Appendix: Details of non-standard audit reports issued in 2008
Local government: Results of the 2007/08 audits.
These details relate to non-standard audit reports issued during the 2008 calendar year. Where an entity is directly or indirectly controlled by one or more city or district councils, we have listed those councils in brackets.
Adverse opinions
| Southland Museum and Art Gallery Trust Board Incorporated (Gore District Council, Invercargill City Council, and Southland District Council) Financial statements year ended: 30 June 2007 We disagreed with the Trustees not recognising the museum collection assets of the Trust Board, nor the associated depreciation expense, in the Trust Board's financial statements. These are departures from New Zealand Equivalent to International Accounting Standard 16 (NZ IAS 16): Property, Plant and Equipment, which requires all assets to be recognised and depreciated in the financial statements. Our audit was also limited because the Trust Board 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. We also noted a breach of the Local Government Act 2002 because the Trust Board did not prepare a statement of intent for the year beginning 1 July 2007. |
| Southland Museum and Art Gallery Trust Board Incorporated (Gore District Council, Invercargill City Council, and Southland District Council) Financial statements year ended: 30 June 2008 We disagreed with the Trustees not recognising the museum collection assets of the Trust Board, nor the associated depreciation expense, in the Trust Board's financial statements. These are departures from New Zealand Equivalent to International Accounting Standard 16 (NZ IAS 16): Property, Plant and Equipment, which requires all assets to be recognised and depreciated in the financial statements. Our audit was also limited because the Trust Board did not prepare a statement of intent for the year beginning 1 July 2007, 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 Board did not prepare a statement of intent for the year beginning 1 July 2008. |
| The Museum of Transport and Technology Board Financial statements year ended: 30 June 2008 We disagreed with the Board not recognising the museum collection assets of the Museum, nor the associated depreciation expense, in the Board's financial statements. These are departures from New Zealand Equivalent to International Accounting Standard 16 (NZ IAS 16): Property, Plant and Equipment, which requires museum collection assets to be recognised and depreciated in the financial statements. |
| The Canterbury Museum Trust Board Financial statements year ended: 30 June 2008 We disagreed with the Board not recognising the museum collection assets of the Museum, nor the associated depreciation expense, in the Board's financial statements. These are departures from New Zealand Equivalent to International Accounting Standard 16 (NZ IAS 16): Property, Plant and Equipment, which requires museum collection assets to be recognised and depreciated in the financial statements. |
| Otago Museum Trust Board Financial statements year ended: 30 June 2008 We disagreed with the Trustees not recognising the museum collection assets of the Museum, nor the associated depreciation expense, in the Board's financial statements. These are departures from New Zealand Equivalent to International Accounting Standard 16 (NZ IAS 16): Property, Plant and Equipment, which requires museum collection assets to be recognised and depreciated in the financial statements. |
| Far North Regional Museum Trust (Far North District Council) Financial statements year ended: 30 June 2006 We disagreed with the Trustees not recognising the museum collection assets of the Museum, nor the associated depreciation expense, in the Trust's financial statements. These are departures from Financial Reporting Standard No. 3 (FRS-3): Accounting for Property, Plant and Equipment, which requires museum collection assets to be recognised and depreciated in the financial statements. Our audit was also limited because we were unable to verify certain revenue due to limited controls over the receipt of that revenue. |
| Hawarden Licensing Trust Financial statements year ended: 31 March 2008 We disagreed with the Trustees not preparing the financial statements in accordance with New Zealand equivalent to International Financial Reporting Standards (NZ IFRS), as required by the Sale of Liquor Act 1989. Because we were unable to carry out audit procedures to obtain adequate assurance about the effect of NZ IFRS on the Trust's financial statements, we were unable to form an opinion on whether the Trust's financial statements fairly reflected the financial position as at 31 March 2008 and the results of its operations for the year ended 31 March 2008. |
