Auckland Council's Audit and Risk Committee 16 Dec 2014

I hereby give notice that an ordinary meeting of the Audit and Risk Committee will be held on:
Date:
Time:
Meeting Room:
Venue:
Tuesday, 16 December 2014

10.00am
Room 1
Level 26
135 Albert Street
Auckland
Audit and Risk Committee

OPEN AGENDA
MEMBERSHIP
Chairperson
Deputy Chairperson
Members
Ex-officio
Cr Sir John Walker, KNZM, CBE

Cr Dr Cathy Casey
Cr Cameron Brewer
Cr Bill Cashmore
Mr Paul Conder, CA
Cr Sharon Stewart, QSM
Mr Roy Tiffin, FCA
Cr Penny Webster
Mayor Len Brown, JP
Deputy Mayor Penny Hulse
(Quorum 4 members)
Mike Giddey
Democracy Advisor
10 December 2014
Contact Telephone: (09) 307 7565
Email: mike.giddey@aucklandcouncil.govt.nz
Website: www.aucklandcouncil.govt.nz
Note:
The reports contained within this agenda are for consideration and should not be construed as Council policy
unless and until adopted. Should Members require further information relating to any reports, please contact
the relevant manager, Chairperson or Deputy Chairperson.
TERMS OF REFERENCE
Responsibilities
The Audit and Risk Committee will be responsible for:
Providing objective advice and recommendations to the Governing Body regarding the
sufficiency, quality and results of assurance on the adequacy and functioning of the councils
risk management, control and governance frameworks and processes.
Exercising active oversight of all areas of Auckland Council control and accountability (including
Council Controlled Organisations), in an integrated and systematic way, such that the results of
risk and assurance reviews and external audits may be incorporated in the priority-setting and
strategic planning processes.
Liaison with Audit NZ and, where necessary, the audit committees of CCOs to ensure robust
financial audits and reviews of the Auckland Council group
EXCLUSION OF THE PUBLIC WHO NEEDS TO LEAVE THE MEETING

Members of the public
All members of the public must leave the meeting when the public are excluded unless a resolution
is passed permitting a person to remain because their knowledge will assist the meeting.
Those who are not members of the public
General principles
Access to confidential information is managed on a need to know basis where access to

the information is required in order for a person to perform their role.
Those who are not members of the meeting (see list below) must leave unless it is
necessary for them to remain and hear the debate in order to perform their role.
Those who need to be present for one confidential item can remain only for that item and
must leave the room for any other confidential items.
In any case of doubt, the ruling of the chairperson is final.
Members of the meeting
The members of the meeting remain (all Governing Body members if the meeting is a
Governing Body meeting; all members of the committee if the meeting is a committee
meeting).
However, standing orders require that a councillor who has a pecuniary conflict of interest
leave the room.
All councillors have the right to attend any meeting of a committee and councillors who are
not members of a committee may remain, subject to any limitations in standing orders.
Staff
All staff supporting the meeting (administrative, senior management) remain.

Only staff who need to because of their role may remain.
Local Board members
Local Board members who need to hear the matter being discussed in order to perform their
role may remain. This will usually be if the matter affects, or is relevant to, a particular Local
Board area.
IMSB
Members of the IMSB who are appointed members of the meeting remain.
Other IMSB members and IMSB staff remain if this is necessary in order for them to perform
their role.
CCOs
Representatives of a CCO can remain only if required to for discussion of a matter relevant to the
CCO.

16 December 2014
ITEM TABLE OF CONTENTS
PAGE
Apologies
Declaration of Interest
Confirmation of Minutes
Petitions
Public Input
Local Board Input
Extraordinary Business
Notices of Motion
Office of the Auditor-General
10
Briefing by Audit New Zealand on the Long-term Plan consultation

document
11
Update on Financial Control interactions with Audit New Zealand during

the last quarter
13
Auckland Council Group Pro Forma Financial Statements and Approval

of Accounting Policies for 31 December 2014
15
Audit and Risk Committee Oversight of Council Controlled Organisation

