Appendix: Details of the non-standard audit reports issued in 2011
Central government: Results of the 2010/11 audits (Volume 1).
Adverse opinions
| Royal New Zealand Navy Museum Trust Incorporated 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. |
| RNZAF Museum Trust Board Financial statements year ended: 30 June 2011 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. |
Qualified opinions
| Southern District Health Board* Financial statements and statement of service performance for the two months ended: 30 June 2010 Our audit was limited because the district health board did not prepare a statement of forecast service performance for the two-month period ended 30 June 2010 and, therefore, was unable to prepare performance information that reflected the standards of delivery performance achieved and the actual revenue earned and output expenses incurred. |
| Ngati Whakue Education Endowment Trust Board Financial statements years ended: 31 December 2009 and 31 December 2010 Our audit was limited because we were unable to confirm the value of the Trust Board's land that was classified as investment property. The land had not been revalued but instead was recognised at its rating value. This is a departure from Statement of Standard Accounting Practice No 17: Accounting for Investment Properties and Properties Intended for Sale (SSAP-17), which requires the investment property to be revalued annually to net current value. |
| Counties Manukau District Health Board Financial statements and statement of service performance year ended: 30 June 2010 Our audit was limited because the district health board recognised some funding from the Ministry of Health which should have been recognised as revenue in the year ended 30 June 2009. These amounts did not meet the requirements under the New Zealand Framework for the Preparation and Presentation of Financial Statements for recognition as a liability. As a result, revenue and the surplus for the year ended 30 June 2010 were overstated and current liabilities and equity were understated. |
| Tauranga Moana Māori Trust Board Financial statements year ended: 30 June 2009 Our audit was limited because we were unable to obtain sufficient evidence to confirm the financial information for the comparative year that related to the Trust Board's interest in a joint venture due to the joint venture not being audited in that year. |
| New Zealand Māori Arts and Craft Institute Financial statements year ended: 31 March 2011 Our audit was limited because we were unable to obtain sufficient assurance over the completeness of revenue due to limited controls over that revenue and because two former employees had been charged with theft of admission receipts. |
| New Zealand Post Recycle Centre Limited (New Zealand Post Limited) Financial statements year ended: 30 June 2010 Our audit was limited because we were unable to obtain sufficient assurance over the completeness of revenue because of limited controls over that revenue. |
| Wilson Home Trust (Waitemata District Health Board) Financial statements year ended: 30 June 2009 Our audit was limited because we were unable to obtain sufficient assurance over the completeness of revenue because of limited controls over that revenue. |
| Auckland DHB Charitable Trust (Auckland District Health Board) Financial statements years ended: 30 June 2010 and 30 June 2011 Our audit was limited because we were unable to obtain sufficient assurance over the completeness of revenue because of limited controls over that revenue. |
| Three Harbours Health Foundation (Waitemata District Health Board) Financial statements year ended: 30 June 2010 Our audit was limited because we were unable to obtain sufficient enough assurance over the completeness of revenue because of limited controls over that revenue. |
| Gisborne Laundry Services (Tairawhiti District Health Board) Financial statements year ended: 30 June 2009 Our audit was limited because we were unable to obtain sufficient enough assurance over the completeness of revenue because of limited controls over that revenue. |
| The Māori Trustee and Group Financial statements and statement of service performance year ended: 31 March 2011 Our audit was limited because we were unable to obtain sufficient assurance over the Group financial statements because the financial information of the associate, Miraka Limited, had not been audited. |
* Southern District Health Board was formed on 1 May 2010 after the merger of Otago District Health Board and Southland District Health Board.
