I hereby give notice that an ordinary meeting of the Audit and Risk Committee will be held on:

 

Date:

Time:

Meeting Room:

Venue:

 

Monday, 24 February 2020

1.15pm

Room 1, Level 26
135 Albert Street
Auckland

 

Komiti Tātari me te Mātai Raru Tūpono /

Audit and Risk Committee

 

OPEN AGENDA

 

 

 

 

MEMBERSHIP

 

Chairperson

Sue Sheldon, CNZM

 

Deputy Chairperson

Cr Daniel Newman, JP

 

Members

Deputy Mayor Cr Bill Cashmore

 

 

Paul Conder

 

 

Cr Shane Henderson

 

 

Bruce Robertson

 

 

 

 

Ex-officio

Mayor Hon Phil Goff, CNZM, JP

 

 

IMSB Chair David Taipari

 

 

 

 

 

(Quorum 3 members)

 

Quorum must include two Governing Body members

 

Mike Giddey

Kaitohutohu Mana Whakahaere / Governance Advisor

 

19 February 2020

 

Contact Telephone: (09) 890 8143

Email: mike.giddey@aucklandcouncil.govt.nz

Website: www.aucklandcouncil.govt.nz

 

 



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

·         health, safety and wellbeing

·         business continuity and resilience

·         integrity and investigations

·         monitoring of compliance with laws and regulations

·         significant projects, programmes of work and procurement 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 the council’s CCOs and the council 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 other than those in these terms of reference. 

 

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.

 

Assurance

 

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

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

·         Review the co-ordination between the risk and assurance 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 assurance 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 Assurance Strategy, including the fraud and integrity aspects, including a detailed work programme.

·         Review annually the ‘Speak Up’ and 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, Assurance, 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 Long-term Plan, 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 way 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:

o   the nature, scope and fees of the external audit

o   areas of audit focus

o   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 Assurance and the Chief Risk Officer are responsible for monitoring CCO risk and internal audit strategies with respect to risks and CCO 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.

 

 

 


Audit and Risk Committee

24 February 2020

 

ITEM   TABLE OF CONTENTS                                                                                         PAGE

1          Apologies                                                                                                                        9

2          Declaration of Interest                                                                                                   9

3          Confirmation of Minutes                                                                                               9

4          Petitions                                                                                                                          9  

5          Public Input                                                                                                                    9

6          Local Board Input                                                                                                          9

7          Extraordinary Business                                                                                              10

8          Audit and Risk Committee Work programme 2020-2022                                        11

9          Treaty Audit Monitoring Update                                                                                 19

10        Health, Safety and Wellbeing update - emerging risks and issues                       31

11        America's Cup programme risk management update                                             35

12        Resource and Building Consents performance and improvement activities update                                                                                                                                       41

13        Resource and Building Consents Performance Measures Assurance Plan Update                                                                                                                                       45

14        Risk Update Report                                                                                                     51

15        Approval of the Audit New Zealand audit plan for the year ended 30 June 2020 69  

16        Consideration of Extraordinary Items 

PUBLIC EXCLUDED

17        Procedural Motion to Exclude the Public                                                               119

C1       Council-controlled Organisations' Quarterly Risk Updates - February 2020     119

C2       Proposed approach for 2020-2021 Insurance Renewal                                        120

C3       Half year results announcement for NZX and Interim Report 31 December 2019 120

C4       Office of the Auditor-General and Audit New Zealand Briefing                           120  

 


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, 9 December 2019, 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.”


Audit and Risk Committee

24 February 2020

 

Audit and Risk Committee Work programme 2020-2022

File No.: CP2020/01169

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To review and approve the Audit and Risk Committee’s three-year forward work programme that has been updated following the Audit and Risk Committee’s meeting on 9 December 2019.

Whakarāpopototanga matua

Executive summary

2.       The Audit and Risk Committee approved its three-year forward work programme at its 9 December 2019 meeting. [Resolution number AUD/2019/68]

3.       In accordance with good practice, the committee reviews the forward programme at each meeting to ensure it can be adapted to council’s risk profile changes and that it remains relevant to the needs of the committee.

4.       Minor scheduling adjustments have been made to implement the decision of the committee on 9 December 2019 to alternate the updates received on activities from Assurance Services department and the Risk department.  Any emerging risks or significant matters will be reported as required in between the update reports.

5.       The financial entries have also been updated to correctly reflect which reports are annual versus interim reports and to include a Green Bond update due in September 2020.

6.       The Top Risk deep dives have been updated. Deep Dives are scheduled to be reported for Service Delivery in May and Climate Change Phase 2 in August 2020.

7.       Scheduling of the annual attendances by each of the council-controlled organisations in 2021 and 2022 has been confirmed and included.

8.       Several new matters are recommended to be included (highlighted in yellow in attachment A):

(a)     A briefing report on council’s approach to integrated reporting with our Annual Report is proposed for May 2020.  The purpose of the report is to brief the committee on council’s approach and seek the Audit and Risk Committee’s endorsement to make the 2019/2020 Annual Report a formal Integrated Report.

(b)     A report on the Sky City Convention Fire post event review is proposed for the 24 May 2020.

(c)     An update on the CCO review is proposed for 24 May 2020 to update the committee on the outcomes of the review.

(d)     Annual updates on insurance activities are proposed in February 2021 and 2022 to enable ongoing oversight and endorsement of the programme development.

9.       Workshops are proposed on the following topics on 24 May 2020:

(a)     Internal audits and reviews completed in Q2 and Q3 2019/2020

(b)     Post event review following Sky City Convention Centre Fire – business continuity and emergency response

(c)     Outcomes of the Top Risk - Service Delivery Deep Dive.

 

 

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a)      approve the recommended new matters and adopt the updated Audit and Risk Committee work programme.

b)      approve the recommended workshop topics to be held in May 2020.

 

 

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Audit and Risk Committee Forward Workprogramme 2020-2022 updated February 2020

13

      

Ngā kaihaina

Signatories

Author

Emma Mosely - Head of Assurance Services (Acting)

Authoriser

Phil Wilson - Governance Director

 


Audit and Risk Committee

24 February 2020

 


Audit and Risk Committee

24 February 2020

 


Audit and Risk Committee

24 February 2020

 


Audit and Risk Committee

24 February 2020

 


Audit and Risk Committee

24 February 2020

 


Audit and Risk Committee

24 February 2020

 


Audit and Risk Committee

24 February 2020

 

Treaty Audit Monitoring Update

File No.: CP2020/01170

 

  

Te take mō te pūrongo

Purpose of the report

1.       To provide an update on:

·    the ongoing monitoring of the council’s Te Tiriti o Waitangi Treaty Audit response programme to implement the recommendations contained in Te Tiriti o Waitangi audits of the council. These audits are commissioned by the Independent Māori Statutory Board every three years.

·    the progress being made on a council-wide Māori Outcomes Framework which includes the performance measures requested at the Audit and Risk Committee meeting in August 2019 (Resolution AUD/2019/42).

A short presentation will also be provided to the committee.

Whakarāpopototanga matua

Executive summary

2.       Every three years the Independent Māori Statutory Board commissions a Tiriti o Waitangi Audit of Auckland Council against its statutory obligations to Māori (the Treaty Audit). In total, 80 recommendations have been made to the council.

3.       Oversight of the implementation of council’s response to the Treaty Audit recommendations occurs via the Waharoa Group which has representatives from the Independent Māori Statutory Board Secretariat, Te Waka Anga Mua and Assurance Services department.

