Appendix 4: Non-standard audit reports issued in 2013
Local government: Results of the 2012/13 audits.
Adverse opinions
| Southland Museum and Art Gallery Trust Board Incorporated (Gore District Council, Invercargill City Council, and Southland District Council) Financial statements and statement of service performance for the year ended 30 June 2013 The Trustees did not recognise the Trust Board's museum collection assets or associated depreciation expense in the financial statements. This is not in keeping with New Zealand Equivalent to International Accounting Standard 16 (NZ IAS 16): Property, Plant and Equipment, which requires public entities to recognise assets and depreciation in their financial statements. |
| Canterbury Museum Trust Board Financial statements and statement of service performance for the year ended 30 June 2013 The Trustees did not recognise the Trust Board's museum collection assets or associated depreciation expense in the financial statements. This is not in keeping with New Zealand Equivalent to International Accounting Standard 16 (NZ IAS 16): Property, Plant and Equipment, which requires public entities to recognise assets and depreciation in their financial statements. |
| Otago Museum Trust Board Financial statements and statement of service performance for the year ended 30 June 2013 The Trustees did not recognise the Trust Board's museum collection assets or associated depreciation expense in the financial statements. This is not in keeping with New Zealand Equivalent to International Accounting Standard 16 (NZ IAS 16): Property, Plant and Equipment, which requires public entities to recognise assets and depreciation in their financial statements. |
| Pukaki ki Rotorua Charitable Trust Financial statements for the years ended 30 June 2011, 30 June 2012, and 30 June 2013 The Trustees did not recognise the Trust's artwork assets in the financial statements. This is not in keeping with the New Zealand Equivalent to International Accounting Standard No.16 (NZ IAS 16): Property, Plant and Equipment, which requires public entities to recognise assets and depreciation in their financial statements. |
| Kaikoura Enhancement Trust (Kaikoura District Council) Financial statements and statement of service performance for the year ended 30 June 2008 The Trustees did not report performance information that reflected the Trust's achievements, measured against performance targets, and did not prepare a statement of intent for the year ended 30 June 2008. The Local Government Act 2002 requires a statement of intent and performance to be prepared. |
| Mayoral Relief Fund Tasman/Nelson (Tasman District Council) Financial statements and statement of service performance for the year ended 30 June 2012 The Trustees did not report performance information that reflected the Trust's achievements, measured against performance targets, and did not prepare a statement of intent for the year ended 30 June 2012. The Local Government Act 2002 requires a statement of intent and performance information to be prepared. We drew attention to the disclosures in the financial statements outlining that the Trust failed to prepare a statement of intent for the year beginning on 1 July 2012. |
| Luggate Nominee Limited (Dunedin City Council) Financial statements and statement of service performance for the years ended 30 June 2009, 30 June 2010, 30 June 2011, 30 June 2012, and 30 June 2013 The company did not report performance information that reflected the company's achievements, measured against performance targets, and failed to prepare a statement of intent for each reporting period. The Local Government Act 2002 requires having a statement of intent and reporting performance information. We drew attention to the disclosures in the financial statements outlining that the company failed to prepare a statement of intent for the years beginning 1 July 2009, 1 July 2010, 1 July 2011, 1 July 2012, and 1 July 2013. |
| West Coast Rural Fire Authority Financial statements and statement of service performance for the years ended 30 June 2005 and 30 June 2006 The Authority did not report performance information that reflected the Authority's achievements, measured against performance targets, and failed to prepare a statement of intent for 2004/05 and 2005/06. The Local Government Act 2002 requires a statement of intent and performance information to be reported. We drew attention to the disclosures in the financial statements outlining that the Authority failed to prepare a statement of intent for the years beginning on 1 July 2005 and 1 July 2006. |
| Mackenzie Tourism and Development Trust (Mackenzie District Council) Financial statements and statement of service performance for the years ended 30 June 2011 and 30 June 2012 The Trust did not report performance information that reflected the Trust's achievements, measured against performance targets, and failed to prepare a statement of intent for 2010/11 and 2011/12. The Local Government Act 2002 requires a statement of intent and performance information to be reported. We drew attention to the disclosures in the financial statements outlining that the Trust failed to prepare a statement of intent for the 2011/12 and 2012/13. We noted the disclosures in the financial statements that referred to the disestablishment basis appropriately being used in preparing the financial statements because the Trust ceased active trading in July 2012 and is being disestablished. |
Disclaimers of opinion
| Christchurch City Council and Group Annual report for the year ended 30 June 2013 We were unable to form an opinion on Christchurch City Council and Group's financial statements as a whole, other than the statement of cash flows, because of the significant damage to the Council's assets caused by a series of Canterbury earthquakes. The Council could not account for the effect of the earthquakes on its assets because it could not estimate the costs to repair these assets. However, the Council disclosed that the earthquakes had affected its assets and gave information about the financial effects of the damage. |
