Agenda of Audit and Risk Committee meeting

Audit and Risk Committee Agenda

25 February 2022

MINUTES OF Central Otago District Council
Audit and Risk Committee HELD IN Ngā Hau e Whā, William Fraser Building,

1 Dunorling Street, Alexandra and livestreamed on microsoft teams
ON Friday, 3 December 2021 AT 9.30 am

PRESENT: Ms L Robertson (Chair), His Worship the Mayor T Cadogan (via Microsoft Teams), Cr S Jeffery, Cr N McKinlay

IN ATTENDANCE: Cr I Cooney, S Jacobs (Chief Executive Officer), L Macdonald (Executive Manager - Corporate Services), J Muir (Executive Manager - Infrastructure Services), L Fleck (Executive Manager – People and Culture), G McFarlane (Business Risk and Procurement Manager), Q Penniall (Environmental Engineering Manager), I Evans (Water Services Manager), A McDowall (Finance Manager), A Crosbie (Senior Strategy Advisor), R Ennis (Health, Safety and Wellbeing Advisor) and R Williams (Governance Manager)

1 Apologies

Committee Resolution

Moved: Robertson

Seconded: McKinlay

That the apology from Cr N Gillespie be received and accepted.

Carried

2 Public Forum

There was no public forum.

3 Confirmation of Minutes

Committee Resolution

Moved: Robertson

Seconded: McKinlay

That the public minutes of the Audit and Risk Committee Meeting held on 1 October 2021 be confirmed as a true and correct record.

Carried

4 Declaration of Interest

Members were reminded of their obligations in respect of declaring any interests. There were no further declarations of interest. The Mayor noted two changes to his declaration.

5 Reports

21.4.2 Policy Register

To consider the updated Policy and Strategy Register. The Committee requested that when due dates on the register changed, that this information was included on the register.

Committee Resolution

Moved: Robertson

Seconded: McKinlay

That the report be received.

Carried

21.4.3 Risk Register

To consider an update on the Risk Register. It was noted that the table included with the agenda was still in a work in progress and a further update would be provided at the February meeting. The committee complimented the work to date and suggested that in addition to the register presented a more high level dashboard document be developed.

Committee Resolution

Moved: Robertson

Seconded: McKinlay

That the report be received.

Carried

21.4.4 The Staff Delegations Manual

To receive the Staff Delegations Manual.

Committee Resolution

Moved: Robertson

Seconded: McKinlay

That the report be received.

Carried

21.4.5 Soft review of the Fraud, Bribery and Corruption Policy and the Protected Disclosures (Whistle Blower) Policy

To consider the findings of the soft review of the Fraud, Bribery and Corruption Policy and the Protected Disclosures (Whistle Blower) Policy.

During discussion a typographical error on fourth bullet point on page 4 of the Fraud, Bribery and Corruption Policy was noted, with the word “risk” to be deleted. The committee also agreed that a statement about possible staff disciplinary action, if an investigation is found to be substantive, would be added to the policy.

Committee Resolution

Moved: Robertson

Seconded: McKinlay

That the Audit and Risk Committee

A. Receives the report.

B. Recommends to Council that they approve the Fraud, Bribery and Corruption Policy with the amendments noted above.

Carried

Committee Resolution

Moved: Robertson

Seconded: McKinlay

That the Audit and Risk Committee recommends to Council that they approve the Protected Disclosures (Whistle Blower) Policy.

Carried

21.4.6 Audit NZ and Internal Audit Update

To consider an update on the status of the external and internal audit programme and any outstanding actions for completed internal and external audits. It was agreed that estimated completion dates for each action would be included in future updates. The Committee also requested for the internal audit plan to be included as a standing agenda item at each meeting.

Committee Resolution

Moved: Robertson

Seconded: McKinlay

That the report be received.

Carried

21.4.7 Financial Report for the period ending 30 September 2021

To consider the financial performance for the period ending 30 September 2021.

Committee Resolution

Moved: Robertson

Seconded: McKinlay

That the report be received.

Carried

21.4.8 Asset Management Policy

To review and recommend to Council that they approve the 2021 Asset Management Policy. Corrections to the document were noted, and the words “for renewal and operational parts of the Long-term Plan” were added to the Council responsibility section of table two in the policy.

Committee Resolution

Moved: Robertson

Seconded: McKinlay

That the Audit and Risk Committee

A. Receives the report.

B. Recommends to Council that they approve the 2021 Asset Management Policy with the above amendment.

Carried

21.4.9 Infrastructure Construction Projects Update

To consider monthly status reports for Clyde Wastewater and Lake Dunstan Water Supply projects and to provide an update on the implementation of project management software.

Staff tabled and spoke to a “Summary Status Report Dashboard” document before responding to questions.

Committee Resolution

Moved: Robertson

Seconded: McKinlay

That the report be received.

Carried

21.4.10 Health, Safety and Wellbeing

To provide with information on health, safety and wellbeing risks and controls at Central Otago District Council. The Chief Executive Officer provided an update on the organisation’s response and preparations under the COVID-19 protection framework.

Committee Resolution

Moved: Robertson

Seconded: McKinlay

That the report be received.

Carried

6 Chair's Report

21.4.11 December 2021 Chair's Report

There was no Chair’s report.

7 Members' Reports

21.4.12 December Members' Reports

There were no members’ reports.

8 Status Reports

21.4.13 December Governance Report

To report on items of general interest, consider the Audit and Risk Committee’s forward work programme and the current status report updates.

Committee Resolution

Moved: Robertson

Seconded: McKinlay

That the report be received.

Carried

9 Date of The Next Meeting

The date of the next scheduled meeting is 25 February 2022.

