Agenda of Assurance, Risk and Finance Committee Meeting

	Authorising Body	Mayor/Council
	Status	Standing Committee
COUNCIL COMMITTEE	Title	Assurance, Risk and Finance Committee Terms of Reference
	Approval Date	19 December 2019
	Responsible Officer	Chief Executive

Purpose

The purpose of the Assurance, Risk and Finance Committee (the Committee) is to assist and advise the Governing Body in discharging its responsibility and ownership of finance, risk and internal control.

The Committee will review the effectiveness of the following aspects:

· The robustness of financial management practices;

· The integrity and appropriateness of internal and external reports and accountability arrangements;

· The robustness of the risk management framework;

· The robustness of internal controls and the internal audit framework;

· Compliance with applicable laws, regulations, standards and best practice guidelines;

· The establishment and maintenance of controls to safeguard the Council’s financial and non-financial assets;

· Data governance framework

To perform his or her role effectively, each Committee member must develop and maintain

his or her skills and knowledge, including an understanding of the Committee’s responsibilities, and of the Council’s business, operations and risks.

Membership

The Council will determine the membership of the Assurance, Risk and Finance Committee including at least one independent appointment with suitable financial and risk management knowledge and experience.

The Assurance, Risk and Finance Committee will comprise of at least five elected members (one of which will be the chairperson), and one independent appointed member.

Mayor Carter

John Vujcich – Chairperson

Bruce Robertson – Deputy Chairperson and Independent Member of the Committee

Moko Tepania

Mate Radich

Rachel Smith

Kelly Stratford

Ann Court

Mike Edmonds

Adele Gardner

Non-appointed councillors may attend meetings with speaking rights, but not voting rights.

Quorum

The quorum at a meeting of the Assurance, Risk and Finance Committee is 4 members.

Frequency of Meetings

The Assurance, Risk and Finance Committee shall meet every 6 weeks, but may be cancelled if there is no business.

Power to Delegate

The Assurance, Risk and Finance Committee may not delegate any of its responsibilities, duties or powers.

Committees Responsibilities

The Committees responsibilities are described below:

Financial systems and performance of the Council

· Review the Council’s financial and non-financial performance against the Long Term Plan and Annual Plan

· Review Council quarterly financial statements and draft Annual Report

Far North Holdings Limited (FNHL)

· Recommend to Council the approval of statement of intent and Annual Report (s67 LGA)

· Receive 6 monthly report on operations (s66 LGA)

· Receive quarterly financial statements

· Recommend appointment of directors of FNHL

Risk Management

· Review appropriateness of Council’s risk management framework and associated procedures for effective risk identification, evaluation and treatment

· Receive and review risk management dashboard reports

· Provide input, annually, into the setting of the risk management programme of work

· Receive updates on current litigation and legal liabilities

Internal Audit and Controls

· Review whether management has in place a current and comprehensive internal audit framework

· Receive and review the internal audit dashboard reports

· Provide input, annually, into the setting of the internal audit programme of work

· Review whether there are appropriate processes and systems in place to identify and investigate fraudulent behaviour

The Committee will manage Council’s relationship with external auditor.

The Committee will approve applications to declare land abandoned and any other such matters under the Rating Act.

Rules and Procedures

Council’s Standing Orders and Code of Conduct apply to all the committee’s meetings.

Annual reporting

The Chair of the Committee will submit a written report to the Chief Executive on an annual basis. The review will summarise the activities of the Committee and how it has contributed to the Council’s governance and strategic objectives. The Chief Executive will place the report on the next available agenda of the governing body.

