Justice Sector - Information Supporting the Estimates of Appropriations for the Government of New Zealand for the Year Ending 30 June 2010

Public Defence Service (M42)#

Scope of Appropriation#

Expenses#

Reasons for Change in Appropriation#

The change in appropriation recognises:

• the Government's decision to appropriate the funding for the Public Defence Service as a permanent function within the Legal Services Agency, to a separate output class in 2008/09, and
• the expansion of the service, beyond the initial two courts of Auckland and Manukau, to include all courts in the Auckland Region.

Output Performance Measures and Standards#

Current and Past Policy Initiatives#

Real Estate Agents Authority (M42)#

Scope of Appropriation#

Expenses#

Reasons for Change in Appropriation#

Timing of implementation, the Real Estate Agents Authority to be formally established from November 2009.

Output Performance Measures and Standards#

The Real Estate Agents Authority will implement new performance measures for the 2010/11 year, as part of its formal establishment from 17 November 2009.

Current and Past Policy Initiatives#

Support and Assistance provided by Victim Support to Victims of Crime (M42)#

Scope of Appropriation#

Expenses#

Output Performance Measures and Standards#

Note 1 - New measures for 2009/10.

Current and Past Policy Initiatives#

Summary of Service Providers for Non-Departmental Outputs#

The above table summarises funding to be allocated through Vote Justice to non-departmental providers, along with an indication of the mechanism to be used for reporting actual performance and (where determined) the length of the funding commitment.

Part 5 - Details and Expected Results for Other Expenses#

Part 5.2 - Non-Departmental Other Expenses#

Intended Impacts, Outcomes and Objectives

Administrative Assistance for Foreshore and Seabed Arrangements (M42)

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

Additional funding approved in 2009/10 as result of the Foreshore & Seabed Financial Implications of Ngati Porou and Te Whanau a Apanui Negotiations initiative.

Current and Past Policy Initiatives

Contribution to Foreshore and Seabed Negotiation Costs (M42)#

Scope of Appropriation#

Expenses#

Reasons for Change in Appropriation#

Funding was transferred from 2008/09 to 2009/10 to fund the additional costs associated with undertaking the review of the Foreshore and Seabed Act.

Impairment of Offender Levy (M42)#

Scope of Appropriation#

Expenses#

Reasons for Change in Appropriation#

New funding approved to cover the impairment expense of the Offender Levy. The impairment expense accounts for the difference between the levy money imposed and the levy money expected to be collected.

Current and Past Policy Initiatives#

Victims' Services (M42)#

Scope of Appropriation#

Expenses#

Reasons for Change in Appropriation#

New funding approved to cover the costs of providing new entitlements and services for victims of serious crime.

Current and Past Policy Initiatives#

Reporting Mechanisms#

The above table indicates the mechanisms to be used for reporting actual performance for each non-departmental other expenses appropriation.

Part 6 - Details and Expected Results for Capital Expenditure#

Part 6.1 - Departmental Capital Expenditure#

Intended Impacts, Outcomes and Objectives

Ministry of Justice - Capital Expenditure PLA (M42)

Scope of Appropriation

Capital Expenditure

Part 6.2 - Non-Departmental Capital Expenditure#

Intended Impacts, Outcomes and Objectives#

Human Rights Commission (M42)#

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

Majority of capital expenditure funding for the Infrastructure and Knowledge management initiative was approved in the 2008/09 financial year.

Current and Past Policy Initiatives

Independent Police Conduct Authority (M42)#

Scope of Appropriation#

Capital Expenditure#

Reasons for Change in Appropriation#

New funding for meeting the requirements of the Independent Police Conduct Authority.

Current and Past Policy Initiatives#

Legal Services Agency (M42)#

Scope of Appropriation#

Capital Expenditure#

Reasons for Change in Appropriation#

The majority of the capital expenditure approved for the development and implementation of the Legal Services Management System was funded in the 2008/09 year.

