Agenda of Audit, Risk and Finance Subcommittee

N-logotype-black-wide Audit, Risk and Finance Subcommittee

28 September 2017

Page No.

1. Apologies

Nil

2. Confirmation of Order of Business

3. Interests

3.1 Updates to the Interests Register

3.2 Identify any conflicts of interest in the agenda

4. Public Forum

5. Confirmation of Minutes

5.1 8 September 2017 7 - 15

Document number M2894

Recommendation

That the Subcommittee

Confirms the minutes of the meeting of the Audit, Risk and Finance Subcommittee, held on 8 September 2017, as a true and correct record.

6. Status Report - Audit Risk and Finance Subcommittee - 28 September 2017 16 - 18

Document number R8406

Recommendation

That the Subcommittee

Receives the Status Report Audit, Risk and Finance Subcommittee 28 September 2017 (R8406) and its attachment (A1753947).

7. Chairperson's Report

Financials Report

Due to tight resourcing constraints in the Finance team during this period, the July 2017 month’s financials are not on this agenda. This timing challenge results from staff illness/absence at a time of exceptionally heavy workload due the Annual Report, audit process and preparation for the Long Term Plan 2018-2028 occurring at the same time.

I have spoken to the Group Manager Corporate Services, who has reviewed the July 2017 income and expenses, and she has advised that all is in line with expectations.

8. PWC Treasury advisor presentation

Price Waterhouse Cooper will make a presentation to the Subcommittee.

9. Protected disclosure policy for elected members 19 - 31

Document number R8402

Recommendation

That the Subcommittee

Receives the report Protected disclosure policy for elected members (R8402) and its attachment (A1338935) ; and

Requests the development of a separate Protected Disclosure Policy for Elected Members, for review by the Subcommittee prior to submitting the policy for approval by Council.

10. Results of 2017 Residents Survey 32 - 125

Document number R8361

Recommendation

That the Subcommittee

Receives the report Results of 2017 Residents Survey (R8361) and its attachment (A1789495); and

Notes the 2017 Residents Survey results (A1789495) will be communicated to the public.

11. Health and Safety Strategic Plan 2017 - 2023 126 - 144

Document number R7718

Recommendation

That the Subcommittee

Receives the report Health and Safety Strategic Plan 2017 - 2023 (R7718) and its attachment (A1398549).

Recommendation to Council

That the Council

Approves the Health and Safety Strategic Plan 2017 - 2023 (A1398549).

12. Audit Engagement Letter 2017 - debenture trust deed 145 - 169

Document number R8254

Recommendation

That the Subcommittee

Receives the report Audit Engagement Letter 2017 - debenture trust deed (R8254) and its attachment (A1815606); and

Notes the Subcommittee can provide feedback on the Audit Engagement letter – debenture trust deed to Audit NZ if required, noting the Mayor will sign the letter once the Subcommittee’s feedback has been incorporated.

13. Revised Internal Audit Annual Plan to June 2018 170 - 175

Document number R8408

Recommendation

That the Subcommittee

Receives the report Revised Internal Audit Annual Plan to June 2018 (R8408) and its attachment (A1800209).

Recommendation to Council

That the Council

Approves the Internal Audit – Annual Audit Plan to 30 June 2018 (A1800209).

Public Excluded Business

14. Exclusion of the Public

Recommendation

That the Subcommittee

Excludes the public from the following parts of the proceedings of this meeting.

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

Item	General subject of each matter to be considered	Reason for passing this resolution in relation to each matter	Particular interests protected (where applicable)
1	Audit, Risk and Finance Subcommittee Meeting - Public Excluded Minutes - 8 September 2017	Section 48(1)(a) The public conduct of this matter would be likely to result in disclosure of information for which good reason exists under section 7.	The withholding of the information is necessary: · Section 7(2)(i) To enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations).

Item

General subject of each matter to be considered

Reason for passing this resolution in relation to each matter

Particular interests protected (where applicable)

Audit, Risk and Finance Subcommittee Meeting - Public Excluded Minutes - 8 September 2017

Section 48(1)(a)

The public conduct of this matter would be likely to result in disclosure of information for which good reason exists under section 7.

The withholding of the information is necessary:

· Section 7(2)(i)

To enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations).

15. Re-admittance of the public

Recommendation

That the Subcommitte

Re-admits the public to the meeting.

Minutes of a meeting of the Audit, Risk and Finance Subcommittee

Held in the Council Chamber, Civic House, 110 Trafalgar Street, Nelson

On Friday 8 September 2017, commencing at 9.59am

Present: Mr J Peters (Chairperson), Her Worship the Mayor R Reese, and Councillors I Barker, B Dahlberg and Mr J Murray

In Attendance: Councillors G Noonan and S Walker, Acting Chief Executive (D Hammond), Group Manager Infrastructure (A Louverdis), Group Manager Community Services (C Ward), Group Manager Corporate Services (N Harrison), Senior Strategic Adviser (N McDonald), Manager Organisational Assurance and Emergency Management (R Ball) and Governance Adviser (L Canton)

Apologies: Nil

1. Apologies

There were no apologies.

2. Confirmation of Order of Business

There was no change to the order of business.

3. Interests

There were no updates to the Interests Register, and no interests with items on the agenda were declared.

