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Financial Statements of the Government of New Zealand for the Year Ended 30 June 2014

Independent Report of the Auditor-General

To the Readers of the Financial Statements of the Government of New Zealand for the Year Ended 30 June 2014

I have audited the financial statements of the Government of New Zealand (the Government) for the year ended 30 June 2014 using my staff, resources and appointed auditors and their staff.

The financial statements of the Government on pages 28 to 167 comprise:

  • the annual financial statements that include the statement of financial position as at 30 June 2014, the statement of financial performance, analysis of expenses by functional classification, statement of comprehensive income, statement of changes in net worth and statement of cash flows for the year ended on that date, a statement of segments and the notes to the financial statements that include accounting policies, a statement of borrowings in note 24, and other explanatory information; and
  • the statement of unappropriated expenditure, statement of expenses or capital expenditure incurred in emergencies and statement of trust money.

Opinion

In my opinion, the financial statements of the Government on pages 28 to 167:

  • comply with generally accepted accounting practice in New Zealand; and
  • fairly reflect the Government's:
    • financial position as at 30 June 2014;
    • financial performance and cash flows for the year ended on that date; and
    • borrowings as at 30 June 2014, and unappropriated expenditure, expenses or capital expenditure incurred in emergencies, and trust monies managed by the Government, for the year ended on that date.

    My audit was completed on 30 September 2014. This is the date at which my opinion is expressed.

    The basis of my opinion is explained below. In addition, I outline the responsibilities of the Treasury and the Minister of Finance, and my responsibilities, and I explain my independence.

    Basis of opinion

    Using my staff and appointed auditors and their staff, I have carried out the audit in accordance with the Auditor-General's Auditing Standards, which incorporate the International Standards on Auditing (New Zealand). Those standards require ethical requirements to be complied with. They also require me to plan and carry out the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

    Material misstatements are differences or omissions of amounts and disclosures that in my judgement are likely to influence readers' overall understanding of the financial statements. If material misstatements had been found that were not corrected, I would have referred to them in my opinion.

    An audit involves carrying out procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the judgements of my staff and appointed auditors and their staff. Also the procedures depend on my judgement, including my assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments I consider internal control relevant to the Treasury's preparation of the financial statements that fairly reflect the matters to which they relate. I consider internal control in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Treasury's internal control.

    An audit also involves evaluating:

    • the appropriateness of accounting policies used and whether they have been consistently applied;
    • the reasonableness of the significant accounting estimates and judgements made;
    • the adequacy of all disclosures in the financial statements; and
    • the overall presentation of the financial statements.

    My staff and appointed auditors and their staff did not examine every transaction. Therefore, I do not guarantee complete accuracy of the financial statements. Also, I did not evaluate the security and controls over electronic publication of the financial statements of the Government.

    I have obtained all the information and explanations I have required and I believe I have obtained sufficient and appropriate audit evidence to provide a basis for my audit opinion.

    Responsibilities of the Treasury and the Minister of Finance

    The Treasury is responsible for preparing financial statements for the Government that:

    • comply with generally accepted accounting practice in New Zealand;
    • fairly reflect the Government's financial position, financial performance and cash flows; and
    • fairly reflect the Government's borrowings, unappropriated expenditure, expenses or capital expenditure incurred in emergencies, and trust money.

    The Treasury is also responsible for such internal control as it determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The Treasury is also responsible for the publication of the financial statements of the Government, whether in printed or electronic form.

    The Minister of Finance is responsible for forming an opinion that the financial statements fairly reflect the financial position and financial performance of the Government.

    The responsibilities of the Treasury and the Minister of Finance arise from the Public Finance Act 1989.

    Responsibilities of the Auditor

    I am responsible for expressing an independent opinion on the financial statements and reporting that opinion to you based on my audit. My responsibility arises from section 15 of the Public Audit Act 2001 and section 30 of the Public Finance Act 1989.

    Independence

    While carrying out this audit, my appointed auditors and their staff followed my independence requirements, which incorporate the independence requirements of the External Reporting Board.

    As an Officer of Parliament, I am constitutionally and operationally independent of the Government and in exercising my functions and powers under the Public Audit Act 2001 as the auditor of public entities, I have no relationship with or interests in the Government.

    Lyn Provost
    Controller and Auditor-General
    Wellington, New Zealand

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