Expected Results#

Current and Past Policy Initiatives#

Public Defence Service Capital Expenditure (M42)#

Scope of Appropriation#

Capital Expenditure#

Reasons for Change in Appropriation#

Capital funding approved for expansion of the Public Defence Service and Duty Solicitor (Auckland Region).

Current and Past Policy Initiatives#

The Real Estate Agents Authority Capital Expenditure (M42)#

Scope of Appropriation#

Capital Expenditure#

Reasons for Change in Appropriation#

Capital transfer of $1.039 million from 2008/09 to 2009/10 due to the establishment of Real Estates Agents Authority to be formally established from November 2009.

Current and Past Policy Initiatives#

Reporting Mechanisms#

The above table indicates the mechanisms to be used for reporting actual results for each non-departmental capital expenditure appropriation.

Performance Information for Appropriations Vote Parliamentary Counsel#

MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Attorney-General (M5)

ADMINISTERING DEPARTMENT: Parliamentary Counsel Office

MINISTER RESPONSIBLE FOR PARLIAMENTARY COUNSEL OFFICE: Attorney-General

Part 1 - Summary of the Vote#

Part 1.1 - Overview of the Vote

The Attorney-General is responsible for appropriations in Vote Parliamentary Counsel for the 2009/10 financial year covering the following:

• a total of just over $9 million for drafting Government Bills (including amendments) and statutory regulations, and examining and reporting on local Bills and private Bills, and drafting amendments to them
• a total of nearly $12 million for supplying printed copies of Government Bills and Government Supplementary Order Papers (SOPs), pamphlet copies of Acts and Statutory Regulations, and annual volumes of Acts and Statutory Regulations, compiling reprints of Acts and Statutory Regulations with their amendments incorporated and publishing them, publishing the Tables of New Zealand Acts and Ordinances and Statutory Regulations in Force in printed form, and in electronic form on the Internet free of charge and providing them for sale at designated bookshops and by subscription, providing free public access via the Internet to an electronic database of legislation, including Bills and SOPs, and maintaining the electronic database of legislation in an up-to-date form
• a total of $979,000 for capital investment in the New Zealand Legislation system (the Parliamentary Council Office's (PCO) integrated drafting and publishing system for New Zealand legislation) - formerly the Public Access to Legislation (PAL) system.

Details of these appropriations are set out in Parts 2-6 below.

Part 1.2 - High-Level Objectives of the Vote#

Objectives of the Vote#

Vote Parliamentary Counsel contributes to parliamentary democracy under the rule of law by supporting Parliament and the executive in their law-making roles, and contributes to the Government's objectives by:

• drafting changes in the law that are necessary to implement Government policies, and
• making the law accessible to the public.

Part 1.3 - Trends in the Vote#

Summary of Financial Activity#

New Policy Initiatives#

Analysis of Significant Trends#

Significant changes in departmental appropriations in Vote Parliamentary Counsel are discussed briefly below.

In the 2007/08 year, additional departmental output expenditure funding of $3.374 million was provided for the implementation of the New Zealand Legislation system. Funding was also provided for ongoing support of the New Zealand Legislation system for the 2008/09 year and outyears.

Part 2 - Details and Expected Performance for Output Expenses#

Part 2.1 - Departmental Output Expenses#

Intended Impacts, Outcomes and Objectives

Access to Legislation (M5)

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

There have been minimal changes to this appropriation.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Law Drafting Services (M5)#

Scope of Appropriation#

Expenses and Revenue#

Reasons for Change in Appropriation#

There have been minimal changes to this appropriation.

Output Performance Measures and Standards#

Current and Past Policy Initiatives#

Part 6 - Details and Expected Results for Capital Expenditure#

Part 6.1 - Departmental Capital Expenditure#

Intended Impacts, Outcomes and Objectives

Parliamentary Counsel Office - Capital Expenditure PLA (M5)

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

This increase in appropriation is to invest in the New Zealand Legislation system (formerly known as the PAL asset) to ensure the system will continue to meet the ongoing requirements for legislative drafting and publication.