| Charleston Goldfields Hall Board Financial statements years ended: 30 June 2006 and 30 June 2007 We disagreed with the Board not preparing its annual financial statements in accordance with the Public Finance Act 1989, including the requirement that those financial statements be prepared in accordance with generally accepted accounting practice. In addition, we were unable to verify cash receipts due to limited controls over the receipt of that cash revenue. However, the limited financial information presented fairly reflected the Board's assets, liabilities, receipts, and payments. |
| Nelson Creek Recreation Reserve Board Financial statements year ended: 30 June 2007 We disagreed with the Board not preparing annual financial statements in accordance with certain provisions of the Crown Entities Act 2004 and not complying with generally accepted accounting practice for the year ended 30 June 2007. Our audit was limited because we were unable to verify certain revenue due to limited control over the receipt of that revenue. However, the financial statements of the Reserve Board fairly reflected the financial position and cash flows. |
Disclaimers of opinion
| Kaikoura Enhancement Trust (Kaikoura District Council) Financial statements years ended: 30 June 2003 and 30 June 2004 We were unable to form an opinion on the financial statements because the financial statements of the Trust for the year ended 30 June 2002 were not audited; therefore, we did not form an opinion about the comparative information or the effect that any misstatement may have on the results for the year ended 30 June 2003. In addition, the financial statements of the Trust for the year ended 30 June 2003 included unaudited figures relating to its associate and there were no satisfactory audit procedures to confirm those figures because the associate was not a public entity and as such, the Auditor-General is not its auditor. 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 2004. |
| Winton Racecourse Reserve Trustees Statement of accounts for the six years ended: 30 June 2004 We were unable to form an opinion on the statement of accounts for the six years ended 30 June 2004 because some financial records were lost and no assurance was given over the balances in the statement of accounts. We were unable to verify some revenue because of limited controls over the receipt of that revenue for the six years ended 30 June 2004. We were also unable to form an opinion on the comparative information as it did not fairly reflect all the assets, liabilities and operations of the Racecourse Reserve Trustees. Finally, we noted that the statement of accounts covered a period of six years from 1 July 1998 to 30 June 2004. This is a departure from section 69 of the Reserves Act 1977 which requires an annual statement of accounts to be prepared and submitted to the Auditor-General for audit, within one month after the close of each financial year. |
Except-for opinions
| Invercargill City Council and group Financial statements years ended: 30 June 2005 and 30 June 2006 Our audit was limited because:
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| Invercargill City Council and group Financial statements years ended: 30 June 2007 and 30 June 2008 Our audit was limited because:
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| Invercargill City Holdings Limited (Invercargill City Council) Financial statements years ended: 30 June 2007 and 30 June 2008 Our audit was limited because:
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| Kaikoura Enhancement Trust (Kaikoura District Council) Financial statements year ended: 30 June 2005 Our audit was limited in respect of comparative information because the financial statements of the Trust's associate were first independently audited for the year ended 30 June 2004. Therefore, we did not form an opinion about the comparative information on the opening balances in the financial position of the Trust as at 1 July 2003. Any misstatement of these opening balances would affect the results for the year ended 30 June 2004. The Trust also 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 for the year ended 30 June 2005. 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 2005. |
| Kaikoura Enhancement Trust (Kaikoura District Council) Financial statements year ended: 30 June 2006 Our audit was limited because 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. In our opinion, the financial statements fairly reflected the financial position, the results of its operations and cash flows for the 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 beginning 1 July 2006. |
| Aurora Energy Limited (Dunedin City Council) Financial statements year ended: 30 June 2008 We disagreed with the company's treatment of a deferred taxation adjustment in the financial statements for the year ended 30 June 2007 which did not comply with the requirements of the New Zealand Equivalent to International Accounting Standard 12 (NZ IAS 12): Income Taxes. The adjustment affected only the comparative information in the 30 June 2008 financial statements. |
