Agenda of Risk and Assurance Committee - Tuesday, 1 December 2020

Item No.	Subject of each matter to be considered	Reason for passing this resolution in relation to each matter	Grounds under Section 48(1) for the passing of this resolution	When the item can be released into the public
9.1	Public Excluded Risk and Assurance Committee Minutes - 15 October 2020	As noted in the relevant Minutes.	As noted in the relevant Minutes.	To remain in public excluded.
9.2	Key Risk Register Update - September 2020	Withholding the information is necessary to prevent the disclosure or use of official information for improper gain or improper advantage.	48(1)(a)(i) Section 7 (2)(j).	To remain in public excluded.

Risk and Assurance Committee Minutes

15 October 2020

Risk and Assurance Committee

Open Minutes

Commencing: Thursday 15 October 2020, 9:30 am

Venue: Council Chambers, Regional House, 1 Elizabeth Street, Tauranga

Chairperson: Cr David Love

Deputy Chairperson: Bruce Robertson

Members: Cr Bill Clark

Cr Stuart Crosby (Via Zoom)

Cr Andrew von Dadelszen

Chairman Doug Leeder (Ex Officio)

In Attendance: Councillors: Jane Nees, Norm Bruning and Kevin Winters (via Zoom)

Staff: Mat Taylor – General Manager, Corporate; Sarah Omundsen – General Manager, Regulatory Services; Debbie Hyland – Finance & Transport Operations Manager; Jessica Easton – Legal and Commercial Manager; Andy Dixon – Treasury & Tax Specialist; Steven Slack – Risk & Assurance Manager; Aaron Huggins – Principal Internal Auditor; Mark Le Comte – Principal Advisor, Finance; Nolene Naude – Financial Accounting Team Lead; Claire Gordon – Finance Support Team Leader; Graeme Howard – Corporate Planning Lead; Tracey Wilson – Financial Accountant; Matt Hunt – Communications Team Leader and Merinda Pansegrouw – Committee Advisor

External Presenters: Leon Pieterse – Audit Director, Audit New Zealand; Richard Williams - Tax Partner Ernst & Young New Zealand; Rachael Gemming - Tax Associate, Ernst & Young New Zealand

Apologies: Cr Te Taru White

1. Apologies

Resolved

That the Risk and Assurance Committee:

1 Accepts the apology from Cr Te Taru White tendered at the meeting.

Love/Clark

CARRIED

2. Order of Business

Members noted a change in the order of business to accommodate external presenters from Audit NZ (Item 8.5 - 2019/20 Draft Annual Report review and item 8.4 - Setting audit fees for the upcoming LTP 2021-2031 audits) and Ernst & Young New Zealand (Item 9.2 - IRD Risk Review of Bay of Plenty Regional Council – Public Excluded).

3. Declaration of Conflicts of Interest

· Bruce Robertson – Item 8.5, 2019/20 Draft Annual Report review

· Councillor Andrew von Dadelszen – Item 9.4, Chairman’s Discretionary Fund 2019/20.

4. Minutes

Minutes to be Confirmed

4.1

Risk and Assurance Committee Minutes - 15 June 2020

Resolved

That the Risk and Assurance Committee:

1 Confirms the minutes, Risk and Assurance Committee Minutes - 15 June 2020 as a true and correct record.

Love/Robertson

CARRIED

5. Reports

Information Only

5.1

2019/20 Draft Annual Report review

Presentation - Risk and Assurance - Draft Annual Report Review 2019-20: Objective ID A3657221

Bruce Robertson declared an interest in Agenda Item 8.5, 2019/20 Draft Annual Report Review and did not participate in any discussion relating to the Awatarariki Fanhead.

Finance & Transport Operations Manager Debbie Hyland, Corporate Planning Lead Graeme Howard, Financial Accounting Team Lead Nolene Naude and Audit Director, Audit New Zealand Leon Pieterse presented the report.

09:42am – Cr Andrew von Dadelszen entered the meeting.

