Financial Statements and Service Performance

Financial Statements and Service Performance

Statement of Responsibility

I am responsible, as Chief Executive of the Education Review Office (ERO), for:

  • the preparation of ERO’s financial statements, and statements of expenses and capital expenditure, and for the judgements expressed in them;
  • having in place a system of internal control designed to provide reasonable assurance as to the integrity and reliability of financial reporting;
  • ensuring that end-of-year performance information on each appropriation administered by ERO is provided in accordance with section 19A to 19C of the Public Finance Act 1989 included in this annual report; and
  • the accuracy of any end-of-year performance information prepared by ERO included in this annual report.

In my opinion:

  • the financial statements fairly reflect the financial position of ERO as at 30 June 2017 and its operations for the year ended on that date; and
  • the forecast financial statements fairly reflect the forecast financial position of ERO as at 30 June 2018 and its operations for the year ending on that date.

 

Nicholas Pole

Chief Executive

29 September 2017

 

Independent Auditor’s Report

To the readers of Education Review Office’s annual report for the year ended 30 June 2017

The Auditor‑General is the auditor of Education Review Office (the Department). The Auditor‑General has appointed me, Mari-Anne Williamson, using the staff and resources of Audit New Zealand, to carry out, on his behalf, the audit of:

  • the financial statements of the Department on pages 40 to 57, that comprise the statement of financial position, statement of commitments, statement of contingent liabilities and contingent assets as at 30 June 2017, the statement of comprehensive revenue and expense, statement of changes in equity, 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;
  • the performance information prepared by the Department for the year ended 30 June 2017 that comprises the report on strategic outcomes on pages 18 to 27 and the statements of service performance on pages 33 to 39; and
  • the statements of expenses and capital expenditure of the Department for the year ended 30 June 2017 on page 58.

Opinion

In our opinion:

  • the financial statements of the Department on pages 40 to 57:

¡      present fairly, in all material respects:

      • its financial position as at 30 June 2017; and
      • its financial performance and cash flows for the year ended on that date; and

¡      comply with generally accepted accounting practice in New Zealand in accordance with the Public Benefit Entity Standards Reduced Disclosure Regime.

  • the performance information of the Department on pages 18  to 27 and 33 to 39:

¡      presents fairly, in all material respects, for the year ended 30 June 2017:

      • what has been achieved with the appropriation; and
      • the actual expenses or capital expenditure incurred compared with the appropriated or forecast expenses or capital expenditure; and

¡      complies with generally accepted accounting practice in New Zealand.

  • the statements of expenses and capital expenditure of the Department on page 58 are presented fairly, in all material respects, in accordance with the requirements of section 45A of the Public Finance Act 1989.

Our audit was completed on 29 September 2017. This is the date at which our opinion is expressed.

The basis for our opinion is explained below. In addition, we outline the responsibilities of the Chief Executive and our responsibilities relating to the information to be audited, we comment on other information, and we explain our independence.

Basis for our opinion

We carried out our audit in accordance with the Auditor‑General’s Auditing Standards, which incorporate the Professional and Ethical Standards and the International Standards on Auditing (New Zealand) issued by the New Zealand Auditing and Assurance Standards Board. Our responsibilities under those standards are further described in the Responsibilities of the auditor section of our report.

We have fulfilled our responsibilities in accordance with the Auditor‑General’s Auditing Standards.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of the Chief Executive for the information to be audited

The Chief Executive is responsible on behalf of the Department for preparing:

  • financial statements that present fairly the Department’s financial position, financial performance, and its cash flows, and that comply with generally accepted accounting practice in New Zealand;
  • performance information that presents fairly what has been achieved with each appropriation, the expenditure incurred as compared with expenditure expected to be incurred, and that complies with generally accepted accounting practice in New Zealand; and
  • statements of expenses and capital expenditure of the Department, that are presented fairly, in accordance with the requirements of the Public Finance Act 1989.

The Chief Executive is responsible for such internal control as is determined is necessary to enable the preparation of the information to be audited that is free from material misstatement, whether due to fraud or error.

In preparing the information to be audited, the Chief Executive is responsible on behalf of the Department for assessing the Department’s ability to continue as a going concern. The Chief Executive is also responsible for disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless there is an intention to merge or to terminate the activities of the Department, or there is no realistic alternative but to do so.

The Chief Executive’s responsibilities arise from the Public Finance Act 1989.

Responsibilities of the auditor for the information to be audited

Our objectives are to obtain reasonable assurance about whether the information we audited, as a whole, is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit carried out in accordance with the Auditor‑General’s Auditing Standards will always detect a material misstatement when it exists. Misstatements are differences or omissions of amounts or disclosures, and can arise from fraud or error. Misstatements are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of readers, taken on the basis of the information we audited.

For the budget information reported in the information we audited, our procedures were limited to checking that the information agreed to the Department’s Strategic Intentions 2016-2020 and the Estimates and Supplementary Estimates of Appropriations 2016/17 for Vote Education Review Office, and the 2016/17 forecast financial figures included in the Department’s 2015/16 Annual Report.

We did not evaluate the security and controls over the electronic publication of the information we audited.

As part of an audit in accordance with the Auditor‑General’s Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. Also:

  • We identify and assess the risks of material misstatement of the information we audited, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
  • We obtain an understanding of internal control relevant to the audit 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;
  • We evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Chief Executive;
  • We evaluate the appropriateness of the reported performance information within the Department’s framework for reporting its performance;
  • We conclude on the appropriateness of the use of the going concern basis of accounting by the Chief Executive and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Department’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the information we audited or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Department to cease to continue as a going concern; and
  • We evaluate the overall presentation, structure and content of the information we audited, including the disclosures, and whether the information we audited represents the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the Chief Executive regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Our responsibilities arise from the Public Audit Act 2001.

Other information

The Chief Executive is responsible for the other information. The other information comprises the information included on pages 3 to 17 and 28, but does not include the information we audited, and our auditor’s report thereon.

Our opinion on the information we audited does not cover the other information and we do not express any form of audit opinion or assurance conclusion thereon.

In connection with the information to be audited, our responsibility is to read the other information. In doing so, we consider whether the other information is materially inconsistent with the information we audited or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on our work, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Independence

We are independent of the Department in accordance with the independence requirements of the Auditor‑General’s Auditing Standards, which incorporate the independence requirements of Professional and Ethical Standard 1 (Revised): Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance Standards Board.

Other than in our capacity as auditor, we have no relationship with, or interests, in the Department.

