Te Pūrongo - TWoA Annual Report 2019 by Te Wananga o Aotearoa

Annual Report 2019

| Te Wānanga o Aotearoa

Te Wānanga o Aotearoa Head Office, Te Puna Mātauranga 320 Factory Road, Te Awamutu 3840

Te PÅ«rongo 2019 |

| Te WÄ nanga o Aotearoa

Annual Report 2019 |

gā Matawhānui Our Vision

He takapau mātauranga, he whānau huarewa

Whānau transformation through education

gā Whakatakanga Our Mission

Kia angitu te tauira

Tauira success

| Te Wānanga o Aotearoa

The panel to the left is representative of the mission statement of Te Wānanga o Aotearoa,

Kia angitu te tauira Tauira success, which underpins our success as an organisation.

The four panels to the right were designed by graduate (student) Nichola Te Kiri (Ngāi Tuhoe), who gained a Bachelor of Māori Art (Rauangi- Visual Arts) in 2018. The four acrylic panels that adorn the external posts of Te Mauri, the Ōtautahi (Christchurch) campus building feature Nichola’s designs, which have drawn from kowhaiwhai and tukutuku patterns to reflect qualities related to Ngā Uara (Te Wānanga o Aotearoa values).

Te PĹŤrongo 2019 |

NgÄ Ture

Te Aroha

Te Whakapono

Te Kotahitanga

The knowledge that our actions are morally and ethically right and that we are acting in an honourable manner.

Having regard for one another and those for whom we are responsible and to whom we are accountable to.

The basis of our beliefs and the confidence that what we are doing is right.

Unity amongst iwi and other ethnicities; standing as one.

| Te Wānanga o Aotearoa

Rārangi Upoko Contents

Ngā Uara Our Values

He Tauira Student Profile

Arotakenga In review

Oranga Hapori Social wellbeing for all New Zealanders

Tā Te Heamana Chairperson’s Report

He Tauira Student Profile

Te Mana Whakahaere Council

Arumoni Economic wellbeing for all New Zealanders

Tā Te Taiurungi Chief Executive’s Report

He Tauira Student Profile

Ngā Tumu Leadership Team

Ngā ki Taurangi Statement of Service Performance

Ahurea Advancing Mātauranga Māori

Te Tahua Financial Report

Annual Report 2019 |

| Te W훮nanga o Aotearoa

Arotakenga In review

More than

Te reo M훮ori provision in Aotearoa is provided by Te W훮nanga o Aotearoa

Te reo M훮ori tauira

27,835 total tauira

Marae nationwide renovated during Marae DIY

Te Pūrongo 2019 |

18,120

98%

total EFTS

Proportion of tauira who would recommend TWoA to friends and whānau

Proportion of tauira who are sharing their skills and knowledge with whānau, hapū, iwi or community

Tauira graduated from the final intake of Te Panekiretanga o te Reo, the country’s highest level te reo Māori programme.

13%

48%

62%

Pasifika tauira

Māori tauira

Asian tauira

Māori kaimahi

| Te WÄ nanga o Aotearoa

Bryan Hemi Te Heamana Chairperson

Annual Report 2019 |

It gives me great pleasure to present Te PĹŤrongo 2019, the annual report of Te WÄ nanga o Aotearoa and my first as chair of this

inspiring organisation.

| Te Wānanga o Aotearoa

Tā Te Heamana Chairperson's report

Tuatahi māku, ka mihia te Wāhi Ngaro mō āna manaakitanga ki a tātou katoa. Māna anō ō tātou ngākau marū i te rirohanga o ō tātou mate, e whakamauru, koutou kei ngā mate tuatini, okioki atu. Āpiti hono tātai hono, te hunga mate ki te hunga mate, āpiti hono, tātai hono, tātau te pito ora ki a tātau, tēnā tātau katoa. Tēnā koutou e ngā iwi, e toro nei ki Te Pūrongo ā-tau a Te Wānanga o Aotearoa, me taku huamo ki te tuku i a ia ki a koutou katoa. Ko taku toa, he toa takitini, e whai hua nei te takimano, arā ko koutou e ngā whānau, e ngā iwi katoa. Ka mihia te heamana i mua i a au, ā, nāna i whakataumata te huarahi e koke ai Te Wānanga o Aotearoa, otirā, e koke ai mātou ko aku hoa poari. Kāore hoki he painga i a Te Ururoa, me tōna taumata, me ngā ringaringa, me ngā waewae o te kaupapa, e whakatinana nei i te kōrero ’he takapau mātauranga, he whānau huarewa’. Koinei te huarahi, e angitu ai te tauira, me ōna tini, me ōna mano. E te iwi, tēnā rā koutou katoa. I must firstly acknowledge my predecessor, Vanessa Eparaima. Vanessa led Te Mana Whakahaere for three years before standing down as chair in 2019, while retaining the role of deputy chair. Her sound leadership of Te Wānanga o Aotearoa has set a high benchmark for those that follow and I am humbled by her continued guidance and support. Along with the other members of Te Mana Whakahaere, I look forward to continuing to work with her in 2020. In 2019, we welcomed chartered accountant Bella TakiariBrame to Te Mana Whakahaere and greatly appreciate the contribution her financial expertise brings. In addition, I take this opportunity to thank all members of Te Mana Whakahaere for their resolute support of me in my role as chair, and their absolute commitment to this organisation. Often giving above and beyond what is typically expected. The comprehensive redesign of head office - along with takiwā leadership – has driven greater efficiencies and effectiveness across Te Wānanga o Aotearoa. It has also seen an improvement in the quality and integrity of our educational delivery and will ensure Te Wānanga o Aotearoa

is a sustainable organisation capable of providing worldclass Indigenous education dedicated to the successful transformation of tauira and their whānau. The redesign also lifts our educational performance and improves our approach to curriculum design and management, moderation and the enrolment process. Equally, the redesign future-proofs our programme offerings and digital delivery, while refining and enhancing the organisation’s senior leadership and head office operations. However, the significant impact of restructuring costs stemming from our head office redesign – which was completed in 2019 - impacted our bottom line. Equally, with less tertiary education funding in an increasingly tough environment, a financial surplus for the year has proved difficult. However, prudent financial management throughout the year means we were able to achieve a breakeven result for 2019. This is a positive outcome in what remains a tight tertiary environment.

Te Pūrongo 2019 |

What is a wānanga? This wānanga-wide discussion goes to the heart of everything we do and will enable us to consider fundamental issues around being a wānanga and how this may impact on what, when, and how we deliver programmes across the country.

To further enhance the sustainability of Te Wānanga o Aotearoa we undertook a number of other measures during 2019. Following consultation with key stakeholder groups, we made a number of decisions to lift the quality of our current programme offering, identify programmes that were to be discontinued and considered new programmes for development in the future.

(the environment), stakeholder engagement and our responsiveness to hapū and community needs, the distinctive contribution our courses make towards mātauranga Māori, and the programmes which differentiate Te Wānanga o Aotearoa as a wānanga. At a fundamental level, this also involves reflection on our kawa – modes of practice, being and doing.

A review of our Mix of Provision was carried out to improve the quality, relevance and sustainability of our programme offerings.

This important discussion gives Te Wānanga o Aotearoa confidence and guidance as we continue to work to understand the implications of the Reform of Vocational Education (RoVE) currently underway.

This focus on sustainability is one of our key Te Pae Tata focus areas - with the others being quality and integrity - and what it means to be a wānanga.

The RoVE tertiary sector reforms in the vocational space will have significant implications for Te Wānanga o Aotearoa, in terms of both opportunity and risk.

We have been undertaking an extensive quality improvement programme at Te Wānanga o Aotearoa that includes improving areas such as moderation, lifting kaiako capability, updating policies and procedures, and setting new curriculum design standards.

Together we are working with government agencies to protect and enhance the place of wānanga in the tertiary education system following RoVE.

Our comprehensive moderation project has seen a robust moderation process developed and launched while kaimahi have also undergone significant training in this area. Another significant undertaking which was launched during 2019 was a timely conversation about what it means to be a wānanga. This wānanga-wide discussion goes to the heart of everything we do and will enable us to consider fundamental issues around being a wānanga and how this may impact on what, when, and how we deliver programmes across the country. This discussion includes issues such as our responsibilities in areas like hauora (health and wellbeing) and te taiao

We are also considering what role we can play in vocational education, particularly for at-risk youth who want to find a future path, a group we place high importance on meeting their needs. The response to this approach has been positive and work has started on co-designing what that might look like in the future. Finally, I acknowledge the work of Te Taiurungi Te Ururoa Flavell, Ngā Tumu and all kaimahi for their willingness to take up the challenge to ensure Te Wānanga o Aotearoa remains at the forefront of mātauranga Māori education in Aotearoa.

Bryan Hemi Te Heamana | Chairperson

| Te Wānanga o Aotearoa

Te Mana Whakahaere Council

Bryan Hemi Heamana

Vanessa Eparaima MNZM Heamana Tuarua

Hon. Te Ururoa Flavell Te Taiurungi

Chairperson

Deputy Chairperson

Chief Executive

MBA, BE Ngāti Kahungunu, Ngāti Koata, Samoan

Raukawa, Ngāti Tūwharetoa

MA, DipTchg Ngāti Rangiwēwehi, Ngāraranui, Ngāti Raukawa, Ngāti Te Ata, Ngāpuhi

Annual Report 2019 |

Robert Gabel Mema | Member BA, BCom, CA Ngāti Kahu, Te Rarawa, Te Paatu

Bella Takiari-Brame Mema Whakatūria Ministerial Appointment MMS, CA, ACT (UK) Waikato-Maniapoto, Te Whānau a Apanui, Ngāti Mutunga, Ngapuhi

Jon Stokes Mema Whakatūria Ministerial Appointment DipJour Ngāti Raukawa, Ngāti Maniapoto

Josh Wharehinga Mema | Member BSocSci, GradDipSupv, DipAdtEd Ngāti Porou, Rongowhakaata, Te Aitanga ā Māhaki, Te Arawa

Katie Bhreatnach Mema | Member LLB (Hons), BA (Hons), LLM Ngāti Mahuta, Ngāti Awa

Steve Ruru Mema Whakatūria Ministerial Appointment BMS, FCA Ngāti Raukawa, Ngāti Ranginui

| Te WÄ nanga o Aotearoa

Hon. Te Ururoa Flavell Te Taiurungi Chief Exectuive

Te Pūrongo 2019 |

Tēnei te ara kei runga, ko te ara o tēnei ariki Ko te ara o tēnei tupua, ko te ara o tēnei matuaaiwi Ko te ara o Ranginui e tū nei Ko te ara o Papatūānuku e takoto nei Ko te ara o Te Wānanga o Aotearoa Kia rarau iho rā te tapuae o Tāne Tēnei te pō, nau mai te ao Kia hihiri te ngākau Kia huarewa ake te iwi i te takapau mātauranga Kia angitu te tauira, kia angitu ko tātau katoa Tūturu e Rongo, whakamaua kia tīna,

haumi e, hui e, tāiki e.

| Te Wānanga o Aotearoa

Tā Te Taiurungi Chief Executive's report

Tēnā tātau i ō whakaaro ki te rau kahurangi kua okioki, ki tua o ngā pae tuangahuru o Kahukura. Ko te kura tawhiti tērā, e mamao nei i te kura tangata e tangi nei, e mōteatea nei, heoi anō, me kī pēnei, anei tātou ngā kanohi ora o rātou mā, nō reira, e ngā iwi, e ngā kāwai nui, e ngā kāwai roa, tēnā tātou. Mā te Wāhi Ngaro hoki rā tātou e manaaki i ngā tūāhuatanga o te wā, tatū atu hoki ki a Kīngi Tūheitia, te pouherenga waka, te pouherenga tāngata. Paimārire. E te iwi, kātahi anō ka eke ki te kotahi tau tūturu nei ōku, hei Taiurungi mō tā tātou kaupapa, tēnei kaupapa i tīmatangia ai i ngā tau toru tekau mā rima ka mahue ake nei, me taku waimarie hoki kua whai wāhi atu ahau hei ringaringa, hei waewae mō te kaupapa nei, i te taha o aku hoamahi; ngā kanohi kitea, ngā ihu oneone, puta noa i ngā takiwā o Te Wānanga o Aotearoa, tae noa ki te taumata whakahaere – me kore ake koutou kei aku rangatira. Tēnei hoki te ngākau whakapuke, ki te tuku i ēnei whakamahuki, e kōpaki nei i ngā huanga o roto i te tau, e tukua atu nei hoki e au i runga i te whakataukī nei: he rau ringa, i oti ai. Nā runga i tēnā, anei ngā ringa e rua nei, nō roto i ngā ringa e hia kē nei, e hora nei i Te Pūrongo ā-tau a Te Wānanga o Aotearoa, tēnā rā koutou katoa.

This has been my first full year at the helm of Te Wānanga o Aotearoa and I am proud to report on the progress we have made as an organisation in Te Pūrongo 2019. Over the last 12 months, I have continually been impressed by the passion, dedication and commitment of our kaimahi to the kaupapa of Te Wānanga o Aotearoa. Their support remains of utmost importance to the organisation and plays a key role in highlighting the unique differences between Te Wānanga o Aotearoa and other tertiary providers. Our kaimahi are the face of our organisation and I admire the way they go above and beyond to ensure our tauira are as successful as they can be. It is little wonder our tauira rate their experience with us so highly. I also acknowledge the ongoing support of Vanessa Eparaima, who stood down as chair of Te Mana Whakahaere in 2019 but remains as deputy, new chair Bryan Hemi and the

other members of Te Mana Whakahaere. Equally, Ngā Tumu have proved invaluable in leading our organisation. During the year we welcomed Ben Ngaia who took up the new role of Tumukauneke (programme development) and Joe Valenti who replaced Tracey Hook as Tumutahua. They, along with all kaimahi, help make Te Wānanga o Aotearoa an inspiring place to work. To actively support our kaimahi and encourage their personal development, every two years Te Wānanga o Aotearoa hosts Te Mata Wānanga – where kaimahi come together to compete in sports and kapa haka and help build cohesiveness across the organisation. People had often talked to me about Te Mata Wānanga but it wasn’t until I experienced it for myself in 2019 that I fully understood what it was all about. Kaimahi shared a fantastic two days of hākinakina, kapa haka and whanaungatanga - hosted by Te Ihu takiwā at the Trusts Stadium at Waitakere.

Annual Report 2019 |

Te Wānanga o Aotearoa is unique among tertiary education providers in having kaimahi working across the country – from Kaitaia to Invercargill - so opportunities for kaimahi to come together are limited but of immense value. The benefits of Te Mata Wānanga are evident in the pride kaimahi take in their performances, the relationships fostered, friendships renewed and overall coming together as one organisation. This geographical spread of kaimahi – necessary because of our commitment to take education to where the people are – presents both challenges and opportunities. During the last year myself and Te Kōmaru (deputy chief executive) Nepia Winiata embarked on a mission to visit as many of our sites as possible to not only explain our thoughts and ideas to staff and to get to know them personally but also to understand the issues they face working in a diverse range of environments and communities. The conversations we have had have been both valuable and illuminating and have directly led to positive changes within the organisation. Another project which is bringing tangible benefits to kaimahi and tauira across the country has been the development of Akorau, a new online learning platform for our hugely popular Te Ara Reo Māori programmes. This has been a major trial for us in providing quality support for our tauira and we will be developing it further for more of our programmes.  Akorau – which has been developed in partnership with the Open Polytechnic – received an honourable mention at the 2019 International E-Learning Awards for the innovative ideas used to create engaging interactive activities. Akorau is part of our strategic work programme, which includes initiatives in areas such as moderation, where Te Wānanga o Aotearoa has made huge progress. We have a dedicated team overseeing our moderation project and significant training for kaimahi has been put in place. Issues identified in 2018 have been successfully dealt with and a robust moderation process is now in place.

