyber Security

22. COVID presented a number of challenges to deliver services securely from home offices but due to a workplan the Information Services (IS) team was already progressing, they were able to significantly speed up implementation to remote working requirements.

23. From a security perspective this included the implementation of a new firewall and remote access into the network. Both these implementations provided the latest security protection for the network. HCC also has the latest end point security solutions (virus and malware protection) installed on all HCC hardware and virus scanning was in place before connecting to the network remotely.

24. There were a couple of instances where malicious emails were received. The staff involved identified the emails as potentially malicious (thanks to the security and awareness training provided at the end of 2019). The Service Desk was notified immediately and the threat was removed through changing the users password.

25. We also safeguard our network with a managed security device that is continually monitoring all network traffic (both wired and wireless) for anything unusual. If something is found an engineer is immediately alerted.

Community facilities and services 

26.  For some facilities people have returned quickly as restrictions have been reduced. But others, including community hubs and swimming pools, had not returned to their previous levels of patronage when the shift back to Level 2 occurred. This continues to impact on revenue.

27.  Many of our facilities still had modifications in place for front line interactions (ie screens on counters, QR Codes and sanitiser stations) and they were quickly able to respond with contact tracing stations, physical distancing signs, queue management where necessary and enhanced cleaning regimes. Council staff have been encouraged to lead by example and be seen to use QR codes as they access buildings.

28.  The requirement to continue to staff contact tracing stations is putting a strain on resource. This is further exacerbated by the need for any staff who are feeling unwell to stay home, when in normal circumstances those with only a cold would have continued to work. This has forced staff to shorten hours at some facilities over the winter months due to lack of available staff.

29.  Our facilities and services are adjusting to the requirements at Levels 1 and 2 and developing ways to make their activity more resilient to shifts. This includes continuing with the increased on-line presence for many and also re-thinking the way activities and small events are run so they can continue.

Financial Management

30.  Covid-19 lockdown had financial impacts for Council. This included reduced revenue as a result of the closure of community facilities such as pools, parks, libraries, and museums ($1.1M), reduced parking and infringements revenue $0.5M together with increased costs for some essential services (e.g. Three Waters).

31. This was anticipated in financial forecasting processes and communicated with Council through the Annual Plan 2020/21 process. The recent shift back to Level 2 will mean further financial impact in the coming months, mostly due to a drop in revenue. The financial impact will be reported to the Policy, Finance and Strategy Committee as part the quarterly performance report on 17 November 2020.

Council Workforce

32.  Flexibility for staff working arrangements continues with many staff undertaking their duties with a mix of onsite and remote working arrangements.

33.  The Resurgence Plan includes protocols for equipment requests to support remote working, approvals and tracking of the location of its hardware.

34. The People and Capability team is updating our advice on working from home to reflect the new environment where it is becoming a regular part of many roles. They are developing new guidelines and protocols which will, among other things, determine the level of support people can expect for the set-up of a home work station. Training will also be provided for people leaders in managing remote workers.

35.  Planning is also underway to convert more space at the Laings Road Administration Building to agile working (or hot-desking) and we expect these changes will enable us to reduce our accommodation footprint as some smaller leases come up for renewal. 

Wellbeing and Health and Safety

36.  The new requirements around the wearing of face coverings/masks is being monitored to ensure Council protocols are compliant and to ensure staff and visitors/customers on site are kept safe and well.

37.  There are guidelines in place for staff who undertake on-site visits and interact with the public as part of their role, the use of PPE equipment, remote work tips for individuals, guidelines for staff tested/being tested for COVID-19, wellbeing and managing stress.

38.  The People and Capability team have developed protocols and a process for manging staff impacted by the pandemic, either having a COVID test or being identified as a close contact of someone who has tested positive.

39.  Council has entered into a partnership with Common Unity which will see its community sewing group provide 250 reusable masks for Council staff, and for each one, a mask will be provided to a child in the community for free.

Local welfare response

40.  A key learning from the initial lockdown was that the national welfare response was slow to roll out. Some local providers were able to activate quickly to meet immediate need, but felt unsupported in their efforts. The EOC office was unable to provide funding to assist until two weeks into the lockdown.

41.  As a result, we have developed a local welfare response which will ensure key support providers, in particular for emergency food supplies, remain connected over the coming months and that a local response can be activated immediately. 