Mari-Anne Williamson

Audit New Zealand

On behalf of the Auditor‑General

Wellington, New Zealand

 

Service Performance for the year ended 30 June 2017

The following service performance information outlines, for each output class, the actual performance measured against quality, quantity, timeliness specifications and cost. The results for the year ended 30 June 2017 are reported against the forecast information contained in the Estimates of Appropriation 2016/17 and of those as amended by the Supplementary Estimates. Explanations of major variations from the Estimates of Appropriation 2016/17 are included.

Output class: Accountability Reviews (Multi-Category Expenses) – Early Childhood Education Services

This class of outputs involves reporting on the performance of early childhood education services. These reviews include education reviews of early childhood education services. Education reviews in the early childhood education sector focus on:

  • how services are contributing to children’s learning and development
  • whether or not services are providing a safe environment that promotes children’s safety and wellbeing
  • national evaluation topics.

Review reports inform the Crown, the governing bodies of services, their staff and parents about the quality of education and management practices.

Quantity, quality and timeliness

ERO estimated and provided the following numbers of Accountability Reviews – Early Childhood Education Services for the year ended 30 June 2017:

Actual
2015/16
Reviews of Early Childhood Education Services  Actual
2016/17
Estimated
2016/17
1,259 Number of Education Reviews – ECE Services 1,217 1,200-1,460


98%

Quality

ERO uses a moderation panel to assess levels of compliance with approved standard procedures for a sample of early childhood education service evaluations



96%


90-100%

 

   

Actual
Timeliness
2015/16
%
Reviews of Early Childhood Education Services - Timeliness of Unconfirmed Reports
Actual
Timeliness
2016/17
%
Forecast Timeliness Standard
2016/17
%


 


85

Education Reviews - ECE Services unconfirmed report sent within:

20 working days


 


74


 


80

96 25 working days 90 90
100 35 working days 98 98

Unconfirmed (near final) reports are sent to early childhood service providers for comment on any issues of fact or matters relating to findings. The timeliness criteria require 80 percent of near-final reports to be sent within 20 working days of the end of the last week on site, 90 percent of near final reports within 25 working days, and 98 percent of near-final reports within 35 working days.

ERO did not meet all the timeliness criteria for early learning services in one category. In some cases staff non-availability (for example, because of ill health) affected ERO’s ability to meet the timeliness criteria. In other cases, time was a lesser consideration relative to other aspects of quality. ERO’s work was also impacted by the November 2016 earthquake, which required us to permanently vacate one of our damaged premises.

Revenue and expenses

The cost of services for Accountability Reviews – Early Childhood Education Services for the year ended 30 June 2017 was:

Actual
2015/16
$000
Reviews of Early Childhood Education Services  - Revenue and Expenses Actual
2016/17
$000
Unaudited
Budget
2016/17
Main
Estimates
$000
Unaudited
Budget
2016/17
Supp.
Estimates
$000

 

9,477

14

Revenue

Revenue Crown

Other Revenue

 

9,307

19

 

9,388

15

 

9,307

17

9,491 Total Revenue 9,326 9,403 9,324
9,432 Total Expenses 9,157 9,403 9,354

There are no major variances against budget for this output class.

Performance against appropriation

ERO used the following performance measures for Accountability Reviews – Early Childhood Education Services for the year ended 30 June 2017.

Actual
2015/16
%
Education Reviews of Early Childhood Education Services (ECEs) - Performance Actual
2016/17
%
Forecast Standard
2016/17
%
New measure % of early childhood services providers that indicate ERO's evaluations are making a contribution to their decisions about how to improve learner outcomes. 83 80
96 % of early childhood services evaluated previously within the 2 year review cycle moving to the 3 year review cycle 89 60-65

Note 1: This measurement is dependent on the cycle of reviews in any given year.

Output class: Accountability Reviews (Multi-Category expenses) – Schools and Other Education Service Providers

This class of outputs involves reporting on the performance of schools and other education service providers (excluding early childhood). These reviews include:

  • education reviews of state schools – primary and secondary
  • homeschooling reviews
  • private school reviews.

Education reviews address the following areas:

  • student learning – engagement, progress and achievement as a central focus
  • compliance issues
  • national evaluation topics.

Homeschooling reviews are reviews of programmes for students granted exemption from attendance at school. They are carried out at the request of the Ministry.

Private school reviews are carried out in order to meet the statutory requirement to review registered private schools under section 35I and Part 28 of the Education Act 1989.

Review reports inform the Crown, the governing bodies of schools, their staff and parents about the quality of education and management practices.

Quantity, quality and timeliness

ERO estimated and provided the following numbers of Accountability Reviews – Schools and Other Education Service Providers for the year ended 30 June 2017:

Actual
2015/16
Education Reviews of Schools and other providers Actual
2016/17
Estimated
2016/17
678 Education Reviews of State Schools 700 650-840
4 Homeschooling Reviews2  9 Up to 35
20 Private School Reviews 24 Up to 25



93%

Quality

ERO uses a moderation panel to assess levels of compliance with approved standard procedures for a sample of schools and other education service providers evaluations



99%


90%-100%
84 Number of Communities of Learning reports 73 Up to 100


100%

Quality

Communities of Learning reports are consistent with approved presentational standards and agreed terms of reference



100%


100%

Note 2: Homeschooling reviews are carried out at the request of the Ministry. ERO met these demands and supplied the requested reviews to the Ministry.

Actual
Timeliness
2015/16
%
Education reviews of Schools and Other Providers - Timeliness of Unconfirmed Reports Actual
Timeliness
2016/17
%
Forecast Timeliness Standard
2016/17
%

 


75

Education Reviews of State Schools 
unconfirmed report sent within:

20 working days

 


56

 


80

88 25 working days 77 90
96 35 working days 92 98

 


100

Homeschooling Reviews 
unconfirmed report sent within:

20 working days

 


78

 


80

100 25 working days 78 90
100 35 working days 100 98

 


95

Private School Reviews 
unconfirmed report sent within:

20 working days

 


79

 


80

100 25 working days 96 90
100 35 working days 100 98

Unconfirmed (near final) reports are sent to schools for comment on any issues of fact or matters relating to findings. The timeliness criteria require 80 percent of near-final reports to be sent within 20 working days of the end of the last week on site, 90 percent of near-final reports within 25 working days, and 98 percent of near-final reports within 35 working days.

