Note 22: Explanation of significant variances against the Main Estimates

Explanations of significant variances from the Office's original 2015/16 budget figures (2015/16 Main Estimates) are as follows:

Statement of comprehensive revenue and expense

Actual audit fee revenue was higher than the Main Estimates by $3.1 million.

  • School audit fees were higher by $1.7 million, relating to increases in school audit fees due to extra work required for auditing payroll controls that are now based at each school and the transition to new accounting standards.
  • Revenue relating to audits carried out by contracted audit service providers was higher than budgeted by $0.7 million, reflecting a higher estimated value of the work to date on audits that were under way at 30 June 2016.
  • Audit fee revenue collected by Audit New Zealand was $0.5 million higher than budgeted due to additional work completed during the year.

Operating costs were higher than the Main Estimates by $2 million, mainly reflecting the additional costs of school and other audits completed by contracted audit service providers.

Statement of financial position and Statement of changes in equity

Debtors and other receivables are $1.2 million higher than the Main Estimates, due to timing of billing of audit fees.

Net assets are $1 million higher than the Main Estimates, a reflection of the higher surplus in the Audit and Assurance Services RDA for 2015/16, which is held in the memorandum account. This is also reflected in the Statement of changes in equity.