Part 7: Timeliness of reporting by other public entities
7.1
In this Part, we look at the timeliness of reporting by public entities that do not fall into the other categories that we have discussed so far – fish and game councils, administering boards and bodies, cemetery trusts, licensing and community trusts, and Māori trust boards. We also audit six entities that exist for a public purpose but are not public entities.
7.2
Some of these entities might have reasonably high profiles in their local communities, but people in those communities might be unaware that the Auditor-General is required to audit the entities' financial statements each year.
Summary of our findings
7.3
For the public entities that do not fall into our other categories, we expected to issue 204 audit reports during 2013/14. The performance of the entities was mixed, and many struggle to produce financial statements for audit. For some types of public entity, we question whether the balance between the costs and benefits of public reporting is right.
Fish and game councils
7.4
All of the fish and game councils met their obligation to prepare audited financial statements by the reporting deadline of 31 December 2013 (see Figure 39).
Figure 39
Timeliness of fish and game councils, as at 30 June 2014
| Timeliness | Number of audit reports |
|---|---|
| On time | 15 |
| Issued late | 0 |
| Total audit reports issued | 15 |
| Audit reports not issued | 0 |
Note: The reporting deadline for fish and game councils was 31 December 2013.
Administering boards and bodies
7.5
Administering boards and bodies include local reserve, domain, and public hall boards. Local racecourse boards and trustees are also in this group of public entities.
7.6
The accountability requirements for administering boards and administering bodies differ, and they have to comply with different laws and regulations. For example, a board is appointed under the Reserves Act 1977 or a corresponding former Act, such as the Reserves and Domains Act 1953.
7.7
When a reserve is governed by a board, the reserve is vested in the Crown and the Crown appoints board members. The core legislation for an administering body is also the Reserves Act 1977, but any legislation or trust that established the reserve that the administering body is responsible for can include restrictions on how the administering body can act.
7.8
Figure 40 shows that just six of the entities' audit reports were issued on time, with 17 issued after the reporting deadline and 23 not issued as at 30 June 2014.
Figure 40
Timeliness of administering boards and bodies, as at 30 June 2014
| Timeliness | Administering boards | Administering bodies |
|---|---|---|
| On time | 5 | 1 |
| Issued late | 8 | 9 |
| Total audit reports issued | 13 | 10 |
| Audit reports not issued | 12 | 3 |
Note: The balance date for administering boards and bodies was 30 June 2013, and the reporting deadline was 30 November 2013.
7.9
On average, we issued the audit reports for the 17 entities that were late (see Figure 41) three months after the reporting deadline.
Figure 41
Late audit reports – administering boards and bodies
| Entity | Status of the next report due |
|---|---|
| Ashburton Racecourse Trustees | Late |
| Bledisloe Park Domain Board | Late |
| Christchurch Racecourse Reserve Trustees | Not issued |
| Geraldine Racecourse Trustees | Not issued |
| Hakataramea Racecourse Trustees | On time |
| Horowhenua Lake Domain Board | On time |
| Kyeburn Public Hall Board | Not issued |
| Manawatu (Foxton) Racecourse Board | Not issued |
| Millerton Hall Board | Not issued |
| Oamaru Racecourse Trustees | Late |
| Ohau Hall Board | Not issued |
| Ongarue Hall Society Incorporated | N/A – entity disestablished |
| Papanui Hall Board | Not issued |
| Poukiore Domain Board | Not issued |
| Ruakaka Central Domain Board | Not issued |
| Taurikura Hall Board | Not issued |
| Wanganui Racecourse Trustees | Not issued |
7.10
Of the 15 entities with audit reports that had not been issued (see Figure 42), nine have audit reports not issued for previous years. Audit reports have not been issued for Winton Racecourse Trustee for eight years.
Figure 42
Unissued audit reports – administering boards and bodies
| Entity | Update as at 24 March 2015 | Years without an audit report |
|---|---|---|
| Awakaponga Public Hall Board | Not issued | 1 |
| Charleston Goldfields Hall Board | Not issued | 2 |
| Coates Memorial Church Board | Not issued | 3 |
| Lake Okataina Scenic Reserve Board | Issued | 0 |
| Lake Rotoiti Scenic Reserve Board | Issued | 0 |
| Mapiu Sport and Recreation Committee | Not issued | 2 |
| Nelson Creek Community Society Incorporated | Not issued | 3 |
| Oakura Reserve Board | Issued | 0 |
| Ruakaka Reserve Board | Not issued | 5 |
| Timaru Racecourse Trustees (Phar Lap Raceway) | Not issued | 4 |
| Waikiekie Reserve Board | Not issued | 1 |
| Waimate Racecourse Trustees | Not issued | 2 |
| Waipu Cove Reserve Board | Not issued | 3 |
| Whatitiri Domain Board | Issued | 0 |
| Winton Racecourse Trustees | Not issued | 8 |
Cemetery trusts
7.11
The 95 cemetery trusts are, generally speaking, very small entities. Only one has revenue of more than $50,000 each year.