ERO did not meet the timeliness criteria for schools for all three categories. This is due to the introduction of the new approach to accelerating student achievement in primary schools in 2016 and intermediate schools and area schools from January 2017. ERO has carefully embedded this new approach with additional moderation. Also ERO’s work was also impacted by the November 2016 earthquake.

Revenue and expenses

The cost of services for Accountability Reviews – Schools and Other Education Service Providers for the year ended 30 June 2017 was:

Actual
2015/16
$000
Education Reviews of Schools and other providers - Revenue and Expenses Actual
2016/17
$000
Unaudited
Budget
2016/17
Main
Estimates
$000
Unaudited
Budget
2016/17
Supp.
Estimates
$000

 

14,845

31

Revenue

Revenue Crown

Other Revenue

 

14,847

36

 

14,818

34

 

14,848

37

14,876 Total Revenue 14,883 14,852 14,885
14,762 Total Expenses 14,720 14,852 14,931

There are no major variances against budget for this output class.

Performance against appropriation

ERO monitors the following measures for Accountability Reviews – Schools and other education service providers for the year ended 30 June 2017.

Actual
2015/16
%
Education Reviews of Schools and other providers - Performance Actual
2016/17
%
Forecast Standard
2016/17
%
New measure % of schools that indicate that ERO's evaluations are making a contribution to their decisions about how to improve learner outcomes 86 80
62% % of schools evaluated previously on the 1-2 year review cycle moving to the 3 year review cycle1 78 60-65
14% % of schools evaluated previously on the 3 year review cycle moving to the 4-5 year review cycle1 7 12-15

Note 1: This measurement is dependent on the cycle of reviews in any given year.

Output class: Quality of Education Reports and Services

This class of outputs comprises:

  • education evaluation reports
  • policy services
  • ministerial services
  • contractual services.

Every year, ERO reports on matters such as delivery of the curriculum, governance and management structures, student achievement, delivery of teaching services and barriers to learning across a number of institutions. These education evaluations may also include case studies of good practice.

Education evaluation reports tend to follow specific themes. A theme may arise out of the Government’s education initiatives or may surface as an issue of strategic importance identified by ERO in its reviews of schools and early childhood education services.

ERO is not primarily a provider of policy advice. From its regular presence in schools and early childhood services it is, however, in a position to make a useful contribution to assist the policy agencies. This service contributes to the Government’s policy priorities for schools and early childhood education service providers.

Ministerial services also include advice to the Minister on the implementation of recommendations arising from institutional evaluations and evaluation reports, or any other matter on which the Minister seeks additional information or feedback.

Contractual services include one-off reviews of institutions (or certain aspects of them), and analyses of particular matters under specific terms of reference agreed with ERO. Contractual reviews are conducted on a fee-for-service basis.

Policy services, ministerial and contractual services are subject to external demand factors making these activities difficult to forecast. No assessments of performance have been reported for these services as these activities only account for less than 10 percent of ERO's total appropriation and, therefore, are not deemed to be material. 

Quantity, quality and timeliness

ERO estimated and provided the following numbers of Quality of Education Reports and Services for the year ended 30 June 2017:

Actual
2015/16
National Evaluation Services  Actual
2016/17
Estimated
2016/17
14 Number of education evaluation reports 15 Up to 20



100%

Quality

Education evaluations are consistent with approved plans and procedures



100%



100%

New measure Key audiences report that ERO's evaluations are informative and useful for identifying or planning improvements within the system or its component parts3 90% 80%-100%
73 Level of public satisfaction (score out of 100)4 74 70

Note 3: This measure was based from a sample of ECEs having confirmed ERO reports between July 2016 and March 2017.

Note 4: This measure is from the Kiwis Count survey carried out by the SSC. It assesses the level of public satisfaction with ERO’s school and ECE evaluation reports. During this financial year, the SSC changed its survey reporting period from a financial year to a calendar year base. The reported number for 2015/16 actual has been restated for the survey period change.

Revenue and expenses

The cost of services for Quality of Education Reports and Services for the year ended 30 June 2017 was:

Actual
2015/16
$000
National Evaluation Reports -
Revenue and Expenses
Actual
2016/17
$000
Unaudited
Budget
2016/17
Main
Estimates
$000
Unaudited
Budget
2016/17
Supp.
Estimates
$000

 

2,792

1,433

Revenue

Revenue Crown

Other Revenue

 

2,902

752

 

2,907

551

 

2,902

1,374

4,225 Total Revenue 3,654 3,458 4,276
4,338 Total Expenses 4,000 3,458 4,285

Other revenue received for contractual services was $201,000 above budget due to higher levels of activity than anticipated. Total expenses were also above budget due mainly to an increase in expenditure associated with contractual services for which ERO received revenue. 

Capital expenditure (Permanent Legislative Authority)

Description

Assets are purchased according to a planned assets replacement programme to maintain and upgrade capability essential to the operation of ERO. The major areas of capital investment for ERO are office accommodation, motor vehicles and computer equipment. ERO is not a capital intensive department.

Actual
2015/16
Capital Expenditure - Performance Actual
2016/17
Unaudited
Budget
2016/17 Main
Estimates
Unaudited Budget
2016/17
Supp.
Estimates
71% Expenditure is in accordance with ERO's capital expenditure plan 28% 75% -100% 75% -100%

Capital expenditure was below budget mainly due to the timing of two building fit-outs carried forward into 2017/18.

Statement of Comprehensive Revenue and Expense

for the year ended 30 June 2017

 


Actual
2015/16
$000

Comprehensive Revenue and Expense

Actual
2016/17
$000
Unaudited
Budget
2016/17
$000
Unaudited
Forecast
2017/18
$000

 

27,114

1,485

Revenue

Revenue Crown

Other Revenue1

 

27,056

824

 

27,113

600

 

27,885

835

28,599 Total Revenue 27,880 27,713 28,720

 

27,114

 Expenses

Personnel2

 

27,056

 

27,113

 

27,885

6,834 Other Expenses3 6,515 5,895 5,962
717 Depreciation and Amortisation5 6 891 997 1,002
300 Capital Charge4 243 300 226
28,590 Total Expenses 27,846 27,713 28,720
9 Surplus 34 0 0
0 Other comprehensive revenue and expense 0 0 0
9 Total Comprehensive Revenue and Expense 34 0 0

Explanations of major variances against the original 2016/17 budget are provided in the Notes to the Financial Statements.

