Annual Report for the Year Ended 30 June 2009
Table of contents
- Cover Page
- Mai te Manahautū / From the Chief Executive
- He Kupu Whakataki / Introduction
- Statement of Responsibility
- Audit Report
- Statement of Service Performance for the Year Ended 30 June 2009
- Organisational Health and Capability
- Financial Statements for the Year Ended 30 June 2009 / Statement of Departmental Accounting Policies for the year ended 30 June 2009
Financial Statements for the Year Ended 30 June 2009 / Statement of Departmental Accounting Policies for the year ended 30 June 2009
Reporting Entity
Te Puni Kōkiri is a Government Department as defined by section 2 of the Public Finance Act 1989. Accordingly, Te Puni Kōkiri has designated itself as a public benefit entity for the purposes of New Zealand equivalents to International Financial Reporting Standards (NZ IFRS).
The financial statements of the department are for the year ended 30 June 2009. The financial statements were authorised for issue by the Chief Executive of Te Puni Kōkiri on 30 September 2009.
In addition, Te Puni Kōkiri has reported the Crown activities that it administers.
Statement of Compliance
The financial statements of Te Puni Kōkiri have been prepared in accordance with the requirements of the Public Finance Act 1989, which includes the requirement to comply with New Zealand generally accepted accounting practices (NZ GAAP).
These financial statements have been prepared in accordance with, and comply with, NZ IFRS as appropriate for public benefit entities.
The accounting policies set out below have been applied consistently to all periods presented in these financial statements.
The financial statements have been prepared on an historical cost basis, modified by the revaluation of certain assets and liabilities as identified in this statement of accounting policies.
The financial statements are presented in New Zealand dollars and all values are rounded to the nearest thousand dollars ($000). The functional currency of Te Puni Kōkiri is New Zealand dollars.
Judgement and Estimations
The preparation of financial statements in conformity with NZ IFRS requires judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
There are no judgements that have significant effect on the financial statements and estimates with a significant risk of material adjustments in the next year.
Accounting Policies
The following particular accounting policies that materially affect the measurement of financial results and financial position have been applied.
The accrual basis of accounting has been used unless otherwise stated.
Revenue
Te Puni Kōkiri derives revenue through the provision of outputs to the Crown and for services to third parties. Revenue is measured at the fair value of consideration received.
Revenue earned from the supply of outputs to the Crown is recognised as revenue when earned.
Capital Charge
The capital charge is recognised as an expense in the period to which the charge relates.
Operating Leases
Leases where the lessor effectively retains substantially all the risks and benefi ts of ownership of the leased items are classified as operating leases. Lease payments under an operating lease are recognised as an expense on a straight line basis over the lease term.
Financial Instruments
Te Puni Kōkiri is party to financial instruments as part of its normal operations. These financial instruments include bank accounts, debtors and creditors. All financial instruments are recognised in the Statement of Financial Position and all revenue and expenses in relation to financial instruments are recognised in the Statement of Comprehensive Income.
Designation of financial assets and financial liabilities by individual entities into instrument categories is determined by the business purpose of the financial instruments, policies and practices for their management, their relationship with other instruments and the reporting costs and benefits associated with each designation.
All foreign exchange transactions are translated at the rates of exchange applicable in each transaction. Te Puni Kōkiri does not carry any balances in foreign currencies.
Cash and Cash Equivalents
Cash includes cash on hand and funds on deposit with banks.
Debtors and Other Receivables
Debtors and other receivables are initially measured at fair value and subsequently measured at amortised cost using the effective interest rate, less impairment changes.
Impairment of a receivable is established when there is objective evidence that the department will not be able to collect amounts due according to the original terms of the receivable. Signifi cant financial difficulties of the debtor, probability that the debtor will enter into bankruptcy, and default in payments are considered indicators that the debtor is impaired. The amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted using the original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the statement of comprehensive income. Overdue receivables that are renegotiated are reclassified as current (i.e. not past due).
Property, Plant and Equipment
Property, plant and equipment consist of land, buildings, leasehold improvements, furniture and office equipment, EDP hardware, software that are an integral part of running the hardware, and motor vehicles.
Property, plant and equipment is shown at cost or valuation, less accumulated depreciation and impairment losses.
Individual assets, or group of assets, are capitalised if their cost is greater than $5,000. The value of an individual asset that is less than $5,000 and is purchased as part of a group of similar assets is capitalised.
Additions
The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits or service potential associated with the item will flow to the department and the cost of the item can be measured reliably.
In most instances, an item of property, plant and equipment is recognised at its cost. Where an asset is acquired at no cost, or for a nominal cost, it is recognised at fair value as at the date of acquisition.
Disposals
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount of the asset. Gains and losses on disposals are included in the statement of comprehensive income in the period in which the transaction occurs. When revalued assets are sold, the amounts included in the property, plant and equipment revaluation reserves in respect of those assets are transferred to general funds.
Subsequent Costs
Costs incurred subsequent to initial acquisition are capitalised only when it is probable that future economic benefits or service potential associated with the item will flow to the Ministry and the cost of the item can be measured reliably.
Depreciation
Depreciation is provided on a straight-line basis on all property, plant and equipment, at rates that will write off the cost (or valuation) of the assets to their estimated residual values over their useful lives. The useful lives and associated depreciation rates of major classes of assets have been estimated as follows:
| Computer Equipment | 4 years | 25% |
| Motor Vehicles | 5 years | 20% |
| Office Equipment | 5 years | 20% |
| Furniture and Fittings | 5 years | 20% |
| Leasehold Improvements | up to 12 years* |
|
| Software Development | 3 1/3 years | 30% |
* Leasehold improvements are depreciated over the unexpired period of the lease or the estimated remaining useful lives of the improvements, whichever is the shorter.
Intangible Assets
Software Acquisition and Development
Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specific software.
Costs associated with maintaining computer software are recognised as an expense when incurred. Costs that are directly associated with the development of software for internal use by the Ministry, are recognised as an intangible asset. Direct costs include the software development, employee costs and an appropriate portion of relevant overheads. Staff training costs are recognised as an expense when incurred.
Amortisation
The carrying value of an intangible asset with a finite life is amortised on a straight-line basis over its useful life. Amortisation begins when the asset is available for use and ceases at the date that the asset is derecognised. The amortisation charge for each period is recognised in the Statement of Comprehensive Income.
The useful lives and associated amortisation rates of major classes of intangible assets have been estimated as follows:
| Acquired computer software | 3 1/3 years | 30% |
| Developed computer software | 3 1/3 years | 30% |
Impairment of Non-Financial Assets
Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. An intangible asset that is not yet available for use at the balance sheet date is tested for impairment annually.
Property, plant and equipment and intangible assets that have a finite useful life are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.
Value in use is depreciated replacement cost for an asset where the future economic benefits or service potential of the asset are not primarily dependent on the asset’s ability to generate net cash inflows and where the entity would, if deprived of the asset, replace its remaining future economic benefi ts or service potential.
If an asset’s carrying amount exceeds its recoverable amount, the asset is impaired and the carrying amount is written down to the recoverable amount. For revalued assets the impairment loss is recognised against the revaluation reserve for that class of asset. Where that results in a debit balance in the revaluation reserve, the balance is recognised in the statement of comprehensive income.
For assets not carried at a revalued amount, the total impairment loss is recognised in the statement of comprehensive income.
The reversal of an impairment loss on a revalued asset is credited to the revaluation reserve. However, to the extent that an impairment loss for that class of asset was previously recognised in the statement of comprehensive income, a reversal of the impairment loss is also recognised in the statement of comprehensive income.
For assets not carried at a revalued amount the reversal of an impairment loss is recognised in the statement of comprehensive income.
Creditors and Other Payables
Creditors and other payables are initially measured at fair value and subsequently measured at amortised cost using the effective interest method.