Risk
43
14
Update on Health and Safety Activities
49
15
Update of Risk Management Activities
53
16
Consideration of Extraordinary Items
11
12
13
PUBLIC EXCLUDED
17
Procedural Motion to Exclude the Public
63
C1
Update on Internal Audit Activities
63
C2
Update on Integrity and Investigation Activities
63
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16 December 2014
1
Apologies
Apologies from Mayor LCM Brown and Deputy Mayor PA Hulse have been received.
Declaration of Interest
Members are reminded of the need to be vigilant to stand aside from decision making
when a conflict arises between their role as a member and any private or other external
interest they might have.
Confirmation of Minutes
That the Audit and Risk Committee:
a)
confirm the ordinary minutes of its meeting, held on Tuesday, 16 September 2014,
including the confidential section, as a true and correct record.
Petitions
At the close of the agenda no requests to present petitions had been received.
Public Input
Standing Order 3.21 provides for Public Input. Applications to speak must be made to the
Committee Secretary, in writing, no later than two (2) working days prior to the meeting
and must include the subject matter. The meeting Chairperson has the discretion to
decline any application that does not meet the requirements of Standing Orders. A
maximum of thirty (30) minutes is allocated to the period for public input with five (5)
minutes speaking time for each speaker.
At the close of the agenda no requests for public input had been received.
Local Board Input

Standing Order 3.22 provides for Local Board Input. The Chairperson (or nominee of that
Chairperson) is entitled to speak for up to five (5) minutes during this time. The
Chairperson of the Local Board (or nominee of that Chairperson) shall wherever practical,
give two (2) days notice of their wish to speak. The meeting Chairperson has the
discretion to decline any application that does not meet the requirements of Standing
Orders.
This right is in addition to the right under Standing Order 3.9.14 to speak to matters on the
agenda.
At the close of the agenda no requests for local board input had been received.
Extraordinary Business
Section 46A(7) of the Local Government Official Information and Meetings Act 1987 (as
amended) states:
An item that is not on the agenda for a meeting may be dealt with at that meeting if(a)
The local authority by resolution so decides; and
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16 December 2014
(b)
The presiding member explains at the meeting, at a time when it is open to the
public,(i)
The reason why the item is not on the agenda; and
(ii)
The reason why the discussion of the item cannot be delayed until a
subsequent meeting.
Section 46A(7A) of the Local Government Official Information and Meetings Act 1987 (as
amended) states:
Where an item is not on the agenda for a meeting,(a)
(b)
That item may be discussed at that meeting if(i)
That item is a minor matter relating to the general business of the local
authority; and
(ii)
the presiding member explains at the beginning of the meeting, at a time

when it is open to the public, that the item will be discussed at the meeting;
but
no resolution, decision or recommendation may be made in respect of that item

except to refer that item to a subsequent meeting of the local authority for further
discussion.
Notices of Motion
At the close of the agenda no requests for notices of motion had been received.
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16 December 2014
Item 9

File No.: CP2014/28011
Purpose
1.
To provide an opportunity for the Auditor-General to address the committee.
Executive Summary
2.
The Auditor-General will address the meeting.
Recommendation/s
a)
receive the information provided by the Auditor-General.
Attachments
There are no attachments for this report.
Signatories
Author
Mike Giddey - Democracy Advisor
Authoriser
Grant Taylor - Governance Director
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16 December 2014
Item 10
Briefing by Audit New Zealand on the Long-term Plan consultation

document
File No.: CP2014/27426
Purpose
1.
To provide an opportunity for Audit New Zealand to address the Committee.
Executive Summary
2.
Audit New Zealand will provide a briefing on the work performed on the Long-term Plan
consultation document.
Recommendation/s
a)
receive the information provided by Audit New Zealand.
Attachments
Signatories
Author
Francis Caetano - Group Financial Controller
Authorisers
Kevin Ramsay - Chief Financial Officer

