Setting your Council up for success at audit time
3 November 2022
Attracting, training and retaining skilled staff is a common challenge for many local governments, even more so in remote or isolated local government areas.
The pressure of managing the year-end process in conjunction with other competing priorities can put significant strain on already constrained internal resources and unnecessarily prolong the audit process.
Some of the barriers many Councils and local governments face in achieving operational, financial and strategic success due to constrained resources at audit time, include:
Outcomes that are inaccurate, incomplete or not strategically aligned due to the significant strain the valuation process puts on internal resources.
Being distracted from focusing on strategic objectives due to the intensive resources required to implement improvements to financial reporting content and processes, which has been highlighted as an area of focus by the Queensland Audit Office (QAO) for all public sector entities.
The ability to access the specific expertise required to address complex accounting matters, such as accounting for tip restoration provisions, application of new accounting standards and asset accounting, particularly for those in remote localities.
Finding an advisory firm who works as a true partner to your Council and has the astute technical skills needed to guide you through the complexity.
Onboarding an experienced team of advisers, who can assist with all aspects of year-end reporting and audit preparation, can help your Council be better equipped to optimise its year-end and financial reporting processes and be better positioned to meet its compliance obligations.
Choosing an adviser who has extensive experience working with a range of local government entities and is equipped with the industry insight and technical expertise to manage the entire end-of-year process will mean you have a team of experts who can:
Assist with end of year reconciliations.
Provide technical advice on complex accounting matters and preparation of position papers for external auditors.
Support asset accounting including review of asset registers, reconciling acquisitions, disposals and write-offs.
Optimise the asset valuation process by engaging with relevant stakeholders, assessing and processing valuation results and preparing workpaper files for audit and financial statement disclosures.
Compile audit files.
Prepare financial statements.
Council case study
Findex and Crowe Australasia’s extensive experience across the local government sector provides us with a unique insight into the dynamics and mechanics of the Councils we partner with.
One Council we partnered with was having trouble attracting and retaining skilled staff due to their location. Additionally, the Council did not have a robust month end process and legacy issues existed within the chart of accounts and subsidiary asset module. This meant, when it came time to undertake their year-end process, they were experiencing significant challenges due to resourcing issues and unforeseen issues in the asset revaluation process.
Findex and Crowe Australasia were brought on board to help prepare Council’s annual statutory financial statements and notes, including supporting workpapers and reconciliations.
We updated the Council’s financial statement model with internal linkages and automation to improve accuracy and efficiency when processing changes or adjustments and provided technical advice regarding asset valuations and capitalisations, which included analysis, reconciliation and disclosure of a significant prior period error restatement. We then looked at asset register maintenance including capitalisations, disposals and depreciation..
In addition to this, the team prepared position papers on significant accounting issues and assisted in the preparation of a number of a number of financial statement disclosure areas . We also provided assistance during the audit process and attended Audit Committee meetings.
Due to our ability to provide the Council with a dedicated resource for extended periods of time both remotely and on-site, they were able to undertake a thorough year end process, resolve long standing issues and produce a high-quality set of financial statements and supporting workpapers which supported an efficient audit process. This engagement remains ongoing.
Councils manage significant assets and finances on behalf of their communities and getting it right is critical to their ability to continue providing the services and facilities that are needed. Findex and Crowe have extensive experience partnering with local Councils to help them become better equipped to optimise their year-end and financial reporting processes and be better positioned to meet their compliance obligations. To see how our Audit team can help you, get in touch with us.