10 Resolution to Exclude the Public

Committee Resolution

Moved: Robertson

Seconded: McKinlay

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

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

General subject of each matter to be considered	Reason for passing this resolution in relation to each matter	Ground(s) under section 48 for the passing of this resolution
Confidential Minutes of the Audit and Risk Committee	s7(2)(a) - the withholding of the information is necessary to protect the privacy of natural persons, including that of deceased natural persons. s7(2)(c)(ii) - the withholding of 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. s7(2)(d) - the withholding of the information is necessary to avoid prejudice to measures protecting the health or safety of members of the public. s7(2)(g) - the withholding of the information is necessary to maintain legal professional privilege. s7(2)(i) - the withholding of the information is necessary to enable Council to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations.)	s48(1)(a)(i) - the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist under section 6 or section 7
21.4.14 - Litigation Register	s7(2)(g) - the withholding of the information is necessary to maintain legal professional privilege	s48(1)(a)(i) - the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist under section 6 or section 7
21.4.15 - Otago Regional Council Issue of Abatement Notices	s7(2)(g) - the withholding of the information is necessary to maintain legal professional privilege	s48(1)(a)(i) - the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist under section 6 or section 7
21.4.16 - December 2021 Confidential Governance Report	s7(2)(c)(ii) - the withholding of 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 s7(2)(d) - the withholding of the information is necessary to avoid prejudice to measures protecting the health or safety of members of the public	s48(1)(a)(i) - the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist under section 6 or section 7

Carried

The public were excluded at 11.25 am and the meeting closed at 12.06 pm.

25 February 2022

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Description automatically generated

22.1.5 Financial Report for the Period ending 31 December 2021

Doc ID: 566721

1. Purpose

To consider the financial performance for the period ending 31 December 2021.

Recommendations

That the report be received.

2. Discussion

The quarterly financial report is presented to the Committee as part of regular updates.

3. Financial Reporting

The operating variance for December 2021 year-to-date is ($3.551M) and is largely the result of Waka Kotahi subsidy, land sales and low operating expenditure.

Overall income has an unfavourable variance against the revised budget of ($5.54M). This relates to the timing of land sale revenue for the Dunstan Park subdivision and a parcel of Three Waters land. The budgeted timing for these activities is earlier than actual completed land sales. This will be adjusted in the forecast to align budgets with adjusted timelines for sales. Other factors include the timing of the roading Waka Kotahi and other grants.

· Land sales have not occurred within the budgeted timeframe. Part of this relates to land Council agreed to sell as part of the long-term planning process. All other land sales from subdivisions will come through later in the financial year when they are sold. The Dunstan Park subdivision sales will start showing in the January 2022 financials.

· Government grants and subsidies are lower than budget by ($799k). This is mainly due to the timing of the Waka Kotahi subsidy of ($968k). This subsidy moves in conjunction with the subsidised roading operating and capital work programmes. This is offset by $373k of Tourism Infrastructure funding for the new Clyde toilet and Miners Lane carparks. The budget for these activities is in User fees and other and will be re-aligned in the next revision of the budget.

· User fees and other has an unfavourable variance of ($578k). Of this variance, ($357k) is due to the grants budget being budgeted in ‘other income’ rather than the correct place of grants and subsidies. This budget includes the Tourism Infrastructure funding for the new Clyde toilet and Miners Lane carparks. This will be corrected in the next revision of the budget. Year-to-date revenue for this category is also down ($25k) in swimming pool admissions and ($132k) for water meter readings. The water meter readings result is believed to be timing and is expected to correct as the year progresses.

· Regulatory fees has a favourable variance of $410k. This variance continues to be driven by the timing of building consent revenue received, which year-to-date is $371k.

· Interest and dividends revenue is unfavourable against budget by ($149k). Interest rates received on term deposit investments are continuing to remain low. This is due to low market interest rates.

· Reserves contributions has a favourable variance of $171k. These contributions are dependent on developers’ timeframes and therefore difficult to gauge when setting budgets.

Expenditure is lower than budget by $1.996M. Operational expenditure is trending lower across all areas with no underlying variance of concern.

· Staff costs has a favourable variance of $381k. The is due in part to the lag between staff moving and the replacement of new staff, plus the relevant recruitment costs. It also includes staff training, made up of conferences and planned attendance at workshops, travel and accommodation. Delays are due to the on-going impact of COVID-19.

· Contracts has a favourable variance of $851k. Contract expenditure is determined by workflow and the time of the contract. This will mean that the phased budgets will not necessarily align with actual expenditure, meaning some work appears favourable, and some contracts spend year-to-date appear (unfavourable). Planned maintenance $164k; contracts $682k; physical works contract $236k; and roading contracts ($229k) are the key timing variances year-to-date. The contracts variance of $682k is being driven by the timing of the Three Waters Stimulus operational improvements projects. Three Waters income and expenditure will be reflected in the February forecast.

· Professional fees has a favourable variance of $437k. This is similar to contract expenditure where budget and actuals do not align throughout the year but typically align by the end of year. Major variances include: asset management plans and management costs ($75k); engineers fees $82k; management consultants $312k; planning consultants (review) $82k and recoverable professional fees ($130k). The asset management plans and management costs variance of ($75k) relates waste services contract that is currently under review.

· Depreciation has an unfavourable variance of ($219k). This is mainly due to a difference between the actual and budgeted wastewater depreciation. This is being investigated in more depth. It is likely due to the timing of project stages and carry forwards, which has impacted on the budget systems automation for calculating the depreciation. This will correct the Annual Plan 2022/23. Areas with major variances include: libraries ($31k); information services ($33k); parks reserves recreation $226k; property $38k; wastewater ($293k); and waste management ($42k). Wastewater is also reflecting the updated valuations which occurred after the Long-term Plan was approved.

