Agenda of Audit and Risk Committee - Tuesday, 28 January 2025

Audit and Risk Committee Agenda

28 January 2025

MINUTES OF Central Otago District Council
Audit and Risk Committee
HELD IN Ngā Hau e Whā, William Fraser Building, 1 Dunorling Street, Alexandra
AND LIVE STREAMED VIA MICROSOFT TEAMS ON Monday, 16 December 2024 AT 9.30 am

PRESENT: Mr B Robertson (Chair), Cr T Alley, Cr T Paterson

IN ATTENDANCE: P Kelly (Chief Executive Officer), S Righarts (Group Manager - Business Support), L Fleck (General Manager - People and Culture), L Webster (Acting Group Manager - Planning and Infrastructure), A Lines (Risk and Procurement Manager), P Penno (Communications Manager), J Thomas (Water Services Sampling & Monitoring Team Leader), S Reynolds (Governance Support Officer)

1 Apologies

Committee Resolution

Moved: Paterson

Seconded: Alley

That apologies from Cr S Browne and Cr S Feinerman be received and accepted.

Carried

2 Public Forum

There was no public forum.

3 Confirmation of Minutes

Committee Resolution

Moved: Robertson

Seconded: Alley

That the public minutes of the Audit and Risk Committee Meeting held on 3 October 2024 be confirmed as a true and correct record.

Carried

4 Declarations of Interest

Members were reminded of their obligations in respect of declaring any interests. There were no further declarations of interest.

5 Reports

24.4.2 Policy and Strategy Register

To consider the updated Policy and Strategy Register and advise on calculating compliance for Water Services.

It was noted that there were some minor wording amendments needed and there were some water service policies and bylaws that were expired that should be updated.

Committee Resolution

Moved: Robertson

Seconded: Alley

That the Audit and Risk Committee

A. Receives the report and accepts the level of significance.

B. Directs staff to calculate compliance for Water Services by using 1 January 2025 as a baseline and assessing water compliance based on performance against the amended schedule.

Carried

24.4.3 Significance and Engagement Policy Review

To consider recommending Council approve the Significance and Engagement Policy for consultation as part of the 2025/26 Long-term Plan.

It was acknowledged that there had been ongoing discussions with Aukaha and they had indicated they may wish to make some further suggestions. If any significant changes were to be made they would be brought back to the Committee.

It was also noted that there had been ongoing discussions about how strategic assets were listed.

Committee Resolution

Moved: Paterson

Seconded: Alley

That the Audit and Risk Committee

A. Receives the report and accepts the level of significance.

B. Recommends to Council to approve the Significance and Engagement Policy for consultation as part of the 2025/26 Long-term Plan subject to suitable amendments.

Carried

24.4.4 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.

Chantelle Gernetzky from Audit New Zealand was unable to attend the meeting. Her apology was received.

Committee Resolution

Moved: Robertson

Seconded: Paterson

That the report be received.

Carried

24.4.5 2025-34 Long-term Plan Programme Update

To update the Committee on the preparation of the 2025-34 Long-term Plan.

It was resolved that there would be additional Audit and Risk meeting in on 28 January 2025 to give the Committee an opportunity to preview the consultation document for the draft 2025-34 Long-term Plan prior to the January Council meeting.

The consultation process for a new water services delivery plan was outlined, covering possible directions.

Committee Resolution

Moved: Alley

Seconded: Paterson

That the report be received.

Carried

24.4.6 Treasury Report

To consider the quarterly treasury report.

Committee Resolution

Moved: Alley

Seconded: Paterson

That the report be received.

Carried

Note: Elaine Wilson and Sally Parker from Aon Insurance joined the meeting for item 24.4.7

24.4.7 2024/2025 Insurance Renewal

To consider the 2024/2025 insurance renewal.

A presentation from Aon was given.

Committee Resolution

Moved: Robertson

Seconded: Alley

That the report be received.

Carried

24.4.8 Revised Procurement Policy

To consider revisions made to the Procurement Policy and endorse the policy for approval by Council.

Committee Resolution

Moved: Robertson

Seconded: Alley

That the Audit and Risk Committee

A. Receives the report and accepts the level of significance.

B. Recommends to Council the approval of the revised Procurement Policy.

Carried

Note: The meeting was adjourned at 11.09 am and resumed at 11.13 am.

