Agenda of Audit and Risk Subcommittee - Monday, 1 September 2025

Audit and Risk Subcommittee

1 September 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 Monday 16 June 2025, commencing at 11.30 am

PRESENT

Chairperson

Mr Warren Allen

Members

Cr Christine Garey

Cr Cherry Lucas

Cr Lee Vandervis

IN ATTENDANCE

Sandy Graham (Chief Executive Officer), Rob West (General Manager Corporate Services), Hayden McAuliffe (Financial Services Manager), Hayley Knight (Assurance Manager), Mandy Grieve (Heath and Safety Advisor), Richard Davey (Treasurer, Dunedin City Holdings Ltd), Serge Kolman (Procurement and Contracts Manager), Jackie Harrison (Manager Governance), Cr Sophie Barker and Cr Carmen Houlahan

Governance Support Officer Wendy Collard

1 Apologies

Moved (Warren Allen/Cr Cherry Lucas):

That the Subcommittee:

Accepts the apology from Janet Copeland (for absence) and Mayor Radich (for lateness)

Motion carried (AR/2025/014)

2 Confirmation of agenda

Moved (Warren Allen/Cr Cherry Lucas):

That the Subcommittee:

Confirms the agenda without addition or alteration

Motion carried (AR/2025/015)

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.

Moved (Warren Allen/Cr Cherry Lucas):

That the Subcommittee:

a) Notes the Elected or Independent Members' Interest Register; and

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

Motion carried (AR/2025/016)

4 Confirmation of Minutes

4.1 Audit and Risk Subcommittee meeting - 10 March 2025

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 10 March 2025 as a correct record.

Motion carried (AR/2025/017)

Part A Reports

5 Audit and Risk Subcommittee Work Plan 2025

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

The Chief Executive Officer (Sandy Graham) and the Assurance Manager (Hayley Knight) spoke to the report and responded to questions.

Moved (Warren Allen/Cr Cherry Lucas):

That the Committee:

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

Motion carried (AR/2025/018)

6 Audit and Risk Subcommittee Updates Report - June 2025

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

The Chief Executive Officer (Sandy Graham), the Financial Services Manager (Hayden McAuliffe) and the Assurance Manager (Hayley Knight) spoke to the report and responded to questions.

Moved (Warren Allen/Cr Cherry Lucas):

That the Committee:

a) Notes the Audit and Risk Subcommittee Updates Report – June 2025

Motion carried (AR/2025/019)

7 Financial Report - Period ended 30 April 2025

A report from Finance provided the financial results for the period ended 30 April 2025 and the financial position as at that date. It noted that the report was presented to the Finance and Council Controlled Committee meeting held on 11June 2025.

The Financial Services Manager (Hayden McAuliffe) spoke to the report and responded to questions.

Moved (Warren Allen/Cr Cherry Lucas):

That the Subcommittee:

a) Notes the Financial Performance for the period ended 30 April 2025 and the Financial Position as at that date.

Motion carried (AR/2025/020)

8 Waipori Fund - Quarter Ending 31 March 2025

A report from Dunedin City Treasury Limited provided information on the results of the Waipori Fund for the quarter ended 31 March 2025. It noted that the report was presented to the Finance and Council Controlled Committee meeting held on 11June 2025.

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

Moved (Warren Allen/Cr Cherry Lucas):

That the Subcommittee:

a) Notes the report from Dunedin City Treasury Limited on the Waipori Fund for the quarter ended 31 March 2025

Motion carried (AR/2025/021)

9 Health, Safety and Wellbeing monthly report for April 2025

A report from Health and Safety provided the monthly Health, Safety and Wellbeing report for April 2025 for the Subcommittee’s information.

The General Manager Corporate (Robert West) and the Health and Safety Advisor (Mandy Grieve) 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 April 2025.

