Statement of Intent 2007-2011

• Ministerial Statement
• Part 1: Outcomes, Priorities and Objectives

• Part 2: Forecast Financial Statements

Part 2: Forecast Financial Statements

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The Minister for Arts, Culture and Heritage is the Responsible Minister for the Ministry for Culture and Heritage.

Statement of responsibility

The forecast financial statements for the Ministry for Culture and Heritage for the year ending 30 June 2008 contained in this report have been prepared in accordance with section 38 of the Public Finance Act 1989.

The Chief Executive of the Ministry for Culture and Heritage acknowledges in signing this statement that he is responsible for the forecast financial statements contained in this report.

The financial performance forecast to be achieved by the Ministry for the year ending 30 June 2008, specified in the statement of forecast financial performance on page 34, is as agreed with the Minister for Arts, Culture and Heritage who is the Minister responsible for the financial performance of the Ministry for Culture and Heritage.

The service performance for the departmental outputs forecast to be achieved by the Ministry for the year ending 30 June 2008, specified in the statement of forecast service performance on pages 35-39, are as agreed with the Minister for Arts, Culture and Heritage and the Minister for Sport and Recreation, who are responsible for the Votes administered by the Ministry.

We certify that the information contained in this report is consistent with existing appropriations, and with the appropriations set out in the Appropriation (2007/08 Estimates) Bill.

Signed

MARTIN MATTHEWS
Chief Executive
24 April 2007

Countersigned

MATTHEW ARCHER
Manager Corporate Services
24 April 2007

The 2006/07 budgeted and estimated actual financial statements have been prepared under NZ GAAP and the 2007/08 forecast fi nancial statements have been prepared under NZ IFRS.

Forecast Statement of Financial Performance for the Year Ending 30 June 2008

	2006/07	2006/07	2007/08	2008/09	2009/10
	Budgeted [1]	Estimated Actual [2]	Budget	Budget	Budget
	$000	$000	$000	$000	$000
Revenue
Crown	15,921	15,001	14,695	14,416	14,416
Department	320	320	245	165	165
Other	288	288	90	90	90
Total Revenue	16,529	15,609	15,030	14,671	14,671
Expenses
Output Expenses:
Personnel	7,224	7,035	7,435	7,585	7,735
Operating	8,791	8,060	7,026	6,553	6,455
Depreciation	389	389	426	399	347
Capital charge	125	125	143	134	134
Total Output Expenses	16,529	15,609	15,030	14,671	14,671
Net Surplus/(Deficit)	-	-	-	-	-

 

This statement is to be read in conjunction with the accompanying Statement of Significant Accounting Policies.

1. This column incorporates both Main Estimates and Supplementary Estimates appropriations for 2006/07.

2. This column reflects 'in principle expense transfers' from 2006/07 to 2007/08 for $920,000.

 

Forecast Statement of Financial Position as at 30 June 2008

	Actual Financial Position as at 30 June 2006	Budgeted Financial Position 30 June 2007	Estimated Financial Position as at 30 June 2007	Forecast Financial Position as at 30 June 2008	Forecast Financial Position as at 30 June 2009	Forecast Financial Position as at 30 June 2010
	$000	$000	$000	$000	$000	$000
Assets
Current assets
Cash and bank balances	1,506	978	927	1,177	1,177	1,177
Debtors and receivables	1,538	245	245	245	245	245
Total Current Assets	3,044	1,223	1,172	1,422	1,422	1,422
Non-current assets
Fixed assets [3]	977	1,324	1,423	1,423	1,423	1,423
Total Non-Current Assets	977	1,324	1,423	1,423	1,423	1,423
Total Assets	4,021	2,547	2,595	2,845	2,845	2,845
Liabilities
Current Liabilities
Creditors and payables	786	645	645	645	645	645
Provision for payment of surplus to the Crown	1,547	-	-	-	-	-
Deferred revenue	-	-	-	-	-	-
Provision for employee entitlements	275	280	280	280	280	280
Total Current Liabilities	2,608	925	925	925	925	925
Term Liabilities
Provision for employee entitlements	133	85	133	133	133	133
Total Term Liabilities	133	85	133	133	133	133
Total Liabilities	2,741	1,010	1,058	1,058	1,058	1,058
Taxpayers' Funds
General funds	1,280	1,537	1,537	1,787	1,787	1,787
Revaluation reserve	-	-	-	-	-	-
Total Taxpayers' Funds	1,280	1,537	1,537	1,787	1,787	1,787
Total Liabilities and Taxpayers' Funds	4,021	2,547	2,595	2,845	2,845	2,845

