Appendix: Details of the non-standard audit reports issued in 2009
Local government: Results of the 2008/09 audits.
These details relate to non-standard audit reports issued during the 2009 calendar year. Where an entity is directly or indirectly controlled by one or more city, district, or regional council, we have listed them in brackets.
Adverse opinions
| Far North Regional Museum Trust (Far North District Council) Financial statements year ended: 30 June 2007 We disagreed with the Trustees not recognising the museum 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 museum collection assets to be recognised and depreciated in the financial statements. We were also unable to form an opinion on the comparative information presented for the Trust because control over donation revenue before it was recorded was limited for the year ended 30 June 2006. |
| Far North Regional Museum Trust (Far North District Council) Financial statements year ended: 30 June 2008 We disagreed with the Trustees not recognising the museum 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 museum collection assets to be recognised and depreciated in the financial statements. |
| The Canterbury Museum Trust Board Financial statements year ended: 30 June 2009 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 Accounting Standard 16: Property, Plant and Equipment, which requires museum collection assets to be recognised and depreciated in the financial statements. |
| The Museum of Transport and Technology Board Financial statements year ended: 30 June 2009 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 New Zealand Equivalent to International Accounting Standard 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 2009 We disagreed with the Trustees not recognising the museum collection assets of the Trust, nor the associated depreciation expense, in the Trust's financial statements. These are departures from New Zealand Equivalent to International Accounting Standard 16: Property, Plant and Equipment, which requires all assets to be recognised and depreciated in the financial statements. |
| Southland Museum and Art Gallery Trust Board Incorporated (Gore District Council, Invercargill City Council, and Southland District Council) Financial statements year ended: 30 June 2009 We disagreed with the Trustees not recognising the museum and gallery 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: Property, Plant and Equipment, which requires all assets to be recognised and depreciated in the financial statements. |
| Hawarden Licensing Trust Financial statements year ended: 31 March 2009 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 impact 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 2009 and the results of its operations for the year ended 31 March 2009. However, had the Trustees been permitted to prepare financial statements in accordance with the financial reporting standards that applied before the introduction of NZ IFRS, then, in our opinion, the financial statements would have fairly reflected the Trust's financial position as at 31 March 2009 and the results of its operations for the year ended on that date. |
| Charleston Goldfields Hall Board Financial statements year ended: 30 June 2008 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. However, the limited financial information presented did fairly reflect the Board's assets, liabilities, receipts, and payments. |
| Millerton Hall Board Financial statements year ended: 30 June 2007 The Board did not prepare annual financial statements in accordance with the Public Finance Act 1989, and their financial statements do not comply with generally accepted accounting practice in New Zealand. However, the limited financial information presented did fairly reflect the assets, liabilities, receipts, and payments of the Board. |
Disclaimers of opinion
| Winton Racecourse Reserve Trustees Financial statements year ended: 30 June 2005 We were unable to form an opinion on the statement of accounts for the year ended 30 June 2005 because we did not attend the closing inventory and livestock count and as a result did not have assurance about the quantities and condition of inventory and livestock recognised in the statement of position. We were unable to verify certain revenues because of limited controls over the receipt of that revenue for the year ended 30 June 2005. We were also unable to form an opinion on the comparative information for the six years ended 30 June 2004 as some financial records were lost, and we were not able to gain assurance over the statement of accounts for that period because any misstatement of these balances would affect the comparative information as well as the current year's financial position and results. |
Except-for opinions
| Auckland Regional Transport Network Limited (Auckland City Council) Financial statements year ended: 30 June 2009 Our audit was limited because the Company did not comply with section 68 of the Local Government Act 2002 by not reporting actual performance against the planned performance, even though it has prepared a Statement of Intent for the period 1 July 2009 to 30 June 2012. We noted the disclosures in the financial statements that refer to the new local government structure for the Auckland region. The Local Government (Tamaki Makaurau Reorganisation) Act 2009 established a single unitary authority (the Auckland Council) that will be responsible for governing the entire Auckland region from 1 November 2010. Decisions had to be made on the Auckland Council's structure and operations, including how the Board of Management would be vested and integrated. |
