Terms of Reference

Purpose

The purpose of the Audit and Risk Committee is to assist and advise the Governing Body in discharging its responsibility and ownership of governance, risk management, and internal control.

The committee will review the effectiveness of the following aspects of governance, risk management and internal control:

· enterprise risk management (ERM) across the Auckland Council group

· internal and external audit and assurance

· integrity and investigations

· monitoring of compliance with laws and regulations

· significant projects and programmes of work focussing on the appropriate management of risk

· oversight of preparation of the LTP, Annual Report, and other external financial reports required by statute.

The scope of the committee includes the oversight of risk management and assurance across council’s CCOs with respect to risk that is significant to the Auckland Council group.

To perform his or her role effectively, each committee member must develop and maintain his or her skills and knowledge, including an understanding of the committee’s responsibilities, and of the council’s business, operations and risks.

Decision-Making Powers

The committee has no decision making powers.

The committee may request expert advice through the chief executive where necessary.

The committee may make recommendations to the Governing Body and / or chief executive.

Tenure

External members will be appointed for an initial period not exceeding three years, after which they will be eligible for extension or re-appointment, after a formal review of their performance, and have not already served two terms on the committee. Councillors appointed to the committee will automatically cease to hold office at the time of the local authority triennial elections. They may be eligible for re-appointment post those elections if they are returned to office and have not already served two terms on the committee.

The chief executive, and the senior management team members will not be members of the committee.

The members, taken collectively, will have a broad range of skills and experience relevant to the operations of the council. At least one member of the committee should have accounting or related financial management experience, with an understanding of accounting and auditing standards in a public sector environment.

Committee’s responsibilities

The committee’s responsibilities are detailed below.

Forward Work Programme

The committee will agree and approve annually a forward work programme – which will consist of in depth briefings and reviews of specific significant risks and assurance strategies, as contained in the ERM “Top Risks” or Auckland Council’s work plan.

Risk management

· Review, approve and monitor the implementation of the ERM policy, framework and strategy (including risks pertaining to CCOs that are significant to the Auckland Council group).

· Review and approve the council’s “risk appetite” statement.

· Review the effectiveness of risk management and internal control systems including all material financial, operational, compliance and other material controls. This includes legislative compliance (including Health and Safety), significant projects and programmes of work, and significant procurement.

Review risk management reports identifying new and / or emerging risks, and any subsequent changes to the ERM “Top Risk” register.

Internal Audit

· Review annually the Internal Audit Charter – which confirms the authority, independence and scope of the function.

· Review and approve annually and monitor the implementation of the 3 year Internal Audit Strategy and 12 month detailed Internal Audit Plan.

· Review the co-ordination between the risk and internal audit functions – including the integration of the council’s ERM risk profile with the Internal Audit programme. This includes assurance over all material financial, operational, compliance and other material controls. This includes legislative compliance (including Health and Safety), significant projects and programmes of work, and significant procurement.

· Review the reports of the Internal Audit functions dealing with findings, conclusions and recommendations (including assurance over risks pertaining to CCOs that are significant to the Auckland Council group)

Review and monitor management’s responsiveness to the findings and recommendations – enquiring into the reasons that any recommendation is not acted upon.

Fraud and Integrity

· Review and approve annually, and monitor the implementation of, the Fraud and Integrity Strategy, including detailed work programme.

· Review annually the whistleblowing procedures and ensure that arrangements are in place by which staff, may, in confidence, raise concerns about possible improprieties in matters of financial reporting, financial control or any other matters, and that there is proportionate and independent investigation of such matters and appropriate follow-up action.

· Review the procedures in relation to the prevention, detection, reporting and investigation of bribery and fraud.

· Review and monitor policy and process to manage conflicts of interest amongst elected members, local board members, management, staff, consultants and contractors.

Review reports from the Risk, Internal Audit, Integrity and Investigations, external audit and management related to whistle blower, ethics, bribery and fraud related incidents.

