Agenda of Audit and Risk Subcommittee

Audit and Risk Subcommittee

10 March 2025

Audit and Risk Subcommittee

MINUTES

Minutes of an ordinary meeting of the Audit and Risk Subcommittee held in the Council Chamber, Dunedin Public Art Gallery, The Octagon, Dunedin on Wednesday 04 December 2024, commencing at 2.00 pm

PRESENT

Chairperson	Warren Allen
Deputy Chairperson	Janet Copeland
Members	Cr Christine Garey	Cr Cherry Lucas
	Cr Lee Vandervis

IN ATTENDANCE

Sandy Graham (Chief Executive Officer), Carolyn Allan (Chief Financial Officer), Scott MacLean (General Manager, Climate and City Growth), Jinty MacTavish (Manager, Zero Carbon), Jonathan Rowe (Programme Manager, South Dunedin Future), Jane Pearce (Health and Safety Manager) Richard Davey (Treasurer, Dunedin City Holdings Ltd), Hayley Knight (Assurance Manager) and Cr Sophie Barker

Governance Support Officer Wendy Collard

1 Apologies

An apology has been received from Mayor Jules Radich

Moved (Warren Allen/Cr Christine Garey):

That the Subcommittee:

Accepts the apology from Mayor Jules Radich

Motion carried (AR/2024/034)

2 Confirmation of agenda

Moved (Warren Allen/Cr Cherry Lucas):

That the Subcommittee:

Confirms the agenda without addition or alteration.

Motion carried (AR/2024/035)

3 Declarations of interest

Members were reminded of the need to stand aside from decision-making when a conflict arose between their role as an elected representative and any private or other external interest they might have.

Warren Allen provided an update to his register of interests.

Moved (Warren Allen/Cr Cherry Lucas):

That the Subcommittee:

a) Amends the Elected and Independent Members' Interest Register; and

b) Confirms the proposed management plan for Elected or Independent Members' Interests.

Motion carried (AR/2024/036)

4 Confirmation of Minutes

4.1 Audit and Risk Subcommittee meeting - 7 October 2024

Moved (Warren Allen/Cr Christine Garey):

That the Subcommittee:

a) Confirms the public part of the minutes of the Audit and Risk Subcommittee meeting held on 07 October 2024 as a correct record.

Motion carried (AR/2024/037)

4.2 Audit and Risk Subcommittee meeting - 25 October 2024

Moved (Warren Allen/Cr Cherry Lucas):

That the Subcommittee:

a) Confirms the public part of the minutes of the Audit and Risk Subcommittee meeting held on 25 October 2024 as a correct record.

Motion carried (AR/2024/038)

Part A Reports

5 Audit and Risk Subcommittee Work Plan 2024/2025

A report from Civic provided a copy of the Audit and Risk Subcommittee Work Plan 2024/2025 which has been aligned with work programme scheduling and decision making.

The Chief Financial Officer (Carolyn Allan) responded to questions.

Following discussion it was agreed that the Financial Strategy and Risks would be added to the work plan along with regular reporting on the Climate Change Adaptation and Mitigation Risk and 2030 Zero Carbon Policy.

Moved (Mr Warren Allen/Cr Christine Garey):

That the Subcommittee:

a) Notes the Audit and Risk Subcommittee Work Plan for 2024/2025

Motion carried (AR/2024/039)

6 Audit and Risk Subcommittee Updates Report

A report from Finance provided updates on the progress of various sundry matters that had been noted by the Subcommittee.

The Chief Financial Officer (Carolyn Allan) spoke to the report and responded to questions.

Moved (Warren Allen/Cr Cherry Lucas):

That the Subcommittee:

a) Notes the Audit and Risk Subcommittee Updates Report.

b) Notes the Timeline for Water Services Delivery Plan.

Motion carried (AR/2024/040)

7 DCC Policy Update Report

A report from Finance provided an update on DCC policies as identified in the Audit and Risk Subcommittee (ARS) Workplan and ongoing audit and business improvement activities.

