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

 

Date:

Time:

Meeting Room:

Venue:

 

Monday, 19 February 2024

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

 

14 February 2024

 

Contact Telephone: +64 9 890 8143

Email: Mike.Giddey@aucklandcouncil.govt.nz

Website: www.aucklandcouncil.govt.nz

 

 

 


Audit and Risk Committee

19 February 2024

 

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 2023-2024                                                                         7

9          Long-term Plan 2024-2034 (LTP): approach to risk and assurance and the preparation of the consultation material                                                                  13

10        IMSB Treaty Audit monitoring update                                                                       29

11        Storm Recovery - risk and quality assurance                                                          41

12        Auckland Emergency Management Prioritised Plan update                                  55

13        Health Safety and Wellbeing Performance Report                                                  61

14        Approval of the draft Audit New Zealand audit plan for the year ended 30 June 2024                                                                                                                                       73

15        31 December 2023 half year results announcement for the NZX and Interim Report                                                                                                                                     111

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

PUBLIC EXCLUDED

17        Te Mōtini ā-Tukanga hei Kaupare i te Marea | Procedural Motion to Exclude the Public        117

C1       CONFIDENTIAL: Substantive Council-Controlled Organisations' Quarterly Risk Update - February 2024                                                                                             117

C2       CONFIDENTIAL: Port of Auckland Risk Update - February 2024                        118

C3       CONFIDENTIAL: Insurance renewal update 2024-2025                                        118

C4       CONFIDENTIAL: Internal audit and integrity update                                             118

C5       CONFIDENTIAL: 31 December 2023 half year results announcement for the NZX and Interim Report                                                                                                            119

C6       CONFIDENTIAL: Office of the Auditor-General and Audit New Zealand briefing 119

 


1          Ngā Tamōtanga | Apologies

 

Apologies from Deputy Mayor Cr D Simpson and Mayor W Brown have been received.

 

 

 

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 Tuesday, 5 December 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

19 February 2024

 

Forward Work Programme 2023-2024

File No.: CP2024/00012

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To review and approve the remaining elements of the Audit and Risk Committee’s 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 following changes have been made to the forward work programme:

·    An update from Auckland Emergency Management will be presented at this committee meeting to report on progress of the Auckland Emergency Management Prioritisation Plan.

·    Deferred from the December 2023 meeting and as part of the Auckland International Airport Limited shares sale process, it was agreed that a report on the process and controls to manage the sale would be provided to the Audit and Risk Committee. An update will be presented at this committee meeting to provide details of the process followed.

·    The Water Reform update that was planned as an item for the February agenda will now be reported in the May 2024 meeting of this committee while clarification about future developments in this space are pending, post the general election.

·    Added three workshop items. ‘Long-term Plan 2024-2034’, ‘Cyber security’ and ‘Data management’ have been identified and will take place prior to the February, May and August meetings of this committee, respectively.

 

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a)      whakaae / approve the Audit and Risk Committee forward work programme, noting that:

i)          an update from Auckland Emergency Management will be presented at this committee meeting

ii)         an update on the Auckland International Airport Limited shares sale process will be presented at this committee meeting

iii)        the Water Reform update that was planned for this agenda will now be reported in the May 2024 meeting of this committee

iv)        three workshop items, ‘Long-term Plan 2024-2034’, ‘Cyber security’ and ‘Data management’ will take place prior to the February, May and August meetings of this committee, respectively.

 

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Forward Work Programme 2023-2024

9

      

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

19 February 2024

 

 


Komiti Tātari me te Mātai Raru Tūpono / Audit and Risk Committee
Forward Work Programme 2023-2024

This committee assists and advises the Governing Body in discharging its responsibility and ownership of governance, risk management and internal control across Auckland Council group. 

Responsibilities include reviewing the effectiveness of enterprise risk management, internal and external audit assurance, health safety and wellbeing, business continuity and resilience, integrity and investigations.  The Committee monitors compliance, risk management in significant projects and programmes of work and procurements and has oversight of risk management and assurance of CCOs, the preparation of the LTP, Annual Report and other statutory financial reports.
The full Terms of Reference is available
here

 

 

Area of work and lead

2023

2024

5 December

19 February

14 May

20 August

17 September

3 December

 

Forward work programme

GM Risk and Assurance

Work programme

Link to decision

Work programme

 

Work programme

 

Work programme

 

Work programme

Committee’s Annual performance report

Work programme

 

Assurance

GM Risk and Assurance

Internal Audit activities update

Link to decision - restated

Internal Audit activities update

Fraud and integrity update

 

Internal Audit update

·      Internal Audit activities update

·      Internal Audit strategy and audit plan – (July 2024 – June 2025)

·      Internal Audit Charter

Internal Audit activities update

Fraud and integrity update

 

 

Internal Audit activities update

 

 

Independent Māori Statutory Board - Treaty Audit

GM Risk and Assurance

 

Treaty Audit Monitoring update

 

 

Treaty Audit Monitoring update

 

 

 

 

Enterprise Risk

GM Risk and Assurance

*Director, Regulatory Services

Enterprise Risk Update

Link to decision

Link to decision – restated

* Regulatory Services – statutory clock management

Link to decision

 

Enterprise Risk Update

 

 

Enterprise Risk Update

 

CCO Risk management

GM Risk and Assurance

CCO quarterly risk report

Attendance by Watercare

Link to decision - restated

CCO quarterly risk report

Attendance by Auckland Transport

 

CCO quarterly risk report

Attendance by Eke Panuku

 

CCO quarterly risk report

Attendance by Tātaki Auckland Unlimited

 

 

CCO quarterly risk report

Attendance by Watercare

 

Ports of Auckland Limited (POAL) Risk management

Governance & Risk Manager (POAL)

 

POAL risk update

Attendance by POAL

 

 

 

POAL annual reports on risk (matters raised through annual audit process and summary of any significant findings raised by auditors)

Attendance by POAL

 

 

Key Strategic Project updates

Director Infrastructure and Environmental Services & CCO/ External Partnerships Dept

Chief of Strategy

GM Financial Strategy and Planning

City Rail Link update

Link to decision

Recovery Project update

Auckland Emergency Management update

City Rail Link update

Three Waters Reform update

 

Three Waters Reform update

Recovery Project update

 

City Rail Link update

 

Health, Safety and Wellbeing

GM Health, Safety and Wellbeing

Health, safety, and wellbeing update

Link to decision

Health, safety and wellbeing update

 

Health, safety and wellbeing update

 

Health, safety and wellbeing update

 

 

Health, safety and wellbeing update

 

Legal Risk

General Counsel

Legal risk report

Link to decision - restated

 

Legal risk report

 

 

 

Legal risk report

 

Insurance

Resilience and Insurance Manager

 

Update on insurance activities

 

Update on insurance activities

 

 

 

Interim Report

Group Financial Controller

 

Review arrangements 31 December 2023

Link to decision

31 December 2023 Interim Financial Statements & NZX Announcement Update

Proforma interim financial statements and accounting policies 31 December 2023

Link to decision

Link to decision - restated

31 December 2023 half year results announcement for the NZX and Interim Report clearance

 

Audit New Zealand Interim management report for the six months ended 31 December 2023

 

 

 

Review arrangements 31 December 2023

31 December 2024 Interim Financial Statements & NZX Announcement Update

Proforma interim financial statements and accounting policies 31 December 2024

 

 

Annual Report

Group Financial Controller

Audit New Zealand final audit management report 30 June 2023

Link to decision

Audit New Zealand Audit Engagement and Audit Proposal letters for 2023, 2024 and 2025

30 June 2024 Arrangements (Audit New Zealand audit plan)

 

NZX Announcement 30 June 2024 / Annual Report 30 June 2024 update for committee

Proforma Annual Report 30 June 2024 (financial statements and accounting policies)

Proforma Volume 4 - Climate Change Risk 30 June 2024

NZX Announcement 2023/ Annual Report 30 June 2024 update for committee

Audit New Zealand Interim audit management report 30 June 2024

Volume 4 - Climate Change Risk 30 June 2024 update for committee

 

30 June 2024 Annual Report

Volume 4 - Climate Change Risk 30 June 2024

CCO annual reports on risk (matters raised through annual audit process and summary of any significant findings raised by auditors)

Attendance by Auckland Transport, Tātaki Auckland Unlimited, Eke Panuku and Watercare

Audit New Zealand final audit management report 30 June 2024

 

 

Climate Change Reporting and Sustainable Finance

CFO Peter Gudsell

Climate disclosure work programme - progress update

Link to decision

Link to decision - restated

 

Climate disclosure work programme - progress update

 

Climate disclosure work programme - progress update

 

Auckland Council’s Sustainable Finance update

 

Climate disclosure work programme - progress update

 

 

Annual Budget 2023/2024

Long-Term Plan 2024-2034

GM Financial Strategy and Planning

Long-term Plan 2024-2034 approach to risk and assurance.