Briefing by Audit New Zealand on the Long-term Plan consultation document
Page 11
Update on Financial Control interactions with Audit New Zealand during

the last quarter
File No.: CP2014/27431
Purpose
1.
This report summarises the significant work undertaken by the Financial Control Unit since
September which involved working with Audit New Zealand.
Executive Summary
2.
Auckland Council is working closely with Audit New Zealand to resolve issues raised in
previous management reports and two new issues arising from the 2013/14 audit. In
addition we are working together as the Council is continuing its implementation plan
resulting from the adoption of the International Public Sector Accounting Standards (IPSAS).
Recommendation/s
a)
receive the report.
Discussion
3.
Following the completion of the audit of the 2013/14 Annual Report, we met with Audit New
Zealand and agreed on the status of the prior year recommendations. As reported at the
September Audit and Risk Committee there are 19 items which are in progress which need
to be resolved. We are developing a programme of work to progress the issues identified.
We have held discussions with Audit New Zealand regarding the final management letter for
the 2013/14 year and have seen an initial draft version of the letter outlining their findings.
Two new items have been identified, management of software licences and the
management of staff with high annual leave balances. We will work with Audit New Zealand
to finalise the draft management report for us to provide our comments. Once the letter is
finalised we will present it to the next Audit and Risk Committee meeting on 18 February
2015.
4.
Financial Control have prepared consolidated financial information based on the first quarter
results of the 2014/15 financial year. This financial information, which was the subject of an
Audit New Zealand review, was supplied to the Auckland Council Treasury department for
the offer document which supports the European Medium Term Notes comfort letter.
5.
Audit New Zealand has also undertaken the first Interim Audit for the 2014/15 financial year
and is in the process of completing the audit of the Long Term Plan consolidation document
which is due to be adopted on 18 December.
6.
Preparation for the half year report and audit review are underway, with the revised
accounting policies and pro forum financial statements redrafted as required for the
implementation of IPSAS.
7.
Accounting policy papers on exchange/non exchange revenue, and related parties are in the
process of being prepared and supplied to Audit New Zealand to support our interpretation
of the new IPSAS.
Update on Financial Control interactions with Audit New Zealand during the last quarter
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16 December 2014

16 December 2014
Item 11
8.
Work continues on analysing several specific arrangements the Council has historically
entered into to determine the impact of the IPSAS Service Concession Arrangement
standard.
Consideration
Local Board Views and Implications
9.
Local boards have not been consulted because the report deals primarily with internal
management issues.
Maori Impact Statement

10.
The report does not have any particular benefit or adverse effects on Maori.
General
11.
Nil.
Implementation Issues
12.
No issues.
Attachments
Signatories
Author
Morna Macfarlane Financial Compliance Manager
Authorisers

Update on Financial Control interactions with Audit New Zealand during the last quarter
Page 14
Auckland Council Group Pro Forma Financial Statements and Approval

of Accounting Policies for 31 December 2014
File No.: CP2014/28309
Purpose
1.
This report presents the pro forma financial statements as at 31 December 2014 for
Auckland Council and group and the relevant accounting policies.
Executive Summary
2.
The Audit and Risk Committee reviews the attached pro forma financial statements and
approves the relevant changes in accounting policies for the purpose of the financial
reporting for the six months ended 31 December 2014.
Recommendation/s
a)
receive the draft pro forma financial statements.
b)
approve the accounting policies contained within the pro forma financial statements
for the preparation of 2015 half year Auckland Council and Group financial
statements and delegate to Mr Roy Tiffin or Mr Paul Conder authority to approve
any amendments resulting from consultation with Audit New Zealand.
Discussion
3.
The 31 December 2014 pro forma financial statements and notes should be read in
conjunction with 30 June 2014 annual report as it contains only significant changes from 30
June 2014.
4.
The primary statements and certain notes contained in the 31 December 2014 pro forma
financial statements have been amended to reflect the adoption of International Public
Sector Accounting Standards (IPSAS) which came into effect on 1 July 2014.
5.
The revised accounting policies and pro forma financial statements have been sent to Audit
New Zealand after taking into consideration Audit New Zealands initial feedback on the
treatment of exchange and non-exchange revenue transactions. Auckland Council is
waiting for Audit New Zealands technical team to confirm whether they are comfortable with
the revised proposed accounting policies and disclosures.
Consideration
6.
This report applies to the preparation of pro forma financial statements for the council and
group. The views of local boards have not been sought.
Mori Impact Statement

7.
The pro forma financial statements do not affect the achievement or reporting of Councils
contribution towards Mori outcomes.
Auckland Council Group Pro Forma Financial Statements and Approval of Accounting Policies for 31
December 2014
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General
8.
There are no financial or resourcing issues arising from the adoption of this report.
9.
There are no implementation issues.
Attachments
No.
Title
Pro forma 2015 Q2 Half Year Report
Page
17
Signatories
Author
Francis Caetano - Group Financial Controller
Authorisers