Statutory Reporting

Review and monitor the integrity of the interim and annual report including statutory financial statements and any other formal announcements relating to the council’s financial performance, focussing particularly on:

· compliance with, and the appropriate application of, relevant accounting policies, practices and accounting standards

· compliance with applicable legal requirements relevant to statutory reporting

· the consistency of application of accounting policies, across reporting periods, and the Auckland Council group

· changes to accounting policies and practices that may affect the way that accounts are presented

· any decisions involving significant judgement, estimation or uncertainty

· the extent to which financial statements are affected by any unusual transactions and the manner in which they are disclosed

· the disclosure of contingent liabilities and contingent assets

· the clarity of disclosures generally

· the basis for the adoption of the going concern assumption

significant adjustments resulting from the audit.

External Audit

· Discuss with the external auditor before the audit commences:

· the nature and scope of the external audit

· areas of audit focus

· error and materiality levels.

· Review with the external auditors representations required by elected members and senior management, including representations as to the fraud and integrity control environment.

· Review the external auditors management letter and management responses, and inquire into reasons for any recommendations not acted upon.

Where required, the chair may ask a senior representative of the Office of the Auditor General to attend the committee meetings to discuss the office’s plans, findings and other matters of mutual interest.

Interaction with Council Controlled Organisations

Other committees dealing with CCO matters may refer matters to the Audit and Risk Committee for review and advice.

This committee will enquire to ensure adequate processes at a governance level exist to identify and manage risks within a CCO. Where an identified risk may impact on Auckland Council or the wider group, the committee will also ensure that all affected entities are aware of and appropriately managing the risk.

The Head of Risk and Head of Internal Audit are responsible for the provision of quality risk, assurance, insurance and ethics and integrity services for all CCOs except Auckland Transport and Watercare (with the exception of insurance services which are provided to Auckland Transport). Auckland Transport and Watercare have their own risk and assurance functions. The Head of Risk and Head of Internal Audit are responsible for monitoring CCO risk and internal audit strategies with respect to risks that are significant to the Auckland Council group.

Annual Report on the work of the committee

The chair of the committee will submit a written review of the performance of the committee to the chief executive on an annual basis. The review will summarise the activities of the committee and how it has contributed to the council’s governance and strategic objectives. The chief executive will place the report on the next available agenda of the governing body.

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

An apology from Mayor P Goff has 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 Monday, 25 June 2018, 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 Governance 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.”

No.	Title	Page
a ⇩	Forward Work Programme	15

Audit and Risk Committee

27 August 2018

Interim Audit Management Report for the year ending 30 June 2018

File No.: CP2018/13315

Te take mō te pūrongo / Purpose of the report

1. To summarise the issues identified by the Office of the Auditor-General during the recent interim audit for the year ended 30 June 2018 and outlines how Auckland Council is addressing the issues raised.

Whakarāpopototanga matua / Executive summary

2. Audit New Zealand is Auckland Council’s external auditor appointed by the Office of the Controller and Auditor-General to conduct the audit on his behalf. Audit New Zealand works with the council throughout the year reviewing our internal controls, half year report and disclosures to both the New Zealand and overseas stock exchanges and auditing our Annual Report. The Office of the Auditor-General issues reports to the council throughout the year with recommendations on how the council can enhance and improve our processes, procedures and disclosures.

3. Following the completion of the interim audit, a report has been issued which outlines issues identified and makes recommendations for significant items that need to be addressed in the preparation of the Annual Report. The report is attached (Attachment A).

4. The new recommendations made include:

· monitoring the implementation of the embedding programme of the new charter

· enhancing the training to staff on the requirements of documentation to support sensitive expenditure

· accounting disclosures in the Annual Report for the holiday pay provision

· ensuring the Annual Report disclosure of building consent applications processed within 20 working days is supportable

· review the systems and controls for recording of resource consent processing times

· completion of an assessment of the impact of early adoption of the financial reporting standard PBE IFRS 9 Financial Instruments.