| Hawke's Bay Cultural Trust (Incorporated) (Hastings District Council and Napier City Council) Financial statements year ended: 30 June 2008 Our audit was limited in respect of comparative information because the audit opinion on the Trust's financial statements for the year ended 30 June 2007 was qualified on the basis that the valuation of collection assets was not in accordance with Financial Reporting Standard 3: Accounting for Property, Plant and Equipment. |
| Wanganui Incorporated (Wanganui District Council) Financial statements period ended: 30 June 2006 Our audit was limited because the value of property, plant and equipment vested on establishment on 31 October 2005 was the book value of the vesting organisations, which could not be verified. The vesting organisations had not been previously audited. This is a departure from Financial Reporting Standard 36 (FRS 36): Accounting for acquisitions resulting in Combinations of Entities or Operations, which requires vested assets to be initially valued at fair value. |
| Wanganui Incorporated (Wanganui District Council) Financial statements year ended: 30 June 2007 Our audit was limited because the value of property, plant and equipment vested on establishment on 31 October 2005 was the book value of the vesting organisations, which could not be verified. This is a departure from New Zealand Equivalent to International Financial Reporting Standard 3 (NZ IFRS 3): Business Combinations, which requires vested assets to be initially valued at fair value. |
| Wanganui Incorporated (Wanganui District Council) Financial statements year ended: 30 June 2008 Our audit was limited in respect of comparative information because the value of property, plant and equipment vested on establishment on 31 October 2005 was the book value of the vesting organisations, which could not be verified. This is a departure from New Zealand Equivalent to International Financial Reporting Standard 3 (NZ IFRS 3): Business Combinations, which requires vested assets to be valued at fair value. In addition, we were unable to verify the amount of the loss on disposal in respect of these vested assets. |
| East Otago Community Sports and Cultural Centre Trust (Dunedin City Council) Financial statements year ended: 30 June 2008 Our audit was limited because we were unable to verify certain revenue due to limited controls over that revenue. |
| Tauranga City Venues Limited Financial statements year ended: 30 June 2008 Our audit was limited because we were unable to verify certain revenue due to limited controls over that revenue. |
| Mapiu Domain Board Financial statements year ended: 30 June 2006 We disagreed with the Board not complying with section 41(2)(k) of the Public Finance Act 1989 because it did not provide budgeted figures in the Statement of Financial Position for the year. |
| Electra Limited Financial statements year ended: 31 March 2008 Our audit was limited because we were unable to verify the completeness and accuracy of recorded faults and Installation Control Point (ICP) data in the performance information reported because there were limited controls over that data. |
| Innovative Waste Kaikoura Limited (Kaikoura District Council) Financial statements year ended: 30 June 2007 Our audit was limited because the Board of Directors did not prepare a statement of intent for the year beginning 1 July 2006 as required by the Local Government Act 2002 and therefore did not prepare a statement of performance that gave a true and fair view of its service achievements. However, the financial statements of the company gave a true and fair view of the financial position, results of its operations, and cash flows. |
| The Southern Rural Fire Authority Financial statements year ended: 30 June 2007 Our audit was limited because the Authority did not prepare a statement of intent for the year beginning 1 July 2006 as required by the Local Government Act 2002 and, therefore, was unable to prepare performance information that reflected its achievements measured against its performance targets. |
| Ruapehu-Wanganui-Rangitikei Economic Development Trust (Ruapehu District Council, Wanganui District Council, Rangitikei District Council) Financial statements year ended: 30 June 2007 Our audit was limited because the Trustees did not prepare a statement of intent for the year beginning 1 July 2006 as required by the Local Government Act 2002 and therefore was unable to prepare performance information that reflected its achievements measured against its performance targets. |
| Pemberton Construction Limited (Waikato District Council) Financial statements year ended: 30 June 2008 Our audit was limited because the company did not prepare a statement of intent for the year beginning 1 July 2007 as required by the Local Government Act 2002 and therefore was unable to prepare performance information that gave a true and fair view of its achievements measured against its performance targets. |
