Agenda of Audit and Risk Committee

TERMS OF REFERENCE

Responsibilities

The Audit and Risk Committee will be responsible for:

· Providing objective advice and recommendations to the Governing Body regarding the sufficiency, quality and results of assurance on the adequacy and functioning of the council’s risk management, control and governance frameworks and processes.

· Exercising active oversight of all areas of Auckland Council control and accountability (including Council Controlled Organisations), in an integrated and systematic way, such that the results of risk and assurance reviews and external audits may be incorporated in the priority-setting and strategic planning processes.

· Liaison with Audit NZ and, where necessary, the audit committees of CCOs to ensure robust financial audits and reviews of the Auckland Council group

Exclusion of the public – who needs to leave the meeting

Members of the public

All members of the public must leave the meeting when the public are excluded unless a resolution is passed permitting a person to remain because their knowledge will assist the meeting.

Those who are not members of the public

General principles

· Access to confidential information is managed on a “need to know” basis where access to the information is required in order for a person to perform their role.

· Those who are not members of the meeting (see list below) must leave unless it is necessary for them to remain and hear the debate in order to perform their role.

· Those who need to be present for one confidential item can remain only for that item and must leave the room for any other confidential items.

· In any case of doubt, the ruling of the chairperson is final.

Members of the meeting

· The members of the meeting remain (all Governing Body members if the meeting is a Governing Body meeting; all members of the committee if the meeting is a committee meeting).

· However, standing orders require that a councillor who has a pecuniary conflict of interest leave the room.

· All councillors have the right to attend any meeting of a committee and councillors who are not members of a committee may remain, subject to any limitations in standing orders.

Independent Māori Statutory Board

· Members of the Independent Māori Statutory Board who are appointed members of the committee remain.

· Independent Māori Statutory Board members and staff remain if this is necessary in order for them to perform their role.

Staff

· All staff supporting the meeting (administrative, senior management) remain.

· Other staff who need to because of their role may remain.

Local Board members

· Local Board members who need to hear the matter being discussed in order to perform their role may remain. This will usually be if the matter affects, or is relevant to, a particular Local Board area.

Council Controlled Organisations

· Representatives of a Council Controlled Organisation can remain only if required to for discussion of a matter relevant to the Council Controlled Organisation.

1 Apologies

Apologies from Cr C Brewer, Mayor LCM Brown, Cr LA Cooper and Deputy Mayor PA Hulse have been received.

2 Declaration of Interest

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.

3 Confirmation of Minutes

That the Audit and Risk Committee:

a) confirm the ordinary minutes of its meeting held on Tuesday, 15 December 2015, including the confidential section, as a true and correct record.

4 Petitions

At the close of the agenda no requests to present petitions had been received.

5 Public Input

Standing Order 7.7 provides for Public Input. Applications to speak must be made to the Democracy Advisor, in writing, no later than one (1) clear working day prior to the meeting and must include the subject matter. The meeting Chairperson has the discretion to decline any application that does not meet the requirements of Standing Orders. A maximum of thirty (30) minutes is allocated to the period for public input with five (5) minutes speaking time for each speaker.

At the close of the agenda no requests for public input had been received.

6 Local Board Input

Standing Order 6.2 provides for Local Board Input. The Chairperson (or nominee of that Chairperson) is entitled to speak for up to five (5) minutes during this time. The Chairperson of the Local Board (or nominee of that Chairperson) shall wherever practical, give one (1) day’s notice of their wish to speak. The meeting Chairperson has the discretion to decline any application that does not meet the requirements of Standing Orders.

This right is in addition to the right under Standing Order 6.1 to speak to matters on the agenda.

At the close of the agenda no requests for local board input had been received.

7 Extraordinary Business

Section 46A(7) of the Local Government Official Information and Meetings Act 1987 (as amended) states:

“An item that is not on the agenda for a meeting may be dealt with at that meeting if-

(a) The local authority by resolution so decides; and

(b) The presiding member explains at the meeting, at a time when it is open to the public,-

(i) The reason why the item is not on the agenda; and

(ii) The reason why the discussion of the item cannot be delayed until a subsequent meeting.”

