Appendix: Details of the non-standard audit reports issued in 2010

Central government: Results of the 2009/10 audits (volume 1).

Adverse opinions

Royal New Zealand Navy Museum Trust Incorporated
Financial statements year ended: 30 June 2009
We disagreed with the Board 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 not previously recognised to be recognised at fair value and depreciated where appropriate. In addition, we were unable to verify some material revenue because of limited controls over that revenue.
RNZAF Museum Trust Board
Financial statements year ended: 30 June 2010
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 not previously recognised to be recognised at fair value and depreciated where appropriate.

Disclaimers of opinion

Te Kura Kaupapa Māori o Ruamata
Financial statements years ended: 31 December 2006 and 31 December 2007
We were unable to form an opinion on the financial statements because of the following limitations in scope:
  • we were unable to obtain enough appropriate audit evidence to support all expenditure;
  • we were unable to confirm that all related party transactions had been properly recorded and disclosed in the financial statements;
  • we were unable to confirm whether some revenue had been properly recorded because of limited controls over that revenue;
  • the Board of Trustees did not provide budgeted figures for the financial year in the financial performance and position statements; and
  • the Board of Trustees did not maintain proper minutes of Board meetings.

Except-for opinions for public entities other than schools

New Zealand Fire Service Commission
Financial statements and statement of service performance year ended: 30 June 2010
Our audit was limited because performance data was not collected for some performance measures from September to December 2009 due to industrial action by firefighters.
Christchurch Polytechnic Institute of Technology and Group
Financial statements and performance information year ended: 31 December 2009
Our audit was limited because the comparative information in the financial statements did not comply with New Zealand International Accounting Standard 27: Consolidated and Separate Financial Statements (NZ IAS 27) – the group financial statements for 2008 did not include the financial position and results of operations and cash flows of Otautahi Education Development Trust (the Trust), a subsidiary of the Polytechnic. The Trust has been included in the group financial statements in accordance with NZ IAS 27 for the first time for the year ended 31 December 2009.
Wellington Institute of Technology
Financial statements and performance information year ended: 31 December 2009
We disagreed with the accounting treatment used in the previous year to account for quality reinvestment programme funding as revenue and as a net receivable in the financial statements in the comparative information. In our opinion, the quality reinvestment programme funding should have been treated as a contribution from the Crown in the 2009 financial statements.
UCOL International Limited (Universal College of Learning)
Financial statements year ended: 31 December 2009
Our audit was limited because the company was unable to establish the amount of tax-related liabilities to be recognised in the financial statements, as required by New Zealand Equivalent to International Accounting Standard No. 12: Income Taxes. This was due to the company being unable to file returns to the Income Tax Department of India for activities carried out in India from 2004 to 2008.
Massey Ventures Limited and Group (Massey University)
Financial statements year ended: 31 December 2009
Our audit was limited because we were unable to verify that the unaudited financial information of the company's associates was properly recorded and disclosed in the financial statements. The associates, which were not public entities, were not within the Auditor-General's mandate and their shareholders elected not to have an audit carried out.
Whitireia Performing Arts Company Limited (Whitireia Community Polytechnic)
Financial statements year ended: 31 December 2009
Our audit was limited because we were unable to verify some revenue due to limited control over that revenue. The company also failed to comply with the law because it did not maintain adequate accounting records to enable the financial statements of the company to be readily and properly audited.
Ivey Hall and Memorial Hall 125th Anniversary Appeal Taxable Activity Trust (Lincoln University)
Financial statements year ended: 31 December 2009
Our audit was limited because we were unable to verify some revenue due to limited controls over that revenue.
Ivey Hall and Memorial Hall 125th Anniversary Appeal Gifting Trust (Lincoln University)
Financial statements year ended: 31 December 2009
Our audit was limited because we were unable to verify some revenue due to limited controls over that revenue.
Wilson Home Trust (Waitemata District Health Board)
Financial statements year ended: 30 June 2008
Our audit was limited because we were unable to verify some revenue due to limited controls over that revenue.
Auckland DHB Charitable Trust (Auckland District Health Board)
Financial statements year ended: 30 June 2009
Our audit was limited because we were unable to verify some revenue due to limited controls over that revenue.
Gisborne Laundry Services (Tairawhiti District Health Board)
Financial statements year ended: 30 June 2007 and 30 June 2008
Our audit was limited because we were unable to verify some revenue due to limited controls over that revenue.

