Audit Readiness in Local Government: From recurring delays to disciplined delivery

Why delays persist: capacity gaps and control failures

Multiple years of disclaimed or qualified opinions have become common - eroding public confidence, slowing decision-making, and draining resources. The root causes? Capacity gaps, weakened controls, and late engagement on complex issues, the challenge now increased by new requirements like IFRS 16.

The picture is patchy. While some authorities publish on time and secure unqualified opinions, many face repeated disclaimers. The underlying reasons are consistent:

• Thin capacity: Not enough qualified finance professionals; over-reliance on one or two “indispensables.”
• Control breakdowns: Bank reconciliations delayed; journals posted without review; basic governance lapses.
• Poor quality of working papers: Scattered files, poor version control, numbers that don’t tie back to the trial balance.
• Complexity deferred: IFRS 16 leases, valuations, PFIs, and unusual transactions left until year-end - when options are few and pressure is high.

What high performers get right

They treat audit readiness as a year-round discipline, not a year-end scramble. That means clarity of ownership, robust planning, and independent QA before anything goes to the auditor.

Here’s how you can prepare:

1) Plan backwards from the Audit Committee date

• Fix the Audit Committee sign-off date first; plan everything else in reverse.
• Publish a single timeline covering drafting, QA, Standard Working Paper Requirements, and time to respond to queries and resolve issues.
• Assign named leads for each statement and note - not just “Finance.”

Why it works: Creates a shared target, synchronises effort across finance, legal, estates and services, and avoids last-minute cross-dependencies.

2) Standardise evidence

• Use consistent working paper templates and file naming (e.g., Note_07_PPE_v1.2_YYYY-MM-DD).
• Each paper states purpose, source data, tie to TB, and reviewer sign-off.
• Maintain an index tracing every statement/note to its supporting paper.

Why it works: Auditors need to re-perform. Standardisation cuts rework and shortens query cycles.

3) Certify the basics every month

• Bank reconciliations cleared within 10 working days.
• Journal governance: clear narratives, second-level approval thresholds, periodic review of sensitive entries.
• Feeder system reconciliations tied back to the ledger.

Why it works: Strong fundamentals prevent qualified opinions for avoidable control issues.

4) Engage early and openly on complex areas

• Bring auditors into technical discussions early (leases under IFRS 16, valuations, provisions, changes to group structures, etc.).
• Share short position papers on accounting treatment adopted for significant new transactions, key accounting policies, assumptions and management judgements.
• Hold weekly 30-minute surgeries on critical topics during pre-close.

Why it works: Early scrutiny surfaces issues when you still have options - and builds trust.

5) Run an independent cold review before Day‑1

• Stage 1: Basics - arithmetic ties, TB-to-note mapping, disclosure checklist completion.
• Stage 2: Judgement - key estimates, valuations, provisions; confirm evidence can be re-performed.

Why it works: A genuine cold review is the single highest-leverage step to avoid painful mid-audit surprises.

6) Don’t skip QA. First impressions matter

The first set of accounts auditors see sets the tone. Well-presented, accurate accounts signal care and competence. Rushed drafts with errors and typos do the opposite - triggering deeper scrutiny and slowing progress.

If you can’t meet a deadline without sacrificing quality, be honest and adjust. In the best organisations, QA is independent of the preparer and automatic - not an afterthought.

How you can prepare your team

The fastest improvers embrace openness and challenge. They hold a short post-audit debrief within two weeks of sign-off, capture what worked well and specific improvements, and bake them into next year’s templates and timetables. 

Audit readiness isn’t about heroics in June; it’s the quiet discipline of planning backwards, standardising evidence, proving controls, and talking early about complexity. Focus on those levers, and you’ll cut audit time, reduce the risk of qualified opinions, and deliver the assurance your stakeholders expect - confidently and on time.

Because when audits go wrong, the consequences can be severe: delayed accounts, statutory recommendations, public interest reports, and reputational damage. That’s why we recommend Audit Readiness Training for Local Government - a structured way to embed these practices with:

• Peer examples from high-performing authorities
• Hot-topic checklists and QA templates
• Practical tools like our Accounts Consistency Checker