Part E: Forecast Financial Statements – Departmental

Comprehensive Income

Statement of Forecast Comprehensive Income for the year ending 30 June 2015
Income
	Actual 2014 $000	Forecast 2015 $000
Crown	221,498	198,728
Other Revenue (see note 1)	161,341	163,061
Total Income	382,839	361,789
Expenditure
Personnel Costs	197,295	190,181
Depreciation and Amortisation Expense	34,929	38,247
Capital Charge	21,935	23,319
Finance Costs	267	264
Other Operating Expenses (see note 2)	143,842	132,656
Total Expenditure	398,268	384,667
Net Surplus/(Deficit)	(15,429)	(22,878)
Net Comprehensive Income	(15,429)	(22,878)

Financial Position

Statement of Forecast Financial Position as at 30 June 2015
Assets
	Actual 2014 $000	Forecast 2015 $000
Current Assets
Cash and Cash Equivalents	37,428	25,865
Debtors and Other Receivables	23,808	16,771
Inventories	1,701	1,700
Prepayments	4,108	4,943
Total Current Assets	67,045	49,279
Non-Current Assets
Property, Plant and Equipment (see note 3)	204,032	219,085
Intangible Assets (see note 4)	68,387	74,858
Total Non-Current Assets	272,419	293,943
Total Assets	339,464	343,222
Liabilities and Taxpayers‘ Funds
Current Liabilities
Creditors and Other Payables	36,574	32,416
Employee Entitlements	10,281	14,548
Other Current Liabilities	14,195	8,500
Provision for Repayment of Surplus	5,366	–
Total Current Liabilities	66,416	55,464
Non-Current Liabilities
Employee Entitlements	1,937	1,908
Other Non-Current Liabilities	210	–
Total Non-Current Liabilities	2,147	1,908
Total Liabilities	68,563	57,372
Equity
Taxpayer‘s Funds	232,210	247,147
Revaluation Reserves	38,691	38,703
Total Equity	270,901	285,850
Total Liabilities and Equity	339,464	343,222

Changes in Equity

Statement of Forecast Changes in Equity for the year ending 30 June 2015
Transfers of General Funds and Revaluation Reserves between Government Departments
	Actual 2014 $000	Forecast 2015 $000
Surplus/(deficit) for the year	(15,429)	(22,878)
Total Comprehensive Income	(15,429)	(22,878)
Capital Injections	413	46,389
Capital Withdrawals	–	(2,000)
Provision for Repayment of Surplus	(5,366)	–
Department of the Prime Minister and Cabinet	(2,635)	–
Ministry of Justice	(12)	–
Total Transfers of General Funds and Revaluation Reserves between Government Departments	(2,647)	–

Movement in Equity for the year	(23,029)	21,511

Add Equity as at 1 July	293,930	264,339
Equity as at 30 June	270,901	285,850

Cash Flows

Statement of Forecast Cash Flows for the year ending 30 June 2015
Cash Flows from Operating Activities
	Actual 2014 $000	Forecast 2015 $000
Cash was Provided from:
Supply of Outputs to the Crown	221,498	198,728
Supply of Outputs to Third Parties	156,162	162,679
Total Cash was Provided from:	377,660	361,407
Cash was Disbursed to:
Suppliers and Employees	(324,894)	(324,004)
Capital Charge	(21,935)	(23,319)
Goods and Services Tax (Net)	(254)	–
Total Cash was Disbursed to:	(347,083)	(347,323)
Net Cash Flows from Operating Activities	30,577	14,084
Cash Flows from Investing Activities
Cash was Provided from:
Sale of Property, Plant and Equipment	174	400
Total Cash was Provided from:	174	400
Cash was Disbursed to:
Purchase of Property, Plant and Equipment	(6,417)	(24,150)
Purchase of Intangibles	(29,523)	(25,170)
Total Cash was Disbursed to:	(35,940)	(49,320)
Net Cash Flows from Investing Activities	(35,766)	(48,920)
Cash Flows from Financing Activities
Cash was Provided from:
Capital Contribution	413	46,389
Total Cash was Provided from:	413	46,389
Cash was Disbursed to:
Capital Withdrawal	–	(2,000)
Transfers to Government Departments	(962)	–
Payment of Finance Leases	(1,589)	–
Repayment of Net Surplus	(6,103)	–
Total Cash was Disbursed to:	(8,654)	(2,000)
Net Cash Flows from Financing Activities	(8,241)	44,389
Movement in Cash
Opening Cash and Cash Equivalents	50,858	16,312
Add Net Increase/(Decrease) in Cash Held	(13,430)	9,553
Closing Cash and Cash Equivalents	37,428	25,865

