Risk and Assurance Committee Agenda NOTICE IS GIVEN that the next meeting of the Risk and Assurance Committee will be held in Council Chambers, Regional House, 1 Elizabeth Street, Tauranga and via Zoom (Audio Visual Meeting) on: Thursday 9 June 2022 COMMENCING AT 2:00 pm This meeting will be livestreamed and recorded. The Public section of this meeting will be livestreamed and recorded and uploaded to Bay of Plenty Regional Council’s website. Further details on this can be found after the Terms of Reference within the Agenda. Bay of Plenty Regional Council - YouTube
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Fiona McTavish Chief Executive, Bay of Plenty Regional Council Toi Moana 31 May 2022 |
Membership
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 |
Purpose
Monitor the effectiveness of Council’s funding and financial policies and frameworks to ensure the Council is managing its finances in an appropriate manner.
Monitor the effectiveness of Council's performance monitoring framework.
Ensure that Council is delivering on agreed outcomes.
Role
· Monitor the effectiveness of Council’s funding and financial policies and Council’s performance monitoring framework (financial and non-financial);
· Review Council’s draft Annual Report prior to Council’s adoption;
· Receive and review external audit letters and management reports;
· Approve and review the internal audit plan and review the annual programme report;
· Approve, review and monitor Council’s risk framework and policy;
· Review the risk register;
· Monitor Council’s legislative compliance and receive reporting on non-compliance matters as part of risk management reporting.
Power to Act
To make all decisions necessary to fulfil the role and scope of the committee subject to the limitations imposed.
Power to Recommend
To Council and/or any standing committee as it deems appropriate.
· The Risk and Assurance Committee is not delegated authority to:
· Develop, review or approve strategic policy and strategy.
· Develop, review or approve Council’s Financial Strategy, funding and financial policies and non-financial operational policies and plans.
The Risk and Assurance Committee reports directly to the Regional Council.
Recording of Meetings
Please note the Public section of this meeting is being recorded and streamed live on Bay of Plenty Regional Council’s website in accordance with Council's Live Streaming and Recording of Meetings Protocols which can be viewed on Council’s website. The recording will be archived and made publicly available on Council's website within two working days after the meeting on www.boprc.govt.nz for a period of three years (or as otherwise agreed to by Council).
All care is taken to maintain your privacy; however, as a visitor in the public gallery or as a participant at the meeting, your presence may be recorded. By remaining in the public gallery, it is understood your consent is given if your image is inadvertently broadcast.
Opinions expressed or statements made by individual persons during a meeting are not the opinions or statements of the Bay of Plenty Regional Council. Council accepts no liability for any opinions or statements made during a meeting.
Bay of Plenty Regional Council - Toi Moana
Governance Commitment
mō te taiao, mō ngā tāngata - our environment and our people go hand-in-hand.
We provide excellent governance when, individually and collectively, we:
· Trust and respect each other
· Stay strategic and focused
· Are courageous and challenge the status quo in all we do
· Listen to our stakeholders and value their input
· Listen to each other to understand various perspectives
· Act as a team who can challenge, change and add value
· Continually evaluate what we do
TREAD LIGHTLY, THINK DEEPLY,
ACT WISELY, SPEAK KINDLY.
Risk and Assurance Committee 9 June 2022
Recommendations in reports are not to be construed as Council policy until adopted by Council.