Expected Results

Performance Information for Appropriations Vote Police#

MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Minister of Police (M51)

ADMINISTERING DEPARTMENT: New Zealand Police

MINISTER RESPONSIBLE FOR NEW ZEALAND POLICE: Minister of Police

Part 1 - Summary of the Vote#

Part 1.1 - Overview of the Vote

The Minister of Police is responsible for appropriations in the Vote for the 2009/10 financial year covering the following:

• a total of $3.077 million for Policy Advice and Ministerial Servicing
• a total of $103.806 million for General Crime Prevention Services
• a total of $92.776 million for Specific Crime Prevention Services and Maintenance of Public Order
• a total of $416.395 million for Police Primary Response Management
• a total of $383.058 million for Investigations
• a total of $103.944 million on Case Resolution and Support to Judicial Process
• a total of $284.473 million for the Road Safety Programme
• a total of $4.100 million in non-departmental appropriations for reimbursing telecommunication providers the costs incurred in making their legacy networks compliant with the requirements of the Telecommunications (Interception Capability) Act 2004 and for contribution to the United Nations Drug Control Programme.

The Department expects to collect a total of $82.800 million of Crown revenue in 2009/10, largely arising from traffic infringement fees.

Details of these appropriations are set out in Parts 2-6 below.

Part 1.2 - High-Level Objectives of the Vote#

Part 1.3 - Trends in the Vote#

Summary of Financial Activity#

New Policy Initiatives#

Analysis of Significant Trends#

Operating Flows

The funding will increase further by $34.192 million by the year 2012/13 primarily for the additional Police staff by December 2011 and reducing the waiting time in Auckland criminal courts.

The increase in funding in 2009/10 is largely directed to:

• additional Police staff nationally including 300 to South Auckland
• reduce the waiting time in Auckland criminal courts
• implementation of taser.

Over the last five years the increase in funding for Vote Police has been largely directed to:

• increase in staff capacity of an extra 1,000 sworn and 250 non-sworn staff
• meet the wage round settlements in 2003, 2006 and 2008
• maintain the current level of Police service delivery affected by cost pressures
• meet additional capital charge resulting from property revaluation
• fund Communications Centres capability
• reduce organised crime
• deploy Police personnel to the Solomon Islands, to Timor-Leste on United Nations Integrated Mission and to Papua New Guinea: Bougainville Community Policing.

Capital Injection

The new initiatives will give a further capital contribution of $12.114 million in 2010/11 mainly for the additional police staff and to replace the radio network.

The increase in the capital contribution of $12.583 million in 2009/10 is largely directed to:

• additional Police staff nationally including 300 to South Auckland
• reduce the waiting time in Auckland criminal courts
• give fresh start to young offenders.

Over the last five years the major factors that have influenced the level of capital contributions were:

• developing infrastructure to match the increase in staff
• implementing rapid identification technology, providing stab resistant body armour and replacing general purpose rifles
• building a new custodial facility at Rotorua Police Station
• enhancing Police security infrastructure to a level necessary to maintain the confidentiality, integrity and availability of Police data
• upgrading and replacing Police breath testing equipment in line with the Government's policy of lower blood alcohol
• road policing devices: hand-held evidential breath testing devices, oral fluid drug testing devices, commercial vehicle investigating unit, portable scales, automatic number plate recognition and e-ticketing devices
• replacing the Police land mobile radio network with a digital radio network.

Part 2 - Details and Expected Performance for Output Expenses#

Part 2.1 - Departmental Output Expenses#

Intended Impacts, Outcomes and Objectives

Case Resolution and Support to Judicial Process (M51)

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

The change provides for:

• increasing staff
• meeting the 2008 wage round
• implementing taser
• reducing the waiting time in Auckland criminal courts
• savings through line by line review.