Net Surplus to Net Cash Flow from Operating Activities

Reconciliation of Total Comprehensive Income to Net Cash Flow from Operating Activities for the year ending 30 June 2015


Add/(Deduct) Non Cash Items
	Actual 2014 $000	Forecast 2015 $000
Total Comprehensive Income	(15,429)	(22,878)
Depreciation and Amortisation	34,929	38,247
Impairment of assets	2,515	–
Loss on write off of assets	4,518	–
Interest Unwind on Leased Premises	267	–
Non-cash Personnel Costs associated with Transfer to Government Departments	339	–
Revenue from Collection Donations and Legal Deposits	–	(382)
	42,568	37,865
Add/(Deduct) Movements in Working Capital Items
(Increase)/Decrease in Debtors and Other Receivables	(6,462)	–
(Increase)/Decrease in Other Current Assets	1,311	(50)
Increase/(Decrease) in Creditors and Other Payables	6,059	(853)
Increase/(Decrease) in Other Current Liabilities	2,467	–
Increase/(Decrease) in Non-Current Liabilities	63	–
	3,438	(903)
Net Cash Flows From Operating Activities	30,577	14,084

Statement of Significant Assumptions

These forecast financial statements have been compiled on the basis of existing government policies and ministerial expectations at the time the statements were finalised. Actual results are as reported in Part C of the 2013/14 Annual Report.

The main assumptions are as follows:

the Department‘s activities will remain substantially the same as for the previous year
operating costs are based on the best estimate at the time the financial statements are finalised, and
estimated year end information for 2013/14 is used as the opening position for the 2014/15 Forecast Statement of Financial Position.

These assumptions are adopted as at 27 March 2014, the same information used in the Budget Economic and Fiscal Update (BEFU: exercise 466, OY1).

Factors that could lead to material differences between the forecast financial statements and the 2014/15 actual financial statements include:

capability resource availability
efficiency or productivity gains
changes to the baseline through initiatives, technical adjustments, expense transfers or retention of underspends
demand driven volume changes, and
policy decisions.

Statement of Entity-Specific Accounting Policies

The Department of Internal Affairs (the Department) has applied the accounting policies set out in the Statement of Accounting Policies included in the Notes section of the 2013/14 Annual Report.

Reporting Entity

The Department of Internal Affairs is a Government Department as defined by section 2 of the Public Finance Act 1989 and is domiciled in New Zealand. For the purpose of financial reporting the Department is a public benefit entity.

Authorisation Statement

These forecast financial statements were authorised for issue by the Department of Internal Affairs on 27 March 2014. The Department is responsible for the forecast financial statements presented, including the appropriateness of the assumptions underlying the forecast financial statements and all other required disclosures.

The forecast financial statements fairly reflect the forecast financial position and operations of the Department for the financial year ending 30 June 2015. Post-BEFU accounting adjustments to the actual balances as at 30 June 2014 have not been incorporated into these forecasts, as no significant changes have occurred between BEFU and the time of finalising the 2013/14 Annual Report.

It is not intended that the forecast financial statements will be updated subsequent to presentation.

Basis of Preparation

These forecast financial statements have been prepared in accordance with New Zealand Public Benefit Entity (NZ PBE) International Public Sector Accounting Standards (IPSAS). While a detailed impact assessment has yet to be completed, no significant impact is expected on transition from NZ IFRS to IPSAS.