Section 46A(7A) of the Local Government Official Information and Meetings Act 1987 (as amended) states:

“Where an item is not on the agenda for a meeting,-

(a) That item may be discussed at that meeting if-

(i) That item is a minor matter relating to the general business of the local authority; and

(ii) the presiding member explains at the beginning of the meeting, at a time when it is open to the public, that the item will be discussed at the meeting; but

(b) no resolution, decision or recommendation may be made in respect of that item except to refer that item to a subsequent meeting of the local authority for further discussion.”

8 Notices of Motion

At the close of the agenda no requests for notices of motion had been received.

Audit and Risk Committee

08 March 2016

Review of Forward Work Programme

File No.: CP2016/03303

Purpose

1. To provide the committee an opportunity to review its forward work programme.

Executive Summary

2. The committee’s forward work programme for 2016 was approved at the December 2015 meeting. It is good practice to review the forward work programme at each committee meeting to ensure that the work programme can react quickly to changes in councils risk profile and remain relevant to the needs of the committee.

Recommendation/s

That the Audit and Risk Committee:

a) re-confirm the approved 2016 forward work programme.

Comments

3. The Audit and Risk Committee’s forward work programme for 2016 was approved at the December 2015 meeting of the committee (Attachment A).

4. The forward work programme reflects:

· Governance, risk management and internal control matters as contained in council’s Enterprise Risk Management “Top Risk” register relevant to the committee’s Terms of Reference.

· Areas of focus of the Internal Audit programme.

· The annual cycle with respect to the audit of the Annual Report, Risk, Internal Audit and Integrity and Investigations functions.

5. It is good practice that the committee, as a standing item at each meeting, should review and confirm its forward work programme. This is to ensure that the work programme is flexible, can react quickly to changes in councils risk profile, and remains relevant to the needs of the committee.

6. For example, it would be appropriate for the committee to consider a change to the approved forward work programme in the event there has been a significant change in the risk profile of council as reflected in the “Top Risk” Register. Similarly a significant event occurring either within council, or the wider operating environment could result in a change in the work programme of the committee.

7. No such a change in council’s risk profile, or significant event, has occurred since the last meeting of this committee. This report recommends that the 2016 approved forward work programme be re-confirmed.

Consideration

Local Board views and implications

8. Not applicable.

Māori impact statement

9. Not applicable.

Implementation

10. Not applicable.

Attachments

No.	Title	Page
a View	Approved Forward Work Programme	11

Signatories

Author	Mark Maloney - Head of Internal Audit
Authoriser	Phil Wilson - Governance Director

Audit and Risk Committee

08 March 2016

Update on Health, Safety and Wellness

File No.: CP2016/03724

Purpose

1. To outline the revised plan of action for health, safety and wellness at Auckland Council, in response to the Health and Safety at Work Act (HSWA) 2015 and to provide a summary of health and safety performance as at February 2016.

Executive Summary

2. The Health and Safety at Work Act (HSWA) 2015 comes into force on 4 April 2016. The intention of the Act (and subordinate regulations) is to significantly improve New Zealand’s health and safety record and focus on workers being given the highest level of protection against harm to their health, safety, and welfare. Key aspects of the new Act are:

· There are four types of duty holder under the Act: a PCBU (person conducting a business or undertaking, officers, workers and others at the workplace.

· As a PCBU, Auckland Council has the primary duty of care and is required to look after the workers it employs or engages, as well as those workers influenced or directed by Council (including volunteers and contractors). Council must exercise its duty so far as is reasonably practicable.

· Certain persons under the Act have a due diligence duty. These persons are known as “officers” and for Council this includes elected members and the Chief Executive and potentially others. There are six aspects to the due diligence obligation which are outlined in the body of this report. Whilst officers do not have the same primary duty as the PCBU to directly ensure health and safety they must exercise due diligence that the PCBU is meeting its duties.

· Workers also must take reasonable care to ensure their own health and safety and the safety of others.