Of 22 evidence portfolios submitted by Te Wānanga o Aotearoa kairangahau, 18 were ranked in the top four categories, with one ranked a category B, six in category C and 11 in category C(NE) – which represents New and Emerging researchers. This success endorses the Te Wānanga o Aotearoa approach to rangahau and will lead to further development of our rangahau strategy to increase our contribution to mātauranga Māori in Aotearoa. In 2019 we also launched Te Mātāpono - a central repository for programme approvals and accreditation to provide kaimahi with up-to-date information on programme compliance requirements - and we developed the Kaiako Capability Project, which enables the implementation of the Kaiako Foundational Standards for Programme Delivery policy and procedure. In terms of our programme offerings, we completed a comprehensive quality evaluation of all 58 qualifications delivered in 2019 and we began a review of our quality management systems. Ahikōmako, the first centre of Māori innovation and entrepreneurship, was opened in 2019, with support from MBIE’s Provincial Development Fund, and has attracted steady interest. Following the tragic events in Ōtautahi in March 2019, Te Wānanga o Aotearoa has reviewed our emergency and first response procedures while ensuring appropriate equipment for emergencies was distributed and available at all sites. We have also implemented an environmental green strategy, including recycling, across the organisation and will focus further on environmental sustainability issues in the coming years. The progress we have made in the last 12 months as an organisation has demonstrated the quality and desire of our kaimahi to continually improve on what we do at Te Wānanga o Aotearoa. Our people expect and deserve quality and that is what we are aiming to give them. Mā te wāhi ngaro tātou e manaaki.

This is significant as moderation has been a key issue for us to consider. Equally significant has been the success of our submissions to the Tertiary Education Commission’s Performance Based Research Fund (PBRF). 2019 was the first time in more than 10 years that Te Wānanga o Aotearoa kairangahau (research staff) have been recognised in the PBRF, which ranks researchers in one of six categories based on evidence portfolios covering their research outputs over the last six years.

Hon. Te Ururoa Flavell Te Taiurungi | Chief Executive

| Te Wānanga o Aotearoa

gā Tumu Leadership team

Hon. Te Ururoa Flavell Te Taiurungi

Nepia Winiata Te Kōmaru

Chief Executive

Deputy Chief Executive

MA, DipTchg Ngāti Rangiwēwehi, Ngāraranui, Ngāti Raukawa, Ngāti Te Ata, Ngāpuhi

GradDipBA, MALP (Dist) Ngāti Raukawa

During 2019, Tracey Hook concluded her tenure as Tumutahua (Executive Director Finance) at Te Wānanga o Aotearoa.

Te Pūrongo 2019 |

Shireen Maged Tumuakoranga

Joe Valenti Tumutahua

Brent Sincock Tumuwhanake

Executive Director Academic Management, Delivery & Rangahau

Executive Director Finance

Executive Director People & Culture

BBus, FCPA

Ngai Tahu

Lindsay Baxter Tumutaumatua

Hone Paul Tumukahutaupua

Executive Director Performance & Quality Assurance

Executive Director Tauira Services & Marketing

Ben Ngaia Tumukauneke Executive Director Development

BBus, GradDipBus, DipAupiki Ngāti Manawa, Ngāti Awa

BA (Hons) Te Āti Awa

PhD, MEd, BEd, BA Awherika

DipCPM, BIT, PMP, MEd (Dist)

| Te Wānanga o Aotearoa

Ahurea (Culture) Advancing mātauranga Māori

Te Wānanga o Aotearoa has much to celebrate from the last 12 months as our commitment to fostering mātauranga Māori throughout Aotearoa continues to bear fruit.

Ahurea (cultural) – along with arumoni (commercial) and hapori (community) - effectively illustrates this commitment. These key landmark themes are based on Ngā Uara - our founding values – of Te Aroha, Te Whakapono, Ngā Ture and Kotahitanga. To successfully grow the acknowledgement, acceptance and understanding of mātauranga Māori throughout Aotearoa, we take a range of different approaches. These include creating, teaching and sharing our knowledge of mātauranga Māori – gained over decades of experience with tauira, whānau and hapori throughout Aotearoa. This approach is continually evolving and helps inform ongoing discussions within Te Wānanga o Aotearoa about what it means to be a wānanga. To be successful with this approach requires strong and enduring relationships and a genuine commitment to see all peoples of Aotearoa thrive and succeed and create a stronger and more unified nation. One way we have helped achieve this over more than 30 years is by delivering a world-class, indigenous educational experience for our tauira. We believe that as tauira develop self-confidence and belief in themselves they have an equally positive impact on their friends, whānau and communities.

Last year, 80% of over 27,000 of our tauira told us their understanding of mātauranga Māori had increased after studying with Te Wānanga o Aotearoa. This figure has shown a sustained increase over recent years and gives us confidence in our approach. And while it is possible to measure this direct impact on tauira of learning with Te Wānanga o Aotearoa, the wider impact this learning has – and on whom - is much more difficult to gauge. However, we are confident of the positive impact on communities throughout Aotearoa our educational offerings create and this confidence has been reinforced by recognition of our work at Ngā Tohu Reo Māori – the Māori Language Awards, run by Te Taura Whiri i te reo Māori – The Māori Language Commission. In 2019, our flagship Te Panekiretanga o te Reo programme – the invite-only, elite-level te reo Māori programme developed by language masters Professor Pou Temara, Tā Tīmoti Karetu and the late Te Wharehuia Milroy was named winner of the Mātauranga Kaupapa Māori category at the awards. Te Wānanga o Aotearoa programmes and people have regularly achieved success at these annual awards, which honour the work of people and organisations contributing to the revitalisation and normalisation of te reo Māori.

Annual Report 2019 |

The number of people participating in Mahuru Māori has increased every year since its inception in 2014, when it was launched as a personal challenge by Te Wānanga o Aotearoa Poutiaki Reo/Tikanga Paraone Gloyne.

However, teaching te reo me ngā tikanga Māori remains our prime focus and in 2019, close to 10,000 people enrolled in one of our te reo or tikanga programmes. Te Wānanga o Aotearoa provides about two thirds of all te reo Māori educational offerings in Aotearoa and it remains our longterm objective to be the pre-eminent provider of mātauranga Māori education in Aotearoa. Along with providing numerous learning opportunities for tauira in areas such as te reo Māori, tikanga Māori and a range of other subjects, Te Wānanga o Aotearoa also fosters the growth of mātauranga Māori in a number of other ways. Our weekly Taringa podcast reached its milestone 100th episode during 2019. The bilingual podcast first aired in 2017, drawing a listenership of just 600 listeners, but now regularly attracts 10,000 each week from Aotearoa, Australia, the United States, UK and a host of other countries including Argentina, Spain and Bahrain. It aims to provide people wanting to learn about te reo Māori and te ao Māori a relaxed and fun introduction to what can be complex subjects and has previously been recognised at the Ngā Tohu Reo Awards.

Once again, Te Wānanga o Aotearoa hosted its increasingly popular Mahuru Māori promotion during September (Mahuru). In 2019, Mahuru Māori attracted more than 5,000 registrations from people wanting and committing to speak te reo Māori only for either a day, a week or the entire month of September. The number of people participating in Mahuru Māori has increased every year since its inception in 2014, when it was launched as a personal challenge by Te Wānanga o Aotearoa Poutiaki Reo/Tikanga Paraone Gloyne. Another key role Te Wānanga o Aotearoa plays in growing mātauranga Māori across Aotearoa is through our strategic partnership with the biennial national kapa haka championships, Te Matatini, which were held in Wellington in 2019. Te Matatini is the largest kapa haka festival in the world and its aim is to ensure kapa haka flourishes throughout Aotearoa. Not only does this massive event align with our kaupapa, it also recognises the significant place kapa haka holds in te ao Māori and provides an opportunity for many kaimahi of Te Wānanga o Aotearoa to display their kapa haka skills on the biggest of stages.

| Te Wānanga o Aotearoa

Our sponsorship of the popular television marae makeover programme Marae DIY also provides an opportunity for our kaimahi to use their skills in toi (the arts) for the benefit of marae communities up and down the country.

It was the first time Te Wānanga o Aotearoa had taken part in the PBRF in 12 years and of 22 Evidence Portfolios submitted by Te Wānanga o Aotearoa kairangahau, 18 were ranked in the top four categories in the interim PBRF results.

Kaimahi take an active role in the marae makeovers and create a toi contribution in conjunction with the haukāinga (home people).

Of those 18, one was ranked a category B, six in category C and 11 in category C(NE) – which represents New and Emerging researchers.

The makeovers also provide an excellent opportunity for kaimahi from any particular marae to connect with their wider whānau during the four-day makeover projects and from Te Wānanga o Aotearoa to grow its profile and reputation among some of our key audiences.

By acknowledging Te Wānanga o Aotearoa kairangahau, the PBRF is endorsing an approach to rangahau which is grounded in te ao Māori and gives us confidence we are on the right track. Our Rangahau Strategic Objective aims to have Te Wānanga o Aotearoa kaimahi involved in innovative rangahau activity that raises the profile of the organisation, builds relationships both internally and externally and helps us move towards financial sustainability. This approach also builds our internal capability and strengthens our organisation.

To ensure we continue to deliver the world-class indigenous educational experience our tauira deserve, it is important we conduct high-quality rangahau (research) to inform our decision making in areas such as educational delivery and different teaching and learning strategies. This approach was recognised in 2019 when the results of the Performance Based Research Fund (PBRF) were announced. The PBRF ranks researchers in one of six categories based on evidence portfolios covering their research outputs over the last six years. The top four categories – A, B, C and C (NE) – attract TEC funding.

This combined approach to our commitments in the cultural arena have borne fruit and are worth celebrating. They also give us confidence on our ability to not only remain the leading indigenous educational organisation in Aotearoa but also to be at the forefront of new developments and to continue to be the pre-eminent provider of mātauranga Māori education.

Te P큰rongo 2019 |

Another key role Te W훮nanga o Aotearoa plays in growing m훮tauranga M훮ori across Aotearoa is through our strategic partnership with the biennial national kapa haka championships,

Te Matatini, which were held in Wellington in 2019.

| Te Wānanga o Aotearoa

Tikanga provides benefits at home and work Mandy Crawford Marsters

Studying tikanga Māori has been helpful for Mandy Crawford Marsters both at work and in her personal life. Mandy studied tikanga Māori at Te Wānanga o Aotearoa and says her learning has been “a life-changing experience”. “Learning tikanga involves deep, personal and mindful, reflection,” she says. “It’s mind-blowing to gain a perspective you’ve had a little of before. I thought I knew a bit but going on this journey was far more in-depth. If more people did this programme there would be more understanding, because it provides space to learn the connection to Te Ao Māori, in comparison to what you already think you might know.” Mandy’s interest in tikanga came after her Māori/ Cook Island husband inspired her by learning more about his Māori whānau after mostly being brought up by his Cook Island side, and a desire to know more about her own whānau and find her identity. “I knew some of my whakapapa, but only to a certain point. I wanted to learn more, how I came to be here and why. Learning this is filling a big gap in my life.” Tikanga is about the purpose, practices and protocols of Te Ao Māori and tikanga programmes at Te Wānanga o Aotearoa help tauira develop their understanding

of tikanga protocols and cultural practices. Over the course of the programme, Mandy says she grew close to her classmates. “To be able to start the journey with a bunch of people you don’t know and then you end up baring your soul and you share things with them that sometimes you haven’t even shared with your own whānau. They become your whānau.” Mandy, who works in Human Resources, says there are benefits for using tikanga at work. “For example, if you can open and close a meeting with a karakia, it provides a safe and tapu space for open kōrero, and to provide mana-enhancing opportunities to resolve what can sometimes be difficult situations.” Mandy says she will continue to learn, to use and share what she has learned wherever she can. “It’s not just something you learn. Once you’ve learned it, you then have a responsibility to share it and to do it justice and honour the kaiako,” she says. “A lot of kaiako are kaumatua and their knowledge is taken from their own lives, they let you stand on their shoulders to learn so you’ve got to acknowledge where it came from. It’s never just yours, it belongs to anybody and everybody.”

Annual Report 2019 |

Mandy Crawford Marsters Graduate Tikanga MÄ ori

| Te Wānanga o Aotearoa

Oranga Hapori (Community) Social wellbeing for all New Zealanders The foundations of Te Wānanga o Aotearoa are solidly built on communities and we take pride in the fact that by providing an education grounded in mātauranga Māori, we enable our tauira to make effective and valuable contributions to their communities throughout New Zealand.

Without the ongoing and committed support from our communities, Te Wānanga o Aotearoa would cease to exist. Our communities provide not only our tauira, but also our inspiration and guidance, while in return we offer a world-class indigenous education which they are able to use to make positive contributions to their communities throughout Aotearoa and around the world. This symbiotic relationship benefits all parties and is embodied in our vision of Whānau Transformation Through Education and our strategic aim of working with communities to provide effective solutions that address their needs. This focus helps us in our goal of increasing the level of mātauranga Māori being used throughout Aotearoa. Hapori (community) encompasses our belief that by improving the skills and knowledge of individuals, society as a whole benefits while the individual is also empowered to succeed in any field they choose. We strive continually to achieve this through a range of approaches that are often the result of working closely with whānau, hapū and iwi to meet their identified educational needs. Our aim is encapsulated by the whakataukī, nāku te rourou nāu te rourou ka ora ai te iwi (with my food basket and your food basket the people will thrive), which emphasises the benefits of working together.

Helping communities is an integral part of our prestigious He Waka Hiringa Masters of Applied Indigenous Knowledge programme, which requires tauira to complete a project which directly benefits their whānau, hapū, iwi or community. In 2019, those projects included helping train people to take part in the IronMāori triathlon event, researching the history behind Tūhoe prophet Rua Kenana and his ultimate pardon in 2019, and establishing that indigenous Coast Watchers stationed throughout the Pacific during World War II had never officially been recognised for their efforts. This rangahau is expected to lead to official recognition of indigenous Coast Watchers in 2020. The rangahau (research) our tauira complete during their two-year masters study not only benefits their communities they work and live in but also contributes to the overall rangahau contribution of Te Wānanga o Aotearoa. Following the success of our kairangahau in the Performance Based Research Fund (PBRF) in 2019, work began on reviewing our Rangahau Strategy and developing initiatives with a view to relaunching our strategy in 2020. Tauira from numerous other courses at Te Wānanga o Aotearoa also use their skills to improve the lives not only of themselves, but their whānau, hapū or iwi.

Te Pūrongo 2019 |

Another significant community contribution – again led by toi kaimahi – was our sponsorship of the popular television marae makeover programme Marae DIY. Seven marae around the country received significant makeovers during filming of the show and those communities will enjoy the benefits for many years to come.

