Agenda of Assurance, Risk and Finance Committee Meeting

Assurance, Risk and Finance Committee Meeting Agenda

12 February 2020

ASSURANCE, RISK AND FINANCE COMMITTEE - MEMBERS REGISTER OF INTERESTS

Name	Responsibility (i.e. Chairperson etc)	Declaration of Interests	Nature of Potential Interest	Member's Proposed Management Plan
Hon John Carter QSO	Board Member of the Local Government Protection Programme	Board Member of the Local Government Protection Program
Hon John Carter QSO	Carter Family Trust
John Vujcich (Chair)	Board Member	Pioneer Village	Matters relating to funding and assets	Declare interest and abstain
	Director	Waitukupata Forest Ltd	Potential for council activity to directly affect its assets	Declare interest and abstain
	Director	Rural Service Solutions Ltd	Matters where council regulatory function impact of company services	Declare interest and abstain
	Director	Kaikohe (Rau Marama) Community Trust	Potential funder	Declare interest and abstain
	Partner	MJ & EMJ Vujcich	Matters where council regulatory function impacts on partnership owned assets	Declare interest and abstain
	Member	Kaikohe Rotary Club	Potential funder, or impact on Rotary projects	Declare interest and abstain
	Member	New Zealand Institute of Directors	Potential provider of training to Council	Declare a Conflict of Interest
	Member	Institute of IT Professionals	Unlikely, but possible provider of services to Council	Declare a Conflict of Interest
	Member	Kaikohe Business Association	Possible funding provider	Declare a Conflict of Interest
Bruce Robertson (Deputy)	No Form Received
Deputy Mayor Ann Court	Waipapa Business Association	Member		Case by case
	Warren Pattinson Limited	Shareholder	Building company. FNDC is a regulator and enforcer	Case by case
	Kerikeri Irrigation	Supplies my water		No
	Top Energy	Supplies my power		No other interest greater than the publics
	District Licensing	N/A	N/A	N/A
	Top Energy Consumer Trust	Trustee	Crossover in regulatory functions, consenting economic development and contracts such as street lighting.	Declare interest and abstain from voting.
	Ann Court Trust	Private	Private	N/A
	Waipapa Rotary	Honorary member	Potential community funding submitter	Declare interest and abstain from voting.
	Properties on Onekura Road, Waipapa	Owner Shareholder	Any proposed FNDC Capital works or policy change which may have a direct impact (positive/adverse)	Declare interest and abstain from voting.
	Property on Daroux Dr, Waipapa	Financial interest	Any proposed FNDC Capital works or policy change which may have a direct impact (positive/adverse)	Declare interest and abstain from voting.
	Flowers and gifts	Ratepayer 'Thankyou'	Bias/ Pre-determination?	Declare to Governance
	Coffee and food	Ratepayers sometimes 'shout' food and beverage	Bias or pre-determination	Case by case
	Staff	N/A	Suggestion of not being impartial or pre-determined!	Be professional, due diligence, weigh the evidence. Be thorough, thoughtful, considered impartial and balanced. Be fair.
	Warren Patteinson	My husband is a builder and may do work for Council staff		Case by case
Ann Court - Partner	Warren Pattinson Limited	Director	Building Company. FNDC is a regulator	Remain at arm’s length
	Air NZ	Shareholder	None	None
	Warren Pattinson Limited	Builder	FNDC is the consent authority, regulator and enforcer.	Apply arm’s length rules
	Kurbside Rod and Custom Club (unlikely)	President NZ Hot Rod Association	Potential to be linked to a funding applicant and my wife is on the decision-making committee.	unlikely to materialise but would absent myself from any process as would Ann.
	Property on Onekura Road, Waipapa	Owner	Any proposed FNDC capital work in the vicinity or rural plan change. Maybe a link to policy development.	Would not submit. Rest on a case by case basis.
Mate Radich	No form received
Kelly Stratford	KS Bookkeeping and Administration	Business Owner, provides book keeping, administration and development of environmental management plans	None perceived	Step aside from decisions that arise, that may have conflicts
	Waikare Marae Trustees	Trustee	Maybe perceived conflicts	Case by case basis
	Bay of Islands College	Parent Elected Trustee	None perceived	If there was a conflict, I will step aside from decision making
	Karetu School	Parent Elected Trustee	None perceived	If there was a conflict, I will step aside from decision making
	Maori title land – Moerewa and Waikare	Beneficiary and husband is a shareholder	None perceived	If there was a conflict, I will step aside from decision making
	Sister is employed by Far North District Council			Wil not discuss work/governance mattes that are confidential
	Gifts - food and beverages	Residents and ratepayers may ‘shout’ food and beverage	Perceived bias or predetermination	Case by case basis
Kelly Stratford - Partner	Chef and Barista	Opua Store	None perceived
Kelly Stratford - Partner	Maori title land – Moerewa	Shareholder	None perceived	If there was a conflict of interest, I would step aside from decision making
Moko Tepania	Teacher at Te Kura Kaupapa Māori o Kaikohe.	Potential Council funding that will benefit my place of employment.		Declare a perceived conflict
	Chairperson at Te Reo o Te Tai Tokerau Trust.	Potential Council funding for events that this trust runs.		Declare a perceived conflict
	Tribal Member – Te Rūnanga o Te Rarawa	As a descendent of Te Rarawa I could have a perceived conflict of interest in Te Rarawa Council relations.		Declare a perceived conflict
	Tribal Member - Te Rūnanga o Whaingaroa	As a descendent of Te Rūnanga o Whaingaroa I could have a perceived conflict of interest in Te Rūnanga o Whaingaroa Council relations.		Declare a perceived conflict
	Tribal Member – Kahukuraariki Trust Board	As a descendent of Kahukuraariki Trust Board I could have a perceived conflict of interest in Kahukuraariki Trust Board Council relations.		Declare a perceived conflict
	Tribal Member – Te Rūnanga ā-Iwi o Ngāpuhi	As a descendent of Te Rūnanga ā-Iwi o Ngāpuhi I could have a perceived conflict of interest in Te Rūnanga ā-Iwi o Ngāpuhi Council relations.		Declare a perceived conflict