Options

42.  Not applicable.

Climate Change Impact and Considerations

43.  The matters addressed in this report have been considered in accordance with the process set out in Council’s Climate Change Considerations Guide.

44.  As well as providing reusable masks for staff, we are encouraging the community through our communication channels to make or purchase reusable masks. This will reduce the environmental impact of disposable masks. 

Consultation

45.  Not applicable.

Legal Considerations

46.  Not applicable.

Financial Considerations

47. The financial considerations are detailed in this report in the relevant areas.

Appendices

No.

Title

Page

1

Appendix 1: Covid 19 Resurgence Action Plan 21 August 2020 - PDF of DOC/20/78227

234

2

Appendix 2: Council services and operations through alert levels 2 3 and 4 - 24 August 2020

236

 

Author: Enid Davids

Risk and Assurance Manager

 

 

 

Approved By: Anna Welanyk

Director Transformation and Resources

 


Attachment 1

Appendix 1: Covid 19 Resurgence Action Plan 21 August 2020 - PDF of DOC/20/78227

 


 


Attachment 2

Appendix 2: Council services and operations through alert levels 2 3 and 4 - 24 August 2020

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


                                                                                     284                                              17 September 2020

Audit and Risk Subcommittee

24 August 2020

 

 

 

File: (20/969)

 

 

 

 

Report no: ARSC2020/5/195

 

Risk Management Update

 

Purpose of Report

1.    The purpose of this report is to update the Audit and Risk Subcommittee on actions and activities to maintain and improve risk management at Council and to present Council’s risk register to 31 July 2020.

Recommendations

That the Subcommittee:

(i)    receives and notes the information contained in this report; and

(ii)   notes the risk register as approved by the Corporate Leadership Team, attached as Appendix 1 to the report.

For the reason that risk reporting provides the Subcommittee with information to support its governance role.

 

Background

2.    The Risk and Assurance Manager provides an update quarterly[1] on the actions and activities to maintain and improve Council’s risk framework. The previous Risk and Assurance Update was last presented to the Audit and Risk Subcommittee on 12 March 2020.

Discussion

Risk framework review

3.    The risk management framework was previously updated in March 2017. Its three yearly review is currently underway. As part of this, the Corporate Leadership Team (CLT) has approved an update to the roles and responsibilities for risk management.

4.    New recommendations include the establishment of a Risk Steering Committee and to adjust the focus and terms of reference for the Risk Management Working Group, which reports to the Steering Committee.

5.    Once established, the Steering Committee will report to the Corporate Leadership Team (CLT) and provide expertise and a layer of scrutiny and challenge around risk information to CLT.

6.    The change is intended to increase ownership of business risk across Hutt City Council (HCC) and to build awareness and capability for risk management across HCC. It also aims to embed consistent practice across the organisation through representation in these groups from across Council. There is a particular focus on improving the identification and management of project risks and expanding the visibility of financial risk exposure in HCC’s projects.

7.    Attached as Appendix 1 to the report are the roles and responsibilities for risk management and associated terms of reference.

8.    The new structure aims to improve the risk reporting to CLT and Council and report risk in a transparent and timely way.

9.    Results from the risk maturity assessment in June 2020 will be considered to inform the focus and implementation of the updated risk structure. The assessment-tool was developed by the Digital team at the Department of Internal Affairs for all-of-government and surveyed business unit manager and directors.

Council’s Risk Register

10.  Attached as Appendix 2 to the report is the risk register to 31 July 2020, as approved by the Corporate Leadership Team.

11.  A strategic risk register was last approved by HCC’s CLT on Monday 10 February 2020 and noted by Council’s Audit and Risk Subcommittee on 12 March 2020. An operational risk register was last approved by the former Strategic Leadership Team on 17 June 2019 and subsequently noted by Council’s Finance and Performance Committee on 17 July 2019.

12.  The risk register template has now been updated and is the first to be reported in this format. The template includes emerging risks, risk owners and strategies to respond to risks identified. This template has also been used to report project risk, for the project updates provided to this Subcommittee on 17 September 2020.

