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Acceptable draft financial statements should be submitted to the auditor by 30 September 2022.

Where acceptable draft financial statements cannot be provided to the auditor by 30 September 2022, the local government should seek approval for an extension from the Minister for Local Government.

Any application for extension must be made prior to 30 September 2022. The application form can be found in Smart Hub under 'Requests for Approval Forms'. When applying for an extension, the local government should:

• clearly identify what work still needs to be undertaken
• discuss with their auditor, so a realistic timeframe for undertaking and finalising the audit can be established.

In preparation for the 2021-22 financial reporting and audit cycle, local government entities are encouraged to be audit ready by:

• reviewing their prior year audit findings and ensure they have been addressed
• reviewing what went well and what could be improved from past audit experiences
• preparing financial statements applying best practice principles.

Best practice principles

There should be a clear management trail of supporting evidence indicating how each item in the financial statements is derived and/or substantiated. Refer to Office of the Auditor General (OAG) Western Australian Public Sector Financial Statements — Better Practice Guide — Tool 11 for an example of requirements for supporting documentation.

Well-structured and complete working papers are essential to support and validate the financial statements. The OAG Western Australian Public Sector Financial Statements — Better Practice Guide — Tool 10 example working papers cover sheet can assist in providing a reference to all relevant documents that support each financial statement item or note.

Agreed reporting timeframes must be adhered to. OAG Western Australian Public Sector Financial Statements — Better Practice Guide — Tool 4 example provides a summary timetable of key financial reporting dates, in a form that is convenient for key stakeholders such as an audit committee or the OAG.

Local government entities are encouraged to implement quality assurance processes and use the tools and resources available to prepare for their audit and financial statements. The OAG Western Australian Public Sector Financial Statements — Better Practice Guide, has information and tools that may assist local governments in preparing their financial statements.

For further information contact LG.accounting@dlgsc.wa.gov.au