4.       Over the last six months, the Waharoa Group has continued to undertake a process for monitoring and reporting on the delivery of the Te Tiriti o Waitangi (Treaty Audit) Response Programme responding to the findings of the Treaty Audit Report 2018.

5.       Of the 34 open Treaty Audit recommendations reported to the Audit and Risk Committee in August 2019, 20 have been closed in the last six months.  Of the 14 open recommendations, seven are in progress. The seven remaining recommendations are being developed either through scoping for integration into work programmes or are awaiting confirmation of closure criteriaA summary of progress is shown in Attachment A.

6.       The development of a performance measurement framework is a recommendation of the 2015 Treaty Audit.  It is included as one of the 10 priorities that were reconfirmed in August 2019 as part of the council’s Māori Outcomes Strategic Direction (previously agreed by the Māori Outcomes Steering Group and Te Toa Takitini Executive Leadership Group).

7.       A Māori Outcomes Framework, including measures and indicators, is being developed to guide work and measurement of these 10 priorities. The framework is due for completion by May 2020 following consultation with key stakeholders (including the Independent Māori Statutory Board).  The proposed framework will be reported to the Parks, Arts, Community and Events Committee (PACE) in April 2020. A reporting cycle will be agreed as part of that decision. A draft example for one of the priority areas is provided in Attachment B.

 

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a)      receive the update on the monitoring and progress of the Treaty Audit response programme and progress on the Māori Outcomes Framework

b)      note the oversight and monitoring that has been performed by the Assurance Services department

c)      note that the Assurance Services department will report on a six-monthly basis on progress against the Treaty Audit Response Programme to this committee in accordance with the approved Assurance Plan 2019/2020.

 

 

Horopaki

Context

8.       The Independent Māori Statutory Board’s Treaty Audit process sets out a framework for assessing council’s performance against statutory responsibilities and requirements relating to Te Tiriti o Waitangi and to Māori.

9.       The third Treaty Audit was completed and received by the Finance and Performance Committee in July 2018, and by the Audit and Risk Committee in September 2018.

10.     Of the 80 Treaty Audit recommendations, 34 were reported as still open at August 2019. Twenty have since been closed and 14 remain open.

11.     Te Tiriti o Waitangi Audit Report 2018 noted that council had made a considerable effort over the previous 12 months to address the outstanding recommendations from the previous two audits. It also recognised that progress has been made in the development of Māori Responsiveness Plans (MRPs).

12.     Te Tiriti o Waitangi Audit Report 2018 recommends that the Assurance Services (formerly Internal Audit) department continue monitoring and reporting to the Audit and Risk Committee and that the council’s ‘follow-up’ framework is used by the Waharoa Group.

13.     The Te Tiriti o Waitangi (Treaty Audit) Response Programme is the basis for the Assurance Services department’s monitoring and reporting to the Audit and Risk Committee.

14.     The Audit and Risk Committee resolved at its August 2019 meeting that the department provide documentation of the performance measures for marae development, economic development, Te Reo Māori and water (kaitiakitanga) in the next report of the Treaty Audit Programme to this committee. (Resolution AUD/2019/42).  The Māori Outcomes Framework under development will contain the performance measures and is discussed below.

Tātaritanga me ngā tohutohu

Analysis and advice

The Waharoa Group

15.     The Waharoa Group is comprised of representatives from the Assurance department, Te Waka Anga Mua and the Independent Māori Statutory Board Secretariat.

16.     The group provides oversight of Te Tiriti o Waitangi (Treaty Audit) Response Programme, including monitoring, guidance and support to action owners and their executives, and agrees closure of recommendations. Assurance Services provides independent oversight and reporting of progress. 

Te Tiriti Audit Response Work Programme

17.     The strengthened process for monitoring the delivery of the work programme has enabled an increase in the rate of closure of audit recommendations. Improved documentation of the work plans to respond to each recommendation and clearer tracking documents have been implemented.

18.     Of the 14 open audit recommendations seven are in progress. The seven remaining recommendations are being developed either through scoping for integration into work programmes or are awaiting confirmation of closure criteria.

Audit Year

Total No. of Recommendations

Recommendations closed from Aug 2019 to Feb 2020

Total open recommendations in current work programme

Project Plans

2012 & 2015

67

11

10

4 in development

6 monitoring

2018

13

9

4

3 in development

1 monitoring

 

19.     There are project plans in place or currently being drafted for all 14 remaining open audit recommendations.

20.     Improvements are being made to centralised registering, tracking and monitoring of Māori Responsiveness Plans (MRPs) by Te Waka Anga Mua to enable accurate reporting and proactive follow up and support. Work is progressing on refreshing and updating existing MRPs for the Finance Division, Assurance Services department and Panuku Development Auckland Limited.  In February 2019 staff advised 21 MRPs are approved and being implemented.  Two MRPs are currently in development.

21.     MRPs are in place for the substantive council-controlled organisations (CCOs).

Evolution of strategic direction and improvements to internal arrangements

22.     In December 2019, the council adopted a strategic direction for Māori outcomes across the council group. The strategy sees an evolution from responsiveness to delivery of outcomes for Māori in Tāmaki Makaurau. Decisions have been made by the executive leadership team on where business responsibility sits for delivering the 10 strategic priorities and agree performance measures.

23.     In August 2019, the council evolved its leadership structure to Māori Outcomes which saw an elevation in the leadership group which now extends across the council divisions.  This enables TWA to ensure audit actions land in the right place with the right support, at the right level, thereby strengthening the strategic lens and oversight of Māori Outcomes.

24.     A key element to the structure is the creation of Māori Outcome Lead roles that report to relevant directors and sit on the leadership teams for People and Performance division, Infrastructure and Environmental Services division, Customer and Community division, Regulatory division and Chief Planning Office division, with dotted line reporting to the General Manager Māori Outcomes and Relationships.

25.     It is anticipated that these changes to strategic direction and strengthening of governance structure and resourcing will support and positively enable the closure of the outstanding audit recommendations over the next 6 months and the continued improvements to deliver the 10 priorities including the Māori Outcomes Framework and performance measures.

Māori Outcomes Framework

26.     The development of the Māori Outcomes Framework is in response to a recommendation from the 2012 Treaty Audit.

27.     The purpose of the framework is to monitor and report how the council group is delivering on Māori outcomes in a comprehensive and more specific way.  It forms a key component of the council group’s collaborative approach to delivering Māori outcomes.

28.     The work is being overseen by a council group steering group called the Māori Outcomes Steering Group (members include council and CCO representatives).

29.     Originally, four priorities were selected by the Te Toa Takitini Executive Leadership Group as there was limited capacity to focus on all ten priorities in the structure at the time. The ten priorities are shown in Attachment C.

30.     The evolved structure and processes have been implemented in order to allow for all priorities to be delivered.  Directorates and council controlled organisations now have responsibility for delivery of their allocated priorities.  In some cases this involves working across directorates.

31.     A Māori Outcomes Framework project plan states the following key milestones:

·    ELT approval of allocation of the 10 priorities across directorates – completed in December 2019

·    Workshop with subject matter experts and programme leads to develop key priority indicators – in progress

·    Draft Framework for endorsement by the Māori Outcomes Steering Group in March 2020

·    Framework to the PACE Committee in April 2020

This Framework includes outcome statements and council-activity level performance measures for all ten strategic priorities. It also includes high level indicators. A draft outline of the Māori Outcomes Framework is provided in Attachment C.