1. Apologies
2. Public Forum
3. Items not on the Agenda
4. Order of Business
5. Declaration of Conflicts of Interest
6. Public Excluded Business to be Transferred into the Open
7. Minutes
Minutes to be Confirmed
7.1 Risk and Assurance Committee Minutes - 14 April 2022 1
8. Reports
Information Only
8.1 External Audit Plan 2021/22 1
Attachment 1 - BOPRC Audit Plan 2022 1
8.2 Chairperson's Report 1
Attachment 1 - Risk and Assurance Work Programme 2022 1
Attachment 2 - Risk and Assurance Completed Work Programme for June 2021 to April 2022 1
8.3 Internal Audit Update 1
8.4 Rates Setting for the 2022/23 financial year 1
Attachment 1 - Rates setting for the 2022-23 financial year - Public Excluded
Attachment 2 - Rating Delegations - Recommended Additions to Council's Delegations Manual - 23 June 2022 1
Resolution to exclude the public
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:
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 |
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8.4 |
Rates Setting for the 2022/23 financial year - Attachment 1 - Rates setting for the 2022-23 financial year - Public Excluded |
Withholding the information is necessary to protect information which is subject to an obligation of confidence or which any person has been or could be compelled to provide under the authority of any enactment, where the making available of the information would be likely otherwise to damage the public interest. |
48(1)(a)(i) Section 7 (2)(c)(ii). |
On the Chief Executive's approval. |
9.1 |
Public Excluded Risk and Assurance Committee Minutes - 14 April 2022 |
As noted in the relevant Minutes. |
As noted in the relevant Minutes. |
To remain in public excluded. |
9.2 |
Digital Cybersecurity Update |
Withholding the information is necessary to protect information where the making available of the information would be likely to unreasonably prejudice the commercial position of the person who supplied or who is the subject of the information. |
48(1)(a)(i) Section 7 (2)(b)(ii). |
On the Chief Executive's approval. |
9.3 |
Completed Internal Audit Review - ICT Security |
Withholding the information is necessary to protect information where the making available of the information would be likely to unreasonably prejudice the commercial position of the person who supplied or who is the subject of the information. |
48(1)(a)(i) Section 7 (2)(b)(ii). |
On the Chief Executive's approval. |
9.4 |
Key Risk Register |
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). |
On the Chief Executive's approval. |
8.4 Rates Setting for the 2022/23 financial year
Attachment 1 - Rates setting for the 2022-23 financial year - Public Excluded
Minutes to be Confirmed
9.1 Public Excluded Risk and Assurance Committee Minutes - 14 April 2022
Information Only
9.2 Digital Cybersecurity Update
9.3 Completed Internal Audit Review - ICT Security
Attachment 1 - ICT Security Internal Audit - Executive Summary
9.4 Key Risk Register
Attachment 1 - Key Risk Register - June 2022
Attachment 2 - KRR - Heat Map June 2022
10. Public Excluded Business to be Transferred into the Open
11. Readmit the Public
Risk and Assurance Committee Minutes |
14 April 2022 |
Open Minutes
Commencing: Thursday 14 April 2022, 09:30 am
Venue: Council Chambers, Regional House, 1 Elizabeth Street, Tauranga and via Zoom (Audio Visual Meeting)
Chairperson: Cr David Love
Deputy Chairperson: Bruce Robertson
Members: Cr Andrew von Dadelszen
Cr Stuart Crosby
Cr Bill Clark
Cr Te Taru White (Via Zoom)
In Attendance: Councillors: Norm Bruning, Jane Nees (Via Zoom), Matemoana McDonald (Via Zoom), Toi Kai Rākau Iti (Via Zoom)
Staff: Fiona McTavish – Chief Executive; Mat Taylor – General Manager Corporate; Chris Ingle – General Manager Integrated Catchments; Stephen Mellor – Acting General Manager, Regulatory Services; Kumaren Perumal – Chief Financial Officer; Mark Le Comte – Principal Advisor - Finance; Steven Slack – Risk & Assurance Manager; Aaron Huggins – Principal Internal Auditor; Prue Sisam – Communications Operations Team Leader; Jessica Easton – Legal and Commercial Manager; Merinda Pansegrouw – Committee Advisor
External: Audit New Zealand Audit Director Leon Pieterse and Audit Manager Anton Labuschagne (both via Zoom)
Apologies: Chairman Doug Leeder (Ex officio Member) and Cr Te Taru White (late arrival)
Declaration of Public Recording
Committee members and the public were reminded that the public section of the meeting was being recorded and would be made available on the Bay of Plenty Regional Council website following the meeting and archived for a period of three years as noted on page 4 of the agenda.