The Chief Financial Officer (Carolyn Allan) and the Assurance Manager (Hayley Knight) spoke to the report and responded to questions.

Following discussion on the Fraud, Bribery and Corruption Prevention Policy, it was agreed that the following minor amendments be made:

1.1 d) to now read: Outline clear roles and responsibilities of the DCC for investing and responding to allegations of fraud, bribery, or corruption.

4.8 to now read: Where fraud is established………………………………..

4.12 h) to now read: robust due diligence enquiry of new suppliers.

Moved (Warren Allen/Cr Cherry Lucas):

That the Committee:

a) Notes the Policy Update Report – December 2024.

b) Endorses approval of the Treasury Risk Management Policy.

c) Approves the Fraud, Bribery and Corruption Prevention Policy.

d) Notes the Fraud, Bribery and Corruption Investigation procedures.

Motion carried (AR/2024/041)

Moved (Warren Allen/Cr Cherry Lucas):

That the Subcommittee:

Pursuant to the provisions of the Local Government Official Information and Meetings Act 1987, exclude the public from the following part of the proceedings of this meeting namely:

General subject of the matter to be considered

Reasons for passing this resolution in relation to each matter

Ground(s) under section 48(1) for the passing of this resolution

Reason for Confidentiality

C4 DCC Risk 'Deep Dive' - Climate Change Mitigation and Adaptation

S7(2)(c)(i)

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 prejudice the supply of similar information or information from the same source and it is in the public interest that such information should continue to be supplied.

S48(1)(a)

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.

Motion carried (AR/2024/042)

The meeting moved into non public at 2.34 pm and reconvened in public at 3.12 pm

7 DCC POLICY UPDATE REPORT (continued)

Following discussion on the Gifts and Hospitality Policy, , it was agreed that the following minor amendments be made:

2.2 to now read: This Policy does not apply to volunteers and those people who provide honorary or unpaid employee of the DCC.

4.1 to now read: The offer of gifts and/or hospitality .from third parties can constitute a personal thank you or be appropriate for relationship management because of the nature of the work. Gifts and/or hospitality ……………..

4.4 to now read: The following is a list of gifts that should not be accepted.

Moved (Warren Allen/Cr Cherry Lucas):

That the Subcommittee:

e) Provide feedback on the Gifts and Hospitality Policy.

f) Notes the Gifts and Hospitality Procedures.

g) Approve the Policy Review Schedule .

h) Notes the Policy Review Process for the Audit and Risk Subcommittee.

Motion carried (AR/2024/043)

8 Health and Safety Monthly Reporting for October 2024

A report from Health and Safety provided the monthly Health, Safety and Wellbeing report for October 2024 for the Subcommittee’s information.

The Health and Safety Manager (Jane Pearce) spoke to the report and responded to questions.

Moved (Warren Allen/Cr Christine Garey):

That the Subcommittee:

a) Notes the monthly Health, Safety and Wellbeing report for October 2024.

Motion carried (AR/2024/044)

9 Financial Report - Period Ended 30 September 2024

A report from Finance provided the financial results for the period ended 30 September 2024 and the financial position as at that date which was presented to the Finance and Council Controlled Organisation Committee meeting held on 14 November 2024.

The Chief Financial Officer (Carolyn Allan) spoke to the report and responded to questions.

Moved (Cr Lee Vandervis/Warren Allen):

That the Subcommittee:

a) Notes the Financial Performance for the period ended 30 September 2024 and the Financial Position as at that date.

Motion carried (AR/2024/045)

10 Waipori Fund - Quarter ending 30 September 2024

A report from Dunedin Treasury Limited provided information on the results of the Waipori Fund for the quarter ended 30 September 2024 which was presented to the Finance and Council Controlled Organisation Committee meeting held on 14 November 2024.

The Treasurer, Dunedin City Holdings Ltd (Richard Davey) spoke to the report and responded to questions.

Moved (Mr Warren Allen/Cr Cherry Lucas):

That the Committee:

a) Notes the report from Dunedin City Treasury Limited on the Waipori Fund for the quarter ended 30 September 2024.