· Refuse and recycling costs has a favourable variance of $168k. This is due to the timing of waste and recycling processing costs. These will fluctuate against the budget from time to time.

· Repairs and maintenance has a favourable variance of $100k. This is mainly due to the timing of various projects as well as building maintenance requirements.

· Loss of sale of asset has an unfavourable variance of ($262k). This is due to the disposal of District Rural Fire building assets to Fire and Emergency New Zealand (FENZ) as part of Council resolution 21.2.6 dated March 2021. This includes the Omakau Fire Depot and the Tarras Fire Station.

· Projects has a favourable variance of $130k. This is due to the phasing schedule of Tourism Central Otago projects.

· Other costs has a favourable variance of $257k. A detailed breakdown for other costs are in a table below the financial statement.

2021/22	6 MONTHS ENDING 31 DECEMBER 2021					2021/22
		YTD	YTD	YTD
Annual Plan		Actual	Revised Budget	Variance		Revised Budget
$000		$000	$000	$000		$000
	Income
33,270	Rates	17,141	17,093	48	˜	33,270
7,248	Govt Grants & Subsidies	7,911	8,710	(799)	˜	16,217
7,323	User Fees & Other	3,112	3,690	(578)	˜	7,866
17,286	Land Sales	-	4,750	(4,750)	˜	14,650
2,155	Regulatory Fees	1,585	1,175	410	˜	2,155
2,104	Development Contributions	1,063	1,052	11	˜	2,104
388	Interest & Dividends	45	194	(149)	˜	388
-	Reserves Contributions	171	-	171	˜	-
55	Other Capital Contributions	91	2	89	˜	55
69,829	Total Income	31,119	36,666	(5,547)	˜	76,705

	Expenditure
13,565	Staff	6,362	6,743	381	˜	13,529
587	Members Remuneration	260	294	34	˜	587
8,904	Contracts	4,441	5,292	851	˜	9,724
2,902	Professional Fees	1,529	1,966	437	˜	3,881
9,997	Depreciation	5,218	4,999	(219)	˜	9,997
13,926	Costs of Sales	2	100	98	˜	7,290
3,920	Refuse & Recycling Costs	1,550	1,718	168	˜	3,920
1,723	Repairs & Maintenance	763	863	100	˜	1,739
1,410	Electricity & Fuel	668	672	4	˜	1,410
-	Loss on Sale of Asset	262	-	(262)	˜	-
652	Grants	406	387	(19)	˜	652
1,115	Technology Costs	503	562	59	˜	1,099
303	Projects	473	603	130	˜	1,206
639	Rates Expense	533	532	(1)	˜	634
423	Insurance	448	423	(25)	˜	423
2,037	Other Costs	759	1,016	257	˜	2,041
62,103	Total Expenses	24,174	26,170	1,996	˜	58,132

7,726	Operating Surplus / (Deficit)	6,945	10,496	(3,551)		18,573

This table has rounding (+/- 1)

· Other costs have been configured to include only needs-based costs which will fluctuate against budget. There are no large variances of note to report on at present.

Other costs breakdown is as below:

2021/22		YTD Actual	YTD Revised Budget	YTD Variance		2021/22
Annual Plan	Other Costs breakdown	YTD Actual	YTD Revised Budget	YTD Variance		Revised Budget
$000		$000	$000	$000		$000
535	Administrative Costs	156	265	109	˜	550
690	Office Expenses	270	341	71	˜	666
234	Operating Expenses	109	126	17	˜	234
327	Advertising	111	154	43	˜	329
175	Valuation Services	86	88	2	˜	175
76	Retail	27	42	15	˜	87
2,037	Total Other Costs	759	1,016	257		2,041

This table has rounding (+/- 1)

Capital Expenditure

Capital expenditure is $13.543M against the year-to-date budget of $31.458M. Year-to-date, 44% of the initial 2021/22 Annual Plan has been expensed, however, when considering the revised annual plan, which includes carry-forwards and capital cost revisions, the year-to-date spend reduces to 21%. Below is a summary for each activity’s capital expenditure.

Due to supply chain and resource issues related to COVID-19, the capital works programme is behind the revised annual plan schedule. Staff plan to bring to Council in April 2022 the second budget revision for this financial year, assuming there is no significant impact from Omicron and its effect on staffing levels within Central Otago District Council.

Council Property and Facilities $4.M favourable against budget:

Cromwell Town Centre projects are driving most of this variance by $3.4M. The work programme is currently in the design phase for the Cromwell Memorial Hall and Events Centre. Next steps include site survey and concept design workshops being held in January 2022. The new Clyde toilets are progressing with the Lodge Lane toilets in operation. The Miners Lane toilets will not be operational until August 2022 when the Clyde wastewater reticulation system is complete. Other areas behind budget include airports $20k, council offices $281k and elderly person housing $150k.

Waste Management $577k favourable against budget:

The glass crushing plant project is behind budget by $47k. The transfer station reconfiguration projects are yet to start, contributing to $398k of the underspend.

Vehicle Fleet ($107k) unfavourable against budget:

Vehicle renewals and purchases are ahead of budget with 42% of the $256k total revised budget being already spent. The reforecast will re-align budgets with actuals.

Information Services $326k favourable against budget:

Information Services projects are behind budget. Projects include geographic information services $82k, enhanced customer experience digital services $19k, enterprise resource planning information services $150k and financial performance improvement $36k.