"Emphasis of matter" paragraphs
| Financial Statements of the Government of New Zealand Financial statements year ended: 30 June 2011 We drew attention to the disclosures in the financial statements about the effects of the Canterbury earthquakes. In particular, we drew attention to the disclosures about:
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| The Earthquake Commission Financial statements and statement of service performance year ended: 30 June 2011 We drew readers' attention to the disclosures in the financial statements outlining the uncertainties associated with the outstanding claims liability and reinsurance receivables because of the Canterbury earthquakes. We also drew readers' attention to the disclosures in the financial statements outlining that they were appropriately prepared on a going concern basis because the Crown, under section 16 of the Earthquake Commission Act 1993, is obliged to grant or advance sufficient sums to meet any current or future deficiencies. |
| AMI Insurance Limited and Group Financial statements year ended: 30 June 2011 We drew attention to the disclosures in the financial statements about how the Canterbury earthquakes have affected the outstanding claim liability and related reinsurance receivables. The disclosures describe the inherent uncertainties involved in estimating those amounts using actuarial assumptions. |
| Canterbury Earthquake Recovery Authority Statements of appropriations for the period ended: 30 June 2011 We drew readers' attention to the disclosures in the statements of appropriations about the provision resulting from the Government's offer to purchase properties in the Canterbury residential red zone. The disclosures describe the significance of the amounts and inherent uncertainties involved in estimating the provision using actuarial assumptions. |
| Department of Internal Affairs Financial statements, statement of service performance, and schedules of non-departmental activities year ended: 30 June 2011 We drew attention to the disclosures in the non-departmental schedules about emergency expenditure incurred by the Department on behalf of the Government. The emergency expenditure was for costs in response to the Canterbury earthquakes and a small amount of the costs for restoration of local authority infrastructure damaged by the earthquakes. We also drew attention to the disclosure about the unquantifiable remaining restoration costs for infrastructure that could not be reliably estimated because of the high level of uncertainty about those costs. |
| Public Trust and Group Financial statements and non-financial performance information year ended: 30 June 2011 We drew readers' attention to the disclosures in the financial statements about the value of unlisted mortgage-backed securities of $24.6 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, in the absence of 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 Financial Performance and Statement of Financial Position. |
| New Zealand Venture Investment Fund Limited and Group Financial statements and statement of service performance year ended: 30 June 2011 We drew readers' attention to the disclosures in the financial statements about the uncertainties in measuring the fair value of the unlisted venture capital investments because of the early stage nature and the absence of quoted market prices. These uncertainties could have a material effect on the statement of comprehensive income and statement of financial position. |
| NZVIF (BPV) Limited (New Zealand Venture Investment Fund Limited) Financial statements year ended: 30 June 2011 We drew readers' attention to the disclosures in the financial statements about the uncertainties in measuring the fair value of the unlisted venture capital investments because of the early stage nature and the absence of quoted market prices. These uncertainties could have a material effect on the statement of comprehensive income and statement of financial position. |
| NZVIF (EIP) Limited (New Zealand Venture Investment Fund Limited) Financial statements year ended: 30 June 2011 We drew readers' attention to the disclosures in the financial statements about the uncertainties in measuring the fair value of the unlisted venture capital investments because of the early stage nature and the absence of quoted market prices. These uncertainties could have a material effect on the statement of comprehensive income and statement of financial position. |
| NZVIF (INF) Limited (New Zealand Venture Investment Fund Limited) Financial statements year ended: 30 June 2011 We drew readers' attention to the disclosures in the financial statements about the uncertainties in measuring the fair value of the unlisted venture capital investments because of the early stage nature and the absence of quoted market prices. These uncertainties could have a material effect on the statement of comprehensive income and statement of financial position. |
| NZVIF (IGT) Limited (New Zealand Venture Investment Fund Limited) Financial statements year ended: 30 June 2011 We drew readers' attention to the disclosures in the financial statements about the uncertainties in measuring the fair value of the unlisted venture capital investments because of the early stage nature and the absence of quoted market prices. These uncertainties could have a material effect on the statement of comprehensive income and statement of financial position. |
