Note 15: Related party transactions

The Office is a wholly owned entity of the Crown. The Office transacts with government departments, Crown entities, and state-owned enterprises on an arm’s-length basis. Examples of those transactions include the Office providing audit services, paying ACC levies, and purchasing airfares and postal services, all of which occur within a normal supplier or client relationship. The transactions are carried out 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, and therefore have not been disclosed.

During the year, there were transactions between the Office and close family members of key management personnel, as follows:

• Some close family members of key management personnel were employed by the Office. The terms and conditions of their appointment were no more favourable than the Office would have adopted if there were no relationship to key management personnel.
• Close family members of a member of key management personnel were directors in a company that provided services to the Office under a contract that was entered into prior to the appointment of the member of key management personnel. The cost of the services purchased was $6,800 (2008 – $8,950) and there was a balance outstanding at balance date of $6,800 (2008 – $3,093).
• During the year, there were also transactions between the Office and entities in which close family members of key management personnel were involved, as follows:
  • A close family member of a member of key management personnel was employed as a member of key management personnel of public entities that are audited by the Auditor-General. The audit fees charged to those public entities were negotiated on normal commercial terms.
  • A close family member of a member of key management personnel was employed by one of the Office’s contracted audit service providers and was involved in an audit carried out by that provider on behalf of the Auditor-General.
  • A close family member of a member of key management personnel was on the governing body of an entity that wholly owned an entity audited by the Auditor-General.

The members of key management personnel associated with the above transactions had no involvement with those transactions.

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.

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