In 2019, tauira from our Katiakitanga - Postgraduate Diploma in Bicultural Professional Supervision – presented their work at the annual Kaitiakitanga conference and again highlighted how studying with Te Wānanga o Aotearoa is changing lives. Over three days, tauira showcased their work in areas such as addiction counselling in the Far North, prisoner reintegration in Hawkes Bay and secondary school teaching in Gisborne. A common theme among tauira was how their learning with Te Wānanga o Aotearoa had enabled them to better serve their communities. It enabled them to approach their work in a way which is firmly grounded in mātauranga Māori, whether their expertise be in teaching, nursing, counselling or a range of other social service professions. The work of our toi (arts) whānau is also producing benefits in areas other than the arts in rural Ōpōtiki. There, Te Wānanga o Aotearoa tauira worked with the local community and the National Institute of Water and Atmospheric Research (NIWA) to carry our research into ways to restore the mussel population in Ōhiwa Harbour, which had been decimated by a voracious predator starfish. Raranga (weaving) tauira created mussel spat lines from harakeke, tī kouka and kiekie which floated above the seafloor, out of the reach of the starfish. The year-long trial was dubbed a huge success and has led to further funding for more research grounded in mātauranga Māori.

We remain a Strategic Partner of Te Matatini – the biennial national kapa haka championships – and in 2019 more than 60,000 people attended this celebration of mātauranga Māori on the biggest of stages in Wellington. Many kaimahi and tauira train for months to take part in Te Matatini, and the fourday event is an excellent opportunity to strengthen community connections. Other major events Te Wānanga o Aotearoa supported in 2019 included the secondary schools cultural festival Polyfest, WOMAD, the Māori Sports Awards and the National Waka Ama Sprint Championships. This compewtition regularly attracts thousands of competitors from all age groups in an event grounded in mātauranga Māori and whanaungatanga. To improve the ability of more of our whānau to access our educational offerings, Te Wānanga o Aotearoa is constantly looking at ways to remove any impediments to study. One key issue is the ability of tauira to travel to campusbased classes and our Home-Based Learning (HBL) programmes reflect this, with more than 4,500 tauira currently enrolled in our five HBL programmes and new tauira enrolling months ahead of intakes. We are also moving to provide more of our programmes in an online environment.

| Te Wānanga o Aotearoa

More than 40 of our programmes already have a presence on i-Akoranga (Moodle) while two of our most popular programmes – Te Ara Reo Māori Level 2 and Te Ara Reo Māori Level 4 – are substantially delivered on Akorau (iQualify). Akorau – developed in conjunction with The Open Polytechnic – was recognised at the 2019 International E-Learning Awards with an honourable mention in the Blended Learning – Academic Division category. It is likely there will be increasing moves towards online delivery in the coming years and this is an area Te Wānanga o Aotearoa will continue to develop.

The tragic events in Ōtautahi in March 2019 reinforced for many of us the significance of words such as hapori or community.

Cost is also a considerable impediment to study and we go to considerable lengths to offer as many of our courses as possible on a fees-free basis, despite the increasingly tough financial environment Te Wānanga o Aotearoa operates in.

On March 15, we opened our Ōtautahi campus to provide whatever support was possible and ensured our Ōtautahi kaimahi and tauira and others affected by the event received a high level of support in the following weeks.

Many of these developments have come about through our continued drive to meet the educational needs of whānau, hapū and iwi. We will continue to work with them and other key stakeholders to develop ways we can further support our communities.

At Te Wānanga o Aotearoa we place considerable significance on our communities and the manner in which the entire country came together as one community in the wake of the attacks validates that approach.

Annual Report 2019 |

It is likely there will be increasing moves towards,

Online delivery, in the coming years and this is an area Te WÄ nanga o Aotearoa will continue to develop.

| Te Wānanga o Aotearoa

ew learning an exciting prospect for teacher James Fowell

While most teachers are eagerly looking forward to the Christmas break, for James Fowell, the next school year is an exciting prospect.

tīkanga and kawa when working with whānau and to regularly check that I am being considerate with how I interact, especially if I am to offer koha into that space”.

“I can’t wait to get started and apply my new learning. I believe in its relevance and its value,” he says.

James has been teaching for 20 years – the last eight at GBHS.

The learnings James wants to share with his whānau at Gisborne Boys’ High School are ones he gained during the year-long Kaitiakitanga – Postgraduate Diploma in Bicultural Professional Supervision programme he’s just completed with Te Wānanga o Aotearoa in Gisborne. The course is unique in that it uses mātauranga Māori as the core of its supervision curriculum in a range of disciplines. It is aimed at professionals with at least five years’ experience working in areas such as social work, health, nursing, midwifery, counselling and education or in their community.

“School wasn’t always a positive experience for me growing up and I became a school teacher with the idea to change some aspects about school that I didn’t like.” Those changes include understanding that everyone has a story and to “ignite a spark”, these stories need to be listened to and alternative methods to encourage engagement developed, not only with the student but their whānau as well.

James says he was interested in learning more about kaitiakitanga in an educational context.

“I realised pretty early in my career that it takes a lot of empathy to work with whānau that are struggling a little bit and it’s not always an easy space to step into for some,” he says.

“I thought I knew what kaitiakitanga meant, but this has opened my eyes to a whole new way of thinking. Kaitiakitanga is an old approach, with renewed relevance and one that I am very interested in developing further.”

“Those youngsters grow up and I want them to become positive contributors to society. I feel I am in a privileged position, Gisborne is my home and if I can make a small difference and somehow add value then I’ll do my very best”.

“More and more the line between being an educator and a counsellor with ākonga in our classes is becoming blurred. I have learnt more traditional ways, following

The Kaitiakitanga programme has added to James’ kete of skills and he is forever grateful to his Koka, Hine MoekeMurray, for her unwavering patience and expert tutelage.

Te Pūrongo 2019 |

“Kaitiakitanga has been just great for me. I really enjoyed the in-depth look into myself and my whakapapa that it gave me. The programme is insightful and it just makes sense. The rangahau (research) gives validation and support to my approach to working with whānau and I have learnt so much. It’s given me a real purpose and new direction . I feel I am better informed in my practice and I’m excited to see what the future brings.” He says the programme is a valuable resource that he’d like to see incorporated into teacher training. “I would totally recommend this programme to anyone that is serious about going on a journey of self-discovery.”

James Fowell Kaiako Diploma in Bicultural Professional Supervision

| Te Wānanga o Aotearoa

Arumoni (Commercial) Economic wellbeing for all New Zealanders The Arumoni (commercial) category represents both the programmes Te Wānanga o Aotearoa provides in the business and industry sectors, but also the operations of the organisation as a whole and the way it functions to provide the best outcomes for our tauira.

Fostering mātauranga Māori throughout Aotearoa is a key goal of Te Wānanga o Aotearoa. But it is equally imperative that the organisation operates as efficiently, effectively and sustainably as possible to deliver the best outcomes for our tauira and our stakeholders.

including Waikato-Tainui, Te Hūmeka – Waikato Māori Business Network, Hamilton & Waikato Tourism and Te Waka - Waikato Regional Economic Development Agency. It allows Māori businesses to innovate, collaborate and grow in a kaupapa Māori environment.

It is also important for us to work with industry and business sectors to ascertain their needs and provide educational opportunities to ensure they are met.

This development highlights the benefits of working closely with our key stakeholders to achieve positive outcomes for industry along with providing ongoing support for the next wave of Māori entrepreneurs. Three months after opening, Ahikōmako had 16 members using its co-working space and facilities.

Equally – in a nation with 160,000 small businesses - our business programmes aim to give tauira the necessary tools to successfully develop and launch their own business ideas. We dedicate more than 20 per cent of our course offerings to business education to help foster this entrepreneurial spirit which Aotearoa is noted for. In 2019 this commitment was given a significant boost with the launch of Ahikōmako – The Centre of Māori Innovation and Entrepreneurship – at our Mangakōtukutuku campus in Kirikiriroa (Hamilton). The state-of-the-art $700,000 centre – which opened in August 2019 - services Māori entrepreneurs, start-ups and business growth, while providing a conduit for iwi, Māori business networks and business development stakeholders, schools and communities across the Waikato Region. Ahikōmako is funded by Te Puni Kōkiri and the Provincial Growth Fund with support from other organisations

Our Innovation Development Group has also continued delivering its popular Pakihi series of free business workshops and mentoring programmes to help Māori grow their business ideas. Kōkiri, meanwhile, began accepting applications for a second cohort of Māori businesses to take part in the business accelerator programme, following the success of its initial offering in 2018. Kōkiri is a four-month programme that focuses on entrepreneurs and business start-ups that have globally-focused business ideas and high-growth potential. It is aimed at speeding up the process of getting these business ideas into the market and investment-ready. These initiatives help provide ongoing support for the thousands of Te Wānanga o Aotearoa tauira who have graduated from our small business programmes over the years.

Annual Report 2019 |

Examples of Whānau Transformation Through Education and Tauira Success provide us with the motivation to do everything within our power to ensure Te Wānanga o Aotearoa is functioning as sustainably as possible to continue providing educational opportunities to tauira for many years to come.

Along with supporting Māori businesses, Te Wānanga o Aotearoa also has an important role to play in assisting those who have low or no qualifications to gains skills and qualifications to enable them to make a positive impact on their whānau. This aligns with our ongoing desire to improve the employment outcomes for our tauira. This includes programmes in industries such as forestry, tourism, sport and exercise, Police preparation and carpentry, where we continue to work with the Māori and Pasifika Trades Training initiative to increase the number of Māori and Pasifika working in the trades sector. This Māori and Pasifika Trades Training programme provides fees free tertiary places for Māori and Pasifika learners aged between 16 and 40 studying in the areas of forestry, infrastructure works and construction. The successful partnership has seen many tauira taking up building apprenticeships at the conclusion of the 38-week Level 3 Carpentry programme. Examples of Whānau Transformation Through Education and Tauira Success provide us with the motivation to do everything within our power to ensure Te Wānanga o Aotearoa is functioning as sustainably as possible to continue providing educational opportunities to tauira for many years to come. In 2019, the restructure of head office and takiwā leadership was implemented to begin aligning Te Wānanga o Aotearoa

with a more sustainable business structure. Work to improve the sustainability of our business model is ongoing. A shortfall of EFTS at level 3 and above – mainly due to re-developed courses taking longer than expected to become established - meant a reduced delivery of provision of 4% against the Investment Plan. Te Mana Whakahaere had agreed to a budget deficit for 2019 but prudent management throughout the year meant we were able to report a breakeven financial position for the year. Several significant measures taken during 2019 will have long-term benefits for the sustainability of Te Wānanga o Aotearoa. They include the development of our Investment Plan and the review and development of a Mix of Provision that differentiates Te Wānanga o Aotearoa as a wānanga. We also successfully completed a property review, with a new site for our Ngāmotu (New Plymouth) campus approved with occupancy expected early in 2020, while a building in Rāhui Pōkeka (Huntly) was placed on the open market in September 2019. Other steps are either underway or planned to further rationalise our property holdings. Our kaimahi play an equally important role in the sustainability of the organisation and it is important that their health and professional development is not overlooked. Staff induction plans were reviewed and a National Training Plan developed in 2019, which has delivered wānanga reo and other initiatives to staff. An increased focus on hauora

| Te Wānanga o Aotearoa

(healthy living) has also seen other health promotions – such as smoking cessation programmes - successfully implemented, including increased involvement in physical health initiatives. A key staff focus in 2019 was the biennial Mata Wānanga event, where kaimahi from around the country come together over two days to compete in areas such as kapa haka and sports. This event holds immense value in building cohesion throughout the organisation and developing a sense of whanaungatanga among staff who are typically spread across the country and have few opportunities to meet and support each other personally. Te Wānanga o Aotearoa continues to work towards becoming a more environmentally sustainable organisation and in 2019 had a specific focus on waste minimisation. The organisation remains actively involved in the Government’s Reform of Vocational Education process, particularly in terms of the opportunities and challenges it presents. There is little doubt the review will have a considerable impact sector-wide and Te Wānanga o Aotearoa will not be exempt, given that vocational training accounts for a significant proportion of our tauira. However, given the special role of wānanga as set out in the Education Act 1989, and work already completed, Te Wānanga o Aotearoa is well placed to emerge strongly from whatever changes are implemented.

Te PĹŤrongo 2019 |

Te WÄ nanga o Aotearoa continues to work towards becoming a more environmentally sustainable organisation and in 2019 had a specific focus on

waste minimisation

| Te Wānanga o Aotearoa

Award winning graduates impress Truedy Taia, Jaylin Kennedy, Leon Mitchell

Two graduates and a current tauira from a new Te Wānanga o Aotearoa Forestry course in Rotorua won top spots at the 2019 awards from Timberlands Ltd in the Central North Island. Graduates of the level 2 Silviculture course Truedy Taia (left) and Jaylin Kennedy (right), now work for contractors CNI Forestry Management Ltd. They received the best overall worker award and the best female planter award respectively. Truedy, the crew manager, and Jaylin are part of an all-female team. Current tauira Leon Mitchell (centre) has been doing work experience with CNI and was a member of the team that won the best planting crew award at the prizegiving at Lake Rerewhakaaitu in the Bay of Plenty. Kaiako Shand Edwardson says he’s really pleased at their success. “I’m very happy for them and Te Wānanga o Aotearoa. Many of our graduates pick up work with CNI and to have Truedy and Jaylin succeeding at this level is just great. Leon’s obviously also been gaining some really valuable experience with CNI.” There are 10 graduates of the course currently working in the bush and others in sawmills. “We prepare our tauira for entry-level jobs, such as planting and pruning, in the forestry sector. It’s very satisfying to see these tauira secure employment and turn their lives around,” says Shand.

Annual Report 2019 |

Truedy Taia, Jaylin Kennedy, Leon Mitchell NgÄ Tauira Tauira Level 2 Silviculture

| Te W훮nanga o Aotearoa

g훮 ki taurangi Statement of Service Performance

Te Huanganui Outcomes Framework

Ahurea Cultural

Oranga Hapori Community

Arumoni Commercial

Ng훮 Mahinga Here o te Mahere Haum카tanga Investment Plan Performance Commitments

Te Tahua Financial Report

Te PÅ«rongo 2019 |

| Te Wānanga o Aotearoa

Te Huanganui Outcomes frameworks

Te Huanganui is Te Wānanga o Aotearoa outcomes framework that sets out the pathway to achievement of our vision and mission. The name Te Huanganui refers to the wider benefits or advantages that result from our work, but more literally, the fruits of our labour. Te Huanganui encapsulates the unique contribution of Te Wānanga o Aotearoa to tertiary education and Aotearoa and sets out the indicators we will use to measure our performance. At a societal level, the three outcomes of Te Huanganui; Ahurea (cultural), Oranga Hapori (community) and Arumoni (commercial), reflect a holistic approach to transformation within a mātauranga Māori context. The following diagram provides a high-level representation of Te Huanganui as approved in the 2017 - 2019 Investment Plan.

Annual Report 2019 |

Ngā Whakatakanga Me Ngā Matawhānui

Arumoni (Commercial)

Ahurea (Culture)

Oranga Hapori (Community)

Economic wellbeing for all New Zealanders

Advancing mātauranga Māori

Social wellbeing for all New Zealanders

Ngā Panga | Impacts

Tauira have skills and knowledge to succeed

Tauira confident in their identity and culture

Tauira connected with their iwi, hapū, marae or community

Ngā Hua | Outputs

Partner for success

Deliver a world-class indigenous educational experience

Ensure sustainability through educational excellence and drive a culture of innovation

| Te Wānanga o Aotearoa

Ahurea hurea

(Culture) Advancing mātauranga Māori

We will make a difference:

We will achieve this by:

Our tauira are confident in their identity and culture

Delivering a world-class indigenous educational experience

Maintaining a suite of high quality mātauranga Māori programmes

Contributing to achievement of the Māori language strategy Te Rautaki Reo Māori

Our rangahau contributes to mātauranga Māori

Te Pūrongo 2019 |

Ngā putanga / Outcome 1.1 We will increase the proportion of Māori and non-Māori who can speak some te reo Māori from 21% of Māori and 3.7% of non-Māori in the 2018 Census Ahurea represents the ideal of advancing mātauranga Māori to provide the foundation for Māori to succeed as Māori. We do this by generating and sharing knowledge of our language, culture and heritage underpinned by a te ao Māori worldview. In 2019 66% or 11,904 EFTS studied Ahurea cultural programmes. We are experiencing unprecedented growth in demand for te reo and tikanga programmes and this places us in a unique position to play a lead role in the revitalisation of te reo Māori.

