Appendix: Details of non-standard audit reports issued
Local government: Results of the 2006/07 audits.
These details relate to non-standard audit reports issued during the 2007 calendar year. Where an entity is directly or indirectly controlled by one or more city or district councils, we have listed them in brackets.
Adverse opinions
| Pukaki Trust |
| Financial statements year ended: 30 June 2005 |
| We disagreed with the Trustees ceasing to recognise the monetary value for an artwork asset it owns, and writing off the previous value of the artwork asset in its financial statements. The Trustees' decision resulted in an overstatement of the expenditure and deficit in the Statement of Financial Performance and an understatement of the assets and equity of the Trust. These are departures from Financial Reporting Standard No. 3: Accounting for Property, Plant and Equipment, which requires artwork assets to be recognised at fair value and depreciated. |
| Hawke's Bay Cultural Trust (Hastings District Council and Napier City Council) |
| Financial statements year ended: 30 June 2007 |
| We disagreed with the Trustees not recognising the collection assets of the Cultural Trust, nor the associated depreciation expense, in the Trust's financial statements. These are departures from Financial Reporting Standard No. 3: Accounting for Property, Plant and Equipment, which requires collection assets not previously recognised to be recognised at fair value and depreciated. |
| Far North Regional Museum Trust (Far North District Council) |
| Financial statements year ended: 30 June 2005 |
| We disagreed with the Trustees not recognising the collection assets of the Trust, nor the associated depreciation expense, in the Trust's financial statements. These are departures from Financial Reporting Standard No. 3: Accounting for Property, Plant and Equipment, which requires collection assets not previously recognised to be recognised at fair value and depreciated. In addition, our audit was limited because we were unable to verify certain revenue because of limited controls over the receipt of that revenue. |
| The Museum of Transport and Technology Board |
| Financial statements year ended: 30 June 2006 and 30 June 2007 |
| We disagreed with the Board not recognising the museum collection assets of the Museum, nor the associated depreciation expense, in the Museum's financial statements. These are departures from Financial Reporting Standard No. 3: Accounting for Property, Plant and Equipment, which requires museum collection assets not previously recognised to be recognised at fair value and depreciated. |
| The Canterbury Museum Trust Board |
| Financial statements years ended: 30 June 2006 and 30 June 2007 |
| We disagreed with the Trust Board not recognising the museum collection assets of the Museum Trust, nor the associated depreciation expense, in the Museum Trust's financial statements. These are departures from Financial Reporting Standard No. 3: Accounting for Property, Plant and Equipment, which requires museum collection assets not previously recognised to be recognised at fair value and depreciated. |
| Otago Museum Trust Board |
| Financial statements year ended: 30 June 2007 |
| We disagreed with the Trust Board not recognising the museum collection assets of the Museum Trust, nor the associated depreciation expense, in the Museum Trust's financial statements. These are departures from New Zealand equivalent to International Financial Reporting Standard No. 16: Property, Plant and Equipment, which requires museum collection assets not previously recognised to be recognised at fair value and depreciated. |
| Nelson Creek Recreation Reserve Board |
| Financial statements year ended: 30 June 2006 |
| We disagreed with the Board not preparing annual financial statements in accordance with section 41(2) of the Public Finance Act 1989 and not complying with generally accepted accounting practice. Our audit was limited because we were unable to verify certain revenue because of limited controls over the receipt of that revenue. |
Disclaimers of opinion
| Bendigo Construction Limited (Invercargill City Council) |
| Financial statements for year ended: 30 June 2005 |
We were unable to form an opinion on the financial statements because of the potential effect of a limitation in evidence available to us. The evidence was limited because:
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| Bendigo Construction Limited (Invercargill City Council) |
| Financial statements for year ended: 30 June 2006 |
We were unable to form an opinion on the financial statements because of the potential effect of a limitation in evidence available to us. The evidence was limited because the Board did not provide the representations that we sought. In addition, we drew attention to the fact that we did not form an opinion on the financial statements for the year ended 30 June 2005 because:
|
| Bond Contracts Limited and Group (Invercargill City Council) |
| Financial statements for year ended: 30 June 2005 |