Motion carried (AR/2025/022)

Resolution to Exclude the Public

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
C1 Audit and Risk Subcommittee meeting - 10 March 2025 - 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)(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)(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)(a) The withholding of the information is necessary to protect the privacy of natural persons, including that of a deceased person. S7(2)(g) The withholding of the information is necessary to maintain legal professional privilege.	.
C2 Audit Arrangements for the year ending 30 June 2025	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.
C3 Long Term Plan Consultation Document Audit	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.
C4 DCC Risk 'Deep Dive' - Procurement and Contract 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.
C5 Improvement Opportunities	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.
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 External Audit Actions Update - June 2025	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 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.
C9 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.
C10 Protected Disclosure Register - June 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.
C11 Investigation Register - June 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.

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.

Motion carried (AR/2025/023)

The meeting went into non-public at 12.36 pm and concluded at 3.02 pm.

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

CHAIRPERSON

Audit and Risk Subcommittee

1 September 2025

Audit and Risk Subcommittee Updates Report - September 2025

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 – September 2025

DISCUSSION

Insurance

2 The main insurance renewal occurred on 30 June 2025 and incorporated the following policies:

· Material Damage Above Ground

· Business Interruption Above Ground

· Material Damage Below Ground Infrastructure

· Annual Contract Works

· Fine Arts

· Civil Engineering – Taieri River Water Supply Viaduct Bridge

· Motor Vehicle

· Liability Policies – Internet, Crime, Directors, and Officers

· Travel and Personal Accident

3 The renewal process was completed on time with consistent terms and no changes to loss limits or deductibles. Insured values were updated in line with current above ground asset schedules and fleet assets. Cover under the annual contract works policy was increased to reflect the larger capital programme in 2025/26. Business interruption cover was updated based on recent modelling.

4 Overall, a 7% reduction in premiums was achieved, reflecting improved market conditions, saving approximately $400k on 2024/25 costs and approximately $500k against budget.

5 The remaining liability policies (general/public, statutory, professional indemnity and employer) are due for renewal 1 November 2025. The renewal proposal is currently being compiled in relation to these policies.

9-Year Plan

6 Audit of the 9-year plan by Audit NZ started on 9^th June and finished on 30^th June 2025, resulting in an unqualified audit opinion.

7 Following the audit process, Council adopted the plan on 30^th June 2025.

8 Individual letters were sent in response to submissions from each Community Board, and to submitters with amenity or funding requests.

9 A digital version of the 9-year plan was made available on the DCC website in the week following its adoption. Two hard copies of the plan were sent to each DCC service centre in early August.

2024/25 Annual Report

10 The interim audit was completed in May. All audit requests have been submitted and there are no outstanding requests.

11 Asset valuations have been scheduled for three departments with the following valuers:

· Transport – Beca

· Property (Investment Property portfolio only) – JLL

· Three Waters - Beca

12 Audit New Zealand will be engaging WSP as an auditors’ expert to assist with their audit of the Three Waters valuation. There will continue to be a strong focus between the Finance team and relevant departments to understand the rationale for valuation adjustments.

13 The final audit fieldwork will be commencing on the week of 15th September. The Finance Team will have the financial statements for Core Council delivered to Audit New Zealand on this date. The group consolidated financial statements will be delivered by 7th October after the completion of the DCHL audit.

14 Giving the time required to complete audits of DCHL and the group companies, the 2024/25 Annual Report will not be ready for adoption by Council before the local government elections on 11 October 2025.

15 Staff are looking at presenting a draft, unaudited version of some sections of the 2024/25 Annual Report to the Council meeting on 23 September 2025, enabling the current Council to review draft performance and results for the year ended 30 June 2025. The draft version would not include consolidated financial results.

16 Following audit, the 2024/25 Annual Report will be adopted by Council at its inaugural meeting of the new triennium on 31 October 2025.

17 The Communications and Marketing Team have again been engaged to improve the readability and presentation of the Annual Report document, building on work done during the development of the 2023/24 Annual Report. Suggested work to improve the presentation, accessibility and readability of the Annual Report and Summary includes adding a performance snapshot, which summarises overall performance of services and activities. Design elements will also be considered such as layout, themes, images, and graphics, with a view to make detailed reporting of service and activity performance more accessible to a general reader. The proposed changes align with examples of accessible and engaging Annual Reports and Summaries from the sector which have visual elements to aid understanding and transparency of performance results.

