Part five | Financial statements – non-departmental

Non-Departmental Expenditure and Capital Expenditure Appropriations
Unappropriated Expenditure
Revenue and Expenditure
Assets and Liabilities
Commitments
Contingent Assets and Liabilities
Notes to the Financial Schedules
Trust Money Administered on behalf of the Crown

Non-Departmental Expenditure and Capital Expenditure Appropriations

Schedule of Non-Departmental Expenditure and Capital Expenditure Against Appropriations

for the year ended 30 June 2010

ACTUAL 2008/09 $000	Appropriations for Expense Items	NOTE	ACTUAL 2009/10 $000	MAIN ESTIMATES 2009/10 $000	SUPP. ESTIMATES 2009/10 $000
	Vote Community and Voluntary Sector
	Non-Departmental Output Expenses
5,932	Charities-Administration		4,886	5,066	5,066
	Other Expenses to be Incurred by the Crown
2,560	Community Development Scheme		2,560	2,560	2,560
421	Community Internship Programme		406	581	581
13,967	Community Organisation Grants Scheme		13,861	13,873	13,873
11,768	Community Partnership Fund *		0	0	0
150	Disarmament Education Grants		150	150	150
402	Support for Volunteering		402	402	402
0	Debt Write-Downs		151	0	151
194	Youth Workers Training Scheme		181	200	200
35,394	Total Appropriations		22,597	22,832	22,983

	Vote Emergency Management
	Other Expenses to be Incurred by the Crown
1,363	Emergency Expenses	4	1,805	100	7,562
889	Subsidies to Local Government		889	889	889
2,252	Total Appropriations		2,694	989	8,451

	Vote Internal Affairs
	Non-Departmental Output Expenses
1,960	Classification of Films, Videos and Publications		1,960	1,960	1,960
0	Development of On-Line Authentication Services		116	116	116
	Other Expenses to be Incurred by the Crown
31	Miscellaneous Grants (Internal Affairs)		103	49	133
0	Reimbursing of holding costs		218	0	218
523	Public Inquiries		25	0	35
2,514	Total Appropriations		2,422	2,125	2,462
	Vote Local Government
	Benefits and Other Unrequited Expenses
52,597	Rates Rebate Scheme	4	44,039	65,000	55,000
	Other Expenses to be Incurred by the Crown
1,828	Chatham Islands Council	4	1,613	3,064	3,467
128	Depreciation		137	147	147
1,500	Tuwharetoa Māori Trust Board		1,500	1,500	1,500
56,053	Total Appropriations		47,289	69,711	60,114

	Vote Ministerial Services
	Benefits and Other Unrequited Expenses
657	Annuities to Former Governors-General, Prime Ministers and Widows		520	475	537
	Other Expenses to be Incurred by the Crown
131	Depreciation		132	137	137
7,922	Executive Council and Ministers’ Salaries and Allowances		7,868	7,720	7,920
19	Governors-General Pension Arrangements		15	20	20
11,278	Ministers’ Internal and External Travel		11,509	11,440	11,790
486	Travel for Former Governors-General and Prime Ministers		114	520	308
20,493	Total Appropriations		20,158	20,312	20,712

	Vote Racing
	Other Expenses to be Incurred by the Crown
2,976	Racing Promotion and Sponsorship Scheme		3,000	3,000	3,000
1,621	Racing Safety Development Fund		923	1,000	1,000
4,597	Total Appropriations		3,923	4,000	4,000

121,302	Total Non-Departmental Expenses		99,083	119,969	118,722

	Appropriations for Capital Expenditure

	Vote Local Government
	Capital Investment in Organisations other than Departments
0	Auckland Transition Agency	4	24,239	0	30,473
	Purchase or Development of Capital Assets by the Crown
169	Capital Investments – Lake Taupo		34	34	34
169	Total Appropriations for Capital Expenditure		24,273	34	30,507

121,471	Total Appropriations		123,356	120,003	149,229

The accompanying notes form part of these financial schedules. For a full understanding of the Crown’s financial position and the operations for the period, reference should be made to the consolidated Financial Statements of the Government for the year ended 30 June 2010.

Details of Multi-year Appropriations

As there were no Multi-year Appropriations active during 2009/10, the following has been included for comparative purposes only.

