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

Date:

Time:

Meeting Room:

Venue:

Tuesday, 20 August 2024

2.00pm

Room 1, Level 26
Te Wharau o Tāmaki - Auckland House
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
	Houkura Member Tony Kake, MNZM
	Deputy Mayor Cr Desley Simpson, JP

(Quorum 3 members)

Mike Giddey

Kaitohutohu Mana Whakahaere / Governance Advisor

14 August 2024

Contact Telephone: +64 9 890 8143

Email: Mike.Giddey@aucklandcouncil.govt.nz

Website: www.aucklandcouncil.govt.nz

Audit and Risk Committee

20 August 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 Houkura - IMSB Treaty Audit monitoring update 9

10 Auckland Council Health, Safety and Wellbeing Update 15

11 The Auditor-General's report to governors on the interim audit for the year ended 30 June 2024 21

12 Auckland Council Group's NZX preliminary announcement and financial results to 30 June 2024 25

13 Summary of Audit and Risk Committee information memoranda, workshops and briefings - 20 August 2024 31

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

PUBLIC EXCLUDED

15 Te Mōtini ā-Tukanga hei Kaupare i te Marea | Procedural Motion to Exclude the Public 33

C1 CONFIDENTIAL: Substantive Council-Controlled Organisations' Quarterly Risk Update - August 2024 (Covering report) 33

C2 CONFIDENTIAL: Council Group Post Insurance Renewal Update Aug 2024 34

C3 CONFIDENTIAL: Internal Audit and Integrity Update 34

C4 CONFIDENTIAL: Auckland Council Group's NZX preliminary announcement and financial results to 30 June 2024 and year-end reporting and audit requirements 35

C5 CONFIDENTIAL: Office of the Auditor-General and Audit New Zealand briefing 35

Audit and Risk Committee

20 August 2024

Forward Work Programme 2023-2024

File No.: CP2024/10771

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 on the Committee’s annual performance report which was planned for the September 2024 committee meeting has been deferred to the December 2024 committee meeting. For the last two years the annual performance report has been presented in September due to the timing of changes in committee chair appointments. With no changes in this respect in the current year, this will now revert to calendar year reporting in December.

· An update on Local Water Done Well which was planned for this committee meeting has been removed from the agenda because the Local Government (Water Service Preliminary Arrangements) Bill was still progressing through the Parliamentary process at the time of the agenda close date. Instead, a memorandum will now be circulated to the committee to provide an update on the progress of this legislation.

· An update on Volume 4 - Climate Change Risk 30 June 2024 which was planned for this committee meeting has been deferred to the September 2024 committee meeting.

· An update on the climate disclosure work programme which was planned for this committee meeting has been deferred to the December 2024 committee meeting.

· An update on the Recovery Project which was planned for this committee meeting has been deferred to the December 2024 committee meeting.

· An update on the Auckland Council Group Climate Risk Framework has been added to the forward work programme and will be presented at the December 2024 committee meeting.

· A new report on the 2024-2034 LTP process has been added to the forward work programme and will be presented at the September 2024 committee meeting to update on progress.

· A new report on cyber security has been added to the forward work programme and will be presented at the December 2024 committee meeting. It is intended that this report will be a recurring item in the future and further changes will be put forward to the forward work programme as part of the December update.

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 on the Committee’s annual performance report has been deferred from the September 2024 committee meeting

ii) an update on Local Water Done Well has been deferred from this committee meeting

iii) an update on Volume 4 - Climate Change Risk 30 June 2024 has been deferred from this committee meeting

iv) an update on climate disclosure work programme has been deferred from this committee meeting

v) an update on Recovery Project has been deferred from this committee meeting

vi) an update on the Auckland Council Group Climate Risk Framework will be presented at the December 2024 committee meeting

vii) a new report on the 2024-2034 LTP process will be presented at the September 2024 committee meeting

viii) a new report on cyber security will be presented at the December 2024 committee meeting.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇨	Forward Work Programme 2023-2024

Ngā kaihaina

Signatories

Authors

Neil Rodrigues - Risk Advisor

Andre de Wet - Senior Risk Advisor

Sathya Ashok - Head of Risk and Audit

Authoriser

Meredith Webb - Chief Risk and Assurance Officer (Acting)

