Audit report

To the readers of the Department of Building and Housing Financial Statements and performance Information for the year ended 30 June 2007.

The Auditor-General is the auditor of Department of Building and Housing (the Department). The Auditor General has appointed me, John O’Connell, using the staff and resources of Audit New Zealand, to carry out the audit on his behalf. The audit covers the financial statements statement of service performance and schedules of non-departmental activities included in the annual report of the Department for the year ended 30 June 2007.

Unqualified opinion

In our opinion:

The financial statements of the Department of Building and Housing comprising the Statement of Accounting Policies, Statement of Financial Performance, Statement of Movements in Taxpayers’ Funds, Statement of Financial Position, Statement of Cash Flows, Statement of Commitments, Statement of Contingent Liabilities, Statement of Unappropriated Expenditure, Statement of Departmental Expenditure and Appropriations, Statement of Trust Monies and Notes to the Financial Statements:

comply with generally accepted accounting practice in New Zealand; and fairly reflect:

• the Department’s financial position as at 30 June 2007; and
• the results of its operations and cash flows for the year ended on that date.

The statement of service performance comprising Vote Housing-output classes Building Act 2004, Building Regulation and Control, Occupational Licensing, Purchase and Monitoring Advice-Housing New Zealand Corporation, Residential Tenancy Services, Sector and Regulatory policy and Weathertight Homes Resolution Services:

comply with generally accepted accounting practice in New Zealand; and fairly reflect for each class of outputs:

• its standard of delivery performance achieved, as compared with the forecast standards outlined in the statement of forecast service performance adopted at the start of the financial year; and
• its actual revenue earned and output expenses incurred, as compared with the forecast revenues and output expenses outlined in the statement of forecast service performance adopted at the start of the financial year.

The schedules of non-departmental activities comprising the Statement of Non-Departmental Accounting Policies, Statement of Non Departmental Expenditure and Appropriations, Schedule of Non Departmental Revenue, Schedule of Non Departmental Expenses, Schedule of Non Departmental Assets, Schedule of Non Departmental Liabilities, Schedule of Non-Departmental Commitments, Schedule of Non-Departmental Contingent Liabilities and Notes to the Schedules:

 fairly reflect the assets, liabilities, revenues, expenses, contingencies, commitments and trust monies managed by the Department on behalf of the Crown for the year ended 30 June 2007.

The audit was completed on 28 September 2007, and is the date at which our opinion is expressed.

The basis of our opinion is explained below. In addition, we outline the responsibilities of the Chief Executive and the Auditor, and explain our independence.

Basis of opinion

We carried out the audit in accordance with the Auditor-General’s Auditing Standards, which incorporate the New Zealand Auditing Standards.

We planned and performed the audit to obtain all the information and explanations we considered necessary in order to obtain reasonable assurance that the financial statements did not have material misstatements, whether caused by fraud or error.

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

The audit involved performing procedures to test the information presented in the financial statements. We assessed the results of those procedures in forming our opinion.

Audit procedures generally include:

• determining whether significant financial and management controls are working and can be relied on to produce complete and accurate data;
• verifying samples of transactions and account balances;
• performing analyses to identify anomalies in the reported data;
• reviewing significant estimates and judgements made by the Chief Executive;
• confirming year-end balances;
• determining whether accounting policies are appropriate and consistently applied; and
• determining whether all financial statement and statement of service performance disclosures are adequate.

We did not examine every transaction, nor do we guarantee complete accuracy of the financial statements or statement of service performance.

We evaluated the overall adequacy of the presentation of information in the financial statements and statement of service performance. We obtained all the information and explanations we required to support our opinion above.

Responsibilities of the Chief Executive and the Auditor

The Chief Executive is responsible for preparing financial statements and a statement of service performance in accordance with generally accepted accounting practice in New Zealand. The financial statements must fairly reflect the financial position of the Department as at 30 June 2007 and the results of its operations and cash flows for the year ended on that date. The statement of service performance must fairly reflect, for each class of outputs, the Department’s standards of delivery performance achieved and revenue earned and expenses incurred, as compared with the forecast standards, revenue and expenses adopted at the start of the financial year. In addition, the schedules of non-departmental activities must fairly reflect the assets, liabilities, revenues, expenses, contingencies, commitments and trust monies managed by the Department on behalf of the Crown for the year ended 30 June 2007. The Chief Executive’s responsibilities arise from sections 45A, 45B and 45(1) (f) of the Public Finance Act 1989.

We are responsible for expressing an independent opinion on the financial statements and statement of service performance and reporting that opinion to you. This responsibility arises from section 15 of the Public Audit Act 2001 and section 45D (2) of the Public Finance Act 1989.

Independence

When carrying out the audit we followed the independence requirements of the Auditor General, which incorporate the independence requirements of the Institute of Chartered Accountants of New Zealand.

Other than the audit, we have no relationship with or interests in the Department.

John O’Connell
Audit New Zealand
On behalf of the Auditor-General
Wellington, New Zealand

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Matters relating to the electronic presentation of the audited financial statements

This audit report relates to the financial statements of Department of Building and Housing for the year ended 30 June 2007 included on the Department of Building and Housing’s web site. The Department’s Chief Executive is responsible for the maintenance and integrity of the Department of Building and Housing’s web site. We have not been engaged to report on the integrity of the Department of Building and Housing’s web site. We accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the web site.

The audit report refers only to the financial statements named above. It does not provide an opinion on any other information which may have been hyperlinked to/from these financial statements. If readers of this report are concerned with the inherent risks arising from electronic data communication they should refer to the published hard copy of the audited financial statements and related audit report dated 28 September 2007 to confirm the information included in the audited financial statements presented on this web site.

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