2004 Annual Report by Te Wananga o Aotearoa

Published by: Te W채nanga o Aotearoa (Head Office - 320 Factory Road) PO Box 151, Te Awamutu, New Zealand Date of issue: 31st August, 2007

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Ko Te Kaupapa o Te Wänanga o Aotearoa Philosophy Charter: 1st January, 2004 – 31st December, 2007

Ki te whakawhiwhi i ngä mea angitü, ä, i ngä akoranga tino teitei katoa mä ngä Mäori me ngä iwi o Aotearoa me te ao Ki te waihanga i tëtahi taiao hei akoranga tikanga Mäori Ki te tautoko, ki te whakahau, ki te ärahi i ngä tauira katoa, i a rätou e aru ana i ngä whanaketanga i ngä akoranga me ngä mahi e pä ana ki a rätou Ki te whakawhiwhi i te mea akoranga whai kiko Ki te whakahau i ngä tauira katoa ki te ako kia whiwhi ai rätou i te puäwaitanga tino teitei o te mäiatanga Ki te whakahau i öna kaimahi, kia pai ai te haere o ngä tikanga o te mahi i whakaatu mai, kia whiwhi ai rätou i te puäwaitanga tino teitei o te mäiatanga

To provide holistic education opportunities of the highest quality for Mäori, peoples of Aotearoa and the world To provide a unique Mäori cultural learning environment To provide support, encouragement and guidance to all learners in their pursuit of personal development, learning and employment To provide practical learning experiences To encourage all learners to learn and achieve to their fullest potential To be a good employer and encourage staff to develop personally and professionally to their fullest potential

2 - Ko Te Kaupapa o Te Wänanga o Aotearoa

Ko Te Uaratanga o Te Wänanga o Aotearoa Mission Statement Charter: 1st January, 2004 – 31st December, 2007

Ko te whakarite mätauranga e hängai ana ki ngä wawata o tënei whakatupuranga, ki te whakaü hoki i ngä moemoeä o ngä whakatupuranga o te ao türoa, ki te whakatikatika kia märama ai ki te hä o te ao tawhito Ki te whakatö ki roto i te hinengaro tangata te möhiotanga o ngä taonga tuku iho, tä rätou reo, tä rätou Mäoritanga e pai ai tä rätou torotoro i ngä iwi o te ao i runga i te mäia me te manawanui Ki te whakamana i te pümanawa moe ki te ako hei taumata e hïkoi whakamua i roto i te ao hou Ki te whakatakoto täkoha e whai hua ai. Kia manawapä anö Kia mutu tonu, he käinga pai tënei ao

To provide an education that best fits the aspirations of this generation, enhances the dreams of future generations, prepares for understanding the essence of past generations To equip our people with knowledge of their heritage, their language, their culture, so they can handle the world at large with confidence and self-determination To empower one’s potential for learning as a base for progress in the modern world To make contributions of consequence. To care To make our world a better place

Ko Te Uaratanga o Te Wänanga o Aotearoa

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Table of Contents Council Members

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Management Personnel

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Te Mana Whakahaere (Council) Chairperson's Report

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2004 Year in Review

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Te Panekiretanga o Te Reo

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Degree in Whakairo

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Mahi Ora Evaluation

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Performance Based Research Fund Results

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Research

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Certificate in Small Business Management

.14

Campus Reports

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Manukau Campus – Mängere, Auckland

.15

Rähui Pökeka Campus – Huntly

.15

Raroera Campus – Hamilton

.15

Apakura Campus – Te Awamutu

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Te Arawa Campus – Rotorua

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Maniapoto Campus – Te Kuiti

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Tokoroa Campus – Tokoroa

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Whirikökä Campus – Gisborne

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Papaiöea Campus – Palmerston North

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Todd Park Campus – Porirua

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Tauira Information

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Overview

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Tauira Participation

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Tauira Demographics

.18

Tauira Achievement

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Employee Information

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Employee Numbers

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Age Profile

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Gender Profile

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Ethnicity Profile

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Statement of Service Performance

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Educational Activities and Learner Outcomes

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Research Management

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Treaty of Waitangi

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Meeting the Needs of Under-represented Groups

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Collaboration and Cooperation with Other Organisations

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Links with Industry, M채ori, Pacific Peoples and Other Communities

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Equal Employment Opportunities

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Quality Improvement

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Financial Performance Indicators

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Financial Report

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Financial Review

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Statement of Responsibility

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Report of the Auditor-General

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Statement of Accounting Policies

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Statement of Financial Performance

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Statement of Movements in Equity

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Statement of Financial Position

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Statement of Cashflows

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Financial Ratios

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Notes to the Financial Statements

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Statement of Commitments and Contingencies

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Table of Contents - 5

Ngä Mema o Te Mana Whakahaere Council Members Chairperson Craig Coxhead B Soc Sci, LLB (Hon), LLM (Waikato)

Ministerial Appointment

Members Dr Rongo Wetere Hon PhD (Sinte Gleska), Hon PhD (AUT), ONZM, FNZIM

Tumuaki / Chief Executive

Bruce Bryant B Com, M Tax S (Hons.), MBA, CA(PP), FNZIM, MRSNZ

Ministerial Appointment

Tania Hodges RPN, B Soc Sci, PG Dip Mgt St, MBA (Distinction)

Ministerial Appointment

Bruce Martin BA, FNZIM

Ministerial Appointment

Lloyd Anderson Dip Dairy Farming, Reg Comp Nurse, Adv C TARM

Co-opted Member

Eleanor Barton

Co-opted Member

Arana Collett

Co-opted Member

Mana Forbes Dip T, TTC

Co-opted Member

Barry Hopkins

Co-opted Member

Harold Maniapoto NZCD

Co-opted Member

Carol Nin Dip Comp Ed

Co-opted Member

Rewi Panapa Dip Comp Nurse, B Nursing

Co-opted Member

Rev. Napi Waaka Dip Tchg, O.B.E. Adj. Professor – Cultural Advisor

Co-opted Member

Richard Batley C.A. BMS University of Waikato

Co-opted Member

Advisors Tui Adams QSO, Hon PhD (Waikato), Adj Professor (TWoA)

Kaumätua – Cultural Advisor

Graeme McNally M Com (Hons), FNZIM, IMC

Ministerial Advisor

6 - Ngä Mema o Te Mana Whakahaere - Council Members

Tangata Kaiwhakahaere Management Personnel Dr Rongo Wetere Hon PhD (Sinte Gleska), Hon PhD (AUT), ONZM, FNZIM

Tumuaki / Chief Executive

Min Marshall Exec MBA (Distinction), PG Dip Mgt St, BS Com

Executive Director

Bentham Ohia Exec MBA, BA, Dip T

Executive Director

Dr Neville Withers PhD, B Agr Sc

Executive Director

Kingi Wetere NZCE

Executive Director

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Te Mana Whakahaere (Council) Chairperson’s Report Tënä rawa atu koutou i runga i o tätou tini aituä, o ia marae, o ia marae, kua whetürangihia. Kei te mihi atu, kei te mihi atu. Rätou te hunga mate ki a rätou. Tätou te hunga ora ki a tätou. Kei te mihi hoki ki tö tätou Arikinui, Te Ata-i-rangi-kaahu. Tënä anö tätou katoa. It is, again, a pleasure to provide the Chairperson’s report for Te Wänanga o Aotearoa on behalf of Te Mana Whakahaere. During the 2004 year, Council continued to be proud of the way our institution expanded the boundaries of tertiary education. Our approach to programme development and delivery continues to ensure opportunities exist for all New Zealanders, throughout the country, to advance their professional development through education. Te Mana Whakahaere worked hard to support the dynamic approach of staff, while strengthening reporting to the Tertiary Advisory Monitoring Unit. As in 2003, Te Mana Whakahaere were supported and assisted by our Advisor, Graeme McNally, to continue improving the governance of our organisation. To this end, Te Mana Whakahaere was involved in TAMU Governance Induction Training (a governance induction training package for new councillors). Te Mana Whakahaere also conducted a review of the council constitution, restructuring of council membership, review of council committee structures, reconsideration of the format and timing of council meetings, development of a council handbook, adoption of standing orders, and completion of a council performance review. We welcomed Richard Batley to Te Mana Whakahaere during the second half of the year. Richard offers a range of public and private sector skills and experience. During 2005, we will also look forward to a new ministerial appointment. The overall aim is to maintain a high standard of membership with a balanced mix of excellent capabilities and skills. A significant event in Wänanga history was the meeting of council members from all three Wänanga - Te Wänanga o Aotearoa, Te Whare Wänanga o Awanuiärangi and Te Wänanga o Raukawa. This was an opportunity for council members from the three wänanga to participate in a joint Te Mana Whakahaere training session that looked specifically at issues common to wänanga.

8 - Te Mana Whakahaere (Council) Chairperson’s Report

The 2004 financial year, however, was a period when political scrutiny and criticism of the institution increased in frequency and ferocity. This had a very real impact on our ability to function as a constructive, pro-active organisation. This political scrutiny contributed, in part, to the delay in the tabling of this report, as did our strong commitment to address the issues raised by the Office of the Auditor-General in its “Inquiry into Certain Aspects of Te Wänanga o Aotearoa”. Another factor was our debate with the auditors about their qualification that appears in this report. We believe that the, at times, fierce political criticism endured by Te Wänanga o Aotearoa during the year was also the catalyst for application of what Council would consider unrealistic reporting required by the Auditor-General’s audit service provider, Deloitte, in terms of the documentation requested and questions requiring answers. This has, in part, resulted in Te Wänanga o Aotearoa this year receiving a qualified audit for the first time in its history, a stark variation from the position taken by Deloitte in the past. This process has been a lengthy and expensive exercise, and there remains very real concern around the unhelpful impression the Auditor-General’s audit opinion may create for staff, students, iwi, stakeholders and the market place. Te Mana Whakahaere, however, has continued to be constructive during times of increased inspection and has sought to improve systems to ensure it is meeting appropriate standards. In December 2004, the Education and Science Select Committee released their report following their visit earlier in the year. While providing a number of recommendations and suggestions, the committee’s conclusion was positive. Te Wänanga o Aotearoa is described as:

“an innovative education institution that provides and delivers programmes and courses that target the educational needs of groups who have previously not been well catered for by other institutions”. Despite this positive appraisal, the effects of high profile criticism and scrutiny did, for the first time in the organisation’s history, impact on EFTS achieved for 2004. EFTS declined from 34,280 in 2003 to 29,671 in 2004, having a flow-on effect in terms of our financial performance and impacting on

the profitability of the institution through reduced revenue. This was compounded by expenditure that exceeded budget resulting in a loss for 2004. Additional factors that contributed to the loss included, among other things, costs associated with the re-development of the Glenview Tavern in Hamilton as a library for the Wänanga, the writing-off of development costs of the Greenlight literacy programme and a software development project. The loss was also due to the rationalisation of property and other relationships between the Wänanga and the Aotearoa Institute.

100,000 tauira throughout the Aotearoa have experienced and come to expect from Te Wänanga o Aotearoa.

The result is well below the expectations of Te Mana Whakahaere. In all, Te Wänanga o Aotearoa recorded a disappointing 2004 financial result. During 2004, we appreciated the support, commitment and contributions of council members and Graeme McNally Ngä mihi ki a koutou katoa. We would also like to acknowledge the contribution of Carol Beckett (secretary to the Te Mana Whakahaere). Thank you, Carol, for your tireless commitment - Ngä mihi nui ki a koe.

Craig Coxhead Chairperson Te Mana Whakahaere

Our Tumuaki continued to carry the challenges, strains and pressures of managing the largest tertiary institution in Aotearoa - Ngä mihi nui ki a koe e te Matua, koutou ko tö tïma whakahaere. Te Mana Whakahaere once again extends many thanks to all staff for their tireless commitment and contributions during 2004. It is through the efforts of staff that retention and completion rates continued to strengthen. Tens of thousands of students, despite some unhelpful and high profile criticism, continued to commit to the nurturing and embracing educational experience provided by Te Wänanga o Aotearoa. Finally, to our tauira, congratulations to those who graduated in 2004. Kia kaha to those who continue with their studies in 2005. We wish you every success and look forward to seeing you at your graduation. To the many tauira who enrolled with Te Wänanga Aotearoa for the first time in 2004, we congratulate you on taking a step towards furthering your education and we look forward to providing the comprehensive educational experience that more than

Te Mana Whakahaere (Council) Chairperson’s Report - 9

Ngä Arotake o te Tau 2004 Year in Review E ngä iwi whänui o te motu nei, tënä rä koutou katoa Te Wänanga o Aotearoa has become a major participant in the tertiary sector in Aotearoa New Zealand in terms of its size and its coverage throughout the country. The institution has been the subject of much scrutiny by government bodies during the past few years and has come under the media spotlight after questions were raised in the House during the early months of 2005. Although we have attempted to provide answers, there is a feeling that Wänanga Mäori, and Te Wänanga o Aotearoa in particular, are not well understood by some stakeholders. One of our immediate priorities is to work with Crown agencies to define what a wänanga is and where wänanga fit within the confines of current legislation and the Tertiary Education Strategy. These efforts are balanced by accommodating non-governmental stakeholder expectations as Te Wänanga o Aotearoa strives to earn its position as provider of choice for many iwi and communities. The outcome of these discussions will ultimately determine our place in the tertiary landscape. Te Wänanga o Aotearoa has operated differently from other TEIs; it has pushed boundaries and been innovative. At times, it has appeared to threaten other tertiary providers merely by its presence within a community. It has done so to provide services for people who would not otherwise have been participants in tertiary education, i.e., those with educational, personal and social needs that were not being met by traditional educational models. An attitude of openness

10 - Ngä Arotake o te Tau - 2004 Year in Review

towards all iwi and cultures, through the consistent application of the principles of tikanga Mäori and ähuatanga Mäori, has been a factor in our growth. We have not had an approach of ‘by Mäori for Mäori’ that is exclusive to Mäori, but have recognised that traditional Mäori values benefit all, irrespective of race, since we all have basic needs that must be met if we are to lead fulfilling lives. We have developed some key programmes that address community needs in literacy, small business management and computing. These programmes use home-based delivery methodologies to further reduce barriers to tertiary education. The programmes are offered at an introductory level and provide pathways to further education within Te Wänanga o Aotearoa or with other TEIs at more advanced levels. During the past year, we entered into agreements for the delivery of entry level qualifications with Te Whare Wänanga o Awanuiärangi, The Open Polytechnic of New Zealand, Northland Polytechnic and the Southern Institute of Technology. These arrangements create pathways and opportunities for tauira where regional TEIs were not currently offering programmes of a similar nature. They also maximise the utilisation of resources available to each institution in a non-competitive manner. Each of the three members of Te Tau Ihu o ngä Wänanga successfully submitted a programme for approval by the World Indigenous Higher Education Consortium (WINHEC) Accreditation Panel. Our contribution was Te Arataki Manu Körero, a programme designed for kaumätua to share and learn tikanga, kawa, whakawhanaungatanga, karakia, waiata and other areas of traditional Mäori culture

and values. The programme concept and design enables elders of all nations and indigenous groups to participate in the reclamation and documentation of their cultural heritage so that the knowledge can be passed on to future generations. On the financial front, a number of internal and external factors have led to our worst result since becoming a wänanga in 1994 and we must learn from the experiences that have presented themselves in 2004. Lower than expected EFTS consumption and an inability to meet expected enrolment targets in certain areas accounted for a reduction in revenue, whilst staffing levels increased despite reduced enrolments. At the same time, investment in programme development and capital infrastructure created a drain on working capital that will need to be managed carefully until reserves can be rebuilt. It is accepted that change is required to solidify our management practices and financial position and steps have been taken to achieve this objective. We are still hopeful that the advancement of the $20 million suspensory loan, negotiated in the Deed of Settlement with the Crown in 2001 and now due, will be honoured. This will provide a solid financial foundation as we move forward.