Audit and Risk Committee

20 August 2024

Houkura - IMSB Treaty Audit monitoring update

File No.: CP2024/09910

Te take mō te pūrongo

Purpose of the report

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

· progress of addressing recommendations contained in all Te Tiriti o Waitangi Audits (Treaty Audits) which are commissioned by Houkura - Independent Māori Statutory Board every three years

· Treaty Audit Response Programme 2021-2024 (Attachment A) which has been developed by Ngā Mātārae on behalf of the Chief Executive and received by the Joint Governing Body and Houkura - Independent Māori Statutory Board in response to the recommendations contained in the Treaty Audits

· specific outcomes from the recently issued He Waka Kōtuia – Te Tiriti o Waitangi audit report 2024 (2024 Treaty Audit Report). The complete report (Attachment C) and a summary of the recommendations and initial actions underway by Ngā Mātārae (Attachment B).

Whakarāpopototanga matua

Executive summary

2. Eight recommendations from the Treaty Audits have been closed since the last report to this committee in February 2024.

3. Since the last update to this committee in February 2024, the scope for He Waka Kōtuia – Te Tiriti o Waitangi audit has been agreed and the audit completed. The 2024 Treaty Audit Report (Attachment C) contains 28 new recommendations which have been summarised with initial actions underway (Attachment B).

4. There are a total of 34 open treaty audit recommendations:

· One relating to the pre-2021 treaty audits with a status of “Overdue”.

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

· 28 new recommendations added from the 2024 Treaty Audit Report.

5. The Treaty Audit Response Programme 2021-2024 (Attachment A), soon to be expanded to include the 28 new recommendations, will continue to be used by Ngā Mātārae as the basis to track progress on the remaining and new recommendations from all treaty audits. Work is already underway to implement the recommendations identified from the 2024 Treaty Audit Report. (Attachment B).

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a) tuhi ā-taipitopito / note the findings and recommendations of He Waka Kōtuia – Te Tiriti o Waitangi audit report 2024 (Attachment C)

b) whiwhi / receive the update on the progress of recommendations documented in the Treaty Audit Response Programme 2021-2024 (Attachment A) and the 28 recommendations with actions underway from the 2024 Treaty Audit Report (Attachment B)

c) 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. Houkura - 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. From the most recent treaty audits:

· The third treaty audit was completed in 2018 and identified a total of 80 recommendations, of which 79 have now been closed.

· He Waka Kōtuia – Te Tiriti o Waitangi Audit 2021 was the fourth treaty audit to be undertaken by Houkura - Independent Māori Statutory Board and identified 14 recommendations of which 11 have now been closed.

· The 2024 Treaty Audit is the fifth treaty audit and was completed in June 2024. The scope of the audit activities included Council-Controlled Organisations, hence the reference to “Council Group” in this report. The 28 recommendations are currently being allocated and actioned.

8. 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 Houkura -Independent Māori Statutory Board Secretariat.

9. 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. Once action owners and timeframes are agreed the programme will be expanded to include the 28 new recommendations (Attachment B).

Tātaritanga me ngā tohutohu

Analysis and advice

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

Original (pre-2021) recommendations needing action	80
Closed prior February 2024	(76)
Closed February 2024 – August 2024	(3)-
Open as at August 2024 (overdue)	1
Fourth treaty audit (2021) recommendations	14
Closed prior to February 2024	(6)
Closed February 2024 to August 2024	(5)
Open as at August 2024 (overdue)	3
Fifth treaty audit (2024) recommendations	28
Open as at August 2024	28

11. The Risk team attended the hui between council kaimahi and the external auditor commissioned by Houkura – Independent Māori Statutory Board and observed acknowledgement and appreciation by both parties, reflected by the timely finalisation of the 2024 Treaty Audit Report.

12. The 28 new recommendations of the 2024 Treaty Audit are categorised under five key focus areas as follows:

· Rangatiratanga - Enhance leadership and participation – people engaged in their communities: There is a need for clear and defined governance processes and structures that support Māori partnership and self-determination.

· Whanaungatanga - Evaluation of the effectiveness of Council Group’s Achieving Māori Outcomes (AMO) plans: The Council Group needs to foster meaningful and mutually beneficial partnerships with mana whenua and mātāwaka.

