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

 

Date:

Time:

Meeting Room:

Venue:

 

Tuesday, 5 December 2023

2.00pm

Room 1, Level 26
135 Albert Street
Auckland

 

Komiti mō te Tātari me te Mātai Tūraru /
Audit and Risk Committee

 

OPEN AGENDA

 

 

 

MEMBERSHIP

 

Chairperson

Paul Connell

 

Deputy Chairperson

Cr Lotu Fuli

 

Members

Cassandra Crowley

 

 

Cr Angela Dalton

 

 

Cr Christine Fletcher, QSO

 

 

Cr Shane Henderson

 

 

Martin Matthews

 

Ex-officio

Mayor Wayne Brown

 

 

IMSB Member Tony Kake, MNZM

 

 

Deputy Mayor Cr Desley Simpson, JP

 

 

 

(Quorum 3 members)

 

 

 

Mike Giddey

Kaitohutohu Mana Whakahaere /
Governance Advisor

 

29 November 2023

 

Contact Telephone: +64 9 890 8143

Email: Mike.Giddey@aucklandcouncil.govt.nz

Website: www.aucklandcouncil.govt.nz

 

 

 


Audit and Risk Committee

05 December 2023

 

ITEM   TABLE OF CONTENTS                                                                                         PAGE

1          Ngā Tamōtanga | Apologies                                                                                         5

2          Te Whakapuaki i te Whai Pānga | Declaration of Interest                                         5

3          Te Whakaū i ngā Āmiki | Confirmation of Minutes                                                    5

4          Ngā Petihana | Petitions                                                                                                5  

5          Ngā Kōrero a te Marea | Public Input                                                                           5

6          Ngā Kōrero a te Poari ā-Rohe Pātata | Local Board Input                                        5

7          Ngā Pakihi Autaia | Extraordinary Business                                                              5

8          Forward Work Programme December 2023                                                               7

9          City Rail Link risk update                                                                                              9

10        Health, Safety, and Wellbeing Performance Report                                                17

11        Statutory Clock Management update                                                                        23

12        Enterprise Risk Update December 2023                                                                   25

13        Final Office of the Auditor-General report to governors for the year ended 30 June 2023                                                                                                                               31

14        Endorsement of the draft Office of the Auditor-General Interim Review Engagement Letter for the 6 months ended 31 December 2023                                                   35

15        Preparation of the interim report and NZX release for the six months ending 31 December 2023                                                                                                             39

16        Climate disclosure work programme update December 2023                               45

17        Long-term Plan 2024-2034 (LTP) approach to risk and assurance                        49

18        Final Audit Management Report for the Long-term Plan Amendment 2023         59

19        Te Whakaaro ki ngā Take Pūtea e Autaia ana | Consideration of Extraordinary Items

PUBLIC EXCLUDED

20        Te Mōtini ā-Tukanga hei Kaupare i te Marea | Procedural Motion to Exclude the Public        63

C1       CONFIDENTIAL: Substantive Council-Controlled Organisations' Quarterly Risk Update - December 2023                                                                                             63

C2       CONFIDENTIAL: Legal Risk update                                                                           64

C3       CONFIDENTIAL: Enterprise Risk Update December 2023                                      64

C4       CONFIDENTIAL: Internal Audit Update                                                                     65

C5       CONFIDENTIAL: Climate disclosure work programme update December 2023  65

C6       CONFIDENTIAL: Interim report and NZX release for the six months ending 31 December 2023                                                                                                             66

C7       CONFIDENTIAL: Office of the Auditor-General and Audit New Zealand briefing 66

 


1          Ngā Tamōtanga | Apologies

 

 

 

 

2          Te Whakapuaki i te Whai Pānga | Declaration of Interest

 

 

3          Te Whakaū i ngā Āmiki | Confirmation of Minutes

 

            Click the meeting date below to access the minutes.

 

That the Audit and Risk Committee:

a)         whakaū / confirm the ordinary minutes of its meeting, held on Friday, 15 September 2023, including the confidential section, as a true and correct record.

 

 

 

4          Ngā Petihana | Petitions

 

 

5          Ngā Kōrero a te Marea | Public Input

 

 

6          Ngā Kōrero a te Poari ā-Rohe Pātata | Local Board Input

 

 

7          Ngā Pakihi Autaia | Extraordinary Business

 

 


Audit and Risk Committee

05 December 2023

 

Forward Work Programme December 2023

File No.: CP2023/16240

 

  

 

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 2023-2024 (Attachment A).

Whakarāpopototanga matua

Executive summary

2.       In accordance with best practice, the committee reviews the forward work programme at each meeting to ensure it remains relevant and can be adapted to changes in Auckland Council’s risk profile.

3.       The proposed forward work programme 2023-2024 covers the period from December 2023 to December 2024.

4.       Feedback has been sought from all report writers and key stakeholders who reported to the committee during the last twelve months.

5.       There are no substantial changes to report in comparison to what was included over the past year. However, there is an increase in the number and frequency of strategic project updates, including the Recovery Project, the Climate Disclosure Work Programme and the current Long-term Plan 2024-2034 process.

6.       Specifically, for this 5 December Audit and Risk Committee meeting, there are a number of additions that were not previously included in the forward work programme:

·    A report on Regulatory Services statutory clock management following enquires by committee members in response to the 2023 year-end audit observation raised by Audit NZ.

·    An additional report, ‘Final Audit Management Report for the Long-term Plan amendment 2023’, will provide an update on the Long-term Plan amendment to allow for the sale of Auckland Airport shares.

·    An additional progress update will be presented to the committee on the ‘Climate Disclosure Work Programme’.

7.       Other finance related additions for the 5 December meeting, are in fact standard items that were accidentally omitted from the forward work programme 2022-2023.

8.       We have not included any specific workshop items for the year 2023-2024. Topics will be added when identified, with approval by the committee. This includes a recent request to add an update to the committee on the current assumptions underpinning the development of the long-term plan, which has been added to the December meeting.


 

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a)      whakaae / approve the Audit and Risk Committee Forward Work Programme 2023-2024, noting that the following changes have been made to the agenda of this 5 December meeting of the Audit and Risk Committee, in comparison to what was previously included as part of the forward work programme 2022-2023:

i)        an additional report to explain Regulatory Services statutory clock management

ii)       an additional report, ‘Final Audit Management Report for the Long-term Plan amendment 2023’, will provide an update to this committee on the Long-term Plan amendment to allow for the sale of Auckland Airport shares

iii)      a progress update will be presented to the committee on the ‘Climate Disclosure Work Programme’

iv)      an additional ‘Audit New Zealand final audit management report 30 June 2023’ will be presented at this committee

v)      an additional ‘Review arrangements 31 December 2023’ report will be presented at this committee

vi)      an additional ‘31 December 2023 Interim Financial Statements & NZX Announcement Update’ will be presented at this committee

vii)     an additional ‘Proforma interim financial statements and accounting policies 31 December 2023’ report will be presented at this committee

viii)    what was previously included on the forward work programme for this committee as ‘Risk management approach for the Annual Budget 2024/2025’ will now be reported as an update on the ‘Risk management approach to the Long-Term Plan 2024-2034’.

 

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Forward Work Programme 2023-2024

 

      

Ngā kaihaina

Signatories

Author

Simon Stewart - Senior Risk Advisor

Authorisers

Emma Burke - General Manager Risk and Assurance

Anna Bray - Acting Director - Governance and CCO Partnerships

 

 


Audit and Risk Committee

05 December 2023

 

City Rail Link risk update

File No.: CP2023/17665

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To provide an update on sponsor risks in relation to the city rail link (CRL) project.

Whakarāpopototanga matua

Executive summary

2.       Auckland Council and the Crown are joint project Sponsors (Sponsors) of the CRL Project. City Rail Link Limited (CRL Ltd), a Crown company, has full governance, operational and financial responsibility for CRL, with delivery targets and independent performance expectations. An independent City Rail Link Project Assurance Manager assists Sponsors in identifying and monitoring risks. The Assurance Manager provides informed advice to Sponsors on the progress of the CRL project in respect of time, cost and quality. They also facilitate two Sponsors’ risk workshops a year.

3.       Over the next two years, the remaining CRL Project works include: station fit out, systems integration, testing and commissioning, completions, and handover. The CRL Project remains on time and within budget.

4.       Since the last risk update to this Committee in May 2023, new governance arrangements have been established in response to the Office of the Auditor General’s recommendations. This includes the establishment of a One Client Governance Group (Group) that comprises the board chairs and chief executives of CRL delivery partners (Auckland Transport, KiwiRail, Auckland One Rail) and CRL Ltd. This Group is supported by the One Client Executive Committee which has replaced the Delivery Partners’ Steering Committee. This Group is tasked with ensuring sufficient reporting and management of issues is occurring within each entity, and they are also considering the longer-term programme to deliver the customer experience beyond the initial opening (‘Day 90 and beyond).  A Terms of Reference for this Group has been approved. 

5.       Sponsors are currently monitoring 27 live Sponsors’ risks. The top nine are provided in this report. All are rated moderate and do not require additional action at this point. These risks focus primarily on asset completion, testing and commissioning, and asset hand over.

6.       A Sponsors’ risk workshop is scheduled for 30 November and a verbal update on any changes to Sponsors’ risks will be provided to this committee (5 December 2023).

7.       Also provided is a summary of Sponsors’ written feedback to the Office of the Auditor General (OAG) on Sponsors’ progress in responding to the four recommendations made in the OAG’s report on the governance of the CRL Project.

 

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a)      tuhi ā-taipitopito / note the City Rail Link Project risk and assurance update.

 

Horopaki

Context

8.       Auckland Council and the Crown are joint project Sponsors of the CRL. Construction of the CRL is being jointly funded on an equal basis by the Crown and Auckland Council. CRL Ltd, a Crown company, has full governance, operational and financial responsibility for CRL, with delivery targets and performance expectations.

9.       Staff last reported formally to this committee in May 2023. This report noted the updated funding request and associated amendments to CRL Project agreements to accommodate this. It also provided an update on the Office of the Auditor General’s recommendations.

10.     CRL Ltd continue to report twice yearly to Auckland Council’s Transport and Infrastructure Committee. The most recent was in September 2023. An outcome of this meeting was a request to have a session with Waka Kotahi to better understand the safety risks and regulations around level crossings and operations once CRL is operating. This session is expected with staff prior to Christmas.

11.     In addition, KiwiRail are now providing regular updates to the Transport and Infrastructure Committee on the overall rail network rebuild programme and how this supports the City Rail Link.

12.     These sessions allow Auckland Council to have greater visibility of the CRL Project and the wider network/programme requirements. All councillors, members from the Independent Māori Statutory Board and several stakeholders have been invited on tours of CRL tunnels and stations in the last three months.

13.     The Sponsors have an independent Assurance Manager, who provides informed advice to Sponsors on the progress of the CRL project in respect of time, costs and quality. The Assurance Manager regularly meet with CRL Ltd and has recently conducted a deep dive on operational readiness. The Assurance Manager provides sponsors with monthly and quarterly reports, that comment on both CRL Ltd and Sponsors’ key risks.

14.     The Assurance Manager also support Sponsors with Sponsors’ risk register and facilitate two risk workshops a year to review and update Sponsor’s risk register. The next workshop is scheduled for the 30 November 2023. This workshop will review and update existing risks, focus on interdependencies and day one and beyond, referred to as ‘Day 90’.

 

Tātaritanga me ngā tohutohu

Analysis and advice

CRL Project status

15.     Over the next two years, the remaining CRL Project works include: station fit out, systems and controls, systems integration of new systems with existing rail stations systems (e.g. Waitematā), testing and commissioning, staged completions, and handovers. This change in project activities, from tunnel and station construction, gives rise to a changed risk profile as the Link Alliance[1] moves from self-delivery to sub-contractor delivered services with more involvement from the Delivery Partners (Auckland Transport and KiwiRail). 

16.     CRL Ltd reporting indicates that the CRL project is forecast to be delivered on time and within budget.


 

17.     The Assurance Manager is contracted to undertake two independent ‘deep dives’ on the project’s operational readiness per year. In October 2023, the first of these reviews was conducted. This ‘deep dive’ focused on the first six (of seventeen) major milestones, and concentrated on the plans, programmes and resources required to meet the milestones. No urgent risks were identified, although it is recognised by all parties that there is still as significant scale of work to be completed within the timeframes. Despite this, all parties are positive that the required work can be delivered on time. The Assurance Manager recommended that a single source of accountability is nominated for the Dynamic Testing process and greater clarity on defining the terms relating to operational readiness is required, as they consider there are two distinct periods currently being combined into ‘operational readiness’[2]. These recommendations are being considered by Sponsors.

