Annual Report 2003/2004

1 Overview

2 Statement of Service Performance for the Year Ended 30 June 2004

3 Financial Statements for the Ministry for the Environment

4 Financial Statements and Schedules: Non-Departmental

5 Triple Bottom Line Progress

6 Management of the Ministry

7 Contact Information

4 Financial Statements and Schedules: Non-Departmental

The following non-departmental statements and schedules record the expenses, revenue and receipts, assets and liabilities that the Ministry manages on behalf of the Crown. The Ministry for the Environment administered $55.7 million of non-departmental payments, $21 million of non-departmental revenue and receipts, $19.9 million of assets, and $6.0 million of liabilities on behalf of the Crown for the year ended 30 June 2004.

These non-departmental balances are consolidated into the Crown Financial Statements and therefore readers of these statements and schedules should also refer to the Crown Financial Statements for 2003/04.

Statement of Accounting Policies

Measurement and recognition rules applied in the preparation of these non-departmental financial statements and schedules are consistent with generally accepted accounting practice and Crown accounting policies.

Land holdings

With the disestablishment of the Ministry of Works and Development in 1988, the Ministry for the Environment inherited a large number of land holdings consisting of:

• reserves that have been taken for flood protection purposes
• soil conservation reserves.

These land holdings have been included in the Crown Asset Schedule as at 30 June 2004, however no recognition was made as at 30 June 2003.

Crown Revenue and Receipts as at 30 June 2004

View Crown Revenue and Receipts as at 30 June 2004 (large table)

Schedule of Expenses as at 30 June 2004

The schedule of expenses summarises non-departmental expenses the Ministry administers on behalf of the Crown. Further details are provided in the Statement of Non-Departmental Expenditure and Appropriations on page 41.

View Schedule of Expenses as at 30 June 2004 (large table)

Schedule of Assets as at 30 June 2004

The schedule of assets summarises the assets that the Ministry administers on behalf of the Crown.

 

Actual 30/06/2003 $000		Actual 30/06/2004 $000	Main estimates 30/06/2004 $000	Supplementary estimates 30/06/2004 $000
	Current assets
4,493	Cash	4,883	1,246	1,566
1,487	Accounts receivable	1,503	2,149	3,514
83	Pre-payments	0	0	0
	Non-current assets
4,166	Term receivables and advances	6,714	4,795	23,921
0	Crown Land	6,813	0	0
10,229	Total non-departmental assets	19,913	8,190	29,001

Schedule of Liabilities as at 30 June 2004

The schedule of liabilities summarises the liabilities the Ministry administers on behalf of the Crown.

Actual 30/06/2003 $000		Actual 30/06/2004 $000	Main estimates 30/06/2004 $000	Supplementary estimates 30/06/2004 $000
	Current liabilities
6,984	Creditors and payables	6,002	4,000	4,000
27	GST	4	0	0
7,011	Total non-departmental liabilities	6,006	4,000	4,000

Statement of Commitments as at 30 June 2004

At 30 June 2004 there were no operating or capital commitments in relation to the activities undertaken by the Ministry on behalf of the Crown (2003: NIL).

Statement of Contingencies as at 30 June 2004

At 30 June 2004 there were no known contingent liabilities or assets. No indemnities or guarantees were given under section 59 of the Public Finance Act 1989 in relation to the activities undertaken by the Ministry on behalf of the Crown (2003: NIL).

The Ministry for the Environment is owner of a contaminated site at Otaki, Kapiti District. At this stage, this cannot be valued until further investigation of the site takes place.

Statement of Responsibility

In terms of sections 35 and 37 of the Public Finance Act 1989, I am responsible, as Chief Executive of the Ministry for the Environment, for the preparation of the Ministry's financial statements and the judgements made in the process of producing those statements.

I have the responsibility of establishing and maintaining, and I have established and maintained, a system of internal control procedures that provide reasonable assurance as to the integrity and reliability of financial reporting.

In my opinion, these financial statements fairly reflect the financial position and operations of the Ministry for the year ended 30 June 2004.

Barry Carbon
Chief Executive
31 August 2004

 

Countersigned by:

Fiona C M Morgan
Finance and Corporate Business Manager
31 August 2004

Audit Report

To the readers of the Ministry for the Environment's financial statements for the year ended 30 June 2004

The Auditor-General is the auditor of the Ministry for the Environment (the Ministry). The Auditor-General has appointed me, Ajay Sharma, using the staff and resources of Audit New Zealand, to carry out the audit of the financial statements of the Ministry, on his behalf, for the year ended 30 June 2004.