32.     The Māori Outcomes Framework is intended to provide guidance and measurement of progress and performance for the council group. The measures and indicators will be drawn from several sources, including the council’s Long-Term Plan and Annual Plan, Statistics New Zealand, and the Quality of Life survey. The work is also integrating relevant measures from strategic documents such as the Independent Māori Statutory Board’s Māori Plan, iwi strategies, and the Mana Whenua Kaitiaki Forum’s 10-year strategy. The reporting cycle of measures will be included in the final Māori Outcomes Framework.

33.     Staff are working closely with mana whenua, mataawaka, the Independent Māori Statutory Board, council group, the Māori Outcomes Steering Group and Te Toa Takitini Executive Leadership Group, to develop and finalise the Māori Outcomes Framework.

Tauākī whakaaweawe āhuarangi

Climate impact statement

34.     There are no impacts on climate from this report.  However, the Māori Outcomes Framework is based on wellbeing and includes environmental wellbeing.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

35.     The Treaty Audit response work programme enables the council group to strengthen responsiveness to Māori through targeted actions and improvements. The Māori Outcomes Framework is intended to give clarity and guidance to the council group.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe

Local impacts and local board views

36.     The views of local boards have not been sought in relation to this report.

Tauākī whakaaweawe Māori

Māori impact statement

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

Ngā ritenga ā-pūtea

Financial implications

38.     The committee is not being asked to make a decision with financial implications.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

39.     The meeting of council’s obligations to Māori and honouring of its Treaty obligations is a priority objective of council. 

40.     Key risks to achieving this objective are lack of resources and capability and oversight and monitoring of the Audit work programme. The independent oversight and monitoring by Assurance Services, membership of the Waharoa Group and six-monthly reporting to the Audit and Risk Committee are key mitigations of these risks.

Ngā koringa ā-muri

Next steps

41.       The Assurance Services department will continue to attend the Waharoa Group and        monitor the Treaty Audit response programme and report to the Audit and Risk Committee     in accordance with the Assurance plan, and the committee’s forward work programme.

 

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Attachment A - Update of Treaty Audit Recommendations from Aug 19

25

b

Attachment B - Draft Example of Maori Outcomes Priority Area Measures

27

c

Attachment C - Māori Outcomes Strategic Direction with Priority Owners

29

     

Ngā kaihaina

Signatories

Authors

Emma Mosely - Head of Assurance Services (Acting)

Simone  Andersen - Head of Maori Strategic Outcomes

Tania Winslade - General Manager, Maori Outcomes & Relationships

Authoriser

Phil Wilson - Governance Director

 


Audit and Risk Committee

24 February 2020

 

PDF Creator


Audit and Risk Committee

24 February 2020

 

PDF Creator



Audit and Risk Committee

24 February 2020

 

PDF Creator



Audit and Risk Committee

24 February 2020

 

Health, Safety and Wellbeing update - emerging risks and issues

File No.: CP2020/01290

 

  

 

Te take mō te pūrongo

Purpose of the report

1.      To update and provide assurance regarding Health, Safety and Wellbeing processes and emerging risks and issues.

Whakarāpopototanga matua

Executive summary

2.      Staff are in the process of reviewing existing health, safety and well-being reporting processes, with a view to ensuring that reports to the committee are meaningful and relevant. This updated reporting format will be in place by the next quarterly report.

3.      This report is focused on Auckland Council’s response to the novel coronavirus (COVID-19) threat and the challenges faced by frontline staff who have to deal with antisocial and, potentially violent behaviour on the part of members of the public.

4.      Staff are able to answer any wider questions regarding Auckland Council’s health, safety and well-being performance at the committee meeting.

 

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a)      note the council’s response to the novel coronavirus threat and challenges for frontline staff facing antisocial behaviour from members of the public.

 

 

Horopaki

Context

5.      Under the Health and Safety at Work Act 2015 all elected members are deemed officers and must exercise 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

Response to novel coronavirus (COVID-19)

6.      Council has put in place a crisis management team (CMT) to plan and direct Auckland Council’s response to the novel coronavirus threat, led by Ian Maxwell (Acting Director Customer and Community Services). The CMT has representatives from key customer facing business units, Auckland Emergency Management, Communications & Engagement, and People & Performance (including Health, Safety & Well-being). Wherever possible, representatives from council-controlled organisations (CCOs) are involved.

7.      The guiding principle is that the council will follow the direction set by the Ministry of Health to determine the appropriate approach to manage our response to the threat posed by the virus.

8.      The CMT's preparations are guided by the premise that there will be three possible stages to the COVID-19 virus' level of infection in New Zealand. They are:

·    Stage I - no virus present in New Zealand

·    Stage II - virus present in the small number of patients, who are restricted to quarantine in medical facilities 

·    Stage III - widespread prevalence across the New Zealand population

9.      We are currently at Stage I, and it is likely that we will reach Stage II. The Ministry of Health's assessment is that it is unlikely New Zealand will get to Stage III. Our current actions are focused on Stage I responses, but preliminary plans are being made in anticipation of Stage II and thought is being given to the implications of Stage III (e.g. impacts on mass gatherings and other Council events).

10.    Responses to date include:

·    MOH posters promoting awareness of the importance of washing and drying hands are being circulated across the organisation's premises.

·    Paper towels (as opposed to air dryers) are being placed in all staff and public washrooms, with which staff have regular contact (e.g.  Libraries).

·    Plans are in place in the event we get to Stage II for increased cleaning of surfaces.

·    Assessment of PPE. Based on MOH guidelines, we do not believe it is appropriate or helpful to provide facemasks. If staff choose to wear them, that choice will be respected.

·    People & Performance have put in place guidance and a register for recording staff details, where a staff member needs to self-isolate.

·    Appropriate messages, led by the Mayor, have reinforced the importance of tolerance and abhorrence of any racist or xenophobic messages. Increased training is available to staff to deal with this.

Staff exposure to antisocial behaviour

11.    Increasingly, council staff are exposed to antisocial behaviour by members of the public. This has noticeably increased in recent years. The behaviour ranges from violent confrontations between members of the public to unacceptable behaviour between members of the public and directed towards staff and places them in situations where they are having to manage these complex situations and ensure their own personal safety.

12.    The reasons for this are many and include increasing homelessness, a failure of support agencies to cater for community needs, and the simple reality that many of our public facing facilities are deliberately set up to encourage visitors. Council has responded to these challenges as best it can, whilst trying to ensure its facilities and amenities remain accessible to local communities.

13.    To give an indication of the scale of the issue in the period 1 October 2019-31 December 2019:

·    There were 533 incidents reported to the council's security team.

·    The main staff affected are in libraries (approximately 280 incidents) and regional parks, pools and leisure (approximately 105 incidents), together with staff in customer services, and community centres.

·    These figures do not include incidents encountered by Regulatory staff, involved in such areas as animal and noise control, licensing, and building regulation.

·    The immediate response to these incidents has involved 25 trespassed notices being served, 18 trespass authorisations issued, and 151 CCTV investigations conducted.

·    Police have been involved in 60 incidents.

14.    The response to the issues has included:

·    Appropriate training being provided within each department to manage conflict situations, including interactions that involve violence.

·    Departments have provided appropriate security and other support where this is warranted.

·    As part of ongoing building refurbishment programme, facilities such as Libraries are including safety design considerations, for example, safe spaces or panic rooms, which can only be accessed by staff.

·    Employee Assistance Program support is provided for affected staff individually and groups of employees who are exposed to traumatic events or incidents.

·    The Corporate Health, Safety and Well-being team are working to prepare a corporate standard to provide guidance on staff having to deal with antisocial behaviour (including violence) from members of the public.