Employee Entitlements
Short-Term Employee Entitlements
Employee entitlements that the department expects to be settled within 12 months of balance date are measured at nominal values based on accrued entitlements at current rates of pay. These include salaries and wages accrued up to balance date, annual leave earned but not yet taken at balance date, retiring and long service leave entitlements expected to be settled within 12 months, and sick leave.
Te Puni Kōkiri recognises a liability for sick leave to the extent that absences in the coming year are expected to be greater than the sick leave entitlements earned in the coming year. The amount is calculated based on the unused sick leave entitlement that can be carried forward at balance date, to the extent that the Ministry anticipates it will be used by staff to cover those future absences.
The department recognises a liability and an expense for performance payments where there is a past practice that has created a constructive obligation.
Long-term Employee Entitlements
Entitlements that are payable beyond 12 months, such as long service leave and retiring leave, have been calculated on an actuarial basis. The calculations are based on:
- likely future entitlements based on years of service, years to entitlement, the likelihood that staff will reach the point of entitlement and contractual entitlements information; and
- the present value of the estimated future cash fl ows.
Superannuation Schemes
Defined Contribution Schemes
Obligations for contributions to the State Sector Retirement Savings Scheme, KiwiSaver and the Government Superannuation Fund are accounted for as defined contribution schemes and are recognised as an expense in the statement of comprehensive income as incurred.
Provisions
The Ministry recognises a provision for future expenditure of uncertain amount or timing when there is a present obligation (either legal or constructive) as a result of a past event, it is probable that an outflow of future economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised as a finance cost.
Taxpayers’ Funds
Taxpayers’ funds is the Crown’s investment in the department and is measured as the difference between total assets and total liabilities.
Commitments
Expenses yet to be incurred on noncancellable contracts that have been entered into on or before balance date are disclosed as commitments to the extent that there are equally unperformed obligations.
Cancellable commitments that have penalty or exit costs explicit in the agreement on exercising that option to cancel are included in the statement of commitments at the value of that penalty or exit cost.
Goods and Services Tax (GST)
All items in the financial statements, including appropriation statements, are stated exclusive of GST, except for receivables and payables, which are stated on a GST inclusive basis. Where GST is not recoverable as input tax, then it is recognised as part of the related asset or expense.
The net amount of GST recoverable from, or payable to, the Inland Revenue Department (IRD) is included as part of receivables or payables in the statement of financial position. The net GST paid to, or received from the IRD, including the GST relating to investing and financing activities, is classified as an operating cash flow in the statement of cash fl ows.
Commitments and contingencies are disclosed exclusive of GST.
Income Tax
Government departments are exempt from income tax as public authorities. Accordingly, no charge for income tax has been provided for.
Contingent Assets and Liabilities
Contingent assets and liabilities are disclosed at the point at which the contingency is evident. Contingent liabilities are disclosed if the possibility that they will crystallise is not remote. Contingent assets are disclosed if it is probable that the benefits will be realised.
Net Operating Surplus
The net operating surplus for the period is repayable to the Crown and a provision for this repayment is shown in the Statement of Financial Position.
Budget Figures
The budget figures are those included in the Ministry’s Forecast Financial Statement published in the Information Supporting the Estimates of Appropriation for the year ending 30 June 2009. In addition, the financial statements also present the updated budget information from the 2008/09 Supplementary Estimates.
Statement of Cost Accounting Policies
Te Puni Kōkiri has determined the cost of outputs using the cost allocation system outlined below.
Criteria for direct costs
‘Direct costs’ are those costs that are directly attributed to an output.
Criteria for indirect costs
‘Indirect costs’ are those costs that cannot be attributed in an economically feasible manner, to a specific output.
These include depreciation and capital charge which are charged to outputs on the basis of fulltime equivalents (FTEs) attributable to each output.
Personnel costs (excluding those of Support Services Wahanga and the Office of the Chief Executive) are allocated to outputs based on budgeted FTEs attributable to each output. Property and other premises costs, such as maintenance, are charged to wahanga (business units) on the basis of budgeted FTEs.
Corporate overheads are allocated to outputs on the basis of budgeted FTEs attributable to each output.
There have been no changes in cost accounting policies.
Changes in Accounting Policies
Accounting policies are changed only if the change is required by a standard or interpretation or otherwise provides more reliable and more relevant information.
There have been no changes in accounting policies. All policies have been applied on a basis consistent with the previous year.
Critical Accounting Estimates and Assumptions
In preparing these financial statements the Ministry has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Critical Judgements in Applying the Ministry’s Accounting Policies
Management has not exercised any critical judgements in applying the Ministry’s accounting policies for the period ended 30 June 2009.
Financial Instrument Risks
The Ministry’s activities expose it to a variety of financial instrument risks, including market risk, credit risk and liquidity risk. The Ministry has a series of policies to manage the risks associated with financial instruments and seeks to minimise exposure from financial instruments. These policies do not allow any transactions that are speculative in nature to be entered into.
Market Risk
Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.
The Ministry’s foreign exchange management policy requires the Ministry to manage currency risk arising from future transactions and recognised liabilities by covering all material foreign exchange exposures as soon as they arise with approved instruments and counterparties.
The Ministry considers foreign exchange exposure to be material where the transaction exposure limit for an individual currency exceeds NZ$100,000.
The Ministry has two approved instruments that can be used to cover foreign exchange exposure;
- Spot foreign exchange contract for not more than two business day settlements; and
- Forward foreign exchange contract for settlement at a future date.
The Ministry’s policy has been approved by the Treasury and is in accordance with the requirements of the Treasury Guidelines for the Management of Crown and Departmental Foreign-Exchange Exposure.
The Ministry has minimal exposure to currency risk. Foreign exchange exposure is predominantly limited to:
- Personnel based overseas e.g. training and secondments;
- Accommodation and other costs related to international travel (including travel advances paid in foreign currency); and
- Purchasing goods and services from foreign suppliers’ e.g. international consultants and journal subscriptions.
Interest rate risk
Interest rate risk is the risk that the fair value of a financial instrument will fluctuate, or the cash flows from a financial instrument will fluctuate, due to changes in market interest rates.
The Ministry has no interest bearing financial instruments and, accordingly, has no exposure to interest rate risk.
Credit risk
Credit risk is the risk that a third party will default on its obligation to the Ministry, causing the Ministry to incur a loss.
In the normal course of its business, credit risk arises from debtors, deposits with banks and derivative financial instrument assets.
The Ministry is only permitted to deposit funds with Westpac, a registered bank, and enter into foreign exchange spot and forward contracts with the New Zealand Debt Management Office or any counterparty that meets the minimum credit rating criteria. These entities have high credit ratings. For its other financial instruments, the Ministry does not have significant concentrations of credit risk.
The Ministry’s maximum credit exposure for each class of financial instrument is represented by the total carrying amount of cash and cash equivalents, net debtors and derivative financial instrument assets. There is no collateral held as security against these financial instruments, including those instruments that are overdue or impaired.
| $000 | Less than 6 months | Between 6 months and 1 year | Between 1 and 5 years | Over 5 years |
|---|---|---|---|---|
| 2009 Creditors and other payables |
2,137 | - | - | - |
| 2008 Creditors and other payables |
6,311 | - | - | - |
Liquidity risk
Liquidity risk is the risk that the Ministry will encounter difficulty raising liquid funds to meet commitments as they fall due.
In meeting its liquidity requirements, the Ministry closely monitors its forecast cash requirements with expected cash drawdowns from the New Zealand Debt Management Office. The Ministry maintains a target level of available cash to meet liquidity requirements.
The table below analyses the Ministry’s financial liabilities that will be settled based on the remaining period at balance sheet date to the contractual maturity date. The amounts disclosed are the contractual undiscounted cash fl ows.
