Agenda of Risk and Assurance Committee Meeting

HASTINGS DISTRICT COUNCIL

Risk and Assurance Committee MEETING

Monday, 3 February 2020

VENUE:

Landmarks Room

Ground Floor

Civic Administration Building

Lyndon Road East

Hastings

TIME:

1.00pm

A G E N D A

1. Apologies

At the close of the agenda no apologies had been received.

At the close of the agenda no requests for leave of absence had been received.

2. Conflict of Interest

Members need to be vigilant to stand aside from decision-making when a conflict arises between their role as a Member of the Council and any private or other external interest they might have. This note is provided as a reminder to Members to scan the agenda and assess their own private interests and identify where they may have a pecuniary or other conflict of interest, or where there may be perceptions of conflict of interest.

If a Member feels they do have a conflict of interest, they should publicly declare that at the start of the relevant item of business and withdraw from participating in the meeting. If a Member thinks they may have a conflict of interest, they can seek advice from the General Counsel or the Democratic Support Manager (preferably before the meeting).

It is noted that while Members can seek advice and discuss these matters, the final decision as to whether a conflict exists rests with the member.

3. Confirmation of Minutes

4. Treasury Activity and Funding Update 5

5. Annual Review of Treasury Management Policy 15

6. Health & Safety Risk Management Update 73

7. Council Risk Appetite Statements 85

8. Risk Assurance Insurance Review 99

9. Risk Assurance Action Status 103

10. Chief Financial Officer Update 111

11. Additional Business Items

12. Extraordinary Business Items

File Ref: 19/1286

REPORT TO: Risk and Assurance Committee

MEETING DATE: Monday 3 February 2020

FROM: Manager Strategic Finance

Brent Chamberlain

SUBJECT: Treasury Activity and Funding Update

1.0 EXECUTIVE SUMMARY - TE KAUPAPA ME TE WHAKARĀPOPOTOTANGA

1.1 The purpose of this report is to update the Subcommittee on treasury activity and funding issues.

1.2 This report contributes to the purpose of local government by primarily promoting the economic and more specifically through the Council’s strategic objective of sustainable use of resources and providing resilience to hazards and shocks.

1.3 The Council’s current total external debt is $149.74m as at 31 December 2019. Offsetting this are $22m of term deposits, giving a net external debt position of $127.74m.

1.4 Since the last update in September, Council has borrowed a further $12m from the Local Government Funding Agency (LGFA). It has also had one term deposit of $4m mature, and created has a further new term deposit of $4m.

1.5 Council is currently compliant with its Treasury Management Policy.

1.6 Officers have been working with Bancorp Treasury Services about future funding requirements, and reviewing the Council’s Treasury Policy (see separate report concerning this matter).

1.7 The Reserve Bank of New Zealand (RBNZ) left its Official Cash Rate (OCR) at 1% at its 13^th November 2019 review.

2.0 RECOMMENDATIONS - NGĀ TŪTOHUNGA

A) That the Committee receives the report titled Treasury Activity and Funding Update

3.0 BACKGROUND – TE HOROPAKI

3.1 The Hastings District Council has a Treasury Policy which forms part of the 2018-2028 Long Term Plan and a Treasury Management Policy. Under these policy documents responsibility for monitoring treasury activity is delegated to the Risk and Assurance Committee.

3.2 Council is provided with independent treasury advice by Miles O’Connor of Bancorp Treasury Services and receives daily and monthly updates on market conditions.

3.3 Under the Treasury Policy, formal reporting to Council occurs quarterly and regular more in depth treasury reporting is provided for the Risk and Assurance Committee.

4.0 DISCUSSION - TE MATAPAKITANGA

4.1 Council’s debt portfolio is managed within macro limits set out in the Treasury Policy. It is recognised that from time to time Council may fall out of policy due to timing issues. The treasury policy allows for officers to take the necessary steps to move Council’s funding profile back within policy in the event that a timing issue causes a policy breach.

4.2 Attachment 1 sets out Council’s overall compliance with Treasury Management Policy as at 31 December 2019.

4.3 The Council’s current total external debt is $149.74m as at 31 December 2019. Offsetting this are $22m of term deposits, giving a net external debt position of $127.74m. This is supported by the Treasury Position 31 December 2019 Report in Attachment 1.

4.4 Recent Borrowings: On the 7^th October Council borrowed $5m, and on the 16^th December Council borrowed a further $7m. Both these amounts were borrowed from the Local Government Funding Agency (LGFA) at a floating rate of Bank Bill 90 day Benchmark Rate (BKBM) (currently 1.22% pa) plus a margin. The details are as follows:

Draw Date	Amount	Margin	Effective Interest Rate	Maturity Date
07/10/2019	$5m	0.6250%	1.8450%	15/04/2026
16/12/2019	$3m	0.3525%	1.5725%	14/04/2022
16/12/2019	$4m	0.5400%	1.7600%	15/04/2025

4.5 Recent Movements in Investments: On the 4^th October one of Council’s Term deposits matured ($4m at 2.5%). These funds were used to fund Council’s ongoing capital program.

Council has 3 active term deposits totalling $18m with rates ranging from 3.1% pa to 3.13% pa. $10m of these are linked to a loan maturity in April 2020, and the remaining $8m is held as funding for future capital expenditure.

On the 16^th December Council entered into a two new deposits totalling $4m as follows:

Bank	Amount	Interest Rate	Maturity
BNZ	$2m	2.89%	17/07/2020
Westpac	$2m	2.62%	17/07/2020

The term deposit was split across two banks as Council already had $18m of deposits with Westpac and has an investment cap of $20m with any one bank as one time as per it’s Treasury Policy.

4.6 Recent RBNZ announcements: The RBNZ left its Official Cash Rate (OCR) at 1% at its 13^th November 2019 review.

4.7 In December 2019 the RBNZ also released the final outcome of its banking capital review which will require the high street banks to hold more funds to further protect from themselves from economic shocks. Economists speculate that this change may have the impact of increasing retail interest rates in the short term while the high street banks adjust their equity mix to compile. The Council borrows on the wholesale market so this should have little impact of their funding.

5.0 OPTIONS - NGĀ KŌWHIRINGA

5.1 Not applicable.

6.0 NEXT STEPS - TE ANGA WHAKAMUA

6.1 Council Officers will continue to work with Bancorp Treasury Services to keep Council’s financing costs to a minimum, maintaining adequate liquidity, while maintaining compliance with Council’s Treasury policy.

Attachments:

1 ⇩	Treasury Position Report 31 December 2019	FIN-15-03-20-197
2 ⇩	Capital Position Report 31 December 2019	FIN-15-03-20-198

SUMMARY OF CONSIDERATIONS - HE WHAKARĀPOPOTO WHAIWHAKAARO

Fit with purpose of Local Government - E noho hāngai pū ai ki te Rangatōpū-ā-rohe

The Council is required to give effect to the purpose of local government as set out in section 10 of the Local Government Act 2002. That purpose is to enable democratic local decision-making and action by (and on behalf of) communities, and to promote the social, economic, environmental, and cultural well-being of communities in the present and for the future.