· Manaakitanga - The application of tikanga Māori, and the Principles of Te Tiriti ensuring greater outcomes for iwi, mātāwaka and whānau: Capability support systems that contribute to mana whenua and mātāwaka priorities are immature or under development.

· Kaitiakitanga - Working alongside Māori to ensure stewardship and protection over Taonga, and sustainable futures: through intergenerational wellbeing: The Council Group needs to improve how they effectively support Māori outcomes and strengthen relationships with mana whenua and mātāwaka.

· Wairuatanga - Iwi and mātāwaka can maintain a spiritual connection to their unique support systems, including marae: Governance structures, funding models, and approaches to engage and partner with mana whenua and mātāwaka to connect in Tāmaki Makaurau and embrace their taha wairua are still maturing.

13. The 2024 Treaty Audit Report (Attachment C), containing 28 new recommendations, was tabled at the Governing Body and Houkura - Independent Māori Statutory Board quarterly joint meeting on 17 June 2024.

14. Detail of the new recommendations and initial actions underway (Attachment B) will be added to the Treaty Audit Response Programme 2021-2024 (Attachment A) for the Enablement Board to provide priorities and guidance to Ngā Mātārae and the Council Group to implement the recommendations.

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 Council Group to strengthen responsiveness to Māori through targeted actions and improvements described in the Auckland Council’s Māori Outcomes Framework. The Māori Outcomes Framework is intended to provide clarity and guidance to the Council Group.

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

Local impacts and local board views

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, the recently completed 2024 Treaty Audit provides a refreshed view for the Council Group to use as a reference in deciding the main focus of its resources and energy in discharging its obligations towards Māori in the community.

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:

· The 28 recommendations in the 2024 Treaty Audit Report are not correctly understood by Ngā Mātārae leading to delays or wasteful resource allocation in implementing the recommendations.

· Enablement Board meetings not taking place at the cadence required to maintain momentum on progress.

· Resource constraints for Ngā Mātārae and council kaimahi to implement required actions.

21. Key mitigations of these risks include:

· Houkura - Independent Māori Statutory Board representation on the Enablement Board and continuing engagement between them and Ngā Mātārae ensure a common understanding of what need to be done to implement the recommendations.

· Māori outcomes have recently been subjected to an internal audit and the findings align with many of the 2024 Treaty Audit findings, which will provide additional guidance for Ngā Mātārae in implementing the 28 new recommendations.

· The Tumuaki Huanga Māori – Director Ngā Mātārae reports to the Governing Body and Houkura – Māori Independent Statutory Board quarterly joint meeting on progress on delivering Māori Outcomes. This is consistent with the audit recommendation regarding increased visibility of Māori Outcomes to leaders.

· 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.

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

Ngā koringa ā-muri

Next steps

22. Progressing with actions associated with each open recommendation as per the Treaty Audit Response Programme 2021 – 2024, soon to be expanded with the 28 recommendations from the 2024 Treaty Audit Report.

23. The Risk and Assurance department will continue to attend Enablement Board meetings to encourage progress towards implementation of all the open recommendations and to monitor progress.

24. The Enablement Board meetings and their requirement to review progress and approve closure of recommendations will continue.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇨	Treaty Audit Response Work Programme 2021-2024
b ⇨	2024 Treaty Audit Report – recommendations and initial actions underway
c ⇨	He Waka Kōtuia Te Tiriti o Waitangi 2024 - Complete report

Ngā kaihaina

Signatories

Authors

Andre de Wet - Senior Risk Advisor

Sathya Ashok - Head of Risk and Audit

Authoriser

Meredith Webb - Chief Risk and Assurance Officer (Acting)

Audit and Risk Committee

20 August 2024

Auckland Council Health, Safety and Wellbeing Update

File No.: CP2024/10512

Te take mō te pūrongo

Purpose of the report

1. To provide an update on enterprise risk controls for health, safety, and wellbeing (HSW), initiatives underway to improve HSW outcomes, and the current state of key performance indicators as at 30 June 2024.

Whakarāpopototanga matua

Executive summary

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

3. Specific controls relating to the management of enterprise HSW risk still require implementation or improvement. This continues to expose Auckland Council and its officers to a degree of uncontrolled enterprise risk, which may then increase the operational risks faced by kaimahi and others. An overview of enterprise risk controls and their effectiveness ratings is included as Attachment A, along with improvement plans.

