Appendix 2: Summaries of the non-standard audit reports we issued in 2018
Our 2018 work about local government.
Modified audit opinions – Disclaimers of opinion
| Innovative Waste Kaikōura Limited (Kaikōura District Council) |
| Year ended 30 June 2017 We were unable to form an opinion on the statement of service performance because we could not get enough evidence that the reported performance was accurate or complete. This limitation in scope arose because the November 2016 earthquake had disrupted the company's normal management processes in reporting non-financial performance against the statement of intent. In addition, we drew attention to the disclosure in the financial statements outlining that the Board of Directors breached the law by failing to prepare a statement of intent for the year beginning 1 July 2017. |
| Gardens Event Trust (Christchurch City Council) |
| Years ended 31 March 2014 and 31 March 2015 We were unable to form an opinion on the financial statements because we could not get enough evidence to verify the Trust's income and expenses. This limitation in scope arose because source documents were lost and could not be located. In addition, we drew attention to disclosures in the financial statements outlining that the Trust appropriately used a basis other than that of going concern to prepare its financial statements because the Trust was due to cease operating. |
Modified audit opinions – Adverse opinions
| Canterbury Museum Trust Board |
| Year ended 30 June 2018 We disagreed with the Trustees not recognising the museum collection assets it owns, nor the associated depreciation expense, in the Trust's financial statements, in keeping with the requirements of generally accepted accounting practice. |
Modified audit opinions – Qualified opinions
| Auckland Council |
| Year ended 30 June 2018 Our audit was limited on the Council's statement of service performance, because we could not determine whether the Council's adjusted performance results for the year ended 30 June 2018 were materially correct for the building consent and non-notified resource consent processing time measures, because of inaccurate recording of processing times. |
| Carterton District Council |
| Year ended 30 June 2018 Our audit was limited on the Council's performance information because we were unable to get enough evidence to confirm the completeness of some complaint and response times information. This limitation arose because the Council does not have a reliable system for recording complaints and response times. |
| Hawke's Bay Regional Council |
| Year ended 30 June 2018 Our audit was limited because we were unable to get enough evidence to determine the tax effects on the expenditure incurred in relation to the Ruataniwha Water Storage Scheme. This is because the Council could not determine the amount of deductible expenditure in relation to losses arising from the disposal of the Scheme. |
| Taranaki Regional Council |
| Year ended 30 June 2018 Our audit was limited because we could not determine the carrying value of Yarrow Stadium, nor how much that value has been impaired, because an assessment of options and costs for repairing and/or reinstating the stands within the Stadium was not completed at the time of authorising the financial statements. |
| Whakatane District Council |
| Year ended 30 June 2018 Our audit on the Council's statement of service provision was limited because we were unable to get enough evidence about some response and processing times for water supply and sewerage call-outs, nor the processing times of building consent applications. This limitation arose because the Council's systems for reporting response and processing times were not reliable. |
| Destination Westland Limited (Westland District Council) |
| Year ended 30 June 2018 Our audit was limited because we could not determine the carrying value of the company's property, plant, and equipment assets. This limitation arose because the company did not carry out a full impairment assessment of its property, plant, and equipment assets. In addition, we drew attention to disclosures in the financial statements outlining that the company's assessment that it is a going concern is dependent on the ongoing financial support that has been provided by its parent entity, Westland Holdings Limited. |
| Westland Holdings Limited (Westland District Council) |
| Year ended 30 June 2018 Our audit was limited because we could not determine the carrying value of the company's airport-related property, plant, and equipment assets. This limitation arose because the company did not carry out a full impairment assessment of its property, plant, and equipment assets. |
| Dunedin City Holdings Limited (Dunedin City Council) |
