3.1 Annual reports and summaries in an election year

Local government: Results of the 2005/06 audits.

The 2007 local government elections are due to be held on 13 October 2007. Local authorities need to take care in preparing and publishing annual reports and summaries of their annual reports in 2007, to ensure that those documents do not give an electoral advantage to existing members during the pre-election period.1

The Local Government Act 2002 (the Act) changed the timing for the annual report, by requiring it to be audited and adopted by 31 October at the latest, and introduced a new requirement for each local authority to prepare a summary of its annual report. The annual report and summary must be made publicly available2 within one month of adopting the annual report – that is, by the end of November at the latest.

The summary of the annual report must represent, fairly and consistently, the major matters dealt with in the annual report. We are required to audit the summary for compliance with this requirement, and the published summary must contain our audit report.

The summary of the annual report is a particularly important document. Many members of the community would look at the summary but not necessarily the full annual report.3

Local authorities need to be particularly careful about the content of their annual reports and summaries in a local government election year. In 2004, we published a report on good practice principles for public communications by local authorities.4 The principles discussed in the report as relevant in a pre-election period are that:

  • a local authority should not promote, nor be perceived to promote, the reelection prospects of members in a local authority-funded publication (such as a summary annual report);
  • a local authority should exercise care in the use of its resources for communications that are presented in such a way that they raise, or could have the effect of raising, a member’s personal profile in the community; and
  • a local authority’s communications policy should recognise the risk that communications about members, in their capacities as spokespersons for the authority, during a pre-election period could result in the member achieving an electoral advantage at ratepayers’ expense.

The report states that, in particular, photos or information that may raise the profile of a member in the electorate should not be used during the pre-election period.

In 2004, we received complaints about the content of a local authority’s summary of its annual report that was published and distributed in the period before the 2004 local authority elections.5

The local authority had published the summary of its annual report within one month of adopting its annual report. This timing coincided with the run-up to the 2004 local authority elections, and led to some concerns in the community and from candidates who were not members that the summary was being used as a council-funded advertising opportunity for members who were standing for re-election. The summary included several photos of members (about 25% of the content).

This issue will require careful management by local authorities during the pre-election period for the 2007 elections. Local authorities must ensure that a summary is a fair representation of the major matters in the annual report, and is set out impartially without providing a platform for political promotion. Authorities must also ensure that material in the annual report does not have the effect of promoting or favouring members who are candidates for re-election.

The issue will arise particularly for those local authorities that adopt their annual reports early and that must publish a summary within one month of adoption. As noted in article 1.2, several authorities tend to adopt their annual reports well before the statutory deadline each year. The incentive to do so may be stronger in an election year.

For local authorities that adopt their annual reports nearer the statutory deadline of the end of October, the annual report and summary could be published in November, after the elections, and the issue avoided.

We have written to local authority chief executives to draw their attention to these issues.

1: By “pre-election period”, we mean the three months before the close of polling day.

2: See section 5(3) of the Act for the definition of “publicly available”.

3: The Society of Local Government Managers has developed good practice guidance for preparing summaries and suggestions for their communication and distribution.

4: Good Practice for Managing Public Communications by Local Authorities, available on our website at www.oag.govt.nz/2004/public-communications.

5: The local authority concerned had adopted an LTCCP in 2003, and was therefore required to prepare a summary of its annual report under the Act.

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