13.  The risk registers are living documents that will be updated monthly and put forward to CLT for information and discussion. The register is a means of providing relevant and timely information to enable conversations about how risk is managed, to ensure there is sufficient attention on key matters and to support planning and decision making. Discussion at CLT will cover reporting on the progress of resolving or managing higher level and emerging risks.

14.  The review of the risk management framework underway will include an update of the criteria for assessing risk (impact and likelihood), including risk appetite statements. Risk ratings will be reviewed and updated accordingly. A risk matrix is currently used to assess risk.

Project risk

15.  A pilot of a “pre mortem” to identify project risk was run for the Naenae Pool Project on 21 July.  The objective of a pre mortem is to identify potential pitfalls and then apply preventative measures before the issues arise. This session was attended by Director for Economy and Development, Director for Communities and Neighbourhoods, Director for Transformation and Resources, Head of Parks and Recreation, Naenae Project Lead and Strategic Projects Manager.

16.  A risk workshop will be run on 4 September for the Eastern Bays Shared Pathway.

17.  All project risks are expected to be identified and managed by the project managers, and the project teams. They are expected to review them regularly as part of the project delivery process. Significant risks are reported to the respective project boards/governance groups and CLT as part of regular project reporting. Where necessary, risk management is also escalated to project boards/governance groups or CLT.

18.  HCC’s Strategic Project Manager ran a project workshop at the end of July for lead project managers, to discuss the development of a consistent and structured approach to project management across all of HCC’s projects. Further development of a project lifecycle framework is underway with the intention of lifting capability and performance around projects and project risk.

Risk Management Working Group

19.  The Risk Management Working Group has met three times since the update provided to this Subcommittee on 12 March 2020.

20.  Over this time, the group has had objectives to review and improve:

a.    the oversight over emergency evacuation procedures in the event of armed aggression;

b.    panic alarm activation at the Administration Building (to be rolled out to other sites);

c.     systems recovery;

d.    external power generators for use in a city wide emergency;

e.     planning for business disruption risk (business continuity) including the implications of Covid-19; and

f.     Fraud Policy review.

21.  The group has had oversight of the risk register update and risk framework review.

22.  Going forward, this group will be dissolved and a new Risk Working Group established.

Options

23.  Not applicable.

Climate Change Impact and Considerations

24.  The matters addressed in this report have been considered in accordance with the process set out in Council’s Climate Change Considerations Guide.  

Consultation

25.  Not applicable.

Legal Considerations

26.  Not applicable.

Financial Considerations

27.  Captured within the body of the report.

Appendices

No.

Title

Page

1

Appendix 1: Roles and Responsibilities for Risk, including Terms for Reference for Steering Group and Working Group

285

2

HCC Risk Register - 31 July 2020

289

 

 

Author: Enid Davids

Risk and Assurance Manager

 

 

 

Approved By: Anna Welanyk

Director Transformation and Resources


Attachment 1

Appendix 1: Roles and Responsibilities for Risk, including Terms for Reference for Steering Group and Working Group

 


 


 


 


Attachment 2

HCC Risk Register - 31 July 2020

 


 


 


 


 


 


 


 


 


 


                                                                                     302                                              17 September 2020

Audit and Risk Subcommittee

24 August 2020

 

 

 

File: (20/970)

 

Report no: ARSC2020/5/196

 

Internal Audit Update

 

Purpose of Report

1.    The purpose of this report is to update the Subcommittee on the actions and activities around the internal audit function, to maintain and improve Council’s internal control framework.

Recommendations

That the Subcommittee receives and notes the information contained in this report.

For the reasons that it provides the Subcommittee with information to support its governance role. Periodic reporting is stipulated in the internal audit charter and the internal audit functional reporting line to the Audit and Risk Subcommittee that supports its authority, objectivity and independence.

 

Background

2.    The Risk and Assurance Manager provides an update quarterly[2] on the actions and activities around internal audit at Council. The Risk and Assurance Update was last presented to the Audit and Risk Subcommittee on 12 March 2020.

Discussion

Internal Audit Planning

3.    Development is underway of the assurance map for Hutt City Council to document all the types of assurance activities that are carried throughout Council that contribute towards the total assurance framework.

4.    Once documented, this will assist to inform the internal audit programme of work and ensure there is sufficient coverage to manage Council’s exposures and risks, and align internal audit’s focus to Council priorities. The Internal Audit work plan will be provided to the Audit and Risk Subcommittee in 25 November 2020.