Output Performance Measures and Standards

Current and Past Policy Initiatives

General Crime Prevention Services (M51)#

Scope of Appropriation#

Expenses and Revenue#

Reasons for Change in Appropriation#

The change provides for:

• increasing staff
• meeting the 2008 wage round
• replacing the Police Land Mobile Radio Network
• implementing taser
• reducing the waiting time in Auckland criminal courts
• giving a fresh start to young offenders
• savings through line by line review.

Output Performance Measures and Standards#

Current and Past Policy Initiatives#

Investigations (M51)#

Scope of Appropriation#

Expenses and Revenue#

Reasons for Change in Appropriation#

The change provides for:

• increasing staff
• meeting the 2008 wage round
• replacing the Police land mobile network
• implementing taser
• reducing the waiting time in Auckland criminal courts
• savings through line by line review.

Output Performance Measures and Standards#

Current and Past Policy Initiatives#

Police Primary Response Management (M51)#

Scope of Appropriation#

Expenses and Revenue#

Reasons for Change in Appropriation#

The change provides for:

• increasing staff
• meeting the 2008 wage round
• replacing the Police land mobile Network
• implementing taser
• reducing the waiting time in Auckland criminal courts
• savings through line by line review.

Output Performance Measures and Standards#

Current and Past Policy Initiatives#

Policy Advice and Ministerial Servicing (M51)#

Scope of Appropriation#

Expenses and Revenue#

Reasons for Change in Appropriation#

The change provides for:

• increasing staff
• meeting the 2008 wage round
• reducing the waiting time in Auckland criminal courts.

Output Performance Measures and Standards#

Current and Past Policy Initiatives#

Road Safety Programme (M51)#

Scope of Appropriation#

Expenses and Revenue#

Reasons for Change in Appropriation#

The change provides for:

• increasing staff
• meeting the 2008 wage round
• replacing the Police land mobile network
• Budget 2007 road policing initiatives; Police Infringement Bureau (PIB) System upgrade; lower blood alcohol limit: driver drug blood testing; speed camera expansion; operating rating system; road policing intel analysts and community initiatives
• reducing the waiting time in Auckland criminal courts
• implementing taser
• savings through line by line review.

Output Performance Measures and Standards#

Current and Past Policy Initiatives#

Specific Crime Prevention Services and Maintenance of Public Order (M51)#

Scope of Appropriation#

Expenses and Revenue#

Reasons for Change in Appropriation#

The change provides for:

• increasing staff
• meeting the 2008 wage round
• reducing the waiting time in Auckland criminal courts
• extending deployment to the Solomon Islands
• savings through the line by line review.

Output Performance Measures and Standards#

Current and Past Policy Initiatives#

Part 5 - Details and Expected Results for Other Expenses#

Part 5.1 - Departmental Other Expenses#

Compensation for Confiscated Firearms (M51)

Scope of Appropriation

Expenses

Current and Past Policy Initiatives

Part 5.2 - Non-Departmental Other Expenses#

Telecommunications Interception Capability (M51)#

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

Crown's obligations to reimburse telecommunication providers for the cost of upgrading their networks to comply with the provisions of Telecommunications (Interception Capability) Act.

Expected Results

Current and Past Policy Initiatives

United Nations Drug Control Programme (M51)#

Scope of Appropriation#

Expenses#

Policy Initiatives#

Part 6 - Details and Expected Results for Capital Expenditure#

Part 6.1 - Departmental Capital Expenditure#

New Zealand Police - Capital Expenditure PLA (M51)

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

Forecast capital expenditure for 2009/10 is lower than 2008/09 as a number of significant property developments Gisborne Station, Whangarei and Manukau Hub - stage 2 have been completed.