Link to decision

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

Link to decision

Update on the Audit of the Long-Term Plan 2024-2034 Consultation Document

Auckland International Airport Limited shares sale process update

Update on the Audit of the Long-Term Plan 2024-2034

 

 

Risk management approach for the Annual Budget 2024/2025

 

Annual Green Bond Report

Treasury Funding Manager

 

 

Process for Annual Green Bond Report 30 June 2024

 

Annual Green Bond Report 30 June 2024

 

 

External Audit

Office of Auditor-General (OAG)

Briefing paper provided

Link to decision - restated

Briefing paper provided

 

Briefing paper provided

 

Briefing paper provided

 

Briefing paper provided

 

Briefing paper provided

 

Workshop

EPMO update on benefits realisation.

Long-term plan – current assumptions.

Long-term Plan 2024-2034

Cyber security

Data Management

 

 

 

                                                        



Audit and Risk Committee

19 February 2024

 

Long-term Plan 2024-2034 (LTP): approach to risk and assurance and the preparation of the consultation material

File No.: CP2024/00286

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To support the Audit and Risk Committee in its role to review the effectiveness of governance over risks, design and operation of internal controls over the preparation of the consultation material for our Long-term Plan 2024-2034.

Whakarāpopototanga matua

Executive summary

2.       This report provides a status update on key controls employed and management of risks related to the development of the consultation material for the Long-term Plan 2024-2034.

3.       Under the Local Government Act 2002 (LGA), all councils are required to adopt a new long-term plan every three years, and the long-term plan must be adopted before the beginning of the first year to which it relates (i.e., for the Long-term Plan 2024-2034, before 1 July 2024). The LGA also specifies the use of the special consultative procedure in adopting the long-term plan. Under the Water Services Legislation Repeal legislation that we expect the Government to introduce to Parliament next week, we expect there to be provision for councils to adopt late (by 30 September) or to defer adoption of the LTP 2024-2034 for a year.

4.       For the purpose of consultation on the long-term plan, the council must adopt a Consultation Document and Supporting Information (LGA, sections 93A and 93G). 

5.       The Budget Committee met on 6 December 2023 to agree to regional items for consultation.  These decisions have formed the basis for the drafting of consultation material and can be found here.

6.       Current legislation specifies 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 (LGA, section 93C(4)).

7.       Current legislation also explicitly prohibits councils from including water services in their long-term plans (LGA 2002, clause 27 of Schedule 1AA).

8.       Up until December 2023, staff had been preparing an LTP on the basis that:

·    Water services would be excluded to reflect current legislation enacted by the previous government

·    Consultation material would be subject to a full audit review and opinion

·    It wasn’t practical to begin consultation any later than 28 February 2024 and therefore consultation material would need to be adopted on 20 February 2024

·    The long-term plan would need to be adopted by 30 June 2024.

9.       However, in late December 2023, advice was received from the Minister for Local Government outlining amendments to water services legislation that would include provisions for councils to include water services in the preparation of their long-term plans for 2024-2034 and options to help councils achieve this, including an option for having unaudited consultation material.

10.     Based on a staff assessment of the options and their appropriateness in the Auckland context, and in consultation with the Mayoral Office and the Chair of the Audit and Risk Committee, project sponsors agreed to proceed with the option of having unaudited consultation material. A memo that outlines this change to legislation as it relates to the preparation of our consultation material is included as Attachment A to this report.

11.     Engagement with Audit New Zealand has proceeded throughout this period with all iterations of the draft consultation material being provided to them for their informal review and feedback. Similarly, staff continue to meet with Audit New Zealand to provide further information to support their control checks and review of underlying assumptions to support the final audit of the Long-term Plan 2024-2034, prior to its adoption in June 2024.

12.     Audit New Zealand will provide an update to the committee on their engagement and input so far as part of today’s meeting.

13.     Since the beginning of February 2024, several workshops with the Budget Committee have taken place to discuss the change in audit scope, legal input and review of legislative compliance for the consultation material, the Auckland Future Fund proposal and the external advice received on the proposal, an update from Watercare, and the draft consultation material.

14.     On 8 February 2024, the government announced plans to repeal Regional Fuel Tax legislation to remove the tax, effective from 1 July 2024. In response, Finance have worked with Auckland Transport to include appropriate disclosures on the potential implications of this decision in the consultation material.

15.     An update on the controls and status of top risks for the Long-term Plan 2024-2034, with particular focus on the preparation of the consultation material, is included in the body of this report.

 

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a)         whiwhi / receive the report on key controls and risks relating to the preparation of the consultation material for the Long-term Plan 2024-2034

b)         whakaae / agree to advise the Governing Body that effective controls and risk management processes have been followed during the preparation of consultation material for the Long-term Plan 2024-2034.

 

Horopaki

Context

16.     On 5 December 2023, staff provided the Audit and Risk Committee an update on the controls and risk management approach for the Long-term Plan 2024-2034. This included detail on the potential changes to water services legislation and the impact this could have on the scope of the consultation for the Long-term Plan 2024-2034.

17.     Subsequently, advice was received from the Minister for Local Government outlining amendments to water services legislation that would include provisions for councils to include water services in the preparation of their long-term plans for 2024-2034 and options to help councils achieve this, including an option for having unaudited consultation material.


 

 

 

18.     Based on a staff assessment of the options and their appropriateness in the Auckland context, and in consultation with the Mayoral Office and the Chair of the Audit and Risk Committee, project sponsors agreed to proceed with the option of having unaudited consultation material. A memo that outlines this change to legislation as it relates to the preparation of our consultation material is included as Attachment A to this report.

19.     On 6 December 2023, the Budget Committee agreed to regional items for consultation. These decisions have formed the basis for the drafting of consultation material and can be found here.

20.     At the time of writing this report, staff are finalising consultation material in line with those decisions. The final material will be circulated to the Audit and Risk Committee ahead of the meeting.

 

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 and the preparation of the consultation material:

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.

·    Project sponsors provide sign-off of consultation material ahead of distribution to elected members.

·    The Project Control Group sponsors signed off the recommended approach by staff to proceed with unaudited consultation material to help de-risk the process, particularly in relation to the tight timeframes associated with decision-making and consultation and the need to seek community views on water investment and its financial implications and include this information in the final LTP.

·    Project sponsors are reviewing all iterations of the draft material and will provide sign-off of final documentation ahead of adoption.

Asset management plans (AMPS)

 

 

·    External auditors will review underlying asset management data to support their audit of the final LTP.

·    Internal audit are undertaking a review of central group processes and documentation related to asset management (with water assets excluded). 

 

·    Department managers and council controlled organisations (CCOs) sign off that the planned services and AMPs are consistent with available funding and strategies.

 

·      Staff are working with Audit New Zealand to provide them with further information to support their control checks and review of asset management data ahead of the final audit of the Long-term Plan 2024-2034.

·    The draft infrastructure strategy has been reviewed by legal and other key staff and is included in consultation material.

·    The findings of the internal audit review will be used to support ongoing improvement of asset management across the council group.

Infrastructure investment

 

 

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

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

·    Scenarios and trade-offs are an integral part of the consultation material to help illustrate to Aucklanders the implications relating to different levels of investment.

·    Infrastructure investment challenges are detailed extensively in the draft Infrastructure Strategy included in the consultation material.

 

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.

·    Proposed performance measures were compared directly with the services that Auckland Council provides. They have been reviewed extensively to ensure they provide a better alignment with council's direction, have reasoning for each provided target and tested to make sure that results will be measurable and accurate.

·    Each measure and their target have been reviewed, based on the core funding proposal, by their own department, Executive Officers, and the Executive Leadership Team (ELT). Noting that some targets are still being confirmed by ELT and CCO boards. These measures and targets are still subject to further review by Audit New Zealand.

 

 

 

 

 

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.

·    Staff from the Chief Planning Office have provided input and review of the consultation material to ensure alignment and consistency between strategy and finance.

·    Robust review processes were put in place to ensure executives from the across the group were able to review and sign-off on relevant sections of the material.

Assumptions

·    Ensure assumptions are documented in the consultation material 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 of budgets by business financial managers to confirm consistent application of assumptions.

·    Staff are providing further information to support Audit NZ and their control checks relating to the significant assumptions that underpin the consultation material.

·    Internal sign-off of financial statements and the significant forecasting assumptions.

·    External advice provided to support key assumptions including those that relate to the Auckland Future Fund proposal.