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Item 13
Audit and Risk Committee Oversight of Council Controlled

Organisation Risk
File No.: CP2014/27719
Purpose
1.
To approve the recommendations and processes that ensures the Audit and Risk
Committee has oversight of Auckland Councils substantive Council Controlled
Organisations (CCO) risks in relation to the Auckland Council Annual Report, and in
compliance with the Audit and Risk Committees terms of reference.
Executive Summary
2.
This report recommends the process for the reporting of risks of the substantive CCOs to
the Auckland Councils Audit and Risk Committee.
Recommendation
a)
request each substantive Council Controlled Organisation provide an Audit Summary Letter
and associated actions/plans to resolve issues identified, to the Audit and Risk Committee
at its September meeting, based on the key findings noted by the CCOs auditor.
b)
note each substantive Council Controlled Organisation will provide regular reporting to the
Council Controlled Organisation Governance and Monitoring Committee as part of the
regular quarterly report and include the following risk information:
(i)
how key risks are identified, assessed and managed
(ii)
an update on the approach to risk management, internal audit and external audit
(iii)
progress on current internal and external audit issues
(iv)
any financial impacts that will affect the council group
(v)
c)
any key risks that are of a senior management or governance level that could impact
on the wellbeing or reputation of the Council Controlled Organisation or Auckland
Council
note a report will be provided to the Audit and Risk Committee summarising the risk issues
identified by the substantive Council Controlled Organisations in their quarterly reports to
the CCO Governance and Monitoring Committee.
Discussion
CCO boards and risk management
3.
Risk management is a key responsibility of a board of directors. In putting in place

mechanisms to increase its oversight of risk and assurance, the council must ensure that it
does not undermine the role of the boards nor diminish the boards responsibility. Provided
the committee maintains an oversight of risk rather than management of CCO risk, this
situation should not arise.
Audit & Risk Committee decisions

4.
At the 16 September 2014 Audit and Risk Committee meeting the committee agreed that a
long-term solution covering nature, scope and timing of risk reporting by CCOs would be
developed and implemented for the 2015 reporting programme.
Audit and Risk Committee Oversight of Council Controlled Organisation Risk
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16 December 2014
5.
The Audit and Risk Committee is asking CCOs to provide evidence of a robust process of
risk identification and analysis ensuring risk is appropriately addressed at a governance
level.
6.
The following processes are proposed to assist the committee in exercising active oversight
and accountability of CCOs in an integrated and systematic way.
Audit Summary Letter

7.
An Audit Summary Letter is to be provided to the councils Audit and Risk Committee
outlining the key findings and how the CCO proposes to address the findings. The key
findings could be those points that the Auditor considers essential and necessary
management improvements.
8.
The Audit Summary Letter would preferably be signed by the Chair of the CCO Audit and
Risk Committee (or equivalent).
9.
An example of the Audit Summary Letter has been previously supplied by Watercare
Services Limited and is attached at Appendix A. The Audit and Risk Committee showed a
preference for this format of risk reporting.
Quarterly Reporting : CCO Governance and Monitoring Committee

10.
As part of the Statement of Intent quarterly reporting programme, CCOs will be required to
provide additional risk information as part of their quarterly reporting requirements.
11.
Each CCO will be asked to provide the following information:

(i)
how key risks are identified, assessed and managed
(ii)
an update on the approach to risk management, internal audit and external audit
(iii)
progress on the current internal and external audit issues
(iv)
any financial impacts that will affect the council group
(v)
12.
any key risks that are of a senior management or governance level that could impact
on the wellbeing or reputation of the CCO or Auckland Council
A report will be provided to the Audit and Risk Committee summarising the risk issues
identified by the substantive Council Controlled Organisations in their quarterly reports to the
CCO Governance and Monitoring committee.
Disclosure Statement
13.
Auckland Council currently has a number of bonds quoted on the New Zealand Debt
Exchange as well as the Singapore and Swiss Exchanges. As a result the council is subject
to continuous disclosure obligations which it must comply with under the NZX Main Board
and Debt Market Listing Rules (Listing Rules) and the Financial Markets Conduct Act 2013
(FMCA). Similar obligations apply to the Singapore and Swiss exchanges.
14.
Timely disclosure of material information is essential in maintaining the integrity of the