5. The report also includes an update on prior year recommendations which are either in progress or have been resolved. Issues in progress are:

· consent processing, controls, processes and system improvements

· payroll controls monitoring

· payroll termination processes.

6. The matters which have been resolved are:

· updating Information Services (IS) policies

· completion of a NewCore benefits realisation plan

· reviewing development contribution invoicing processes

· finalising a project plan for the consultation document and Long-term plan 2018-2028.

7. The council accepts the recommendations made and has provided a response outlining actions being taken to address each issue raised. Work is underway to address these matters.

Ngā tūtohunga / Recommendation/s

That the Audit and Risk Committee:

a) note the issues identified by the Office of the Auditor-General and the council’s responses to the matters raised in the interim audit for the year ended 30 June 2018.

Horopaki / Context

8. This report summarises the issues identified by the Office of the Auditor-General during their interim audit and outlines how the council is addressing the matters raised.

Tātaritanga me ngā tohutohu / Analysis and advice

9. An interim audit is completed for the purpose of reviewing the council’s control environment. An assessment is made by the auditors of the council’s control environment and financial and non-financial systems to determine their audit approach, so that they can issue an audit opinion on the council’s annual report, including the financial statements and service performance information.

10. The auditors have assessed that the council’s financial system and information technology controls are appropriate. They have however, made recommendations for improvements required in service performance systems, processes and reporting in the building and resource consenting areas.

11. Recommendations from the interim audit are:

· Monitoring the implementation of the council’s charter. As a result of the review of its staff behavioural policies, the council has developed and adopted a new charter. The charter sets out expectations for staff conduct and includes standards and guides. An embedding programme has been developed which includes a compulsory e-learning module and other implementation activities. The auditor has recommended that monitoring the embedding programme is undertaken to ensure the successful implementation of the charter in the council and council-controlled organisations (CCOs). The embedding programme is currently in progress and includes the establishment of a group-wide working group to assist with implementation.

· Enhancements to the training of staff on the requirements for clear documentation for sensitive expenditure. The council requires appropriate support documentation to be attached to all expenditure incurred. However, the auditors concluded that, in some cases, the business purpose was not always clearly documented and have recommended that the requirement for clear documentation be communicated to all staff. The charter includes a money and assets component and the guidance document outlines the requirement for appropriate documentation. Sensitive expenditure is also a component of the compulsory charter e-learning module.

· Holiday pay provision in the annual report. In the 2016/2017 annual report, the council made a provision for potential payments to meet its Holiday Act obligations. The first payments have been made during the current financial year. The auditors have recommended that the provision related to this issue be reviewed to reflect the remaining obligations at 30 June 2018. The council has completed the assessment and the calculation is currently being reviewed by the auditors as part of the 2017/2018 year end final audit.

· Consenting activities- processes, system improvements and reporting. The auditors identified a number of processes, control weakness and reporting issues associated with building and resource consent applications. They have concluded that if these are not addressed, they could potentially have an impact on the year-end audit report. A report was tabled at the June 2018 Audit and Risk Committee outlining the work which had been undertaken to address the issues raised. A further update is scheduled for this meeting.

· Early adoption financial reporting standard PBE IFRS 9 Financial Instruments. A revised financial reporting standard has been issued for the recognition and measurement of financial assets and financial liabilities for public benefit entities. The standard is effective for the reporting period beginning 1 January 2021. However, the Auckland Council group is classified as a mixed group because it comprises both public benefit and for-profit entities. Therefore, the group has decided to adopt PBE IFRS 9 when it becomes effective for the for-profit entities, in the 2018/2019 financial year, to reduce compliance costs. The council has prepared an assessment of the impact of PBE IFRS 9 to the financial instruments and has provided this to the auditors for review.

12. Findings from the interim audit of system or control issues which were previously raised and are in progress:

· Payroll systems and controls and monitoring. The auditors concluded that the processes in place to review the payroll master file changes should be revised. The council had assessed that the risks were controlled by performing additional checks. In addition, in June 2018 the implementation of a new payroll system, which requires employees to enter their own changes to personal information, significantly reduces the volume of items entered by payroll staff.