This statement is to be read in conjunction with the accompanying Statement of Significant Accounting Policies.

3. Further details of Fixed Assets are contained in the table further down this document.

 

Forecast Statement of Cash Flows for the Year Ending 30 June 2008

	2006/07 Budgeted $000	2006/07 Estim- ated Actual $000	2007/08 Budget $000	2008/09 Budget $000	2009/10 Budget $000
Cash Flows from Operating Activities
Cash provided from:
- Supply of outputs to:
Crown	17,214	16,294	14,695	14,416	14,416
Other	606	606	335	255	255
Cash disbursed to:
- Cost of producing outputs:
Personnel and operating expenses	(16,197)	(15,229)	(14,461)	(14,138)	(14,190)
Capital charge	(125)	(125)	(143)	(134)	(134
Net Cash Flows from Operating Activities	1,498	1,546	426	399	347
Cash Flows from Investing Activities
Cash provided from:
- Sale of physical assets	-	-	-	-	-
Cash disbursed to:
- Purchase of physical assets	(736)	(835)	(426)	(399)	(347)
Net Cash Flows from Investing Activities	(736)	(835)	(426)	(399)	(347)
Cash Flows from Financing Activities
Cash provided from:
- Capital contributions	257	257	250	-	-
Cash disbursed to:
- Payment of surplus to the Crown	(1,547)	(1,547)	-	-	-
Net Cash Flows from Financing Activities	(1,290)	(1,290)	250	-	-
Net Increase/(Decrease) in Cash Held	(528)	(579)	250	-	-
Opening Total Cash Balances at 1 July	1,506	1,506	927	1,177	1,177
Closing Total Cash Balances at 30 June projected	978	927	1,177	1,177	1,177

This statement is to be read in conjunction with the accompanying Statement of Significant Accounting Policies. .

Reconciliation of Net Cash Flows from Operating Activities to Net Surplus/(Deficit) in the Forecast Statement of Financial Performance for the Year Ending 30 June 2008

	2006/07 Budgeted $000	2006/07 Estimated Actual $000	2007/08 Budget $000	2008/09 Budget $000	2009/10 Budget $000
Operating Surplus/(Deficit)	-	-	-	-	-
Add/(deduct) non-cash expenses/(revenues):
Depreciation	389	389	426	399	347
Add/(deduct) movements in working capital:
(Increase)/decrease in debtors and receivables	1,293	1,293	-	-	-
Increase/(decrease) in creditors and payables	(184)	(136)	-	-	-
Increase/(decrease) in deferred income	-	-	-	-	-
Add/(deduct) investing activity items:
Net (gain)/loss on sale of fixed assets	-	-	-	-	-
Net Cash Flows from Operating Activities	1,498	1,546	426	399	347

This statement is to be read in conjunction with the accompanying Statement of Significant Accounting Policies.

Forecast Statement of Movements in Taxpayers' Funds (Equity) for the Year Ending 30 June 2008

	Budge- ted Position 2006/07 $000	Fore- cast Position as at 30 June 2007 $000	Fore- cast Position as at 30 June 2008 $000	Fore- cast Position as at 30 June 2009 $000	Fore- cast Position as at 30 June 2010 $000
Taxpayers' Funds at start of period	1,280	1,280	1,537	1,787	1,787
Net surplus/(deficit) for year	-	-	-	-	-
Increase/(decrease) in revaluation reserve
Total recognised revenues and expenses for the period
Capital contributions from the Crown	257	257	250	-	-
Provision for payment of surplus to the Crown	-	-	-	-	-
Total adjustments for flows to and from the Crown	257	257	250	-	-
Asset/liability transfers between departments	-	-	-	-	-
Taxpayers' Funds at end of period	1,537	1,537	1,787	1,787	1,787

This statement is to be read in conjunction with the accompanying Statement of Significant Accounting Policies.