5.    Components of the total assurance framework is outlined below:

6.    Resourcing required to delivery of internal audit programme will be reviewed. Recommendations will be put forward to the next Subcommittee on 25 November 2020.

Progress against the Internal Audit Plan 2019-2020

7.    The internal audit plan 2019-2020 was approved by the former Finance and Performance Committee on 17 July 2019 and proposed the following internal audits:

§ Procurement and contract management;

§ Development and Reserve Contributions; Contribution Credits and Rates Remissions; and

§ Sensitive Expenditure.

8.    The Internal Audit activity completed for the 2019-2020 year is as follows:

§ Cash Handling internal audit completed on 3 September 2019 (from the 2018/2019 internal audit plan);

§ Animal Control Services Contract with Wellington City Council high level review was completed on 29 November 2019; and

§ A control review following an ‘Obtain by Deception offence’ (perpetrated by an external actor) to assess how the situation was handled and changes required to strengthen the internal control environment, particularly controls directly impacting the fraud incident and how it occurred. Completed December 2019 and followed up in January 2020.

9.    A full update on the activities outlined in the paragraph above was provided to the Subcommittee on 12 March 2020 in the Risk and Assurance Update.

10.  During the year, other functions and processes were reviewed as a priority. This ensured council staff were made aware of areas of improvement that were needed to address internal controls, health and safety and obligations under contract.

11.  With the COVID-19 novel coronavirus outbreak and New Zealand subsequently going into lockdown, there was focus on the pandemic plan and business continuity plans. Preparations for lockdown included reviewing a prioritised listing of services and staff for remote access, prior to the roll out of the VPN solution, to ensure critical services could continue during lockdown.

12.  Risk management has been a focus, to lift the capability and improve performance around risk management at Council. Embedding risk processes that operate systematically across the organisation, with business ownership, monitoring and reporting will have implications on the assurance required. Strong first and second lines allow for assurance to focus attention on important exposures and areas not covered well. Refer to the Risk Management Update report to the Subcommittee at this meeting.

13.  The Risk and Assurance Manager provided assistance with the Fraser Park Sportsville and Ricoh Sports Centre Update paper to the Community and Environment Committee on 8 July 2020.

Internal audit findings

14.  Table 1 below outlines internal audit findings from 1 July 2019 to date that have been raised, resolved, closed and are outstanding.

Open Issues as at August 2020

Total

Internal Audit area

Date raised

High

Medium

Low

Closed

Outstanding

Animal Control Services Contract High level review

Health and safety matters

Nov-2019

4

4

0

Opportunities to optimise efficiencies for costs and revenue

Nov-2019

7

6

0

Cash Handling Internal Audit

Health and safety matters

Sep-2019

8

8

0

Physical access and security

Sep-2019

8

7

       1 (a)

Public Records Act 2003 - Compliance Maturity Review

Recovery testing CM9 document management system

Sep-2015

1

       1 (b)

Total Internal Audit Issues

0

9

19

25

3

Internal Audit findings summary
as at August 2020

 

Internal Audit findings to August 2020

High

Medium

Low

Total

Open issues as at 1 July 2018

1

0

1

Identified during period since 1 July 2018

8

19

27

Resolved during period since 1/07/18 to August 2020

8

17

26

Total Open Internal Audit Issues

0

1

1

2

 

Notes to table 1:

(a)      The open finding regarding the recovery testing CM9 document management system was also raised by audit New Zealand and an updated provided in the External Audit Update paper to the subcommittee at this meeting.

(b)      Progress to close the open finding regarding procedures for emergency evacuation in the event of armed aggression is in progress. Procedures in place at the Administration Building require further refinement & procedures are to be rolled out to other Council sites. The Health and Safety Manager who commenced in that role on 13 August 2020 will close this out in the coming quarter. This will be confirmed to the Subcommittee on 25 November 2020.

Compliance

15.  The conflict of interest policy requires Council officers to confirm/disclose interests that might lead to circumstances whereby an individual’s ability to apply judgement or act in one's role is, or could be impaired or influenced by a secondary interest.