| Oakura Reserve Board Statement of financial position and operating statement for the year ended 30 June 2009 We were unable to form an opinion on the Reserve Board's statement of financial position and operating statement for the year ended 30 June 2009 because we were unable to get a statement of responsibility from the Board that the law requires and a signed representation letter and because we could not gain enough assurance about the completeness of revenue and expenditure information due to limited controls over revenue and expenditure. |
| Matata Recreation Reserve Board Financial statements for the year ended 30 June 2007 We were unable to form an opinion on the Reserve Board's financial statements for the year ended 30 June 2007 because we were unable to get a signed representation letter from the Board or enough assurance about the completeness of revenue because of limited controls over that revenue. We were unable to verify expenditure because of inadequate supporting documents for payments. We drew attention to the disclosures in the financial statements that referred to the disestablishment of the Reserve Board and the transfer of its operations, assets, and liabilities to the Department of Conservation on 24 August 2009. The Board's decision not to adjust the financial statements was appropriate. |
| Matata Recreation Reserve Board Financial statements for the years ended 30 June 2008 and 30 June 2009 We were unable to form an opinion on the Reserve Board's financial statements for the years ended 30 June 2008 and 30 June 2009 because we were unable to obtain a signed representation letter and a signed statement of responsibility from the Board, enough assurance about the completeness of revenue because of limited controls over that revenue and enough assurance about comparative information. We drew attention to the disclosures in the financial statements that referred to the disestablishment of the Reserve Board and the transfer of its operations, assets, and liabilities to the Department of Conservation on 24 August 2009. The Board's decision not to adjust the financial statements was appropriate. |
Qualified opinions
| Tuam Limited (Christchurch City Council) Financial statements and statement of service performance for the year ended 30 June 2013 Our audit was limited on the comparative information presented for the year ended 30 June 2013 because we issued a disclaimer of opinion on the company's 30 June 2012 financial statements, other than the cash flow statement and statement of service performance because of the company not being able to reliably work out the fair value of the investment properties as at 30 June 2012 and the related current and deferred tax balances at that date. |
| Tauranga City Venues Limited (Tauranga City Council) Financial statements and statement of service performance for the year ended 30 June 2013 Our audit of comparative information was limited because we were unable to get assurance about the completeness of revenue for the year ended 30 June 2012. |
| Sarjeant Gallery Trust Financial statements for the year ended 30 June 2010 Our audit was limited because property, plant, and equipment were understated and equity was overstated as a result of the Trust recognising the transfer of its property, plant, and equipment to Wanganui District Council on 1 July 2009, which should have been recognised in the financial year ended 30 June 2011, the year the resolution was made. Our audit on the comparative information was limited because the Trust's financial statements for the year ended 30 June 2009 was affected by opening balances being not audited in that year. |
| Sarjeant Gallery Trust Financial statements for the year ended 30 June 2011 Our audit of the comparative information in the 2011 financial statements was limited because the property, plant and equipment was understated and the equity was overstated as a result of the Trust recognising the transfer of its property, plant, and equipment to Wanganui District Council in the year ended 30 June 2010, instead of the year ended 30 June 2011, the year the resolution was made. |
| Tauranga City Aquatics Limited (Tauranga City Council) Financial statements and statement of service performance for the year ended 30 June 2013 Our audit was limited because we could not get enough assurance about the completeness of revenue (because the company had limited controls over that revenue). We drew attention to the disclosures in the financial statements that referred to the disestablishment basis appropriately being used in preparing the financial statements because the company's assets and liabilities were transferred to Bay Leisure and Events Limited on 1 July 2013. |
| Tauranga City Investments Limited and Group (Tauranga City Council) Financial statements and statement of service performance for the year ended 30 June 2013 The company had limited controls over some revenue, which limited the assurance we could get about the completeness of the revenue information. |
| The World Buskers Festival Trust (Christchurch City Council) Financial statements and statement of objectives and performance for the year ended 30 June 2013 The Trust had limited controls over some revenue, which limited the assurance we could get about the completeness of the revenue information. |
| Nelson Creek Recreation Reserve Board Statements of accounts for the years ended 30 June 2009 and 30 June 2010 The Board had limited controls over some revenue and hall hire bonds, which limited the assurance we could get about the completeness of the information. |
| Mataroa Hall Board Financial statements for the year ended 30 June 2013 The Board had limited controls over some revenue, which limited the assurance we could get about the completeness of the revenue information. |