4. Public Forum

There was no public forum.

5. Confirmation of Minutes

5.1 27 June 2017

Document number M2711, agenda pages 9 - 18 refer.

Resolved AUD/2017/037

That the Subcommittee

Confirms the minutes of the meeting of the Audit, Risk and Finance Subcommittee, held on 27 June 2017, as a true and correct record.

Murray/Dahlberg Carried

6. Status Report - Audit Risk and Finance Subcommittee - 8 September 2017

Document number R8299, agenda pages 19 - 21 refer.

Attendance: Her Worship the Mayor joined the meeting at 10.04am

Resolved AUD/2017/038

That the Subcommittee

Receives the Status Report Audit, Risk and Finance Subcommittee 8 September 2017 (R8299) and its attachment (A1753947).

Barker/Dahlberg Carried

7. Chairperson's Report

Attendance: Her Worship the Mayor left the meeting at 10.05am.

The Chairperson gave a brief oral report.

8. Internal Audit Quarterly Report to 30 June 2017

Document number R7588, agenda pages 22 - 37 refer.

Internal Audit Analyst, Lynn Anderson, presented the report and answered questions about the audit recommendations and internal processes.

Attendance: Her Worship the Mayor returned to the meeting at 10.15am.

Resolved AUD/2017/039

That the Subcommittee

Receives the report Internal Audit Quarterly Report to 30 June 2017 (R7588) and its attachment (A1813237); and

Notes that a Subcommittee workshop on the Internal Audit Plan has been scheduled for 14 September 2017.

Barker/Dahlberg Carried

9. Internal Audit - Summary of New or Outstanding Significant Risk Exposures and Control Issues 30 June 2017

Document number R8239, agenda pages 38 - 41 refer.

Internal Audit Analyst, Lynn Anderson presented the report. Ms Anderson and Risk and Procurement Analyst, Steve Vaughan, answered questions.

It was suggested that the delegations issue identified in the report should be addressed as a priority, to better avoid project delivery delays caused by the current lengthy decision-making process for project changes.

Resolved AUD/2017/040

That the Subcommittee

Receives the report Internal Audit - Summary of New or Outstanding Significant Risk Exposures and Control Issues 30 June 2017 (R8239) and its attachment (A1813245).

Murray/Dahlberg Carried

Recommendation to Council AUD/2017/041

That the Council

Requests that the Acting Chief Executive reviews Committee and Officer Delegations to ensure project delays are avoided as identified in the report Internal Audit - Summary of New or Outstanding Significant Risk Exposures and Control Issues 30 June 2017 (R8239).

Dahlberg/Barker

10. Service Delivery Review Quarterly Progress Update - September 2017

Document number R7771, agenda pages 42 - 66 refer.

Policy Adviser, Gabrielle Thorpe presented the report. Ms Thorpe, Senior Strategic Adviser, Nicky McDonald and Group Manager Corporate Services, Nikki Harrison, answered questions about the services reviewed.

It was noted that Section 17a reviews were conducted at a point in time and the Planning and City Development review did not align with Council’s City Vision discussions as it was undertaken before those discussions were completed.

Resolved AUD/2017/042

That the Subcommittee

Receives the report Service Delivery Review Quarterly Progress Update - September 2017 (R7771) and its attachments (A1748571, A1772835, A1809382, A1806918 and A1810637).

Murray/Dahlberg Carried

11. Council Key Risks Quarterly Report 2 Calendar 2017

Document number R8236, agenda pages 67 - 84 refer.

Risk and Procurement Analyst, Steve Vaughan, presented the report and answered questions about the identified risks and management of controls.

Resolved AUD/2017/043

That the Subcommittee

Receives the report Council Key Risks Quarterly Report 2 Calendar 2017 and its attachment (A1811819).

Murray/Dahlberg Carried

12. Health Safety and Wellbeing; Quarterly Report

Document number R8220, agenda pages 85 - 97 refer.

Health and Safety Adviser, Malcolm Hughes, presented the report noting updates since 30 June 2017 to the following items in the report:

· Over Speed Events 2016-17 (item 5b of Attachment 1) were now below 1 event per 100km

· Outstanding H&S Actions (InControl) (item 7 of Attachment 1) had decreased to 13 events in the “Over due > 3mths” category and 18 events in the “Over due < 3mths” category.

Mr Hughes answered questions about the statistics in the report.

It was requested that officers give further consideration to measures to reduce the number of security related incidents at the libraries.

Resolved AUD/2017/044

That the Subcommittee

Receives the report Health Safety and Wellbeing; Quarterly Report (R8220) and its attachment (A1775723).

Peters/Dahlberg Carried

Resolved AUD/2017/045

That the Subcommittee

Requests that officers report back to the subcommittee on security related events at Council libraries including details of controls and treatments.

Dahlberg/Barker Carried

Recommendation to Council AUD/2017/046

That the Council

Notes the report Health Safety and Wellbeing; Quarterly Report (R8220) and its attachment (A1775723); and

Acknowledges the assessment of critical health and safety risks contained in the attachment (A1775723).

Dahlberg/Barker Carried

13. Carry Forwards 2016/17

Document number R7004, agenda pages 98 - 107 refer.

