Part 5: Timeliness of reporting by local government entities
5.1
In this Part, we look at the performance of public entities in our local government portfolio. We include a summary of the overall findings and make some observations about the type of entities that are not meeting deadlines for public reporting and what we know about the reasons for this.
5.2
We have included more detailed tables looking at the results of the various entity types in the local government portfolio and name the entities whose audited performance information was not available on time.
Summary of our findings
5.3
Of the 349 audit reports for the entities included in the local government portfolio:
- 306 (88%) were issued early or on time;
- 33 (9%) were issued late; and
- 10 (3%) had not been issued as at 30 June 2014.
5.4
Six local authorities did not meet their reporting deadlines, with audit reports issued, on average, two months late. Five of the six local authorities met the reporting deadline for the following year.
Local authorities
5.5
We have reported each year on how well local authorities met their reporting requirements. In 2014, we noted that, since the Local Government Act 2002 was introduced, there has not been a year in which every local authority has met all accountability requirements for releasing publicly available annual reports.6 Figure 25 shows the level of compliance with these requirements.
Figure 25
Local authorities' performance in meeting deadlines for annual reports, 2009/10 to 2013/14
| Deadline for | Percentage of local authorities meeting reporting deadlines | ||||
|---|---|---|---|---|---|
| 2009/10 | 2010/11 | 2011/12 | 2012/13 | 2013/14 | |
| Adopting the annual report | 91% | 90% | 99% | 92% | 96% |
| Releasing the annual report | 94% | 94% | 99% | 96% | 92% |
| Releasing the summary annual report | 92% | 92% | 96% | 95% | 91% |
5.6
For 2012/13, the audit reports for 72 local authorities (92%) were issued on or before the deadline. For the 12 months to 30 June 2014, audit reports for six local authorities were issued after the deadline – on average, just under two months late (see Figure 26).
Figure 26
Timeliness of local authorities, as at 30 June 2014
| Timeliness | Number of audit reports |
|---|---|
| On time | 72 |
| Issued late | 6 |
| Total audit reports issued | 78 |
| Audit reports not issued | 0 |
Note: The balance date for local authorities was 30 June 2013, and the reporting deadline was 31 October 2013.
5.7
The timeliness of local authorities' reporting has declined in recent years. However, five of the six local authorities that were late in 2013/14 met their reporting deadline for the following year (see Figure 27).
Figure 27
Late audit reports – local authorities
| Entity | Status of the next report due |
|---|---|
| Central Hawkes Bay District Council | On time |
| Chatham Islands Council | On time |
| Far North District Council | On time |
| Horowhenua District Council | On time |
| Hurunui District Council | On time |
| Westland District Council | Late |
5.8
In our report, Local government: Results of the 2012/13 audits, we explained that, in one instance, the failure of a council-controlled organisation to meet its reporting deadline affected the parent local authority's ability to meet its deadline.
Council-controlled organisations
5.9
As Figure 28 shows, 159 council-controlled organisations (89%) had their audit reports issued by the reporting deadline, with 15 (8%) issued late. Just five (3%) had not been issued as at 30 June 2014, but three have since had audit reports issued.
Figure 28
Timeliness of council-controlled organisations, as at 30 June 2014
| Timeliness | Number of audit reports |
|---|---|
| On time | 159 |
| Issued late | 15 |
| Total audit reports issued | 174 |
| Audit reports not issued | 5 |
Note: The balance dates and reporting deadlines for council-controlled organisations vary.
5.10
Audit reports that were late were issued, on average, slightly more than three months after the reporting deadline. However, the average is skewed by four audit reports that were between six and nine months late.
5.11
Some council-controlled organisations performed better when their next audit report was due.
Figure 29
Late audit reports – council-controlled organisations
| Entity | Status of the next report due |
|---|---|
| Canterbury Economic Development Co. Limited | Late |
| Hauraki Rail Trail Charitable Trust (became an exempt council-controlled organisation in May 2014) | On time |
| Hutt City Community Facilities Trust | On time |
| Infracon Limited | N/A – entity disestablished |
| Lambton Harbour Development Project | Not issued |
| Mayoral Relief Fund Tasman/Nelson | Late |
| Northland Inc Limited | On time |
| Tamatea Limited | N/A – to be disestablished |
| Tasman Farms Limited | Late |
| Te Mata Park Trust Board | Late |
| The Gisborne District Disaster Relief Trust | Late |
| Timaru District Promotions Trust | N/A – to be disestablished |
| S C Aoraki Development Trust | N/A – to be disestablished |
| South Waikato Economic Development Trust | N/A – to be disestablished |
| Tararua Forests Limited | N/A – entity disestablished |
5.12
As at 30 June 2014, audit reports for the 5 council-controlled organisations listed in Figure 30 had not been issued. On average, they were five-and-a-half months late at that date. When we updated our data as at 24 March 2015, two of these entities had had their audit reports issued.