4. A performance dashboard for Q4, FY24 (April – June 2024) is found in Attachment B. The dashboard provides data on incidents and risk mechanisms, high potential events and wellbeing measures for the quarter. The dashboard is scheduled for review (Q2, FY25) to support officers to meet due diligence requirements (s44 Health and Safety at Work Act 2015).

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

5. 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 support Auckland Council’s officers (as defined within the Health and Safety at Work Act 2015) to exercise due diligence obligations.

6. Recommendations on the adequacy and functioning of Auckland 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

7. Enterprise health and safety risk refers to the broad spectrum of potential risks that may adversely affect an organisation. The effective management of enterprise risk includes activities which enable the management of operational risks, and the systems used to monitor risk and prevent or mitigate harm.

8. Each enterprise level risk is aligned to work streams within the HSW FY25 Workplan.

9. There are three key HSW enterprise level risks associated with Auckland Council. See below a summary extract from Attachment A:

Risk title	Inherent risk	Current residual risk	Improvement plan summary
Failure to comply with requirements within H&S legislation			A significant review of the HSW critical risks programme and management system framework is underway, with the purpose of identifying causal pathways and critical controls (in collaboration with frontline teams) and a process for verifying and providing assurance to officers of the PCBU.
Failure to effectively manage ACC injury claims and entitlements			Maintain current status for injury management; implement occupational health surveillance programme (provider confirmed).
Insufficient effort applied to improve wellbeing of kaimahi			Hauora Strategy scheduled for review in Q2, FY25; review EAP provision to ensure fit for purpose; embed Mental Health Specialists.

Critical Risk Programme

10. The critical risk programme focuses on Auckland Council risks with the potential for fatalities, or life-altering injuries. As these critical risks may not appear in incident statistics they may be overlooked, and therefore a different approach is needed to understand and manage them. The approach being taken is defined as Critical Control Management and ensures that focus is placed on understanding the key controls and validating their presence and effectiveness.

11. The approach to HSW risk management and critical risk management is under review and being updated to reflect the requirements of ISO 31000:2018 (Risk management) and ISO 45001:2018 (Occupational health and safety management systems), as well as the ACC Accredited Employer Programme (AEP) Audit Standard. Work has commenced on aligning HSW risk management practices with these standards and is expected to be completed by the end of FY25.

Contractor Management Improvements

12. A refreshed work programme is underway to review and update Auckland Council’s Contractor Safety Management framework. The work programme has four phases (discovery, design, implementation, verification and assurance) and a key output is the development of a Contractor Health and Safety Management Procedure and resources to support Auckland Council to establish a consistent approach. This will reduce the risk of failing to meet legislative requirements and aims to build an improved contractor experience with reduced compliance costs.

13. A Steering Committee will be established to provide governance for the project and ensure it is resourced appropriately and delivers the required outcomes.

14. It is important to ensure sufficient contractor safety management expertise is available to support the organisation to consistently meet duties under the Health and Safety at Work Act. Discussions are underway to obtain this capability to support the development of a consistent approach to contractor safety management.

Wellbeing

15. Recruitment has commenced for two Mental Health and Wellbeing Advisors (permanent and fixed term). With Mental Health being a concern in the latest Peakon Engagement Survey and an ongoing concern across our communities, this is a considerable commitment from Te Kaunihera (Auckland Council) for the continued wellbeing of our kaimahi.

16. The Te Papa Hauora (Wellbeing) content on Kotahi has been refreshed and is now live. A working group of volunteer stakeholders provided feedback to ensure delivery of detail and information required by our kaimahi.

17. Pastoral care support continues to be in high demand, with key themes reported by users around stress, wellbeing, mental health, and violence/aggressive behaviour.