2026/27 Annual Plan

18 Initial work on the development of the 2026/27 Annual Plan has started. Staff will use the development of the Plan as an opportunity to identify new or improved revenue streams, and to review expenditure.

19 The schedule for development of the 2026/27 Annual Plan includes sufficient time for an amendment, including audit, should one be required to address a significant or material change from Year 2 of the 9 Year Plan. Community engagement is tentatively scheduled for March/April 2026.

20 The Annual Plan 2026/27 will be adopted by Council by 30 June 2026.

Elections Update

21 Nominations closed on 1^st August with all areas requiring an election. We received record number of candidates for Mayor and Councillors.

22 Candidate Signs are now up, and full the campaigning has begun.

23 We are now moving into voting period with special voting beginning on 9^th September, with an office opening in the plaza meeting room.

Local Water Done Well

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

25 The third stage of LWDW is in progress 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. The Bill which has now been separated into two Bills is expected to be enacted in August 2025. The Bills provide for:

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

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

c) Planning, reporting, and financial management.

d) A new economic regulation and consumer protection regime.

e) Changes to the water quality regulatory framework and the water services regulator.

f) Repeals and amendments to other legislation resulting from the December Bill (separated into a second Bill now).

26 Following consultation on the Water Consultation Options, Council at its meeting on 26 May 2025 approved the in-house delivery option as the water services delivery model and that this decision would be reflected in the 9-year plan 2025-34.

27 At the Council meeting dated 12 August 2025 Council adopted the draft WSDP presented by staff subject to minor edits. Staff submitted the WSDP to the Secretary for Local Government on 25 August 2025.

28 Staff are currently working through the contents of the December Bills to identify further actions required.

Climate Mitigation and Adaptation Report

29 As requested by the ARS, Zero Carbon and South Dunedin Futures are developing a regular update report on climate change mitigation and adaptation. This report will cover the risks, controls, and planned improvement actions.

30 The aim will be to have the first high level version of this report to ARS at the December 2025 meeting and have this as a regular 6-monthly report.

OPTIONS

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

Signatories

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

Attachments

There are no attachments for this report.

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This report provides an update on various audit and risk related matters.

Fit with strategic framework

	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 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

1 September 2025

DCC Policy Update Report

Department: Finance

EXECUTIVE SUMMARY

1 This report provides an update on DCC policies as identified in the Audit and Risk Subcommittee (ARS) Workplan and ongoing audit and business improvement activities.

RECOMMENDATIONS

That the Subcommittee:

a) Notes the Policy Update Report – August 2025.

b) Provide feedback on the Sensitive Expenditure Policy (Attachment A clean, Attachment B track changes).

c) Notes the Sensitive Expenditure Guidelines (Attachment C).

d) Provide feedback on the Purchase Card Policy (Attachment D clean, Attachment E track changes).

e) Notes the Purchase Card Procedures (Attachment F).

DISCUSSION

2 The following policies are undergoing review:

a) Asset Disposal and Write-Off Policy

b) ICT Acceptable Use Policy

c) Information Management Policy

d) Staff Code of Conduct

e) Health, Safety and Wellbeing Policy

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

Sensitive Expenditure Policy

4 The Office of the Auditor General (OAG) recommends that public sector have robust policies and procedures for managing sensitive expenditure as a way of promoting the public’s trust and confidence.

5 The reviewed policy (Attachment A and B) has been provided for feedback, and the guidelines (Attachment C) are presented to provide further context. Minor changes have been made to the policy to provide further details in line with guidance from the OAG. These changes include:

a) Updated the Responsible Officer to ‘Chief Financial Officer’

b) Changed the scheduled review date period from 2 to 3 years – reviews can be conducted at any stage as required to address substantial changes.

c) The Policy has been updated to follow the new template.

d) Updating the definition for employee to align with other policies.

e) Expanding what is meant by each of the six-principles required for sensitive expenditure.

6 The guidelines have used the six-principles approach to provide greater clarity on what is appropriate sensitive expenditure at the DCC.

