Appendix 2: Modified audit opinions

Results of the 2017 school audits

2017 school audits

School	Reason for the modified opinion
Al-Madinah School	We were unable to form an opinion because of limited controls and scrutiny of payments. We noted multiple irregularities including: inadequate documentation for some payments, payments that appeared excessive for the purpose, and uncertainties over the extent of transactions with related parties and whether these had been carried out at arms-length. We also drew readers' attention to the financial statements not being submitted to the Ministry by 31 May 2018. We issued the same opinion for the 2016 year – see the table below
Ballance School	We could not get enough assurance about locally raised funds because the Trustees had limited controls over that revenue. The school had a similar qualification for its 2016 financial statements.
Feilding Intermediate School	We could not get enough assurance about locally raised funds because the Trustees had limited controls over those revenues, and payroll expenses because of a lack of appropriate records.
Flag Swamp School	We could not get enough assurance about the school's expenditure by credit card. We also drew attention to the financial statements not being submitted to the Ministry by 31 May 2018.
Golden Bay School	We could not get enough evidence to support the provision for cyclical maintenance because the school did not have appropriate evidence to support the provision.
Mountainview High School	We could not get enough assurance about expenditure under the direct control of the board (apart from payroll, notional lease costs, and depreciation) because the Trustees had limited controls over expenditure.
Opawa School	Our audit of the comparative information disclosed in the financial statements was limited because we did not have enough evidence to support the provision for cyclical maintenance as at 31 December 2016. For the year ended 31 December 2017, the school prepared a 10-year property plan and we were able to ascertain that the provision for the current year was not materially misstated.
Paeroa Central School	We could not get enough assurance about locally raised funds revenue because the Trustees had limited controls over that revenue.
St Mary's School (Gore)	Our audit of the comparative information disclosed in the financial statements was limited because we did not have enough evidence to support the provision for cyclical maintenance as at 31 December 2016. For the year ended 31 December 2017, the provision for the current year was not materially misstated.
Tangaroa College	We could not get enough assurance about procurement, purchases, and payments in the 2016 financial year because the Trustees had limited controls over this expenditure. The audit report referred to this limitation on the comparative information.
Taumarunui High School Community Trust	We could not get enough assurance about revenues because the Trustees had limited controls over those revenues. The Trust had a similar opinion for 2015 and 2016.
Te Kura Kaupapa Māori o Taumarunui	We could not get enough evidence to support the provision for cyclical maintenance because the school did not have an up-to-date 10-year property plan.
Waikouaiti School	We could not get enough assurance about revenues because the Trustees had limited controls over those revenues.
Waitara High School	We could not get enough assurance about revenue from trading because the Trustees had limited controls over that revenue. The school had a similar opinion for the 2016 year.
William Colenso College	We disagreed with the board not preparing group financial statements to consolidate the financial statements of its subsidiary, the William Colenso College Charitable Trust. We have issued the same opinion on the school's financial statements since the 2012 financial year.

Previous-year audits

School	Reason for the modified opinion
Al-Madinah School – 31 December 2016	We were unable to form an opinion because of limited controls and scrutiny of payments. We noted multiple irregularities including: inadequate documentation for some payments, payments that appeared excessive for the purpose, and uncertainties over the extent of transactions with related parties and whether these had been carried out at arms-length. We also drew readers' attention to the financial statements not being submitted to the Ministry by 31 May 2017.
Al-Madinah School – 31 December 2015	We could not determine whether all related party transactions had been disclosed because the controls over identification and disclosure are limited. We also drew readers' attention to potential conflicts with the proprietor and funds raised on behalf of the school being given to the proprietor, the appointment of a Limited Statutory Manager and the financial statements not being submitted to the Ministry by 31 May 2016.
Maketu School – 31 December 2015	We could not get enough assurance about locally raised funds revenue because the Trustees had limited controls over that revenue.
Otorohanga College – 31 December 2015 and 2016	We could not get enough assurance about locally raised funds because the Trustees had limited controls over that revenue for the 2015 year. The audit report on the 31 December 2016 financial statements referred to this limitation on the comparative information.
Saint Joseph's School Upper Hutt – 31 December 2016	We could not get enough assurance about revenue from the school's After School Care Club. During 2016, the school asked parents to donate their fees to the friends of St Joseph's School, a separate entity set up by parents to fundraise the school. The revenue recorded by the school for After School care was understated, which contributed to the school's operating deficit. The school also breached the law by not depositing the fees paid by the parents for After School Care directly into the school's bank account.
Tangaroa College – 31 December 2016	We could not get enough assurance about procurement, purchases, and payments because the trustees had limited controls over this expenditure. We could gain enough assurance over payroll, notional lease and depreciation expenses from other procedures. The school had similar opinions for the 2013, 2014, and 2015 years.
Te Kura Kaupapa Māori o Takapau – 31 December 2015	We were unable to form an opinion because we were unable to obtain enough evidence about bank accounts, revenue and expenditure accounts receivable or expenditure and accounts payable. This is because a staff member set up bank accounts outside the control of the Board of Trustees, which resulted in the suspected misuse of school funds during the year. We also drew attention to the failure to keep appropriate minutes and the financial statements not being submitted to the Ministry by 31 May 2016.
Te Kura Kaupapa Māori o Te Kura Kokiri – 31 December 2013	We could not get enough assurance about expenditure under the direct control of the board (apart from payroll, notional lease costs, and depreciation) because the Trustees had limited controls over expenditure. We also drew attention to several unusual payments and the financial statements not being submitted to the Ministry by 31 May 2014. We have issued similar opinions for the 2010, 2011, and 2012 years.
Te Wharekura o Mauao – 31 December 2014	We could not get enough assurance about revenue because the Trustees had limited controls over those revenues. We also drew attention to the financial statements not being submitted to the Ministry by 31 May 2015. The school had a similar opinion for the 2013 year.
Te Wharekura o Te Rau Aroha – 31 December 2014	We could not get enough assurance about trading and activities revenue because the Trustees had limited controls over those revenues and payroll expenses because of a lack of appropriate records. We also drew attention to the financial statements not being submitted to the Ministry by 31 May 2015.
Whakatane High School – 31 December 2016	We could not get enough assurance about revenue from canteen sales because the Trustees had limited controls over that revenue.