Recording of Meeting: Risk and Assurance Committee - 14 April 2022 - YouTube
1. Apologies
Resolved That the Risk and Assurance Committee: 1 Accepts the apologies from Chairman Doug Leeder and Cr Te Taru White (for late arrival) as tendered at the meeting. Love/von Dadelszen CARRIED |
2. Declarations of Conflicts of Interest
Cr Stuart Crosby: Item 7.1 Audit New Zealand Report on the audit of the Bay of Plenty Regional Council for the year ended 30 June 2021 (Quayside Board Director)
Bruce Robertson: Item 7.1 Audit New Zealand Report on the audit of the Bay of Plenty Regional Council for the year ended 30 June 2021 (Chairperson of the Timaru District Council Audit Committee; member of the Tauranga City Council Strategic Risk and Audit Committee)
3. Minutes
Minutes to be Confirmed
3.1 |
Risk and Assurance Committee Minutes - 2 December 2021 |
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Resolved That the Risk and Assurance Committee: 1 Confirms the Risk and Assurance Committee Minutes - 2 December 2021 as a true and correct record. von Dadelszen/Robertson CARRIED |
4. Reports
Information Only
4.1 |
Audit New Zealand Report on the audit of the Bay of Plenty Regional Council for the year ended 30 June 2021 Presented by: Chief Financial Officer, Kumaren Perumal and Audit New Zealand (Audit NZ) Audit Director Leon Pieterse and Audit Manager Anton Labuschagne. Key Points – Audit NZ: · Issued an unmodified audit report dated 16 December 2021 · Confirmed that the revaluation of Council’s assets was carried out appropriately and was fairly stated in the financial stratements. With regard to the fair value assessment over the rivers and drainage asset class, agreed with the conclusion that it was not material to the financial statements and that no further revaluations were required as at 30 June 2021 · Revaluation of Council’s Put Option: was satisfied that the revaluation (process and liabilities) had been performed in accordance with appropriate accounting standards and that the value of the liability reflected fair value · KPMG Audit of Port of Tauranga Limited: prior period errors, which flowed through to Bay of Plenty Regional Council, had been updated in the final financials and was correctly disclosed as a prior period error. Key Points - Members: · Acknowledged the impact of Covid-19 over the past two years · In terms of the Audit arrangements, highlighted that it was critical to identify any potential issues early in the process · Bus patronage performance measure: noted that a standard approach was currently being developed by Audit NZ which involved the introduction of additional procedures. Since this has signalled that the nature of the recommendation regarding a Type 2 report would be amended accordingly, it would be appreciated if ongoing updates from Audit NZ were provided as the matter progressed · Noted that the Internal Audit Team was currently reviewing Council’s Fraud Policy/Practice · Recognised the audit challenges faced due to the complexity of a multi group structure involved · Requested that finalisation of the 2021/2022 Audit Plan be expedited as a priority, preferably by mid-May 2022 and prior to the next Risk and Assurance Committee scheduled for June 2022 · Highlighted that timely sign-off of the 2021/2022 Audit Plan would allow open/proper discussion regarding potential risks/issues affecting the Annual Report and also enable clear logistical arrangements in preparation for the imminent Local Government Elections in October 2022. |
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Resolved That the Risk and Assurance Committee: 1 Receives the report, Audit New Zealand Report on the audit of the Bay of Plenty Regional Council for the year ended 30 June 2021 2 Delegates to the Chair and Deputy Chair of the Risk and Assurance Committee approval of the 2021/2022 Audit Plan. von Dadelszen/Clark CARRIED |
4.2 |
Chairperson's Report Presented by: General Manager, Corporate Mat Taylor who updated Committee members on the Risk and Assurance Committee’s Work Programme for the remainder of 2022: Key Points: · Highlighted the Draft Annual Report Review 2021/2022 to be received by the Risk and Assurance Committee at its September 2022 meeting · Draft letter of representation on the Annual Report Review 2021/2022 would also be presented at the September 2022 meeting to enable the provision of sufficient information to provide confidence/assurance to the new Council elected in October 2022 regarding the process
Key Points - Members: · Due to the nature of having to account for a Group/various subsidiaries, reiterated the importance of being made aware of potential issues (“front-loading” concerns) in a timely manner to enable staff to address matters well-timed for sign-off. |
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Resolved That the Risk and Assurance Committee: 1 Receives the report, Chairperson's Report. Love/von Dadelszen CARRIED |
4.3 |