| Manukau Building Consultants Limited (Manukau City Council) Financial statements year ended: 30 June 2009 Our audit was limited because the Company corrected previous overestimations of the percentage-completion of its building consents inspections. The correction was carried out in accordance with the New Zealand Equivalent to International Reporting Standard 8: Accounting Policies, Changes in Accounting Estimates and Errors. However, due to incomplete data in the previous year, the Company was unable to fully and adequately quantify the effect of the correction. We noted the disclosures in the financial statements that refer to the new local government structure for the Auckland region. The Local Government (Tamaki Makaurau Reorganisation) Act 2009 established a single unitary authority (the Auckland Council) that will be responsible for governing the entire Auckland region from 1 November 2010. Decisions had to be made on the Auckland Council's structure and operations, including how the Company would be vested and integrated. |
| Safer Papakura Trust (Papakura District Council) Financial statements year ended: 30 June 2009 Our audit was limited because the Trust did not prepare a Statement of Intent for the year ending 30 June 2009 as required by the Local Government Act 2002 and, therefore, was unable to prepare performance information that fairly reflected its achievements measured against its performance targets. We noted the disclosures in the financial statements that refer to the new local government structure for the Auckland region. The Local Government (Tamaki Makaurau Reorganisation) Act 2009 established a single unitary authority (the Auckland Council) that will be responsible for governing the entire Auckland region from 1 November 2010. Decisions had to be made on the Auckland Council's structure and operations, including how the Trust would be vested and integrated. |
| Invercargill City Council Financial statements year ended: 30 June 2009 Our audit was limited because the Council included unaudited figures relating to its associate company, Bond Contracts Limited, in its financial statements. As a result, there were no satisfactory audit procedures that we could adopt to obtain sufficient evidence to confirm these unaudited figures. |
| Invercargill City Holdings Limited (Invercargill City Council) Financial statements year ended: 30 June 2009 Our audit was limited because the company included unaudited figures relating to its associate company, Bond Contracts Limited, in its financial statements. As a result, there were no satisfactory audit procedures that we could adopt to obtain sufficient evidence to confirm these unaudited figures. |
| Wanganui Incorporated (Wanganui District Council) Financial statements year ended: 30 June 2009 Our audit was limited because the comparative information included the value of property, plant, and equipment vested on establishment on 31 October 2005, which could not be satisfactorily verified because the vested assets were not recognised at fair value at the date of vesting. Should there have been any misstatement of the carrying amount of property, plant, and equipment vested, then the loss on disposal, which was presented as comparative information, would be correspondingly misstated. |
| West Coast Snowflake Limited Financial statements year ended: 31 March 2008 Our audit was limited because we were unable to obtain sufficient audit evidence to support the carrying values of office equipment and plant and equipment, which was stated at the Directors' estimate of net realisable value at 31 March 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 ceased business in December 2007. |
| West Coast Snowflake Limited Financial statements year ended: 31 March 2009 Our audit was limited because during the year the Company recognised an impairment expense for plant and equipment, and we were unable to obtain sufficient audit evidence to support this expense. In addition, we were unable to obtain sufficient audit evidence to support the opening value of plant and equipment, which had been based on the Directors' estimate of net realisable value. 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 ceased trading in December 2007. |
| Village Pool Charitable Trust (Hastings District Council) Financial statements years ended: 30 June 2008 and 30 June 2009 Our audit was limited because we were unable to verify some material revenues due to limited controls over those revenues before they were recorded. |
| Tauranga City Venues Limited (Tauranga City Council) Financial statements year ended: 30 June 2009 Our audit was limited because we were unable to verify some material revenues due to limited controls over those revenues before they were recorded. |