This report contributes to the purpose of local government by primarily promoting economic wellbeing and more specifically through the Council’s objective of sustainable use of resources and providing resilience to hazards and shocks.

Link to the Council’s Community Outcomes - E noho hāngai pū ai ki te rautaki matua

This proposal promotes the economic well-being of communities in the present and for the future.

Māori Impact Statement - Te Tauākī Kaupapa Māori

There are no known impacts for Tangata Whenua.

Sustainability - Te Toitūtanga

This proposal promotes sustainable financing costs ensuring the economic well-being of communities in the present and for the future.

Financial considerations - Ngā Whaiwhakaaro Ahumoni

This proposal will ensure that financing costs are kept within Council’s existing budgets.

Significance and Engagement - Te Hiranga me te Tūhonotanga

This decision/report has been assessed under the Council's Significance and Engagement Policy as being of minor significance.

Consultation – internal and/or external - Whakawhiti Whakaaro-ā-roto, ā-waho

There has been no external engagement.

Risks: Legal/ Health and Safety - Ngā Tūraru: Ngā Ture / Hauora me te Haumaru

The purpose of this report, and the Treasury Policies it refers to, assist Officiers to manage Council’s treasury risk.

Rural Community Board - Ngā Poari-ā-hapori

There are no implications for the Rural Community Board.

File Ref: 19/1287

REPORT TO: Risk and Assurance Committee

MEETING DATE: Monday 3 February 2020

FROM: Manager Strategic Finance

Brent Chamberlain

SUBJECT: Annual Review of Treasury Management Policy

1.0 EXECUTIVE SUMMARY - TE KAUPAPA ME TE WHAKARĀPOPOTOTANGA

1.1 The purpose of this report to undertake a review of Council’s Treasury Management Policy.

1.2 This report contributes to the purpose of local government by primarily promoting economic wellbeing and more specifically through the Council’s strategic objective of protecting Council’s assets and efficient use of public funds.

1.3 This report reviews and proposes changes to Council’s Treasury Management Policy.

1.4 The proposed change include changes to daily transaction limits, definitions of liquid assets, the fixed and floating debts limits, the maturity profile of external debt, and changes to interest cost benchmarks. In addition there has been an attempt to shorten the policy by culling superfluous clauses.

2.0 RECOMMENDATIONS - NGĀ TŪTOHUNGA

A) That the Committee receives the report titled Annual Review of Treasury Management Policy

B) That the Committee approves the proposed changes to the Treasury Management Policy, and sends it to Council for adoption

3.0 BACKGROUND – TE HOROPAKI

3.1 Hastings District Council has a Treasury Management Policy which has the aim of minimising the Council’s costs and risks in the management of its external borrowings and maximise its return on investments.

3.2 It is a requirement of the Local Government Act 2002 Section 102 [2] that all Councils have a Liability Management Policy and an Investment Policy. Hastings District Council has chosen to incorporate these policies into a single policy entitled Treasury Management Policy.

3.3 Until July 2019 Council’s treasury advisor was PriceWaterhouse Coopers. As a result of a RFP process Council has changed its Treasury Advisors to Bancorp Treasury.

3.4 This is the first review of Council’s Treasury Management Policy undertaken by Bancorp Treasury.

4.0 DISCUSSION - TE MATAPAKITANGA

4.1 Council’s current Treasury Management Policy has been developed in conjunction with PriceWaterhouse Coopers and was last reviewed in November 2018.

4.2 The proposed replacement policy document is based on Council’s existing policy, rather than a complete rewrite from scratch. Attached is Council’s existing policy with the proposed changes marked up using track changes.

4.3 The current policy is quite wordy and repetitive, therefore a number of the changes proposed are simply removing some of the unnecessary background information and sharpening the document up without changing the underlying meaning.

4.4 The major changes that alter absolute limits and KPI’s are as follows:

2.4 Delegation of Authority and Authority Limits

The Maximum daily transaction limit has been increased to $40m to reflect what has been happening in reality anyway. With the LGFA debt rollovers often hitting $20m on a single date, Officer’s often find themselves extinguishing one $20m debt and drawing a new $20m replacement debt the same day which totals $40m of transactions before any other business is conducted.

3.1 External Debt Ratios and Limits

The definition of Liquid Assets has been broadened to include pre-funding of term debt maturing in the next 365 days, and term deposits maturing in less than 181 days.

5.1.3 Interest Rate Risk Control Limits

This section deals with Interest Rate Risk Control Limits or stated another way the percentages of fixed and floating rate debt. The section that is being amended had 16 separate one year time bands compared to the proposed 3 time bands. Bancorp’s view is that 16 bands is too complex and means that interest rate exposures have to be micro managed merely to comply with the policy but which in reality produces little or no economic benefit to Council. The current bands extend out to 16 years which means that HDC could fix its interest rate out to a 16 year horizon. Bancorp’s analysis indicates that fixing exposures that far in the future does not provide any tangible benefit and in many cases actually costs the borrower in terms of interest expense compared to the situation where exposures had not been fixed that far.

5.2.2 Liquidity/Funding Risk Control Limits

Section 5.2.2 deals with Funding/Liquidity risk control limits with the table which contains three time bands replaced with one requirement stating that no more than $100 million of 33% of a councils borrowings will mature in any rolling 12 month period. This simplifies the management process and provides greater flexibility when managing funding maturity exposures.

6.2 Management of Debt and Interest Rate Risk

Section 6.2 deals with management of Debt and Interest Rate Risk and replaces the existing benchmark which refers to only one interest rate (the wholesale 7 year rate) with a new benchmark which incorporates 7 separate interest rates which are directly related to new risk control bands contained in Section 5.1.3. The new benchmark will provide a more appropriate comparison and one which is not unduly affected by distortions in one rate (which the old one is as it only refers to the 7 year rate).

Appendix I – Definition of Financial Instruments, and Appendix II – Glossary of terms Corporate Treasury Management

This whole section (while nice to have) doesn’t add any value to the policy and is recommended to be removed and put into a separate document to be used for training purposes.

5.0 OPTIONS - NGĀ KŌWHIRINGA

Option One - Recommended Option - Te Kōwhiringa Tuatahi – Te Kōwhiringa Tūtohunga

5.1 The Risk and Assurance Subcommittee can choose to adopt the proposed changes in part or in full.

Advantages

· The proposed changes are a simplification of the policy, without significantly changing the risk profile of the policy. They are easier to understand and less stringent to work within allowing officers a slightly greater degree of flexibility, while maintaining the necessary controls.

