Part D: Financial Statements – Non-Departmental : Annual Report 2012-13 : Corporate Publications : Resource material : The New Zealand Department of Internal Affairs
 
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Resource material › Corporate Publications › Annual Report 2012-13Pūrongo ā Tau

Part D: Financial Statements - Non-Departmental

Non-Departmental Statements and Schedules for the year ended 30 June 2013

The following non-departmental statements and schedules record the income, expenses, assets, liabilities, commitments, contingent liabilities, contingent assets, and trust accounts the Department manages on behalf of the Crown.

Statement of Non-Departmental Expenditure and Capital Expenditure Against Appropriations for the year ended 30 June 2013
ACTUAL
2012
ACTUAL
2013
$000
MAINS EST
2013
$000
SUPP EST
2013
$000
Non-Departmental Expenses
Vote Community and Voluntary Sector
Non-Departmental Output Expenses
4,857 Charities – Administration
Other Expenses to be Incurred by the Crown
3,211 Community Development Scheme
331 Community Internship Programme
12,487 Community Organisation Grants Scheme
3,880 Digital Literacy and Connection
150 Disarmament Education Grants
402 Support for Volunteering
174 Youth Workers Training Scheme
25,492 Total Vote Community and Voluntary Sector
Vote Emergency Management
Other Expenses to be Incurred by the Crown
2,273 Emergency Expenses
362 February 2011 Christchurch Earthquake National Controller Costs
80,539 Canterbury Earthquake – Payments in respect of Indemnity for Response and Recovery Costs
1,023 Subsidies to Local Government
84,197 Total Vote Emergency Management
Vote Internal Affairs
Non-Departmental Output Expenses
1,960 Classification of Films, Videos and Publications 1,960 1,960 1,960
116 Development of On-Line Authentication Services 116 116 116
Charities – Administration 5,066
Public Lending Right for New Zealand Authors 1,991 2,000 2,000
Benefits and Other Unrequited Expenses
Rates Rebate Scheme 53,347 60,000 55,000
Other Expenses to be Incurred by the Crown
Chatham Islands Council 3,387 2,233 4,374
Community Development Scheme 4,297 4,695 5,154
Community Internship Programme 147 331 231
Community Organisation Grants Scheme 12,491 12,500 12,500
Crown-owned Assets at Lake Taupo – Maintenance Costs 719 1,393 748
Debt Write-down 13 13
Depreciation on Official Residences 192 193 193
Digital Literacy and Connection 3,881 3,881 3,881
Disarmament Education Grants 150 150 150
Emergency Expenses 9,840 1,000 12,875
Executive Council and Members of the Executive – Salaries and Allowances PLA 9,015 8,700 8,940
February 2011 Christchurch Earthquake National Controller Costs 41 281
Former Governors-General – Annuities and Other Payments PLA 443 435 456
Former Prime Ministers – Annuities PLA 159 160 168
Former Prime Ministers – Domestic Travel 143 270 270
Members of the Executive – Travel 11,696 11,790 11,790
18 Miscellaneous Grants – Internal Affairs 9 49 49
1,028 Pike River Royal Commission of Inquiry – Legal Representation and Assistance 41 600 80
1,655 Public Inquiries 597 599 599
Racing Safety Development Fund 988 1,000 1,000
Release of funds previously applied to Canterbury earthquake – Payments in respect of Indemnity for Response and Recovery Costs (5,415)
Subsidies to Local Government 792 889 889
Support for Volunteering 498 402 502
Te Oneroa a Tohe Beach Management 300 400
Tuwharetoa Māori Trust Board (PLA) 1,500 1,500 1,500
Youth Workers Training Scheme 199 200 200
4,777 Total Vote Internal Affairs 113,237 122,412 126,319
Vote Local Government
Benefits and Other Unrequited Expenses
52,489 Rates Rebate Scheme
Other Expenses to be Incurred by the Crown
1,946 Chatham Islands Council
342 Crown-owned Assets at Lake Taupo – Maintenance Costs
1,500 Tuwharetoa Māori Trust Board
56,277 Total Vote Local Government
Vote Ministerial Services
Other Expenses to be Incurred by the Crown
192 Depreciation on Official Residences
8,549 Executive Council and Members of the Executive – Salaries and Allowances (PLA)
434 Former Governors-General – Annuities and Other Payments (PLA)
160 Former Prime Ministers – Annuities (PLA)
234 Former Prime Ministers – DomesticTravel
10,798 Members of the Executive’s – Travel
20,367 Total Vote Ministerial Services
Vote National Library
Non-Departmental Output Expenses
2,004 Public Lending Rights
2,004 Total Vote National Library
Vote Racing
Other expenses to be incurred by the Crown
985 Racing Safety Development Fund
985 Total Vote Racing
194,099 Total Non-Departmental Expenditure 113,237 122,412 126,319
Non-Departmental Capital Expenditure
Vote Internal Affairs
Non-Departmental Capital Expenditure
Capital Investments Lake Taupo 1,025 342 1,029
Heritage Collection – Annual 1,784 1,546 1,796
Total Vote Internal Affairs 2,809 1,888 2,825
Vote Local Government
Non-Departmental Capital Expenditure
1,258 Loan to the Auckland Transition Authority
325 Capital Investments Lake Taupo
4,550 Local Government Funding Agency
6,133 Total Vote Local Government
Vote National Library
Non-Departmental Capital Expenditure
1,260 Heritage Collection – Annual
1,260 Total Vote National Library
7,393 Total Non-Departmental Capital Expenditure 2,809 1,888 2,825
201,492 Total Non-Departmental Appropriations 116,046 124,300 129,144
Reconciliation between the Non-Departmental Expenditure against Appropriations Schedule and the Non-Departmental Schedule of Expenditure
ACTUAL
2012
$000
ACTUAL
2013
$000
197,628 Total Expenses in Schedule of Expenditure 112,437
(1,454) Former Governors-General – Annuities and Other Payments Re-measurement 478
(1,333) Former Prime Ministers – Annuities Re-measurement (175)
(742) Former Prime Ministers – DomesticTravel Re-measurement 497
194,099 Total Expenses in Schedule of Non-Departmental Expenditure and Capital Expenditure Against Appropriation 113,237

The accompanying notes form part of these financial statements. For a full understanding of the Crown’s financial position and the results of its operations for the year, refer to the consolidated Financial Statements of the Government for the year ended 30 June 2013.