HSW reporting refresh

18. HSW reporting is scheduled for review in Q2 FY25 with a view to ensuring it supports the officers of Auckland Council to meet due diligence requirements under Section 44 of the Health and Safety at Work Act 2015:

· Keep up to date with health and safety matters

· Understand the nature of the organisation and its risks and hazards

· Ensure the organisation has the appropriate resources and processes to manage health and safe risks

· Ensure there are appropriate reporting and investigation processes in place

· Ensure the organisation has and implements processes to comply with the Health and Safety at Work Act 2015

· Verify that the activities listed above are occurring

ACC Accredited Employer Audit

19. ACC has confirmed that Auckland Council will remain at tertiary level accreditation (November 2023). This is presently the highest level of accreditation. The HSW Team is preparing for the next external audit scheduled for October 2024.To retain tertiary accreditation we must pass this audit.

20. Preparation for this audit is commencing at the start of June 2024.This year the audit focuses on Injury Management only. Next year’s (2025) audit will include all health and safety management requirements.

Worker engagement, participation, and representation (WEPR)

21. Provisions for worker engagement, participation, and representation (WEPR) in health, safety and wellbeing are a requirement in the Health and Safety at Work Act 2015, and the Health and Safety at Work (Worker Engagement, Representation and Participation) Regulations 2016. At Auckland Council, we have health, safety and wellbeing representatives and health and safety committees established to meet these obligations and to support the improvement of health, safety, and wellbeing outcomes.

22. The existing WEPR arrangements have been reviewed, refreshed and republished to reflect current state (including union consultation). Implementation of any required changes will commence in the first half of FY25, including health and safety representative elections.

HSW induction

23. The Health and Safety at Work (General Risk and Workplace Management) Regulations 2016 require persons conducting a business or undertaking (PCBUs) to provide workers with information, supervision, training, and instruction (Reg 9) – including induction.

24. The existing eLearning induction module is currently under review and will be refreshed and launched by end of Q1, FY25. This eLearning module covers the general HSW induction to Auckland Council. A site-specific induction template is under development to support the eLearning module.

Tauākī whakaaweawe āhuarangi

Climate impact statement

25. 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 Auckland 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.

26. 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

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

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

Local impacts and local board views

28. 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

29. 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.

30. 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

31. 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

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

33. Refer to the Enterprise Risk Register (Attachment A), points 7-9.

Ngā koringa ā-muri

Next steps

34. Following the 20 August 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 ⇨	HSW Enterprise Risk Controls as at 30 June 2024
b ⇨	HSW Performance Report (Dashboard), Q4 FY24

Ngā kaihaina

Signatories

Author

Brigitta Wassenaar - Health Safety and Wellbeing Programme

Authorisers

Becki Abbott - Head of Health Safety and Wellbeing

Mirla Edmundson - Chief People, Safety and Wellbeing Officer

Meredith Webb - Chief Risk and Assurance Officer (Acting)

Audit and Risk Committee

20 August 2024

The Auditor-General's report to governors on the interim audit for the year ended 30 June 2024

File No.: CP2024/07756

Te take mō te pūrongo

Purpose of the report

1. To summarise the matters identified by Audit New Zealand on behalf of the Deputy Auditor-General during the interim audit for the year ended 30 June 2024 and outline how Auckland Council is addressing the matters.

Whakarāpopototanga matua

Executive summary

2. The Deputy Auditor-General has issued his report to governors following the completion of the interim audit. The report outlines areas in which internal controls and financial disclosures can be improved.

3. There is one new recommendation since the last report, that all payroll general ledger reconciliations are reviewed in a timely manner.

4. There are three recommendations that are similar to prior recommendations relating to delegated financial authorities and reviews of employee termination payments.

5. Management accepts the recommendations and has provided responses outlining the actions being taken to address them.

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a) tuhi ā-taipitopito / note the matters identified in the Deputy Auditor-General’s report to governors, for the interim audit of the year ended 30 June 2024, and management’s responses.

Horopaki

Context

6. The Deputy Auditor-General is Auckland Council and Auckland Council Group’s external auditor, appointed by the Auditor-General to conduct the audit on his behalf. He uses his staff and his appointed auditor’s staff (Audit New Zealand) to review the statutory financial and performance reporting, and the internal controls on which it is reliant.

7. On completion of the interim audit, the Deputy Auditor-General provides a report to governors which outlines areas in which internal controls and financial or service performance disclosures can be improved. The report for the interim audit of the group’s 30 June 2024 annual report is provided as Attachment A.

8. This report summarises the matters identified by Audit New Zealand staff (on behalf of the Deputy Auditor-General) during their interim audit and outlines management’s responses.