| NZVIF (Seed Fund) Limited (New Zealand Venture Investment Fund Limited) Financial statements year ended: 30 June 2011 We drew readers' attention to the disclosures in the financial statements about the uncertainties in measuring the fair value of the unlisted venture capital investments because of the early stage nature and the absence of quoted market prices. These uncertainties could have a material effect on the statement of comprehensive income and statement of financial position. |
| NZVIF (No 8) Limited (New Zealand Venture Investment Fund Limited) Financial statements year ended: 30 June 2011 We drew readers' attention to the disclosures in the financial statements about the uncertainties in measuring the fair value of the unlisted venture capital investments because of the early stage nature and the absence of quoted market prices. These uncertainties could have a material effect on the statement of comprehensive income and statement of financial position. |
| NZVIF (TMT) Limited (New Zealand Venture Investment Fund Limited) Financial statements year ended: 30 June 2011 We drew readers' attention to the disclosures in the financial statements about the uncertainties in measuring the fair value of the unlisted venture capital investments because of the early stage nature and the absence of quoted market prices. These uncertainties 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 2011 We drew readers' attention to the disclosures in the financial statements that outlined that the Board made a 5% reduction to the valuation of buildings that was carried out by the independent valuer as at 30 June 2009 and which was included in the 30 June 2010 and 30 June 2011 financial statements. The Board's decision was not supported by the New Zealand Equivalent to International Accounting Standard No.16 Property, Plant and Equipment (NZ IAS 16) which requires valuations to be either carried out by, or reviewed by, an independent valuer. There was no information after 30 June 2009 to support a 5% adjustment. |
| Whanganui District Health Board Financial statements and statement of service performance year ended: 30 June 2011 We drew readers' attention to the disclosures in the financial statements outlining the serious financial difficulties of the Board as well as what the Board was doing to manage the situation, which included that the Crown has indicated that it will provide financial support to maintain viability of the Board. |
| Spring Creek Mining Company (Solid Energy New Zealand Limited) Financial statements year ended: 30 June 2011 We drew readers' attention to the disclosures in the financial statements that outlined the serious financial difficulties and the uncertainties about the company's ability to continue as a going concern. |
| Dental Council Financial statements year ended: 31 March 2011 We drew readers' attention to the disclosures in the financial statements that referred to uncertainty about the future delivery of office functions. |
| Tuhoe-Waikaremoana Māori Trust Board and Group Financial statements year ended: 31 March 2011 We drew readers' attention to the disclosures in the financial statements that referred to the Board of Trustees' intentions to significantly change the nature of the Board's operations including the transfer of certain assets to a separate Charitable Trust, which depends on the Board obtaining the approval of the High Court. |
| Department of Building and Housing Financial statements, statement of service performance, and schedules of non-departmental activities year ended: 30 June 2011 We drew readers' attention to the disclosures in the financial statements that referred to the uncertainties associated with the provision for Weathertight Services Financial Assistance Package in the non-departmental schedule of liabilities. |
| Cardiff Holdings No. 1 Limited (Genesis Power Limited) Financial statements year ended: 30 June 2010 We drew readers' attention to the disclosures in the financial statements outlining that they were appropriately prepared on a going concern basis because the parent company has confirmed that it would provide adequate support to ensure that the company will meet its debts as they fall due. |
| Cardiff Holdings No. 2 Limited (Genesis Power Limited) Financial statements year ended: 30 June 2010 We drew readers' attention to the disclosures in the financial statements outlining that they were appropriately prepared on a going concern basis because the parent company has confirmed that it would provide adequate support to ensure that the company will meet its debts as they fall due. |
| Kupe Holdings Limited (Genesis Power Limited) Financial statements year ended: 30 June 2010 We drew readers' attention to the disclosures in the financial statements outlining that they were appropriately prepared on a going concern basis because the parent company has confirmed that it would provide adequate support to ensure that the company will meet its debts as they fall due. |
| GP No. 1 Limited (Genesis Power Limited) Financial statements year ended: 30 June 2010 We drew readers' attention to the disclosures in the financial statements outlining that they were appropriately prepared on a going concern basis because the parent company has confirmed that it would provide adequate support to ensure that the company will meet its debts as they fall due. |