Note 1: This measurement is dependent on the cycle of reviews in any given year.
Note 2: Homeschooling reviews are carried out at the request of the Ministry. ERO met these demands and supplied the requested reviews to the Ministry.
Note 3: This measure was based from a sample of ECEs having confirmed ERO reports between July 2016 and March 2017.
Note 4: This measure is from the Kiwis Count survey carried out by the SSC. It assesses the level of public satisfaction with ERO’s school and ECE evaluation reports. During this financial year, the SSC changed its survey reporting period from a financial year to a calendar year base. The reported number for 2015/16 actual has been restated for the survey period change.

__________________________________________________________________________________________

Statement of Changes in Equity

for the year ended 30 June 2017


Actual
2015/16
$000

Statement of Changes in Equity

Actual
2016/17
$000
Unaudited
Budget
2016/17
$000
Unaudited
Forecast
2017/18
$000

3,746 

9

 


(9)

 Balance at 1 July

Total Comprehensive Revenue and Expense

Owner Transactions

Repayment of Surplus to the Crown

3,746 

34

        


(34)

3,746 

0

       


0

4,021

0

     


0

3,746 Balance at 30 June 3,746 3,746 4,021

Explanations of major variances against the original 2016/17 budget are provided in the Notes to the Financial Statements.

The Statement of Accounting Polices and the Notes to the Financial Statements form part of these Financial Statements.

Statement of Financial Position

as at 30 June 2017

Actual
30 June
2016
$000


Statement of Financial Position

Actual
30 June 2017
$000

Unaudited
Budget
2017
$000

Unaudited
Forecast
2018
$000

 

 

5,041

Assets

Current Assets

Cash

 

 

5,402

 

 

3,794

 

 

4,290

79

Receivables7

90

55

55

65

Prepayments

185

93

93

5,158

Total Current Assets

5,677

3,942

4,438

 

2,617

Non-Current Assets

Property, Plant and Equipment5

 

2,080

 

2,947

 

3,163

641

Intangibles6

737

1,172

840

3,258

Total Non-Current Assets

2,817

4,119

4,003

8,416

Total Assets

8,494

8,061

8,441

 

 

1,348

Liabilities

Current Liabilities

Payables and Deferred Revenue8

 

 

1,504

 

 

1,325

 

 

1,325

253

Provisions9

146

104

126

9

Repayment of Surplus to the Crown

34

0

0

1,821

Employee Entitlements10

1,837

1,790

1,855

3,431

Total Current Liabilities

3,521

3,219

3,306

 

528

Non-Current Liabilities

Provisions9

 

574

 

376

 

543

711

Employee Entitlements10

653

720

571

1,239

Total Non-Current Liabilities

1,227

1,096

1,114

4,670

Total Liabilities

4,748

4,315

4,420

 

3,746

Equity

Taxpayers’ Funds

 

3,746

 

3,746

 

4,021

3,746

Total Equity

3,746

3,746

4,021

8,416

Total Liabilities and Equity

8,494

8,061

8,441

Explanations of major variances against the original 2016/17 budget are provided in the Notes to the Financial Statements.

 The Statement of Accounting Polices and the Notes to the Financial Statements form part of these Financial Statements.

Statement of Cash Flows

for the year ended 30 June 2017

 


Actual
2015/16
$000


Statement of Cash Flows


Actual
2016/17
$000

Unaudited
Budget
2016/17
$000

Unaudited
Forecast
2017/18
$000

 

 


27,114

Cash Flows from Operating Activities

Cash provided from:

Crown

 

 


27,056

 

 


27,113

 

 


27,885

942

Other

957

600

835

 

(20,732)

Cash applied to:

Personnel

 

(20,317)

 

(20,522)

 

(20,940)

(6,862)

Suppliers

(6,521)

(5,891)

(6,031)

(300)

Capital Charge

(243)

(300)

(226)

(29)

Goods and Services Tax (net)

0

0

0

133

Net Cash Inflow from Operating Activities

932

1,000

523

 

 


15

Cash Flows from Investing Activities

Cash provided from:

Sale of Property, Plant and Equipment

 

 


0

 

 


0

 

 


67

 

(945)

Cash applied to:

Purchase of Property, Plant and Equipment

 

(241)

 

(577)

 

(480)

(125)

Purchase of Intangible Assets

(294)

(518)

(350)

(1,055)

Net Cash Outflow from Investing Activities

(535)

(1,095)

(763)

 

 


(58)

Cash Flows from Financing Activities

Cash applied to:

Repayment of Surplus to the Crown

 

 


(9)

 

 


(25)

 

 


(15)

(58)

Net Cash Outflow from Financing Activities

(9)

(25)

(15)

(980)

Net Increase/(Decrease) in Cash

388

(120)

(255)

5,994

Cash at Start of the Year

5,014

3,914

4,545

5,014

Cash at the End of the Year

5,402

3,794

4,290

Explanations of major variances against the original 2016/17 budget are provided in the Notes to the Financial Statements.

The Statement of Accounting Polices and the Notes to the Financial Statements form part of these Financial Statements.

Statement of Contingent Liabilities and Contingent Assets

as at 30 June 2017

ERO has no contingent liabilities and assets (30 June 2016: nil).

__________________________________________________________________________________________

Statement of Commitments

as at 30 June 2017

Actual
30 June
2016
$000


Statement of Commitments

Actual
30 June  2017
$000

 

0

Capital Commitments

Leasehold improvements

 

0

0

Total Capital Commitments

198

 

1,276

Non-Cancellable Operating Lease Commitments

Not later than one year

 

1,126

3,692

Later than one year and not later than five years

3,233

1,187

Later than five years

1,892

6,155

Total Non-Cancellable Operating Lease Commitments

6,251

6,155

Total Commitments

6,449

ERO has entered into a capital commitment to fit out its new Hamilton premises that has not been paid for nor recognised as a liability.

ERO leases all of its office premises in New Zealand, which have a non-cancellable leasing period of up to nine years. The non-cancellable leases have varying terms, an escalation clause and renewal rights. There are no restrictions placed on ERO by any of its leasing arrangements. The amounts disclosed above as future commitments are based on the current rental rates.

The Statement of Accounting Polices and the Notes to the Financial Statements form part of these Financial Statements.

Statement of Accounting Policies

for the year ended 30 June 2017

Reporting entity

ERO is a government department as defined by section 2 of the Public Finance Act 1989 (PFA) and is domiciled and operates in New Zealand. The primary objective of ERO is to provide goods or services for the community or social benefit rather than making a financial return. Accordingly, ERO has designated itself as a public benefit entity (PBE) for financial reporting purposes.