18.     CRL Ltd’s safety performance over the last quarter has been relatively consistent. CRL Ltd and Sponsors remain focused on health and safety given the increase in sub-contractors and workers on site during station and tunnel fit our and testing.

One Client Governance Group and One Client Executive Committee

19.     There are several interrelated aspects of the CRL project involving CRL Ltd and delivery partners (Auckland Transport, KiwiRail and Auckland One Rail). These include:

·    successful testing and commissioning of new infrastructure

·    dynamic testing of the railway, stations and tunnels

·    independent reliability assessment

·    emergency trials

·    driver familiarisation

·    approval of rail safety cases (regulator within Waka Kotahi)

·    related infrastructure upgrades (crossings, more trains, stabling, etc)

·    operational readiness – day one and beyond

20.     To mitigate risks in this area, new governance arrangements have been put in place to mitigate the risks associated with the multiple agencies and the various interfaces. A One Client Governance Group has been established, consisting of the board chairs and chief executives of delivery partners (Auckland Transport, KiwiRail, Auckland One Rail) and CRL Ltd. This is supported by the One Client Executive Group which has replaced the Delivery Partners Steering Committee.

21.     The One Client Governance Group is now meeting regularly and has agreed to act on a ‘One Client’ basis. This group meets four times per year, or as required, to provide oversight of the interdependencies in the delivery of ‘day 90’ in service operations. They are tasked with ensuring sufficient reporting, resourcing and management of issues is occurring within each entity.  A Terms of Reference for this group has been approved and a consolidated risk report has been developed. 

22.     This group is also considering the longer-term programme to deliver the customer experience beyond the initial opening (“day 90”/beyond).  This will include ongoing upgrades to meet patronage increases, and other programmes to build an efficient transport network in Auckland, including how the rail environment interacts with roads (particularly crossings) and other public transport networks. The Group will consider the comprehensive benefit realisation plan under development by the Ministry of Transport.

Sponsors’ risks

23.     On the 14 September 2023, Sponsors’ officials and the Assurance Manager met to align the Sponsors’ risk registers with a Sponsors’ risk profile.

24.     Sponsors have a total of 27 live risks. All are rated moderate and do not require additional action at this point. The top nine live risks are provided below. These risks focus primarily on asset completion, testing and commissioning, and asset hand over.

 

Risk

Likelihood

Consequence

Mitigation/Action

1

Programme

Auckland Transport, Auckland One Rail and / or KiwiRail are not ready to start on Day 1

Possible

Moderate

One Client Executive and Governance Group, regular meetings, and planning sessions with Auckland Transport, Auckland One Rail and KiwiRail to ensure everyone contributes and stays on schedule.

2

Customer experience

CRL service does not meet public expectations

Possible

Minor

One Client Executive and Governance Group, development of the customer journey experience and work programme.

3

Regulations

Waka Kotahi do not grant licences required to operate

Possible

Moderate

Regular meetings and engagement between all parties. Independent Safety Advisor conducts audits.

A legal review of the safety assurance process has been completed and reviewed by the CRL Ltd Board.

4

Costs

Cost escalation beyond budget (P50)

Possible

Moderate

CRL Ltd and Sponsors monitor Link Alliance programme for potential impacts to practical completion date.

5

Reputational

Benefits of CRL project are not fully realised

Possible

Moderate

Ministry of Transport are developing Benefit Realisation Plan and ownership of areas will be assigned.

6

Operational

Relationship between CRL Ltd and Delivery Partners deteriorates

Possible

Moderate

Regular meetings and establishment of One Client Executive and Governance groups to manage interfaces and any escalation issues.

7

Programme

Inadequate sponsor oversight – no single accountability for ensuring all aspects of the project is delivered

Possible

Minor

New governance structures established, regular interface meetings and Assurance Manager reviews to facilitate collaboration and understand resource capabilities, constraints and ensure that issues are identified and addressed promptly, and that resource planning and management is adequate.

8

Operational

Owners receive assets that do not meet operational requirements

Possible

Moderate

CRL Ltd have appointed a GM Assurance and Integration to manage. CRL Ltd also has an Independent Certifier who provides additional control, ensuring the Sponsors and stakeholders receive Independent Assurance that the Link Alliance is fulfilling Project requirements for testing, commissioning, and systems integration.

The Independent Certifier's role involves validating the achievement of project requirements at various stages and certifying the completion of specific stages.

Link Alliance are also required to ensure the detail and specification needed to match how an operator and maintainer deliver a railway service is assessed against contracted CRL performance targets.

9

Operational

Owners may not accept the asset or impose conditions on the asset handover, resulting in delayed start

Possible

Moderate

CRL Ltd and Link Alliance continue to work with Auckland Transport, Auckland One Rail and KiwiRail for testing and operational readiness.

The role of the Independent Certifier will assist in assuring that the assets are in an acceptable condition.

 

25.     The second bi-annual workshop is scheduled for 30 November to review and update Sponsors’ risks. The workshop will be facilitated by the Assurance Manager and include Sponsor representatives and representatives from CRL, Auckland Transport and Kiwi Rail. A verbal update on the outcomes of the workshop will be provided to this committee.

26.     It is expected that following the 30 November workshop, additional risks relating to operationalisation, health and safety performance, leading up to Day 0, Day 90 and beyond will be included. For example, a key risk is an adverse event occurring in one of the stations or tunnels and emergency services being prepared to respond. To mitigate this risk, over 50 Auckland emergency services personnel have completed CRL familiarisation visits, enhancing preparedness. Fire and Emergency New Zealand and St John have committed to participating in four live emergency response exercises scheduled for November at various CRL stations and sites.

Office of the Auditor-General performance audit of the governance of the CRL Project 2022

27.     The OAG requested a written response on how Sponsors were following up on the four recommendations made in their performance audit report of the governance of the CRL Project. Sponsors responded on the 20 October 2023, as follows:

28.     Recommendation 1 referred to the need for a better system of tracking and prioritising Sponsors Assurance Manager recommendations. Sponsors noted that the Assurance Manager attends the Joint Sponsor Team meetings and Sponsors’ meetings with CRL Ltd. The Assurance Manager’s recommendations are recorded monthly and are discussed as part of the standing Joint Sponsors Team agenda. Where they present a strategic risk, they are added to the risk register, which is also a regular item on the Joint Sponsors Team agenda.

29.     Sponsors have been working with CSAM to ensure that their focus is on Sponsor’s risks and risk framework, and not on matters that are the responsibility of the Link Alliance or CRL Ltd. CRL Ltd and the Assurance Manager both keep sponsors aware of key operational issues, which may require escalation to sponsors. Sponsors monitor these issues, but to only act where there are risks to CRL Project cost, scope and the project completion date.

30.     Recommendation 2 referred to completion of a benefits realisation plan and assigning responsibility for benefits management. This work has been led by the Ministry of Transport and is still in development.

31.     Recommendation 3 refers to appropriate involvement of delivery partner boards with the project.  In response to this recommendation, sponsors have established the One Client Governance Group (discussed above).

32.     As a result of this Group and as the project progresses towards Day 1, we are seeing more reporting of the CRL Project and risks through to Auckland Transport’s Board, and in their monthly updates and quarterly performance reporting to council’s Transport and Infrastructure Committee.

33.     Recommendation 4 referred to sponsors’ officials sustaining improvements in reporting to Sponsors to promote accountability, improve governance and gain the confidence of stakeholders.

34.     Since the release of the OAG report in 2022, Auckland Council has a new Mayor and council. This term of council has established a Transport and Infrastructure Committee, responsible for the oversight of major transport and infrastructure matters that affect the region, including the City Rail Link project oversight.

35.     Briefings to council’s new sponsors representatives (Mayor and Deputy Mayor) were undertaken late last year, and tours of CRL and the underground station have been offered to all councillors, with one visit on 9 October and on 7 November. These tours provided elected members with a tangible understanding of the scale of the project, interface issues and overall progress.

Tauākī whakaaweawe āhuarangi

Climate impact statement

36.     This report is about updated risk assessments for the City Rail Link Project.  It therefore has no specific impacts on climate change. Climate change impacts themselves are factored into the design considerations and risk assessments of the project. These are considered well-controlled by those delivering the project and are not a particular focus for Sponsors currently. 

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

37.     Auckland Transport has an integral role in the delivery of an operationally successful rail link, as described in this report.  It has a formal role in the project as one of the ‘delivery partners’ (along with KiwiRail) and on the One Client Governance Group and One Client Executive Group. Auckland Transport is integrally involved in the oversight mechanisms established to deliver ‘day 90 and beyond’ operations.

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

Local impacts and local board views

38.     Local Board views were not required for this report.

Tauākī whakaaweawe Māori

Māori impact statement

39.     This report does not benefit or have any impact on Māori.

Ngā ritenga ā-pūtea

Financial implications

40.     The committee is not being asked to make decisions with financial implications.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

41.     This report is about the management of Auckland Council’s Sponsors risk in the CRL Project.

Ngā koringa ā-muri

Next steps

42.     Further updates on Sponsors’ risks for the CRL Project will be provided to this committee in six months.

 

Ngā tāpirihanga

Attachments

There are no attachments for this report.    

Ngā kaihaina

Signatories

Author

Claire Gomas - Principal Advisor

Authorisers

Alastair Cameron - Manager - CCO Governance & External Partnerships

Barry Potter - Director Infrastructure and Environmental Services

Anna Bray - Acting Director - Governance and CCO Partnerships

 

 


Audit and Risk Committee

05 December 2023

 

Health, Safety, and Wellbeing Performance Report

File No.: CP2023/17883

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To provide an update on enterprise risk controls for health, safety, and wellbeing; initiatives underway to improve controls, and the current state of selected key performance indicators as at 30 September 2023.

Whakarāpopototanga matua

Executive summary

2.       This is a regular report provided to the Audit and Risk Committee to enable members to understand and make recommendations relating to the management of health, safety, and wellbeing (HSW) risk at Auckland Council.

3.       There are gaps that have been identified in the effectiveness or completeness of specific enterprise risk controls relating to HSW, specifically relating to the control of critical risks, and availability of risk information for kaimahi (staff). Improvement projects are underway to close identified gaps and ensure that controls are in place, and these are described in Attachment A.

4.       Several other projects are in progress to strengthen and improve on other already existing controls, and to improve the health, safety and wellbeing of kaimahi and deliver on the recommendations of the hauora (wellbeing) review.

5.       Key performance indicators are provided in Attachment B, alongside historical data to show changes over time. This report provides further analysis and commentary on these key indicators for the committee’s information.

 

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a)      tuhi ā-taipitopito / note the information in this report and the associated health, safety, and wellbeing indicators.

b)      whakaae / agree to refer this report to the Governing Body, along with any commentary the committee deems appropriate, and recommend that the Governing Body forwards this report to local boards for their information.

 

Horopaki

Context

6.       This report provides commentary and a range of health, safety, and wellbeing performance indicators to enable the Audit and Risk Committee to provide objective advice, and allow Auckland Council’s officers (as defined within the Health and Safety at Work Act 2015) to exercise due diligence obligations.

7.       Recommendations on the adequacy and functioning of the council’s health, safety, and wellbeing risk management system and associated programmes are subsequently shared with the Governing Body.

Tātaritanga me ngā tohutohu

Analysis and advice

Enterprise Risk Control Effectiveness

8.       Enterprise risk associated with health, safety, and wellbeing refers to those risks which pose a threat of negative consequences to the organisation as a PCBU (person conducting a business or undertaking), or its officers. It is distinct from, but related to, those risks which may harm an individual. Where enterprise risk is not effectively controlled, it leads to an environment within which operational risk controls may be impacted or compromised, which may then lead to illness, injuries, or death.

9.       At an enterprise level, the risk is to the PCBU and officers directly through financial, legal, reputational and cultural consequences that relate to how the organisation and its leaders manage their obligations under the various pieces of legislation that relate to health and safety. These risks, and the associated control assessments, are detailed within Appendix A.

10.     There are three key enterprise level risks associated with HSW. These are:

·    Failure by Auckland Council to comply with health and safety legislation, which can lead to prosecution, significant financial penalties, prison sentences for officers, major service interruptions and a loss of engagement of kaimahi.