9. Recommendations are categorised as:

· Urgent - address urgently

· Necessary - address at the earliest reasonable opportunity, generally within six months

· Beneficial - address, generally within six to 12 months

Tātaritanga me ngā tohutohu

Analysis and advice

10. Audit New Zealand completed their first and second interim audit visits for the 2023/2024 financial year in June 2024. Their focus was on:

· updating their understanding of the council’s systems and controls that support financial and service performance information

· assessing the effectiveness of those controls and of the overall control environment

· maintaining an awareness of key issues impacting the council.

11. Key messages relate to improvements required in the control environment, payroll processes and controls, and service performance of non-notified resource consents.

12. All recommendations are categorised as necessary.

13. There is one new recommendation since the last audit report in relation to controls over the timeliness of review for payroll general ledger reconciliation. The recommendation is that all payroll general ledger reconciliations are reviewed in a timely manner. Management concurs and will ensure that going forward there is a back-up reviewer for the payroll general ledger reconciliations in case of staff absence or turnover.

14. Updates were provided on previously raised areas of control deficiency.

Matter	Recommendation	Management’s response
Approval limits in SAP not fully aligned to Chief Executive’s Delegations Register	A control should be established to ensure the delegated financial authorities (DFAs) within the SAP system are always aligned to the most recent DFAs as determined by the Register.	The input of financial limits into SAP is itself a control to minimise any breach. On an ongoing basis where new financial limits are entered into SAP, we will sample check that the Tier allocation is correct as part of our monthly standard checks.
Purchase Orders approved outside DFA	We continue to recommend that all staff be reminded of importance of saving supporting authorisations especially when approving transactions on behalf of a delegated authority.	Our DFA guidance is clear that when a delegate, if required, authorises someone to act on their behalf that this should be recorded in writing for each decision. Staff who may be authorised to approve transactions in SAP will be required to do DFA training, and will receive a subsequent reminder of the importance of obtaining and retaining any approval in writing.
Payroll processes and controls – review of termination payments	Staff should be reminded about the importance of reviewing termination payments in a timely manner.	We have improved our termination control process over the past year, with all steps documented. In addition, it is hoped that planned improvements to our human resource information and payroll systems will better support the termination process.

Tauākī whakaaweawe āhuarangi

Climate impact statement

15. There are no items covered in this report that have an impact on climate change.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

16. The council-controlled organisations which use our SAP platform have their own DFAs in SAP, so the matters raised would have no impact on them.

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

Local impacts and local board views

17. There are no matters in the report to governors that relate to local boards. Accordingly, the views of local boards have not been sought.

Tauākī whakaaweawe Māori

Māori impact statement

18. The report does not affect the achievement of Māori outcomes and does not include any recommendations in relation to that the group’s achievement of Māori outcomes.

Ngā ritenga ā-pūtea

Financial implications

19. There are no financial implications directly arising from the information contained in this report, although it should be noted that improper use of financial authority could lead to a financial loss to the council.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

20. Management is actively addressing the issues raised and has assessed that the matters will not impact the audit opinion of the 2023/2024 annual report.

Ngā koringa ā-muri

Next steps

21. Management will continue to follow up on its commitments to address the matters raised in the auditor’s report to governors.

Ngā tāpirihanga

Attachments

No.	Title	Page
a⇨	Report to governors from Deputy Auditor-General

Ngā kaihaina

Signatories

Authors

Tracy Gers - External Stakeholder Group Reporting Manager

Yvonne Teo - Financial Accounting Manager

Francis Caetano - Group Financial Controller

Authorisers

John Bishop - Group Treasurer

Ross Tucker - Group Chief Financial Officer

Meredith Webb - Chief Risk and Assurance Officer (Acting)

Audit and Risk Committee

20 August 2024

Auckland Council Group's NZX preliminary announcement and financial results to 30 June 2024

File No.: CP2024/07435

Te take mō te pūrongo

Purpose of the report

1. To inform the Audit and Risk Committee of the process followed to prepare the draft NZX announcement (including the group’s primary financial statements and notes) and media release for the financial year ended 30 June 2024.

Whakarāpopototanga matua

Executive summary

2. The draft Auckland Council Group NZX preliminary announcement (which includes the group’s primary financial statements and notes) and media release (collectively called the “draft 2024 NZX release”) have been prepared for the financial year ended 30 June 2024.