Assurance, Risk and Finance Committee Meeting Agenda

12 February 2020

3 Information Reports

3.1 Audit Management Report for June 2019

File Number: A2823691

Author: Janice Smith, Chief Financial Officer

Authoriser: William J Taylor MBE, General Manager - Corporate Services

Purpose of the Report

To present the final Audit Management Report for the Annual Report process for June 2019.

Executive Summary

· Audit New Zealand prepares an Audit Management report upon the closure of each Annual report audit. This contains issues that require management response as well as issues that remain outstanding from previous reports.

Recommendation

That the Assurance, Risk and Finance Committee receive the report “Audit Management Report for June 2019”.

1) Background

Audit New Zealand prepares an Audit Management report upon the closure of each Annual report audit. This contains issues that require management response as well as issues that remain outstanding from previous reports. The current report for June 2019 identifies five new issues which are deemed “necessary” with 17 issues from prior audits of which three are now closed with 14 remaining “active” as part of this report.

2) Discussion and Options

The report was approved for release to Council by the Audit Manager on the 28^th November 2019.

The one “urgent” item that remains open from prior audits relates to project management. The Project Management Framework has now been rolled out in the IAM team and it is anticipated that this issue will be either closed completely or reduced to a lower level in the next audit management report.

The report contains management’s response on all issues raised.

Reason for the recommendation

The actions required in relation to this report are covered separately in the Audit and Assurance reports to this committee.

3) Financial Implications and Budgetary Provision

There are no specific financial implications associated with this report.

Attachments

1. Audit Management Report June 2019 - A2823685 ⇩

Assurance, Risk and Finance Committee Meeting Agenda

12 February 2020

3.2 Revenue Recovery Report - February 2020

File Number: A2825732

Author: Margriet Veenstra, Manager - Transaction Services

Authoriser: William J Taylor MBE, General Manager - Corporate Services

Purpose of the Report

The purpose of this report is to provide regular reporting to the Far North District Council Assurance, Risk and Finance Committee.

