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 bookkeeping, 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
Adele Gardner	N/A - FNDC Honorarium
	Te Hiku Education Trust	Trustee
	Te Ahu Charitable Trust	Trustee
	ST Johns Kaitaia Branch	Trustee/ Committee Member
	Te Hiku Sports Hub Committee	Committee Member
	I know many FNDC staff members as I was an FNDC staff member from 1994-2008.
Partner of Adele Gardner	N/A as Retired

Assurance, Risk and Finance Committee Meeting Agenda

27 April 2022

4 Confirmation of Previous Minutes

4.1 Confirmation of Previous Minutes

File Number: A3667630

Author: Joshna Panday, Democracy Advisor

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

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.

Recommendation

That the Assurance, Risk and Finance Committee confirms the minutes of the Assurance, Risk and Finance Committee meeting held 16 March 2022 as a true and correct record.

1) 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) 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.

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) Financial Implications and Budgetary Provision

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

Attachments

1. 2022-03-16 Assurance, Risk and Finance Committee Minutes - A3625802 ⇩

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.

Compliance requirement	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 for 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 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.

Table 1: Top organisational risk dashboard

Risk ID:	Risk title	Date Risk adopted	Inherent risk score	Residual risk score	The risk trend is:	Months since risk trend last changed:	High level risk treatment progress:
Climate Change
ARF015	Climate Change Organisation Transition Risk	01/12/22	31		Stable	3	The Climate Change Risk Reference Group is working to develop an understanding of treatments in place, in progress and gaps/opportunities.
ARF016	Climate Change Community Transition Risk	01/12/22	39		Stable	3	The Climate Change Risk Reference Group is working to develop an understanding of treatments in place, in progress and gaps/opportunities.
ARF017	Climate Change Direct Risk to Council Physical and Natural Assets	01/12/22	37		Stable	4	The Climate Change Risk Reference Group is progressing work to identify treatments in place, in progress and gaps/opportunities such as need to integrated Climate change adaption and mitigation planning into Infrastructure Planning, Asset Management Planning and Financial Planning.
ARF018	Failure to understand and capture climate-related opportunities	01/12/22	29				The Climate Change Risk Reference Group is working to develop an understanding of opportunities.
Enterprise Governance
ARF003	Health & Safety Vulnerabilities	30/05/19	46	34	Increasing	20	A 90-day Health Safety and Wellbeing review has commenced. This review includes existing projects; progress to complete Council’s 5-year Health, Safety and Wellbeing strategic plan; calendar of core Health Safety and Wellbeing activities; progress of treatments; and an audit of health and safety processes and records.
ARF005	Affordability Risk	30/05/19	45	26	Increasing	18	An Affordability Risk Reference Group has been established with a work programme which includes theming and prioritizing the organisational Affordability risk(s). Terms of reference have been agreed.
ARF010	Data Governance Risks	30/05/19	39	14	Increasing	6	Good progress has been made to implement treatments. Cyber security risk, is intensifying with growing digital dependency and increasing geopolitical disruptions.
Infrastructure and Asset Management
ARF004	Asset Management Risks	30/05/19	45	18	Decreasing	4	Asset Management Plans and project management framework are implemented with good progress made against other treatments.
ARF006	Project Priorities Deliveries Delays	30/05/19	45	14	Increasing	4	The external environment is impacting this risk with issues being experienced such as contractor availability and increasing cost of labour and materials.
ARF007	Compliance NRC Abatements	30/05/19	45	18	Increasing	6	NRC are increasing the use of abatement notices as a key part of their compliance strategy. Legislative and regulatory change currently being faced.
ARF012	Contract Management Risks	30/05/19	39	14	Stable	23	Treatments such as the new contracts register, and contract management framework are progressing.
ARF013	Drinking Water Resilience	05/07/20	35		Stable	18	Updated Water Safety Plans (due 31 March 2022) will inform our understanding of the resilience issues faced by each scheme along with an improvement plan for those issues.
ARF014	Programme Darwin	08/09/21	35	13	Increasing	6	Treatments to reduce either the impact or probability of this risk are yet to be confirmed or implemented.

Table 2: 2022 Deep dive programme and risk progress report schedule;

	2022 ARF meeting date:	02/02	16/03	27/04	22/06	31/08
	Deep Dive Programme:			Review Risk Management Policy Affordability risks	Climate Change – Treatment mapping / residual risk	Infrastructure & Asset Management risks
Climate Change risk progress reporting schedule
ARF015	Climate Change Organisation Transition Risk		ü		ü	ü
ARF016	Climate Change Community Transition Risk		ü		ü	ü
ARF017	Climate Change Direct Risk to Council Physical and Natural Assets	ü		ü		ü
ARF018	Failure to understand and capture climate-related opportunities				ü
Enterprise Governance risk progress reporting schedule
ARF003	Health & Safety Vulnerabilities	ü		ü		ü
ARF005	Affordability Risk				ü
ARF010	Data Governance Risks				ü
Infrastructure and Asset Management risk progress reporting schedule
ARF004	Asset Management Risks	ü				ü
ARF006	Project Priorities Deliveries Delays	ü		ü		ü
ARF007	Compliance NRC Abatements				ü
ARF012	Contract Management Risks	ü		ü		ü
ARF013	Drinking Water Resilience		ü		ü	ü
ARF014	Programme Darwin	ü		ü		ü
	Externally funded shovel ready, economic stimulus employment opportunity projects		ü