We were unable to form an opinion on the company and group financial statements because of the potential effect of a limitation in the scope of the audit. The scope of the audit was limited because:
|
| Bond Contracts Limited and Group (Invercargill City Council) |
| Financial statements for year ended: 30 June 2006 |
We were unable to form an opinion on the company and group financial statements because of the potential effect of a limitation in the scope of the audit. The scope of the audit was limited because:
|
Except-for opinions
| Upper Hutt City Council and Group |
| Financial statements year ended: 30 June 2007 |
| We disagreed with the value at which the Council and Group recognised operational, restricted and infrastructural asset classes in the financial statements. The Council and Group accounting policy is to recognise operational, restricted and infrastructural asset classes at fair value. We identified reliable indicators to suggest that it was likely there had been a material increase in the value of the operational, restricted, and infrastructure asset classes. On this basis the Council departed from New Zealand equivalent to International Accounting Standard No. 16: Property, Plant and Equipment, which requires classes of property, plant and equipment that are revalued to be revalued with sufficient regularity to ensure that they are not included at a value that is materially different to fair value. |
| Invercargill City Holdings Limited and Group (Invercargill City Council) |
| Financial statements years ended: 30 June 2005 and 30 June 2006 |
Our audit was limited because of:
|
| Inframax Construction Limited (Waitomo District Council) |
| Financial statements year ended: 30 June 2004 |
| We disagreed with the Board only about comparative information because the Statement of Movements in Equity showed a prior period adjustment resulting from an error in the recognition of accrued revenue on maintenance contracts. This was a departure from Financial Reporting Standard No. 7: Extraordinary Items and Fundamental Errors, which allows for the recognition of a prior period adjustment only in the event of a fundamental error. In our view, the adjustment was not a fundamental error. |
| Tasman Bays Heritage Trust Incorporated (Nelson City Council and Tasman District Council) |
| Financial statements year ended: 30 June 2006 |
| We disagreed with the Trustees only about comparative information because the value of collection and exhibition assets donated to the Trust between 1 July 2000 and 30 June 2003 had not been recognised in the Trust's financial statements for the year ended 30 June 2005. Non-recognition of collection and exhibition assets was a departure from Financial Reporting Standard No. 3: Accounting for Property, Plant and Equipment. We also noted a breach of the Local Government Act 2002 because the Trustees did not prepare a Statement of Intent for the year ended 30 June 2006. |
| Aurora Energy Limited (Dunedin City Council) |
| Financial statements year ended: 30 June 2007** |
| We disagreed with the company recognising the reduction in its deferred taxation liability arising from the revaluation of its network assets in previous years directly through the statement of changes in equity. This is a departure from the requirements of the New Zealand Equivalent to International Accounting Standard 12: Income Taxes. |
| Buller Health Trust (Buller District Council) |
| Financial statements year ended: 30 June 2002 |
| Our audit was limited because the financial statements of the Trust had not previously been audited. Therefore, we did not form an opinion about the comparative information and noted that any misstatement of the comparative figures would affect the results for the year ended 30 June 2002 |
| Buller Health Trust (Buller District Council) |
| Financial statements year ended: 30 June 2003 |
| Our audit was limited in respect of comparative information only because the financial statements of the Trust had not been audited for the year ended 30 June 2001 and any misstatement of that year's figures would affect the results for the year ended 30 June 2002. |
| Buller Health Trust (Buller District Council) |
| Financial statements year ended: 30 June 2005 and 30 June 2006 |
| The Trust did not prepare a Statement of Intent for the years beginning 1 July 2004 and 1 July 2005 respectively, as required by the Local Government Act 2002. Therefore, it had not prepared performance information that fairly reflected its service achievements. We also noted a breach of the Local Government Act 2002 because the Board of Trustees did not prepare a Statement of Intent for the years beginning 1 July 2005 and 1 July 2006 respectively. |
| Buller Health Trust (Buller District Council) |
| Financial statements year ended: 30 June 2007 |
| The Trust did not prepare a Statement of Intent for the year beginning 1 July 2006, as required by the Local Government Act 2002. Therefore, it had not prepared performance information that fairly reflected its service achievements. |
| Cranberries New Zealand Limited |
| Financial statements year ended: 31 March 2006 |