 

Accounting standards

·    Document review against accounting standard FRS-42 for prospective financial statements.

·    Peer review of financials by the Financial Control team.

·    At the time of writing this report, staff were preparing the consultation material and financials to be reviewed by the Financial Control team. A verbal update will be provided to the committee at the meeting. 

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.

·    Financial modelling has been provided to Audit New Zealand. Key staff have also met with auditors to walk them through the model and to respond to questions.

·    Internal consistency checking by finance staff throughout the process.

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 memo advising on legal compliance will be provided by our General Counsel to the chair of the Audit and Risk Committee ahead of this meeting.

·    An external legal review is also being undertaken to provide an additional layer of assurance.

 

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.

 

·    The draft financial strategy included in consultation material includes detail on our financial prudence measures.

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 Budget Committee agreed the Communications and Engagement Plan on 6 December 2023. The plan outlines how the consultation process will meet the special consultative procedure required for this process.

·    Audit New Zealand will continue to provide feedback and review of the material as it relates to the topics and key issues we have identified for consultation.

·    Legal review and input to ensure the topics and key issues identified in the consultation material is reflective of the decisions made by the Budget Committee in December.

 

 

 

 

 

·    Cognitive testing using a draft feedback form and questions for consultation took place in January with both members of the public and members of our community partners and demographic advisory panels to inform development of the consultation material.

·    Auckland University has also provided academic review of the feedback form.

Budget refresh for Final LTP

 

 

·    Budget refresh process will ensure 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 final budgets, there will be a review and signoff by boards of CCOs and council’s Executive Leadership Team.

·    Budgets and financial information to support the preparation of the consultation material have received sign-off by boards of CCOs and council’s Executive Leadership Team.

·    The budget refresh process has begun to support the final Long-term Plan 2024-2034 and will receive sign-off by boards of CCOs and council’s Executive Leadership Team.

 

Update on risks and controls

22.     The following table provides a status update of some of the top project risks as they relate to the preparation of the consultation material.

Risk title

Description

Controls existing at present for risk mitigation

Status

 

Low risk

   Medium risk

  

 High risk

 

Critical risk

 

Water services role in the LTP

Current legislation prohibits councils from including water services as part of their long-term plan. However,

central government has indicated that legislative reform will take place in February 2024, requiring

 water services and related investment to be included in long-term plans.

Pre-engagement with Watercare has assisted in our ability to respond to these changes. Document review timelines have been adjusted where possible to enable the draft Watercare financials and their capital programme to be included in consultation materials after receiving sign-off from their board.

Delay in legislative change to repeal water reform (and provide for unaudited consultation material)

As signalled by the government, water reform will be repealed and that repeal legislation will include provisions for a local government to proceed with unaudited LTP consultation material to enable water services and related investment to be included. If this legislation change is delayed it creates a risk that council’s consultation material isn't legally compliant at the time of adoption.

The government has indicated that it intends to introduce repeal legislation under urgency in the week of 13 February 2024.  If that happens, the legislation is likely to be enacted that week or the week of 19 February (i.e. either before, or shortly after, the council meets to adopt the consultation material on 20 February). Further, staff have been engaging with the Department of Internal Affairs (DIA) around the draft repeal legislation and expect that the legislation will include provisions that mitigate any risk associated with the council adopting the consultation material before the repeal legislation is enacted.

 

Auckland Future Fund Proposal

A key proposal included for consultation is the Auckland Future Fund which includes proposed changes to the council’s shareholdings in Port of Auckland Limited and Auckland International Airport Limited. This is a high-value and complex proposal which carries a high degree of legal compliance risk and is of high political and public interest.

External advice on the proposal has been sought to inform consultation material. External legal review of the consultation material relating to the proposal has also taken place to provide another layer of assurance.

Staff are also continuing to work with Audit NZ to incorporate their feedback into the consultation materials for this proposal.

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.

 

We are closely monitoring central government decision-making and regularly engaging with central government at different levels.

The consultation materials clearly state our 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

 

A section on our approach to climate and climate risk has been included in consultation material. Preparation has begun to support final decision-making with appropriate climate assessment of the various proposals.

The Governing Body has received training on the climate standards, what is expected from them under the ‘governance’ section of the standards and the risks associated with an unfavourable disclosure.

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.

We are continuing to closely monitor economic trends and undertake sensitivity analysis and ensure that the consultation materials adequately address the potential impact of that uncertainty.

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).

We are providing as much information as possible to elected members in workshops and briefings ahead of adoption meeting. Opportunities have been provided for elected members to provide feedback on the consultation material. Contingency plans have been provided to the Project Control Group including assessment of implications and cost related to any delay in the timeline or consultation.

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.

We are undertaking an assessment of critical skills and knowledge concentration and putting appropriate succession and resource cover plans in place.

We are relying on a wider pool of resource from across the group as opposed to a smaller set of staff.

 

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. As a result of the change in audit scope, there is a greater need to manage the audit process effectively to ensure there is adequate checks and assurances provided to support the audit of the final LTP.

Audit New Zealand relationship is clearly owned by one workstream within the LTP project.

Close communication with Audit NZ is being maintained (despite the change in audit scope) and planning continues to progress to support the audit of the final LTP.

 

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.

We are undertaking robust reviews of data as part of the internal review processes for the financial and infrastructure workstreams. Our internal risk and audit teams are working with relevant workstream leads and key staff to ensure review processes of data are adequate and, where necessary, make recommendations for improvement.

 

 

Tauākī whakaaweawe āhuarangi

Climate impact statement

23.     Consultation material includes information relating to the top climate risks for the group as well as detail on climate-related investment and our general approach for this long-term plan.

24.     Further work to assess climate impacts of the proposals is underway and will be provided to the Budget Committee to support final decision-making.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

25.     Council controlled organisations (CCOs) have been key to the development of the consultation material, providing input on key proposals, financials, capital programmes and other financial settings.

26.     CCO boards have signed-off on their relative budgets that are included in the consultation material.

27.     The project team continue to work with Auckland Transport in particular to align the process for the Long-term Plan 2024-2034 and the Regional Land Transport Plan where possible.

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

Local impacts and local board views

28.     In December, local boards agreed local consultation matters which are reflected in consultation material.

29.     Local boards will be supported to run local engagement events to support consultation with their local communities in March.

30.     Workshops are open to local board chairs and briefings for all local board members will continue as we move towards final decision-making. 

Tauākī whakaaweawe Māori

Māori impact statement

31.     Pre-engagement hui with mana whenua and mataawaka have been scheduled to support their preparation of submissions as part of consultation. Separate Have Your Say events will be held in the Town Hall for Māori organisations to provide their feedback on the proposals directly to the Budget Committee in March.

32.     Detail on Māori outcomes funding is included in the material as well as a full section on Kia Ora Tāmaki Makaurau, council’s Māori outcomes performance measurement framework that guides the council group on supporting strong Māori communities.

Ngā ritenga ā-pūtea

Financial implications

33.     Given the change in scope of audit, an engagement letter has yet to be provided that would include audit fees. When a draft engagement letter is prepared this will be provided to the Chair of the Audit and Risk Committee. 

34.     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

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

Ngā koringa ā-muri

Next steps

36.     On 20 February, the Budget Committee will be asked to adopt the consultation document and supporting information for consultation with Aucklanders.

37.     Once decisions are made, consultation material will be printed and distributed across council venues to support the consultation that will run from 28 February to 28 March.

38.     Staff will continue to work alongside Audit New Zealand to support their control checks and reviews for this part of the process. Further updates on this engagement will be provided to members of the Audit and Risk Committee in a memo, ahead of the next committee meeting on 14 May.

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Memo - changes on water legislation and LTP provisions

24

     

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

19 February 2024

 

IMSB Treaty Audit monitoring update

File No.: CP2024/00015

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       This report covers the period from August 2023 to February 2024 and provides an update on the:

i)          recommendations contained in the Te Tiriti o Waitangi Audits (Treaty Audits) of Auckland Council which are commissioned by the Independent Māori Statutory Board every three years

ii)         Treaty Audit Response Programme 2021-2024 (Attachment A) which has been developed by Ngā Mātārae in response to the recommendations contained in He Waka Kōtuia / Te Tiriti o Waitangi 2021 and reported to the Governing Body and Independent Māori Statutory Board’s joint forum

iii)        progress with the upcoming 2024 Treaty Audit.

Whakarāpopototanga matua

Executive summary

2.       One recommendation from the 2021 Treaty Audit report has been closed since the last report to this committee in August 2023. Another has been delayed due to the closure criteria being amended in response to a change in circumstances. Three other recommendations, as detailed in Attachment A, are ready for closure awaiting approval at the next Enablement Board meeting.