3. This report confirms the quality assurance processes undertaken in preparation of the draft 2024 NZX release.

4. The 2024 NZX preliminary announcement will be released to the NZX on Thursday 29 August 2024.

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a) tuhi ā-taipitopito / note that there are no significant outstanding issues relating to the process for the preparation of the draft 2024 NZX release

b) tuhi ā-taipitopito / note that the draft 2024 NZX release will be discussed in the confidential part of this agenda.

Horopaki

Context

5. The Audit and Risk Committee reviews the quality of the annual report and summary annual report (annual reports) and the processes followed to prepare them. It liaises with Audit New Zealand to ensure a robust audit of the Auckland Council Group.

6. The Governing Body reviews the financial and non-financial performance of the group to ensure the integrity and reliability of the reported financial and performance information.

7. This report along with the associated confidential report, the Deputy Auditor-General’s briefing paper and his comments at this meeting, assist the Audit and Risk Committee to fulfil its duty as noted above.

8. Following the completion of the audit, Audit New Zealand will provide a report to those charged with governance which includes any matters arising from their final audit such as process or control deficiencies.

9. In accordance with the NZX listing rules, the group must lodge a results announcement with the NZX within 60 days of balance date.

10. The NZX release is required to comply with Appendix 2 of the NZX Listing Rules which requires:

· a statement of financial performance

· a statement of financial position

· a statement of cash flows

· a statement of movements in equity

· commentary on the results for the period, sufficient for a user to be able to compare the results with the prior period

· a statement as to whether the financial statements are audited, in the process of being audited or not yet audited and details of any (likely) qualifications

· a statement of accounting policies critical to the portrayal of the group’s financial condition and results and required judgements and estimates about uncertain matters

· the impact of any changes in accounting policies.

11. The draft 2024 NZX release is materially based on consolidated information obtained from the council, council-controlled organisations (CCOs) and Port of Auckland Limited’s reporting packs. Reporting packs have been supported by assurances obtained in representation letters which were signed by their respective chief financial officer/chief executive officers and chairs of their audit committee/boards.

12. At this meeting, Audit New Zealand, on behalf of the Auditor-General as the group’s auditor, will confirm clearance on the draft 2024 NZX release pursuant to the issue of their opinion on the group’s annual report in September 2024.

Tātaritanga me ngā tohutohu

Analysis and advice

13. The draft 2024 NZX release will be presented in the confidential NZX agenda item later in this meeting.

14. The following reporting milestones provide an outline of the process underway to prepare, review and issue the audited financial results for year ended 30 June 2024.

Tauākī whakaaweawe āhuarangi

Climate impact statement

15. This report relates to the group’s financial statements only and as such has no climate implications. Information relating to the group’s impact on the climate, and the climate’s impact on the group will be included in the annual reports.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

16. The draft 2024 NZX release consolidates financial information provided by the substantive CCOs and Port of Auckland Limited.

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

Local impacts and local board views

17. The draft 2024 NZX release relates to reporting at a group level. Accordingly, the views of the local boards have not been sought.

Tauākī whakaaweawe Māori

Māori impact statement

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

Ngā ritenga ā-pūtea

Financial implications

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

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

Risk of error, omission or non-compliance in preparation of the draft 2024 NZX release

20. There is a risk that errors or inaccuracies could occur in the preparation of the draft 2024 NZX release. To mitigate this risk, quality assurance reviews were performed on the consolidated results and commentary and the year-end reports. The reviews focused on accuracy, completeness and reasonableness of disclosures, legislative compliance and adherence to Auckland Council communications standards. A summary of the reviews is as follows:

Reviewer	Consolidated results and commentary	Media release	Preliminary NZX release
Group chief financial officer
Group treasurer
Group financial controller
External stakeholder group reporting manager
Senior group reporting technical accountant
Financial accounting manager
General manager financial strategy and planning
Manager group performance reporting
Manager financial stakeholder relations
Senior specialist corporate communications and media
Senior solicitor and Mayne Wetherell

21. All the quality assurance reviewers who performed reviews from a technical financial perspective are Chartered Accountant (CA) qualified or equivalent and have the appropriate technical accounting skills and knowledge.