Departmental Capital Expenditure (to be incurred in accordance with section 24 of the Public Finance Act 1989)

 

Departmental Capital Expenditure	Actual 2001/ 02 $000	Actual 2002/ 03 $000	Actual 2003/ 04 $000	Actual 2004/ 05 $000	Actual 2005/ 06 $000	Budget 2006/ 07 $000	Estim-ated Actual 2006/ 07 $000	Fore- cast 2007/ 08 $000 [4]
Computer hardware	22	2	214	16	136	70	70	73
Computer software	-	-	181	47	402	401	400	-
Intangible Assets	-	-	-	-	-	-	-	194
Leasehold improvements	46	124	168	-	-	200	300	100
Office equipment	30	24	33	-	30	30	30	19
Office furniture	-	-	15	12	3	35	35	40
Works of art	-	-	7	11	-	-	-	-
Total	98	150	618	86	571	736	835	426

4. The forecast capital expenditure for the 2007/08 financial year is primarily routine replacement and upgrade of the department's information technology and office facilities and equipment to help our staff efficiently deliver the services set out in this Statement of Intent.

 

Forecast Details of Fixed Assets by Category as at 30 June 2008

	2006/07 Budget-ed Position Net Book Value	30 June 2007 Estim- ated Position Net Book Value	30 June 2008 Fore- cast Position Cost	30 June 2008 Fore- cast Position Accumu- lated Deprec- iation	30 June 2008 Fore-cast Position Net Book Value	30 June 2009 Fore-cast Position Net Book Value	30 June 2010 Fore-cast Position Net Book Value
	$000	$000	$000	$000	$000	$000	$000
Computer hardware	155	155	570	415	155	155	155
Computer software	668	667	1,225	558	-	-	-
Intangible Assets	-	-	-	-	667	667	667
Leasehold improve- ments	379	480	1,128	608	520	520	520
Office equipment	58	58	197	139	58	58	58
Office furniture	44	43	385	382	3	3	3
Works of art	20	20	20	-	20	20	20
Total	1,324	1,423	3,525	2,102	1,423	1,423	1,423

Statement of Forecast Financial Performance for the Ministry for the Year Ending 30 June 2008

Performance Indicators: 2006/07 and 2007/08

	Unit	2006/ 07	2006/ 07	2007/ 08	2008/ 09	2009/ 10
		Budgeted	Estim- ated Actual	Budget	Budget	Budget
Operating Results
Revenue – department and other	$000	608	608	335	255	255
Output expenses	$000	16,529	15,609	15,030	14,671	14,671
Operating surplus before capital charge	$000	125	125	143	134	134
Net surplus	$000	-	-	-	-	-
Working Capital
Net current assets [5]	$000	298	247	497	497	497
Current ratio [6]	%	132	127	154	154	154
Average creditors outstanding	days	30	30	30	30	30
Resource Utilisation
Physical assets:
- Total physical assets at year-end	$000	1,324	1,423	1,423	1,423	1,423
- Value per employee	$000
- Additions as percentage of physical assets	%	56	59	30	30	30
Taxpayers' funds:
- Level at year-end	$000	1,537	1,537	1,787	1,787	1,787
- Level per employee	$000
Forecast Net Cash Flows
Surplus/(deficit) operating activities	$000	1,498	1,546	426	399	347
Surplus/(deficit) investing activities	$000	(736)	(835)	(426)	(399)	(347)
Surplus/(deficit) financing activities	$000	(1,290)	(1,290)	250	-	-
Net increase/(decrease) in cash held	$000	(528)	(579)	250	-	-
Human Resources
Total staff (FTEs)	number	87	89	95	95	95

5. Current assets minus current liabilities.
6. Current assets as a proportion of current liabilities.

 

Statement of Forecast Service Performance for Each Departmental Output for the Year Ending 30 June 2008

The Ministry for Culture and Heritage has committed itself to provide in 2007/08 departmental outputs which meet the requirements of its Vote Ministers in terms of their nature, timeliness, quality and quantity specifications, and cost.