Disadvantages

· The previous policy was very detailed and prescriptive which made treasury management very black and white but sometimes prevented officers from making decisions that an informed investor might make.

6.0 NEXT STEPS - TE ANGA WHAKAMUA

6.1 The updated policy will be taken to Operations and Monitoring Committee for ratification and adoption.

Attachments:

1 ⇩

Treasury Management Policy - Risk and Assurance

FIN-15-01-20-17

SUMMARY OF CONSIDERATIONS - HE WHAKARĀPOPOTO WHAIWHAKAARO

Fit with purpose of Local Government - E noho hāngai pū ai ki te Rangatōpū-ā-rohe

Link to the Council’s Community Outcomes - E noho hāngai pū ai ki te rautaki matua

This proposal promotes the economic well-being of communities in the present and for the future.

Māori Impact Statement - Te Tauākī Kaupapa Māori

There are no know impacts on Tangata Whenua of adopting the revised Treasury Management Policy.

Sustainability - Te Toitūtanga

There is no impact on sustainability of adopting the revised Treasury Management Policy.

Financial considerations - Ngā Whaiwhakaaro Ahumoni

There is no financial impact of adopting the revised Treasury Management Policy.

Significance and Engagement - Te Hiranga me te Tūhonotanga

This report has been assessed under the Council's Significance and Engagement Policy as being of minor significance.

Consultation – internal and/or external - Whakawhiti Whakaaro-ā-roto, ā-waho

Apart from consultation between officers and Council’s treasury advisors there has been no other consultation occur on this matter.

Risks: Legal/ Health and Safety - Ngā Tūraru: Ngā Ture / Hauora me te Haumaru

No implications

Rural Community Board - Ngā Poari-ā-hapori

No implications

Treasury Management Policy - Risk and Assurance

Attachment 1

PDF Creator

File Ref: 20/2

REPORT TO: Risk and Assurance Committee

MEETING DATE: Monday 3 February 2020

FROM: Health and Safety Manager

Jennie Kuzman

SUBJECT: Health & Safety Risk Management Update

1.0 PURPOSE AND SUMMARY - TE KAUPAPA ME TE WHAKARĀPOPOTOTANGA

1.1 The purpose of this report is to provide an update to the Committee in regards to the management of Health and Safety risks within Council.

1.2 This issue arises due to the Health and Safety at Work Act 2015 and the requirement of that legislation for Elected Members to exercise due diligence to ensure that Council complies with its Health and Safety duties and obligations.

1.3 Due diligence is defined in section 44(4) of the Health and Safety at Work Act 2015 as (Elected Members) taking reasonable steps to:

· “Acquire and update knowledge of health and safety matters.

· Gain an understanding of the operations carried out by the organisation, and the hazards and risks generally associated with those operations.

· Ensure the PCBU has, and uses, appropriate resources and processes to eliminate or minimise those risks.

· Ensure the PCBU has appropriate processes for receiving and considering information about incidents, hazards and risks, and for responding to that information in a timely way.

· Ensure there are processes for complying with any duty, and that these are implemented.

· Verify that these resources and processes are in place and being used”.

1.4 Please note that the term ‘PCBU’ or Person Conducting a Business or Undertaking, is a legal term that applies to one person (sole trader) or more than one person (organisation) and in this context can be interpreted as referring to Hastings District Council as the organisation.

1.5 The publication ‘Health and Safety Guide: Good Governance for Directors’ published in March 2016 provides useful information for Elected Members and can be found online at: https://worksafe.govt.nz/managing-health-and-safety/businesses/guidance-for-business-leaders/

1.6 The guide states that directors (or in this case Elected Members) “must exercise the care, diligence, and skill that a reasonable director would exercise in the same circumstances. What is considered reasonable will depend on the particular circumstances, including the nature of the business or undertaking, and the director or officer’s role and responsibilities”.

1.7 “Directors, may seek health and safety advice from experts or others within their organisation, such as managers. Where they choose to rely on this advice, the reliance must be reasonable. Directors should obtain enough health and safety knowledge to ask the right questions of the right people and to obtain credible information”.

1.8 Currently, in order to assist Elected Members with their due diligence duties, a high level summary report is provided on a quarterly basis to meetings where full Council are in attendance. This report focuses on the overall Health and Safety Performance of Council against organisational objectives.

1.9 Additionally, regular detailed reports are provided to the Risk and Assurance Committee (formerly the Risk and Audit subcommittee) regarding the management of Council’s Health and Safety Risks.

1.10 Report Contents

1.11 This report provides information regarding the areas of:

· Health and Safety Training for Elected Members

· Health and Safety Policy Update.

· Contractor Health and Safety Management.

· ISO/NZS 45001:2018 (External Health & Safety Audit) Implementation Update.

1.12 Health and Safety Training for Elected Members

1.13 A training workshop will be provided to Elected Members within the next few months in order to provide further guidance with regards to Health and Safety responsibilities, this will be of particular importance to those Elected Members who are new to Council.

1.14 Health and Safety Policy Update

1.15 Council updated its Health and Safety Policy in 2018, this policy was formally ratified by Council and signed by the then Chief Executive and Mayor on behalf of Council.

1.16 An update to this policy has recently been drafted for approval by the Chief Executive and it is proposed that this Policy also be ratified by Council.

1.17 A copy of the updated policy is attached as Attachment 1 for Committee members to review prior to this policy going to the Operations and Monitoring Committee for ratification on the 27^th February 2020.

1.18 Contractor Health and Safety Management

1.19 Under the Health and Safety at Work Act 2015, Council has a primary duty of care to ensure as far as reasonably practicable, the Health and Safety of workers who work for Council and workers whose activities are influenced or directed by Council. The legal term ‘worker’ applies to any individual who carries out work in any capacity for Council (this includes Employees, Volunteers, Contractors and the employees of contractors).

1.20 Additionally, Council will often share Health and Safety duties with other organisations (in relation to the same matter) when activities form part of a contracting chain or work in a shared workplace. This is usually referred to as ‘overlapping duties’ and Council has a duty under the Act to consult, cooperate with and coordinate activities with all other organisations that it shares overlapping duties with, so far as is reasonably practicable.

1.21 WorkSafe (the Regulator) has set out its expectations for the Principal (this is Council when it contracts others to undertake work) in a contracting chain within its reference document ’Good Practice Guidelines: PCBU’s working together – Advice When Contracting, June 2019’. Which can be found online at https://worksafe.govt.nz/managing-health-and-safety/getting-started/understanding-the-law/overlapping-duties/pcbus-working-together-advice-when-contracting/

1.22 WorkSafe expects the principal in a contracting chain to be a Health and Safety leader and WorkSafe also expects principals to :

· “Set clear Health and Safety expectations and incorporate these into contracts with contractors.

· Work with designers to eliminate risks so far as is reasonably practicable, or minimise risks if they cannot be eliminated (this is a concept commonly known as ‘safety in design’).