| Te Kauwhata Licensing Trust Financial statements years ended: 31 March 2006 and 31 March 2007 Our audits were limited because we were unable to verify some revenues due to limited controls over those revenues and limited controls over stock on hand at the point of sale. We were also unable to verify the significant fluctuations of the catering account gross margin in 2007 because we could not verify the completeness of recorded revenue. |
| Queenstown National Bank Events Centre Trust (Queenstown-Lakes District Council) Financial statements year ended: 30 June 2008 Our audit was limited because the Trust did not prepare performance information that fairly reflected its service achievements, as required by section 68 of the Local Government Act 2002. |
| Varroa Agency Incorporated Financial statements year ended: 30 June 2008 Our audit was limited because the Agency did not prepare a statement of intent for the year beginning 1 July 2007, as required by the Local Government Act 2002, and was therefore 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 Agency did not prepare a statement of intent for the year beginning 1 July 2008. |
| Westland Holdings Limited (Westland District Council) Financial statements year ended: 30 June 2007 Our audit was limited because the company did not prepare a statement of intent for the year beginning 1 July 2006, as required by the Local Government Act 2002, and was therefore 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 company did not prepare a statement of intent for the year beginning 1 July 2007. |
| Westland Holdings Limited (Westland 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 was therefore unable to prepare performance information that reflected its achievements measured against its performance targets. |
| Lakes Engineering Limited (Queenstown-Lakes 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 was therefore unable to prepare performance information that gave a true and fair view of its achievements measured against its performance targets. |
| Pemberton Construction Limited (Waikato District Council) Financial statements year ended: 30 June 2009 Our audit was limited because the company did not prepare a statement of intent for the year beginning 1 July 2008, as required by the Local Government Act 2002, and was therefore unable to prepare performance information that fairly reflected its achievements measured against its performance targets. 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 amalgamated with the parent company from 1 July 2009. |
| Whangarei Art Museum Management Group (Whangarei District Council) Financial statements year ended: 30 June 2009 Our audit was limited because the Trust did not prepare a statement of intent for the year beginning 1 July 2008, as required by the Local Government Act 2002, and was therefore unable to prepare performance information that fairly reflected its achievements measured against its performance targets. |
| Newtons Coachways (1993) Limited (Dunedin City Council) Financial statements year ended: 30 June 2009 Our audit was limited because the company did not prepare a statement of intent for the year beginning 1 July 2008, as required by the Local Government Act 2002, and was therefore unable to prepare performance information that gave a true and fair view of its achievements measured against its performance targets. We also drew attention to the fact that the company did not prepare a statement of intent for the year beginning 1 July 2009. |
| Canterbury Economic Development Company Limited Financial statements period ended: 30 June 2009 Our audit was limited because the Company did not prepare a Statement of Intent for the year beginning 1 July 2008, as required by the Local Government Act 2002, and was therefore unable to prepare performance information that gave a true and fair view of its achievements measured against its performance targets. |
| Manawatu Community Trust (Manawatu District Council) Financial statements year ended: 30 June 2009 Our audit was limited because the Trust did not prepare a Statement of Intent for the year beginning 1 July 2008, as required by the Local Government Act 2002, and was therefore unable to prepare performance information that gave a true and fair view of its achievements measured against its performance targets. |
Explanatory paragraphs – emphasis of matter
Explanatory paragraph – emphasis of matter for local authorities in the Auckland region
| 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 Government decided to dissolve the existing local authorities and groups, and establish a new local government structure for the Auckland region. As a consequence of the dissolution of the local authorities, the group structure in its current form will also cease to exist. In accordance with the Local Government (Tamaki Makaurau Reorganisation) Act 2009, the functions, duties, and powers of the local authorities will become the functions, duties, and powers of a single unitary authority (the Auckland Council) that will be responsible for governing the entire Auckland region from 1 November 2010. Decisions had to be made on the local authorities' structure and operations, including how the systems, plans, policies, assets, and liabilities of the local authorities, including their subsidiaries, would be vested and integrated. All the local authorities and groups expected the services currently delivered to continue to be delivered by the organisational structure put in place by the Auckland Council and, therefore, the assets and liabilities of the local authorities and groups would be relevant to the Auckland Council. For that reason, no adjustments had been made to the financial statements because of the dissolution basis of preparation. Entities whose audit reports included such an explanatory paragraph for the financial year ended 30 June 2009 were:
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Explanatory paragraphs – emphasis of matter for local authorities' subsidiaries in the Auckland region
| We noted the disclosures in the financial statements that referred to the new local government structure for the Auckland region. The Local Government (Tamaki Makaurau Reorganisation) Act 2009 established a single unitary authority (Auckland Council) that will be responsible for governing the entire Auckland region from 1 November 2010. Decisions had to be made on Auckland Council's structure and operations, including how the local authorities' subsidiaries would be vested and integrated. Entities whose audit reports included such an explanatory paragraph for the financial year ended 30 June 2009 (controlling entity in bold) were: |
Auckland Regional Council's subsidiaries:
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Auckland City Council's subsidiaries:
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Manukau City Council's subsidiaries:
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North Shore City Council's subsidiaries:
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Rodney District Council's subsidiaries:
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Waitakere City Council's subsidiaries:
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Subsidiary jointly owned by six local authorities:
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Explanatory paragraphs – emphasis of matter for other entities
| Waitomo District Council Financial statements year ended: 30 June 2009 We drew attention to the serious financial difficulties of the Council and group, which incurred a loss of $4.0 million because one of the subsidiary's borrowings were classified as current liabilities as a result of the subsidiary breaching its banking covenants. Since 30 June 2009, the subsidiary had managed the situation by renegotiating its banking covenants with its lender. |
| Inframax Construction Limited (Waitomo District Council) Financial statements year ended: 30 June 2009 We drew attention to the serious financial difficulties of the company, which incurred a loss of $4.9 million because the company's borrowings were classified as current liabilities as a result of the company breaching its banking covenants. Since 30 June 2009, the company had managed the situation by obtaining share capital from its shareholder and by renegotiating its banking covenants with its lender. |
| Pakuranga Arts and Cultural Trust (Manukau City Council) Financial statements year ended: 30 June 2009 We noted the disclosures in the financial statements that refer to the Trust depreciating its buildings and improvements over a 60-year period when, in fact, the lease with the Manukau City Council for the land the buildings are on was for only an initial period of 20 years with a right of renewal for a further 20 years. However, with Auckland Council not coming into existence until 1 November 2010, Manukau City Council was not in a position to give assurance that Auckland Council would continue this lease. |
| Central Plains Water Trust (Selwyn District Council) Financial statements year ended: 30 June 2009 We drew attention to uncertainties surrounding the going concern assumption. The validity of the going concern assumption was dependent on continued funding from Central Plains Water Limited or other sources. Central Plains Water Limited's continued existence depends on obtaining resource consents and obtaining further funding from existing shareholders or other sources. |
| Westroads Limited (Westland District Council) Financial statements year ended: 30 June 2009 We drew attention to uncertainties surrounding the going concern assumption. The validity of the going concern assumption was dependent on successfully refinancing the loans or identifying other sources of funding. |
| Westroads Greymouth Limited (Westland District Council) Financial statements year ended: 30 June 2009 We drew attention to uncertainties surrounding the going concern assumption. The validity of the going concern assumption was dependent on successfully refinancing the loans or identifying other sources of funding. |
| Westland Holdings Limited (Westland District Council) Financial statements year ended: 30 June 2009 We drew attention to uncertainties surrounding the going concern assumption. The validity of the going concern assumption was dependent on successfully refinancing the loans or identifying other sources of funding. |
| New Zealand Mutual Liability RiskPool Financial statements years ended: 30 June 2008 and 30 June 2009 We drew attention to the fact that the going concern basis had appropriately been used in preparing the financial statements. We noted that the Trustee of the RiskPool is able to levy members to cover any shortfall in equity in any funds. |