3.       There are a total of 12 open treaty audit recommendations:

·    four relating to the pre-2021 treaty audits and remain overdue

·    eight relating to the 2021 Treaty Audit report with a status of “Overdue / Delayed”.

4.       The Treaty Audit Response Programme 2021-2024 (Attachment A) will continue to be used by Ngā Mātārae as the basis to monitor progress in implementing the remaining and new recommendations from all treaty audits.

5.       Subject to final sign-off by all parties, the 2024 Treaty Audit is planned for March 2024 to June 2024. 

 

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a)      whiwhi / receive the update on the monitoring and progress of the Treaty Audit Response Programme 2021-2024

b)      tuhi ā-taipitopito / note that the Risk and Assurance department will continue to report on a six-monthly basis on progress against the Treaty Audit Response Programme 2021-2024 (Attachment A) to this committee.

 

Horopaki

Context

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

7.       The third treaty audit was completed and received by the Finance and Performance Committee in July 2018, and by the Audit and Risk Committee in September 2018. It identified a total of 80 recommendations, of which 76 have now been closed.

8.       He Waka Kōtuia – Te Tiriti o Waitangi Audit 2021 was the fourth treaty audit to be undertaken by the Independent Māori Statutory Board.

9.       The Enablement Board provides oversight of the Treaty Audit Response Programme, including monitoring and guidance to action owners and their executives, and agrees closure of recommendations. The Enablement Board has representatives from the Risk and Assurance department, Ngā Mātārae and the Independent Māori Statutory Board Secretariat.

10.     The Treaty Audit Response Programme 2021-2024 (Attachment A) is the basis for the Risk and Assurance department’s monitoring and reporting to this committee.

11.     The next Te Tiriti o Waitangi Audit is due 2024 and is in the final stage of sign-off by the Independent Māori Statutory Board and it’s contracted external service provider.   

Tātaritanga me ngā tohutohu

Analysis and advice

12.     Fourteen (14) recommendations were identified in the 2021 treaty audit, building on previous audit findings.

13.     The current status of treaty audit recommendations is as follows. Refer to Attachment A for further details: 

Original (pre-2021) recommendations needing action

80

Closed prior August 2023

(76)

Closed August 2023 – January 2024

--

Open as at January 2024 (overdue)

  4*

 

 

Fourth treaty audit (2021) recommendations

14

Closed prior to August 2023

(5)

Closed August 2023 to January 2024

(1)

Open as at January 2024

8

Overdue as at January 2024

8*

Indications from Ngā Mātārae are that one of the pre-2021 recommendations and two of the 2021 recommendations are ready for closure (See Attachment A) and will be presented for closure at the next Enablement Board meeting. 

 

 

 

14.     The Independent Māori Statutory Board informed us that Te Tiriti o Waitangi Audit 2024 aims to examine Auckland Council’s understanding and response to selected principles of Te Tiriti o Waitangi. Subject to any unforeseen circumstances, the audit work will be performed during March 2024 to June 2024 and its findings presented to the Governing Body and Independent Māori Statutory Board’s joint forum shortly afterwards.

Tauākī whakaaweawe āhuarangi

Climate impact statement

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

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

16.     The Treaty Audit Response Programme work enables the Auckland Council group to strengthen responsiveness to Māori through targeted actions and improvements described in Auckland Council’s Māori Outcomes Framework. The Māori Outcomes Framework is intended to provide clarity and guidance to the Auckland Council group.

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

Local impacts and local board views

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

Tauākī whakaaweawe Māori

Māori impact statement

18.     The closure of treaty audit findings through the Treaty Audit Response Programme will have a positive impact on Māori as it leads to stronger responsiveness to Māori through targeted actions and improvements described in the Māori Outcomes Framework. For example: Recommendation 1.1 and 2.1 (See Attachment A) will improve Kia ora te hononga – Effective Māori participation.

Ngā ritenga ā-pūtea

Financial implications

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

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

20.     Key risks to achieving completion of the Treaty Audit Response Programme are:

·    Enablement Board meetings not taking place at the cadence required from the terms of reference

·    some action owners as per Attachment A continue experiencing resource constraints.

21.     Key mitigations of these risks include:

·    intended review of the Enablement Board operation to assess whether it is operating in the optimum way

·    introducing an escalation process to resolve challenges in progressing closure

·    agreeing clear roles and responsibilities for action owners and action sponsors, and the Enablement Board secretariat regularly following up on progress feedback from them

·    support and guidance by Ngā Mātārae

·    oversight and support by the Enablement Board six-monthly reporting on progress to this committee.

Ngā koringa ā-muri

Next steps

22.     The Risk and Assurance department will continue to attend Enablement Board meetings to encourage progress towards implementation of the recommendations in the Treaty Audit Response Programme 2021 – 2024 and to monitor progress.

23.     Three recommendations are ready for closure and will be presented for closure at the next Enablement Board meeting. Ngā Mātārae will continue to progress the remaining open recommendations.

24.     The Independent Māori Statutory Board and Ngā Mātārae will continue supporting Te Tiriti o Waitangi Audit 2024.

 

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Treaty Audit Response Work Programme 2021 - 2024

33

     

Ngā kaihaina

Signatories

Authors

Sathya Ashok - Head of Risk and Audit

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

19 February 2024

 









Audit and Risk Committee

19 February 2024

 

Storm Recovery - risk and quality assurance

File No.: CP2024/00358

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To provide an overview of the Recovery Office activities to the Audit and Risk Committee, including the office’s processes to identify and manage risk.

Whakarāpopototanga matua

Executive summary

2.       Recovery from the severe weather events of early 2023 is a significant project for Auckland Council. As such, it is within the scope of the Audit and Risk Committee to review the project’s appropriate management of risk. This report presents an overview of the Recovery Office, key activities, and the office’s risk management systems.

3.       The Recovery Office was established in March 2023 to coordinate recovery efforts, including funding and resources where these are within the council’s influence. Recovery is a fast-moving and wide-ranging process, engaging with thousands of Aucklanders with different levels of urgency and need. This report outlines significant activities from the past year.

4.       The Recovery Office has risk management processes in place to guide the range of activities underway, aligning with best practice and reporting standards. Risk and quality assurance was made a key portfolio in the office structure in September 2023. The approach now includes a risk and quality assurance panel with representation from each team within the Recovery Office, and a dedicated six-weekly risk and issues meeting of the Recovery Leadership Team.

5.       There are currently 83 open risks on the recovery risk register. Most risks are currently categorised as medium to high because, although their likelihood is low, their impact on the recovery programme and on Aucklanders would be high. We expect that 20 of these risks will be able to be closed or consolidated at the Recovery Leadership Team risk meeting in February.

6.       The risks and associated mitigations of highest priority at present are:

·   Sufficient funding for residential property buy-outs and repairs

·   Impacts of timeframes for implementation of community-scale risk mitigation projects

·   Meeting commitments for property categorisation

·   Management of data for reporting metrics

·   Delivery of the customer relationship management project

·   Further severe weather events

7.       The Recovery Office will cease operations at the end of 2024 and remaining recovery activity will transition into regular council operations. Some risks may remain in place after the closure of the office. These will be transferred to council teams’ risk management processes, as part of the transition process.

 

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a)      tuhi ā-taipitopito / note the Recovery Office update.

 

Horopaki

Context

Severe weather events demanded a significant response

8.       The Auckland Anniversary Weekend floods and Cyclone Gabrielle in January and February 2023 have had a devastating and long-lasting impact on many communities and thousands of individuals across Tāmaki Makaurau.

9.       The extreme rainfall, flooding, landslides, wind damage and storm surges have brought significant hardship, suffering and challenges for individuals and communities. Tragically, six people lost their lives. Over 4,500 households needed assistance with almost 600 provided with emergency accommodation. Around 3,000 homes have had restricted or prohibited access.

10.     Essential lifeline infrastructure and facilities were impacted and needed urgent repairs. This includes roads, bridges, stormwater systems and community facilities. There was also extensive damage to commercial buildings, inventory, productive lands, regional and local parks and recreational areas.

11.     During the Auckland Anniversary Weekend floods, a local state of emergency was declared for the Auckland region. This was superseded by the declaration of a national state of emergency after the widespread impacts of Cyclone Gabrielle.

12.     When the state of emergency expired, a transition period came into force for the Auckland region. The purpose of a transition period is to aid recovery by providing powers to manage, co-ordinate or direct recovery activities. The local transition period for the Auckland region has been extended a number of times, as a way of managing risks associated with emergency response and recovery.

Auckland’s Recovery Office was established to coordinate recovery efforts

13.     Recovery from the severe weather events of early 2023 relies on a number of parties, including mana whenua, communities, non-government organisations, and government agencies who are all contributing their knowledge, time, resources and services.