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
Bruce Robertson (Deputy)	Chair/Deputy Chair of a number of Audit and Risk Committees: Far North Auckland Bay of Plenty Regional Tauranga Thames Coromandel Hamilton Waipa Otorohanga Waitomo Environment Southland Invercargill Southland.		There is a low level of there being a potential interest conflict. An outside potential is water reform and ‘discussion’ of one north regional water company in loving North AKD with Watercare.	I remain aware of my roiled and will Raise any matter with the Mayor/CEO And chair of ARF should any matter potentially conflict.
Bruce Robertson (Deputy)	Currently None are North AKD. Previously I have Undertaken work on Okara Park with Whangarei DC.	Advisory Work.	Okara Park is a regional Stadium. Matter solely related Governance and role of DC. Low risk of conflict.
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
	District Licensing	N/A	N/A	N/A
	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 Pattinson	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
	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
	Māori 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			Will 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
	Taumarere Counselling Services	Advisory Board Member	May be perceived conflicts	Should conflict arise, step aside from voting
	He Puna Aroha Putea Whakapapa	Trustee	May be perceived conflicts	Should conflict arise, step aside from voting should they apply for funds
	Kawakawa Returned Services Association	Member	May be perceived conflicts	Should conflict arise, step aside from voting should they apply for funds
	Whangaroa Returned Services Association	Member	May be perceived conflicts	Should conflict arise, step aside from voting should they apply for funds
	National Emergency Management Advisor Committee	Member		Case by case basis
	Te Rūnanga ā Iwi o Ngāpuhi	Tribal affiliate member	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 should there appear to be one
	Te Rūnanga ā Iwi o Ngāti Hine	Tribal affiliate member	Could have a perceived conflict of interest	Declare a perceived conflict should I determine there is a conflict
	Kawakawa Business and Community Association	Member		Will declare a perceived conflict should there appear to be one
	Sport Northland	Board Member	May be perceived conflicts	Should conflict arise, step aside from voting
Kelly Stratford - Partner	Chef and Barista	Opua Store	None perceived
Kelly Stratford - Partner	Māori title land – Moerewa	Shareholder	None perceived	If there was a conflict of interest, I would step aside from decision making
Rachel Smith	Friends of Rolands Wood Charitable Trust	Trustee
	Mid North Family Support	Trustee
	Property Owner	Kerikeri
	Friends who work at Far North District Council
	Kerikeri Cruising Club	Subscription Member
	Vision Kerikeri	Financial Member
Rachel Smith (Partner)	Property Owner	Kerikeri
	Friends who work at Far North District Council
	Kerikeri Cruising Club	Subscription Member and Treasurer
	Vision Kerikeri	Financial Member
	Town and General Groundcare Limited	Director/Shareholder
Moko Tepania	Teacher	Te Kura Kaupapa Māori o Kaikohe.	Potential Council funding that will benefit my place of employment.	Declare a perceived conflict
	Chairperson	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
Mike Edmonds	Chair	Kaikohe Mechanical and Historic Trust	Council Funding	Decide at the time
Mike Edmonds	Committee member	Kaikohe Rugby Football and Sports Club	Council Funding	Withdraw and abstain

Assurance, Risk and Finance Committee Meeting Agenda

21 July 2021

4 Confirmation of Previous Minutes

4.1 Confirmation of Previous Minutes

File Number: A3274775

Author: Casey Gannon, Meetings Administrator

Authoriser: Aisha Huriwai, Team Leader Democracy Services

Te Take Pūrongo / Purpose of the Report

The minutes are attached to allow the Committee to confirm that the minutes are a true and correct record of previous meetings.

ngĀ tŪtohunga / Recommendation

That the Assurance, Risk and Finance Committee confirms the minutes of the Assurance, Risk and Finance Committee meeting held 16 June 2021 as a true and correct record.

1) te TĀhuhu kŌrero / Background

Local Government Act 2002 Schedule 7 Section 28 states that a local authority must keep minutes of its proceedings. The minutes of these proceedings duly entered and authenticated as prescribed by a local authority are prima facie evidence of those meetings.

2) Te matapaki me NgĀ KŌwhiringa / Discussion and Options

The minutes of the meetings are attached.

Far North District Council Standing Orders Section 27.3 states that no discussion shall arise on the substance of the minutes in any succeeding meeting, except as to their correctness.

Te Take Tūtohunga / Reason for the recommendation

The reason for the recommendation is to confirm the minutes are a true and correct record of the previous meetings.

3) NgĀ PĀnga PŪtea me ngĀ wĀhanga tahua / Financial Implications and Budgetary Provision

There are no financial implications or the need for budgetary provision as a result of this report.

ngĀ Āpitihanga / Attachments

1. 2021-06-16 Assurance, Risk and Finance Committee Minutes - A3242627 ⇩

Te Hōtaka Take Ōkawa / Compliance schedule:

Full consideration has been given to the provisions of the Local Government Act 2002 S77 in relation to decision making, in particular:

1. A Local authority must, in the course of the decision-making process,

a) Seek to identify all reasonably practicable options for the achievement of the objective of a decision; and

b) Assess the options in terms of their advantages and disadvantages; and

c) If any of the options identified under paragraph (a) involves a significant decision in relation to land or a body of water, take into account the relationship of Māori and their culture and traditions with their ancestral land, water sites, waahi tapu, valued flora and fauna and other taonga.