· Payroll systems termination processes. When an employee leaves the council, the employee’s manager initiates the termination process which results in Payroll stopping payments. The auditors believe that further guidance and training should be provided to managers on their responsibilities. The council believes that a range of measures in place (such as publishing knowledge articles on the intranet, a manager’s guideline document for new managers and sending out provisional payroll reports before each pay run) reduces the risks. The June 2018 amendment to the payroll system also provides a further prompt to managers as new employees are no longer able to be added without the removal of previous employees.

13. The report also contains details of several matters which had previously been raised and have been resolved:

· Update of IS policies. As part of the introduction of the charter the council has revised and published a number of IS security supporting guidelines.

· NewCore benefits realisation plan. The NewCore project completion report was presented to the July 2017 Finance and Performance Committee and the 25 June 2018 Audit and Risk Committee.

· Invoicing development contributions. During the 2016/2017 financial year the council experienced some issues invoicing a small number of development contributions which were not invoiced correctly in the previous legacy systems. The issue was resolved in November 2017 by moving development contribution invoicing to SAP as a result of NewCore. The matter has not reoccurred since.

· Development of a project plan for the consultation document and Long-term Plan 2018-2028. A project plan was used in the long-term plan project management process.

14. The management report that council will receive following the 2017/2018 year end final audit will provide a full update on all outstanding previously raised recommendations.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe /
Local impacts and local board views

15. There are no issues relating to reporting at a local board level. Accordingly, the views of local boards have not been sought.

Tauākī whakaaweawe Māori / Māori impact statement

16. The report does not affect the achievement or reporting on the council or the council group’s contributions towards Māori outcomes. The council’s contributions to Māori outcomes are reported in the annual report.

Ngā ritenga ā-pūtea / Financial implications

17. There are no financial implications directly arising from the information contained in this report.

Ngā raru tūpono / Risks

18. The council is actively addressing the issues raised, and we have assessed the matters will not impact on the audit opinion of the council’s annual report.

Ngā koringa ā-muri / Next steps

19. A further report will be received from the auditors following the completion of the 2017/2018 year end final audit, which will include an update on the progress of previously raised items.

Ngā tāpirihanga / Attachments

No.	Title	Page
a ⇩	Interim Audit Management Report 30 June 2018	25

Ngā kaihaina / Signatories

Author

Morna Macfarlane - Financial Compliance Manager

Authorisers

Francis Caetano - Group Financial Controller

Kevin Ramsay - General Manager Corporate Finance and Property

Matthew Walker - Acting Group Chief Financial Officer

Phil Wilson - Governance Director

Audit and Risk Committee

27 August 2018

Final Audit Management Report for the Long-term Plan 2018-2028

File No.: CP2018/14654

Te take mō te pūrongo / Purpose of the report

1. To summarise the matters identified by the Office of the Auditor-General during the recent audit for the Long-term Plan 2018-2028 and outlines how Auckland Council is addressing the matters raised.

Whakarāpopototanga matua / Executive summary

2. On 28 June 2018, the Office of the Auditor-General issued a standard audit report on Auckland Council’s Long-term Plan 2018-2028. This meant they were satisfied that the plan meets the statutory purpose and they did not need to draw the readers’ attention to anything in particular.

3. The Office of the Auditor-General also issues reports to the council with recommendations on how the council can enhance and improve our processes for current and future planning.

4. Following the completion of the Long-term Plan 2018-2028 audit, a management report has been issued, which outlines key issues and makes recommendations for future annual plan or long-term plan cycles. The report is attached (Attachment A).

5. The matters raised, and recommendations made in this attached report are:

a) the auditors’ expectation is that the entities within the Auckland Council group delivering the agreed capital programme will have in place robust project and contract management processes and governance frameworks. They recommend that the council also puts in place an overarching governance framework that would enable oversight of the whole programme across entities.

b) the council continues to develop the Infrastructure Strategy, so it better supports options for longer term decision-making.

c) the centralised project management approach, application of key controls and detailed project planning disciplines continue to be developed and utilised on an ongoing basis for future long-term plans, any amendments and annual plan rounds.