Attendance: Councillor Barker left the meeting at 11.52am.

Senior Accountant, Tracey Hughes, and Manager Capital Projects, Shane Davies, presented the report. Ms Hughes, Mr Davies, and Group Manager Infrastructure, Alec Louverdis, answered questions.

Attendance: Councillor Barker returned to the meeting at 11.53am.

Resolved AUD/2017/047

That the Subcommittee

Receives the report Carry Forwards 2016/17 (R7004) and its attachments (A1801073 and A1801504).

Barker/Dahlberg Carried

Recommendation to Council AUD/2017/048

That the Council

Approves the carry forward of $6,298,000 unspent capital budget for use in 2017/18; and

Approves the offsetting of $268,021 of capital spent in 2016/17 against 2017/18 budgets; and

Approves the carry forward of $1,812,113 of unspent operating budget for use in 2017/18; and

Notes savings in 2016/17 capital expenditure of $2,187,000.

Barker/Dahlberg Carried

14. Draft Annual Report 2016/17

Document number R7805, agenda pages 202 - 205 refer.

Senior Accountant, Tracey Hughes, and Policy Coordinator, Jane Loughnan, presented the report and answered questions.

Resolved AUD/2017/049

That the Subcommittee

Receives the report Draft Annual Report 2016/17 (R7805) and its attachment (A1703959); and

Relinquishes its delegation in regard to recommending the adoption of the Draft Annual Report 2016/17, provided that there are no material changes to the draft resulting from the audit.

Barker/Murray Carried

Recommendation to Council AUD/2017/050

That the Council

Notes the draft Annual Report 2016/17 has been prepared and will be audited before being presented to Council for adoption; and

Notes that if there are material changes to the draft resulting from the audit, these will be brought back to the Audit Risk and Finance Subcommittee on 28 September 2017; and

Notes that, if there are no material changes to the draft resulting from the audit, due to timing constraints, the final Annual Report 2016/17 will be presented directly to Council for adoption, rather than via the Audit, Risk and Finance Subcommittee.

Barker/Murray Carried

15. Results of 2017 Residents Survey

Document number R7968, agenda pages 108 - 201 refer.

Resolved AUD/2017/051

That the Subcommittee

Defers the item Results of 2017 Residents Survey (R7968) and its attachment (A1789495) to be considered at the Audit, Risk and Finance Subcommittee meeting to be held on 28 September 2017.

Peters/Dahlberg Carried

16. Exclusion of the Public

Resolved AUD/2017/052

That the Subcommittee

Excludes the public from the following parts of the proceedings of this meeting.

Murray/Dahlberg Carried

Item	General subject of each matter to be considered	Reason for passing this resolution in relation to each matter	Particular interests protected (where applicable)
1	Audit, Risk and Finance Subcommittee Meeting - Public Excluded Minutes - 27 June 2017	Section 48(1)(a) The public conduct of this matter would be likely to result in disclosure of information for which good reason exists under section 7.	The withholding of the information is necessary: · Section 7(2)(a) To protect the privacy of natural persons, including that of a deceased person. · Section 7(2)(i) To enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations).
2	Service Delivery Review Quarterly Progress Update	Section 48(1)(a) The public conduct of this matter would be likely to result in disclosure of information for which good reason exists under section 7	The withholding of the information is necessary: · Section 7(2)(i) To enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations)

Item

General subject of each matter to be considered

Reason for passing this resolution in relation to each matter

Particular interests protected (where applicable)

Audit, Risk and Finance Subcommittee Meeting - Public Excluded Minutes - 27 June 2017

Section 48(1)(a)

The public conduct of this matter would be likely to result in disclosure of information for which good reason exists under section 7.

The withholding of the information is necessary:

· Section 7(2)(a)

To protect the privacy of natural persons, including that of a deceased person.

· Section 7(2)(i)

To enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations).

Service Delivery Review Quarterly Progress Update

Section 48(1)(a)

The public conduct of this matter would be likely to result in disclosure of information for which good reason exists under section 7

The withholding of the information is necessary:

· Section 7(2)(i)

To enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations)

The meeting went into public excluded session at 12.25pm and resumed in public session at 12.32pm.

17. Re-admittance of the Public

Resolved AUD/2017/053

That the Subcommittee

Re-admits the public to the meeting.

Peters/Murray Carried

There being no further business the meeting ended at 12.32pm.

Confirmed as a correct record of proceedings:

Chairperson Date

Audit, Risk and Finance Subcommittee

28 September 2017

REPORT R8402

Protected disclosure policy for elected members

1. Purpose of Report

1.1 To consider the development of a separate Protected Disclosure Policy for elected members.

2. Recommendation

That the Subcommittee

Receives the report Protected disclosure policy for elected members (R8402) and its attachment (A1338935) ; and

Requests the development of a separate Protected Disclosure Policy for Elected Members, for review by the Subcommittee prior to submitting the policy for approval by Council.

3. Background

3.1 The Audit, Risk and Finance Subcommittee has oversight of the Council’s management of risk and internal procedures including those related to disclosure of serious wrongdoing.

3.2 At the Audit, Risk and Finance Subcommittee on 27 June 2017 the Subcommittee noted that the Protected Disclosure Policy, which has been implemented and treated as an organisational policy applying to employees, potentially should also apply to elected members.