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Unappropriated Expenditure

Schedule of Non-Departmental Unappropriated Expenditure and Capital Expenditure for the year ended 30 June 2013

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

2012/13 Unappropriated Expenditure against Main Estimates

There was no unappropriated expenditure against Main Estimates for the year ended 30 June 2013 (2011/12: $1.186m).

2012/13 Unappropriated Expenditure against Supplementary Estimates

There was no unappropriated expenditure against Supplementary Estimates for the year ended 30 June 2013 (2011/12: $nil).

Section 25 Public Finance Act Expenditure

Under section 25 of the Public Finance Act 1989, the Minister of Finance can approve expenses to meet emergency costs. Approval was given as a direct result of declaring a state of national emergency for the Canterbury earthquakes under the Civil Defence Act 1983 and the Civil Defence Emergency Management Act 2002. In the year to 30 June 2013 there was no expenditure under this approval (2011/12: $nil).

Details of the costs incurred under section 25 of the Public Finance Act are in note 11.

The accompanying notes form part of these financial statements. For a full understanding of the Crown’s financial position and the results of its operations for the year, refer to the consolidated Financial Statements of the Government for the year ended 30 June 2013.

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Revenue and Expenditure

Schedule of Non-Departmental Revenue for the year ended 30 June 2013
ACTUAL
2012
$000
ACTUAL
2013
$000
MAINS EST
2013
$000
SUPP EST
2013
$000
Operating Revenue
56 Crown Revenue 57
6,776 Donations Received 3,885 1,000 1,000
41 Fines and Penalties 43
424 Refunds of Unspent Grants 581 686 436
133 Interest Received
7,430 Total Operating Revenue 4,566 1,686 1,436
Other Revenue
Unrealised Gain on the Remeasurement of Shares 536
7,430 Total Revenue 5,102 1,686 1,436
Schedule of Non-Departmental Expenditure for the year ended 30 June 2013
ACTUAL
2012*
$000
ACTUAL
2013
$000
MAINS EST
2013
$000
SUPP EST
2013
$000
Output Expenses
23,704 Personnel and travel Expenses – Members of the Executive Council, Former Governors-General and Prime Ministers 20,656 21,355 21,624
77,154 Grants 78,790 86,097 81,556
96,432 Other Expenses 12,655 14,767 22,946
338 Depreciation 336 193 193
197,628 Total Output Expenses 112,437 122,412 126,319
Other Expenses
849 Unrealised Loss on the Remeasurement of Shares
198,477 Total Operating Expenses 112,437 122,412 126,319
*
2012 comparitives have been adjusted between output expense classes to match the appropriation classification. The main adjustment is to the classification of emergency expenses and payments in respect of indemnity for response and recovery costs relating to the Canterbury earthquakes from grants to other expenses.

Explanation of significant variances against budget are detailed in note 9.

The accompanying notes form part of these financial statements. For a full understanding of the Crown’s financial position and the results of its operations for the year, refer to the consolidated Financial Statements of the Government for the year ended 30 June 2013.

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Schedule of Non-Departmental Assets and Liabilities and Revaluation Reserves

This schedule summarises the assets the Department administers on behalf of the Crown.

Schedule of Non-Departmental Assets as at 30 June 2013
ACTUAL
2012
$000
NOTE ACTUAL
2013
$000
MAINS EST
2013
$000
SUPP EST
2013
$000
Assets
Current Assets
139,749 Cash and Cash Equivalents 26,115 17,996 34,962
2,139 Debtors and Other Receivables 2 259 4 154
141,888 Total Current Assets 26,374 18,000 35,116
Non-Current Assets
Debtors and Other Receivables 113 117 117
4,151 Shares 3 4,687 6,793 4,151
21,832 Plant, Property and Equipment 4 22,521 22,813 22,667
1,292,018 Heritage Collections 4 1,297,687 1,289,074 1,294,814
1,318,001 Total Non-Current Assets 1,325,008 1,318,797 1,321,749
1,459,889 Total Assets 1,351,382 1,336,797 1,356,865

This schedule summarises the Liabilities and Revaluation Reserves the Department administers on behalf of the Crown.

Schedule of Non-Departmental Liabilities and Revaluation Reserves as at 30 June 2013
ACTUAL
2012
$000
NOTE ACTUAL
2013
$000
MAINS EST
2013
$000
SUPP EST
2013
$000
Liabilities
Current Liabilities
110,207 Creditors and other Payables 6 6,856 5,507 5,157
110,207 Total Current Liabilities 6,856 5,507 5,157
Non-Current Liabilities
14,203 Provisions 7 13,402 10,251 14,203
14,203 Total Non-Current Liabilities 13,402 10,251 14,203
124,410 Total Liabilities 20,258 15,758 19,360
Revaluation Reserves
Revaluation Reserves
296,123 Revaluation Reserve 8 296,123 296,123 296,123
296,123 Total Revaluation Reserves 296,123 296,123 296,123

Explanation of significant variances against budget are detailed in note 9.

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Non-Departmental Commitments

Non-Departmental Commitments as at 30 June 2013
ACTUAL
2012
$000
ACTUAL
2013
$000
Other Operating Commitments
908 Less than one year 627
627 One to two years
Two to five years
1,535 Total Other Operating Commitments 627
1,535 Total Commitments 627

The accompanying notes form part of these financial statements. For a full understanding of the Crown’s financial position and the results of its operations for the year, refer to the consolidated Financial Statements of the Government for the year ended 30 June 2013.