Except-for opinions for schools

Wellington Girls' College
Financial statements year ended: 31 December 2009
We disagreed with the Board of Trustees not preparing group financial statements to consolidate the financial statements of its controlled entity, the Wellington Girls' College Charitable Foundation. This is a departure from New Zealand Equivalent to International Accounting Standard No. 27: Consolidated and Separate Financial Statements, which requires the Board of Trustees to present consolidated financial statements.
New Plymouth Girls' High School
Financial statements year ended: 31 December 2009
We disagreed with the Board of Trustees not preparing group financial statements to consolidate the financial statements of its controlled entity, the New Plymouth Girls High School Centenary Trust Board. This is a departure from New Zealand Equivalent to International Accounting Standard No. 27: Consolidated and Separate Financial Statements, which requires the Board of Trustees to present consolidated financial statements.
Te Wharekura o Rakaumangamanga
Financial statements year ended: 31 December 2009
We disagreed with the Board of Trustees not preparing group financial statements to consolidate the financial statements of its controlled entity, Te Wharekura O Rakaumangamanga Foundation Charitable Trust. This is a departure from New Zealand Equivalent to International Accounting Standard No. 27: Consolidated and Separate Financial Statements, which requires the Board of Trustees to present consolidated financial statements.
Wanganui City College
Financial statements year ended: 31 December 2009
We disagreed with the Board of Trustees not preparing group financial statements to consolidate the financial statements of its subsidiary, the College House Hostel Trust. This is a departure from New Zealand Equivalent to International Accounting Standard No. 27: Consolidated and Separate Financial Statements, which requires the Board of Trustees to present consolidated financial statements.
Wellington East Girls' College
Financial statements year ended: 31 December 2009
We disagreed with the decision of the Board of Trustees to increase the amount owing to trusts for bequests received to help restore the capital value of the bequests. This is a departure from New Zealand Equivalent to International Accounting Standard 37: Provisions, Contingent Liabilities and Contingent Assets, which requires provisions to be valued at their present obligation.
Puni School
Financial statements year ended: 31 December 2009
The Board did not report the budget figures for the Statement of Financial Position and the Statement of Changes in Equity. This is a departure from statutory reporting requirements.
Hato Paora College
Financial statements years ended: 31 December 2008 and 31 December 2009
Our audits were limited because we could not establish whether decisions made by the governing body of the College were appropriate as the College had not been managed by a properly constituted Board of Trustees. The governing body was comprised of representatives of the Board of Trustees and the proprietor. This is a breach of sections 75 and 94 of the Education Act 1989, which specify that a Board of Trustees is responsible for the management of a school and specify how a Board of Trustees should be constituted.
In our 31 December 2008 audit report, we disagreed with the governing body recognising expenditure for capital works on land owned by the proprietor as an asset. The use of funding for this purpose is not permitted by law unless the Board's financial interest in the capital works has been agreed and the approval of the Ministry of Education has been obtained. The Board's financial interest is not the subject of an agreement with the proprietor and the Ministry of Education has not granted the approval. Therefore, the expenditure was unlawful and the fixed assets, equity, and surplus of the College were overstated.
Saint Peter's College (Palmerston North)
Financial statements year ended: 31 December 2009
We disagreed with the Board of Trustees recognising expenditure incurred in 2008 for capital works on land owned by the College proprietor as an asset. The use of funding for this purpose is not permitted by law unless the Board's financial interest in the capital works has been agreed and the approval of the Ministry of Education has been obtained. The Board's financial interest is not the subject of an agreement with the proprietor and the Ministry of Education has not granted the approval. Therefore, the expenditure was unlawful and did not meet the criteria for the Board to recognise it as a fixed asset and should be written off. As a result, the fixed assets and equity of the College were overstated.
Pakuranga Health Camp School
Financial statements year ended: 31 December 2009
Our audit was limited because the notional lease grant and expenditure had been omitted from the financial statements due to the uncertainty associated with the ownership of the school property. The inclusion of the notional lease from the use of land and buildings and the associated grant income in the Income Statement is generally recognised as necessary to fairly reflect the magnitude of the school's operations. The effect of this omission is that the total income and total expenses are understated but this has no impact on the net surplus for the year. This was a departure from the statutory reporting requirements of section 87(3) of the Education Act 1989.
Mayfield Primary School
Financial statements year ended: 31 December 2009
Our work was limited because of an unresolved investigation into certain transactions between the school and a related party. There were no practical audit procedures to determine the effect of the investigation until a conclusion has been reached.