Key Points:

· Currently awaiting finalisation of results from Quayside Holdings Limited before proceeding with next steps; expected the final results to be available before the end of October 2020

· Presented the draft financial and non-financial performance results of the Council for the year ending 30 June 2020

· Council’s draft operating surplus for year two of the Long Term Plan 2018-2028 was $2.8 million which was $0.2 million higher than the budgeted surplus of $2.6 million

· Council’s Long Term Plan 2018-2028 included 33 performance measures with targets for 2019/20; achieved 28 (85%) of the targets that were set for the year ended 30 June 2020

· While COVID-19 has had an impact on a number of Council’s services, Council still managed to see improvement in some of the levels of service, including resource consent processing times and the replacement of non-compliant burners in the Rotorua Airshed

· Final reviews were currently being carried out by staff and Audit New Zealand and changes.

· Staff anticipate that the final 2019/20 Annual Report would be presented for adoption by Council in November/December 2020.

Key Points - Members:

· Acknowledged the impact of a hugely disruptive year; the second half of 2019/20 saw the emergence of COVID-19 which has had an unprecedented impact

· Thanked staff for their commitment to continued service delivery

· Noted that a report on a “Comprehensive Procurement Plan” for quarried rock material would be considered by Council at its meeting on 29 October 2020.

Key Points – External Auditor, Leon Pieterse:

· Provided an overview of the overall audit process and the envisaged timeline for the Annual Report sign-of

· 2020 had been a challenging year in the audit area; COVID-19 had caused a delay in the finalisation/sign-off of audits

· Was comfortable that the control environment was reliable and would result in an efficient audit

· The PUT-option was still outstanding since the methodology required a review by an independent external party; feedback was expected to be completed by the end of October 2020

· Was satisfied with the Regional Infrastructure Fund payments/process and the COVID-19 Disclosure Statement

· The consolidation of accounts was however still outstanding as Quayside Holding’s audit still needed to be completed. Audit NZ was currently working alongside Quayside on progressing the finalisation.

Item for Staff Follow Up:

· Executive Summary 2019/20 Draft Annual report (Page 77) to be updated by providing clarification on the status of the Regional Coastal Environment Plan (RCEP), indicating that the Plan had been signed off by the Minister of Conservation.

Resolved

That the Risk and Assurance Committee:

1 Receives the report, 2019/20 Draft Annual Report review.

von Dadelszen/Clark

CARRIED

Public Excluded Section

Resolved

Resolution to exclude the public

1 Excludes the public from the following parts of the proceedings of this meeting as set out below:

The general subject of each matter to be considered while the public is excluded, the reason for passing this resolution in relation to each matter, and the specific grounds under section 48(1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution are as follows:

Item No.	Subject of each matter to be considered	Reason for passing this resolution in relation to each matter	Grounds under Section 48(1) for the passing of this resolution	When the item can be released into the public
8.5	2019/20 Draft Annual Report review	Withholding the information is necessary to maintain legal professional privilege.	48(1)(a)(i) Section 7 (2)(g).	To remain in public excluded.

2 That Leon Pieterse – Audit Director, Audit New Zealand be permitted to stay in the public excluded section of the meeting due to his knowledge of the matter under discussion, being the 2019/20 Draft Annual Report review.

[Love/Robertson]

[CARRIED]

5.2

Setting audit fees for the upcoming LTP 2021-2031 audits

Finance & Transport Operations Manager Debbie Hyland and Audit Director, Audit New Zealand Leon Pieterse presented the report.

Key Points:

· After three years with no increases, there were cost pressures that would be addressed in the setting of the 2021-31 LTP audit fees

· The 2021-31 LTP audit fees would be set on the fee established for the 2018-2028 LTP audit (excluding any additional fee recoveries) plus an increase of 7.5% (an inflationary increase of approximately 2.5% per annum).

Resolved

That the Risk and Assurance Committee:

1 Receives the report, Setting Audit Fees for the upcoming LTP 2021-2031 Audits.

Robertson/von Dadelszen

CARRIED

Public Excluded Section

Resolved

Resolution to exclude the public

1 Excludes the public from the following parts of the proceedings of this meeting as set out below:

Item No.	Subject of each matter to be considered	Reason for passing this resolution in relation to each matter	Grounds under Section 48(1) for the passing of this resolution	When the item can be released into the public
9.2	IRD Risk Review of Bay of Plenty Regional Council	Withholding the information is necessary to maintain legal professional privilege.	48(1)(a)(i) Section 7 (2)(g).	To remain in public excluded.