14.     Auckland Council is responsible for the overall coordination of recovery efforts, including funding and resources where these are within the council’s influence. This work is carried out by the Recovery Office, established in March 2023 and funded specifically for this purpose. The Recovery Office has a finite life: at the end of 2024, the office will cease operating and transition any outstanding matters to the appropriate council programme.

Recovery is wide-ranging and far-reaching

15.     Recovery efforts are described in the Tāmaki Makaurau Recovery Plan, published January 2024. They are organised into four whenu (strands):

·   Community and social recovery

·   Māori partnership and participation

·   Natural and built environment

·   Economic recovery

16.     The whenu are supported by an extensive communications, customer engagement and data management infrastructure, necessary to engage with the thousands of affected Aucklanders.

 


 

 

17.     The Recovery Office is staffed by a mixture of Auckland Council staff and contingent workers. Where possible, key roles are held by Auckland Council staff, to support integration with council operations and a smooth transition back into regular business at the end of 2024. Contingent workers have enabled a rapid scaling up in response to business demands, for example in the technical assessment of risk to properties, and in communications with affected communities. Some of the community and social recovery staff are funded by MSD and are based in local NGOs and iwi. This makes the most of existing community connections and ensures a continuity beyond the life of the Recovery Office.

18.     Achievements in the first year of operations the Recovery Office include:

·   Community and social recovery:

o $8.4 million social and wellbeing support funding raised from third parties, providing for practical needs (e.g., furniture and vouchers), wellbeing support and community mobilisation.

o Navigator service stood up to provide one-on-one support over 800 households with the resources and information they need to make progress with their recovery.

o Support for community-led recovery initiatives, including provision of grants.

o Agreement from the Governing Body to remit rates for uninhabitable residential properties arising from the severe weather events, to a value of over $3.05 million, with an average of $3,693 per property.

·   Māori partnership and participation

o Active engagement with mana whenua, with a series of hui contributing to development of the Tāmaki Makaurau Recovery Plan. Additional funding and effort has been allocated to better support Recovery Office engagement with mana whenua, however the level of engagement to date has been relatively low. Recognising issues of consultation fatigue, competing priorities, capacity, and the need for meaningful and purposeful engagement, Recovery Office staff are in discussions with mana whenua on how best to proceed. For example, developing roles for mana whenua in the practical implementation of recovery efforts.

·   Natural and built environment:

o More than 7000 placards issued at properties following rapid building assessments, with around 3000 red and yellow placards. Ongoing work to ‘de-placard’ buildings as they are made safe: 157 red and 935 yellow placards remain in place in January 2024.

o 2400 properties signed up to be assessed for future risk to life from weather events – this figure is growing as more opt into the assessment process. Of these, more than 1500 desktop assessments and 1100 onsite assessments have been completed.

o Co-funding agreement with the Crown to secure $1.1 billion from the Crown, matched with $900 million from Auckland Council to fund transport repairs, buy-out of residential properties where there is intolerable risk to life, and resilience projects.

o Design of the residential property categorisation approach and agreement of policies to enable the Category 3 Voluntary Buy-out Support Scheme and the Category 2P Grants Scheme. Processes established to enable:

-    technical assessment and categorisation of properties

-    voluntary purchase of Category 3 properties (managed by Eke Panuku)

-    the relocation, deconstruction or demolition of Category 3 dwellings

-    a grant scheme to support Category 2P homeowners to make property-level repairs.

o Policy to be finalised in 2024 includes the approach to Category 2C (community level mitigation solutions), and policy for the future use of severely affected land.

o 3446 rebuild/repair and resilience projects identified across Auckland Council roading and wastewater infrastructure, parks and facilities. 75% of transport projects and 64% of parks and community facility repair projects have now been completed. More than 200 water and wastewater issues occurred. 71 water and wastewater projects are in the pipeline with permanent solutions in planning or needing funding business cases.

o Public requests for stormwater service and maintenance nearly doubled in 2023, compared to the previous annual average. 87% of those requests have been resolved and new measures are in place including real-time monitoring in key hotspots and increased asset clearing.

·   Economic development

o Government-funded business recovery package delivered by business associations and networks for both short-term support and longer-term planning. This included business continuity and resilience planning, business support grants, mental health and wellbeing programmes, and a flood relief business helpline.

o Ongoing provision of enabling processes such as provision of consenting services to enable emergency works and longer-term recovery projects.

Governance and management systems are in place

19.     The Governing Body oversees the Recovery Office’s work. It receives monthly progress updates and makes decisions as required, with a Storm Recovery Political Advisory Group constituted to provide guidance to staff for the duration of the recovery effort, and to make recommendations to the Governing Body. Internally, a Senior Executive Group provides guidance and advice on significant decisions. This group is supported by the Recovery Leadership Team and several working groups, as described in the governance structure included at Attachment A.

20.     Crown Infrastructure Partners is administering and overseeing the implementation of the Crown Funding Agreement. Arrangements include a governance group with senior representatives from each of the Crown, Crown Infrastructure Partners and the council meeting quarterly to review progress.

21.     The Recovery Office maintains regular engagement with key central government agencies and forums, and has extensive relationships in place with local community groups and supporting agencies.

 

Tātaritanga me ngā tohutohu

Analysis and advice

Recovery Office approach to risk and quality assurance

22.     In June 2023 the Recovery Office sought support from the risk team within Auckland Council to develop a risk matrix that would be fit for purpose for the recovery effort. When the office structure was finalised in September 2023, risk and quality assurance was made a key portfolio, and a portfolio responsible owner was assigned.

23.     Work has since been undertaken to update the Recovery Office’s register to ensure that it is aligned with best practice and reporting standards. This includes the Auditor General Guidelines, Local Government Act 2002, Auckland Council policies from the Risk and Audit department, and findings from the Royal Commission into Auckland’s Governance (2009).


 

24.     The Recovery Office follows best practice as set out by the Auditor General and Auckland Council policies, as documented in figure one.

 

Figure One. Recovery Office risk assessment process

 

25.     The Auckland Council risk matrix approach is being discussed with the council risk team to ensure that it meets the needs of the Tāmaki Makaurau Recovery Office. The fast-paced demands and short-term nature of recovery mean that the assessment of likelihood and impact need to be adjusted to ensure the risk impact is appropriately assessed.

 

Processes are in place to assess and respond to risks

26.     The approach to risk and issues management was updated in late November 2023. The new approach has now been approved and begins in February 2024. This has included a review of all risks by the Recovery Leadership Team (RLT). In summary the approach is:

·   A risk and quality assurance panel, including a representative for each team within the Recovery Office. This ensures potential risks and issues are raised at various levels and escalated to the Recovery Lead Team on a weekly basis. This allows for early intervention and mitigation of risks.

·   A dedicated risk and issues meeting, held by the RLT every 6 weeks to assess risk levels and control effectiveness.

27.     Risk ratings and control assessment ratings are being tested for application in the Recovery Office and are included as Attachment B.

 

Identified Recovery Office risks

28.     There are currently 83 open risks on the recovery risk register, which have been categorised into types and key performance areas for monitoring purposes (see figure two). Most risks are currently categorised as medium to high because, although their likelihood is low, their impact on the recovery programme and on Aucklanders would be high.

29.     We expect that 20 of these risks will be able to be closed or consolidated at the next Recovery Leadership Team risk meeting in February. The necessary work has been undertaken to mitigate these risks, with some final documentation required.

 

 

 

Figure Two. Recovery Office Risks by Type

30.     To ensure the Recovery Office meets best practice standards, risks and issues are closed rather than deleted. If a risk is closed, it will be documented with its final value and an update of why it was closed at that value. This approach ensures that valuable information is retained and can be referred to in the future.

31.     Some risks may remain in place after the closure of the Recovery Office at the end of 2024. These will be transferred to council teams’ risk management processes, as part of the transition of work programmes into the council’s ‘business as usual’.

 

Current priority risks

32.     Of the identified risks, six are of particular priority for the Recovery Office. These are described in Table One.

Table One. Priority Risks for the Recovery Office

Risk

Description

Identified mitigations

1.   Sufficient funding for residential property buy-outs (Category 3) and repairs (Category 2)

Assumptions had to be used to develop the co-funding agreement with the Crown, at a time where information was limited. There is a risk that the number of Category 3 and Category 2 properties is higher than expected over time, which would mean further negotiation is needed for additional funding. While this is provided for in the agreement, the government and environment has changed which creates risk.