The financial statements of ERO are for the year ended 30 June 2017 and were approved for issue by the Chief Executive on 29 September 2017.

Basis of preparation

The financial statements have been prepared on a going concern basis, and the accounting policies have been applied consistently throughout the period.

Statement of compliance

The financial statements of ERO have been prepared in accordance with the requirements of the PFA, which include the requirement to comply with New Zealand generally accepted accounting practice (NZ GAAP) and Treasury Instructions.

The financial statements have been prepared in accordance with Tier 2 PBE accounting standards with reduced disclosure concessions. ERO meets the criteria of Tier 2 reporting as its expenditure in the last two financial years is below $30 million and is not publicly accountable.

These financial statements comply with PBE accounting standards.

Presentation currency and rounding

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

Summary of significant accounting policies

The following are the accounting policies, which may have a material effect on the measurement of the financial position of ERO and the results of its operations.

Revenue

Revenue from the Crown is measured based on ERO’s funding entitlement for the reporting period. The funding entitlement is established by Parliament when it passes the appropriation acts for the financial year. The amount of revenue recognised takes into account any amendments to appropriations approved in the Appropriation (Supplementary Estimates) Act for the year.

There are no conditions attached to the funding from the Crown. However, ERO can incur expenses only within the scope and limits of its appropriations. The fair value of Revenue Crown has been determined to be equivalent to the funding entitlement. 

ERO also derives revenue from the provision of services to third parties and rent recoveries. Services provided to third parties on commercial terms are exchange transactions. Revenue from these services is recognised at the time of completion of the service or in accordance with the terms of specific contracts and is reported in the financial period to which it relates. Rental revenue under an operating sublease is recognised as revenue on a straight-line basis over the lease term.

Capital charge

The capital charge is recognised as an expense in the financial year to which the charge relates.

Operating leases

An operating lease is a lease that does not transfer substantially all the risks and rewards incidental to ownership of an asset. Lease payments under an operating lease are recognised as an expense on a straight-line basis over the lease term.

Lease incentives received are recognised in the surplus or deficit as a reduction of rental expense over the lease term.

Cash

Cash includes cash on hand and funds on deposit with banks. ERO is only permitted to expend its cash and cash equivalents within the scope and limits of its appropriations.

Receivables

Short-term receivables are recorded at their face value, less any provision for impairment.

A receivable is considered impaired when there is evidence that ERO will not be able to collect the amount due. The amount of the impairment is the difference between the carrying amount of the receivable and the present value of the amounts expected to be collected.

Financial instruments

ERO is party to financial instruments entered into in the course of its normal operations. These include cash, receivables and payables. All financial instruments are measured at fair value and are recognised in the Statement of Financial Position. All associated revenue and expenses are credited to or charged against the Statement of Comprehensive Revenue and Expense.

Property, plant and equipment

Property, plant, and equipment consists of leasehold improvements, furniture and office equipment, computer hardware and motor vehicles.

Property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses.

The initial cost of property, plant and equipment includes the purchase consideration and those costs that are directly attributable to bringing the asset into the location and condition necessary for its intended purpose. Subsequent expenditure that extends or expands the asset’s service potential and that can be measured reliably is capitalised.

 Capitalisation thresholds applied for individual assets or group of assets are set out as follows: 

Capitalisation Thresholds

$

Computer Hardware

1,000

Motor Vehicles

15,000

Office Equipment

1,000

Furniture and Fittings

1,500

Leasehold Improvements

1,500

Additions

The cost of an item of property, plant, and equipment is recognised as an asset if it is probable that future economic benefits or service potential associated with the item will flow to ERO and the cost of the item can be measured reliably.

In most instances, an item of property, plant and equipment is recognised at its cost. Where an asset is acquired at no cost, or for a nominal cost, it is recognised at fair value as at the date of acquisition.

Disposals

Gains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount of the asset. Gains and losses on disposals are included in the surplus or deficit. When a revalued asset is sold, the amount included in the property revaluation reserve in respect of the disposed asset is transferred to taxpayers’ funds.

Depreciation

Depreciation is charged on property, plant and equipment on a straight-line basis over their estimated useful lives, which will write off the cost of the assets to their estimated residual value.

The estimated useful life, residual values and associated depreciation rates applied to each class of property, plant and equipment are as follows:


Depreciation of Property, Plant and Equipment

Estimated
Useful Life
(Years)

Depreciation Rates
(%)

Residual Values
(%)

Computer Hardware

4

25

-

Motor Vehicles

4-5

20-25

25

Office Equipment

5

20

-

Furniture and Fittings

10

10

-

Leasehold Improvements

Up to 10

Up to 10

-

The residual value and useful life of an asset is reviewed, and adjusted if applicable, at each financial year end.

Intangible assets

Intangible assets with finite lives are stated at cost less amortisation and any impairment losses.

Acquired intangible assets are initially recorded at cost. The cost of an internally generated intangible asset represents expenditure incurred in the development phase of the asset only. The development phase occurs after the following can be demonstrated: technical feasibility; ability to complete the asset; intention and ability to sell or use; and when the development expenditure can be reliably measured.

Where an intangible asset is acquired at no cost, or for a nominal cost, it is recognised at fair value as at the date of acquisition.

Capitalisation thresholds applied for individual assets or group of intangible assets are set out as follows:

Capitalisation Thresholds

$

Computer Software

1,000

Review Procedures

20,000

Amortisation

Amortisation is charged on intangible assets on a straight-line basis over their estimated useful lives. The estimated useful lives and associated amortisation rates applied to these assets are as follows:


Amortisation of Intangibles

Estimated
Useful Life
(Years)

Amortisation Rates
(%)

Computer Software

4

25

Review Procedures

5

20

Impairment of property, plant and equipment and intangible assets

ERO does not hold any cash-generating assets. Assets are considered cash-generating where their primary objective is to generate a commercial return.

Non cash-generating assets

Intangible assets subsequently measured at cost that have an indefinite useful life or are not yet available for use, are not subject to amortisation and are tested annually for impairment.

Property, plant, and equipment and intangible assets held at cost that have a finite useful life are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable service amount. The recoverable service amount is the higher of an asset’s fair value less costs to sell and value in use.

Value in use is the present value of the asset’s remaining service potential. Value in use is determined using an approach based on either a depreciated replacement cost approach, restoration cost approach, or a service units approach. The most appropriate approach used to measure value in use depends on the nature of the impairment and availability of information.

