Minutes of Finance Audit & Risk Sub-committee

1. Welcome/Apologies/Notices

The Chairman welcomed everyone present to the meeting.

There were no apologies, nor notices.

2. Conflict of Interest Declarations

There were no conflict of interest declarations.

3. Confirmation of Minutes of the Finance Audit & Risk Sub-committee Held on 22 September 2015

Resolution

Minutes of the Finance Audit & Risk Sub-committee held on Tuesday 22 September 2015, a copy having been circulated prior to the meeting, were taken as read and confirmed as a true and correct record.

Scott/Wilson

CARRIED

4. Matters Arising from Minutes of the Finance Audit & Risk Sub-Committee Held on 22 September 2015

There were no matters arising from the minutes.

Follow-ups from Previous Finance Audit & Risk Sub-committee Meetings

Mrs Lambert updated the committee on the status of the follow-ups, including Napier Port looking at their internal processes before being able to provide an answer of whether or not they can change their financial year dates to align with Council and HBRIC Ltd.

There was discussion about the Conflict of Interest staff policy, and councillors raised issues with ownership of shares and whether there should be a threshold, perceived conflict of interest and personal conflict, a suggestion that all staff conflicts should be dealt with by the Chief Executive, advice of a conflict of interest arising for staff should be made in writing, staff should not use Council materials for either personal or other work, and the issue of staff submissions in a personal capacity. It was agreed that the concerns raised by Councillors would be considered through the next review of the Policy – due November 2015.

FIN8/15

Resolution

1. That the Committee receives the report “Follow-ups from Previous Finance Audit and Risk Sub-committee Meetings”.

Wilson/Scott

CARRIED

Costings, Scope and Priorities for Internal Audits

Mr Paul Drury outlined the prioritised internal audits which have been costed by PriceWaterhouse Coopers to enable a decision on which projects to undertake, when.

Mr John Dixon - Partner PricewaterhouseCoopers provided information on queries traversing Terms of Reference for the work to be undertaken, prioritising the audits according to the level of residual risk, and the need to undertake a s17A review of the Operations Group governance, as well as the budget available to carry out the internal audit work programme.

FIN9/15

Resolutions

The Finance, Audit and Risk Subcommittee recommends that the Corporate and Strategic Committee:

1. Agrees that the decisions to be made are not significant under the criteria contained in Council’s adopted Significance and Engagement Policy, and that Council can exercise its discretion under Sections 79(1)(a) and 82(3) of the Local Government Act 2002 and make decisions on this issue without conferring directly with the community.

2. Agrees that the Business Continuity and Disaster Recovery Plan internal audit be carried out during the current financial year (2015-16) with the following internal audits being carried out as the Sub-committee approves and budgets allow.

2.1 Stakeholder relationship management

2.2 Fraud prevention and detection review (including conflicts of interest).

3. Notes that the cost of the audit to be carried out in 2015-16 will be funded from the financial provisions set aside for such audits in the Annual Plan.

Scott/Wilson

CARRIED

Council Insurance Programme

Mr Matthew Meacham of JLT insurers outlined the insurance policies under the HB councils shared insurance programme. Discussion traversed:

· breakdown of HBRC ‘specific’ coverage as opposed to the ‘group’

· premiums and how HBRC specific contributions are determined

· fair cover for personal injury/accident – states Elected Members, Maori members and all other employees of Council – should be Elected Members, Maori Committee and Regional Planning Committee members … to be specific and correct

· public liability and professional indemnity – confirm, in writing, cover for defence costs and that defence costs are ring-fenced, including which specific Insurance Policy provides the insurance

· wreck removal insurance – confirm whether HBRC has claimed for wreck removal in the past

· identify uninsured risks that are not insured elsewhere – Hall Hirers Liability, Rural Fire Fighting Costs insurance, Cyber liability, employee disputes, computer & machinery breakdown, infrastructure

Mr Sam Ketley, Associate Director, of Aon, provided an overview of Council’s infrastructure insurance. Discussion covered:

· HBRC’s infrastructure insured for replacement cost as per valuation

· Central Government reviewing their 60% infrastructure coverage.

FIN10/15

Resolution

1. That the Finance Audit & Risk Subcommittee receives the Council Insurance Programme report and presentations provide by Jardine Lloyd Thompson and Aon as Council appointed insurance brokers.

Barker/Wilson

CARRIED

The meeting adjourned at 3.05pm and reconvened at 3.10pm

Risk Assessment and Management

Mr John Dixon - Partner PricewaterhouseCoopers provided an overview of his findings from reviewing the September presentation of Quantate and the Risk framework development to date. He expressed the view that Council has made a good start and provided some guidance around governance level responsibilities and some recommendations for how to more efficiently manage and report on risks. Discussions traversed:

· reporting mechanisms

· defining the acceptable risk profile using a rating system (1-5 or 1-10) to inform staff of what levels of residual risk are acceptable to Council for different types of risks

· opportunity with ‘induction’ of independent member to hold a workshop and review the Risk Framework to identify gaps

· priorities for the work outlined in the PWC letter.

FIN11/15

Resolution

1. That the Finance, Audit and Risk Subcommittee receives the attached paper “Risk Assessment and Management” from John Dixon, Pricewaterhouse Coopers.

Scott/Barker

CARRIED

Charter for the Finance Audit & Risk Sub-Committee

Mrs Lambert outlined the Charter as drafted, requesting feedback and input. There were suggestions for amendment including the Members’ Power and Authority section.

FIN12/15

Resolutions

1. That the Finance Audit & Risk Sub-committee requests that the Chief Executive notes the agreed amendments and brings the updated Charter to the next Finance Audit & Risk Sub-committee meeting for confirmation.

Barker/Wilson

CARRIED

10.

Work Programme Going Forward

The paper was taken as read.

Recommendation

1. That the Finance, Audit and Risk Sub-committee receives and considers the “Work Programme Going Forward” report.

11.

Independent Member

FIN13/15

Resolution

That the Sub-committee excludes the public from this section of the meeting, being Agenda Item 11 Independent Member with the general subject of the item to be considered while the public is excluded; the reasons for passing the resolution and the specific grounds under Section 48 (1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution being as follows:

GENERAL SUBJECT OF THE ITEM TO BE CONSIDERED	REASON FOR PASSING THIS RESOLUTION	GROUNDS UNDER SECTION 48(1) FOR THE PASSING OF THE RESOLUTION
Independent Member	7(2)(a) That the public conduct of this agenda item would be likely to result in the disclosure of information where the withholding of the information is necessary to protect the privacy of natural persons.	The Council is specified, in the First Schedule to this Act, as a body to which the Act applies.

Barker/Wilson

CARRIED

The meeting went into public excluded session at 3.30pm and out of public excluded session at 3.45pm

Closure:

There being no further business the Chairman declared the meeting closed at 3.45pm on Monday 9 November 2015.

Signed as a true and correct record.

DATE: ................................................ CHAIRMAN: ...............................................