Part 4: Timeliness in annual reporting

Local government: Results of the 2012/13 audits.

In this Part, we describe:

The importance of timely reporting

Annual reports provide information that helps communities to assess how well their local authorities perform. Ratepayers and communities are entitled to receive information on how their local authority has performed, both financially and operationally, against the local authority's intentions for the year.

For communities to effectively assess how well the local authority has performed, they need and deserve timely information. For this reason, local authorities need to ensure that their reports are on time.

The Act requires each local authority to:

  • complete and adopt its annual report – containing audited financial statements and service performance information − within four months after the end of the financial year;
  • make publicly available its annual report within one month of adopting it; and
  • release an audited summary of the annual report within one month of adopting the annual report.

The local authority decides when to prepare and publish the audited annual reports and summaries, within the timing requirements of the Act.

Figure 5 shows how well local authorities met their statutory deadlines. Appendix 3 sets out more detail on when local authorities adopted and released their annual reports and summary annual reports.

Figure 5
Performance in meeting statutory deadlines for annual reports, 2008/09 to 2012/13

Statutory deadline for Percentage of local authorities meeting statutory deadlines
2008/09 2009/10 2010/11 2011/12 2012/13
Adopting the annual report 99% 91% 90% 99% 92%
Releasing the annual report 99% 94% 94% 99% 96%
Releasing the summary annual report 86% 92% 92% 96% 95%

Since the introduction of the Act, there has not been a year in which every local authority has met all accountability requirements for the release of publicly available annual reports. This is not satisfactory.

Although we have not yet quantified the data, we are aware that some council-controlled organisations also failed to meet the statutory deadline. In one instance, a council-controlled organisation's failure to meet the statutory deadline affected the parent local authority's ability to meet its statutory deadline.

Adopting annual reports

The Act allows local authorities four months after the end of the financial year to complete and adopt their annual reports.

Six local authorities failed to meet the statutory deadline for 2012/13. This was worse than the year before, when one local authority failed to meet the statutory deadline.

Far North District Council and Hurunui District Council had not adopted their annual reports as at 31 January 2014 – that is, three months after their statutory deadline and seven months after their balance date. Hurunui District Council still had not adopted its annual report as at 31 March 2014.

Of the six local authorities that failed to meet the statutory deadline for the 2012/13 annual reports, Central Hawkes Bay District Council, Hurunui District Council, and Westland District Council had also failed to meet the deadline for 2010/11 and/or 2011/12. In past years, the other three local authorities met the deadline.

One local authority that believed it had adopted its annual report appears to have only conditionally adopted the annual report, "subject to final audit clearance". The Act requires the annual report to include the audit report when the annual report is adopted. In our view, the local authority had yet to formally adopt its annual report. When we compiled our statistics, the local authority was seeking legal advice on this point. In this report, we have treated the local authority's annual report as adopted.

We are disappointed that, despite the previous year's improvement, six local authorities failed to meet the statutory deadline. Those not meeting the deadline are failing to provide their communities with the timely information they are entitled to receive.

Two local authorities disclosed reasons for not meeting the statutory deadline:

  • In one instance, a quorum was not met at the meeting scheduled to adopt the annual report before the statutory deadline. The elected members met the following week and adopted the annual report on 8 November 2013.
  • In the other instance, the audit of a subsidiary significant to the local authority was delayed. The local authority said that this delayed the local authority's annual report. However, the local authority gave the same reason for missing the deadline in 2010/11. In our view, the local authority should have been aware of the recurring problem and taken appropriate steps to ensure that it met the statutory deadline.

The other local authorities that failed to meet the statutory deadline did not disclose why they were unable to adopt their annual report within four months of the end of the financial year.

Releasing annual reports to the public

We looked at when local authorities released their annual reports. The Act allows up to one calendar month between when a local authority adopts and releases the annual report.

One local authority missed the one-month deadline for releasing its annual report. Two local authorities had yet to complete their annual reports when we compiled the statistics for this Part.

Most local authorities publish their annual reports on their websites. In our view, local authorities should be able to publish annual reports on their websites within a few days of adopting them.

For 2012/13, fewer local authorities released their annual reports promptly after adopting them, compared to the year before. Only 49% of local authorities made their 2012/13 annual reports public within 10 days of adopting them, down from 58% for the 2011/12 annual reports. This is unsatisfactory and, as with adopting audited annual reports, we expect local authorities to focus on improving this.

Releasing summary annual reports to the public

Releasing an audited summary of the annual report is an important part of a local authority's accountability to its community. The summary is the most accessible and understandable information for most readers, and the easiest document to circulate and make widely available.

Two local authorities did not provide their communities with audited summaries of their annual reports within one month of adopting their annual reports.

When we compiled our statistics at 31 January 2014, two local authorities had not completed their annual reports and summary annual reports.

Local authorities know they must produce a summary annual report. We emphasise that local authorities need to effectively project manage the production and publication of their summary annual reports.

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