Purchase Card Policy

7 A review has been undertaken on the Purchase Card Policy (Attachment D and E) as part of the regular scheduled review (review date scheduled for August 2023). The review has been undertaken by the Assurance Manager, with representatives from Finance and has incorporated recommendations from the recent Purchase Cards Internal Audit completed by Crowe.

8 The following updates have been made to the Purchase Card Policy:

a) Updated the Responsible Officer to ‘Chief Financial Officer’

b) Changed the scheduled review date period from 2 to 3 years – reviews can be conducted at any stage as required to address substantial changes.

c) The Policy has been updated to follow the new template.

d) Added detail about Mayoral purchase card to follow current practice.

e) Added details on the monthly limits which are applied to all DCC purchase cards.

f) Added details on the requirement for a signed declaration for transactions without receipts.

9 The Purchase Card Procedures (Attachment F) have also been updated based upon Audit recommendations - these are highlighted in the document.

NEXT STEPS

10 Feedback provided by ARS on policies presented will be considered. If the changes are major these will go back to the Executive Leadership Team for final review and approval.

Signatories

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

Attachments

	Title	Page
⇩a	Policy Sensitive Expenditure August 2025 Clean	55
⇩b	Policy Sensitive Expenditure August 2025 track changes	61
⇩c	Guidelines Sensitive Expenditure August 2025	68
⇩d	Policy Purchase Card - August 2025 clean	84
⇩e	Policy Purchase Card - August 2025 track changes	87
⇩f	Purchase Card Procedures August 2025	90

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This report provides an update on Council Policy documents as identified by the Audit and Risk Subcommittee Workplan, which is a regulatory function considered good quality and cost effective.

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	☐	☐	✔

The Audit and Risk Subcommittee monitors and provides assurance for the effective review and management of core Council Policies – thereby supporting business controls and delivery, governance and the realisation of strategic objectives.

Māori Impact Statement

There are no know impacts for mana whenua.

Sustainability

There are no implications for sustainability.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

There are no known implications.

Financial considerations

No financial implications have been identified.

Significance

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

Engagement – external

The Serious Fraud Office was consulted on for the review of the Fraud, Bribery and Corruption Prevention Policy.

Other local authorities were contacted to understand their threshold for declaring gifts and hospitality offered as a part of the Gifts and Hospitality Policy review process.

Engagement - internal

Activities noted herein include cross Council engagement and collaboration on Policy review and development.

Risks: Legal / Health and Safety etc.

A failure to maintain effective and appropriate Policy framework across core Council functions exposes the DCC to a range of operational and strategic risks, including financial, business and service performance, community, business and sector confidence, as well as potential fraud and litigation.

Conflict of Interest

No conflicts of interest have been identified.

Community Boards

There are no known implications for the Community Boards.

Audit and Risk Subcommittee

1 September 2025

Financial Report - Period ended 30 June 2025

Department: Finance

EXECUTIVE SUMMARY

1 This report provides the provisional financial results for the period ended 30 June 2025 and the financial position as at that date, noting the results presented are subject to final adjustments and external audit. The report was presented to the Council meeting held on Tuesday, 26 August 2025.

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

Financial Overview

For the period ended 30 June 2025

RECOMMENDATIONS

That the Subcommittee:

a) Notes the Financial Performance for the period ended 30 June 2025 and the Financial Position as at that date.

b) Notes the 30 June 2025 result is subject to final adjustments and external audit, by Audit New Zealand.

BACKGROUND

3 This report provides the financial statements for the period ended 30 June 2025. 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 30 June 2025. Please refer to Attachment I for the detailed financial update, including a summary of Better Off Funding expenditure for the quarter to 30 June 2025.

Statement of Financial Performance

5 Revenue was $405.040 million for the period or $3.716 million less than budget.

6 Operating revenue (external and internal combined) was unfavourable $739k, mainly due to lower-than-expected revenue from the Parking Services, Transport, Aquatic Services, Resource Consents and Building Services activities.