In 2008/09 the Department had multi-year appropriations for other expenses to be incurred by the Crown for Vote Community and Voluntary Sector and non-departmental output expenditure for Vote Internal Affairs.

The Community Partnership Fund under Vote Community and Voluntary Sector was a contestable fund for the development of initiatives by partnerships that will improve capability and skills to use information and communication technology, and develop community driven requirements for digital content. This appropriation commenced on 1 July 2005 and finished on 30 June 2009.

The Significant Community-based Project Fund under Vote Internal Affairs was an appropriation to support major community-based projects that have a range of benefits contributing to regional and/or national outcomes with particular reference to arts, culture and heritage; sport and recreation; tourism; conservation and the environment; and economic development. This appropriation commenced on 1 July 2005 and finished on 30 June 2009.

	Vote Community and Voluntary Sector	Vote Internal Affairs
	Community Partnership Fund ($000)	Significant Community Based Project Fund ($000)
MYA* commences	1 July 2005	1 July 2005
MYA expires	30 June 2009	30 June 2009
Original Appropriation	17,403	32,000
Adjustments	5,607	846
Total Appropriation	23,010	32,846
Actuals to 2005/06 Year End	0	19,254
Actuals to 2006/07 Year End	4,226	32,000
Actuals to 2007/08 Year End	11,242	32,846
Actuals to 2008/09 Year End	23,010	32,846

* MYA = Multi-year appropriation

Unappropriated Expenditure

Schedule of Non-Departmental Unappropriated Expenditure and Capital Expenditure

for the year ended 30 June 2010

The Statement of Unappropriated Expenditure details the amount of expenditure incurred above appropriation.

2009/10 Unappropriated Expenditure against Main Estimates

There was no unappropriated expenditure against Main Estimates for the year ended 30 June 2010. (2008/09: $Nil).

2009/10 Unappropriated Expenditure against Supplementary Estimates

There was no unappropriated expenditure against Supplementary Estimates for the year ended 30 June 2010. (2008/09: $Nil).

Revenue and Expenditure

Non-Departmental Schedule of Revenue

for the year ended 30 June 2010

ACTUAL 2008/09 $000		Note	ACTUAL 2009/10 $000	MAIN ESTIMATES 2009/10 $000	SUPP. ESTIMATES 2009/10 $000
	Revenue	2,4
166	Vote Community and Voluntary Sector		357	10	0
0	Vote Emergency Management		1,139	0	0
174	Vote Internal Affairs		107	0	0
1	Vote Local Government		125	0	0
5	Vote Ministerial Services		0	10	0

346	Total Revenue		1,728	20	0

Non-Departmental Schedule of Expenditure

for the year ended 30 June 2010

ACTUAL 2008/09 $000		Note	ACTUAL 2009/10 $000	MAIN ESTIMATES 2009/10 $000	SUPP. ESTIMATES 2009/10 $000
	Expenditure
35,394	Vote Community and Voluntary Sector		22,597	22,832	22,983
2,252	Vote Emergency Management		2,694	989	8,451
2,514	Vote Internal Affairs		2,422	2,125	2,462
56,053	Vote Local Government		47,289	69,711	60,114
20,492	Vote Ministerial Services		20,158	20,312	20,712
4,597	Vote Racing		3,923	4,000	4,000
121,302	Total Appropriated Expenditure		99,083	119,969	118,722

	Other Expenditure
11,846	GST	3	12,780	13,072	14,598

133,148	Total Expenditure		111,863	133,041	133,320

Assets and Liabilities

Schedule of Non-Departmental Assets

as at 30 June 2010

The Schedule of Assets summarises the assets the Department administers on behalf of the Crown.