market and to ensure the market is informed of relevant information in a timely manner so
that investors can make informed investment decisions. Timely disclosure promotes a fair,
orderly and transparent market.
15.
Councils continuous disclosure obligations under the Listing Rules require that once the
council becomes aware of any material information it must immediately release that material
information to the NZX unless certain permitted exceptions apply. The consequences of the
council failing to comply with its continuous disclosure obligations may attract disciplinary
action from the NZX. Such failure will also be a contravention of the FMCA which may give
rise to civil liability for council and for its officers.
16.
In order to maintain councils compliance with FMCA and Listing Rules CCOs must advise
the council of any material information that could affect councils ability to maintain
compliance with its continuous disclosure obligations.
Page 44
17.
Councils legal department are developing a Disclosure Register and implementation of this
process will include the CCOs. The timeframe for this work to be completed is in the first
quarter of 2015.
Consideration
18.
The matters raised in this report relate to CCO accountability and governance which is a
Governing Body function.

19.
Oversight of CCO risk by the councils Audit and Risk Committee has no specific
implications for Mori wellbeing and does not raise any matters requiring iwi consultation.
20.
Internal Audit will be responsible for ensuring compliance with the approved
recommendations outlining risk reporting by CCOs.
Attachments
No.
Title
Watercare Services Limited - Audit Summary Letter
Page
47
Signatories
Author
Josie Meuli - Senior Advisor
Authorisers
John Bishop - Treasurer and Manager CCO Governance & External Partnerships
Page 45
Item 13

16 December 2014
Attachment A
Item 13

16 December 2014
Page 47

16 December 2014
Item 14

File No.: CP2014/28649
Purpose
1.
This report summarises the activities undertaken by the Health and Safety Department to
prepare for the proposed Health and Safety Legislation to be enacted in late 2015, and as
follow-up from our two yearly Accident Compensation Corporation (ACC) audit.
Executive Summary
2.
The continued health and safety of our employees, contractors and visitors is one of our
highest risks and therefore its management is a high priority for the organisation. The
purpose of this report is to advise the committee of the key activities that have been
completed and those that are underway to improve the practices and culture of the
organisation to meet this challenge.
Recommendation
a)
receive this update on Health and Safety activities report.
Discussion
3.
Health and Safety Risk

As an organisation we understand that many of the activities our employees undertake pose
a potential risk to their health and safety, and at times to the health and safety of visitors to
our sites. We manage those risks by using traditional health and safety management
practices such as identifying hazards and investigating incidents. This has led to a
significant drop in Lost Time Injury Frequency Rate (LTIFR, a common measure of safety
performance). LTIFR dropped from 15.4 in October 2012 to 7.95 in October 2013 to 5.1 in
October 2014, an outstanding improvement in performance.
4.
Change in Legislation
New Zealand will have new Health and Safety Legislation in 2015, as a result of the Royal
Commission into health and safety practices in New Zealand. The legislation has not been
enacted yet, but the changes are likely to place significant additional responsibilities on
organisations to improve their health and safety management. Under this legislation it is
likely that elected members will have the due diligence obligations of an officer but will not
be subject to prosecution, if they fail to meet those obligations.
Auckland Council is preparing to meet the requirements of the proposed legislation by;
Conducting a compliance review a check of our current system against the new
legislation (planned for April 2015 when the legislation will be finalised). There will be
actions from the review and these will be planned and implemented before the Act is
enforced in September 2015.
Preparing to meet the officers due diligence requirements there are six requirements
specifically for officers (likely to be the Executive Lead Team) under the proposed
legislation, mainly around positive due diligence. That is, officers are required to understand
what risks there are in the business and how those risks are managed. They are expected
to get first-hand knowledge of those risks and health and safety management techniques.
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16 December 2014
Item 14
5.
Accident Compensation Corporation Workplace Safety Management Practices (ACC