| Year ended 30 June 2018 Our audit was limited because we could not determine the value of stadium assets, which should have been recognised in the financial statements on a commercial basis, because the valuation that was carried out did not take into account how the stadium assets were being used and how they should be accounted for. |
| Taranaki Stadium Trust (Taranaki Regional Council) |
| Year ended 30 June 2018 Our audit was limited because we could not determine the carrying value of the Yarrow Stadium, nor how much that value has been impaired. This is because an assessment of options and costs for repairing and/or reinstating the stands within the Stadium was not completed at the time of authorising the financial statements. |
| Hawke's Bay Regional Investment Company Limited (Hawke's Bay Regional Council) |
| Year ended 30 June 2017 Our audit was limited because we were unable to get enough evidence to verify that the carrying value of the expenditure for developing the Ruataniwha Water Storage Scheme is recoverable. We were also unable to determine the deferred tax balances that should arise from the impairment of the Ruataniwha Water Storage Scheme intangible asset. |
| Invercargill City Forests Limited (Invercargill City Council) |
| Year ended 30 June 2018 Our audit was limited because the company's financial statements included unaudited financial information for the period between 1 July 2017 and 30 September 2017, which related to an associate, IF Forestry Group Limited. The investment in IF Forestry Group Limited was sold on 30 September 2017. As a result, we were unable to obtain enough independent evidence to confirm the financial information because the associate is not a public entity and, as such, the Auditor-General is not its auditor. |
| Tararua Aquatic Community Trust (Tararua District Council) |
| Year ended 30 June 2017 Our audit was limited because we could not get enough assurance about pool income because the Trustees had limited controls over that revenue. |
| The World Buskers' Festival Trust (Christchurch City Council) |
| Year ended 30 June 2018 Our audit was limited because we could not get enough assurance about door donations revenue because the Board had limited controls over that revenue. |
| Waipa Community Facilities Trust (Waipa District Council) |
| Year ended 30 June 2018 Our audit was limited because we could not get enough assurance about the Trust's cash receipts from trading and facilities activities. The Board had limited controls over that revenue. |
| Hauraki Rail Trail Charitable Trust (Hauraki District Council, Matamata-Piako District Council, and Thames-Coromandel District Council) |
| Year ended 30 June 2017 Our audit was limited because we could not get enough assurance about commission revenue because the Trustees had limited controls over that revenue. |
| Hauraki Rail Trail Charitable Trust (Hauraki District Council, Matamata-Piako District Council, and Thames-Coromandel District Council) |
| Year ended 30 June 2018 Our audit of the comparative information included in the 30 June 2018 financial statements was limited because in 2017 we were unable to get enough assurance about commission revenue. |
Unmodified opinions with "emphasis of matter" paragraphs
| Ruapehu District Council |
| Year ended 30 June 2018 We drew attention to disclosures in the financial statements outlining the uncertainties about whether the District Council had complied with the Local Government (Rating) Act 2002 when it set its wastewater targeted uniform annual charge. |
| Greater Wellington Regional Council |
| Year ended 30 June 2018 We drew attention to disclosures in the financial statements outlining the uncertainties that arose because of the damage done by the Kaikōura earthquake, which include estimates of the expected insurance proceeds and the related costs to repair or replace assets. |
| Manawatu-Wanganui Regional Council |
| Year ended 30 June 2018 We drew attention to the disclosures in the financial statements outlining the uncertainties in measuring the fair value of the Council's investment in CentrePort Limited, which has experienced a significant amount of damage due to the Kaikōura earthquake. |
| WRC Holdings Limited (Greater Wellington Regional Council) |
| Years ended 30 June 2017 and 30 June 2018 We drew attention to disclosures in the financial statements outlining the uncertainties related to the effects of the Kaikōura earthquake. These uncertainties include the estimates that have been made to value the insurance proceeds that are expected to be received and the costs to repair or replace assets. They also include the estimates that have had to be made to account for the possible impairment of assets and the related tax treatment. |
| MWRC Holdings Limited (Manawatu-Wanganui Regional Council) |