Tauākī whakaaweawe āhuarangi

Climate impact statement

15.    The decisions contained in this report do not have an impact on climate change.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

16.    CCOs are involved in the CMT for the novel coronavirus where appropriate.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe

Local impacts and local board views

17.    Local boards have oversight of many of facilities where measures are being or will be put in place to address ay issues with novel coronavirus and antisocial behaviour, and will be involved as appropriate.

Tauākī whakaaweawe Māori

Māori impact statement

18.    No additional Māori impact.

Ngā ritenga ā-pūtea

Financial implications

19.    Currently, any additional cost associated with extra cleaning, provision of towels and sanitisers, and salary cost associated with self-isolation is being managed within existing budgets.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

20.    The risk of non-compliance with health and safety is recorded in the council’s top risk register. Controls are in place to monitor and respond to critical risks through the Risk Manager System.

Ngā koringa ā-muri

Next steps

21.    Continue to monitor the development of the virus and plan accordingly.

22.    Develop a pan-Council standard on dealing with antisocial behaviour, while supporting departmental plans. Developed for the council parent and offered to CCOs.

 

Ngā tāpirihanga

Attachments

There are no attachments for this report.    

Ngā kaihaina

Signatories

Author

Andre Lubbe - Head of Employment Relations

Authorisers

Patricia Reade - Director People and Performance

Phil Wilson - Governance Director

 


Audit and Risk Committee

24 February 2020

 

America's Cup programme risk management update

File No.: CP2020/01093

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To receive an update on risk management activities for the 36th America’s Cup programme.

Whakarāpopototanga matua

Executive summary

2.       The America’s Cup programme was established in 2018 to enable Tāmaki Makaurau to host the 36th defence of the America’s Cup in 2021.

3.       The Wynyard Edge Alliance is responsible for delivering the essential infrastructure to host the America’s Cup. Auckland Tourism, Events and Economic Development (ATEED) is leading the event coordination and planning on behalf of the Auckland Council Group and the Crown. This will ensure that the city continues to function efficiently during the America’s Cup, and that the events take place in a safe manner.

4.       This will be achieved in collaboration with the event deliverer, America’s Cup Event Limited, who are responsible for the on-water racing and the race village.

5.       The focus of the America’s Cup programme is moving from the infrastructure build to the events, and the Programme Management Office has moved from Auckland Council to ATEED to focus on the event delivery.

6.       The chair of the America’s Cup Joint Chief Executive Group has engaged external consultancy services to review the overall programme governance in February and March 2020. This will ensure adequate risk governance and management is taking place at all levels. The programme risk lead function will continue to be led by Auckland Council, until the review has been completed.

7.       The overall risk profile of the America’s Cup Host’s programme is stable. As of 4 February 2020, the programme risk register was made up of 27 risks, of which three are rated high and 20 are rated medium after controls and mitigations have been put in place. All risks continue to be actively managed by the risk owners. A summary of key risk themes is provided in this report, and top residual risks are outlined in Attachment A.

8.       ATEED and Auckland Council representatives will present on these risks at the 24 February 2020 Audit and Risk Committee meeting. A further update on America’s Cup risk management activities will be provided to the Audit and Risk Committee in August 2020.

 

Ngā tūtohunga

Recommendation

That the Audit and Risk Committee:

a)      receive the update on the risk management activities for the 36th America’s Cup programme.

 


 

 

Horopaki

Context

9.       The America’s Cup programme risk lead function continues to be led by Auckland Council, providing leadership, guidance and oversight for the risk management activities across the programme. This function will remain in place until the programme’s governance review is completed in February and March 2020 to ensure there is adequate oversight of the overall programme risk profile. Any recommendations arising from the review will be considered by Joint Chief Executive Group following its completion.

10.     America’s Cup project and workstream leads maintain and update their own risk registers on a monthly basis. The programme risk lead works with these leads to review and challenge the rationality and effectiveness of risk identification, assessments, controls and mitigations.

11.     America’s Cup programme risks that are high or extreme after controls have been put in place, as well as any other relevant risks, are reported to the Joint Chief Executive Steering Group. This comprises of Auckland Council Group, the Ministry of Business Innovation and Employment (on behalf of the Crown), America’s Cup Event Limited, New Zealand Police, State Services Commission and mana whenua.

12.     The council’s chief risk officer chaired the Risk Advisory Group which supported the Joint Chief Executive Group on risk management. The group last convened in October 2019 before being placed on-hold while the governance review takes place.

13.     The Wynyard Edge Alliance, established by Auckland Council and central government to deliver the America’s Cup infrastructure, and America’s Cup Event Limited continue to maintain their own risk management and reporting systems. Top level risks that may impact the overall programme are highlighted to the Joint Chief Executive Group through monthly reporting.

Tātaritanga me ngā tohutohu

Analysis and advice

14.     The overall risk profile of the America’s Cup programme is stable. The programme risk register at 4 February 2020 was made up of 27 risks, of which three are rated high and 20 are rated medium after controls and mitigations have been put in place. All risks continue to be actively managed by the risk owners.

15.     A summary of key programme risk themes and management activities is provided in Table 1 below. Top risk probabilities and impacts are provided in Attachment A.

Table 1. Key America’s Cup programme risk themes and management activities

Risks

Residual risk rating

Management activities

Insufficient programme funding and resources – event delivery and city operations

Insufficient funding available to achieve America’s Cup programme outcomes and to deliver all Host Venue Agreement obligations, including meeting stakeholder and public expectations.

High

Auckland Council Group executives are in discussions around how budgets and resources should be managed during the America’s Cup events, and more widely over the whole 2021 major events programme to share any efficiencies from managing 2021 as a complete programme.

 

Withdrawal of challengers (dependency)

This would affect the scale of the Prada Cup and will leave vacant bases.

High

Emirates Team New Zealand is supportive of giving Stars+Stripes a concession to compete in the Prada Cup, however the Challenger of Record will need to agree to any changes to protocol.

The Crown and the council are working with America’s Cup Event Limited on how the vacant challenger bases could be re-purposed during the event. An alternative use for vacant bases will be confirmed in advance of the event.

Significant disruption (security incident)

Significant disruptions to America's Cup events (on-water or on-land) due to security incidents such as riots, protests, civil disorder, war, violence or terrorism.

Medium

A Security Steering Group has been established by New Zealand Police. There is also a C4 Security and Crowd Management Working Group in place at an operational level to minimise this risk.

Governance

Poor or inadequate oversight and governance of the programme.

To be advised following the governance review being undertaken in February and March 2020.

PricewaterhouseCooper has been engaged to conduct a review of the governance model to ensure adequate governance and management (including risk management) is taking place at all levels.

Health, safety and wellbeing

Public, staff, volunteers and contractors may be harmed during America’s Cup planning or events, due to an external or internal incident or exposure to a hazard.

Medium

Individual agencies and stakeholders continue to manage their respective health and safety obligations. A C4, Security and Crowd Management Working Group is in place at an operational level to minimise this risk.

Downtown and waterfront construction activities during the event period (dependency)

These activities could impact on the presentation of Auckland and negatively affect the hosting of the event.

 

Medium

These risks are managed by phasing and prioritising projects to enable major works to be completed, which will allow occupation of the public areas.

Minor works will be undertaken during non-racing and afterhour periods.

Hoarding and fencing will be erected around any remaining construction sites, and pedestrian safety and security will be managed.

Insufficient programme funding and resources – America’s Cup infrastructure

Insufficient funding available to deliver infrastructure required for the America’s Cup.

Low

Financial risks related to the infrastructure build have been well managed through the Wynyard Edge Alliance, including its Project Alliance Board which includes representatives from both the Crown and Auckland Council.