| Southland Flood Relief Fund (Gore District Council) Financial statements year ended: 30 June 2007 Our audit was limited because the Trust did not prepare a statement of intent for the year beginning 1 July 2006 as required by the Local Government Act 2002 and therefore was unable to prepare performance information that gave a true and fair view of its achievements measured against its performance targets. 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 2007. |
| Southland Flood Relief Fund (Gore District Council) Financial statements year ended: 30 June 2008 Our audit was limited because the Trust did not prepare a statement of intent for the year beginning 1 July 2007 as required by the Local Government Act 2002 and therefore was unable to prepare performance information that gave a true and fair view of its achievements measured against its performance targets. 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 2008. |
| Crops for Southland Incorporated (Southland District Council) Financial statements year ended: 30 June 2005 Our audit was limited because the society did not prepare a statement of intent for the year beginning 1 July 2004 as required by the Local Government Act 2002 and therefore was unable to prepare performance information that reflected its achievements measured against its performance targets. We also noted a breach of the Local Government Act 2002 because the society did not prepare a statement of intent for the year beginning 1 July 2005. |
| Crops for Southland Incorporated (Southland District Council) Financial statements year ended: 30 June 2006 Our audit was limited because the society did not prepare a statement of intent for the year beginning 1 July 2005 as required by the Local Government Act 2002 and therefore was unable to prepare performance information that reflected its achievements measured against its performance targets. We also noted a breach of the Local Government Act 2002 because the society did not prepare a statement of intent for the year beginning 1 July 2006. |
| Crops for Southland Incorporated (Southland District Council) Financial statements year ended: 30 June 2007 Our audit was limited because the society did not prepare a statement of intent for the year beginning 1 July 2006 as required by the Local Government Act 2002 and therefore was unable to prepare performance information that reflected its achievements measured against its performance targets. We also noted a breach of the Local Government Act 2002 because the society did not prepare a statement of intent for the year beginning 1 July 2007. |
| Crops for Southland Incorporated (Southland District Council) Financial statements year ended: 30 June 2008 Our audit was limited because the society did not prepare a statement of intent for the year beginning 1 July 2007 as required by the Local Government Act 2002 and therefore was unable to prepare performance information that reflected its achievements measured against its performance targets. We also noted a breach of the Local Government Act 2002 because the society did not prepare a statement of intent for the year beginning 1 July 2008. |
| Auckland Regional Transport Network Limited (Auckland City Council) Financial statements year ended: 30 June 2008 Our audit was limited because the Company failed to compare, in its annual report, the Company's actual performance with its planned performance as outlined in its statement of intent, and explain the variances between the two. This is a requirement of the Local Government Act 2002. |
| ARTNL Metro Limited (Auckland City Council) Financial statements year ended: 30 June 2008 Our audit was limited because the Company failed to compare, in its annual report, the Company's actual performance with its planned performance as outlined in its statement of intent, and explain the variances between the two. This is a requirement of the Local Government Act 2002. We also noted the disclosures in the financial statements that referred to the going concern basis had appropriately not been used in preparing the financial statements because the company would be disestablished in the foreseeable future. |
| ARTNL Britomart Limited (Auckland City Council) Financial statements year ended: 30 June 2008 Our audit was limited because the Company failed to compare, in its annual report, the Company's actual performance with its planned performance as outlined in its statement of intent, and explain the variances between the two. This is a requirement of the Local Government Act 2002. |
| ARTNL Harbour Berths Limited (Auckland City Council) Financial statements year ended: 30 June 2008 Our audit was limited because the Company failed to compare, in its annual report, the Company's actual performance with its planned performance as outlined in its statement of intent, and explain the variances between the two. This is a requirement of the Local Government Act 2002. We also noted the disclosures in the financial statements that referred to the going concern basis had appropriately not been used in preparing the financial statements because the company would be disestablished in the foreseeable future. |