· Choose the best contractors and site managers for the job using Health & Safety prequalification measures, not simply choosing them based on cost.

· Check health and safety records of potential contractors.

· Put clear and effective reporting procedures in place so they can be confident all duties are being met.

· Set up a clear framework for information sharing for the duration of the project”.

1.23 Additionally, where Council staff manage projects, WorkSafe expects that Council staff will:

· “Work with Contractors to ensure an appropriate Health and Safety plan is in place.

· Monitor the work practices of Contractor and subcontractor workers.

· Put clear and effective reporting procedures in place so they can be confident all duties are being met”.

1.24 Council manages its Contracts and Contractors in-line with the principles of these Good Practice Guidelines and has done so for the past several years. There are processes in place regarding procurement to ensure that there is a non-price evaluation (including an evaluation of tenderers’ Health and Safety systems and practices) as well as a lowest price evaluation during tenderer selection.

1.25 To assist Elected Members in undertaking their due diligences requirements in regards to the management of Contractors it was proposed at the September 2019 Risk and Audit Subcommittee Meeting, that a high level contractor performance report (for the Contractors working under Council’s 10 highest risk term contracts) be provided to the Committee on a quarterly basis. It is intended that the first report be provided for the meeting scheduled for the 4th May 2020.

1.26 This report will include performance indicator scores for each of the Contractors working under Council’s 10 highest risk term contracts, covering management of Health and Safety, quality, contract delivery and finances.

1.27 The 10 contractors in alphabetical order are:

· Armourguard Ltd (Noise Control Contract)

· City Care Ltd (Water Services Maintenance Contract)

· Downer Ltd (Urban Road Maintenance Contract)

· Fulton Hogan Ltd (Rural Road Maintenance Contract)

· Gemco Ltd (Opera House Redevelopment Contract)

· Greensky Ltd (Recycling Collection Contract)

· HSM Security Ltd (Night Security and Animal Control After hours Contracts)

· M.W. Lissette Ltd (Landfill Civil Works Contract)

· Recreational Services Ltd, (Parks, Open Spaces and Amenities Maintenance Contract).

· Waste Management Ltd (Municipal Waste Collection Contract)

1.28 Attachment 2 sets out a draft template for this report.

1.29 Implementation of ISO/NZ Standard 45001:2018 (Health and Safety Management Systems) Accreditation

1.30 As previously advised to the Risk and Audit Subcommittee, following the disestablishment of the ACC Workplace Safety Management Practices (WSMP) accreditation scheme in 2018, the then Acting Chief Executive authorised implementation of the international Health and Safety standard ISO 45001:2018 which has also been adopted by the New Zealand Standards Authority.

1.31 Telarc NZ has been engaged to undertake an initial assessment of what is required to meet the standard (essentially a gap analysis). Unfortunately the assessment which was scheduled for late 2019, has had to be rescheduled for the 25^th February 2020 due to auditor unavailability. A report will be provided to the Risk and Audit Subcommittee following this assessment.

2.0 RECOMMENDATIONS - NGĀ TŪTOHUNGA

A) That the Committee receives the report titled Health & Safety Risk Management Update

B) That the Committee recommend to Council that the updated Health and Safety Policy be ratified.

Attachments:

1 ⇩	Draft HDC Health and Safety Policy 2020	HR-03-02-2-20-35
2 ⇩	Draft Contractor Quarterly Performance Report Template	HR-03-01-20-334

Draft HDC Health and Safety Policy 2020

Attachment 1

HEALTH AND SAFETY POLICY 2020

Proposed changes are highlighted in yellow

•

OUR COMMITMENT:

Hastings District Council is committed to keeping workers (employees, volunteers and contractors) and the community safe through living a strong Health and Safety culture.

TO ACHIEVE THIS, HASTINGS DISTRICT COUNCIL MANAGERS WILL:

• Maintain and continuously improve our Health and Safety management system.

• Set targets for improvement and measure, appraise and report on our Health and Safety performance.

• Take a proactive approach to managing Health and Safety risk by actively identifying hazards and unsafe behaviour within the workplace, and take steps to reduce the risks to an acceptable level.

• Build and maintain a workplace environment and culture that supports good health and Wellbeing.

• Increase awareness, participation and learning through active communication consultation, training and collaboration with workers with regard to Health, Safety and Wellbeing matters.

• Assess and recognise the Health and Safety performance of employees and contractors.

• Accurately report and learn from our incidents (including near misses).

• Support the safe and early return to work of injured employees.

• Ensure that we design, construct, operate and maintain our assets so that they safeguard the community.

• Require our contractors to demonstrate a strong Health and Safety culture within their organisations.

• Comply with all relevant legislation, regulations, and codes of practice and industry standards.

EVERYONE'S Responsibilities:

We believe that whilst senior management have ultimate accountability, we all have responsibility for Health and Safety. All workers (employees, volunteers and contractors) must observe our safety rules, policies, procedures and instructions. They shall ensure their own Health and Safety at work and ensure that no action or inaction on their part causes harm to others. This includes the responsibility to stop any work that they believe is unsafe or cannot be conducted in a safe manner.

Draft Contractor Quarterly Performance Report Template

Attachment 2

Contractor Quarterly Performance Report

Indicator Report – Quarter 3, 2019/2020

DRAFT TEMPLATE

· Summary

This report provides a high level indication of contractor performance on Council’s ten highest risk term Contracts for members of the Risk and Assurance Committee. There are four categories which are monitored: Health and Safety Management, Quality Management, Contract Delivery and Financial Management.

· OPTION ONE: Based on Standard Contract Management Delivery Criteria

· Key:

· Score	· Health & Safety · Criteria	· Quality · Criteria	· Contract Delivery · Criteria	· Financial · Criteria
Good Performance	· Less than 5% of Safety Observation scores Poor or Fair · No WorkSafe notifiable/ serious incidents, injuries or illnesses · Proactive management of Safety and Health risks	Criteria to be developed regarding: · Specifications · Rework	Criteria to be developed regarding: · Delivery on schedule · Delays /issues	Criteria to be developed regarding · Budget · Variations
Average Performance	· 6-20% of Safety Observation scores Poor or Fair · No WorkSafe notifiable / serious injuries, illnesses or incidents which were reasonably preventable · Reasonable management of Health and Safety risks
Poor Performance	· Greater than 20% of Safety Observation Scores Poor or Fair · Occurrence of WorkSafe notifiable /serious injury or illness which were reasonably preventable · Unsatisfactory/poor management of Health and Safety risks

· Traffic Light

· Score

· Health & Safety

· Criteria

· Quality

· Criteria

· Contract Delivery

· Criteria

· Financial

· Criteria

Good Performance

· Less than 5% of Safety Observation scores Poor or Fair

· No WorkSafe notifiable/ serious incidents, injuries or illnesses

· Proactive management of Safety and Health risks

Criteria to be developed regarding:

· Specifications

· Rework

Criteria to be developed regarding:

· Delivery on schedule

· Delays /issues

Criteria to be developed regarding

· Budget

· Variations

Average Performance

· 6-20% of Safety Observation scores Poor or Fair

· No WorkSafe notifiable / serious injuries, illnesses or incidents which were reasonably preventable

· Reasonable management of Health and Safety risks

Poor Performance

· Greater than 20% of Safety Observation Scores Poor or Fair

· Occurrence of WorkSafe notifiable /serious injury or illness which were reasonably preventable

· Unsatisfactory/poor management of Health and Safety risks

· Contractor Name

Insert brief description of contract works and contract term

· Indicator Status	· Performance Category	· Comments
	Health & Safety	25 % of safety observation scores are poor
	Quality
	Contract Delivery
	Finances

· EXAMPLE Commentary

A number of issues with regards to traffic management observed within the quarter.