Ngā pānga / Impact 1.2 Our tauira are confident in their identity and culture

1.2.1 Proportion of tauira who confirm an increased understanding of mātauranga Māori

2019 Target

2019 Actual

2018 Actual

2017 Actual

80%

78%

75%

We measure our impact on tauira through the annual Graduate Survey. The 2019 Survey was sent to a cohort of 14,294 recent graduates and 3,626 (or 25%) took the opportunity to respond. Although not all of our programmes have a cultural focus, our kaupapa runs through everything we do, and we expect this to have a tangible impact on tauira knowledge of te ao Māori. Over this plan period our efforts have resulted in a steady increase in tauira understanding of mātauranga Māori, the upward trend continued and we reached the target in 2019. Over the next plan period we will continue to enhance our tauira experience with opportunities to gain a deeper understanding of te Ao Māori.

| Te Wānanga o Aotearoa

Ngā hua / Outputs 1.3 Maintain a suite of high quality mātauranga Māori programmes

1.3.1 Quality of mātauranga Māori programmes regularly reviewed

2019 Target

2019 Actual

2018 Actual

2017 Actual

3 reviews

Achieved 5 reviews

Achieved 4 reviews

With a number of long-standing mātauranga Māori programmes, the internal programme evaluation process provides a timely assessment of how we can improve. In 2019 we exceeded the target with the following five programme reviews: ›

Te Hapūtanga o te Ao Tikanga (Level 5)

›

Te Maunga Kura Toi (Level 5-7) – Whakairo

›

Te Pokaitahi Tikanga (Level 4) – Tikanga Whakaaro

›

Te Pokaitahi Reo (Level 4)

›

Te Hapūtanga o te Reo (Level 5)

In addition to this, we also reviewed and updated our programme evaluation methodology resulting in a new monitoring and evaluation framework Ngā Whetū Arataki (The Guiding Stars). The framework aligns programme evaluation with strategic direction and kaupapa, and it supports evaluators to make evaluative judgements and provide more detailed feedback on how we can improve. 1.4 Contribute to achievement of the Māori Language Strategy - Te Rautaki Reo Māori

1.4.1

Deliver Māori language and cultural initiatives

2019 Target

2019 Actual

2018 Actual

2017 Actual

10 initiatives

Achieved 10+ initiatives

In order to advance mātauranga Māori and contribute to the uptake of te reo Māori at a societal level, Te Wānanga o Aotearoa goes beyond its role as a tertiary education provider to deliver numerous Māori language and cultural initiatives every year. The following list highlights 10 key initiatives for 2019: 1. We supported kaimahi to participate in Te Matatini ki te Ao (Kapa Haka Nationals) and Mata Wānanga our inhouse kapa haka and multi-sport competition. 2. With over 10,000 listens a week, Taringa podcast clocked its 100th episode and featured in the top ten educational podcasts on iTunes. 3. We continued to support the revitalisation and growth of Toi Māori with several exhibitions throughout the motu such as the Maunga Kura Toi collaborative exhibition held in Huntly and Rū Harakeke Pū Harakau, He Toi Whenua, He Toi Moana, He Taonga Tuku Iho in Te Kuiti, and Whakapuāwai in Te Awamutu.

Annual Report 2019 |

4. Our association with the Waka Ama Nationals was recognised with the Event Excellence Award at the NZ Sport and Recreation Awards. 5. In addition to our ongoing support for Waka Ama, we sponsored a number of major events including Te Matatini, WOMAD and the Māori Sports Awards. 6. We continued our sponsorship of Marae DIY and supported a number of kaimahi to renovate their home marae. 7. Participation in Mahuru Māori continued to grow with over 5,000 participants committing to speak te reo for a day, a week or the whole month of September. 8. Coinciding with Mahuru Māori, Te Wiki o te Reo Māori (Maori Language Week) activities included a hīkoi to Raroera, Māngere, Wellington and Christchurch for ‘kai and kōrero’ sessions with kaimahi. 9. The Aotearoa Scholarship Trust provided a range of scholarships to support the higher learning aspirations of tauira. 10. Over 40 Te Puna Mātauranga kaimahi participated in a two-day full immersion beginner reo programme. 1.5 TWoA rangahau contributes to mātauranga Māori

1.5.1

Proportion of degree kaiako with an approved Individual Rangahau Plan (IRP)

1.5.2

He Waka Hiringa graduate research outputs

2019 Target

2019 Actual

2018 Actual

2017 Actual

80%

83%

55%

77%

321

There was a renewed focus on developing kaiako capability in 2019 resulting in 35 of 42 or 83% of degree teaching kaiako with an approved IRP. The success of these IRPs in building the capability of our researchers also culminated in 18 of 22 of them rated C(NE) recognising them as new and emerging researchers in our first Performance-Based Research Fund evaluation. During the year we actively contributed to mātauranga Māori though our ongoing association with Ngā Pae o Te Māramatanga and involvement in collaborative rangahau projects such as ‘Kaikaikaroro – Student success in Wānanga’ led by Te Whare Wānanga o Awanuiārangi. We also continued to provide our kaiako with opportunities to share their rangahau by hosting two events around the Native American Indigenous Studies Association Conference held in Hamilton. In order to graduate, He Waka Hiringa tauira have to complete a rangahau project that benefits iwi or the community. There were 32 He Waka Hiringa qualification completions, and therefore 32 rangahau projects, registered in our student management system. That is 32 projects such as a model of Tongan social work practice, a Māori-centred approach to innovation and planting and protecting medicinal plants for healing purposes, that are having a positive impact in communities nationwide. We are now in the process of developing a new Rangahau Strategy that will set out how we will build on this progress over the next plan period.

This result is subject to confirmation in the April SDR

| Te WÄ nanga o Aotearoa

Oranga Hapori (Community) Social wellbeing for all New Zealanders

We will make a difference:

We will achieve this by:

Our tauira are connected with their iwi, hapĹŤ, marae or community

Partnering for success

Tauira are actively sought after by their communities and industry

TWoA is recognised as a reputable and desirable national provider

Te Pūrongo 2019 |

Ngā putanga / Outcome 2.1 We will increase the proportion of Māori satisfied with life overall to >80% in the 2018 Census 2 Oranga Hapori reflects our desire to improve the social wellbeing of all New Zealanders resulting in a more equitable society where all New Zealanders have the opportunity to succeed. In 2019 16% or 2,943 EFTS studied Oranga Hapori programmes such as learning to study, English for speakers of other languages (ESoL) or health and fitness. Hapori is also reflected in our community based delivery model with over 120 sites nationwide – we are in the community and for the community.

Ngā pānga / Impact 2.2 Our tauira are connected with their iwi, hapū, marae or community

2.2.1

Proportion of tauira who are sharing their new skills and knowledge with whānau, hapū, iwi or community

2019 Target

2019 Actual

2018 Actual

2017 Actual

85%

88%

86%

Our tauira are strengthened through the meaningful connections they make while studying with us. We achieve this through our amazing kaiako and delivery approach that includes a physical presence in many communities nationwide. One example of how we do this is an end of year noho for over 120 te reo Māori tauira and kaiako that was held at Te Wharekura o Mauao in Tauranga in November 2019. Tauira were also joined for part of the weekend by whānau members who got a chance to see and hear how far they have progressed in learning te reo Māori. The Graduate Survey (see 1.2.1 for survey summary) result for tauira sharing their new skills and knowledge remained steady at 88% in 2019, exceeding the target by 3% for a second year. Over the next plan period we will continue to enhance our tauira experience through meaningful connections with whānau, hapū, iwi or the community in which they live.

Statistics NZ - NZ Social Indicators – He kete tatauranga

| Te W훮nanga o Aotearoa

Ng훮 hua / Outputs 2.3 Tauira are actively sought after by their communities and industry

2.3.1

Stakeholders satisfied

2019 Target

2019 Actual

2018 Actual

2017 Actual

85%

79%

78%

73%

During the year Te Mana Whakahaere agreed to a Stakeholder Plan that details our key stakeholders and sets out how we will be responsive to their needs. The new structure also brought improved communication and engagement as new kaimahi came on board. Although the stakeholder satisfaction result did not meet the target, it continued an upward trend with 79% of stakeholders satisfied or very satisfied. This positive result is tempered by a response rate of 15%, down from 28% in 2018, with 279 email invitations yielding only 43 responses. The survey is an important tool to gain feedback from our stakeholders and ensure their views are represented in our planning and delivery. In 2020 we will take steps to improve the response rate by shifting the timing (from late November to early November) and ensuring that the database is regularly updated and refreshed with new contacts. 2.4 TWoA is recognised as a reputable and desirable national provider

2.4.1

Proportion of tauira who would recommend TWoA to friends and wh훮nau

2019 Target

2019 Actual

2018 Actual

2017 Actual

95%

98%

Our tauira love their time with us and this has shown through with a consistently high result of 98% of tauira who would recommend us to their friends and wh훮nau (see 1.2.1 for Graduate Survey summary). Our best marketing has always been word of mouth and this result is a strong testament to our incredible kaiako. Over the next plan period and we will continue to look at ways to support them to continue to deliver a transformative tauira experience.

Annual Report 2019 |

| Te WÄ nanga o Aotearoa

Arumoni rumoni

(Commercial) Economic wellbeing for all New Zealanders

We will make a difference:

We will achieve this by:

Tauira have the skills and knowledge to succeed

Ensure sustainability through educational excellence/Drive a culture of innovation

Diversify revenue streams to reduce reliance on government funding

Meet Investment Plan commitments

Deliver a suite of Innovate teaching high quality and learning practices to programmes that enable a positive, engaging provide pathways to and accessible tauira further education or experience employment

Te Pūrongo 2019 |

Ngā putanga / Outcome 3.1 Increase the proportion of New Zealand households with adequate income from 57% (Statistics NZ, Household Economic Survey) Arumoni recognises the interconnectedness between mātauranga Māori, the strength of communities and economic wellbeing. As a tertiary provider, it is also about our responsibility to add value to the Government’s investment by impacting the economic advancement of our tauira and their whānau. In 2019 18% or 3,272 EFTS studied Arumoni programmes such as business, computing, teaching and social work. Many tauira start their higher education journey with us and while many of our programmes do not have a vocational focus, our firm expectation is that regardless of what they study, it will have a positive impact on all areas of their lives.

Ngā pānga / Impact 3.2 Tauira have the skills and knowledge to succeed

3.2.1 Proportion of tauira who reported a positive employment-related outcome

2019 Target

2019 Actual

2018 Actual

2017 Actual

69%

59%

61%

We aim to transform tauira to think for themselves, plan for themselves and provide for themselves and their whanau, and we use the Graduate Survey (see 1.2.1 for survey summary) to monitor the cultural, social and economic impact of studying with us. The result for tauira who reported a positive employment-related outcome remained steady at 59%, again missing the target by 10%. Whilst this result is reflective of the nature of our mix of programmes, through the mix of provision review work has begun to ensure all programmes deliver positive outcomes for tauira. There is a substantial programme of redevelopments underway and this includes addressing minor shortcomings identified by our industry stakeholders.

| Te Wānanga o Aotearoa

Ngā hua / Outputs 3.3 Meet Investment Plan Performance Commitments 2019 Target

2019 Actual

2018 Actual

2017 Actual

99-102%

95.95%

94.6%

98.9%

3.3.2 Surplus

-3%

-2%

3.3.3

Met

Partially Met

Not Met

3.3.1

EFTS target

Performance commitments

At 95.95%, overall EFTS fell short of the 99% threshold which meant we did not receive the full allocation of Investment Plan funding. This shortfall was largely due to less SAC Level 3+ EFTS in general and business courses as new business courses re-developed through the Targeted Review of Qualification (TRoQ) process took longer than anticipated to establish themselves. Te Mana Whakahaere agreed to a deficit budget of -$2 million for 2019 to reposition the organisation following the restructure. Despite this, prudent management and in-year adjustments saw the actual result breakeven. The 2018-19 restructure began the process of moving to a more sustainable structure and further work will be done in 2020 to improve the sustainability of our business model. The Investment Plan Performance Commitments are set out in the following section. The section includes a new set of targets that were agreed with the TEC for the 2019-2021 period. The result is marked as ‘partially met’ as many key indicators were improved, and many targets met or exceeded. 3.4 Deliver a suite of high quality programmes that provide pathways to further education or employment

3.4.1

EER capability in self-assessment and educational performance

2019 Target

2019 Actual

2018 Actual

2017 Actual

Confident

Not Yet Confident

In 2018 Te Wānanga o Aotearoa External Evaluation and Review (EER) rating was downgraded from Category One to Category Three. Whilst the EER report was very positive, it also highlighted a number of long-standing shortcomings that needed to be addressed. Our leadership immediately responded to the findings of the EER by refocussing head office roles and responsibilities and implementing a comprehensive quality improvement programme to reset the standard of educational quality at Te Wānanga o Aotearoa. 2019 was a year of action with kaimahi across the organisation working together to complete a long list of initiatives in advance of the next EER, including a comprehensive review of education systems, policies and procedures from enrolment through to graduation.

Annual Report 2019 |

3.5 Diversify revenue streams to reduce reliance on government funding

2019 Target

2019 Actual

2018 Actual

2017 Actual

17%

13%

14%

3.5.1 Increase proportion of funding from non-government sources

Non-government funding has remained steady at 13% of income in 2019. Although non-government funding did not increase over this plan period, we will continue to take opportunities to increase non-government income through educational contracts that are aligned with our strategy, increased returns from managed funds and any other initiatives that do not detract from our educational endeavours. 3.6 Innovate teaching and learning practices to enable a positive, engaging and accessible tauira experience

3.6.1 Tauira satisfaction

3.6.2 Implement Blended Learning Strategy

2019 Target

2019 Actual

2018 Actual

2017 Actual

>90%

87%

86%

Strategy implemented

Achieved

We use the Graduate Survey (see 1.2.1 for the survey summary) to monitor tauira satisfaction. Satisfaction remained steady at 87% in 2019 and although it did not reach target this plateau reflects a level of consistency in the quality of their student experience. Over the next plan period we will strive to lift tauira satisfaction by being more responsive to their feedback provided in surveys and through tauira representatives. We took great strides in blended learning in 2019 partnering with The Open Polytechnic to launch the Akorau online learning platform. A dedicated team has been established and, after a massive effort to ready the programme and train kaiako, Te Ara Reo MÄ ori was the first programme to be delivered on Akorau in Semester A 2019. During the year a number of implementation issues were ironed out and we developed a plan to progressively introduce programmes on the platform.

| Te WÄ nanga o Aotearoa

Cost of Service Statement For the year ending 31 December 2019 Group Budget Investment Plan 2019 $000

Group Budget TMW Approved 2019 $000

Group Actual 2019 $000

Group Actual 2018 $000

Parent Actual 2019 $000

Parent Actual 2018 $000

Ahurea | Cultural

51,299

85,471

83,022

82,249

92,922

88,206

Oranga Hapori | Community

43,025

18,876

21,959

23,630

15,729

17,080

Arumoni | Commercial

71,156

46,136

41,689

41,782

41,272

44,385

165,480

150,483

146,670

147,661

149,923

149,671

Ahurea | Cultural

50,318

87,414

86,953

84,581

90,745

86,123

Oranga Hapori | Community

42,375

15,807

17,786

19,494

15,499

19,114

Arumoni | Commercial

70,387

49,283

41,932

48,509

43,509

49,462

163,080

152,504

146,671

152,584

149,753

154,699

2,400

(2,021)

(1)

(4,923)

170

(5,028)

Revenue

Total revenue Expenditure

Total expenditure Operating surplus/deficit

The Cost of Service statements include budget figures from the 2017-19 Investment Plan and the budget approved by Te Mana Whakahaere (TMW) on 19 December 2018. These budgets differ as Investment Plan funding is approved on an annual basis and is subject to change. When considered against the Investment Plan budget that was approved in August 2016, the results reflect ongoing shift to language programmes over the plan period. Investment plan EFTS, and consequently funding, have also been impacted by a significant reduction in Youth Guarantee provision and to a lesser extent the impact of NZQA conditions that have affected delivery of a small number of programmes. When considered against the TMW approved budget, the results reflect the ongoing challenge of operating in a sector with capped funding and rising costs.

