Annual Report 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 software3 1/3 years 30%
Developed computer software 3 1/3 years30%

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.

Statement of Comprehensive Income for the Year Ended 30 June 2009
30-Jun-08
Actual

$000s
Note30-Jun-09
Actual

$000s
30-Jun-09
Main
Estimates
$000s
30-Jun-09
Supps
Estimates
$000s
Income
59,894Crown 66,07863,967 64,499
656Department(s) 681545 545
2Other Revenue2- -
60,552Total Income 66,76164,51265,044
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 charge4355653409
57,579 Total Expenses61,26464,51265,044
2,973 Net Surplus / (deficit)5,497--
- Other comprehensive income---
2,973 Total Comprehensive Income5,497--

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.

Statement of Movements in Taxpayers’ Funds for the Year Ended 30 June 2009
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 - -
2,973Total Income and Expense for the Period5,497 --
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).

Statement of Financial Position as at 30 June 2009
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.

Statement of Cash Flows for the Year Ended 30 June 2009
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.

Reconciliation of Net Operating Surplus to Net Cash Flows from Operating Activities for the Year Ended 30 June 2009
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 Surplus5,497- -
Add: Non-cash items
1,249Depreciation and amortisation1,4551,578 1,527
1,249Total non-cash items1,4551,578 1,527
Add/(Less) movements in working capital items
398 Increase)/Decrease in debtors and receivables(46)- 58
49(Increase)/Decrease in prepayments27- -
775Increase/(Decrease) in Creditors & Payables(4,174)2,311 (4,311)
(88)Increase/(Decrease) in current employee entitlements88297 622
1,134Net 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)- -
5,285Net cash flow from operating activity3,6103,986 (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.

Statement of Departmental Commitments as at 30 June 2009
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.

Statement of Departmental Contingent Assets and Liabilities as at 30 June 2009
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.

Statement of Departmental Expenditure and Capital Expenditure Appropriations for the Year Ended 30 June 2009
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

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

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

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

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

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 669246 297 822 3,278
Depreciation expense 248315 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 584255 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 20094532,620 18 365 575 4,031

Note 6: Intangible assets

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

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

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 Leave16
1,902Total current portion 2,562
Non-Current Liabilities
76 Long Service and Retirement Leave 297
76 Total non-current portion297
1,978 Total employee entitlements2,859

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

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:

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)

Statement of Comprehensive Income (page 51)
30-Jun-09
Actual

$000s
30-Jun-09
Main
Estimates
$000s
Variance


$000s
Personnel 32,58534,521 (1,936)
Operating 26,86927,760(891)
Depreciation and amortisation1,4551,578 (123)
Capital charge 355653(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)

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)

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 Cultural8,6226,869 (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 Trustee8,8179,602 758
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.

Schedule of Non-Departmental Revenue for the Year Ended 30 June 2009
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.

Schedule of Non-departmental Expenses for the Year Ended 30 June 2009
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.

Statement of Non-departmental Expenditure and Capital Expenditure Appropriations for the Year Ended 30 June 2009
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 Boards15 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).

Statement of Non-Departmental Unappropriated Expenditure and Capital Expenditure as at 30 June 2009
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:

Schedule of Non-Departmental Assets as at 30 June 2009
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

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 Liabilities42
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.

Schedule of Non-Departmental Liabilities as at 30 June 2009
30-Jun-08
Actual

$000s
30-Jun-09
Actual

$000s
Category
12,223 Māori Potential Fund 5,336
78,517 Crown Entities & Non-Government Organisations69,438
90,740Total Crown Commitments by Category 74,774
Out year commitments
88,539Less than one year 74,726
2,201One 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.

Statement of Non-Departmental Contingent Assets and Liabilities as at 30 June 2009
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.

Explanation for Significant Variances
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

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.

Back to top