Financial audit timeliness needs to improve
Under the Public Finance and Audit Act 1983, we are required to issue all NSW government entity financial audit opinions within ten weeks of receiving entities’ financial statements. Ninety-one per cent of our opinions were issued within ten weeks in 2017-18, an increase from 86 per cent. The earlier we give entities our audit opinions and management letters, the sooner they can make a decision around our recommendations.
In our first year auditing the financial statements of local government entities, we provided 73 per cent of audit opinions by 31 October 2017. Our target for the 2018–19 year is 100 per cent.
While we issue interim management letters throughout the audit, we aim to issue our final management letters within six weeks of issuing our respective audit opinions. In 2017-18, we achieved 61 per cent, compared to last year’s 67 per cent. We continue to develop and implement strategies to improve the timeliness of our management letters.
Performance audit timeliness remains steady
Our average time to complete performance audits was 11 months, which is consistent with previous years’ averages of 10-11 months. We have achieved this while taking on a new mandate and exploring new ways to present insights from our reports.
Taking on a new mandate to conduct performance audits of the local government sector entailed important work developing a good understanding of the issues in the sector, and taking appropriate time to respond to questions and concerns from key stakeholders.
State and university entities
Audit opinions within 10 weeks %
Local government entities
Audit opinions by 31 October
Management letters to clients within 6 weeks %
The year ahead
In 2018-19, we will focus on the timeliness of our audit output through innovation, collaboration and streamlined processes. This includes:
- working with NSW government entities, central agencies and the Office of Local Government to achieve improved quality and timeliness of financial and performance audit reports
- using stakeholder feedback to maintain effective relationships through our ‘Influencing for Impact’ strategic initiative
- improving our resource capacity by spreading the timing of audit work and partnering better with audit service providers external to the Audit Office
- our branches working together better to improve efficiency and enhance skills and knowledge transfer though our ‘Working Better, Working Together’ strategic initiative
- exploring opportunities to make greater use of technology to speed up and simplify reporting processes through our ‘Reporting Process’ strategic initiative.
For more information on our strategic initiatives see the year ahead.