·    Failure to effectively manage ACC injury claims which can lead to loss of accreditation, reputational damage, increased premiums, significant claim costs, and loss of employee productivity and engagement.

·    Insufficient effort applied to improve wellbeing of kaimahi, which can lead to a loss of engagement, productivity, and quality of work.

11.     Most controls associated with these three risks are in place and are operating as intended, although some of these have been flagged as requiring further improvement.

12.     There are three controls that have been identified as being insufficient to effectively control the associated risk, which are related directly to operational risk registers, and critical control management. For these enterprise-level controls, they describe the need for all operational risks to be clearly defined, with operational controls identified and documented. These have been inconsistent in the past, with risk registers taking several formats and having differing expectations within them. This is reflective of the previous operating model for health, safety, and wellbeing which was recently updated.

13.     Critical risks (those risks that carry the most significant consequences) have previously not been defined at Auckland Council, as this is a newer expectation that reflects growing maturity in health and safety. As it is a new requirement, the work that is required to identify, assess, and define the risk and associated controls has not been fully completed.

14.     Activity is underway to address all control gaps, and information on the improvement plans is provided within Appendix A.

Project Hīra

15.     Project Hīra is the programme of work that is underway to improve our management of health and safety through the replacement of Risk Manager with Donesafe (our online health and safety reporting and management tool). This programme includes the procurement and platform configuration, alongside change management, process improvement, people leader training, and an awareness campaign.


 

16.     The management of risk has continued to be the primary focus for the project, with work completed to build the system that will be used to identify and document all risks and controls that exist at a team or location level. These risk registers will outline the hazards that kaimahi, contractors, and others are exposed to, and the specific controls that need to be in place to eliminate or minimise the risk of harm. The population of these registers is now being managed as a ‘business-as-usual’ (BAU) activity by the health, safety, and wellbeing team and is being considered out-of-scope for the purposes of this project.

17.     All modules have now been released within Donesafe, with the final modules providing Auckland Council with the systems required to improve the management of contractor health and safety requirements, alongside kaimahi-specific needs such as health monitoring and competency management. It is expected that all remaining project activity will be finished on time, with project completion scheduled for December 15th 2023.

Critical Risk Management

18.     An ongoing programme of work to improve the management of critical risks (those risks that have the potential to cause fatalities or life-altering injuries) is continuing. This work is based on the ‘Critical Control Management’ methodology provided by the International Council on Mining and Minerals (ICMM), which is considered international best practice for these types of risks.

19.     There are 6 critical risk standards currently in place. A further 11 draft critical risk standards have been created and are currently undergoing quality review checks prior to being progressed to change impact analysis. This will raise the number of critical risk standards to 17. There are a further 3 standards in development, mostly relating to psychosocial risks.

Wellbeing

20.     There is continued focus on delivering on the final recommendations made within the Hauora (Wellbeing) Review, and to action the work within the Iti Kahurangi Mental Health Plan. Seventy percent (70%) of the short to medium-term actions within the Iti Kahurangi plan have now been completed, with the remaining actions requiring resources which have been working reactively to supporting staff with pastoral care and mental health needs. These actions are currently underway, but progressing slowly due to those resource constraints.

21.     Actions completed recently include the release of Mental Health First Aid training to people leaders, and suicide prevention training for high-risk teams. There are also now internally-delivered workshops which train kaimahi in the principles and application of Te Whare Tapa Whā, a model of Māori health promotion developed by Professor Sir Mason Durie.

22.     Once these last medium-term Iti Kahurangi actions are completed, focus will be applied to longer-term actions. These are more challenging as they address issues such as work design and systemic barriers. This will be supported by teams from across the organisation, working collaboratively to solve challenging issues (e.g., workloads etc.).

23.     Pastoral care support continues to be in high demand, with a significant lift in the number of interactions and support provided. The number of cases being handled by this team of three Pastoral Care Specialists has risen from 30 cases (individuals and teams) in July to 68 cases in September. Key themes reported by users are around stress, workload, burnout, and the impact of change. It is unclear as to whether the rise in demand relates to an increase in issues or is a result of heightened awareness of the services being provided.


 

Contractor Health and Safety Management

24.     A programme of work to improve and enhance the management of contractor health and safety requirements and processes is underway. The intention of this programme is to build a greater focus on the consultation, coordination, and cooperation between PCBU’s to improve safety performance while also reducing unnecessary administration, effort and cost. A module created in Donesafe will also play a key enablement role in this work, allowing a single system to manage health and safety for contractors that are undertaking work for Auckland Council.

25.     Current activity for this work programme is to codesign an approach with key stakeholders from across Auckland Council, leading to the development of a draft procedure and set of processes which can be integrated into existing processes to ensure a sustainable, robust, and consistent system of work. A high-level approach has been defined by the working group, and this will be provided to key stakeholders for feedback over Q2 of FY24.

ACC Accredited Employer Audit

26.     The annual ACC Accredited Employer Audit was undertaken in mid-October, with a focus on health and safety within the Infrastructure and Environmental Services directorate, and the Group Services directorate.

27.     The auditor has provided a report indicating that their recommendation will be that Auckland Council maintains our current ‘Tertiary’ level accreditation, which is the highest level of accreditation available. Tertiary status demonstrates that Auckland Council is delivering on fundamental health and safety requirements, and is well-placed to achieve accreditation when new audit standards are released that lift minimum performance expectations to what is currently equivalent to tertiary.

28.     Accreditation is subject to approval by ACC, which may take until January 2024 to confirm.

Key Performance Indicator Commentary

29.     Key performance indicators are provided in Attachment B, alongside historical data to show changes over time.

30.     Incident reporting within 24 hours has decreased slightly to 79% in August and 75% in September (from 72% in June and 81% in July) against a target of 80%. This is partly due to some locations waiting until there are a number of incidents, and then entering them at once. The HSW team are working with those sites to identify any barriers or enablers, and provide coaching to reduce ‘batching’. This can also be the result of a minor injury (pain or discomfort) not being seen as an “incident” but subsequently resulting in an ACC claim, which then requires an incident to be reported.

31.     As noted in previous reports, incident numbers continue to be higher as a result of improvements made through Project Hīra with approximately 520 incidents or hazards reported each month. While this indicates greater reporting, anecdotal evidence suggests that the ‘real’ number of incidents each month is higher. Violence and aggression incidents continue to be the most common risk type involved in incidents, with 148 incidents reported over August and September 2023.

32.     Overdue actions continue to be the focus for Auckland Council, with 72% of open actions overdue at the end of September 2023. An initial sample of records has identified that many of these actions have been completed, but not updated within the system. The health, safety, and wellbeing team are continuing to improve this by working alongside leadership teams.


 

Tauākī whakaaweawe āhuarangi

Climate impact statement

33.     Te Tāruke-ā-Tāwhiri: Auckland’s Climate Plan acknowledges that if we do not take care of the environment, we are not taking care of our own health and wellbeing. While there are no climate impacts specifically arising from this performance report, the services the council provides, and related health, safety and wellbeing risk controls will have varying climate impacts that need to be considered on a case-by-case basis.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

34.     This report is based on Auckland Council organisation activities only and does not provide a group-wide view.

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

Local impacts and local board views

35.     Like Governing Body members, local board members are ‘officers’ under the Health and Safety at Work Act 2015 and must exercise a duty of due diligence in a way that reflects the nature and responsibility of their role.

36.     It is recommended that this report is referred to the Governing Body and (as with previous health, safety, and wellbeing reports) that the Governing Body then forwards this report to local boards for their information.

Tauākī whakaaweawe Māori

Māori impact statement

37.     While this report does not have specific impacts for Māori, staff acknowledge the importance of taking a holistic, Kaupapa Māori approach to health, safety, and wellbeing.

38.     In particular, the hauora (wellbeing) programme arising from the Hauora Review is utilising an approach that reflects Kaupapa Māori values and interventions. The council’s current mental health improvement programme, Iti Kahurangi, is based on ‘Te Whare Tapa Whā’, a holistic Māori health model. This model acknowledges the different elements needed to sustain hauora, including wairua (spiritual), hinengaro (mental and emotional), tinana (physical), whanau (family and social) and whenua (land and roots).

Ngā ritenga ā-pūtea

Financial implications

39.     The work in this report is being managed within current budgets and there are no additional financial implications to report.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

40.     The risk of non-compliance with health and safety is recorded in the council’s top risk register. This risk register entry provides an overview of the controls and mitigations in place.

Ngā koringa ā-muri

Next steps

41.     Following the 5 December 2023 Audit and Risk Committee meeting, it is recommended that this report be referred to the Governing Body for its information. It is also recommended the Governing Body forwards this report to local boards for their information.

 

Ngā tāpirihanga

Attachments

No.

Title

Page

a

HSW Enterprise Risk Control Update

 

b

HSW Performance Dashboard

 

     

Ngā kaihaina

Signatories

Author

Paul Robertson - GM Health Safety and Wellbeing

Authorisers

Richard Jarrett - Director Group Services

Anna Bray - Acting Director - Governance and CCO Partnerships

 

 


Audit and Risk Committee

05 December 2023

 

Statutory Clock Management update

File No.: CP2023/18976

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To provide an opportunity for the Director Regulatory Services to respond to concerns raised by the committee at the 21 August 2023 meeting.

Whakarāpopototanga matua

Executive summary

2.       Craig Hobbs, Director Regulatory Services supported by Ian McCormick, General Manager Building Consents and Natalya Yakovleva, General Manager Regulatory Engineering & Resource Consents will address their memo at Attachment A.

 

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a)      tuhi ā-taipitopito / note the information provided by the Director Regulatory Services.

 

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Response to Concerns Raised by the Audit and Risk Committee

 

     

Ngā kaihaina

Signatories

Author

Ian McCormick - Manager Building Control

Authorisers

Craig Hobbs - Director Regulatory Services

Anna Bray - Acting Director - Governance and CCO Partnerships

 

 


Audit and Risk Committee

05 December 2023

 

Enterprise Risk Update December 2023

File No.: CP2023/17429

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To update the Audit and Risk Committee on:

i)        the status of and changes to the identified Auckland Council strategic risks presented to the committee in August 2023

ii)       the progress of risk management activities in the period June 2023 to December 2023

iii)      priorities for the next quarter.

Whakarāpopototanga matua

Executive summary

2.       The Risk team has facilitated a substantial update of Auckland Council’s strategic risks with risk sponsors and risk leads, including a more focused visual format to enhance engagement with strategic risks across Auckland Council.

3.       The primary focus of the Risk team remains providing risk support and risk advice to the Auckland Council’s directorates, departments, projects and programmes and other key stakeholders, along with reporting significant matters to governance committees and bodies.

4.       The Risk team has been working to enable a more cohesive, consistent risk management experience through the implementation of digital risk registers in Microsoft SharePoint. A pilot has been completed with Risk Champions, with additional work underway to launch in the first half of 2024.

5.       The Risk team has created multimedia material and educational content to improve accessibility and engagement with risk practice across the council, along with refreshing the knowledgebase on Kotahi (intranet) and interactive ‘Risk Kōrero’ sessions with Risk Champions.

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a)      tuhi ā-taipitopito / note the Enterprise Risk Update – December 2023 report and updated strategic risks

b)      whakaae / agree to refer the Enterprise Risk Update – December 2023 report to the Governing Body for information.  

Horopaki

Context

6.       This report provides an update on Auckland Council’s risk activities and risk management, including key programmes, for the period June 2023 to December 2023.

7.       A strategic risk review commenced in July 2023 and identified risks were presented to the Audit and Risk Committee at the 21 August meeting. Since this meeting the Risk team has facilitated a risk assessment process with risk leads and sponsors.

8.       The assessed strategic risks were presented to the ELT in November 2023 for review and feedback. This has resulted in an increase from eight to nine rated strategic risks with identified supporting controls and treatment actions.

9.       This information enables the Audit and Risk Committee to fulfil their governance and oversight role of the effectiveness of risk management within Auckland Council.

Tātaritanga me ngā tohutohu

Analysis and advice

Enterprise risk activity update

10.     The Risk team commenced a facilitated review of Auckland Council’s strategic risks in July 2023, with a focus on identifying gaps in our strategic risk profile and assessing strategic risks with a better understanding of control effectiveness.

11.     Workshops conducted with ELT on 3 July 2023 and 7 August 2023 resulted in the identification of eight strategic risks. Subsequent discussions with risk sponsors and leads led to the recognition of a ninth risk.