| Our audit was limited because the financial statements of the company had not previously been audited. We therefore did not form an opinion about the comparative information and noted that any misstatement of the comparative figures would affect the results for the year ended 31 March 2006. |
| Cranberries New Zealand Limited |
| Financial statements year ended: 31 March 2007 |
| Our audit was limited in respect of comparative information only because the financial statements of the company had not been audited for the year ended 31 March 2005 and any misstatement of that year's figures would affect the results for the year ended 31 March 2006. |
| Tiromoana Station Limited (Christchurch City Council) |
| Financial statements year ended: 30 June 2006 |
| Our audit was limited in respect of comparative information only because the financial statements of the company had not been audited for the year ended 30 June 2004 and any misstatement of that year's figures would affect the results for the year ended 30 June 2005. |
| Sister Cities New Zealand Incorporated (Hastings District Council) |
| Financial statements year ended: 30 June 2004 |
| Our audit was limited in respect of comparative information only because we were unable to verify certain revenue because of limited controls over the receipt of that revenue for the year ended 30 June 2003. |
| Tourism Dunedin Trust (Dunedin City Council) |
| Financial statements year ended: 30 June 2006 |
| The Trust did not prepare a Statement of Intent for the year beginning 1 July 2005 as required by the Local Government Act 2002. Therefore, it had not prepared performance information that fairly reflected its service achievements. We also noted a breach of the Local Government Act 2002 because the Trust did not prepare a Statement of Intent for the year beginning 1 July 2006. |
| Tramway Reserve Trust (Selwyn District Council) |
| Financial statements year ended: 30 June 2005 |
| The Trust did not prepare a Statement of Intent for the year beginning 1 July 2004 as required by the Local Government Act 2002. Therefore, it had not prepared performance information that fairly reflected its service achievements. |
| Westland Holdings Limited and Group (Westland District Council) |
| Financial statements year ended: 30 June 2006 |
| The Company did not prepare a Statement of Intent for the year beginning 1 July 2005 as required by the Local Government Act 2002. Therefore, it had not prepared performance information that fairly reflected its service achievements. We also noted a breach of the Local Government Act 2002 because the Board did not prepare a Statement of Intent for the year beginning 1 July 2006. |
| Marlborough Airport Limited (Marlborough District Council) |
| Financial statements year ended: 30 June 2007 |
| The Company did not prepare a Statement of Intent for the year beginning 1 July 2006 as required by the Local Government Act. Therefore, it had not prepared performance information that fairly reflected its service achievements. |
| Varroa Agency Incorporated (Environment Canterbury) |
| Financial statements year ended: 30 June 2006 and 30 June 2007 |
| The Agency did not prepare a Statement of Intent for the years beginning 1 July 2005 and 1 July 2006 respectively as required by the Local Government Act 2002. Therefore, it had not prepared performance information that gave a true and fair view of its service achievements. We also noted a breach of the Local Government Act 2002 because the Board did not prepare a Statement of Intent for the years beginning 1 July 2006 and 1 July 2007 respectively. |
| Pemberton Construction Limited (Waikato District Council) |
| Financial statements year ended: 30 June 2007 |
| The Company did not prepare a Statement of Intent for the year beginning 1 July 2006 as required by the Local Government Act 2002. Therefore, it had not prepared performance information that gave a true and fair view of its service achievements. We also noted the disclosure in the financial statements that the Board did not prepare a Statement of Intent for the year beginning 1 July 2007. |
| Auckland Regional Transport Network Limited and Group (Auckland City Council) |
| Financial statements year ended: 30 June 2006 and 30 June 2007 |
| The Company did not prepare a Statement of Intent for the years beginning 1 July 2005 and 1 July 2006 as required by the Local Government Act 2002. Therefore, it had not prepared performance information that gave a true and fair view of its service achievements. |
| ARTNL Harbour Berths Limited (Auckland City Council) |
| Financial statements year ended: 30 June 2006 |
| The Company did not prepare a Statement of Intent for the year beginning 1 July 2005 as required by the Local Government Act 2002. Therefore, it had not prepared performance information that gave a true and fair view of its service achievements. |
| ARTNL Harbour Berths Limited (Auckland City Council) |
| Financial statements year ended: 30 June 2007 |