These works are over 70 per cent complete with final completion in November 2020.

16.     Workstream leads continue to work with stakeholders across the programme to ensure the hosts and parties meet their obligations under the Host Venue Agreement. If obligations are not met, this may result in reputational damage, financial loss and non-achievement of the America's Cup objectives.

17.     The next risk update on America’s Cup programme will be provided to this committee in August 2020.

Ngā tāpirihanga

Attachments

No.

Title

Page

a

America's Cup Programme - Top Residual Risks - February 2020

39

     

Ngā kaihaina

Signatories

Authors

Barry Potter - Director Infrastructure and Environmental Services

Nick Hill – Chief Executive, ATEED

Authorisers

Kevin Ramsay - Chief Risk Officer (Acting)

Phil Wilson - Governance Director

 


Audit and Risk Committee

24 February 2020

 


Audit and Risk Committee

24 February 2020

 

Resource and Building Consents performance and improvement activities update

File No.: CP2020/01784

 

  

Te take mō te pūrongo

Purpose of the report

1.       To update the Audit and Risk Committee on the plan to improve overall performance of building and resource consent processes and the progress towards having accurate processing time recording for Building and Resource Consents to generate statutory performance results in the 2019/2020 Annual Report.

Whakarāpopototanga matua

Executive summary

2.       Annual audits in 2018 and 2019 highlighted inaccuracies in system generated figures for the reported statutory performance of consents issued within 20 working days.

3.       A programme of work has been undertaken within the Regulatory Services directorate to address these variances in the resource and building consent areas, particularly aimed at having an accurate unmodified result reported against the 2020 Annual Report.

4.       Additional resources have been employed to verify the results for all the consents issued from 1 July 2019. This process and work have then been audited by Assurance Services prior to an assessment by Audit NZ scheduled for late February. The outcomes of this process will be reported separately to the Audit and Risk Committee.

5.       A programme of work has been implemented to improve system performance and work practices. This has led to improved statutory performance figures for both the Resource and Building Consent departments.

 

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a)      note the work that has been undertaken to respond to the resource consent and building consent processing time variances reported by Audit New Zealand in 2019 and improve overall performance

 

 

Horopaki

Context

6.       During the 2017/2018 annual audit, Audit New Zealand reported errors arising from its testing of Resource and Building consent processing time key performance indicators. These errors were considered ‘material.’ They resulted in a modification to the audit opinion Audit New Zealand issued on the 2018 Annual Report.

7.       During the 2018/2019 annual audit, the initial testing of a sample of both Resource and Building consents indicated that there was still an unacceptable number of variances between the reported performance levels and the evidence stored within our systems to support verification of those results. 


 

8.       As a result of their findings, Audit NZ advised us that in order to receive an unmodified audit opinion for 2019, we needed to re-calculate actual performance for 2019. The re-calculation was based on a representative sample of consents (759 building consents and 959 resource consents) selected by Audit NZ.

9.       Actual performance for each consent was calculated based on measured back to source documents and system evidence to give a manually calculated result. These results were audited and subsequently accepted as an accurate representation of performance.

10.     It was recommended that business units continue to focus on improving the accuracy of their reporting and their capture/ storage of supporting documentary evidence through system related enhancements and consistent manual task execution.  

11.     Assurance Services has been working with both the Building and Resource Consent departments to respond to these issues. This work has been reported to this committee regularly.

Tātaritanga me ngā tohutohu

Analysis and advice

12.     In preparation for the 2020 Audit, the Regulatory Services Directorate is verifying every consent decision with a statutory clock implication from the 1st July 2019. This equates to approximately 2,000 building consent records and 900 resource consent records every month.

13.     There are currently 10 people across the resource and building consents team performing this work. These staff are dedicated to validating the existence of compliant documentary evidence to support every consent record. Where an anomaly is found between a record and available documentary evidence, further work is performed by the business to investigate the issue and resolve the discrepancy. Due to the legislative complexity of the consent processes and related workflow, this represents a significant financial cost overhead to both departments. 

14.     Whilst engaging in initiatives to enhance the accuracy of their reporting the resource consent and building consent departments have also continued to work on improving the timeliness of consenting service delivery. This has resulted in substantive improvements over the financial year to date. The improvements are well indicated by reference to their monthly statutory performance from July 2019 [Refer table below.]

15.     Notwithstanding the obvious benefit to the customer of improved performance, it also means that, in the event that there is an inaccuracy in the statutory clock calculation, it is less likely to change a consent result from within 20 statutory to one where it is over the 20 statutory day threshold and results in a non-compliance.    

16.     Whilst the actual number of building consent applications has declined by 4 per cent over the financial year to date, the scale and complexity of the developments being consented has increased substantially. This is best evidenced by the record number of residential units consented (15,154) in 2019 and the 19 per cent increase in the $-value of works consented against the previous year ($10.7b.) Over this same period, consenting performance has continued to improve. If we contrast recent months with the same period the previous year, the median statutory days taken to approve a building consent has reduced by 4.5 days and the number of days it takes an applicant to respond to any request for additional information by 18 per cent (4 days).  The median elapsed days (total business days) to grant and issue a consent from receipt of application has reduced from 40 days down to 33 days.

 

17.     Based on the status of the processes and testing information available an alternative method of calculating the resource consent performance result is required. Two options to calculate the result for resource consents have been identified. 

18.     The options are:

(a)     Use a random sample to generate a representative result (same process completed for 2018/2019 financial year).

(b)     Use a statistical methodology to extrapolate results from a cleansed subset of data across the whole data source.

19.     Consultation with Audit NZ technical statistics experts is being urgently completed and a verbal update will be provided by Assurance Services to the Audit and Risk Committee at the meeting.

Tauākī whakaaweawe āhuarangi

Climate impact statement

20.     There are no climate impacts as a result of this report.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

21.     There are no council group impacts arising from this report.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe

Local impacts and local board views

22.     Local board views were not required for this report.

Tauākī whakaaweawe Māori

Māori impact statement

23.     This report does not benefit or have any adverse effect on Māori.

Ngā ritenga ā-pūtea

Financial implications

24.     This report does not require the committee to make decisions that have financial implications.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

25.     This report outlines mitigations being taken by the Regulatory Services Directorate to avoid the risk of having reported Annual Report performance results being modified or qualified; and the implications such a result might have on public trust and confidence.

Ngā koringa ā-muri

Next steps

26.     The manual task of verifying all consenting decisions with reporting implications for the 2019/2020 year will continue through to the end of the year.

27.     Audit NZ testing is about to be undertaken for the data for the first half of the year 1July 2019 to 31 December 2019 for building consents.

 

28.     Depending on results of the Assurance Services and Audit NZ testing, and once the reliability of the data is improved, Regulatory Services intend to implement a plan to be able to drop back from the level of manual verification currently being undertaken.  Testing will continue but will target types of consents that are at higher risk of error due to their complexity and the number of requests for information.

29.     System changes required into SAP have been specified and are waiting to be implemented within an ICT priority queue.  Two areas of change have been requested:

1.   An additional field added to require staff to store the location of documentary evidence

2.   Improved system reporting to identify areas of priority checking based on modified dates.

30.     Staff training has been implemented to highlight and address the areas of concern. Further targeted training for teams and individuals identified as a result of the verification steps is being implemented. Whilst there has been a noticeable improvement in reporting accuracy and capture of relevant corroborative documentary evidence, there are older consents remaining in our work in progress being taken ‘off hold’, that continue to require more work to remediate. 

