Local governments across the Tasman have had a busy year complying with a number of fast-breaking requirements from their Office of the Auditor-General (OAG).
Part of their compliance challenge involved completing obligatory three-yearly, long-term plans for 2012-22, and then moving swiftly to complete their 2011/12 annual reports.
But the OAG is chuffed at the timely reporting! Apparently only one authority missed a deadline to complete and adopt its audited annual report within four months after the end of the financial year – a significant improvement on the previous two years.
Our Kiwi counterparts won’t have much time to draw breath though, because the current year (2012/13) has a suite of new disclosure requirements which will affect the content of their annual reports.
For instance, the OAG has flagged its intention to look more closely in future at the management of significant assets throughout central and local government. In fact it asked its auditors to gather information about asset management as part of their last (2011/12) annual audits of selected public entities.
The OAG recognises that individual significant assets have a certain life, require maintenance and eventually need replacement. But it stresses that they all combine to make a network which is expected to continue delivering essential community services in the long term.
So the information on assets which it now intends collecting will be used to better understand how entities describe and explain the services they aim to deliver. It will also give the OAG a better idea of the condition of significant assets, and the extent of deferred maintenance and deferred renewals.
Moreover, in the next few years, local authorities and other public entities will adopt a new financial reporting framework.
The OAG doesn’t necessarily see this new framework as a “silver bullet”.
“But we do expect the resulting financial reports will provide more useful accountability information and more straightforward reporting requirements, particularly for smaller local authorities,” said Controller and Auditor-General, Lyn Provost in her annual report issued on March 21.
“This report continues our approach to assessing long-term financial performance and the potential for financial risk and uncertainty using a set of indicators,” she said. “I consider it has merit but is not perfect – it is just one way to view financial prudence and financial sustainability.”
The OAG report makes good reading for anyone interested in how local government operates in New Zealand. It covers the ongoing development of good anti-fraud frameworks, the management of greenhouse gas emissions and the imminent changes to annual reporting content. In addition, it carries its first recovery report on the earthquake-struck region of Canterbury and stresses the need for every local authority to seriously consider how it manages assets, procurement practices, insurance, and governance and accountability arrangements.
You can link directly to the report here: http://www.oag.govt.nz/2013/local-govt