| Oakura Reserve Board Financial statements for the years ended 30 June 2010 and 30 June 2011 The Board had limited controls over some revenue, which limited the assurance we could get about the completeness of the revenue information. |
| Ruakaka Central Domain Board Statement of accounts for the years ended 30 June 2012 and 30 June 2013 The Board had limited controls over some revenue, which limited the assurance we could get about the completeness of the revenue information. |
| Ongarue Hall Society Incorporated Statement of accounts for the year ended 30 June 2010 The Society had limited controls over some revenue, which limited the assurance we could get about the completeness of the revenue information. |
| Waikiekie Domain Board Statement of accounts for the year ended 30 June 2011 The Board had limited controls over some revenue, which limited the assurance we could get about the completeness of the revenue information. |
| Whatitiri Domain Board Statement of accounts for the years ended 30 June 2010 and 30 June 2011 The Board had limited controls over some revenue, which limited the assurance we could get about the completeness of the revenue information. |
| Awakaponga Public Hall Board Financial statements for the years ended 30 June 2011 and 30 June 2012 The Board had limited controls over some revenue, which limited the assurance we could get about the completeness of the revenue information. |
| Millerton Hall Board Statement of accounts for the years ended 30 June 2011 and 30 June 2012 The Board had limited controls over some revenue, which limited the assurance we could get about the completeness of the revenue information. |
| Taurikura Hall Board Statement of accounts for the year ended 30 June 2012 The Board had limited controls over some revenue, which limited the assurance we could get about the completeness of the revenue information. |
| Ruapuke Cemetery Statement of accounts for the years ended 31 March 2011 and 31 March 2012 The Board had limited controls over some revenue and stock, which limited the assurance we could get about the completeness of the revenue information and carrying value of the remaining stock on hand. |
| Blacks Cemetery Statement of accounts for the year ended 31 March 2010 Our audit was limited because we were unable to get appropriate and enough audit evidence to support all payments. We drew attention to the disclosures in the financial statements that referred to the disestablishment basis appropriately being used in preparing the financial statements because Central Otago District Council took over the Cemetery's functions in December 2012. |
| Calcium Cemetery Statement of accounts for the years ended 31 March 2008, 31 March 2009, 31 March 2010, and 31 March 2011 Our audit was limited because we were unable to get appropriate and enough audit evidence to support all payments. |
| Matata Cemetery Trustees Statement of accounts for the year ended 31 March 2012 Our audit was limited because we were unable to get appropriate and enough audit evidence to support all payments. |
| North Canterbury Fish and Game Council Financial statements and statement of service performance for the year ended 31 August 2013 Our audit was limited because we were unable to get appropriate and enough audit evidence to verify the quantity of inventories or biological assets as at balance date. |
Emphasis of matter paragraphs
| Kaipara District Council Financial statements for the year ended 30 June 2012 We drew attention to disclosures in the financial statements about:
|
| Kaipara District Council Financial statements for the year ended 30 June 2013 We drew attention to the disclosures in the financial statements about:
|
| Taupo District Council and Group Financial statements for the year ended 30 June 2013 We drew attention to the disclosures in the financial statements that referred to the breach of the Local Government Act 2002 because the Council failed to adopt its 2012-22 long-term plan by 1 July 2012, which is needed for accountability reasons and for setting valid rates under the Local Government (Rating) Act 2002. Because the long-term plan was not adopted until 24 September 2013, the Council applied to the Department of Internal Affairs for an Order in Council to validate the late adoption of the long-term plan as if it had been adopted before 1 July 2012. |
| Inframax Construction Limited (Waitomo District Council) Financial statements and statement of performance measures for the year ended 30 June 2013 We drew attention to the disclosures in the financial statements outlining the serious financial difficulties experienced by the company, including the net loss for the year ended 30 June 2013 and resulting uncertainties about using the going-concern assumption. The validity of the going-concern assumption depended on the continuing financial support of the company's lenders and Waitomo District Council. |
| Grow Wellington Limited and Group (Greater Wellington Regional Council) Financial statements and statement of service performance for the year ended 30 June 2013 We drew attention to the disclosures in the financial statements about the uncertainties in measuring the fair value of shares in incubator and accelerator companies because of the early nature of the investments and the absence of quoted market prices. |
| Creative HQ Limited (Greater Wellington Regional Council) Financial statements and report on performance for the year ended 30 June 2013 We drew attention to the disclosures in the financial statements about the uncertainties in measuring the fair value of shares in incubator and accelerator companies because of the early nature of the investments and the absence of quoted market prices. |