6. Council staff accept the recommendations made and have provided a response outlining actions being taken to address each issue raised.

Ngā tūtohunga / Recommendation/s

That the Audit and Risk Committee:

a) note the matters identified by the Office of the Auditor-General and the council’s responses to the matters raised in the audit for the Long-term Plan 2018-2028.

Horopaki / Context

7. This report summarises the matters identified by the Office of the Auditor-General during their audit and outlines how the council is addressing the matters raised.

Tātaritanga me ngā tohutohu / Analysis and advice

8. On 28 June 2018, the Office of the Auditor-General issued a standard audit report on Auckland Council’s Long-term Plan 2018-2028. This meant they were satisfied that the plan meets the statutory purpose and they did not need to draw the readers’ attention to anything in particular.

9. They found the underlying information and assumptions used to prepare the long-term plan provided a reasonable and supportable basis for preparation.

10. The Office of the Auditor-General also issues reports to the council with recommendations on how the council can enhance and improve our processes for current and future planning.

11. Following the completion of the long-term plan audit, a management report has been issued, which outlines issues identified and makes recommendations for items that could be addressed in the preparation of future annual plans and long-term plans.

12. Council staff accept the recommendations made and have provided a response outlining actions being taken to address each matter raised.

13. The report also includes an update on the management report issued following the completion of the ‘Consultation Document’ phase of the audit, dated 4 May 2018. It states that all the matters raised in this report, have now been substantively resolved or are in the process to be resolved.

14. The recommendations made, and council’s response to them, are summarised in sub-sections below.

Integration with central government

15. The auditors’ expectation is that the entities within the Auckland Council group delivering the agreed capital programme will have in place robust project and contract management processes and governance frameworks. They recommend that the council also puts in place an overarching governance framework that would enable oversight of the whole programme across entities.

Council’s response

16. Development of Auckland Council’s long-term plan involved significant collaboration projects on items such as integrated transport planning and the regional fuel tax. Staff agree that strong governance and ongoing collaboration (both internally and externally) will be important as we deliver the plan’s ambitious capital programme.

17. Council staff report to the Finance and Performance Committee on the delivery of the work programmes on a quarterly basis and are investigating how reporting can be improved to better reflect the investment outcomes for Aucklanders and the monitoring of programme delivery. This includes a governance group of key managers from across the council group with responsibility for delivering key components of the programme.

18. The council will also employ a collaborative governance approach as it delivers key parts of the long-term plan programme including:

a) projects funded by the Regional Fuel Tax where the enabling legislation includes specific reporting requirements on the approved scheme

b) the programme of investment in the city centre with a focus on infrastructure for the America’s Cup.

Infrastructure Strategy and Financial Strategy

19. Auditors recommend the council continues to develop the Infrastructure Strategy so it better supports options for longer term decision making.

Council’s response

20. For this long-term plan some critical infrastructure funding decisions needed to be made for the first decade and therefore the focus of the infrastructure strategy was on these key near-term investment decisions.

21. The council has identified further decisions and issues beyond the first decade of the Infrastructure Strategy. The strategy notes that while there is a reasonable amount of certainty about the investment in the first decade, those projects are subsequent to this period are more conceptual and likely to change in response to future needs.

22. Staff responsible for the Infrastructure Strategy agree that, at this stage, the timing of when these decisions will need to be made is unclear and further work is required. This work will inform future long-term plan cycles.

Project management

23. Auditors recommend that:

· a centralised project management approach

· the application of key controls

· detailed project planning disciplines

continue to be developed and utilised on an ongoing basis for future long-term plans, any long-term plan amendments and annual plan rounds.

Council’s response

24. Particular circumstances around the change in central government and the initiation of a new round of the Auckland Transport Alignment Project presented significant timing challenges for the council with its Long-term Plan 2018-2028.