2 That Richard Williams - Tax Partner and Rachael Gemming - Tax Associate, Ernst & Young New Zealand be permitted to stay in the public excluded section of the meeting due to their knowledge of the matter under discussion, being the IRD Risk Review of Bay of Plenty Regional Council.

[Love/Robertson]

[CARRIED]

5.3

Committee Chairperson's Report

General Manager, Corporate Mat Taylor updated members on the Audit and Risk Committee’s activities and provided an overview of the work programme for the remainder of 2020.

Key Point:

· Risk and Assurance Workshop planned for 24 November 2020 to review Council’s Financial Strategy/Risks associated with the Long Term Plan and the Risk Management Framework.

Resolved

That the Risk and Assurance Committee:

1 Receives the report, Committee Chairperson's Report.

von Dadelszen/Clark

CARRIED

5.4

Chairman's Discretionary Fund 2019/20

Cr von Dadelszen declared an interest in Agenda Item 9.4, Chairman’s Discretionary Fund 2019/20 and refrained from participating in the discussion.

General Manager, Corporate Mat Taylor presented the report.

Key Point - Members:

· Noted that the correct naming was “Rotary Youth Awareness (RYDA)” and not “Rotorua Youth Awareness (RYDA)”.

Resolved

That the Risk and Assurance Committee:

1 Receives the report, Chairman's Discretionary Fund 2019/20.

Love/Robertson

CARRIED

5.5

Expenditure and Koha Report for the year ended 30 June 2020

Finance & Transport Operations Manager Debbie Hyland and Financial Accounting Team Lead Nolene Naude presented the report.

Key Points:

· The report provided open and transparent financial information about Council’s supplier spend/payments to third parties including suppliers, contractors and consultants for the year ended 30 June 2020

· Noted that the redacted information in the report pertained to personal information of individuals.

Item for Staff Follow Up:

· Future Expenditure and Koha Reports to include a third report: grouping of expenditure information by category.

Resolved

That the Risk and Assurance Committee:

1 Receives the report, Expenditure and Koha Report for the year ended 30 June 2020.

von Dadelszen/Clark

CARRIED

5.6

Local Government Official Information and Meetings Act 1987 - Annual Report 1 July 2019 to 30 June 2020

Legal and Commercial Manager Jessica Easton presented the report.

Key Points:

· There were 75 requests for official information during the period

· Council had responded to three investigations of complaints to the Office of the Ombudsmen

· Council had maintained high standards of service in responding to requests for official information with 100% compliance in meeting statutory timeframes.

Resolved

That the Risk and Assurance Committee:

1 Receives the report, Local Government Official Information and Meetings Act 1987 - Annual Report 1 July 2019 to 30 June 2020.

von Dadelszen/Clark

CARRIED

5.7

Internal Audit Update and Audit Plan

Risk & Assurance Manager Steven Slack and Principal Internal Auditor Aaron Huggins presented the report.

Key Points:

· Noted that the Risk and Assurance Workshop planned for 24 November 2020 to review Council’s Risk Management Framework would provide an opportunity for members:

o to review the plan for the next three years

o to assess risks relating to gravel extraction

o to identify strategic priorities/consider risks relating to the Long Term Plan 2021-2031

o to review the potential impact of legislative reform/Three Waters/freshwater reforms/sector risks.

Resolved

That the Risk and Assurance Committee:

1 Receives the report, Internal Audit Update and Audit Plan;

2 Approves the Internal Audit Work Plan 2020/21, 2021/22, 2022/23, including the detailed work plan for 2020/21.

Robertson/Clark

CARRIED

6. Public Excluded Section

Resolved

Resolution to exclude the public

1 Excludes the public from the following parts of the proceedings of this meeting as set out below:

Item No.	Subject of each matter to be considered	Reason for passing this resolution in relation to each matter	Grounds under Section 48(1) for the passing of this resolution	When the item can be released into the public
6.1	Public Excluded Risk and Assurance Minutes - 15 June 2020	As noted in the relevant Minutes.	As noted in the relevant Minutes.	To remain in public excluded.
6.3	Key Risk Register Update - September 2020	Withholding the information is necessary to prevent the disclosure or use of official information for improper gain or improper advantage.	48(1)(a)(i) Section 7 (2)(j).	To remain in public excluded.
6.4	Annual Report on Legal Services & Legislative Compliance	· Withholding the information is necessary to maintain legal professional privilege; · Withholding the information is necessary to enable any local authority holding the information to carry out, without prejudice or disadvantage, commercial activities; · Withholding the information is necessary to enable any local authority holding the information to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations).	48(1)(a)(i) Section 7 (2)(g); 48(1)(a)(i) Section 7 (2)(h); 48(1)(a)(i) Section 7 (2)(i).	To remain in public excluded.
6.5	Rates Setting 2020/21 Update	Withholding the information is necessary to maintain legal professional privilege.	48(1)(a)(i) Section 7 (2)(g).	To remain in public excluded.

Love/Robertson

CARRIED

12:30 pm – the meeting closed.

Confirmed

Cr David Love

Chairperson, Risk and Assurance Committee



Report To:	Risk and Assurance Committee
Meeting Date:	1 December 2020
Report Writer:	Mat Taylor, General Manager, Corporate
Report Authoriser:	Mat Taylor, General Manager, Corporate
Purpose:	An update on Risk & Assurance Committee activities

Chairperson's Report

Executive Summary

This report provides the Committee with an update on Risk and Assurance Committee activities.

Recommendations

That the Risk and Assurance Committee:

1 Receives the report, Chairperson's Report.

1. Introduction

The report shows an updated Risk and Assurance Work Programme and an updated Risk and Assurance Completed Work Programme.

1.1 Alignment with Strategic Framework

A Healthy Environment
Freshwater for Life
Safe and Resilient Communities
A Vibrant Region
The Way We Work	We continually seek opportunities to innovate and improve.

1.1.1 Community Well-beings Assessment

Dominant Well-Beings Affected

¨ Environmental

¨ Cultural

¨ Social

þ Economic

2. Council Performance Monitoring Report – Detailed Briefings for Councillors

The following monthly financial monitoring meeting (detailed financial briefing) was held with Councillors since the previous meeting of the Risk and Assurance Committee:

Monday, 2 November 2020

3. Risk and Assurance Work Programme

Appendix 1 shows the Risk and Assurance Work Programme for the rest of the 2020/21 financial year. This Work Programme sets out the planned and scheduled reporting to the Risk and Assurance Committee.

The appendix is categorised to identify the broad areas of responsibility for the Committee. Other items may be added by councillors and staff should this be required to respond to issues as they occur throughout the year.

4. Risk and Assurance Completed Work Programme

Appendix 2 shows the Risk and Assurance Completed Work Programme for the period March 2019 to December 2020.

5. Considerations

5.1 Risks and Mitigations

There are no significant risks associated with this matter/subject/project/initiative.

5.2 Climate Change

The matters addressed in this report are of a procedural nature and there is no need to consider climate change impacts.

5.3 Financial Implications

This work is being undertaken within the current budget for the Government Activity in Year 1 of the Long Term Plan 2018-2028

6. Next Steps

The work programme will be updated following the meeting.

Attachments

Attachment 1 - Risk and Assurance Work Programme ⇩

Attachment 2 - Risk and Assurance Completed Work Programme ⇩



Report To:	Risk and Assurance Committee
Meeting Date:	1 December 2020
Report Writer:	Debbie Hyland, Finance & Transport Operations Manager
Report Authoriser:	Mat Taylor, General Manager, Corporate
Purpose:	Audit Engagement Letter for the 2021-2031 Long-Term Plan

Audit Engagement Letter: Audit of the consultation document and Long-Term Plan for the period commencing 1 July 2021

Executive Summary

The purpose of this report is for the Risk and Assurance Committee to receive the Audit New Zealand Audit Engagement Letter for the audit of the consultation document and Long Term Plan for the period commencing 1 July 2021.

Recommendations

That the Risk and Assurance Committee:

1 Receives the report, Audit Engagement Letter: Audit of the consultation document and Long-Term Plan for the period commencing 1 July 2021.

1. Introduction

In October 2020, Audit New Zealand issued the Audit Engagement Letter for the audit of the consultation document and Long-Term Plan for the period commencing 1 July 2021.