3.3 The Subcommittee resolved to leave the report Protected Disclosure Policy (R7631) and its attachment (A1338935) to lie on the table awaiting further advice from the Chief Executive on amending the policy to cover elected members.

3.4 Advice was sought from LGNZ and the Office of the Ombudsman on the application of the Protected Disclosures Act 2000 to elected members. The advice from LGNZ was that the Act does not apply to elected members. In contrast the advice from the Office of the Ombudsman was that it does apply to elected members. Officers base the recommendation outlined in this report on the advice from the Office of the Ombudsman, as it is the agency primarily tasked with overseeing the administrative conduct of state sector agencies in relation to protected disclosures.

3.5 The organisational policy in its current form outlines internal procedures that may be less relevant or appropriate to elected members. In particular, the Disclosure Officers which are identified as appropriate recipients of information from employees may not be appropriate as recipients of information from elected members. Additionally not all of the protections for individuals who disclose information are relevant to elected members, in particular the protection relating to retaliatory action from the organisation potentially giving rise to grounds for a personal grievance.

3.6 Notwithstanding the current lack of a policy tailored for elected members, any elected member who wished to make a protected disclosure in accordance with the Act is able to do so, and is able to access relevant protections outlined in the Act.

4. Options

4.1 Option 1: It is recommended that Council develop a policy on protected disclosures specifically tailored for elected members, and that the policy be reviewed by the Audit, Risk and Finance Subcommittee prior to forwarding to Council for consideration. This option will provide greatest clarity and simplicity for both employees and elected members.

4.2 Option 2: Alternatively the existing organisational policy on protected disclosures could be amended to provide internal procedures appropriate for disclosure of information by elected members. This is not recommended as the internal procedures outlined in the existing policy are not relevant (and may not be appropriate) to elected members and the inclusion of internal procedures which are relevant for one group but not another would increase the complexity of the policy and therefore reduce clarity.

4.3 Option 3: Alternatively no action could be taken. This is not recommended as it may leave elected members with limited clarity about how to disclose information about serious wrongdoing.

Stephanie Vincent

Manager People and Capability

Attachments

Attachment 1: A1338935 - Protected Disclosure Policy 2017 ⇩

Important considerations for decision making

1. Fit with Purpose of Local Government

Fit-for-purpose policies are required to ensure that organisational performance is efficient, effective and appropriate to present and anticipated future circumstances.

2. Consistency with Community Outcomes and Council Policy

Fit-for-purpose organisational policies are required to ensure the Community Outcome of Our Council provides leadership and fosters partnerships, a regional perspective, and community engagement.

3. Risk

Effective implementation of a new policy will provide specific guidance for elected members who wish to make use of the mechanisms available to them under the Protected Disclosures Act 2000.

4. Financial impact

There is no financial impact associated with this policy.

5. Degree of significance and level of engagement

This matter is of low significance.

6. Inclusion of Māori in the decision making process

No consultation has occurred with Māori.

7. Delegations

No decision is required from the Subcommittee as the matter is an organisational policy, which falls within the delegations of the Chief Executive. For development of a policy for Elected Members, the Subcommittee is responsible for risk management and has the power to recommend to Council.

Audit, Risk and Finance Subcommittee

28 September 2017

REPORT R8361

Results of 2017 Residents Survey

1. Purpose of Report

This report was deferred at the Audit, Risk and Finance Subcommittee meeting on 8 September 2017.

1.1 To provide information from the 2017 Residents’ Survey to inform the Long Term Plan and monitor outcomes.

2. Summary

2.1 Most of the results of the 2017 Residents’ Survey are similar to previous years. The 2017 Survey included an online sample which has increased the representation of 16-39 year olds in the survey.

2.2 The activities with the highest levels of satisfaction included libraries, parks and recreation, swimming pools (users only), community facilities, and water supply.

2.3 Satisfaction levels with the Suter Art Gallery are significantly higher than previous years and reflect the major redevelopment of the gallery which was completed in the last year.

2.4 There has been an increase in dissatisfaction with transport activities in general. Satisfaction levels with specific components of the transport activities are also lower, particularly with public transport.

3. Recommendation

That the Subcommittee

Receives the report Results of 2017 Residents Survey (R8361) and its attachment (A1789495); and

Notes the 2017 Residents Survey results (A1789495) will be communicated to the public.

4. Background

4.1 The purpose of the Residents’ Survey is to get statistically representative resident feedback on Council performance which is used to inform and monitor the Long Term Plan (LTP).

4.2 Council has been conducting annual surveys of residents since the late 1990s, covering a range of topics. Where possible, questions are repeated to enable comparisons over time. Council’s current approach to annual residents’ surveys is to run a long (20-minute) survey every three years, timed for the year before the LTP, such as in 2017. This allows a wider range of topics to be covered to inform LTP decision-making. In the intervening years, such as in 2016, shorter surveys (up to 10 minutes) are undertaken. These focus on collecting data to report on LTP performance measures and to inform Asset and Activity Management Plans.

4.3 Other sources of information, such as user surveys, complaints, and submissions, are also considered to provide more detail on services and performance.