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Non-Departmental Contingent Assets and Liabilities

Schedule of Non-Departmental Contingent Assets and Liabilities as at 30 June 2013

Quantifiable Contingent Assets

At 30 June 2013, the Crown had a quantifiable contingent asset of $0.300m for a dividend payment from the Local Government Funding Agency (2012: $nil).

Non-quantifiable Contingent Assets

There were no non-quantifiable contingent assets as at 30 June 2013 (2012: $nil).

Quantifiable Contingent Liabilities

There were no quantifiable contingent liabilities as at 30 June 2013 (2012: $nil).

Non-quantifiable Contingent Liabilities

There were no non-quantifiable contingent liabilities as at 30 June 2013 (2012: $nil).

The accompanying notes form part of these financial statements. For a full understanding of the Crown’s financial position and the results of its operations for the year, refer to the consolidated Financial Statements of the Government for the year ended 30 June 2013.

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Notes to the Non-Departmental Financial Schedules

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 (the Department) on behalf of the Crown.

These Non-Departmental balances are consolidated into the Financial Statements of the Government for the year ended 30 June 2013. 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.

Basis of Preparation

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.

Measurement and recognition rules applied in the preparation of these Non-Departmental schedules and statements are consistent with New Zealand generally accepted accounting practice as appropriate for public benefit entities.

The accrual basis of accounting has been used unless otherwise stated.

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

Budget Figures

The budget figures are those presented in the Budget Estimates of Appropriation (Main Est) for the Department.

The Supplementary Estimates (Supp Est) figures incorporate the Department’s full year estimates. The budgets also include other amendments made through the course of the Supplementary Estimates process.

Comparatives

When presentation or, classifications 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.

Functional and Presentation Currency

The functional currency of the Department is New Zealand dollars. The financial statements are presented in New Zealand dollars and all values are rounded to the nearest thousand dollars ($000).

Significant Accounting Policies

The following particular accounting policies have been applied:

Revenue

Revenues from the supply of services are recognised when earned in the Non-Departmental Schedule of Revenue on a straight-line-basis over the specified period for the services.

Donation Revenue

When a heritage collection asset is acquired by donation or legal deposit for nil or nominal consideration, the fair value of the asset received is recognised as revenue in the Non-Departmental Schedule of Revenue.

Expenses
Grants

Discretionary grants are only recognised when a constructive obligation exists. This is deemed to occur both when the grant has been approved and the approval has been communicated to the recipient. Non-discretionary grants are recognised when specified criteria have been fulfilled and notice has been given to the Department.

Cash

Cash includes cash in transit and bank accounts.

Debtors and Other Receivables

Accounts receivable have been designated as debtors and other receivables. Debtors and other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Debtors and other receivables are recognised initially at fair value plus transaction costs and subsequently measured at amortised cost using the effective interest rate method. Debtors and other receivables entered into with 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 any loans and receivables are impaired. Any impairment losses are recognised in the Non-Departmental Schedule of Expenses.

Shares

Where the Department holds a non-controlling minority interest, the shares are valued at cost in the financial statements. Associates are entities in which the Department has significant influence, but not control over their operating and financial policies. In the Department’s financial statements, the Crown investment in associates has been valued by the equity method.

Property, Plant and Equipment

Disposal

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

Impairment

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.

Revaluations

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.

Specific Asset Class Policies

The asset class specific policies are described below.

Land and Buildings

Land and buildings are revalued at least every five years or whenever the carrying amount differs materially to fair value.

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 are undertaken in accordance with the standards issued by the New Zealand Property Institute.

Depreciation on buildings 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 range from 10 to 50 years. Depreciation is not charged on land.

Alexander Turnbull Library Heritage Collections

Section 11 of the National Library of New Zealand (Te Puna Mātauranga o Aotearoa) Act 2003 requires the Crown to own the collections held in the Alexander Turnbull Library in perpetuity.

The Alexander Turnbull Library Heritage Collections are measured at fair value. Due to the unique nature of the Heritage Collections it is not always practical or possible to obtain a market valuation. In these circumstances collections have been adjusted by the movement in the Consumer Price Index to better reflect their current value. There are also difficulties associated with obtaining an objective valuation for the specified cultural and heritage assets.

The carrying value includes the value of purchases for the collections since the last revaluation and the value of material received through donations and legal deposits.

A valuation is performed every three years. The collections are not depreciated.

National Archives Collection

Non-exceptional National Archives Collection items are revalued every three years using a methodology that divided the collection into categories by format and age, to associate records that together could be said to have a broad commonality of value. Benchmark valuations were obtained from an independent valuer through market assessments and from other collections of a similar nature to government archives. Accessions since the date of valuation are valued on the basis of these benchmarks.

Independent valuations of other exceptional items, including the Treaty of Waitangi, are conducted every three years and are based on market assessments from similar nature collections.

The valuation of the National Archives Collection includes only public archives in the possession of Archives New Zealand. Public archives held in other approved repositories do not form part of the valuation.

The collection is not depreciated.

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 of less than 12 months are recognised at their nominal value.

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.

The balance of provisions represents the estimated value of future benefits payable to former Governors-General and former Prime Ministers over their expected lives payable under the Governors-General Act 2010 and the Civil List Act 1979.

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 when there is a possibility that they will crystallise.

Goods and Services Tax (GST)

Amounts in the financial statements, including appropriation schedules, are reported exclusive of GST except for receivables and payables, which are stated on a GST-inclusive basis. In accordance with Treasury Instructions, GST is returned on revenue received on behalf of the Crown where applicable. However, an input tax deduction is not claimed on non-departmental expenditure. Instead, the amount of GST applicable to non-departmental expenditure is recognised as a separate expense and eliminated against GST revenue on consolidation of the Financial Statements of the Government.