16.  The annual disclosure circulation process was completed on 23 June 2020, whereby CLT, business unit managers and staff with interests on the register confirm the register is up to date. The annual circulation has been expanded to incorporate managers confirming the registering of gifts, that all suspected and detected fraud has been reported (none noted) and that all significant changes in personal circumstances have been notified (e.g. criminal offence charges, bankruptcy, drivers licence disqualification or suspension etc).

17.  The Fraud policy three yearly review was completed in July 2020. The essence of the policy remains the same, with some minor adjustments to make the policy clear, concise and easy to understand. A section on procurement and contract management has been added, in recognition of the fraud risk exposure within those activities and the requirement to be particularly vigilant.

18.  A number of other internal policies have been implemented or updated in the preceding six months, including policies for Information and Communications Technology, Procurement, Sensitive Expenditure, Financial Delegations, Property, Plant and Equipment. Further details can be found in the External Audit Update report to the Subcommittee at this meeting.

19.  There have been neither reports of suspected or detected fraud, including no reports via the online reporting Jotform, launched June 2019.

Climate Change Impact and Considerations

20.  The matters addressed in this report have been considered in accordance with the process set out in Council’s Climate Change Considerations Guide.

Appendices

There are no appendices for this report.

Author: Enid Davids

Risk and Assurance Manager

 

Approved By: Anna Welanyk

Director Transformation and Resources


                                                                                     307                                              17 September 2020

Audit and Risk Subcommittee

27 August 2020

 

 

 

File: (20/990)

 

 

 

 

Report no: ARSC2020/5/203

 

End of Financial Year Report back on the Mayor’s Donations and Grants

 

Purpose of Report

1.    The purpose of this report is to provide an end of year report to the Subcommittee on donations and grants made from the Mayor’s Office in the 2019/2020 financial year.

Recommendations

That the Subcommittee receives and notes the report.

 

Background

2.    The Mayor’s Office has had a longstanding budget allocation to make discretionary grants and donations.

3.    In the 2019/2020 financial year, $14,000 was allocated for grants and donations.  This funding is separated into two streams:

a.  $10,000 for grants and donations to provide general financial assistance such as small one off donations to groups the Mayor is a patron of, and also support for charity events that benefit local residents; and

b.  $4,000 for New Zealand Representatives grants to individuals/teams/clubs that have been selected to represent Lower Hutt at regional or national events.

4.    Council’s Finance and Performance Committee received a memorandum dated 1 April 2019 from the Risk and Assurance Manager (attached as Appendix 1 to the report) which provides an overview of the process used to manage the Mayor’s Office grants and donations. 

Discussion

5.    Across both streams of funding, $3,150 in grants and donations were made from the Mayor’s Office in the 2019/2020 financial year.  This compares to $3,425 in 2018/2019 and $11,889.13 in 2017/2018. 

6.    The level of spending from year to year reflects the discretionary nature of the funding, as well as the comparatively low level of promotion and awareness of funding.  Officers propose no change to level of promotion given the small amount of funding available.    

7.    COVID-19 has had some impact on the funding allocated in the 2019/2020 financial year.  Many regional and national events have been cancelled where participants may have previously applied for a New Zealand Representative grant from the Mayor’s Office.

8.    Council’s 2020/2021 budget provides for the same level of funding for Mayor’s Office grants and donations as the 2019/2020 financial year.  This is being reviewed and considered as part of Council’s current base budget review process. 

Grants and Donations

9.    In 2019/2020 $10,000 was available for general grants and donations from the Mayor’s Office.  Of this, $950 was spent. 

10.  A $500 grant was made to Te Ara Whanui Kaupapa Māori Te Ara Whanui in February 2020 to assist the Kura to participate in a national kapa haka competition.  The competition was later cancelled due to COVID-19, and the donation was returned in June 2020. 

