Note 19: Explanation of major variances against budget

Explanations for major variances from the Office's forecast figures in the Annual Plan 2010/11 are as follows:

Statement of comprehensive income

Audit fee revenue was higher than budgeted due to additional revenue arising from the transition audits relating to the merger of Auckland Councils, additional revenue for Treasury's 2011 Departmental Internal Control Evaluation (not previously budgeted) and updated forecasts as audit fees are finalised and the flow of revenue across financial years crystallises.

Costs were higher than budgeted, a reflection of delivery of the additional audit work outlined above.

Statement of financial position

Current assets are higher than forecast which is mainly due to a higher cash balance arising from the operating surplus for the year. Debtors are also higher than forecast due to the timing of audit fee invoicing.

Current liabilities are higher than forecast, which is attributable to the provision for repayment of surplus to the Crown and higher payables due to the timing of payments at the end of the financial year.