24.4.9 Risk Management Policy and Risk Appetite Statement

To consider updates made to the Risk Management Policy as part of its soft review and to consider the newly created Risk Appetite Statement.

Report writers would receive training on policy implementation within their workflows and it was noted that there would be another review in 12 months’ time rather than the suggested two yearly review.

Committee Resolution

Moved: Paterson

Seconded: Alley

That the Audit and Risk Committee

A. Receives the report and accepts the level of significance.

B. Recommends to Council the approval of the revised Risk Management Policy.

C. Recommends to Council the approval of the new Risk Appetite Statement.

Carried

24.4.10 IANZ Accreditation

To inform the Audit & Risk Committee regarding the special accreditation assessment by International Accreditation New Zealand (IANZ).

It was noted that an annual competency assessment would help mitigate any future issues, and that this was being considered at as part of the continual improvement processes. It was stated that there were some staff resourcing issues in these functions.

Committee Resolution

Moved: Robertson

Seconded: Paterson

That the report be received.

Carried

24.4.11 Animal Control Data

To inform the committee regarding data anomalies between CODC dog registration data and the information held on the National Dog Database.

Committee Resolution

Moved: Alley

Seconded: Paterson

That the report be received.

Carried

24.4.12 November Wastewater Compliance Status Update

To consider progress on achieving Otago Regional Council Consent (ORC) compliance for Central Otago District Council (CODC) wastewater activities.

Committee Resolution

Moved: Alley

Seconded: Robertson

That the report be received.

Carried

24.4.13 Health, Safety and Wellbeing Report

To provide the Audit & Risk Committee with an update on the health, safety and wellbeing performance of the organisation.

A more detailed account of the Health and Safety committee's work would be included in forthcoming reports.

Committee Resolution

Moved: Paterson

Seconded: Alley

That the report be received.

Carried

24.4.14 CAPEX Reporting on Major Projects

To consider an update on CAPEX projects around the district.

It was noted that improvements would be made around the timing of delivering these reports to the Committee.

Committee Resolution

Moved: Robertson

Seconded: Alley

That the report be received.

Carried

6 Chair's Report

24.4.15 Chair's Report

To consider the Chair’s report.

The chair noted the challenging workload for staff and elected members coming in to a Long-term Plan and Local Election year and stated the importance of attracting quality candidates to run for elected roles.

Committee Resolution

Moved: Robertson

Seconded: Alley

That the report be received.

Carried

7 Members' Reports

24.4.16 Members' Reports

To consider the members’ reports.

Members acknowledged the difficulty in conveying the various options and challenges related to water service provision to the community.

Committee Resolution

Moved: Robertson

Seconded: Alley

That the reports be received.

Carried

8 Status Reports

24.4.17 December 2024 Governance Report

To report on items of general interest and the current status report updates.

Committee Resolution

Moved: Robertson

Seconded: Paterson

That the report be received.

Carried

9 Date of The Next Meeting

The date of the next scheduled meeting is 14 February 2025.

10 Resolution to Exclude the Public

Committee Resolution

Moved: Robertson

Seconded: Alley

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	Plain English Reason
24.4.18 - Bad Debts and Abandoned Land	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)(b)(ii) - the withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information s7(2)(f)(ii) - the withholding of the information is necessary to maintain the effective conduct of public affairs through the protection of Council members, officers, employees, and persons from improper pressure or harassment s7(2)(j) - the withholding of the information is necessary to prevent the disclosure or use of official information for improper gain or improper advantage	To protect a person's privacy Commercial sensitivity To protect people from harassment To prevent use of the information for improper gain or advantage
24.4.19 - Cybersecurity, Information and Records Management and Privacy Plans for 2022-2025 Implementation Update	s7(2)(j) - the withholding of the information is necessary to prevent the disclosure or use of official information for improper gain or improper advantage	To prevent use of the information for improper gain or advantage
24.4.20 - Risk Management Update	s7(2)(j) - the withholding of the information is necessary to prevent the disclosure or use of official information for improper gain or improper advantage	To prevent use of the information for improper gain or advantage
24.4.21 - Litigation Register	s7(2)(g) - the withholding of the information is necessary to maintain legal professional privilege	Legal professional privilege

Carried

The public were excluded at 12.18 pm and the meeting closed at 12.50 pm.

