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Overview of our financial results
Operating result
For 2021/22, our Office had a deficit of $1.820 million. Our net operating results by output are summarised below.
| Audit and Assurance Services $000 |
Statutory Auditor Function $000 |
Remuneration of Auditor-General and Deputy Auditor-General $000 |
Total $000 |
|
|---|---|---|---|---|
| Revenue | 93,618 | 19,181 | 1,099 | 113,898 |
| Costs | (98,546) | (16,073) | (1,099) | (115,718) |
| Surplus/(Deficit)* | (4,928) | 3,108 | - | (1,820) |
* The operating deficit excludes gain on sale of assets, which was $7,000 for the year.
The deficit of $4.928 million relating to our Audit and Assurance Services reflects the limited capacity and availability of auditors, arising from Covid-19, which has affected our progress to complete annual audits. The deficit amount is transferred to our memorandum account, which was set up to help us manage the peaks and troughs in our audit fee revenue cycle.
The surplus of $3.108 million on the Statutory Auditor Function arose from the deferral of some projects to 2022/23 largely as a result of delays caused by Covid-19 and longer contract negotiations in relation to systems implementations. The surplus is subject to an In-Principle Expense Transfer (IPET) of $2.000 million approved by the Officers of Parliament Committee (OPC) in February 2022. OPC will be asked to confirm or approve an amended amount in October 2022. The IPET currently lets us increase the available budget in 2022/23 by up to $2.000 million for the deferral of projects that were not completed in 2021/22.
Memorandum account
The deficit for the year was more than initially planned, mainly due to capacity constraints affecting progress on the completion of annual audits. The deficit was offset by capital contributions from the Crown to address the increased time and non-recoverable costs of audits arising from Covid‑19.
| Audit and Assurance Services memorandum account | $000 |
|---|---|
| Opening balance at 1 July 2021 | (2,282)* |
| Audit and Assurance Services deficit | (4,928) |
| Capital contribution | 6,800 |
| Closing balance at 30 June 2022 | (410) |
* The opening balance was restated (see Note 1 for more information).
Investment in our assets
In 2021/22, we continued our replacement programme for IT hardware, furniture, and vehicles. We also continued implementing our Information Systems Strategic Plan, which covers a five-year programme of work to improve our information systems and services across the Office. Due to delays in contract negotiations we did not spend as much as we anticipated on IT software and system implementations. Supply chain issues also reduced the amount we spent on IT hardware.
The significant fitout costs related to the relocation of our Auckland office.