Internal Audit Update Presented by: Aaron Huggins, Principal Internal Auditor and Steve Slack, Risk & Assurance Manager. Key Points - Members: · Expressed appreciation for the progress made with the Internal Audit Programme · Noted that two actions relating to Procurement was still open/in progress as workplans were underway to address these actions · Acknowledged that the Digital Team, amidst the busy Covid-19 period, had successfully rolled out the Authenticator Programme, providing another layer of security for the organisation. Key Points - Staff: · Confirmed that the ongoing Covid-19 situation had impacted the Digital Team who had been extremely busy during the Covid period supporting the organisation to successfully work remotely; hence affecting completion of the ICT Security Review (from the 2020/21 Internal Audit Plan). Assured Committee members that suitable back-up was in place to ensure that from an ICT perspective, security was being maintained |
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Resolved That the Risk and Assurance Committee: 1 Receives the report, Internal Audit Update. Robertson/von Dadelszen CARRIED |
4.4 |
Draft Terms of Reference - Efficiency and Effectiveness Reviews Presented by: Kumaren Perumal – Chief Financial Officer and Mark Le Comte – Principal Advisor – Finance. Key Points - Members: · Seeking efficiency and effectiveness aligned with the requirements of the Local Government Act · Encouraged staff to provide trend analysis in future financial reports to enable elected members to make informed decisions based on historic data/trends · Considered benchmarking as a useful tool. Council should be strong advocates to benchmark with peers/relevant industries to enable the identification of opportunities for improvement/provide comfort and optimise where possible, particularly in the current challenging economic climate · As part of seeking efficiency and effectiveness, needed to evaluate and decide on matters no longer required/assess how Council could do things differently/better as conditions/scenarios kept changing · Accepted that the practical implementation of the Terms of Reference would be in the approach, namely the “how” and the “what” · In order to be more efficient/effective, Council needed to focus on opportunities; looking at both scale and collaboration · The culture in local government of “having to spend the budget” needed to be reviewed/aligned with a private sector approach, i.e. focussing on savings · Ultimately the responsibility rested with Elected Members: projects requested through the Long Term Plan/Annual Plan processes required more due diligence/rigor/sufficient discussion/thinking time to enable clear direction given to staff. Key Points - Staff: · The direction and guidance highlighted by Committee members regarding future planning processes and reporting would assist with continuous improvement and increase in standards of performance to achieve the desired outcomes. |
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Resolved That the Risk and Assurance Committee: 1 Receives the report, Draft Terms of Reference - Efficiency and Effectiveness Reviews. 2 Recommends that the Efficiency and Effectiveness Terms of Reference are referred to the Council to be established following the Triennium elections to be added to the work programme. von Dadelszen/Robertson CARRIED |
5. 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:
Love/Robertson CARRIED |
10:30 am – the meeting closed.
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Confirmed
Cr David Love
Chairperson, Risk and Assurance Committee
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Report To: |
Risk and Assurance Committee |
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Meeting Date: |
9 June 2022 |
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Report Writer: |
Nolene Naude, Financial Accounting Team Lead and Kumaren Perumal, Chief Financial Officer |
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Report Authoriser: |
Mat Taylor, General Manager, Corporate |
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Purpose: |
For the Risk and Assurance Committee to receive the Audit Plan for the year ending 30 June 2022 |
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External Audit Plan 2021/22
Executive Summary This report provides the Audit Plan proposed by Audit New Zealand (Audit NZ) for the external audit of the Bay of Plenty Regional Council and Group for the year ending 31 June 2022. Leon Pieterse (Audit Director) and Anton Labuschagne (Audit Manager) will attend the Committee meeting to present the Audit Plan and respond to questions from the Committee. |
That the Risk and Assurance Committee:
1. Receives the report, External Audit Plan 2021/22.
The Audit Plan for the year ending 30 June 2022 presents the audit arrangements and discusses the audit risks and issues, the audit process, reporting protocols and audit logistics.
