Environmental / Resource Management
The Annual Reporting and Audit Time Frames Extensions Legislation Bill (the Bill) has been passed by the House and will come into force when it receives royal assent. The Bill amends the Crown Entities Act 2004 (CEA) and the Local Government Act 2002 (LGA02) by extending, for the 2020/21 and 2021/22 financial years, the time frames provided in relation to audits of Crown entities, with end-of-year balance dates of 30 June, and the annual reporting requirements of local authorities and council-controlled organisations.
Crown entities, under the CEA, must provide their audit reports to the Auditor-General within 3 months after the end of the financial year. This deadline is extended by the Bill for Crown entities (and organisations subject to provisions of the CEA), with end-of-year balance dates of 30 June. For the 2020/21 and 2021/22 financial years their audit reports must be provided to the Auditor-General by the close of 31 December.
Council-controlled organisations, under the LGA02, must deliver to the shareholders, and make available to the public, a report on the organisation’s operations during that year, within 3 months after the end of each financial year. Under the Bill, for the 2020/21 and 2021/22 financial years, the report must be delivered, and made available to the public, no later than the close of 30 November.
Local authorities, under the LGA02, must prepare and adopt in respect of each financial year an annual report. Each annual report must be completed and adopted, by resolution, within 4 months after the end of the financial year to which it relates. Under the Bill, for the 2020/21 and 2021/22 financial years, the annual report must be completed and adopted no later than the close of 31 December.
Background to the Bill
This year, global mobility restrictions and auditors leaving the profession have meant a shortage of auditors in Australia and New Zealand. The reporting time frames are being extended to allow auditors to sequence their work over a longer period and maintain the quality of their work.
The Auditor-General’s advice
The Auditor-General has advised that auditors will engage directly with Crown entities, organisations listed in Schedules 4 and 4A of the Public Finance Act 1989, local authorities, and council-controlled organisations to discuss the sequencing of audit work. Many of the public organisations that Office of the Auditor-General audits will be unaffected by this change and their audits will be completed within normal statutory time frames.
Audits that will be completed within the normal statutory reporting time frames include:
- The audit of the financial statements of the Government and its main component audits. This includes all government departments, the Reserve Bank of New Zealand, New Zealand Superannuation Fund, State-owned enterprises, and mixed-ownership model companies.
- Large Crown entities, such as the Accident Compensation Corporation, Kainga Ora – Homes and Communities, Waka Kotahi NZ Transport Agency, and larger district health boards.
- All Financial Markets Conduct reporting entities (those covered by the Financial Markets Conduct Act 2013) such as Auckland Council.
- Larger local authorities (for example, Christchurch City, Tauranga City, Wellington City, and Dunedin City, including significant council-controlled organisations).
Any outstanding audits of local authorities’ long-term plans 2021-31 will also be a priority, as well as any remaining audits of significant public organisations with a 31 March 2021 balance date.
Audits that will be completed within the extended statutory reporting time frames include:
- small to medium-sized local authorities and smaller council-controlled organisations;
- some smaller district health boards; and
- smaller Crown entities, trusts, and organisations listed in Schedules 4 and 4A of the Public Finance Act 1989.
The Bill can be read here
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