12.     The nine risks include Assets, Climate Change Response, Data Information and Privacy, Financially Sustainable Organisational Model, ICT Currency and Security, People, Political Decision Making, Social Licence and Strategic Relationships.

13.     The Risk team facilitated:

·    a refinement of risk descriptions

·    identification of current controls and assignment of a control effectiveness rating

·    identification of treatment actions and assignment of action owners

·    evaluation of ratings at inherent, residual, and target stages.

Refer to Attachment A for the risk descriptions, heat map and relevant inherent, residual and target risk ratings.

14.     Work continues on the development of directorate risk profiles and directorate risk registers. This is with a view of being able to incorporate directorate level risks in existing risk reporting to the Executive Leadership Team by March 2024.

Strategic projects and programmes

15.     The Risk team continues to provide support to key projects and programmes. There has been increased activity in this area with the development of critical programmes during the period, including, but not limited to, the Long Term Plan (LTP), the Tamaki Makaurau Recovery Programme (TMRP), Task Force on Climate-related Financial Disclosures (TCFD) and the Affordable Water reform.

16.     LTP: The Risk team has standardised its approach to the LTP that enables provision of consistent support to workstreams and workstream leads, while enabling the team to provide independent reporting and guidance to senior management and oversight bodies linked to the LTP. The Risk team will continue to support the programme management and workstreams into early 2024.

17.     TMRP: The Risk team has been instrumental in the development of the risk function at the TMRP, including taking on active management of the risk registers for a time, educating personnel on risk management and working with external stakeholders in building a risk-and-issues awareness culture within the TMRP.

18.     TCFD: Working alongside the sustainability and finance teams, the Risk team has enabled consolidation of the initial set of climate risks that were identified in late 2022. The identification of controls (with a sufficient group-level remit to mitigate or maintain these risks) has commenced. Further work will be done in 2024 to support integrated risk approaches between climate, enterprise and group-level risks to drive efficiency of operation and also to address disclosures.


 

19.     Affordable Water Reform: The Risk team has provided consistent support to the project office through the changes and uncertainties of government and the shape of the reform. It anticipates continued support once the shape of the reform has been confirmed by the incoming central government in early 2024.

20.     Representation review: Based on the information provided in the Representation Matters Project Plan and conversations with both project sponsors and project managers, the Risk team has provided support, facilitated the initial risk identification process and continues to advise on best practice risk management. Focus will move towards identifying current controls, assess effectiveness, assign residual risk ratings and work to identify any required actions. Representation Matters covers both the Representation Review and Reorganisation process which are required prior to the 2025 local elections.

Digital risk registers

21.     The Risk team observed that the application of excel-based risk registers led to inconsistencies across the council. The Risk team has, in response, enabled a more cohesive, consistent risk management experience through the implementation of digital risk registers through Microsoft SharePoint.

22.     A successful pilot was conducted across selected departments in the council with the support from Risk Champions.

23.     Digitising risk registers has created significant efficiencies for departments This work used inhouse resources, both at people and system level, and involved no additional cost to the council.

24.     Further work is in progress to implement reporting and dashboards, following which the solution will be launched in a phased manner to all departments and directorates in 2024.

Supporting risk maturity

25.     To deliver a better risk experience, the Risk team developed educational material and engagement with risk practice across the council through animated videos, a refresh of the knowledgebase on Kotahi (intranet) and interactive ‘Risk Kōrero’ sessions with Risk Champions. The continued development of these resources will strengthen implementation of Auckland Council’s Risk Management Policy and Framework, providing kaimahi and Risk Champions with the capability and tools to understand and apply their roles and responsibilities in risk management.

Group risks

26.     The Risk team continues to progress the conversation around group risks. The draft identified group risks were presented and discussed with this committee at a workshop prior to the 21 August 2023 Audit and Risk Committee meeting. The Risk team subsequently presented the group risks to the CEO Forum (consisting of the CEOs from entities within the Auckland Council group) encouraging ownership and risk mitigation among the entities. The Risk team will continue to engage with key stakeholders and entities in 2024, especially in alignment with the work on climate risks, to collectively explore methods to best address group risk management.       

Tauākī whakaaweawe āhuarangi

Climate impact statement

27.     Climate change and its impacts remain a strategic risk for the council group and mitigations and responses remain a priority for Auckland Council.

28.     The Risk and Assurance department continues to collaborate with the Chief Sustainability Office, Finance Division, and relevant departments across the council group to support Auckland Council’s adaptation and mitigation workstreams, as well as the group’s task force on climate-related financial disclosures.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

29.     The Risk and Assurance department works with risk managers and key staff in council-controlled organisations to collaborate and share knowledge on common risks. The risk profiles and updates from council-controlled organisations are covered in a separate report in this meeting.

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

Local impacts and local board views

30.     There are no direct impacts on local boards.

Tauākī whakaaweawe Māori

Māori impact statement

31.     Māori Outcomes no longer features as a strategic risk, however, remains a strategic priority for council. The Executive Leadership team opted to narrow the risk focus towards risks that have a significant impact on council’s ability to operate.

32.     To support this change and to ensure Māori Outcomes remain in focus, directorates and departments are expected to call out specific risks to Māori Outcomes within their respective risk registers and escalate them in line with our Risk Management Policy and Framework where appropriate. Ngā Mātārae, the division supporting Māori Outcomes, is also actively working with directorates to draft and achieve specific objectives articulated in their Achieving Māori Outcome plans.

Ngā ritenga ā-pūtea

Financial implications

33.     The Financial Management strategic risk previously reported to the Audit and Risk Committee was revamped into the Financially Sustainable Organisation Model to reflect the current thinking that the strategic risk is wider than just the financial management component. Detail on this change are in the confidential Enterprise Risk Update – December 2023 paper. 

34.     There are no financial costs associated with the committee receiving this report on enterprise risk management activities, and there are no funding decisions required.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

35.     The strategic risk mitigations for Auckland Council were discussed as part of the strategic risk review process. Actions have been identified by risk leads and sponsors where controls can be improved and further mitigations are required.

36.     The Risk and Assurance department continuously reviews the external and internal environment to identify emerging or heightened risks and trends, which are presented to the Enterprise Leadership team on a regular basis.


 

Ngā koringa ā-muri

Next steps

37.     The following are focus areas for risk management activities:

i)        continued monitoring of Auckland Council’s strategic risks and supporting action owners to improve the existing controls and progress with risk treatment actions

ii)       continued monitoring of emerging risks, heightened risk drivers and the potential impacts

iii)      building risk management awareness, knowledge and skills through risk kōrero and development of interactive risk learning material

iv)      ongoing risk support for key strategic programmes and projects and directorates

v)      ongoing development of directorate risk profiles and directorate risk registers to support decision-making.

 

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Strategic Risks December 2023

 

     

Ngā kaihaina

Signatories

Authors

Sathya Ashok - Head of Risk and Audit

Joel Kirk - Senior Risk Advisor

Andre de Wet - Senior Risk Advisor

Authorisers

Emma Burke - General Manager Risk and Assurance

Anna Bray - Acting Director - Governance and CCO Partnerships

 

 


Audit and Risk Committee

05 December 2023

 

Final Office of the Auditor-General report to governors for the year ended 30 June 2023

File No.: CP2023/17909

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To provide committee members with an overview of the internal control and financial/non-financial reporting matters identified by the Office of the Auditor-General during the final audit for the year ended 30 June 2023 and outline how Auckland Council is addressing these matters.

Whakarāpopototanga matua

Executive summary

2.       Audit New Zealand is Auckland Council’s external auditor appointed by the Office of the Auditor-General to conduct the audit on their behalf. Audit New Zealand works with the council throughout the year reviewing our internal controls, half year report and disclosures to both the New Zealand and overseas stock exchanges and auditing our annual report. The Office of the Auditor-General issues reports to the council throughout the year with recommendations on issues identified, and makes recommendations for improvements to our processes, procedures and disclosures.

3.       We have received the report for the final audit for the year ended 30 June 2023. The report includes recommendations with priority ratings. The report is provided as Attachment A.

4.       The service performance of non-notified resource consents continues to be highlighted as an area for improvement, specifically regarding processes, systems and controls to accurately record resource consent processing times.

5.       There is one new recommendation in relation to CCO forecast financial statements within their Statements of Intent, which are not all compliant with the Local Government Act 2002 (LGA).

6.       The report also includes an update on prior year recommendations which are either in progress or have been resolved. Issues in progress (but all well advanced) are:

Matter

Priority rating

Valuation of operational assets, restricted assets and infrastructure assets

Necessary

Valuation of investment properties

Necessary

Lack of support for vendor masterfile changes

Necessary

Payroll processes and controls

Necessary

Approvals for CE, Mayor and Deputy Mayor expenses are not “one-up” approved

Necessary

Review of Delegated Financial Authority Policy and SAP delegation

Necessary

 

7.       One of the seven outstanding matters raised in previous reports has been resolved. This is detailed in Appendix 2 of Attachment A under the heading “Matters that have been addressed during the year”.

8.       The council accepts the Office of the Auditor-General’s recommendations and has provided a response outlining actions being taken to address each issue.

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a)      tuhi a-taipitopito / note the matters identified by the Office of the Auditor-General in its report to governors for the year ended 30 June 2023, and Auckland Council’s responses to those matters.

Horopaki

Context

9.       This report summarises the matters identified by the Office of the Auditor-General during the final audit for the year ended 30 June 2023 and outlines how the council is addressing the matters raised.

10.     The Office of the Auditor-General issued their audit report on the Auckland Council Group Annual Report 2022/2023 on 8 November 2023. As part of the audit process, the auditors evaluate the council’s systems, processes and controls that have an impact on the annual report. Matters identified during the audit are reported to the council. The council responds to the matters raised and describes the actions that will be undertaken to resolve them.

Tātaritanga me ngā tohutohu

Analysis and advice

11.     The following were new matters raised, with management’s response:

Matter

Management’s response

CCO forecast financial statements

The LGA requires council controlled organisations (CCOs) that are not council controlled trading organisations (CCTO) to include forecast financial statements in their statements of intent (SOIs) that comply with generally accepted accounting practice (GAAP). Not all CCOs are compliant with this requirement. Council’s review and approval process should identify these matters going forward.

We concur and will provide guidance to CCOs to ensure future compliance.

12.     Updates were provided on previous recommendations, all of which have a priority rating of ‘necessary’:

Matter

Management’s response

Valuation of operational assets, restricted assets and infrastructure assets

New contracts with valuers for 2023/2024 address these recommendations.

Valuation of investment properties

New contracts with valuers for 2023/2024 address these recommendations.

Lack of support for vendor Masterfile changes

Changes to vendor masterfiles are made with supporting documents saved in a centralised place and reviewed by the Head of Procurement, Capability and Compliance.

Payroll processes and controls

An additional check has been added to the termination process.

Automation of workflow of termination checklists is planned for next financial year.

Approvals for CE, Mayor and Deputy Mayor expenses are not “one-up” approved

Governance Services will remind the Mayoral Office of the importance of following the Elected Members’ Expense Policy for appropriate approvals.

The elected members travel form template has been updated to reflect approval requirements.

Review of Delegated Financial Authority Policy and SAP delegation

A sample of potential DFA breaches were reviewed and no inappropriate or unusual transactions were found.

The CE Delegations Register (Register) has been updated and approved in September 2023.

 

SAP will be reviewed to ensure it aligns with the Register.

Tauākī whakaaweawe āhuarangi

Climate impact statement

13.     There are no items covered by this agenda item that impact climate change although there is an audit recommendation regarding climate change financial disclosures and greenhouse gas emissions reporting in the 2022/2023 Annual Report.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

14.     As noted in 11 above, Auckland Council will provide guidance to CCOs to ensure that their statements of intent comply with the requirements of the LGA.

15.     There are no other items covered by this agenda item that impact the Auckland Council Group, so the views of group entities have not been sought.

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

Local impacts and local board views

16.     There are no local impacts from the audit report or issues relating to reporting at a local board level. Accordingly, the views of local boards have not been sought.

Tauākī whakaaweawe Māori

Māori impact statement

17.     The report does not affect the achievement or reporting on Auckland Council’s or the Auckland Council Group’s contributions towards Māori outcomes. The council’s contributions to Māori outcomes are reported in the annual report.

Ngā ritenga ā-pūtea

Financial implications

18.     There are no financial implications directly arising from the information contained in the report as no financial decision is sought.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

19.     There is a risk that actions undertaken by management to address internal control deficiencies may not be considered sufficient or appropriate to address Audit New Zealand’s concerns. To mitigate this risk, the financial control and risk teams have regular open discussions with Audit New Zealand to ensure that matters are being progressed to Audit New Zealand’s satisfaction.

