Note 20: Explanations of significant variances against the Main Estimates

Explanations of significant variances from the Office's original 2020/21 budget figures (2020/21 Main Estimates) are as follows:

Statement of comprehensive revenue and expense

The overall surplus for 2020/21 was $2.001 million, compared to a surplus of $1.296 million budgeted in the Main Estimates. Revenue was $2.072 million higher than the Main Estimates and expenditure was $1.367 million higher. These increases primarily reflect more work completed on audits of public entities carried out by contracted auditor service providers. These increases were offset by a lower level of revenue and, to a lesser extent expenditure, generated by Audit New Zealand due to capacity constraints and a lower level of expenditure by the rest of the Office on various projects, including implementation of the Information Systems Strategic Plan.

Statement of financial position and Statement of changes in equity

Net assets at 30 June 2021 were $3.985 million lower than the Main Estimates. This is reflected in the Office's memorandum account balance, which was forecast in the Main Estimates to be in surplus by $1.502 million but is in deficit by $1.175 million. This reflects lower revenue generated by Audit New Zealand than forecast due to capacity constraints and a lower percentage of completion for the 30 June 2021 audit engagements.

Assets at 30 June 2021 were $0.042 million higher than the Main Estimates. This reflects higher cash levels and increased receivables from billing clients based on contract schedules, partially offset by reduced software expenditure related to the Office's Information Systems Strategic Plan.

Liabilities at 30 June 2021 were $4.027 million higher than the Main Estimates. This reflects higher levels of income received in advance and higher employee liabilities due to the effect of the Covid-19 pandemic on annual leave taken and accumulated time off in lieu.