Part 1: Completing the school audits

Results of the 2020 school audits.

In this Part, we report on how many schools provided draft financial statements for audit and how many audits have been completed, including audits of public organisations related to schools.

Schools must provide their draft financial statements for audit by 31 March (the statutory deadline). In recent years, we have worked with the Ministry of Education (the Ministry) and the schools sector to encourage schools to provide their draft financial statements for audit as soon as possible and at the latest by the statutory deadline.

This year, we received about 96% of draft financial statements for audit by 31 March 2021. As Figure 1 shows, this is the best result we have had in the past 10 years. We appreciate the hard work that schools carried out in the first quarter of the calendar year to provide draft financial statements and the information we needed for the audit by 31 March.

Figure 1
Numbers of draft financial statements received for audit during the past few years

Figure 1. The rate of receipt of draft financial statements for audit has been returning to pre-Novopay levels (2011) in the past few years. This year, we received 96% of draft financial statements for audit by 31 March, and we are receiving more draft financial statements earlier in March. This is critical in ensuring that as many school audits as possible meet the May deadline.

Note: We use 2011 as a comparison because this was pre-Novopay and we were able to complete 95% of our audits by the 31 May statutory deadline.
Source: Office of the Auditor-General.

This year was another challenging year for our school audits. We completed 1732 (70%)1 of the 2020 school audits by 31 May 2021 (the statutory deadline). Although this improved on the 59% completion rate for the 2019 audits, Covid-19 has continued to affect our ability to complete audits on time.

The most significant impact of Covid-19 on our audits this year was the acute shortage of auditors, which has been exacerbated by the closed borders. In addition, more audits than usual carried over from the previous year because of the disruptions of the Covid-19 lockdowns in 2020. At the start of 2021, 169 of the 2019 audits were still outstanding. In recent years, an average of 60 previous years’ audits have been outstanding at the end of the year.

We were disappointed that we could not complete more audits by 31 May 2021. The shortage of auditors was the reason that most of the schools audits that did not meet the statutory deadline were completed late. However, we have made good progress since May. As at 31 October 2021, we have completed 2273 (92%) of the 2020 school audits.

In a typical year, about 100 (4%) of the previous year’s school audits remain outstanding at the end of October. Because of the delays experienced this year, 185 (8%) of the 2020 audits were still outstanding as at 31 October. This is an improvement on last year, where 292 (12%) of the 2019 audits were outstanding at the end of October. Figure 2 shows the number of outstanding audits by year.

Figure 2
Outstanding audits, at the end of October, by audit year

Audit year As at 31 October 2021 As at 31 October 2020 As at 31 October 2019
2020 185
2019 40 292
2018 19 44 112
2017 8 12 23
2016 7 9 14
2015 4 5 7
2014 1 1 2
2013 1 1 1
Total 265 364 159

Source: Office of the Auditor-General.

Although some audits were not completed for reasons unrelated to Covid-19 and some of those audits were in arrears before Covid-19, the shortage of auditors has made it more difficult to complete these audits. However, we are committed to bringing them up to date as soon as possible, and our auditors are putting plans in place to complete the outstanding school audits for 2020 and earlier.

We completed 282 school audits from previous years since we last reported on the results of the school audits in November 2020. There were 80 previous-year audits of 49 schools outstanding on 31 October this year, compared with 72 audits at the same time last year.

The details of the school audits that were outstanding on 31 October 2021 are on our website.

We have recently appointed auditors for the next three years’ audits. As part of that exercise, we have re-sized some audit portfolios to better reflect auditors’ capacity so that audits can be completed on time.

However, ongoing Covid-19 restrictions and border closures will continue to make completing school audits challenging and we cannot rule out further disruptions and delays. We encourage all involved to keep working together to complete school audits on time and support the accountability of schools.

1: This includes public organisations related to schools.