Meeting held with Contractor to discuss ways to make improvements

· OPTION TWO: Based on Risk Impact Scales

· Key:

· Traffic Light	· Score	· Health & Safety · Criteria	· Financial · Criteria	· Service Delivery · Criteria	· Compliance · Criteria	· Reputation · Criteria
	Good Performance	· Less than 5% of Safety Observation scores Poor or Fair · No Worksafe notifiable or serious incidents, injuries or illnesses · Proactive management of Safety and Health risks	· Less than 10% or $200,000 variation on approved budget including variations	· Less than 10% variation in service delivery timeframe or quality standard.	· No detected material non-compliance with legislative obligations.	· No media attention or attention of a few individuals
	Average Performance	· 6-20% of Safety Observation scores Poor or Fair · No Worksafe Notifiable or serious injuries, illnesses or incidents which were reasonably preventable · Reasonable management of Health and Safety risks	· Variation of between 10% and 25% or $200,000 - $1,000,000 from approved budget including variations	· Variation of between 10% and 25% in service delivery timeframe or quality standard	· Formal warning, or adverse public exposure, for a legislative non-compliance.	· Local media attention or adverse feedback from an organised local group or community.
	Poor Performance	· Greater than 20% of Safety Observation Scores Poor or Fair · Occurrence of notifiable injury or illnesses which were reasonably preventable · Unsatisfactory/poor management of Health and Safety risks	· More than 25% or $1,000,000 variation on approved budget including variations.	· More than 25% variation in service delivery timeframe or quality standard.	· Fine or prosecution for a legislative non-compliance.	· Significant regional or national adverse public interest or media attention.

File Ref: 19/1284

REPORT TO: Risk and Assurance Committee

MEETING DATE: Monday 3 February 2020

FROM: Risk and Corporate Services Manager

Regan Smith

SUBJECT: Council Risk Appetite Statements

1.0 EXECUTIVE SUMMARY - TE KAUPAPA ME TE WHAKARĀPOPOTOTANGA

1.1 The purpose of this report is to present a revised Hastings District Council (HDC) Risk Appetite statement for the Committee to approve, and subsequently recommendation to Council for adoption.

1.2 This proposal contributes to the purpose of local government by promoting successful implementation of all Council Long Term Plan focus areas.

1.3 Based on feedback from the Risk and Audit Subcommittee on 2 July 2019 regarding the original draft Risk Appetite Statement the following changes should be noted:

· Risk Appetite Terminology has been refined.

· The overarching risk appetite statement has been expanded upon by providing specific statements of risk appetite and tolerance for each of the focus areas in 2018/2028 Long Term Plan (LTP), plus an additional area covering Council core business.

· The Council risk appetite is recognised to vary depending on the strategic outcome, and ranges from Minimalist to Flexible.

2.0 RECOMMENDATIONS - NGĀ TŪTOHUNGA

A) That the Committee receives the report titled Council Risk Appetite Statements.

B) That the Committee:

i. Approve the Risk Appetite Statement as a fair reflection of the Council’s attitude toward risk, and subsequently,

ii. Recommend to the Council that the Risk Appetite Statement be adopted as a means for communicating risk taking tolerances and monitoring risk taking behavior.

iii. Recommends to Council that reviewing the Risk Appetite Statement should be a key step within the Long Term Plan process.

3.0 BACKGROUND – TE HOROPAKI

3.1 In order to develop a Risk Appetite Statement for Council, a survey of Elected Members and Council Officers was undertaken. The results of these surveys where incorporated in to a draft Risk Appetite Statement presented to the Risk and Audit Subcommittee on 2 July 2019.

3.2 Based on feedback from the Subcommittee as this meeting, a revised draft Risk Appetite Statement was tabled at the 2^nd September Risk & Audit Subcommittee meeting. This draft better reflected the variation in risk appetite across the range of services that Council provides.

3.3 The current draft Risk Appetite Statement (Attachment 1) now covers the Council approach to risk for each of the key focus areas in the 2018/2028 LTP, plus an additional focus area to capture Council’s core service areas of regulatory oversight, provision of infrastructure and community well-being.

4.0 DISCUSSION - TE MATAPAKITANGA

4.1 It is considered best practice to include a statement of risk appetite as part of a risk management framework. The ISO31000 risk management standard recommends defining risk criteria, the equivalent of risk appetite, before undertaking risk identification and analysis processes.

4.2 The Institute of Risk Management defines risk appetite as the “amount of risk that an organisation is willing to seek or accept in pursuit of long-term objectives”. Put another way, risk appetite can be considered the value the organisation is willing to put at risk in order to deliver strategic goals.

4.3 A good risk appetite statement should include the acceptable tolerances for variation in delivery of the organisation’s objectives. These tolerances should be measurable so that they can be effectively monitored. In this way, defining risk appetite should assist with managing the organisation’s total risk exposure.

4.4 Because risk appetite is a tool to managing the organisation’s total risk exposure, it is vital that the statement is defined by the organisation’s governing body. As a result, the draft Risk Appetite Statement for HDC is presented to the Risk and Assurance Committee for consideration.

4.5 Risk Survey Key Discussion Points

4.6 The risk appetite survey results identified four key areas of difference between Elected Members, Executive Management and Officers that warrant further discussion. Those are tabled for consideration by the Committee:

· How much focus should be put on protecting the community when seeking to achieve progress.

· How much focus to apply to compliance when trying to deliver responsive service.

· How much effort to put in to partnership and communication/consultation when that might affect the speed of service or perceived bureaucracy.

· Should speed of service or cost effectiveness be the key service driver.

OPTIONS - NGĀ KŌWHIRINGAOption One - Recommended Option - Te Kōwhiringa Tuatahi – Te Kōwhiringa Tūtohunga 5.1 Approve the draft Risk Appetite Statement, with or without amendment.

Advantages

· Sets a foundation for communicating appropriate risk taking behaviour within Council.