Forecast Service Performance

Departmental outputs to be delivered by the Ministry for Culture and Heritage, and their associated revenue, expenses and surplus or deficit, are summarised below..

Departmental Output	Revenue: Crown $000	Revenue: Depts $000	Revenue: Other $000	Total Expenses Approp- riated $000	Surplus/ (Deficit) $000
Vote Arts, Culture and Heritage
Heritage services	6,207	90	90	6,387	-
International cultural diplomacy	2,089	-	-	2,089	-
Policy advice and grants administration	6,301	155	-	6,456	-
Vote Sport and Recreation
Purchase advice and monitoring of sport and recreation Crown entities	98	-	-	98	-
Aggregate totals in Statement of Financial Performance	14,695	245	90	15,030	-

Output Descriptions and Forecast Non-Financial Service Performance

Vote Arts, Culture and Heritage

Output – Heritage services

Quantity, Quality and Timeliness

The following performance measures and standards apply to this output:

Historical publications and administrative services

Performance targets for historical publications and administrative services are:

Te Ara - The Encyclopedia of New Zealand

• Three additional regions in the ‘Places' theme of Te Ara will be completed by 30 June 2008.
• The ‘Bush' theme will be launched and the text of the ‘Settled landscape’ theme will be completed by 30 June 2008.

New Zealand history

• Undertake at least twelve historical projects (five projects will be completed during the year).
• Publish at least twelve new features during the year on www.NZHistory.net.nz.
• 80% of historical projects completed meet time criteria.
• 100% of historical projects completed meet content criteria.
• Sesquicentenary Gift Trust for Awards in Oral History and New Zealand History Research Trust Fund: no justified complaints will be received concerning administration of these funds.

Heritage property management

Performance targets for the management of national monuments and war graves are:

• 4,188 war graves, 81 historic graves and sixteen national monuments will be maintained in accordance with the agreed programme.
• The National War Memorial and seven overseas war memorials will be managed and maintained in accordance with the agreed programme.
• All site inspections to determine necessary maintenance will be undertaken in accordance with an agreed schedule.
• At the conclusion of scheduled maintenance all sites will be in a good state of repair with inscriptions legible and stonework intact.
• 90% of all contracts over $1,000 for capital works and maintenance within New Zealand will comply with agreed criteria as set out in the 2007/08 Output Plan.
• Special projects will be managed in accordance with the agreed programme.

Symbols of New Zealand sovereignty

The performance target for the administration of legislation associated with the protection of New Zealand identity (sovereignty) is:

• 100% of submissions to the Minister in relation to the Flags, Emblems, and Names Protection Act 1981 will be accepted.

Commemorating Waitangi Day Fund

The performance target for the fund is:

• No justified complaints will be received concerning administration of the fund.

Administering the Government Exhibition Indemnification Scheme

• An estimated five indemnifications will be established and administered during the year.
• 100% of indemnifications established and administered will meet the timing requirements of the applicant.
• 100% of indemnifications will comply with the policy guidelines for the scheme.

Protect Objects Act

Performance targets for the administration of the Protect Objects Act 1975 are:

• 150 (the estimated range is 120 to 180) applications made under the Protect Objects Act 1975 completed:
• an estimated 50 export certificates for protected objects will be issued (estimated range 40 to 60)
• an estimated 50 determinations on the custody of newly found taonga will be made (estimated range 40 to 60)
• an estimated 50 collectors of tanoga tuturu will be registered (estimated range 40 to 60)
• No decisions will be overturned through the appeal process.