Ngā koringa ā-muri

Next steps

20.     Auckland Council will continue to work on resolving and clearing the outstanding issues.

 

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Final Office of the Auditor-General report to governors for the year ended 30 June 2023

 

     

Ngā kaihaina

Signatories

Authors

Tracy Gers - Group Accounting & Reporting Manager

Francis Caetano - Group Financial Controller

Authorisers

John Bishop - Group Treasurer

Peter Gudsell - Group Chief Financial Officer

Anna Bray - Acting Director - Governance and CCO Partnerships

 

 


Audit and Risk Committee

05 December 2023

 

Endorsement of the draft Office of the Auditor-General Interim Review Engagement Letter for the 6 months ended 31 December 2023

File No.: CP2023/17900

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To review and endorse the draft Office of the Auditor-General Interim Review Engagement Letter for the six months ending 31 December 2023 (Attachment A).

Whakarāpopototanga matua

Executive summary

2.       Audit New Zealand has provided the Office of the Auditor-General’s draft interim review engagement letter for the six months ending 31 December 2023 (the draft letter).

3.       The draft letter outlines the scope of responsibilities, group entities subject to review, areas of review focus and administration matters such as proposed fee, logistics and timetables.

4.       The review fee has been agreed at $139,208 plus disbursements. This is approximately 10 per cent of the fee for the audit of the 30 June 2023 annual report. It is a 2.5 per cent increase on the fee for the review of the prior year’s interim report for the six months ended 31 December 2022.

5.       The draft letter is substantially the same as in prior years with the removal of City Rail Link Limited and the addition of the following three new matters; house buy-back scheme, material recoveries facility and food scraps partnership.

6.       Other areas of review focus from the prior year include:

·   valuation of property, plant, and equipment

·   construction costs and impairment assessments

·   valuation of the weathertightness and associated building defect claims provision

·   valuation and disclosure of derivatives

·   three waters reform

·   valuation of investment properties

·   central government funding

·   management override of controls

·   rates

·   legislative compliance.

7.       The Audit and Risk Committee has responsibility for reviewing and endorsing the draft letter before Audit New Zealand issues the final letter for approval by the mayor and chief executive.

8.       The group financial controller will present any amendments to this draft letter at the committee meeting.

9.       Audit New Zealand Audit Director Athol Graham will be in attendance to answer any questions the committee may have in relation to the draft letter.


 

 

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a)      arotake / review and ohia / endorse Audit New Zealand’s draft interim review engagement letter, including the proposed review engagement fee

b)      tono / request Audit New Zealand issue the final interim review audit engagement letter

c)      tono / request the mayor and chief executive sign the final interim review audit engagement letter.

 

Horopaki

Context

10.     Management has reviewed the draft letter and provided feedback to Audit New Zealand, which has been incorporated.

11.     A review engagement provides readers with a moderate level of assurance that nothing has come to the auditor’s attention that causes the auditor to believe that the interim financial statements do not fairly reflect the Auckland Council Group’s financial position, performance and cash flows for the period. This moderate level of assurance (known as negative assurance) is a lower level of assurance than that of an audit and is our usual process for interim reporting.

12.     The review is performed in accordance with the review standards issued by the External Reporting Board. It primarily involves enquiry, analytical procedures, the obtaining of representations and reconciliation of the financial statements to underlying accounting records.

13.     The draft letter outlines the scope of responsibilities, group entities subject to review, areas of review focus and administration matters such as logistics, proposed fee and timetable. It is substantially the same as in prior years.

Tātaritanga me ngā tohutohu

Analysis and advice

Review engagement letter

14.     The draft review engagement letter outlines the:

·   scope of the Audit New Zealand and the Deputy Auditor-General’s responsibilities

·   scope of the Governing Body and management’s responsibilities

·   areas of the review focus

·   engagement logistics and timelines.


 

15.     This draft letter includes areas of focus which are similar to the prior year with the removal of City Rail Link Limited and the addition of the following three new matters; house buy-back scheme, material recoveries facility and food scraps partnership. The areas of focus are:

·   valuation of property, plant and equipment - fair value assessment of fixed assets – consideration of significant changes in fair value which might require an independent valuation to be carried out

·   construction costs and impairment assessments – work in progress should be capitalised when the asset becomes operational and an impairment assessment is required of assets including significant work in progress balances

·   valuation of the weathertightness and associated building defect claims provision – the provision needs to be reviewed and updated

·   valuation and disclosure of derivatives – derivatives should be correctly valued and significant movements in fair value should be appropriately explained in the interim financial statements

·   three waters reform – there should be sufficient disclosure about the potential impacts of the reform or repeal of the reform on the group interim financial statements

·   valuation of investment properties – investment properties should be properly classified and valued in the financial statements

·   central government funding – any new agreements should be fairly reflected in the financial statements

·   management override of controls – Audit New Zealand will maintain an awareness for the risk of management override of controls as they perform review procedures

·   rates – annual rates should be appropriately discounted to reflect present value

·   legislative compliance – Audit New Zealand will follow up on the completion of a review of the interim report by Legal Services

New matters

·    house buy-back scheme - consider how these costs should be recorded in the interim financial statements including any estimated provision for qualifying claims from residents that have or are likely to opt-in to the scheme

·    downtown carpark – consider how the asset should be disclosed and valued at 31 December 2023

·    material recoveries facility – management to prepare an accounting assessment of the arrangements including how the facility assets should be accounted for going forward

·    food scraps partnership - review the terms of the contract and determine whether a liability needs to be estimated at 31 December 2023 for any shortfall in the volume of food scraps delivered.

Ngā ritenga ā-pūtea

Financial implications

16.     As in the past, the interim review engagement fee has been set at 10 per cent of the annual audit fee. The proposed fee for the review engagement is $139,208 plus disbursements which is an increase of 2.5 per cent on the fee charged for the same interim review engagement last year. This is provided for within existing budgets.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

17.     There is a risk of a potential further increase in the auditor’s fees. This could occur if there is a significant increase in the review scope which would require extra audit effort, or if Audit New Zealand engages experts (e.g. valuers).

18.     To mitigate this risk, Audit New Zealand and Auckland Council staff meet fortnightly to discuss audit issues to ensure they are managed and resolved efficiently.

Ngā koringa ā-muri

Next steps

19.     Following the endorsement of the draft letter by the committee, Audit New Zealand will issue the letter in its final form for the mayor and chief executive to sign. Auckland Council staff will also confirm and finalise the council and Audit New Zealand’s delivery timelines, to ensure a timely and efficient review process.

 

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Draft Office of the Auditor-General Interim Review Engagement Letter for the 6 months ended 31 December 2023

 

     

Ngā kaihaina

Signatories

Authors

Tracy Gers - Group Accounting & Reporting Manager

Francis Caetano - Group Financial Controller

Authorisers

John Bishop - Group Treasurer

Peter Gudsell - Group Chief Financial Officer

Anna Bray - Acting Director - Governance and CCO Partnerships

 

 


Audit and Risk Committee

05 December 2023

 

Preparation of the interim report and NZX release for the six months ending 31 December 2023

File No.: CP2023/17907

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To provide the Audit and Risk Committee with an update on the status of financial processes for the preparation of the interim report and the NZX release for the six months ending 31 December 2023.

Whakarāpopototanga matua

Executive summary

2.       As an issuer of debt on the NZX, listing rules require the Auckland Council Group to release financial information within 60 days after the six months ending 31 December 2023.

3.       To promote good governance and meet investor expectations, management prepares an interim report and has negative assurance provided over it by Audit New Zealand on behalf of the Auditor-General.

4.       On 19 February 2024, the Audit and Risk Committee will be asked to recommend that the deputy mayor approve, and recommend to the mayor and chief executive that they approve, the following documents for release to the NZX on 27 February 2024:

·   NZX announcement

·   associated media release 

·   interim report for the six months ending 31 December 2023.

5.       This report assists the committee in their assessment of the adequacy of the interim report processes and the controls in place to prepare it. The interim report includes:

·   key review matters for the review engagement as at 31 December 2023

·   review engagement milestones

·   quality assurance and compliance sign-off processes

·   management representation letters and management confirmations

·   the Audit and Risk Committee’s oversight of the management of fraud.

6.       To encourage transparency in our committee reporting, we have endeavoured to discuss as much information as possible about the half year reporting and audit review requirements in this report. However, there is some information which cannot be released to the public due to disclosure requirements of the NZX. Instead, updates on key areas of judgement, estimates and assumptions, and on issues and risks will be presented to the committee in the confidential report at this meeting “Confidential: Interim report and NZX release for the six months ending 31 December 2023”.

7.       Additionally, six other documents will be provided in the confidential item relating to the preparation of the reporting for the six months ending 31 December 2023:

·   draft NZX announcement (based on prior year)

·   draft memo to the group treasurer and group chief financial officer (based on prior year)

·   draft memo to the mayor and chief executive (based on prior year)

·   draft letter of representation for the group interim report (based on prior year)

·   draft fraud questionnaire

·   pro forma interim report for the six months ending 31 December 2023 (for endorsement).

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a)      tuhi ā-taipitopito / note the information contained in this financial process status update for the Auckland Council Group NZX announcement and interim report for the six months ending 31 December 2023

b)      tuhi ā-taipitopito / note that an update on the confidential matters and confidential draft documents related to the interim report and NZX release will be discussed later in this meeting in confidence.

 

Horopaki

Context

8.       As an issuer of debt on the NZX, listing rules require the Auckland Council Group to release financial information within 60 days after the six months ending 31 December 2023.

9.       The release to the NZX (‘NZX release’) includes the following documents:

·   results announcement

·   media release

·   interim report for the six months ending 31 December 2023.

10.     To promote good governance and meet investor expectations, management prepares an interim report and has negative assurance provided over it by Audit New Zealand on behalf of the Auditor-General.

11.     The purpose of the interim report is to provide an update on material information reported in the Auckland Council Group Annual Report 2022/2023 (annual report), and for this reason committee members may wish to read the pro forma in conjunction with volume three of the annual report.

12.     Management has prepared a pro forma interim report (included in the confidential report “Confidential: Interim report and NZX release for the six months ending 31 December 2023”). It sets out the format and policies of the interim report, and contains the financial statements, accounting policies and notes to the financial statements. Many sections are incomplete as they can only be updated when the information is available or confirmed after 31 December 2023.

13.     On 19 February 2024 the Audit and Risk Committee will review the NZX release, and the processes and controls used in preparing the documents.

14.     Audit New Zealand will attend that Audit and Risk Committee meeting to enable the committee to discuss Audit New Zealand’s review, to assess whether a robust financial review has occurred.

15.     At the meeting, management will ask the Audit and Risk Committee to make the following recommendations in fulfilment of its terms of reference:

·   recommend that deputy mayor approve the half year NZX release for the six months ended 31 December 2023.

·   recommend that the deputy mayor authorise the mayor and the chief executive to approve and release the half year NZX release on 27 February 2024.

16.     Prior to making their recommendation, deputy mayor will review and enquire into the financial and operational performance of the group. The Governing Body made this delegation at their 15 December 2022 meeting.

Tātaritanga me ngā tohutohu

Analysis and advice

17.     Audit New Zealand’s key review matters for the review engagement as at 31 December 2023 are:

·   internal control matters:

o management override of controls

o legislative compliance

·   accounting matters:

o valuation of property, plant and equipment

o construction costs and impairment assessments

o valuation of investment properties

o valuation and disclosure of derivatives

o valuation of the provision for weathertightness and associated building defect claims

o rates

o Affordable Waters Reform

o cost sharing arrangement with central government for flood-related funding.

·   Emerging matters:

o consideration of how house buy-back scheme costs should be recorded

o implications, if any, of contractual arrangements related to the material recoveries facility

o contractual obligations related to the food to waste contract.