2. Debtors and Other Receivables

Debtors and Other Receivables
ACTUAL
2012
$000
ACTUAL
2013
$000
343 Accounts Receivable 259
1,796 Current Loan to Charities Commision
2,139 Total Debtors and Other Receivables 259

The carrying value of receivables approximates their fair value.

3. Shares

Local Government Funding Agency

The Crown holds $5.000m of the $25.000m paid-up capital of the Local Government Funding Agency (LGFA). The shares have been valued by the equity method as, although the Crown does not have direct representation on the LGFA Board of Directors, it may solely appoint, remove and replace one member of the Shareholders’ Council. The Shareholders’ Council makes recommendations to Shareholders as to the appointment, removal, re-election, replacement and remuneration of Directors. The share value has therefore been adjusted to reflect the Crown’s share of any changes in the net assets of the LGFA.

LGFA Net Assets at 30 June 2013 were $23.436m (2012: $20.757m). The Crown’s share of the net assets is $4.687m (2012: $4.151m).

The summarised financial information of LGFA is:

Local Government Funding Agency financial information
ACTUAL
2012
$000
ACTUAL
2013
$000
10,894 Revenues 5,673
943,019 Assets 2,688,189
922,262 Liabilities 2,664,753
(4,243) Surplus/(Deficit) 2,678

The above figures are unaudited.

The Crown is not a guarantor of the LGFA and has no share of any contingent liabilities of the LGFA.

4. Property, Plant and Equipment

Property, Plant and Equipment 2013
Asset Class Balance
1 July
$000
Additions
$000
Revaluation/
Impairments
$000
Disposals
$000
Transfers*
$000
Balance
30 June
$000
Cost or Valuation
Property, Plant and Equipment
Land 10,800 10,800
Buildings – Residential 6,543 6,543
Buildings – Commercial 5,138 1,025 6,163
Total Cost of Valuation of Property, Plant and Equipment 22,481 1,025 23,506
Heritage Collections
Archives Heritage Collection 445,845 2,717 448,562
Total Archives Heritage Collection 445,845 2,717 448,562
Alexander Turnbull Library Heritage Collections
Cartographic 24,726 30 24,756
Children’s Historical 1,569 215 1,784
Drawing and Prints 63,525 270 63,795
Ephemera 4,672 78 4,750
Formed 446 446
General 99,181 16 99,197
Manuscript/Archives 72,798 831 73,629
Music 1,604 28 1,632
Newspapers 44,803 42 44,845
New Zealand and Pacific 29,624 397 30,021
Oral History 12,763 112 12,875
Others 429 429
Photographic 66,067 312 66,379
Serials 39,567 295 39,862
Short Title 4,617 19 4,636
Rare Books and Fine Prints 379,782 307 380,089
Total Alexander Turnbull Library Heritage Collections 846,173 2,952 849,125
Total Cost of Collections 1,292,018 5,669 1,297,687
Total Cost 1,314,499 6,694 1,321,193
Accumulated Depreciation
Property, Plant and Equipment
Buildings – Residential 198 198 396
Buildings – Commercial 451 138 589
Total Accumulated Depreciation 649 336 985
Net Book Value
Property, Plant and Equipment 21,832 689 22,521
Collections 1,292,018 5,669 1,297,687
Total Net Book Value 1,313,850 6,358 1,320,208
*
Transfers between Government Departments.
Property, Plant and Equipment 2012
Asset Class Balance
1 July
$000
Additions
$000
Revaluation/
Impairments
$000
Disposals
$000
Transfers*
$000
Balance
30 June
$000
Cost or Valuation
Property, Plant and Equipment
Land 10,800 10,800
Buildings – Residential 6,841 (298) 6,543
Buildings – Commercial 4,515 325 298 5,138
Total Cost of Valuation of Property,
Plant and Equipment
22,156 325 22,481
Heritage Collections
Archives Heritage Collection 440,104 5,741 445,845
Total Archives Heritage Collection 440,104 5,741 445,845
Alexander Turnbull Library Heritage Collections
Cartographic 24,711 15 24,726
Children’s Historical 1,437 132 1,569
Drawing and Prints 63,322 203 63,525
Ephemera 4,613 59 4,672
Formed 446 446
General 99,171 10 99,181
Manuscript/Archives 72,508 290 72,798
Music 1,576 28 1,604
Newspapers 44,752 51 44,803
New Zealand and Pacific 29,253 371 29,624
Oral History 12,596 167 12,763
Others 429 429
Photographic 65,749 318 66,067
Serials 39,314 253 39,567
Short Title 4,583 34 4,617
Rare Books and Fine Prints 379,418 364 379,782
Total Alexander Turnbull Library Heritage Collections 843,878 2,295 846,173
Total Cost of Collections 1,283,982 8,036 1,292,018
Total Cost 1,306,138 8,361 1,314,499
Accumulated Depreciation
Property, Plant and Equipment
Buildings – Residential 198 198
Buildings – Commercial 311 140 451
Total Accumulated Depreciation 311 338 649
Net Book Value
Property, Plant and Equipment 21,845 (13) 21,832
Collections 1,283,982 8,036 1,292,018
Total Net Book Value 1,305,827 8,023 1,313,850
*
Transfers between Government Departments.

5. Financial Instruments

The carrying amounts of financial assets and financial liabilities in each of the NZ IAS 39 categories are as follows:

Financial Instruments
ACTUAL
2012
$000
ACTUAL
2013
$000
Financial assets at Fair Value Through Profit or Loss
4,151 Shares 4,687
4,151 Total Financial assets at Fair Value Through Profit or Loss 4,687
Loans and Receivables
139,749 Cash and Cash Equivalents 26,115
2,139 Debtors and other Receivables 259
141,888 Total Loans and Receivables 26,374
Financial Liabilities Measured at Amortised Cost
110,207 Creditors and Other Payables 6,856
110,207 Total Financial Liabilities Measured at Amortised Cost 6,856

The Department is party to financial instrument arrangements as part of its daily operations. These include cash and cash equivalents, accounts receivable, accounts payable and provisions, accrued expenses, term accrued expenses and foreign currency forward contracts.