MATAPAKI ME NGĀ KŌWHIRINGA / Discussion and Next Steps

Organisational risk management

Council continues to experience external environment influences which are aggravating a number of organisational risks:

· Impact of inflation due to two major trends (reduction of the effect of the dis-inflationary force of globalisation; and the transition to factoring in the full cost of producing and delivering goods and services); COVID-19-related impact on supply chains (including the move from just in time to just in case); and the effects of sanctions on Russia and their invasion of Ukraine

· COVID-19-related disruptions to supply chains including rising commodity prices

· Labour market gaps difficulties in attracting and retaining skilled staff in specific areas where there are New Zealand wide “shortages”

· Intensifying cybersecurity risk with growing digital dependency and increasing geopolitical disruptions

· Resourcing required to respond to government led regulatory changes (climate change, local government, 3waters)

· Increasing regulatory intervention - MinterEllisonRuddWatts 2022 litigation forecast is for increasing regulatory intervention due to climate change, class actions and swift legislative change for some sectors. This includes increase focus by Health and safety regulators on ‘upstream’ duty holders; and expectation that the Office of the Privacy Commissioner (OPC) will switch gear from education to enforcement under the enhanced privacy regulatory framework (Privacy Act 2020).

The 2022 Global Risks Report

The 2022 Global Risks Report (published by the World Economic Forum) leverages the collective intelligence of an expanding community of the world’s foremost risk experts, convened by the World Economic Forum’s Global Risks Practice - the Global Risks Report Advisory Board, the Chief Risk Officers Community and the Global Future Council on Frontier Risks, as well as a series of consultations with regional and thematic experts from the public and private sectors. It also draws on the views of over 12,000 country-level leaders who identified critical short-term risks to their 124 countries, gathered through the World Economic Forum’s Executive Opinion Survey.

The following two 2022 Global Risks Report graphics identify the top ten global risks by severity and the risks the most damaging risks will aggravate.

Chart, bar chart

Description automatically generated with medium confidence

Chart, diagram

Description automatically generated with medium confidence

Progress to establish a legal compliance system to assist in the management of legislative risk and compliance:

To address the legal compliance risk of our rapidly evolving and complex regulations Council has entered into an agreement with ComplyWith. ComplyWith provides a generic legal compliance system, with the content needed for local government (the Obligations Register), mapping these obligations to the responsible staff member. Implementation is on track to complete the first survey completed by end May 2022.

Emergent risk:

Table 3: Table of identified emergent risk

Emergent risks	Presented to ARF:	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	The Assurance, Risk and Finance Committee received a report at the March 2022 meeting
2. 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.
3. The risk of not fit for purpose business continuity arrangements.	October 2020	A progress up-date is provided under the group risk section.
4. 4. Government’s Three Waters Reform programme.	December 2020	Progress on the three waters reform programme does not form part of the Assurance, Risk and Finance Committee agenda.
5. 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.
6. Ngapuhi Mana Whakahono ā Rohe.	February 2022	This emergent risk is focussed on our ability to meet the statutory timeframe to review all Council policies and process within six months of completing a Mana Whakahono ā Rohe. An internal hui /workshop with a cross-functional team of 17 staff, supported by the Principal Advisor Organisational Performance & Transformation and the Project and Change Specialist, is planned.

Emergent risks	Presented to ARF:	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	The Assurance, Risk and Finance Committee received a report at the March 2022 meeting.
2. 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.
3. The risk of not fit for purpose business continuity arrangements.	October 2020	A progress up-date is provided under the group risk section.
4. Government’s Three Waters Reform programme.	December 2020	Progress on the three waters reform programme does not form part of the Assurance, Risk and Finance Committee agenda.
5. 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.
6. Ngapuhi Mana Whakahono ā Rohe.	Feb 2022	This emergent risk is focussed on our ability to meet the statutory timeframe to review all Council policies and process within six months of completing a Mana Whakahono ā Rohe. An internal hui /workshop with a cross-functional team of 17 staff, supported by the Principal Advisor Organisational Performance & Transformation and the Project and Change Specialist, is planned.

Risk progress reports – highlights and analysis:

1. ARF003 Health & Safety Vulnerabilities Risk Progress Report. The inherent risk rating trend has been assessed as increasing. A 90-day Health Safety and Wellbeing review is underway. This review will include existing projects; progress to complete Council’s 5-year Health, Safety and Wellbeing strategic plan; calendar of core Health Safety and Wellbeing activities; progress of treatments; and an audit of health and safety processes and records.

2. ARF006 Project Priorities Deliveries Delays Progress Report. The inherent risk rating trend has been assessed as increasing. Tenders received for two significant projects above the available budgets. Material and labour prices have risen considerably in the past 12 months and an oversupply of construction projects is impacting on availability of contractors.