1.1 Legislative Framework
The audit of the Bay of Plenty Regional Council is carried out under Section 15 of the Public Audit Act 2001 (the Act) which states that “the Auditor General must from time to time audit the financial statements, accounts, and other information that a public entity is required to have audited”.
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 |
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þ Environmental
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þ Cultural
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þ Social
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þ Economic
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2. Audit Plan
The Audit plan proposed by Audit NZ for the audit of the Bay of Plenty Regional Council and Group for the year ending 30 June 2022 is included as Attachment 1 to this report.
2.1 Audit Risks and Issues
Audit NZ has identified the following risks and issues which will be reviewed and tested during their audit:
· Revaluation of property, plant and equipment
· Fair value assessment for property, plant and equipment
· Valuation of the Put Option
· Consolidation of group financial statements
· The risk of management override of internal controls
· Software as an Accounting Service (SaaS) and
· Fraud risk.
2.2 Group Audit
Audit NZ’s audit approach is to ensure they have sufficient information to give an opinion on the Council Group, which comprises the Quayside Group and Toi Moana Trust.
The audit plan discusses the areas of focus relating to the audit of the Council Group as a whole.
2.3 Materiality
In performing their audit, Audit NZ will apply the following materiality settings:
Parent Financial Statements Materiality
· Overall materiality $49.5 million
· Specific materiality $4.5 million
· Clearly trivial threshold $225,000
Audit NZ has also identified several measures as material and assessed materiality for planning purposes.
Group Financial Statements Materiality
· Overall materiality $208.7 million
· Specific materiality $10.8 million
· Clearly trivial threshold $540,000
2.4 Timetable
The key dates relating to the 2021/22 external audit are summarised in the table below.
Date |
Description |
20 June 2022 (2 weeks) |
First interim audit commences |
19 September 2022 |
Final audit commences |
23 September 2022 |
Audit of consolidated accounts |
14 November 2022 |
Verbal audit clearance |
23 November 2022 |
Audit opinion issued |
15 December 2022 |
Final detailed Report to Council issued |
3. Considerations
3.1 Risks and Mitigations
There are no significant risks associated with the Audit NZ 2021/22 external audit plan or audit fees
3.2 Climate Change
There are no direct climate change implications arising as a result of this report.
3.3 Implications for Māori
There are no direct implications for Māori arising as a result of this report.
3.4 Community Engagement
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Engagement with the community is not required as the recommended proposal / decision relates to internal Council matters only. |
3.5 Financial Implications
There are no material unbudgeted financial implications and this fits within the allocated budget.
4. Next Steps
Following this meeting, Audit NZ will undertake the interim audit and staff will begin preparations for the final audit for the year ending 30 June 2022. This will include preparation of year-end guidance for the Council Group.
Attachment 1 - BOPRC Audit Plan 2022 ⇩
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Report To: |
Risk and Assurance Committee |
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Meeting Date: |
9 June 2022 |
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Report Writer: |
Mat Taylor, General Manager, Corporate |
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Report Authoriser: |
Mat Taylor, General Manager, Corporate |
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Purpose: |
Update on Risk and Assurance Committee Activities |
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Chairperson's Report
Executive Summary This report provides the Committee with an update on Risk and Assurance Committee activities. |
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 |
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Freshwater for Life |
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Safe and Resilient Communities |
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A Vibrant Region |
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The Way We Work |
We continually seek opportunities to innovate and improve. |
1.1.1 Community Well-beings Assessment
Dominant Well-Beings Affected |
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¨ Environmental
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¨ Cultural
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¨ Social
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þ Economic
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2. Risk and Assurance Work Programme
Appendix 1 shows the Risk and Assurance Work Programme for September 2022. 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.