4.4 The 2017 Residents’ Survey was conducted by Versus Research in May 2017. This year, a mixed-method approach was used for data collection, which involved a phone survey of 400 residents and an online survey of 120 residents. Respondents to the online survey were recruited using Facebook. The online method was included to target those who are unable to be reached by landline, particularly younger residents. Results from both methods were compared to ensure any differences were a result of sample rather than method.

4.5 The overall results have a maximum margin of error of +/-4.3% at the 95 percent confidence interval. This means we can be 95% confident that these results are true of all Nelson residents, give or take 4.3%. Age and gender weightings have been applied to ensure specific demographic groups are not under or over represented. This also allows the reporting of any significant differences in the results for different age groups, genders, and for different parts of Nelson. Satisfaction ratings were based on a 5-point scale with 1 representing Very Dissatisfied and 5 representing Very Satisfied.

4.6 Respondents who gave dissatisfied ratings were asked for their reasons, and those reasons are summarised in charts throughout the attached report. Weighted percentages are used if more than 50 people were dissatisfied. If less than 50 people were dissatisfied, the charts show the actual number of mentions, as there was a risk of percentages being misleading for small base sample sizes.

5. Discussion

Overall Performance and Service

5.1 Fifty-five percent of residents are satisfied or very satisfied with Council’s overall performance, which is a similar result compared with 2014 when this question was last asked.

5.2 Just over half of all residents had direct contact with Council staff in the last year and 67% of them are satisfied or very satisfied with the service they received.

Council Activities

5.3 Residents were asked to rate their satisfaction with specific Council activities. Satisfaction levels for each activity were generally similar to results in previous years.

5.3.1 As with previous years, the highest levels of satisfaction were with Parks and Recreation (82% satisfied or very satisfied), Community Facilities (74%), and Water Supply (72%).

5.3.2 The lowest levels of satisfaction were with Flood Protection, Regulatory Compliance, and Environmental Management. Residents commented that there was too much flooding occurring and Council isn’t doing enough. Similarly, residents commented that Council isn’t doing enough to manage and improve the environment. Feedback on Regulatory Compliance was that it takes too long, the process is too complicated, and there are too many rules.

Transport

5.4 Forty-eight percent of residents are satisfied or very satisfied with Transport activities, a quarter are neutral and 27% are dissatisfied or very dissatisfied.

5.4.1 The main reasons given for dissatisfaction were residents saying that public transport is limited, roads are poor and need improvement, and cycleways need to be improved.

5.4.2 Residents were asked about components of the transport network in more detail and satisfaction levels had generally decreased compared with 2014 results. The lowest levels of satisfaction were with public transport (36% satisfied or very satisfied), with the main reason being residents feeling that it is not extensive enough and more buses are needed.

Facilities and Events

5.5 Residents were asked about their use of and satisfaction with several Council facilities, and their attendance at Summer and Arts Festival events.

5.5.1 Forty-one percent of residents have used or visited Riverside and/or Nayland Pool in the last year, a similar rate to 2016. Seventy-eight percent of pool users are satisfied or very satisfied with the swimming pools.

5.5.2 Fifty-nine percent of residents have visited the Suter Art Gallery in the last two years, and 85% of those are satisfied or very satisfied. Satisfaction levels are significantly higher than previous years and reflect the major redevelopment of the gallery which was completed in the last year.

5.5.3 Close to three-quarters of residents (72%) have used a public library in the past year, with the majority citing Elma Turner library as their main library. Eighty-eight percent of residents are satisfied or very satisfied with the public library service.

5.5.4 Two-thirds of residents attended events as the Summer Festival or Arts Festival, including the Masked Parade. Over half (55%) attended Summer Festival events, an increase compared with 2016 but similar to 2014 results. Thirty-nine percent attended the Masked Parade and 27% attended Arts Festival events.

Environment

5.6 Residents were asked what they felt is the single most important environmental issue facing the region. As in 2014, the last time this question was asked, the most common issue was water pollution. Other issues that were frequently mentioned included traffic/congestion and rubbish/recycling. Issues that were mentioned more frequently in 2017 than in 2014 included population growth and land use/urban sprawl.

5.6.1 Residents were then asked how important they felt it was for Council to focus on a range of specific environmental issues. Again, results were generally similar to 2014, with the top three issues being water quality in local streams and rivers, the coastal environment and beaches, and marine water quality. Waste minimisation, natural habitats and ecosystems, air quality and natural hazards were all also rated as important by at least 84% of residents. Natural landscapes and heritage sites/buildings were seen as relatively less important.

5.6.2 There has been a significant change in recycling habits with residents now putting out their recycling less frequently (every month or every fortnight) than previously, when the majority put out their recycling every week. This reflects the change in Nelson’s recycling collection since September 2016, with bigger bins now being collected at least every two weeks. There has been a significant decrease in the number of household who never put out their recycling, from 6% in 2014 to 2% in 2017. This is also consistent with an increase in recycling volumes since the new system was introduced.

5.6.3 Although about two-thirds of households compost their household food waste and their household garden waste, there has been a significant drop in the number, particularly for the composting of garden waste.

Communication and Consultation

5.7 Forty-five percent of residents feel informed or well-informed about Council and its services, a third are neutral, and 20% do not feel informed. The main reason for not feeling informed included residents not hearing from Council and feedback that Council needed to communicate more.