22. There is a risk that significant matters that affect the financial performance, financial position or cash flows of council-controlled entities or Port of Auckland Limited may not be adequately disclosed. To mitigate this risk, the group financial controller has obtained short and long-form representation letters from the respective chief financial officer/chief executive officers and chairs of their audit committee/boards which cover the completeness, accuracy and adequacy of disclosures provided in their reporting. In addition, the group financial controller will obtain updates from the respective chief financial officers just prior to the release to the NZX to ensure nothing else has arisen since the representation letters were signed, that could materially affect their financial reporting disclosures.

Ngā koringa ā-muri

Next steps

23. The draft 2024 NZX release will be presented to the deputy mayor on 27 August 2024 to recommend the mayor and chief executive approve the documents be released on 29 August 2024.

24. The draft 2024 NZX release will then be presented to the mayor and chief executive on 28August 2024 for approval before release on 29 August 2024.

Ngā tāpirihanga

Attachments

There are no attachments for this report.

Ngā kaihaina

Signatories

Authors

Yvonne Teo - Financial Accounting Manager

Francis Caetano - Group Financial Controller

Authorisers

John Bishop - Group Treasurer

Ross Tucker - Group Chief Financial Officer

Meredith Webb - Chief Risk and Assurance Officer (Acting)

Audit and Risk Committee

20 August 2024

Summary of Audit and Risk Committee information memoranda, workshops and briefings - 20 August 2024

File No.: CP2024/06408

Te take mō te pūrongo

Purpose of the report

1. To whiwhi / receive a summary and provide a public record of memoranda, workshop and briefing papers that may have been held or been distributed to committee members.

Whakarāpopototanga matua

Executive summary

2. This is a regular information-only report which aims to provide greater visibility of information circulated to committee members via memoranda/workshops and briefings or other means, where no decisions are required.

3. The following information memoranda have been sent:

Date

Subject

16/05/2024

CONFIDENTIAL: Increase in Privacy Breaches (no attachment)

Reasons for Confidentiality:

s7(2)(a)
The withholding of the information is necessary to protect the privacy of natural persons, including that of a deceased person.

s7(2)(d)
The withholding of the information is necessary to avoid prejudice to measures protecting the health and safety of members of the public.

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 workshop material contains information that could be misused to target the council, or its employees, ratepayers or customers, which if successful could include the disclosure of a wide variety of confidential, private or sensitive information.

11/07/2024

Auckland Council Tax Governance Update and Final Tax Policy

4. The following workshops/briefings have taken place for the committee:

Date

Subject

14/05/2024

CONFIDENTIAL: Data and Privacy Management workshop (no attachment)

Reasons for Confidentiality:

s7(2)(a)
The withholding of the information is necessary to protect the privacy of natural persons, including that of a deceased person.

s7(2)(d)
The withholding of the information is necessary to avoid prejudice to measures protecting the health and safety of members of the public.

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.

14/05/2024

LTP: approach to risk and assurance to support final decision-making workshop

5. These documents can be found on the Auckland Council website, at the following link:
http://infocouncil.aucklandcouncil.govt.nz/

o at the top left of the page, select meeting/te hui “Audit and Risk Committee” from the drop-down tab and click “View”;

o under ‘Attachments’, select either the HTML or PDF version of the document entitled ‘Extra Attachments’.

6. Note that, unlike an agenda report, staff will not be present to answer questions about the items referred to in this summary. Audit and Risk Committee members should direct any questions to the authors.

Ngā tūtohunga

Recommendation/s

That the Audit and Risk Committee:

a) whiwhi / receive the Summary of Audit and Risk Committee information memoranda, workshops and briefings – 20 August 2024.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇨	Auckland Council Tax Governance Update (Under Separate Cover)
b ⇨	Auckland Council Final Tax Policy (Under Separate Cover)
c ⇨	LTP: approach to risk and assurance to support final decision-making workshop (Under Separate Cover)

Ngā kaihaina

Signatories

Author	Mike Giddey - Kaitohutohu Mana Whakahaere / Governance Advisor
Authoriser	Meredith Webb - Chief Risk and Assurance Officer (Acting)

Audit and Risk Committee

20 August 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 - August 2024 (Covering 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