If an asset’s carrying amount exceeds its recoverable service amount, the asset is regarded as impaired and the carrying amount is written down to the recoverable service amount. The total impairment loss is recognised in the surplus or deficit.

The reversal of an impairment loss is recognised in the surplus or deficit.

The type of assets used by ERO does not give rise to adjustments for impairment. ERO’s assets will either be written off due to physical damage or obsolescence or are repaired.

Payables

Short-term payables are recorded at their fair value.

Employee entitlements

Provision is made in respect of ERO’s liability for accrued salary, annual leave, special leave, sick leave, retirement leave and long service leave. All associated expenses are charged against the Statement of Comprehensive Revenue and Expense.

Short-term employee entitlements

Employee entitlements that are due to be settled within 12 months after the end of the period in which the employee renders the related service are measured based on accrued entitlements at current rates of pay. These include salaries and wages accrued up to balance date, annual leave earned but not yet taken at balance date, long service leave and retirement gratuities expected to be settled within 12 months, and sick leave.

A liability for sick leave is recognised to the extent that absences in the coming year are expected to be greater than the sick leave entitlements earned in the coming year. The amount is calculated based on the unused sick leave entitlement that can be carried forward at balance date, to the extent that it will be used by staff to cover those future absences.

A liability and an expense are recognised for bonuses where ERO has a contractual obligation or where there is a past practice that has created a constructive obligation and a reliable estimate of the obligation can be made.

Long-term employee entitlements

Employee entitlements that are due to be settled beyond 12 months after the end of the reporting period in which the employee renders the related service, such as long service leave and retirement gratuities, are calculated on an actuarial basis. The calculations are based on:

  • likely future entitlements accruing to staff, based on years of service, years to entitlement, the likelihood that staff will reach the point of entitlement, and contractual entitlements information; and
  • the present value of the estimated future cash flows.

Presentation of employee entitlements

Sick leave, annual leave, vested long service leave, non-vested long service leave and retirement gratuities expected to be settled within 12 months of balance date are classified as a current liability. All other employee entitlements are classified as a non-current liability.

Superannuation schemes – defined contribution schemes

Obligations for contributions to the State Sector Retirement Savings Scheme, KiwiSaver and the Government Superannuation Fund are accounted for as defined contribution schemes and are recognised as an expense in the surplus or deficit as incurred.

Provisions

ERO recognises a provision for future expenditure of uncertain amount or timing when there is a present obligation (either constructive or legal) as a result of past events. It is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount or timing of the obligation.

Provisions are measured at the present value of the expenditures expected to settle the obligations.

Reinstatement of premises

ERO has some reinstatement obligations at the expiry of the lease term to make good any damage caused to the premises and to remove any fixtures or fittings installed by ERO. In many cases, ERO has the option to renew these leases, which affects the timing of the expected cash outflows to make good the premises. The provision is measured at the expected cost to settle the obligation.

Equity

Equity is the Crown’s investment in ERO and is measured as the difference between total assets and total liabilities.

Commitments

Commitments are future expenses and liabilities to be incurred on contracts that have been entered into at balance date. Information on non-cancellable capital and lease commitments are reported in the statement of commitments.

Cancellable capital commitments that have penalty or exit costs explicit in the agreement on exercising that option to cancel are reported in the statement of commitments at the lower of the remaining contractual commitment and the value of those penalty or exit costs (i.e. the minimum future payments).

Goods and services tax (GST)

All items in the financial statements and appropriation statements are stated exclusive of GST, except for receivables and payables, 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 recoverable from, or payable to, the Inland Revenue Department is included as part of receivables or payables in the statement of financial position.

The net GST paid to or received from the IRD, including the GST relating to investing and financing activities, is classified as an operating cash flow in the statement of cash flows.

Commitments and contingencies are disclosed exclusive of GST.

Income tax

ERO, as a government department, is exempt from the payment of income tax. Accordingly, no provision for income tax has been provided.

Cost allocation

Direct costs are costs incurred by output delivery management units.

Direct costs are attributed to the three classes of outputs based on time spent on each class from ERO’s time recording system. For the year ended 30 June 2017, 76 percent of total output costs were direct costs (30 June 2016: 76 percent).

Indirect costs are the costs of corporate management and support services that cannot be identified with a specific output in an economically feasible manner. Indirect costs are allocated to output-delivery management units (excluding Policy Services and Ministerial Services) through the most appropriate cost driver as a proxy for consumption. Indirect costs amounted to 24 percent of total output costs for the year ended 30 June 2017 (30 June 2016: 24 percent).

The cost of education evaluation reports includes a transfer of time from institutional reporting activities. This transfer represents time spent by review officers in institutions collecting overview information.

The costs of policy services and ministerial services are based on the estimated hours at the average charge-out rate.

There have been no changes in cost allocation policies from the previous reporting period.

Critical accounting estimates and assumptions

In preparing these financial statements, ERO has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are provision for reinstatement, retirement leave and long service leave.

Notes 9 and 10 provide an analysis of the exposure in relation to estimates and uncertainties surrounding reinstatement obligations of leased premises, retirement leave and long service leave liabilities.

Budget and forecast figures

The 2017 budget figures are for the year ended 30 June 2017 and were published in the 2015/16 annual report. They are consistent with ERO’s best estimate financial forecast information submitted to the Treasury for the Budget Economic and Fiscal Update (BEFU) for the year ending 2016/17.

The 2018 forecast figures are for the year ending 30 June 2018, which are consistent with the best estimate financial forecast information submitted to Treasury for the BEFU for the year ending 2017/18.

The forecast financial statements have been prepared as required by the PFA to communicate forecast financial information for accountability purposes.

The budget and forecast figures are unaudited and have been prepared using the accounting policies adopted in preparing these financial statements.

The 30 June 2018 forecast figures have been prepared in accordance with PBE FRS 42 Prospective Financial Statements.

The forecast financial statements were approved for issue by the Chief Executive on 6 April 2017. The Chief Executive is responsible for the forecast financial statements, including the appropriateness of the assumptions underlying them and all other required disclosures.

While ERO regularly updates its forecasts, updated forecast financial statements for the year ending 30 June 2018 will not be published.

Significant assumptions used in preparing the forecast financials

The forecast figures contained in these financial statements reflect the Office’s purpose and activities and are based on a number of assumptions on what may occur during the 2016/17 year. The forecast figures have been compiled on the basis of existing government policies and Ministerial expectations at the time the Main Estimates were finalised.