· Defines a set of tolerances that can be used to monitor whether Council’s total risk exposure is within acceptable limits.

· Implements a key component of a best practice Enterprise Risk Management system.

Disadvantages

· Requires Council to report against the tolerances and therefore creates some additional administrative overhead.

Option Two – Status Quo - Te Kōwhiringa Tuarua – Te Āhuatanga o nāianei

5.2 Reject the draft Risk Appetite Statement, with or without requesting further work.

Advantages

· May save some administrative overhead associated with reporting against risk tolerances.

Disadvantages

· Council Officers will be left to make their own conclusions regarding the level of risk taking that is appropriate, which is likely to result variable outcomes and potentially overly conservative approach.

6.0 NEXT STEPS - TE ANGA WHAKAMUA

6.1 Should the Committee approve the draft Risk Appetite Statement, the next steps will include:

· Communicating the approved risk tolerances within Council.

· Monitoring performance against the defined risk tolerances.

6.2 In order to keep the Risk Appetite Statement relevant, it is recommended that a review of the Council’ risk appetite is a key step within the LTP process.

Attachments:

1 ⇩

DRAFT HDC Risk Appetite Statement V3.4

PMD-03-81-19-198

SUMMARY OF CONSIDERATIONS - HE WHAKARĀPOPOTO WHAIWHAKAARO

Fit with purpose of Local Government - E noho hāngai pū ai ki te Rangatōpū-ā-rohe

This report contributes to the purpose of Local Government by promoting successful implementation of all Long Term Plan focus areas to achieve the wellbeing and strategic outcomes set by Council.

Link to the Council’s Community Outcomes - E noho hāngai pū ai ki te rautaki matua

This proposal does not directly contribute to delivery of a specific well-being, but will promote greater understanding of the attitude to risk to increase confidence that any specific well-being outcome is delivered as expected.

Māori Impact Statement - Te Tauākī Kaupapa Māori

There are no known impacts for Tangata Whenua.

Sustainability - Te Toitūtanga

There are no implications for sustainability.

Financial considerations - Ngā Whaiwhakaaro Ahumoni

There are no direct financial implications of the proposal.

It should be noted that the purpose of risk appetite is to assist understanding of risk taking, including how much value can be put at risk. Therefore, this proposal should assist with reducing unexpected financial variations.

Significance and Engagement - Te Hiranga me te Tūhonotanga

This decision has been assessed under the Council's Significance and Engagement Policy as being of low significance to the community.

It is of some operational importance to Council, as a good understanding of risk appetite supports effective operational delivery and reduces unexpected outcomes.

Consultation – internal and/or external - Whakawhiti Whakaaro-ā-roto, ā-waho

No external engagement or consultation has been undertaken.

Risks: Legal/ Health and Safety - Ngā Tūraru: Ngā Ture / Hauora me te Haumaru

Definition of Risk Criteria, or Risk Appetite, is not a legislative compliance requirement but is considered industry best practice, and is included in ISO31000 the standard on Risk Management.

There are no other specific risks associated with this proposal.

Rural Community Board - Ngā Poari-ā-hapori

There are no specific implications for any Community Boards.

File Ref: 20/53

REPORT TO: Risk and Assurance Committee

MEETING DATE: Monday 3 February 2020

FROM: Risk Assurance Advisor

Dean Ferguson

SUBJECT: Risk Assurance Insurance Review

1.0 PURPOSE AND SUMMARY - TE KAUPAPA ME TE WHAKARĀPOPOTOTANGA

1.1 The purpose of this report is to provide an update to the Committee in regards to the Risk Assurance review of Council’s Insurance programme.

1.2 The purpose of this review was to assess and evaluate the effectiveness of insurance as a control for a number of strategic risks. The review found that that the insurance programme is well managed and insurance as a control is fully effective.

1.3 The review also took into consideration the changing landscape around insurance to establish whether Council was prepared for future risks to the insurance industry. This included considering what insurance cover may look like going forward, and options around alternate forms of mitigation i.e. self-insuring.

1.4 The main points are:

· Insurance is one of the key mitigations to manage the risk of assets not being available in the future to provide services.

· Council has an open and transparent relationship with their insurance brokerage firm, Marsh. An officer is assigned to manage the insurance portfolio who in turn works with the various business units to ensure their needs are accounted for.

· The insurance market has changed since the recent earthquake events and an increase in significant weather events, not just in New Zealand but globally.

· Insurance companies are now looking at risk profiling regions opposed to taking a holistic view of the country.

· Loss modelling now plays a significant role in how insurance is applied, what type of cover is suitable and how much that insurance will cost (and then pay out).

· Lloyds recently undertook a survey which named New Zealand as the second riskiest country in major global insurance report, behind Bangladesh.

· Hawke’s Bay region’s risk profile has increased in recent years due to the risk around the Hikurangi Subduction Zone, Coastal Erosion and an increase in significant weather events.

· Council is not currently covered for any cyber-attack related incidents. Due to cyber security continually being reported as a top 10 risk to an organisation, the need for some form of cover will be discussed at the next insurance renewal discussions between Council and their broker, Marsh.

2.0 Review Findings

2.1 Based on the work performed, it was found that the overall management control environment around insurance was fully effective.

2.2 However, as set out in 1.4, there are a number of factors that will have an impact on the effectiveness of those controls in the future. Council will need to be in a position to be adaptable to change and review options around how insurance is applied, what type of cover is suitable and how much certain insurance will cost before the premiums outweigh the value or likelihood of a claim.

2.3 The below strategic risks were identified as having insurance as either a mitigation or prevention. Each of the controls were reviewed against their respective strategic risk and the insurance type they best aligned with. The overall rating was fully effective.

3.0 Emerging issues – 5 year view

3.1 Reduced market access – insurers either pulling out of high risk countries or raising premiums to a level where they will become unaffordable.

3.2 Contract Insurance (third party liability limitation) – specified or tagged insurance putting the onus on Council to compromise on types of contract insurance.

3.3 Loss modelling becoming business as usual – understanding the risk from a micro level.

3.4 Climate change – more frequent weather events, coastal erosion and inundation zones.

3.5 Cyber risk – a greater reliance on cloud hosted and artificial intelligence systems.

3.6 Business Continuity – a greater reliance on being resilient and having a strong business continuity framework and culture to support insurable assets.

4.0 RECOMMENDATIONS - NGĀ TŪTOHUNGA

A) That the Committee receives the report titled Risk Assurance Insurance Review

Attachments:

There are no attachments for this report.

File Ref: 19/1285

REPORT TO: Risk and Assurance Committee

MEETING DATE: Monday 3 February 2020

FROM: Risk and Corporate Services Manager

Regan Smith

SUBJECT: Risk Assurance Action Status

1.0 EXECUTIVE SUMMARY - TE KAUPAPA ME TE WHAKARĀPOPOTOTANGA

1.1 The purpose of this report is to provide the Committee with assurance that improvement opportunities raised during Risk Assurance Reviews are being progressed.