The letter is attached and sets out the terms of the audit engagement and the respective responsibilities of Council and the Appointed Auditor, the audit scope and objectives, the audit approach and areas of audit emphasis, logistics and costs.

1.1 Legislative Framework

The Local Government Act 2002 requires Council to prepare a Long Term Plan every three years that describes the community outcomes for the region, and setting out its priorities over the next 10 years.

1.2 Alignment with Strategic Framework

The Way We Work

We deliver value to our ratepayers and our customers.

1.2.1 Community Well-beings Assessment

Dominant Well-Beings Affected

þ Environmental

þ Cultural

þ Social

þ Economic

The delivery of the 2021-31 Long Term Plan covers all aspects of the community well-beings.

2. Audit Engagement Letter

2.1 Audit focus

Audit New Zealand has identified the following areas of audit emphasis:

· Impact of the economic downturn caused by Covid-19 on Council’s forecasts;

· Financial strategy and infrastructure strategy;

· Assumptions (with specific focus on climate change assumption); and

· Quality of asset-related forecasting information

2.2 Audit timing

The key dates in the audit timetable are:

Self-assessment provided to Council	25 August 2020
Self-assessment returned to Audit New Zealand	30 November 2020
Interim visit (initial assessment)	7 December 2020
Proposed consultation document available	11 January 2021
Audit of consultation document begins	18 January 2021
Audit opinion on consultation document required	18 February 2021
Draft Report to Council on consultation document engagement	25 February 2021
Finalised Report to Council on consultation document engagement	4 March 2021
Proposed LTP for adoption available and start of LTP audit (two weeks)	24 May 2021
Audit opinion on adopted LTP	7 June 2021
Draft Report to Council on LTP	11 June 2021
Finalised Report to Council on LTP	18 June 2021

3. Considerations

3.1 Risks and Mitigations

There are no significant risks associated with this matter.

3.2 Climate Change

The matters addressed in this report are of a procedural nature and there is no need to consider climate change impacts.

3.3 Implications for Māori

There are no direct implications for Māori arising as a result of this report.

3.4 Community Engagement

Engagement with the community is not required as the recommended proposal / decision relates to internal Council matters only.

3.5 Financial Implications

If the recommendation is adopted by Council, will it result in:

If the answer is ‘no’ to both questions please select the dropdown option 1 and complete appropriately.

If the answer is ‘yes’ to either question please select “Budget Implications” in the building block below and liaise with your Management Accountant in order to complete the Financial Impact table.

There are no material unbudgeted financial implications and this fits within the allocated budget. The audit fee for the consultation document and the Long-Term Plan commencing 1 July 2021 is $85,200 (excluding GST and disbursements). This will be accommodated within the overall audit fee budget of $138,450 (excluding GST).

4. Next Steps

Next Steps: What next? What resources are needed? Further analysis? Timeframes ahead. Any consultation planned. Remind Council of the process ahead. Next update to Council?

Conclusion: Short concluding remarks. Referring back to recommendations. No new content.

Staff will provide the self-assessment to Audit New Zealand once completed to enable the initial assessment to be completed.

Attachments

Attachment 1 - BOPRC LTP 2021-2031 - Audit Engagement Letter ⇩



Report To:	Risk and Assurance Committee
Meeting Date:	1 December 2020
Report Writer:	Paula Chapman, Project Manager; Pim De Monchy, Coastal Catchments Manager; Greg Corbett, Biosecurity Manager and Annabel Chappell, Manager, Special Projects
Report Authoriser:	Chris Ingle, General Manager, Integrated Catchments
Purpose:	To inform the Committee on strategic risks associated with the delivery of Crown funded post-COVID-19 economic stimulus projects.

Risks for Post-COVID-19 Crown Funded Projects

Executive Summary

Council has obtained Crown funding for a number of economic stimulus projects that align with our community outcomes and advance our core work. The funding supports projects in the areas of biosecurity, pest plant management, flood protection, environmental enhancement and environmental restoration.

The purpose of this report is to inform the Committee of strategic risks associated with the delivery of these projects, and how these risks are being managed and mitigated.