The Department’s activities expose it to a variety of financial instrument risks, including market risk, credit risk and liquidity risk. The Department 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.

Credit Risk

Credit risk is the risk that a third party will default on its obligations, causing a loss to be incurred. Credit risk arises from debtors and deposits with banks. Funds must be deposited with Westpac, a registered bank.

Credit evaluations are undertaken on customers requiring credit. Collateral or other security is not generally required to support financial instruments with credit risk. Other than cash and bank balances and trade receivables, the Department does not have any significant credit risk.

Maximum Exposures to Credit Risk
ACTUAL
2012
$000
ACTUAL
2013
$000
139,749 Cash and Cash Equivalents 26,115
343 Accounts Receivable 259
4,151 Investment in Local Government Funding Agency 4,687
144,243 Total Exposure to Credit Risk 31,061

Cash and cash equivalents excludes any cash physically held including as petty cash as cash is not exposed to credit risk.

Liquidity Risk

Liquidity risk is the risk that the Department will encounter difficulty raising liquid funds to meet commitments as they fall due.

In meeting its liquidity requirements, the Department closely monitors its forecast cash requirements with expected draw downs from the New Zealand Debt Management Office. The Department maintains a target level of available cash to meet liquidity requirements.

The table below analyses the Department’s financial liabilities that will be settled based on the remaining period at balance date to the contractual maturity date. The amounts disclosed are the contractual undiscounted cash flows.

The table below analyses the Department’s financial liabilities that will be settled based on the remaining period at balance date to the contractual maturity date. The amounts disclosed are the contractual undiscounted cash flows.
Total
$000
Less Than
6 Months
$000
Between
6 Months
and 1 Year
$000
Between
1 Year and
5 Years
$000
Over
5 Years
$000
2013
Creditors and Other Payables 6,856 6,856
2012
Creditors and Other Payables 110,207 110,207

6. Creditors and Other Payables

Creditors and Other Payables
ACTUAL
2012
$000
ACTUAL
2013
$000
19,846 Accrued Expenses 6,329
90,361 Accrued Canterbury Earthquake Expenses 148
Accrued Heritage Collection Purchases 379
110,207 Total Debtors and Other Receivables 6,856

The carrying value of creditors and other payables approximates their fair value. Other payables and Accrued Heritage Collection purchases are non-interest bearing and are normally settled on 30 day terms and Accrued Canterbury Earthquake expenses are expected to be settled through the course of 2012/13.

7. Provisions

The balance of the provisions account represents the estimated value of future benefits payable to Former Governors-General and Prime Ministers over their expected lives payable under the Civil List Act as at balance date.

Actuarial services were provided by Mercer Human Resource Consulting Ltd and were prepared by Mark Channon, Fellow of the New Zealand Society of Actuaries.

The measurement of the estimated future benefits depends on a number of factors that are determined on an actuarial basis using a number of assumptions. Two key assumptions used in calculating this liability include the discount rate and the consumer price index. Any changes in these assumptions will affect the carrying value of the liability.

2012 2013
Discount Rate 3.58% 3.91%
Consumer Price Index 2.50% 2.50%

8. Revaluation of Plant, Property and Equipment

Revaluation of Plant, Property and Equipment 2013
Balance
1 July
$000
Revaluation
Movement
$000
Balance
30 June
$000
Land and Buildings 10,735 10,735
Archives Heritage Collection
Alexander Turnbull Library Heritage Collections 285,388 285,388
Total Revaluation Reserves 296,123 296,123
Revaluation of Plant, Property and Equipment 2012
Balance
1 July
$000
Revaluation
Movement
$000
Balance
30 June
$000
Land and Buildings 10,735 10,735
Archives Heritage Collection
Alexander Turnbull Library Heritage Collections 285,388 285,388
Total Revaluation Reserves 296,123 296,123

Based on the advice of independent third parties and Department management that there have been no material changes to the carrying value of the Department’s assets during the accounting period, full valuations as at 30 June 2013 have not been sought.

Land and Buildings

Ministerial Properties

Darroch Ltd, a Licensed Real Estate Agent (REAA 2008) and registered independent valuer, conducted a valuation of Non-Departmental Ministerial Properties land and buildings during May 2011 with valuations effective 30 June 2011.

The Ministerial Properties comprising Premier House, Vogel House and Bolton Street are restricted for Government use. The carrying value of the restricted use land and buildings is $14.874m (2011/12: $15.022m.)

Lake Taupo Boating and Building Facilities
Building Facilities

Building facilities were valued by Darroch Ltd, a Licensed Real Estate Agent (REAA 2008) and registered independent valuer, who conducted a valuation during May 2011 with valuations effective 30 June 2011.

Boating Facilities

Boating facilities were valued by DTZ New Zealand Ltd (MREINZ), a registered independent valuer, in May 2009 with valuations effective 30 June 2009.

National Archives Collection

The National Archives Collection was revalued as at 30 June 2011 by an independent valuer, Dunbar Sloane, through market assessments and from other collections of a similar nature to government archives.

The Treaty of Waitangi was revalued as at 30 June 2011 by an independent valuer, Sotheby’s (London).

Other exceptional items are based on a valuation as at 30 June 2011 from Dunbar Sloane. These valuations were based on market assessments and from other collections of a similar nature.

Alexander Turnbull Library Heritage Collections

The Alexander Turnbull Library Heritage Collections were revalued as at 30 June 2011 by National Library staff. The revaluations were made based on an assessment of the change in the market price of similar collections between the date of the last valuation conducted on 30 June 2008 and 30 June 2011.