| GP No. 2 Limited (Genesis Power Limited) Financial statements year ended: 30 June 2010 We drew readers' attention to the disclosures in the financial statements outlining that they were appropriately prepared on a going concern basis because the parent company has confirmed that it would provide adequate support to ensure that the company will meet its debts as they fall due. |
| GP No. 4 Limited (Genesis Power Limited) Financial statements year ended: 30 June 2010 We drew readers' attention to the disclosures in the financial statements outlining that they were appropriately prepared on a going concern basis because the parent company has confirmed that it would provide adequate support to ensure that the company will meet its debts as they fall due. |
| GP No. 5 Limited (Genesis Power Limited) Financial statements year ended: 30 June 2010 We drew readers' attention to the disclosures in the financial statements outlining that they were appropriately prepared on a going concern basis because the parent company has confirmed that it would provide adequate support to ensure that the company will meet its debts as they fall due. |
| Archives New Zealand Financial statements, statement of service performance, and schedules of non-departmental activities seven months ended: 31 January 2011 We drew readers' attention to the disclosures in the financial statements that referred to the disestablishment basis appropriately being used in preparing the financial statements because Archives merged with the Department of Internal Affairs from 1 February 2011 and vested its assets and liabilities in the Department of Internal Affairs. |
| Electricity Commission Financial statements and statement of service performance four months ended: 31 October 2010 We drew readers' attention to the disclosures in the financial statements that referred to the dissolution basis appropriately being used in preparing the financial statements because the Electricity Industry Act 2010 dissolved the Electricity Commission from 31 October 2010 and vested its assets and liabilities in the Electricity Authority. |
| Foundation for Research, Science and Technology Financial statements seven months ended: 31 January 2011 We drew readers' attention to the disclosures in the financial statements that referred to the disestablishment basis appropriately being used in preparing the financial statements because the Foundation for Research, Science and Technology was dissolved from 31 January 2011 and its assets and liabilities were vested in the Ministry of Science and Innovation. |
| Ministry of Research, Science and Technology Financial statements, statement of service performance, and schedules of non-departmental activities seven months ended: 31 January 2011 We drew readers' attention to the disclosures in the financial statements that referred to the disestablishment basis appropriately being used in preparing the financial statements because the Ministry of Research, Science and Technology was dissolved from 31 January 2011 and its assets and liabilities were vested in the Ministry of Science and Innovation. |
| Securities Commission Financial statements and statement of service performance year ended: 30 April 2011 We drew readers' attention to the disclosures in the financial statements that referred to the disestablishment basis appropriately being used in preparing the financial statements because the functions of the Commission were transferred to the Financial Markets Authority on 1 May 2011. |
| National Library of New Zealand Financial statements, statement of service performance, and schedules of non-departmental activities seven months ended: 31 January 2011 We drew readers' attention to the disclosures in the financial statements that referred to the disestablishment basis appropriately being used in preparing the financial statements because the National Library was dissolved from 31 January 2011 and vested its assets and liabilities in the Department of Internal Affairs. |
| Ministry of Fisheries Financial statements, non-financial performance information, and schedules of non-departmental activities year ended: 30 June 2011 We drew readers' attention to the disclosures in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because the Ministry was disestablished as at 1 July 2011 and its assets and liabilities were transferred to the Ministry of Agriculture and Forestry. |
| Crown Health Financing Agency Financial statements and statement of service performance year ended: 30 June 2011 We drew readers' attention to the disclosures in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because the Government decided to transfer the functions of the Agency to the Ministry of Health in 2012. |
| Environmental Risk Management Authority Financial statements and statement of service performance year ended: 30 June 2011 We drew readers' attention to the disclosures in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because the Authority was disestablished and its functions transferred to the Environmental Protection Authority on 1 July 2011. |
| Legal Services Agency Financial statements and non-financial performance information year ended: 30 June 2010 We drew readers' attention to 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 Agency to the Ministry of Justice in 2011, after the legislation to implement these changes is enacted. |
| Legal Services Agency Financial statements and non-financial performance information year ended: 30 June 2011 We drew readers' attention to the disclosures in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because the Agency was disestablished from 1 July 2011 and its assets, liabilities, and debts were vested in the Ministry of Justice. |