WSMP) Audit
ACC conducted the two yearly audit of the health and safety management system at council
and CCOs in October 2014. The audit found some quality practices in the organization with
five elements judged to be at Tertiary (best) status. However there was insufficient evidence
to maintain our Tertiary experience rating with three elements judged to be at Secondary
status. ACC therefore confirmed in November that council and CCOs rating has dropped to
Secondary and this affects our levy rate, adding an estimated $75,000 in ACC cost per year
at current staffing levels.
The Health and Safety team has been very successful at returning people to meaningful
work when they are injured in the workplace. ACC sets a part of the levy that workplaces
pay based on rehabilitation performance. Auckland Councils good performance has
resulted in a lower calculated levy from ACC and a saving of around $40,000 in ACC cost
per year.
The drop in rating from ACC despite good performance in rehabilitation and Lost Time Injury
Frequency Rate is consistent with rising regulatory expectations of performance in Health
and Safety. Auckland Council will work quickly to use the findings of the audit, and the
recommendations for improvement to inform all our improvement programmes.
6.
Changes in Operating Practices

The Health and Safety team has been working collaboratively with representatives of
business leaders, team members, PSA organisers and delegates to understand and develop
innovative approaches to better manage some of our key risks. Key areas of focus are:
Working alone
Contractor management
Setting standards
Reporting incidents and accidents
Safety sensitive roles
The recommendations from the working groups focusing on the above areas will be
combined with the changes council needs to make to be compliant with the new legislation.
The combined programme of work will then be delivered to all teams in council in the first six
months of 2015 and the improvements measured with follow up actions agreed and
implemented.
Consideration
7.
Local boards have not been consulted because the report primarily deals with internal
management issues.

8.
This report does not have any particular benefit or adverse effects on Mori.
General
9.
There are no general issues related to this report
Page 50
10.
Implementation of Health and Safety Transformation is being planned so that council

improves against;
Some previously identified risk areas (Health and Safety Transformation program)
ACC Audit outcomes
Legislation changes
Attachments
Signatories
Author
Mark Lipman - Head of Health and Safety
Authorisers
Alan Brookbanks People & Capability Director

Page 51
Item 14

16 December 2014

16 December 2014
Item 15

File No.: CP2014/28656
Purpose
1.
This report summarises the activities undertaken by the Risk Management department since
the last report to the Audit and Risk Committee in September 2014.
Executive Summary
2.
The Risk Management department continued to implement the Enterprise Risk Management
Policy and Framework as per the Enterprise Risk Management Strategic Plan 2012-17.
Recommendation
a)
receive the Update on Risk Management Activities report.
Discussion
3.
Appointment of Head of Risk

Council established the Head of Risk position to lead the ongoing development and
implementation of the councils risk management framework, focusing on building the risk
culture. The appointment is now finalised with Jazz Singh being appointed to the position,
He was previously Manager, Property and Commercial within councils Legal Services and
will commence in the role from 19 January 2015. Risk Management portfolio will also report
to the General Counsel, Katherine Anderson from that date onwards.
4.
Risk Report
The top risks were finalised and agreed by the Executive Leadership Team (ELT). The risk
owners continue to work on the risk treatment plans to further improve risk management
processes at council. Auckland Council Risk Report is included as Attachment A.
5.
Organisation-wide Risk Registers

Risk Management is in the process of automating the risk registers from manual-based
Excel spreadsheets to using an existing automated system, Hyperion in a step towards
getting a longer-term council-wide risk management tool/system. This would allow Risk
Management to have single point visibility and adequate audit trails for the mitigation of risks
identified.
6.
Operational Risk
Key operational risks are reported to the ELT in the monthly performance report.
Management are continuing to focus on key risks and improving the risk culture across
council. Auckland Council is on a journey of creating a high performing organisation and
uses the Balanced Scorecard model with key focus areas being Customer and
Community, People, Financial and Productivity. Specific measures were defined and
approved by ELT.
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16 December 2014
7.
Targeted Risk Review

The Information Services (IS) Risk Review was completed. There were a total of 16
strategic and operational level risks identified with clear accountabilities and risk treatments
agreed with the risk owners (IS Lead Team). The IS Risk Management Framework was also
revised with clear tolerance levels defined. In addition, the framework defined the
responsibility of the Head of IS to escalate high and critical risks to the ELT, with an
appropriate risk mitigation plan for the lowering of the risk exposure level. Subsequent to
the review, IS also recruited a Senior IS Risk Advisor to ensure the risks are managed
appropriately.
8.
Continuous Disclosure Policy