2. This section is subject to Section 79 - Compliance with procedures in relation to decisions.

He Take Ōkawa / Compliance requirement	Te Aromatawai Kaimahi / Staff assessment
State the level of significance (high or low) of the issue or proposal as determined by the Council’s Significance and Engagement Policy	This is a matter of low significance.
State the relevant Council policies (external or internal), legislation, and/or community outcomes (as stated in the LTP) that relate to this decision.	This report complies with the Local Government Act 2002 Schedule 7 Section 28.
State whether this issue or proposal has a District wide relevance and, if not, the ways in which the appropriate Community Board’s views have been sought.	It is the responsibility of each meeting to confirm their minutes therefore the views of another meeting are not relevant.
State the possible implications for Māori and how Māori have been provided with an opportunity to contribute to decision making if this decision is significant and relates to land and/or any body of water.	There are no implications on Māori in confirming minutes from a previous meeting. Any implications on Māori arising from matters included in meeting minutes should be considered as part of the relevant report.
Identify persons likely to be affected by or have an interest in the matter, and how you have given consideration to their views or preferences (for example – youth, the aged and those with disabilities).	This report is asking for the minutes to be confirmed as true and correct record, any interests that affect other people should be considered as part of the individual reports.
State the financial implications and where budgetary provisions have been made to support this decision.	There are no financial implications or the need for budgetary provision arising from this report.
Chief Financial Officer review.	The Chief Financial Officer has not reviewed this report.

Assurance, Risk and Finance Committee Meeting Agenda

21 July 2021

MINUTES OF Far North District Council
Assurance, Risk and Finance Committee Meeting
HELD AT THE Council Chamber, Memorial Avenue, Kaikohe
ON Wednesday, 16 June 2021 AT 1.30 pm

PRESENT: Chairperson John Vujcich, Deputy Chairperson Bruce Robertson, Mayor John Carter (HWTM) (via Microsoft TEAMs), Deputy Mayor Ann Court, Cr Rachel Smith, Cr Kelly Stratford (via Microsoft TEAMs), Cr Moko Tepania, Member Mike Edmonds, Member Adele Gardner

SATFF: Shaun Clarke (Chief Executive Officer), William J Taylor, MBE (General Manager Corporate Services), Dean Myburgh (General Manager District Services), Andy Finch (General Manager Infrastructure and Asset Management), Darren Edwards (General Manager Strategic Planning and Policy)

1 Karakia TimatAnga – Opening Prayer

Chair Vujcich opened with a karakia.

2 Ngā Whakapāha Me Ngā Pānga Mema / Apologies and Declarations of Interest

Apology

Resolution 2021/1

Moved: Cr Rachel Smith

Seconded: Member Adele Gardner

That the apology received from Cr Mate Radich be accepted and leave of absence granted.

Carried

3 Ngā Tono Kōrero / Deputation

The meeting was adjourned from 1.38 pm to 1:44 pm to tend to technical difficulties.

4 Confirmation of Previous Minutes

4.1 Confirmation of Previous Minutes

Agenda item 4.1 document number A3217348, pages 12 - 18 refers.

Resolution 2021/2

Moved: Member Bruce Robertson

Seconded: Cr Moko Tepania

That the Assurance, Risk and Finance Committee confirms the minutes of the Assurance, Risk and Finance Committee meeting held 5 May 2021 as a true and correct record.

Carried

5 Reports

5.1 Far North Holdings Statement of Intent 2021 to 2024

Agenda item 5.1 document number A3217104, pages 19 - 32 refers.

Recommendation

Moved: Chairperson John Vujcich

Seconded: Mayor John Carter

That the Assurance, Risk and Finance Committee receive the report Far North Holdings Statement of Intent 2021 to 2024.

AMENDMENT

Moved: Member Rachel Smith

Seconded: Member Kelly Stratford

Assurance, Risk and Finance Committee directs Chief Executive Officer to hold a workshop with Elected Members before 31 July 2021.

The amendment became the substative motion.

RESOLUTION 2021/3

Moved: Cr Rachel Smith

Seconded: Cr Kelly Stratford

That the Assurance, Risk and Finance Committee:

a) receive the report Far North Holdings Statement of Intent 2021 to 2024; and,

b) direct Chief Executive Officer to hold a workshop with Elected Members before 31 July 2021.

carried

Against: Cr Kelly Stratford

6 Information Reports

6.1 Council Financial Report for the Period Ending 30 April 2021

Agenda item 6.1 document number A3212234, pages 33 - 61 refers.

Resolution 2021/4

Moved: Member Bruce Robertson

Seconded: Cr Rachel Smith

That the Assurance, Risk and Finance Committee receive the report Council Financial Report for the Period Ending 30 April 2021.

Carried

Note: Assurance, Risk and Finance Committee note the exemplary performance of Northland Transport Alliance.

At 2:11 pm His Worship the Mayor left the meeting.

6.2 Revenue Recovery Report - 31 March 2021

Agenda item 6.2 document number A3201566, pages 62 - 67 refers.

Resolution 2021/5

Moved: Cr Moko Tepania

Seconded: Cr Rachel Smith

That the Assurance, Risk and Finance Committee receive the report Revenue Recovery Report - 31 March 2021.

Carried

At 2:29 pm Cr Kelly Stratford left the meeting.

6.3 June Risk Management

Agenda item 6.3 document number A3198952, pages 68 - 86 refers.