Key milestones

18.     The key milestones for the NZX release and interim report are:

Quality assurance and compliance approvals

19.     Quality assurance reviews will be performed on the consolidated results and commentary of the NZX release documents. The reviews will focus on accuracy, completeness and reasonableness of disclosures, legislative compliance and adherence to council communications standards. A summary of the reviews are as follows:

Reviewer

Consolidated results and commentary

Interim report

NZX release

Media release

Group chief financial officer*

 

ü

ü

ü

Group treasurer*

ü

ü

ü

ü

GM financial strategy and planning

 

ü

ü

ü

GM financial and business performance*

 

ü

ü

ü

Group financial controller*

ü

ü

ü

ü

Manager external stakeholder group reporting manager*

ü

ü

ü

ü

Senior group reporting technical accountant*

ü

ü

ü

ü

Financial accounting manager*

ü

ü

ü

ü

Head of group financial planning*

 

ü

ü

ü

Senior specialist corporate communications

 

 

ü

ü

Senior solicitor and Mayne Wetherell

 

ü

ü

ü

20.     All the quality assurance reviewers performing technical reviews (denoted with *) are Chartered Accountant (CA) or equivalent and have the appropriate technical accounting skills and knowledge.

Management representation letters and management confirmations

21.     Audit New Zealand will require the mayor and chief executive to sign a letter providing assurance that the control environment adequately supports the validity, accuracy and completeness of financial reporting, and that the financial statements comply with applicable standards and regulations. 

22.     To support the mayor and the chief executive’s representations, the group chief financial officer, group treasurer and the group financial controller will sign a back-to-back representation letter.

23.     A draft copy of the representations, based on the prior year, is included in the confidential report at this meeting titled “Confidential: Interim report and NZX release for the six months ending 31 December 2023”.


 

Draft representation on fraud and fraud questionnaire

24.     Audit New Zealand make formal enquiries of the Audit and Risk Committee, senior management and the Risk and Assurance department in relation to fraud using a questionnaire. The questionnaire covers risk assessment, monitoring controls, mitigating systems and controls, risk communication and the assessment of fraud risk.

25.     The committee formally respond to these enquiries in writing. The representations made are supported by questionnaires completed by senior management and the Risk and Assurance department.

26.     A copy of the draft fraud questionnaire is included in the confidential report at this meeting titled “Confidential: Interim report and NZX release for the six months ending 31 December 2023”.

Other matters

27.     The group financial controller will communicate any significant risks or material judgements that arise between committee meetings to the chair of the committee, along with any unresolved significant disagreements between Auckland Council management and Audit New Zealand.

Tauākī whakaaweawe āhuarangi

Climate impact statement

28.     This report relates to a financial reporting process only and as such has no climate implications. Auckland Council Group’s climate impact will be included in the annual report and summary annual report. No decision is sought in this paper that has an impact on greenhouse gas emissions and the council’s approach to reduce emissions.

29.     However, it is acknowledged that the activities undertaken by the group and reported on within interim report have the potential to be impacted by climate change and can also reinforce or weaken our climate action response.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

30.     Feedback will be sought from the substantive council-controlled organisations, Port of Auckland Limited and City Rail Link Limited to ensure that any matters that apply to them have been considered in preparation for the 31 December 2023 interim report. All matters have been incorporated into the work plan.

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

Local impacts and local board views

31.     This report relates to the financial reporting of the Auckland Council Group, which does not include reporting at a local board level. No decision is sought that would impact local boards and accordingly the views of the local boards have not been sought.

Tauākī whakaaweawe Māori

Māori impact statement

32.     This report relates to the approval of financial reporting of the Auckland Council Group, which does not affect the achievement or reporting of the council’s contributions to Māori outcomes. No decision is sought in this paper that has a direct impact on Māori.

Ngā ritenga ā-pūtea

Financial implications

33.     There are no financial implications directly arising from the information contained in the report as no financial decision is sought.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

34.     No risks have been identified related to the information provided in this report.

35.     Any risks and mitigations relating to the half-year interim reporting, key judgements and assumptions will be outlined in the confidential section of this meeting under the report “Confidential: Interim report and NZX release for the six months ending 31 December 2023”.

Ngā koringa ā-muri

Next steps

36.     The committee will review the confidential key judgements, estimates and assumptions and attachments relating to this report in the confidential section of this meeting under the report “Confidential: Interim report and NZX release for the six months ending 31 December 2023”.

37.     The Auckland Council Group NZX announcement, media release and interim report for the six months ending 31 December 2023 will be presented to the Audit and Risk Committee on 19 February 2024 for review and approval.

 

Ngā tāpirihanga

Attachments

There are no attachments for this report.     

Ngā kaihaina

Signatories

Authors

Tracy Gers - Group Accounting & Reporting Manager

Francis Caetano - Group Financial Controller

Authorisers

John Bishop - Group Treasurer

Peter Gudsell - Group Chief Financial Officer

Anna Bray - Acting Director - Governance and CCO Partnerships

 

 


Audit and Risk Committee

05 December 2023

 

Climate disclosure work programme update December 2023

File No.: CP2023/17931

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To update on the Auckland Council Group’s progress towards compliance with climate disclosure standards and associated legislation which comes into effect for the year ended 30 June 2024.

Whakarāpopototanga matua

Executive summary

2.       This report provides information that informs the Audit and Risk Committee of the climate disclosure team’s progress. It should be read in conjunction with the confidential report of the same name.

3.       Several projects have been delivered or are currently being delivered as part of the climate disclosure work programme.

4.       These projects support the group’s progress towards achieving compliance and a positive climate statement for the year ended 30 June 2024.

5.       A compliance plan has been drafted to ensure compliance with regulations, climate standards and that it is prepared using the principles of good governance. The draft plan is included in Attachment A. Feedback from the committee is requested by 12 January 2024.

6.       A materiality assessment is underway to determine financial, greenhouse gas emissions, and non-financial materiality. The climate disclosure team will update the committee at its meeting in May 2024.

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a)      tuhi ā-taipitopito / note the council’s progress towards compliance with climate disclosure standards and associated legislation which comes into effect for the year ended 30 June 2024.

Horopaki

Context

7.       The Financial Markets Conduct Act 2013 (FMC Act) requires the Auckland Council Group to make annual climate-related disclosures based on standards published by the External Reporting Board (XRB) from the year ended 30 June 2024 onwards.

8.       As the financial market’s regulator, the Financial Markets Authority has issued guidance on record keeping and a scenario analysis information sheet.

9.       The Auckland Council climate reporting team is a virtual team within the Group Treasury and Sustainability teams. It has an ongoing work programme to ensure that the group’s climate statement will be fully compliant with the climate standards for the year ended 30 June 2024, that the statement will reflect the group’s positive intent to embed the consideration of climate risk within its systems, processes and operations and that any reporting on climate matters is an unbiased and accurate reflection of the group’s position and activities.

10.     This report informs the committee of the climate reporting team’s progress. It should be read in conjunction with the confidential report of the same name.

Tātaritanga me ngā tohutohu

Analysis and advice

Work programme 2024

11.     The climate disclosure work programme has several projects and activities scheduled for the 2024 calendar year. The programme structure reflects the four thematic areas in accordance with the Aotearoa New Zealand Climate Standards. To ensure delivery is progressing in the trajectory needed, core projects and activities have been categorised as governance, strategy, risk management, metrics and targets and other (e.g. compliance, record keeping, materiality etc.).

12.     These projects combine deliverables required to achieve compliance and deliverables to achieve outcomes that support a favourable disclosure.

13.     The below projects are currently being delivered by the programme.

Project overview

Led by

Implementing recommendations from a climate governance review completed by Tonkin + Taylor / InformedCity as part of the 2022 work programme

Auckland Council and group entities

 

Developing a group transition plan that can be incorporated into the 2027-2037 Long-term Plan

Auckland Council - a joint project with teams in the Chief Planning Office, the climate disclosure team and financial strategy and planning team

Developing a group greenhouse gas emissions (GHG) calculation policy

Auckland Council - a joint project with the sustainability and climate disclosure teams

Consolidating GHG measurement at the group level

Auckland Council - a joint project with the sustainability and climate disclosure teams, being undertaken by a third-party consultant.

Developing methodologies for determining the percentage of assets and operations impacted by climate change

Auckland Council - climate disclosure team

Developing methodologies for determining the current and anticipated financial impacts of climate risks and opportunities

Auckland Council - climate disclosure team

Developing metrics and targets that demonstrate our performance in addressing our top climate risks – both Auckland Council and entity led

Auckland Council - climate disclosure team

Developing a compliance plan for the climate statement

Auckland Council - climate disclosure team

Upskilling the Governing Body on climate risks, and assisting them to understand their role in considering the risks during long-term plan decision making

Auckland Council - climate disclosure team

Detailed assessment of the group’s climate-related risks and the implementation of a climate risk management framework.

Auckland Council - climate disclosure team

14.     During the current 2023 year we have made significant progress in the following areas:

·   Consolidated and then rated climate risks that were identified in the 2022 work programme

·   Updated our climate scenarios so that they meet the requirements of the Aotearoa New Zealand Climate Standards

·   Tested the group’s resilience to climate change focussing on five key areas - Service Delivery, Community Outcomes, Funding, Reputation and Strategic Priorities.

Climate statement compliance plan

15.     We have developed a compliance plan to provide assurance that the climate statement complies with regulatory and climate standard requirements and it is prepared using the principles of good governance. The draft compliance plan is included in Attachment A.

16.     Areas covered include:

·   objectives of the plan

·   preparation, review and approval of the climate statements.

17.     The appendices include relevant legislative requirements, review and approval templates and a sample statement of compliance.

18.     Committee members are requested to provide feedback on this plan by 12 January 2024.

Climate statement materiality

19.     We are revising our consideration of climate statement materiality and will present our conclusions and recommendations to the committee at its meeting in May 2024.

20.     The areas under review are:

·   Financial materiality – this will reflect the group financial materiality applied to the group’s financial statement.

·   GHG materiality - we are researching local and international guidance and practise to support our position. The two components that we are looking to determine are:

o A de minimis for inclusion of new categories, or exclusion of existing categories of Scope 3 emissions within our inventory.

o A materiality threshold for determining whether to restate our baseline or comparatives based on changes to emissions factors or changes in the organisation e.g. sale of a business line, correction of a prior period error etc.

·   Non-financial materiality – we are undertaking a materiality assessment to determine the topics that are of most interest to key stakeholders, with a focus on investors. To assist with this, we plan to send out a materiality survey to key stakeholders in the coming weeks.

Tauākī whakaaweawe āhuarangi

Climate impact statement

21.     This report is for noting, and therefore does not contain any decision that might have an impact on the climate. However, the work programme includes activities that will highlight and quantify the impacts of the most material climate risks on the group and seeks to ensure that measures are put in place to avoid, reduce, eliminate or mitigate those impacts.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

22.     The climate reporting team regularly engages with all group entities at a leadership and operational level through its working and governance groups. All group entities are supportive of the climate disclosure work programme, but resourcing is a challenge.

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

Local impacts and local board views

23.     Local board views have not been sought as the current work is aimed at an overall group level.

Tauākī whakaaweawe Māori

Māori impact statement

24.     This report has no impact on Māori, although the impact of climate risks on Māori has been considered throughout the work programme.

Ngā ritenga ā-pūtea

Financial implications

25.     This report is for noting, and therefore does not contain any decision that might have a financial impact on the council. It should be noted however that climate disclosures are relatively new in New Zealand and abroad, so there is limited best practise to learn from, and no established ways of doing some of the complex pieces of work that are required such as scenario development, strategy resilience testing, risk assessment and quantification etc. As a result, the work programme will continue to require input from highly skilled climate scientists and practitioners who have skills and knowledge that are unavailable in the team, or where there is inadequate resourcing in the climate reporting, sustainability or risk teams. This work will be funded from existing departmental consultancy budgets.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

26.     This report is for noting, and therefore does not contain any decision that might have associated risks. Risks relating to progressing the climate disclosure work programme are discussed in the confidential report of the same name on this agenda.

Ngā koringa ā-muri

Next steps

27.     The confidential report of the same name includes further detail related to the climate disclosure programme and will be discussed later in the meeting.

 

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Climate Disclosure Compliance Plan

 

     

Ngā kaihaina

Signatories

Authors

Tracy Gers - Group Accounting & Reporting Manager

Helen Mahoney - Manager Group Sustainable Finance

Authorisers

John Bishop - Group Treasurer

Peter Gudsell - Group Chief Financial Officer

Anna Bray - Acting Director - Governance and CCO Partnerships

 

 


Audit and Risk Committee

05 December 2023

 

Long-term Plan 2024-2034 (LTP) approach to risk and assurance

File No.: CP2023/18007

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To provide an update on the development of the Long-term Plan 2024-2034 in line with the Audit and Risk Committee’s oversight role, and to receive a draft Audit New Zealand engagement letter for the audit of council’s consultation material for the Long-term Plan 2024-2034.