Tirohia School
Financial statements years ended: 31 December 2007 and 31 December 2008
Our audit was limited because we were unable to verify some revenue due to limited controls over that revenue and we were unable to verify the adequacy of the provision for cyclical maintenance. In our opinion, the provision did not adequately estimate the cost of maintenance or the required painting cycles and is materially understated. The effect of the understatement is to understate expenditure and understate liabilities.
Birchville School
Financial statements year ended: 31 December 2009
Our audit was limited because we were unable to verify some revenue due to limited controls over that revenue.
Devon Intermediate School
Financial statements year ended: 31 December 2009
Our audit was limited because we were unable to verify some revenue due to limited controls over that revenue.
Freyberg Community School
Financial statements year ended: 31 December 2009
Our audit was limited because we were unable to verify some revenue due to limited controls over that revenue.
Hokitika School
Financial statements year ended: 31 December 2009
Our audit was limited because we were unable to verify some revenue due to limited controls over that revenue.
Kiwitahi School
Financial statements year ended: 31 December 2009
Our audit was limited because we were unable to verify some revenue due to limited controls over that revenue.
Makauri School
Financial statements year ended: 31 December 2009
Our audit was limited because we were unable to verify some revenue due to limited controls over that revenue.
Mangapapa School
Financial statements year ended: 31 December 2009
Our audit was limited because we were unable to verify some revenue due to limited controls over that revenue.
Motu School
Financial statements year ended: 31 December 2009
Our audit was limited because we were unable to verify some revenue due to limited controls over that revenue.
Ohuka School
Financial statements year ended: 31 December 2009
Our audit was limited because we were unable to verify some revenue due to limited controls over that revenue.
Red Beach School
Financial statements year ended: 31 December 2009
Our audit was limited because we were unable to verify some revenue due to limited controls over that revenue.
Saint Joseph's Catholic School (Paeroa)
Financial statements year ended: 31 December 2009
Our audit was limited because we were unable to verify some revenue due to limited controls over that revenue.
Tangowahine School
Financial statements year ended: 31 December 2009
Our audit was limited because we were unable to verify some revenue due to limited controls over that revenue.
Taumarunui High School & Community Trust
Financial statements year ended: 31 December 2009
Our audit was limited because we were unable to verify some revenue due to limited controls over that revenue.
Te Kura Kaupapa Māori o Te Rawhiti Roa
Financial statements year ended: 31 December 2009
Our audit was limited because we were unable to verify some revenue due to limited controls over that revenue.
Te Kura Kaupapa Māori o Takapau
Financial statements year ended: 31 December 2009
Our audit was limited because we were unable to verify some revenue due to limited controls over that revenue.
Tongariro Area School
Financial statements year ended: 31 December 2009
Our audit was limited because we were unable to verify some revenue due to limited controls over that revenue.
Upper Hutt School
Financial statements year ended: 31 December 2009
Our audit was limited because we were unable to verify some revenue due to limited controls over that revenue.
Weber School
Financial statements year ended: 31 December 2009
Our audit was limited because we were unable to verify some revenue due to limited controls over that revenue.
Whatatutu School
Financial statements year ended: 31 December 2009
Our audit was limited because we were unable to verify some revenue due to limited controls over that revenue.
Moanataiari School
Financial statements year ended: 31 December 2009
Our audit was limited because we were unable to verify some revenue due to a lack of records for that revenue.
Woodstock School
Financial statements year ended: 31 December 2009
Our audit was limited because we were unable to verify some revenue due to a lack of records for that revenue.
Te Kura Kaupapa Māori o Waiuku
Financial statements year ended: 31 December 2008
Our audit was limited because we were unable to verify some revenue due to limited controls over that revenue and certain accounting records were not available for inspection.
Ross Intermediate
Financial statements year ended: 31 December 2009
Our audit was limited because we were unable to verify some expenditure due to limited controls over that expenditure.
Allenvale Special School and Resource Centre
Financial statements year ended: 31 December 2009
Our audit was limited because the results of an investigation into the financial management of the school were not known at the completion of the audit.
Taikura Rudolf Steiner School
Financial statements year ended: 31 December 2009
We disagreed with the Board of Trustees making an unlawful transfer of Crown money to a third party.
Parkside Christian SDA School
Financial statements year ended: 31 December 2009
We disagreed with the Board of Trustees making an unlawful transfer of Crown money to its proprietor.
Te Tipua School
Financial statements year ended: 31 December 2009
We disagreed with the Board of Trustees not including the surplus on its transport operation, which was Crown money held on behalf of the School, as a current asset in the Statement of Financial Position.