The following programmes were approved and/or accredited during 2004: • Bachelor of Iwi Environmental Management; • Certificate in Eco-cultural Tourism; • Diploma in Te Arataki Manu Körero – Level 5; and • Bachelor of Social Work (Bi-culturalism in Practice). The 2004 year saw further steps being taken to strengthen research activity at Te Wänanga o Aotearoa. The Research Support Unit completed its first year of operation, fostering a sound research culture across the institution. Te Wänanga o Aotearoa also continued to participate in the Performance Based Research Fund (PBRF). Information about this is contained later in this report.

Highlights for the 2004 year include: • development of effective internal audit processes to minimise risk; • improved tauira evaluation returns; • improved evaluation process for monitoring action plans; • improved policy awareness and staff motivation to ‘know’ about policies; and • improved satellite management and satellite involvement with Te Wänanga o Aotearoa.

Ngä Arotake o te Tau - 2004 Year in Review - 11

Te Panekiretanga o Te Reo

Degree in Whakairo

Te Wänanga o Aotearoa is honoured to support the establishment of Te Panekiretanga o Te Reo - The Institute of Excellence in Mäori Language. It is envisioned that the institute will take on a leadership role in the revitalisation and regeneration of the Mäori language for people with high levels of fluency.

Te Wänanga o Aotearoa gained accreditation to deliver Te Maunga Kura Toi (Bachelor of Mäori Art) degree programme for the first time in 2004. The programme was initially designed by Professor Kereti Rautangata and Dr Paakaariki Harrison and provides recognition for those pursuing the higher learning of wänangatanga Mäori.

The institute gathers together Mäori language experts who provide high-level Mäori language training primarily for teachers, but also for translators, interpreters, broadcasters, journalists and other specialist career fields. The teaching team includes Dr Tïmoti Käretu (Director), Pou Temara (Associate Director) and Professor Wharehuia Milroy.

The programme was piloted in 2002, with 22 tauira from around the country coming together at Apakura Campus in Te Awamutu to take up the challenge: “hei pupuru i te aho o te wänanga, hei kawe i ngä kura huna a Rua” (‘To retain the strands of knowledge, to perpetuate the hidden (mystic) schools of Rua (knowledge)).

The pilot programme was delivered and evaluated between July 2004 and January 2005. Twenty-eight tauira were chosen from a wide range of professions and iwi backgrounds. Each candidate demonstrated a commitment to increasing their knowledge of and fluency in the Mäori language. Eight of the twenty-eight tauira were Te Wänanga o Aotearoa staff. The institute will inspire these people to strive to attain the pinnacles of Mäori language excellence. Programmes will be delivered between February and December each year, starting in 2005.

As part of the programme and to achieve the Advanced Diploma in Mäori Art, tauira completed two beautifully carved and traditionally constructed Pätaka (‘storehouses of knowledge’). The tauira and their work are portrayed in the recently published book, Te Papa Hono Tütaki, Te Moko Tukupä Wänanga a Rua i te Whëke Rangi.

As part of its work, Te Panekiretanga o Te Reo is also planning to create a national repository of language resources, a research unit and pathways for further post-graduate study.

12 - Ngä Arotake o te Tau - 2004 Year in Review

Eighteen tauira who had previously graduated from the diploma and advanced diploma in whakairo, will become the first graduates from the degree programme in December 2004. These tauira will be the first ever to be awarded a degree in whakairo.

Mahi Ora Evaluation In 2004, Mahi Ora in collaboration with the International Research Institute for Mäori and Indigenous Education, published an evaluation of the Mahi Ora programme. The data for the evaluation were obtained through surveys of 600 Mahi Ora tauira. Overall tauira satisfaction with the Mahi Ora programme was high, at 96.3%. Tauira stated the programme helped them develop a more positive attitude (90%), supported them to find further educational opportunities (68.3%) and supported them to find work (41.4%). Tauira rated Mahi Ora kaitiaki (tutors) very well with 83% of those surveyed rating staff as either ‘Excellent’ or ‘Good’. Tauira saw kaitiaki as positive role models within the community and felt that the non-judgemental and non-threatening approaches taken by them were key elements that encouraged tauira participation. Whanaungatanga was also a recognisable element that encouraged participation. Resources supplied as part of the Mahi Ora programme were rated very highly, with 95.6% of tauira surveyed rating resources as either ‘Excellent’ or ‘Good’. The Mahi Ora assessment process was also rated very well, with 84.4% of tauira rating the assessment process as either ‘Excellent’ or ‘Good’. Of those raising concerns about the assessment process, most highlighted delay in the assessment process as an issue.

Performance Based Research Fund Results The Performance Based Research Fund (PBRF) is a government mechanism for funding research in degree-granting organisations. This mechanism was established in 2003 to address perceived inadequacies in the existing research funding mechanism (EFTS funding). The fund is distributed based on levels of research, not enrolments. Te Wänanga o Aotearoa decided to participate in this type of funding in June 2003. Considering other institutions had been receiving research funding for many years, Te Wänanga o Aotearoa showed quite good results, gathering evidence portfolios (EPs) from 70 staff. Our participation in the PBRF has put Te Wänanga o Aotearoa ‘on the map’ as a research institution and the organisation has performed creditably. We also now have data that we can use to argue our case for a more equitable process should we choose to participate in the future. Te Wänanga o Aotearoa was the only organisation that submitted work in whakairo, raranga and waiata, areas in which our organisation obviously has a niche worthy of strong development and support.

Mahi Ora is considered to be a programme that offers tauira the potential to bring positive change in their lives and is seen to enhance opportunities for those who are long-term unemployed. The overwhelming majority of ‘final comments’ about the Mahi Ora programme were very positive.

Ngä Arotake o te Tau - 2004 Year in Review - 13

Research The key focus for 2004 was to develop processes to manage research successfully on an institution-wide scale. We began this process by establishing a definition of research in the context of Te Wänanga o Aotearoa: Ko te kaupapa rangahau te whäinga päkaha o te möhiotanga me te mätauranga, e äta tautoko ana, e whakarangatira ana, tuatahi, i te wairua ora o te Mäori, tuarua, i te wairua ora o ngä iwi huhua o Aotearoa me te ao. Kaupapa rangahau is the rigorous pursuit of knowledge and wisdom that supports and positively promotes the lives of Mäori, other New Zealanders and people throughout the world. An important relationship has been developed with Ngä Pae o te Maramatanga from whom we have been successful in securing funding to build the research capacity and provide resources for our staff. As a tertiary education institution, it is important that programmes delivered by our staff are built on research conducted by our staff. Research support staff will continue to visit campuses regularly to provide staff with support and research resources.

14 - Ngä Arotake o te Tau - 2004 Year in Review

Certificate in Small Business Management During 2004, the Aotearoa Business School evolved to become the School of Sustainable Business Management. Of the programmes offered by the School, probably none has been more successful than the innovative Certificate in Small Business Management (CSBM). The programme attracted over three thousand tauira in 2004 alone and is on track to becoming a competitive player in New Zealand’s business and management education market, delivering low cost, high-quality business education to thousands of tauira across the country. The CSBM is a level 4 certificate and is offered as a full-time programme that runs for 36 weeks. Tauira have the option of attending classes or for those with work or whänau commitments, studying from home. Unlike other business programmes which focus on theory, tauira in the CSBM learn valuable business skills while developing a comprehensive business plan for their own business idea. In a survey of over 200 CSBM tauira, 85.1% of tauira already in business said that the programme had assisted them in their business, 75.7% of tauira said they used or referred to programme materials in the operation of their business, while 85% of respondents recommended the CSBM to others.

Campus Reports

Manukau Campus Mängere, Auckland

Raroera Campus Hamilton

Celebrating Culture in the Pasifika Capital of the World

At the Centre of the Heartland

The Manukau Campus includes the Gadsby Road and Canning Crescent sites and provides education to tauira in the South Auckland region. The Canning Crescent site has now seen its first full year of operation, having opened in 2003.

The Raroera Campus in Hamilton delivers education to tauira in the Waikato region from Ngäruawähia to Te Awamutu.

In 2004, the campus hosted the Trades and Industry Mäori Summit and the Welsh Minister of Education. Staff from the campus also took part in the TEC Mäori Strategic Consultation Hui and attended the launch of the TEC Pacific People’s Strategy. A key highlight was the launch of Aotearoa One, a double-hull waka hourua (voyaging canoe), which will be used as a training vessel as part of our Kaihoe Waka programme. Aotearoa One also featured at the International Marine Trade Exhibition and Convention’s Boat Show at Epson Showgrounds. Manukau Campus is proud to announce Richard Cooper’s attainment of a Doctorate in Fine Arts. Richard is currently Head of Department of the Buck Nin School of Fine Arts.

2004 saw the opening of Rangiaowhia Marae on Raroera Campus by Parekura Horomia. The marae will be a valued asset for our campus and will be used extensively by Te Wänanga o Aotearoa tauira and staff, and by the wider community. Fifteen-hundred tauira graduated from Raroera Campus during 2004, some of whom were our first graduates from Te Korowai Äkonga (Bachelor of Teaching). Graduates also included a number of tauira from our Mäori language and culture programmes delivered to Department of Corrections inmates in Tongariro and Ohura prisons. One of our raranga (weaving) tauira won first prize in the Wearable Arts Awards at the Fieldays and was invited to attend the Nelson Wearable Arts Awards. Tauira from the Applied Sport Basketball Academy men’s team achieved second place at the National Champs. Three members of this team trialled for the New Zealand under-23 team.

Rähui Pökeka Campus Huntly On the Banks of the Mighty Waikato Rähui Pökeka Campus delivers education to tauira living between South Auckland and Ngäruawähia. A major highlight for the Rähui Pökeka Campus was the opening of Te Kura Toi Taiwhanga (Arts Centre). The centre houses the three streams of the arts programmes – rauangi (visual arts), raranga (weaving) and whakairo (carving).

Campus Reports - 15

Apakura Campus Te Awamutu

Maniapoto Campus Te Kuiti

Home of Te Wänanga o Aotearoa

Creating Change in the Heart of Maniapoto

Apakura Campus in Te Awamutu delivers education to tauira in the Te Awamutu district, and in Paeroa, Matamata, Cambridge, Otorohanga and Waitara districts.

Maniapoto Campus delivers education to tauira in the King Country, National Park and Northern Taranaki regions. Outposts in Taranaki and Taumarunui support the campus provide programmes for tauira who would otherwise have very limited access to tertiary education.

A key highlight for the year saw Apakura Campus open an outpost in Matamata. This was achieved through collaboration with Ngäti Raukawa and Te Kaokao Roa o Patetere. The outpost will provide opportunities for people in the area to participate in tertiary education. Another key highlight for the year was the graduation of eighteen tauira from the Whakairo Degree programme. The degree is the first of its kind in Aotearoa NZ. Ongoing work with the Department of Corrections has enabled us to begin offering Te Ara Reo Mäori to youth inmates at Waikeria Prison.

Te Arawa Campus Rotorua The Spirit of Friendship in Rotorua Te Arawa Campus provides educational opportunities to tauira in the Rotorua and Tauranga regions, and in the Eastern Bay of Plenty, including Kawerau and Whakatäne. During 2004, Te Arawa Campus worked collaboratively with Te Wänanga o Awanuiärangi to deliver Te Ara Reo Mäori and computing programmes at levels 2 and 3. The campus also worked with Bay of Plenty Polytechnic to deliver a variety of programmes successfully. Highlights for 2004 include the conferral of Bachelor of Mäori Performing Arts and Bachelor of Primary Teaching degrees for the first time to tauira in the Tauranga, Rotorua and Kawerau regions. Te Arataki Manu Körero – the Kaumätua programme was also very well received as a valuable taonga by Kaumätua and Kuia of Te Arawa.

16 - Campus Reports

Major highlights for 2004 included the opening of a new whakairo facility in Te Kuiti and the unveiling of new carvings, tukutuku and art work at Napinapi Marae. The campus also extended its service provision in North Taranaki. An additional highlight was the graduation of three staff members of Maniapoto Campus from the Maunga Kura Toi (Bachelor of Arts) degree, majoring in whakairo.

Tokoroa Campus Tokoroa At the Gates of the Forest Tokoroa Campus provides education to tauira in the South Waikato and surrounding districts. During 2004, the campus relocated to a new site at the Timberlands Hotel on State Highway One in Tokoroa. The site was officially opened on the 26th April, 2004. The campus continues to work with local iwi Tüwharetoa, Ngäti Kahungunu and Tainui to achieve its goals. Eight-hundred tauira graduated from the South Waikato and Tüwharetoa area during the year. A major highlight saw tauira of the Bridging to Tertiary Performing Arts programme perform at Te Papa Museum and the Wellington Civic Centre.

Whirikökä Campus Gisborne

Todd Park Campus Porirua

First to Greet the New Day

Sharing Knowledge in the Capital

Whirikökä Campus enjoyed its first full year of operation after opening in 2003. The campus provides education to tauira in Gisborne, the East Coast, Opötiki, Wairoa and Waikaremoana

Porirua Campus delivers education to tauira living in the Wellington Central and Lower Hutt areas.

Whirikökä Campus continued to operate collaboratively with Massey University; The Open Polytechnic of New Zealand; Curtin University (Australia), Auckland University of Technology and Te Wänanga o Awanuiärangi during 2004.

Papaiöea Campus Palmerston North At the Heart of the Knowledge City The Papaiöea Campus based in Palmerston North delivers education to tauira living in the lower central North Island, including New Plymouth and Wanganui. A major highlight for Papaiöea campus was the launch of Te Panekiretanga o Te Reo Mäori by Dr Tïmoti Karetu. This programme is explained in more detail in the 2004 Year in Review section earlier in this report.

2004 saw the enrolment of over 600 tauira on the Year One and Year Two Te Ara Reo Mäori programmes, highlighting the need for these programmes and the value placed on them by tauira in the communities we serve. Porirua Campus opened a new computer facility in Lower Hutt in July 2004. This facility will provide tauira living in the Lower Hutt area with local access to computers. The campus hosted several overseas delegations in 2004, including a Chilean delegation, members of the Commonwealth Secretariat and manuhiri (visitors) from Curtin University. Porirua campus also continued to engage with the community by supporting events such as Keep Porirua Beautiful, waka ama, Top Surf Wellington, PolyFest and Pacifica Jam. Raranga tauira and kaiako (tutors) displayed their work at the Pätaka Art Gallery during the International Festival of Arts.

Papaiöea Campus also supported artist Sonny Hawkins (Ngäti Porou) as he unveiled Te Wero - The Bronze Warrior Statute that adorns the newly refurbished Glenview International Hotel and Conference Centre. Papaiöea Campus continues to operate collaborative relationships with UCOL, Massey University, Te Wänanga o Raukawa, Te Papa Museum and Te Manawa Science Gallery and Museum.

Campus Reports - 17

Tauira Information Overview

EFTS

2004 has been another strong year for enrolments at Te Wänanga o Aotearoa, with over three and a half thousand additional tauira coming to learn at our institution. Overall completion rates have increased across the organisation, from 66.1% in 2003 to 74.05% in 2004. This is in spite of retention rates falling slightly during the same period, from 84.13% down to 83.08%.