· There is increased liability under the new legislation and officers (but not elected members) may be personally liable for failing to comply with the Act. The penalties include large fines and possible imprisonment. Elected members acting in their capacity as elected members (as distinguished from elected members acting in a governance role for another entity) are excluded from liability for the most serious offences under the new Act.

3. Auckland Council is committed to being a high performance council, where our elected and appointed members, employees, contractors, volunteers and the people who use our council facilities and services are safe and all major risks are reduced and managed accordingly. The changing legislation is an opportunity for Auckland Council to make a step change in its view and management of health and safety.

4. Auckland Council’s current health and safety policy statement outlines that ‘no business objective will take priority over health and safety’. In response to the changed responsibilities in the new Act, this report recommends that Council updates its strategy for health and safety over the next three years. Both a good practice (compliance) programme and a refreshed culture change programme will be implemented, to achieve our health, safety and wellness goals.

5. Briefings for governing body and local board elected members are underway to ensure elected members understand their role and responsibilities under the Act. Further training for elected members and the executive leadership team will be delivered during 2016, along with a wider training programme for staff and health and safety representatives. A volunteer toolkit is also being developed.

6. This report outlines the key milestones and deliverables in 2016, to implement a strong safety culture to ensure council effectively meet its new responsibilities under the Act.

7. This report also includes a summary of Council’s current health and safety performance. Moving forward, performance reporting is to be enhanced and more detailed reporting will be delivered to both the organisation and elected members.

Recommendation/s

That the Audit and Risk Committee:

a) receive the update on Health, Safety and Wellness report.

Comments

Change in legislation - Health and Safety at Work Act (HSWA) 2015

8. As noted above there is a changing legislative environment in New Zealand with the enactment of the new HSWA 2015. The intention of the Act (and subordinate regulations) is to significantly improve New Zealand’s health and safety record and focus on workers being given the highest level of protection against harm to their health, safety and welfare.

9. As a PCBU, Auckland Council must ensure, so far as is reasonably practicable, the health and safety of the workers it employs or engages, as well as those workers influenced or directed by Council (including volunteers and contractors).

10. Individual officers (which includes elected members and the Chief Executive – and potentially others) now also have a due diligence duty. As noted above and in the initial briefings to councillors and local board chairs provided by council’s legal advisors, there are six due diligence obligations for officers:

1) Keep up to date with safety matters

2) Understand the nature of the business and its hazards and risks

3) Ensure the person running the business has the appropriate resources and processes to manage risks to health and safety

4) Ensure there are appropriate reporting and investigation processes in place

5) Ensure the PCBU has and implements processes for complying with the Act (monitor)

6) Verify; ensure processes are in place to verify use of resources and processes e.g. audits, benchmarking and safety observations.

11. Whilst officers are not required to directly manage health and safety they must exercise due diligence that the PCBU is meeting its duties.

12. An additional briefing for all elected members is scheduled for 18 March, which will include discussions on due diligence requirements and steps that will need to be taken to address and meet those requirements post 4 April 2016.

13. The Audit and Risk Committee will play a key role in ensuring council as a PCBU is meeting its duties. Regular health and safety and risk based reporting is a critical element of the organisation’s response and serves to demonstrate council has the right disciplines in place to support this. Internal Audit has scheduled regular work and reporting in this area.

Enhancing our approach to health, safety and wellness – 2016 to 2018

14. The change in legislation and the upcoming ACC Worksafe Safety Management Practices (WSMP) audit in October 2016 provide Council with an opportunity to enhance accountability and personal responsibility for wellbeing, health and safety. Leaders and team members can shift from being compliance focused to seeing health and safety as an essential part of a high performance culture, and good for business. Whilst there are areas across council where good and best practice is occurring, greater consistency could be achieved.

15. This report proposes that Council takes a phased approach from 2016 - 2018 to enhancing its health and safety performance, culture and outcomes. Key strategic goals have been identified for different stages of the phased approach. Over the next three years, this approach will see Auckland Council operating as a proactive organisation with an embedded health and safety culture where staff and elected and appointed members embody “Health and Safety starts with me – Ka timata te hauora me te aria hauata ki a au”.