Qualified opinion - comparative information only

In the 2003 financial statements, the Ministry had not recognised certain land holdings in its non-departmental schedule of assets. This was a departure from Financial Reporting Standard No.3, Property, Plant and Equipment (FRS-3), which requires that items that meet the asset recognition criteria must be recognised. In 2004, these assets have been recognised in accordance with FRS-3 at an amount of $6,813,000 in the non-departmental schedule of assets.

In all other respects, the 2004 financial statements of the Ministry comply with generally accepted accounting practice in New Zealand.

In our opinion, except for the matter referred above of which related to the 2003 comparative information, the financial statements comprising the Statement of Service Performance, Performance Indicators, Statement of Financial Performance, Statement of Financial Position, Statement of Movements in Taxpayers' Funds, Statement of Cash Flows, Reconciliation of Net Operating Surplus to Net Cash Flow From Operating Activities, Statement of Commitments, Statement of Contingencies, Statement of Unappropriated Expenditure, Statement of Departmental Expenditure and Appropriations, Statement of Non-Departmental Expenditure and Appropriations, Statement of Accounting Policies, Notes 1 to 15 to the Financial Statements, and the Non-Departmental Statement of Accounting Policies, Crown Revenue and Receipts, Crown Schedule of Expenses, Assets, Liabilities, Commitments, and Contingencies:

• comply with generally accepted accounting practice in New Zealand; and
• fairly reflect:
  • the Ministry's financial position as at 30 June 2004;
  • the results of its operations and cash flows for the year ended on that date;
  • its service performance achievements measured against the performance targets adopted for the year ended on that date; and
  • the assets, liabilities, revenues, expenses, contingencies and commitments managed by the Ministry on behalf of the Crown for the year ended 30 June 2004.

The audit was completed on 30 September 2004, and this is the date at which our opinion is expressed.

The basis of the opinion is explained below. In addition, we outline the responsibilities of the Chief Executive and the Auditor, and explain our independence.

Basis of opinion

We carried out the audit in accordance with the Auditor-General's Auditing Standards, which incorporate the New Zealand Auditing Standards.

We planned and performed our audit to obtain all the information and explanations we considered necessary in order to obtain reasonable assurance that the financial statements did not have material misstatements, whether caused by fraud or error.

Material misstatements are differences or omissions of amounts and disclosures that would affect a reader's overall understanding of the financial statements. We found a material misstatement relating to the 2003 comparative information, as we referred to in our opinion.

Our audit involved performing procedures to test the information presented in the financial statements. We assessed the results of those procedures in forming our opinion.

Audit procedures generally include:

• determining whether significant financial and management controls are working and can be relied on to produce complete and accurate data;
• verifying samples of transactions and account balances;
• performing analyses to identify anomalies in the reported data;
• reviewing significant estimates and judgements made by the Chief Executive;
• confirming year-end balances;
• determining whether accounting policies are appropriate and consistently applied; and
• determining whether all financial statement disclosures are adequate.

We did not examine every transaction, nor do we guarantee complete accuracy of the financial statements.

We evaluated the overall adequacy of the presentation of information in the financial statements. We obtained all the information and explanations we required to support the opinion above.

Responsibilities of the Chief Executive and the Auditor

The Chief Executive is responsible for preparing financial statements in accordance with generally accepted accounting practice in New Zealand. Those financial statements must fairly reflect the financial position of the Ministry as at 30 June 2004. They must also fairly reflect the results of its operations and cash flows and service performance achievements for the year ended on that date. In addition, they must fairly reflect the assets, liabilities, revenues, expenses, contingencies, and commitments managed by the Ministry on behalf of the Crown for the year ended 30 June 2004. The Chief Executive's responsibilities arise from the Public Finance Act 1989.

We are responsible for expressing an independent opinion on the financial statements and reporting that opinion to you. This responsibility arises from section 15 of the Public Audit Act 2001 and section 38(1) of the Public Finance Act 1989.

Independence

When carrying out the audit we followed the independence requirements of the Auditor General, which incorporate the independence requirements of the Institute of Chartered Accountants of New Zealand.

In addition to the audit we have carried out an assurance related assignment for the Ministry by reviewing the Bioethics Council's planning, forecasting and contract management business processes. This assignment was compatible with those independence requirements. Other than the audit and this assignment, we have no relationship with or interests in the Ministry.

Ajay Sharma
Audit New Zealand
On behalf of the Auditor-General
Wellington, New Zealand