Although the number of tauira engaging with Te Wänanga o Aotearoa increased during 2004, total consumed EFTS decreased. Data from the 2004 SDR show a 13.4% decline in EFTS consumed by the organisation. The decrease resulted from tauira choosing to take shorter programmes of study. However, consumed EFTS figures for 2004 show an increase of 42.9% on 2002 figures and 385% on 2001 figures.

This section presents information relating to participation, demographics and achievement of tauira attending Te Wänanga o Aotearoa in 2004. Data and statistics for 2001 to 2003, where available, are also presented to enable comparative analyses.

Tauira Participation Te Wänanga o Aotearoa has been committed to increasing participation in tertiary education since its inception. The commitment of staff across the organisation to reducing barriers to education and raising foundation skills of tauira has again generated growth in tauira numbers. Demographics of these tauira have remained relatively constant, with the exception of a shift in ethnicity, showing a reduction in the proportion of tauira Mäori attending the institution and a concomitant increase in Asian tauira.

Tauira Numbers Figures from the 2004 single data return (SDR) show a 5.3% increase in tauira numbers in 2004. This represents a 51.2% improvement on 2002 SDR numbers and a 306.5% improvement on 2001. The table below shows tauira numbers from SDRs for 2000 to 2004. Number of Tauira

18 - Tauira Information

2000

2001

2002

2003

2004

3127

16423

44158

63389

66756

The table below shows consumed EFTS from SDRs for 2000 to 2004. EFTS

2000

2001

2002

2003

2004

1574

6118

20769

34280

29671

The decline in consumed EFTS is reflected across all campuses throughout Aotearoa NZ. This decline was offset to some extent by an increase in enrolments with the Aotearoa Business School, outreaches and satellites. The Kiwi Ora programme also saw considerable growth as tauira recognised the benefits of settlement education to improve their lives as new New Zealanders.

Tauira Demographics The tauira profile of Te Wänanga o Aotearoa reflects areas of need within the communities served by the organisation. Since its inception, Te Wänanga o Aotearoa has consistently attracted high numbers of Mäori, women and people in the over-30 age group. 2004 was no exception, with high numbers of tauira in these demographics continuing to transform their lives through the programmes offered by Te Wänanga o Aotearoa.

Age Profile

Ethnicity Profile

The age demographic of Te Wänanga o Aotearoa tauira remained relatively constant between 2001 and 2004. However, a trend is emerging with the percentage of 18-24 year olds declining as the percentage of tauira over the age of 40 years increases.

Numbers of Mäori engaging with education at Te Wänanga o Aotearoa remained strong during 2004. However, the proportion of tauira Mäori continued to decrease. To a large extent, this shift was caused by increased numbers of Asian tauira joining our language and settlement programmes.

The following diagram shows age demographic statistics for 2001 to 2004.

The following table shows ethnicity statistics for 2000 to 2004.

2000

2001

2002

2003

2004

2000

2001

2002

2003

2004

Mäori

90%

85%

77%

59%

45%

16%

18%

17%

16%

28%

Under 18 years

European/Päkehä

18-24

23%

18%

13%

11%

Asian

25-39

45%

44%

43%

Pacific Island

40 years plus

28%

36%

42%

45%

Other

Gender Profile In-line with previous years, Te Wänanga o Aotearoa continued to attract larger numbers of females than males. The following table shows percentages of males and females engaging with education at Te Wänanga o Aotearoa from 2001 to 2004. 2000

2001

2002

2003

2004

Male

36%

26%

30%

33%

Female

64%

74%

70%

67%

Mahi Ora and Te Ara Reo Mäori continued to attract strong numbers of tauira Mäori (over 70%). The following table shows numbers of tauira Mäori by programme. Mahi Ora Kiwi Ora

Mäori

Total Tauira

% Mäori

13578

17586

77%

19980

Te Ara Reo Mäori

8179

11483

71%

All Other Programmes

8575

17707

48%

Tauira Information - 19

Prior Activity Profile

Tauira Achievement

Although a large proportion of the tauira enrolled at Te Wänanga o Aotearoa in 2004 were in the ‘non-workforce’ category at the time of their enrolment, this proportion is declining as increasing numbers of people in the workforce join the organisation to raise their skill levels. This trend has been consistent over the last four years. Growth in enrolments in larger programmes offered by Te Wänanga o Aotearoa is responsible for this trend.

Tauira at Te Wänanga o Aotearoa continued to perform well in their studies during 2004. The overall course retention rate for 2004 was slightly lower than previous years, but remains above 80%. However, there has been a marked improvement in the overall course completion rate, moving from 66.1% in 2003 to 74.1% in 2004.

The following table shows prior activity statistics for tauira enrolling at Te Wänanga o Aotearoa for 2000 to 2004. 2000

2001

2002

2003

2004

Non-Workforce

53%

46%

41%

37%

Workforce

28%

38%

41%

43%

Tertiary

13%

10%

School

Overseas

Other

The following table shows retention and completion statistics for the 2001 – 2004 period. 2001

2002

2003

2004

Course Retention Rate

87.2%

85.4%

84.1%

83.1%

Course Completion Rate

69.1%

67.0%

66.1%

74.1%

Te Wänanga o Aotearoa continued to attract a significant proportion of second chance learners in 2004, although this number has declined each year since 2001. The following table shows percentages of second chance learners1 engaging in study with Te Wänanga o Aotearoa.

Second Chance Learners

2000

2001

2002

2003

2004

33.3%

32.6%

25.6%

18.7%

Te Wänanga o Aotearoa will continue to encourage tauira in this group to engage with tertiary education.

Second chance learners are those tauira participating in education at Te Wänanga o Aotearoa who had no secondary qualifications or tertiary experience.

20 - Tauira Information

Employee Information

In accordance with its kaupapa, Te Wänanga o Aotearoa strives to be a good employer. As part of this commitment, the organisation is inclusive of all people, regardless of culture, ethnicity, age, gender, political opinion or religious persuasion. This section presents demographics of employees working for Te Wänanga o Aotearoa over the past five years.

The employee gender ratio has remained relatively constant over the past four years, although the number of females working for the organisation has been growing at a rate of between 1% and 4% per year. The current employee gender ratio closely matches the tauira gender ratio. The following table shows the percentage of males and females working for the organisation from 2001 to 2004.

Employee Numbers Full-time equivalent employee (FTE) numbers grew by 16.3% during 2004. Although total EFTS decreased by 13.4%, tauira numbers increased by 5.3% during the year. FTE numbers have grown partly to meet the needs of increased tauira numbers, but also to meet increased infrastructure requirements resulting from growth in previous years. The following table shows numbers of FTEs for 2000 to 2004. FTEs

Gender Profile

2000

2001

2002

2003

2004

193.6

399.1

950

1232.4

1432.5

Age Profile The age profile of employees has remained constant (within 2% or less, year by year) over the past four years. The following table shows age profiles for employees working in the organisation from 2001 to 2004.

2000

2001

2002

2003

2004

Male

43%

42%

38%

34%

Female

57%

58%

62%

66%

Ethnicity Profile The number of Mäori working at Te Wänanga o Aotearoa has increased steadily over the last four years. As a Mäori organisation, this strengthens connections with iwi and with the communities predominantly served by the organisation. It also provides day-to-day input from a key group of stakeholders into activities occurring within the organisation. The following table show ethnicity demographic statistics for the 2001 – 2004 period. 2000

2001

2002

2003

2004

NZ Mäori

38%

42%

44%

55%

NZ European / Päkehä

Pacific Island

2000

2001

2002

2003

2004

Asian

<25

10%

16%

14%

12%

Other

25-34

27%

28%

Not Specified

51%

48%

43%

28%

35-44

29%

28%

29%

45-54

21%

19%

20%

55+

13%

10%

11%

Employee Information - 21

Statement of Service Performance Educational Activities and Learner Outcomes Whäinga One – Programme Development Te Wänanga o Aotearoa will continue to provide international quality learning experiences in accordance with Mäori tradition and custom through programme development approved and accredited for delivery at Te Wänanga o Aotearoa.

Activity 1 Introduce new qualifications that meet the needs of learners, industry and other stakeholders Measurement / Indicators

Performance

A minimum of three Bachelor level degree programmes

Partially Achieved

Implement a minimum of two Masters degrees over the next three years

Two Masters degrees - Master of Education and Master of Business Administration - are being offered through an arrangement with Curtin University of technology, Perth, Australia

Three Bachelor degrees awaiting final confirmation from NZQA

Activity 2 Review Academic Committee structures and processes to strengthen programme development, approval and quality assurance (including implementation and ongoing evaluation processes) Measurement / Indicators

Performance

Ongoing evaluation of structures and processes from 2004

Achieved

Programme development undertaken following appraisal of labour market and stakeholder needs

Partially Achieved

22 - Statement of Service Performance

A process to evaluate labour market and stakeholder needs was developed during 2004 and will be introduced in May 2005

Activity 3 Ensure that programmes increase existing information for learners on options following graduation (employment and education) Measurement / Indicators

Performance

All programmes contain information on future employment or education options available on successful completion (ongoing)

Achieved Marketing material related to programmes lists career path options

Activity 4 Annual evaluation of Te Korowai Akonga (Bachelor of Teaching – Primary) and Te Tohu Maruata (Bachelor of Mäori Performing Arts) to determine viability of delivery at new sites Measurement / Indicators

Performance

Annual evaluation

Achieved

Whäinga Two –Technology Development Te Wänanga o Aotearoa information technology is used to monitor and track the progress and achievement of current students and from late 2004 will begin to be used to develop databases of information - including graduate destinations.

Activity 1 Full implementation of Take2 student management system Measurement / Indicators

Performance

Review of effectiveness and further development in 2004

Achieved Take 2 is implemented across 24 sites including satellites. Take 2 modifications continue, with plans to upgrade to version 7 in 2005

Activity 2 Campus administration staff support timely and efficient management of student information - particularly at peak enrolment and reporting times Measurement / Indicators

Performance

On-going review and improvement of campus level administration

Achieved Regular reviews and audits of procedures. Recommendations are reviewed. Performance is closely monitored

Whäinga Three – Participation and Achievement Te Wänanga o Aotearoa has in place a number of objectives and measures for learner participation and achievement. Many of these measures have been in place since 1999 and are consistently met and exceeded. The range of measures is being extended through technology that will track learner achievements, including graduate outcomes and destinations. Te Wänanga o Aotearoa is committed to high learner participation, retention and success rates for learners that reflect community profiles.

Activity 3

Activity 1

Expand information technology architecture and environment for the growing user base

Maintain high learner completion rates

Measurement / Indicators

Performance

Review of current information system infrastructure to ascertain level of service required

Achieved

Clearly defined roadmap developed to achieve desired technology architecture and timescale for implementation

Achieved

Measurement / Indicators

Performance

Minimum of approximately 65%

Achieved Learner completion rate was 79.54%

ICT review commissioned and implemented in 2004

The road map for the Information Technology restructuring has been developed in 2004. ICT review recommendations being developed in 2005

Activity 2 Maintain high learner retention rates Measurement / Indicators

Performance

Approximately 80%

Achieved Learner retention rate was 83.51%

Activity 4 Learner access to computers and the internet to develop their computer skills Measurement / Indicators

Performance

Computing facilities accessible to all TWoA learners through TWoA Campuses, Computer Gyms and Virtual Learning Centres in 2004

Achieved Access to computers now available in multiple sites Computer support also provided nationwide

Activity 3a Ensure that campus learner profiles are more reflective of local and regional community demographic profiles Measurement / Indicators

Performance

Annual Campus reports illustrate community profile compared with learner profile, and describes activity to support and reflect community profile

Achieved Annual campus reports and other documents have been completed which illustrate and describe the information

Statement of Service Performance - 23

Activity 3b

Whäinga Four – Learner/Whänau Support

Conduct on-going research and evaluation of the impact of programmes and activities on graduate destinations and wider community

Te Wänanga o Aotearoa student support services enable students and whänau to access academic and personal support. These services recognise the diversity of factors that contribute to learner success and are designed to enable students and whänau to address barriers to learning achievement.

Measurement / Indicators

Performance

NZIER completed an independent assessment of TWoA’s impact on the communities it serves in 2003. Further evaluation and research to be undertaken in 2004

Achieved The BERL report and the Mahi Ora evaluation conducted during 2004 furthered knowledge, research and evaluation of the earlier report by NZIER

Activity 4 Formalise research into the impact of Te Wänanga o Aotearoa programmes and graduates on communities Measurement / Indicators

Performance

Develop pilot research indicators:

Achieved

NZIER social, cultural, economic assessment report will form the

A range of independent research, to inform future programmes and strategic development, was commissioned in 2004

development of ongoing research into the impact of TWoA programmes. Proportions of adult learners in a community engaged in life-long learning

Activity 1 Establish early learning centres at Te Wänanga o Aotearoa Campuses for Te Wänanga o Aotearoa and local community tamariki Measurement / Indicators

Performance

Four additional centres operational by 2006

Not Achieved Target was reviewed in 2004 TWoA has rationalised its plans by maintaining existing number of Early Learning Centres and has no strategy to add further Centres

Activity 2 Library information systems integrated at each Te Wänanga o Aotearoa campus Measurement / Indicators

Performance

Levels of community/population proficiency in Te Reo Mäori

By 2006, fully integrated centralised library established

Achieved

Participation in employment and changing levels of unemployment in communities

Staff trained in use of information systems

Graduate destinations within the workforce Begin longitudinal study looking at socio economic indicators of effect of TWoA – initial timeframe 2004

24 - Statement of Service Performance

Students access to information systems and training as required Develop a library information systems capability as necessary to meet growing demand for administrative and information systems support

Campus libraries staffed and resourced Staff trained and student training package developed Library information systems were developed during 2004 and will be implemented during the first quarter of 2005.

