|
Audit and Risk Committee
24 June 2024
|
|
Update on
the final status of Key Controls and Risks related to the Long-term Plan
2024-2034
File No.: CP2024/07835
Te take mō te
pūrongo
Purpose of the report
1. To
provide oversight to the Audit and Risk Committee on the key control processes,
including the audit review, for the finalisation of the Long-term Plan
2024-2034 ahead of adoption by the Governing Body on 27 June 2024.
Whakarāpopototanga matua
Executive summary
2. The
Audit and Risk Committee has a key oversight role over control processes and
risks associated with the development of the Long-term Plan
2024-2034.
3. The
Long-term Plan 2024-2034 must be audited and include an
audit opinion. Audit New Zealand and the Office of the Auditor General will
advise the committee directly on their progress as part of a separate report on
today’s agenda.
4. On
16 May 2024, the Budget Committee and the Governing Body met to make final
decisions on the Long-term Plan 2024-2034. These decisions form the basis for
the drafting of the final documents.
5. At
the time of writing this report, all key control processes for the finalisation
of the Long-term Plan 2024-2034 had been completed
apart from final legal sign-off. The Audit and Risk Committee will receive
confirmation of legal sign-off ahead of this meeting.
Ngā tūtohunga
Recommendation/s
That the Audit and Risk
Committee:
a) whiwhi
/ receive the report on the key controls and risks relating to the development
of the Long-term Plan 2024-2034
b) whakaae
/ agree to advise the Governing Body that effective internal control and risk
management processes have been followed during the preparation of the Long-term
Plan 2024-2034
c) whakaae
/ agree to advise the Governing Body that there are no significant outstanding
audit issues [if there are any outstanding issues this will be noted in the
resolution].
Horopaki
Context
6. The
Local Government Act 2002 requires local authorities to prepare and adopt a
long-term plan every three years.
7. The
Audit and Risk Committee has a key oversight role (reflected in its Terms of
Reference) over control processes and risks associated with the development of
Auckland Council’s long-term plan.
8. Section
94 of the Local Government Act 2002 requires the long-term plan to be audited
by and contain a report from the Auditor-General. Audit New Zealand and the
Office of the Auditor-General will advise the committee directly on progress
with that audit.
9. To
deliver the Long-term Plan 2024-2034 with an
unqualified audit opinion, it is critical for the council group to ensure that:
· processes
are robust
· information
contained in the Long-term Plan 2024-2034 is materially
complete and reliable
· any
risks associated with the Long-term Plan 2024-2034 process
are minimised
· the
Long-term Plan 2024-2034 complies with the statutory
requirements for a long-term plan, including those set out in the Local
Government Act 2002 and the Local Government (Auckland Council) Act 2009.
10. Council’s
standard risk management and assurance approach has been followed when
monitoring the development of the Long-term Plan 2024-2034 and
the operation of key controls and sign-offs.
11. A risk
management update on the approach to support final decision-making was reported
to and considered by the Audit and Risk Committee on 14 May 2024. The committee noted that effective internal controls were followed and that there were no significant outstanding audit issues at the
time of the resolution.
12. Today’s
update focuses on the final status of key controls and risks related to the
Long-term Plan 2024-2034 where staff have reflected the
decisions made by the Governing Body in the Long-term Plan 2024-2034 in line
with the appropriate legislation.
13. On 16 May 2024, following consideration of public feedback received
and updated information, the Governing Body agreed the content of the Long-term
Plan 2024-2034. The final Long-term Plan 2024-2034 documentation has been
prepared reflecting these decisions.
Tātaritanga me ngā
tohutohu
Analysis and advice
14. The following
table provides an update relating to the controls and sign-offs for key areas
of the Long-term Plan (LTP) as they relate to the final
documents.
|
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.
· Issues
are escalated and actions identified to keep the project on track at weekly
meetings with project sponsors.
· Project
sponsors provide sign-off of final advice to support decision-making.
|
· Project sponsors and key staff have been involved in
the development, review and sign-off of final documentation.
· A workshop and drop-in session with the Governing Body were
scheduled to provide elected members with the draft material ahead of the
adoption meeting.
|
|
Assumptions
|
· Ensure
assumptions are documented in the final LTP, and are complete, reasonable and
supportable.
· Financial
statements 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.
|
· A
memo and supporting information have been provided to Audit New Zealand
outlining our approach to key assumptions in support of the final audit of
the LTP.
