Thursday, November 30, 2017
Ross McCullough
Opotiki District Council has been told it needs to up its game in the wake of an Audit New Zealand report that identifies various issues requiring work.
The report for the year ended June 30, 2017 was tabled at the council’s audit and risk committee meeting this week.
Audit NZ issued an unmodified audit opinion on October 31 this year, indicating it was satisfied the key financial statements and council’s activities and performance information “fairly reflected” council’s activity for the year and its financial position at the end of the year.
Several of council’s systems and assessments were also reviewed and tested and satisfied auditors.
However, audit director Clarence Susan said the Opotiki council audit did not go as smoothly as they would have liked, and Audit NZ now intended to meet with management to discuss ways they could work together to ensure a more efficient annual reporting process going forward.
During the audit, it was council’s annual reporting process under Section 3.5 that drew an urgent rating, meaning council needs to address the problem area urgently as it exposes the council to significant risk.
Risks could include a material error in financial statements and the non-financial information; a breach of significant legislation; or harm to its reputation.
As a result, Audit NZ has recommended to council that its annual report process is planned and scheduled on a project basis and closely monitored to ensure milestones are met.
Another area identified by Audit NZ to be addressed by the council is around its property, plant and equipment.
Specifically, that no formal impairment assessment of its property, plant and equipment has been carried out, with council relying on notification from staff of any issues of impairment.
“This exposes the district council to the risk of carrying assets at an amount higher than their recoverable amount,” the report says.
Audit New Zealand has recommended council performs a formal impairment assessment over assets held at cost to ensure they are measured at the lower of cost and recoverable amount.
There were also six other deficiencies that Audit NZ rated necessary, or needing to be addressed at the earliest reasonable opportunity.
In an executive summary accompanying the report, finance and corporate services manager Bevan Gray said the report highlighted issues-areas that required addressing. Some were existing issues council hadn’t yet addressed, and there were some new areas.
The new areas to address should be taken as a signal to council that it needs to “up our game” so to speak, Mr Gray said.
“We will be in the limelight now with a major national infrastructure project on our doorstep.
“We are going to need to ensure that we not only address these issues now, but also to be confident that we are responsive enough in the future that changes and amendments to legislation are addressed before the audit process begins.”
Mr Gray said council had already begun to address previous audit issues, and would now do so with the new issues raised by Audit NZ.
He pointed out council management had made good progress with outstanding issues from previous audits.
Mr Gray said this year, there were a considerable number of points raised by Audit NZ, some of which were around process, but to some degree most related in some form or another to resourcing.
There were processes already under way to address the resourcing issues, and a lot of progress had been made already.
Every year Audit NZ undertakes an interim audit before the end of the year, and a full audit once council’s draft annual report is available.