28 January 2025

5 Reports

25.1.2 The consultation document and supporting material for the 2025-34 Long-term Plan

Doc ID: 2026664

Report Author:	Saskia Righarts, Group Manager - Business Support
Reviewed and authorised by:	Peter Kelly, Chief Executive Officer

1. Purpose of Report

To consider recommending to Council that the 2025-34 draft Consultation Document for the Long-term Plan and supporting information to the Consultation Document be provided to Audit New Zealand.

Recommendations

That the Audit and Risk Committee

A. Receives the report and accepts the level of significance.

B. Recommends to Council that the draft Consultation Document be provided to Audit New Zealand for audit as required under the Local Government Act 2002.

C. Recommends to Council that the following supporting information to the Consultation Document be provided to Audit New Zealand to facilitate the audit:

(a) Infrastructure Strategy

(b) Financial Strategy

(d) Fees and Charges

(e) Significance and Engagement Policy

(f) Revenue and Financing Policy

(g) Rates Remission and Postponement Policy

(h) Liability Management Policy

(i) Investment Policy

(j) Prospective Financial Statements and Prospective Funding Impact Statements

(k) Community Outcomes Development

(l) Significant Forecasting Assumptions and Risks

(m) Capital Expenditure for Activity Groups

2. Background

The Local Government Act 2002 (S 93 and 93A) requires Council to prepare and adopt a Long-term Plan every three years. At the February 2024 Council meeting it was agreed that the 2024-34 Long-term Plan be deferred and Council prepare an enhanced 2024-25 Annual Plan (under the options provided by the Government in the legislative changes surrounding the repeal of the three waters legislation).

This decision results in this being a nine-year plan (2025-34). Council will prepare the next long-term plan in two years’ time (2027-37 Long-term Plan) to get back into cycle with the requirements of the Local Government Act 2002.

The long-term plan process requires that Council prepare a Consultation Document and supporting information that has been audited by Audit New Zealand. Both the Consultation Document and the supporting information will be made available to the public.

Under Council’s Registrar of delegations the Audit and Risk Committee has responsibility for the oversight of the preparation of the 2025-34 Long-term Plan. At the Committee’s meeting on 16 December 2024, it was agreed to schedule an additional meeting in to review the 2025-34 Long-term Plan material ahead of the audit commencing 3 February 2025.

3. Discussion

Council is required to adopt a Consultation Document for the 2025-34 Long-term Plan that has been audited by Audit New Zealand. The Consultation Document outlines Council’s consultation ideas for the future and provides instructions to the public on the submission process.

At the Council meeting on 18 December 2024, Council agreed the following would be included as consultation items:

1. What’s our plan for water?

2. Volumetric water charges

3. Community halls and facilities

4. Ida MacDonald Roxburgh Pool Punawai Ora

5. Alexandra Outdoor Pool

6. Manuherekia Valley Community Hub

7. Supercars Championships at Highlands Motorsport Park

8. Artificial Turf at Maniototo Area School

9. Artificial Turf at Dunstan High School

The Significance and Engagement Policy was reviewed by the Audit and Risk Committee. As a result of feedback, the following changes were updated: finalising the Strategic Asset section and grouping some of the individually listed items; removed phrase ‘all aspects of decision making’ in the Māori Participation Framework; amended typos; adjusted wording in the table on mana whenua engagement; changed ‘Promise to the Public’ to ‘Commitment to the Public’ in Schedule 1; and adjusted the arrow in the Significance Continuum on page 4 of the Policy. Staff felt these adjustments reflected the feedback of the Committee while adhering to the guidance of the Office of the Auditor General, that the Policy meets the expectations of the specific community with regard to significance.

In order to facilitate the audit process Council is required to provide supporting material to Audit New Zealand. This information comprises the Infrastructure Strategy, Financial Strategy, Prospective Financial Information, Funding Impact Statement (Rates), Revenue and Financing Policy, Rating Policy, Investment Policy, Liability Management Policy, Significance and Engagement Policy, Significant Forecasting Assumptions and Risks, Development and Financial Contributions Policy and the Schedule of Fees and Charges. Changes may be made to these documents as a result of the audit and the public consultation process. These documents will also form the basis for the final 2025-34 Long-term Plan which is planned to be adopted by Council in June 2025.