Recommendations

That the Risk and Assurance Committee:

1 Receives the report, Risks for Post-COVID-19 Crown Funded Projects.

1. Introduction

Council has been successful in securing Crown funding which has been made available following the COVID-19 event to support economic stimulus projects. Council applied for funding for projects that meet the Crown’s criteria which also align with our strategic priorities. The additional funding secured creates the opportunity to accelerate outcomes that Council is already striving to achieve.

These projects will deliver employment opportunities and outcomes that include:

· Regional economic development support through local businesses

· Employment of local workers

· Upskilling and strengthening of local communities

· Increased resilience to climate change impacts,

· Cadetship training and qualifications for hands-on environmental work,

· Improved riparian management and water quality in focus catchments,

· Increased biodiversity through native planting programmes,

· Improved rivers system habitat through weed control,

· Improved access to recreational areas,

· Improved protection of frost flat and geothermal ecosystems through wilding conifer control, and

· Improved biodiversity and primary production through wallaby control.

Funding has been approved for the following Bay of Plenty Regional Council-led projects. It should be noted that several other projects in the region are being funded by central government for similar reasons, but are being contracted through third parties such as Ngāti Awa, Te Whānau Apanui, Te Arawa Lakes Trust, Bay Conservation Alliance, the Manaaki Kaimai Mamaku Trust and Territorial Local Authorities. While Council may have an interest in these projects and a role in their delivery, these are not listed here.

*Fund*	*Projects/Locations*	*Total Value ($M)*	*Status*	*Period*	*Co-funding ($M)*
Crown Infrastructure Partners	6 flood projects Region-Wide	$23.175	Agreement finalised, with MBIE for signing	3 years	$7.725 Approved by Council 09/2020
Te Uru Rakau 1B trees	Subsidises native planting work Region-Wide	$1.5	$1M allocated to projects and underway	Final payment due April 2023	Existing budgets
MfE Public Waterways & Environment Restoration (PWER) fund	Focus catchment projects Region-Wide	$3.0 from MfE plus $3.0 from BOPRC	Contracted	2 years	$2.5 Opex from Rotorua and Coastal Catchments, plus $0.5 staff time.
Wallabies and Wildings (MPI)	Wilding Pine control Eastern Bay	$0.962	Pending	2020/2021	$0.145 from existing budgets
Wallabies and Wildings (MPI)	Wallaby Control Rotorua Lakes	$1.8	Pending	2020/2021	$0.4 from existing budgets

The purpose of this report is to inform the Committee of strategic risks associated with the delivery of these projects, and how these risks are being managed and mitigated.

1.1 Alignment with Strategic Framework

A Healthy Environment	We manage our natural resources effectively through regulation, education and action.
Safe and Resilient Communities	We support community safety through flood protection and navigation safety.
A Vibrant Region	We work with and connect the right people to create a prosperous region and economy. We invest appropriately in infrastructure to support sustainable development.
The Way We Work	We look to partnerships for best outcomes.

These Crown funded projects directly deliver on the organisational strategic priorities of A Healthy Environment, Safe and Resilient Communities, and A Vibrant Region. The projects will achieve tangible outcomes for pest plant and animal management, environmental restoration and enhancement and flood protection.

1.1.1 Community Well-beings Assessment

Dominant Well-Beings Affected

þ Environmental

High - Positive

þ Cultural

High - Positive

þ Social

High - Positive

þ Economic

High - Positive

2. Strategic Risks

Each project has its own operational risk register to manage day to day risks in relation to project delivery.

In addition to the operational risks, there are a number of strategic risks that are relevant to the programme of work. A risk workshop was held with Activity Managers responsible for delivery of the Crown funded projects to identify these strategic risks, and share and capture all of the mitigations and management actions that are taking place to reduce the risks.

The below table outlines these risks and provides information on management and mitigation actions being undertaken to reduce each risk.