31.     The Building Consents department are currently exploring a change to their consent process workflow, specifically around how technical inputs from the structural and development engineering teams are treated in the statutory clock calculation. This provides an opportunity to reduce complexity and make it easier to verify the calculation for reporting purposes moving forward. 

32.     The Resource Consents department are currently reviewing the end to end process in order to ensure it is fit for purpose. This will result in changes to the workflow within the SAP system (15 changes have been identified to date), and a significant training plan with a tentative start date of early April.

33.     The Regulatory Services Directorate is currently progressing a regulatory excellence programme focussing of enhancing service delivery performance. This programme is be staged over a two to three-year period with iterative improvements being deployed, as they are developed, throughout this period.

34.     A “Consenting Performance Measure Assurance Plan” has been produced and implemented in collaboration between Regulatory Services and Assurance Services, with the objective of enabling a smooth and timely process so that Audit NZ can confirm the 2020 annual plan performance reporting.

 

Ngā tāpirihanga

Attachments

There are no attachments for this report.    

Ngā kaihaina

Signatories

Author

Peter Laurenson - Manager Project Assessment South

Authorisers

Ian McCormick - Manager Building Control

Ian Smallburn - General Manager Resource Consents

Craig Hobbs - Director Regulatory Services

Phil Wilson - Governance Director

 


Audit and Risk Committee

24 February 2020

 

Resource and Building Consents Performance Measures Assurance Plan Update

File No.: CP2020/01172

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To update the Audit and Risk Committee on the consents performance measure assurance activities and decisions made for generation of required performance results for the Annual Report concerning the processing of consents within 20 working days.

Whakarāpopototanga matua

Executive summary

2.       In 2019 additional checking and assurance processes were implemented by the Regulatory division and Assurance Services to ensure the data for the timeliness of the processing of consents is accurate and validated sufficiently that it can be relied on and reported in the Annual Report.

3.       At the time of the last report to the Audit and Risk Committee in December 2019, the processes had been set up but were not sufficiently implemented to test and give assurance that they were working and effective.

4.       Assurance Services’ testing to date has indicated that:

(a)     The building consents process is robust and operating effectively and will likely be able to generate a sufficiently reliable result from the processes and systems. 

(b)     The resource consents process is also robust. However, progress made to date is not adequate to be able to test accuracy or be confident that it will be able to produce a sufficiently reliable result in time. 

5.       Based on the status of the processes and testing information available, it has been decided that an alternative method of calculating the resource consent performance result is required.

6.       Two options to calculate the result for resource consents have been identified.  Consultation with Audit NZ technical statistics experts is being urgently completed. The options are:

(a)     Use a random sample to generate a representative result (same process completed for 2018/2019 financial year).

(b)     Use a statistical methodology to extrapolate results from a cleansed subset of data across the whole data source.

7.       A decision on the required process for resource consents, is expected by 21 February 2020 and a verbal update will be provided to the Committee.

8.       A separate report will be provided to the Audit and Risk Committee on 24 February 2020 from the Building Consents and Resource Consents departments on the work being undertaken to produce accurate reporting and improve performance overall.


 

 

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a)      receive the update on the consents performance measure assurance activities and the generation of required performance results for the Annual Report concerning the processing of consents within 20 working days.

 

Horopaki

Context

9.       The reliability of the systems data for building and resource consents has been an ongoing issue for Council over which the Audit and Risk Committee has had regular oversight.

10.     While the quality and accuracy of the consenting data and performance has been improving over time, the processes remain complex and reliant on manual processes that are vulnerable to human error. Consequently, additional testing and quality assurance have been implemented under the Consents Performance Measure Assurance Plan (Attachment A).

11.     For the 2018/2019 Annual Report the results for both resource and building consents were generated by a recalculation of a sample of consents that was completed by Assurance Services.

12.     The purpose of the assurance plan and additional checking processes are to ensure the data of the timeliness of the processing of consents is accurate and validated sufficiently that it can be relied on and reported in the Annual Report.

Tātaritanga me ngā tohutohu

Analysis and advice

13.     In October 2019 the consents assurance performance measure assurance plan was developed and implemented.  Activities include building control and resource consents undertaking a 100 per cent checking and remediating process for all consents for the financial year and Assurance Services department (internal audit) performing quality assurance checking of this process and cleansed data.

14.     In December 2019, the additional checking processes in both resource consents and building consents had been set up but they had not sufficiently implemented to test whether they were working and effective.

15.     In the quarter ending February 2020, Assurance Services has completed:

(a)     quality assurance of the processes and documentation and provided advice for improvements and efficiencies; and

(b)     random testing of the data that has been 100 per cent checked by resource and building consents to test the effectiveness and reliability of the processes.

16.     Assurance Services testing has established for building consents that:

(b)     The building consents process will likely be able to generate a sufficiently reliable result from the processes and systems. 

(c)     The 100 per cent checking process has been assessed and is robust and operating as planned.


 

 

(d)     Based on current progress, this work will be completed by the annual report deadlines. We identified a small number of errors, isolated to one staff member. However, these issues have been rectified and additional quality assurance introduced, and we do not believe there will be an effect on the overall result.

17.     Assurance Services testing has found for resource consents that:

(a)     The resource consents 100 per cent checking process is robust and operating.  Building consents have been checking a range of requirements to help raise performance (including the accurate use of the clock, billing and other data).

(b)     However, progress is not enough for Assurance Services to be able to form a view on the accuracy of the process to produce the timeliness KPI data. The checking process appears to be sound, but the full end to end process has not been completed so that the errors identified, and missing information, has been rectified in the system.  Resource Consents are taking steps to accelerate the checking process, but this is unlikely to be completed in time to ensure reliable substantiated figures for the Annual Report.

18.     On 11 February 2020, the Steering Group overseeing the assurance processes decided, based on status of the processes and testing information available, that an alternative method of calculating the resource consent performance result is required.

19.     At the writing of this report, two options to calculate the result for resource consents have been identified. The options are:

(a)     Use a random sample to generate a representative result (same process completed for 2018/2019 financial year).

(b)     Use a statistical methodology to extrapolate results from a cleansed subset of data across the whole data source.

Consultation with Audit NZ technical experts is being urgently completed to inform a final decision on the required process. 

20.     A decision for resource consents on the required process is expected to be reached by 21 February 2020.  A verbal update will be provided to the Committee at its meeting on 24 February 2020.

Tauākī whakaaweawe āhuarangi

Climate impact statement

21.     There are no climate impacts arising from this report.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

22.     There are no council group impacts arising from this report.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe

Local impacts and local board views

23.     This report does not have any specific local impact or require local board input.

Tauākī whakaaweawe Māori

Māori impact statement

24.     This report does not specifically benefit or have any adverse effects on Māori.

Ngā ritenga ā-pūtea

Financial implications

25.     This report does not require the committee to make decisions with financial implications.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

26.     There is a risk that the Regulatory Services division will not be able to report accurate performance measures that can be adequately substantiated by Audit New Zealand, resulting in a modified audit opinion.

27.     This risk is being mitigated through the Assurance Plan which will ensure close oversight and escalation of activities and issues to ensure either an effective checking process with errors being sufficiently resolved, or a recalculation approach if this cannot be achieved.

Ngā koringa ā-muri

Next steps

28.     Assurance Services is continuing oversight and auditing of the building and resource consent processes to ensure they are operating adequately to generate accurate data for the full financial year.

29.     Planning and scheduling discussions have commenced between Audit NZ and the Building Control department for the Audit NZ testing.

30.     Assurance Services are facilitating discussions between Audit NZ and resource consents to ensure required processes and resourcing to complete an alternative method of calculation are established.  Once a decision is made, urgent arrangements will need to be made to undertake the calculation of the Annual Report result for resource consents.

