Appendix: Text of our audit opinion on the planning document

Matters arising from Auckland Council's planning document.

Report of the Auditor-General to the readers of Auckland Council's long-term plan for the period of eight years and eight months commencing 1 November 2010

I have audited the Auckland Council's Long-Term Plan (the Planning Document), prepared by the Auckland Transition Agency (ATA), using my staff and resources.

The Planning Document is defined by section 19A of the Local Government (Tamaki Makaurau Reorganisation) Act 2009 (the Act). It must be prepared by the ATA for the Auckland Council before the Auckland Council comes into existence on 1 November 2010. The Planning Document, which is a transitional document, is not required to be consulted upon and has not been considered or adopted by the Auckland Council.

Opinion

In our opinion:

  • the Planning Document incorporating volumes 1 to 6, dated 29 October 2010, and prepared by the ATA acting on behalf of the Auckland Council, complies with the requirements of the Act in all material respects; and
  • as a transitional document, the Planning Document provides a reasonable basis for accountability and input into future planning and decision making by the Auckland Council and its communities.

Actual results are likely to be different from the forecast information since anticipated events frequently do not occur as expected and the variation may be material. Accordingly, we express no opinion as to whether the forecasts will be achieved.

Basis of preparation of the Planning Document, which the Auckland Council has not had the opportunity to consider

The Planning Document is a transitional document prepared by the ATA for the Auckland Council. The Planning Document enables the Auckland Council to commence with a reasonable basis for accountability and input into future planning and decision making. However, the Auckland Council has not had the opportunity to consider the merits of any of the information presented in the Planning Document, including assumptions and underlying information, service levels and performance targets, and funding, financial and accounting policies.

Assumptions and underlying information

The assumptions in the Planning Document, together with the underlying information, which have been used to prepare financial forecasts, are based on updated assumptions and underlying information supporting the 2009-19 Long-Term Council Community Plans (LTCCPs) of the previous Auckland local authorities, and their annual plans. Significant forecasting assumptions and their associated level of uncertainty are set out on pages 41 to 48 of volume 5 of the Planning Document. Page 23 of volume 1 of the Planning Document highlights the significant assumption that the total general rates requirement can be reduced by $47.7 million per annum from 1 July 2011 onwards by realising efficiency gains and cost reductions. The Planning Document has been prepared on the basis that the Auckland Council will identify and implement such gains and cost reductions.

Service levels and performance targets

The levels of service and performance measures in the Planning Document are based on a consolidation of levels of service and performance measures of the previous Auckland local authorities. As far as practicable, activities across Auckland have been consistently identified and grouped. As a result, the levels of service and performance targets represent an average of what is expected to be delivered by the Auckland Council, rather than the levels of service and performance targets expected to be delivered within particular local areas.

Funding, financial and accounting policies

The interim funding, financial and accounting policies in the Planning Document include:

  • the following policies that have been consolidated from the multiple policies of the previous Auckland local authorities:
    • a single set of accounting policies;
    • a single liability management policy; and
    • a single investment policy; and
  • other funding and financial policies that have been carried forward from the previous Auckland local authorities, such as multiple Revenue and Financing Policies, and multiple Development and Financial Contributions Policies.

The Auckland Council will be required to engage and consult with its communities on all of the above matters as required by relevant legislation.

Our report was completed on 29 October 2010, and is the date at which our opinion is expressed.

The basis of the opinion is explained below. In addition, we outline the responsibilities of the ATA, the Auckland Council and the auditor, and explain our independence.

Basis of opinion

We carried out the audit in accordance with the International Standard on Assurance Engagements 3000: Assurance Engagements Other Than Audits or Reviews of Historical Financial Information and the Auditor-General's Auditing Standards, which incorporate the New Zealand Auditing Standards. Also, we examined the forecast financial information in accordance with the International Standard on Assurance Engagements 3400: The Examination of Prospective Financial Information.

We planned and performed our audit to obtain all the information and explanations we considered necessary to obtain reasonable assurance that the Planning Document, which is a transitional document, does not contain material misstatements. If we had found material misstatements that were not corrected, we would have referred to them in our opinion.

Our audit procedures included assessing whether:

  • the presentation of the Planning Document complies with the requirements of the Act;
  • the process of consolidating the relevant information in the 2009-19 audited LTCCPs and Annual Plans of the previous Auckland local authorities was adequate, and the transition and other adjustments are reasonable and supportable;
  • the policies adopted by the ATA for the Auckland Council have been consistently applied in the development of the forecast information;
  • the assumptions set out in the Planning Document are based on the best information currently available to the ATA acting on the Auckland Council's behalf, and provide a reasonable and supportable basis for the preparation of the forecast information;
  • the forecast information has been properly prepared on the basis of the underlying information and the assumptions adopted, and the forecast information complies with generally accepted accounting practice in New Zealand;
  • the intended levels of service provision are appropriately reflected throughout the Planning Document;
  • the performance targets and other measures by which actual levels of service provision may meaningfully be assessed reflect the key aspects of the intended service delivery and performance;
  • the relationship between the intended levels of service and the performance measures and forecast financial information has been adequately explained in the Planning Document; and
  • the financial approach outlined by the ATA for the Auckland Council and reflected in the financial overview, supported by the policies included in the Planning Document, has been clearly communicated in the Planning Document.

We do not guarantee complete accuracy of the information in the Planning Document. We evaluated the overall adequacy of the presentation of information. We obtained all the information and explanations we required to support our opinion above.

Responsibilities of the ATA and the Auckland Council

The ATA is responsible under the Act for preparing the Planning Document for the Auckland Council, by applying assumptions and presenting the Auckland Council's forecast information in accordance with generally accepted accounting practice in New Zealand. The ATA's responsibilities arise from section 19A of the Act.

The Planning Document is required to be based on the best information currently available to the ATA acting on the Auckland Council's behalf, and to comply with the provisions of Schedule 2 of the Act. Clause 1 of Schedule 2 of the Act requires the Planning Document to be based on a consolidation of the relevant information contained in the 2009-19 LTCCPs of the previous Auckland local authorities (that will be dissolved on 31 October 2010), and, to the extent relevant, on their Annual Plans.

The Auckland Council's responsibilities commence on 1 November 2010. Consequently the Auckland Council has not had the opportunity to consider the merits of the Planning Document, which reinforces that it is a transitional document. For the period from 1 November 2010 to 30 June 2012, the Planning Document serves as the Auckland Council's LTCCP that local authorities are required to have in accordance with section 93 of the Local Government Act 2002. For the period from 1 November 2010 to 30 June 2011, the Planning Document serves as the Auckland Council's Annual Plan that local authorities are required to have in accordance with section 95 of the Local Government Act 2002.

Responsibilities of the auditor

We are responsible for expressing and reporting to you an independent opinion on the Planning Document that includes the extent to which it complies with the requirements of the Act. This responsibility arises from section 15 of the Public Audit Act 2001 and clause 7 of Schedule 2 of the Act.

It is not our responsibility to express an opinion on the merits of any policy content in the Planning Document.

Independence

Other than this report, the audits of the previous Auckland local authorities and the ATA, and as auditor of the Auckland Council and its subsidiaries, we have no relationship with, or interests in, the Auckland Council or the ATA.

Lyn Provost
Controller and Auditor-General

Wellington

New Zealand

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