| Year ended 30 June 2018 We drew attention to the disclosures in the financial statements about the uncertainties in measuring the fair value of the company's investment in CentrePort Limited. CentrePort Limited properties were damaged by the Kaikōura earthquake and there is a high degree of uncertainty about the amount and timing of insurance money to be received, the amount and timing of capital spending that will be needed to repair assets, and any current or future changes in demand for CentrePort Limited's operations. |
| CentrePort Limited (Greater Wellington Regional Council) |
| Year ended 30 June 2018 We drew attention to disclosures in the financial statements outlining the uncertainties related to the effects of the Kaikōura earthquake. |
| CentrePort Properties Limited (Greater Wellington Regional Council) |
| Year ended 30 June 2018 We drew attention to disclosures in the financial statements outlining the uncertainties related to the effects of the Kaikōura earthquake, including the extent of damage to properties and the insurance proceeds that are expected to be received. |
| Harbour Quays A1 Limited (Greater Wellington Regional Council) |
| Year ended 30 June 2018 We drew attention to disclosures in the financial statements outlining the uncertainties arising because of the damage done to the company's assets by the Kaikōura earthquake. |
| Harbour Quays F1F2 Limited (Greater Wellington Regional Council) |
| Year ended 30 June 2018 We drew attention to disclosures in the financial statements outlining the uncertainties arising because of the damage done to the company's assets by the Kaikōura earthquake. |
| Port Investments Limited (Greater Wellington Regional Council) |
| Year ended 30 June 2018 We drew attention to disclosures in the financial statements outlining the uncertainties related to the effects of the Kaikōura earthquake. |
| Invercargill City Property Limited (Invercargill City Council) |
| Year ended 30 June 2018 We drew attention to disclosures in the financial statements outlining that the company is experiencing financial difficulties and, as a result, is reliant on financial support of its parent company. |
| Cranley Farms Limited |
| Year ended 31 May 2017 We drew attention to disclosures in the financial statements outlining uncertainties about the company's ability to continue as a going concern because it depends on the support of funders and shareholders. |
| Auckland Council Investments Limited (Auckland Council) |
| Year ended 30 June 2018 We drew attention to disclosures in the financial statements outlining that the Board of Directors appropriately used a non-going-concern basis when preparing their financial statements. This decision reflected the fact that the company transferred its shares in Ports of Auckland Limited and Auckland International Airport Limited to Auckland Council on 2 July 2018 and will be disestablished. |
| Blakely Construction Limited (Selwyn District Council) |
| Year ended 30 June 2018 We drew attention to disclosures in the financial statements outlining that the Board of Directors appropriately used a disestablishment basis to prepare the financial statements because the company was amalgamated into another company and removed from the Companies Register from 2 July 2018. |
| Wellington Regional Economic Development Agency Limited (Wellington City Council) |
| Years ended 30 June 2016 and 30 June 2017 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. The uncertainties were due to the early-stage nature of the investments, the absence of quoted market prices, and the reliance placed on the information supplied by the incubator and accelerator companies. |
| NZ Mutual Liability Riskpool |
| Year ended 30 June 2017 We drew attention to the disclosures in the financial statements outlining the uncertainties affecting the value of the outstanding claims provision and related reinsurance receivables. Estimates have had to be used to value the outstanding claims provision and the reinsurance receivables, which include using actuarial assumptions, and leaky building claims, which are subject to a high degree of uncertainty. |
| Waitaki District Health Services Limited (Waitaki District Council) |
| Year ended 30 June 2018 We drew attention to disclosures in the financial statements outlining the work being done by the company to confirm whether or not it may owe staff money under the Holidays Act 2003, and the basis for how the company had calculated the related contingent liability in its financial statements. |
| Tauwhareparae Forests Limited (Gisborne District Council) |