Statement of Comprehensive Income for the Year Ended 30 June 2009
The Statement of Comprehensive Income shows the components of revenue and expenditure (exclusive of Goods and Services Tax) relating to all outputs produced by Te Puni Kōkiri.
| 30-Jun-08 Actual $000s |
Note | 30-Jun-09 Actual $000s |
30-Jun-09 Main Estimates $000s |
30-Jun-09 Supps Estimates $000s |
|
|---|---|---|---|---|---|
| Income | |||||
| 59,894 | Crown | 66,078 | 63,967 | 64,499 | |
| 656 | Department(s) | 681 | 545 | 545 | |
| 2 | Other Revenue | 2 | - | - | |
| 60,552 | Total Income | 66,761 | 64,512 | 65,044 | |
| Expenses | |||||
| 29,870 | Personnel | 1 | 32,585 | 34,521 | 34,165 |
| 26,097 | Operating | 2 | 26,869 | 27,760 | 28,943 |
| 1,249 | Depreciation and amortisation | 3 | 1,455 | 1,578 | 1,527 |
| 363 | Capital charge | 4 | 355 | 653 | 409 |
| 57,579 | Total Expenses | 61,264 | 64,512 | 65,044 | |
| 2,973 | Net Surplus / (deficit) | 5,497 | - | - | |
| - | Other comprehensive income | - | - | - | |
| 2,973 | Total Comprehensive Income | 5,497 | - | - |
The accompanying accounting policies and notes form part of these Financial Statements. For information on major variances against budget, refer note 13 on page 66
Statement of Movements in Taxpayers' Funds for the Year Ended 30 June 2009
The Statement of Movements in Taxpayers' Funds shows the reconciliation of funds at the beginning of the year with the funds at the end of the year.
| 30-Jun-08 Actual $000s |
30-Jun-09 Actual $000s |
30-Jun-09 Main Estimates $000s |
30-Jun-09 Supps Estimates $000s |
|
|---|---|---|---|---|
| Balance at 1 July | ||||
| 4,764 | General funds | 4,764 | 4,764 | 4,764 |
| 4,764 | Taxpayers' Funds Opening Balance | 4,764 | 4,764 | 4,764 |
| Changes in Taxpayers’ Funds | ||||
| Income and Expense for the Period | ||||
| 2,973 | Net surplus / (deficit) for the year | 5,497 | - | - |
| 2,973 | Total Income and Expense for the Period | 5,497 | - | - |
| Other Changes | ||||
| (2,973) | Repayment of surplus | (5,497) | - | - |
| - | Capital Contribution | 1,382 | 1,383 | 1,383 |
| (2,973) | Total Changes in Taxpayers’ Funds | (4,115) | 1,383 | 1,383 |
| Balance at 30 June | ||||
| 4,764 | General funds | 6,146 | 6,147 | 6,147 |
| 4,764 | Taxpayers’ funds as at 30 June | 6,146 | 6,417 | 6,417 |
The accompanying accounting policies and notes form part of these Financial Statements. For information on major variances against budget, refer note 13 on page 66
Statement of Financial Position as at 30 June 2009
The Statement of Financial Position shows the major classes of assets and major classes of liabilities and equity of Te Puni Kōkiri. The difference between the assets and liabilities is the taxpayers’ funds (net assets).
| 30-Jun-08 Actual $000s |
Note | 30-Jun-09 Actual $000s |
30-Jun-09 Main Estimates $000s |
30-Jun-09 Supps Estimates $000s |
|
|---|---|---|---|---|---|
| Assets | |||||
| Current Assets | |||||
| 12,188 | Cash and cash equivalents | 9 | 11,905 | 7,892 | 6,557 |
| 41 | Debtors and other receivables | 9 | 87 | 450 | 50 |
| 267 | Prepayments | 240 | 200 | 200 | |
| 12,496 | Total Current Assets | 12,232 | 8,542 | 6,807 | |
| Non-current Assets | |||||
| 3,193 | Property, plant and equipment | 5 | 4,031 | 5,733 | 3,507 |
| 337 | Intangible assets | 6 | 376 | 943 | 433 |
| 3,530 | Total Non-current Assets | 4,407 | 6,676 | 3,940 | |
| 16,026 | Total Assets | 16,639 | 15,218 | 10,747 | |
| Liabilities | |||||
| Current Liabilities | |||||
| 6,311 | Creditors and other payables | 7 | 2,137 | 6,400 | 2,000 |
| 2,973 | Repayment of surplus | 5,497 | - | - | |
| 1,902 | Employee entitlements | 8 | 2,562 | 2,371 | 2,300 |
| 11,186 | Total Current Liabilities | 10,196 | 8,771 | 4,300 | |
| Non-current Liabilities | |||||
| 76 | Employee entitlements | 8 | 297 | 300 | 300 |
| 76 | Total Non-current Liabilities | 297 | 300 | 300 | |
| 11,262 | Total Liabilities | 10,493 | 9,071 | 4,600 | |
| Taxpayers' Funds | |||||
| 4,764 | General Funds | 6,147 | 6,147 | 6,147 | |
| 4,764 | Total Taxpayers' Funds | 6,147 | 6,147 | 6,147 | |
| 16,026 | Total Liabilities & Taxpayers' Funds | 16,639 | 15,218 | 10,747 |
The accompanying accounting policies and notes form part of these Financial Statements. For information on major variances against budget, refer note 13 on page 66
Statement of Cash Flows for the Year Ended 30 June 2009
The Statement of Cash Flows shows the cash received and paid by Te Puni Kōkiri during the year, from its activities.
| 30-Jun-08 Actual $000s |
30-Jun-09 Actual $000s |
30-Jun-09 Main Estimates $000s |
30-Jun-09 Supps Estimates $000s |
|
|---|---|---|---|---|
| Cash Flows from Operating Activities | ||||
| Receipts from: | ||||
| 59,894 | Crown | 66,078 | 63,967 | 64,499 |
| 656 | Department(s) | 681 | 545 | 545 |
| 449 | Other | (17) | - | 58 |
| Payments to: | ||||
| (25,515) | Suppliers | (31,880) | (28,632) | (33,233) |
| (29,958) | Employees | (30,031) | (34,663) | (37,011) |
| (360) | Capital charge | (358) | (653) | (412) |
| 119 | Goods and services tax (net) | (863) | 3,422 | 3,450 |
| 5,285 | Net Cash from Operating Activities | 3,610 | 3,986 | (2,104) |
| Cash Flow from Investing Activities | ||||
| Receipts from: | ||||
| 439 | Sale of property, plant and equipment | 200 | - | - |
| Purchase of: | ||||
| (1,559) | Property, plant and equipment | (2,370) | (4,687) | (1,937) |
| (126) | Intangible assets | (132) | - | - |
| (1,246) | Net Cash from Investing Activities | (2,302) | (4,687) | (1,937) |
| Cash Flow from Financing Activities | ||||
| (866) | Repayment of surplus | (2,973) | - | (2,973) |
| - | Capital contribution | 1,382 | 1,383 | 1,383 |
| (866) | Net Cash from Financing Activities | (1,591) | 1,383 | (1,590) |
| 3,173 | Net Increase / (Decrease) in Cash | (283) | 682 | (5,631) |
| 9,015 | Cash at the beginning of the year | 12,188 | 7,210 | 12,188 |
| 12,188 | Cash at the end of the year | 11,905 | 7,892 | 6,557 |
The accompanying accounting policies and notes form part of these Financial Statements. For information on major variances against budget, refer note 13 on page 66
Reconciliation of Net Operating Surplus to Net Cash Flows from Operating Activities for the Year Ended 30 June 2009
The Reconciliation of Net Operating Surplus to Net Cash Flows from Operating Activities shows the non-cash adjustments and other adjustments applied to the net operating surplus as reported in the Statement of Comprehensive Income on page 51 to arrive at the net cash fl ows from operating activities disclosed in the Statement of Cash Flows on page 54.