9. Explanation of Significant Variances against Budget

Variance between the Main Estimates and the Supplementary Estimates

Non-Departmental Appropriations

The significant variances for Appropriated Expenditure are explained below:

Charities – Administration

The decrease in the budget between the Main Estimates and the Supplementary Estimates of $5.066m was due to the transfer of the Charities Commission functions to an operational unit within the Department from 1 July 2012.

Rates Rebate Scheme

The decrease in the budget between the Main Estimates and the Supplementary Estimates of $5.000m reflects the forecast take up of the scheme.

Chatham Islands Council

The increase in the budget between the Main Estimates and the Supplementary Estimates of $2.141m was due to an expense transfer from 2011/12 to 2012/13 for the Chatham Islands Solid Waste Management.

Community Development Scheme

The increase in the budget between the Main Estimates and the Supplementary Estimates of $459,000 was due to an expense transfer from 2011/12 to 2012/13 due to delays in the development of Community-Led initiatives (increase of $614,000), and was partially offset by an expense transfer from 2012/13 to 2013/14 to reflect the expected timing of the implementation of specific projects within the Community-Led initiatives (decrease of $155,000).

Community Internship Programme

The decrease in the budget between the Main Estimates and the Supplementary Estimates of $100,000 was due to a transfer of funding to the non-departmental appropriation, Support for Volunteering, to reflect a reprioritisation of funding to align with government priorities.

Crown-owned Assets at Lake Taupo – Maintenance Costs

The decrease in the budget between the Main Estimates and the Supplementary Estimates of $645,000 was due to an expense transfer from 2012/13 to 2013/14 due to delays in the completion of the multi-year programme to remedy deferred maintenance of the Crown-owned assets at Lake Taupo (decrease of $2.100m). This was partially offset by an expense transfer from 2011/12 to 2012/13 for Lake Taupo maintenance costs (increase of $1.455m).

Debt Write-down

This appropriation of $13,000 was created between the Main Estimates and the Supplementary Estimates due to a write-down of unrecoverable non-departmental debts relating to the Community Organisation Grants Scheme.

Emergency Expenses

The increase in the budget between the Main Estimates and the Supplementary Estimates of $11.875m was due to reimbursement of Christchurch City Council’s response costs for the Canterbury Earthquakes (September 2010, February 2011, June 2011 and December 2011) (increase of $8.340m), and expense transfers from 2011/12 to 2012/13 to reimburse local authorities for response and recovery costs incurred as a result of the 2012 Nelson-Tasman flood events (increase of $2.000m) and to provide assistance to Environment Bay of Plenty for hazard mitigation work (increase of $1.535m).

Executive Council and Members of the Executive – Salaries and Allowances PLA

The increase in the budget between the Main Estimates and the Supplementary Estimates of $240,000 was due to an increase in costs pursuant to the Parliamentary Salaries and Allowances Determination 2012.

February 2011 Christchurch Earthquake National Controller Costs

The increase in the budget between the Main Estimates and the Supplementary Estimates of $281,000 was due to an expense transfer from 2011/12 to 2012/13 for the costs incurred at the discretion of the National Controller Civil Defence for response costs after 21 March 2011 as part of the response to the 22 February 2011 Christchurch earthquake.

Former Governors-General – Annuities and Other Payments PLA

The increase in the budget between the Main Estimates and the Supplementary Estimates of $21,000 was due to an increase in costs based on forecast demand.

Former Prime Ministers – Annuities PLA

The increase in the budget between the Main Estimates and the Supplementary Estimates of $8,000 was due to the forecast increase in costs pursuant to the Parliamentary Annuities Determination 2013.

Pike River Royal Commission of Inquiry – Legal representation and assistance

The decrease in the budget between the Main Estimates and the Supplementary Estimates of $520,000 due to a reduction in funding resulting from the completion of the Royal Commission of Inquiry on the Pike River Coal Mine Tragedy (decrease of $670,000), and was partially offset by an expense transfer from 2011/12 to 2012/13 due to the deferral of some of the work programme to 2012/13 and the extended timeframe for the Royal Commission of Inquiry on the Pike River Coal Mine Tragedy (increase of $150,000).

Public Inquiries

The budget did not change between the Main Estimates and the Supplementary Estimates however there was a reduction in funding due to the completion of the Royal Commission of Inquiry on the Pike River Coal Mine Tragedy and the Royal Commission of Inquiry into Building Failure caused by Canterbury Earthquakes (decrease of $275,000), and was totally offset by expense transfers from 2011/12 to 2012/13 for the Royal Commission of Inquiry into Building Failure caused by Canterbury Earthquakes (increase of $225,000) and the Royal Commission of Inquiry on the Pike River Coal Mine Tragedy (increase of $50,000).

Support for Volunteering

The increase in the budget between the Main Estimates and the Supplementary Estimates of $100,000 was due to a transfer of funding from the non-departmental appropriation, Community Internship Programme, to reflect a reprioritisation of funding to align with government priorities.

Te Oneroa a Tōhē Beach Management

The increase in the budget between the Main Estimates and the Supplementary Estimates of $100,000 was due to an expense transfer from 2011/12 to 2012/13 for the development of the Te Hiku Beach Management Plan.

Schedule of Non-Departmental Assets and Liabilities

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

The increase in the budget between the Main Estimates and the Supplementary Estimates reflects the closing balances as at 30 June 2012.

Variance between the Actual 2012/13 and the Supplementary Estimates

Actual expenditure was 2.6 per cent lower than the Supplementary Estimates. The overall under-expenditure of $3.175m is primarily attributable to the following factors as outlined in the Vote commentary below.

Non-Departmental Appropriations
Chatham Islands Council

Actual expenditure was lower than Supplementary Estimates by $0.987m mainly due to delays in the Chatham Islands Solid Waste Management programme, for which an in-principle expense transfer up to a maximum of $1.050m to 2013/14 was approved.