| Year ended 30 June 2017 We drew attention to the disclosure in the financial statements outlining that, in spite of the requirements of the Local Government Act 2002, the company did not prepare a statement of service performance. This is because the company is inactive had no performance to report. In addition, we also highlighted that the company did not comply with the Local Government Act 2002 because it did not complete a statement of intent by 30 June 2017 for the year beginning 1 July 2017. |
| Forest Growth Holdings Limited (Invercargill City Council) |
| Year ended 30 June 2018 We drew attention to two disclosures in the financial statements. The first disclosure outlined that the financial statements had been prepared on a disestablishment basis, because the Board of Directors had resolved that the company would cease operations and become dormant within the next 12 months. The second disclosure outlined that the Board of Directors breached the law by failing to prepare a statement of intent for the year ending 30 June 2018. |
| Christchurch Agency for Energy (Christchurch City Council) |
| Year ended 30 June 2018 We drew attention to disclosures in the financial statements outlining that the Trust appropriately used a disestablishment basis when preparing its financial statements. This is because the Trust intends to cease operating in the next 12 months. Any remaining assets will be transferred at the direction of the settlor of the Trust, for a similar charitable purpose, in keeping with the Trust Deed. |
| Tarata Ngatimaru Pukehou Joint Venture (New Plymouth District Council) |
| Year ended 30 June 2018 We drew attention to disclosures in the financial statements outlining that the Joint Committee appropriately used a disestablishment basis when preparing its financial statements. The forest harvesting was completed and the joint venture was to cease after 30 September 2018. |
| HarbourCold Dunedin Joint Venture (Otago Regional Council) |
| Year ended 30 June 2018 We drew attention to disclosures in the financial statements about the joint venture appropriately using a basis other than that of a going concern when preparing its financial statements. The joint venture will be disestablished within one year, with any operations and remaining assets being distributed between the joint venture participants by 30 June 2019. |
| North Shore Heritage Trust (Auckland Council) |
| Years ended 30 June 2016 and 30 June 2017 We drew attention to disclosures in the financial statements outlining that the Trustees appropriately used a dissolution basis when preparing the financial statements because the Trustees have resolved to wind up the Trust when all of its existing funds have been depleted. |
| Venture Southland (Invercargill City Council, Southland District Council, and Gore District Council) |
| Year ended 30 June 2018 We drew attention to disclosures in the financial statements outlining that the Joint Committee appropriately used a basis other than that of a going concern when preparing its financial statements. The Joint Committee intends to disestablish the Group in the next 12 months and transfer any remaining operations, assets, liabilities, and existing contracts to a new entity before 30 June 2019. |
| Marlborough Kaikōura Rural Fire Authority |
| Year ended 30 June 2017 We drew attention to disclosures in the financial statements outlining that the Authority appropriately used a basis other than that of a going concern when preparing its financial statements. The Authority transferred its functions and operations, including response assets, to Fire and Emergency New Zealand on 1 July 2017, with the remaining assets to be transferred when the Authority is dissolved on 30 June 2018. |
| South Canterbury Rural Fire District Committee |
| Year ended 30 June 2017 We drew attention to disclosures in the financial statements outlining that the Committee appropriately used a basis other than that of a going concern when preparing its financial statements. This is because the functions and operations of the Committee, including its response assets, were or are expected to be transferred to Fire and Emergency New Zealand. |
| Southern Rural Fire Authority |
| Year ended 30 June 2017 We drew attention to disclosures in the financial statements outlining that the Authority appropriately used a basis other than that of a going concern when preparing its financial statements. The Authority transferred its functions and operations, including response assets, to Fire and Emergency New Zealand on 1 July 2017, with the remaining assets to be transferred when the Authority is dissolved on 30 June 2018. |
| Whanganui Joint Venture Airport (Whanganui District Council) |
| Years ended 30 June 2015 and 30 June 2016 We drew attention to disclosures in the financial statements outlining that the joint venture breached the law by failing to complete its annual reports within three months of the end of the financial year. |