11.  A full list of recipients is outlined below:

Date

Description

Amount

03/07/2019

Patron donation to Wainuiomata Pioneer Church

$50.00

03/07/2019

Patron donation to Petone Rugby Football Club

$50.00

19/08/2019

Donation to Whitireia Health Promotion Day at Bob Scott

$50.00

04/10/2019

Patron donation to Wainuiomata Golf Club

$50.00

10/12/2019

Patron donation to Stop Out Sports Club

$50.00

12/12/2019

Food contribution to Stokes Valley Food Bank

$300.00

20/12/2019

Food contribution to Man Up And Legacy Barbeque

$200.00

10/12/2020

Patron donation to The Hearing Association

$50.00

24/02/2020

Patron donation to Capital Area Chartered Clubs Darts Inc

$50.00

06/04/2020

Co-Patron donation to Table Tennis Wellington

$50.00

16/04/2020

Patron donation to Hutt Valley Darts Association

$50.00

New Zealand Representative’s Grants

12.  In 2019/2020 $4,000 was available for New Zealand Representatives’ Grants from the Mayor’s Office.  Of this, $2,200 was spent. 

13.  A full list of recipients is outlined below.  The names of recipients are not included for privacy reasons, and the fact that many are young students. 

Date

Description

Amount

03/07/2019

Support for one individual – WBSC Junior Women’s World Championship – Softball

$100.00

03/07/2019

Support for one individual – WBSC Junior Women’s World Championship – Softball

$100.00

03/07/2019

Support for one individual – NZ Women’s Indoor Netball Team

$100.00

03/07/2019

Support for one individual – Assistant Coach NZ Mixed Indoor Netball Team

$100.00

03/07/2019

Support for three individuals – Taekwondo Pacific Games

$300.00

03/07/2019

Support for one individual – NZ U23 Women’s Softball Team

$100.00

03/07/2019

Support for one individual – NZ U23 Women’s Softball Team

$100.00

03/07/2019

Support for one individual – NZ U23 Women’s Softball Team

$100.00

03/07/2019

Support for one individual – Asia Oceania Olympic Qualifier – Junior White Sox

$100.00

03/07/2019

Support for one individual – WBSC Junior Women’s World Championship – Softball

$100.00

11/07/2019

Support for one individual – FIBA Oceania Championships – Basketball

$100.00

08/08/2019

Support for one individual – WBSC Junior Women’s World Championship – Softball

$100.00

28/08/2019

Primary Sport Wellington – Inter Regional Primary and Intermediate Schools Cross Country Championship

$550.00

29/08/2019

Support for two individuals – NZ Influence Crew Team – Great Wall of China Marathon Athlete

$200.00

18/02/2019

Support for one individual – National Touch Championship

$50.00

Recent changes to Mayor’s Office grants and donations

14.  Officers, in consultation with the Mayor, have made some recent changes to the operation of the Mayor’s Office grants and donations. 

15.  Historically organisations the Mayor agrees to be a patron of have received $50 from Council.  These donations will either be met personally by the Mayor going forward, or organisations will be encouraged to request funding, which may or may not be approved.

16.  For 2020/2021 a full list of grants and donations recipients will be available on Council’s website and regularly updated as grants and donations are made. 

Climate Change Impact and Considerations

17.  The matters addressed in this report have been considered in accordance with the process set out in Council’s Climate Change Considerations Guide.

Consultation

18.  Consultation is not required.

Legal Considerations

19.  There are no legal considerations arising from this report.

Financial Considerations

20.  There are no financial considerations arising from this report.

Appendices

No.

Title

Page

1

Appendix 1: 28 Nov18 - FPC report back - Mayoral Grants and Donations

308

 

 

Author: Jarred Griffiths

Head of the Mayor's Office

 

 

 

Approved By: Jo Miller

Chief Executive


Attachment 1

Appendix 1: 28 Nov18 - FPC report back - Mayoral Grants and Donations

 


 


 


                                                                                     313                                              17 September 2020

Audit and Risk Subcommittee

28 May 2020

 

 

 

File: (20/476)

 

 

 

 

Report no: ARSC2020/5/198

 

Seismic Performance Register

 

Purpose of Report

1.    To provide an update to the Subcommittee on Council’s programme of work to assess the seismic strength of Council-owned buildings. This update is currently being provided to each meeting of the Subcommittee.

Recommendations

That the Subcommittee receives and notes the information contained in the report.

 

Background

2.    Council published a seismic performance register in November 2019 which lists council-owned buildings, identifies their seismic rating and links to the latest engineering assessment report. The register was developed to ensure a whole of organisation view of Council buildings and that information was readily available to the public. A link to the register can be found here: http://huttcity.govt.nz/seismicregister

3.    An operational management policy is in place to provide staff with a framework for undertaking engineering assessments for Council buildings. A copy of the policy can be viewed here.