1			*Inherent Score*
Description	What’s the Risk?		Likelihood	Impact	Total
Impact on business as usual (BAU) delivery	The increased volume of work created by the Crown funded projects impacts on Council’s ability to deliver its BAU services		3	3	9
			*Current Score*
What are we doing about the risk?		Effect on	Likelihood	Impact	Total
Mitigating Actions and Controls I. The projects for which funding was applied for align with Council’s strategic priorities and existing work programme. II. Council has the existing expertise and capability to deliver the Crown funded projects as the projects relate to core business activities. III. Council’s resourcing structure has been re-geared to deliver both BAU and the Crown funded projects, with additional resourcing being engaged (contractors) or employed (staff) where necessary.		Likelihood and impact	2	2	4

2			*Inherent Score*
Description	What’s the Risk?		Likelihood	Impact	Total
Conditions of funding are not met	Obligations are not met or milestones are not achieved, resulting in funding being withheld or stopped		3	4	12
			*Current Score*
What are we doing about the risk?		Effect on	Likelihood	Impact	Total
Mitigating Actions and Controls I. Dialogue with the relevant Crown agencies has taken place when negotiating the funding agreements to clarify the funding conditions and ensure that expectations can be met. II. Activity Managers have a clear understanding of the obligations Council has committed to and are being delivered against. III. Accurate scoping of projects, regular reporting and forecasting for crown funded projects. IV. Additional support is being provided to contractors to build their capability and assist them in meeting the Health and Safety requirements of the Crown funding agreements. V. Effective project management, financial management and reporting in place.		Likelihood and impact	2	3	6

3			*Inherent Score*
Description	What’s the Risk?		Likelihood	Impact	Total
Outcomes not achieved	The benefits of the stimulus package are not realised or do not align with funding expectations		3	4	12
			*Current Score*
What are we doing about the risk?		Effect on	Likelihood	Impact	Total
Mitigating Actions and Controls I. Social procurement policy has been developed and applied across procurement process for Crown funded stimulus projects. II. Data is being captured to record tangible measures that clearly show the outcomes and objectives are being achieved. III. Council is working with and supporting contractors to assist them in meeting the Social Procurement Outcomes for the Crown funding agreements.		Likelihood and impact	2	4	8

4			*Inherent Score*
Description	What’s the Risk?		Likelihood	Impact	Total
Poor project delivery	Sub-optimal quality, cost over-runs and time delays occur		3	4	12
			*Current Score*
What are we doing about the risk?		Effect on	Likelihood	Impact	Total
Mitigating Actions and Controls I. Experienced project managers are managing all Crown funded stimulus projects. II. Regular reporting is undertaken to measure and monitor quality, cost and programme timeframes. III. Robust risk management for both operational and strategic risks is in place.		Likelihood and impact	2	3	6

5			*Inherent Score*
Description	What’s the Risk?		Likelihood	Impact	Total
Increased operational costs	As the Crown funding for the projects is for a finite period of time, Council may be left with increased operational costs to maintain expected levels of service		5	3	15
			*Current Score*
What are we doing about the risk?		Effect on	Likelihood	Impact	Total
Mitigating Actions and Controls I. New infrastructure assets provided for through asset management processes, affecting future targeted rate requirements for depreciation and maintenance II. Planning for maintaining the gains long term is being undertaken with our funding partners. III. Reviews of the effectiveness of work programmes will take place to identify which have had the most benefit so that only these are maintained in the future. IV. Councillor input into Jobs for Nature panel, leading to improved processes to identify and manage risks, and more sustained benefits in terms of both nature and jobs		Likelihood and impact	3	2	6

3. Considerations

3.1 Climate Change

The Climate Change Commission has recommended that recovery is used as an opportunity to kick start transition and adaptation planning for climate change. The residents’ survey also indicated strong support for climate change initiatives as part of recovery.

The implementation of flood protection projects makes a positive contribution to adaptation and the priority ‘ensuring the region is adapting to a changing climate’ through the flood protection stimulus projects.

Environmental enhancement projects such as Te Uru Rakau 1 Billion Trees contribute to the priority ‘helping facilitate the transition to a low carbon economy’.

3.2 Implications for Māori

Māori are predicted to be particularly impacted by COVID-19 job losses. Central government stimulus project contracting features procurement requirements that support supplier diversity and includes employment and upskilling opportunities for Māori.

3.3 Community Engagement

INFORM

Whakamōhio

To provide affected communities with balanced and objective information to assist them in understanding the problems, alternatives and/or solutions.

3.4 Financial Implications

There are no material unbudgeted financial implications as the projects fit within the allocated budgets and Crown funding contributions.