16. The proposed approach includes working in partnership with our CCOs to gain strategic alignment on the direction of health and safety for the wider council and benefit to Auckland citizens and communities.

17. In addition, Auckland Council, as a large organisation that interacts with numerous contractors, suppliers and NZ businesses, has the ability to influence NZ health and safety culture in a positive way. Ensuring council’s health and safety is aligned to industry best practice and being part of business discussions in NZ is imperative.

18. To start, the overall objectives in 2016 are to have the fundamentals right across the organisation (with business focused solutions) in line with legislative and audit requirements; sharing good practice and lessons learned and effectively educating, upskilling and engaging our staff and elected members.

19. This will provide the foundation for a strategic culture change programme starting in 2017 with further consolidation in 2018. The table below outlines the high level roadmap for 2016 - 2018.

Phase 1: 2016	Strategic goals
The two key milestones in 2016 are the implementation of the Health and Safety at Work Act (HSWA) 2015 (from 4 April 2016) and council’s ACC Worksafe Safety Management Practices (WSMP) audit in October 2016. The initial focus will be to respond effectively to the requirements of the HSWA 2015 to ensure that staff and elected members understand and deliver against their duties and due diligence responsibilities. This will be supported by achieving a revised health and safety strategy with agreed Key Performance Indicators. Implement the Health, Safety and Wellness Good Practice programme: getting the basics right with business focused solutions. Will occur throughout 2016. · Reporting – improved reporting processes (including HSWA notification to WorkSafe NZ) and improved reporting tool (Vault2). · Incident investigation review and implement new approach including clear and consistent escalation process (maximise lessons learned), initiate internal health and safety audit programme. · Contracts and contractor management, including refreshing contract and project managers in good practice and upskilling them on HSWA 2015 requirements (e.g. safety in design, overlapping duties, duty to consult, cooperate and coordinate). · Volunteers – analysis of the different categories of volunteers that Council engages and works with, the corresponding obligations, and Council’s compliance strategy (includes training for business units). · Delivering HSWA representative and committee requirements including health and safety representative support and training; health and safety committee structure review and new model implemented. · Training, education and employee participation (e.g. streamlined induction programme for all staff; ELT and elected member site visits, targeted business activity training). · Refreshing council’s wellbeing programme. · Establishing the new health and safety team, embedding the new business partner model, with the team contributing to the health and safety community of practice across the council family. · Supporting ELT/SLT in setting the health and safety strategy and objectives which further embed the ‘health and safety starts with me’ culture.	Have the basics right across the organisation with business focused solutions; educate and upskill and share good practice · Transition to a risk based approach to work environments and facilities, versus hazards assessment alone. · Improved contractor management and systems, particularly monitoring, audting and evaluation. · Increasing near miss reporting and action to reduce incidents and injuries and an improved repsonse to mental health and wellbeing issues (including stress and fatigue). · Increased staff awareness and personal action and reporting (staff are confident to report and understand the importance of reporting). · Refreshed approach to staff wellbeing with a stronger focus on mental health and wellbeing.
Phase 2: 2017
· In 2017 the focus will be on maintaining the foundation established across the business, building on lessons learned and demonstrating council’s good practice in line with audit and legislative requirements. · Increased employee engagement and accountability will be prioritised and a focus on living our policy – health and safety starts with me (think safe, work safe, home safe). It is recommended that an organisation wide recognition programme is implemented in 2017 to support this.	Risk areas are addressed, the organisation is continuously improving; staff are more confident in their approach and understanding · Behaviour and culture change across the organisation; improvement of a minimum two-three per cent on the previous engagement survey wellbeing score. Further details to be developed March – June 2016
Phase 3: 2018
· Programme to be developed as part of the strategy development March – June 2016	Health and Safety starts with me culture is fully integrated; council is recognised as a proactive organisation achieving good and best practice and its goals for staff, volunteers, contractors and the public. Further details to be developed March – June 2016