Explanatory paragraphs for public entities other than schools

University of Auckland and Group
Financial statements and performance information year ended: 31 December 2009
We drew readers' attention to the disclosures in the financial statements about the Partnerships for Excellence funding in 2009, which was provided by the Crown as a capital appropriation for increasing the University's capability. This should have been recognised as equity in nature and not recognised as income in advance. In addition, the relevant research contract funding should have been recognised as a capital contribution from the Crown in 2009 rather than partly as revenue and partly as a liability. Although these amounts are not material to the financial statements as a whole, we felt it important to highlight the disclosures to the readers of the financial statements.
Public Trust and Group
Financial statements and statement of service performance year ended: 30 June 2010
We drew readers' attention to the disclosures in the financial statements about the value of unlisted mortgage-backed securities of $29.3 million for which there was not an active liquid market and for which no quoted price was available. Although the fair value of these investments was based on the best available information, without an active, liquid market and quoted market prices a high degree of uncertainty existed about that value, which could have a material effect on the Statement of Comprehensive Income and Statement of Financial Position.
MidCentral District Health Board and Group
Financial statements and statement of service performance year ended: 30 June 2010
We drew readers' attention to the disclosures in the financial statements about the 5% reduction the Board made to the valuation of buildings carried out by the independent valuer as at 30 June 2009 and which was included in the 30 June 2010 balance. This is not supported by the New Zealand Equivalent to International Accounting Standard No. 16 Property, Plant and Equipment, which requires valuations to be either carried out by or reviewed by an independent valuer. The reduction made by the Board was not included in the valuation provided by the independent valuer. There was no information subsequent to 30 June 2009 to support this adjustment. However, the reduction is not material to the financial statements as a whole.
Whanganui District Health Board
Financial statements and statement of service performance year ended: 30 June 2010
We drew readers' attention to the serious financial difficulties of the Board. The Health Board was managing the situation and, subject to deficit support, there would be enough cash flow generated from operating activities to meet the investing and financing cash flow requirements as set out in the Board's Statement of Intent. The Crown has indicated that it would provide such support where necessary to maintain the Board's viability.
Tairawhiti Polytechnic
Financial statements and performance information year ended: 31 December 2009
We noted the disclosures in the financial statements that referred to the going concern assumption appropriately being used in preparing the financial statements. The Polytechnic was pursuing merger talks with Eastern Institute of Technology and changes were taking place in the tertiary education sector that would result in a loss of government funding in the future that could affect the viability of the institution as an independent entity in the next two to three years.
Archives New Zealand
Financial statements and statement of service performance year ended: 30 June 2010
We noted the disclosures in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because the entity will amalgamate into the Department of Internal Affairs.
Electoral Commission
Financial statements and statement of service performance year ended: 31 December 2010
We noted the disclosures in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because of the Government's decision to transfer the functions of the Commission to the new Electoral Commission, after new legislation was enacted on 21 May 2010.
Electricity Commission
Financial statements and statement of service performance year ended: 30 June 2010
We noted the disclosures in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because of the Government's decision to transfer the functions, powers, assets, contractual obligations, and entitlements of the Commission to the Electricity Authority on 1 November 2010, as a result of the Electricity Industry Act 2010.
Environmental Risk Management Authority
Financial statements and statement of service performance year ended: 30 June 2010
We noted the disclosures in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because of the Government's decision to transfer the functions of the Authority to the Environmental Protection Authority in 2011, after the legislation to implement these changes is enacted.
Foundation for Research, Science and Technology
Financial statements and statement of service performance year ended: 30 June 2010
We noted the disclosures in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because of the Government's decision to transfer the functions of the Foundation to the Ministry of Science and Innovation in 2011, after the legislation to implement these changes is enacted.
Ministry of Research, Science and Technology
Financial statements and statement of service performance year ended: 30 June 2010
We noted the disclosures in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because of the Government's decision to transfer the functions of the Ministry to the Ministry of Science and Innovation in 2011, after the legislation to implement these changes is enacted.
New Zealand Food Safety Authority
Financial statements and statement of service performance year ended: 30 June 2010
We noted the disclosures in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because of the Government's decision to merge the Authority with the Ministry of Agriculture and Fisheries on 1 July 2010.
Securities Commission
Financial statements and statement of service performance year ended: 30 June 2010