 

Output – International cultural diplomacy

Quantity, Quality and Timeliness

The following performance measures and standards apply to this output:

• The approved projects will be funded and completed on time and within the approved budget.
• An estimated five briefing reports for the year will be provided to Ministers on the overall programme of activity and allocation of funding for individual cultural diplomacy projects.
• An estimated three briefing reports for the year will be provided to the Minister, reporting on progress in implementing the programme and outcomes of funded activity.
• The cross-agency steering group will rate the Ministry's management of the programme as good or better.

Output – Policy advice and grants administration

Quantity, Quality and Timeliness

The following performance measures and standards apply to this output:

Policy advice

Performance targets for policy advice are:

Briefing reports

An estimated 370 briefing reports will be provided during the year to Ministers on significant issues in the arts, culture, heritage and broadcasting sectors, developments in the portfolios, and relevant policy proposals by other departments.

• 100% of briefing reports will meet the deadlines set by the Ministers' offices.
• Ministers will rate, on an annual basis, the Ministry's performance in regard to briefing reports provided as good or better.

Submissions to Cabinet/Cabinet Committees

• An estimated 30 Cabinet or Cabinet Committee submissions will be provided during the year to Ministers.
• 100% of submissions will meet Cabinet Office deadlines.
• An estimated 60 Cabinet or Cabinet Committee submissions of other government departments will be contributed to.
• Ministers will rate, on an annual basis, the Ministry's performance in regard to submissions to Cabinet/Cabinet Committees provided as good or better.

Sets of speech notes

• An estimated 90 sets of speech notes will be provided during the year to Ministers.
• 100% of sets of speech notes will meet the deadlines set by the Ministers' offices.
• Ministers will rate, on an annual basis, the Ministry's performance in regard to sets of speech notes provided as good or better.

Grants administration

Performance targets for grants administration are:

• Crown payments for Non-Departmental Output Expenses, Other Expenses, and Capital Contributions will be disbursed to at least eighteen organisations during the year. All payments will be made in accordance with instructions and conditions governing payment.
• The performance of recipients of Crown payments will be specified in memoranda of understanding or other funding arrangements agreed to by the responsible Ministers. All agreements will be completed by 31 July 2007, unless a formal extension is agreed to by the relevant Minister.
• An estimated 140 briefing reports on agency performance and issues related to agency operations will be provided during the year to Ministers.
• Advice and assistance to recipients of Crown payments will be provided as required.
• Advice provided will be rated as satisfactory or better by 90% of respondents.

Ministerial servicing

Performance targets for ministerial servicing are:

Ministerial correspondence

• An estimated 500 draft replies to ministerial correspondence will be provided during the year.
• Unless otherwise agreed with Ministers, 90% of draft replies will be provided within fifteen working days of receipt.
• Unless otherwise agreed with Ministers, 100% of draft replies will be provided within twenty working days of receipt.
• Ministers will rate, on an annual basis, the Ministry's performance in regard to draft replies to ministerial correspondence provided as good or better.

Questions in the House

• An estimated 200 draft responses to questions in the House will be provided during the year.
• 100% of draft responses will meet the deadlines set by the Ministers' offices.
• Ministers will rate, on an annual basis, the Ministry's performance in regard to draft responses to questions in the House provided as good or better.

Vote Sport and Recreation

Output – Purchase advice and monitoring of sport and recreation Crown entities

Quantity, Quality and Timeliness

The following performance targets apply to this output:

• An estimated ten briefing reports will be provided during the year.
• Crown payments for Non-Departmental Output Expenses, Benefits and Other Unrequited Expenses, and Other Crown Expenses will be disbursed to at least two organisations during the year. All payments will be made in accordance with instructions and conditions governing payment.
• The performance of recipients of Crown payments will be specified in memoranda of understanding or other funding arrangements agreed to by the Minister. All agreements will be completed by 31 July 2007, unless a formal extension is agreed to by the Minister.
• Advice and assistance to recipients of Crown payments will be provided as required.
• Advice provided will be rated as satisfactory or better by all respondents.
• The Minister will rate, on an annual basis, the Ministry's performance in regard to purchase advice and monitoring provided as good or better.

