Audit office delays may impact Council’s IPART requests

Administrator Rik Hart has criticised “external agencies” that were making life tough for Central Coast Council.

He has reluctantly agreed to a “request” from the NSW Audit Office that Council ask the Office of Local Government for an extension of time to submit its audited 2020-2021 Financial Reports.

He said he had no choice but to agree but he was disappointed.

He said Council had submitted its financial statements into the NSW Audit office by August 31 in the hope of getting a speedy response and that was the fastest it had ever submitted them.

“The audit cost us three quarter of a million dollars last year because of the time the Audit Office took,” Hart said at the Council meeting on December 14.

“Now I can understand that. That year’s financials included the major part of the financial situation.

“But this year the financial team had the financials in within eight weeks (of the end of the financial year) and it is very disappointing to receive a request to extend (the time with the Audit office) out to the end of February: that is six months,” Hart said.

“Now to be slightly fair to the audit office, there were a couple of changes we had to make but very small.”

He said the first one was about $I.5 to $1.7M around the capitalisation of IT equipment, a change made in accordance with accounting practices which council had to abide by and it was a very small change.

The second one was around the revaluation of some assets.

Council had put in the wrong asset number which had to be corrected.

He said the corrections took about eight days to do and the Auditor General now proposed to have those accounts for six months.

“And no doubt we will get charged another three quarters of a million dollars,” he said.

Hart said the council needed those audited figures back before then so they could be included in Council’s submissions to IPART.

“Clearly it is a handicap to us to put our submission in to IPART if we don’t have our audited results to substantiate our financial position,” he said.

He said he might be over-reacting or perhaps he was expecting too much but he just wished the external agencies such as IPART and the NSW Audit Office spoke to each other.

“I have no choice,” he said.

Council submitted an extension request to defer the due date for lodgement of its audited
2020-2021 Financial Statements from December 17, 2021 to February 28, 2022.

It is the second request for this year.

The first request was to extend them from October 31.

Hart said this request to February overlapped with the time during which Council has to consider new Delivery Plans, Long Term Financial Plans and two applications to IPART.

“I urge the Audit Office to prioritise the finalisation of the audit of Council’s financial statements earlier than the end of February next year.

“This is because Council has notified IPART of its proposal to apply to maintain the Special Variation and that application is due by February 7, 2022.

“Council’s financial actions taken in 2020-21 and contained in the financial statements are an important part of that intended submission,” Hart said.

Council has a statutory obligation to submit its audited financial statements with the NSW Office of Local Government by October 31 each year.

The Audit Office of NSW advised Council that the audit of the financial statements would not be completed by that deadline and requested Council seek an extension to December 17, 2021 and now to February 28, 2022.

Merilyn Vale