We noted the disclosures in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because of the Government's decision to transfer the functions of the Commission to the proposed Financial Markets Authority and to disestablish the Commission in 2011, after the legislation to implement these changes is enacted.
National Library of New Zealand
Financial statements and statement of service performance year ended: 30 June 2010
We noted the disclosures in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because of the Government's decision to merge the functions of the National Library with the Department of Internal Affairs and Archives New Zealand and to disestablish the National Library in 2011, after the legislation to implement these changes is enacted.
Otago District Health Board
Financial statements and statement of service performance period ended: 30 April 2010
We noted the disclosures in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because the Board was merged with Southland District Health Board on 30 April 2010, according to an Order in Council made under the Health Sector (Transfers) Act 1993. The Order in Council transferred the Board's assets and liabilities to the Southern District Health Board, which will continue to provide the same services provided by the Board. Therefore, no adjustments have been made to the financial statements because of the dissolution basis of preparation.
Southland District Health Board
Financial statements and statement of service performance period ended: 30 April 2010
We noted the disclosures in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because the Board was merged with Otago District Health Board on 30 April 2010, according to an Order in Council made under the Health Sector (Transfers) Act 1993. The Order in Council transferred the Board's assets and liabilities to the Southern District Health Board, which will continue to provide the same services provided by the Board. Therefore, no adjustments have been made to the financial statements because of the dissolution basis of preparation.
New Zealand School of Fisheries Limited (Nelson Marlborough Institute of Technology)
Financial statements year ended: 31 December 2009
We noted the disclosures 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 disestablished after 31 December 2009.
The Nelson Academy Limited (Nelson Marlborough Institute of Technology)
Financial statements year ended: 31 December 2009
We noted the disclosures 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 disestablished after 31 December 2009.
Nelson Marlborough Institute of Technology International Limited (Nelson Marlborough Institute of Technology)
Financial statements year ended: 31 December 2009
We noted the disclosures 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 disestablished after 31 December 2009.
iPredict Limited and Group (Victoria University of Wellington)
Financial statements year ended: 31 December 2009
We noted the disclosures in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because the company had negative equity at the time of the financial statements being approved and no letter of support had been received from shareholders.
Predictions Clearing Limited (Victoria University of Wellington)
Financial statements year ended: 31 December 2009
We noted the disclosures in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because the company had negative equity at the time of the financial statements being approved and no letter of support had been received from shareholders.
MVLONE Limited and Group (Massey University)
Financial statements years ended: 31 December 2008 and 31 December 2009
We noted the disclosures 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 disestablished after 31 December 2009.
MVLTWO Limited (Massey University)
Financial statements years ended: 31 December 2008 and 31 December 2009
We noted the disclosures 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 disestablished after 31 December 2009.
Public Trust Investment Funds Balanced Income Fund (Public Trust)
Financial statements year ended: 31 March 2010
We noted the disclosures in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because the Fund was to be closed in the next financial year (and the fund transferred to a new fund structure).
Public Trust Group Investment Funds (GIF) - Feeder Funds (Public Trust)
Financial statements years ended: 15 March 2009 and 15 March 2010
We noted the disclosures in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because the Fund was to be closed in the next financial year (and the fund transferred to a new fund structure).
Public Trust Group Investment Funds (PTIF) - Investing Funds (Public Trust)
Financial statements year ended: 31 March 2010
We noted the disclosures in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because the Fund was to be closed in the next financial year (and the fund transferred to a new fund structure).
Woodville Windfarm Limited (Meridian Energy)
Financial statements year ended: 31 December 2009
We noted the disclosures in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because the Directors filed a request with the Companies Office to have the company removed from the register.
Bay of Plenty Provincial Patriotic Council
Financial statements period ended: 30 November 2006
We noted the disclosures in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because the entity closed on 30 November 2006. The financial statements were prepared for a 14-month period until the date of disestablishment. This is a departure from section 40 of the Patriotic and Canteen Funds Act 1947, which requires the Council to prepare its accounts for the year ended 30 September each year.
Southland Provincial Patriotic Council
Financial statements year ended: 30 September 2009
We noted the disclosures in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because the Council was disestablished by resolution on 15 December 2005. Assets and liabilities are still held by the Council until a final decision is made as to where these assets and liabilities will vest.