Non-Departmental Activity Administered by Ministry for Culture and Heritage

All figures are GST exclusive unless stated otherwise.

Vote Arts, Culture and Heritage

The Ministry for Culture and Heritage administers annual funding contributions from government to the following arts, heritage and broadcasting sector organisations:

Non-Departmental Outputs to be supplied by Arts, Culture, Heritage and Broadcasting Sector Organisations in 2007/08

Non-Departmental Output	Provider	$000
Management of Historic Places	New Zealand Historic Places Trust	10,503
	Antarctic Heritage Trust	356
		10,859
Museum Services	Museum of New Zealand Te Papa Tongarewa	20,574
	New Zealand Film Archive	1,170
		21,744
Performing Arts Services	New Zealand Symphony Orchestra	12,346
	Royal New Zealand Ballet	3,534
	Te Matatini Society Incorporated	1,247
	New Zealand Music Industry Commission	1,156
		18,283
Promotion and Support of the Arts and Film	Arts Council of New Zealand Toi Aotearoa	15,452
	New Zealand Film Commission	10,111
		25,563
Protection of Taonga Tuturu	Regional Museums: Auckland War Memorial Museum, Canterbury Museum, Otago Museum; and conservation service providers.	79
Public Broadcasting Services	Broadcasting Commission	109,813
	Broadcasting Standards Authority	609
	National Pacific Radio Trust	3,000
	Television New Zealand	29,868
	Radio New Zealand International	1,900
	Freeview	5,000
		150,190
TOTAL FUNDING		226,718

Capital Contributions to Crown Organisations

Museum of New Zealand Te Papa Tongarewa

$9 million is allocated to Te Papa for ongoing capital expenditure for museum operations, exhibition research and development, and acquisition of collection items. An additional allocation of $1 million is being provided in 2007/08 for the development of international touring exhibitions and refurbishment of Te Papa's long-term exhibitions in Wellington.

New Zealand Film Commission

$946,000 is being allocated in 2007/08 to cover the costs of the New Zealand Film Commission relocating premises in Wellington.

New Zealand Historic Places Trust

$850,000 was allocated to NZHPT in 2006/07 for an upgrade of information technology systems and regional office vehicles, and urgent deferred maintenance at historic properties. $2 million is being provided in 2007/08 for maintenance of historic properties.

Radio New Zealand

$521,000 is being allocated to Radio New Zealand in 2007/08 to enable it to extend transmission coverage to low density population areas.

Other Crown Expenses

Capital Projects at Regional Museums

A Regional Museums Policy for Capital Construction Projects was established by government in 1994. Since then a number of individually approved capital development projects have received funding under this policy.

The government established an annual fund for resourcing projects approved under the policy from 2001/02 onwards. In 2007/08, $28.380 million is available through the Policy. This total includes funding returned from a project that was unable to be completed and funding unallocated in 2006/07. Funding for the Policy in future years will be $9.156 million per annum.

Commemorating Waitangi Day Fund

In 2001 government agreed to transfer responsibility for the Waitangi Day Act 1976 from the Department of Internal Affairs to the Ministry for Culture and Heritage. The Act provides for the observance of the 6th of February each year as Waitangi Day. Included in the transfer is the administration of the Treaty of Waitangi commemorations.

In 2007/08 $288,000 is being provided to meet the costs associated with the Crown's involvement in Waitangi commemorations, including liaison with the Waitangi marae trustees, the Government House reception and administration of the Treaty of Waitangi commemorations grants scheme.

Kerikeri Heritage Bypass

In September 2004, Cabinet approved funding of $2.415 million for the Kerikeri Heritage Bypass, to protect the nationally significant heritage buildings, Kemp House and the Stone Store. A further $2.457 million was approved in 2006/07 (total $4.872 million). This equates to approximately 25% of the estimated costs of design, land purchase and construction of the Bypass. Construction commenced in November 2006 following an agreement being reached on land acquisition and the acceptance of a tender. The completion date is currently planned to be around June 2008.