Performance Information for Appropriations Vote Serious Fraud#

MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Minister of Police (M51)

ADMINISTERING DEPARTMENT: Serious Fraud Office

MINISTER RESPONSIBLE FOR SERIOUS FRAUD OFFICE: Minister of Police

Part 1 - Summary of the Vote#

Part 1.1 - Overview of the Vote

The Minister of Police is responsible for appropriations in Vote Serious Fraud for the 2009/10 financial year covering the following:

• a total of over $5 million for the detection, investigation and prosecution of cases of suspected serious or complex fraud offending brought to the attention of, or detected by, the Serious Fraud Office
• a total of nearly $2 million to implement and operate the non-conviction based forfeiture provisions of the Criminal Proceeds (Recovery) Act 2009
• a total of $520,000 on the purchase or development of assets by and for the use of the Serious Fraud Office.

Details of these appropriations are set out in Parts 2-6 below.

Part 1.2 - High-Level Objectives of the Vote#

Contribution of Appropriations to Government Priorities and Outcomes#

The appropriations in Vote Serious Fraud will contribute to the Government priorities to reduce the occurrence, impact, and harm of serious financial crime by:

• improving the possibility of serious financial crime being detected, investigated, and prosecuted
• continuing to deliver a world class conviction rate
• continuing to improve SFO responsiveness to victims
• continuing to develop close working relationships with the Police, Organised and Financial Crime Agency (OFCANZ), and other public service departments to identify and achieve shared goals, and proactively to share good practice
• pursuing a prevention programme based on education and deterrence
• proactively address staff recruitment and retention issues, and ensure staff have the right equipment.

Part 1.3 - Trends in the Vote#

Summary of Financial Activity#

Analysis of Significant Trends#

The departmental output expense baseline was increased from 2007/08 to fund the new output expense Civil Forfeiture of Criminal Assets and provide additional funding ($300,000 in 2007/08 increasing to $600,000 in outyears) to maintain capability under the Investigation and Prosecution of Complex or Serious Fraud output expense.

Expenditure against the Civil Forfeiture of Criminal Assets output expense has been minimal due to the delay in enactment of enabling legislation - the Criminal Proceeds (Recovery) Bill. Baseline operational funding of $1.890 million has been provided for the Civil Forfeiture of Criminal Assets output expense from 2009/10. Work is being undertaken with the Police and the Organised and Financial Crime Agency (OFCANZ) to develop a combined approach to the implementation of the Criminal Proceeds (Recovery) Act 2009.

A capital injection of $690,000 was provided in 2008/09 to enable the Serious Fraud Office to reconfigure office accommodation to better utilise space and provide capacity to accommodate additional resources, whether they be required for civil forfeiture, organised crime work, corruption or for other temporary or permanent reasons; and for an upgrade of Information Technology Systems.

Part 2 - Details and Expected Performance for Output Expenses#

Part 2.1 - Departmental Output Expenses#

Intended Impacts, Outcomes and Objectives

Civil Forfeiture of Criminal Assets (M51)

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

The implementation of this output class, for which operational funding was provided from 2007/08, was subject to the passage of the Criminal Proceeds (Recovery) Bill which was enacted in 2009.

Output Performance Measures and Standards

Investigation and Prosecution of Complex or Serious Fraud (M51)#

Scope of Appropriation#

Expenses and Revenue#

Reasons for Change in Appropriation#

Additional funding was provided in 2008/09, through a transfer from the Civil Forfeiture of Criminal Assets output expense appropriation, to maintain the capability of the Serious Fraud Office to deliver against this output expense.

Output Performance Measures and Standards#

Part 6 - Details and Expected Results for Capital Expenditure#

Part 6.1 - Departmental Capital Expenditure#

Intended Impacts, Outcomes and Objectives

Serious Fraud Office - Capital Expenditure PLA (M51)

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

A capital injection of $690,000 was provided in 2008/09 to enable the Serious Fraud Office to upgrade office accommodation and Information Technology Assets.