Activity 3 Te Wänanga o Aotearoa literacy strategy Measurement / Indicators

Performance

Pilot completed 2004

Achieved

All students have access to the literacy programme by 2006

Greenlight pilot completed in 2004 Programme enrolments also begun in 2004 in several locations

Activity 4 Enhance the Te Wänanga o Aotearoa learning experience through a strong sense of whänau and community Measurement / Indicators

Performance

TWoA campus activities inclusive of local and regional communities (e.g., campus open days) and that support a strong sense of community (e.g., sports days for students and staff) – campuses to report annually

Achieved More than 36 of these events were held at various locations throughout New Zealand during 2004

Te Wänanga o Aotearoa maintains international quality education through professional development of tutorial staff with the skills to support successful learner outcomes:

Activity 1 Require that all tutorial staff have, as a minimum, either recognised teaching qualifications or comparable experience skills and have adequate knowledge of the subjects they teach Measurement / Indicators

Performance

All tutorial staff have recognised qualifications relevant to the subjects they teach, and/or equivalent industry experience or expertise, appropriate to the level they teach

Partially Achieved

All tutorial staff participate in professional development

A comprehensive programme of training and development was undertaken in 2004 Over 100 staff participated in professional development training

Activity 2a

Activity 5 Ensure learner support facilities meet the needs of international students studying at Te Wänanga o Aotearoa campuses in Aotearoa Measurement / Indicators

Performance

Full compliance with the Ministry of Education mandatory Code of Practice for the Pastoral Care of International Students (become signatory)

Achieved

Learner support package developed and reviewed with engagement of international students and community representatives (that include welfare outside the classroom)

Whäinga Five – Staff Professional Development

TWoA has complied with the Ministry of Education Code of Practice for the Pastoral Care of International Students. TWoA is currently a signatory of this code

High level of skill in the use of competency based assessment by tutorial staff teaching programmes that incorporate unit standards and wänanga units Measurement / Indicators

Performance

Specific training in competencybased assessment successfully completed by all tutorial staff where required (on-going)

Partially Achieved Training & development unit has worked closely with campus and school HOD’s to coordinate and arrange tutor training in specified units

Statement of Service Performance - 25

Activity 2b

Research Management

Ongoing annual student evaluation and appraisal of delivery of programmes by all tutorial staff

Whäinga Six – Research

Measurement / Indicators

Performance

Standard TWoA procedures and reporting of student feedback contributes to staff professional development and annual performance review

Achieved Student evaluation procedure was reviewed and a new process implemented in 2004

Activity 3 Develop and roll-out a training package to support the on-going professional development of Mahi Ora kaitiaki Measurement / Indicators

Performance

Training for all new kaitiaki using the Kaitiaki Leadership Programme (ongoing)

Achieved

Research is critical to the ongoing quality and relevance of Te Wänanga o Aotearoa learning experiences and intrinsic to the tradition of whare wänanga Mäori. This is reflected in the legislative provisions for public tertiary education institutions where wänanga are described as: “characterised by teaching and research that maintains, advances, and disseminates knowledge and develops intellectual independence, and assists the application of knowledge regarding ähuatanga Mäori according to tikanga Mäori.” s162(4)(b)(iv) To advance, disseminate, and maintain knowledge through teaching and research Te Wänanga o Aotearoa is increasing the participation of staff in research activities and building capability and capacity internally that supports a strong research culture.

Version 4 of the Kaitiaki Leadership Programme was developed in 2004. All new Kaitiaki attended this training in February 2005

Activity 1 Review draft research policies and ethical guidelines for Te Wänanga o Aotearoa research practices

Activity 4

Measurement / Indicators

Performance

All tutorial staff are competent in and practise Te Wänanga o Aotearoa assessment methodology

Policies agreed and in use by staff and students Review of policies in 2005

Achieved

Measurement / Indicators

Performance

Assessment skills training for all tutorial staff 2004 and ongoing

Partially Achieved

Ongoing training for new tutorial staff as required

26 - Statement of Service Performance

Assessment skills training were available to all tutorial staff during 2004. 54% of the tutorial staff attended this training

The draft policy has now been set and has been in place since July 2004

Activity 2

Activity 5

Increase staff participation in research

Contribute to Ngä Pae o te Märamatanga - (Horizons of Insight) – Centre of Research Excellence hosted by the University of Auckland

Measurement / Indicators

Performance

Annual staff participation increases of 5% measured through records of recognised research outputs

Achieved First two research registers (2002 and 2003) now published

Measurement / Indicators

Performance

Ngä Pae o te Märamatanga Board membership and participation in the development and implementation of research proposals

Achieved

Activity 3 Provide training in research processes to include ongoing skills assessment Measurement / Indicators

Performance

All tutorial staff involved in degree programmes trained in developing research proposals

Partially Achieved All tutorial staff were invited to participate in training A new section about research has been included in the Performance Appraisal Forms

Activity 4 Develop relationships and collaborate with iwi on research projects Measurement / Indicators

Performance

Contract and complete research projects with iwi according to the annual budget

Achieved TWoA worked collaboratively with local Iwi and Köwhai Consulting Ltd to support the research and publication of the Tanehaka Report

TWoA is one of the eight founding members of the Ngä Pae o te Märamatanga Board and participates in the development of research proposals

Activity 6 Support a strong research culture at Te Wänanga o Aotearoa, and wider Mäori/community engagement in research development and outputs/dividends Measurement / Indicators

Performance

Continue to attract recognised researchers to build research reputation and capability

Achieved

Research activity or achievements are reported in every issue of Ka Mïharo (internal magazine) Complete not less than one research project annually in response to a request from a Mäori community At least five student and staff exchanges/projects undertaken in conjunction with overseas research organisations

Two recognised researchers visited the Wänanga during the year A new research newsletter has been developed – “Te Whänau Manaaki Rangahau” 3 student exchanges have taken place particularly with native American institutions TWoA participated in the PBRF round

Ongoing periodical research activity publication (initiated in 2003) recording publications and research outputs

Statement of Service Performance - 27

Treaty of Waitangi

Activity 3

Whäinga Seven – Treaty of Waitangi

Maintaining and strengthening links with Mäori communities locally regionally and nationally

The approach of Te Wänanga o Aotearoa to meeting Treaty of Waitangi obligations illustrates the dual responsibilities of Te Wänanga o Aotearoa in respect of the Treaty as both Treaty partner and publicly funded tertiary education institution. Key activities supporting Te Wänanga o Aotearoa obligations under the Treaty of Waitangi are:

Activity 1 To advance and complete the agreements reached through the WAI718 capital settlement claim Measurement / Indicators

Performance

Planned settlement process implemented on time and in line with agreed objectives and targets

Partially Achieved

Continue progress towards a partnership agreement between the Ministry of Education and the three Wänanga

There has been no partnership agreement signed to record the commitment and relationship between both parties for future reference

Activity 2 Te Wänanga o Aotearoa engagement in policy development and implementation alongside the other public funded Wänanga Measurement / Indicators

Performance

Evidenced through TWoA / Wänanga representation in Working Parties, submissions to government

Achieved

28 - Statement of Service Performance

Measurement / Indicators

Performance

Continue to have the highest number of Mäori learners of any TEI

Achieved

Develop programmes tailored to hapu/iwi needs (e.g., that reflect tikanga-ä-iwi and mita-ä-iwi)

The Wänanga has been stated to have enrolled almost six times more Mäori students than the next largest provider, the Open Polytechnic of New Zealand

Meeting the Needs of Under-Represented Groups Te Wänanga o Aotearoa is inclusive of all people who wish to study in a Mäori cultural learning environment. It successfully targets participation and achievement increases in a number of groups in the following areas:

Activity 2 Maintain high Mäori learner participation rates Measurement / Indicators

Performance

Approximately 80% annually (minimum)

Not achieved 48% of students enrolled in 2004 were Mäori

• those who have not benefited from mainstream education; • those who want a second chance in accessing formal education; • those who are long-term unemployed; and • those who represent the lower socio-economic groups in Aotearoa. Te Wänanga o Aotearoa is the first positive education experience for many tauira and provides the holistic support necessary for successful tauira outcomes. Many of the tauira previously marginalised from the tertiary education system come from Mäori and Pacific communities and go on to achieve successful outcomes in the Te Wänanga o Aotearoa Mäori cultural learning environment.

Whäinga Eight – Mäori and Pacific Peoples’ Tertiary Participation Te Wänanga o Aotearoa will engage in a number of activities over the next three years that will provide an entry to tertiary study for newcomers to tertiary education and provide opportunities for Mäori and Pacific peoples to participate in tertiary education.

Activity 3 Increase the proportion of male Mäori and youth learners at Te Wänanga o Aotearoa through the range and level of programmes offered to meet their education and employment needs Measurement / Indicators

Performance

Develop TWoA programmes targeting male Mäori and youth including vocational and industry related programmes

Achieved Several programmes have been developed targeting male Mäori and youth

Activity 4 Maintain high quality Te Reo Mäori programmes Measurement / Indicators

Performance

Increase numbers of Te Reo students progressing into higher level Reo Programmes

Achieved There has been a 36% increase in Te Reo students progressing into higher level Te Reo programmes

Activity 1 Maintain high numbers of students who are newcomers to tertiary education Measurement / Indicators

Performance

Approximately 50% annually

Not achieved In 2004 only 22.5% of students were newcomers to tertiary education

Statement of Service Performance - 29

Activity 5

Activity 1

Increase links with Mäori communities that encourage Mäori learners to transition directly from compulsory schooling into Te Wänanga o Aotearoa

Support accessible provision through Memoranda of Agreement with private training establishments (ngä Wänanga a rohe) accredited to offer Te Wänanga o Aotearoa programmes in local areas.

Measurement / Indicators

Performance

Report annually on number of Mäori learners enrolling directly from school

Achieved 871 Mäori learners enrolled directly from school

Measurement / Indicators

Performance

Maintain a minimum of 12 satellites

Achieved

TWoA campus outposts developed in line with local and regional demand

13 satellites were in use during the year Campus outposts were developed in line with local and regional demand

Activity 6 Ensure that Te Wänanga o Aotearoa campuses meet the needs and aspirations of Pacific peoples’ communities Measurement / Indicators

Performance

Campuses should reflect Pacific peoples’ culture and heritage, and have a staff profile to support successful learning outcomes for TWoA Pacific learners

Achieved Pacific Strategy developed in 2004 and will be implemented in 2005

Activity 2 Increasing the number of, and participation in, Te Wänanga o Aotearoa programmes offered through marae, community based and other flexible modes of delivery Measurement / Indicators

Performance

Pilot Virtual Learning Centres in partnership with local schools

Achieved

Conduct a survey of Pacific peoples’ tertiary education needs

National rollout of Virtual Learning Centres maintained and enhanced in 2004

Programmes are tailored to meet the tertiary education needs of Pacific peoples’ – e.g. Te Ara Reo Cook Island Mäori

Develop and rollout self-directed online learning programmes 2004/5

Whäinga Nine – Access Te Wänanga o Aotearoa will extend the delivery of programmes to areas where access to a tertiary education institution is limited or to where existing services do not meet the needs of Mäori or Pacific peoples and other similar target groups.

30 - Statement of Service Performance

The centres have been piloted since 2002 36 VLC’s were rolled out in the North Island in 2003/2004 A new certificate in computing, levels 2 and 3, with self-directed and online study was rolled out in 2004 with TWoA providing in home computer and internet access for the 2,800 students enrolled for 2005

Collaboration and Cooperation with Other Organisations Whäinga Ten – Relationships In line with its Charter, Te Wänanga o Aotearoa will maintain and develop relationships that support learner aspirations for educational and employment success. Te Wänanga o Aotearoa has special relationships with the other two TEI wänanga and with Mäori private training establishments. Collaboration between Te Wänanga o Aotearoa and other tertiary education organisations for education provision will continue to be approved by the Te Wänanga o Aotearoa Council with the recommendation of the Tumuaki.

Activity 3 Extend global indigenous networks that support internationally benchmarked quality education and support indigenous peoples higher education globally Measurement / Indicators

Performance

Host the World Indigenous Peoples Conference (WIPCE) in 2005

Partially Achieved

Active member of the World Indigenous Nations Higher Education Consortium (WINHEC)

The World Indigenous Peoples Conference (WIPCE) is due to take place in 2005 There are WIPEC and WINHEC meetings scheduled to be held in 2005

Activity 1

Activity 4

Continue to enter into joint ventures where programmes or provision support Te Wänanga o Aotearoa learner aspirations for staircasing

Iwi, hapü and whänau will continue to inform the development of programmes and training that meet their needs and expectations

Measurement / Indicators

Performance

Measurement / Indicators

Performance

Develop in line with TWoA learner demand

Partially Achieved

Partnerships with a minimum of five iwi or Mäori organisations developed and implemented by 2004

Achieved

Existing relationships maintained in accordance with learner demand

9 partnerships with iwi and Mäori organisations were developed and implemented in 2004

New venture with Curtin University of technology

Activity 2 Develop strong relationships with local and regional schools through the roll out of Learning Communities project and Te Wänanga o Aotearoa computing programmes Measurement / Indicators

Performance

Memorandums of Understanding with schools engaged in Learning Communities Project

Achieved 43 Memorandums of Understanding signed with 36 Virtual Learning Centres in operation

Statement of Service Performance - 31

Links with Industry, Mäori, Pacific Peoples and Other Communities Whäinga Eleven – Stakeholder Input Te Wänanga o Aotearoa provides practical learning experiences that support personal development, learning and employment. Learners want programmes that meet their education needs and aspirations across a range of economic, social, cultural and spiritual dimensions. Te Wänanga o Aotearoa strives to meet these needs and aspirations by engaging learners and relevant stakeholders in programme design and delivery.

Review of Komiti Äwhina (Programme Advisory Committees) for all programmes Measurement / Indicators

Performance

Review of effectiveness (2004)

Not Achieved

Review recommendations implemented (2004)

No reviews were completed during 2004

Activity 2 Review system for student input and evaluation for improving programme effectiveness Measurement / Indicators

Performance

Implement standardised system for seeking student engagement in the evaluation and improvement of system effectiveness (2004)

Achieved

32 - Statement of Service Performance

Campuses have strong relationships with local and regional communities that support quality learner outcomes (education and employment) Measurement / Indicators

Performance

Campuses to demonstrate high level of engagement with local and regional industry stakeholders and ensure that provision reflects local and regional industry needs

Achieved Campuses have demonstrated a high level of consultation throughout the year

Activity 4

Activity 1

Review and implement recommendations for improvement

Activity 3

New processes and systems for obtaining student feedback developed and implemented in 2004

Industry relationships developed and enhanced Measurement / Indicators

Performance

A minimum of two workplace training initiatives implemented in 2004

Achieved

A minimum of two initiatives to encourage transition from school into vocational training implemented in 2004 Implementation of initiatives generated from the Mäori Training Summit (2003) attended by ITO’s, Mäori organisations, tertiary organisations and employers

Workplace training initiatives include presentation with Kawau Limited and an agreement to train 2 industry workers Initiatives to encourage school leavers include: the relationship with Work and Income Management and the introduction of the VLC programme in schools Initiatives generated from the 2003 training summit are being implemented

Equal Employment Opportunities

Quality Improvement

Whäinga Twelve – Equal Employment Opportunities

Te Wänanga o Aotearoa will maintain quality in the design of learning programmes and in the delivery and assessment of tauira learning. Quality management systems across the organisation support quality in all dimensions. Tauira will enjoy high quality learning experiences, staff will work in a quality environment and Te Wänanga o Aotearoa will be recognised internationally as a high quality Aotearoa NZ tertiary education institution.

Over the next three years, Te Wänanga o Aotearoa will continue to implement staffing strategies that equip it to respond to the development aspirations of Mäori communities and New Zealand’s Pacific peoples’ communities. The provision of a learning environment conducive to the interests of student target groups will continue to provide employment opportunities for Mäori and Pacific peoples.