Summary of performance

20. The table below provides Council’s Lost Time Injury Frequency Rate (LTIFR) data as at January 2016.

21. Commentary on LTIFR data:

· During 2013 there were three months with Lost Time Injuries (LTI’s) between eight and 10

· Because of the rolling 12 months data analysis this meant LTIFR during 2014 significantly spiked i.e. the high rates over the three months on 2013 impacted overall LTIFR rates for some time

· Since then council has been trending back to our current target performance of <2.25

· During the first seven months of 2015, there were a maximum of 2-3 LTI’s per month

· This resulted in a LTIFR in August 2015 of 2.39

· From August 2015 to January 2016 we experienced an increase LTIFR (2.90 as at January 2016)

· In order to achieve our current target of <2.25, and continue to reduce injuries and lost time due to injuries, we need to perform well over next six months and focus on risk areas including Community Services (Parks, Sports and Recreation and Community Facilities), City Parks Services and Waste.

22. A more detailed report with February 2016 data will be tabled at the committee meeting.

Consideration

Local Board views and implications

23. Local board members are being briefed on the changes to legislation. A briefing was provided post the 22 February 2016 Local Board Chairs Forum and all local board members are invited to the next briefing on Friday, 18 March 2016. A toolkit is being developed for all elected members, which will be distributed prior to the 18 March 2016 briefing with key information and support material on the new legislation and officer due diligence obligations. Further training and development will occur during 2016.

Māori impact statement

24. The design and implementation of the new approach set out in this report will take into account Māori wellbeing priorities identified in Council’ Māori responsiveness framework, Te Toa Takitini work programmes, and other relevant documents. The health, safety and wellbeing of Māori staff, elected and appointed members, volunteers and members of the public will continue to be a priority within the new approach.

Implementation

25. Auckland Council has a dedicated health, safety and wellness team within the People and Capability division. There are also health and safety specific roles in certain business units e.g. Infrastructure and Environmental Services and City Parks Services. The health, safety and wellness team has a new structure and a new business partner model. The team is working closely with the legal team on the new legislative requirements.

26. Day-to-day delivery of health, safety and wellness advice and activity at Auckland Council sits with the council team. However, the achievement of our health and safety outcomes, responsibilities and duties under the Act requires safety leadership from the executive and senior leadership teams, elected members and strong partnership with our CCOs.

27. Budget for the health and safety programme for FY17 is currently being finalised as part of the overall budget refresh.

Attachments

There are no attachments for this report.

Signatories

Author

Claire Richardson – Acting Head of Health and Safety

Authorisers

Christine Etherington - People & Capability Director

Phil Wilson - Governance Director

Audit and Risk Committee

08 March 2016

Substantive Council-Controlled Organisations - Risk Update

File No.: CP2016/02984

Purpose

1. To receive key risk information, as requested by the Audit and Risk Committee, from the substantive council-controlled organisations (CCOs).

Executive Summary

2. The Audit and Risk Committee has requested that CCOs provide key information in their quarterly reports regarding their risk management processes and any key risks relevant to the council group (16 December 2014 committee meeting).

3. The requested information covers the following topics:

· how key risks are identified, assessed and managed

· an update on the approach to risk management, internal audit and external audit

· progress on current internal and external audit issues

· any financial impacts that will affect the council group

· any key risks that are of a senior management or governance level that could impact on the wellbeing or reputation of the council-controlled organisation or Auckland Council.

4. This report provides a summary of the information requested by the committee, provided by the substantive CCOs in their 2015/16 half year (second quarter) reports.

Recommendation/s

That the Audit and Risk Committee:

a) receive the update on risk reported by substantive council-controlled organisations in their 2015/2016 half year reports.

Comments

5. At the 16 December 2014 Audit and Risk Committee meeting, CCOs were requested to provide key risk information in their quarterly reports covering the following topics:

· how key risks are identified, assessed and managed

· an update on the approach to risk management, internal audit and external audit

· progress on current internal and external audit issues

· any financial impacts that will affect the council group

· any key risks that are of a senior management or governance level that could impact on the wellbeing or reputation of the council-controlled organisation or Auckland Council.