Outcomes Framework Mix of Provision The following table shows EFTS provision for each outcome group for the 2017-2019 Investment Plan period. As part of the strategic review of our mix of provision, some wahanga were better aligned with our organisational outcomes and these shifts are reflected in the following tables. The EFTS totals may differ due to rounding.

Annual Report 2019 |

2019 Planned

2019 Actual

2018 Actual

2017 Actual

Arumoni | Commercial

5,021

3,272

5,379

6,444

Oranga Hapori | Community

5,832

2,943

2,112

2,435

Ahurea | Cultural

9,100

11,904

12,059

11,307

20,006

18,120

19,550

20,186

2019 Planned

2019 Actual

2018 Actual

2017 Actual

Arumoni - Commercial

5,021

3,272

5,379

6,444

Te Arawhānui (business)

2,720

2,616

3,045

2,943

Te Arawhānui (computing)

1,107

372

635

1,362

Shifted to Oranga Hapori

285

351

906

1,052

Outcome group

Total

Outcome group/discipline

Te Hiringa (education) Te Hiringa (health and social services/youth work) Umanga (skills, trades and vocations)

1,194

284

509

736

Oranga Hapori - Community

5,832

2,943

2,112

2,435

Tūāpapa (learning to study/ESOL)

2,587

1,575

1,659

1849

Hauora (health and fitness)

1,388

120

454

586

583

251

See Arumoni above

Te Hiringa (health and social services/youth work)

1,274

996

Ahurea - Cultural

9,100

11,904

12,059

11,307

Angitu (Māori and indigenous people's development)

2,190

3,421

2,940

2,999

Te Reo Rangatira (Māori language)

5,618

7,015

7,651

6,884

Toi (Māori and indigenous arts)

1,292

1,467

1,468

1,424

20,006

18,120

19,550

20,186

Te Hiringa (education)

Total

There was a significant reduction in Arumoni EFTS due to decisions to exit out of low level computing programmes and another siginificant reduction in Youth Guarantee. Over the next plan period we will consider new programmes that fit with the strategic focus of the Arumoni wahanga. There were also significant EFTS decreases across the Oranga Hapori wahanga. As part of the ongoing review of our mix of provision we will seek to improve the quality, relevance and strategic focus of the programmes in the Oranga Hapori wahanga. Ahurea language and cultural progrmames continue to grow with significant increases in Angitu and Te Reo Rangatira EFTS.

| Te Wānanga o Aotearoa

Ngā Mahinga Here o te Mahere Haumītanga Investment Plan Performance Commitments This section provides the results for performance commitments negotiated with TEC for 2019-2021. These targets align strategic objectives with government goals set out in the Tertiary Education Strategy. The 2019 results are interim as they are subject to validation by the TEC following submission of the final Single Data Return in April 2020.

Participation

The expected number of graduates at Level 1-3

The proportion of total SAC eligible EFTS enrolled at Level 1-3

The proportion of total SAC eligible EFTS enrolled at Level 4-7 (non degree)

The proportion of total SAC eligible EFTS enrolled at Level 7 degree

The proportion of total SAC eligible EFTS enrolled at Level 8-10

2018 Actual

2019 Interim Result

2019 Target

2020 Target

2021 Target

non-Māori, non-Pasifika

9,955

10,444

7,000

Māori

6,774

6,052

5,000

Pasifika

1,142

960

1,000

non-Māori, non-Pasifika

50%

48%

Māori

45%

Pasifika

non-Māori, non-Pasifika

36%

35%

30%

Māori

58%

59%

60%

Pasifika

10%

non-Māori, non-Pasifika

12%

10%

Māori

70%

68%

Pasifika

26%

28%

22%

non-Māori, non-Pasifika

11%

10%

Māori

75%

77%

80%

Pasifika

19%

20%

10%

Te Pūrongo 2019 |

Te Wānanga o Aotearoa continues to attract thousands of Māori and Pasifika tauira every year and this is reflected in the table above with the majority of participation targets met or exceeded. Whilst the overall number of tauira has remained relatively static, the demographic profile of our tauira has shifted in recent years with a surge in popularity of our Level 1-4 beginner reo programmes. Although this has resulted in a slight decrease in the proportion of Māori tauira, we are seeing great success in our strategy to provide accessible programmes that revitalise te reo Māori in Aotearoa. For Māori tauira, the participation results reflect our efforts to engage second chance learners with programmes where they can learn about te Ao Māori and support their success at higher levels through our community focussed bi-cultural degree programmes. The results also show that we continue to attract large numbers of Pasifika tauira across all levels, particularly those programmes offered in our Mangere and Porirua campuses. It should be noted that there is only one programme at Level 8-10, He Waka Hiringa, therefore changes in this tiny cohort (approximately 40 tauira) have a big impact on the results for that level grouping.

First-Year Retention

The first year retention rate for students at Level 4-7 (non degree)

The first year retention rate for students at Level 7 degree

2018 Actual

2019 Interim Result

2019 Target

2020 Target

2021 Target

non-Māori, non-Pasifika

Māori

Pasifika

non-Māori, non-Pasifika

77%

86%

76%

Māori

73%

68%

71%

76%

Pasifika

73%

77%

74%

76%

The targets and results for Level 4-7 (non degree) are zero as all programmes at these levels are one year or less in duration. Whilst we exceeded the targets, and improved on the 2018 results, for non-Māori, non-Pasifika and Pasifika tauira, it was disappointing that we missed the target for Māori tauira. In 2020 we will implement Te Ata Hapara to lift tauira success through improved services, communications, onboarding and enrolment processes.

| Te Wānanga o Aotearoa

Course Completion

The course completion rate for students at Level 1-10

2018 Actual

2019 Interim Result

2019 Target

2020 Target

2021 Target

non-Māori, non-Pasifika

81%

82%

78%

80%

Māori

72%

73%

78%

80%

Pasifika

70%

74%

78%

80%

The course completion targets in the table above reflect our ongoing commitment to work towards parity of achievement for all tauira. Pleasingly the overall course completion rates increased in 2019 after several years of decline, and the result for non-Māori, non-Pasifika tauira exceeded the new target. Although the result for Māori and Pasifika tauira missed the target we will use this as a baseline as we implement improvements over the next plan period.

Progression

The progression rate for students at Level 1-3

2018 Actual

2019 Interim Result

2019 Target

2020 Target

2021 Target

non-Māori, non-Pasifika

39%

35%

40%

45%

47%

Māori

42%

40%

45%

47%

Pasifika

38%

37%

40%

45%

47%

Māori tauira were the only tauira to achieve the target progression rate for students at Level 1-3 in 2019. Te Wānanga o Aotearoa progression rates often fluctuate with a large proportion of older tauira who take up language and cultural courses at different levels rather than following a linear path to higher level study or employment. Over the next plan period work will continue to improve pathways and employment outcomes of our programmes.

Annual Report 2019 |

Other commitments 2018 Actual

2019 Actual

2019 Target

2020 Target

2021 Target

The amount of external research income earned

$60,000

The number of research degrees completed

The number of international student EFTS

Commitment

Although Te Wānanga o Aotearoa received no external research income in 2019, it continued to make great progress in building the capability of new and emerging researchers with 18 kaiako rated in the PBRF. In 2020 we will implement Te Aratiatia 2020-2025, a strategic plan that sets the course for the next phase of rangahau. There were 32 research degree completions in our student management system however, this result is ‘interim’ as the completions were not submitted in time to be included in the SDR. Te Wānanga o Aotearoa exited out of international provision in 2018.

Tauira Profile The following tables provide an overview of tauira demographics from 2014. After hovering around 31,000 tauira or 20,000 EFTS, 2019 was the first year that tauira numbers and EFTS decreased. Our tauira demographic profile continues to shift with the increase in tauira studying te reo Māori programmes.

Tauira Year

Tauira

2019

27,835

2018

31,445

2017

31,636

2016

31,291

2015

30,467

2014

32,235

| Te Wānanga o Aotearoa

EFTS Year

Overall

SAC 1-2 EFTS

SAC 3+ EFTS

Youth Guarantee

2019

18,120

4,714

13,348

2018

19,558

5,420

13,908

230

2017

20,199

5,399

14,276

455

2016

20,242

4,883

14,804

523

2015

19,987

5,231

14,123

590

2014

20,713

5,621

14,469

576

Tauira Ethnicity Please note that these figures may add up to more than 100% as tauira identify with more than one ethnicity

Year

Māori

European

Asian

Pasifika

Other

2019

48%

47%

13%

2018

51%

44%

12%

2017

54%

40%

12%

10%

2016

55%

36%

12%

11%

2015

55%

34%

12%

11%

2014

54%

36%

12%

11%

Tauira Age Year

Under 25

25 to 39 Years

40 Years +

2019

37%

53%

2018

11%

36%

53%

2017

14%

36%

50%

2016

15%

33%

52%

2015

16%

32%

52%

2014

17%

32%

52%

Te Pūrongo 2019 |

Equal Opportunities Te Wānanga o Aotearoa is committed to providing open, accessible and inclusive study and employment opportunities for all. This commitment is embedded in ngā uara, our values that are considered as part of our policies and practices and everything we do as an organisation. Equal Educational Opportunities Te Wānanga o Aotearoa has a diverse tauira population unlike any other New Zealand tertiary education organisation. Of 27,835 tauira: ›

48% are Māori, 47% European, 9% Pasifika, 13% Asian;

›

72% are female and 28% male;

›

half are over 40 years of age (53%);

›

20% had no secondary qualifications and 35% had no prior tertiary qualification;

›

12% have a disability.

Despite the challenges posed by such a diverse student body, we are determined to eliminate barriers to tauira success and boost achievement for Māori and Pasifika tauira. Our fees free policy for the majority of sub-degree qualifications is the key component of maintaining accessibility for tauira who would not normally have the financial means to undertake tertiary studies. As a major provider of foundation education we aim to give tauira without prior qualifications the confidence to achieve higher levels of qualification. Our part time and home-based learning programmes provide tauira with the ability to upskill without interrupting employment or other responsibilities. We also take pride in a values-based learner experience that connects all tauira with their identity so they can succeed in cultural, social and economic contexts. Equal Employment Opportunities Te Wānanga o Aotearoa is also committed to equal opportunities for our kaimahi. In 2019 there were 1,664 full and part-time kaimahi, of this 68% were female and 62% male. Family-friendly working environments, and cultural leave are just some of the initiatives that we provide as we seek to 'walk the talk' through values-based employment policies and practices.

| Te Wānanga o Aotearoa

Te Tahua Financials

Tauaki Haepapa Statement of Responsibility

Te Pūrongo a te kaitātari kaute motuhake Independent Auditor's Report

Tauaki whiwhinga moni me te utu matawhānui Statement of comprehensive revenue and expense

Tauaki nekehanga rawa Statement of changes in net assets/ equity

Tauaki tūnga pūtea Statement of financial position

Tauaki kapewhiti Statements of cash flows

Ngā whakamārama ki ngā tauaki pūtea Notes to the financial statements

Annual Report 2019 |

| Te Wānanga o Aotearoa

Tauaki Haepapa Statement of Responsibility

In the financial year ended 31 December 2019, Te Mana Whakahaere (the Council) and the management of Te Wānanga o Aotearoa were responsible for: › preparation of the annual financial statements and statement of service performance and the judgements used in them; and › establishing and maintaining a system of internal control designed to provide reasonable assurance as to the integrity and reliability of financial reporting and non financial reporting. In the opinion of Te Mana Whakahaere and management of Te Wānanga o Aotearoa, the financial statements and statement of service performance fairly reflect the financial position and operations of Te Wānanga o Aotearoa for the year ended 31 December 2019.

30 | 04 | 20 Bryan Hemi, Heamana | Chairperson

30 | 04 | 20 Hon. Te Ururoa Flavell, Te Taiurungi | CEO

Te Pūrongo 2019 |

Te Pūrongo a te kaitātari kaute motuhake

Independent Auditor's Report

To the readers of Te Wānanga o Aotearoa Te Kuratini o Ngā Waka and group’s financial statements and statement of service performance for the year ended 31 December 2019. The Auditor-General is the auditor of Te Wānanga o Aotearoa Te Kuratini o Ngā Waka (the Wānanga) and group. The Auditor-General has appointed me, Clarence Susan, using the staff and resources of Audit New Zealand, to carry out the audit of the financial statements and statement of service performance of the Wānanga and group on his behalf. Opinion

›

the financial statements of the Wānanga and group on pages 74 to 129, that comprise the statement of financial position as at 31 December 2019, the statement of comprehensive revenue and expense, statement of changes in net assets/equity and statement of cash flows for the year ended on that date and the notes to the financial statements that include accounting policies and other explanatory information; and the statement of service performance of the Wānanga and group on pages 46 to 60 and 62 to 65.

In our opinion: ›

the financial position as at 31 December 2019; and

›

the financial performance and cash flows for the year then ended; and

›

comply with generally accepted accounting practice in New Zealand in accordance with Public Benefit Entity Reporting Standards; and

›

the statement of service performance of the Wānanga and group on pages 46 to 60 and 62 to 65

›

presents fairly, in all material respects, the Wānanga and group’s service performance achievements measured against the proposed outcomes described in the investment plan for the year ended 31 December 2019; and

›

complies with generally accepted accounting practice in New Zealand.

We have audited: ›

›

Our audit was completed on 30 April 2020. This is the date at which our opinion is expressed. The basis for our opinion is explained below. In addition, we outline the responsibilities of

the financial statements of the Wānanga and group on pages 74 to 129:

Te Mana Whakahaere and our responsibilities relating to the financial statements and the statement

›

of service performance, we comment on other information, and we explain our independence.

present fairly, in all material respects:

| Te Wānanga o Aotearoa

COVID-19 Without modifying our opinion, we draw your attention to the disclosures in note 24 on page 125, which outline the possible effects to the Wānanga as a result of the COVID-19 pandemic. It is difficult to determine the full effect of it on the Wānanga at this time. Basis for our opinion We carried out our audit in accordance with the AuditorGeneral’s Auditing Standards, which incorporate the Professional and Ethical Standards and the International Standards on Auditing (New Zealand) issued by the New Zealand Auditing and Assurance Standards Board. Our responsibilities under those standards are further described in the Responsibilities of the auditor section of our report. We have fulfilled our responsibilities in accordance with the Auditor-General’s Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of Te Mana Whakahaere for the financial statements and the statement of service performance

Responsibilities of the auditor for the audit of the financial statements and the statement of service performance Our objectives are to obtain reasonable assurance about whether the financial statements and the statement of service performance, as a whole, are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit carried out in accordance with the Auditor-General’s Auditing Standards will always detect a material misstatement when it exists. Misstatements are differences or omissions of amounts or disclosures, and can arise from fraud or error. Misstatements are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of readers taken on the basis of these financial statements and statement of service performance. For the budget information reported in the financial statements and the statement of service performance, our procedures were limited to checking that the information agreed to the Wānanga and group’s investment plan and approved budget. ›

Te Mana Whakahaere is responsible on behalf of the Wānanga and group for preparing financial statements that are fairly presented and that comply with generally accepted accounting practice in New Zealand.