| 30-Jun-08 Actual $000s |
30-Jun-09 Actual $000s |
30-Jun-09 Main Estimates $000s |
30-Jun-09 Supps Estimates $000s |
|
|---|---|---|---|---|
| 2,973 | Net Operating Surplus | 5,497 | - | - |
| Add: Non-cash items | ||||
| 1,249 | Depreciation and amortisation | 1,455 | 1,578 | 1,527 |
| 1,249 | Total non-cash items | 1,455 | 1,578 | 1,527 |
| Add/(Less) movements in working capital items | ||||
| 398 | Increase)/Decrease in debtors and receivables | (46) | - | 58 |
| 49 | (Increase)/Decrease in prepayments | 27 | - | - |
| 775 | Increase/(Decrease) in Creditors & Payables | (4,174) | 2,311 | (4,311) |
| (88) | Increase/(Decrease) in current employee entitlements | 882 | 97 | 622 |
| 1,134 | Net movements in working capital | (3,311) | 2,408 | (3,631) |
| Add/(Less) investing activity | ||||
| (71) | Loss/(Gain) on sale of fixed assets | (31) | - | - |
| (71) | Total investing activity | (31) | - | - |
| 5,285 | Net cash flow from operating activity | 3,610 | 3,986 | (2,104) |
The accompanying accounting policies and notes form part of these Financial Statements. For information on major variances against budget, refer note 13 on page 66
Statement of Departmental Commitments as at 30 June 2009
The Statement of Departmental Commitments shows the future contractual obligations (exclusive of GST) of Te Puni Kōkiri that will become liabilities if and when the terms and conditions of existing contracts are met.
Operating leases include lease payments for premises and motor vehicles.
Te Puni Kōkiri has long-term leases on its premises in New Zealand. The annual lease payments are subject to regular reviews, ranging from one year to four years. The amounts disclosed below as future commitments are based on the current rental rates.
| 30-Jun-08 Actual $000s |
30-Jun-09 Supps Estimates $000s |
|
|---|---|---|
| Accommodation lease commitments | ||
| 3,164 | Less than one year | 3,217 |
| 2,744 | One to two years | 1,093 |
| 1,204 | Two to five years | 350 |
| 20 | More than five years | - |
| 7,132 | Total accommodation lease commitments | 4,660 |
| Other operating commitments | ||
| 179 | Less than one year | 324 |
| 16 | One to two years | 319 |
| - | Two to five years | 210 |
| - | More than five years | - |
| 195 | Total other operating commitments | 853 |
| 7,327 | Total commitments | 5,513 |
The accompanying accounting policies and notes form part of these Financial Statements. For information on major variances against budget, refer note 13 on page 66
Statement of Departmental Contingent Assets and Liabilities as at 30 June 2009
The Statement of Departmental Contingent Assets and Liabilities shows amounts at balance date that could potentially become assets or liabilities depending on the occurrence of one or more uncertain future events after 30 June 2009. It does not include general or unspecified business risks or conditions.
| 30-Jun-08 Actual $000s |
30-Jun-09 Actual $000s |
|
|---|---|---|
| Contingent Liabilities | ||
| - | Public Liability claims | 257 |
| - | Total Contingent Liabilities | 257 |
The Public Liability claim largely relates to the maximum exposure for a business agreement with Telecom. This was disclosed in the Non-Departmental Statement of Contingent Assets and Liabilities in 2007/08 but has now been transferred to the Departmental Statement of Contingent Assets and Liabilities as it is a departmental contract.
The accompanying accounting policies and notes form part of these Financial Statements. For information on major variances against budget, refer note 13 on page 66
Statement of Departmental Expenditure and Capital Expenditure Appropriations for the Year Ended 30 June 2009
The Statement of Departmental Expenditure and Capital Expenditure Appropriations show expenditure (exclusive of Goods and Services Tax) against funds appropriated by Parliament.
| 30-Jun-08 Actual $000s |
Note | 30-Jun-09 Actual $000s |
30-Jun-09 Main Estimates $000s |
30-Jun-09 Supps Estimates $000s |
|
|---|---|---|---|---|---|
| VOTE: MĀORI AFFAIRS | |||||
| Appropriation for classes of outputs | |||||
| 6,997 | Policy - Social and Cultural | 8,622 | 6,869 | 8,866 | |
| 12,837 | Policy - Economic and Enterprise | 11,786 | 13,584 | 12,328 | |
| 7,061 | Policy - Crown Māori Relationships | 6,571 | 7,432 | 7,010 | |
| 8,569 | Relationships and Information | 8,732 | 8,838 | 9,174 | |
| 15,965 | Operations Management | 16,625 | 18,187 | 18,240 | |
| 6,101 | Services to the Māori Trustee | 14 | 8,817 | 9,602 | 9,226 |
| 49 | EEMED Establishment | - | - | - | |
| - | Ministerial Economic Taskforce | 111 | - | 200 | |
| 57,579 | Total Appropriations for Classes of Outputs | 61,264 | 64,512 | 65,044 |
Statement of Departmental Unappropriated Expenditure and Capital Expenditure as at 30 June 2009
There was no unappropriated expenditure for the year ended 30 June 2009 (Nil for the year ended 30 June 2008).
The accompanying accounting policies and notes form part of these Financial Statements. For information on major variances against budget, refer note 13 on page 66
Notes to the Financial Statements for the Year Ended 30 June 2009
Note 1: Personnel Costs
| 30-Jun-08 Actual $000s |
30-Jun-09 Actual $000s |
|
|---|---|---|
| 29,111 | Salaries and Wages | 31,798 |
| 759 | Other Personnel Costs | 787 |
| 29,870 | Total Personnel Costs | 32,585 |
Note 2: Operating Costs
| 30-Jun-08 Actual $000s |
30-Jun-09 Actual $000s |
|
|---|---|---|
| 142 | Audit fees for audit of financial statements | 143 |
| 10 | Other fees charged by auditors | - |
| 3,123 | Operating lease rentals | 3,295 |
| 161 | Overseas and Pacific Travel | 155 |
| 2,151 | Domestic Travel | 2,474 |
| 925 | Printing, Books and Publicity | 950 |
| 1,506 | Contract Workers | 1,306 |
| 4,337 | Consultancy Fees | 5,132 |
| 2,136 | MBFS Commission | 1,835 |
| 4,268 | Programmes | 3,783 |
| 1,132 | Telecommunications | 1,190 |
| 243 | Computer Related Expense | 255 |
| 23 | Koha | 14 |
| 5,940 | Other Operating Costs | 6,337 |
| 26,097 | Total Operating Costs | 26,869 |
Note 3: Depreciation Charge
| 30-Jun-08 Actual $000s |
30-Jun-09 Actual $000s |
|
|---|---|---|
| 248 | EDP Equipment | 245 |
| 315 | Motor Vehicles | 488 |
| 3 | Office Equipment | 5 |
| 119 | Furniture & Fittings | 170 |
| 508 | Leasehold Improvements | 454 |
| 56 | Software Systems | 93 |
| 1,249 | Total Depreciation Costs | 1,455 |
Note 4: Capital Charge
| 30-Jun-08 Actual $000s |
30-Jun-09 Actual $000s |
|
|---|---|---|
| 363 | Te Puni Kōkiri pays a capital charge to the Crown on its taxpayers' funds as at 30 June and 31 December each year. The capital charge rate for the year ended 30 June 2009 was 7.5% (2008: 7.5%). | 355 |
Note 5: Property, Plant and Equipment
| EDP Equipment $000s |
Motor Vehicles $000s |
Office Equipment $000s |
Furniture & Fittings $000s |