Executive Summary

· This is the first report for the financial year 2019/20 and provides information on action taken to collect the current and arrears balances for rates, water and sundry debt, and to provide information on how collection is tracking against targets.

Recommendation

That the Assurance, Risk and Finance Committee receive the report “Revenue Recovery Report - February 2020”.

Background

This document has been prepared to outline current and arrears balances for rates, water and sundry debtors as at 31 December 2019 and the actions taken by the Debt Management Team for the collection of the debt.

This information is part of the standing items reported to the Committee on a regular basis.

Discussion and Next Steps

The information has been identified for general title and Māori Freehold Land rates and water accounts. Sundry debtors, which is another revenue stream for council, is shown in a separate table.

The total arrears balance for general title rates has reduced by 21% since 31 July 2019 and water by 35%. Māori Freehold Land rates has reduced by 1% since 31 July 2019 and water by 8%.

Below are the actions and focus areas for the first half of the rating year for the Debt Management Team for the collection of the general title rates and water.

· Continuing from last rating year, there are 64 properties currently with an external Law Firm to proceed with legal action for rates and water arrears.

o Action commenced on 45 properties;

§ Judgment by default was received for one property and another 6 have been submitted this month. A further 14 to be submitted in January 2020 once the deadline has passed.

§ 5 were paid in full and 11 have a Deed of Settlement agreement in place

§ Owners for 3 properties are to officially abandon the land

§ 5 require additional action, including serving of substituted service.

o The remaining 19 properties were withdrawn from legal proceedings as they were deemed to be Māori Land or subject to the 1967 Act.

o Next action(s) for properties where default judgment has been obtained, is to be discussed and agreed with Council.

· First phase of mortgage demand for general title properties commenced in December for 194 accounts with another 300 identified for the second phase for which mortgage demand will be issued in February to ensure payment by the end of the rating year.

· Continuous audit of existing Arrangements to Pay to ensure the agreements are being met.

· Ongoing promotion of the Internal Affairs Rates Rebates Scheme in day to day communications with Ratepayers.

Of the total number of accounts marked as ‘Balance to be collected by other means’:

· 56% of the arrears balance is made up of last year’s outstanding rates and 65% of the last two years.

· Of the 65%, we are due to commence the next tranche of Mortgage Demand for another 35% in February 2020.

· For the remaining 35%, the arrears balance is split across several years. Those with the highest debt balance, will have received Final Demand letters and are waiting to be referred for Legal proceedings once the first groups have been completed.

The Te Hono team relations and development initiatives have opened communications about payment of rates for Māori Freehold Land.

· Debt Management have been asked to provide and discuss payment options for some property owners in the past months.

· A list of 57 Māori Freehold land properties with Mortgages with a debt totalling $373K have been passed to the Te Hono team to initiate conversations prior to mortgage demand which is due to take place 20 February 2020.

Focus for the second half of the rating year for general title rates and water will be:

· Mortgage demand to be issued for a further 300 properties on 20 February 2020, together with 57 Māori Freehold Land properties.

· A letter to be sent to the remaining properties with mortgages but with low arrears balances, notifying them that they will be included in mortgage demand next rating year if the arrears balance is not addressed.

· Final mortgage demand for the 1^st phase of 194 accounts will be issued on the 20^th of March 2020.

· Details for all identified Abandoned Land properties will be passed for feedback in February 2020 to Council, Community Groups, Iwi, the NRC and Māori Land Court.

· Direct Debit switch/set up offer supported by ASB to be introduced with option for another offer next rating year to promote the Online Services launch.

· An article has been prepared in cooperation with the Communications team for publication in all local papers in January/February to explain Council is getting tougher on debt, outlining the options available to rate payers who have arrears.

The total sundry debtors aged debt has been reduced by 61% since 30 June 2019. The Debtors ledger was split alphabetically between Debt Management Officers at the start of the rating year, with each team member focussing on aged debt. Additionally, the team have:

· Regular monthly meetings with Compliance Support and Building Consents Support teams to resolve outstanding issues and implement process improvement where applicable.