ACTUAL 2008/09 $000		NOTE	ACTUAL 2010/10 $000	MAIN ESTIMATES 2009/10 $000	SUPP. ESTIMATES 2009/10 $000
	Assets
	Current Assets
55,193	Cash		30,563	17,466	26,266
238	Accounts Receivable		735	147	147
0	Loans	4	8,125	0	30,473
55,431	Total Current Assets		39,423	17,613	56,886
	Non Current Assets
1,793	Investments in Crown Entities		1,793	1,793	1,793
8,250	Land -Ministerial Properties		9,950	8,250	8,250
4,954	Buildings – Ministerial Properties		5,222	4,094	4,817
4,865	Buildings – Lake Taupo Harbourmaster		4,763	5,016	4,854
19,862	Total Non Current Assets		21,728	19,153	19,714

75,293	Total Assets		61,151	36,766	76,600

Land and Buildings

DTZ New Zealand Ltd (MREINZ), registered independent valuer, conducted a valuation of non-departmental Ministerial Properties land and buildings during April 2008 with valuations effective 30 June 2008. The Lake Taupo Boating Facilities have been revalued by DTZ New Zealand Ltd (MREINZ), registered independent valuer in May 2009 with valuations effective 30 June 2009.

The Ministerial Properties comprising of Premier House, Vogel House and Bolton Street are restricted for Government use. The carrying value of the land and buildings is $13,072,000. (2008/09: $13,204,000).

Investments in Crown Entities

The Department monitors a number of Crown entities. The investments in these entities are recorded within the Crown financial statements on a line-by-line basis except for the Charities Commission and Auckland Transition Agency.

Schedule of Non-Departmental Liabilities

as at 30 June 2010

The Schedule of Assets summarises the liabilities the Department administers on behalf of the Crown.

ACTUAL 2008/09 $000		ACTUAL 2009/10 $000	MAIN ESTIMATES 2009/10 $000	SUPP. ESTIMATES 2009/10 $000
	Liabilities
	Current Liabilities
30,405	Payables	11,072	1,853	11,848
30,405	Total Current Liabilities	11,072	1,853	11,848
	Term Liabilities
10,498	Provisions	10,343	10,251	10,251
10,498	Total Term Liabilities	10,343	10,251	10,251

40,903	Total Liabilities	21,415	12,104	22,099

Commitments

Year Ended 30 June 2010

Actual 2008/09 $000		Actual 2009/10 $000
	Other Operating Commitments
0	Less than one year	796
0	One to two years	908
0	Two to five years	1,534
0	Total Other Operating Commitments	3,238
0	Total Commitments	3,238

Contingent Assets and Liabilities

Schedule of Non-Departmental Contingent Assets and Liabilities as at 30 June 2010

Quantified Contingent Liabilities

Actual 2008/09 $000		Actual 2009/10 $000
91	Annuities	191
502	Emergency Responses	0
593	Total Contingent Liabilities	191

Unquantified Contingent Liabilities

Year Ended 30 June 2010

There were no unquantified contingent liabilities for the year ended 30 June 2010.

Year Ended 30 June 2009

There were unquantified contingent liabilities for the year ended 30 June 2009 relating to various emergency responses.

Unquantified Contingent Assets

Year Ended 30 June 2010

There were no Contingent Assets for the year ended 30 June 2010.

Year Ended 30 June 2009

There were unquantified contingent assets representing potential refunds of emergency expenses paid to the Whangarei District Council and Far North District Council in relation to the Kaeo flooding.

Notes to the Financial Schedules

Notes to the Non-Departmental Financial Schedules

for the year ended 30 June 2010

Note 1

Statement of Accounting Policies

Reporting Entity

These non-departmental schedules and statements present financial information on public funds managed by the Department of Internal Affairs on behalf of the Crown.

These non-departmental balances are consolidated into the Financial Statements of the Government. For a full understanding of the Crown’s financial position, results of operations and cash flows for the year, reference should also be made to the consolidated Financial Statements of the Government.

Reporting Period

The reporting period for these financial schedules is the year ended 30 June 2010.

Basis of preparation

These financial statements have been prepared in accordance with New Zealand generally accepted accounting practice (NZ GAAP). They comply with New Zealand equivalents to IFRS (NZ IFRS) and other applicable Financial Reporting Standards, as appropriate for public benefit entities.

Budget Figures

The budget figures are those presented in the Budget 2009 Estimates of Appropriation (Main Estimates) and those amended by the Supplementary Estimates (Supp. Estimates).

Comparatives

When presentation or classification of items in the financial schedules are amended or accounting policies are changed voluntarily, comparative figures are restated to ensure consistency with the current period unless it is impracticable to do so.

Accounting policies

The non-departmental schedules have been prepared in accordance with the Government’s accounting policies as set out in the consolidated Financial Statements of the Government, and in accordance with relevant Treasury instructions and Treasury circulars.