Parks and Recreation $1.18M favourable against budget:

This favourable variance is driven by a mixture of the timing of project budgets and contractor’s availability to perform the work. Projects include landscaping, signage and irrigation. The Cromwell pool replacement heat pump is on order and is due for delivery in February 2022 with preliminary fitting work to be carried out in December 2021. This accounts for half of the capital budget variance.

Roading $957k favourable against budget:

Roading projects are behind schedule and this is mainly due to the timing of the capital programme which tend to ramp up over the summer construction season. Projects include footpath renewals $70k, carpark renewals $224k, structures renewals $233k, sealed road renewals $558k.

Three Waters is $10.8M favourable against budget:

The favourable variance is due to the timing of construction projects. The main drivers include the Lake Dunstan water supply $4.2M, water treatment plant and capacity upgrades $2.6M, water supply renewals $791k and water stimulus fund projects $1.5M. The Clyde wastewater reticulation network construction is progressing well.

2021/22						2021/22	Progress to date against revised budget
Annual Plan	CAPITAL EXPENDITURE	YTD Actual	YTD Revised Budget	YTD Variance		Revised Budget
$000		$000	$000	$000		$000
6,058	Council Property and Facilities	626	4,699	4,073	˜	9,146	7%
382	Waste Management	336	913	577	˜	913	37%
-	i-SITEs	-	4	4	˜	4	0%
50	Customer Services and Administration	14	31	17	˜	62	23%
204	Vehicle Fleet	107	-	(107)	˜	256	42%
248	Planning	-	35	35	˜	348	0%
352	Information Services	129	455	326	˜	1,386	9%
164	Libraries	57	93	36	˜	512	11%
1,713	Parks and Recreation	505	1,685	1,180	˜	3,755	13%
7,420	Roading	3,018	3,975	957	˜	7,950	38%
14,243	Three Waters	8,751	19,568	10,817	˜	38,726	23%
30,834	Grand Total	13,543	31,458	17,915		63,058	21%

Statement of Financial Position

The Statement of Financial Position (Balance Sheet) is a new report which will be included in the reports to both Council and to the Audit and Risk Committee. It is included to show the comparisons between actuals and budget. Below the financial position is a table summarising the reserves and the cash balances. This gives assurance that there are available funds to meet the cash financial reserve balances typically included in Council’s set of financial reports.

2020/21 Actual	2020/21 YTD December Actual	STATEMENT OF FINANCIAL POSITION	2021/22 YTD* Actual	2021/22 Revised Budget	2021/22 Annual Plan
$000	$000	for the period ended 31 December 2021	$000	$000	$000
		EQUITY
392,456	382,902	Ratepayers equity	404,206	414,890	393,593
12,321	8,492	Surplus/(Deficit)	6,945	18,491	7,644
7,035	14,442	Council Reserves	7,603	4,258	4,178
487,465	483,494	Property revaluation reserve	487,393	496,629	496,629
(17)	(20)	Investment shares fair value revaluation reserve	(17)	(20)	(20)
80	80	Restricted reserves	80	80	80
899,340	889,390	Total equity	906,210	934,328	902,104
		REPRESENTED BY:
		Current assets
6,514	9,931	Cash and cash equivalents	4,802	19,896	19,896
10,000	11,000	Other financial assets	6,000	8,000	8,000
4,852	34	Receivables	483	3,171	3,171
-	-	Non-Current assets held for sale	-	-	-
5,394	1,543	Inventories	6,613	1,509	1,509
-	-	Investment Bond	-	625	625
26,760	22,508	Total current assets	17,898	33,201	33,201
		Less current liabilities
256	295	Agency and deposits	509	273	273
13,254	3,401	Payables and deferred revenue	5,126	4,705	4,705
673	654	Employee entitlements	777	1,010	1,010
-	-	Borrowings and other financial liabilities	-	-	-
14,183	4,350	Total current liabilities	6,412	5,988	5,988
12,577	18,158	Working capital	11,486	27,213	27,213
		Non-current assets
111	109	Available for sale financial assets	111	109	109
282	317	Loans and receivables	254	333	333
26,030	21,739	Work in Progress	37,400	63,058	30,834
852,712	846,195	Property, plant and equipment	849,328	864,309	864,309
1,272	845	Intangible assets	1,275	2,271	2,271
431	355	Forestry assets	431	357	357
5,925	1,675	Investment property	5,925	1,683	1,683
886,763	871,235	Total non-current assets	894,724	932,120	899,896
		Less non-current liabilities
-	3	Provisions	-	5	5
-	-	Borrowings and other financial liabilities	-	25,000	25,000
-	3	Total non-current liabilities	-	25,005	25,005

899,340	889,390	Net assets (assets minus liabilities)	906,210	934,328	902,104

This table has rounding (+/- 1)

* year-to-date actual values are subject to change and are only indicative of the end of year totals.

The cash balance and its reconciliation to council cash-reserves, is to provide surety to council that the cash reserves are supported by cash in the bank. Timing is not always perfect due to accrual accounting and income revenue being received in advance. What this report demonstrates is that at 30 June 2021 Council had audited (cash) financial reserves of $7M, and $16.5M in actual cash in the bank. The reason for the significant variance is the cash received in advance for the new financial year.