These are the first set of prospective financial statements presented by the Department under NZ PBE IPSAS. They are compliant with Public Benefit Entity Financial Reporting Standard 42 Prospective Financial Statements (PBE FRS-42) and are consistent with Generally Accepted Accounting Practice. The purpose of the forecast financial statements is to facilitate Parliament's consideration of the appropriations for, and planned performance of the Department. Use of this information for other purposes may not be appropriate. Readers are cautioned that actual results are likely to vary from the forecast information presented and that the variations may be material.

The actual results for 30 June 2014 are based on NZ IFRS for public benefit entities.

The forecast financial statements are unaudited.

Notes to the Financial Statements

Note 1 – Other Revenue
	Actual 2014 $000	Forecast 2015 $000
Passport Fees	77,548	78,000
Citizenship Fees	12,644	12,700
Birth, Death, Marriage and Civil Union Fees	10,496	10,200
Non-casino Gaming Licences and Fees	14,663	16,058
Casino Operators‘ Levies	4,992	5,242
VIP Transport	7,054	7,414
Recovery from New Zealand Lottery Grants Board	8,885	9,673
New Zealand Gazette	876	844
Translation Services	1,030	1,000
Language Line Interpreter Services	1,323	1,291
e-Government Development and Operations	859	4,351
Electronic Purchasing in Collaboration (EPIC)	2,413	2,411
Te Puna Catalogue and Interloan Library Services	1,322	1,312
Kotui Library Services	1,050	1,027
Charities Registrations	802	852
Result 10 Service Transformation	2,400	2,400
Authentications	1,361	2,570
Insurance Recoveries relating to Christchurch Earthquakes	6,019	–
Other Third Party Revenue	5,604	5,716
Total Other Revenue	161,341	163,061

Note 2 – Operating Expenses
	Actual 2014 $000	Forecast 2015 $000
Agency Fees	11,998	14,434
Computer Costs	31,513	35,499
Consultants	6,015	7,140
Inventory Costs	18,560	18,510
Office Expenses	13,906	12,251
Professional Fees	9,387	7,445
Publicity and Promotion	1,331	1,117
Rental and Leasing Costs	12,152	18,497
Staff Development	2,024	3,778
Library Resources and Subscriptions	3,652	3,392
Travel Expenses	6,520	6,327
Fee for Auditor (for the Financial Statement Audit)	351	360
Fees to Auditor (for Assurance and Related Services)	34	–
Increase/(Decrease) in Provision for Doubtful Debts	150	–
Other Departmental Operating Costs	26,249	3,906
Total Operating Expenses	143,842	132,656

Note 3 – Property, Plant and Equipment
Cost or revaluation
	Land $000	Buildings $000	Plant & Equipment $000	Furniture/ Office equipment $000	Other $000	Total $000
Balance as at 1 July 2014	49,815	136,112	20,274	54,532	53,424	314,157
Additions by purchase	–	18,838	1,364	1,800	2,530	24,532
Disposals	–	–	–	–	(400)	(400)
Balance as at 30 June 2015	49,815	154,950	21,638	56,332	55,554	338,289
Accumulated depreciation and impairment losses
Balance as at 1 July 2014	–	14,389	10,284	42,940	36,367	103,980
Depreciation expense	–	5,470	1,063	5,341	3,350	15,224
Balance as at 30 June 2015	–	19,859	11,347	48,281	39,717	119,204
Carrying amount as at 30 June 2015	49,815	135,091	10,291	8,051	15,837	219,085

Note 4 – Intangible Assets
Cost
	Software $000
Balance as at 1 July 2014	177,512
Additions	25,170
Revaluations	–
Balance as at 30 June 2015	202,682
Accumulated amortisation
Balance as at 1 July 2014	104,801
Amortisation Expense	23,023
Balance as at 30 June 2015	127,824
Carrying amount as at 30 June 2015	74,858

The Department of Internal Affairs

Te Tari Taiwhenua

Building a safe, prosperous and respected nation