3. Risk and Assurance Completed Work Programme
Appendix 2 shows the Risk and Assurance Completed Work Programme for the period June 2021 to April 2022.
4. Considerations
4.1 Risks and Mitigations
There are no significant risks associated with this matter/subject/project/initiative.
4.2 Climate Change
The matters addressed in this report are of a procedural nature and there is no need to consider climate change impacts.
4.3 Implications for Māori
There are no implications for Māori.
4.4 Financial Implications
This work is being undertaken within the current budget for the Government Activity in Year 1 of the Long Term Plan 2021 – 2031.
5. Next Steps
None.
Attachment 1 - Appendix 1 - Risk and Assurance Work Programme 2022 ⇩
Attachment 2 - Appendix 2 - Risk and Assurance Completed Work Programme for June 2021 to April 2022 ⇩
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Report To: |
Risk and Assurance Committee |
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Meeting Date: |
9 June 2022 |
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Report Writer: |
Aaron Huggins, Principal Internal Auditor |
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Report Authoriser: |
Mat Taylor, General Manager, Corporate |
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Purpose: |
To provide an update on the internal audit program and the audit plan. |
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Internal Audit Update
Executive Summary This report provides an update on the status of internal audit activities as at 31 March 2022 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 31 March 2022. |
That the Risk and Assurance Committee:
1 Receives the report, Internal Audit Update.
1. Introduction
This report provides the quarterly update on internal audit activity undertaken by internal audit staff and external assurance specialists 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 31 March 2022.
1.1 Alignment with Strategic Framework
The Way We Work |
We continually seek opportunities to innovate and improve. |
2. Internal Audit Work Plan 2021/22 Status
Based on the Internal Audit Work Plan 2021/22 the following table summarises the status of internal audit reviews for 2021/22.
Review |
Field work |
GM Sponsor |
Status |
Status of Internal Audit |
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Planning /Scope |
Fieldwork |
Draft Report |
Mgmt Actions |
Final Report |
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Project management |
BOPRC |
Corporate |
In Progress |
Complete |
In Progress (25%) |
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Business continuity management |
BOPRC |
Chief Executive |
In Progress |
Complete |
In Progress (25%) |
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Pest management plan |
BOPRC |
Integrated Catchments |
In Progress |
Complete |
Complete |
Complete |
In Progress (25%) |
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Risk management |
Co-Source |
Corporate |
In Progress |
Complete |
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Laboratory services – benefits realisation |
BOPRC |
Regulatory Services |
In Progress |
Complete |
Complete |
Complete |
In Progress (25%) |
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Post-COVID funding readiness |
BOPRC |
Integrated Catchments |
In Progress |
In Progress (75%) |
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Compliance process |
BOPRC |
Regulatory Services |
In Progress |
Complete |
In Progress (25%) |
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Payroll |
BOPRC |
People & Leadership |
In Progress |
Complete |
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ICT Security Review (20/21) |
BOPRC |
Corporate |
In Progress |
Complete |
Complete |
Complete |
Complete |
Complete |
While the quarter has continued to see COVID impact operations across BOPRC, this has started to reduce. As such, a more normalised assurance delivery workflow has started to resume.
We have appointed a provider to carry out the Risk Management review, which will be performed during July 2022.
3. Internal Audit Follow Up
Internal Audit has reviewed all open management actions as part of the follow up work in the 2021/22 Work Plan.
Management actions
At the start of the quarter (1 January 2022) there were 35 open management actions.
During the quarter three actions were closed and twenty nine actions were added. The total of actions open as at 31 March 2021 is 61, the majority of these relate to ICT Security (29), Policy Framework (ten), and Fraud Risk Assessment (five).
ICT Security – newly completed review, report presented this meeting.
Policy Framework – the People & Leadership Team are continuing to address the findings identified through an ongoing workstream.