5.7.1 In response to a question on how residents would prefer to get news or information about what Council is doing, there is an increasing preference for communication via social media and the Council website. However, a significant portion of residents still prefer print communication methods such as articles in the paper, flyers in the mail, addressed mail or Council publications. The 16-39 year age group were more likely to mention social media, while the 65 years and over age group were more likely to mention articles in the paper.

5.7.2 Forty-two percent of residents are satisfied or very satisfied with opportunities to provide feedback and take part in Council decision-making, a third are neutral and 17% are dissatisfied or very dissatisfied. The main reasons for dissatisfaction were residents feeling there is not a lot of communication or consultation from Council.

6. Options

6.1 The preferred option is to release the results to the public. This supports the Community Outcome around Council providing information to help our leaders understand their communities. Communicating the results, including how they feed into Long Term Plan decisions, also provides a feedback loop to those residents who took part in the survey and helps maintain good response rates to future surveys and consultation.

Nicky McDonald

Senior Strategic Adviser

Attachments

Attachment 1: A1789495 2017 Residents Survey Final Report ⇩

Important considerations for decision making

1. Fit with Purpose of Local Government

Residents’ Survey results provide information on current and future needs of residents, and feedback for assessing the standard of delivery of assets, services, and regulatory functions.

2. Consistency with Community Outcomes and Council Policy

Release of Residents’ Survey results supports the Community Outcome that Council provides leadership and fosters partnerships, a regional perspective, and community engagement.

3. Risk

There is low risk associated with releasing survey results to the public and it is important for transparency.

4. Financial impact

Survey costs have been allocated within budget in Long Term Plan operational budgets.

5. Degree of significance and level of engagement

This decision is of low significance and no engagement, beyond making results available, is planned.

6. Inclusion of Māori in the decision making process

Maori have not been consulted in preparation of this report.

7. Delegations

The Audit Risk and Finance Subcommittee has the responsibility for Council’s financial and service performance. The Audit Risk and Finance Subcommittee has the power to make a recommendation to Council on this matter.

Audit, Risk and Finance Subcommittee

28 September 2017

REPORT R7718

Health and Safety Strategic Plan 2017 - 2023

1. Purpose of Report

1.1 To review and approve the Health and Safety Strategic Plan 2017-2023.

2. Recommendation

That the Subcommittee

Receives the report Health and Safety Strategic Plan 2017 - 2023 (R7718) and its attachment (A1398549).

Recommendation to Council

That the Council

Approves the Health and Safety Strategic Plan 2017 - 2023 (A1398549).

3. Background

3.1 Council has implemented a Health and Safety Management System following adoption of the Health and Safety at Work Act (HSWA) 2015. On 10 August 2017 Council reviewed and approved the Health and Safety Governance Charter. The Governance Charter sets out specific leadership responsibilities, objectives and actions for councillors, including approval of a Health and Safety Strategic Plan.

3.2 The attached Health and Safety Strategic Plan covers the period 2017-2023 and updates the previous Plan (2015-2020). The Strategic Plan is aimed at the organisational level of Council activity, and outlines actions to be undertaken by Council management and workers, primarily facilitated by Council’s Organisational Assurance team.

4. Discussion

4.1 Under the HSWA 2015 Council is considered a person conducting a business or undertaking (PCBU). The primary duty of care under this Act requires a PCBU to ensure so far as is reasonably practicable, the health and safety of workers and others that may be affected by the work of the PCBU. This primary duty of care is reflected in the objective of the Health and Safety Strategic Plan.

4.2 More detailed information regarding how Council meets its duties under the HSWA 2015 is outlined in Council’s Health and Safety Manual. The Health and Safety Manual is aimed primarily at management and staff. This document is updated regularly and systematically reviewed by Organisational Assurance every three years.

4.2.1 The attached Health and Safety Strategic Plan has been written to align with the Council’s risk management framework. The key principles relating to duties under the HSWA 2015 have been incorporated into the goals and activity schedules of the proposed Plan.

5. Review and changes

5.1 The previous Health and Safety Strategic Plan (2015-2020) was considerably longer (37 pages) than this revision (14 pages). This reflects the maturity of Council’s health and safety leadership culture in that the revised Plan no longer requires lengthy explanations of why we need to continually improve in order to achieve health and safety objectives.

5.2 Also removed from this revision is a comprehensive overview of Council’s Health and Safety Management System, as this is now outlined in the Health and Safety Manual.

6. Options

6.1 Options are presented below:

Option 1: Approve the H&S Strategic Plan 2017 -2023
Advantages	· Council demonstrates positive due diligence in relation to health and safety matters in the Council workplace. This assists in meeting councillors’ obligations as ‘Officers’ under the HSWA 2015 · Council leadership and workers have clear guidance on organisational priorities in regard to continual improvement in the management of risks to health and safety in Council workplaces.
Risks and Disadvantages	· Receiving the report alone is not sufficient. Positive diligence (understanding, asking questions etc.) is required.
Option 2: Decline to approve H&S Strategic Plan 2017 -2023
Advantages	· Further changes or improvements to the proposed Strategic Plan could be made. · Resources applied to H&S could be applied to other areas.
Risks and Disadvantages	· Progress on priority activities outlined in the plan may be delayed. · Council will have less evidence to demonstrate and guide compliance with its HSWA 2015 obligations.