Discussion

4.    Since publishing the register, assessments have been added as they are completed. Some buildings that were originally on the register have now been removed following engineering advice from WSP that assessments are not required. This includes mainly public toilets, small kiosks and some changing rooms. The rationale for this is that these structures present limited risk to the public due to being single level, construction occurred post 1976 when the first significant seismic codes were introduced in New Zealand and that occupancy is low. Council is maintaining a list of these buildings, but has removed these from the website link above.

5.    Council has a number of buildings or spaces that are classified as earthquake prone, i.e. <34% NBS.

6.    Wainuiomata Outdoor Swimming Pool changing room: An ISA found that the building containing the female changing rooms was at 30% NBS. Council had to meet a number of conditions for building consent which included new emergency lighting and fire system for the whole complex. The work to meet the building consent is 85% achieved with the new fire system and most of the strengthening work completed. The reminder of the building work is scheduled to be finished by the end of September to allow time to apply for the code of compliance before the pool opens in mid-November for its summer season.

7.    Walter Nash corridor: A DSA for Walter Nash was received in November 2019. The assessment found that a corridor in the building was rated at 20% NBS. Other parts of the building were rated at varying NBS% and this information is available on the seismic register. Council met with the structural engineer and primary contractor to discuss design requirements to remediate the space that is earthquake prone and the work is due to begin on 7 September. The quote has been accepted from the primary contractor and the first site meeting with stakeholders is 1 September.

8.    Little Theatre:  An ISA for the Little Theatre indicated a 15% Initial Seismic Assessment (ISA) and seismic grade E. A decision was taken at the time of receiving the report to not take any future bookings and this arrangement continues.

9.    Engineers reviewed the geotechnical report that was undertaken by WSP covering the area around the Little Theatre and the War Memorial Library building. A DSA has been received reflecting this information and has been published to the register. The Little Theatre has received a 30% NBS with a seismic grade (D). The Building Consent Application is currently under peer review for the Structural Drawings and Design for strengthening the building. A Fire and Accessibility Report has already been completed for the project.

10.  War Memorial Library: The War Memorial Library is rated at 40-45% NBS which means it is not earthquake prone. The engineering assessments have identified parts of the building that could be improved by strengthening work. Budget has been set aside in the 2020/21 financial year for strengthening work on the War Memorial Library. Discussions with the structural engineer and primary contractor concluded that the works cannot be strengthened separately as they are not independent of each other.

11.  Due to additional necessary works at the War Memorial Library (HVAC and roof replacement with an estimated cost of $325K which is currently not budgeted and needs to be included in the LTP), there is still planning to be done on the approach to bring this building up to requirement.

12.  This report is currently being provided to each meeting of the Subcommittee. Officers would recommend that now the register is firmly part of business as usual, reporting move to quarterly or six-monthly.

Consultation

13.  There are no consultation implications arising from this report.

Legal Considerations

14.  There are no legal considerations arising from this report.

Financial Considerations

15.  There are financial considerations arising from this report.  See section 11 above.

Climate Change Impact and Considerations

16.  The matters addressed in this report have been considered in accordance with the process set out in Council’s Climate Change Considerations Guide

Appendices

There are no appendices for this report.  

 

Author: Caryn Ellis

Senior Advisor to the Chief Executive

 

 

Approved By: Anna Welanyk

Director Transformation and Resources

 


                                                                                     314                                              17 September 2020

Audit and Risk Subcommittee

19 August 2020

 

 

 

File: (20/947)

 

 

 

 

Report no: ARSC2020/5/96

 

Audit and Risk Work Programme 2020

 

 

 

 

Recommendation

That the Work Programme be noted and received.

 

 

Appendices

No.

Title

Page

1

Appendix 1: Audit and Risk Subcommittee Work Programme

315

 

 

Author: Toi Lealofi

Committee Advisor

 

 

 

 

Approved By: Kathryn Stannard

Head of Democratic Services


Attachment 1

Appendix 1: Audit and Risk Subcommittee Work Programme

 


 



[1] In previous trienniums Risk and Assurance updates were provided twice a year.

[2] In previous trienniums Risk and Assurance updates were provided twice a year.