Leasehold Improvements $000s |
Total $000s |
|
|---|---|---|---|---|---|---|
| Cost or Valuation | ||||||
| Balance at 1 July 2007 | 1,666 | 1,464 | 252 | 791 | 2,298 | 6,471 |
| Additions | 287 | 1,125 | - | 105 | 41 | 1,558 |
| Disposals | - | (927) | - | - | - | (927) |
| Balance at 30 June 2008 | 1,953 | 1,662 | 252 | 896 | 2,339 | 7,102 |
| Balance at 1 July 2008 | 1,953 | 1,662 | 252 | 896 | 2,339 | 7,102 |
| Additions | 238 | 2,040 | 16 | 39 | 38 | 2,371 |
| Disposals | (299) | (498) | 3 | 239 | (240) | (794) |
| Balance at 30 June 2009 | 1,892 | 3,204 | 271 | 1,174 | 2,138 | 8,680 |
| Accumulated depreciation | ||||||
| Balance at 1 July 2007 | 1,244 | 669 | 246 | 297 | 822 | 3,278 |
| Depreciation expense | 248 | 315 | 3 | 118 | 508 | 1,192 |
| Eliminate on disposal | (2) | (559) | - | - | - | (561) |
| Balance at 30 June 2008 | 1,490 | 425 | 249 | 415 | 1,330 | 3,909 |
| Balance at 1 July 2008 | 1,490 | 425 | 249 | 415 | 1,330 | 3,909 |
| Depreciation expense | 245 | 488 | 5 | 170 | 454 | 1,363 |
| Eliminate on disposal | (296) | (329) | (1) | 224 | (222) | (625) |
| Balance at 30 June 2009 | 1,440 | 584 | 255 | 803 | 1,567 | 4,649 |
| Carrying amounts | ||||||
| At 1 July 2007 | 422 | 795 | 6 | 494 | 1,476 | 3,193 |
| At 30 June and 1 July 2008 | 463 | 1,237 | 3 | 481 | 1,009 | 3,193 |
| At 30 June 2009 | 453 | 2,620 | 18 | 365 | 575 | 4,031 |
Note 6: Intangible assets
| Acquired software $000s |
Internally generated software $000s |
Total $000s |
|
|---|---|---|---|
| Cost or valuation | |||
| Balance at 1 July 2007 | 1,278 | 494 | 1,772 |
| Additions | 90 | 87 | 177 |
| Disposals | - | (52) | (52) |
| Balance at 30 June 2008 | 1,368 | 529 | 1,897 |
| Balance at 1 July 2008 | 1,368 | 529* | 1,897 |
| Additions | 90 | 42 | 132 |
| Disposals | - | - | - |
| Balance at 30 June 2009 | 1,458 | 571 | 2,028 |
| Accumulated amortisation | |||
| Balance at 1 July 2007 | 1,125 | 379 | 1,504 |
| Amortisation expense | 56 | - | 56 |
| Balance at 30 June 2008 | 1,181 | 379 | 1,560 |
| Balance at 1 July 2008 | 1,181 | 379 | 1,560 |
| Amortisation expense | 66 | 27 | 93 |
| Balance at 30 June 2009 | 1,247 | 406 | 1,653 |
| Carrying amounts | |||
| At 1 July 2007 | 153 | 115 | 268 |
| At 30 June and 1 July 2008 | 187 | 150 | 337 |
| At 30 June 2009 | 211 | 165 | 376 |
* Amount includes work-in-progress of $83,000 ($83,000 in 2007/08).
Note 7: Creditors and other Payables
| 30-Jun-08 Actual $000s |
30-Jun-09 Actual $000s |
|
|---|---|---|
| 2,403 | Trade Creditors | 948 |
| 3,667 | Accrued Expenses | 1,811 |
| 241 | GST payable/(receivable) | (622) |
| 6,311 | Total creditors and payables | 2,137 |
Note 8: Employee Entitlements
| 30-Jun-08 Actual $000s |
30-Jun-09 Actual $000s |
|
|---|---|---|
| Current Liabilities | ||
| 1,562 | Annual Leave | 1,728 |
| 317 | Salaries and Wages | 818 |
| 23 | Long Service and Retirement Leave | 16 |
| 1,902 | Total current portion | 2,562 |
| Non-Current Liabilities | ||
| 76 | Long Service and Retirement Leave | 297 |
| 76 | Total non-current portion | 297 |
| 1,978 | Total employee entitlements | 2,859 |
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.
Note 9: Categories of financial instruments
| 30-Jun-08 Actual $000s |
30-Jun-09 Actual $000s |
|
|---|---|---|
| Loans and receivables | ||
| 12,188 | Cash and cash equivalents | 11,905 |
| 41 | Debtors and other receivables | 87 |
| 12,229 | Total loans and receivables | 11,992 |
Note 10: Related party transactions and key management personnel
Related party transactions
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.
Transactions with related parties
Māori Trustee
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
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.
Ministerial Economic Taskforce
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 compensation:
| 30-Jun-08 Actual $000s |
30-Jun-09 Actual $000s |
|
|---|---|---|
| 1,448 | Salaries and other short-term employee benefits | 1,382 |
| 3 | Other long-term benefits | 3 |
| 1,451 | Total key management personnel compensation | 1,385 |
Key management personnel include the Chief Executive and the four members of the Executive Leadership Team (ELT).
Note 11: Capital Management
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.
Note 12: Explanation for Significant Budget Changes
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).
Note 13: Explanation for Significant Variances
The following notes explain significant variances between Main Estimates and Actuals.
Statement of Comprehensive Income (page 51)
| 30-Jun-09 Actual $000s |
30-Jun-09 Main Estimates $000s |
Variance $000s |
|
|---|---|---|---|
| Personnel | 32,585 | 34,521 | (1,936) |
| Operating | 26,869 | 27,760 | (891) |
| Depreciation and amortisation | 1,455 | 1,578 | (123) |
| Capital charge | 355 | 653 | (298) |
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.
Statement of Financial Position (page 53)
| 30-Jun-09 Actual $000s |
30-Jun-09 Main Estimates $000s |
Variance $000s |
|
|---|---|---|---|
| Cash and cash equivalents | 11,905 | 7,892 | 4,013 |
| Property, plant and equipment | 4,031 | 5,733 | (1,702) |
| Intangible assets | 376 | 943 | (567) |
| Creditors and other payables | 2,137 | 6,400 | (4,263) |
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.
Statement of Departmental Expenditure and Capital Expenditure Appropriations (page 58)
| 30-Jun-09 Actual $000s |
30-Jun-09 Main Estimates $000s |
Variance $000s |
|
|---|---|---|---|
| Policy - Social and Cultural | 8,622 | 6,869 | (1,753) |
| Policy - Economic and Enterprise | 11,786 | 13,584 | 1,798 |
| Policy - Crown Māori Relationships | 6,571 | 7,432 | 861 |
| Operations Management | 16,625 | 18,187 | 1,562 |
| Services to the Maori Trustee | 8,817 | 9,602 | 758 |
| Ministerial Economic Taskforce | 111 | - | (111) |
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.
Note 14: Discontinuing Activity - Māori Trust Office
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.
Standards and interpretations issued but not yet effective
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.
Statement of Non-Departmental Accounting Policies
The following non-departmental statements and schedules record the expenses, revenue and receipts, assets and liabilities that Te Puni Kōkiri manages on behalf of the Crown.
The Non-Departmental balances are consolidated into the Financial Statements of the Government and therefore readers of these statements and schedules should also refer to the Financial Statements of the Government for 2008/09.
Statement of Compliance
These financial statements have been prepared in accordance with New Zealand generally accepted accounting practice. They comply with NZ IFRS and other applicable Financial Reporting Standards, as appropriate for public benefit entities.
