Maintaining trust and confidence in a time of crisis

As I’m writing this blog, New Zealand has more than 1200 cases of Covid-19 infection and we are in Day 15 of  lockdown. The world has changed – there is uncertainty and fear about the impact on ourselves and our loved ones. How long we’ll be operating like this as a country and the full social and economic implications are unclear.

For us in the Office, our priorities are clear – we look after people first. This means we’re focused on being reasonable and considerate as we’re carrying out our audit work.

Each council will be in the midst of its own planning and response to Covid-19.

In a time of crisis, there’s a risk that public organisations, including councils, lose the trust and confidence of communities. In our last blog we talked about three key enablers for building and maintaining trust and confidence:

• Competence (getting things right) – being seen to have internal processes and governance in place to give confidence to communities and to central government that councils can handle “bigger” issues.
• Reliability– consistent performance, compliance, and dependability.
• Honesty – truthfulness, integrity, and openness – doing the right things in the right way.

Councils’ audit and risk committees are an essential governance mechanism. They can support councils to maintain the trust and confidence of their communities as they manage the uncharted risks that they are being exposed to as a result of the Covid-19 pandemic. The committees can do this by providing assurance to elected members (and council management) that risk is being well managed – that the council has a plan in place – and in supporting the council to think longer term, beyond the crisis at hand.

How they do this is by acting as trusted advisors – bringing a diversity of perspectives and challenging and questioning elected members and council staff to help them gain confidence that the decisions they are making are well-informed and future-focused. This is a core role of an audit and risk committee.

Councils will be grappling with a range of challenges that audit and risk committees can help them to navigate, including:

• maintaining good systems and controls, particularly in light of the increased risks of cybersecurity breaches and fraud;

• ensuring that the council is able to maintain its core business while responding to Covid-19, including considering which current projects and initiatives are essential or can be delayed;
• whether risk profiles are changing as circumstances change – during eventual recovery, if managing multiple lockdowns, and how key person risks might change; and
• considering the medium- to long-term implications of Covid-19 and building scenarios around them – what do they mean for the assumptions that underpin the council’s annual and long-term plans? What does financial prudence look like under these scenarios?

What role is your audit and risk committee playing in working with the council and management in its response to the COVID-19 outbreak?