Community Development Scheme

Actual expenditure was lower than Supplementary Estimates by $0.857m mainly due to delays in the implementation of specific projects in the community-led initiatives, for which an in-principle expense transfer up to a maximum of $1m to 2013/14 was approved.

Community Internship Programme

Actual expenditure was lower than Supplementary Estimates by $0.084m mainly due to lower than anticipated demand for development grants.

Emergency Expenses

Actual expenditure was lower than Supplementary Estimates by $3.035m mainly due to lower than expected level of response claims. In-principle expense transfers to 2013/14 were approved for the Response and Recovery for flooding in the Nelson-Tasman Region for up to a maximum of $2.000m and the Governments’ contribution towards Environment Bay of Plenty for hazard mitigation works for up to a maximum of $0.627m.

February 2011 Christchurch Earthquake National Controller Costs

Actual expenditure was lower than Supplementary Estimates by $0.240m mainly due to lower than anticipated costs incurred at the discretion of the National Controller Civil Defence for response costs after 21 March 2011 as part of the response to the 22 February 2011 Christchurch earthquake. An in-principle expense transfer for up to a maximum of $0.265m was approved.

Former Prime Ministers – Annuities (PLA)

Actual expenditure was lower than Supplementary Estimates by $0.009m mainly due to lower than anticipated increase in annuity as advised by Remuneration Authority.

Former Prime Ministers – Domestic Travel

Actual expenditure was lower than Supplementary Estimates by $0.127m mainly due to lower than anticipated demand for travel.

Miscellaneous Grants – Internal Affairs

Actual expenditure was lower than Supplementary Estimates by $0.040m mainly due to lower than anticipated demand for grants.

Pike River Royal Commission of Inquiry – Legal representation and assistance

Actual expenditure was lower than Supplementary Estimates by $0.039m mainly due to lower than anticipated costs for legal representation.

Subsidies to Local Government

Actual expenditure was lower than Supplementary Estimates by $0.097m mainly due to lower than anticipated level of claims for emergency management preparation through Resilience Fund. An in-principle expense transfer for up to a maximum of $0.045m to 2013/14 was approved.

Te Oneroa a Tohe Beach Management

Actual expenditure was lower than Supplementary Estimates by $0.400m mainly due to delays in closure of settlement negotiations between the Crown and Te Hiku. An in-principle expense transfer for up to a maximum of $0.400m to 2013/14 was approved.

Schedule of Non-Departmental Revenue

Actual revenue was higher than Supplementary Estimates primarily reflecting the value of accessions of documents received by National Archives during 2012/13.

Schedule of Non-Departmental Assets and Liabilities

The actual cash balance as at 30 June 2013 was $8.847m lower than Supplementary Estimates, primarily due to the high level of grants paid during the year.

10. Payments to or in respect of benefits and privileges of former Governors General

The terms of the appointment of a person as Governor-General may include an agreement for that person and his or her spouse or partner to be provided with specified benefits or privileges by way of payments in respect of domestic travel and the use of chauffeured cars when he or she no longer holds office as Governor-General.

This statement sets out the details of any benefits or privileges paid to or in respect of any former Governor-General under an agreement made under Section 11(1) or Section 27(1)(d) of the Governor-General Act 2010.

2012/13 FBT
$
Airfares
$
Surface Travel
$
Total
$
Lady Norma Beattie 1,831 2,424 3,820 8,075
Lady Jane Blundell 273 273
Lady Beverley Reeves 1,327 2,395 4,834 8,556
Dame Catherine Tizard 1,741 2,692 9,707 14,140
The Rt Hon Sir Michael Hardie-Boyes 3,957 3,957
Dame Sylvia Cartwright 1,043 1,622 2,933 5,598
The Rt Hon Sir Anand Satyanand 12,193 16,253 2,522 30,968
Total 18,408 25,386 27,773 71,567

11. Emergency Expenditure for Canterbury Earthquakes

The Canterbury region was significantly affected by two major earthquakes and a number of aftershocks during the 2010/11 and 2011/12 financial years, resulting in significant damage to property and infrastructure. The two major earthquakes were a magnitude 7.1 on 4 September 2010 and a magnitude 6.3 on 22 February 2011. Significant aftershocks that caused further damage occurred on 26 December 2010 and on 13 June 2011.

These Non-Departmental financial statements include expenses incurred in relation to these earthquakes, under Non-Departmental Other Expenses in Vote Emergency Management.

Emergency Expenditure for Canterbury Earthquakes
Actual
2011
$000
Actual
2012
$000
Actual
2013
$000
Actual Since Feb 2011
$000
National Controller Direct Response Expenses
February 2011 Christchurch Earthquake National Controller Costs 3,324 362 41 3,727
Section 25 Public Finance Act 19,281 19,281
Total National Controller Direct Response Expenses 22,605 362 41 23,008
Canterbury Local Authorities’ Response and Recovery Expenses
Expenses recognised in respect of Indemnity for Response and Recovery Costs – Section 65ZG Public Finance Act 108,457 80,539 188,996
Emergency Expenses 15,849 46 9,840 25,735
Section 25 Public Finance Act 8,696 8,696
Total Canterbury Local Authorities’ Response and Recovery Expenses 133,002 80,585 9,840 223,427
Total Canterbury Earthquake Expenses 155,607 80,947 9,881 246,435

National Controller Direct Response Expenses

Following the 22 February earthquake, and declaration of a State of National Emergency, the National Controller incurred necessary expenses in response to the emergency during 2010/11. These included expenses for freighting in emergency supplies and teams, chemical toilets, emergency fences and specialist equipment. The bulk of this expenditure was approved when the Minister of Finance invoked Section 25 of the Public Finance Act 1989 (expenses may be incurred in emergencies) immediately following the February earthquake.

National Controller Direct Response Expenses incurred in 2012/13 totalling $0.041m (2011/12: $0.362m, 2010/11: $3.324m) have arisen as a result of claims against the Crown for actions incurred during the State of National Emergency.