| Timaru District Promotions Trust (Timaru District Council) Financial statements year ended: 30 June 2009 We drew attention to the fact that the going concern basis had appropriately been used in preparing the financial statements. We noted that an organisational review was being carried out. |
| S C Aoraki Development Trust (Timaru District Council) Financial statements year ended: 30 June 2009 We drew attention to the fact that the going concern basis had appropriately been used in preparing the financial statements. We noted that an organisational review was being carried out. |
| Hurunui Holdings Limited (Hurunui District Council) Financial statements year ended: 30 June 2009 We noted the disclosures in the financial statements that the going concern basis had appropriately not been used in preparing the financial statements because Hurunui District Council has resolved to transfer the assets and liabilities from the company back to the Council by way of an imputed dividend. The company will no longer continue to trade. |
| Hawke's Bay Airport Authority (Hastings District Council and Napier City Council) Financial statements year ended: 30 June 2009 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 joint venture agreement was terminated from 1 July 2009. |
| Taupo District Economic Development Advisory Board (Taupo District Council) Financial statements year ended: 30 June 2009 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 operations of the Board were transferred to the Enterprise Lake Taupo Trust. |
| Ngā Tapuwae Community Facilities Trust (Manukau District Council) Financial statements year ended: 30 June 2009 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 was wound up as at 30 June 2009. |
| Forever Beech Limited Financial statements years ended: 30 June 2008 and 30 June 2009 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 ceased trading in July 2009. |
| North Shore City Council Sinking Fund Commissioners Financial statements year ended: 30 June 2009 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 16 June 2009. |
| The Hutt City Council Sinking Fund Commissioners Financial statements year ended: 30 June 2009 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 2009. |
| Waitakere City 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 to be wound up within the next 12 months. |
| Dunedin City 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 wound up on 30 June 2008. |
| Bay of Plenty Regional 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 wound up on 30 June 2007. |
| Proudly Papakura Trust (Papakura 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 Trustees decided to wind up the Trust on 30 June 2009. |
| TTCF West Auckland Limited Financial statements year ended: 30 June 2009 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 ceased trading on 31 May 2009. |
| Riccarton Bush Trustees (Christchurch City 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, as required by section 64 of the Local Government Act 2002. However, we noted that the Trust had been able to report performance information against the overall operating objectives reported to Christchurch City Council. We also noted the disclosure in the financial statements that the Trustees did not comply with the law by not adopting a statement of intent for the year beginning 1 July 2008 by the date by which it was required to be prepared, which was 30 June 2008. |
| Te Kohaka o Tuhaitara Trust (Waimakariri District Council) Financial statements year ended: 30 June 2009 We noted a breach of the Local Government Act 2002 because the Trustees did not adopt a statement of intent for the period ended 30 June 2009, as required by section 64 of the Local Government Act 2002. However, we noted that the Trust had been able to prepare a statement of service performance against the statement of intent for 2007/08. We also noted the disclosure in the financial statements that the Trustees did not prepare a statement of intent for the year beginning 1 July 2009 by the date by which it was required to be prepared, which was 30 June 2009. |
| Whakatane Airport Authority (Whakatane District Council) Financial statements year ended: 30 June 2009 We noted a breach of the Local Government Act 2002 because the Authority did not prepare a statement of intent for the year beginning 1 July 2009 by the date by which it was required to be prepared, which was 30 June 2009. |
| Balfour Cemetery Trust Financial statements year ended: two years ended 31 March 2008 We noted a breach of the Burial and Cremation Act 1964 because the Cemetery Trustees prepared one statement of accounts covering two years, from 1 April 2006 to 31 March 2008. |
| North Shore Domain and North Harbour Stadium Trust Board (North Shore City Council) Financial statements year ended: 28 February 2007 We noted a breach of the Local Government Act 2002 because the Trust failed to have a June balance date, as required by the Act. |
| North Shore Domain and North Harbour Stadium Trust Board (North Shore City Council) Financial statements year ended: 29 February 2008 We noted a breach of the Local Government Act 2002 because the Trust did not deliver to the shareholders and report to the public the results of the Trust's operations within three months of the year ended 29 February 2008. |