Resolution 2021/6

Moved: Chairperson John Vujcich

Seconded: Member Bruce Robertson

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

Carried

6.4 People and Capability Quarterly Update: 1 January - 31 March 2021

Agenda item 6.4 document number A3211089, pages 87 - 88 refers.

Resolution 2021/7

Moved: Cr Moko Tepania

Seconded: Chairperson John Vujcich

That the Assurance, Risk and Finance Committee receive the report People and Capability Quarterly Update: 1 January - 31 March 2021.

Carried

At 2:43 pm, Cr Rachel Smith left the meeting. At 2:45 pm, Cr Rachel Smith returned to the meeting.

6.5 Audit New Zealand Management Report for June 2020

Agenda item 6.5 document number A3209230, pages 89 - 120 refers.

Resolution 2021/8

Moved: Member Bruce Robertson

Seconded: Cr Rachel Smith

That the Assurance, Risk and Finance Committee receive the report Audit New Zealand Management Report for June 2020.

Carried

7 Te Wāhanga Tūmatati / Public Excluded

RESOLUTION TO EXCLUDE THE PUBLIC

Committee Resolution 2021/9

Moved: Chairperson John Vujcich

Seconded: Member Bruce Robertson

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
7.1 - Confirmation of Previous Minutes	s7(2)(h) - the withholding of the information is necessary to enable Council to carry out, without prejudice or disadvantage, commercial activities	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
7.2 - Audit New Zealand Fraud Questionnaire for Governance - May 2021	s7(2)(b)(ii) - the withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information s7(2)(e) - the withholding of the information is necessary to avoid prejudice to measures that prevent or mitigate material loss to members of the public 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)(j) - the withholding of the information is necessary to prevent the disclosure or use of official information for improper gain or improper advantage	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
7.3 - Far North District Council Current Legal Action and Potential Liability Claims as at 31 May 2021.	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

Carried

8 Karakia Whakamutunga – Closing Prayer

Cr Rachel Smith closed with a karakaia.

9 Te Kapinga Hui / Meeting Close

The meeting closed at 3:33 pm.

The minutes of this meeting will be confirmed at the Assurance, Risk and Finance Committee meeting to be held on 21 July 2021.

...................................................

CHAIRPERSON

Assurance, Risk and Finance Committee Meeting Agenda

21 July 2021

5 Reports

5.1 Audit New Zealand Documentation For The Year Ended 30 June 2021

File Number: A3275485

Author: Janice Smith, Chief Financial Officer

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

Take Pūrongo / Purpose of the Report

This report presents the draft external audit proposal and audit plan from Audit New Zealand. The Audit proposal includes fees for 2020/21 and 2021/22 audits.

WhakarĀpopoto matua / Executive Summary

· Far North District Council is required to be audited by the auditor appointed by the Office of the Auditor General, which for Far North District Council is Audit New Zealand.

tŪtohunga / Recommendation

That the Assurance, Risk and Finance Committee:

a) receive the audit documents

i) Audit Proposal Letter for the June 2021 and 2022 Financial Years;

ii) Audit Plan for the Year Ended 30 June 2021; and,

b) approve the CEO and Mayor signing the documents on behalf of Council as appropriate.

1) TĀhuhu kŌrero / Background

Far North District Council, in compliance with the Local Government Act 2002, prepares an Annual Report at the end of each financial year. This is required to be audited by the appointed Auditor, which for Far North District Council is Audit New Zealand. The schedule of dates agreed with Audit New Zealand for the financial year 2019/2020, are as follows:

o Interim Audit 1 – 12 April to 16 April 2021

o Interim Audit 2 – 17 May to 21 May 2021

o Pre final Audit – 28 June to 2 July 2021

o Final Audit – the three weeks commencing 30 August 2021

Adoption of the Annual Report is anticipated to be at the 27 October 2021 Council meeting.

2) matapaki me NgĀ KŌwhiringa / Discussion and Options

Attached to this report are the proposed audit plan and the audit proposal letter for the financial years 2020/21 and 2021/22.

The relevant legislation in relation to this issue is as follows:

a) Local Government Act 2002, Part 6, Section 98, Subpart 2 which requires Local Authorities to prepare and adopt an Annual Report in respect of each financial year; and

b) Local Government Act 2002, Part 6, Section 99, which requires the Annual report to include the Auditors Report outlining the authority’s compliance with Schedule 10 of the Local Government Act 2002.

It is recommended that the audit plan and the audit proposal be received and that the CEO and Mayor be authorised to sign on behalf of Council as appropriate.

Take Tūtohunga / Reason for the recommendation

To make the Committee aware of the documentation required to formalise the audit processes for the financial year ended 30 June 2021.

3) PĀnga PŪtea me ngĀ wĀhanga tahua / Financial Implications and Budgetary Provision

There are no specific financial implications other than the fees proposed. These are budgeted and included in the Annual Plan each year.

