Notes to the financial statements |

For the year ended 31 December 2022

23. Explanation of major variances against budget

Accounting policy

It should be noted Te Wānanga o Aotearoa budget figures have been approved by Te Mana Whakahaere at the beginning of the year. Budget figures are prepared in accordance with NZ GAAP and are consistent with the accounting policies adopted by Te Mana Whakahaere for the preparation of the financial statements. However, some items presented in the budget have been reclassified in the annual report to be consistent with the presentation of actuals.

Explanations for major variations from Te Wānanga o Aotearoa budget figures are as follows:

Statement of comprehensive revenue and expense

Te Wānanga o Aotearoa result was a surplus of $3.5m (2.4% of total revenue) which was $3.5m above budget.

Government funding was $6.1m below budget. EFTS consumption was 3,555 below target a negative impact of COVID-19 restrictions offset by additional funding received in recognition of the unique challenges and aspirations of Wānanga .

Interest income was $0.5m higher than budget due to higher than planned interest rates.

Other revenue was $10m below budget, mainly attributed to significantly lower than planned returns on managed funds due to world-events negatively impacting financial markets.

Kaimahi costs were $11.5m favourable to budget mainly due to unfilled vacancies and the need for less kaimahi due to lower EFTS.

Depreciation and amortisation was $1.0m above budget because budget assumptions excluded the impact of property revaluations completed in 2021, offset by the result of lower than budgeted capital expenditure.

Other expenses were $8.9m favourable to budget. Variable costs of tauira kete, teaching resources and noho marae were $4.2m lower budget because of below target EFTS consumption. Overhead expenditure was lower across almost all categories due to the COVID-19 restrictions effecting ability to spend as planned.

Statement of financial position

Cash and cash equivalents are $8.9m higher than budget to fund operational requirements through the Christmas closedown.

Tauira and other receivables were $13.6m lower than budget mainly due to SAC funding being recognised based on when the course withdrawal date has passed, and the number of eligible students who have enrolled at that time.

Other financial assets were $8m higher than budget from higher cash-flows from operations than planned due to lower operational and capital expenditure. The budget also assumed different timing of maturity and investment than actual.

Prepayments were $0.8m higher than budget. The budget assumed different timing of renewals than actual.

Managed funds was $12.3m higher than budget due to an unplanned increase in principal funds invested from excess cash available at the beginning of the year offset by lower than expected returns on investments due to worldwide events impacting negatively on financial markets.

Property, plant and equipment were $19.3m higher than budget from the unplanned impact of property revaluations completed in 2021 after the budget was approved.

Intangible assets were $5.4m lower than budget due to planned capital expenditure not proceeding or being deferred as planned due to changes in scope or resourcing availability.

Payables were $9.8m higher than budget as the budget did not include other government funding of $9.4m as being payable at year-end or consider the deferment of year-end tax payments.

Statement of cash flows

Government funding receipts were $13.7m lower than budget due to not meeting EFTS targets offset by the receipt of new funding in recognition of challenges and aspirations of Wānanga.

Dividends were $1.0m higher than budget due to higher returns than planned.

Other cash receipts from operating activities were $1.4m lower than budget because the budget assumed different timing of receipts.

Payments to kaimahi were $18.9m below budget due largely to unfilled vacancies and the need for less kaimahi as a result of fewer EFTS.