3. ARF012 Contract Management Risks Progress Report. The inherent risk rating trend has been assessed as stable as Council continues to make progress against treatments.

4. ARF014 Programme Darwin. No risk progress report has been tabled due to the proposal (below) to provide a full Program Darwin risk report at the next Assurance, Risk and Finance Committee meeting. The inherent risk rating trend remains assessed as increasing with treatments to reduce either the impact or probability of this risk yet to be confirmed or implemented.

5. ARF017 Climate Change Direct Risk to Council Physical and Natural Assets The inherent risk rating trend has been assessed as stable. The Climate Change Risk Reference Group is progressing work to identify treatments in place, in progress and gaps/opportunities such as need to integrated Climate change adaption and mitigation planning into Infrastructure Planning, Asset Management Planning and Financial Planning.

Programme Darwin

Background and context: On 16 December 2021 a decision report was presented to Council. This report requested additional funding to reduce the overall delivery risk. After deliberation Elected Members agreed “that the item is left to lie on the table” and voted on an amendment:

“That Council request a working group be established and a terms of reference be developed, in collaboration with CEO and relevant staff, reporting to the ARF Committee for governance oversight of Programme Darwin”.

A Programme Darwin Elected Members Steering Group has been established and a Terms of Reference drafted. The draft Terms of Reference has not been adopted.

The officer-level Darwin Programme Working Group agreed that an additional risk report, from the Infrastructure Asset Management team, on Programme Darwin be scheduled for the May 2022 Assurance, Risk and Finance Committee agenda. The goal of this report is to provide better clarity, for governance purposes, of the potential impacts of Programme Darwin to the organisation.

Group Risk Up-date

Group 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

27 April 2022

5.2 Revenue recovery report 31 March 2022

File Number: A3661007

Author: Margriet Veenstra, Manager - Transaction Services

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

TAKE PŪRONGO / Purpose of the Report

To provide quarterly reporting to the Far North District Council Assurance, Risk, and Finance Committee.

WHAKARĀPOPOTO MATUA / Executive SummarY

This is the third report for the financial year 2021-22 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 31 March 2022.

tĀHUHU KŌRERO / Background

This document has been prepared to outline current and arrears balances for rates, water and Sundry debt as of 31 March 2022 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 Māori Freehold Land rates and water accounts with sundry debtors shown in a separate table. Since the 1^st of July 2021, the General Title rates total arrears balance has been reduced by 30% and water rates by 38%.

General Title rates and water debt

Key actions since the last report:

· Mortgage demand was issued against 152 accounts, with more than $2,000 in arrears, totalling $553,328.99.

· These accounts were selected for the following reasons:

o Mortgage Demand(s) has been issued previously which was paid by the bank

o Have been contacted as part of pre-demand calling but have not made payments.

o No contact details on the account and owners have not responded to letters

o New owners (2019+), no payments since purchase, no response to letters or calls

· A review of all 70 ASB account, where first mortgage demand was issued the day before the August 2021 lockdown has been completed. We will request ASB to contact all customers, requesting full payment of arrears within 4 weeks, otherwise final demand will be issued and paid.

Next actions:

· Continue mortgage demand pre-calling for the smaller financial institutions and water accounts.

· Review properties without a mortgage and high arrears and commence demand process in collaboration with Council’s Legal Services team.

· Contact owners of local businesses to offer a seasonal payment plan, providing reduced rates payments during the winter months to provide relief as tourism picks up when the borders open from May 1^st. An increase in payments during the summer months will bring their rates up to date by the end of the rating year.

· Complete in-depth investigations for the first tranche of abandoned land sales and commence with the process.

· Post instalment due date calling of owners whose rates had been current but missed payment of the 4^th instalment to offer support, payment plans and remittance of penalties.

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

· These are properties where there is no mortgage, and we do not have a payment arrangement or direct debit set up on the account.

· 36% of properties only have last year’s rates in arrears and 12% have 2 years of arrears. Debt management will be contacting these owners by phone, email, or letter. Any water arrears will be picked up at the same time.

· 52% of these accounts have arrears of 3 or more rating years. Debt management will start the final demand process for these which can result in referral to Council’s legal services team to commence legal proceedings.

Māori Freehold Land rates and water debt

The debt for Māori Freehold land has reduced since the write-offs were completed in June as per the Local Government (Rating of Whenua Māori) Amendment Act 2021. The rates debt has reduced by 2.13% since the start of the year.

Sundry debtors debt

The total sundry debtors aged debt balance has reduced by $1.3 million since the last report, mainly due to payment of a large invoice for $1.2 million.

The 90 day+ resource consent and building consent debt has increased and debt management continue to work with both teams to reduce this. We do continue to see a reduction 30-to-60-day debt totals for both resource consents and building consents.

Debt management continue to send final demand letters and refer them to Council Legal Services team to take legal action where possible.

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 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.

Āpitihanga / Attachments

1. 31 March 2022 ARF Revenue recovery Report attachment - A3666978 ⇩

		District Services Risk Dashboard		Review Date: 28/03/2023 24 risks


		IAM Group Risk Dashboard		Review Date: 28/03/2022 25 risks


Table 4: Key to risk category
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