Motion carried (AR/2024/046)

Cr Garey left the meeting at 3.57 pm.

Resolution to Exclude the Public

Moved (Mr Warren Allen/Cr Cherry Lucas):

That the Committee:

Pursuant to the provisions of the Local Government Official Information and Meetings Act 1987, exclude the public from the following part of the proceedings of this meeting namely:

General subject of the matter to be considered	Reasons for passing this resolution in relation to each matter	Ground(s) under section 48(1) for the passing of this resolution	Reason for Confidentiality
C1 Audit and Risk Subcommittee meeting - 7 October 2024 - Public Excluded	S7(2)(h) The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities. S7(2)(c)(i) 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 prejudice the supply of similar information or information from the same source and it is in the public interest that such information should continue to be supplied. S7(2)(b)(ii) The withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information. S7(2)(a) The withholding of the information is necessary to protect the privacy of natural persons, including that of a deceased person.	.
C2 Audit and Risk Subcommittee meeting - 25 October 2024 - Public Excluded	S7(2)(b)(i) The withholding of the information is necessary to protect information where the making available of the information would disclose a trade secret.	.
C3 Treasury Risk Management Compliance Report	S7(2)(h) The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities.	S48(1)(a) 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.
C5 Internal Audit Workplan Update	S7(2)(b)(i) The withholding of the information is necessary to protect information where the making available of the information would disclose a trade secret. S7(2)(c)(i) 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 prejudice the supply of similar information or information from the same source and it is in the public interest that such information should continue to be supplied. S7(2)(h) The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities.	S48(1)(a) 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.
C6 DCC External Audit Actions Update - November 2024	S7(2)(c)(i) 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 prejudice the supply of similar information or information from the same source and it is in the public interest that such information should continue to be supplied.	S48(1)(a) 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.
C7 Audit Engagement Letter (Draft)	S7(2)(i) The withholding of the information is necessary to enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations).	S48(1)(a) 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.
C8 Dunedin City Holdings Ltd - Update on Audit and Risk Activity	S7(2)(b)(ii) The withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information.	S48(1)(a) 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.
C9 DCC Risk 'Deep Dive' - Fraud Risk Management	S7(2)(c)(i) 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 prejudice the supply of similar information or information from the same source and it is in the public interest that such information should continue to be supplied.	S48(1)(a) 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.

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, or Section 6 or Section 7 or Section 9 of the Official Information Act 1982, as the case may require, which would be prejudiced by the holding of the whole or the relevant part of the proceedings of the meeting in public are as shown above after each item.

That Mark Cervantes (Crowe) be permitted to attend the meeting, after the public has been excluded, because of their knowledge of Items C5. This knowledge, which would been of assistance in relation to the matters discussed, was relevant because they would be reporting on the item under consideration.

Motion carried (AR/2024/047)

The meeting moved into non-public at 3.58 pm and concluded at 5.12 pm.

..............................................

CHAIRPERSON

Audit and Risk Subcommittee

10 March 2025

Audit and Risk Subcommittee Updates Report

Department: Finance

EXECUTIVE SUMMARY

1 This report provides updates on the progress of various sundry matters that have been noted by the Subcommittee.

RECOMMENDATIONS

That the Subcommittee:

a) Notes the Audit and Risk Subcommittee Updates Report

b) Notes the OAG Report: Observations from 2024-34 long term plans (Attachment A)

c) Notes the WEF Global Risks Report 2025: Key Findings (Attachment B)

DISCUSSION

1 Insurance

2 Following the update to the National Seismic Hazard Model, Council commissioned work to model and understand earthquake loss for below-ground assets to inform insurance loss limits. This modelling has been completed and a draft report has been received. Results from the modelling indicate that no significant changes are required.

3 The Business Interruption review is yet to be completed. This work is expected to inform the 1 July 2025 renewal process which commences later this month.

2 9 Year Plan

4 A 9-year plan Council meeting was held on 28 - 30 January 2025, where activities and budgets were presented to Council for its consideration. Following this, the first version of the draft consultation document was provided to Audit NZ on 3 February 2025.