6. While the format of the risk information varies for each CCO, the above requirements have been largely addressed in the quarterly reports.

7. Since the last update to the committee at its 29 July 2015 meeting, there have been no significant changes to the processes and approaches to risk management by CCOs to report.

8. There are also no critical risks reported in the half year reports. All CCO chief executives have been contacted to advise whether any critical risks have been identified since 31 December 2015. We expect to provide this confirmation at the committee meeting.

9. The one difference to note from the 29 July update regards the new CCO that resulted from the CCO Review.

10. On 1 September 2015, Development Auckland Limited (Panuku) was established. This new entity was formed by way of a short-form amalgamation under the Companies Act (1993) of Auckland Council Property Limited (ACPL) and Waterfront Auckland.

11. As a result, this report now includes information provided by Panuku.

12. Panuku has adopted risk management processes similar to those previously in place by Waterfront Auckland. These follow a risk management framework based on AS/NZA ISO 31000 Risk Management – Principles and Guidelines. Further details are provided in the summary document (Attachment A).

13. A summary of the information provided by the CCOs in the half year reports is included (Attachment A).

Consideration

Local Board views and implications

14. The matters raised in this report relate to CCO accountability and governance which is the responsibility of the governing body. As such, the views of particular local boards were not sought.

Māori impact statement

15. Oversight of CCO risk by the council’s Audit and Risk Committee has no specific implications for Māori wellbeing and does not raise any matters requiring iwi consultation.

Implementation

16. This is an update report with no implementation actions arising.

Attachments

No.	Title	Page
a View	Substantive CCOs Risk Management Summary Report - 2015/16 Second Quarter	25

Signatories

Author

Rita Bento-Allpress – Senior Advisor, CCO Governance and External Partnerships

Authorisers

Alastair Cameron - Manager CCO Governance and External Partnerships

Phil Wilson - Governance Director

Audit and Risk Committee

08 March 2016

NewCore Project Update

File No.: CP2016/03344

Purpose

1. To update the committee as to the NewCore project’s:

· Objectives and deliverables.

· Critical path, including key dates.

· Key risks and mitigations (including governance, independent quality assurance, and other assurance mechanisms over key risks).

Executive Summary

2. The committee will receive a briefing on the NewCore project, by way of workshop, immediately prior to this meeting.

3. That briefing will cover project objectives and deliverables, the project critical path, governance of the project, key risks and risk mitigations.

Recommendation/s

That the Audit and Risk Committee:

a) receive the NewCore project update report.

Comments

4. This committee approved its forward 2016 work programme in December 2015. That forward work programme provides for a NewCore project update briefing to this committee at this meeting, to be followed by a further update in July 2016.

5. That briefing will take place immediately prior to this meeting of the committee, by way of workshop. The briefing will cover:

· The project objectives/ deliverables (what and when).

· Governance structure.

· Critical path – key dates.

· Key risks (high level – the key significant risks).

· Risk mitigations over key risks.

6. The slides from the workshop will be tabled at the meeting.

7. The NewCore project team also reports on a quarterly basis to the Finance and Performance Committee. In December 2015, the Finance and Performance Committee received a report indicating that the NewCore project is progressing well and remains forecast to be completed on budget. This reporting is consistent with the views of Internal Audit.

8. The NewCore budgeted operational and capital expenditure is $156.94 million. The latest project capex and operational forecast is within budget.

Consideration

Local Board views and implications

9. Nil applicable.

Māori impact statement

10. Nil applicable

Implementation

11. Nil applicable.

Attachments

There are no attachments for this report.

Signatories

Author	Mark Maloney - Head of Internal Audit
Authoriser	Phil Wilson - Governance Director

Audit and Risk Committee

08 March 2016

Monitoring of Treaty Audit Response Work Programme

File No.: CP2016/01083

Purpose

1. This report updates the committee on the monitoring work performed by Internal Audit with respect to Council’s Treaty Audit response work programme.

