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Auditor-General Shares Insights From 2020 Local Government Work

The Auditor-General’s new report, Insights into local government: 2020, presents the main findings from the 2019/20 audits of New Zealand’s local councils and other local government work.

“Providing affordable and sustainable services to communities has always been a challenge for councils, but it is becoming even harder,” says John Ryan.

“Well-planned, funded, and well-managed asset renewal programmes are critical to sustainable service delivery. Without this, communities can end up paying more to renew their assets and suffering unexpected disruptions to services because of asset failure.”

Previous reports have noted concerns that councils have not been adequately reinvesting in their assets. This trend continued in 2019/20.

However, many councils have identified this matter in their 2021-31 long-term plan consultation documents.

Covid-19 also severely disrupted the preparation, and audits, of councils’ 2019/20 annual reports. Auditors needed considerably more time to complete the audits of the 2019/20 annual reports compared with a normal year.

Auditors also issued more qualified audit opinions on councils’ annual reports than before. Most qualifications were because enough evidence could not be obtained to support non-financial performance reported by councils.

“The performance that a council reports should tell a story about the services it delivers, why it delivers them, and what difference it intends to make to its community,” says Auditor-General John Ryan.

The report also highlights the importance of effective council governance. This requires elected members to manage uncertainties and gain assurance that the council is identifying – and appropriately managing – organisational risks.

The report outlines the Office’s work during 2019/20 to support councils and their audit and risk committees in achieving good governance, accountability, and transparency. The Office has focused heavily on sharing insights about what “good” looks like; understanding how councils manage risk; and supporting councils’ long-term plans for 2021-31.

This report also explores the challenges faced by regional councils in managing conflicts of interest. This includes discussions about some of the conflict of interest issues the Office considered during the year, and uses two examples from regional councils to illustrate the points discussed.

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