Modelling is in place to track actual progress and updated assumptions against the current funding agreement envelope. The Recovery Leadership Team have monthly commercial forecasting and expenditure meetings with finance to track costs and forecasts, supported by a dedicated Recovery finance business partner. There is a good faith provision in the co-funding agreement with government to re-enter discussions if it proves the funding for the Voluntary Buy-out Support Scheme is insufficient.

2.   Impact of timeframes for implementation of community-scale risk mitigation projects

It will take a minimum of 5 years to deliver a Category 2C (community-scale) intervention.  Over this period a homeowner is left in a situation where there is intolerable risk to life, and likely financial, mental and physical stress.  As a result, there are risks for homeowners, communities and risks to council reputation.

Proposed policy to address this risk will be presented to the Governing Body on 29 February 2024.

3.   Meeting commitments for property categorisation

Public commitments have been made for completion of categorisation decisions to homeowners across Auckland for geotechnical (March) and flood impacted (June) properties.  There is a risk that these commitments are not met.

Policy decisions for 2C planned for consideration in February will support faster categorisation decisions for many flood impacted properties.  In addition, process changes are underway for geotech and flooding to improve the speed of assessments and categorisation decisions. 

4.   Management of data for reporting metrics

There is no single data repository for recovery data and it is unlikely this will be possible in the short to medium term (if ever).  However, reporting capability is urgently required to communicate progress and forecast timelines.  The lack of comprehensive reporting capability is a key risk.

Efforts to integrate data and reporting are underway. CRM reporting is currently being tested. A powerBI dashboard for reporting data that sits outside of CRM is in development.  In the interim, regular reporting on categorisation and buyout actuals and forecasts has been developed to meet CIP requirements.

5.   Delivery of the customer relationship management project

The scope and cost of CRM project has increased significantly compared to initial expectations. The Recovery Office needs to ensure that CRM deliverables meet recovery requirements and consider longer term transition / council needs, and presents value for money. Key risk to be managed is over-spend and under-delivery. 

Recovery Leadership Team is closely monitoring the implementation of the CRM programme, coordinating with wider Auckland Council leadership team. A dedicated programme manager has been appointed – key accountabilities include locking down financials and completing a business case to enable business decisions on recovery activities that are not currently included in CRM.

6.   Further severe weather events

Another severe weather event could occur before recovery efforts are complete.

 

Storm Response funding is being used to increase proactive maintenance and improve the council’s ability to respond quickly to events. Recovery continues to focus on the most vulnerable communities (category 2 and 3) and developing community interventions to reduce risk.

 

Tauākī whakaaweawe āhuarangi

Climate impact statement

33.     This report is about the Recovery Office’s risk management processes. 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, for example in the technical assessments of future flooding and land instability risk, and in the remediation projects for roads and community facilities. These are considered well-controlled by those delivering the projects.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

34.     The Recovery Office works across the council group, with guidance from the Storm Recovery Senior Executive Group. Elements of the recovery programme sit across the council group and are reported into the Recovery Office. A transition plan will be presented to the Governing Body in June 2024, taking a cross-council approach to ensure the transition of ongoing recovery activities at the end of 2024 is effective.

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

Local impacts and local board views

35.     Local Board views were not required for this report. Local boards have been engaged with in region-wide consultation processes, and on an as-needs basis for areas that were more significantly impacted by the severe weather events.

Tauākī whakaaweawe Māori

Māori impact statement

36.     This report does not benefit or have any impact on Māori. Mana whenua and mataawaka living in Auckland were impacted by the January floods and Cyclone Gabrielle as individuals and whānau and through impacts on marae and sites of cultural significance. Many marae acted as community hubs providing support to those impacted by the weather event.

37.     Māori partnership and participation is one of the four whenu (strands) of the Tāmaki Makaurau Recovery Plan, which includes a number of actions to support this objective. Mana whenua are also well-placed and have an expectation to play a key role and/or participate in local recovery planning and make decisions on things that are important to them in their own rohe.

38.     Delivery of work programmes such as Making Space for Water create opportunities for mana whenua to exercise their kaitiakitanga, drawing on mātauranga Māori to deliver outcomes for the natural and built environments, consistent with tikanga.

39.     The recovery also provides procurement opportunities for Māori businesses, including in relation to sustainable deconstruction of Category 3 properties. Auckland Council's deconstruction supplier panel includes objectives to work with Māori businesses.

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.     Risks and mitigations are the focus of this report, discussed in the Analysis and Advice section above.

 

Ngā koringa ā-muri

Next steps

42.     The new approach to risk management will be embedded over the next few months and the RLT will monitor the effectiveness of the approach.

43.     Key risks will be escalated to the Senior Executive Group, particularly if they relate to cross-council matters or the ensuring an effective transition of recovery efforts.

44.     Key risks will continue to be reported monthly to the Governing Body.

 

 

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Recovery Programme Structure

51

b

Recovery Office Risk and Control Assessment Ratings

53

     

Ngā kaihaina

Signatories

Authors

Mace Ward - Deputy Group Recovery Manager

Tanya Stocks - Recovery Office Strategic Support

Authorisers

Mat Tucker - Group Recovery Manager

Anna Bray - Acting Director - Governance and CCO Partnerships

 

 


Audit and Risk Committee

19 February 2024

 



Audit and Risk Committee

19 February 2024

 


Audit and Risk Committee

19 February 2024

 

Auckland Emergency Management Prioritised Plan update

File No.: CP2024/00194

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To update the Audit and Risk Committee on the Auckland Emergency Management Prioritised Plan.

Whakarāpopototanga matua

Executive summary

2.       Over a two-day period on Friday, 27 January 2023, Auckland experienced a significant flood event. This led to loss of life and property, mass evacuations and widespread transport and infrastructure disruption.

3.       Bush International Consulting was engaged to examine the Council’s response efforts to this event, and recommend improvements to strengthen the response model, including readiness to respond. The review specifically looked at how well the Council’s emergency management system operated under the extreme stress of the initial response stages of the flood event, with a focus on the first 48 hours.

4.       The Bush report took place against a backdrop of previous events, readiness and response reviews and work already underway within Auckland Emergency Management (AEM) to address previous reviews. These included a review by David Smol in response to the Auckland storm of April 2018, and a rapid review of the Auckland Anniversary Floods and Cyclone Gabrielle, initiated by the Director of Governance.

5.       To consolidate these reviews and the AEM work programme at the time, a Prioritised Plan was developed and approved by the Civil Defence Emergency Management Committee in April 2023 (Resolution CDEMC/2023/6).

6.       The Prioritised Plan contains 29 actions covering improvements to planning, leadership and governance, operational procedures, capability, partnerships, assets and systems, and communications. The plan is effectively the work programme for AEM until the end of the 2023/2024 financial year (30 June 2024).

7.       Of the 29 actions within the plan, 20 are complete, 5 are progressing and on track, and 4 are progressing but delayed in terms of the indicative timings set out in the Prioritised Plan. Attachment A provides commentary for each action, including a summary of progress made to date. All actions are on track for completion by the end of the financial year. 

8.       The forward work programme for 2024/2025 will be informed by the Auckland Civil Defence Emergency Management Group Plan, which is currently with the Minister of Emergency Management for review under the Civil Defence Emergency Management Act. It is anticipated that the Group Plan will be adopted at the March Civil Defence Emergency Management Committee meeting.

 

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a)      whiwhi / receive an update on the Auckland Emergency Management Prioritised Plan.

 

Ngā tāpirihanga

Attachments

No.

Title

Page

a

AEM Prioritised Plan progress

57

     

Ngā kaihaina

Signatories

Author

Kristen Spooner - Principal Advisor Strategy and Planning

Authorisers

Adam Maggs - Head of Capability and Strategy, Auckland Emergency Management

Anna Bray - Acting Director - Governance and CCO Partnerships

 

 


Audit and Risk Committee

19 February 2024

 




Audit and Risk Committee

19 February 2024

 

Health Safety and Wellbeing Performance Report

File No.: CP2024/00307

 

  

 

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 31 December 2023.

Whakarāpopototanga matua

2.       Executive summaryThis 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). Since previous reporting, there has been minimal material improvement to improving the risk control effectiveness due to annual leave and the summer break. Current status of improvement is reflected 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.       Attachment B includes key performance indicators along with historical data illustrating changes over time. This report offers additional analysis and commentary on these key indicators for the committee’s consideration.

 

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a)      tuhi a-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.       This remains an ongoing update with reference to previous reports to the Audit and Risk Committee. Enterprise risk related to health, safety and wellbeing relates to risk that could potentially result in adverse consequences for the organisation as a PCBU (person conducting a business or undertaking) or its officers. When enterprise risk is inadequately managed, it creates an environment where operational risk controls may be compromised which in turn may lead to illness, injury, or death. At an enterprise level, the risk to the PCBU and officers involves financial, legal, reputational, and cultural consequences tied with compliance to health and safety legislation. Details of these risks and controls may be found in Appendix A.