· Continued collaboration with Council Legal team for advice and support for aged debt collection.

· Closed current accounts in Pathway without any activity for more than a year to avoid incorrect invoicing.

Financial Implications and Budgetary Provision

Provision is made annually for doubtful debts in relation to the arrears owed to council. A higher provision for Māori Freehold land rates and water is made in comparison to General Title rates and water due to the difference in collection options available to Council.

Attachments

1. 2020-02-12 ARF Revenue recovery Report attachment - A2825313 ⇩

Assurance, Risk and Finance Committee Meeting Agenda

12 February 2020

3.3 Internal Audit and Assurance Report

File Number: A2826403

Author: Lisa Huria, Audit and Assurance Specialist

Authoriser: William J Taylor MBE, General Manager - Corporate Services

Purpose of the Report

To provide an update on work completed within the Far North District Council Assurance Programme 2019.

Executive Summary

· This report provides an update on work completed within the FNDC Assurance Programme 2019.

· Update on the number of internal and external audit recommendations that have been completed or are currently underway.

Recommendation

That the Assurance, Risk and Finance Committee receive the report Internal Audit and Assurance Report.

Background

The Audit, Risk, and Finance Committee approved the FNDC Assurance Programme 2019 at its March 2019 meeting.

This programme covered several areas requiring assurance such as TechnologyOne User Access, Conflict of Interest Management and the development and implementation of a Legislative Compliance Framework.

TechnologyOne User Access

As per Audit New Zealand recommendation, a review was undertaken to ensure Chief Executive financial delegations to staff were entered correctly into the TechnologyOne system.

The review found there were some minor inconsistencies such as job titles that had changed slightly or had become obsolete. These inconsistencies had occurred mainly because of department and/or team realignments. In the future steps will be taken to ensure the Register of Delegations and TechnologyOne is updated when necessary.

Conflict of Interest Management

As per Audit New Zealand recommendation, a review was undertaken to ensure conflicts of interest are being managed for new and existing staff.

This review found that Employee Interest Declaration forms had been completed and received for 97% of 298 current staff employed before 2019. Management plans for staff that declared any perceived, potential or actual conflicts have been put in place for a number of these staff but there are still some to be completed.

43% of 103 staff that commenced employment during 2019 have yet to complete the Employee Interest Declaration form which has highlighted the need to improve this process. This improvement is now in progress. A follow up internal audit is scheduled for 2020.

Legislative Compliance Framework

A Legislative Compliance Framework is an essential part of managing risk in any organisation. It enables Council to carry out its statutory functions and duties by establishing and maintaining a system for monitoring and reporting on compliance with all relevant legislation.

Research to look at what other Councils are doing in this area has been completed. There are a variety of systems in place such as:

· Responsibility lies with departmental managers to manage themselves with no formal system or process.

· A document, spreadsheet or SharePoint list is created that lists all relevant legislation, who is responsible and whether they comply or not. This list also needs to be manually kept up to date with all legislation changes.

· An online system which is kept up to date with legislation changes by the vendor; maps responsibilities; translates law into plain English; identifies compliance, corrective actions and legal risks; and provides high-level overview infographics reporting.

Stakeholder interviews to provide insight and feedback have been undertaken with relevant managers during January 2020. A business case containing a recommendation will be going to the Strategic Leadership Team for their approval in February/March 2020.

FNDC Assurance Programme 2020

This programme is currently being finalised and will be presented to the Assurance, Risk and Finance Committee for their endorsement once approved by the Strategic Leadership Team.

Audit Recommendations

Good progress has been made implementing recommendations from internal and external audits. There are plans in place to complete outstanding recommendations.