1.2 This report contributes to the purpose of local government by primarily promoting effective operation of the Council.

1.3 The main points are:

· The majority of risk assurance tasks are being satisfactorily progressed.

· The only overdue action relates to finalising a Cash Handling Policy. This work is substantially complete waiting final amendments and approval.

· 93 Resource Consents with which Council must comply have been loaded in to Lutra Infrastructure Data (ID) system for management.

2.0 RECOMMENDATIONS - NGĀ TŪTOHUNGA

A) That the Committee receives the report titled Risk Assurance Action Status

3.0 BACKGROUND – TE HOROPAKI

3.1 The Risk Assurance Review programme involve assessing how well the critical controls identified for each of the Council’s strategic risk are working.

3.2 As a result of these assessments improvement opportunities may be identified, which are raised as Tasks for business unit managers to implement.

3.3 This report provides a status summary for Tasks from all Assurance Reviews.

4.0 DISCUSSION - TE MATAPAKITANGA

4.1 Risk Assurance Task Summary:

· Completed Tasks.

Previous Quarter	Current Quarter
2	4

· Open Tasks

In Progress	Count
Current	6
Overdue	1
Total	7

Refer to Appendix 1 for a full list of tasks.

· Overdue Tasks.

Team	Task	Due Date	Strategic Risk
Finance	Draft and finalise the Cash Handling Policy ready for sign-off	27/9/19	10. Corruption and Fraud Incidents
Comment: The policy is substantially complete. Minor amendments are required so the policy can be approved and then implemented.

4.2 Resource Consent Compliance Summary:

· The following table lists consents issued by other authorities to HDC that have conditions with which Council must comply.

Team	Number
3 Waters	15
Drinking Water	18
Waste Water	12
Stormwater	17
Trade Waste	24
General	7
Total	93

5.0 NEXT STEPS - TE ANGA WHAKAMUA

5.1 A work programme is being developed with Finance to support implementation of the cash handling policy.

5.2 Work is underway to capture Resource Consent compliance data to support compliance monitoring and reporting.

Attachments:

1 ⇩

Strategic Risk Task Performance December 2019

PMD-9-3-19-7

SUMMARY OF CONSIDERATIONS - HE WHAKARĀPOPOTO WHAIWHAKAARO

Fit with purpose of Local Government - E noho hāngai pū ai ki te Rangatōpū-ā-rohe

This report contributes to the purpose of local government by supporting effective operation of the Council.

Link to the Council’s Community Outcomes - E noho hāngai pū ai ki te rautaki matua

There is no specific contribution to Community Outcomes

Māori Impact Statement - Te Tauākī Kaupapa Māori

There are no known impacts for Tangata Whenua.

Sustainability - Te Toitūtanga

There are no implications for sustainability.

Financial considerations - Ngā Whaiwhakaaro Ahumoni

There are no financial implications.

Significance and Engagement - Te Hiranga me te Tūhonotanga

This decision/report has been assessed under the Council's Significance and Engagement Policy as being of low significance.

Consultation – internal and/or external - Whakawhiti Whakaaro-ā-roto, ā-waho

There has been no external engagement.

Risks: Legal/ Health and Safety - Ngā Tūraru: Ngā Ture / Hauora me te Haumaru

Failure to implement risk control improvements leaves Council open to criticism should a risk event materialise.

Rural Community Board - Ngā Poari-ā-hapori

There are no implications for Community Boards.

File Ref: 19/1293

REPORT TO: Risk and Assurance Committee

MEETING DATE: Monday 3 February 2020

FROM: Chief Financial Officer

Bruce Allan

SUBJECT: Chief Financial Officer Update

1.0 PURPOSE AND SUMMARY - TE KAUPAPA ME TE WHAKARĀPOPOTOTANGA

1.1 The purpose of this report is to provide the subcommittee with updates on other initiatives that are currently underway and to provide an update on outstanding actions from previous meetings.

Electronic Purchase Order Project (Procure to Pay (P2P))

1.2 The P2P module has now been implemented into the financial system, and has been fully rolled out across Council. This roll out was staged group by group, and was a significant logistical exercise, involving a total of four finance staff operating as trainers, and involved around 200 staff members being trained over a three month period.

1.3 The new electronic purchase order system has now gone fully live across Council and has generally been well received. Where issues have arisen, these are being resolved both with the users and the finance team.

1.4 Ongoing adjustments and improvements are expected and will be part of the long term business improvement strategy. One of the outcomes of the new purchase order system will see finance working to reduce the number of working days before close off.

Audit Report for the financial year ended 30 June 2019

1.5 The report to Council from Audit New Zealand on the audit of Hastings District Council and the group for the year ended 30 June 2019 has been received and is attached as Attachment 1.

1.6 Audit New Zealand have issued an unmodified opinion, and were pleased to note continued improvement in the delivery of the draft Annual Report and the progress that Council have made in clearing previous recommendations. Of the previous 15 open recommendations 7 have now been implemented and closed, with another 4 likely to be closed off at the interim audit in 2020. The remaining 4 open recommendations include two that will be resolved due to the implementation of the new EPO system and one that relates to the implementation of a contract management system which has a project underway.

1.7 There were three new recommendations that were raised, none of which were of an urgent priority. These can be viewed as part of the audit action sheet attached as Attachment 2.

1.8 Audit New Zealand state that the financial statements are free from material misstatements, including omissions. During the audit any misstatements other than those which were clearly trivial, that were found were discussed with officers. There were no significant misstatements identified during the audit that were not corrected.

Internal Audit

1.9 As per the 2019/20 internal audit plan, an audit of payroll compliance covering procedures and practices to assess whether the controls and processes ensured complete, accurate and timely processing of payroll information has been completed in December 2019.

1.10 Currently the report is being drafted by Crowe (formally Crowe Horwath) with an update of findings to be reported to the next risk and assurance committee meeting.

1.11 The audit action sheet Attachment 2 is an update from both external and internal audit recommendations, with updated comments on progress.

Risk Assurance Update

1.12 Over the last six months the Risk Assurance team has established a firm foundation as a centre of expertise and support for risk management activities across Council. The team successes include provision of risk management support to the following strategic projects:

- WMMP Project (Kerbside collection)

- Procurement manual update project

- 10 year water strategy project

- Cape Kidnappers

- Karamu Master Plan

1.13 In addition, the Risk Assurance Advisor has been the lead officer in the following special projects:

- Landfill review

- Forestry slash management

- Caroline Rd cool store response

- Civil Defence Emergency Management Controller activities

1.14 Due to this proactive risk management workload, there has been an impact on the review programme previously reported to the committee in July 2019. The programme originally set out to complete eight reviews by the end of the 2019/2020 Financial Year (FY). At present one of those reviews on Strategic Risk Critical Controls, has been completed and it is unlikely the remaining planned reviews can be completed by the original target date. As a result, the intention is to focus on two areas of material risk in the current FY programme, which are reviews on Transportation and Policies, Procedures and Training. A revised review programme for the 2020/2021 FY will be provided at the next Risk Assurance Committee meeting.