Āpitihanga / Attachments

1. Draft Audit Plan - A3275445 ⇩

2. FNDC 2021 and 2022 Fee Proposal Letter - A3275447 ⇩

Hōtaka Take Ōkawa / Compliance Schedule:

Full consideration has been given to the provisions of the Local Government Act 2002 S77 in relation to decision making, in particular:

1. A Local authority must, in the course of the decision-making process,

a) Seek to identify all reasonably practicable options for the achievement of the objective of a decision; and

b) Assess the options in terms of their advantages and disadvantages; and

2. This section is subject to Section 79 - Compliance with procedures in relation to decisions.

He Take Ōkawa / Compliance Requirement	Aromatawai Kaimahi / Staff Assessment
State the level of significance (high or low) of the issue or proposal as determined by the Council’s Significance and Engagement Policy	Low
State the relevant Council policies (external or internal), legislation, and/or community outcomes (as stated in the LTP) that relate to this decision.	Local Government Act Part 6, Sub Part 2, s98 and s99
State whether this issue or proposal has a District wide relevance and, if not, the ways in which the appropriate Community Board’s views have been sought.	District Wide
State the possible implications for Māori and how Māori have been provided with an opportunity to contribute to decision making if this decision is significant and relates to land and/or any body of water. State the possible implications and how this report aligns with Te Tiriti o Waitangi / The Treaty of Waitangi.	None
Identify persons likely to be affected by or have an interest in the matter, and how you have given consideration to their views or preferences (for example – youth, the aged and those with disabilities).	None
State the financial implications and where budgetary provisions have been made to support this decision.	None
Chief Financial Officer review.	The Chief Financial Officer has prepared this report

Assurance, Risk and Finance Committee Meeting Agenda

21 July 2021

5.2 Far North Holdings Management Accounts Q3 2021

File Number: A3274408

Author: Julia Lee, Senior Financial Accountant

Authoriser: Janice Smith, Chief Financial Officer

Take Pūrongo / Purpose of the Report

To report the financial position of Far North Holdings Limited as at 31 March 2021.

WhakarĀpopoto matua / Executive Summary

At the Council meeting of 23 April 2020, Council requested that Far North Holdings Limited report on the financial position on a quarterly basis. This report is the third quarter report for the financial year 2021-21.

tŪtohunga / Recommendation

That the Assurance, Risk and Finance Committee receive the report Far North Holdings Management Accounts Q3 2021.

1) TĀhuhu kŌrero / Background

The March 2021 third quarter financial report has now been received from Far North Holdings Limited.

2) matapaki me NgĀ KŌwhiringa / Discussion and Options

This financial year is still being challenged with COVID‐19 and the associated consequences. As

budgeted, the border restrictions implemented have affected income relating to cruise ships and

airports. Rent relief was provided to tenants who were experiencing difficulties. The support

required by tenants has been less than expected due to the remarkable level of local tourism

activity in the Bay of Islands.

For this quarter, services revenue is up by $601k, due to boating and tourism activity in the Bay of Islands being better than anticipated. The performance at the marina, Paihia car park and the airport all continue to impress in the current circumstances.

Rental income is favourable by $265k. This is predominantly due to the COVID‐19 rent relief not

being required for as many tenants as budgeted. It should be noted that the budget was

finalised during the lockdown period when the outlook was particularly ominous.

Recoverable income is ahead of budget, and conversely direct expenses from investment

property is also up.

On the expenses side, Employee Benefit expenses are favourable by $353k. This will reduce as additional senior staff have been employed to assist with the growing requirements of FNHL’s business and upcoming projects. To date the savings have been offset by the increase in other operating expenses which includes the costs of external resources for planning and consultancy.

As aspects of tourism and the boating industry have been flourishing in the Bay of Islands, fuel sales have also been thriving. This has meant inventory costs have shown as a variance and are up $470k. Fuel sales have correspondingly increased, but the variance in goods sold has been offset by insufficient honey sales.

Finance expenses being below budget is attributable to the interest rate being lower than

projected.

Overall, the surplus is ahead of budget by $805,776 being 113% of the budgeted surplus of $713,048 for the 9 months to 31 March 2021. However, it should be noted that the surplus is $322k behind the same period as last year. Equity to asset ratio is positive at 52.76%, with a permissible ratio of 50%.

3) PĀnga PŪtea me ngĀ wĀhanga tahua / Financial Implications and Budgetary Provision

The budgeted dividend for the financial year 2020/21 was $340,000 based on the very constrained budget position compiled in lockdown last year. The current surplus is indicating that the dividend will be higher than this if the surplus continues to hold at the level identified in the third quarter report.