Measurement System
Measurement and recognition rules applied in the preparation of the Non-Departmental statements and schedules are consistent with generally accepted accounting practice and the Financial Statements of the Government’s accounting policies. The financial statements have been prepared on an historical cost basis.
The financial statements are presented in New Zealand dollars and all values are rounded to the nearest thousand dollars ($000). The functional currency of Te Puni Kōkiri is New Zealand dollars.
Accounting Policies
The following particular accounting policies that materially affect the measurement of financial results and financial position have been applied.
Budget Figures
The budget figures are those presented in the 2008 Main Estimates as amended by the 2008/09 Supplementary Estimates and any transfer made by Order in Council under section 26A of the Public Finance Act 1989.
Revenue
Te Puni Kōkiri derives revenue through the provision of outputs to the Crown and for services to third parties. Revenue is measured at the fair value of consideration received.
Revenue from supply of services is recognised at balance date on a straight line basis over the specified period for the services, unless an alternative method better represents the stage of completion of transaction.
Goods and Services Tax (GST)
The Statements of Non-Departmental Expenditure and Appropriations are exclusive of GST. The Statement of Financial Position is exclusive of GST, except for Creditors and Payables, and Debtors and Receivables, which are GST inclusive.
The amount of GST owing to or from the Inland Revenue Department at balance date, being the difference between Output GST and Input GST, is included in Creditors and other Payables or Debtors and other Receivables (as appropriate).
Commitments
Future expenses and liabilities to be incurred on contracts that have been entered into at balance date are disclosed as commitments to the extent that there are equally unperformed obligations.
Contingent Assets and Liabilities
Contingent assets and liabilities are disclosed at the point at which the contingency is evident. Contingent liabilities are disclosed if the possibility that they will crystallise is not remote. Contingent assets are disclosed if it is probable that the benefits will be realised.
Financial Instruments
Te Puni Kōkiri is party to financial instruments as part of its normal operations. These financial instruments include bank accounts, short-term deposits, debtors and creditors. All financial instruments are recognised in the Statement of Financial Position and all revenue and expenses in relation to financial instruments are recognised in the Statement of Comprehensive Income.
Designation of financial assets and financial liabilities by individual entities into instrument categories is determined by the business purpose of the financial instruments, policies and practices for their management, their relationship with other instruments and the reporting costs and benefits associated with each designation.
All foreign exchange transactions are translated at the rates of exchange applicable in each transaction. Te Puni Kōkiri does not carry any balances in foreign currencies.
Liquidity risk
Liquidity risk is the risk that the Ministry will encounter difficulty raising liquid funds to meet commitments as they fall due.
In meeting its liquidity requirements, the Ministry closely monitors its forecast cash requirements with expected cash drawdowns from the New Zealand Debt Management Office. The Ministry maintains a target level of available cash to meet liquidity requirements.
The table overleaf analyses the Ministry’s financial liabilities that will be settled based on the remaining period at balance sheet date to the contractual maturity date. The amounts disclosed are the contractual undiscounted cash fl ows.
| $000 |
Less than 6 months |
Between 6 months and 1 year |
Between 1 and 5 years |
Over 5 years |
|---|---|---|---|---|
| 2009 | ||||
| Creditors and other payables | 1,734 | - | - | - |
| 2008 | ||||
| Creditors and other payables | 1,932 | - | - | - |
Financial Assets
Cash and cash equivalents include cash on hand, cash in transit, bank accounts and deposits with a maturity of no more than three months from date of acquisition.
Other financial assets have been designated as loans and receivables. These include Māori Trustee debt and Rural Lending loans.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables are recognised initially at fair value plus transaction costs and subsequently measured at amortised cost using the effective interest rate method. Loans and receivables issued with duration less than 12 months are recognised at their nominal value. Allowances for estimated irrecoverable amounts are recognised when there is objective evidence that the asset is impaired. Interest, impairment losses and foreign exchange gain and losses are recognised in the Statement of Comprehensive Income.
A provision for impairment of receivables is established when there is objective evidence that Te Puni Kōkiri will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted using the effective interest method.
Financial Liabilities
Financial liabilities are recognised initially at fair value less transaction costs and subsequently measured at amortised cost using effective interest rate method. Financial liabilities entered into with duration less than 12 months are recognised at their nominal value. Amortisation and, in the case of monetary items, foreign exchange gains and losses, are recognised in the Statement of Comprehensive Income as is any gain or loss when the liability is derecognised.
Changes in Accounting Policies
Accounting policies are changed only if the change is required by a standard or interpretation or otherwise provides more reliable and more relevant information.
There have been no changes in accounting policies. All policies have been applied on a basis consistent with the previous year.
Schedule of Non-Departmental Revenue for the Year Ended 30 June 2009
The Schedule of Non-Departmental Revenue shows budgeted revenue against actual revenue. Figures are GST exclusive.
| 30-Jun-08 Actual $000s |
Note | 30-Jun-09 Actual $000s |
30-Jun-09 Supp Estimates $000s |
|
|---|---|---|---|---|
| Current Revenue | ||||
| Non-Tax Revenue | ||||
| 21 | Interest on Advances | 23 | 155 | |
| (13) | Miscellaneous Receipts | 93 | - | |
| 6,102 | Māori Trustee | 1 | 8,864 | 3,802 |
| 1 | Mortgage Repayments Intended for Housing Corporation of New Zealand | - | 10 | |
| 6,111 | Total Current Revenue | 8,980 | 3,967 | |
| Capital Revenue | ||||
| 538 | Repayment of Advances | 876 | 325 | |
| 3,819 | Revaluation of Crown Land | 2 | - | - |
| 776 | Gain on Sale of Properties | - | - | |
| 5,133 | Total Capital Revenue | 876 | 325 | |
| 11,244 | Total Crown Revenue | 9,856 | 4,292 | |
The accompanying accounting policies and notes form part of these Financial Statements.
Schedule of Non-departmental Expenses for the Year Ended 30 June 2009
The Schedule of Expenses summarises Non-Departmental expenses that Te Puni Kōkiri administers on behalf of the Crown. Further details are provided in the Statement of Expenditure and Capital Expenditure Appropriations on pages 74 to 75. Figures are GST exclusive.
| 30-Jun-08 Actual $000s |
Note | 30-Jun-09 Actual $000s |
30-Jun-09 Supp Estimates $000s |
|
|---|---|---|---|---|
| Non-Departmental Expenses | ||||
| Operating Annual Appropriations | ||||
| 98,171 | Non-Departmental Output Expenses | 95,680 | 95,847 | |
| 478 | Benefits and Other Unrequited Expenses | 478 | 480 | |
| 12,474 | Other Expenses to be Incurred by the Crown | 39,020 | 46,421 | |
| 111,123 | Total Operating Annual Appropriations | 135,178 | 142,748 | |
| 1,840 | Capital Expenditure | 828 | 1,422 | |
| 24 | Appropriations for Other Expenses | 15 | 24 | |
| - | Loss on Revaluation of Crown Land | 2 | 677 | - |
| (131) | Provision for Write Off's – Rural Lending | (232) | (231) | |
| 112,856 | Total Non-Departmental Expenses | 136,466 | 143,963 |
The accompanying accounting policies and notes form part of these Financial Statements.