· Key
assumptions have been reviewed by the Group Chief Financial Officer and
disclosed in the final documentation.
|
|
Legal sign off/Document
preparation
|
· Council
has an experienced legal team who will conduct a review of the advice to
support decision-making as well as the final LTP and provide legal support
and guidance during the process.
|
· At
the time of writing this report, our legal team were reviewing final
documents to provide legal sign-off. No legal issues have been raised to
date.
|
|
Budget refresh for
Final LTP
|
· Prior to submission of final budgets, there was a
review and sign-off by the boards and/or executive teams of
council-controlled organisations (CCOs) and the council’s Executive
Leadership Team.
|
· At
the time of writing this report, sign-off on final budgets was progressing
through CCOs and the council’s Executive Leadership Team.
|
Update on risks and controls
15. At the time of writing this report, almost all relevant risks to the
project have been closed.
16. The following risks remain open as they relate to the final step in
the process, adopting the Long-term Plan 2024-2034.
|
Risk title
|
Description
|
Controls
existing at present for risk mitigation
|
Status
Low risk
 Medium risk
High risk
Critical risk
|
|
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.
|
Workstreams
for the delivery of specific advice have been set up and include a wider pool
of resource from across the group as opposed to a smaller set of staff. A
plan to cover key staff who are critical to the delivery of the project has
been created.
|
|
|
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 are 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 by project managers with
regular meetings being held during this final audit. Audit dashboard is being
used to track and monitor requests.
|
|
|
Timeline pressure
|
Staff
unable to meet deadlines associated with the delivery of final documents and
additional audit queries.
|
We
have clear and regular project management
communication with staff that includes daily standups, tracking activities
and outputs, and setting clear expectations around deadlines and slippage.
|
|
|
Data management
|
The
risk that data is inadequate or of poor quality which in turn impacts the
quality of final documentation.
|
We are
continuing to undertake robust reviews of data as part of the internal review
processes for the final documents. Our kaimahi are working with key staff
across the group to ensure review processes of data are adequate and, where
necessary, make recommendations for improvement.
|
|
Tauākī whakaaweawe
āhuarangi
Climate impact statement
17. A climate
assessment of the proposals included for consultation was provided to the
Budget Committee as part of a wider trade-off discussion during a workshop on 1
May 2024. This assessment considers impacts to resilience and emissions.
18. Climate
considerations feature throughout the final documents and key strategies, like
the financial and infrastructure strategies.
Ngā whakaaweawe me
ngā tirohanga a te rōpū Kaunihera
Council group impacts and views
19. The Long-term Plan 2024-2034 is prepared on a group basis and the
involvement and sign-off by CCOs is discussed in the body of the report.
20. CCO boards
and executives have reviewed and signed-off on their relative budgets and key
information that is included in final documents.
Ngā whakaaweawe
ā-rohe me ngā tirohanga a te poari ā-rohe
Local impacts and local board views
21. Local boards
have continued to be involved in the Long-term Plan 2024-2034 process
and have played a lead role in terms of engagement with their local communities.
Local community feedback was summarised and considered by the Governing Body as
part of decision making on 16 May 2024. Local boards provided feedback on
regional issues as part of final decision making.
22. Local board
agreements are currently being agreed by local boards, with the final
agreements due to be agreed by 13 June 2024. All local board agreements will be
included in final documents for adoption by the Governing Body on 27 June 2024.
Tauākī whakaaweawe
Māori
Māori impact statement
23. On
16 May 2024, both the Budget Committee and the Governing Body
met to make final decisions on the Long-term Plan 2024-2034, noting that the
Budget Committee includes two Houkura members. The additional step of the
Budget Committee recommending final decisions to the Governing Body was
included to provide Houkura with an opportunity to consider advice and take
part in decision-making.
24. The Long-term Plan 2024-2034 includes an increase to the budget
for Māori outcomes from $150 million to $171 million across the 10 years.
25. Delivering
better outcomes for Māori features as a key focus for the group throughout
the final documents.
Ngā ritenga
ā-pūtea
Financial implications
26. The
Long-term Plan 2024-2034 includes the council
group’s financial forecasts, this report does not specifically affect its
achievement or reporting.
Ngā raru tūpono me
ngā whakamaurutanga
Risks and mitigations
27. Key
risks and mitigations associated with the Long-term Plan
2024-2034 are set out within this report.
Ngā koringa ā-muri
Next steps
28. Following the
presentation of this report, Audit New Zealand will present their status report
on audit matters.
29. The
Long-term Plan 2024-2034 is scheduled to be adopted by the Governing Body on 27
June 2024.
Ngā tāpirihanga
Attachments
There are no attachments for
this report.
Ngā kaihaina
Signatories
|
Authors
|
Tamsyn Matchett - Programme Manager
Helen Aksiuta - Project Manager
|
|
Authorisers
|
Ross Tucker - General Manager, Financial Strategy and
Planning
Nicola Mills - Acting Group Chief Financial Officer
Anna Bray - Acting Director - Governance and CCO
Partnerships
|