Local Authorities’ Response and Recovery Expenses

Under current Government policy settings, outlined in the National Civil Defence Emergency Management Plan (‘the Plan’) and Guide to the National Civil Defence Emergency Management Plan[109] (‘the Guide’), the four affected Canterbury local authorities will be reimbursed, in whole or part, for certain types of response and recovery costs incurred as a result of the earthquakes. Under the Plan and the Guide, primary responsibility for managing these claims rests with the Department.

The Government provided an indemnity in favour of the four affected Canterbury authorities under 65ZD of the Public Finance Act 1989 for these costs. The indemnity formalises the implicit guarantee under the Guide.

In March 2012 the indemnity was extended to include CERA for recovery costs, along with transfer of the responsibility for assessment and management of these claims. The indemnity enables both the Department and CERA to recognise their respective obligations in respect of response and recovery costs without further appropriation.

The Department has therefore not recorded any liability for recovery costs at 30 June 2012.

Response Costs – Four Affected Canterbury Authorities

Under the Guide the standard financial support policy is for the Government to:

  • fully reimburse response costs associated with caring for displaced people; and
  • reimburse 60% of response costs associated with precautionary measures to reduce immediate danger and temporary repairs to essential infrastructure.

The Government subsequently decided to fully reimburse Christchurch City Council for costs associated with temporary repairs to essential infrastructure because of the earthquakes.

Response Costs – Other Councils Assisting

The Government has also agreed to reimburse costs totalling $0.035m for other councils that provided assistance to the four affected Canterbury authorities in the immediate aftermath of the September 2010 and February 2011 earthquakes. The other Councils assisting were reimbursed for travel, accommodation, food and minor incidental costs for staff and volunteers who provided on-the-ground support during the immediate post-quake response periods.

Recovery Costs

Recovery costs shown by the Department are those that were settled with the affected Councils prior to transfer of responsibility to CERA. Following transfer of responsibility for the recovery cost claims process to CERA, the Department no longer records any liability for recovery cost claims.

Summary of Claims Lodged, Paid and Accrued
Christchurch City Council
$000
Waimakariri District Council
$000
Environment Canterbury
$000
Selwyn District Council
$000
Other Councils Assisting
$000
Total
2010/11
Claims From Councils
Emergency expenses 11,712 3,774 182 181 15,849
Response costs claims lodged 107,652 714 1,584 2,267 112,217
Estimated response costs 4,936 4,936
Total Claims 119,364 4,488 6,702 2,448 133,002
Payments made to Councils
Emergency expenses (11,712) (3,774) (182) (181) (15,849)
Response costs (8,696) (8,696)
Total Payments (20,408) (3,774) (182) (181) (24,545)
Claims accrued at 30 June 2011 98,956 714 6,520 2,267 108,457
2011/12
Accrued Claims carried forward 98,956 714 6,520 2,267 108,457
Claims From Councils
Emergency expenses 11 35 46
Response costs claims lodged 81,156 588 81,744
Estimated response costs 22,236 22,236
Total Claims 103,392 588 11 35 104,026
Less claims declined or requiring special policy decisions (17,516) (3,703) (2,222) (23,441)
Payments made to Councils
Emergency expenses (11) (35) (46)
Payments made to Councils (94,471) (1,302) (2,817) (45) (98,635)
Total Payments (94,471) (1,302) (2,828) (45) (35) (98,681)
Claims accrued at 30 June 2012 90,361 90,361
2012/13
Accrued Claims carried forward 90,361 90,361
Claims From Councils
Emergency expenses 8,340 129 8,469
Total Claims 8,340 129 8,469
Less claims declined and accruals reversed (6,376) (6,376)
Payments made to Councils
Emergency expenses (92,325) (92,325)
Total Payments (92,325) (92,325)
Claims accrued at 30 June 2013 129 129

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Trust Money Administered on Behalf of the Crown

Schedule of Trust Money Administered on Behalf of the Crown for the year ended 30 June 2013

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

Description of Trusts

Vogel House Trust:

This trust was established to hold bonds for the hire of Vogel House and Premier House.

Christchurch Earthquake Appeal Fund:

This trust was established by Government as a result of the Canterbury Earthquake of 22 February 2011. It is a registered charity and administers donations and grants made to affected people in Canterbury.

New Zealand 1990 Scholarships:

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

Macklin Bequest Fund:

The Macklin Bequest Fund is used to fund special projects relating to the National Library and may include collaborative projects between the National Library and other institutions in the galleries, libraries, archives and museum sector or between the National Library and other libraries that supplement and further the work of other libraries in New Zealand.

Interloans Billing System Fund:

The Interloans Billing System Fund is administered by the National Library. The trust manages the on-charging of fees for national inter-lending of books between participating New Zealand libraries and fees for Trans-Tasman inter-lending between participating New Zealand and Australian libraries.

Schedule of Trust Money

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.

These figures are subject to audit.

Trust Open Balance
$000
Adjustment to Opening Balance*
$000
Contributions
$000
Distributions
$000
Revenue
$000
Expenses
$000
Closing Balance 2013
$000
Vogel House
Christchurch Earthquake Appeal Fund 38,500 8,652 5,913 (32,231) 2,082 22,916
New Zealand 1990 Scholarships 724 19 743
Macklin Bequest Fund 262 15 13 290
Interloans Billing System Fund 7 438 (387) 58
Total Trusts 39,493 8,652 5,928 (32,231) 2,552 (387) 24,007
*
The 2012 closing balance of the Christchurch Earthquake Appeal Fund shown in the 2011-12 Annual Report of the Department was unaudited. This figure has been adjusted by $8.652m to reflect the audited result.

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Footnotes

[109] The Guide is issued by the Director of Civil Defence Emergency Management (CDEM) under Section 9 of the Civil Defence Emergency Management Act 2002.

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