Statement of Non-departmental Expenditure and Capital Expenditure Appropriations for the Year Ended 30 June 2009
The Statement of Non-Departmental Expenditure and Capital Expenditure Appropriations shows expenditure and capital payments incurred against funds appropriated by Parliament. Te Puni Kōkiri administers these appropriations on behalf of the Crown. Figures are GST exclusive.
| 30-Jun-08 Actual $000s |
Note | 30-Jun-09 Actual $000s |
30-Jun-09 Supp Estimates $000s |
|
|---|---|---|---|---|
| Operating Annual Appropriations | ||||
| Non-Departmental Output Expenses | ||||
| 40,332 | Māori Television Broadcasting | 3 | 40,332 | 40,332 |
| 10,744 | Māori Radio Broadcasting | 4 | 10,744 | 10,744 |
| 1,608 | Administration of Māori Broadcasting | 5 | 2,128 | 2,128 |
| 3,204 | Promotion of the Māori Language | 6 | 3,204 | 3,204 |
| 455 | Iwi Housing Support | 454 | 456 | |
| 16,506 | Māori Television Channel | 7 | 16,539 | 16,539 |
| 530 | Treaty of Waitangi Touring Exhibition | - | - | |
| Māori Potential Funds | ||||
| 6,734 | -Matauranga (Knowledge) | 8 | 7,122 | 7,168 |
| 10,569 | -Whakamana (Leadership) | 8 | 8,065 | 8,108 |
| 7,489 | -Rawa (Resources) | 8 | 7,092 | 7,168 |
| 24,792 | Total Māori Potential Funds | 22,279 | 22,444 | |
| 98,171 | Total Non-Departmental Output Expenses | 95,680 | 95,847 | |
| Benefits and Other Unrequited Expenses | ||||
| 478 | Rangatiratanga Grants | 478 | 480 | |
| 478 | Total Benefits and Other Unrequited Expenses | 478 | 480 | |
| Other Expenses to be Incurred by the Crown | ||||
| 6,102 | Provision for Māori Trustee Debt | 1 | 8,864 | 9,186 |
| 196 | New Zealand Māori Council | 196 | 196 | |
| 178 | Māori Wardens | 1,156 | 1,178 | |
| 626 | Māori Registration Service | 9 | 626 | 626 |
| 1 | Payments to Housing Corporation of New Zealand | - | 36 | |
| 131 | Te Putahi Paoho | 131 | 131 | |
| 160 | Regional Tourism Organisations-Planning | 160 | 160 | |
| 2,000 | Re-erection of Mataatua Whare | 10 | 5,000 | 5,000 |
| 156 | S460A Loans Write-off | - | - | |
| - | Te Ariki Trust | - | 21 | |
| 1,867 | Māori Women's Development Fund | 11 | 1,867 | 1,867 |
| 1,000 | Beyond Hui Taumata | 1,000 | 1,000 | |
| 50 | Loss from sale of Mauao Reserve | - | - | |
| 7 | Orakei Act 1991 | 7 | 7 | |
| - | Wharewaka - Waterfront Development | 14 | - | 7,000 |
| - | Sir Robert Mahuta Endowment Fund | 14 | 20,000 | 20,000 |
| - | Administrative expenses for Crown Land | 13 | 13 | |
| 12,474 | Total Other Expenses to be Incurred by the Crown | 39,020 | 46,421 | |
| 111,123 | Total Operating Annual Appropriations | 135,178 | 142,748 | |
| Capital Contributions to other persons or organisations |
||||
| 80 | Rural Lending | 12 | 828 | 1,422 |
| 160 | Administration of Māori Broadcasting | 5 | - | - |
| 1,600 | Māori Television Channel | - | - | |
| 1,840 | Total Capital Contributions | 828 | 1,422 | |
| Appropriations for Other Expenses | ||||
| 24 | Payments to Trust Boards | 15 | 24 | |
| 24 | Total Other Expenses | 15 | 24 | |
| 112,987 | Total Non-Departmental Appropriations | 136,021 | 144,194 |
The accompanying accounting policies and notes form part of these Financial Statements.
Statement of Non-Departmental Unappropriated Expenditure and Capital Expenditure as at 30 June 2009
In terms of the Public Finance Act 1989, approval has been sought under section 26(c) from the Minister of Finance for unappropriated expenditure totalling $6,156.46 for the year ended 30 June 2009 (nil for the year ended 30 June 2008).
| 30-Jun-08 Actual $000s |
30-Jun-09 Actual $000s |
|
|---|---|---|
| Non-Departmental Other Expense | ||
| - | Administrative Expenses for Crown Land for year ended 30 June 2009 | 6 |
| - | Administrative Expenses for Crown Land for year ended 30 June 2008 | 13 |
| - | Total | 19 |
Direct costs of Crown land administered by Te Puni Kōkiri under Part 2 of the Māori Affairs Restructuring Act 1989. Previously these costs had been netted against rental income. The unappropriated expenditure relates to expenditure incurred during 2008/09 prior to Cabinet approval under imprest supply to the new appropriation.
The accompanying accounting policies and notes form part of these Financial Statements.
Schedule of Non-Departmental Assets as at 30 June 2009
Non-Departmental assets are administered by Te Puni Kōkiri on behalf of the Crown. As these assets are neither controlled by Te Puni Kōkiri nor used in the production of Te Puni Kōkiri outputs, they are not reported in the department’s Statement of Financial Position.
Non-Departmental Assets administered by Te Puni Kōkiri on behalf of the Crown include:
| 30-Jun-08 Actual $000s |
Note | 30-Jun-09 Actual $000s |
|
|---|---|---|---|
| Current Assets | |||
| 61,106 | Cash | 42,500 | |
| 142 | Accounts Receivable/Prepayments | 13 | 21,106 |
| 61,248 | Total Current Assets | 63,606 | |
| Non Current Assets | |||
| Māori Trust Office | |||
| 61,343 | Māori Trustee - Debt | 1 | 70,207 |
| (61,343) | Māori Trustee - Debt Provision | 1 | (70,207) |
| - | Total Non Current Assets | - | |
| Investments | |||
| Rural Lending | |||
| 1,672 | Total Loans | 12 | 1,389 |
| (646) | Less : Provision for doubtful debts | (357) | |
| 1,026 | 1,032 | ||
| Māori Land Development | |||
| Investments comprise Advances to | |||
| 179 | Crown owned stations | 14 | 179 |
| (179) | Less : Provision for doubtful debts | (179) | |
| - | - | ||
| 1,026 | Total Investments | 1,032 | |
| Property Plant and Equipment | |||
| 3,082 | Land | 2 | 3,125 |
| 3,082 | Total Property Plant and Equipment | 3,125 | |
| 66,076 | Total non-departmental assets administered by Te Puni Kōkiri | 67,763 |
The accompanying accounting policies and notes form part of these Financial Statements.
Schedule of Non-Departmental Liabilities as at 30 June 2009
| 30-Jun-08 Actual $000s |
30-Jun-09 Actual $000s |
|
|---|---|---|
| Current Liabilities | ||
| 1,890 | Creditors and Payables | 1,692 |
| 42 | Other Liabilities | 42 |
| 1,932 | Total Current Liabilities | 1,734 |
Schedule of Non-Departmental Commitments as at 30 June 2009
The Schedule of Non-Departmental Commitments shows the future contractual obligations (exclusive of GST) that will become liabilities if and when the terms and conditions of existing contracts are met.
| 30-Jun-08 Actual $000s |
30-Jun-09 Actual $000s |
|
|---|---|---|
| Category | ||
| 12,223 | Māori Potential Fund | 5,336 |
| 78,517 | Crown Entities & Non-Government Organisations | 69,438 |
| 90,740 | Total Crown Commitments by Category | 74,774 |
| Out year commitments | ||
| 88,539 | Less than one year | 74,726 |
| 2,201 | One to two years | 48 |
| - | Two to five years | - |
| - | More than five years | - |
| 90,740 | Total Crown Commitments by out year | 74,774 |
The accompanying accounting policies and notes form part of these Financial Statements.
