Note 15: Related party transactions

The Office is a wholly owned entity of the Crown. The Office enters into transactions with government departments, Crown entities, and state-owned enterprises on an arm’s-length basis. Transactions that occur within a normal supplier or client relationship, on terms and conditions no more or less favourable than those which it is reasonable to expect the Office would have adopted if dealing with that entity at arm’s length in the same circumstances, are not disclosed.

The following transactions were carried out with related parties:

• There are close family members of key management personnel employed by the Office. The terms and conditions of those arrangements are no more favourable than the Office would have adopted if there were no relationship to key management personnel.
• The Office purchased services from Research Write Limited, a research and communications firm, in which the Deputy Controller and Auditor-General’s sister and brother-in-law are Directors. The contract was entered into prior to her appointment as Deputy, on normal commercial terms. The services purchased cost $8,950 (2007 – $11,000) and continued to be supplied on normal commercial terms. There is a balance of $3,093 (2007 – $2,813) outstanding at balance date.
• The Office carried out the audit of the Ministry of Agriculture and Forestry (MAF) in which the Assistant Auditor-General Research and Development’s husband is the Acting Chief Information Officer. The value of the services provided under the contract during the year totalled $183,000 (2007 – $178,000) and were negotiated on normal commercial terms. There were no outstanding balances at balance date (2007 – nil). The Assistant Auditor-General Research and Development had no involvement with the audit of MAF.
• The Office carried out the audit of the Valuers Registration Board (the Board) of which the General Manager Operations at Audit New Zealand is an outgoing member. The General Manager Operations held the Board membership position, which is a ministerial appointment, prior to employment with the Office and, on joining the Office, the Auditor-General agreed that some work be done as a transition to leaving the Board. The audit of the Board was carried out by a contracted audit service provider, not by Audit New Zealand. The value of the audit fee under the contract totalled $5,000 (2007 – $5,000) and it was negotiated on normal commercial terms.

Key management personnel compensation

Key management personnel include the Auditor-General, the Deputy Auditor-General, and the ten members of the OAG and Audit New Zealand Leadership Teams.