31.     Assurance Services will continue its leadership of the Steering Group and monitor and maintain oversight of the Regulatory division’s processes and the planned programme of work to implement systems controls and training to ensure quality data in the next financial year.

32.     A further update will be provided to the Audit and Risk Committee on 24 May 2020.

 

Ngā tāpirihanga

Article I.  Attachments

No.

Title

Page

a

Consents Assurance Plan

49

     

Ngā kaihaina

Article II. Signatories

Authors

Emma Mosely - Head of Assurance Services (Acting)

Nick Rennie - Manager Audit and Probity

Authoriser

Phil Wilson - Governance Director

 


Audit and Risk Committee

24 February 2020

 


Audit and Risk Committee

24 February 2020

 

Risk Update Report

File No.: CP2020/00748

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To update the Audit and Risk Committee (ARC) on risk management activities at Auckland Council for the period December 2019 - February 2020.

Whakarāpopototanga matua

Executive summary

2.       The Risk Strategy is unchanged with the focus continuing to be to lift risk culture across the enterprise.

3.       As part of the wider strategy to continuously improve building bottom up momentum, the Risk Champions from departments met for the quarterly kōrero in November 2019.  Risk and control identification and articulation, tools to support risk discussion and roles and responsibilities were discussed.

4.       To further strengthen the tone from the top, the recently introduced Risk Business Partnering approach is now embedded, with the Executive Leadership Team (ELT) members having a dedicated Risk Business Partner supporting each division.

5.       The updating of the Top Risk report using the new format is underway with ELT.  This will clearly identify risk ownership, and the monitoring and effectiveness of controls for Auckland Council.  Further confirmation of controls linked to the risks and actions need to be signed off before presenting to ARC.

6.       The Risk Framework has been updated to incorporate ISO31000: 2018 standards and is being tabled with ELT for approval and sign off.

7.       The Risk Appetite Statement is being reviewed and updated as part of the risk programme.

8.       The viability of deploying an organisational risk system is being scoped so that recording and tracking of risks, controls and actions are consistent and simplified with automated escalations to support enhancing the risk culture at council.  This will reduce manual activities and provide real time insights to support risk-based decision making.  Note some council controlled organisations (CCOs) have already implemented risk systems.

9.         The deep dive review on the top risk called “Service Delivery” is underway. This review is primarily investigating the effectiveness of the controls in place, associated with the delivery of council services provided through third parties. Key findings will be provided at a future meeting.

10.     To ensure that the group’s insurance programme stays fit for purpose, the council and CCO staff have completed work on a number of key policy and risk reviews to prepare for the 2020/2021 renewal.  This is discussed as a separate topic in today’s agenda.

 

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a)      note the risk and insurance activities in this report.

 

 

Horopaki

Context

11.     This report provides an update on risk activities for Auckland Council to enable the committee to fulfil their governance and oversight role for effective risk management.

Tātaritanga me ngā tohutohu

Analysis and advice

12.     The risk champions reset occurred in November 2019.  New risk champion resources have been identified by their respective departmental heads and are being initiated into the programme.

13.     The risk function is leveraging the Business Risk Partner approach to get adequate risk representation, improve risk capability and the consistency of risk champions who support the General Managers with risk management.

14.     As part of simplification, the combined top down and bottom up approach for risk management is supported with updated roles and responsibilities of risk management, control ownership, actions monitoring and reporting.  This has been updated in the Risk Framework.

15.     Regular reviews of the Risk Strategy, the Risk Management Framework and the Risk Assessment Tool are part of the risk programme and have been completed recently, or are about to be completed.  Work is also currently underway on the Risk Appetite Statement, (Top) Risk Register and new format Risk Reporting, which will be brought back to this committee within the calendar year. These components of the programme are shown below, alongside the various roles that exist to deliver on the programme.

 

 

16.     Underpinning the programme and roles noted above, is a risk system. To enable data driven risk-based decision making, the use of such a risk system is being scoped. This will reduce manual interventions, give time back in the long run to the departments and provide real time risk reporting and insights. The recommendations and outcome of this scoping will be provided to this committee at a future meeting.

17.       The deep dive review on the top risk called “Service Delivery” is underway. This review is primarily investigating the effectiveness of the controls in place, associated with the delivery of council services provided through third parties. Key findings will be provided at a future meeting.

18.     To ensure that the group’s insurance programme stays fit for purpose, the council and council-controlled organisation staff have completed key policy and risk reviews to prepare for the 2020/21 renewal. This is discussed separately in today’s agenda.

Tauākī whakaaweawe āhuarangi

Climate impact statement

19.     Climate change adaptation and mitigation stays as a top risk for Auckland Council.

20.     There are no direct climate change implications arising from this information on report.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

21.     The Enterprise Risk team continue to work closely with the council-controlled organisations about their top risks and report these to the Auckland Council Group.  Separately, council-controlled organisations provide individual risk update reports on a quarterly basis and there is regular interaction with risk practitioners from council-controlled organisations.

22.     The Insurance Leadership Group continues to work closely across the group to prepare for the upcoming insurance renewal.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe

Local impacts and local board views

23.     Local boards are affected by many of the top risks as they represent risks to the entire council organisation.  While no specific consultation has been done for this report, the top risks presented in this format will assist local boards in making decisions.

Tauākī whakaaweawe Māori

Māori impact statement

24.     There are no specific Maori impacts directly arising from the information on this report.

Ngā ritenga ā-pūtea

Financial implications

25.     There are no financial implications directly arising from this information report.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

26.     No new specific risks have been raised for further attention in this report.

Ngā koringa ā-muri

Next steps

27.     The new format of top risk reporting along with controls and their effectiveness will be provided at the next risk update.

28.     The updated Risk Appetite Statement will be finalised and presented to this committee for approval at the August meeting.

29.     The updated Risk Framework will be presented for information at a future meeting of this committee.

30.     An update of progress on the risk system will be provided at a future meeting of this committee once it has been further scoped.

 

 

 

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Auckland Council Top Risk Register

55

     

Ngā kaihaina

Signatories

Author

Ann Brown - Senior Risk Advisor

Authorisers

Kevin Ramsay - Chief Risk Officer (Acting)

Dani Gardiner - General Counsel

Phil Wilson - Governance Director

 


Audit and Risk Committee

24 February 2020

 


Audit and Risk Committee

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Audit and Risk Committee

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Audit and Risk Committee

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Audit and Risk Committee

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Audit and Risk Committee

24 February 2020

 


Audit and Risk Committee

24 February 2020

 


Audit and Risk Committee

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Audit and Risk Committee

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Audit and Risk Committee

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Audit and Risk Committee

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Audit and Risk Committee

24 February 2020

 


Audit and Risk Committee

24 February 2020

 

Approval of the Audit New Zealand audit plan for the year ended 30 June 2020

File No.: CP2020/01024

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To approve the draft Audit New Zealand audit plan for their audit of the Auckland Council Group’s 30 June 2020 annual report.

Whakarāpopototanga matua

Executive summary

2.       Audit New Zealand has provided the draft audit plan for their audit of the council’s 30 June 2020 annual report for the council’s approval in Attachment A.

3.       The audit plan outlines key audit matters, the areas of audit focus, significant business and reporting risks and administration matters such as logistics and timetables.

4.       The audit plan is provided in draft and is required to be approved by the Audit and Risk Committee before Audit New Zealand issues the final audit plan for signing by the mayor and chief executive.