Cash Balances	Full Year Actuals	*YTD Actuals as at**
	30 June 2021	31 December 2021
	$000	$000
Cash at Bank (cash and cash equivalents)	6,514	4,802
Investments* (other financial assets)	10,000	6,000
Total Cash Balances	16,514	10,802

	Actual Reserves	YTD Reserves*
Council Reserves	30 June 2021	31 December 2021
District Reserves	985	(2,314)
District Targeted Reserves	(17,674)	(13,998)
Vincent Community Board	2,692	5,510
Cromwell Community Board	18,903	19,333
Maniototo Community Board	813	953
Teviot Valley Community Board	1,317	1,121
Total Council Reserves	7,035	10,604

Cash Variance to Reserves	9,479	198
* Investments are broken down in point 5 of this report.
Variance made up of the timing of Cash received in advance :
Three-waters (Stimulus)	4,200
STAPP	365
Rates/Water	500
Other	1,500
	6,565

Cash Variance to reserves	2,914	198

This table has rounding (+/- 1)

* year-to-date actual values are subject to change and are only indicative of the end of year totals.

4. Accounts Receivable

As at 31 December 2021, Council had $136k outstanding in accounts receivables greater than 90 days. Sundry debtors are the key contributors and include:

· Ministry of Business and Innovation $57.5k (grant funding for Welcoming Communities Programme). This has subsequently be paid in full.

· Top Shelf Productions $5.7k (agreement to fund people on Bikes Series 2)

· Hillview Winery Limited $5.9k (relating to rental Alexandra Airport)

· Ventia $6k (relating to fibre drilling repairs)

· Arawata Assets $5.9k (relating to rental of Tarbert St premise)

Resource consents include:

· Crom 1825 Limited $7.9k (development contribution fees)

· M N Shaw $8.5k (payment plan in place – balance to be paid by 30 June 2022)

Type of Debtor	Current	30 Days	60 Days	> 90 Days
Other	$ 47,655	$ 52,833	$ 16,663	$ 100,031
Building Consents	$ 33,328	$ 14,175	$ 8,094	$ 8,141
Resource Consents	$ 56,763	$ 31,810	$ 1,939	$ 28,010
TOTAL	$ 137,746	$ 98,818	$ 26,697	$ 136,182

Type of Debtor	December 2021	November 2021	October 2021	December 2020
Other	$ 217,182	$ 101,490	$ 179,709	$ 168,450
Building Consents	$ 63,739	$ 68,849	$ 46,259	$ 34,024
Resource Consents	$ 118,522	$ 96,245	$ (37,342)	$ 185,465
TOTAL	$ 399,443	$ 266,585	$ 188,626	$ 387,939

Debt is actively managed and monitored and if a debtor is past our three-month threshold, their information is sent to our debt collection agency, Receivables Management Limited.

There is a credit balance of ($53k) in current month outstanding invoices in “under 500”. This relates to resource consent debtors where payment has been made in advance of the invoice.

5. Investment

As at 31 December 2021, council had cash balances of $10.8M, of which term deposits totalling $6M mature within 90 days.

Bank	Amount	Term (Month)	Start Date	End Date	Fixed Rate
KiwiBank	2,000,000	1	10 Dec 2021	10 Jan 2022	0.40%
KiwiBank	4,000,000	3	10 Dec 2021	10 Mar 2022	1.00%

Weighted average interest rates for all council term deposits is 0.80%.

6. Internal Loans

Forecast closing balance for 30 June 2022 is $4.075M.

OWED BY	Original Loan	1 July 2021	30 June 2022 Forecast
OWED BY	Original Loan	Opening Balance	Closing Balance
Public Toilets	670,000	491,239	468,048
Tarbert St Bldg	25,868	13,067	11,574
Alex Town Centre	94,420	49,759	44,545
Alex Town Centre	186,398	91,041	79,921
Alex Town Centre	290,600	155,412	139,137
Centennial Milkbar	47,821	21,284	18,192
Vincent Grants	95,000	19,000	9,500
Pioneer Store Naseby	21,589	10,949	9,609
Water	867,000	717,829	691,212
ANZ Bank Seismic Strengthening	180,000	149,030	143,504
Molyneux Pool	650,000	571,900	539,400
Maniototo Hospital	1,873,000	1,775,142	1,723,630
Alexandra Airport	218,000	204,485	197,216
Total	5,219,695	4,270,138	4,075,488

7. External Community Loans

The total amount of external loans at the beginning of the financial year 2021-22 was $189k. As at 31 December 2021, the outstanding balance was $161k. Council has received $27k in principal payments and $4.9k in interest payments.

Owed By	Original Loan	1 July 2021 Actual Opening Balance	Principal	Interest	30 December 2021 Actual Closing Balance
Cromwell College	400,000	130,770	17,451	3,607	113,318
Maniototo Curling	160,000	35,662	6,790	821	28,872
Oturehua Water	46,471	22,623	2,853	548	19,770
	606,471	189,055	27,094	4,976	161,960

8. Reserve Funds table

· As at 30 June 2021 the Council has an audited closing reserve funds balance of $7.035M. This reflects the whole district’s reserves and factors in the district-wide reserves which are in deficit at ($16.7M). Refer to Appendix 1.

· Taking the 2020-21 audited Annual Report closing balance and adding 2021-22 income and expenditure, carry forwards and resolutions, the whole district is projected to end the 2021-22 financial year with a closing deficit of ($10.772M).

9. Attachments

Appendix 1 - Reserves 2021_22 .pdf ⇩

Report author:	Reviewed and authorised by:

Ann McDowall	Leanne Macdonald
Finance Manager	Executive Manager - Corporate Services
10/02/2022	10/02/2022

25 February 2022

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22.1.6 Cyber Security Plan 2018-2021 update

Doc ID: 563929

1. Purpose

To consider an update on the 2018-2021 Cyber Security Plan.

Recommendations

That the report be received.

2. Discussion

In this report, the following topics will be covered:

· What’s happening in New Zealand?

· What’s happening at Central Otago District Council?