Executive Summary

2. Internal Audit, as part of its routine work programme, monitors the council group’s implementation of the Treaty Audit response work programme in response to recommendations arising from the Independent Māori Statutory Board’s (IMSB) 2015 Treaty of Waitangi audit.

3. This work forms part of the assurance provided by Internal Audit to the Audit and Risk committee on the council group’s compliance with legislation.

4. This work is in progress and will continue over the 2016/2017 and 2017/2018 years in accordance with council’s Treaty Audit response work programme.

5. Based on the work performed to date councils Treaty Audit response work programme is on track.

6. The primary focus of Internal Audits work to date has been the provision of “real time” feedback on project plans for Audit recommendations; departmental and CCO Māori Responsiveness Plans; and as a participating member of the Waharoa group

7. In accordance with this committees forward work plan, Internal Audit will report on the council group’s implementation of the Treaty Audit response work programme on a six monthly basis.

Recommendation/s

That the Audit and Risk Committee:

a) receive the Monitoring of Treaty Audit Response Work Programme report

b) note the monitoring work that has been performed to date by Internal Audit

c) note that Internal Audit’s view is that the Treaty Audit response work programme is on track

d) note that Internal Audit will report on a six monthly basis to this committee.

Comments

8. The IMSB’s Treaty of Waitangi audit process sets out a framework for assessing council’s performance in acting in accordance with statutory references to Te Tiriti and statutory responsibilities to Māori.

9. The results of the second Treaty of Waitangi audit were reported to the Finance and Performance Committee on 21 May 2015 (Te Tiriti o Waitangi Audit Report 2015).

10. Council’s Treaty Audit response work programme was adopted by the Finance and Performance Committee on 20 August 2015. The committee noted that quarterly progress reports will be provided to the:

· Council’s chief executive and the executive leadership group of Te Toa Takitini;

· The Finance and Performance Committee

· Joint Governing Body and Independent Māori Statutory Board meetings

And that bi-annual reports by Internal Audit on progress of the Treaty Audit response work programme and its operations will be provided to the Audit and Risk Committee during 2015-2018.

11. Te Tiriti o Waitangi Audit Report 2015 includes a “Summary of Recommended Actions”, containing 25 Action Groups linked to the 67 specific recommendations of the audit report.

12. Recommendation 66 was that “the responsibility for monitoring the work programme completion should move from Te Waka Angamua to Internal Audit, an independent function comprising risk and controls experts, well versed in how to undertake substantive follow up activity and with a direct reporting line to the Audit and Risk Committee, a body charged with oversight of risk, control and compliance matters”.

13. This committee approved the forward work programme for the committee at the December 2015 meeting of this committee. The forward work programme requires Internal Audit to report to this committee on a six monthly basis, on its monitoring work with respect to council’s response to the recommendations contained in the Te Tiriti o Waitangi Audit Report 2015.

Focus of Internal Audit’s work

14. The primary focus of Internal Audits work to date has been the provision of “real time” feedback on project plans for Audit recommendations, departmental and CCO Māori Responsiveness Plans; and as a participating member of the Waharoa group. These areas are discussed further below.

15. The broad approach to the work performed by Internal Audit is:

· Review of departmental and CCOs Māori Responsiveness Plans and action owner’s individual project plans – assessing whether they are “fit for purpose” to achieve Treaty Audit recommendation objectives.

· Obtaining of regular updates from audit action owners as to progress in executing individual project plans.

· Periodic testing (via enquiry, observation, review and testing of underlying controls, processes and documentation) to assess whether individual project plans, internal controls and underlying processes are being implemented as intended.

· Review of the Treaty Audit response work programme component of the quarterly reporting to the Finance and Performance Committee of the Quarterly Te Toa Takatini Māori Responsiveness Portfolio.

· Twice yearly reporting to the Audit and Risk Committee.

Māori Responsiveness Plans and Treaty Audit response project plans

16. Māori Responsiveness Plans are a key mechanism to improve Māori responsiveness. The objective of the Māori Responsiveness Plan is to detail how an individual department or CCO will contribute to the delivery of councils commitment to Māori. The application of the Māori Responsiveness Framework to each departments operations and services provides the basis for improved Māori responsiveness through business planning, training send service redesign.