Expected Results

Statements of Forecast Service Performance#

The Statements of Forecast Service Performance of departments included in the Justice Sector comprise the service performance information for all departmental output expense appropriations that are proposed to be used by those departments. In this context, service performance information comprises the scope, expenses and revenue, and output performance measures and standards for each class of outputs within those departmental appropriations, as set out in Part 2.1 of the Performance Information for appropriations in each Vote.

The following table identifies the classes of outputs incorporated in the Statement of Forecast Service Performance for each department in the Justice Sector. In one instance, this includes reference to classes of outputs within appropriations presented in a Vote in another sector.

Forecast Financial Statements of Departments#

Statement of Common Accounting Policies#

These accounting policies have been applied in the forecast financial statements of all departments and Offices of Parliament except as outlined in the statement of entity-specific accounting policies for individual departments or Offices of Parliament.

These forecast financial statements are prepared in accordance with section 41(1)(a)-(f) of the Public Finance Act 1989. The purpose of the forecast financial statements is to facilitate Parliament's consideration of appropriations for, and planned performance of departments and offices of Parliament. Use of this information for other purposes may not be appropriate. It is not intended that these forecast financial statements be updated subsequent to publication.

Statement of Compliance

These forecast financial statements for the year ended 30 June 2009 comply with FRS-42 Prospective Financial Statements.

Specific Accounting Policies#

The accounting policies set out below have been applied consistently to all periods presented in these statements. These statements have been prepared on a going-concern basis. The measurement base applied is historical cost modified by the revaluation of certain assets and liabilities as identified in this statement of accounting policies.

The accrual basis of accounting has been used unless otherwise stated. These financial statements are presented in New Zealand dollars, which is the entity's functional currency. All financial information presented has been rounded to the nearest thousand.

Judgements and Estimations#

The preparation of forecast financial statements in conformity with FRS-42 requires judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates and these variations may be material.

Revenue#

Revenue is derived through the provision of outputs to the Crown and from services to third parties. Revenue is recognised in the forecast statement of financial performance when earned.

Leases#

Operating Leases

Where substantially all of the risks and rewards of ownership are retained by the lessor, leases are classified as operating leases.

Lease payments under operating leases are recognised as an expense on a straight-line basis over the lease term.

Finance Leases

Leases which effectively transfer to the department substantially all the risks and rewards incidental to ownership of the leased items are classified as finance leases. These are capitalised at the lower of the fair value of the asset or the present value of the minimum lease payments. The leased assets and the corresponding lease liabilities are recognised in the statement of financial position. The leased assets are depreciated over the period the department is expected to benefit from their use. The interest expense component of finance lease payments is recognised in the statement of financial performance.

Borrowing Costs#

Borrowing costs are recognised as an expense when incurred.

Property, Plant and Equipment#

Property, plant and equipment, other than land and buildings, is stated at cost less accumulated depreciation and impairment losses. Land and buildings are stated at fair value as determined by an independent registered valuer. Fair value is determined using market-based evidence. Land and buildings are revalued with sufficient regularity to ensure that carrying value is not materially different from fair value at the end of the reporting period. Additions between revaluations are recorded at cost. Any capitalisation thresholds applied are set out in the statement of entity-specific accounting policies.

Depreciation#

Depreciation is provided on a straight-line basis so as to allocate the cost [or valuation] of an item of property, plant and equipment, less any estimated residual value, over its estimated useful life.

The estimated useful lives are set out in the statement of entity-specific accounting policies.

Leasehold improvements are capitalised and the cost is amortised over the unexpired period of the lease or the estimated useful life of the improvements, whichever is shorter.

Items under construction are not depreciated. The total cost of a capital project is transferred to the appropriate asset class on its completion and then depreciated.

Intangible Assets#

Intangible assets with finite useful lives (such as computer software) are recorded at cost less accumulated amortisation and impairment losses.