Enterprise Risk Management Framework

1.15 The HDC Enterprise Risk Management Framework was due for review in January 2020. With the agreement of the Chair for the Risk Assurance Committee, the review has been delayed until the Council risk appetite statement has been adopted so this can be incorporated in to the next revision of the Framework.

Forestry Slash Management

1.16 Over the last eighteen months the Risk Assurance team have been reviewing and assessing the risk and potential impacts to our assets and communities through the forestry activity and slash management. As a result, HBRC have recently recruited a Compliance Monitoring Officer in which HDC jointly funds 50% FTE. As part of the joint funding and providing assurance to Council, Risk Assurance have led the discussions around setting up an action plan and refining KPI’s to ensure the proper monitoring of forestry harvesting (pre, during and post) is carried out and to ensure Council’s key objectives are met. This has included producing an interactive risk based map detailing all forestry locations, key lifeline roads, bridges and culverts, MPI erosion susceptibility heat map, archaeological sites, flood risk areas, consented bore locations to name a few.

1.17 Other initiatives to provide assurance around forestry activity include ensuring the new FTE has access to certain Council records and systems pertaining to notifications and/ or known forestry activity, access to key Council officers (Environmental Consents, Transportation, and Compliance) and is fully apprised of the risk profile of the district. A reporting suite has been generated in order to capture key information and inform relevant staff of any breaches or observations.

1.18 Further to that, an audit will be conducted on the last ten forestry harvest plan notifications that have been submitted to both HBRC and HDC to identify gaps and ensure full compliance between the TA and Regional.

Three Waters Update

1.19 The water safety plan (WSP) for the main Hastings urban supply has been updated using the latest Ministry of Health guidance. This was submitted for Drinking Water Assessor (DWA) assessment on the 8^th November 2019. Prior to submission it underwent various internal and external reviews. The DWA are currently progressing their adequacy assessment of this new plan. If approved officers understand it would be the first WSP approved under the new framework.

1.20 As part of the urban supply upgrade programme an assessment has been undertaken to consider whether there were any interim upgrades works required. The focus was to consider whether there were any interim works that would deliver fully compliant water in a shorter timeframe. The assessment concluded that any interim works would add circa $1m of cost to the programme and would not substantially reduce the time to provide compliant water. The monitoring and assessments of protozoa risks at Frimley are considered to be very low, therefore this option provides little benefit and the focus should remain on the final solution.

Review of Aquatics Delivery Model

1.21 The Group Manager of Community Facilities and Programmes has undertaken an internal review of the delivery model for Council’s aquatics facilities including formalising the roles and responsibilities between Councils Assets Group and the facility operators. The review has also utilised the skills and expertise of an external aquatics facility operator in improving practices at our facilities.

Appointment of Independent member of Risk and Assurance Committee

1.22 The Finance and Risk Committee on 17 September 2019 received a report recommending that Council follow best practice and appoint a second independent member of the Audit and Assurance Committee, the resolutions of that meeting are detailed below.

“That the Committee receives the report titled “Appointment of Independent member to the Risk & Audit Subcommittee”.

That the Committee recommend to the incoming Council following the 2019 triennial elections that:

i. Mr Jon Nichols be reappointed as the independent chair of the Risk & Audit Subcommittee for a further three years.

ii. A second independent member of the Risk & Audit Subcommittee be appointed for a period of three years with a preference for that member to have asset management experience.”

1.23 Guidance is sought from the Committee members on the recommended approach to identifying and recommending a preferred candidate to Council.

Action List

1.24 Attached as Attachment 3, is the updated action list.

2.0 RECOMMENDATIONS - NGĀ TŪTOHUNGA

A) That the Committee receives the report titled Chief Financial Officer Update.

Attachments:

1 ⇩	Financial Management - Audits - External audit - Audit NZ's Summary Letter to Audit and Risk Committee 2019	FIN-07-01-20-440
2 ⇩	Audit Action Sheet as at 3 Feb 2020	FIN-07-02-20-109
3 ⇩	Status of Actions Sheet	CG-14-118

Status of Actions Sheet

Attachment 3

Hastings District Council

Risk and Audit Subcommittee

Status of Actions Sheet – 3 February 2020

Item No.	Meeting Date	Action	Reporting Officer	Progress as at 22 October 2019	Complete
1	19/6/17	Building Control Liability Issues · The Subcommittee would take a watching brief and 1. Officers would report back regularly in order to update the Subcommittee.	Building Control Manager	Ongoing, last update provided at 2/7/19 meeting
2	15/11/18	Performance of Contract Post Tender · Need to develop a mechanism to monitor contract performance post implementation	Chair/CFO	Chair to supply CFO an example of how this monitored in other industries
3	06/05/19	Review of Aquatics delivery model · Mayor asked for a review of service delivery model	GM CF&P	Review of Resourcing and Management Structure underway. Cover off with CFO overview.
4	06/05/19	Electronic Purchase Order Project · FC to take Jon Nichols, Crs Kerr and Travers through the P2P process once it is ready to be implemented	FC	Completed 31 January 2020.
5	02/07/19	Governance Oversight of Finances · Finance to develop a inhouse training package	CFO	Programmed with Induction First tranche to be delivered 13/2/20
6	16/09/19	Risk Appetite Statement · Draft Risk Appetite Statement to be modified and circulated to Risk and Audit	CFO/Regan Smith	On agenda
7	02/07/19	Internal Audit · Summary of progress to be presented to next Risk and Audit Meeting	FC	Included in CFO update report
8	02/07/19	Closed Landfills · A report to be developed to Risk and Audit on the locations and integrity of closed landfills within HDC boundaries and other areas required.	GM:AM CT	Ongoing
9	16/09/19	Treasuring Activity and Funding · Invite Bancorp Treasury advisors to subcommittee · Convey options if interest rates go below zero · Advise savings by using swaps	BC	Invited to 3/2/20 meeting Bnacorp to discuss TBC
10	16/09/19	Risk Assurance Reviews · Update to Council · Transportation review	DF	Proposed fo 2^nd qtr of 2020 Programme for 2^nd qt of 2020
11	16/09/10	Health & Safety Risk Management · Next report to committee to incorporae traffic light reporting · Dashboard reporting to be developed – include contractor performance	JK	Reporting updated
12	16/09/19	General Action Review · CFO and Chair to review actions outstanding.	BA	Completed

Hastings District Council

Lyndon Road East, Hastings

Risk and Assurance Subcommittee – Terms of Reference