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Independent Auditor's Report

To the Readers of the Treasury's Financial Statements, Non-financial Performance Information and Schedules of Non-departmental Activities for the Year Ended 30 June 2011

The Auditor-General is the auditor of The Treasury (the Department). The Auditor-General has appointed me, Godfrey Boyce, using the staff and resources of KPMG, to carry out the audit of the financial statements, the non-financial performance information and the schedules of non-departmental activities of the Department on her behalf.

We have audited:

  • the financial statements of the Department on pages 68 to 85, that comprise the statement of financial position, statement of commitments, statement of contingent liabilities and contingent assets as at 30 June 2011, the statement of comprehensive income, statement of changes in taxpayers' funds, statement of departmental capital expenditure, statement of departmental expenses and capital expenditure against appropriations, statement of unappropriated expenditure and capital expenditure and statement of cash flows for the year ended on that date and the notes to the financial statements that include accounting policies and other explanatory information; and
  • the non-financial performance information of the Department that comprises the statement of service performance on pages 27 to 64 and the report about outcomes on pages 8 to 20; and
  • the schedules of non-departmental activities of the Department on pages 95 to 117 that comprise the schedule of assets, schedule of liabilities, schedule of commitments, schedule of contingent liabilities and schedule of trust monies as at 30 June 2011, the schedule of expenses, schedule of expenditure and appropriations, schedule of earthquake expenditure, statement of unappropriated and capital expenditure, schedule of revenue and schedule of capital receipts for the year ended on that date and the notes to the schedules that include accounting policies and other explanatory information

Opinion

In our opinion:

  • the financial statements of the Department on pages 68 to 85:
    • comply with generally accepted accounting practice in New Zealand; and
    • fairly reflect the Department's:
      • financial position as at 30 June 2011;
      • financial performance and cash flows for the year ended on that date;
      • expenses and capital expenditure incurred against each appropriation administered by the Department and each class of outputs included in each output expense appropriation for the year ended 30 June 2011; and
      • unappropriated expenses and capital expenditure for the year ended 30 June 2011; and
  • the non-financial performance information of the Department on pages 27 to 64 and 8 to 20:
    • complies with generally accepted accounting practice in New Zealand; and
    • fairly reflects the Department's service performance and outcomes for the year ended 30 June 2011, including for each class of outputs:
      • its service performance compared with the forecasts in the statement of forecast service performance at the start of the financial year; and
      • its actual revenue and output expenses compared with the forecasts in the statement of forecast service performance at the start of the financial year; and
  • the schedules of non-departmental activities of the Department on pages 95 to 117, fairly reflect:
    • the assets, liabilities, contingencies, commitments and trust monies as at 30 June 2011 managed by the Department on behalf of the Crown; and
    • the revenues, expenses, expenditure and capital expenditure against appropriations and unappropriated expenditure and capital expenditure for the year ended on that date managed by the Department on behalf of the Crown.

Our audit was completed on 30 September 2011. This is the date at which our opinion is expressed.

The basis of our opinion is explained below. In addition, we outline the responsibilities of the Secretary to the Treasury and our responsibilities, and we explain our independence.

Basis of opinion

We carried out our audit in accordance with the Auditor-General's Auditing Standards, which incorporate the International Standards on Auditing (New Zealand). Those standards require that we comply with ethical requirements and plan and carry out our audit to obtain reasonable assurance about whether the financial statements, the non-financial performance information and the schedules of non-departmental activities are free from material misstatement.

Material misstatements are differences or omissions of amounts and disclosures that would affect a reader's overall understanding of the financial statements, the non-financial performance information and the schedules of non-departmental activities. If we had found material misstatements that were not corrected, we would have referred to them in our opinion.

An audit involves carrying out procedures to obtain audit evidence about the amounts and disclosures in the financial statements, the non-financial performance information and the schedules of non-departmental activities. The procedures selected depend on our judgement, including our assessment of risks of material misstatement of the financial statements, the non-financial performance information and the schedules of non-departmental activities, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Department's preparation of the financial statements, the non-financial performance information and the schedules of non-departmental activities that fairly reflect the matters to which they relate. We 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 Department'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 by the Secretary to the Treasury;
  • the appropriateness of the reported non-financial performance information within the Department's framework for reporting performance;
  • the adequacy of all disclosures in the financial statements, the non-financial performance information and the schedules of non-departmental activities; and
  • the overall presentation of the financial statements, the non-financial performance information and the schedules of non-departmental activities.

We did not examine every transaction, nor do we guarantee complete accuracy of the financial statements, the non-financial performance information and the schedules of non-departmental activities. We have obtained all the information and explanations we have required and we believe we have obtained sufficient and appropriate audit evidence to provide a basis for our audit opinion.

Responsibilities of the Secretary to the Treasury

The Secretary to the Treasury is responsible for preparing:

  • financial statements and non-financial performance information that:
    • comply with generally accepted accounting practice in New Zealand;
    • fairly reflect the Department's financial position, financial performance, cash flows, expenses and capital expenditure incurred against each appropriation and its unappropriated expenses and capital expenditure; and
    • fairly reflect its service performance and outcomes; and
  • schedules of non-departmental activities, in accordance with the Treasury Instructions 2010 that fairly reflect those activities managed by the Department on behalf of the Crown.

The Secretary to the Treasury is also responsible for such internal control as is determined is necessary to enable the preparation of financial statements, and non-financial performance information and schedules of non-departmental activities that are free from material misstatement, whether due to fraud or error.

The Secretary to the Treasury's responsibilities arise from the Public Finance Act 1989.

Responsibilities of the Auditor

We are responsible for expressing an independent opinion on the financial statements, the non-financial performance information and the schedules of non-departmental activities and reporting that opinion to you based on our audit. Our responsibility arises from section 15 of the Public Audit Act 2001 and 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 New Zealand Institute of Chartered Accountants.

In addition to the audit we have carried out assignments in the areas of general accounting and advisory, which are compatible with those independence requirements. Other than the audit and these assignments, we have no relationship with or interests in the Department.

Godfrey Boyce
KPMG
On behalf of the Auditor-General
Wellington, New Zealand

Matters Relating to the Electronic Presentation of the Audited Financial Statements

This audit report relates to the financial statements of The Treasury for the year ended 30 June 2011 included on The Treasury’s website. The Secretary to the Treasury is responsible for the maintenance and integrity of The Treasury's website. We have not been engaged to report on the integrity of The Treasury's website. We accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

The audit report refers only to the financial statements named above. It does not provide an opinion on any other information which may have been hyperlinked to or from the financial statements. If readers of this report are concerned with the inherent risks arising from electronic data communication they should refer to the published hard copy of the audited financial statements and related audit report dated 30 September 2010 to confirm the information included in the audited financial statements presented on this website.

Legislation in New Zealand governing the preparation and dissemination of financial information may differ from legislation in other jurisdictions.

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