Audit Name	Total Number of Recommendations	Recommendations Completed	Recommendations Underway
External Audit - KPMG - Procurement 2017	34	29	5
External Audit - Audit NZ - Annual Management Report - Interim 2017	18	15	3
Internal Audit - Information Security 2018	15	12	3
Internal Audit - Contract Management Review 2018	4	3	1
External Audit - Audit NZ - Annual Management Report - Final 2018	5	4	1
External Audit - Audit NZ - Annual Management Report - Final 2019	6	1	5
External Audit - Three Waters Interim Alliance Agreement Review	6	4	2
External Audit - MPI Council Food Act Recognised Agency Audit 2019	3	3	N/A
External Audit - LGOIMA Compliance and Practice Report - 2019	30	13	17
External Audit - IANZ – Building Consent Authority Accreditation Assessment Report 2019 *nb: significant actions have been taken on the audit recommendations – these are currently being considered by IANZ and expect to be cleared before 14 February 2020	11	*0	11

Financial Implications and Budgetary Provision

This report is for information only.

Attachments

Nil

Assurance, Risk and Finance Committee Meeting Agenda

12 February 2020

3.4 Risk Management Report

File Number: A2826762

Author: Tanya Reid, Manager Transformation, Risk and Audit (Acting)

Authoriser: William J Taylor MBE, General Manager - Corporate Services

Purpose of the Report

To provide the organisation’s top 12 risk dashboard, risk progress reports and group risk up-date.

No decision required.

Executive Summary

· Risk progress updates are provided for four of the top 12 risk treatment plans.

· Excellent progress has also been made on group risk.

Recommendation

That the Assurance, Risk and Finance Committee receive the report Risk Management Report.

Background

The Transformation and Assurance team has facilitated the development of treatment plans for the organisation’s top 12 risks. We are now in the phase where regular reporting of the organisation’s top 12 risks, and treatment plans, is in place.

A programme of deep dive workshops is planned for these risks. The first of two deep dive workshops for ARF005 Affordability Risk has been completed, with the second workshop to be scheduled.

The Transformation and Assurance team is working through the organisation to refresh / establish Group Risk registers, with treatment plans, and regular reviews.

Discussion and Next Steps

Four risk progress reports, with treatment plans, are attached. Risk ARF002, BCA Status Risk, is the subject of a separate report.

The ARF005 Affordability deep dive workshop has been split into two parts with the second part to be scheduled. At the end of this workshop members will agree the next risk “deep dive.”

An elected member workshop is to be scheduled to cover the FNDC Risk Management Framework.

Nine group (District Services, IAMs and Corporate Services) risk development workshops have been completed with a further eight workshops scheduled for these groups, including Strategic Planning & Policy. Further workshops are to be scheduled with the CEO Office.

Financial Implications and Budgetary Provision

At this stage no additional budgetary provision has been identified for the treatment plans.

Attachments

1. 2020 01 ARF003 Health Safety and Wellbeing Vulnerabilities Risk Progress Report - A2827712 ⇩

2. 2020 01 ARF006 Projects Priorities Delivery Delays Risk Progress Report - A2826766 ⇩

3. 2020 01 ARF009 Customer Service Delivery Progress Report - A2827520 ⇩

4. 2020 01 ARF012 Contract Management Risks Progress Report - A2827432 ⇩

Assurance, Risk and Finance Committee Meeting Agenda

12 February 2020

4 Public Excluded

RESOLUTION TO EXCLUDE THE PUBLIC

Recommendation

That the public be excluded from the following parts of the proceedings of this meeting.

The general subject matter 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 of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution are as follows:

General subject of each matter to be considered	Reason for passing this resolution in relation to each matter	Ground(s) under section 48 for the passing of this resolution
4.1 - Fraud Near Miss Report	s6(a) - the making available of the information would be likely to prejudice the maintenance of the law, including the prevention, investigation, and detection of offences, and the right to a fair trial	s48(1)(a)(i) - the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist under section 6 or section 7
4.2 - FNDC Current Legal Action Potential Liability Claims	s7(2)(g) - the withholding of the information is necessary to maintain legal professional privilege	s48(1)(a)(i) - the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist under section 6 or section 7
4.3 - Rate arrears - collection options	s7(2)(f)(i) - free and frank expression of opinions by or between or to members or officers or employees of any local authority s7(2)(g) - the withholding of the information is necessary to maintain legal professional privilege	s48(1)(a)(i) - the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist under section 6 or section 7