| Health Sponsorship Council Financial statements and statement of service performance year ended: 30 June 2011 We drew readers' attention to the disclosures in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because the Government decided to combine the functions of the Council, the Alcohol Advisory Council, and the relevant functions of the Ministry of Health into the Health Promotion Agency in 2012. |
| Auckland Transition Agency Financial statements for the period: 25 May 2009 to 31 October 2010 We drew readers' attention to the disclosures in the financial statements that referred to the dissolution basis appropriately being used in preparing the financial statements because on 1 November 2010, the Local Government (Tamaki Makaurau Reorganisation) Act 2009 dissolved Auckland Transition Agency and vested its assets and liabilities in Auckland Council. |
| Charities Commission Financial statements and statement of service performance year ended: 30 June 2011 We drew readers' attention to 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 Department of Internal Affairs, after the legislation to implement these changes is enacted. |
| Mental Health Commission Financial statements and statement of service performance year ended: 30 June 2011 We drew readers' attention to 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 Office of the Health and Disability Commissioner, after the legislation to implement these changes is enacted. |
| Alcohol Advisory Council of New Zealand Financial statements and statement of service performance year ended: 30 June 2011 We drew readers' attention to the disclosures in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because the Government decided to combine the functions of the Council, the Health Sponsorship Council, and the relevant functions of the Ministry of Health into the Health Promotion Agency in 2012. |
| Meat Biologics Research Consortium (Meat Biologics Consortia Limited – Massey University, AgResearch, and IRL BIOSOL Limited) Financial statements year ended: 30 June 2010 We drew readers' attention to the disclosures in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because the Consortium was expected to wind down within 12 months from 24 November 2010, the date of the audit report. |
| Scion Australasia Limited (New Zealand Forest Research Institute Limited) Financial statements year ended: 30 June 2010 We drew readers' attention to the disclosures in the financial statements that referred to the cessation basis appropriately being used in preparing the financial statements because the company ceased to trade. |
| PIBDT Ownership Limited Financial statements year ended: 30 June 2011 We drew readers' attention to 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 of Directors intend to wind up the company within the next 12 months. |
| Manukau Pacific Markets Limited (PIBDT Ownership Limited) Financial statements year ended: 30 June 2011 We drew readers' attention to 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 of Directors intend to wind up the company within the next 12 months. |
| Southmarkets Limited (PIBDT Ownership Limited) Financial statements year ended: 30 June 2011 We drew readers' attention to 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 of Directors intend to wind up the company within the next 12 months. |
| Public Trust Investment Funds Balanced Income Fund Financial statements year ended: 31 March 2011 We drew readers' attention to 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 is expected to be closed in the next financial year, with the Fund being transferred to a new fund structure. |
| Public Trust Investment Funds Financial statements year ended: 31 March 2011 We drew readers' attention to the disclosures in the financial statements of the New Zealand and Australian Equities Investment Fund (No. 67) and the International Equities Investment Fund (No. 68) that referred to the going concern assumption appropriately not being used in preparing these financial statements because the Funds are expected to be closed in the next financial year with the Funds being transferred to a new fund structure. |
| Ngai Tahu Ancillary Claims Trust Financial statements years ended: 30 June 2010 and 30 June 2011 We drew readers' attention to the disclosures in the financial statements that referred to the going concern assumption appropriately not being used in preparing the financial statements because the Trust will stop operating after the transfer of the remaining claim property. |
| Taranaki Provincial Patriotic Council Financial statements years ended: 30 September 2008, 30 September 2009, and 30 September 2010 We drew readers' attention to 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 approved in principle the formation of a trust to assume ownership of the assets of the Provincial Patriotic Council and to supersede the functioning of the Provincial Patriotic Council. |
| Electoral Commission Financial statements and statement of service performance three months ended: 30 September 2010 We drew readers' attention to the disclosures in the financial statements that referred to the dissolution basis appropriately being used in preparing the financial statements because the Electoral (Administration) Amendment Act 2010 dissolved the Electoral Commission from 30 September 2010 and vested the assets and liabilities in the new Electoral Commission. |