| The Company did not prepare a Statement of Intent for the year beginning 1 July 2006 as required by the Local Government Act 2002. Therefore, it had not prepared performance information to give a true and fair view of its service achievements. We also noted the disclosure in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because the Company was to be wound up in the foreseeable future. |
| ARTNL Metro Limited (Auckland City Council) |
| Financial statements year ended: 30 June 2006 |
| The Company did not prepare a Statement of Intent for the year beginning 1 July 2005 as required by the Local Government Act 2002. Therefore, it had not prepared performance information that gave a true and fair view of its service achievements. |
| ARTNL Metro Limited (Auckland City Council) |
| Financial statements year ended: 30 June 2007 |
| The Company did not prepare a Statement of Intent for the year beginning 1 July 2006 as required by the Local Government Act 2002. Therefore, it had not prepared performance information to give a true and fair view of its service achievements. We also noted the disclosure in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because the Company was to be wound up in the next 12 months. |
| ARTNL Britomart Limited (Auckland City Council) |
| Financial statements year ended: 30 June 2006 and 30 June 2007 |
| The Company did not prepare a Statement of Intent for the years beginning 1 July 2005 and 1 July 2006 as required by the Local Government Act 2002. Therefore, it had not prepared performance information that gave a true and fair view of its service achievements. |
| Tourism Dunedin Trust (Dunedin City Council) |
| Financial statements year ended: 30 June 2007 |
| The Trust did not prepare a Statement of Intent for the year beginning 1 July 2006 as required by the Local Government Act 2002. Therefore, it had not prepared information that fairly reflected its service achievements. We also noted the disclosure in the financial statements that referred to uncertainty over the continued financial support from the trust's parent, Dunedin City Council, and the Trust meeting its 2008 budget. The validity of the going concern assumption was dependent on the continued support and the trust meeting its 2008 budget. |
| East Otago Community Sports and Cultural Centre Trust (Dunedin City Council) |
| Financial statements year ended: 30 June 2006 and 30 June 2007 |
| Our audit was limited because we were unable to verify certain revenue because of limited controls over the receipt of that revenue. |
| Carparking Joint Venture (Christchurch City Council) |
| Financial statements year ended: 30 June 2007 |
| Our audit was limited because we were unable to verify certain revenue because of limited controls over the receipt of that revenue. |
| Village Pool Charitable Trust (Hastings District Council) |
| Financial statements year ended: 30 June 2007 |
| Our audit was limited because we were unable to verify certain revenue because of limited controls over the receipt of that revenue. |
* The limitations in the scope of the audits of Bond Contracts Limited and Group for the years ended 30 June 2005 and 30 June 2006 are noted on page 107.
** We have been advised by the Board of its intention to withdraw and reissue the financial statements.
Explanatory paragraphs - emphasis of matter
| New Zealand Mutual Liability Riskpool |
| Financial statements year ended: 30 June 2006 |
| We noted the disclosure in the financial statements that referred to the financials statements being appropriately prepared on the going concern basis because the Trustee of the Riskpool was able to levy members to cover any shortfall in equity in any fund. |
| Whisper Tech Limited |
| Financial statements year ended: 30 June 2005 |
| We noted the disclosure in the financial statements that referred to uncertainty about the viability of Whisper Tech Joint Venture (the Joint Venture), which was the exclusive licensee of the company's assets and intellectual property under a licence agreement. The validity of the going concern assumption depended on financial support from the parties to the Joint Venture that were also significant shareholders in the company. |
| Whisper Tech Joint Venture |
| Financial statements year ended: 30 June 2005 |
| We noted the disclosure in the financial statements that referred to uncertainty over the continued financial support of the joint venturers. The validity of the going concern assumption depended on that support. |
| Far North Holdings Limited and Group (Far North District Council) |
| Financial statements year ended: 30 June 2007 |
| We noted that the chairman's report contained alternative versions of the statement of financial performance and statement of financial position to the audited financial statements. We noted that the statements outlined in the Chairman's report did not comply with generally accepted accounting practice and were not audited. |
| Advance Whangarei Limited (Whangarei District Council) |
| Financial statements year ended: 30 June 2006 |
| We noted the disclosure in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because the company was wound up on 30 June 2006. |
| Far North Developments Limited (Far North District Council) |
| Financial statements year ended: 30 June 2007 |