Āpitihanga / Attachments

1. FNHL March 2021 Quarterly Report - A3272600 ⇩

Hōtaka Take Ōkawa / Compliance Schedule:

Full consideration has been given to the provisions of the Local Government Act 2002 S77 in relation to decision making, in particular:

1. A Local authority must, in the course of the decision-making process,

a) Seek to identify all reasonably practicable options for the achievement of the objective of a decision; and

b) Assess the options in terms of their advantages and disadvantages; and

2. This section is subject to Section 79 - Compliance with procedures in relation to decisions.

He Take Ōkawa / Compliance Requirement	Aromatawai Kaimahi / Staff Assessment
State the level of significance (high or low) of the issue or proposal as determined by the Council’s Significance and Engagement Policy	Not significant
State the relevant Council policies (external or internal), legislation, and/or community outcomes (as stated in the LTP) that relate to this decision.	Schedule 8 (3) of the Local Government Act 2002
State whether this issue or proposal has a District wide relevance and, if not, the ways in which the appropriate Community Board’s views have been sought.	Not applicable
State the possible implications for Māori and how Māori have been provided with an opportunity to contribute to decision making if this decision is significant and relates to land and/or any body of water. State the possible implications and how this report aligns with Te Tiriti o Waitangi / The Treaty of Waitangi.	Not applicable
Identify persons likely to be affected by or have an interest in the matter, and how you have given consideration to their views or preferences (for example – youth, the aged and those with disabilities).	Not applicable
State the financial implications and where budgetary provisions have been made to support this decision.	No financial budgetary issues
Chief Financial Officer review.	The Chief Financial Officer has reviewed this report

Table 1: July 2021 Top Organisational Risk Dashboard					Key to trend of risk rating:			Decline
								No change/stable
								Increase
Risk ID:	Risk title	Inherent risk score	Trend of risk rating	Residual risk score	Accountable Risk Governance	Responsible Risk Governance	Risk Progress Report schedule		Risk Progress Report ARF agenda:
ARF001	Climate Change	63		30	CEO	GMSPP	6 Monthly		Mar 21
ARF003	Health & Safety Vulnerabilities	46		34	CEO	Manager P&C	3 Monthly		July 21
ARF004	Asset Management Risks	45		18	CEO	GMIAM	6 Monthly		Mar 21
ARF005	Affordability Risk	45		26	CEO	GMSPP	6 Monthly		June 21
ARF006	Project Priorities Deliveries Delays	45		14	CEO	GMIAM	3 Monthly		July 21
ARF007	Compliance NRC Abatements	45		18	CEO	GMIAM	6 Monthly		June 21
ARF009	Customer Service Delivery	39		22	CEO	Manager P&C	3 Monthly		June 21
ARF010	Data Governance Risks	39		14	CEO	CEO	6 Monthly		June 21
ARF012	Contract Management Risks	39		14	CEO	GMIAM	3 Monthly		July 21
ARF013	Drinking Water Resilience	35		ARF to agree level residual risk	CEO	GMIAM	3 Monthly		June 21

Table 2: 2021 Risk Programme

2021 ARF meeting date:	10/02	24/03	05/05	16/06	21/07	08/09	20/10	01/12
Risk deep dives		ARF001	ARF003	ARF013	ARF003	ARF004	ARF006	ARF005

ARF001 Climate Change		ü				ü
ARF003 Health & Safety Vulnerabilities	ü		ü		ü	ü		ü
ARF004 Asset Management Risks		ü				ü
ARF005 Affordability				ü				ü
ARF006 Project - Priorities Deliveries Delays	ü		ü		ü		ü
ARF007 Compliance NRC Abatements				ü				ü
ARF009 Customer Service Delivery		ü		ü		ü		ü
ARF010 Data Governance Risks				ü				ü
ARF012 Contract Management Risks	ü		ü		ü		ü
ARF013 Drinking Water Resilience		ü		ü		ü		ü

MATAPAKI ME NGĀ KŌWHIRINGA / Discussion and Next Steps

Organisational Risk Management:

The 16 June 2021 deep dive was a rapid immersion into our drinking water resilience risk. This session was attended by two subject matter experts, Infrastructure Compliance Lead and PM Drinking Water Assessment with the Managers of Asset Management and Infrastructure Operations. At the session Elected Members wanted to understand resilience in regard changing conditions and operations, and how our thinking round resilience has matured (over the last 12 months) by supply:

· Alternative water supply for Kaitaia should be available after Christmas 2021

· Second deep bore at Monument Hill

· Reservoir storage for Kerikeri

· Catchment management process review of Water Treatment Plants

· Water Safety Plans (which also address risk management) will protect from source to customer and include improvement plans

What the acceptable level of risk, for each water scheme and the residual risk profile, is yet to be determined.

The July 2021 deep dive has focuses on health and safety vulnerabilities. The session will share the results of a recent Great Workplaces Wellbeing survey which investigates how hybrid working has affected our wellbeing.