Of the open actions 6 are past their original due date. The overdue actions relate predominately to Asset Management (four) and Procurement (two). Workplans are underway in the relevant teams to address these actions during the financial year (resourcing permitting).
Improvement actions
For framework reviews which have identified continuous improvement actions, these actions will be disclosed separately to give assurance to the Risk and Assurance committee that these actions continue to be monitored to ensure BOPRC’s frameworks improve and develop.
At the start of the quarter (1 January 2022) there was 1 open Health & Safety improvement action; this action remains open and refers to the last phase of the critical risk project rollout.
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 Internal Audit status update (as at 31 March 2022).
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Report To: |
Risk and Assurance Committee |
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Meeting Date: |
9 June 2022 |
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Report Writer: |
Mereana Toroa, Finance Support Team Lead and Kumaren Perumal, Chief Financial Officer |
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Report Authoriser: |
Mat Taylor, General Manager, Corporate |
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Purpose: |
Rates setting for 2022/23 financial year |
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Rates Setting for the 2022/23 financial year
Executive Summary This report provides the draft Bay of Plenty Regional Council rates setting recommendations to ensure continued statutory compliance for the rates setting process for the 2022/23 financial year. An external legal review has been undertaken to perform a legislative compliance review of the rates setting process for 2022/23 financial year. The attached draft Rates Setting Report to Council incorporates amendments arising from this review process. Council is scheduled to set rates for the 2022/23 financial at its meeting on 23 June 2022. |
That the Risk and Assurance Committee:
1 Receives the report, Rates Setting for the 2022/23 financial year;
2 Confirms the public be excluded on the grounds set out in the Local Government Official Information and Meetings Act 1987 from consideration of the following report attachment:
(a) Rates setting for the 2022-23 financial year under Section 48(1)(a)(i) Section 7 (2)(c)(ii) as withholding the information is necessary to protect information which is subject to an obligation of confidence or which any person has been or could be compelled to provide under the authority of any enactment, where the making available of the information would be likely otherwise to damage the public interest and that this attachment be released to the public on the Chief Executive’s approval.
1. Introduction
1.1 Legislative Framework
The Local Government Act 2002 (the Act) and more specifically the Local Government (Rating) Act 2002 (the Rating Act) sets out the process for setting rates for a property. This involves the preparation of three formal documents:
i. Funding Impact Statement;
ii. Rates Setting Report to Council; and
iii. Draft Annual Plan
1.2 Alignment with Strategic Framework
A Healthy Environment |
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Freshwater for Life |
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Safe and Resilient Communities |
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A Vibrant Region |
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The Way We Work |
We deliver value to our ratepayers and our customers. |
Rates revenue supports the delivery of all of our work to achieve the Community Outcomes.
1.2.1 Community Well-beings Assessment
Dominant Well-Beings Affected |
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¨ Environmental
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¨ Cultural
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¨ Social
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¨ Economic
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Rates revenue supports the delivery of all of our work to improve the well-beings.
2. Rates Setting
2.1 Background
The Local Government Act 2002 (the Act) and more specifically the Local Government (Rating) Act 2002 (the Rating Act) sets out the process for setting rates for a property. This involves the preparation of three formal documents;
i. Funding Impact Statement;
ii. Rates Setting Report to Council; and
iii. Long Term Plan.
2.2 Funding Impact Statement
The Funding Impact Statement (FIS) is a detailed explanation to the community of what rates will be charged, how they will be calculated and what they will be used for. Ratepayers should be able to work out what they will pay from this document.
To prepare an Annual Plan (Schedule 10, part 2 Clause 20) and Long Term Plan (Schedule 10, part 1 Clause 5 and 15) in accordance with the Act, the plan must include a FIS for the year to which it relates. It must be in the prescribed form, and must identify:
a) The sources of funding to be used by the local authority;
b) The amount of funds expected to be produced from each source; and
c) How the funds are to be applied.
2.3 Rates Resolution
The Rates Resolution is a local authority’s formal legal decision to impose specific rates on a community and creates the obligation to pay. Each rate must be set in keeping with the relevant FIS and Long Term Plan.