25. Improvements were made through the process particularly around project governance, version control, and the documentation of risks and controls. The project team are working to embed these improvements for future planning processes.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe /
Local impacts and local board views

26. There are no issues raised in the management letter relating to planning at a local board level. Accordingly, the views of local boards have not been sought.

Tauākī whakaaweawe Māori / Māori impact statement

27. The report does not affect the achievement or reporting on the council or the council group’s contributions towards Māori outcomes.

Ngā ritenga ā-pūtea / Financial implications

28. There are no financial implications directly arising from the information contained in this report.

Ngā raru tūpono / Risks

29. Risks and issues raised are detailed in the body of this report and its attachment.

Ngā koringa ā-muri / Next steps

30. The council staff are actively addressing the issues raised by Office of the Auditor-General to ensure that they are resolved.

Ngā tāpirihanga / Attachments

No.	Title	Page
a ⇩	OAG managment report for final Long-term Plan 2018-2028	51

Ngā kaihaina / Signatories

Author

Ross Tucker - Acting General Manager, Financial Strategy and Planning

Authorisers

Matthew Walker - Acting Group Chief Financial Officer

Phil Wilson - Governance Director

Audit and Risk Committee

27 August 2018

Quarterly health and safety performance report

File No.: CP2018/14885

Te take mō te pūrongo / Purpose of the report

1. To receive the fourth quarter report on Auckland Council’s health and safety performance.

Whakarāpopototanga matua / Executive summary

2. Auckland Council’s strategic health and safety vision is ‘to become a leading organisation for health and safety by 2020’.

3. Over the fourth quarter, most of the key health and safety metrics continue to track in the right direction.

Ngā tūtohunga / Recommendation/s

That the Audit and Risk Committee:

a) receive the fourth quarter report on the Auckland Council’s health and safety performance

b) refer this report to the Governing Body and draw the attention of elected members to their duties under the Health and Safety at Work Act 2015

c) note that this report will also be provided to all local boards for their information.

Horopaki / Context

4. Under the Health and Safety at Work Act 2015 all elected members are deemed ‘officers’ and must exercise a duty of due diligence in relation to health and safety. These quarterly reports provide information to assist elected members to carry out that role.

Tātaritanga me ngā tohutohu / Analysis and advice

Key metrics

5. The council’s key safety indicators include four key metrics: Lost Time Injury Frequency Rate (LTIFR), near misses, unsafe conditions, and corrective actions/critical risks. The council’s performance for the fourth quarter for each of those metrics is set out below.

Lost time Injury Frequency Rate

6. In 2015 the council set an aspirational for the LTIFR of <2.25. This measures the number of lost time injuries per one million hours worked. By the end of the fourth quarter, this target had continued to trend downwards, which is a positive result.

7. In quarter three we introduced the Total Recordable Injury Frequency Rate (TRIFR) measure. This measures the number of all Lost Time Injuries and Medically Treated Injuries standardised over a period of 1,000,000 working hours. This measure is considered a more accurate reflection of an organisation’s risk profile and approach to injury prevention.

Summary of lost injury trends

	Trend	Jul	Jun	May
Rolling LTIFR (indicative)		1.80	1.96	2.12
Rolling TRIFR		15.61	16.04	16.16
Number of Lost Time Injuries		3	3	1
Number of all injuries inclusive of first aid, medical treatment and lost time		32	31	46

Near misses and unsafe conditions

8. The council uses the Risk Manager System to report near misses and unsafe conditions. At the end of the fourth quarter:

· there was a decrease of five per cent in the number of reported unsafe conditions compared to previous quarter.

· there was a decrease of 19 per cent in the number of reported near misses compared to the previous quarter.

9. We have seen one failure to report an incident through the system. This related to a waste truck which appeared to have suffered brake failure. Whilst the incident, which arose from a contractor operation, was properly handled and investigated it was not captured in the Risk Manager System. Staff are investigating this further.