Whakarāpopototanga matua

Executive summary

2.       As set out in the Local Government Act 2002, the council must adopt the Long-term Plan 2024-2034 before the beginning of the first year to which it relates (i.e., 1 July 2024), and in adopting the long-term plan, the council must use the special consultative procedure.

3.       Section 94 of the Local Government Act 2002 requires the long-term plan (LTP) to be audited by and contain a report from the Auditor-General. To deliver an LTP that achieves an unqualified audit opinion, it is critical for the council group to ensure that:

·   LTP processes are robust

·   information contained in the LTP is materially complete and reliable

·   any risks associated with the LTP process are minimised

·   the LTP meets the requirements of all relevant legal requirements, including those set out in the Local Government Act 2002, and the Local Government (Auckland Council) Act 2009.

4.       For the purpose of consultation on the long-term plan the council must adopt a consultation document and supporting information (Local Government Act 2002, sections 93A and 93G).  That material must also be audited, and the consultation document must include a report from the Auditor-General on whether the consultation document gives effect to its statutory purpose, and the quality of the information and assumptions underlying the information provided in the consultation document (Local Government Act 2002, section 93C(4)).

5.       Since this committee received an initial report on the risk management approach to the Long-term Plan 2024-2034 in September 2023, political engagement has continued through regular weekly workshops and briefings. Regular written communication has also been provided to ensure Budget Committee members are kept well informed throughout the process.

6.       A total of 49 workshops and briefings (inclusive of local board briefings) have taken place since June 2023 covering a range of topics and key compliance issues to support decision-making.

7.       A summary of staff advice has been provided to support the Mayoral Proposal for consideration by the Budget Committee on 6 December 2023. Other reports relating to key matters relating to the Long-term Plan 2024-2034 such as financial policy and the communications and engagement plan are also included as separate reports on the same agenda.

8.       An update on the controls and status of top risks for the Long-term Plan 2024-2034 is included in the body of this report.

9.       Audit New Zealand will provide a draft audit engagement letter for the audit of the consultation material and Long-term Plan 2024-2034 ahead of today’s meeting – see Attachment A.

10.     Given the complexity of this LTP, and the uncertainty related to new policy direction or potential changes to legislation made by the new government, staff consider the scope of engagement will need to be as broad as possible.

11.     If further changes are required to the scope of engagement or related fees after this meeting, details will be provided to the chair of this committee for final approval.

 

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a)     tuhi ā-taipitopito / note the update on the development of the Long-term Plan 2024-2034 including the approach to risk management

b)     tuhi ā-taipitopito / note the draft engagement letter from Audit New Zealand for the audit of Auckland Council group’s consultation material and the Long-term Plan 2024-2034

c)     tautapa / delegate to the chair of this committee authority to approve the final engagement letter once it is received and make any recommendations to the Mayor in relation to signing the letter.

 

 

Horopaki

Context

12.     The LTP is a key statutory document for Auckland Council, enabling the implementation of its strategic plans and identifying what people can expect in terms of the council’s activities over the next 10 years.

13.     Staff from across the group have provided advice on investment options as they relate to the Governing Body’s Guidance Document for the LTP, key legislative requirements like the financial strategy and infrastructure strategy, climate risk and disclosure obligations, balance sheet considerations (debt and rates), department and CCO budgets and other key financial information.

14.     Staff have also provided initial advice and information on Watercare and water investment options to enable the council to respond quickly to any legislative change in respect of water reform by the new government. 

15.     Formal advice on options for consultation on the Long-term Plan 2024-2034 is included on the agenda for the Budget Committee on 6 December 2023. Once decisions on consultation items are made, staff will prepare draft consultation material reflecting those decisions for audit early next year.

16.     The scope for consultation is likely to be broad and we will seek to provide Aucklanders with information on different options for levels of investment, services, and rates pathways. This approach supports Aucklanders to better understand the trade-offs involved, and will give the council flexibility to consider feedback and other relevant matters in making final decisions.

17.     In preparation for the audit of the consultation material and Long-term Plan 2024-2034, Audit New Zealand will provide a draft audit engagement letter to this committee ahead of this meeting – see Attachment A. 

18.     We continue to meet with Audit New Zealand regularly to provide updates on key issues, political engagement, and project timelines and deliverables. This approach will continue into the new year as we progress with the audit of consultation material.

19.     The Long-term Plan 2024-2034 work-stream leads, and other key staff have provided responses to a self-assessment as requested by Audit New Zealand. Further information on internal controls has also been provided to assist Audit New Zealand in their engagement. 

20.     Staff consider that given the complexity and likely scope of the Long-term Plan 2024-2034, and the uncertainty related to new policy direction or potential changes to legislation by the new government, the scope of engagement needs to be as broad as possible.

Tātaritanga me ngā tohutohu

Analysis and advice

Update on controls and sign-offs

21.     The following table provides an update relating to the controls and sign-offs for key areas of the LTP that were provided to this committee in September:

Area

Key controls and sign-offs

Update

Programme management and governance

 

 

·      An LTP Project Control Group monitors LTP alignment with council priorities and ensures that significant risks are being actively managed.

·      Councillors and the Mayor provide early direction and are engaged throughout the LTP process so risks to the timeline for adoption are monitored and managed.

·      The Project Control Group continues to meet regularly to monitor the management of risks across the project. Status reporting is provided fortnightly to support this.

·      Early direction was provided to the council group through the Governing Body Direction Document that was also provided to this committee in our September update. Weekly briefings, workshops and written communication has been provided to elected members to provide comprehensive engagement.

Asset management plans (AMPS)

 

 

·      Internal audit team will conduct a review to evaluate the effectiveness of processes and controls involved in the development of AMPs across the group. The group here includes Auckland Council, Eke Panuku, Tataki Auckland Unlimited (TAUL) and Auckland Transport.

·      Department manager and CCO sign off that the planned services and AMPs are consistent with available funding and strategies.

·      Internal audit continue to work with key staff across the group to support the audit of the Long-term Plan 2024-2034.

·      A draft infrastructure strategy has been prepared and the asset data and investment data (to the extent available pre-mayoral proposal) has been provided to inform that draft and signed off by the AMP owners (executive level).

Infrastructure investment

 

 

·      Mitigate risks of uncoordinated planning by areas working together in one workstream on an integrated programme of infrastructure provision.

·      Engagement with community and stakeholders on scenario trade-offs and decisions.

·      The investment impact assessment tool has been used to test the investment proposed by the group, along with options (to the extent available pre-mayoral proposal) in an apples-with-apples comparison to test alignment of the group investment with organisational and mayoral priorities.

Levels of service and performance measures/ performance targets

 

 

·      Validate existing set of performance measures for better alignment to strategic direction, relevancy with meaningful targets, underpinned by a robust reporting methodology.

·      Following approval of budgets, performance measure targets will be realigned and signed-off by managers and/or executives to ensure that the planned services are consistent with available funding.

·      A draft set of performance measures was given to Audit New Zealand to seek early feedback, which has been provided. A report outlining the approach to the performance framework and measures is included to support decision-making for the Budget Committee on 6 December.

Key alignment and linkages

·      Key steps will be taken to ensure that financial and non-financial information included in the LTP is consistent with council’s strategies, policies and assumptions.

·      Appropriate managers and/or executives from council and CCOs will review and sign-off whether information included for each group of activities has been incorporated into the underlying information.

·      The Strategic Integration Group that is part of the project’s governance structure has been providing advice and support to ensure alignment across key issues for this LTP.

·      Robust review processes of advice and information continues across staff advice and reporting including legal review and CCO board sign-off, where necessary.

Assumptions

·      Ensure assumptions are documented in the consultation documentation and the final Long-term Plan, and are complete, reasonable and supportable.

·      Financial statements will include documentation of significant forecasting assumptions, the level of uncertainty, and the potential impacts of that uncertainty.

·      Sign-off on budgets by business financial managers to confirm consistent application of assumptions.

·      Core assumptions have being refined and included in advice to support the Mayoral proposal.

·      Some assumptions will continue to be refined for the consultation material based on new information.

 

Accounting standards

·      Document review against accounting standard FRS-42 for prospective financial statements as well as New Zealand Society of Local Government Managers guidance.

·      Peer review of financials by Financial Control team.

 

 

·      Relevant to the next stage of the process.

Financial model and data

 

 

·      Monitor built-in checks in model of treasury ratios, prudential benchmarks and the balanced budget requirement.

·      Review the financial model against significant commitments, policies and strategies e.g. City Rail Link commitments, Financial Strategy, Infrastructure Strategy.

·      In progress to support decision-making on the Mayoral Proposal. Work will continue and flow through to consultation material.

Legal sign off/Document preparation

 

 

·      Council has an experienced legal team who will conduct a review of the consultation document, supporting information, and the final LTP, and provide legal support and guidance during the process.

·      A legal review of staff reports to support decision-making for 6 December Budget Committee was provided.

Prudent financial management

 

 

·      Financial scenarios presented to elected members will illustrate the impact of different scenarios on rates and debt levels in the short and long term.

·      Final published documents will include assessment of council’s borrowing against its prescribed limits and of its operating budget through a prescribed Balanced Budget Benchmark.

·      Information and advice on financial prudence has been included in the staff advice for the 6 December Budget Committee.

Right debate with the community

 

·      Engagement options will be provided to the Governing Body earlier in the process and will include a range of options to ensure we’re providing fit for purpose, best practice engagement with Aucklanders.

·      The Communication and Engagement Plan will be workshopped with the Budget Committee before it is agreed in December 2023.

·      The Communications and Engagement Plan is included on the agenda for the 6 December Budget Committee. The plan includes deliberative engagement opportunities that were agreed to by the Governing Body on 26 October.

·      The recommended Communications and Engagement Plan has been developed to ensure that the consultation process will meet the requirements for the special consultative procedure.

Budget refresh for Final LTP

·      Budget refresh process will incorporate alignment of budgets with AMP and performance targets and any new investment or changes in budget request will require a full justification.

·      Prior to submission of all budgets, there will be a review and signoff by boards of CCOs and council’s Executive Leadership Team.

·      Relevant to the next stage of the process.

 

Update on risks and mitigations

22.     The following table provides a status update of the project risks that were provided to this committee in September.

 

Risk title

Description

Mitigation

Status

      Low risk

      Elevated risk

      High risk

Three waters role in the budget

Current water reform legislation removes three waters from the LTP and prevents Auckland Council from including any content relating to water services in its LTP.

The risk that a change of government sees three waters remain with councils, or transition delayed.

Align LTP content to current legislation while also closely monitoring central government decision-making.

Continue to collaborate with Watercare and Healthy Waters teams to ensure enough underlying data is collected for three waters to meet minimum audit requirements.

 

Change of government policy direction post-election

The risk that, in addition to water reform, changes in government policy direction in areas such as housing, transport and climate has significant implications for the LTP.

 

Closely monitor central government decision-making and regularly engage with central government at different levels.

Clearly state significant assumptions (including around government policy), the level of uncertainty and the potential impact of that uncertainty.

Consideration of climate risks and opportunities

Auckland Council group will need to describe how climate-related risks and opportunities serve as an input to its internal capital deployment and funding decision-making processes in its climate disclosure.

The risk that elected members do not sufficiently consider these risks and opportunities, and/or that this consideration cannot be clearly demonstrated.

Brief the governing body on the climate standards, what is expected from them under the ‘governance’ section of the standards and the risks associated with an unfavourable disclosure.

 

Identify key staff resources and expertise to support decision-makers as needed and ensure adequate information is provided to enable effective consideration of climate risks and opportunities throughout the LTP.

Uncertain economic environment

The risk that unexpected changes in population projections, economic growth, employment, inflation and interest rates could impact the context of the priorities, decisions, options and advice that support the development of the LTP.

Closely monitor economic trends and undertake sensitivity analysis. Transparently disclose significant assumptions, the level of uncertainty, and the potential impact of that uncertainty.

Lack of clear and consistent strategic direction

The risk that new or changed strategic direction late in the process could put significant pressure on timelines.

Staff to work with Mayor and councillors to ensure work is aligned to the early strategic direction as much as possible, and clearly references this direction.

Ensure that the constraints around late changes in direction are well understood by all elected members.

Delay in political decision-making

The risk that elected members do not feel ready or informed enough to make decisions (this could be due to a delay in advice being provided to elected members due to slippage with timeframes).

Appropriate resource planning to ensure key staff are available to provide the support and advice required. Key communications and guidance material provided to the group to ensure advice and information meets the needs and requests of the elected members.