The preparation of the Rates Resolution must be in accordance with section 23 of the Rating Act. The rates set in the resolution must;
d) Relate to a financial year;
e) Be set in accordance with the relevant provisions of the Council’s LTP and FIS for that financial year.
2.4 Long Term Plan
The Long Term Plan (LTP) sets out what Council intends to do and how it will go about delivering on its objectives over the next ten years.
Detailed legal requirements on what is to be included in the LTP is prescribed under schedule 10, part 1 of the Act. This includes the FIS, a policy governing Council’s financial strategy for the next three years, Council’s revenue and financing policy and Council’s Rates Remissions and Postponement Policies. This provides a prudent financial management framework for Council to make decisions.
It also provides the basis for Council’s funding mix and source of funds.
2.5 Annual Plan
The Annual Plan shows what the Council intends to do and how it will go about delivering on its objectives for the coming financial year.
The detailed legal requirements on what is to be included in the Annual Plan is set out in schedule 10, part 2 of the Act. This includes the FIS and rating database information. This provides a prudent financial management framework for Council to make decisions.
3. Local Government Rate Setting Reviews
3.1 Audit Implications
While the Annual Plan is not subject to an audit process Audit New Zealand carries out an Annual Plan legal compliance assessment as part of the annual report audit process.
3.2 Legal Review
An external legal advisor has been engaged to perform a statutory compliance review for the 2022/23 financial year’s rate setting and collection processes. Feedback from this process has been incorporated into the attached draft Rates setting for the 2022-23 financial year paper. The review will continue up to the date of the finalisation of the Council report, and will be completed in advance of the Council meeting.
Recommendations from the review are included in the final rates setting recommendations presented to Council for the 2022/23 financial year.
4. Draft Rates Setting 2022/23
4.1 Changes from 2021/22
Council will be collecting its own rates from 2022/23. As such, paragraphs 21 to 27 in Attachment 1 have been specifically amended to address all envisaged process implications of the rates collection function.
There are no new targeted rates to be set for the 2022/23 year.
5. Considerations
5.1 Risks and Mitigations
The main risk relates the rates setting process not being legislatively compliant
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 Implications for Māori
Māori are ratepayers and are affected in the same way as any other member of the community in the same situation as them in terms of property ownership and ability to pay. Māori freehold land may, in certain circumstances, we eligible for rates remissions.
The Local Government (Rating of Whenua Māori) Amendment Act 2021 came into force on 1 July 2021. This changed several aspects of the Local Government (Rating) Act, and other Acts, to facilitate the principles set out in the Preamble to Te Ture Whenua Maori Act 1993.
The reviews of the Revenue and Financing Policy, the Policy on Development Contributions or Financial Contributions, and the policy on the Remission and Postponement of Rates on Māori Freehold Land are required to support the principles set out in the Preamble to Te Ture Whenua Maori Act 1993.
5.4 Community Engagement
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INFORM Whakamōhio |
To provide affected communities with balanced and objective information to assist them in understanding the problems, alternatives and/or solutions. |
Council deliberated on the draft Annual Plan 2022/23 and related policies at its meeting of 18 May 2022. This followed a process that involved four Council workshops through late 2021 and early 2022. The proposed draft Annual Plan 2022/23 budget has been revised to incorporate Council direction from the deliberations meeting on 18 May 2022.
5.5 Financial Implications
This work is planned under the Finance Activity in the Annual Plan 2022-2023.
6. Next Steps
The next steps for this process are to address the final legal review recommendations, receive feedback from the Committee on this report, recommend that Council adopts the Annual Plan and Financial Polices, recommend that Council adopts the rates resolutions.
Attachment 1 - Rates setting for the 2022-23 financial year (Public Excluded) ⇩
Attachment 2 - Rating Delegations - Recommended Additions to Council's Delegations Manual - 23 June 2022 ⇩
Risk and Assurance Committee 9 June 2022
Item 8.4
Public Excluded Attachment 1
Rates setting for the 2022-23 financial year