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Only the Proposal and Policy sections of this Cabinet paper are extracted below in HTML. If you require a full HTML version please contact [email protected] and cite CAB-21-SUB-0260 as a reference.
Cabinet Paper: CAB-21-SUB-0260: Annual Reporting and Audit Timeframes Extensions Legislation Bill: Approval for Introduction
1This paper seeks agreement to introduce the Annual Reporting and Audit Timeframes Extensions Legislation Bill.
2The Auditor-General has advised me that the ability of auditors to meet legislated audit timeframes, and produce sufficiently robust audits, is under pressure. This is due to capacity constraints within the auditing profession and the ongoing impacts of COVID-19. There is a shortage of auditors in New Zealand and Australia due to high demand, disruptions from current border settings to the traditional model of bringing in offshore staff to assist with peak audit workloads, and high turnover of Audit New Zealand staff.
3In response to these issues the Auditor-General has sought my support for extensions to audit timelines under the Crown Entities Act 2004. He has also sought the Minister of Local Government’s support for extensions to timelines in the Local Government Act 2020. These extensions are both required to ensure robust audit opinions and compliance with legislative timelines.
4On 30 June 2021, the Cabinet Economic Development Committee (Committee), with power to Act, agreed to seeking a legislative response to address the issue before the House rises for the July recess (DEV-21-MIN-0149). The Committee agreed to the development of a Bill that would amend the Crown Entities Act 2004 to extend by two months, the timeframes in which auditors must audit those reports and statements for the financial years ending 30 June 2021 and 30 June 2022 for:
4.1 organisations listed at Schedule 4 of the Public Finance Act 1989;
4.2companies listed in Schedule 4A of the Public Finance Act 1989; and
5The amendment will apply only for entities subject to the audit requirements of the Crown Entities Act and with financial years ending 30 June 2021 and 30 June 2022.
6On 30 June 2021 the Committee also authorised the Minister of Local Government to approve a policy to amend the Local Government Act 2002 to extend the reporting timeframes for local authorities and council-controlled organisations for the 2020/21 and 2021/22 financial years in the same Bill that amends the Crown Entities Act (DEV-21-MIN-0149). The Minister of Local Government has used this authorisation to include in the draft Bill amendments to annual report timeframes in the Local Government Act.
7The Minister of Finance has been authorised by the Committee to take the draft Bill to Cabinet for consideration, without going through the Cabinet Legislation Committee.
8This Bill is required to give effect to the proposed legislative changes. The Bill contains non-contentious amendments that are likely to get cross-party support.