| Infracon Limited (Tararua District Council) Financial statements and statement of service performance for the year ended 30 June 2013 We drew attention to the disclosures in the financial statements that referred to the uncertainties surrounding the going-concern assumption. The validity of the going-concern assumption depends on Infracon Limited's bank continuing support and the company's ability to put its turnaround plan into effect. |
| Central Plains Water Trust (Christchurch City Council and Selwyn District Council) Financial statements and performance information for the year ended 30 June 2013 We drew attention to the disclosures in the financial statements that referred to the uncertainties surrounding the going-concern assumption. The validity of the going-concern assumption depends on continued funding from Central Plains Water Limited and other sources. |
| New Zealand Mutual Liability Riskpool Financial statements for the year ended 30 June 2013 We drew attention to the disclosures in the financial statements that referred to the uncertainties associated with the outstanding claims liability and reinsurance receivables of New Zealand Mutual Liability Riskpool and the inherent uncertainties involved in estimating those amounts using actuarial assumptions. We also drew attention to the disclosures in the financial statements that referred to the going-concern assumption appropriately being used in preparing the financial statements of the Scheme as a whole and Funds No.7 and No.15, and Funds No.10 to No.13 (where the total liabilities exceed total assets because the Trustee is able to levy the members of the Funds to cover any shortfall in equity in any Fund under the terms of the Deed of Trust). |
| Athol Cemetery Trust Statement of accounts for the 19 years ended 31 December 2012 We drew attention to the disclosures in the financial statements that referred to the fact that the Trustees had prepared one statement of accounts covering 19 years from 1 April 1993 to 31 March 2012. This is a departure from the requirements of section 29(2) of the Burial and Cremation Act 1964, which requires that Trustees in April prepare for audit a statement of accounts showing full particulars of all money received and paid during the year to the 31 March just past, together with a statement of assets and liabilities as at the close of that year. |
| Tauwhareparae Forests Limited (Gisborne District Council) Financial statements for the year ended 30 June 2013 We drew attention to the disclosure in the financial statements about the company not having a statement of service performance because it is inactive and did not have any performance to report. The company did not comply with the law by failing to complete by 30 June 2013 the statement of intent for the year beginning 1 July 2014. |
| Westland Nature Trust (Westland District Council) Financial statements for the year ended 30 June 2013 We drew attention to the disclosure in the financial statements about the Trust not having a statement of service performance because it is inactive and did not have any performance to report. The Trust failed to comply with the law by not completing by 30 June 2013 the statement of intent for the year beginning 1 July 2013. |
| Luggate Nominee Limited (Dunedin City Council) Financial statements and statement of service performance for the year ended 30 June 2008 We drew attention to the disclosure in the financial statements outlining that the company failed to comply with the law by not completing a statement of intent for the year beginning 1 July 2008. |
| West Coast Rural Fire Authority Financial statements and statement of service performance for the year ended 30 June 2004 We drew attention to the disclosure in the financial statements outlining that the Authority failed to comply with the law by not completing a statement of intent for the year beginning 1 July 2004. |
| Kaikoura Community Facilities Trust (Kaikoura District Council) Financial statements and statement of service performance for the years ended 31 March 2010 and 31 March 2011 We drew attention to the disclosure in the financial statements about the Trust not having a statement of service performance because it is inactive and did not have any performance to report. The Trust failed to comply with the law by not completing the statement of intent for the year beginning 1 April by 31 March of that year. |
| Kaikoura Community Charitable Trust (Kaikoura District Council) Financial statements and statement of service performance for the year ended 30 June 2012 We drew attention to the disclosure in the financial statements outlining that the Trust failed to comply with the law by not completing a statement of intent for the year ended 30 June 2012. |
| Regional Software Holdings Limited Financial statements and statement of service performance for the year ended 30 June 2013 We drew attention to the disclosure in the financial statements outlining that the company failed to comply with the law by not completing a statement of intent for the year ended 30 June 2013. We drew attention to the disclosure that outlines how the company reported performance information in the statement of service performance without having a statement of intent. |
| Canterbury Development Corporation Holdings Limited and Group (Christchurch City Council) Financial statements for the year ended 30 June 2013 We drew attention to the disclosure in the financial statements outlining that the company failed to comply with the law by not completing a statement of intent for the year beginning 1 July 2012. |
| Canterbury Development Corporation and Group (Christchurch City Council) Financial statements and statement of service performance for the year ended 30 June 2013 We drew attention to the disclosure in the financial statements outlining that the company failed to comply with the law by not completing a statement of intent for the year beginning 1 July 2012. |
