Note 16: Related party transactions

All related party transactions have been entered into on an arm's-length basis.

The Office is a wholly owned entity of the Crown. The Government is a major source of revenue for the Office.

Significant transactions with government-related entities

The Office has received funding from the Crown of $10.120 million (2013 $10.080 million) to provide performance audits, inquiries, advice to Parliament, and audits of small entities for the year ended 30 June 2014.

Collectively, but not individually significant transactions with government-related entities

In conducting its activities, the Office is required to pay various taxes and levies (such as GST, FBT, PAYE, and ACC levies) to the Crown and entities related to the Crown. The payment of these taxes and levies, other than income tax, is based on the standard terms and conditions that apply to all tax and levy payers. The Office is exempt from paying income tax.

The Office also purchases goods and services from entities controlled, significantly influenced, or jointly controlled by the Crown. Purchases from these government-related entities for the year ended 30 June 2014 totalled $1.498 million (2013 $1.506 million). These purchases included air travel from Air New Zealand, capital charge from The Treasury, and postal services from New Zealand Post. The balances outstanding at balance date amount to $47,800. Normally, 30-day credit terms apply to these amounts.

During the year, there were transactions between the Office and close family members of key management personnel, as follows:

• Some close family members of key management personnel were employed by the Office. The terms and conditions of their appointment were no more favourable than the Office would have adopted if there were no relationship to key management personnel.
• Close family members of a member of key management personnel were directors in a company that provided services to the Office under a contract that was entered into before the appointment of the member. The cost of the services purchased was $13,800 (2013 – $16,100) and there was nil outstanding at balance date (2013 – nil).

Key management personnel compensation

Key management personnel include the Auditor-General, the Deputy Auditor-General, and the ten members of the OAG and Audit New Zealand Leadership Teams.

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