The main assumptions, which were adopted as at 6 April 2016, were as follows:

  • ERO's activities will remain substantially the same as for the previous year
  • personnel costs are based on 216 full time equivalents
  • operating costs are based on historical experience adjusted for any known expected increase or decrease in expenditure items
  • estimated year-end information for 2016/17 is used as the opening position for the 2017/18 forecasts.

The actual financial results achieved for 30 June 2017 are likely to vary from the forecast information presented, and the variations may be material. 

Notes to the Financial Statements

for the year ended 30 June 2017

1. Other revenue

Actual
2015/16
$000


Other Revenue note

 Actual
2016/17
$000

1,428

Sale of services

748

50

Rental revenue from sub-leases

59

4

Net gain on disposal of property, plant  and equipment

0

3

Other

17

1,485

Total Other Revenue

824

 2. Personnel costs

Actual
2015/16
$000


Personnel Costs note

 Actual
2016/17
$000

20,022

Salaries and wages

19,383

781

Employer contribution to superannuation schemes

723

(81)

Increase/(Decrease) in employee entitlements

77

17

Other

14

20,739

Total Personnel Costs

20,197

Employer contributions to defined contribution plans include contributions to the State Sector Retirement Savings Scheme, KiwiSaver, the Individual Retirement Plan and the Government Superannuation Fund.

3. Other expenses

Actual
2015/16
$000


Other expenses note

 Actual
2016/17
$000

Unaudited
Budget
2016/17
$000

1,747

Leasing and Rental Costs

1,308

1,694

381

Consultancy

525

340

2,005

Domestic Travel

2,098

1,542

64

International Travel

54

83

59

Fees paid to Auditors for Financial Statements Audit

61

56

2,578

Other

2,469

2,180

6,834

Total Operating Costs

6,515

5,895

4. Capital charge

ERO pays a capital charge to the Crown based on its equity as at 30 June and 31 December each year. The capital charge rate for the year ended 30 June 2017 was 6 percent (30 June 2016: 8 percent).

5. Property, plant and equipment

Movements for each class of property, plant, and equipment are as follows:

Property, Plant and Equipment note

Computer
Hardware
$000

Motor
Vehicles
$000

Office
Equipment
$000

Furniture
& Fittings
$000

Leasehold
Improve-
ments $000

P,P & E 
Total
$000

30 June 2016

 

 

 

 

 

 

Cost

764

1,824

327

279

2,450

5,644

Accumulated Depreciation

(581)

(777)

(313)

(49)

(1,307)

(3,027)

Balance at 30 June 2016

183

1,047

14

230

1,143

2,617

30 June 2016

Balance at 1 July 2016

 

183

 

1,047

 

14

 

230

 

1,143

 

2,617

Additions

190

0

3

1

47

241

Disposals - Costs

(6)

0

(17)

0

(242)

(265)

Disposals - Accumulated Depreciation

4

0

18

0

158

180

Depreciation

(92)

(263)

(8)

(27)

(303)

(693)

Balance at 30 June 2017

279

784

10

204

803

2,080

30 June 2017

Cost

 

948

 

1,824

 

313

 

280

 

2,255

 

5,620

Accumulated Depreciation

(669)

(1,040)

(303)

(76)

(1,452)

(3,540)

Balance at 30 June 2017

279

784

10

204

803

2,080

6. Intangibles

Movements for each class of intangible asset are as follows:


Intangibles note

Computer
Software
$000

Review
Procedures
$000

Intangibles 
Total
$000

30 June 2016

Cost

 

1,281

 

1,127

 

2,408

Accumulated Amortisation

(1,237)

(530)

(1,767)

Balance at 30 June 2016

44

597

641

30 June 2016

Balance at 1 July 2016

 

44

 

597

 

641

Additions

37

257

294

Amortisation

(26)

(172)

(198)

Balance at 30 June 2017

55

682

737

30 June 2016

Cost

 

1,318

 

1,384

 

2,702

Accumulated Amortisation

(1,263)

(702)

(1,965)

Balance at 30 June 2017

55

682

737

There are no restrictions over the title of ERO’s intangible assets, nor any intangible assets pledged as security for liabilities.

7. Receivables

The carrying value of receivables approximates their fair value as they are normally issued with duration of not more than three months.

Actual
30 June 2016
$000


Receivables note

 Actual
30 June 2017
$000

79

Receivables from contractual services (exchange transactions)

90

79

Total Receivables

90

8. Payables and deferred revenue

Actual
30 June 2016
$000


Payables and deferred revenue note

 Actual
30 June 2017
$000

326

Creditors

413

421

Accrued Expenses

355

386

Income in Advance for Contractual Services

530

1,133

Payables and deferred revenue under exchange transactions

1,298

215

Tax Payables – GST, FBT and PAYE

206

215

Payables and deferred revenue under non–exchange transactions

206

1,348

Total payables and deferred revenue

1,504

The carrying value of creditors and other payables approximate their fair value as they are normally settled within three months.

9. Provisions

Leasing incentives

Leasing incentives received as an inducement to enter into an operating lease are recognised evenly over the term of the lease as a reduction in the rental expense.

Reinstatement provision

ERO has entered into leases on its premises in Auckland, Christchurch, Hamilton, Napier, Whanganui, Wellington and Dunedin. As part of the lease agreements, ERO has some reinstatement obligations at the termination of the leases.

Actual
30 June 2016
$000


Provisions note

 Actual
30 June 2017
$000

 

75

Current Portion

Leasing Incentives

 

75

0

Onerous Contracts

0

178

Reinstatement

71

253

Total Current Portion at end of year

146

 

Non-Current Portion

 

171

Leasing Incentives

300

357

Reinstatement

274

528

Total Non-Current Portion at end of year

574

781

Total Provisions at end of year

720

 

214

Leasing Incentives

Balance at Start of Year

 

246

84

Additional Provision during the Year

204

(52)

Provision used during the Year

(75)

246

Total Leasing Incentives Provision at end of year

375

 

Onerous Contract

 

22

Balance at Start of Year

0

0

Additional Provision during the Year

0

(22)

Provision used during the Year

0

0

Total  Onerous Contract Provision at end of year

0

 

515

Reinstatement

Balance at Start of Year

 

535

20

Additional Provision during the Year

0

0

Unused Provision reversed during the Year

(190)

0

Provision used during the Year

0

535

Total Reinstatement Provision at end of year

345

781

Total Provisions at end of year

720

10. Employee entitlements

Actual
30 June 2016
$000


Employee entitlements note

 Actual
30 June 2017
$000

 

1,202

Current Liabilities

Annual Leave, Special Leave and Sick Leave

 

1,251

468

Retirement Leave and Long Service Leave

300

151

Accrued Salaries

286

1,821

Total Current Portion

1,837

 

711

Non-Current Liabilities

Retirement Leave and Long Service Leave

 

653

711

Total Non-Current Portion

653

2,532

Total Employee entitlements at end of year

2,490

The present value of retirement leave and long service leave obligations depend on factors that are determined on an actuarial basis using several assumptions. Two key assumptions used in calculating this liability include the discount rate and the salary inflation factor. Any changes in these assumptions will affect the carrying amount of the liability.

