Introduction

This report serves two broad purposes:

• it constitutes our “annual report” on the audits for 2002-03 of the Crown and its sub-entities – mainly as reflected in the Financial Statements of the Government of New Zealand for the Year Ended 30 June 2003 (the Financial Statements), parliamentary paper B.11, 2003; and
• it brings to attention a number of other matters (related both directly and indirectly to events occurring in the financial year 2002-03) that we believe warrant consideration by Parliament.

Part One (pages 9-21) deals with the Government’s Financial Statements as audited and presented to the House. Specific topics addressed include:

• consolidation issues;
• valuation issues;
• application of standards based on International Financial Reporting Standards; and
• resolution of issues previously raised.

Part Two (pages 23-32) deals with the results of our audits of government departments for the year ended 30 June 2003. We include our usual:

• commentary on the audit opinions on the departments’ financial reports; and
• assessments of the departments’ financial and service performance management.

Part Three (pages 33-43) sets out details of the non-standard audit reports we issued during the period 1 July 2002 to 31 December 2003 on the financial reports of:

• entities that are part of the Crown reporting entity; and
• other public entities not within the local government portfolio.

Part Four (pages 45-65) outlines the requirements relating to payment of remuneration and other payments to school principals, and describes work we undertook to ascertain the practices and extent of compliance by school boards of trustees in respect of the various forms of payment made.

Part Five (pages 67-76) comments on pending changes to Financial Reporting Standards, with particular reference to possible consequences for public sector entities.

Part Six (pages 77-103) gives the current status of follow-up action on previous reports we have made to Parliament.