· Association of Local Government Information Management (ALGIM) Cyber Security Programme update

· Outstanding Key Recommendation Status Report (in the future, these key recommendations will be included in the ALGIM Cyber Security Programme update)

· Cyber Security programme of work

Executive Summary

A cyber security audit is planned for the first half of 2022. The new Cyber Security Plan 2022-2024 has been drafted to form the basis of the scope for this audit.

Focus areas of cyber security since the last report have been on:

· User education, training, and awareness

· Protective technology improvements to maximise value

· Updating and reviewing actions related to the requirements and controls for the (ALGIM) Cyber Security Programme framework

What’s happening in New Zealand?

Council utilise Computer Emergency Response Team (CERT) as a resource for cyber security support. CERT NZ works to support businesses, organisations and individuals who are affected (or may be affected) by cyber security incidents. CERT provide trusted and authoritative information and advice, while also collating a profile of the threat landscape in New Zealand.

The following highlights quarter three 2021 cyber security incidents across New Zealand:

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More details on the current threat landscape can be found here: Quarter Three Report 2021 | CERT NZ

What’s happening at Central Otago District Council?

Information Services is seeing a trend in technology platforms being targeted rather than people currently.

The following outlines what Council protective technologies are doing for the 4 January 2022 to 3 February 2022 period:

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· Potentially unwanted applications (PUAs)

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Managed Threat Response service over the last 30 days:

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ALGIM Cyber Security Programme update

Association of Local Government Information Management (ALGIM) has defined a Cyber Security framework which is powered by Self-Assessment and Management System for Standards Compliance (SAM for Compliance) giving councils the ability to manage and reduce organisational Cyber Security related risk. As part of the programme, councils that demonstrate defined levels of achievement and improvement will receive awards at the ALGIM annual conference.

The latest Management Status Report is attached for your information (Appendix 1).

The following details the current snapshot of how Council is preforming within this framework benchmarked against other councils:

· The following shows that Council is 77.32% compliant with the framework controls:

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· The following shows how Council is tracking against other councils within this framework over the last 12 months:

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· The following is a summary of the controls by status:

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Regularly review of the framework occurs once a month, updating controls and working on outstanding actions and improvements.

The following is summary of the improvements within each function:

Identify:

· Asset Management – Procedures have been finalised and changes to processes are being implemented.

· Governance – Policy and procedures are finalised and up to date. Digital and Information Strategy is due to be finalised June 2022, which will include Cyber Security.

· Risk Assessment and Management – Forms part of the Information Services Activity Management Plan, which has recently been reviewed. Cyber security risks are identified, and mitigations are being implemented and monitored.

Manage:

· Access Control – Planned physical security work has been delayed due to COVID-19. Work on remote access agreements with contractors is being progressed.

· Information and Data Security – USB portable drives access restriction testing is progressing; exemptions are yet to be agreed.

· Information Protection Procedures and Processes – Procedures have been finalised and changes to processes are being implemented.

· Maintenance – Annual review of maintenance has occurred, with changes being implemented.

Protect:

· Awareness and Training – this is currently the focus in the organisation, with Phriendly Phishing virtual training, reporting and staff education ongoing. Onsite specialist training has been delayed due to COVID-19.

· Protective Technology – After the core functionally was initially deployed and bedded in, improvements to maximise its value are being investigated and deployed to further meet Council policies and standards.

Detect:

· Anomalies and Events – Events Management Procedure is in progress to formalise and improve current processes.

· Continuous Monitoring – Investigation into enhanced continuous monitoring technologies is being progressed.

Respond:

· Review of the Information and Communication Technology (ICT) Disaster Recovery Plan is underway due to the renewal of server infrastructure. This renewal has provided improved business continuity and recovery options. Testing of this updated plan will confirm Information Services ability to respond and meet the business continuity requirements of council.

Recover:

· ICT Disaster Recovery Plan is underway as the renewal project for server, storage, backup, and recovery systems is coming to an end. This environment has been replaced following a successful tender bid from The Information Management Group (TIMG). TIMG are providing the following:

o Infrastructure as a Services (IaaS) – Fully managed service that will reside in the Alexandra server room.

o Back-up as a Service (BaaS) – Fully managed service that will reside in the TIMG Auckland datacentre. This will provide all councils back-up requirements, including backing up critical cloud services such as Microsoft 365 and MAGIQ Cloud in the future.

o Disaster Recovery as a Service (DRaaS) – Fully managed service that will reside in the TIMG Auckland datacentre. This will provide an improved recovery solution with geographical resilience and improved recovery times.

· In addition to the ICT Disaster Recovery Plan being updated, the Back-up and Recovery Procedure is being updated taking into account the new service. This service and procedure enable Council recover from minor data loss through recovering from a major event.

The following shows how Council is tracking by each function within the framework when compared to other councils:

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The following shows the trend by each function over the last 12 months. Recover and respond have not been the focus, as council’s ability to respond is well established. Improvements has been made within manage, protect, and detect due to work around protective technologies and staff awareness and education.

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Outstanding Key Recommendation Status Report

Following the Cyber Security Audit in 2019 key recommendations were made. There are no outstanding key recommendations.

Cyber Security programme of work

The Cyber Security Plan has been supported by Cyber Security programme of work. The current programme is nearing completion, which will be replaced by a new programme initiated by the new cyber security plan.

New Cyber Security Plan

This project is currently scheduled for first half of 2022, following the Cyber Security Audit.

Information Services Service Management procedures

These are Information Services primary service management procedures, which have a relationship with the Protection of Information and Information Systems policy and standard series:

· Asset Management Procedure

· Change Management Procedure

· Incident and Problem Management Procedure, this includes the sub process of critical incident management, which includes incident reporting

· Knowledge Management Procedure

· Preventative Maintenance Management Procedure

· Project Management Procedure

· Service Desk and Services Management Procedure

These procedures have now been finalised and iterative changes will be made as these practices mature over the coming 12 months.