Corrective actions/critical risks

10. The Risk Manager System also allows the council to identify and categorise our critical risks and track corrective actions. ‘Critical risks’ are health and safety hazards that are present in the business and if they occurred have the potential for a critical outcome, for example, fatality, permanent disability or significant loss of plant/equipment. These can now be identified through the system. This is important to drive improvement and reduce risk.

11. The number of completed corrective actions has been on a downward trend since November 2017. At the end of April, the per cent completion of these actions was 45 per cent. This means that council people-leaders are not completing actions allocated to mitigate risks. Staff are currently reviewing a change to a more ‘centrally’ managed process. The new governance framework required from departments will improve this area. The overall organisational maturity level for health and safety contributes to this downward trend.

12. Concurrently however we have seen our incident response rates increase, which indicates that people leaders are responding to the system and notifications sent to them. This is an improvement on previous months.

13. As critical risks are now visible they can be assessed and control measures put in place including tracking. This helps minimise the likely outcomes of these risks.

Rolling year trend - critical risks

Critical risks – quarterly

Risk	Quarterly Trend	Qtr 4	Qtr 3	Qtr2	Qtr 1
Violence		38%	24%	39%	31%
Mental health		9%	7%	1%	2%
Lone Working		4%	1%	1%	6%
Items falling from height		2%	11%	2%	7%
Fatigue		10%	7%	8%	8%
Explosive atmosphere	-	0%	0%	0%	1%
Driving		19%	22%	16%	22%
Control of substance hazardous to health (COSHH)		2%	3%	1%	3%
Confined space		0%	2%	1%	1%
Mains plant and equipment	-	1%	1%	1%	0%
Water safety		13%	23%	31%	18%
Working at height		2%	1%	0%	0%
LOLE (Lifting operations, lifting equipment)	-	0%	0%	0%	0%

14. Violence remains the council’s top health and safety risk. Council has responded as follows:

· In August 2017, the council’s executive lead team resolved to take a zero-tolerance stance towards violence or any form abuse towards our staff from our customers.

· Staff have recently delivered an Enterprise wide communications campaign to raise awareness under the banner of ‘Safe Places, Safe People’. The message to our staff is that it is ‘ok to walk away’. Numbers of reported incidents are expected to increase during this campaign. This may sound counterintuitive it will help us to understand if there is a genuine problem with underreporting these types of hazards.

· Staff have also conducted physical security audits of various customer facing locations and reviewed training that staff received. Those audits have advised that training should now be mandatory for customer-facing staff to raise their skills on conflict resolution and de-escalation techniques.

· Staff have also recently published a new guide to supplement the existing Key Safety Requirements we had on this topic. Staff have been using the findings from the investigation into the Ashburton Work and Income New Zealand shootings to guide council’s response.

15. WorkSafe recently visited the council to review our procedures for asbestos. They were impressed with our processes in place to deal with this. Much credit needs to go to the Community Facilities Asset Risk Assessment Programme (ARAP) for the work in this space which is industry leading.

Due diligence duties

16. As officers, elected members have the duties set out in the table below. This also shows measures underway to support those duties.

Duty

Support provided

Duty 1 - Acquire and keep up-to-date with health and safety knowledge and matters

Health and safety training has been ongoing to ensure elected members and senior management are well informed and up to date on health and safety matters, Refresher training and an update session was held with Governing Body in July 2018. Council also completed training of all its Local Board officers. The Kura Kawana (elected member development) programme will now focus on more practical skills for its members.

Duty 2 - Understand council’s operations and associated hazards/risks

A health and safety site visit plan for the chief executive, executive lead team members and elected members is in place.

The executive lead team operates as the Health Safety and Wellbeing Committee which creates better visibility and understanding of council operations and the health and safety risks in their parts of the organisation.

Two local boards (Devonport-Takapuna and Waitematā) have asked for a site visit, and visits were being arranged at the time of writing this report.