Activity 1 Employ suitably qualified staff with the capacity and commitment to contribute to the unique character of Te Wänanga o Aotearoa Measurement / Indicators

Performance

Appointment criteria and job descriptions will reflect cultural responsibilities

Partially Achieved

All staff will be required to have or develop a basic knowledge and understanding of Te Reo Mäori and tikanga Mäori as part of professional development

Appointment criteria and job descriptions reflect cultural responsibilities and staff are encouraged to have or develop knowledge of Te Reo Mäori and tikanga Mäori however this is not yet compulsory

Whäinga Thirteen – Quality Management To maintain quality in the design of learning programmes and in the delivery and assessment of student learning, Te Wänanga o Aotearoa ensures that effective quality management systems are operating. This means on-going review and development of quality management systems that support evolving organisational needs. Specific activities over the next three years to support this objective are:

Activity 1 Increase capability at campus level to implement and use Te Wänanga o Aotearoa Quality Management Systems Measurement / Indicators

Performance

On-going training of Education Support Officers at all campuses

Achieved

Statement of Service Performance - 33

Activity 2

Activity 5

Support establishment of a Wänanga Quality Assurance Body (QAB)

Quality management systems to maintain or enhance accountabilities in financial management, educational quality and student administration are developed and implemented

Measurement / Indicators

Performance

Continue to work with Te Tau Ihu o ngä Wänanga and the New Zealand Qualifications Authority to establish a Wänanga QAB

Achieved Measurement / Indicators

Performance

To continue to strengthen the internal audit function

Partially achieved

Activity 3 Te Wänanga o Aotearoa organisational Health and Safety Management System fully implemented with on-going review

A number of initiatives were undertaken in 2004, aimed at strengthening the academic, financial and student administration functions

Measurement / Indicators

Performance

Meet 3 year implementation plan objectives and begin formal annual planning in 2005

Partially Achieved

Activity 6

TWoA expects to fully implement the plan objectives by 2005

Governance and management policies and processes updated by on-going review

Activity 4 Manage institutional risks with the Audit and Risk Management Committee (a sub-committee of Council) Measurement / Indicators

Performance

Policies approved and implemented

Partially achieved

34 - Statement of Service Performance

Measurement / Indicators

Performance

Audit and Risk Management Committee works with senior management to monitor and evaluate policies and processes

Partially achieved

Financial Performance Indicators Whäinga Fourteen– Ensure Te Wänanga o Aotearoa Remains Financially Sound by Maintaining Good Financial Management Practices Te Wänanga o Aotearoa will maintain a financially sound position that supports the Charter and Kaupapa of the organisation. Te Wänanga o Aotearoa has consistently met financial performance targets established in the Statement of Objectives while the organisation has experienced growth since gaining tertiary status in 1994. Measurement / Indicators

Performance

Operating surplus of at least $27 million

Not achieved – operating deficit of $23.6 million

Operating surplus as a percentage of income 16%

Not achieved – deficit 13.4%

Return on assets 5%

Not achieved – (18.0%)

Net operating cashflows at least 1.1:1

Achieved – ratio 1.1:1

Liquid assets as a percentage of cash outflow from operations at least 14%

Achieved – 15.4%

Working Capital Ratio1.5:1

Not achieved – 1.2:1

Statement of Service Performance - 35

Financial Report

Financial Review

• The property next to the Canning Crescent campus was purchased to allow for growth in this area.

EFTS

• A resource centre was built in Hamilton at the Raroera Campus to provide additional teaching space for the campus.

Our total EFTS achieved this year was 29,671. This was a decrease of 13% on the results for 2003. Of this total: • Our campus based programmes contributed 17,934 EFTS – a decrease of 2,971 EFTS;

• A property was purchased at Whangaparäoa to provide office space for the marine unit along with a marina berth for Aotearoa One, the double hulled waka that was completed during the year.

• The Mahi Ora programme contributed 3,961 EFTS – a decrease of 3,246 EFTS. • Other Satellite providers contributed a further 7,776 EFTS – an increase of 1,608 EFTS. Aside from the decrease in EFTS for the Mahi Ora programme there was also a significant decrease in EFTS for the Te Ara Reo Mäori programme. These decreases were offset to some extent by an increase in the enrolments for the Kiwi Ora and Certificate in Small Business Management programmes.

Financial Position Net assets as at year end are $93m, which is a decrease of $24m. As a result of the Treaty settlement agreement with the Ministry of Education it was anticipated that a suspensory loan of $15m would be received during the 2004 year. This loan was not forthcoming and resulted in a negative impact on the cash reserves for the year. The year closed with a working capital surplus of $5m – a decrease of $30m from last year. Other key events during the year which affected our fixed asset base were as follows. • The Tokoroa campus refurbishment was completed. • A property was purchased near Hamilton to provide a possible site for a Whakairo School of Excellence. • The refurbishment of the Glenview Library and Conference Centre in Hamilton was close to completion at the end of the year.

36 - Financial Report

Overall Financial Performance The net deficit of $23.6m was significantly less than the budgeted surplus of $25m. The main drivers of this variance were EFTS targets not being reached ($15m shortfall) while expenditure continued to occur at higher than budgeted levels.

Non Recurring Expenditure Significant impacts on the results were two abnormal transactions that occurred in the 2004 year. First, a settlement was reached with Aotearoa Institute in relation to various matters which resulted in a charge of $5.25m being applied to the 2004 year. Secondly, there was a substantial write down of assets as a result of events subsequent to balance date. The total impairment of assets that occurred in 2004 was $17.5m.

Income The profile of our income streams is shown in the table below. Source

2004

2003

2002

2001

2000

MOE

89%

95%

94%

81%

64%

Fees

15%

31%

Other

While the percentage of our revenue from total Government Funding decreased by 6%, our revenue from Student Fees remained steady. Our income from other sources increased by 125% due to an increase in income from joint venture arrangements.

Expenditure The profile of our expenditure is shown in the table below. Source

2004

2003

2002

2001

2000

Personnel Costs

35%

36%

37%

32%

49%

Resources

39%

34%

26%

39%

22%

Administration

16%

11%

13%

12%

Trading

11%

Property Costs

13%

Depreciation

Impairment of Assets

In actual dollar terms, expenditure this year shows an increase in all areas compared to last year. Personnel costs remain consistent at 35% of total spend, whilst the proportion spent on resources has again increased. Depreciation is less than previous years, however, as previously noted there are one-off write downs of some assets.

Cash Flow The opening cash balance held at the organisation was $37.4m. There was a positive net cash flow from operations of $12m for the year and a positive net cash flow from financing activities of $5.9m. However these were offset by a negative cash flow from purchases of property, plant and equipment of $40.6m. Accordingly the total net decrease in cash balances was $22.7m giving a closing cash balance of $14.7m. However of this amount, $13m was due to the Ministry of Education as a result of over funding.

Financial Report - 37

Statement of Responsibility In the financial year ended 31 December, 2004, Te Mana Whakahaere (the Council) and the management of Te Wänanga o Aotearoa were responsible for: 1. preparation of the annual financial statements and the judgements used in them; and 2. establishing and maintaining a system of internal control designed to provide reasonable assurance as to the integrity and reliability of financial reporting. In the opinion of Te Mana Whakahaere and management of Te Wänanga o Aotearoa, the annual financial statements for the financial year ended 31 December, 2004 fairly reflect the financial position and operation of Te Wänanga o Aotearoa.

Craig Coxhead - Council Chairperson B Soc Sci, LLB(Hon), LLM(Waikato)

Bentham Ohia – Pouhere Exec MBA, Dip T, BA

Brian Roche - Crown Manager

Date: Friday, 31 August 2007

38 - Financial Report

CA, BCA (Victoria)

Report of the Auditor-General TO THE READERS OF TE WÄNANGA O AOTEAROA TE KURATINI O NGÄ WAKA AND GROUP’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2004 The Auditor-General is the auditor of Te Wänanga o Aotearoa Te Kuratini o Ngä Waka (the Wänanga) and group. The Auditor-General has appointed me, Graham Naylor, using the staff and resources of Deloitte, to carry out the audit of the financial statements of the Wänanga and group, on his behalf, for the year ended 31 December 2004.

Qualified Opinion – Limitation in Evidence for Related Party Transaction Disclosures The Wänanga and group did not maintain adequate systems and controls during the year ended 31 December 2004 to identify all related party transactions, including any amounts receivable from or payable to related parties as at 31 December 2004. As a consequence, despite the disclosures in Note 6 on page 46 and Note 20 on page 54, we are unable to satisfy ourselves:

In our opinion, except for adjustments that might have been found to be necessary had we been able to obtain sufficient evidence over related party transactions, the financial statements of the Wänanga and group on pages 20 to 29 and 34 to 59: • comply with generally accepted accounting practice in New Zealand; and • fairly reflect: - the Wänanga and group’s financial position as at 31 December 2004; - the results of operations and cash flows for the year ended on that date; and - the service performance achievements measured against the performance targets adopted for the year ended on that date. The audit was completed on 31st August, 2007 and is the date at which our qualified opinion is expressed. The basis of our opinion, which refers to fundamental uncertainties, is explained below. In addition, we outline the responsibilities of the Council and the Auditor, and explain our independence.

• that all related party transactions have been properly recorded and disclosed in the financial statements, in accordance with Financial Reporting Standard No.9: Information to be Disclosed in Financial Statements (FRS-9), and Statement of Standard Accounting Practice No. 22: Related Party Disclosures (SSAP-22); • that the related party transactions have been conducted on an arm’s-length basis; and • that the assertions underlying the recognition of related party transactions and balances in the financial statements of the Wänanga and group fairly reflect their economic substance.

Financial Report - 39

Basis of Opinion We carried out the audit in accordance with the AuditorGeneral’s Auditing Standards, which incorporate the New Zealand Auditing Standards. However, the scope of our work was limited due to the limitation in evidence over the disclosure of related party transactions. 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. We are unable to determine whether there are material misstatements because the scope of our work was limited due to the limitation in evidence over the disclosure of related party transactions, as we referred to 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 Council; • confirming year-end balances; • determining whether accounting policies are appropriate and consistently applied; and • determining whether all financial statement disclosures are adequate.

40 - Financial Report

We evaluated the overall adequacy of the presentation of information in the financial statements. We did not obtain all the information and explanations we required because of the limitation in evidence over the disclosure of related party transactions, as explained above.

Fundamental Uncertainty Validity of the Going Concern Assumption In forming our opinion, we considered the adequacy of the disclosures made on pages 29 of the financial statements about the validity of the going concern assumption. We consider the disclosures to be adequate. The disclosures outline the factors the Wänanga and group considered in adopting the going concern assumption, including: • the uncertainty over the actual number of Equivalent Full Time Students that will be enrolled for the years ending 31 December 2007 and 31 December 2008; and • the uncertainty over the Council’s negotiations for a $20 million Crown suspensory loan to settle an outstanding Treaty of Waitangi claim. If the Wänanga and group were unable to continue in operational existence for the foreseeable future, adjustments may have to be made to reflect the situation that assets may need to be realised other than in the amounts at which they are currently recorded in the Statement of Financial Position. In addition, the Wänanga and group may have to provide for further liabilities that might arise, and to reclassify fixed assets and long-term liabilities as current assets and liabilities.

Responsibilities of the Council and the Auditor The Council is responsible for preparing financial statements in accordance with generally accepted accounting practice in New Zealand. Those financial statements must fairly reflect the financial position of the Wänanga and group as at 31 December 2004. They must also fairly reflect the results of operations and cash flows and service performance achievements for the year ended on that date. The responsibilities of the Council arise from the Public Finance Act 1989. We are responsible for expressing an independent opinion on the financial statements and reporting that opinion to you. This responsibility arises from section 15 of the Public Audit Act 2001 and the Public Finance Act 1989.

Independence Graeme McNally, who was a Christchurch based partner of Deloitte, was requested by the Associate Minister of Tertiary Education and the Ministry of Education to advise the Council of the Wänanga on governance matters in June 2002. Mr McNally had no involvement in the preparation of the Wänanga and group’s financial statements nor was he involved in the audit. To minimise any threat to audit independence, an independent review of the audit files has been carried out by the Office of the Auditor-General. Any threat to audit independence has been completely removed for future reporting periods when Mr McNally resigned as advisor to the Wänanga from January 2005. Other than the audit, and the relationship described above, we have no relationship with or interests in the Wänanga or its subsidiary.

Graham Naylor Deloitte On behalf of the Auditor-General Hamilton, New Zealand

Financial Report - 41

Statement of Accounting Policies for the year ended 31 December, 2004

General Accounting Policies Reporting Entity Te Wänanga o Aotearoa is a Wänanga constituted by an Order in Council dated 21 June 1993. The financial statements presented are for Te Wänanga o Aotearoa and the consolidated financial statements are for the group comprising Te Wänanga o Aotearoa and its wholly owned subsidiary MO1 Limited. These financial statements are prepared in accordance with Section 203 of the Education Act 1989 and are presented in accordance with Generally Accepted Accounting Practice as defined in the Public Finance Act 1989.

Going Concern The Going Concern principle has been adopted in the preparation of these financial statements. This approach has been adopted after considering the following factors: • The Crown has provided the cash funding required to support the continuing operation of the Wänanga since the identification of its financial problems. The Council believes that the Government will continue to support Te Wänanga o Aotearoa because the Minister for Tertiary Education has publicly made statements regarding the Crown’s support for the continued delivery of services to Te Wänanga O Aotearoa students and has recognised the role the organisation plays within New Zealand’s educational infrastructure. • Te Wänanga o Aotearoa and Group has budgeted the number of Equivalent Full Time Students (EFTS) for the year ended 31 December 2007 and 31 December 2008. The numbers budgeted reflect those considered by Cabinet when they approved the institutions Profile. Similar to all other institutions operating in the sector the actual number of EFTS that will be enrolled for the years ended 31 December 2007 and 31 December 2008 is uncertain at this stage. On the basis of progress to date the Council believes these budgeted EFTS

42 - Financial Report

are achievable. • The Crown provided Te Wänanga o Aotearoa with a $20 million funding facility in early 2005 to enable Te Wänanga o Aotearoa to meets its financial obligations. This facility, controlled by the Crown Manager, has been utilised on four occasions in the period to the date of signing these Financials Statements. All amounts have been repaid. The facility has been used as a short term overdraft facility to fund working capital shortfalls. The facility has been rolled over periodically in both of the 2005 and 2006 financial years. The current facility has been reduced to $10 million and expires on 30 November 2007. The Council is confident that continued financial support, if needed, will be forthcoming. • Cabinet has agreed by the way of minute that a suspensory loan of up to $20 million will be made available from 30 November 2007 to settle the amount outstanding from the Waitangi Tribunal Claim Wai 718. The loan, while still being subject to the finalisation of a negotiated agreement between the Tertiary Education Commission and Te Wänanga o Aotearoa, will be paid out in three instalments over three years of $10 million before the end of 2007, $5 million in 2008 and $5 million in 2009. • Te Wänanga o Aotearoa has undertaken a substantial restructure in 2006 without any ongoing financial assistance being required from the Crown. • The financial support provided to other public tertiary educational institutes which have experienced problems similar to those facing Te Wänanga O Aotearoa. • The recognition that Te Wänanga o Aotearoa has continued to operate and has met all its financial obligations as and when they have fallen due. • Cash forecasts for the 2007 and 2008 financial year indicate that the institution will have sufficient cash to meet its financial obligations. Accordingly the Council has prepared these financial statements based on the going concern assumption.

The going concern assumption depends on the: • Institution, similar to all other institutions operating in the sector, achieving its forecast levels of student enrolments in 2007 and 2008; and • Successful conclusion of negotiations with the Crown as to terms for the $20 million suspensory loan.

Specific Accounting Policies The following specific accounting policies which materially affect the measurement of financial performance and the financial position have been applied: A.

Revenue from the Tertiary Education Commission is recognised on an EFTS consumption basis as the course is provided and student fees are recognised when the course is provided. Other revenue is recognised when the activity which gives rise to the revenue is conducted. Government grants are recognised when eligibility has been established by the grantor.

Whilst the Council is confident in the ability of Te Wänanga o Aotearoa to continue as a going concern, if the forecast level of enrolments is not achieved or the negotiations of the terms of the suspensory loan are not successfully concluded there would be significant uncertainty as to whether Te Wänanga o Aotearoa would be able to continue as a going concern. If Te Wänanga o Aotearoa was unable to continue as a going concern adjustments may have to be made to reflect the situation that assets may have to be realised and liabilities extinguished other than in the normal course of business and at amounts which could differ significantly from the amounts at which they are currently reported in the Statement of Financial Position. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and the recognition and classification of liabilities that may be necessary should Te Wänanga o Aotearoa be unable to continue as a going concern.