3. Attachments

Appendix 1 - Management Status Report ⇩

Report author:	Reviewed and authorised by:

Nathan McLeod	Leanne Macdonald
IS Manager	Executive Manager - Corporate Services
17/01/2022	8/02/2022

25 February 2022

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22.1.9 Health, Safety and Wellbeing Report

Doc ID: 566834

1. Purpose

To provide with information on health, safety and wellbeing risks and controls at Central Otago District Council.

Recommendations

That the report be received.

2. Discussion

2.1 Covid-19

2.1.1 Covid-19 Vaccination Policy

On Friday December 20, 2021, the Chief Executive Officer approved the COVID-19 Vaccination Policy.

This policy required all staff to have received their first vaccination for COVID-19 by January 5, 2022.

2.1.2 Working from home rotations

On Monday January 31, 2022, council moved to a three-bubble working model. Working bubbles are intended to support business continuity during the COVID-19 pandemic.

The bubbles minimise the contact between workers while allowing council to continue to deliver its full range of services.

In council offices, bubbles work on a fortnightly rotation between their home and council workplaces, with one bubble working fully from the office in an area isolated from the other two bubbles. This rotation allows for inspections (for example building inspectors) to continue as usual.

Customer service in the service centre is open as usual with teams in a fortnightly rotation.

Other service areas (for example, libraries and pools) are also open. Employees in these areas have been grouped as closely as possible to a two-bubble system.

As part of this decision, council requires external meetings to be held online or offsite, as appropriate.

2.2 Contractor management

Four contractors improved their score from green to gold during the last reporting period. The average contractor score improved from 88% to 89%.

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Fig 1. Sitewise scores at February 1, 2022

Major contractors Delta and Fulton Hogan have provided their updated COVID-19 management plans for red light.

No incidents involving contractors were raised to council during the reporting period October to December 2021.

2.3 Health and safety reporting

There were 143 reports made in 2021.

Report status	Reported	Reviewer	Outstanding actions	Closed
	0	0	2	143

2.3.1 Worker reports

From October to December 2021, Health and Safety focused on promoting proactive reporting of health and safety concerns.

75% of incident reports filed by employees during 2021 were proactive reports. Proactive reports include observations, near misses/exposures and unsafe behaviours.

Proactive reporting allows the People and Culture team to provide early intervention and prevention to employees to ensure that the reports do not escalate to injury or illness.

2.3.1a Worker injuries

There were eight recordable injuries during the reporting period October-December 2021.

Two lost time injuries (LTIs) occurred during this period accounting for 24 lost work hours.

In 2021, there were 80 work hours lost to injury.

Reporting period	Non-treatment injury	FAI	LTI	MTI	Fatality	Total recordable injuries
July-Sept 21	2	1	0	0	0	3
Oct-Dec 21	5	1	2	0	0	8

2.3.1b Lost time injury rate

At the December 3, 2021, meeting of the Audit and Risk Committee, the question was raised about what an acceptable rate of lost time injury might look like.

According to the Business Leaders’ Health and Safety Forum Benchmark Report 2020, the New Zealand national average for LTIs is 1.99 injuries per 200,000 hours of work. This average includes data from a range of industries, including local government.

In 2021, council had a 12-month average LTI of 2.27 (accounting for 3 injuries).

From the next report, this rate will be presented as a rolling average.

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Chart 1: Average lost time injury rate in 2021 compared with national average for 2020

Month	Average LTIR (YTD)	Number of injuries
January 2021	0	0
February 2021	0	0
March 2021	0	0
April 2021	0	0
May 2021	0	0
June 2021	1.66	1
July 2021	1.39	0
August 2021	1.19	0
September 2021	1.04	0
October 2021	1.85	1
November 2021	2.50	1
December 2021	2.27	0

2.3.1c ACC report

In 2021, council had the highest number of ACC claims made by employees in five years. However, council was more effective in minimising the amount of time spent away from work due to injury. Four of the ACC claims in 2021 did not require any time away from work.

Year	No of claims
2017	6
2018	5
2019	5
2020	3
2021	7

Council has a return-to-work process for employees who are away from work due to injury or ill-health, regardless of cause (work-related or private).

Before council accepts a work-related claim, the employee must have reported the incident. Incident reporting allows Health and Safety to provide early intervention and prevention options before the employee gets to the claim stage.

The number of claims over $500 and the number of compensation days are used to calculate the discount or loading (penalty) applied to our annual ACC levy.

At the end of 2021 there were no employees off work on work-related ACC.

2.3.2 Public incidents

There were 15 incidents involving members of the public during October and December 2021.

Most incidents occur in the aquatic facilities.

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2.3.2a Public injuries

During the reporting period, there were eleven injuries to members of the public.

Reporting period	Non-treatment injury	FAI	MTI	Fatality	Total recordable injuries
July-Sept 21	2	7	0	0	9
Oct-Dec 21	0	11	0	0	11

2.4 Critical risk

The number of incident reports made relating to critical risk has been included in this report. This is the first presentation of this data.

All incident reports relating to critical risk in 2021 were proactive reports (observations, exposure events, near misses or reports of unsafe behaviour).

For example, biological hazards had 20 related reports in 2021. These incidents include minor bleeding and faecal matter in the pool (commonly referred to a code brown). These incidents would be considered exposure events.