We did not evaluate the security and controls over the electronic publication of the financial statements and the statement of service performance.

›

Te Mana Whakahaere is also responsible on behalf of the Wānanga and group for preparing a statement of service performance that is fairly presented and that complies with generally accepted accounting practice in New Zealand.

As part of an audit in accordance with the AuditorGeneral’s Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. Also:

›

disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Wānanga and group to cease to continue as a going concern. • We evaluate the overall presentation, structure and content of the financial statements and the statement of service performance, including the disclosures, and whether the financial statements and the statement of service performance represent the underlying transactions and events in a manner that achieves fair presentation.

›

We obtain sufficient appropriate audit evidence regarding the financial statements and the statement of service performance of the entities or business activities within the group to express an opinion on the consolidated financial statements and the consolidated statement of service performance. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

Te Mana Whakahaere is responsible for such internal control as it determines is necessary to enable it to prepare financial statements and a statement of service performance that are free from material misstatement, whether due to fraud or error. In preparing the financial statements and the statement of service performance, Te Mana Whakahaere is responsible on behalf of the Wānanga and group for assessing the Wānanga and group’s ability to continue as a going concern. Te Mana Whakahaere is also responsible for disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless Te Mana Whakahaere intends to liquidate the Wānanga and group or to cease operations, or has no realistic alternative but to do so. Te Mana Whakahaere responsibilities arise from the Crown Entities Act 2004 and the Education Act 1989.

Annual Report 2019 |

We communicate with Te Mana Whakahaere regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Our responsibilities arise from the Public Audit Act 2001. Other information Te Mana Whakahaere is responsible for the other information. The other information comprises the information included on pages 1 to 45, 61, 66 to 73 and 130 to 131 but does not include the financial statements and the statement of service performance, and our auditor’s report thereon. Our opinion on the financial statements and the statement of service performance does not cover the other information and we do not express any form of audit opinion or assurance conclusion thereon. In connection with our audit of the financial statements and the statement of service performance, our responsibility is to read the other information. In doing so, we consider whether the other information is materially inconsistent with the financial statements and the statement of service performance or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on our work, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Independence We are independent of the Wānanga and group in accordance with the independence requirements of the Auditor-General’s Auditing Standards, which incorporate the independence requirements of Professional and Ethical Standard 1: International Code of Ethics for Assurance Practitioners (including International Independence Standards) (New Zealand) issued by the New Zealand Auditing and Assurance Standards Board. Other than the audit, we have no relationship with or interests in the Wānanga or any of its subsidiaries.

Clarence Susan Audit New Zealand On behalf of the Auditor-General Tauranga, New Zealand

| Te Wānanga o Aotearoa

Statement of comprehensive revenue and expense | For the year ended 31 December 2019

Group Actual 2019 $'000

Note

Group Budget 2019 $'000

Group Actual 2018 $'000

Parent Actual 2019 $'000

Parent Budget 2019 $'000

Parent Actual 2018 $'000

131,717

127,671

127,858

131,717

127,671

Revenue

Government funding

Tauira fees

3,488

4,042

4,421

3,488

4,042

3,902

Interest revenue

2,325

1,216

2,969

2,255

1,146

2,892

Other revenue

12,999

13,508

12,600

16,322

16,393

15,206

146,670

150,483

147,661

149,923

153,298

149,671

(92,810)

(90,660)

(82,653)

(89,091)

(86,569)

Total income

127,858

Expenditure Kaimahi costs

(85,526)

14,15

(12,250)

(11,454)

(11,236)

(12,107)

(11,274)

(11,022)

(48,895)

(48,240)

(50,686)

(54,993)

(55,049)

(57,108)

(146,671)

(152,504)

(152,582)

(149,753)

(155,414)

(154,699)

(1)

(2,021)

(4,921)

170

(2,116)

(5,028)

Gains/(loss) on property revaluations

–

15,761

–

15,761

Total other comprehensive income

–

15,761

–

15,761

(1)

(2,021)

10,840

170

(2,116)

10,733

Depreciation and amortisation expense Other expenses Total expenses Surplus/(deficit) for the year

Other comprehensive revenue and expense

Total comprehensive income

Explanations of major variances against budget are provided in note 25. The accompanying notes form an integrated part of these financial statements.

Te Pūrongo 2019 |

Statement of changes in net assets / equity | For the year ended 31 December 2019

Note

Actual Accumulated Comprehensive Revenue and Expense $'000

Actual property revaluation reserves $'000

Actual total net assets/equity $'000

Budget $'000

155,036

34,574

189,610

176,295

Total comprehensive revenue and expense for the year

(1)

–

(1)

(2,021)

Reversal of revaluation charge in equity

–

155,035

34,642

189,677

174,274

159,957

18,684

178,641

177,150

(4,921)

15,761

10,840

(3,414)

128

Group Balance as at 1 January 2019

Balance at 31 December 2019

Group Balance as at 1 January 2018 Total comprehensive revenue and expense for the year Reversal of revaluation charge to equity Balance at 31 December 2018

–

155,036

34,573

189,609

173,736

152,962

34,574

187,536

170,140

Parent Balance as at 1 January 2019 Transfers from DynaSpeak Limited Total comprehensive revenue and expense for the year Reversal of revaluation charge to equity Balance at 31 December 2019

(306)

–

(306)

170

–

170

–

– (2,116) –

152,826

34,642

187,468

168,024

157,990

18,684

176,674

173,599

(5,028)

15,761

10,733

(3,459)

128

Parent Balance as at 1 January 2018 Total comprehensive revenue and expense for the year Reversal of revaluation charge to equity Balance at 31 December 2018

– 152,962

The accompanying notes form an integrated part of these financial statements.

34,573

187,535

– 170,140

| Te Wānanga o Aotearoa

Statement of financial position | For the year ended 31 December 2019

Note

Group Actual 2019 $'000

Group Budget 2019 $'000

Group Actual 2018 $'000

Parent Actual 2019 $'000

Parent Budget 2019 $'000

Parent Actual 2018 $'000

7,096

6,818

10,089

7,071

5,197

9,770

ASSETS Current assets Cash and cash equivalents Tauira and other receivables Other financial assets Inventories

11,640

8,254

10,666

11,637

6,644

10,655

38,195

24,000

67,165

36,000

21,835

65,000

2,399

2,321

2,195

2,399

2,321

2,193

1,130

921

815

1,126

893

788

2,073

–

2,073

–

62,533

42,314

90,930

60,306

36,890

88,406

Prepayments Non-current assets held for sale

Total current assets Non-current assets Managed funds

40,687

42,247

–

40,687

42,247

–

Property, plant and equipment

95,657

85,985

105,003

95,657

85,753

104,771

Intangible assets

7,970

14,062

9,759

7,970

13,810

9,507

Shares in subsidiaries

–

475

Total non-current assets

144,314

142,294

114,762

144,314

142,285

114,753

Total assets

206,847

184,608

205,692

204,620

179,175

203,159

LIABILITIES Current liabilities Payables

8,228

3,720

7,897

8,210

3,500

7,884

Kaimahi entitlements

7,897

6,197

7,603

7,897

5,889

7,294

Provisions

440

155

440

EECA crown loan Total current liabilities

109

–

109

–

16,674

10,005

15,655

16,656

9,433

15,208

Non-current liabilities Provisions

142

–

427

142

–

415

Payables

–

329

–

329

–

354

–

354

–

EECA crown loan Total non-current liabilities Total liabilities Net assets

496

329

427

496

329

415

17,170

10,334

16,082

17,152

9,762

15,623

189,677

174,274

189,610

187,468

169,413

187,536

Equity Accumulated funds

155,035

155,590

155,036

152,826

150,729

152,962

Property revaluation reserve

34,642

18,684

34,574

34,642

18,684

34,574

189,677

174,274

189,610

187,468

169,413

187,536

Total equity

Explanations of major variances against budget are provided in note 25. The accompanying notes form an integrated part of these financial statements.

For and on behalf of Te Mana Whakahaere:

30 | 04 | 20 Bryan Hemi, Heamana | Chairperson

30 | 04 | 20 Hon. Te Ururoa Flavell, Te Taiurungi | Chief Executive

Annual Report 2019 |

Statement of cash flow | For the year ended 31 December 2019 Group Actual 2019 $'000

Group Budget 2019 $'000

Group Actual 2018 $'000

Parent Actual 2019 $'000

Parent Budget 2019 $'000

Parent Actual 2018 $'000

126,401

131,717

130,622

126,401

131,717

130,622

3,610

4,042

3,920

3,610

4,042

3,820

Receipt from intercompany

–

3,390

2,975

2,800

Payment to intercompany

–

(8,019)

(9,023)

(9,363)

2,651

1,216

3,209

2,576

1,146

3,109

–

11,177

11,380

12,276

11,103

11,291

12,097

Payments to kaimahi

(85,904)

(87,758)

(91,764)

(82,973)

(86,617)

(87,557)

Payments to suppliers

(47,069)

(49,682)

(50,835)

(45,146)

(49,355)

(48,172)

(27)

–

(278)

–

(302)

10,844

10,915

7,155

11,007

6,176

7,057

462

–

267

461

–

238

(2,931)

(5,826)

(4,636)

(2,847)

(5,522)

(4,532)

Purchase of software development

(287)

(2,021)

(343)

(282)

(2,021)

(323)

Purchase of programme development

(515)

(3,206)

(102)

(500)

(3,206)

(115)

(40,000)

–

(40,000)

–

28,970

–

1,920

29,000

–

2,000

(14,301)

(11,053)

(2,894)

(14,170)

(10,749)

(2,732)

Proceeds from borrowed funds

500

–

500

–

Repayment of borrowed funds

(36)

–

(36)

–

Net cash flow from financing activities

464

–

464

–

Net (decrease)/increase in cash and cash equivalents

(2,993)

(138)

4,261

(2,699)

(4,573)

4,325

Cash and cash equivalents at beginning of year

10,089

6,956

5,828

9,770

5,445

7,096

6,818

10,089

7,071

5,197

9,770

Note

Cash flows from operating activities Receipts from government grants Receipts from tauira fees

Interest revenue received Dividends revenue

Other cash receipts from operating activities

GST (net) Net cash flow from operating activites Cash flows from investing activities Sale of property, plant and equipment Purchase of property, plant and equipment

Purchase of funds management Purchase of investments (net) Net cash flow from investing activities Cash flows from investing activities

Cash, cash equivalents, and bank overdrafts at the end of the year

Explanations of major variances against budget are provided in note 25. The accompanying notes form an integrated part of these financial statements.

| Te Wānanga o Aotearoa

Statement of cash flow continued | For the year ended 31 December 2019

Reconciliation of net surplus/(deficit) after tax to net cash flow from operating activities Group Actual 2019 $'000

Group Actual 2018 $'000

Parent Actual 2019 $'000

Parent Actual 2018 $'000

(1)

(4,921)

170

(5,028)

12,245

11,241

12,103

11,022

1,240

243

1,239

238

Artwork revaluation

–

(74)

–

(74)

Provisions/(provision reversal)

–

165

–

110

(96)

–

(249)

–

(687)

–

(687)

–

12,702

11,661

12,311

11,382

Net (gain) on disposal of property, plant and equipment

(317)

(331)

Capitalisation of labour

(928)

(1,070)

(928)

(1,051)

(1,245)

(1,059)

(1,259)

(1,018)

(205)

(111)

(206)

(111)

(1,212)

3,162

(1,213)

3,154

(313)

(89)

(341)

(152)

(Increase)/decrease in interest accrued

334

240

327

217

Increase/(decrease) in payables

690

(931)

611

(1,112)

Increase/(decrease) in net GST

(27)

(278)

(302)

Increase/(decrease) in revenue received in advance

(298)

(2)

(278)

Increase/(decrease) in tauira fees

–

(419)

–

Increase/(decrease) in provisions

–

125

–

295

604

134

Increase/(decrease) in fees-free income received in advance

(178)

171

(178)

171

Net movement in working capital

(612)

1,474

(215)

1,721

10,844

7,155

11,007

7,057

Note

Surplus/(deficit) after tax Add/(less) non-cash movements Depreciation and amortisation expense Asset impairment

Impairment/(impairment reversal) of receivables Transfers from DynaSpeak Limited Managed funds investment net (gains)/losses Total non-cash items

14,15

Add/(deduct) items classified as investing or financing activities

Total items classified as investing or financing activities Add/(less) movements in working capital items (Increase)/decrease in inventories (Increase)/decrease in tauira and other receivables (Increase)/decrease in prepayments

Increase/(decrease) in provision for kaimahi entitlements

Net cash inflow(outflow) from operating activities

Te Pūrongo 2019 |

Notes to the financial statements | For the year ended 31 December 2019

1. Statement of accounting policies for the year ended 31 December 2019

2.1 Basis of preparation

1.1 Reporting entity

The financial statements have been prepared on the going concern basis, and the accounting policies have been applied consistently throughout the period.

Te Wānanga o Aotearoa is a Tertiary Education Institution domiciled in New Zealand and is governed by the Crown Entities Act 2004 and the Education Act 1989.

Statement of compliance

The primary purpose of Te Wānanga o Aotearoa is to provide tertiary education and it has designated itself as a public sector public benefit entity for the purposes of financial reporting. The group consists of the ultimate parent, Te Wānanga o Aotearoa, and its subsidiary Aotearoa Scholarship Trust (100% controlled). The subsidiary is incorporated and domiciled in New Zealand. The business of DynaSpeak Limited, which was previously a 100% owned subsidiary of Te Wānanga o Aotearoa, was legally transferred to Te Wānanga o Aotearoa on the 30th September 2019 and DynaSpeak Limited has been liquidated. The financial statements cover all of the activities pertaining to an educational and research institution including but not limited to:

The financial statements and service performance information comply with Public Benefit Entity International Public Sector Accounting Standards ("PBE IPSAS") for Tier 1 entities. The financial statements of the Te Wānanga o Aotearoa and group have been prepared in accordance with the requirements of the Crown Entities Act 2004 and the Education Act 1989, which includes the requirement to comply with New Zealand Generally Accepted Accounting Practice ("NZ GAAP"). They comply with PBE IPSAS and other applicable Financial Reporting Standards, as appropriate for Tier 1 public sector public benefit entities. Measurement base The financial statements have been prepared on a historical cost basis except where modified by the revaluation of artwork, land and buildings. Functional and presentation currency

› ›

›

The provision of student services and the facilitating of student activities, including scholarships; The activities of a researcher, developer, publisher, property owner, occupier including tenant or landlord, trustee, provider of accommodation, early childhood services, conferences, exhibitions, recreation facilities, sponsorship and hireage; and Any other activity or occupation incidental to an educational and research institution.

The financial statements of Te Wānanga o Aotearoa and group are for the year ended 31 December 2019. The financial statements were authorised for issue on 30th April 2020 by Te Mana Whakahaere.

