Masterton District Council [MDC] and South Wairarapa District Council [SWDC] have both breached statutory deadlines by deferring the adoption of their 2021/22 annual reports – the result of resourcing issues at Audit New Zealand.
South Wairarapa Mayor Martin Connelly said he is “very unimpressed” the Auditor General “would allow this non-performance to happen”, given his responsibility to oversee the proper conduct of public affairs.
“This is a highly unsatisfactory position for us to be in, as it prevents our residents from getting the information they are entitled to regarding the council’s performance,” Connelly said.
SWDC and MDC are among dozens of councils that have been unable to sign off their annual reports in time, due to covid-19 significantly affecting the availability of auditors internationally.
Given the concentration of public sector balance dates around June 30, audit firms normally supplement their permanent audit staff with senior auditors from overseas.
But due to our borders being closed for an extended period, and immigration settings since they were reopened, Audit New Zealand was unable to secure permanent and supplementary auditors as it has in the past.
As a result, the government extended the deadline for audits from October 31 to December 31 for the past two years.
Audit New Zealand is the auditor for 52 of New Zealand’s 78 councils for the 2021/22 audits.
The remaining 26 are audited by other audit service providers on the Auditor-General’s behalf.
A spokesperson for the Office of the Auditor-General said just over half of all council audits were signed before the statutory deadline.
“There are no penalties for missing the deadline,” he said.
“Where the deadline was missed, it will be noted in the audit opinion and the council’s annual report.
“For those councils where the cause was the auditor shortage, we will make that clear.”
The spokesperson said SWDC’s 2021/22 audit is now due to be completed by the end of February, and MDC’s 2021/22 audit is due by the end of March.
“The Auditor-General and Audit New Zealand are working hard to complete the audit work that was deferred because of covid-19.
“These steps include reallocating work to auditing firms with capacity, recruiting skilled auditors from overseas, increasing our graduate intakes, and setting up international secondment arrangements.”
Masterton Mayor Gary Caffell said the council’s confidence in the work of Audit New Zealand is “unaffected” by the delay.
Masterton District Council’s finance manager David Paris said the delay in auditing the Annual Report 2021/22 has been noted by the council’s independently-chaired Audit and Risk Committee “but remains a low risk for the council”.
“The operational impact will see the audit now done at the same time as the 2023/24 budget is being prepared,” Paris said.
“I do not expect any significant changes to the draft Annual Report document as a result.”
Carterton District Council approved its audited annual report on December 21.
The normal statutory deadline of October 31 will apply in 2022/23, and Audit New Zealand is confident it will to be able to meet that deadline for council audits this year.
Associate Local Government Minister Kieran McAnulty was disappointed that “through no fault of their own, [councils] haven’t been able to implement their annual reports”.
“I will be raising this with the Auditor General, who is responsible for Audit New Zealand,” he said.
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