Further deep dives are scheduled for the remainder of this calendar year, see table 2.

A risk training workshop, for elected members, is in development. With the support of our independent member to Assurance, Risk and Finance Committee, it is proposed to deliver this bespoke in-house training later in the new financial year.

Emergent risk:

No new emergent risks have been identified for inclusion in this report.

Table 3: Table of Identified Emergent Risk

Emergent risks	Presented to Assurance, Risk and Finance Committee	Progress
1. The risk of externally funded shovel ready, economic stimulus employment opportunity projects due to the impact of the COVID-19 pandemic.	October 2020	Subject of a risk progress report to the Assurance, Risk and Finance Committee meeting, March 2021.
2. The financial and legal risks because of climate change. Timing of a report on this risk, to the Assurance, Risk and Finance Committee meeting, is to be determined.	October 2020	March 2021 Climate Change deep dive was held. Proposed to break the climate change into two risks to enable focus on transition risks such as financial and legal.
3. District Services have proposed to escalate one of their top group risks for consideration of inclusion on the top organisational dashboard.	October 2020	It is proposed that this be included in the Assurance, Risk and Finance Committee risk workshop agenda.
4. The risk of not fit for purpose business continuity arrangements.	October 2020	This was subject to a report at the December 20 Assurance, Risk and Finance Committee meeting. An up-date is provided under the group risk section.
5. Government’s Three Waters Reform programme: a. Establishment of Taumata Arowai b. Regulatory reforms as outlined in the Water Services Bill, and c. Reform of water delivery services including wastewater and stormwater networks.	December 2020	Taumata Arowai established March 2021. Next steps in the 3waters reform programme: 1. Cabinet decisions on detailed reform proposals, expected mid 2021 2. Release of Council specific analysis and information (linked to Cabinet decisions on number and boundaries of entities, expected mid 2021 3. Release of RfI data – DIA will release a flat file containing all non- commercially sensitive council raw data provided under the RfI, expected mid-2021.
6. Potential impact of the Worksafe decision, in December 2020, to charge 13 parties over the Whakaari/White Island tragedy; and the government review of WorkSafe New Zealand’s performance of its regulatory functions in relation to activities on Whakaari White Island.	February 2021	Impact to be considered when further information is to hand. MBIE expects to receive this report by 30 June 2021.

Organisational Risk Progress Reports:

Three scheduled risk progress reports, including high level treatment plan progress, are provided with highlights and analysis of risk progress below. More detail is available in the attached risk progress reports.

A decision report was to be put to the July 2021 Assurance, Risk and Finance Committee meeting on the formation of an Affordability Risk reference group and a recommendation to commission a new affordability study. The decision was made to delay this report until the 3 waters reform Council specific analysis and information has been received. It is anticipated that this report will provide significant economic analysis which will be used to inform this risk.

No additional reporting requirement for organisational risk has been identified.

Risk progress reports – highlights and analysis:

1. ARF003 Health Safety and Wellbeing Vulnerabilities Risk Progress Report: The inherent risk rating trend has been assessed as increasing. Post the May 2021 ARF meeting, two further vulnerabilities were added focusing on the Beach Safety Review and Opua Cycleway Risk Mitigations. The report also includes a section on existing treatment in place to support the Health, Safety and Wellbeing of FNDC Staff.

2. ARF006 Projects Priorities Delivery Delays Risk Progress Report: The inherent risk rating trend has been assessed as stable. Performance to financial year end June 2021 has improved (this year versus prior) with close to 82% of this year’s work programme being awarded by the end of June.

3. ARF012 Contract Management Risk Progress Report: The inherent risk rating trend has been assessed as stable. The Contract Management Framework, Policy, process and templates have been completed. New treatments have been identified to manage increasing number of “small” contractors and our contract concentration risk.

Risk dashboards:

The dashboards provide information on:

· the total number of identified risks

· the percentage of risks assessed categorised as high, medium or low impact score

· the level of the risk within Council (Department, Group or Organisation level risk); and

· the risk description by category (see table 4):

o Health, Safety & Wellbeing

o Legal

o Operational / Financial

o Optimising efficiency

o People and culture

o Regulatory and Compliance

o Reputational / Strategic.

Assurance, Risk and Finance Committee Meeting Agenda

21 July 2021

6.3 Revenue recovery report as at 30 June 2021

File Number: A3277137

Author: Margriet Veenstra, Manager - Transaction Services

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

TAKE PŪRONGO / Purpose of the Report

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

WHAKARĀPOPOTO MATUA / Executive SummarY

This is the final report for the financial year 2020/21 and provides information on action taken to collect the current and arrears balances for rates, water and sundry debt so far this year, and to provide information on how collection is tracking against targets.