The financial statements are presented in New Zealand dollars and all values are rounded to the nearest thousand dollars ($'000). The functional currency of Te Wānanga o Aotearoa and its subsidiaries is New Zealand dollars. There has been no change in the functional currency of the group during the year. There have been no changes to the cost allocation methodology since the date of the last audited financial statements. Standards early adopted

2.Summary of significant accounting policies

PBE IFRS 9 Financial Instruments

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below.

In line with the Financial Statements of the Government, Te Wānanga o Aotearoa has elected to early adopt PBE IFRS 9 Financial instruments. PBE IFRS 9 replaces PBE IPSAS 29 Financial Instruments: Recognition and Measurement. Information about the adoption of PBE IFRS 9 is provided in Note 26.

These policies have been consistently applied to the opening statements of financial position and reporting period to 31 December 2019, unless otherwise stated.

| Te Wānanga o Aotearoa

Notes to the financial statements | For the year ended 31 December 2019

PBE FRS 48 Service Performance Reporting

2.2 Basis of consolidation

Te Wānanga o Aotearoa has elected to early adopt PBE FRS 48 Service Performance Reporting. PBE FRS 48 replaces the service performance reporting requirements of PBE IPSAS 1. This results in no significant change to the statement of performance.

The consolidated financial statements are prepared by adding together like items of assets, liabilities, equity, revenues, expenses and cash flows on a line by line basis. All significant intra-group balances, transactions, revenue and expenses are eliminated in full on consolidation.

Standards, amendments, and interpretations issued that are not yet effective and have not been early adopted

Subsidiaries

Standards, amendments, and interpretations issued but not yet effective that have not been early adopted, and which are relevant to Te Wānanga o Aotearoa and Group, are: PBE IPSAS 41 Financial Instruments PBE IPSAS 41 Financial Instruments replaces PBE IPSAS 29 Financial Instruments: Recognition and Measurement and PBE IFRS 9 Financial Instruments and is effective for financial years beginning on or after 1 January 2022, with early application permitted. The main changes compared to PBE IPSAS 29 that are relevant to Te Wānanga o Aotearoa are: ›

New financial asset classification requirements for determining whether an asset is measured at fair value or amortised cost.

›

A new impairment model for financial assets based on expected losses, which may result in the earlier recognition of impairment losses.

Te Wānanga o Aotearoa intends to adopt PBE IPSAS 41 for the 31 December 2022 financial year. Te Wānanga o Aotearoa has not yet assessed in detail the impact of the new standard. PBE IPSAS 2 Statement of Cash Flows An amendment to PBE IPSAS 2 Statement of Cash Flows requires entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes. This amendment is effective for annual periods beginning on or after 1 January 2021, with early application permitted. Te Wānanga o Aotearoa does not intend to early adopt the amendment.

Te Wānanga o Aotearoa consolidates in the group financial statements all entities where Te Wānanga o Aotearoa has the capacity to control their financing and operating policies so as to obtain benefits from the activities of those entities. This power exists where Te Wānanga o Aotearoa controls the majority voting power on the governing body or where such policies have been irreversibly predetermined by Te Wānanga o Aotearoa or where the determination of such policies is unable to materially impact the level of potential ownership benefits that arise from the activities of the subsidiary. Investments in subsidiaries are carried at cost in the parent entity financial statements of Te Wānanga o Aotearoa. The business of DynaSpeak Limited, which was previously a 100% owned subsidiary of Te Wananga o Aotearoa, was legally transferred to Te Wananga o Aotearoa on the 30th September 2019 and DynaSpeak Limited has been liquidated, therefore the parent figures from 1 October 2019 include DynaSpeak Limited. 2.3 Goods and Services Tax (GST) All items in the financial statements are stated exclusive of GST, except for receivables and payables, which are presented on a GST inclusive basis. Where GST is not recoverable as input tax, it is recognised as part of the related asset or expense. The net amount of GST recoverable from or payable to the Inland Revenue (IRD) is included as part of receivables or payables in the statement of financial position. The net GST paid to or received from the IRD, including the GST relating to investing and financing activities, is classified as an operating cash flow in the statement of cash flows. Commitments and contingencies are disclosed exclusive of GST.

Annual Report 2019 |

Notes to the financial statements | For the year ended 31 December 2019

2.4 Cost allocation

3. Revenue

The cost of service for each significant activity of Te Wānanga o Aotearoa and the group has been derived using the cost allocation outlined below. Direct costs are those costs directly attributable to a significant activity. Indirect costs are those costs that cannot be identified in an economically feasible manner with a specific activity. Direct costs are charged directly to the significant activity. Indirect costs are charged to significant activities using the appropriate cost drivers.

Accounting policy

2.5 Key judgements, estimates and assumptions The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenue and expenses. Actual results may differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. The following items have been included in the financial statements as a result of key judgements or estimates: Distinction between revenue and capital contribution: Most Crown funding received is operational in nature. Thus it is provided by the Crown under the authority of an expense appropriation and is recognised as revenue. Where funding is received from the Crown under the authority of a capital appropriation, Te Wānanga o Aotearoa accounts for the funding as a capital contribution directly in accumulated funds.

Revenue classification Te Wānanga o Aotearoa classifies its revenue as exchange and non-exchange transactions. Exchange transactions are transactions in which one entity receives assets or services, or has liabilities extinguished, and directly gives approximately equal value (primarily in the form of cash, goods, services, or use of assets) to another entity in exchange. Non-exchange transactions are those where Te Wānanga o Aotearoa either receives value from another entity without directly giving approximately equal value in exchange, or gives value to another entity without directly receiving approximately equal value in exchange. Revenue recognition Revenue is recognised when the amount of revenue can be measured reliably and it is probable that economic benefits will flow to Te Wānanga o Aotearoa and is measured at the fair value of consideration received or receivable. Revenue from exchange transactions The following specific recognition criteria in relation to the parent and group's revenue streams must also be met before revenue is recognised. Rental revenue Rental revenue is recognised in the surplus or deficit on an accrual basis. Interest revenue

Estimation of useful lives of assets: The estimation of the useful lives of assets has been based on historical experience as well as the manufacturers' warranties (for plant and equipment), lease terms (for leased equipment) and turnover policies (for motor vehicles). In addition, the condition of each asset is assessed at least once per year and considered against the remaining useful life. Adjustments to useful lives are made when considered necessary. Property revaluations: Note 14 provides information about the estimates and assumptions exercised in the measurement of revalued land and buildings.

Interest revenue is recognised on a time proportion basis that takes into account the effective yield on the asset. Dividend revenue Dividends are recognised when the right to receive payment has been established. Contract revenue Certain contract revenue is accounted for as an exchange transaction and is recognised on percentage of completion basis.

| Te Wānanga o Aotearoa

Notes to the financial statements | For the year ended 31 December 2019

3. Revenue (continued) Revenue from non-exchange transactions Inflows of resources from non-exchange transactions are only recognised as assets where it is probable that the associated future economic benefit or service potential will flow to the entity and fair value is reliably measured. Liabilities are recognised in relation to inflows of resources from non-exchange transactions when there is a resulting present obligation as a result of the non-exchange transactions where it is probable that an outflow of resources embodying future economic benefit or service potential will be required to settle the obligation and the amount of the obligation can be reliably estimated. The following specific recognition criteria in relation to the parent and group's non-exchange transaction revenue streams must also be met before revenue is recognised. Student Achievement Component Funding (SAC) SAC funding is Te Wānanga o Aotearoa's main source of operational funding from the Tertiary Education Commission (TEC). Te Wānanga o Aotearoa considers SAC funding to be non-exchange and recognises SAC funding as revenue when the course withdrawal date has passed, based on the number of eligible students enrolled in the course at that date and the value of the course.

of completion is measured by reference to the days of the course completed as a proportion of the total course days. Fees-free revenue Te Wānanga o Aotearoa considers fees-free revenue as non-exchange revenue and recognises revenue when the course withdrawal date for an eligible student has passed. Te Wānanga o Aotearoa has presented funding received for fees-free as part of tuition fees. This is on the basis that receipts from the TEC are for payment on behalf of the student as specified in the relevant funding mechanism. Performance Based Research Fund (PBRF) Te Wānanga o Aoetearoa considers PBRF funding to be non-exchange in nature. PBRF funding is specifically identified by the TEC as being for a funding period as required by section 159YA of the Education Act 1989. Te Wānanga o Aotearoa recognises its confirmed allocation of PBRF funding at the commencement of the specified funding period, which is the same as Te Wānanga o Aotearoa's financial year. PBRF revenue is measured based onTe Wānanga o Aotearoa funding entitlement adjusted for any expected adjustments as part of the final wash-up process. Indicative funding for future periods is not recognised until confirmed for that future period. Research and contract revenue

Other government grants Funding is received from the TEC in relation to costs expected to be incurred by Te Wānanga o Aotearoa to complete specific projects agreed between the TEC and Te Wānanga o Aotearoa. Other grants are recognised as revenue when they become receivable unless there is an obligation in substance to return the funds if conditions of the grant are not met. If there is such an obligation, the grants are initially recorded as grants received in advance and then recognised as revenue when the conditions of the grant are satisfied. Tauira tuition fees Domestic tauira tuition fees are subsidised by government funding and are considered non-exchange. Revenue is recognised when the course withdrawal date has passed, which is when a student is no longer entitled to a refund for withdrawing from the course. International student tuition fees are accounted for as exchange transactions and recognised as revenue on a course percentage of completion basis. The percentage

For a non-exchange research contract, the total funding receivable under the contract is recognised as revenue immediately, unless there are substantive conditions in the contract. If there are substantive conditions, revenue is recognised when the conditions are satisfied. A condition could include the requirement to complete research to the satisfaction of the funder to retain funding or return unspent funds. Revenue for future periods is not recognised where the contract contains substantive termination provisions for failure to comply with the requirements of the contract. Conditions and termination provisions need to be substantive, which is assessed by considering factors such as contract monitoring mechanisms of the funder and the past practice of the funder. Contract revenue Certain contract revenue is accounted for as a non-exchange transaction and is recognised as revenue immediately based on hours of delivery each month, unless there are substantive conditions in the contract. If there are substantive conditions, revenue is recognised when the conditions are satisfied.

Te Pūrongo 2019 |

Notes to the financial statements | For the year ended 31 December 2019

3. Revenue (continued) Group 2019 $'000

Group 2018 $'000

Parent 2019 $'000

Parent 2018 $'000

126,249

126,054

126,249

126,054

1,432

1,617

1,432

1,617

177

–

177

–

127,858

127,671

127,858

127,671

3,488

3,902

3,488

3,902

Fees from international tauira

–

519

–

Fees-free

–

3,488

4,421

3,488

3,902

2,325

2,969

2,255

2,892

2,325

2,969

2,255

2,892

6,737

7,092

6,737

7,092

334

270

334

270

Artwork revaluation gain

–

Donation from DynaSpeak Limited

–

3,379

2,800

145

144

4,948

5,159

4,893

4,967

835

–

835

–

12,999

12,600

16,322

15,206

146,670

147,661

149,923

149,671

Government funding Student Achievement Component funding Other government funding Performance based research funding Total government funding Tauira fees Fees from domestic tauira

Total tauira fees Interest revenue Total interest revenue

Breakdown of other revenue Contract revenue* Profit on sale of property, plant and equipment

Dividends from external sources Miscellaneous revenue Gains on managed funds investment (note 10) Total other revenue Total revenue

| Te Wānanga o Aotearoa

Notes to the financial statements | For the year ended 31 December 2019

3. Revenue (continued) Revenue classified as exchange or non-exchange transactions Group 2019 $'000

Group 2018 $'000

Parent 2019 $'000

Parent 2018 $'000

–

519

–

3,045

3,575

3,045

3,575

334

270

334

270

2,325

2,969

2,255

2,892

Dividends from external sources

145

144

Miscellaneous revenue

588

851

545

684

6,437

8,189

6,323

7,424

126,249

126,054

126,249

126,054

Other government funding

1,432

1,617

1,432

1,617

Fees from domestic tauira

3,488

3,902

3,488

3,902

Artwork revaluation gain

–

Donation from DynaSpeak Limited

–

3,379

2,800

Miscellaneous revenue

4,360

4,308

4,348

4,283

Contract revenue

3,692

3,517

3,692

3,517

PBRF revenue

177

–

177

–

Gains on managed funds investment

835

–

835

–

Total revenue from non-exchange transactions

140,233

139,472

143,600

142,247

Total exchange and non-exchange

146,670

147,661

149,923

149,671

Revenue from exchange transactions Fees from international tauira Contract revenue* Profit on sale of property, plant and equipment Interest revenue

Total revenue from exchange transactions

Revenue from non-exchange transactions Student Achievement Component funding

* Contract revenue relates to licences and subcontracting arrangements.

Annual Report 2019 |

Notes to the financial statements | For the year ended 31 December 2019

4. Kaimahi costs Accounting Policy Superannuation Schemes Employer contributions to Kiwisaver are accounted for as defined contribution schemes and are recognised as an expense in the surplus or deficit when incurred.

Group 2019 $'000

Group 2018 $'000

Parent 2019 $'000

Parent 2018 $'000

Wages and salaries

82,030

87,225

79,292

83,203

Other kaimahi costs

2,364

2,526

2,309

2,449

Employer contributions to defined contribution plans*

1,804

1,920

1,741

1,822

257

239

146

(929)

(1,070)

(928)

(1,051)

85,526

90,660

82,653

86,569

Increase/(decrease) in employee entitlements Capitalised internal labour Total kaimahi costs

*Employer contributions to defined contribution plans include contributions to KiwiSaver.

| Te Wānanga o Aotearoa

Notes to the financial statements | For the year ended 31 December 2019

5. Other expenses Accounting policy Scholarships Scholarships awarded by Te Wānanga o Aotearoa group that reduce the amount of tuition fees payable by the student are accounted for as an expense and not offset against student tuition fees revenue. Operating leases An operating lease is a lease that does not transfer substantially all the risks and rewards incidental to ownership of an asset to the lessee. Lease payments under an operating lease are recognised as an expense on a straight-line basis over the lease term. Lease incentives received are recognised in the surplus or deficit as a reduction of rental expense over the lease term.

Group 2019 $'000

Group 2018 $'000

Parent 2019 $'000

Parent 2018 $'000

251

241

234

140

290

–

290

–

Impairment/(impairment reversal) of receivables

(96)

Bad debts written off

258

257

258

257

Minimum lease payments – operating lease

4,097

4,178

4,097

4,178

Consultancy fees

2,909

2,664

2,895

2,649

433

479

407

445

311

302

Contract tutors

7,494

7,957

7,494

7,957

Rent

2,052

2,277

1,047

925

Impairment of intangibles, inventory and PPE

1,336

406

1,336

406

414

363

414

362

6,994

6,728

6,767

6,427

10,940

12,793

10,692

12,057

757

1,406

757

1,406

–

7,735

9,023

Tauira resources

9,068

8,600

8,981

8,465

Travel

1,632

1,800

1,626

1,789

48,895

50,686

54,993

57,108

Note

Fees to auditors Audit fees for financial statements audit (Audit NZ) Audit fees for internal audits (other service providers) Loss on managed funds investment

Small capital purchases Loss on sale/ disposal

Sponsorship and koha Occupancy expenses Administration Satellite payments Intercompany expenses

Total other expenses

The fees paid to audit firms for internal audits were for planning and undertaking internal audits.

Te PĹŤrongo 2019 |

Notes to the financial statements | For the year ended 31 December 2019

6. Cash and cash equivalents Accounting policy Cash and cash equivalents includes cash at bank and in hand, deposits held at call and short term deposits with an original maturity of three months or less.