Malcolm Hughes

Health and Safety Adviser

Attachments

Attachment 1: (A1398549) Health and Safety Strategic Plan 2017 - 2021 ⇩

Important considerations for decision making

1. Fit with Purpose of Local Government

This report forms part of Council’s work to perform its regulatory functions. Council has an obligation under the Health and Safety at Work Act 2015 (HSWA) because it is classed as a Person Conducting a Business or Undertaking (PCBU). The primary duty of care under HSWA requires a PCBU to ensure so far as is reasonably practicable, the health and safety of workers and others that may be affected by the work of the PCBU.

2. Consistency with Community Outcomes and Council Policy

The recommendations align with the Community Outcome: Our communities are healthy, safe, inclusive and resilient.

3. Risk

This report aims to help councillors meet their due diligence obligations as “Officers” under the Health and Safety at Work Act 2015. The likelihood of adverse consequences is assessed as low based on the current record of Council’s health and safety systems and our on-going monitoring of them. However the consequences for Council could still be significant if there were to be a serious harm incident to a Council worker, contractor or other person. These consequences could include harm to people, prosecution of the Council and/or its officers, financial penalties, and/or reputational damage.

4. Financial impact

There are no immediate budget implications arising from this report.

5. Degree of significance and level of engagement

This matter is of low significance because it is reporting providing high level guidance on Council’s health and safety management and no engagement is required.

6. Inclusion of Māori in the decision making process

Māori have not been consulted in the preparation of this report.

7. Delegations

The Audit Risk and Finance Subcommittee has responsibility for health and safety and has the power to make recommendations to Council about any matters within its areas of responsibility.

Audit, Risk and Finance Subcommittee

28 September 2017

REPORT R8254

Audit Engagement Letter 2017 - debenture trust deed

1. Purpose of Report

1.1 To provide the Subcommittee with the Audit engagement letter for the debenture trust deed and ask for any feedback before the letter is signed by the Mayor.

2. Recommendation

That the Subcommittee

Receives the report Audit Engagement Letter 2017 - debenture trust deed (R8254) and its attachment (A1815606); and

3. Discussion

3.1 The debenture trust deed between Council and Covenant Trustee Services Limited (the trustee) states that each year, at the same time as the annual report, the auditors must provide a report addressed to the trustee covering a number of matters.

3.2 The Audit engagement letter for the debenture trust deed (Attachment 1) sets out the proposed arrangements for this audit.

3.3 This engagement letter for the debenture trust deed was not available from Audit NZ in May 2017 when the other audit arrangement letters were presented to the Audit, Risk and Finance subcommittee. It is presented now for any feedback before signing by the Mayor.

4. Options

4.1 The options are to provide feedback to Audit NZ prior to the Mayor signing the letters or not.

Nikki Harrison

Group Manager Corporate Services

Attachments

Attachment 1: A1815606 - Audit NZ debenture trust deed letter ⇩

Important considerations for decision making

1. Fit with Purpose of Local Government

Section 99 of the Local Government Act 2002 requires the audit of information contained in the Annual Report and Summary.

2. Consistency with Community Outcomes and Council Policy

This report supports the community outcome that Council provides infrastructure that is efficient, cost effective and meets current and future needs of our community.

3. Risk

There is no risk in approving this recommendation.

4. Financial impact

The recommendation will not have any significant financial impact.

5. Degree of significance and level of engagement

This matter is of low significance because it does not affect the level of service provided by Council or the way in which services are delivered and no engagement has been undertaken.

6. Inclusion of Māori in the decision making process

There has been no consultation with Māori in the preparation of this report.

7. Delegations

The Audit, Risk and Finance Subcommittee has responsibility for audit processes and management of financial risks. The Audit, Risk and Finance Subcommittee has the power to make a recommendation to Council on this matter.

Audit, Risk and Finance Subcommittee

28 September 2017

REPORT R8408

Revised Internal Audit Annual Plan to June 2018

1. Purpose of Report

1.1 To approve the revised Internal Audit Plan for the year to 30 June 2018, following a workshop with Subcommittee members held on 14 September 2017.

2. Recommendation

That the Subcommittee

Receives the report Revised Internal Audit Annual Plan to June 2018 (R8408) and its attachment (A1800209).

Recommendation to Council

That the Council

Approves the Internal Audit – Annual Audit Plan to 30 June 2018 (A1800209).

3. Background

3.1 Under the approved Internal Audit Charter a risk-based internal audit plan is to be reviewed by the Subcommittee at least annually prior to the beginning of each financial year.

3.2 The Charter requires that in compiling the internal audit plan the impact of resource limitations is to be considered.

3.3 At its meeting on 27 June 2017 the Subcommittee considered a proposed internal audit annual plan to June 2018 (Report R7587) and recommended this to Council for approval at its meeting on 10 August 2017. However following consultation, Council referred the proposed plan back to the Audit, Risk and Finance Subcommittee for further discussion.