9.       Most controls associated with enterprise risk are in place, however, gaps remain within those controls. Work to close these gaps continues and remains ongoing, however due to the summer holiday season and associated staff leave, opportunities to improve control effectiveness since previous reporting have been limited and no change to control effectiveness has been made.

10.     Activity to address all control gaps continues with information on the improvement plans provided within Appendix A. At this time there is no further material progress made against control effectiveness due to other prioritised commitments and resource obligations.

Project Hīra

11.     Project Hīra is the programme of work to improve the management of safety through replacement of Auckland Council online health and safety management software and associated change management processes.

12.     Project Hīra has now successfully been completed on schedule and within budget. The Health, Safety and Wellbeing department will continue to measure the ongoing benefits as described within the project business case as part of a business-as-usual approach.

13.     The creation of the local risk registers is ongoing work and 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. Population of master risks will be completed before the end of February 2024 so that finalisation of local risk registers may take place. The population of these registers will continue being managed as a ‘business-as-usual’ (BAU) activity.

14.     All modules have now been released within Donesafe, with final modules providing the systems required to improve the management of contractor health and safety requirements, alongside kaimahi-specific needs such as health monitoring and competency management.

Critical Risk Management

15.     Work is continuing to ensure that critical risk standards are designed in a way that they deliver meaningful value to leaders and team members, which will remain an ongoing programme of work as change requirements are identified and implementation plans put in place.

16.     As critical risk standards are finalised a full change impact analysis is being undertaken to understand the scale of the improvement activity required. These change impact analysis documents will be used to create action plans for departments and directorates to achieve the standard over a practical and sustainable period of time.

Wellbeing

17.     Auckland Council continue to deliver on the final recommendations made within the Hauora (Wellbeing) Review, and the Iti Kahurangi Mental Health Plan. The remaining actions require resources which have been instead been working reactively on supporting staff with pastoral care and mental health needs.

18.     A current focus is on designing an internal training offering for staff that covers both mental health, first aid and suicide prevention skills which will replace our external training offering.

19.     After the 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.).

20.     Pastoral care support continues to be in high demand with 27 individuals and 13 teams supported through December 2023. Key themes reported by users are around stress, workload, burnout, and the impact of change. A drop in demand in December likely relates to the number of staff going on leave over this period. 

ACC Accredited Employer Audit

21.     ACC has confirmed that Auckland Council will remain at tertiary level accreditation – the highest level of accreditation. Preparations are now underway for the next ACC audit that will take place in October 2024.

Key Performance Indicator Commentary

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

23.     Incident reporting within 24 hours is at 79%, which is slightly below the target of 80%. Work is continuing to remove barriers of reporting.

24.     Overdue actions have significantly improved and has dropped to 43.5% at the end of December 2023. The health, safety, and wellbeing team are continuing to improve this by working alongside leadership teams.

25.     There were 74 incidents of violence and aggression reported by kaimahi in December 2023. This includes a serious assault that occurred in Aotea Square that resulted in the worker requiring transportation to hospital.

Tauākī whakaaweawe āhuarangi

Climate impact statement

26.     Te Taruke-a-Tawhiri: 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.

27.     Changes to the climate can influence other health- and safety-related risks. Examples include, but are not limited to, the frequency and severity of natural disasters, emergence of new diseases, and the risk of working in high temperature environments. Climate is therefore considered a factor that may escalate existing risks.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

28.     This report is based on Auckland Council organisation activies 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

29.     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.

30.     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

31.     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.

32.     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 Wha’, 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

33.     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

34.     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

35.     Following the 19 February 2024 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

Health, Safety, and Wellbeing Enterprise Risk and Control Performance Report

65

b

Health, Safety, and Wellbeing Dashboard December 2023

69

     

Ngā kaihaina

Signatories

Author

Darren Johnston - Health & Safety Manager

Authorisers

Paul Robertson – General Manager Health Safety and Wellbeing

Richard Jarrett - Director Group Services

Anna Bray - Acting Director - Governance and CCO Partnerships

 

 


Audit and Risk Committee

19 February 2024

 





Audit and Risk Committee

19 February 2024

 





Audit and Risk Committee

19 February 2024

 

Approval of the draft Audit New Zealand audit plan for the year ended 30 June 2024

File No.: CP2024/00366

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To approve the draft Audit New Zealand audit plan for their audit of the Auckland Council Group’s 30 June 2024 annual report.

Whakarāpopototanga matua

Executive summary

2.       Audit New Zealand has provided the draft audit plan for their audit of the council’s 30 June 2024 annual report for the council’s approval (Attachment A). The group financial controller has reviewed the draft letter, provided feedback and Audit New Zealand has made all requested amendments.

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

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

5.       Deputy Controller and Auditor-General Andrew McConnell, Sector Manager – Auckland David Taylor and Audit Directors Athol Graham and Karen MacKenzie will be in attendance to discuss the proposed key audit matters and answer any questions the committee may have.

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a)      arotake / review and whakaae / approve the draft audit plan for the audit of the 30 June 2024 annual report (Attachment A)

b)      tono / request Audit New Zealand to issue the final audit plan.

 Horopaki

Context

6.       The audit plan outlines how Audit New Zealand will conduct their audit to obtain reasonable assurance that the 30 June 2024 financial statements and performance information are free from material misstatement resulting from error, omission, or fraud.

7.       The draft audit plan outlines the following:

·        key audit matters

·        Audit New Zealand’s response to areas of risk

·        emerging issues and other areas of audit focus

·        the audit process

·        reporting protocols, logistics, timelines and auditor expectations.


 

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

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

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

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

Tātaritanga me ngā tohutohu

Analysis and advice

9.       The draft audit plan is largely unchanged from prior years, except for

·    the removal of the key audit matter: Reporting performance on the three waters, transport and housing in response to population growth

·    the addition of a key audit matter: three performance measures relating to the stormwater network

·    the materiality thresholds.

10.     For property, plant and equipment held at fair value the group materiality threshold will be $5.2 billion. For everything else, the group materiality threshold will be $110 million.

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

·        valuation of operational, restricted and infrastructure assets – consideration of significant changes in fair value which might require an independent valuation to be carried out. Classes of assets being revalued should be appropriately valued and related disclosures, such as the sensitivity of the valuation to changes in key assumptions, must comply with accounting standards.

·        valuation and disclosure of derivatives – derivatives should be appropriately valued, and fair value movements should be clearly explained in the financial statements.

·        valuation of the weathertightness and associated building defects provision are complex, subject to a high degree of judgement and estimation and there is inherent uncertainty in the quantum and value of unreported claims.

·        in addition to these potential KAMs, Audit NZ have advised that they are considering whether there is a KAM in relation to the Category 3 and Category 2P provisions. Further, Audit NZ are also considering whether to include a KAM in relation to service performance information.

12.     The draft audit plan also outlines other significant risks and areas of audit emphasis. Those denoted with an asterisk are new this year.

Business risk/issue

Audit response

The risk of management override of internal controls

·   Test appropriateness of journal entries

·   Review accounting estimates for bias

·   Evaluate unusual and one-off transactions

Valuation of investment properties

·   Review valuations for reasonability, reliability and compliance with PBE IPSAS 16

House buy-back scheme*

·   Review the data, methodology and assumptions used to calculate the provision

Materials Recovery Facility*

·   Review the accounting assessment of the arrangement

Food scraps partnership*

·   Review the accounting assessment of the contract

Legislative compliance

·   Assess compliance systems and processes

·   Enquire as to non-compliance and consider its effect, if any

·   Review compliance of rates setting, regional fuel tax Financial Markets Conduct Act and NZX rules

·   Review disclosures for compliance with the Local Government Act, the Local Government (Financial Reporting and Prudence) Regulations 2014 and the Non-Financial Performance Measures Rules 2013

Accounting for assets

·   Review impairment assessment processes, compliance with capitalisation policies and processes that ensure timely capitalisation of work in progress

Central government funding

·   Consider appropriateness of accounting treatment and disclosure

Legal risks

·   Review legal provisions taking into account estimates provided by external lawyers and the status of any significant litigation and judicial reviews

 

13.     The emerging issues are the same as the prior year, being waters reforms and climate change.

14.     The plan highlights areas of interest across the local government sector. They include:

Area of interest

Considerations

Fraud risk

·    How does management exercise its responsibilities

·    Has a robust assessment been completed

·    What assurance is there over internal controls to address fraud risk

·    What protocols/procedures have been established to keep management informed of actual, suspected or alleged fraud

·    How has actual, suspected, or alleged fraud been dealt with

Group audit considerations

·    Consider the work done by entity auditors

·    Consider the effect of any uncorrected misstatements and significant control deficiencies on the audit opinion

 


 

15.     Prior year material performance measures for Auckland Council related to consenting, greenhouse gas emissions, stormwater performance, new dwellings consented and completed, Aucklanders’ quality of life, marine and freshwater quality. The material measures for the current financial year will be finalised in March ahead of the interim in April. Any changes will advised at the May Audit and Risk Committee meeting.