Measurement Base Unless otherwise stated the general accounting principles recognised as appropriate for the measurement and reporting of the financial position under the historical cost method have been used. The reporting currency is that of New Zealand dollars. Accrual accounting is used to measure the cost of services provided and to recognise revenues.

Revenue

Rental Income is recognised in the Statement of Financial Performance on an accruals basis. Interest Income is accrued using the effective interest rate applicable. B.

Accounts Receivable Accounts Receivable are stated at expected realisable value after providing for debts where collection is doubtful.

Inventory All inventories are valued at the lower of cost and net realisable value.

Property, Plant and Equipment Property, plant and equipment are initially recorded at cost in the Statement of Financial Position. The Library Collection and Artwork are initially recorded at cost in the Statement of Financial Position. Subsequent Expenditure Subsequent expenditure relating to an item of property, plant and equipment is capitalised to the initial cost of the item when the expenditure increases the economic benefits over the life of the item or where that expenditure was necessarily incurred to enable the future economic benefits to be obtained and the

Financial Report - 43

expenditure would have been included in the initial cost of the item had the expenditure been incurred at the time of acquisition.

Capitalisation of Programme Development Costs is limited to the amount which, taken together with further related costs, is probable of recovery from future related economic benefits. Development costs recognised as an asset are amortised on a straight line basis over a five year period once accreditation has been achieved, commencing from the period in which the programme is first delivered. All other development costs and all research costs are recognised as expenses in the period in which they are incurred.

All other subsequent expenditure is expensed in the period in which it is incurred. Impairment All items of property, plant and equipment are assessed for impairment at each reporting date. Where the carrying amount is assessed to be greater than its recoverable amount, the item is written down. The write down is recognised in the Statement of Financial Performance.

Disposal

Depreciation Property, Plant and Equipment, with the exception of Land and Artwork (which are not depreciated) and Library Collection (which is depreciated at 12.5% diminishing value), are depreciated on a straight line basis at rates that will write off the cost over the estimated useful life of the asset. The estimated useful life of assets is as follows: Buildings

50 years

Leasehold Land Improvements

10%

10 years

Equipment

20%

5 years

Computers

25%

4 years

Furniture and Fittings

20%

5 years

Vehicles

20%

5 years

Waka

10%

10 years

Owned Land Improvements

20%

5 years

44 - Financial Report

Goods and Services Tax The financial statements are prepared exclusive of GST except Accounts Payable and Accounts Receivable which are disclosed inclusively. Goods and Services Tax is accounted for on an invoice basis and the balance owing at balance date is disclosed in the Statement of Financial Position.

On disposal or permanent withdrawal of an item of property, plant and equipment the difference between the disposal proceeds (if any) and the carrying amount is recognised in the Statement of Financial Performance. E.

Programme Development Costs

Consolidation of Subsidiary The group financial statements incorporate the financial statements of the parent of Te W채nanga o Aotearoa and its wholly owned subsidiary, which has been consolidated using the purchase method. The results of any subsidiaries acquired or disposed of during the year are consolidated from the effective dates of acquisition or until the effective dates of disposal. All inter-company transactions, balances and unrealised profits are eliminated on consolidation.

Goodwill Goodwill, representing the excess of the cost of shares in a subsidiary or associate over the fair value of the net assets acquired at the date of acquisition, is shown as an intangible asset. Goodwill is amortised in the Statement of Financial Position on a straight line basis over the period of the expected benefit. To the extent that the unamortised balance of goodwill is no longer probable of being recovered from the expected future economic benefits, it is recognised immediately as an expense.

Operating Leases

Operating lease rentals are recognised evenly over the expected period of benefit to Te W채nanga o Aotearoa. K.

All provisions are recorded at the best estimate of the expenditure required to settle the obligation at balance date. Where the effect is material, the expected expenditures are discounted to their present value using pre-tax discount rates.

Finance Leases Leases under which Te W채nanga o Aotearoa assumes substantially all the risks and rewards of ownership are classified as finance leases and are capitalised.

Restructuring Restructuring is a programme planned and controlled by management that materially changes the scope of a business undertaken by the group or the manner in which the business is conducted by the group. The group recognises a provision for restructuring when the Council has approved a detailed formal plan, and the restructuring has commenced or a public announcement regarding the restructuring has been made. Costs and expenditures related to ongoing operations are not included in the provision for restructuring.

The finance charge is allocated to periods during the lease term so as to produce a constant periodic rate of interest on the outstanding balance of the liability for each period. L.

Financial Instruments Financial Instruments carried on the Statement of Financial Position include cash and bank balances, investments, receivables, trade creditors and borrowings. The particular recognition methods adapted are disclosed in the individual policy statements associated with each item. Financial Instruments denominated in foreign currencies are translated at the rates of exchange ruling on the balance date.

Trademarks Purchased identifiable intangible assets, comprising patents and trademarks, are recognised at cost and amortised on a straight line basis over their estimated useful lives. Where the carrying amount of an identified intangible asset exceeds its recoverable amount, it is written down to its recoverable amount. Investments Investments are stated at the lower of cost and net realisable value.

Provisions

Statement of Cash Flows The Statement of Cash Flows is prepared exclusive of GST, which is consistent with the method used in the Statement of Financial Performance. Definitions of the terms used in the Statement of Cash Flows; Cash includes coins and notes, demand deposits and other highly liquid investments readily convertible into cash and includes at call borrowings such as bank overdrafts, used by the organisation as part of their day to day cash management. Operating activities include all transactions and other events that are not investing or financing activities. Investing activities are those activities relating to the acquisition and disposal of current and non-current investments and other non-current assets. Financing activities are those activities relating to changes in the equity and debt capital structure of the organisation and those activities relating to the cost of servicing the organisations equity capital.

Financial Report - 45

Foreign Currency Transactions

Changes in Accounting Policies

Transactions denominated in foreign currencies are translated into the reporting currency using the exchange rate in effect at the transaction date.

There have been no changes in Accounting Policies for the current financial period. All policies have been applied on a basis consistent with the previous year.

Monetary items receivable or payable in a foreign currency, other than those resulting from short term transactions covered by forward exchange contracts, are translated at balance date at the closing rate. Exchange differences on foreign currency balances are recognised in the statement of financial performance. R.

Budget Figures The budget figures are those approved by the Council and Ministry of Education. The budget figures have been prepared in accordance with generally accepted accounting practice and are consistent with the accounting policies adopted by the Council for the preparation of the financial statements.

Employee Entitlements Provision is made in the Statement of Financial Performance and Statement of Financial Position for the benefits due to staff under existing contracts for annual, long service and gratuities leave, on the basis of actual entitlement.

Comparative Figures Comparative information has been reclassified where necessary to achieve consistency in disclosure with the current year.

46 - Financial Report

Statement of Financial Performance for the year ended 31 December, 2004

Group

Actual

Budget

Parent

Group

Parent

Actual

Budget

Actual

31/12/2004 $000

31/12/2004

31/12/2003

$000

Notes

Government Funding Ministry of Education Other Government Funding Total Government Funding

156,347

170,826

478

683

156,825

171,509

3,386

5,389

156,347 1

170,826

177,026

478

683

460

156,825

171,509

177,486

3,368

5,389

3,304

Student Tuition Fees Domestic Other Income Trading Income

402

642

402

642

3,037

225

2,509

964

2,226

714

2,478

2,226

Other Income

13,336

13,732

17,104

10,205

1,355

4,315

Total Other Income

16,247

15,338

19,732

11,561

6,870

6,766

176,458

192,236

179,925

188,459

187,660

187,556

70,022

67,969

66,400

64,361

55,833

52,394

Consumable/Faculty Costs

77,939

70,813

68,836

70,813

52,621

71,696

Occupancy Property Costs

15,991

12,549

15,765

12,379

11,904

11,684

Interest

Total Income

Less Personnel Salaries & Associated Costs

Other Costs

Administration

7,985

8,808

25,248

20,434

24,416

22,165

Interest Expense

119

180

119

180

112

Total Other Costs

102,034

92,350

109,968

103,806

89,053

105,657

Depreciation and Amortisation

10,485

6,898

9,798

6,298

9,527

5,502

Impairment in Value of Term Assets

17,500

Total Cost of Services

200,041

167,217

203,666

174,465

154,413

163,553

Net Surplus (Deficit) for the Year

(23,583)

25,019

(23,741)

13,994

33,247

24,003

The notes to these accounts form an integral part of these statements and should be read in conjunction with them.

Financial Report - 47

Statement of Movements in Equity for the year ended 31 December, 2004

Opening Public Equity Equity Introduced Net Surplus/(Deficit) for the year Public Equity as at 31 December 2004

Group

Actual

Budget

Parent

Group

Parent

Actual

Budget

Actual

31/12/2004 $000

31/12/2004

31/12/2003

$000

Notes

116,769

114,483

100,817

101,166

78,522

71,814

5,000

(23,583)

25,019

(23,741)

13,994

33,247

24,003

93,186

139,502

77,076

115,160

116,769

100,817

The notes to these accounts form an integral part of these statements and should be read in conjunction with them.

48 - Financial Report

Statement of Financial Position as at 31 December, 2004

Group

Parent

Group

Parent

Actual

Budget

Actual

Budget

Actual

31/12/2004

31/12/2003

$000

Public Equity

Notes

Parent

93,186

139,502

77,076

115,160

116,769

100,817

Cash at Bank

14,666

44,636

11,120

31,167

37,924

33,882

Accounts Receivable

10,592

8,606

6,753

3,724

7,607

3,685

2,287

607

2,287

607

457

Current Assets

Prepayments Inventory Total Current Assets

9,381

3,641

8,171

1,641

3,741

1,709

36,926

57,490

28,331

37,139

49,729

39,733

28,353

10,990

29,080

11,734

11,597

13,387

547

Less Current Liabilities Accounts Payable Line of Credit Current Portion of Term Liabilities Employee Entitlements Total Current Liabilities Working Capital Surplus/(Deficit) Property, Plant and Equipment

3,674

3,297

3,604

3,297

2,445

32,071

14,287

32,728

15,031

14,667

16,457

4,855

43,203

(4,397)

22,108

35,062

23,276

87,663

93,236

83,500

89,969

73,964

71,553

Other Non Current Assets Programme Development

3,518

822

4,135

2,379

Goodwill

500

Trademark

Investment in MO1 Limited

Advance to MO1 Limited

Advance to Aotearoa Institute

3,115

Total Other Non Current Assets

6,638

3,115

720

15 20

3,115

3,943

3,135

7,755

6,000

720

Term Liabilities Mortgage Aotearoa Institute Term Portion of Finance Leases Total Term Liabilities Net Assets

Craig Coxhead - Council Chairperson B Soc Sci, LLB(Hon), LLM(Waikato) Date: Friday, 31 August 2007

Brian Roche - Crown Manager CA, BCA (Victoria)

5,250

5,970

93,186

139,502

77,076

115,160

116,769

100,817

Bentham Ohia â&#x20AC;&#x201C; Pouhere Exec MBA, Dip T, BA Date: Friday, 31 August 2007

For and on behalf of the Council

Date: Friday, 31 August 2007

The notes to these accounts form an integral part of these statements and should be read in conjunction with them.

Financial Report - 49

Statement of Cashflows for the year ended 31 December, 2004

Group

Parent Notes

Parent

Group

Parent

Actual

Budget

Actual

Budget

Actual

31/12/2004

31/12/2003

$000

Cash Flows from Operating Activities Cash was provided from: Operating Income

173,971

190,693

177,854

186,617

185,803

195,847

Interest Received

2,509

964

2,226

714

2,174

1,922

176,480

191,657

180,080

187,331

187,977

197,769

164,406

161,441

170,890

167,652

142,817

158,170

119

180

119

180

112

164,525

161,621

171,009

167,832

142,929

158,282

11,955

30,036

9,071

19,499

45,048

39,487

35,224

22,678

33,583

21,568

36,598

35,768

Cash was applied to: Employees and Suppliers Interest expense Net Cash Flows From Operating Activities

Cash Flows from Investing Activities Cash was applied to: Purchase of Property, Plant and Equipment Programme Development

5,343

3,604

4,760

2,379

40,567

22,678

37,187

21,568

41,358

38,147

(40,567)

(22,678)

(37,187)

(21,568)

(41,358)

(38,147)

5,000

5,250

764

3,519

6,014

5,000

8,519

150

5,924

(48)

5,924

(48)

4,850

8,369

(22,688)

14,147

(22,192)

(2,117)

8,540

9,709

Opening Balance 1 January 2004

37,377

30,489

33,335

33,284

28,893

23,682

Gain (Loss) on Foreign Exchange

(23)

(56)

14,666

44,636

11,120

31,167

37,377

33,335

Net Cash Flows From Investing Activities Cash Flows from Financing Activities Cash was provided from: Equity Aotearoa Institute Liability Mortgage Loan repaid by Subsidiary Cash was applied to: Settlement of Debt Net Cash Flows From Financing Activities Net (Decrease)/Increase In Cash Held

Closing Balance 31 December 2004 Note:

2003 comparitive figures for the closing cash balance include both cash at bank and line of credit from the Statement of Financial Position.

Cash at Bank

37,924

Line of Credit

(547)

37,377

33,335

Closing Balance 31 December 2003 The notes to these accounts form an integral part of these statements and should be read in conjunction with them.

50 - Financial Report

33,882

Financial Ratios for the year ended 31 December, 2004

2004

2003

2002

2001

Group

Parent

Group

Parent

Group

Parent

Group

Parent

$000

Short Term Liquidity Current Monetary Assets

14,666

11,120

37,377

33,335

28,894

23,682

Current Liabilities

32,027

32,684

14,667

16,457

13,420

16,101

4,307

3,920

Ratio

0.46:1

0.34:1

2.55:1

2.02:1

2.15:1

1.47:1

2.53:1

2.47:1

10,894

9,681

Public Equity to Total Assets Ratio Public Equity

93,186

77,076

116,769

100,817

78,523

71,814

38,955

38,184

Total Assets

131,227

115,774

131,448

117,286

93,632

89,605

43,501

42,344

0.72:1

0.68:1

0.89:1

0.86:1

0.84:1

0.80:1

0.90:1

Total Liabilities

38,041

38,698

14,679

16,469

15,110

17,790

4,547

4,160

Public Equity

93,186

77,076

116,769

100,817

78,523

71,814

38,955

38,184

Exposure to Liabilities

0.40:1

0.49:1

0.13:1

0.16:1

0.19:1

0.25:1

0.12:1

0.11:1

Ratio Exposure to Liabilities

Change in Financial Value 93,186

77,076

116,769

100,817

78,523

71,814

38,955

38,184

(20.20%)

(23.55%)

49.00%

40.00%

102.00%

88.00%

222.00%

216.00%

Net Result for the period

(23,583)

(23,741)

33,247

24,003

29,229

23,292

1,872

1,102

Total Assets

131,227

115,774

131,448

117,287

93,632

89,605

43,501

42,344

Percentage

(17.97%)

(20.50%)

25.29%

20.47%

31.22%

25.99%

4.30%

2.60%

Net Assets Change in Financial Value Return on Assets

The notes to these accounts form an integral part of these statements and should be read in conjunction with them.

Financial Report - 51

Notes to the Financial Statements for the year ended 31 December, 2004

1. Government Funding Te W채nanga o Aotearoa is a Crown recognised tertiary institution. The major source of funding is from the Ministry of Education. All revenue relates to continuing activities.