3.4 Subsequently a workshop was held on 14 September 2017 at which issues around Council’s internal audit plan were discussed. These issues included the volume and type of audits to be carried out, the methodology for selecting audits, and the consequences for the organisation in terms of resourcing audits and implementing recommendations. The discussion at the workshop led to some changes to the proposed work programme, including the addition of an audit on the ‘control environment’.

3.5 This report presents a revised internal audit plan for approval based on the discussion at the workshop.

4. Discussion

4.1 Internal audit’s purpose is to consider all types of threats to Council achieving its objectives – these do not only relate to finances, they can also cover strategic objectives or business resilience. It is not possible to cover all threats but a clear risk appraisal should indicate the most important areas of focus when the Annual Audit Plan is compiled. The selection of audit topics therefore is critical to the achievement of internal audit’s purpose.

4.1.1 The initial approach to the selection of audit topics, when the internal audit function was first created, was to perform as many audits as possible, covering areas where there may have been financial risk. This has resulted in good coverage of the primary areas where Council had concerns relating to the effectiveness of internal controls. There have been however some unintended consequences of this approach.

4.1.2 It has led to a narrow focus in audit topics (primarily relating to financial risk), and has left exposed many of the risk areas identified in Council’s newly approved risk criteria model. These are risk areas that Council has agreed are of most concern. Further, of the 33 audits performed up to 30 June 2017, only five of these were found to have issues that were at a risk level Council should be concerned with, but there were 589 corrective actions generated from these audits, creating a down-flow effect on the organisation.

4.2 In the last year, the organisation has experienced an increase in awareness of and consideration for risk management and this should be incorporated into the internal audit function. The new audit topic selection model which has been developed to help determine the audits to be performed in the upcoming year meets this alignment by ensuring that the most at-risk operations are being reviewed and thereby ensures optimal use of the internal audit function. It is a practical approach which takes into account the limited resources available with the understanding that, should those limited resources be overstretched, additional work will need to be outsourced.

4.3 The initial Annual Audit Plan presented to Council on 10 August 2017 continued to follow the high volume, mostly financial audit topic approach, and for the above reasons, has now been replaced.

4.4 The Revised Internal Audit Plan to 30 June 2018 (attached) has been compiled using the new model for audit topic selection with topics having the highest risks given priority. The Plan provides for 10 audits of varying size. It takes into account the ability of the organisation to effectively absorb and implement the audit recommendations. The number and size of audits proposed for the balance of 2017/18 is as follows (further details in the attached plan):

Size of Audits	Number
Compound (C)	4
Standard (S)	3
Minor (Mn)	3
TOTAL	10

4.5 Estimates of the time, and therefore resources, required to complete the 10 audits is based on experience to date. Audits which require specialist expertise not available internally are allocated to external contractors.

4.6 A budget allocation of $40,000 has already been approved to support the audit plan in 2017/18, aimed primarily at contractor support for two compound audits. At the workshop the inclusion of one additional contractor audit and $12,000 additional funding was discussed. However following further discussions at Senior Leadership Team level it is considered that it will be possible to accommodate this with an internally resourced audit and thus stay within the already approved budget.

5. Options

Option 1: Accept the Proposed Internal Audit Plan to June 2018
Advantages	· Council can demonstrate its commitment to improving controls and practices that ensure the prudent, effective and efficient management of Council resources.
Risks and Disadvantages	· The internal audit plan might not be achieved due to unexpected factors, such as the complexity of audits or the non-availability of personnel. · The internal audit plan is finite in scope and therefore functions outside the scope of the plan are not audited.
Option 2: Reject the Proposed Internal Audit Plan to June 2018
Advantages	· The resources applied to this audit plan could be diverted to other Council priorities.
Risks and Disadvantages	· Council may suffer reputational damage and financial losses that could lead to the public losing confidence in Council’s ability to function effectively on its behalf and to meet its obligations under the Local Government Act 2002.

6. Conclusion

6.1 The internal audit annual plan to 30 June 2018 is recommended for approval.

Lynn Anderson

Internal Audit Analyst

Attachments

Attachment 1: A1800209 - Internal Audit - Annual Audit Plan to 30 June 2018 ⇩

Important considerations for decision making

1. Fit with Purpose of Local Government

Council has chosen to undertake internal audits to help improve systems, their controls and efficiencies, in order to help give confidence that it will be able to meet its responsibilities cost-effectively and efficiently.

2. Consistency with Community Outcomes and Council Policy

This report supports the community outcome that Council provides leadership, which includes the responsibility for protecting finances and assets through the minimisation of fraud, consistent with guidance provided in Council’s Fraud Prevention Policy.

3. Risk

There is more risk that Council may not meet its responsibilities cost-effectively and efficiently if this recommendation is not accepted.

4. Financial impact

The recommendation includes approval for additional budget of $15,000.

5. Degree of significance and level of engagement

This matter is of low significance because it does not affect the level of service provided by Council or the way in which services are delivered. Therefore no engagement has been undertaken.

6. Inclusion of Māori in the decision making process

There has been no consultation with Maori in the preparation of this report.

7. Delegations

The Audit, Risk and Finance Subcommittee has the responsibility for audit processes and the management of financial risks. The Audit, Risk and Finance Subcommittee has the power to make a recommendation to Council on this matter.