3.1 Role of the Auditor-General in the accountability framework of local government

Local government: Results of the 2003-04 audits.

The Auditor-General is the auditor of local authorities, council-controlled organisations and subsidiaries of council-controlled organisations under the Local Government Act 2002 (the 2002 Act) and the Public Audit Act 2001. Local authorities and council-controlled organisations are “public entities” under the Public Audit Act. Section 15 of the Public Audit Act requires the Auditor-General to audit the financial statements and other information that a public entity is required to have audited.

The 2002 Act sets out the range of “other information”, in addition to annual financial statements, that local authorities and council-controlled organisations are required to have audited:

  • a local authority’s draft Long-Term Council Community Plan (LTCCP);
  • a local authority’s adopted LTCCP;
  • a local authority’s amendment to an LTCCP;
  • a local authority’s compliance with the content requirements applying to the annual report and statements required to be made by the local authority in the annual report;
  • a local authority’s summary of its annual report;
  • a local authority’s expenditure on advertising a reorganisation proposal; and
  • a council-controlled organisation’s performance targets and other measures by which performance was judged in relation to the organisation’s objectives.

The 2002 Act sets several new requirements for local authorities and the Auditor-General in the area of reporting and audit, including an audited LTCCP, an enhanced annual report (aspects of which are audited), and an audited summary annual report. The most significant of the new requirements are the audited LTCCP and audited summary annual report.

The succeeding sections of Part 3 contain a brief outline of the 2002 Act’s requirements and our comments on each of the following aspects:

  • our preparations for the audit of local authorities’ 2006 LTCCPs, and observations on LTCCPs adopted in 2003 and 2004;
  • how 9 local authorities met some of the new reporting requirements in their first annual reports under the 2002 Act; and
  • issues arising in local authorities’ preparation of summaries of LTCCPs, annual plans and annual reports.
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