Planning is underway to establish a continuous disclosure committee of staff related to
councils bond programme with the NZX. Continuous disclosure is a requirement of the NZX
Main Board and Debt Market Listing Rules, as well as the Financial Markets Conduct Act
2013. The committee membership and policy, as well as quarterly reporting programme, will
be reported to the next meeting of the Audit and Risk Committee in 2015.
9.
Enterprise Risk Management Framework

The ERM Framework identifies risk categories with relevant risk tolerance limits. To ensure
adequate mitigation is in place, specific risk frameworks are being continually developed in
high risk/strategic areas to get greater coverage from a risk management perspective. The
following are being continually improved:
10.
Programme and Project Risk Framework The Project Management Framework at

council provides a standard approach of managing projects with clear gateway,
performance monitoring and progress reporting, project hub, roles and responsibilities,
tools and training, guidelines and collaboration.
Within this framework, risk
management was clearly integrated within the processes and is being continually
improved.
Liability Risk Framework to ensure that council minimizes potential risk exposures
around financial liability, through contractual arrangements, health and safety and other
regulatory or compliance requirements, the team continues to work with the relevant
areas, as and when required. Risk Management continues to collaborate with
Procurement, Legal Services and Insurance to bring consistency in managing
Professional Indemnity and Public Liability insurance requirements across council. In
addition, the transformation of the health and safety programme continues.
Treasury Risk Framework quarterly and ad hoc meetings, as appropriate, are held
with the Treasury team to review treasury risks, potential non-compliance to policy and
emerging risks in the debt markets.
Asset Management Planning Council is exposed to considerable risks due to the

scale of the assets it owns and manages. Risk Management is working closely with the
Asset Management Planning team to further embed risk management requirements. A
steering committee was established and Risk Management continues to provide risk
guidance. This is currently being audited by Audit NZ.
Fraud Risk Framework we continue to work closely with the Integrity and
Investigations Manager to minimize fraud risks and assist as and when required.
Risk Management Workshop

The Risk Management team continues to provide guidance to management and business
areas. Workshops were completed for Brands and Channel (Communication and
Engagement) and Parks, Sports and Recreation (Operations).
11.
CCO Engagement
There are plans for greater engagement with CCOs next year.
Page 54
12.
Project Risk Management

Risk Management provides advice and support to the various project teams by ensuring
risks are identified, documented and monitored as part of the programme and Project Risk
Framework. No new projects were included.
The projects that Risk Management is involved in are:
o
NewCore - currently under review, and proposed Programme Governance Structure,

with clearer terms of reference and responsibilities defined.
Workplace Strategy
The Southern Initiative - currently under review
Payment Card Industry Data Security Standards (PCIDSS) ongoing advice being
provided
Waiheke Library - ongoing advice being provided
Lopdell House and Gallery Refurbishment - completed
Project Connect - completed
NorSGa no advice provided
Quay Street Seawall no advice provided
Auckland Harbour Bridge SkyPath - ongoing advice being provided
Revaluation and Rates - completed
Consideration
13.
Local boards have not been consulted because the report primarily deals with internal
management issues.

14.
This report does not have any particular benefit or adverse effects on Mori.
General
15.
None
16.
None
Attachments
No.
Title
Auckland Council Risk Report December 2014
Page
57
Signatories
Author
Aashmita Naikar - Risk Manager
Authorisers
Alan Brookbanks People & Capability Director

