Auditor-General’s report, Central government: Results of the 2016/17 audits

The Auditor-General’s report Central government: Results of the 2016/17 audits was presented to the House of Representatives today.

This report sets out the results of our audit of the Financial Statements of the Government of New Zealand for the year ended 30 June 2017 and of carrying out the Controller function. Both are essential components of New Zealand’s public financial management system.

The 2016/17 financial year saw major disruption to government services and transport infrastructure resulting from the Kaikōura earthquake in November 2016. The Government also identified external risks to New Zealand’s economy from overseas events and trends, and uncertainty about global trade developments.

The key audit matters for 2016/17 were:

• recognising tax revenue;
• valuing the rail network assets, the State highway network, electricity generation assets, and the social housing portfolio;
• valuing the Accident Compensation Corporation’s outstanding claims liability and the Government employees’ superannuation liability; and
• valuing financial assets and liabilities.

We were satisfied that the balances and disclosures in the Government’s financial statements relating to the key audit matters are reasonable. We have made recommendations to the Treasury in relation to these key audit matters. We also noted two other significant matters arising from the audit, which we discuss in this report: accounting for the proposed Crown contribution to the City Rail Link development in Auckland and the treatment of income-related rent subsidies.

With the potential for further natural disasters, and with current international developments, there will undoubtedly continue to be changes and challenges for central government agencies to respond to. These may require agencies to respond in an agile and timely manner. It is important that agencies continue to provide quality reporting in a timely manner to ensure their financial and performance reports continue to be of a standard that promotes transparency and accountability to Parliament and the public of New Zealand.

A two-page summary and epub of this report are also available.

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