Annex 1: Audit results for 2022

It is important that public organisations issue audited financial statements within statutory time frames. This enables the Parliament, Ministers, and the public alike to hold these organisations to account for their financial and service performance in a timely manner. The following table shows how many audits we had to complete and how many were completed by the reporting deadline.

The timeliness of some audits was affected by poor quality information and the late provision of information to auditors, both of which affected the efficient use of audit resources and timeliness of reporting. Our ability to complete audits on time was also affected by the disestablishment of the entities that made up Te Pūkenga, where issues specific to disestablishment had to be resolved.

Another important aspect of accountability is the type of audit report that is issued on the financial information – standard or non-standard.

A non-standard audit report is issued when the auditor is unable to obtain enough evidence about an issue, the auditor concludes that there is a misstatement in the financial information, or where there is a matter of importance that the auditor considers should be drawn to the attention of readers of the financial statements.

Non-standard audit reports were issued on the University of Canterbury and the University of Otago. This is because these universities chose to include a measure of greenhouse gas (GHG) emissions in their performance information. Considering the public interest in climate change related information, we drew attention to disclosures outlining the uncertainty in the reported GHG emissions. Quantifying GHG emissions is subject to uncertainty. Science knowledge (including the methodologies used to determine the data that needs to be reported) is still evolving, as is GHG reporting and assurance standards.

The table below shows how many non-standard audit reports were issued.

We also issued a non-standard audit report on Te Pūkenga. This audit report contained a qualified opinion because we were unable to obtain enough evidence to verify the breakdown of its operating cash flows for 2022 and the reconciliation of the net deficit to the net operating activity cash flow.

During the year, we needed to audit 18 polytechnics, institutes of technology, and related entities that were being disestablished to enable their financial results to be consolidated into Te Pūkenga at the end of 2022. We issued non-standard audit reports on all completed audits. We are required to draw attention to disclosures in the financial statements when they have been prepared on a disestablishment basis.

One of these audit reports (Universal College of Learning Limited) contained a qualified opinion.¹ The qualified opinion was issued because we were unable to obtain enough information to determine whether the carrying value of buildings recognised in the comparative information in the financial statements included all the costs of relevant seismic remediation work. The modification was identified in the prior year and flowed into the comparative information that was reported for the year ended 31 December 2022.

We issued non-standard audit reports on the financial statements of two TEI subsidiaries. Both audit reports included explanatory paragraphs drawing readers’ attention to a decision to disestablish the subsidiary.

1: A modified audit opinion can be issued by the auditor if there is an error, a disagreement over a particular matter, or a lack of sufficient audit evidence in a particular area of the financial statements, including disclosures. The type of modification depends on how material or pervasive the impact is.