2. Council Remuneration 2004 Salaries & Associated Costs includes Te Mana Whakahaere and sub-committees remuneration of $60,992 distributed as follows: Craig Coxhead - Council

18,104

Lloyd Anderson - Council/Audit & Risk

3,825

Eleanor Barton - Council

2,040

Richard Batley - Council/Audit & Risk

1,020

Barry Hopkins - Council

2,295

Tania Hodges - Council/Audit & Risk

4,803

Bruce Martin - Council

1,020

Harold Maniapoto - Council

John Storey - Audit & Risk

18,000

Shane Jones - Audit & Risk

8,100

Carol Nin - Council

510 1,275

There were no Directors Fees paid by MO1 Limited in 2004. 2003 Salaries & Associated Costs includes Te Mana Whakahaere remuneration of $58,785 distributed as follows: Joseph Arrell - Council

Lloyd Anderson - Council/Audit & Risk

3,825

Eleanor Barton - Council

19,500 2,550

Bruce Bryant - Council/Audit & Risk

4,845

Arana Collett - Council

1,020

Craig Coxhead - Council

10,980

Tania Hodges - Council/Audit & Risk

4,590

Barry Hopkins - Council

2,805

Harold Maniapoto - Council

1,785

Carol Nin - Council

1,530

Rewi Panapa - Council

1,785

Bruce Martin - Council

Mana Forbes - Council

1,785

Edwin Te Moananui - Council

Directors Fees paid by MO1 Limited of $49,997 distributed as follows: Bruce Bryant

52 - Financial Report

49,997

510 1,275

3. Statutory Disclosures Group 2004

Parent 2004

Group 2003

Parent 2003

$000

Interest Expense

119

112

487

427

Fees Paid to Auditors For Audit Services

Provision for Doubtful Debts

For Other Services

1,115

925

Operating Lease Expense

6,293

6,162

4,772

Bad Debts Written Off

369

150

104

Koha

240

226

2,852

Development Costs (note 11, 13)

1,663

1,113

625

Depreciation (note 11)

8,822

8,684

6,050

5,502

Rent

1,234

664

Amortisation of Goodwill (note 14) Amortisation of Programme

4. Other Income Group 2004

Parent 2004

Group 2003

Parent 2003

$000

Contract Income

8,112

5,902

2,999

Trade Rebate

2,889

523

192

6,000

Rent Received Management Fee - MO1 Ltd (note 20.9) Other Income Total Other Income

1,812

1,790

1,163

1,124

13,336

17,104

1,355

4,315

Contract income relates to licences and subcontracting arrangements that Te W채nanga o Aotearoa has with other institutions.

Financial Report - 53

5. Crown Equity and Compensation The Crown has made equity contributions to Te Wänanga o Aotearoa in line with the recommendations outlined in The Wänanga Capital Establishment Report – Waitangi Tribunal Report 1999 (WAI 718).(refer Accounting Policies, General, Going Concern.) As at 31 December 2004 the following amounts have been received: Group 2004

Parent 2004

Group 2003

Parent 2003

$000

Balance at Beginning of Year

51,691

46,691

5,000

51,691

Crown Contributions Received this Year Balance at End of Year

A $20 million suspensory loan was due to be advanced to Te Wänanga o Aotearoa over the 2004-2005 years to complete the equity contributions agreed to. This loan has not yet been advanced as at the date of signing these Financial Statements.

6. Accounts Receivable Group 2004

Parent 2004

Group 2003

Parent 2003

$000

Student Fee Debtors

1,090

925

Ministry of Education

1,471

Goods & Services Tax

726

Intercompany - MO1 Limited

101

146

Oma Investments Limited (refer note 20)

3,224

General Debtors (refer note 20)

7,393

3,453

5,410

1,342

11,707

7,868

8,532

4,610

Less Provision for Doubtful Debts

1,115

925

10,592

6,753

7,607

3,685

7. Prepayments

VLC Computers Other

54 - Financial Report

Group 2004

Parent 2004

Group 2003

Parent 2003

$000

1,836

451

457

2,287

457

8. Accounts Payable Group 2004

Parent 2004

$000

Goods and Services Tax Accrual

147

PAYE Childcare Grants** Ministry of Education

Parent 2003

$000

591

321

673

636

1,076

836

13,240

1,654

4,574

Intercompany - MO1 Limited Sundry Creditors

Group 2003

13,457

12,687

9,094

6,580

28,353

29,080

11,597

13,387

** These funds have been received as capital grants from the Ministry of Education for the purpose of building three childcare centres but this was repaid in 2005.

9. Provision for Employee Entitlements Group 2004

Parent 2004

Group 2003

Parent 2003

$000

Accrued Salaries

1,088

1,087

579

Accrued Holiday Pay

2,586

2,517

1,866

3,674

3,604

2,445

Financial Report - 55

10. Property, Plant and Equipment Group

Cost

Accumulated Depreciation

Book Value

$000

2004 Land

7,657

178

123

Buildings

40,095

1,565

38,530

Leasehold Improvement

10,996

2,173

8,823

Equipment

12,232

4,090

8,142

Computers

Leasehold Land Improvements

13,011

5,769

7,242

Furniture & Fittings

6,871

2,782

4,089

Motor Vehicles - Owned

9,394

3,060

6,334

Waka

614

150

464

Artworks

912

Library

2,860

585

2,275

Work in Progress

3,072

107,892

20,229

87,663

Motor Vehicles - Finance Lease

Parent

Cost

Accumulated Depreciation

Book Value

$000

2004 Land

7,657

Buildings

38,158

1,339

36,819

Leasehold Improvement

10,919

2,137

8,782

Equipment

11,049

3,755

7,294

Computers

Leasehold Land Improvements

7,657

11,556

5,201

6,355

Furniture & Fittings

6,676

2,698

3,978

Motor Vehicles - Owned

8,702

2,811

5,891

Waka

614

150

464

Artworks

912

Library

2,861

585

2,276

Work in Progress

3,072

102,176

18,676

83,500

Motor Vehicles - Finance Lease

56 - Financial Report

Group

Cost

Accumulated Depreciation

Book Value

$000

2003 Land Leasehold Land Improvements Buildings

5,590

150

139

34,312

789

33,523

Leasehold Improvement

6,696

1,254

5,442

Equipment

8,702

1,932

6,770

Computers

8,916

2,948

5,968

Furniture & Fittings

4,818

1,628

3,190

Motor Vehicles - Owned

6,997

1,770

5,227

614

515

Waka Artworks Library Work in Progress

Group

691

1,461

260

1,201

6,436

728

5,708

85,383

11,419

73,964

Cost

Accumulated Depreciation

Book Value

$000

2003 Land Buildings

5,590

33,456

758

32,698

Leasehold Improvement

6,619

1,244

5,375

Equipment

8,126

1,879

6,247

Computers

7,884

2,845

5,039

Furniture & Fittings

4,618

1,604

3,014

Motor Vehicles - Owned

6,465

1,719

4,746

614

515

Waka Artworks

691

Library

1,462

260

1,202

Work in Progress

6,436

81,961

10,408

71,553

Financial Report - 57

On 30 June 2003 Te W채nanga o Aotearoa purchased the land, buildings and chattels of Glenview International Hotel and Conference Facility, situated at 254 Ohaupo Road, Hamilton. The purchase price paid amounted to $5.12 million, made up as follows. Land

$1,500,000

Buildings

$2,620,000

Chattels

$500,000

The excess of the purchase price paid over the value of the assets amounting to $500,000 represents goodwill paid on acquisition (refer note 14).

11. Depreciation and Amortisation Group 2004

Parent 2004

Group 2003

Parent 2003

$000

Leasehold Land Improvements Buildings Leasehold Improvement

870

675

388

847

821

536

535

Equipment

2,040

1,846

1,076

1,075

Computers

1,972

2,352

2,233

1,686

Furniture & Fittings

1,060

1,100

780

781

Motor Vehicles

1,612

1,514

810

Waka

Library

325

183

Goodwill Amortisation (note 14)

2,852

1,663

1,113

625

10,485

9,798

9,527

5,502

Amortisation (note 13)

12. Impairment in Value of Term Assets

Goodwill (note 14)

Group 2004

Parent 2004

Group 2003

Parent 2003

$000

500

Waka

1,756

Software

2,300

Land and Buildings

1,061

Work in Progress

7,768

Programme Development

4,048

Other Total Impairment in Term Assets

58 - Financial Report

17,500

13. Programme Development Group 2004

Parent 2004

Group 2003

Parent 2003

$000

Balance at Beginning of Year

4,135

2,379

Capitalisation During the Year

5,094

3,604

4,760

2,379

Amortisation (note 11)

(1,663)

(1,113)

(625)

Impairment (note 12)

(4,048)

3,518

822

4,135

2,379

Balance at End of Year

Programme development costs were incurred in developing Lifeworks and Mauri Ora programmes.

14. Goodwill Group 2004

Parent 2004

Group 2003

Parent 2003

$000

Cost Balance at Beginning of Year Capitalised During the Year * Balance at End of Year

7,346

500

6,846

500

7,346

500

7,346

500

6,846

3,994

2,852

500

7,346

500

6,846

500

Accumulated Amortisation Balance at Beginning of Year Amortised Expense for the Year (note 11) Impairment Expense (note 12) Balance at End of Year Carrying Value Balance at End of Year

* Goodwill of $500,000 relating to the acquisition of the Glenview International Hotel and Conference Facility was expensed during the year. (2003 Goodwill capitalised during the year of $500,000 relates to the acquisition of the Glenview International Hotel and Conference facility.)

Financial Report - 59

15. Investment in MO1 Limited MO1 Limited is a fully owned subsidiary of Te W채nanga o Aotearoa and is in the business of education. The balance date of the company is 31 December. The results of MO1 Limited are incorporated in the group financial statements. During 2003 MO1 Limited repaid the advance owed to Te W채nanga o Aotearoa of $3.5 million.

16. Reconciliation of Year to Date Surplus to Operating Activities Cashflow

Year to Date Surplus/(Deficit)

Group 2004

Parent 2004

Group 2003

Parent 2003

$000

(23,583)

(23,741)

33,247

24,003

Add Depreciation/Losses on Disposal

10,485

9,798

6,050

5,502

Add Impairment in Value of Term Assets

17,500

2,852

Add Amortisation of Goodwill Add Development costs Written Off

625

4,425

3,580

42,830

29,561

Debtors

(2,985)

(3,069)

4,333

11,850

Prepayments

(1,830)

(164)

(165)

Inventory

(5,640)

(6,462)

(2,738)

(1,636)

Creditors

16,756

15,693

768

(123)

Employee Entitlements

1,229

1,159

Write off of Investments

11,955

9,071

45,048

39,487

Add Loss of Foreign Exchange

Add Movements in Working Capital:

Cash Flows From Operating Activities

60 - Financial Report

17 Financial Instruments Financial instruments which may subject Te Wänanga o Aotearoa to interest rate risk relate to overdrawn bank balances. To limit the amount of interest rate exposure, Te Wänanga o Aotearoa has provided to their bankers the right of offset between credit funds held by the bank against any overdrawn balances. Te Wänanga o Aotearoa no longer has a line of credit with Bank of New Zealand (2003 - $547,200). In 2003 the interest rate was 9.05% The facility was used to cover the purchase of computers and motor vehicles. Te Wänanga o Aotearoa has a US$ Account with a current balance of US$226,449 (2003- US$150,327). The exchange rate as at 31 December 2004 of 0.7085 (2003 - 0.6605) was applied. Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the group. Cash accounts are held with high credit quality financial institutions. Student fee debtors and general debtors consist of a large number of customers and the group does not have any significant concentration of credit risk with regards to these balances. As disclosed in note 20 there are related party receivable balances from OMA Investments Limited of $3.224 million (2003 - nil) and Aotearoa Institute of $3.115 million (2003 - $3.115 million).

18 Mortgage - Landcorp Investments Limited The loan from Landcorp Investments Limited is secured by way of a mortgage on the land and buildings at 15 Canning Crescent, Mängere. The interest rate is fixed at 4%. The interest and principal are repayable on a half-yearly basis by equal payments of $22,050. The mortgage matures on 31 December 2034. The loan amount at balance date was $763,979. The Fair Value of the mortgage at 31 December 2004 was $509,951.

Financial Report - 61

19 Early Learning Centres During the 2004 financial year, Te W채nanga o Aotearoa received grants from the Ministry of Education for Early Learning purposes. Ministry of Education funds received can be accounted for the following way: Apakura Te K채kano

2004

2003

MOE Funding Received Bulk Funding

148,064

12,606

1,600

Incentive Funding Language & Kaupapa Training TOTAL MOE Funding Received

1,861

$151,525

$12,606

Funds applied to: Salaries

Raroera Te K채kano

151,525

12,606

$151,525

$12,606

2004

2003

MOE Funding Received Bulk Funding

79,167

87,545

Low Socio Economic

1,400

Special Needs

1,225

Incentive Funding

Training TOTAL MOE Funding Received

3,723

$85,515

$87,545

84,115

87,545

1,400

$85,515

$87,545

Funds applied to: Salaries Resources

62 - Financial Report

Manukau Te K채kano

2004

2003

MOE Funding Received Bulk Funding

102,605

59,223

Low Socio Economic

3,582

Special Needs

1,791

Language & Kaupapa

1,600

$109,578

$59,223

106,254

59,223

3,324

$109,578

$59,223

Incentive Funding

TOTAL MOE Funding Received Funds applied to: Salaries Resources

Te Rau Oriwa

2004

2003

MOE Funding Received Bulk Funding

76,332

88,932

Incentive Funding Low Socio Economic

5,378

Special Needs

2,113

Language & Kaupapa TOTAL MOE Funding Received

1,600

$85,423

$88,932

83,676

88,932

Funds applied to: Salaries Resources

1,747

$85,423

$88,932

Financial Report - 63

Raroera Te Puäwai

2004

2003

MOE Funding Received Bulk Funding

72,221

7,314

1,600

Incentive Funding Language & Kaupapa Training TOTAL MOE Funding Received

3,723

$77,544

$7,314

77,544

7,314

$77,544

$7,314

Funds applied to: Salaries

Building Programme Grants

2004

2003

Unspent Building Programme Grants as at 01-01-04

836,347

1,040,571

Additional Grants Received

Building Grants Applied to the Building Programme

(204,224)

836,347

Unspent Building Programme Grants as at 31-12-04

The unspent building programme grants were repaid in May 2005.

20 Related Party Transactions

››› Property

›› 20.1 Aotearoa Institute Te Kuratini o Ngä Waka Trust Board (Aotearoa Institute)

Aotearoa Institute leases buildings to Te Wänanga o Aotearoa at commercial rental rates. At the date of signing these financial statements the leases with Aotearoa Institute were 3 years with two further terms each of three years.

There are several components to the relationship with Aotearoa Institute including: ››› Governance The governing bodies of Aotearoa Institute and Te Wänanga o Aotearoa had two members in common at balance date. There were also five senior employees of Te Wänanga o Aotearoa on the Board of Aotearoa Institute. Aotearoa Institute’s financial operations are separate and distinct to that of Te Wänanga o Aotearoa. All material transactions between the two entities are charged at a fair market rate.

64 - Financial Report

At balance date Te Wänanga o Aotearoa was claiming reimbursement from Aotearoa Institute for a significant proportion of the leasehold improvements that Te Wänanga o Aotearoa had made to properties leased from Aotearoa Institute including the Porirua building which has subsequently been sold. This matter was settled as part of the December 2006 agreement between the parties (refer note 21.2).