7.12
Figure 43 shows that just eight audit reports were signed by the deadline, 68 were issued by 30 June 2014 but late (on average, about four-and-a-half months late), and 19 had not been issued as at 30 June 2014.
Figure 43
Timeliness of cemetery trusts, as at 30 June 2014
| Timeliness | Number of audit reports |
|---|---|
| On time | 8 |
| Issued late | 68 |
| Total audit reports issued | 76 |
| Audit reports not issued | 19 |
Note: The balance date for cemetery trusts was 31 March 2013, and the reporting deadline was 2 September 2013.
7.13
We asked each appointed auditor to explain some of the factors affecting the timeliness of issuing audit reports. Overwhelmingly, the cause of the lateness was delays in providing information to the auditor or with receiving signed financial statements.
7.14
Of the 19 cemetery trusts with audit reports that had not been issued, 14 also had audit reports for earlier years that had not been issued (see Figure 44). In total, 56 audit reports had not been issued as at 30 June 2014. Nine audit reports, dating back to 2005, have not been issued for Fabian's Valley Cemetery Trustee.
Figure 44
Unissued audit reports – cemetery trusts
| Entity | Update as at 24 March 2015 | Years without an audit report |
|---|---|---|
| Athol Cemetery Trust | Issued | 0 |
| Balfour Cemetery Trust | Not issued | 2 |
| Calcium Cemetery | Not issued | 2 |
| Crookston Cemetery | Issued | 0 |
| Fabians Valley Cemetery Trustees | Not issued | 9 |
| Glen Murray Cemetery Trustees | Not issued | 3 |
| Hawea Cemetery | Not issued | 3 |
| Mangapai Cemetery Board | Not issued | 3 |
| Mangere Cemetery Board | Not issued | 2 |
| Marua Cemetery | Not issued | 3 |
| Matata Cemetery Trustees | Issued | 0 |
| Millers Flat Cemetery | Issued | 0 |
| Ohingaiti Cemetery Trustees | Not issued | 3 |
| Papatowai Cemetery | Not issued | 2 |
| Puhoi Cemetery Board (disestablished) | Issued | 0 |
| Te Arai Cemetery Board | Not issued | 5 |
| Waikaka Cemetery Trust | Not issued | 2 |
| Waikiekie Cemetery | Not issued | 3 |
| Wayby Cemetery Trustees | Not issued | 2 |
Licensing and community trusts
7.15
Licensing trusts have a legal obligation to account to their communities for the assets that they hold and operate on their communities' behalf. The Sale and Supply of Alcohol Act sets out the accountability obligations of licensing trusts. They must prepare financial statements in keeping with GAAP within five months after the end of each financial year. The financial statements must be audited by the Auditor-General. The audited financial statements must be publicly notified after the audit report has been issued.7
7.16
Figure 45 shows that 27 of the 39 licensing and community trusts met their reporting obligations.
Figure 45
Timeliness of licensing and community trusts, as at 30 June 2014
| Timeliness | Entity | Subsidiaries or related entities | Total number of audit reports |
|---|---|---|---|
| On time | 12 | 15 | 27 |
| Issued late | 4 | 4 | 8 |
| Total audit reports issued | 16 | 19 | 35 |
| Audit reports not issued | 4 | 0 | 4 |
Note: The balance date for licensing and community trusts was 31 March 2013, and the reporting deadline for most was 31 October 2013.
7.17
On average, audit reports for the eight late entities (see Figure 46) were issued about three months after the reporting deadline.
Figure 46
Late audit reports – licensing and community trusts
| Entity | Parent or responsible entity | Status of the next report due |
|---|---|---|
| Birkenhead Charitable Trust | Birkenhead Licensing Trust | Late |
| Cheviot Licensing Trust | - | Late |
| Geraldine Licensing Trust | - | Late |
| Kauri Finance Limited | Trust Porirua | On time |
| Porirua Community Trust | - | On time |
| Rimutaka Trust | Rimutaka Licensing Trust | Not issued |
| Rimutaka Licensing Trust | - | Not issued |
| Trust Porirua | Porirua Community Trust | On time |
7.18
By 30 June 2014, audit reports for just four trusts had not been issued. When we checked in March 2015, the audit reports for all four had still not been issued (see Figure 47).