Statement of Non-Departmental Contingent Assets and Liabilities as at 30 June 2009
The Statement of Non-Departmental Contingent Assets and Liabilities shows amounts at balance date that could potentially become assets or liabilities depending on the occurrence of one or more uncertain future events after 30 June 2009. It does not include general or unspecifi ed business risks or conditions. This schedule is exclusive of GST.
| 30-Jun-08 Actual $000s |
30-Jun-09 Actual $000s |
|
|---|---|---|
| 2,358 | Income Tax and GST indemnity | 16,447 |
| 278 | Public Liability Claims | - |
| 2,636 | Total Contingent Liabilities | 16,447 |
Where contingent liabilities have arisen as a consequence of legal action being taken against the Crown, the amount included is the amount claimed and thus the maximum potential cost. It does not represent either an admission that the claim is valid or an estimation of the possible amount of any award against the Crown.
The increase in Income Tax, GST and Gift duty indemnity relates to the Crown granting indemnity to Waikato-Tainui against any liability for GST, income tax and gift duty that may arise as a result of a payment of $20.0 million to the trustees of the Waikato Raupata River Trust for the Waikato Endowed Colleges Trust.
The Public Liability claim largely relates to the maximum exposure for a business agreement with Telecom. This was disclosed in the Non-Departmental Statement of Contingent Assets and Liabilities in 2007/08 but has now been transferred to the Departmental Statement of Contingent Assets and Liabilities as it is a departmental contract.
The accompanying accounting policies and notes form part of these Financial Statements.
Notes to the Non-Departmental Financial Statements and Schedules for the Year Ended 30 June 2009
Note 1: Māori Trustee
The Crown incurs expenditure via the Te Puni Kōkiri departmental appropriation under the output class “Services to the Māori Trustee”. There is an expectation that this expenditure will be repaid by the Māori Trustee to the Crown at some future date. However, Cabinet have agreed that the accumulated debt will be written off on passing of the Māori Trustee Amendment Act 2009, effective 1 July 2009. A 100% provision against the Māori Trustee’s debt is shown to reflect that the accumulated debt will be written off during 2009/10.
Note 2: Revaluation of Crown Land
Te Puni Kōkiri holds a number of Crown land blocks which are intended for disposal. The land blocks held for sale are revalued annually while the others are held at cost. Independent valuations were done by Veitch Morison Valuers Ltd, Garton and Associates, E.I. Clissold and QV Valuations between 26 May 2009 and 8 July 2009.
Note 3: Māori Television Broadcasting
Promotion of Māori language and Māori culture through television broadcasting by Te Māngai Pāho.
Note 4: Māori Radio Broadcasting
Promotion of Māori language and Māori culture through radio broadcasting by Te Māngai Pāho.
Note 5: Administration of Māori Broadcasting
Purchase of administration services from Te Māngai Pāho to meet its statutory functions and deliver on the Government's Māori broadcasting policy.
Note 6: Promotion of the Māori Language
Purchase of initiatives to revitalise and develop the Māori language in New Zealand. This includes outputs from Te Taura Whiri I Te Reo Māori (Māori Language Commission) and involves the promotion of the Māori language in New Zealand.
Note 7: Māori Television Channel
Ongoing administration costs of the Māori Television channel for the Māori Television Service.
Note 8: Māori Potential Funds
Classified as three Non-Departmental Output Expenses; Whakamana (leadership), Matauranga (knowledge/skills) and Rawa (resources). The Māori Potential Funds provide funding to accelerate Māori development through directly investing in community programmes and activities and are a direct link to the three strategic investment areas which were identified through the Māori Potential Approach.
Note 9: Māori Registration Service
Contribution towards the establishment of a national Māori registration service, which will assist in linking Māori with their tribes and tribal groups and compiling comprehensive and accurate registers of their members.
Note 10: Re-erection of Mataatua Whare
This is limited to the erection of the Mataatua Whare at Whakatane, and the establishment of related facilities to support cultural tourism and development opportunities.
Note 11: Māori Women's Development Fund
This reflects administration funding for the Māori Women's Development Fund.
Note 12: Rural Lending
Rural Lending represents the remaining nominal value of the former Rural Loans Portfolio of the Department of Māori Affairs and Iwi Transition Agency programmes.
The only new advances being made under these provisions are those necessary to complete compensation obligations to lessees where compensation is payable in terms of leases issued under the provisions of Part XXIV of the Māori Affairs Act 1953 and now administered by Te Puni Kōkiri under Part II of the Māori Affairs Restructuring Act 1989.
Note 13: Accounts Receivables/Prepayments
Accounts receivables/prepayments balance in 2008/09 is due to timing of the first quarterly payments to the Crown entities which had to be classified as prepayments.
Note 14: Crown owned stations
Crown owned stations were part of the old Maori Land Development programme which managed and operated the remaining Land Development schemes that was administered under Part 2 of the Maori Affairs Restructuring Act 1989.
The land blocks, as intended were being returned to the original owners with debts that could be serviced from on-going farming activities. Rawhiti station was one of the Crown owned stations in this scheme. This station was formally transferred to Office of Treaty Settlement in December 1997 for a total price which was less than the book value. The loss on sale of $179,000 was not appropriated and written off, but has since been treated as an asset of Te Puni Kōkiri, with a corresponding provision for full write-off. The net realisable value of this asset is nil.
Note 15: Explanation for Significant Budget Changes
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 170 to 172).
Note 16: Explanation for Significant Variances
The following notes explain significant variances between the Main Estimates and Actuals for Non-Departmental Expenditure.
| 30-Jun-09 Actual $000s |
30-Jun-09 Main Estimates $000s |
Variance $000s |
|
|---|---|---|---|
| Other Expenses to be Incurred by the Crown | |||
| Provision for Māori Trustee Debt | 8,864 | 4,893 | 3,971 |
| Wharewaka - Waterfront Development | - | 7,000 | (7,000) |
| Sir Robert Mahuta Endowment Fund | 20,000 | - | 20,000 |
| Capital Contributions to other persons or organisations | |||
| Rural Lending | 828 | 1,922 | (1,094) |
Provision for Māori Trustee Debt: The increase relates to additional funding for transition activities of the Māori Trustee to implement the work programme required in 2008/09 and outyears, including the establishment of a new stand-alone Māori Trustee entity.
Wharewaka – Waterfront Development: In Budget 2008, one-off funding of $7.0 million was appropriated in 2008/09 to support the construction of a Wharewaka complex on the Wellington Waterfront (Taranaki Street wharf and lagoon). As the appropriate governance arrangements were not formalised by 30 June 2009, no payments were done in 2008/09. An in principle expense transfer into 2009/10 of up to $7.0 million has been approved.
Sir Robert Mahuta Endowment Fund: This is a new appropriation for one-off funding for the Waikato Endowed Colleges to support the vision of Sir Robert Mahuta for it to be an educational centre providing leadership, innovation, research and scholarship in indigenous development and practices; and in particular to support the College’s special focus on the Waikato River.
Rural Lending: The variance is due to a decrease in the number of advances being made to landowners.
Note 17: Categories of financial instruments
| 30-Jun-08 Actual $000s |
30-Jun-09 Actual $000s |
|
|---|---|---|
| Loans and receivables | ||
| 61,106 | Cash and cash equivalents | 42,500 |
| 1,168 | Debtors and other receivables | 22,138 |
| 62,274 | Total loans and receivables | 64,638 |
Note 18: Crown Entities
In addition to the above, the Minister of Māori Affairs receives administration services in respect of the following Crown Entities:
- Te Māngai Pāho
- Te Taura Whiri I Te Reo Māori
The investment in these entities is recorded within the Financial Statements of the Government on a line by line basis. No disclosure is made in this schedule.
Please refer to the Annual Reports at the following websites:
Te Māngai Pāho at www.tmp.govt.nz
Māori Television Service at www.Māoritelevision.com and
Te Taura Whiri I Te Reo Māori at www.tetaurawhiri.govt.nz
for information on their financial performance and position.