War Graves, Historic Graves and National Monuments and Memorials

Commonwealth War Graves Commission

New Zealand was a founder signatory to the Royal Charter that established the War Graves Commission in 1917. The Commission is charged with the commemoration of the war dead and the care of their graves. New Zealand's annual levy is set at 2.14% of the Commission's costs, which reflects the proportionate number of graves of New Zealand servicepeople. In 2007/08 an amount of $2.643 million is required to meet New Zealand's contribution.

New Zealand Memorial Park

$6 million was provided in 2004/05 for the purchase of land for the establishment of a New Zealand Memorial Park in Wellington. $2.701 million was allocated in 2005/06 for the establishment of the park. The park is expected to be completed in 2008.

Development and Maintenance of Heritage Property

The Government is responsible for the care of 4,188 war graves within New Zealand and overseas, 81 historic graves and 16 national monuments in New Zealand, and five overseas war memorials in Turkey, France and Belgium. In 2007/08 $516,000 is required for this work.

Vote Sport and Recreation

Sport and Recreation Sector Organisations

The Ministry for Culture and Heritage administers government's annual funding contributions to two organisations: the New Zealand Sports Drug Agency (Drug Free Sports New Zealand), and Sport and Recreation New Zealand (SPARC).

Both of these agencies are Crown entities, and are required to publish annual statements of intent. The Ministry for Culture and Heritage is not required to provide support for the Minister for Sport and Recreation in making appointments to the boards of these agencies.

Non-Departmental Outputs to be supplied by Sport and Recreation Sector Organisations in 2007/08

Non-Departmental Output	Provider	$000 (GST excl)
Children and Young People’s Lifestyles Initiatives	SPARC	11,111
Drugs Testing of Sports Persons	Drug Free Sports New Zealand	1,691
Sport and Recreation Programmes	SPARC	52,288
TOTAL FUNDING		65,090

 

Benefits and Other Unrequited Expenses

In 2007/08 funding of $4.250 million has been allocated to Sports Education Scholarships to enable emerging and talented New Zealanders to pursue tertiary study and elite-level sport development concurrently. The scholarships are administered through SPARC.

Other Crown Expenses

Miscellaneous Grants

In 2007/08 funding of $44,000 has been provided to support sports-related initiatives, including participation in sport and recreation activities by groups, individuals and organisations that are unable to obtain support through organisations such as SPARC, local authorities and the New Zealand Lottery Grants Board.

Statement of Significant Underlying Assumptions

Reporting Entity

The Ministry for Culture and Heritage is a government department as defined by section 2 of the Public Finance Act 1989.

These forecast financial statements have been prepared in accordance with Section 38 of the Public Finance Act 1989.

These statements have been compiled on the basis of government policies and the Ministry's output agreements with the Minister for Arts, Culture and Heritage and the Minister for Sport and Recreation at the time the statements were finalised.

These statements have been prepared on a going-concern basis. The prospective financial statements comply with FRS 42. The actual financial results achieved for the period covered are likely to vary from the information presented, and these variations may be material.

Statement of Significant Accounting Policies

Statement of Compliance

The 2006/07 budgeted and actual financial statements have been prepared in accordance with New Zealand generally accepted accounting practice. The 2007/08 forecast financial statements have been prepared under the New Zealand international financial reporting standards (NZ IFRS). The Ministry is a Public Benefit Entity. These forecasted financial statements comply with NZ IFRS and NZ IFRS 1 has been applied. There are no significant differences arising on transition to NZ IFRS.

Specific Accounting Policies

The accounting policies set out below have been applied consistently to all periods presented in these statements and in preparing an opening NZ IFRS balance sheet as at 1 July 2006 for the purposes of the transition to NZ IFRS.

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 statements are presented in New Zealand dollars rounded to the nearest million.

Revenue

The Ministry derives revenue through the provision of outputs to the Crown and from services to third parties. Third-party revenue is predominantly derived through the undertaking of historical projects on a full cost-recovery basis. Revenue is recognised when earned and is reported in the financial period to which it relates.