The accrual basis of accounting has been used unless otherwise stated. These financial statements are presented in New Zealand dollars rounded to the nearest thousand.

The accounting policies set out below have been applied consistently to all periods presented in these financial statements.

Significant Accounting Policies

The following particular accounting policies have been applied:

Revenue

Revenues from the supply of services are recognised when earned in the schedule of Revenue and Expenditure on a straight line basis over the specified period for the services.

Expenses

Where grants are discretionary the expense is recognised when the grant has been approved and approval has been communicated to the recipient, thereby creating a constructive obligation. Otherwise the expense is recognised when the specified criteria have been fulfilled and notice has been given to the Department.

Goods and Services Tax (GST)

Amounts in the financial schedules are reported exclusive of GST except for accounts receivable and accounts payable. GST input tax on non-departmental expenditure is expensed.

Financial Instruments

Designation of financial assets and financial liabilities 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.

Financial Assets

Cash includes cash in transit and bank accounts.

Accounts receivable have been designated as loans and receivables. 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 entered into with a duration of less than 12 months are recognised at their nominal value. At each balance date, the Department assesses whether there is any objective evidence that loans and receivables are impaired. Any Impairment losses are recognised in the Schedule of Revenue and Expenses as bad debts.

Financial Liabilities

Financial liabilities are recognised initially at fair value less transaction costs and subsequently measured at amortised cost using the effective interest rate method.

Financial liabilities entered into with duration less than 12 months are recognised at their nominal value.

Property, Plant and Equipment

Revaluations are carried out for land and buildings to reflect the service potential or economic benefit obtained through control of these assets. Land and buildings are recorded at fair value less impairment losses and, for buildings, less depreciation accumulated since the assets were last revalued. Valuations undertaken in accordance with the standards issued by the New Zealand Property Institute are used.

Land and Buildings are revalued at least every five years or whenever the carrying amount differs materially to fair value. Unrealised gains and losses arising from changes in the value of land and buildings are recognised as at balance date. To the extent that a gain reverses a loss previously charged to the Schedule of Revenue and Expenditure for the asset class, the gain is credited to the Schedule of Revenue and Expenditure. Otherwise, gains are credited to an asset revaluation reserve for that class of asset. To the extent that there is a balance in the asset revaluation reserve for the asset class any loss is debited to the reserve. Otherwise, losses are reported in the Schedule of Revenue and Expenditure.

Accumulated depreciation at revaluation date is eliminated against the gross carrying amount so that the carrying amount after revaluation equals the revalued amount.

Realised gains and losses arising from disposal of land and property are recognised in the Schedule of Revenue and Expenditure in the period in which the transaction occurs.

The carrying amounts of land and property are reviewed at least annually to determine if there is any indication of impairment. Where an asset’s recoverable amount is less than its carrying amount, it will be reported at its recoverable amount and an impairment loss will be recognised. Losses resulting from impairment are reported in the Schedule of Revenue and Expenditure, unless the asset is carried at a revalued amount in which case any impairment loss is treated as a revaluation decrease.

Depreciation

Depreciation is charged on a straight-line basis at rates calculated to allocate the cost or valuation of an item of property, less any estimated residual value, over its estimated useful life. The estimated useful lives for buildings ranges from 10 to 50 years.

Other Liabilities and Provisions

Other liabilities and provisions are recorded at the best estimate of the expenditure required to settle the obligation. Liabilities and provisions to be settled beyond 12 months are recorded at their present value.

Commitments

Operating and capital commitments arising from non-cancellable contractual or statutory obligations are disclosed within the Schedule of Commitments to the extent that both parties have not performed their obligations.

Contingent Assets and Liabilities

Contingent assets and contingent liabilities are recorded in the Schedule of Contingent Assets and Contingent Liabilities at the point at which the contingency is evident. Contingent assets are disclosed if it is probable that the benefits will be realised. Contingent liabilities are disclosed if the possibility that they will crystallise is not remote.

Note 2

Revenue and Receipts

Revenue and receipts consists mainly of prior year’s grant refunds ($1.502 million), interest on loan to Auckland Transition Agency ($0.125 million) and fines & penalties ($0.101 million).