Figure 47
Unissued audit reports – licensing and community trusts
| Entity | Update as at 24 March 2015 | Years without an audit report |
|---|---|---|
| Birkenhead Licensing Trust | Not issued | 1 |
| Hawarden Licensing Trust | Not issued | 2 |
| Parakai Licensing Trust (to be disestablished) | Not issued | 3 |
| Mount Wellington Licensing Trust | Not issued | 3 |
7.19
We are concerned that several smaller licensing trusts are not complying with their accountability and reporting obligations. Some licensing trusts continue to fail to report in a timely manner.
7.20
It is important that entities meet their accountability obligations to their communities. No government department or select committee is responsible for monitoring licensing trusts or can assist trusts that are having difficulties meeting their financial accountability obligations.
Māori trust boards
7.21
Amendments to the Māori Trust Boards Act 1955 in 2011 removed Māori trust boards from the definition of a public entity under the Public Audit Act, which means that the Auditor-General will no longer be the auditor of these boards after 2012/13. Instead, the audit will be carried out by a chartered accountant or someone eligible to act as an auditor under the provisions of the Companies Act. All audit reports for before 2012/13 that have not been issued must still be issued.
7.22
Figure 48 shows that, of the 11 Māori trust boards we audit, we issued six audit reports.
Figure 48
Timeliness of Māori trust boards, as at 30 June 2014
| Timeliness | Number of audit reports |
|---|---|
| On time | 5 |
| Issued late | 1 |
| Total audit reports issued | 6 |
| Audit reports not issued | 5 |
Note: The balance date for Māori trust boards was either 31 March 2013 or 30 June 2013, and the reporting deadline was, respectively, either 31 August 2013 or 30 November 2013.
7.23
The audit report for the Aorangi Māori Trust Board was issued slightly more than four months after the deadline.
7.24
All but one of the entities with audits reports that had not been issued during 2013/14 have financial statements for previous years still to be audited. The Tai Tokerau Māori Trust Board has financial statements for four years still to be audited.
7.25
Figure 49 lists the five entities that had audit reports yet to be issued as at 30 June 2014 (slightly more than seven and a half months late).
Figure 49
Unissued audit reports – Māori trust boards
| Entity | Parent or responsible entity | Update as at 24 March 2015 | Years without an audit report |
|---|---|---|---|
| Aupouri Māori Trust Board | - | Not issued | 1 |
| Tai Tokerau Māori Trust Board | - | Not issued | 4 |
| Te Rūnanga o Ngāti Whātua | - | Not issued | 1 |
| Treaty Relationship Company Limited | Te Rūnanga o Ngāti Whātua and Auckland DHB | Not issued | 2 |
| Whanganui River Māori Trust Board | - | Not issued | 1 |
Entities audited under section 19 of the Public Audit Act 2001
7.26
Section 19 of the Public Audit Act sets out the conditions under which the Auditor-General can audit entities that are not public entities. The Act states that "at the request of an entity that is not a public entity, the Auditor-General may enter into an arrangement with that entity to be its auditor". However:
… before entering into an arrangement, the Auditor-General must be satisfied that—
- the entity exists for a public purpose; and
- the entity is, or ought reasonably to be, accountable to any or all of the Crown, the House of Representatives, the public, or a section of the public for the exercise of its functions and the management of its resources; and
- it is not practicable for those to whom the entity is, or ought reasonably to be, accountable to appoint an auditor of the entity; and
- it is practicable and in the public interest that the Auditor-General accepts the appointment.
7.27
We carried out six audits under section 19 of the Public Audit Act. We have included the results (see Figure 50) because the rationale for auditing these entities acknowledges the accountability of the entities to the Crown, Parliament, and/or the public.
Figure 50
Timeliness of section 19 entities, as at 30 June 2014
| Timeliness | Number of audit reports |
|---|---|
| On time | 4 |
| Issued late | 2 |
| Total audit reports issued | 6 |
| Audit reports not issued | 0 |
7.28
Audit reports for Greytown District Trust Lands Trust and New Zealand Antarctic Research Institute were issued within two months of the expected date.
7: Before this Act, licensing trusts were required by the Sale of Liquor Act 1989 to prepare a balance sheet and a profit and loss account each year, and to publicly notify a summary of them. For more information about licensing trusts, see our 2014 report, Challenges facing licensing trusts.