Critical risk

Existing controls

New or upcoming controls

Related incident reports

Driving

· Vehicle User Policy

· E-Roads installed in fleet vehicles

· 5-Star ANCAP rated vehicles

· Licenced drivers

· Fleet inductions for new starters

· Chain fitting training

· Adverse Weather Guidelines were updated

Remote or isolated working

· Working from Home Policy

· Panic buttons

· Work planning

· Buddy systems

· Risk assessments

· Planned procurement of Lone Worker software in Q4 2021-22

· Employees working from home are required to complete a risk assessment for their work space every 6 months (or as things change)

· Panic button installed at Ranfurly Pool

· Trespass procedures reviewed

Psychosocial

hazards

· Employee Assistance Programme (EAP)

· Wellbeing programme

· Regular 1:1s

· Flexible working

· Equal Employment Opportunity (EEO), Discrimination, Harassment and Bullying Policy

· Performance Management Policy

· Fit for Work Programme

· De-escalation training completed by Environmental Engineering

· Referrals to EAP by People and Culture: 30 (to end of Q3)

· EAP take up rate:

· 32 individual users (Q2),

· 30 individual users (Q3)

Biological hazards

· High-risk vaccinations programme

· Engineering controls

· PPE is provided

· Covid-19 Vaccination Policy adopted

· Health and safety made site visits to all wastewater treatment facilities in district

Hazardous chemicals

· Chemical register

· Display safety data sheets

· Appropriate storage

· Quantities stored is kept at a minimum

· Ventilation and circulation of air is monitored

· PPE is provided for handling or working with chemicals

· Records of training are maintained

· Fire schemes updated with FENZ (chemical registers)

· Qualified contractors

· Wastewater treatment site visits

2.6 Training and initiatives

The following regular training was completed:

Training	This period	YTD
New staff inductions	9	35
First aid certificates	0	41
SiteSafe passports	5	13
Fire safety warden	14	25

Initiatives planned:

· Working from home wellbeing focus for all teams as they move into a new phase of working

· Move it March will return for 2022

· Internal values implementation team have proposed a programme for 2022

3. Attachments

Nil

Report author:	Reviewed and authorised by:

Rachel Ennis	Louise Fleck
Health, Safety and Wellbeing Officer	Executive Manager - People and Culture
14/02/2022	14/02/2022


AGENDA Audit and Risk Committee Meeting Friday, 25 February 2022
Date:	Friday, 25 February 2022
Time:	9.30 am
Location:	Microsoft Teams and Live Streamed (Unless there is a move from the current Red Alert level, in which case it may be held at Nga Hāu e Whā, William Fraser Building, 1 Dunorling Street, Alexandra. In both cases, due to COVID-19 restrictions and limitations of the physical space, public access will be available through a live stream of the meeting. The link to the live stream will be available on the Central Otago District Council's website.)
Sanchia Jacobs Chief Executive Officer

Local Government Act 2002 Purpose Provisions	This decision enables democratic local decision making and action by, and on behalf of communities by ensuring independent advice and guidance is offered by the Audit and Risk Committee on appropriate matters.
Decision consistent with other Council plans and policies? Such as the District Plan, Economic Development Strategy etc.	Yes, this decision will enhance the Council’s Delegation Register.
Considerations as to sustainability, the environment and climate change impacts	There are no implications from this decision.
Risks Analysis	There are no risks with the recommended option.
Significance, Consultation and Engagement (internal and external)	This is a procedural matter and, therefore, no external consultation or engagement is required.

Internal Audit Review Programme	FY 20-21	FY 21-22	FY 22-23	FY 23-24
Information and Records Management	ü
Procurement		ü
Cyber Security		ü
Contract Management			ü
Capital Expenditure Planning and Monitoring			ü
Health & Safety				ü
Recruitment Review				ü
Environmental Management (including Sustainability)
Business Continuity / Disaster Recovery
Asset Management
Benefits Realisation
Legislative Compliance

Local Government Act 2002 Purpose Provisions	This decision ensures the organisation conducts business in an open, transparent, and democratically accountable manner.
Decision consistent with other Council plans and policies? Such as the District Plan, Economic Development Strategy etc.	The Policy maintains consistency with other Council policies and processes.
Considerations as to sustainability, the environment and climate change impacts	There are no implications.
Risks Analysis	This new policy supports best practice and mitigates financial and reputational risk by supporting Council granting release of information.
Significance, Consultation and Engagement (internal and external)	The policy is not significant and are therefore unlikely to generate community or media interest. No consultation is required as this is not deemed significant under the Significance and Engagement Policy.

Local Government Act 2002 Purpose Provisions	This decision ensures the organisation conducts business in an open, transparent, and democratically accountable manner.
Decision consistent with other Council plans and policies? Such as the District Plan, Economic Development Strategy etc.	The Policy maintains consistency with other Council policies and processes.
Considerations as to sustainability, the environment and climate change impacts	There are no implications.
Risks Analysis	This new policy supports best practice and mitigates financial and reputational risk by enabling robust personal information management.
Significance, Consultation and Engagement (internal and external)	The policy is not significant and are therefore unlikely to generate community or media interest. No consultation is required as this is not deemed significant under the Significance and Engagement Policy.

Report author:	Reviewed and authorised by:

Alix Crosbie	Saskia Righarts
Senior Strategy Advisor	Chief Advisor
8/02/2022	11/02/2022

Report author:	Reviewed and authorised by:

Rebecca Williams	Sanchia Jacobs
Governance Manager	Chief Executive Officer
9/02/2022	18/02/2022

Report author:	Reviewed and authorised by:

Gabi McFarlane	Leanne Macdonald
Risk and Procurement Manager	Executive Manager - Corporate Services
21/12/2021	9/02/2022