Duty 3 - Ensure the council has appropriate resourcing and processes to eliminate/minimise risks

A key focus of the current strategy is to build capability within the organisation and to prioritise high risk business areas. A corporate training programme has now been agreed mandating all people leaders to complete a one day ‘Managing Safely’ course. This course has been developed from the Institute of Occupational Safety and Health’s own Managing Safely course, a well-respected and known international standard. We have trained 208 managers to date; 113 are registered and are waiting to attend. We are on track to hit our target of 400 by the end of the year. We have prioritised high risk departments for this training first and communicated the importance of attendance.

Duty 4 - Ensure the council has appropriate processes for receiving and considering information regarding incidents, hazards and risks and for responding in a timely way to that information

A management framework is now in place. It is designed to ensure robust safety governance, processes, guidance and positive behaviours around health and safety. Risk Manager is also working effectively as our reporting tool for unsafe conditions, incidents and near misses.

We have seen one major reporting failure as set out above.

Duty 5 - Ensure the council has, and implements, processes for complying with any duty or obligation

The chief executive and mayor have recently signed the Health and Safety Policy Statement, and this has been implemented alongside the new Health and Safety Framework. It focuses on developing the right behaviours across the whole organisation, including our council-controlled organisations, those being:

· being open and honest,

· working with others

· embracing safety

· communicating clearly

· trusting your instincts.

The new framework sets the rules for how safety is expected to be managed.

Duty 6 -Take reasonable steps to verify the provision and use of resources and processes

through reviews and audits

Safe365 Audits have been carried out across the operations division. This has identified capability of departments and allowed council to see gaps at the departmental and enterprise levels. It is expected this will be the focus of an upcoming workshop.

Staff are developing an assurance framework for use within the council working alongside Internal Audit department.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe /
Local impacts and local board views

17. Briefings for elected members, including local boards, have now been completed across all local boards

18. This report will be provided to all local boards together with a briefing from staff.

Tauākī whakaaweawe Māori / Māori impact statement

19. Council staff are working with the Independent Māori Statutory Board and the council’s co-governance entities, such as the Tūpuna Maunga Authority, Te Poari o Kaipātiki ki Kaipara, the Ngāti Whātua Ōrākei Reserves Board and Te Motu a Hiaroa (Puketutu Island) Trust to ensure they have information and support to comply with their duties under the legislation.

Ngā ritenga ā-pūtea / Financial implications

20. There are no financial implications arising from the advice in this report.

Ngā raru tūpono / Risks

21. The risk of non-compliance with health and safety is recorded in the council’s top risk register. As set out above, controls are in place to monitor and respond to critical risks through the Risk Manager System.

Ngā koringa ā-muri / Next steps

22. Staff will continue with the implementation of the Health and Safety Strategy, embedding the new Health and Safety Framework, which now includes our Wellbeing Strategy.

Ngā tāpirihanga / Attachments

No.	Title	Page
a ⇩	Quarterly Health & Safety Statistics	71

Ngā kaihaina / Signatories

Author

Oliver Sanandres - Head of Health, Safety and Wellbeing

Authorisers

Patricia Reade - Director People and Performance

Phil Wilson - Governance Director

Audit and Risk Committee

27 August 2018

Exclusion of the Public: Local Government Official Information and Meetings Act 1987

That the Audit and Risk Committee:

a) exclude the public from the following part(s) of the proceedings of this meeting.

The general subject of each matter to be considered while the public is excluded, the reason for passing this resolution in relation to each matter, and the specific grounds under section 48(1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution follows.

This resolution is made in reliance on section 48(1)(a) of the Local Government Official Information and Meetings Act 1987 and the particular interest or interests protected by section 6 or section 7 of that Act which would be prejudiced by the holding of the whole or relevant part of the proceedings of the meeting in public, as follows:

C1 New Zealand Stock Exchange Preliminary Announcement, media release and primary financial statements for the year ended 30 June 2018

Reason for passing this resolution in relation to each matter

Particular interest(s) protected (where applicable)

Ground(s) under section 48(1) for the passing of this resolution