1.3 Timeliness of Annual Reporting

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Local authorities’ annual reports provide information to assist communities to assess the performance of their local authority, and to hold it to account for that performance. Timely information is necessary for this to occur.

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Each year we examine the timeliness of local authority annual reporting.

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In regard to 2002-03, this was the final year local authorities reported under the Local Government Act 1974 (the 1974 Act). Local authorities had until 30 November 2003 (i.e. five months after their financial year-end) to adopt their annual reports.

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For 2002-03 in respect of the 86 local authorities:

• the audits of 4 were completed by 31 August 2003;
• the audits of 16 were completed by 30 September 2003;
• the audits of 23 were completed by 31 October 2003; and
• the audits of 43 (43 last year) were completed by 30 November 2003 – of these, 25 were completed in the fourth week of November.

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Overall, the results are consistent with 2001-02. We were hoping for a general improvement.

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Section 98 of the Local Government Act 2002 (the 2002 Act) sets new requirements for adoption and public release of a local authority’s annual report. The annual report is to be adopted within four months of the end of the financial year (i.e. by 31 October). This brings forward the adoption date for the annual report by one month from the requirement that existed under the 1974 Act.

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The 2002 Act also requires that the annual report, and a summary of the annual report, be made available to the public within one month of the adoption of the annual report. Under the 1974 Act, there was no specified time within which the annual report was to be made available to the public. We particularly welcome these changes. We see the annual report summary as an opportunity for local authorities to encourage greater communication with communities on their achievements and future directions.

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For 2002-03:

• 28 local authorities released their annual report within 5 working days of the date of their audit opinion;
• 15 local authorities released their annual report between 6 and 10 working days after the date of their audit opinion;
• 21 local authorities released their annual report between 11 and 20 working days after the date of their audit opinion; and
• the remaining 22 local authorities released their annual report 21 working days or more after the date of their audit opinion.

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Six local authorities released a summary of their annual report. Of these, 3 were from the “early 9"² Of the 6 local authorities to release a summary:

• 5 of the 6 had a gap of 10 or greater days between their audit opinion and releasing their summary reports, while the other 1 issued the summary within 10 days.
• 3 of the 6 released their summary within one working day of releasing their annual report. The remaining 3 released their summary more than 10 working days later.

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The new requirements for adoption and public release of annual reports take effect for the year in which a local authority adopts its first long-term council community plan (LTCCP). For all local authorities except the “early 9”, this will be the financial year ending 30 June 2005.

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We continue to believe that the new dates for adoption and public release of annual reports will represent a considerable challenge for some local authorities.³ We will therefore continue to monitor adoption and public release dates as the 2002 Act provisions come fully into effect.

Footnote 2: “Early 9” refers to the nine councils that adopted their first long-term council community plan in 2002-03.

Footnote 3: For example, Local Government: Results of the 2001-02 Audits, parliamentary paper B.29[03b], 2003, page 18.