This year, we worked with state government entities and some larger local governments as they undertook an initial self-assessment of their financial statement preparation processes using the maturity model on our website. The self-assessment has provided insights into areas of strength and improvement for each of our clients.

The stronger an entity’s financial statement preparation processes were, the easier the entity found it to complete its financial statements by the legislated deadline. Meeting these deadlines this year was a significant achievement for our state and local government clients, given the impacts and uncertainties of COVID‑19.

Now is a good time for entities to reflect on their recent financial statement preparation experiences to update their initial self-assessment against the maturity model. Where they identify areas for improvement, each entity can develop an implementation plan for discussion with its audit committee.

We have also collated the results of the self-assessments for this year to include them in our reports to parliament. The results show that most of the large and well-established entities have more mature processes in place. Some smaller entities, and departments more recently affected by machinery-of-government changes, assessed their processes as being less mature, but appropriate for them.

Key strengths and areas of improvement include:

Strengths identified Timely valuations for property, plant and equipment and infrastructure assets, with clear instructions provided to valuation experts and robust reviews of their reports Continuous refinement of financial statements to reflect operations and the needs of users Good engagement with auditors on financial reporting issues, improvements to processes, and upcoming accounting standards

Improvements identified Monthly reporting through analysis providing better performance insights. This is particularly challenging for large entities with diverse operations across the state Financial statements are commonly prepared using spreadsheets and word processing tools. There may be opportunities to automate the preparation of financial statements

Our engagement leaders will continue to work with entities on the maturity assessments.