By Type:
Table of contents:
* Amount includes work-in-progress of $83,000 ($83,000 in 2007/08).
The increase in employee entitlements is largely due to higher salary and wage accrual as at balance date due to timing of the last pay run as well as the SSC common leave provisions for long service leave (came into effect in May 2008) which has a two year impact in 2008/09.
For the calculation of long service leave, discount rates of 3.01% for year 1, 3.82% for year 2 and 5.96% for year 3 and onwards with a salary inflation factor of 2% per year were used. These rates and the model for calculations were provided by the Treasury.
The Ministry is a wholly owned entity of the Crown. The Government signifi cantly infl uences the roles of the department as well as being its major source of revenue.
Te Puni Kōkiri enters into transactions with other government departments, Crown entities and state-owned enterprises on an arm’s length basis. Those transactions that occur within a normal supplier or client relationship on terms and conditions no more or less favourable than those which it is reasonable to expect Te Puni Kōkiri would have adopted if dealing with that entity at arm’s length in the same circumstance are not disclosed.
The Māori Trustee was a member of the Ministry’s Executive Leadership Team till 30 June 2009. In September 2007, Te Puni Kōkiri entered into a Māori Potential Fund contract with the Māori Trustee to the value of $3.020 million (GST exclusive) for the period from 10 September 2007 to 30 June 2010. The remaining value of the contract as at 30 June 2009 is $1.200 million.
This contract is to ‘develop Māori globally-competitive icon businesses in the agribusiness sector, focusing on developing niche products for the world markets, developing the basis for increasing productivity from the natural resources, by adding value through technology, management practices, and market relationships’.
Although the Māori Potential Fund contract is with the Māori Trustee, the project is a joint partnership between the Māori Trustee, Federation of Māori Authorities and the Poutama Trust.
Te Puni Kōkiri staff who work in local communities may in a private capacity hold executive or advisory positions in local organisations. Some of these organisations may receive funding via Te Puni Kōkiri. These organisations are therefore considered related parties of Te Puni Kōkiri.
Te Puni Kōkiri staff are required to declare any real or potential conflicts of interest. Steps are then taken to ensure that staff members with a conflict of interest are not involved in any Te Puni Kōkiri decisions involving a group/organisation they may be involved with in a private capacity.
No provision has been required, nor any expense recognised, for impairment of receivables from related parties.
The Ministerial Economic Taskforce was established in March 2009 to take forward the ideas presented at the Māori Economic Workshop in January 2009. The Taskforce is chaired by the Minister of Māori Affairs and comprises seven independent members.
During 2008/09, Te Puni Kōkiri has entered into transactions with organisations associated with Taskforce members on an arm’s length basis.
Those transactions that occur within a normal supplier or client relationship on terms and conditions no more or less favourable than those which it is reasonable to expect Te Puni Kōkiri would have adopted if dealing with those entities at arm’s length in the same circumstance are not disclosed.
There are no instances in which Taskforce members had any control or influence over the business transactions of Te Puni Kōkiri during the period.
Key management personnel include the Chief Executive and the four members of the Executive Leadership Team (ELT).
Te Puni Kōkiri’s capital is its taxpayers’ funds, which is represented by net assets.
The Ministry manages its revenue, expenses, assets, liabilities and general financial dealings prudently. Its equity is largely managed as a by-product of managing the above, as well as compliance with the Government budget processes and Treasury instructions.
The objective of managing the Ministry’s equity is to ensure the Ministry effectively achieves its goals and objectives for which it has been established, whilst remaining a going concern.
Refer to “The Supplementary Estimates of Appropriations for the year ending 30 June 2009” for an explanation of significant budget changes between the 2008 Main Estimates and 2008/09 Supplementary Estimates for Vote Māori Affairs (B.7 – Pages 499 and 504).
The following notes explain significant variances between Main Estimates and Actuals.
Personnel: The variance is mainly due to a combination of number of positions remaining vacant or taking longer than expected time to be appointed as well as lower than anticipated costs for the December 2008 remuneration increase.
Operating: The variance is largely due to savings in Contractors/Consultants costs, Conference/ Hui costs, and Programme funding. This is mainly due to a concerted effort across the department to demonstrate a responsible attitude to the current economic recession and Value for Money principles of the government. This has led to greater scrutiny of expenditure decisions and reduced expenditure in some cases.