17. Project Plans are the key mechanism that detail how individual action owners will respond to each of the 67 Treaty Audit recommendations, what will be delivered and when, resources to be applied, key milestones and key risks and risk mitigations.

18. In assessing whether Māori Responsiveness Plans and Treaty Audit response project plans are “fit for purpose ”, the focus of Internal Audit’s review work has been whether:

· Initiatives as contained in the plans will achieve the objectives of Treaty Audit recommendations.

· Appropriate accountabilities have been put in place within individual departments and CCOs for delivery of the plans.

· Proposed performance frameworks within the plans are appropriate to assess whether outcomes will be achieved.

· Adequate budget and resource has been set aside to delivery on the plans.

· The proposed delivery timeframes of specific initiatives are realistic and “doable” given departmental and CCO priorities.

19. Internal Audit will continue to provide real time feedback on Māori Responsiveness Plans and Treaty Audit response project plans as these are developed.

Waharoa group

20. Internal Audit also discharges its monitoring responsibilities through its contribution to the work of the Waharoa group. The Waharoa group, comprised of representatives from Internal Audit, Te Waka Angamua and the IMSB Secretariat, has the role of monitoring progress and applying criteria for closure of actions and each related Treaty Audit recommendation.

21. A large component of the Waharoa group’s work to date has been reaching agreement between the IMSB, Internal Audit and business owners as to what constitutes closure, and requiring evidence of closure with respect to each specific recommendation in the 2015/2016 Treaty Audit response work programme.

22. This upfront agreement on closure criteria will help mitigate against any future disagreement as to whether recommendations have been closed, increase resource efficiency in addressing the Treaty Audit recommendations and contribute to a more effective audit process moving forward.

23. As per paragraph 11 above, Te Tiriti o Waitangi Audit Report 2015 includes a “Summary of Recommended Actions”, containing 25 Action Groups linked to the 67 specific recommendations of the audit report. Each action has a set of agreed closure criteria and when these are met the Waharoa Group will jointly agree to close the action (and the linked Treaty Audit Recommendation). When all actions within a group are complete, the Action Group can be closed. Progress to date on the Te Tiriti O Waitangi Audit Report 2015 is summarized below:

Action

Groups

Open

Closed

Good progress made against action group Māori Responsiveness Planning. Two individual actions within the action group have been completed, five are near completion.

The Hearings Policy action group is complete.

24. Attachment A (Treaty Audit 2015 Recommendations – Progress Summary) provides a summary of Council’s progress in addressing the specific audit recommendations. This was reported to the 25 February Finance and Performance Committee.

Future focus

25. Internal Audit will focus over the next six months on recommendations due to be implemented in quarter three and quarter four of 2015/2016. These are identified in Attachment A.

Consideration

Local Board views and implications

26. Local boards through their advisors have been consulted in the identification of local board Māori transformational shift activity. Local boards will be included in the business partnering process to support the implementation of the monitoring and reporting system Māori transformational activity.

Māori impact statement

27. The Treaty of Waitangi Audit response work programme enables the council group to strengthen responsiveness to Māori through targeted actions and improvements.

Implementation

28. The monitoring role of Internal Audit will continue through the course of the Treaty Audit response programme.

Attachments

No.	Title	Page
a View	Treaty Audit 2015 Recommendations Progress Summary	37

Signatories

Author	Mark Maloney - Head of Internal Audit
Authoriser	Phil Wilson - Governance Director

Chairperson	Cr Bill Cashmore
Deputy Chairperson	Mr Paul Conder, CA
Members	Cr Cameron Brewer
	Cr Ross Clow
	Cr Linda Cooper, JP
	Cr Sharon Stewart, QSM
	Mr Roy Tiffin, FCA
	Cr Sir John Walker, KNZM, CBE
	Cr Penny Webster
Ex-officio	Mayor Len Brown, JP
	Deputy Mayor Penny Hulse