Any capitalisation thresholds applied are set out in the statement of entity-specific accounting policies.

Amortisation is charged to the statement of financial performance on a straight-line basis over the estimated useful life of the asset.

The estimated useful lives are set out in the statement of entity-specific accounting policies.

Intangible assets with indefinite useful lives are not amortised, but are tested at least annually for impairment.

Where there is an active market for an intangible asset, the asset is recorded at a revalued amount, being fair value less any subsequent accumulated amortisation and accumulated impairment losses.

Cash and Cash Equivalents#

Cash includes cash on hand and funds on deposit with banks with a maturity of 3 months or less from date of acquisition.

Debtors and Other Receivables#

Debtors and other receivables are initially measured at fair value and subsequently measured at amortised cost using the effective interest rate, less impairment charges. Allowances for estimated irrecoverable amounts are recognised when there is objective evidence that the asset is impaired.

Inventories#

Inventories held for sale or use in the production of goods and services on a commercial basis are recorded at the lower of cost and net realisable value. The cost of purchased inventory is determined using the weighted average cost method.

Inventories held for distribution for public benefit purposes are recorded at cost (calculated using the weighted average cost method) adjusted when applicable for any loss of service potential. Where inventories are acquired at no cost, or for nominal consideration, the cost is the current replacement cost at the date of acquisition.

Employee Entitlements#

Pension Liabilities

Obligations for contributions to defined contribution retirement plans are recognised in the statement of financial performance as they fall due.

Other Employee Entitlements

Employee entitlements to salaries and wages, annual leave, sick leave, long service leave, retiring leave and other similar benefits are recognised in the statement of financial performance when they accrue to employees. Employee entitlements to be settled within 12 months are reported at the amount expected to be paid. Long-term employee entitlements are reported at the present value of the estimated future cash outflows.

Termination Benefits

Termination benefits are recognised in the statement of financial performance only when there is a demonstrable commitment to either terminate employment prior to normal retirement date or to provide such benefits as a result of an offer to encourage voluntary redundancy. Termination benefits to be settled within 12 months are reported at the amount expected to be paid. Other termination benefits are reported at the present value of the estimated future cash outflows.

Onerous Contracts#

Where the benefits to be derived from a contract are lower than the unavoidable costs of meeting the obligation under the contract, a provision is recognised. The provision is stated at the present value of the future net cash outflows expected to be incurred in respect of the contract.

Foreign Currency#

Foreign currency transactions are reported at the New Zealand dollar exchange rate at the date of the transaction.

Statement of Cash Flows#

The following are definitions of the terms used in the statement of cash flows:

• cash and cash equivalents include cash on hand, cash in transit, bank accounts and deposits with a maturity of no more than three months from date of acquisition
• investing activities are those activities relating to the acquisition and disposal of non-current assets
• financing activities comprise capital injections by, or repayment of capital to, the Crown, and
• operating activities include all transactions and other events that are not investing or financing activities.

Taxation#

Departments and Offices of Parliament are exempt from income tax as public authorities. Accordingly no charge for income tax has been provided for.

Goods and Services Tax#

These forecast financial statements are GST exclusive, except for receivables and payables in the statement of financial position, which are stated on a GST inclusive basis. Where GST is not recoverable as input tax, then it is recognised as part of the related asset or expense.

The net amount of GST owing to or from the Inland Revenue Department at balance date is included as part of receivables or payables (as appropriate) in the statement of financial position.

Commitments#

Future expenses and liabilities to be incurred on contracts that have been entered into at balance date are disclosed as commitments to the extent that there are equally unperformed obligations.

Contingent Liabilities and Contingent Assets#

Contingent liabilities are disclosed if the possibility that they will crystallise is not remote. Contingent assets are disclosed if it is probable that the benefits will be realised.