Explanatory paragraphs - emphasis of matter
| Central Plains Water Trust (Selwyn District Council) Financial statements year ended: 30 June 2008 We noted the disclosures in the financial statements that referred to the uncertainties surrounding the going concern assumption. The validity of the going concern assumption depends on continued funding from Central Plains Water Limited and other sources. Central Plains Water Limited's continued funding depends upon obtaining resource consents and obtaining further funding from existing shareholders or other sources. |
| Hawke's Bay Airport Authority (Hastings District Council and Napier City Council) Financial statements year ended: 30 June 2008 We noted the disclosures in the financial statements that outlined that the financial statements were prepared on a going concern basis, notwithstanding the plan to terminate the Authority and to establish a company to undertake the airport activities. |
| Cup Village NZ Limited Financial statements year ended: 30 June 2008 We noted the disclosures in the financial statements that the going concern basis had appropriately not been used in preparing the financial statements because the company was likely to be disestablished within the next year. |
| Cup Village 2000 Limited Financial statements year ended: 30 June 2008 We noted the disclosures in the financial statements that the going concern basis had appropriately not been used in preparing the financial statements because the company was likely to be disestablished within the next year. |
| Far North Developments Limited (Far North District Council) Financial statements year ended: 30 June 2008 We noted the disclosures in the financial statements that the going concern basis had appropriately not been used in preparing the financial statements because the company was disestablished. |
| Rotorua District Council Sinking Fund Commissioners Financial statements year ended: 30 June 2007 We noted the disclosures in the financial statements that the going concern basis had appropriately not been used in preparing the financial statements because the Sinking Fund was disestablished on 30 June 2007. |
| Ruapehu District Council Sinking Fund Commissioners Financial statements year ended: 30 June 2008 We noted the disclosures in the financial statements that the going concern basis had appropriately not been used in preparing the financial statements because the Sinking Fund was disestablished on 30 June 2008. |
| Ngā Tapuwae Community Facilities Trust Financial statements year ended: 30 June 2008 We noted the disclosures in the financial statements that the going concern basis had appropriately not been used in preparing the financial statements because the Trust would be wound up by December 2008. |
| Mackenzie Holdings Limited (Mackenzie District Council) Financial statements year ended: 30 June 2007 We noted the disclosures in the financial statements that the going concern basis had appropriately not been used in preparing the financial statements because the company and its shareholder agreed that the company's operations would not be continued under the current structure. |
| Cooks Gardens Trust Board (Wanganui District Council) Financial statements years ended: 30 June 2007 and 30 June 2008 We noted the disclosures in the financial statements that referred to the vesting of some of the Board's assets in the Wanganui District Council. |
Explanatory paragraphs - breaches of law
| Buller Holdings Limited (Buller District Council) Financial statements year ended: 30 June 2008 We noted a breach of the Local Government Act 2002 because the company did not adopt a statement of intent for the year ended 30 June 2008. However, we noted that the company had been able to prepare a statement of service performance against the draft version of the statement of intent for 2007-08. |
| Ruapehu-Wanganui-Rangitikei Economic Development Trust (Ruapehu District Council, Wanganui District Council, Rangitikei District Council) Financial statements year ended: 30 June 2008 We noted a breach of the Local Government Act 2002 because the Trust did not adopt a statement of intent for the year ended 30 June 2008. However, we noted that the Trust had been able to prepare a statement of service performance against the draft version of the statement of intent for 2007-08. |
| Pihama Cemetery Trustees Financial statements year ended: 31 March 2006 We noted a breach of the Burial and Cremation Act 1964 because the Cemetery Trustees provided a loan to another local organisation. |
| Auckland City Water Limited (Auckland City Council) Financial statements year ended: 30 June 2008 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. |
| Lakes Leisure Limited (Queenstown Lakes District Council) Financial statements year ended: 30 June 2008 We noted a breach of the Local Government Act 2002 because the company did not deliver to shareholders and report to the public the results of the company's operations within three months of the end of the financial year. |