Property, Plant and Equipment

All fixed assets costing $1,000 or more are capitalised (except for computer equipment where the threshold has been set at $2,000 and software licensing and development costs where the threshold has been set at $5,000) and recorded at historical cost less accumulated depreciation.

The initial cost of a fixed asset is the value of the consideration given to acquire or create the asset and any directly attributable costs of bringing the asset to working condition for its intended use less accumulated depreciation and accumulated impairment losses. Leasehold improvement costs include significant project management and related fees.

The carrying amounts of plant, property and equipment are reviewed at least annually to determine if there is any indication of impairment. Where an asset’s recoverable amount is less than its carrying amount, it will be reported at its recoverable amount and an impairment loss will be recognised. Losses resulting from impairment are reported in the Statement of Financial Performance, unless the asset is carried at a revalued amount in which case any impairment loss is treated as a revaluation decrease.

Depreciation Rates

Depreciation is provided on a straight-line basis as follows at rates calculated to allocate the cost or valuation of an item of property, plant and equipment, less any estimated residual value, over its estimated useful life, as follows:

	% per annum
Office furniture	20
Computer equipment and software
- Personal computers	33 1/3
- Computer equipment other than personal computers	25
- Software licensing and development costs	33 1/3
Office equipment	20
Works of art	1

Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful lives of the improvements, whichever is shorter. Consequently, the depreciation rate for each asset will vary depending upon the lease period or the useful life of the improvements when the work is completed.

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 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 development expenditure can be reliably measured. Expenditure incurred on research of an internally generated intangible asset is expensed when it is incurred. Where the research phase cannot be distinguished from the development phase, the expenditure is expensed when it is incurred.

Intangible assets with finite lives are subsequently recorded at cost less any amortisation and impairment losses. Amortisation is charged to the Statement of Financial Performance on a straight-line basis over the useful life of the asset.

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 depreciation and subsequent accumulated impairment losses. Revaluations are done for each intangible asset, not for a class of asset.

Realised gains and losses arising from disposal of intangible assets are recognised in the Statement of Financial Performance in the period in which the transaction occurs. Unrealised gains and losses arising from changes in the value of intangible assets are recognised as at balance date. To the extent that a gain reverses a loss previously charged to the Statement of Financial Performance, the gain is credited to the Statement of Financial Performance. Otherwise, gains are credited to an asset revaluation reserve for that asset. To the extent that there is a balance in the asset revaluation reserve for the intangible asset a revaluation loss is debited to the reserve. Otherwise, losses are reported in the Statement of Financial Performance.

Intangible assets with finite lives are reviewed at least annually to determine if there is any indication of impairment. An intangible asset with an indefinite life is tested for impairment annually. Where an intangible asset’s recoverable amount is less than its carrying amount, it will be reported at its recoverable amount and an impairment loss will be recognised. Losses resulting from impairment are reported in the Statement of Financial Performance, unless the asset is carried at a revalued amount in which case the impairment loss is treated as a revaluation decrease.

Debtors

Trade and other receivables are initially measured at fair value and subsequently measured at amortised cost using the effective interest method, less any provision for impairment.

Benefits

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, 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. The liability for long-term employee entitlements is reported as 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 settled within 12 months are reported at the amount expected to be paid, otherwise they are reported as the present value of the estimated future cash outflows.

Statement of Cash Flows

Cash means cash balances on hand and held in bank accounts.

Operating activities include cash received from all income sources of the Ministry and record the cash payments made for the supply of goods and services.

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.

Cost Allocation

The Ministry has derived the costs of outputs shown in these statements using a cost-allocation system which assigns direct costs to outputs and indirect costs to outputs based on staff numbers.

Goods and Services Tax

These statements are GST exclusive, except for receivables and payables which are stated on a GST inclusive basis.

Taxation

Government departments are exempt from the payment of income tax in terms of the Income Tax Act 1994. Accordingly, no charge for income tax has been provided for.

Changes in Accounting Policies

Accounting policies are changed only if the change is required by a standard or interpretation or otherwise provides more reliable and more relevant information.

Page last updated: May 18, 2007

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