Figure 30
Unissued audit reports – council-controlled organisations
| Entity | Update as at 24 March 2015 | Years without an audit report |
|---|---|---|
| Ashburton Stadium Complex Trust | Not issued | 1 |
| Destination Coromandel Trust | Issued | 0 |
| Kaikoura Enhancement Trust (to be disestablished) | Not issued | 1 |
| Ridgeway Joint Venture | Not issued | 1 |
| Tourism West Coast Incorporated | Issued | 0 |
Exempt council-controlled organisations
5.13
Local authorities can exempt small, non-profit council-controlled organisations from having to prepare annual accountability documents under the Local Government Act. However, the constitutions or trust deeds of some of these entities require them to prepare audited financial statements. We carry out the audits.
5.14
All but one audit report was issued for the group of exempt council-controlled organisations by 30 June 2014, with 86% issued by the reporting deadline (see Figure 31). The main explanation for the delay was the entity failing to finalise financial statements or to make the relevant information available to the auditors on time.
Figure 31
Timeliness of exempt council-controlled organisations, as at 30 June 2014
| Timeliness | Number of audit reports |
|---|---|
| On time | 25 |
| Issued late | 3 |
| Total audit reports issued | 28 |
| Audit reports not issued | 1 |
Note: The balance dates and reporting deadlines for exempt council-controlled organisations vary.
5.15
Audit reports for three exempt council-controlled organisations (see Figure 32) were issued, on average, slightly more than three and half months after the reporting deadline.
Figure 32
Late audit reports – exempt council-controlled organisations
| Entity | Status of the next report due |
|---|---|
| Cooks Gardens Trust Board | N/A – entity disestablished |
| Sarjeant Gallery Trust | Not issued |
| Waimakariri Art Collection Trust | Not issued |
5.16
One entity's audit report had not been issued by 30 June 2014. The Ruapehu-Wanganui-Rangitikei Economic Development Trust, which is a multi-parent subsidiary, has not had an audit report issued for four years.
Other local government entities
5.17
Figure 33 shows that most other local government entities met their accountability obligations. Fifty audit reports were issued on time, nine were late, and four were not issued by 30 June 2014.
Figure 33
Timeliness of other local government entities, as at 30 June 2014
| Timeliness | Number of audit reports |
|---|---|
| On time | 50 |
| Issued late | 9 |
| Total audit reports issued | 59 |
| Audit reports not issued | 4 |
Note: The balance dates and reporting deadlines for council-controlled organisations vary.
5.18
Late audit reports for entities were, on average, issued slightly more than two-and-a-half months after the reporting deadline. Several were also late with their next report (see Figure 34).
Figure 34
Late audit reports – other local government entities
| Entity | Parent or responsible entity | Status of the next report due |
|---|---|---|
| Chatham Islands Shipping Limited | - | We are no longer required to audit this entity |
| Gardens Event Trust | - | Not issued |
| Hawke's Bay Regional Sports Park | - | Late |
| Independent Maori Statutory Board | - | Late |
| Local Government Rural Trust | - | Late |
| Marlborough Kaikoura Rural Fire Authority | - | Not issued |
| Nelson Tasman Combined Civil Defence Organisation | - | Late |
| NZ Mutual Liability Riskpool | New Zealand Local Government Insurance Corporation Limited | On time |
| Waimakariri Libraries Trust | - | Not issued |
5.19
As at 30 June 2014, audit reports had yet to be issued for the entities listed in Figure 35. By then, they were, on average, seven-and-a-half months late.
Figure 35
Unissued audit reports – other local government entities
| Entity | Parent or responsible entity | Update as at 24 March 2015 | Years without an audit report |
|---|---|---|---|
| Franklin Art, Culture and Learning Trust (to be disestablished) | - | Not issued | 3 |
| Kiwitea Rural Water Scheme | Manawatu District Council | Not issued | 2 |
| Local Government Mutual Funds Trustee Limited | New Zealand Local Government Insurance Corporation Limited | Issued | 0 |
| Safer Papakura Trust (to be disestablished) | - | Issued | 0 |
5.20
Auditors can contribute to the failure to meet reporting deadlines. Reporting by Kiwitea Rural Water Scheme is a case in point. Several matters, including questions about the legal status of the entity and whether it must be audited by the Auditor-General, have contributed to delays. Resolving such matters in a timely way is important, and we are working with the Scheme and the Manawatu District Council to address the outstanding matters and complete any subsequent audit work.
6: See Local government: Results of the 2012/13 audits and Local government: Results of the 2013/14 audits, which are available at our website, oag.govt.nz.