5.       Deputy Auditor-General Greg Schollum and Audit New Zealand Director Athol Graham are in attendance to discuss the proposed key audit matters and answer any questions the committee may have.

 

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a)      approve the draft audit plan for the 30 June 2020 audit of the annual report

b)      request Audit New Zealand issue the final audit plan

c)      delegate the mayor and chief executive to sign the finalised audit plan.

 

Horopaki

Context

6.       The audit plan outlines how Audit New Zealand will conduct their audit to obtain reasonable assurance that the 30 June 2020 financial statements and performance information are free from material misstatement resulting from error, omission or fraud.

7.       The draft audit plan outlines the following:

·        key audit matters

·        Audit New Zealand’s response to accounting, business and service performance risks

·        the audit process

·        reporting protocols, logistics and timelines.


 

 

8.       As Auckland Council is an issuer of bonds on the New Zealand, Swiss and Singapore exchanges, the audit opinion on the group annual report is required to include the auditor’s comments of key audit matters. Key audit matters are defined as those matters that, in the auditor’s professional judgement, are of the most significance in the audit of the financial statements. The focus will be on:

·        areas identified as involving significant risk or requiring significant auditor judgement

·        areas in which the auditor encountered significant difficulty during the audit, such as obtaining sufficient, appropriate audit evidence

·        circumstances that required significant modification of the auditor’s planned approach, such as the identification of a significant deficiency in internal controls.

Tātaritanga me ngā tohutohu

Analysis and advice

9.       The draft audit plan outlines the following key audit matters:

·        valuation of operational and infrastructure assets

·        valuation and disclosure of derivatives

·        valuation of the weathertightness provision

·        accounting and disclosure of City Rail Link Limited

·        reporting performance on housing, transport and water.

10.     These key audit matters are consistent with the prior year except for the addition of disclosure of derivatives.

11.     The draft audit plan also outlines other business and reporting risks which include:

·        performance information reporting – reviewing consenting and stormwater services measures, and considering the value provided by integrated reporting

·        Crown funding initiatives – considering accounting for the Housing Infrastructure Fund, Crown Infrastructure Agreement (Wainui) and Regional Fuel Tax, focussing on the impact of funding and financing decisions, correct accounting treatment and appropriate disclosures and the proper management of funds and their application to approved projects

·        treasury function – reviewing treasury management processes and procedures, considering any breach of financial benchmarks and covenants and disclosures in relation to compliance with financial limits and covenants

·        risk of management override of internal controls – considering whether this has occurred and has impacted the financial reporting

·        legislative compliance – reviewing legislative compliance in relation to rates setting, the Regional Fuel Tax, Financial Markets Conduct Act 2013, NZX rules and financial reporting disclosures imposed by various local government acts and rules

·        information systems control environment - reviewing IT governance processes over IT, people and resources and reviewing activity-level controls.

12.     The draft audit plan also highlights seven accounting risks, namely:

·        accounting for impairment, capitalisation of costs and recognition of completed assets

·        valuation of investment properties

·        accounting for the America’s Cup

·        accounting for food scraps arrangement

·        other provisions (including Eden Park revolving credit facility)

·        adoption of accounting standards

·        unallocated receipts.

13.     To view the detailed explanations of the risks and the audit responses please refer to the draft audit plan in Attachment A.

14.     The key audit matters and other business and reporting risks have been reviewed by management and are appropriate. These matters are part of the council’s business as usual and no specific items need to be brought to your attention.

15.     The proposed fee for the 30 June 2020 audit is $1,214,278 plus estimated disbursements of $30,000 (excluding GST). This sum was set out in the Office of the Auditor-General’s Audit proposal letter for the years ending 30 June 2020, 2021 and 2022. The proposal letter, dated 17 December 2019 (Attachment B), was approved by this committee on 9 December 2019 (resolution as Attachment C) and signed by the mayor and chief executive on 18 December 2019.

16.     The audit plan contains the audit timings and delivery dates for information. The council is currently working with Audit New Zealand to finalise the agreed dates so that the council and group can meet the reporting requirements of the NZX.

Tauākī whakaaweawe āhuarangi

Climate impact statement

17.     There is no impact arising directly from this report. However, reporting of the groups response to climate change risk will be discussed in the 2019/2020 annual report.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

18.     The audit plan covers the audit of the Auckland Council Group as a whole. Accordingly, information relating to entities in the group are outlined in the audit plan and will be communicated to the relevant staff.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe

Local impacts and local board views

19.     This report is about the engagement of Audit New Zealand for the Auckland Council Group as a whole, with no direct impact at a local board level.

Tauākī whakaaweawe Māori

Māori impact statement

20.     The report is about the engagement of Audit New Zealand for the Auckland Council Group as a whole, with no impact specific to Māori.

Ngā ritenga ā-pūtea

Financial implications

21.     This paper is about the reporting of the financial performance of the Auckland Council Group. As such, there are no financial decisions required (noting the audit fee and disbursements were previously approved), and there are no financial implications as a result of this paper.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

22.     No decisions beyond document approval and related delegations are sought from the committee and accordingly no risks need be considered.

Ngā koringa ā-muri

Next steps

23.     Following the approval of the audit plan by this committee, we will request that Audit New Zealand issue the audit plan in final and the mayor and chief executive will sign the finalised audit plan. Staff will also confirm and finalise the delivery timelines with Audit New Zealand.

 

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Draft audit plan for the year ending 30 June 2020

73

b

Signed proposal letter

109

c

Proposal letter resolution 9 December 2019

117

     

Ngā kaihaina

Signatories

Authors

Tracy Gers - Group Accounting & Reporting Manager

Francis  Caetano - Group Financial Controller

Authorisers

John Bishop - Group Treasurer

Matthew Walker - Group Chief Financial Officer

Phil Wilson - Governance Director

 


Audit and Risk Committee

24 February 2020

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


Audit and Risk Committee

24 February 2020

 


 


 


 


 


 


 


 


Audit and Risk Committee

24 February 2020

 

     

 


Audit and Risk Committee

24 February 2020

 

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       Council-controlled Organisations' Quarterly Risk Updates - February 2020

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

The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.

s7(2)(c)(i) - The withholding of the information is necessary to protect information which is subject to an obligation of confidence or which any person has been or could be compelled to provide under the authority of any enactment, where the making available of the information would be likely to prejudice the supply of similar information or information from the same source and it is in the public interest that such information should continue to be supplied.

s7(2)(h) - The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities.

In particular, the report contains risk reporting and detailed top risks confidential to the council-controlled organisations' Boards or Audit and Risk Committees. The council controlled organisations have provided their risk reports for the council's Audit and Risk Committee subject to confidentiality.

s48(1)(a)

The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.

 


 

 

C2       Proposed approach for 2020-2021 Insurance Renewal

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

The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.

s7(2)(h) - The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities.

In particular, the report contains details of the proposed insurance strategy, policies and programmes for which terms and costings are being sought from and negotiated with the insurance market.

s48(1)(a)

The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.

 

C3       Half year results announcement for NZX and Interim Report 31 December 2019

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

The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.

s7(2)(j) - The withholding of the information is necessary to prevent the disclosure or use of official information for improper gain or improper advantage.

In particular, the report contains information which if disclosed to the public, could breach NZX disclosure rules.

s48(1)(a)

The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.

 

C4       Office of the Auditor-General and Audit New Zealand Briefing

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

The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.

s7(2)(h) - The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities.

In particular, the report from Audit New Zealand contains information regarding the interim report and financial results of the Auckland Council Group and Auckland Council as at 31 December 2019.

s48(1)(a)

The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.