5 The audit of the consultation document is in progress. A “hot review” of the consultation document is scheduled to be undertaken by the Office of the Auditor General during the week commencing 10 March 2025. Adoption of the consultation document is scheduled for the 26 March 2025 Council meeting.

6 Alongside the development of this 9-year plan, is the development of the “Local Water Done Well – Ōtepoti” consultation document that discusses potential models for delivering water services. Both consultations will be undertaken at the same time, along with a joint hearing in early May.

7 A decision on the delivery model to be used for Dunedin will be made in late May, and the final 9-year plan document will reflect that decision. Further discussion on Local Water Done Well is provided below.

8 A high-level timetable for the remainder of the 9-year plan project is as follows:

Timing	Task
March 2025	Audit “Hot review”, completion of audit Adoption of the 9-year plan consultation document.
31 March to 30 April 2025	Engagement and submission period
5 – 8 May 2025 26 – 29 May 2025	Hearings Deliberations
30 June 2025	Adoption of the 9-year plan

4 Local Water Done Well

9 The Government is now in the final stage of their three-stage process implementing its “Local Water Done Well” (LWDW) reform programme.

10 The first stage of LWDW saw the repeal of legislation relating to large water services entities. This was in February 2024.

11 The second stage of LWDW was implemented with the passing of the Local Government (Water Services Preliminary Arrangements) Act 2024 (Preliminary Act) on 2 September 2024. As a result, Council is required to prepare and submit a WSDP to the Secretary for Local Government by 3 September 2025.

12 The third stage of LWDW is now underway with the introduction of the Local Government (Water Services) Bill (the December Bill) on 10 December 2024. The December Bill provides the enduring settings for LWDW including the framework for economic regulation as well as the more detailed powers and duties for service delivery models. Council has made a submission on the Bill which is expected to be enacted in mid-2025. The Bill provides for:

i. Structural arrangements for water service delivery including establishment, ownership, and governance of water organisations.

ii. Operational matters such as arrangements for charging, bylaws, and management of stormwater networks.

iii. Planning, reporting, and financial management.

iv. A new economic regulation and consumer protection regime.

v. Changes to the water quality regulatory framework and the water services regulator.

13 Guidance on the future water services delivery system was released by the DIA on 8 August 2024, and further on the WSDP on 3 September 2024. The Guidance was subsequently updated in December 2024.

14 At the Council meeting on 26 February 2025, Council was considered a report “Local Water Done Well – Decision on Water Models for Consultation”. The Council decided, for the purposes of consultation, on:

a) its preferred water services delivery model (Preferred Option); and

b) what other option(s) it will consult on (Alternative Option(s))

5 (together, referred to as “the Water Consultation Options”).

15 Council selected the in-house delivery option as the preferred option for DCC’s future water services delivery model, and the single CCO (asset owning) option as an alternative option.

16 Staff are preparing the LWDW consultation document accordingly. As discussed above, the LWDW consultation document is being developed alongside the development of the 9-year plan consultation document. Both consultations will be undertaken at the same time, along with a joint hearing in early May.

17 A decision on the delivery model to be used for Dunedin will be made as soon as possible after the Hearings. A decision on the WSDM would need to be made in mid-May so that staff can update the 9-year plan to reflect the WSDM, as required, and to allow time for the Audit Report on the 9-year plan.

18 Council will adopt its 9-year plan on 30 June 2025, and will submit its WSDP to the Secretary for Local Government before 3 September 2025.

19 At the Council meeting on 26 February 2025, Council also considered a report on “Memorandum of Understanding with Christchurch City Council – Potential for Shared Services”. This report provided Council with information regarding a proposed process with Christchurch City Council (CCC) to investigate whether there are opportunities for certain shared water services (Shared Services) between the DCC and CCC.

20 The aim of Shared Services would be to reduce costs and enhance water services for each council’s communities. This aligns with the objectives of the LWDW reforms. A memorandum of understanding (MOU) has been prepared to record the proposed process for investigating the possibility of Shared Services.