››› Management Services Te Wänanga o Aotearoa provided management and administration services to Aotearoa Institute to the extent of $40,000 during the year. At balance date, Aotearoa Institute was a general debtor of Te Wänanga o Aotearoa due to the accrual of those services provided to the extent of $45,000 including GST (2003 - $45,000 including GST). ››› Advances During 2001 an advance of $3.1 million was made to Aotearoa Institute, which was fully ratified by the Te Wänanga o Aotearoa Council. These funds were used for the purchase and renovation of buildings to be used by Te Wänanga o Aotearoa for which leasing arrangements have been entered into. In February 2006 the campus building in Porirua was sold by Aotearoa Institute. Aotearoa Institute used the proceeds of the sale to pay some of the outstanding interest on the advance. The remaining interest was capitalised, along with the principal and secured over the campus in Te Rapa. The total amount due was $3.5 million. The loan attracts interest at 10% per annum and was repayable on 365 days demand. This matter was settled as part of the December 2006 agreement between the parties (refer note 21.2). At the date of signing these financial statements there were no amounts outstanding. ››› Leasing of Computers During the year Te Wänanga o Aotearoa leased computers from Aotearoa Institute. The value of the lease was $2.1 million. Te Wänanga o Aotearoa then leased the computers to computer students enrolled with Te Wänanga o Aotearoa. Upon the successful completion of the course Aotearoa Institute awarded the computer to the student in the form of a scholarship. This arrangement was approved by the Tertiary Education Commission prior to being entered into and an agreement has now been reached for all computers not awarded to students to be gifted to Te Wänanga o Aotearoa.

›› 20.2 OMA Investments Limited (now GTL Investments Limited) OMA Investments Limited is a fully owned subsidiary of Aotearoa Institute. Te Wänanga o Aotearoa and MO1 Limited purchase student learning resources from Oma Investments Limited. Oma Investments Limited manages and distributes the inventory on behalf of Te Wänanga o Aotearoa and MO1 Limited. For most of 2003 and 2004, William Wetere was General Manager of OMA Investments Limited. Prior to this he was employed as a senior manager at MO1 Limited. Kingi Wetere was General Manager of MO1 Limited until early 2004 and then moved into a senior position in Te Wänanga o Aotearoa. Kingi ceased being employed by Te Wänanga o Aotearoa in April 2005. He was a director of MO1 Limited from 2001-2005. In September 2006, Te Wänanga o Aotearoa entered into an agreement with GTL Investments Limited to provide management services to MO1 Limited which included the services of Kingi Wetere. He has recently been appointed to the position of General Manager, MO1 Ltd. Rongo Wetere was Tumuaki of Te Wänanga o Aotearoa until December 2005. William Wetere and Kingi Wetere are sons of Rongo Wetere. Until 15 April 2005 Rongo Wetere was a director of OMA Investments Ltd. Rongo Wetere, William Wetere and Kingi Wetere were all, at one time, directors of both OMA Investments Limited and MO1 Limited. Two other Te Wänanga o Aotearoa personnel (Min Marshall and Bruce Bryant) were for a time directors of OMA Investments Limited and MO1 Limited, while also holding management or governance positions at Te Wänanga o Aotearoa. In late 2004 OMA Investments Limited issued Te Wänanga o Aotearoa with a trade rebate of $3.2 million including GST. $900,000 of this rebate was offset against invoices received in 2005 and the remaining amount was to be

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offset against invoices in 2006 and 2007. This matter was subsequently settled as part of the December 2006 agreement between Te Wänanga o Aotearoa and Aotearoa Institute. (refer Note 21.2). (In October 2003 Te Wänanga o Aotearoa purchased back stock from OMA Investments Limited at a cost of $1,677,259.) ›› 20.3 Glenview International Hotel and Conference Centre Limited The Glenview International Hotel and Conference Centre Limited (“the company”) is a fully owned subsidiary of Aotearoa Institute. The company operates the accommodation and conference areas of the Glenview complex. Te Wänanga o Aotearoa purchased the land and buildings comprising the Glenview Hotel Complex in Hamilton in 2003. During 2003-2004 Te Wänanga o Aotearoa renovated and up graded the facility which the company operates out of along with space at the site which was used for Te Wänanga o Aotearoa central library, offices and meeting rooms. As at Balance Date no lease payments had been made by the company for the use of this space. This matter was subsequently settled as part of the December 2006 agreement between Te Wänanga o Aotearoa and Aotearoa Institute. (refer Note 21.2) ›› 20.4 Ora Limited Susan Cullen (daughter of Rongo Wetere) is the sole shareholder and director of Ora Limited. Ora Limited has a sub-contracting arrangement with Te Wänanga o Aotearoa to provide the Kiwi Ora programme to new immigrants to New Zealand. During 2004 Te Wänanga o Aotearoa paid $23.78 million (2003 - $10.71 million) to Ora Limited for the provision of this programme. In 2006 as part of a wash-up of transactions it was established and agreed that Ora Ltd owed Te Wänanga o Aotearoa $2.3million (excluding GST). This amount is due to be repaid by September 2007.

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›› 20.5 Awarua Limited Susan Cullen is the sole shareholder and director of Awarua Limited. During 2004 Te Wänanga o Aotearoa reimbursed Awarua for the direct costs incurred in undertaking various Te Wänanga o Aotearoa special projects to the amount of $376,000. (2003 – MO1 Limited, a fully owned subsidiary of Te Wänanga o Aotearoa, paid Awarua $1.7 million, including GST, for the Lifeworks programme which is delivered by the Open Polytechnic of New Zealand.) ›› 20.6 Wairau Property Developments Limited Susan Cullen is the sole shareholder and one of the directors of Wairau Property Developments Limited. Wairau Property Developments Limited leases properties to Te Wänanga o Aotearoa. During 2004 Te Wänanga o Aotearoa paid $79,000 (2003 – nil) to Wairua Property Developments Limited. ›› 20.7 Power Chill NZ Limited Kingi Wetere and William Wetere have a significant ownership interest in Power Chill NZ Limited. Power Chill NZ Limited is an air-conditioning business that has often tendered for and undertaken work for Te Wänanga o Aotearoa and MO1 Limited. Kingi Wetere and William Wetere are also directors of this company. During 2004 Power Chill supplied goods and services to Te Wänanga o Aotearoa to the value of $419,000 (2003 - $184,000). ›› 20.8 Aranui (2003) Limited Ara Wetere is the brother of Rongo Wetere. Ara is the sole director and shareholder of Aranui (2003) Limited. Aranui (2003) Limited has provided landscaping, grounds maintenance, drainage, tar sealing and fencing services to Te Wänanga o Aotearoa. During 2004 the value of these services was $907,000 (2003 - $751,000).

›› 20.9 MO1 Limited MO1 Limited is a wholly owned subsidiary of Te Wänanga o Aotearoa. The Board of MO1 Limited is appointed by the Council of Te Wänanga o Aotearoa. MO1 Limited provides educational services for Te Wänanga o Aotearoa and Te Wänanga o Aotearoa is part of the MO1 Limited provider network. During 2004 Te Wänanga o Aotearoa paid MO1 Limited $18,065,424 for these services and MO1 Limited paid Te Wänanga o Aotearoa $3,551,044 as well as a Management Fee of $6 million.

21 Post Balance Sheet Events Owing to the time delays experienced in finalising the 2004 accounts a significant number of events have occurred post balance sheet that will influence the ability of users of this financial report in making decisions or assessments about the information contained in this report. ›› 21.1 Appointment of Crown Manager and Crown Observer In March 2005 Mr Brian Roche was appointed as the Crown Manager and Crown Observer. In the former position the Council delegated to him all financial delegations within the institution. In October 2006 Malcolm Inglis was appointed Crown Observer. Brian Roche continues to fill the role of Crown Manager for the organisation. ›› 21.2 Settlement between Te Wänanga o Aotearoa and Aotearoa Institute In December 2006 agreement was reached between the two parties whereby all claims between the two parties were settled. (refer 20.1 – 20.3) As part of the settlement the following occurred: • All claims made by Aotearoa Institute with respect to Intellectual Property and amounts due to Aotearoa Institute in recognition of their contribution to the founding of Te Wänanga o Aotearoa were withdrawn.

• The claim by Te Wänanga o Aotearoa with respect to leasehold improvements was withdrawn. • Te Wänanga o Aotearoa has conditionally agreed to sell the Glenview International Hotel and Conference Centre to Aotearoa Institute in June 2008 (or before if possible) at the then market value. As part of the settlement a market rent of $1.3 million was imputed into the final settlement. • Aotearoa Institute agreed to give first right of refusal to Te Wänanga o Aotearoa over the properties currently leased at Te Rapa, Malfroy Road (Rotorua) and Apakura (Te Awamutu) in June 2008 (or before if possible) at the then market rates. • The two parties agreed to enter into an agreement with respect to the future licensing of the Greenlight literacy programme within New Zealand. Under the agreement, a separate subsidiary of Aotearoa Institute, Arrowmight International Limited, is acting as agent of a Cuban organisation, IPLAC, the developer of the programme in conjunction with Te Wänanga o Aotearoa. Te Wänanga o Aotearoa will pay 10.5% of any future revenue derived from the programme to Arrowmight in consideration of any intellectual property and other claims IPLAC might have for the programme. • All ongoing leases between the two parties were to be determined at market value on the basis of a three year lease with a right of renewal for a further three plus three years. ›› 21.3 Executive Management and Structure of the Organisation Since Balance Date the institution has undergone significant restructuring including the departure of the Tumuaki, Rongo Wetere. In addition there was an extensive process associated with Te Anga Whakamua which resulted in a significant reduction in staff numbers. On 25 September 2006 Cabinet approved a fees exemption to allow the Chairperson of Council to work on a full time basis. The Chair started on a full time basis on 16 October 2006.

• All amounts due to Te Wänanga o Aotearoa with respect to the trade rebates, loans and advances ($5.95 million) were extinguished.

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›› 21.4 Crown Loan

›› 21.6 Legal Challenges

Over the course of 2005, 2006 and 2007 the Crown has provided ongoing financial support to the institution. The support has been in the form of a working capital loan facility. The initial funding facility, made available in May 2005, was for $20 million. The facility has been rolled over on 31 July 2005, 15 October 2005, 15 December 2005, 28 February 2006, 30 June 2006 and 30 November 2006. The current facility, which has been reduced to allow maximum drawings of $10 million, is due for repayment on 30 November 2007.

Since balance date the institution has been subjected to significant legal challenges with respect to the legality of the Council and its constitution. These matters, together with several other legal matters associated with the employment of the Tumuaki, have now been settled in favour of the institution.

The facility has been under the direct control of the Crown Manager. It has been used to support the ongoing operation of the institution and to meet its financial working capital obligations. At the date of signing the financial statements, drawings of $6 million were held in an interest bearing account controlled by the Crown Manager, from which funds are made available from time to time. $4 million has been utilised on one occasion during the course of 2005 and drawings of up to $4.5 million were made in December 2006. This amount has subsequently been repaid to the account. The net cost of the interest on the loan was $101,549 in 2005 and $64,327 in 2006. ›› 21.5 Property Portfolio During 2005 a review was undertaken of the property portfolio and as a consequence of this review a rationalisation of the portfolio commenced and a number of surplus owned and leased properties have been progressively exited. As at the date of these accounts 91 leases have been terminated. 7 properties worth $4.663 million have been sold.

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›› 21.7 Unite Incorporated Unite Incorporated is a trade union with a presence throughout a number of main centres in New Zealand. The Secretary of Unite Incorporated is Matt McCarten who is no longer a member of the Council of Te Wänanga o Aotearoa. In November 2006 the Council ratified an agreement whereby Te Wänanga o Aotearoa entered into a collaboration pilot project with Unite Incorporated. Under this project Te Wänanga o Aotearoa offers a suite of programmes to members and staff of employers within the Unite network. The pilot project is supported by a full business case and Te Wänanga o Aotearoa receives an appropriate level of financial return on the project. The first enrolments under this pilot project were taken in November 2006 with 356 members of Unite Incorporated enrolling in a 12 month computer course offered by Te Wänanga o Aotearoa. These students undertake their studies at premises in central Auckland leased by Unite Incorporated from an independent third party. This lease is guaranteed by the Aotearoa Institute.

Under the agreement, Te Wänanga o Aotearoa pays an amount of $620 per enrolment to Unite Incorporated to cover the following, inter alia: • marketing, advertising and enrolment services; • provision of the serviced premises in central Auckland inclusive of all outgoings, security and reception; • full access to the premises for students; • ongoing pastoral care for students; and • dual branding of the premises. Te Wänanga o Aotearoa is responsible for the cost of the original set-up of classroom space including infrastructure systems and all matters of education delivery and compliance. Further opportunities under this relationship are currently being investigated.

22 Legislative Compliance Te Wänanga o Aotearoa breached the Public Finance Act 1989, in that its audited financial statements were not available within 120 days of 31 December 2004. Te Wänanga o Aotearoa breached Section 192 of the Education Act which requires that any mortgages obtained by a Tertiary Institute be approved by Secretary for Education. Te Wänanga o Aotearoa did not obtain approval from the Secretary for the mortgage on a property in Mängere.

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Statement of Commitments and Contingencies for the year ended 31 December, 2004

Commitments Capital Commitments Buildings 2004

2003

$000

Estimated capital expenditure contracted for at balance date, but not provided for Capital Commitment at the following Campuses Gisborne Glenview Refurbishment

170

370

5,908

Hamilton

765

Rotorua

555

M채ngere

240

964

Tokoroa Palmerston North

Te Awamutu

249

836

Capital grant from the Ministry of Education to build childcare centres

There were no additional commitments on behalf of the Group.

Non-cancellable Operating Leases Buildings 2004

2003

$000

Not later than one year

4,856

3,719

Later than one year and not later than two years

4,234

2,008

Later than two years but not later than five years

9,765

2,457

Later than five years

7,485

2,516

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Cancellable Operating Leases Computers and Equipment 2004

2003

$000

Not later than one year

122

Later than one year and not later than two years

Later than two years but not later than five years

Vehicles 2004

2003

$000

Not later than one year

Finance Leases There were no finance leases held by Te W채nanga o Aotearoa at balance date.

Vehicles 2004

2003

$000 Not later than one year

$000 -

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Contingencies Personal Grievances As at 31 December 2004 there were 11 open personal grievance claims against Te Wänanga o Aotearoa. Of these 11 claims 5 are still active. They are considered to be low risk and unlikely to proceed.

Carich Training Centre Limited (Carich) (in liquidation) In February 2003 the Receivers of Carich made a claim amounting to $10.5 million against Te Wänanga o Aotearoa for breach of contract. Te Wänanga o Aotearoa believes the claim to be defendable and consequently no provision has been made in the financial statements.

Aotearoa Institute Te Kuratini o Ngä Waka Trust Board (Aotearoa Institute) Prior to balance date Aotearoa Institute had indicated that it intended to make a claim against Te Wänanga o Aotearoa for intellectual property and artworks transferred to Te Wänanga o Aotearoa on its formation. This claim has subsequently been settled as part of the agreement between the parties (refer note 21.2 in the notes to the Financial Statements).

InfoQuest In 2005 a claim from Infoquest, a Malaysian software developer, was received with respect to services supplied to Te Wänanga o Aotearoa. On the basis of the analysis undertaken and the legal advice received no amounts have been set aside on this claim. There are no other known contingent liabilities at balance date for the group.

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