Waimate District Council’s annual report audit has been delayed till early 2022.
Staffing shortages at Audit New Zealand and the ongoing impact of Covid-19 disruptions have delayed the audit of the Waimate District Council’s annual report until early 2022.
Tina Stevenson, the council’s corporate services group manager, said in a report to an audit and risk committee meeting on Tuesday, that the delay of the audit means it is no longer possible to adopt the 2021 annual report by the December 31, 2021 statutory deadline.
Stevenson said council staff had prioritised the preparation of the annual report “in order to meet previously advised timelines for its audit”.
However, a letter tabled at the meeting from Audit NZ’s executive director Stephen Walker on November 15 outlined “some important changes we are needing to make to the timing of a number of June 2021 audits as wee deal with the ongoing impact of Covid-related disruptions”.
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“Since the statutory extension to reporting deadlines was granted (by Parliament) in July, we have all been working with the effects of another national lockdown and ongoing alert level changes,” Walker said.
“This means it will now be necessary to complete your start to your audit in the first few months of 2022.
“We realise this is not a position any of us wanted to be in. But it is now unavoidable as we deal with the ongoing challenges posted by Covid-related disruptions to our teams and our clients.”
Stevenson said council’s audit had been expected to commence from November 15.
“During the planning week, Audit NZ advised they needed to reschedule our audit due to their resourcing challenges and ceased work on our audit planning accordingly.
“We have been provided with a provisional indication of the dates of the rescheduled audit, with planning to commence on January 17, and the detailed testing to start a week later on January 24, 2022.
“This is anticipated to allow for adoption of the annual report and summary late February/early March 2022.”
Stevenson’s report indicated that the proposed rescheduling may not yet be achieved due to the auditor resourcing issues.
The report also said “the delay requires staff to revisit the draft 2021 Annual Report prior to the commencement of the rescheduled audit to update for new information as necessary to ensure the report is timely for audit and adoption late February/early March.
“This will detract staff from other priorities that are normally scheduled at that time of year including the preparation and completion of the draft 2022/23 Annual Plan.”
Walker’s letter added that Parliament had extended statutory reporting time frames to acknowledge the growing complexities affecting audits due to changing alert levels and an unprecedented shortage of auditors in New Zealand and Australia.
“We committed to using this time wisely, by first completing audits that had a major impact on wider public accountability. This includes the financial statements of the Government, government departments, state owned-enterprises, and Financial Markets Conduct reporting entities, like Auckland council.
“While these bigger audits went well, the national lockdown in August and September took place when they were underway, requiring significant additional time and resource. Many of our clients have also been dealing with significant ongoing disruption, meaning limited access to people and resources, slower delivery of information, and more work to test judgements in new areas.
“The most significant consequence is that this will affect the timing of some currently outstanding June 30, 2021 audits, including your council’s audit. We intend to start your (Waimate’s) audit in February 2022 and will aim to complete it by March 2022. Your Appointed Auditor will keep you informed regarding the planned timing.”
Audit NZ’s Mike Heine confirmed that eight councils are expected to have their annual report audits completed in 2022.
“Of those, one audit opinion won’t be signed until January at the council’s request,” Heine said.
“Of the remaining seven, as we noted in October, two councils were particularly late in completing their long-term plans, which took up time that would otherwise have been available to work on their annual audits. With the shortage, we were not able to schedule those two annual audits until early 2022.”