21 Shared Services would not affect the underlying ownership of each council’s existing water assets as the services would be managed through contracts.

6 Policy Updates

22 There are no updated policies presented at this meeting. The following policies are undergoing review:

a) Asset Management Policy

b) Asset Disposal and Write-Off Policy

c) ICT Acceptable Use Policy

d) Information Management Policy

e) Purchase Card Policy

f) Staff Code of Conduct

g) Sensitive Expenditure Policy

23 After the review process, updated copies of DCC policies will be provided to the Subcommittee for either feedback or noting.

7 OAG Report: Observations from audits of council’s 2024-34 long term plans

24 The Office of the Auditor General (OAG) have release a report outlining the observations from audits conducted on council’s 2024-34 long term plans.

25 The Dunedin City Council is not in this audit report as it was one of 12 council’s that opted to defer and carry out a 9-year plan. The report is included as Attachment A for noting.

8 World Economic Forum – Global Risk Report

26 The World Economic Forum (WEF) has produced insights report on the global risk landscape. This report is based on findings from the Global Risks Perception Survey, which is conducted with over 900 experts across academic, business, government, the international community, and civil society.

27 This information can be useful in understanding the global risk trends and possible impacts for the Dunedin City Council (DCC).

28 The summary section has been attached to this report for noting (Attachment B). The full report can be found via the following link: https://reports.weforum.org/docs/WEF_Global_Risks_Report_2025.pdf

29 The main global findings from the 2025 report are:

a) The perception on the global state now and into the future is ‘bleak’ with many expecting unsettled times in the next 2 years and turbulent in the next 10 years (see Figure 1)

b) Geopolitical concerns have risen to now be the number 1 and 3 top risks for the current global risk landscape (see Figure 2).

c) The top risk for the two-year horizon is misinformation and disinformation (see Figure 3). This is important to highlight for the DCC environment with both the 9-year plan consultation process and the local government elections coming up. Care needs to be taken to support effective and accurate communication between the DCC and the community to support trust in the Council.

d) “Inequality” has come out as the top interconnected risk this year, suggesting perceived fragility to social stability over the next two years. This has come about through challenges in the economic environment, social polarisation and misinformation and disinformation as well as other risks.

e) Environmental risks still feature prominently in the 10-year horizon (see Figure 3) and is the top ranked risk in the civil sector for the next 2 years (see Figure 4).

f) The use of AI has continued to grow, but the risk of adverse effects of AI technologies is not featured in the top 10 for the 2-year outlook but is on the 10-year outlook.

30 From a New Zealand perspective, the top 5 risks (see Figure 5) are mostly economic based, alongside extreme weather, and poverty and inequality.

31 The information provided from the WEF Global Risk Report will be used to analyse the DCC corporate risk register and the potential impacts to the DCC.

9 Figure 1: Short- and long-term global outlook.

11 Figure 2: The top five risks in the current global risk landscape.

13 Figure 3: The top ten risks predicted globally for the next 2 years and 10 years.

14 Figure 4: The top ten risks predicted for the Civil Society for the next 2 years.

16 Figure 5: The top five risks identified by risk professionals in New Zealand.

OPTIONS

17 This is a noting report so there are no options.

Signatories

Author:	Hayley Knight - Assurance Manager
Authoriser:	Carolyn Allan - Chief Financial Officer

Attachments

	Title	Page
⇩a	OAG Report: Observations from 2024-34 long term plans	34
⇩b	WEF Global Risks Report 2025: Key Findings	74

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This report provides an update on the DCC Internal Audit Workplan, which is a regulatory function and is considered good quality and cost effective.