7 Grants revenue was unfavourable $924 reflecting funding decisions by NZTA under the National Land Transport Programme, and a reduction in the contractor work programme in specific areas to offset cost over runs in some activities. NZTA subsidy revenue totalling $2.250 million relating to the October rain event has been received, with a further $2.488 million approved which will be claimed as costs are incurred.

8 Expenditure was $425.489 million for the period, or $16.278 million less than budget.

9 Personnel costs was unfavourable $1.345 million, reflecting overtime payments for 3 waters and union negotiated contract increases, which is being managed with vacancy management. The month of June showed an unfavourable variance of $605k, mainly due to accrued leave adjustments.

10 Operations and maintenance expenditure was favourable $2.732 million; however, this favourable variance was offset by an unfavourable $1.283 million variance in internal costs, largely 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 $2.027 million associated with the October 2024 rain event.

11 Depreciation costs were favourable $12.599 million, mainly due to the revaluation of Three Waters assets, and to a lesser extent Property and Parks assets.

12 Interest costs were favourable $4.939 million, reflecting a lower interest rate than budgeted and lower debt.

13 The Waipori Fund has reported a net operating surplus for the year of $8.852 million, $4.427 million more than budget. Operating revenue was favourable $4.435 million. Australian, International and New Zealand equities saw an increase in value of $480k million during June. Fixed term investments values saw an increase in value for the month of $614k, maintaining favourable results for the year. Despite these results, year-end market volatility, influenced by tariff policies and geopolitical tensions, meant the Fund's value wasn't sufficiently above its inflation-adjusted capital base to support a distribution of $3 million or more.

Statement of Financial Position

14 Capital expenditure was $147.958 million or 71.5% of the full year budget. Capital expenditure in most activities was generally within budget for the period.

15 The loans balance at 30 June was $650.972 million which was $58.501 million less than budget. This a reflection of the capital expenditure programme, which was underspent by $58.925 million to June. Additional to the June loans balance there was accrued interest of $5.968 million.

16 Attachment B includes a chart showing actual group and DCC debt for the years ending June 2004-2025. It provides forecast information for the years ending June 2026 -2028 based on the current Statements of Intent (SOI), and the first two years of the draft 9-year plan.

Final Adjustments and External Audit

17 Final adjustments in addition to this report include:

· Completion of vested assets

· Revaluation of assets (Three Waters, Transport, Investment Property)

· Landfill aftercare provisions

· Depreciation

18 Audit New Zealand is scheduled to start their audit in early September 2025, with an expected signoff date of 31 October 2025.

OPTIONS

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

NEXT STEPS

20 Financial Result Reports continue be presented to future meetings of Council.

Signatories

Author:	Lawrie Warwood - Financial Analyst
Authoriser:	Carolyn Allan - Chief Financial Officer

Attachments

	Title	Page
⇩a	Dashboard Summary Financial Information	106
⇩b	Debt Graph	107
⇩c	Statement of Financial Performance	108
⇩d	Statement of Financial Position	109
⇩e	Statement of Cashflows	110
⇩f	Capital Expenditure Summary	111
⇩g	Capital Expenditure Detailed Programme	112
⇩h	Operating Variances	121
⇩i	Detailed Financial Update	122

Audit and Risk Subcommittee

1 September 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 - 16 June 2025 - Public Excluded	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)(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)(a) The withholding of the information is necessary to protect the privacy of natural persons, including that of a deceased person. 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)(h) The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities. 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 DCC Employee Engagement and Wellbeing Survey 2025	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.
C4 Audit NZ Report on the 9 year plan 2025-34	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.
C5 Finance Assurance 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.	The information in this report is commercially sensitive..
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 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.
C9 Protected Disclosure Register - August 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.
C10 Investigation Register - August 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) and Monique Kruger (Manager, Audit New Zealand) be permitted to attend the meeting, after the public has been excluded, because of his knowledge of Items C4. 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	Warren Allen
Deputy Chairperson	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 16 June 2025	11

Author:	Jane Pearce - Health and Safety Manager
Authoriser:	David Ward - General Manager, 3 Waters and Transition

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

Author:	Tony Nelmes - Project Accountant
Authoriser:	Carolyn Allan - Chief Financial Officer