Depreciation and amortisation: The variance relates to delays in delivery and postponement of purchase of a number of assets including those budgeted for the new Māori Trustee which has not been utilised due to delays in planned transition and change management activities.
Capital charge: The variance is largely due to an error in calculating the budget, where all new capital for MTO approved in the Budget 2008 was being used to calculate the capital charge budget, which was later corrected in the Supplementary Estimates to include only the capital related to the 2008/09 financial year.
Cash and cash equivalents: The increase in cash is largely due to the Net Operating surplus.
Property, plant and equipment: The variance relates to delays in delivery and postponement of purchase of a number of assets including those budgeted for establishment of the new Māori Trustee which has not been utilised due to delays in planned transition and change management activities.
Intangible assets: The variance relates to delays in delivery and postponement of purchase of a number of intangible assets including an Electronic Workflow System ($0.300 million), enhancements to the Document Management System ($0.060 million) and GIS Mapping ($0.120 million) projects which did not proceed as planned. The new software costs associated with the establishment of the new Māori Trustee did not proceed ($0.266 million) due to delays in planned transition and change management activities.
Creditors and Payables: The variance is mainly due to lower year end accruals and creditors than originally forecasted as we have implemented monitoring mechanisms in response to the Cabinet’s directive to all Government departments to improve payment timeframes.
Policy - Social and Cultural: The increase is principally arising from; increased activity in the criminal justice sector; an emphasis on delivering research, information and monitoring outputs in this priority area; additional emphasis on marae development; and the development of a Cultural Futures work programme (this work programme complements and extends the Economic Futures work undertaken in 2007/08).
Policy – Economic and Enterprise: The decrease largely relates to reallocation of resources to recognise increased activity in the Policy - Social and Cultural output.
Policy - Crown Māori Relationships: The decrease largely relates to reallocation of resources to recognise increased activity in the Policy - Social and Cultural output.
Operations Management: The variance is largely due to the winding down of the Kapohia ngā Rawa (KnR) and Kaitātake ā Rohe (KAR) programmes which are being replaced by the Whanau Advocates programme in 2009/10.
Services to the Māori Trustee: The Māori Trust Office (MTO) received new funding in 2008/09 and out-years to strengthen current capability/capacity. Due to delays in recruitment to vacant and new positions, a permanent underspend in 2008/09 only of $0.976m was identified as savings and returned to the Crown during Budget 2009. Net savings of $0.409 million is due to delays in planned transition and change management activities.
Ministerial Economic Taskforce: This is a new appropriation approved in Budget 2009 for meeting the costs of running the Ministerial Economic Taskforce which provides advice to the Minister of Māori Affairs.
With the enactment of the Māori Trustee Amendment Act 2009, a new stand-alone Māori Trustee entity came into effect on 1 July 2009. This entails the separation of the Māori Trust Office (MTO) from Te Puni Kōkiri and moving the respective MTO balances as at 30 June 2009 to the new Māori Trustee entity. The portion of the balance sheet transferred to the new Māori Trustee entity included working capital of $1.104 million and Taxpayers equity of $1.525 million, resulting in a reduction in Taxpayers’ equity of Te Puni Kōkiri to $4.621 million.
From 1 July 2009, the Crown Revenue and associated expenses for the MTO has been transferred from Departmental Output Expense – Services to the Māori Trustee to the new Non-Departmental Output Expense – Māori Trustee Functions. Te Puni Kōkiri is continuing to provide some corporate functions to the Māori Trustee on a cost recovery basis.
The Government has elected to early adopt all NZ IFRSs and Interpretations that had been approved by the New Zealand Accounting Standards Review Board (NZ ASRB) as at 30 June 2009 that are not yet applicable, except NZ IAS 1: Presentation of Financial Statements (revised) approved by the NZ ASRB in November 2007. This standard becomes effective for periods commencing on or after 1 January 2009, and was adopted in the forecast financial statements presented with the 2009 Budget, but not those presented with the 2008 Budget, against which these financial statements are compared. Adoption of NZ IAS 1: Presentation of Financial Statements (revised) results in presentation changes only.
The early adoption of these standards and interpretations did not have a material impact on the financial statements.