Provide an extensive series of briefings and workshops to support decision-makers, supplemented by staff availability to answer emailed questions or be present and elected member drop-in sessions.

 

Key person dependencies

The risk that specific knowledge about the LTP process or systems is held by a single person and/or a small group of stakeholders, resulting in delays or problems should that person no longer be available.

Undertake an assessment of critical skills and knowledge concentration and put appropriate succession plans in place.

Comprehensive documentation drafted to capture the specialised knowledge.

 

Unclear roles and responsibilities

The risk that specific deliverables are not done or done incorrectly or late due to gaps or discrepancies in the roles and responsibilities of all the key participants.

1. Clearly define roles and responsibilities between co-sponsors, divisions, and stakeholders from each division and workstreams.

2. A critical scrutiny of all roles and responsibilities by a suitably experienced subject matter expert to identify any gaps or overlaps.

3. Mapping and documenting of roles, responsibilities, and accountabilities (RASCI) through all workstreams.

Management of Audit process

The risk that poor coordination or communication between council and Audit NZ results in slippage to key deliverables and elements of the audit process. The subsequent risk that this impacts delivery of the consultation document and final signed LTP.

1. Audit NZ relationship is clearly owned by one workstream within LTP.

2. Communication with Audit NZ is maintained and is clear throughout the project, especially in the planning stage and when there are areas of change to workstream objectives or plans, and/or the deliverables required by Audit NZ.

 

Data management

The risk that data is inadequate or of poor quality which in turn impacts the ability to analyse or understand potential impacts of decisions.

Robust review of data included in internal review processes for the financial and infrastructure workstreams. Internal risk and audit teams to work with relevant workstream leads and key staff to ensure review processes of data are adequate and, where necessary, make recommendations for improvement.

 

Scope of Audit and engagement with Audit New Zealand

23.     Audit New Zealand will provide a draft engagement letter ahead of today’s meeting, that outlines their current views on the scope and cost of the audit of the Long-term Plan 2024-2034 including consultation material – see Attachment A.

24.     Given the level of uncertainty relating to potential policy or legislative changes by the new government, the draft engagement letter might require further changes to both scope and associated fees.

25.     If changes are required, an updated version will be provided to the chair of this committee for approval under the recommended delegation. Following this, the mayor will sign the final letter after considering any recommendations from the chair.

Tauākī whakaaweawe āhuarangi

Climate impact statement

26.     Advice and training on climate risks, disclosure obligations and a climate assessment of investment options including a summary of opportunities to consider through the LTP was provided to the Budget Committee through a series of workshops. Climate continues to be highlighted as a key issue for the LTP and more broadly, for the council group and the region.

27.     This work has been led by a group of council staff involved in the climate workstream that sits within the project. This workstream has also provided review and support of other key deliverables and advice, including the drafting of the consultation material. This is the first time this project has included a stand-alone climate workstream.

28.     Consultation material will include information relating to the top climate risks for the group as well as detail on the potential climate impacts of some proposals, where necessary. Climate investment will also likely feature in the consultation material, subject to decision-making by the Budget Committee on 6 December.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

29.     Council controlled organisations (CCOs) have been key to the development of the LTP so far and the advice and information that has been provided to support decision-making. Depending on decisions made by the Budget Committee on 6 December, potential impacts across the group will be more clearly defined.

30.     It is likely that a range of investment options for different services and departments across the group will be provided for during consultation. This will include options that could impact service levels and capital investment. Once decisions on consultation items are made, staff from across the group will work to ensure we have the appropriate level of detail to support these proposals for consultation.

31.     Staff have provided briefings and updates to CCO boards and executive forums throughout the process.

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

Local impacts and local board views

32.     Local board chairs have been invited to all workshops and briefings on the Long-term Plan 2024-2034. Additionally, almost all material covered in workshops has been provided to all local board members as part of regular weekly briefings.

33.     Local boards had an opportunity to provide feedback on material provided to the Budget Committee up until 13 November through workshop sessions that were held on 22 November. Following that, local boards met to consider the draft Mayoral Proposal and formally resolved on their input and advocacy on regional issues outlined in the Mayoral Proposal. This input has been summarised and included in a report on the agenda for the Budget Committee on 6 December to support decision-making, as well as to recognise their role in this process.

34.     At the same time, local boards will also resolve on local consultation matters and once decisions are made, these will be reflected in consultation material.

Tauākī whakaaweawe Māori

Māori impact statement

35.     Early engagement with iwi leaders has been led by the Mayor through an iwi chairs forum that has met twice between September and December this year. During these sessions, feedback on the Governing Body Guidance Document and the draft Mayoral Proposal was provided directly to the Mayor for his consideration.

36.     Engagement for mana whenua and mataawaka is outlined in the Communications and Engagement plan that is on the agenda for the Budget Committee on 6 December.

37.     Māori outcomes funding is included in the Mayoral Proposal as a result of recommendations received by the Mayor from the political working group for Māori outcomes.

Ngā ritenga ā-pūtea

Financial implications

38.     Given the potential scope of the Long-term Plan 2024-2034, and uncertainty of government policy direction, engagement fees will be subject to change. Any changes to the scope of the audit engagement will be provided to the chair of this committee for approval before any final engagement letter is received.

39.     A provision for long-term plan audit fees has been included within the existing operating budget for 2023/2024.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

40.     Risks and mitigations have been outlined in the body of this report.

41.     As highlighted in the body of this report, potential changes to central government policy direction, particularly relating to water reform and transport funding, continues to create significant risk for this process. Council staff will continue to work with Audit New Zealand to ensure we are aligned with our approach to mitigate the associated risks to enable the delivery of an audited consultation material within an appropriate timeframe.

Ngā koringa ā-muri

Next steps

42.     On 6 December, the Budget Committee will consider the Mayoral Proposal and other key matters to determine the regional items for consultation, as well as the Communications and Engagement Plan.

43.     Once decisions are made, staff will then work to produce consultation material that reflects those decisions for audit early next year.

44.     Staff will provide this committee an update next year on the progress of the audit, and oversight of the consultation material ahead of the adoption of the consultation material by the Budget Committee currently scheduled for the end of February 2024.

 

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Audit engagement letter: Audit of the consultation document and long-term plan for the period commencing 1 July 2024

 

     

Ngā kaihaina

Signatories

Authors

Tamsyn Matchett - Programme Manager

Michael Burns - Manager Financial Strategy

Authorisers

Ross Tucker - General Manager, Financial Strategy and Planning

Peter Gudsell - Group Chief Financial Officer

Anna Bray - Acting Director - Governance and CCO Partnerships

 

 


Audit and Risk Committee

05 December 2023

 

Final Audit Management Report for the Long-term Plan Amendment 2023

File No.: CP2023/18008

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To summarise the matters identified by the Office of the Auditor-General during the recent audit of the 10-year Budget 2021-2031 (long-term plan) and outline how Auckland Council is addressing the matters raised.

Whakarāpopototanga matua

Executive summary

2.       On 8 June 2023 the Governing Body of Auckland Council adopted an amendment to the 10-year Budget 2021-2031 (or long-term plan). On the same day the Office of the Auditor-General issued an unmodified audit opinion on this amendment. This report confirms that the conclusions reflected in their report on the original 10-year Budget 2021-2031 remain valid.

3.       The Office of the Auditor-General has recently issued a report to the council that summarises the results of the audit, conclusions, corrected misstatements, and relevant disclosures. This management report on the audit of the amendment to our 10-year Budget 2021-2031 is provided as Attachment A.

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a)      whiwhi / receive the management report from the Office of the Auditor-General on the audit of the amendment to the 10-year Budget 2021-2031.

 

Horopaki

Context

4.       On 8 June 2023 the Governing Body of Auckland Council adopted an amendment to the 10-year Budget 2021-2031 (or long-term plan) as part of decisions for the Annual Budget 2023/2024. On the same day the Office of the Auditor-General issued an unmodified audit opinion on this amendment. This report confirms that the conclusions reflected in their report on the original 10-year Budget 2021-2031 remains valid.

5.       The report on the original 10-year Budget 2021-2031, issued on 29 June 2021, was a standard audit report that meant that the Office of the Auditor-General was satisfied that the plan met the statutory purpose and that they did not need to draw the readers’ attention to anything in particular. 

6.       The management report attached to this report includes details on corrected misstatements and overall findings of their audit.

 

Tātaritanga me ngā tohutohu

Analysis and advice

7.       A management report on the audit of the amendment of the 10-year Budget 2021-2031 has been issued and is provided in Attachment A. The matters discussed in the report, beyond the core audit findings, are summarised below.

Uncorrected misstatements and disclosure deficiencies

8.       The auditors noted that all misstatements that were identified through the audit were corrected.

Corrected misstatements

9.       The auditors noted that misstatements related to interest costs in the prospective financial statements were corrected. The misstatements were related to the difference between the interest rates used to demonstrate the projected value of the proposal to the council and the, historical, interest rates required to be used to prepare amended long-term plan statements. The exact corrections are included in Attachment A.

Corrected disclosure deficiencies

10.     The auditors noted the consultation document was updated to disclose the impacts of the amendment on levels of service.

Overall findings from the audit

11.     Auditors noted satisfaction that key assumptions applied to the amendment were appropriate and supporting information reasonable.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

12.     There are no issues raised in the management letter relating to council-controlled organisations. Accordingly, their views have not been sought.

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

Local impacts and local board views

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

Tauākī whakaaweawe Māori

Māori impact statement

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

Ngā ritenga ā-pūtea

Financial implications

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

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

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

Ngā koringa ā-muri

Next steps

17.     The council staff will continue to work with Audit New Zealand to ensure a best practice approach is taken for the audit of council’s 10-year Budget 2023-2024 in time for consultation early 2024.

 

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Final management report on the Long-term Plan Amendment

 

     

Ngā kaihaina

Signatories

Authors

Tamsyn Matchett - Programme Manager

Michael Burns - Manager Financial Strategy

Ross Tucker - General Manager, Financial Strategy and Planning

Authorisers

Peter Gudsell - Group Chief Financial Officer

Anna Bray - Acting Director - Governance and CCO Partnerships

 

 


Audit and Risk Committee

05 December 2023

 

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

That the Audit and Risk Committee

a)      whakaae / agree to 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       CONFIDENTIAL: Substantive Council-Controlled Organisations' Quarterly Risk Update - December 2023

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.

In particular, the report contains risk reporting and detailed risks confidential to the substantive council-controlled organsiations' boards or Audit and Risk Committees. The substantive council-controlled organisations have provided their risk reports for 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       CONFIDENTIAL: Legal Risk update

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)(g) - The withholding of the information is necessary to maintain legal professional privilege.

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

s7(2)(i) - The withholding of the information is necessary to enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations).

In particular, the report contains legally privileged and commercially sensitive information.

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       CONFIDENTIAL: Enterprise Risk Update December 2023

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.

In particular, the report contains detailed information on the mitigation activities of the strategic risks that could be detrimental to risk management objectives if in the public domain.

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       CONFIDENTIAL: Internal Audit Update

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)(c)(ii) - 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 damage the public interest.

In particular, the report contains information which if released would jeopardise the effective delivery of the Internal Audit work programme.

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.

 

C5       CONFIDENTIAL: Climate disclosure work programme update December 2023

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 about climate risks that could materially impact the Auckland Council Group's financial position in the future and have not yet been reported to the public.

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.

 


 

 

C6       CONFIDENTIAL: Interim report and NZX release for the six months ending 31 December 2023

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 and attachments contain information regarding the interim report and financial results of the Auckland Council Group to 31 December 2023 which cannot be made public until released to the NZX

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.

 

 

 

C7       CONFIDENTIAL: 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)(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 from the Office of the Auditor-General and Audit New Zealand contains information regarding the financial results of the Auckland Council Group and Auckland Council for 31 December 2023 which cannot be made public until released to the NZX.

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.

 



[1] The Link Alliance comprises CRLL, Vinci Construction Grands Projects S.A.S, Downers New Zealand Limited, Soletanche Bachy International (NZ) Limited, AECOM New Zealand Limited, Opus International Consultants Limited and Tonkin & Taylor Limited.

[2] The first is the activities required to complete and hand over the CRL assets as “ready for use” for KiwiRail and Auckland Transport. The second comprises activities outside of the CRL Project scope that must be completed for KiwiRail and Auckland Transport to confirm they are “ready to use the assets” and move into in-revenue service.