Fit with strategic framework This report provides an update on the progress made by Council to deliver upon the activities identified by the Audit and Risk Subcommittee, which is a regulatory function and considered good quality and cost effective

	Contributes	Detracts	Not applicable
Social Wellbeing Strategy	✔	☐	☐
Economic Development Strategy	✔	☐	☐
Environment Strategy	✔	☐	☐
Arts and Culture Strategy	✔	☐	☐
3 Waters Strategy	✔	☐	☐
Future Development Strategy	✔	☐	☐
Integrated Transport Strategy	✔	☐	☐
Parks and Recreation Strategy	✔	☐	☐
Other strategic projects/policies/plans	☐	☐	✔

This report provides an update on the progress made by Council to deliver upon the activities identified by the Audit and Risk Subcommittee, which is a regulatory function and considered good quality and cost effective

Māori Impact Statement

There are no known impacts for mana whenua.

Sustainability

There are no implications for sustainability

Zero carbon

There are no implications for zero carbon.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

There are no known implications.

Financial considerations

No financial implications have been identified

Significance

This report is rated low under the Council’s Significance and Engagement Policy.

Engagement – external

No external engagement has been undertaken.

Engagement - internal

Activities noted herein include cross Council engagement and collaboration.

Risks: Legal / Health and Safety etc.

No risks have been identified.

Conflict of Interest

There are no conflict of interest identified.

Community Boards

There have been no implications for Community Boards identified.

Audit and Risk Subcommittee

10 March 2025

Financial Report - Period ended 31 December 2024

Department: Finance

EXECUTIVE SUMMARY

1 This report provides the financial results for the period ended 31 December 2024 and the financial position as at that date. This report was presented to the Council meeting held on 26 February 2025.

2 As this is an administrative report only, there are no options or Summary of Considerations.

Financial Overview

For the period ended 31 December 2024

RECOMMENDATIONS

That the Committee:

a) Notes the Financial Performance for the period ended 31 December 2024 and the Financial Position as at that date.

BACKGROUND

3 This report provides the financial statements for the period ended 31 December 2024. It includes reports on financial performance, financial position, cashflows and capital expenditure. Summary information is provided in the body of this report with detailed results attached. The operating result is also shown by group, including analysis by revenue and expenditure type.

DISCUSSION

4 This report includes a high-level summary of the financial information to 31 December 2024. Please refer to Attachment I for the detailed financial update.

Statement of Financial Performance

5 Revenue was $196.467 million for the period or $2.372 million less than budget.

6 Operating revenue (external and internal combined) was unfavourable $881k mainly due to lower-than-expected revenue from the Parking Services and Aquatic Services activities.

7 Grants revenue was unfavourable $2.346 million reflecting funding decisions by NZTA under the National Land Transport Programme, and timing of the transport contractor work programme.

8 Expenditure was $221.256 million for the period, or $7.648 million less than budget.

9 Personnel costs was unfavourable $526k, reflecting overtime payments for 3 waters and union negotiated contract increases, which is being managed with vacancy management. The month of December showed a favourable variance of $1.030 million, primarily driven by changes in the annual leave provision as a result of staff taking leave during the Christmas holiday period.

10 Operations and maintenance expenditure was favourable $1.093 million; however, this favourable variance was offset by an unfavourable $971k variance in internal costs, due largely to landfill disposal costs for kerbside collections now recorded as internal costs. Unfavourable Transport maintenance costs are more than offset by under expenditure in other activities, including Three Waters and Waste and Environmental Services. Transport costs included emergency works totalling $1.718 million associated with the October rain event.

11 Depreciation costs were favourable $7.036 million, mainly due to the revaluation of Three Waters assets, and to a lesser extent Property and Parks assets.

12 Interest costs were favourable $1.689 million, reflecting a lower interest rate than budgeted and the timing of new loan advances.

13 Year to date the Waipori Fund has reported a net operating surplus of $7.412 million, $5.199 million more than budget. New Zealand and international equities saw continued increases in value during December, largely offset however by a reduction in value for Australian equities. Fixed term investment saw an increase in value for the month, maintaining favourable results for the year to date.

Statement of Financial Position

14 Capital expenditure was $70.535 million or 70.8% of the year-to-date budget. Capital expenditure in most activities was generally within budget for the period.

15 The loans balance at 31 December was $630.972 million which was $24.501 million less than budget. This a reflection of the capital expenditure programme, which was underspent by $29.067 million to December. Additional to the December loans balance there was accrued interest of $6.527 million.

