Annual Report for the Year Ended 30 June 1999

• Our Vision
• Principal Functions
• Chief Executive's Overview
• The Way Forward
• Key Achievements
• The Ministry
• 1998/99 Financial Performance
• Key Statistics
• Statement of Responsibility
• Report of the Audit Office
• Financial Statements
• Output Class Performance
• References

Annual Report for the Year Ended 30 June 1999

1998/99 Financial Performance

Note 13: Creditors and Payables

Note 13: Creditors and Payables.

	30/6/99 Actual $000	30/6/98 Actual $000

Trade creditors	1,465	287
Accrued expenses	2,443	3,105
GST payable	779	702

Total creditors and payables

4,687

4,094

Note 14: Provision for Repayment of Surplus to the Crown

Note 14: Provision for Repayment of Surplus to the Crown.

	30/6/99 Actual $000	30/6/98 Actual $000

Net surplus/(deficit)	(118)	2,164
Add/(deduct) other expenses:
Departmental restructuring	500	(52)
Retirement and long service leave	1,300	0

Total provision for repayment of surplus

1,682

2,112

Note 15: Employee Entitlements

Note 15: Employee Entitlements.

	30/6/99 Actual $000	30/6/98 Actual $000

Non-current liabilities
Retirement and long service leave	1,567	319

Total non-current portion

1,567

319

Current liabilities
Annual leave	1,010	937
Other personnel expenses	2,068	697

Total current portion

3,078

1,634

Total employee entitlements

4,645

1,953

Note 16: Financial Instruments

The Ministry is party to financial instrument arrangements as part of its everyday operations.
These include instruments such as bank balances, investments, accounts receivable and trade creditors.

Credit Risk

Credit risk is the risk that a third party will default on its obligations to the Ministry, causing the Ministry to incur a loss. In the normal course of its business, the Ministry incurs credit risk from its trade debtors, transactions with financial institutions and the New Zealand Debt Management Office.

The Ministry does not require any collateral or security to support financial instruments with financial institutions that the Ministry deals with, or with the NZDMO, as these entities have high credit ratings. For its other financial instruments, the Ministry does not have significant concentrations of credit risk.

Fair Value

The fair value of all financial instruments is equivalent to the carrying amount disclosed in the Statement of Financial Position.

Currency Risk and Interest Rate Risk

Currency risk is the risk that debtors and creditors due in foreign currency will fluctuate due to changes in foreign exchange rates.

Interest rate risk is the risk that the Ministry's return on the funds it has invested will fluctuate due to changes in market interest rates. Under sections 46 and 47 of the Public Finance Act, the Ministry cannot raise a loan without Ministerial approval and no such loans have been raised. Accordingly there is no interest rate exposure on funds borrowed.

The Ministry has no significant exposure to currency risk or interest rate risk on its financial instruments.

Note 17: Contingencies

The Ministry does not have any contingent assets as at 30 June 1999 (30 June 1998 nil).

Contingent liabilities are separately disclosed in the Statement of Contingent Liabilities.

Note 18: Related Party Information

The Ministry is a wholly owned entity of the Crown. The Government significantly influences the roles of the Ministry as well as being its major source of revenue.

The Ministry enters into numerous transactions with other government departments, Crown agencies and state-owned enterprises on an arm's length basis. These transactions are not considered to be related party transactions.

Apart from those transactions described above, the Ministry has not entered into any related party transactions.

Note 19: Major Budget Variations

Statement of Financial Performance, Statement of Movement in Taxpayers' Funds and Statement of Financial Position

Explanations for the major variations from the initial Budget Night Estimates were outlined in the Supplementary Estimates. The expenditure variations were due, in the main, to:

1. a change in accounting policy with respect to the recognition of some employee entitlements ($1.3 million); and
2. providing for the outsourcing of the Ministry's fisheries registry services to Commercial Fisheries Services Limited ($1 million).

Note 20: Post Balance Date Events

Outsourcing of Registry Services

On 26 July 1999, the Ministry entered into a contract with Commercial Fisheries Services (CFS) Ltd to deliver a wide range of registry based services. This contract, which is for three years, was implemented effective from 2 August 1999 with the transfer of 68 staff from the Ministry to CFS's subcontractor Datacom Employer Services Limited.

Under the contract, which was evaluated against section 294 of the Fisheries Act 1996, the Ministry continues to provide information systems and services and the Chief Executive of the Ministry remains accountable for the delivery of the services in the contract.

At balance date, $1 million had been provided for the costs of the transition to the new provider.

Statements of Service Performance for the Year Ended 30 June 1999

Statements of Service Performance for each Output Class, together with the actual and budgeted costs for each Output Class and contributing Outputs are detailed in the following pages.

Consolidated Output Classes - Statement of Financial Performance

Consolidated Output Classes - Statement of Financial performance.

	30/06/99 Actual $000	30/06/99 Budget $000	30/06/99 Actual as % of Budget	30/06/98 Actual $000

Revenue:
Crown	39,200	39,200	100	37,685
Other	2,374	2,323	102	2,691

Total revenue

41,574

41,523

100

40,376

Expenses:
Policy Advice	1,912	2,019	95	1,141
Operational Advice	6,948	7,201	96	6,105
Government Service Specification and Purchasing	2,573	2,874	90	1,594
Enforcement of Fisheries Policies	15,096	15,129	99	13,948
Prosecution of Offences	1,995	2,558	78	2,579
Fisheries Services	9,576	9,839	97	11,838
Administration of Crown Receipts and Payments	806	836	96	805
Biosecurity	425	482	88	297

Total expenses

39,331

40,938

96

38,307

Surplus

2,243

585

383

2,069

Standards to be Adopted for the Provision of Policy Advice

All policy advice from the Ministry will be delivered in accordance with the following standards:

Purpose

Reports clearly state their purpose and address any questions that have been set.

Logic

Assumptions behind the advice are explicit, the argument logical and supported by facts.

Accuracy

The facts in the papers are accurate and all material facts have been included.

Options

An adequate range of options have been presented and assessed for benefits, costs and consequences to fisheries management.

Consultation

Evidence exists of adequate consultation with interested parties where applicable and possible objections to the proposals have been identified.

Practicality

Problems of implementation, technical feasibility, compliance costs, enforcement implications, timing and consistency with other policies have been considered.

Presentation

Material presented meets Cabinet Office requirements.

Review

The Minister's views on the quality of advice will be sought through appropriate means on a six-monthly basis.