Changes in Accounting Policies#

Any changes in accounting policies since the date of the last audited financial statements prepared under New Zealand generally accepted accounting practice are described in the statement of entity-specific accounting policies. The last audited financial statements (30 June 2008) were prepared in accordance with NZ IFRS (New Zealand Equivalents to International Financial Reporting Standards) as appropriate for public benefit entities.

Forecast Financial Statements Department of Corrections #

Statement of Forecast Comprehensive Income for the year ending 30 June 2010#

Statement of Forecast Changes in Taxpayers' Funds for the year ending 30 June 2010#

Forecast Statement of Financial Position as at 30 June 2010#

Statement of Forecast Cash Flows for the year ending 30 June 2010#

Statement of Significant Assumptions#

These statements have been compiled on the basis of government policies and the Department of Corrections' output agreements with the Minister of Corrections at the time the statements were finalised.

The 2008/09 budgeted figures are based on management's judgements, estimates and assumptions of the final 2008/09 outcome and is used as the opening position for 2009/10 forecasts. Estimated year end information for 2008/09 is used as the opening position for the 2009/10 forecasts.

The capital charge rate for the year ending 30 June 2010 is assumed to be 7.5% per annum.

Statement of Entity-Specific Accounting Policies#

The Department of Corrections has applied the accounting policies set out in Statement of Accounting Policies Standard included in this document, except as stated below.

Reporting entity

These are the prospective financial statements of Department of Corrections, prepared in accordance with section 38 of the Public Finance Act 1989.

The Department of Corrections is a Government Department as defined by section 2 of the Public Finance Act 1989. For the purposes of financial reporting the Department of Corrections is a public benefit entity.

Specific Accounting Policies

Property, plant and equipment

The capitalisation thresholds applied are set out below:

Depreciation

The estimated useful lives of property, plant and equipment are set out below:

Intangible assets

The capitalisation thresholds applied are set out below:

The estimated useful lives of intangible assets are set out below:

Cost Allocation

Direct costs are charged to outputs based on actual consumption or activity analysis. Pre established ratios have been used in some instances.

Indirect costs are allocated to outputs based on appropriate resource consumption and/or activity analysis.

Non-current assets held for sale

Non-current assets held for sale are classified as held for sale if their carrying amount will be recovered principally through a sale transaction, not through continuing use. Non-current assets held for sale are measured at the lower of their carrying amount and fair value less costs to sell.

Any impairment losses for write-downs of non-current assets held for sale are recognised in the Statement of Financial Performance.

Any increases in fair value (less costs to sell) are recognised up to the level of any impairment losses that have been previously recognised.

Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue to be recognised.

Biological assets

The Department recognises biological assets or agriculture produce when, and only when:

• the Department controls the assets as a result of past events
• it is probable that future economic benefits associated with the asset will flow to the Department, and
• the fair value or costs of the asset can be measured reliably

Biological Assets managed for harvesting into agricultural produce are recorded at fair value less point of sale costs, with any realised gains or losses reported in the Statement of Financial Performance.

The Department's valuations incorporate any material point of sale costs in the valuation.

The Department's biological assets are forests and livestock.

Forests

Forestry assets are independently revalued annually at fair value less estimated point of sale costs. Fair value is determined based on the present value of expected net cash flows discounted at a current market determined pre-tax rate.

Gains or losses arising on initial recognition of biological assets at fair value less estimated point of sale costs and from a change in fair value less estimated point of sale costs are recognised in the Statement of Financial Performance.

The costs to maintain the forestry assets are included in the Statement of Financial Performance.

Livestock

Livestock assets are recorded at fair value less point of sale costs.

Gains and losses due to changes in the per head value of the livestock at balance date are taken to the Statement of Financial Performance.

Gains and losses due to changes in livestock numbers are taken directly to the Statement of Financial Performance.

Any material differences in fair value are taken to Statement of Financial Performance.

Notes to the Financial Statements#

Note 1 - Operating Expenses

Note 2 - Reconciliation of Net Cash Flows from Operating Activities#