16 Attachment A includes a chart showing actual group and DCC debt for the years ending June 2003-2024. It provides forecast information for the years ending June 2024-2027 based on the current Statements of Intent (SOI), and the first two years of the draft 9 year plan.

OPTIONS

17 As this is an administrative report only, there are no options provided.

NEXT STEPS

18 Financial Result Reports continue be presented to future meetings of either the Finance and Council Controlled Organisation Committee or Council.

Signatories

Author:	Hayden McAuliffe – Financial Services Manager
Authoriser:	Carolyn Allan – Chief Financial Officer

Attachments

	Title	Page
⇩a	Dashboard Summary Financial Information	113
⇩b	Debt Graph	114
⇩c	Statement of Financial Performance	115
⇩d	Statement of Financial Position	116
⇩e	Statement of Cashflow	117
⇩f	Capital Expenditure Summary	118
⇩g	Capital Expenditure Detailed Programme	119
⇩h	Operating Variances	126
⇩i	Detailed Financial Update	127

Audit and Risk Subcommittee

10 March 2025

Waipori Fund - Quarter ending 31 December 2024

Department: Finance

EXECUTIVE SUMMARY

1 The attached report from Dunedin City Treasury Limited provides information on the results of the Waipori Fund for the quarter ended 31 December 2024.

RECOMMENDATIONS

That the Subcommittee:

a) Notes the report from Dunedin City Treasury Limited on the Waipori Fund for the quarter ended 31 December 2024.

DISCUSSION

2 The Waipori Fund Statement of Investment Policy and Objectives (SIPO) requires quarterly reporting on the performance and financial position of the fund.

3 Dunedin City Treasury Limited has provided the Waipori Fund report for the December 2024 quarter. The report is provided as Attachment A.

OPTIONS

4 As this is a noting report, no options are provided.

NEXT STEPS

5 Quarterly reporting on the performance and financial position of the fund will be provided to future meetings of either the Financial and Council Controlled Organisations Committee or Council.

Signatories

Authoriser:

Carolyn Allan - Chief Financial Officer

Attachments

	Title	Page
⇩a	Waipori Fund - December 2024 Quarter	142

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This decision enables democratic local decision making and action by, and on behalf of communities.

Fit with strategic framework

	Contributes	Detracts	Not applicable
Social Wellbeing Strategy	☐	☐	✔
Economic Development Strategy	☐	☐	✔
Environment Strategy	☐	☐	✔
Arts and Culture Strategy	☐	☐	✔
3 Waters Strategy	☐	☐	✔
Spatial Plan	☐	☐	✔
Integrated Transport Strategy	☐	☐	✔
Parks and Recreation Strategy	☐	☐	✔
Other strategic projects/policies/plans	☐	☐	✔

Reporting on the performance of the Waipori Fund does not contribute directly to the Strategic Framework.

Māori Impact Statement

Investment returns from the Waipori Fund impact on the level of rates payable, and therefore impact across all Dunedin communities including Māori.

Sustainability

There are no impacts for sustainability.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

A review of the SIPO for the Waipori Fund will be taken into account when developing a Financial Strategy for the 9 year plan 2025-34.

Financial considerations

Financial considerations are presented in the Waipori Fund report for the March 2024 quarter.

Significance

This report is considered to be of low significance in terms of the Council’s Significance and Engagement Policy.

Engagement – external

There has been no external engagement.

Engagement - internal

There has been no internal engagement.

Risks: Legal / Health and Safety etc.

There are no identified risks.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

There are no implications for Community Boards.