| New Zealand Food Innovation South Island Limited (Christchurch City Council) Financial statements and statement of service performance for the year ended 30 June 2013 We drew attention to the disclosure in the financial statements outlining that the company failed to comply with the law by not completing a statement of intent for the year beginning 1 July 2012. |
| CRIS Limited and Group (Christchurch City Council) Financial statements and statement of service performance for the year ended 30 June 2013 We drew attention to the disclosure in the financial statements outlining that the company failed to comply with the law by not completing a statement of intent for the year beginning 1 July 2012. |
| North Tugz Limited (Ports of Auckland Limited and Northport Limited) Financial statements for the year ended 30 June 2013 We drew attention to the disclosure in the financial statements about the negotiations of the company for a new long-term service agreement with a key customer and a renewed or replacement bank facility whose outcome was uncertain. |
| New Zealand Local Government Insurance Corporation Limited and Group – Trading as Civic Assurance Financial statements for the year ended 31 December 2012 We drew attention to the disclosure in the financial statements that referred to the going-concern assumption being appropriately used in preparing the financial statements, despite uncertainties about the outcome of reinsurance issues and when the company will resume its normal business activities. |
| Tamaki Redevelopment Company Limited Financial statements for the 11 months ended 30 June 2013 We drew attention to the disclosure in the financial statements about the company's financial statements being prepared under the going-concern assumption because it relies on its shareholders to fund operating expenses and liabilities. Funding until 30 June 2014 is secure. Further funding depends on shareholders approving a business case in the second quarter of 2014. |
| New Zealand Local Authority Protection Programme Disaster Fund Special purpose financial statements for the year ended 30 June 2013 We drew attention to the disclosure in the special purpose financial statements that referred to the fact that the Trustees had prepared special purpose financial statements. We also drew attention to the disclosure in the financial statements that referred to the uncertainties about gross claim liabilities and related reinsurance recoveries arising from the 2010 and 2011 Canterbury earthquakes. |
| Christchurch Stadium Trust Financial statements for the year ended 31 December 2012 We drew attention to the disclosure in the financial statements that referred to the going-concern basis appropriately not being used in preparing the financial statements because the Trust had a limited life and had an obligation to decommission the stadium and wind up when Christchurch has a new permanent stadium. We drew attention to the expected financial difficulties, which the Trust will not be able to address without further support from other parties. |
| Selwyn Investment Holdings Limited and Group (Selwyn District Council) Financial statements and statement of service performance for the year ended 30 June 2013 We drew attention to the disclosure in the financial statements that referred to the realisation basis appropriately being used in preparing the financial statements because the shareholders in the company decided to liquidate the company on 4 September 2013. |
| Lakes Environmental Limited (Queenstown-Lakes District Council) Financial statements and statement of service performance for the year ended 30 June 2013 We drew attention to the disclosure in the financial statements that referred to the disestablishment basis appropriately being used in preparing the financial statements because the shareholder decided to re-integrate the operations of the company into Queenstown-Lakes District Council and to disestablish the company. |
| Lakes Leisure Limited (Queenstown-Lakes District Council) Financial statements and statement of service performance for the year ended 30 June 2013 We drew attention to the disclosure in the financial statements that referred to the disestablishment basis appropriately being used in preparing the financial statements because the shareholder decided to re-integrate the operations of the company into Queenstown-Lakes District Council and to disestablish the company. |
| S C Aoraki Development Trust (Timaru District Council) Financial statements for the year ended 30 June 2013 We drew attention to the disclosure in the financial statements that referred to the disestablishment basis appropriately being used in preparing the financial statements because the Trust was officially dissolved on 20 August 2013. |
| Timaru District Promotion Trust (Timaru District Council) Financial statements and statement of service performance for the year ended 30 June 2013 We drew attention to the disclosure in the financial statements that referred to the disestablishment basis appropriately being used in preparing the financial statements because the Trust was officially dissolved on 20 August 2013. |
| Taranaki Provincial Patriotic Council Financial statements for the year ended 30 September 2011 We drew attention to the disclosure in the financial statements that referred to the disestablishment basis appropriately being used in preparing the financial statements because the Council (the governing body) approved in principle the formation of a Trust to assume ownership of the assets of the Council and to supersede the functioning of the ownership of the Council. |
| Puhoi Cemetery Board Statement of accounts for the year ended 31 March 2010 We drew attention to the disclosure in the financial statements that referred to the disestablishment basis appropriately being used in preparing the financial statements because the Cemetery Trustees began the process of having the cemetery vested in Auckland Council. |