The audit and risk committee meeting was held on 24 March 2016. Apologies were received from Sangster and Mr Graham Naylor. All other councillors were present.
The agenda included: (1) Audit management report for the annual report 2014-15, (2) Internal audit update, (3) NZTA investment audit, and (4) 2015-16 audit arrangements letter. In committee (in confidence) items included: (1) Review of leasing procedures, (2) Reputational risk register, and (3) internal audit – payroll control review.
Audit management report
At the conclusion of each audit the Audit Director issues an management report which is primarily focused on key findings and recommendations on significant matters arising from the audit, including procedural change suggestions.
This was another good audit report for council. There were no significant matters raised in the Audit NZ management report. As in previous years Council received an unmodified audit opinion for the Annual Report 2014-15.
Internal audit update
The subcommittee received the internal audit update report. Highlights included:
- Security Issues. There appeared to have been a break-in to the Richmond office tender box. Security would be increased.
- Revaluations. Infrastructure assets (roads and bridges, wastewater, solid waste, water supply, stormwater, coastal assets and river protection assets) were revalued as at 31 March 2015. They are next scheduled to be revalued in March 2018. Assets not valued, and recorded at cost, include land under roads and library collections. A valuer has been commissioned to value the port assets for the 2015-16 Annual Report. Land and buildings are scheduled to be revalued as at 30 June 2016.
- Public benefit entity standard. With the change to Public Benefit Entity (PBE) accounting standards staff will review whether the annual report financial statements and disclosure notes to the accounts can be decreased in volume and complexity to ensure they are more understandable for the readers. Staff are currently reviewing the notes and layout of the annual report to further enhance the disclosures and fulfill requirements under the accounting standards.
- Accounts receivable. Staff have commenced a full review of the Accounts Receivable function, with a focus on debt management, risk mitigation, policy, and procedural compliance. The current debt management system was quite cumbersome and there were some longstanding debt legacy issues. The review would cover reporting of debt and ‘best practice’ on managing accounts receivable.
- Redundancy payments. There has been one redundancy during this financial year. This was due to a restructure of the Records Management department.
NZTA Investment Audit
The subcommittee received the NZTA investment audit report. The audit report noted that the council exhibited sound management practices to support the delivery of its land transport programme.
The NZ Transport Agency (NZTA) provides a substantial subsidy to Tasman District Council towards its roading programme. Every 3 years the NZTA carries out an investment audit to provide assurance that the land transport programme is being well managed and delivering value for money. The total of the subsidy in the period reviewed was $19.5 million.
Audit arrangements letter
The subcommittee received the audit arrangements letter report and approved the audit arrangements, with amendments to the timetable and corrections to the references to ‘city council’.
Councillors raised concerns about the references to ‘city council’ within the audit arrangement letter, and Mr Kearney (the auditor) said this would be corrected for the copy due to be signed. The Subcommittee anticipated reviewing the draft Annual Report at its 8 September 2016 meeting.
Agenda and minutes
The agenda and minutes are located at www.tasman.govt.nz/council/council-meetings/subcommittee-meetings/audit-subcommittee-meetings/?path=/EDMS/Public/Meetings/AuditSubcommittee/2016/2016-03-24.