| We noted the disclosure in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because the company ceased operating. |
| ARRB Road Info Limited (New Plymouth District Council and South Taranaki District Council) |
| Financial statements year ended: 30 June 2007 |
| We noted the disclosure in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because of the Board's intention to wind up the company. |
| Wellington Regional Economic Development Trust (Wellington City Council, Hutt City Council, and Porirua City Council) |
| Financial statements year ended: 30 June 2007 |
| We noted the disclosure in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because of the Trustees' intention to wind up the trust. |
| America's Cup Village Limited and Group (Auckland Regional Council) |
| Financial statements year ended: 30 June 2006 |
| We noted the disclosure in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because the company was likely to be disestablished within 12 months. |
| Nga Tapuwae Community Facilities Trust (Manukau City Council) |
| Financial statements year ended: 30 June 2006 |
| We noted the disclosure in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because of the Trustees' intention to wind up the trust. |
| Papatoetoe Licensing Trust |
| Financial statements year ended: 31 March 2006 and 31 March 2007 |
| We noted the disclosure in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because of the Trustees' intention to wind up the trust. |
| Invercargill Licensing Trust Sports Foundation |
| Financial statements year ended: 31 March 2007 |
| We noted the disclosure in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because the Trust was likely to be wound up after 31 March 2007. |
| Invercargill Licensing Trust - Charitable Trust |
| Financial statements year ended: 31 March 2007 |
| We noted the disclosure in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because the Trust was likely to be wound up after 31 March 2007. |
| Whakatane District Council Sinking Fund Commissioners (Whakatane District Council) |
| Financial statements year ended: 30 June 2007 |
| We noted the disclosure in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because the Sinking Fund was closed on 15 May 2007. |
Explanatory paragraphs - breaches of law
| Whakatane Airport Authority (Whakatane District Council) |
| Financial statements year ended: 30 June 2007 |
| We noted a breach of the Local Government Act 2002 because the Authority did not prepare a Statement of Intent for the year ended 30 June 2007. The Authority also did not have a statement of intent in place for the period beginning 1 July 2007. |
| Hawke's Bay Tourism Trust (Hawke's Bay Regional Council, Hastings District Council, and Napier City Council) |
| Financial statements year ended: 30 June 2006 |
| We noted a breach of the Local Government Act 2002 because the Trust did not prepare a Statement of Intent for the year ended 30 June 2006. We also noted the disclosure in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because of the Trustees' intention to wind up the trust. |
| Hawke's Bay Tourism Trust (Hawke's Bay Regional Council, Hastings District Council, and Napier City Council) |
| Financial statements year ended: 30 June 2007 |
| We noted a breach of the Local Government Act 2002 because the Trust did not prepare a Statement of Intent for the year ended 30 June 2007. We noted the disclosure in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because of the Trustees' intention to wind up the trust. We also noted the disclosure in the financial statements that the trust did not prepare a Statement of Intent for the period beginning 1 July 2007. |
| Hawke's Bay Economic Development Agency (Hawke's Bay Regional Council, Hastings District Council and Napier City Council) |
| Financial statements year ended: 30 June 2006 |
| We noted a breach of the Local Government Act 2002 because the Agency did not prepare a Statement of Intent for the year ended 30 June 2006. We noted the disclosure in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because of the Trustees' intention to wind up the Agency. |
| Buller Health Trust (Buller District Council) |
| Financial statements year ended: 30 June 2004 |
| We noted a breach of the Local Government Act 2002 because the Trust did not prepare a Statement of Intent for the year beginning 1 July 2004. |
| Waikato Quarries Limited (Waikato District Council) |
| Financial statements year ended: 30 June 2006 |
| We noted a breach of the Local Government Act 2002 because the company did not prepare a Statement of Intent for the year ended 30 June 2006. |
| Port Westland Limited (Grey District Council) |
| Financial statements year ended: 30 June 2007 |
| We noted a breach of the Local Government Act 2002 because the company did not prepare a Statement of Intent for the year beginning 1 July 2007. |
| Tuam Limited (Christchurch City Council) |
| Financial statements year ended: 30 June 2007 |
| We noted a breach of the Local Government Act 2002 because the company did not prepare a Statement of Intent for the year ending 30 June 2007. |