Audit and Risk Subcommittee

10 March 2025

Resolution to Exclude the Public

That the Audit and Risk Subcommittee:

Pursuant to the provisions of the Local Government Official Information and Meetings Act 1987, exclude the public from the following part of the proceedings of this meeting namely:

General subject of the matter to be considered	Reasons for passing this resolution in relation to each matter	Ground(s) under section 48(1) for the passing of this resolution	Reason for Confidentiality
C1 Confirmation of the Confidential Minutes of Audit and Risk Subcommittee meeting - 4 December 2024 - Public Excluded	S7(2)(h) The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities. S7(2)(c)(i) 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 prejudice the supply of similar information or information from the same source and it is in the public interest that such information should continue to be supplied. S7(2)(b)(i) The withholding of the information is necessary to protect information where the making available of the information would disclose a trade secret. S7(2)(i) The withholding of the information is necessary to enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations). S7(2)(b)(ii) The withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information.	.
C2 Treasury Risk Management Compliance Report	S7(2)(h) The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities.	S48(1)(a) 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.
C3 Report to the Council on the Audit of Dunedin City Council for the year end 30 June 2024	S7(2)(b)(ii) The withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information.	S48(1)(a) 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.
C4 9 Year Plan Audit - Update	S7(2)(b)(i) The withholding of the information is necessary to protect information where the making available of the information would disclose a trade secret. S7(2)(c)(i) 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 prejudice the supply of similar information or information from the same source and it is in the public interest that such information should continue to be supplied. S7(2)(h) The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities.	S48(1)(a) 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.
C5 Dunedin City Holdings Ltd - Update on Audit and Risk Activity	S7(2)(b)(ii) The withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information.	S48(1)(a) 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.
C6 Internal Audit Workplan Update	S7(2)(b)(i) The withholding of the information is necessary to protect information where the making available of the information would disclose a trade secret. S7(2)(c)(i) 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 prejudice the supply of similar information or information from the same source and it is in the public interest that such information should continue to be supplied. S7(2)(h) The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities.	S48(1)(a) 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.
C7 DCC Internal Audit Actions Update	S7(2)(c)(i) 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 prejudice the supply of similar information or information from the same source and it is in the public interest that such information should continue to be supplied.	S48(1)(a) 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.
C8 DCC Risk 'Deep Dive' - Fraud Risk Management	S7(2)(c)(i) 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 prejudice the supply of similar information or information from the same source and it is in the public interest that such information should continue to be supplied.	S48(1)(a) 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.
C9 Gifts and Hospitality Register	S7(2)(a) The withholding of the information is necessary to protect the privacy of natural persons, including that of a deceased person.	S48(1)(a) 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.
C10 Chairperson's Report	S7(2)(a) The withholding of the information is necessary to protect the privacy of natural persons, including that of a deceased person.	S48(1)(a) 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.
C11 Legal Matters	S7(2)(g) The withholding of the information is necessary to maintain legal professional privilege.	S48(1)(a) 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.
C12 Protected Disclosure Register - February 2025	S7(2)(a) The withholding of the information is necessary to protect the privacy of natural persons, including that of a deceased person. S7(2)(c)(i) 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 prejudice the supply of similar information or information from the same source and it is in the public interest that such information should continue to be supplied.	S48(1)(a) 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.
C13 Investigation Register - February 2025	S7(2)(a) The withholding of the information is necessary to protect the privacy of natural persons, including that of a deceased person. S7(2)(c)(i) 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 prejudice the supply of similar information or information from the same source and it is in the public interest that such information should continue to be supplied.	S48(1)(a) 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.

That Rudie Tomlinson (Director, Audit New Zealand) be permitted to attend the meeting, after the public has been excluded, because of his knowledge of Items C3. This knowledge, which would been of assistance in relation to the matters discussed, was relevant because they would be reporting on the item under consideration.

Chairperson	Mr Warren Allen
Deputy Chairperson	Ms Janet Copeland
Members	Cr Christine Garey	Cr Cherry Lucas
	Mayor Jules Radich	Cr Lee Vandervis

	Title	Page
A ⇩	Minutes of Audit and Risk Subcommittee meeting held on 4 December 2024	11

Author:	Wendy Collard - Governance Support Officer
Authoriser:	Carolyn Allan - Chief Financial Officer

Author:	Jane Pearce - Health and Safety Manager
Authoriser:	Mike Cartwright – Acting General Manager Corporate Services