Explanatory paragraphs for schools

Breaches of law for not reporting by 31 May 2010 (42 schools)
Boards of Trustees have a statutory obligation to issue their audited financial statements by 31 May.
We noted that 42 schools had breached the law by failing to meet this statutory reporting deadline, and had chosen not to disclose the breach in their financial statements.
Closures of entities (four schools and 23 transport networks)
Accounting standards require schools that have been or are being closed to prepare their financial statements on the basis that they are not a "going concern".
We noted that four closed schools and 23 closed transport networks (which are public entities controlled by schools) had prepared their financial statements on an appropriate basis.
Serious financial difficulties (19 schools)
Some schools are in serious financial difficulty, mainly because of large working capital deficits.
We noted that 19 schools had included disclosures in their financial statements that outlined their financial difficulties and the actions they were taking to address the factors that had resulted in those difficulties.
Breaches of law for borrowing above the permitted limit without approval (14 schools)
Boards of Trustees are not permitted to borrow above a permitted limit without the approval of the Ministers of Education and Finance.
Fourteen schools had breached the law by not seeking authority from the joint Ministers for borrowing above the permitted limit and had chosen not to disclose the breach in their financial statements.
Breaches of law for not having a 10-year property plan (eight schools)
Boards of Trustees have a statutory obligation to prepare and review annually, and have professionally reviewed every three years, a property plan that includes all the maintenance requirements of the school for a prospective 10-year period.
Eight schools had breached the law by failing to update the 10-year property plan annually and had chosen not to disclose the breach in their financial statements.
Breaches of law for not submitting financial statements for audit by 31 March 2010 (eight schools)
Boards of Trustees have a statutory obligation to submit their financial statements for audit by 31 March.
Eight schools had breached the law by failing to submit their financial statements for audit by 31 March 2010 and had chosen not to disclose the breach in their financial statements.
Breaches of law for not including the required analysis of variance reports (six schools)
Schools are obliged by the Education Act 1989 to include, in their annual reports, reports comparing their performance against their objectives.
Six schools had breached the law by not including this analysis in their annual reports and had chosen not to disclose the breach in their financial statements.
Other reasons (29 schools)
Our audit reports included emphasis of matter paragraphs for other reasons:
  • Three schools failed to keep proper accounting records.
  • Three integrated schools were in a process to modify the documentation to comply with the Ministry of Education's guidelines on local fundraising by boards and proprietors.
  • Three schools invested in non-approved banking institutions without the authority of the Ministers of Education and Finance.
  • Two schools depended on the Minister of Education's decision and community consultation about whether to close.
  • Two schools paid their staff in advance without the approval of the Ministry of Education.
  • Two schools acquired an interest in land without the approval of the Minister of Education.
  • One school was using a bank account that was not under its direct control and authority.
  • One school had trustees who were interested in contracts with the Board of Trustees, under which the total payments made or to be made by or on behalf of the Board of Trustees exceeded $25,000 in a financial year, without the approval of the Minister of Education.
  • One school was disposing of a building, which was unlawfully recognised as fixed assets expenditure on capital works on land owned by the school's proprietor.
  • One school was seeking approval from the Ministry of Education to recognise the Board of Trustees' interest in the proprietor's premises.
  • One school was reviewing its fixed asset register to establish whether to retain several assets listed at nil value.
  • One school granted a license to occupy certain school buildings and part of the school field to third parties without the approval of the Minister of Education.
  • One school had two permanently appointed staff serving on the Board of Trustees during the year.
  • One school did not exclude a member with a declared conflict of interest from board meetings to consider and discuss matters in the area where the conflict existed and payments exceeded the approval from the Secretary for Education.
  • One school had disclosed a prior year transaction where there were questions over its appropriateness.
  • One school spent a large amount of money on an overseas trip for some students and adults, which was considered wasteful and showed a lack of probity.
  • One school paid remuneration which was approved by the Ministry of Education to the principal for duties relating to professional and pastoral leadership and management of a hostel that was owned by the proprietor – who also paid him for the same duties.
  • One school had a significant number of related party transactions between the school, the proprietor, and a kindergarten.
  • One school had funds owing to the Ministry of Education that had not been reconciled between various projects.
  • One school had its 2008 comparative figures in the financial statements amended to correct errors that overstated equity and fixed assets.

Note: Includes any explanatory paragraphs and breaches of law in the qualified audit reports above.

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