TŪTOHUNGA / Recommendation

That the Assurance, Risk and Finance Committee receive the report Revenue recovery report as at 30 June 2021.

tĀHUHU KŌRERO / Background

This document has been prepared to outline current and arrears balances for rates, water and Sundry debt as at 30 June 2021 and the actions taken by the debt management team for the collection of the General Title rates and water and sundry debt.

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

MATAPAKI ME NGĀ KŌWHIRINGA / Discussion and Next Steps

Background

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

Discussion and Next Steps

The data provided is for General Title and Maori Freehold Land rates and water accounts with sundry debtors shown in a separate table. The General Title rates total arrears balance has been reduced by 46% from $9,498,217 on 31 July 2020 to $5,145,536 on 30 June 2021. The General Title water rates were reduced by 45% from $1,439,058 on 31 July 2020 to $795,218 on 30 June 2021.

General Title rates and water debt

Key actions since the last report:

· Since the last report, payments were received for the last batch of final demand issued for the properties which had been issued mortgage demand this year. Since commencing mortgage demand, a direct debit is in place for 365 properties to clear the arrears and a further 50 cleared their arrears in full.

· Debt management contacted owners of only last years’ rates owing to offer payment plans to avoid Council issuing mortgage demand in the new rating year.

Next actions:

· Complete reporting for all properties with mortgages and prepare to issue mortgage demand to the 5 major banks on the 1^st of August 2021. Smaller banks and financial institutions to follow.

· Reports to be provided to Council legal team to send letters to an additional 10 property owners identified for potential legal proceedings.

· Complete review of 5 properties to commence the Abandoned land process.

· Complete reporting for properties without a mortgage to make contact and send the first demand letter as part of the final demand process which could result in legal action after the 3^rd letter.

For the total number of General Title rates and water accounts marked as ‘Debt recovery action to commence’:

· 199 are properties with a mortgage who debt management were not able to contact and so they will be included in mortgage demand next year.

· The remaining 578 properties are those where there is no mortgage, no payments have been received and the owner has not contacted council to discuss payment options.

· 298 of these accounts have arrears of 3 or more rating years.

o A review to take place of all the accounts who received 2 demand letters in 2019 and send a final letter notifying the owners that legal proceedings are imminent.

o Debt management to attempt to contact the remaining property owners and/or send demand letters.

· 95 have rates arrears of up to two years.

o Debt management to attempt to make contact and/or send demand letters.

Maori Freehold Land rates and water debt

The debt Maori Freehold land has reduced since the last report, because of write-off’s which were completed in June as per the Local Government (Rating of Whenua Maori) Amendment Act 2021.

Sundry debtors debt

The total sundry debtors aged debt balance has reduced since the last report, as the outstanding invoice for $1m was paid after the report date. However, the 90+ resource consent debt has reduced by $134,507 since the last report.

While working closely with the resource consents team to clear the aged debt, debt management have continued their focus on current resource consent collection.

Final demand letters have been issued to debtors with outstanding debt and these will be referred to Council Legal Services team to take legal action in the next couple of months.

Work in progress:

· Resource consent team to update the resource consent application confirmation letter to customers, adding an explanation of the payment and invoicing process, plus requirements and responsibilities of the applicant.

· Resource consent team to update the resource consent invoices to give a better overview of charges and fee review objection timeline to reduce queries.

· Council Legal Services Team to review of previous legal opinion that Council is not able to request payment prior to issuing a resource consent by council legal services team.

PĀNGA PŪTEA ME NGĀ WĀHANGA TAHUA / Financial Implications and Budgetary Provision

Provision is made annually for doubtful debts in relation to the arrears owed to council. A higher provision for Maori 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.

Āpitihanga / Attachments

1. June 2021 ARF Revenue recovery Report attachment - A3277123 ⇩


	Group Risk Dashboards

District Services Risk Dashboard	24 risks ü Three lines defence established	Date: 28/06/21


IAM Group Risk Dashboard	27 risks ü Three lines defence established	Date: 28/06/21

Risk Description	Description of category	Example
Health Safety & Wellbeing	A work environment that is without risk to health and safety, so far as is reasonably practicable	Lone worker vulnerability
Legal	Application of the law (and its consequences) to FNDC actions	Court action
Operational/Financial	Whole of business view of FNDC performance including service/services delivery, risk, finance, environmental	Affordability
Optimising efficiency	Managing the present, lineal response to what exists today such as system, Continuous Improvement, process	Born digital improvements e.g. BCA application
People and culture	Capability, mindsets, behaviour	Disability awareness workshops
Regulatory and Compliance	Conforming to rules, external = law or regulation; internal = policies	Audits
Reputational	The external estimation in which FNDC and brand is held	Customer service delivery
Strategic	Adapting to change: Innovation / create the future / selectively forget the past	Climate change / Affordability