4. Next Steps

The Crown funded projects are all in various stages of their work programme. A number of outstanding funding agreements are still to be executed, while other projects are well under way.

Risks will continue to be monitored and managed throughout the work programme.



Report To:	Risk and Assurance Committee
Meeting Date:	1 December 2020
Report Writer:	Steven Slack, Risk & Assurance Manager
Report Authoriser:	Mat Taylor, General Manager, Corporate
Purpose:	To provide an update an internal audit program and the audit plan.

Internal Audit Status Update

Executive Summary

This report provides an update on the status of internal audit activities as at 30 June 2020 and includes:

· The status of internal audit reviews in the current year;

· The status of follow up of internal audit recommendations and management actions to 30 September 2020.

Recommendations

That the Risk and Assurance Committee:

1 Receives the report, Internal Audit Status Update.

1. Introduction

This report provides the quarterly update on internal audit activity undertaken by internal audit staff and external internal audit specialists, KPMG, as part of Bay of Plenty Regional Council’s co-sourced internal audit approach. It includes:

· The status of internal audit reviews in the current year;

· The status of follow up of internal audit recommendations and management actions to 30 September 2020.

1.1 Alignment with Strategic Framework

A Healthy Environment
Freshwater for Life
Safe and Resilient Communities
A Vibrant Region
The Way We Work	We continually seek opportunities to innovate and improve.

2. Internal Audit Work Plan 2020/21 Status

Based on the Internal Audit Work Plan 2020/21 the following table summarises the status of internal audit reviews for 2020/21.

Review	Field work	GM Sponsor	Status	Status of Internal Audit
Review	Field work	GM Sponsor	Status	Planning /Scope	Fieldwork	Draft Report	Mgmt Actions	Final Report
Policy Framework	BOPRC	Corporate	In Progress	In Progress
Fraud Risk Assessment	BOPRC	Corporate	In Progress	Complete	In Progress
Conflict of Interest Management	BOPRC	Corporate	Complete	Complete	Complete	Complete	Complete	Complete
Consents Process	BOPRC	Regulatory Services
ICT Security	BOPRC	Corporate	In Progress	Complete	In Progress
Gravel Extraction process	BOPRC	Integrated Catchments	In Progress	Complete	In Progress
Climate Change Impacts	BOPRC	Science and Strategy	In Progress	Complete	In Progress
Mount Manganui / Rotorua Air Standards	BOPRC	Regulatory Services	In Progress	In Progress

In addition as part of the continuous improvement model adopted by BOPRC, and for the CE, LT, Managers and Staff to engage Internal Audit as a partner in this improvement, within the audit plan is scope for ad hoc reviews at the request of management.

Internal audit has conducted a number of these reviews resulting in control and efficiency improvements.

3. Internal Audit Follow Up

Internal Audit has reviewed all open management actions as part of the follow up work in the 2020/21 Work Plan.

At the start of the quarter (1 July 2020) there were 51 open management actions.

During the quarter sixteen actions were closed and eight actions were added. The total of actions open as at 30 September 2020 is 43, the majority of these relate to Asset Management (thirteen) and Grants (ten).

Grants – Two actions were closed during the quarter, with the remainder awaiting the final implementation in Tech 1 which forms part of the Technology roadmap.

Asset Management – The Asset Management Steering Group (AMSG) was re-established in April 2020, currently the group meets fortnightly. The Group is working on the recommendations and building these into the Asset Management Plans that flow into the current LTP process.

Of the open actions 29 are past their original due date, with 11 actions closed during the quarter. The overdue actions relate predominately to Asset Management (thirteen) and Grants (nine).

4. Considerations

4.1 Climate Change

The matters addressed in this report are of a procedural nature and there is no need to consider climate change impacts.

4.2 Financial Implications

There are no material unbudgeted financial implications and this fits within the allocated budget.

5. Next Steps

To note the contents of the report.

Chairperson	Cr David Love
Deputy Chairperson	Bruce Robertson (Independent)
Members	Cr Bill Clark Cr Stuart Crosby Cr Andrew von Dadelszen Cr Te Taru White
Ex Officio	Chairman Doug Leeder
Quorum	Three members, consisting of half the number of members
Meeting frequency	Quarterly