16.     Material performance measures for council-controlled organisations are:

Area of interest

Measures

Water and wastewater

·    compliance of drinking water with relevant standards

·    water loss

·    complaints in relation to water and wastewater

·    response times to urgent call-outs

·    water consumption

·    sewage overflows

·    attendance at overflows

·    complaints about the sewage system

·    compliance with resource consents for sewage discharge

Transport

·    peak period lane productivity

·    road maintenance standards

·    roads in acceptable condition

·    cycle movements

·    fatalities and serious injuries

·    public transport boardings

·    punctuality of public transport

·    cost recovery from fares

·    customer satisfaction

Economic development

·    contribution to GDP from major events

 

17.     The key audit matters, significant risks, other areas of audit emphasis and material measures have been reviewed by management and are considered appropriate. These matters are part of the council’s business as usual, and no specific items need to be brought to your attention.

18.     The audit plan contains the audit timings and delivery dates for information. Management is working with Audit New Zealand to finalise these dates.

Tauākī whakaaweawe āhuarangi

Climate impact statement

19.     There is no impact arising directly from this report. However, climate change is an emerging issue identified by Audit New Zealand and reporting of the group’s response to climate change risk will be disclosed in the 2023/2024 annual report.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

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

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

Local impacts and local board views

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

Tauākī whakaaweawe Māori

Māori impact statement

22.     The report is about the engagement of Audit New Zealand for the Auckland Council Group as a whole, with no specific impact on Māori or the achievement of Māori outcomes.

Ngā ritenga ā-pūtea

Financial implications

23.     This paper is about the reporting of the financial performance of the Auckland Council Group. As such, there are no financial decisions required, and there are no financial implications arising from this paper.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

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

Ngā koringa ā-muri

Next steps

25.     Following the approval of the audit plan by this committee, we will request that Audit New Zealand issue the audit plan in final. Staff will also confirm and finalise the delivery timelines with Audit New Zealand to ensure a timely and efficient annual audit process.

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Draft audit plan for the audit of the 30 June 2024 Annual report

79

     

Ngā kaihaina

Signatories

Authors

Tracy Gers - External Stakeholder Group 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

19 February 2024

 

































Audit and Risk Committee

19 February 2024

 

31 December 2023 half year results announcement for the NZX and Interim Report

File No.: CP2024/00365

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To provide assurance over controls applied to ensure the draft half year NZX release contains valid, accurate and complete information.

Whakarāpopototanga matua

Executive summary

2.       The Auckland Council Group’s draft half year NZX release has been prepared by the Financial Control team for the six months ended 31 December 2023.

3.       The draft half year NZX release has gone through multiple reviews for compliance with applicable laws and regulations, and to ensure that the information included is valid, accurate and complete.

4.       The group financial controller will present the draft half year NZX release in the confidential part of this meeting. The deputy auditor-general and appointed auditor will comment on the auditor review process and provide verbal clearance on the draft half year NZX release.

 

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a)      tuhi ā-taipitopito / note the processes and controls to ensure the validity, accuracy and completeness of the interim report.

 

Horopaki

Context

5.       The Financial Control team prepares the half year NZX release in accordance with the NZX listing rules. The information in the release is based on consolidated reporting packs from the council and its subsidiaries including council-controlled organisations and Port of Auckland, as well as its joint ventures including City Rail Link Limited (CRLL). It is supported by assurances obtained in letters of representation from senior management and board members of each entity.

Tātaritanga me ngā tohutohu

Analysis and advice

Letters of representation

6.       Letters of representation provide assurance that the financial information provided:

·   complies with generally accepted accounting practices, including the New Zealand Public Benefit Entity International Public Sector Accounting Standards

·   fairly reflects the financial position as at 31 December 2023, financial performance and cash flows for the six months ended 31 December 2023.

7.       We obtain short form and long form letters of representation from substantive CCOs, POAL and CRLL. Short form letters of representation are received at the same time group reporting packs are received and are signed by the relevant entity’s chief financial officer. They contain summarised representations. Long form letters of representation are signed by the chair of the board/audit committee and/or chief executive of the relevant entity. They contain detailed representations including a summary of uncorrected misstatements.

8.       The mayor and chief executive are required to sign a letter of representation to Audit New Zealand to provide assurance that the interim report complies with financial reporting standards and fairly reflects the group’s financial position, financial performance, and cash flows. A back-to-back letter of representation has been prepared and signed by the group financial controller, the group treasurer and the group chief financial officer, to support the mayor and chief executive in their sign-off of the letter of representation to Audit New Zealand. Copies of these letters will be made available by the group financial controller for review at this committee meeting.

Interim report preparation process

9.       The diagram below outlines the process undertaken to prepare the draft half year NZX release.

Tauākī whakaaweawe āhuarangi

Climate impact statement

10.     This paper 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 30 June 2024 Annual Report.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

11.     This report relates to the Auckland Council Group as a whole and as such takes into account group impacts and views.

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

Local impacts and local board views

12.     This report relates to the approval of financial reporting of the Auckland Council Group as a whole and does not include reporting at a local board level. Accordingly, the views of the local boards have not been sought.

Tauākī whakaaweawe Māori

Māori impact statement

13.     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. The group’s contributions to Māori outcomes will be reported in the 30 June 2024 Annual Report.

Ngā ritenga ā-pūtea

Financial implications

14.     This report relates to the approval of financial reporting. As such, no decision is sought which would have direct financial implications.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

Risk of invalid, inaccurate or incomplete information

15.     The highest risk associated with this approval of the draft half year NZX release is that it might contain invalid, inaccurate or incomplete information. The mitigation to this risk is the high-level review of these documents by this committee, as well as detailed reviews by Auckland Council finance management staff and Audit New Zealand.

Audit review

16.     The draft half year NZX release has been reviewed by several Audit New Zealand reviewers, including their technical team.


 

Auckland Council management review

17.     Within the council, the following reviews have taken place:

 

Group CFO

Group treasurer

Group financial controller

GM financial strategy and planning

Manager group accounting and reporting

Manager Financial Stakeholder Relations

Senior group reporting technical accountant

Financial accounting manager

Legal Department / Mayne Wetherell

Auckland Council reporting pack with commentary

 

 

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Auckland Council reporting summary with commentary

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Auckland Council Group reporting pack with commentary

 

 

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Auckland Council Group reporting summary with commentary

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Half year NZX release

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Risk of significant adverse events immediately prior to signing being omitted

18.     The Financial Control team will confirm, with all material subsidiaries and joint ventures and relevant senior managers at the council, that no adverse events have taken place just prior to the mayor and chief executive officer providing final approval of the half year NZX release.

Risk of failure to comply with NZX listing rules

19.     Mayne Wetherell provided a formal memorandum that details the council’s obligations in relation to the rules, which was used by the Financial Control department, in conjunction with the rules themselves, to ensure compliance.

Ngā koringa ā-muri

Next steps

20.     The group financial controller will present the draft half year NZX release in the confidential section of this meeting. The deputy auditor-general will comment on the auditor review process and provide verbal clearance on the draft half year NZX release.

21.     The draft half year NZX release will be presented to the deputy mayor on 23 February 2024 to recommend that the mayor and the chief executive approve the release of the reports.

22.     The draft half year NZX release will then be presented to the chief executive and the mayor on 26 February 2024 to request they approve the final half year NZX release and authorise for it to be released to the NZX and the public on 27 February 2024.

 

Ngā tāpirihanga

Attachments

There are no attachments for this report.     

Ngā kaihaina

Signatories

Authors

Tracy Gers - External Stakeholder Group 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

19 February 2024

 

 

 

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 - February 2024

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 organisations' 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: Port of Auckland Risk Update - February 2024

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 Port of Auckland Limited's board or Audit and Risk Committee. They have provided their risk report 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.

 

C3       CONFIDENTIAL: Insurance renewal update 2024-2025

Reason for passing this resolution in relation to each matter

Particular interest(s) protected (where applicable)

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

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

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

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

s48(1)(a)

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

 

C4       CONFIDENTIAL: Internal audit and integrity 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: 31 December 2023 half year results announcement for the NZX and Interim Report

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 Auckland Council Group as at 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.

 

C6       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.