Expected future payments are discounted using discount rates derived from the yield curve of New Zealand government bonds. The discount rates used have maturities that match, as closely as possible, the estimated future cash outflows. The discount rates and salary inflation factor used are those advised by the Treasury.

If the risk-free discount rates were to differ by 1 percent from ERO’s estimates, with all other factors held constant, the carrying amount of the liability would be an estimated $31,215 higher/lower.

If the salary inflation factor were to differ by 1 percent from ERO’s estimates, with all other factors held constant, the carrying amount of the liability would be an estimated $31,331 higher/lower.

11. Related parties

ERO is a wholly owned entity of the Crown.

Related party disclosures have not been made for transactions with related parties that are within a normal supplier or client/recipient relationship on terms and condition no more or less favourable than those that it is reasonable to expect ERO would have adopted in dealing with the party at arm’s length in the same circumstances. Further, transactions with other government agencies (for example, government departments and Crown entities) are not disclosed as related party transactions when they are consistent with the normal operating arrangements between government agencies and undertaken on the normal terms and conditions for such transactions.

Related party transactions required to be disclosed

ERO has no related party transactions required to be disclosed. Any related party transactions have been entered into on an arm’s length basis by ERO.

Key management personnel compensation

Key management personnel include the Chief Executive and seven members of the Executive Leadership Team.

Actual
2015/16


Key management personnel compensation

 Actual
2016/17

1,682

Remuneration ($000s)

1,726

8

Full-time Equivalent Staff

8

The Minister of Education does not have responsibility for planning, directing and controlling the activities of ERO. The Minister’s remuneration and other benefits have therefore been excluded from the above disclosure.

12. Financial instruments

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

 

Actual
30 June 2016
$000


Financial instruments note

 Actual
30 June 2017
$000

 

5,014

Loans and Receivables

Cash

 

5,402

79

Receivables

90

5,093

Total Loans and Receivables

5,492

 

747

Financial liabilities measured at amortised cost

Payables (excluding Income in advance)

 

768

13. Events after balance date

There have been no significant events after balance date.

14. Explanation of major variances against budget 

Variances against budget note


Actual
2016/17
$000

Unaudited
Budget
2016/17
$000

Variance
to Budget
2016/17
$000

Statement of Comprehensive Income and Expense

Other Expenses

 

6,515

 

5,895

 

620

Statement of Financial Position

Cash

 

5,402

 

3,794

 

1,608

Property, Plant and Equipment

2,080

2,947

(867)

Statement of Cash Flows

Cash applied to Suppliers

 

6,521

 

5,891

 

630

Purchase of Assets

535

1,095

(560)

The major variances to budget were as follows:

  • Other Expenses was $620,000 above budget due mainly to an increase in expenditure associated with contractual services for which ERO received revenue
  • Cash was $1,608,000 above budget due to timing of capital expenditure
  • Cash applied to suppliers was $630,000 above budget due to an increase in other expenses associated with ERO’s contractual services described above
  • Purchase of property, plant and equipment was $560,000 below budget due to the timing of ERO’s fit out to its Wellington corporate office and its Hamilton premises. 

Appropriation Statements

The following statements report information about the expenses and capital incurred against each appropriation administered by ERO for the year ended 30 June 2017.

Statement of Budgeted and Actual Expenses and Capital Expenditure incurred against Appropriations for the year ended 30 June 2017


Expenditure
after
remeasure-
ments
2015/16
$000

Vote Education Review Office

Statement of Budgeted and Actual Expenses and Capital Expenditure incurred against Appropriations

Expenditure
before
remeasure-
ments
2016/17
$000

Remeasure-
ments


2016/17
$000

Expenditure
after
remeasure-
ments
2016/17
$000

Approved
Appro-
priation

2016/17
$000

 

 

 

 

4,338

Vote Education Review Office

Departmental Output Expenses

Quality of Education Reports and Services

 

 

 

 

4,000

 

 

 

 

(5)

 

 

 

 

3,995

 

 

 

 

4,285

4,338

Total Departmental Output Expenses

4,000

(5)

3,995

4,285

 

 

 

 

9,432

Multi-Category Appropriation

Accountability Reviews

Early Childhood Education Services

 

 

 

 

9,157

 

 

 

 

(12)

 

 

 

 

9,145

 

 

 

 

9,354

14,762

Schools and Other Education Service Providers

14,720

(14)

14,706

14,931

24,194

Total Accountability Reviews

23,877

(26)

23,851

24,285

 

 

 

1,070

Permanent Legislative Authority (PLA)

Capital Expenditure – PLA

 

 

 

535

 

 

 

0

 

 

 

535

 

 

 

1,879

29,602

Total Annual and Permanent Appropriations

28,412

(31)

28,381

30,449

The appropriation figures are those presented in the Estimates of Appropriations for the Government of New Zealand for the year ended 30 June 2017, as amended by the Supplementary Estimates.

The Capital Expenditure-Permanent Legislative Authority appropriation is limited to the purchase or development of assets by and for the use of ERO, as authorised by section 24(1) of the Public Finance Act 1989. No amount is appropriated for Capital Expenditure-Permanent Legislative Authority.

__________________________________________________________________________________________

Statement of Expenses and Capital Expenditure incurred without Appropriation or Other Authority, or in excess of an Existing Appropriation or Other Authority

for the year ended 30 June 2017

ERO has not incurred expenses in excess of or without appropriation by Parliament (30 June 2016: nil).

__________________________________________________________________________________________

Statement of Departmental Capital Injections without, or in excess of, Authority

for the year ended 30 June 2017

ERO has not received any capital injections during the year, or in excess of, authority (30 June 2016: nil). __________________________________________________________________________________________