Page 55
Item 15

16 December 2014
Attachment A
Item 15

16 December 2014
Page 57
Attachment A
Item 15

16 December 2014
Page 58
Attachment A
Item 15

16 December 2014
Page 59
Attachment A
Item 15

16 December 2014
Page 60
Attachment A
Item 15

16 December 2014
Page 61
Attachment A
Item 15

16 December 2014
Page 62

16 December 2014
Exclusion of the Public: Local Government Official Information

and Meetings Act 1987
a)
exclude the public from the following part(s) 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
follows.
This resolution is made in reliance on section 48(1)(a) of the Local Government Official
Information and Meetings Act 1987 and the particular interest or interests protected by section 6 or
section 7 of that Act which would be prejudiced by the holding of the whole or relevant part of the
proceedings of the meeting in public, as follows:
C1
Update on Internal Audit Activities
Reason for passing this resolution

in relation to each matter
Particular interest(s) protected

(where applicable)
Ground(s) under section 48(1) for

the passing of this resolution
The public conduct of the part of

the meeting would be likely to result
in the disclosure of information for
which good reason for withholding
exists under section 7.
s7(2)(c)(ii) - The withholding of the

information is necessary to protect
information which is subject to an
obligation of confidence or which
any person has been or could be
compelled to provide under the
authority of any enactment, where
the making available of the
information would be likely to
damage the public interest.
s48(1)(a)
In particular, the report contains

financial and operational
information and details of Internal
Audit activity which if released may
jeopardise the effective delivery of
Internal Audit services.
C2
Update on Integrity and Investigation Activities
Reason for passing this resolution

in relation to each matter
Particular interest(s) protected

(where applicable)
Ground(s) under section 48(1) for

the passing of this resolution

s6(a) - The making available of the

information would be likely to
prejudice the maintenance of the
law, including the prevention,
investigation, and detection of
offences and the right to a fair trial.
s48(1)(a)
In particular, the report contains

financial and operational
information regarding investigation
and other activity, which if released
may compromise the effective
delivery of our integrity and
investigative services.
Public Excluded
Page 63

Auckland Council's Audit and Risk Committee 16 Dec 2014

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Auckland Council's Audit and Risk Committee 16 Dec 2014

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I hereby give notice that an ordinary meeting of the Audit and Risk Committee will be held on:

Tuesday, 16 December 2014

Audit and Risk Committee

Cr Sir John Walker, KNZM, CBE

EXCLUSION OF THE PUBLIC WHO NEEDS TO LEAVE THE MEETING

Access to confidential information is managed on a need to know basis where access to

Members of the meeting

All staff supporting the meeting (administrative, senior management) remain.

Local Board members

Audit and Risk Committee

Local Board Input

Office of the Auditor-General

Briefing by Audit New Zealand on the Long-term Plan consultation

Update on Financial Control interactions with Audit New Zealand during

Auckland Council Group Pro Forma Financial Statements and Approval

Audit and Risk Committee Oversight of Council Controlled Organisation

Update on Health and Safety Activities

Update of Risk Management Activities

Consideration of Extraordinary Items

Procedural Motion to Exclude the Public

Update on Internal Audit Activities

Update on Integrity and Investigation Activities

Audit and Risk Committee

Local Board Input

The local authority by resolution so decides; and

Audit and Risk Committee

The reason why the item is not on the agenda; and

That item may be discussed at that meeting if(i)

the presiding member explains at the beginning of the meeting, at a time

no resolution, decision or recommendation may be made in respect of that item

Audit and Risk Committee

Office of the Auditor-General

To provide an opportunity for the Auditor-General to address the committee.

The Auditor-General will address the meeting.

receive the information provided by the Auditor-General.

Mike Giddey - Democracy Advisor

Grant Taylor - Governance Director

Office of the Auditor-General

Audit and Risk Committee

Briefing by Audit New Zealand on the Long-term Plan consultation

To provide an opportunity for Audit New Zealand to address the Committee.

receive the information provided by Audit New Zealand.

Francis Caetano - Group Financial Controller

Kevin Ramsay - Chief Financial Officer

Briefing by Audit New Zealand on the Long-term Plan consultation document

Update on Financial Control interactions with Audit New Zealand during

receive the report.

Audit and Risk Committee

Audit and Risk Committee

Maori Impact Statement

Morna Macfarlane Financial Compliance Manager

Kevin Ramsay - Chief Financial Officer

Auckland Council Group Pro Forma Financial Statements and Approval

receive the draft pro forma financial statements.

Mori Impact Statement

Audit and Risk Committee

Audit and Risk Committee

There are no implementation issues.

Pro forma 2015 Q2 Half Year Report

Francis Caetano - Group Financial Controller

Kevin Ramsay - Chief Financial Officer

Audit and Risk Committee

Audit and Risk Committee