Note at the time of generation of this agenda, staff are waiting for a decision on how to treat water services in the consultation document. The challenge is that Central Otago District Council is in conversations with other councils about a joint Council Controlled Organisation, of which consultation will occur after the audit of the consultation document. The material in the consultation document may well change during the audit in February.

As at the time of the preparation of the agenda, the following documents were still being worked on and will be sent out under separate cover:

(a) Draft Consultation Document

(b) Infrastructure Strategy

4. Financial Considerations

Details regarding financial considerations can be found in Appendices 9 and 10.

5. Options

Option 1 – (Recommended)

Recommend to Council to approve that the consultation document and supporting material is provided to Audit New Zealand to enable the audit to commence on 3 February 2025.

Advantages:

· Adheres to the scheduled programme for the development of 2025-34 Long-term Plan.

· Ensures compliance with the requirements of the Local Government Act 2002.

· Meets community expectations.

Disadvantages:

· None identified.

Option 2

Recommend to Council to approve that the consultation document and supporting material with amendments is provided to Audit New Zealand to enable the audit to commence on 3 February 2025.

Advantages:

· Adheres to the scheduled programme for the development of 2025-34 Long-term Plan.

· Ensures compliance with the requirements of the Local Government Act 2002.

· Meets community expectations.

Disadvantages:

· None identified.

Option 3

Recommends to Council to not approve that the consultation document and supporting material is provided to Audit New Zealand to enable the audit to commence on 3 February 2025.

Advantages:

· None identified.

Disadvantages:

· Does not adhere to the scheduled programme for the development of 2025-34 Long-term Plan.

· Does not comply with the requirements of the Local Government Act 2002 and will likely cause delays. There is a risk that the 2025-34 Long-term Plan would not be adopted by June 2025, impacting Council’s ability to collect rates for the planned work programmes.

· Does not meet community expectations.

6. Compliance

Local Government Act 2002 Purpose Provisions	This decision enables democratic local decision making and action by, and on behalf of communities by ensuring the correct legal process is followed in the development of the 2025-34 Long-term Plan.
Decision consistent with other Council plans and policies? Such as the District Plan, Economic Development Strategy etc.	The consultation document and supporting material for the 2025-34 Long-term Plan is required under the Local Government Act 2002.
Considerations as to sustainability, the environment and climate change impacts	There are no direct considerations as to sustainability, the environment and climate change impacts.
Risks Analysis	There is no risk in approving these documents be provided to Audit New Zealand. A delay in approving these documents will likely delay the audit and impact on the plan to have the 2025-34 Long-term Plan presented for final approval on 25 June 2025.
Significance, Consultation and Engagement (internal and external)	Once audited, these documents will be provided as part of the material for the 2025-34 Long-term Plan consultation. Public consultation is scheduled from 19 March to 16 April 2025.

7. Next Steps

The Committee’s feedback will be provided verbally at the Council meeting on 29 January 2025. Following Council agreement, the Consultation Document and supporting material will be provided to Audit New Zealand, with the audit scheduled to commence 3 February 2025. Amendments will be made as required and presented back to Council on 17 March 2025 for approval to adopt these documents for formal consultation.

8. Attachments

Appendix 1 - Financial Strategy ⇩

Appendix 2 - Fees and Charges Schedule ⇩

Appendix 3 - Significance and Engagement Policy ⇩

Appendix 4 - Revenue and Financing Policy ⇩

Appendix 5 - Rates Remission and Postponement Policy ⇩

Appendix 6 - Liability Management Policy ⇩

Appendix 7 - Investment Policy ⇩

Appendix 8 - Community Outcomes ⇩

Appendix 9 - Significant Forecasting Assumptions and Risks ⇩

Appendix 10 - Prospective Financial Statements and Prospective Funding Impact Statements ⇩

Appendix 11 - Capital Expenditure for Activity Groups ⇩


AGENDA Audit and Risk Committee Meeting Tuesday, 28 January 2025
Date:	Tuesday, 28 January 2025
Time:	9.30 am
Location:	Microsoft Teams (A link to the live stream will be available on the Central Otago District Council's website.)
Peter Kelly Chief Executive Officer

Report Author:	Wayne McEnteer, Governance Manager
Reviewed and authorised by:	Saskia Righarts, Group Manager - Business Support