Note 3

GST Expense

Section 6 of the Public Finance Act 1989 provides authority for GST expenditure in relation to appropriated expenditure.

Note 4

Explanation of significant variances against budget

The significant variances within the Non-Departmental Schedule of Revenue are explained below:

Actual Revenue was $1.728 million higher than the Supplementary Estimates mainly due to the refund of grants from 2008/09 that were not required.

The significant variances for Appropriated Expenditure are explained below:

Vote Emergency Management

Other Expenses to be Incurred by the Crown

Emergency Expenses

The increase of $7.462 million between Main Estimates and Supplementary Estimates relates to assistance to Environment Bay of Plenty and Whakatane District Council for hazard mitigation work following civil defence emergency events in 2004 and 2005 ($5.011 million), an increase in the level of contingency funding for civil defence emergencies ($1.900 million), an expense transfer from 2008/09 to 2009/10 for assistance to homeowners affected by flooding in Kaeo ($0.500 million) and reimbursement of council response costs as a result of the July 2008 National Storm Event ($0.051 million).

The actual expenditure was $5.757 million lower than the Supplementary Estimates mainly due to:

a change in timing of expenditure for Environment Bay of Plenty and Whakatane District Council for hazard mitigation work ($3.238 million). An in-principle expense transfer was approved to transfer the unspent funding to 2010/11;
delays in the completion of the long-term mitigation plan to relocate or raise vulnerable houses in the Kaeo catchment and township ($0.500 million), for which an in-principle expense transfer was approved; and
the majority of the increase in contingency funding for emergency expenses was not required ($1.948 million).

Vote Local Government

Benefits and Other Unrequited Expenses

Rates Rebate Scheme

The decrease of $10.000 million between the Main Estimates and the Supplementary Estimates relates to a forecast decrease in demand.

The actual expenditure was $10.961 million lower than the Supplementary Estimates. This expenditure is demand driven and the take-up of the scheme in 2009/10 was lower than anticipated.

Other Expenses to be Incurred by the Crown

Chatham Islands Council

The actual expenditure was $1.854 million lower than the Supplementary Estimates due to delays in identifying suitable waste management sites. An in-principle expense transfer from 2009/10 to 2010/11 was approved for this under spend.

Purchase or Development of Capital Assets by the Crown

Loan to the Auckland Transition Agency

This appropriation was created in 2009/10 and the actual expenditure reflects the provision of a loan to the Auckland Transition Agency ($30.473 million).

The actual expenditure was $6.234 million lower than the Supplementary Estimates due to the Auckland Transition Agency’s loan requirements being lower than anticipated. An in-principle capital transfer was approved from 2009/10 to 2010/11 to reflect the change in timing of loan requirements.

The significant variances within the Schedule of Non-Departmental Assets are explained below:

The change in budget between Main Estimates and Supplementary Estimates relates to higher payables ($9.995 million) and accordingly higher cash ($8.800 million). The increase in loans of $30.473 million reflects the recognition of the Auckland Transition Agency (ATA) as a debtor, as a result of the loan to the ATA.

The actual loans were $22.348 million lower than the Supplementary Estimates. The actual loans reflect the amount owed by the Auckland Transition Agency (ATA) to the Department.

Trust Money Administered on Behalf of the Crown

Schedule of Trust Money Administered on Behalf of the Crown for the year ended 30 June 2010

The following trust money was administered on behalf of the Crown under Part VII of the Public Finance Act 1989.

The schedule shows the opening and closing trust balances including bank and investments at cost, and the movements during the year.

Under the Public Finance Act 1989, and by delegation from the Secretary to The Treasury, trust money can only be invested on deposit with New Zealand registered banks or in New Zealand government stock. Trust money is also managed so there is no significant concentration of credit risk. Interest rate risk is managed by investing across a wide range of maturity dates, but subject to liquidity requirements.

Schedule Of Trust Money

	Opening Balance 2009/10 $000	Revenue $000	Expenses $000	Closing Balance 2009/10 $000
Vogel House	1	1	(2)	0
New Zealand 1990 Scholarships	670	17	0	687
Total	671	18	(2)	687

The Vogel House Trust was established to hold bonds for the hireage of Vogel House and Premier House.

The New Zealand 1990 Scholarship Trust was established to provide scholarships for top overall students in University Bursaries examinations.