Group 2019 $'000

Group 2018 $'000

Parent 2019 $'000

Parent 2018 $'000

Cash at bank and in hand

7,096

10,089

7,071

9,770

Total cash and cash equivalents

7,096

10,089

7,071

9,770

While cash and cash equivalents at 31 December 2019 are subject to the expected credit loss requirement of PBE IFRS 9, no loss allowance has been recognised because the estimated loss allowance for credit loss is trivial. There are no restrictions over any of the cash and cash equivalent balances held by Te WÄ nanga o Aotearoa and group at 31 December 2019 (2018: nil).

| Te Wānanga o Aotearoa

Notes to the financial statements | For the year ended 31 December 2019

7. Tauira and other recieveables Accounting policy Tauira fees and other receivables are recorded at the amount due, less an allowance for credit losses. Te Wānanga o Aotearoa applies the simplified expected credit loss model of recognising lifetime expected credit losses for receivables.

The expected credit loss rates for receivables at 31 December 2019 are based on the following: ›

Debt is over $150

In measuring expected credit losses, tauira fees and other receivables have been assessed on a collective basis as they possess shared credit risk characteristics. They have been grouped based on the days past due.

›

Age of debt is over 365 days

›

AP's stopped and minimal or no contact with Te Wānanga o Aotearoa or collection agency around debt

Tauira fees and other receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include the debtor being in liquidation.

There have been no changes in the estimation technique or significant assumptions used in measuring the loss allowance.

Group 2019 $'000

Group 2018 $'000

Parent 2019 $'000

Parent 2018 $'000

656

956

656

956

(139)

(235)

(139)

(235)

517

721

517

721

1,572

1,059

327

661

324

651

–

9,224

8,225

9,224

8,225

Total other receivables

11,123

9,945

11,120

9,934

Gross tauira and other receivables

11,640

10,666

11,637

10,655

766

821

763

810

Receivables from non-exchange transactions

10,874

9,845

10,874

9,845

Total receivables

11,640

10,666

11,637

10,655

Tauira receivables Tauira fee receivables Less: allowance for credit losses Net tauira receivables Other receivables Trade receivables Accrued interest Subsidiary TEC funding receivable

1,572 1,047

Total receivables above comprise: Receivables from exchange transactions

Annual Report 2019 |

Notes to the financial statements | For the year ended 31 December 2019

7. Tauira and other receivables (continued) (a) Fair value

(b) Impairment

Other receivables are non-interest bearing and receipt is normally on short term of 30-day terms. Therefore the carrying value of other receivables approximates their fair value.

The carrying amount of receivables that would otherwise be past due or impaired and whose terms have been renegotiated is nil (2018: nil).

Tauira receivables are non-interest bearing and receipt is normally on enrolment and no later than graduation. Therefore the carrying value of tauira receivables approximates their fair value.

2019 Provision for uncollectability $'000

Net $'000

2018 Gross Provision for $'000 uncollectability $'000

Net $'000

10,596

–

10,596

9,675

–

9,675

Past due 1-60 days

148

–

148

–

Past due 61-120 days

268

–

268

105

–

105

Past due > 120 days

767

(139)

628

1,073

(235)

838

11,779

(139)

11,640

10,901

(235)

10,666

10,593

–

10,593

9,668

–

9,668

Past due 1-60 days

148

–

148

–

Past due 61-120 days

268

–

268

105

–

105

Past due > 120 days

767

(139)

628

1,069

(235)

834

(139)

11,637

10,890

(235)

10,655

Gross $'000

Group Not past due

Total Parent Not past due

Total

11,776

All receivables greater than 30 days in age are considered to be past due. The impairment provision has been calculated based on expected losses for Te Wānanga o Aotearoa and the pool of receivables. Expected losses have been determined based on an analysis of losses for Te Wānanga o Aotearoa in previous periods and a review of specific receivables. Other impaired receivables have been determined to be impaired because of the significant financial difficulties being experienced by the debtor.

| Te Wānanga o Aotearoa

Notes to the financial statements | For the year ended 31 December 2019

7. Tauira and other recieveables (continued)

The movement in the allowance for credit losses are as follows:

Group 2019 $'000

Group 2018 $'000

Parent 2019 $'000

Parent 2018 $'000

Allowance for credit losses as at 1 January calculated under PBE IPSAS 29

235

149

235

149

PBE IFRS 9 expected credit loss adjustment - through opening accumulated surplus/deficit

–

Opening allowance for credit losses as at 1 Jan

235

149

235

149

Increase in loss allowance made during the year

161

343

161

343

(257)

139

235

139

235

Receivables written-off during the period Balance at 31 December

Te Wānanga o Aotearoa and group holds no collateral as security as other credit enhancements over receivables that are either past due or impaired.

8. Inventory Accounting policy Inventories held for distribution or consumption in the provision of services that are not issued on a commercial basis are measured at the cost, adjusted for any loss of service potential.

The cost of purchased inventory is determined as follows: ›

inventories held for resale - purchase cost is on a weighted average cost materials and consumables to be utilised for rendering of services - purchase cost is on a first in, first out basis.

›

Inventories acquired through non-exchange transactions are measured at fair value at the date of acquisition.

›

Inventories held for use in the provision of goods and services on a commercial basis are valued at the lower of cost and net realisable value.

The amount of any write-down for the loss of service potential or from cost to net realisable value is recognised in the surplus or deficit in the period of the write-down.

Group 2019 $'000

Inventories held for distribution Work in progress Total inventory

Group 2018 $'000

Parent 2019 $'000

Parent 2018 $'000

2,196

1,974

2,196

1,972

203

221

203

221

2,399

2,195

2,399

2,193

Te Pūrongo 2019 |

Notes to the financial statements | For the year ended 31 December 2019

8. Inventory (continued)

Inventories are made up of consumables and inventories held for distribution to Takiwā. Consumables are materials or supplies which will be consumed in conjunction with the delivery of services and predominantly comprise of books and resources used in the teaching of courses to tauira. Inventory consumed for the group in 2019 is $2.9m (2018: $3.3m) and parent 2019 is $2.8m (2018: $3.2m). These figures form part of tauira resources which is disclosed in note 5, Other expenses. The write-down of inventories held for distribution due to tauira resources being revised and redeveloped amounted to $0.56m in 2019 (2018: $0.28m). There have been no reversals of write-downs in 2019 (2018: nil). No inventories are pledged as security for liabilities (2018: nil). 9. Assets held for sale

Accounting policy A non-current asset is classified as held for sale if its carrying amount will be recovered principally through sale rather than through continuing use. The asset is measured at the lower of its carrying amount and fair value less costs to sell. Write-downs of the asset are recognised in the surplus or deficit. Any increases in fair value less costs to sell are recognised in the surplus or deficit up to the level of any impairment losses that have previously been recognised. Non-current assets held for sale (including those that are part of a disposal group) are not depreciated or amortised while they are classified as held for sale.

Group 2019 $'000

Group 2018 $'000

Parent 2019 $'000

Parent 2018 $'000

640

–

640

–

Buildings

1,433

–

1,433

–

Total

2,073

–

2,073

–

Land

Te Wānanga o Aotearoa owns land and buildings at Rotowaro Road in Huntly. Te Mana Whakahaere has agreed to sell the property, as it will provide no future use to Te Wānanga o Aotearoa. The accumulated property revaluation reserve recognised in equity for the Rotowaro Road property at 31 December 2019 is $1.176m.

| Te Wānanga o Aotearoa

Notes to the financial statements | For the year ended 31 December 2019

10. Other financial assets Accounting policy Financial assets are initially recognised at fair value plus transaction costs unless they are carried at fair value through surplus or deficit in which case the transaction costs are recognised in the surplus or deficit. Purchases and sales of financial assets are recognised on trade-date, the date on which Te Wānanga o Aotearoa and group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and Te Wānanga o Aotearoa and group has transferred substantially all the risks and rewards of ownership.

Financial assets at fair value through surplus or deficit Financial assets at fair value through surplus or deficit include financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short-term or is part of a portfolio that are managed together and for which there is evidence of short-term profit taking. Derivatives are also categorised as held for trading.

Term deposits Term deposits are initially measured at the amount invested. Where applicable, interest is subsequently accrued and added to the investment balance. A loss allowance for expected credit losses is recognised if the estimated loss allowance is not trivial.

After initial recognition, financial assets in this category are measured at their fair values with gains or losses on remeasurement recognised in the surplus or deficit.

At year end, term deposits are assessed for indicators of impairment. If they are impaired, the amount not expected to be collected is recognised in the surplus or deficit. Managed fund The managed fund is a portfolio of financial assets that are actively traded with the intention of making profits. Therefore, the managed fund is measured at fair value through surplus/deficit. After initial recognition, the managed fund is measured at fair value, with gains and losses recognised in the surplus or deficit. Financial assets are classified into the following categories for the purpose of measurement: › › ›

fair value through surplus or deficit; amortised cost; and fair value through other comprehensive income.

The classification of a financial asset depends on the purpose for which the instrument was acquired.

Financial assets acquired principally for the purpose of selling in the short term or part of a portfolio classified as held for trading are classified as a current asset.

Amortised cost Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. A gain or loss on a debt investment is subsequently measured at amortised cost and is not part of a hedging relationship is recognised in profit or loss when the asset is derecognised or impaired. Fair value through other comprehensive revenue and expense Financial assets at fair value through other comprehensive revenue and expense are those that are designated into the category at initial recognition or are not classified in any of the other categories above. They are included in non-current assets unless management intends to dispose of, or realise, the investment within 12 months of balance date. Te Wānanga o Aotearoa and group includes in this category: › ›

investments that it intends to hold long-term but which may be realised before maturity; and shareholdings that it holds for strategic purposes.

After initial recognition, these investments are measured at their fair value, with gains and losses recognised in other comprehensive revenue and expense, except for impairment losses, which are recognised in the surplus or deficit. On derecognition, the cumulative gain or loss previously recognised in other comprehensive revenue and expense is reclassified from equity to the surplus or deficit.

Annual Report 2019 |

Notes to the financial statements | For the year ended 31 December 2019

10. Other financial assets (continued) Impairment of financial assets At each balance date, Te Wānanga o Aotearoa assesses whether there is any objective evidence that a financial asset or group of financial assets is impaired. Any impairment losses are recognised in the surplus or deficit.

Group 2019 $'000

Group 2018 $'000

Parent 2019 $'000

Parent 2018 $'000

Term deposits with maturities <12 months

38,195

67,165

36,000

65,000

Total current portion

38,195

67,165

36,000

65,000

Managed funds

40,687

–

40,687

–

Total non-current portion

40,687

–

40,687

–

Total other financial assets

78,882

67,165

76,687

65,000

Current portion

Non-current portion

Fair value Term deposits Te Wānanga o Aotearoa considers there has not been a significant increase in credit risk for investments in term deposits because the issuer of the investment continues to have low credit risk at balance date. Term deposits are held with banks that have a long-term AA- investment grade credit rating, which indicates the bank has a very strong capacity to meet its financial commitments. No loss allowance for expected credit losses has been recognised because the estimated 12-month expected loss allowance for credit losses is trivial. The carrying amount of term deposits approximates their fair value. The weighted average effective interest rate for term deposits is 2.94% (2018: 3.40%).

| Te Wānanga o Aotearoa

Notes to the financial statements | For the year ended 31 December 2019

10. Other financial assets (continued) Managed funds The managed fund is measured at fair value and consists of listed shares and listed bonds. The fair value of the managed fund investments is determined using quoted market bid prices from independently sourced market information. Therefore the carrying value of managed funds approximates their fair value.

Group 2019 $'000

Group 2018 $'000

Parent 2019 $'000

Parent 2018 $'000

6,418

–

6,418

–

13,124

–

13,124

–

11,011

–

11,011

–

9,721

–

9,721

–

408

–

408

–

40,687

–

40,687

–

Group 2019 $'000

Group 2018 $'000

Parent 2019 $'000

Parent 2018 $'000

Equity securities - NZ

716

–

716

–

Equity securities - Australia

106

–

106

–

Total unrealised gains on assets at fair value through surplus or deficit

822

–

822

–

Fixed interest - International

–

Total realised gains on assets at fair value through surplus or deficit

–

835

–

835

–

Fixed interest fund Fixed interest - NZ Fixed interest - International Equity Equity securities - NZ Equity securities - Australia Cash Cash - NZD Cash - AUD Total managed funds

Gains in market value of investments

Unrealised gains on assets at fair value through surplus of deficit

Realised gains on assets at fair value through surplus of deficit

Total gain in market value of investments

Te Pūrongo 2019 |

Notes to the financial statements | For the year ended 31 December 2019

10. Other financial assets (continued) Losses in market value of investments

Group 2019 $'000

Group 2018 $'000

Parent 2019 $'000

Parent 2018 $'000

Fixed Interest - NZ

112

–

112

–

Fixed Interest - International

117

–

117

–

Total unrealised losses on assets at fair value through surplus of deficit

229

–

229

–

Cash

–

Total realised losses on assets at fair value through surplus or deficit

–

290

–

290

–

Unrealised losses on assets at fair value through surplus of deficit

Realised losses on assets at fair value through surplus of deficit

Total loss in market value of investments

Impairment There were no impairment provisions for other financial assets. None of the financial assets are either past due or impaired.

| Te Wānanga o Aotearoa

Notes to the financial statements | For the year ended 31 December 2019

11. Payables Accounting policy Short-term creditors and other payables are recorded at their face value.

Group 2019 $'000

Group 2018 $'000

Parent 2019 $'000

Parent 2018 $'000

Trade payables

2,416

2,358

2,416

2,147

Accrued expenses

2,562

1,890

2,552

1,886

–

173

(8)

173

4,978

4,421

4,960

4,206

–

284

Other government funding

406

864

406

864

Taxes payable (GST, PAYE)

2,844

2,612

2,844

2,530

Total

3,250

3,476

3,250

3,678

Total current portion

8,228

7,897

8,210

7,884

–

8,228

7,897

8,210

7,884

Note

Payables and deferred revenue under exchange transactions:

Revenue in advance Total Payables and deferred revenue under non-exchange transactions: Amounts due to related parties-DynaSpeak Limited

Total non-current portion Total payables and deferred revenue

Creditors and other payables are non-interest bearing and are normally settled on terms varying between 7 days and 20th of the month following invoice date. Therefore, the carrying value of trade and other payables approximates their fair value. Deferred non-exchange revenue relates to grants, donations received to which there are stipulated conditions attached. Non-exchange revenue in relation to this balance is recognised at the point-in-time as each stipulated condition is met. For terms and conditions relating to related parties payables, refer to note 20.

Annual Report 2019 |

| Te Wānanga o Aotearoa

Notes to the financial statements | For the year ended 31 December 2019

12. Kaimahi entitlements Accounting policy Short-term kaimahi entitlements Kaimahi entitlements that Te Wānanga o Aotearoa expects to be settled within 12 months of balance date are measured at nominal values based on accrued entitlements at current rates of pay. These include salaries and wages accrued up to balance date, annual leave earned, but not yet taken at balance date and sick leave. Te Wānanga o Aotearoa recognises a liability for sick leave to the extent that compensated absences in the coming year are expected to be greater than the sick leave entitlements earned in the coming year. The amount is calculated based on the unused sick leave entitlement that can be carried forward at balance date to the extent Te Wānanga o Aotearoa anticipates it will be used by staff to cover those future absences. Superannuation schemes Obligations for contributions to KiwiSaver are accounted for as defined contribution superannuation schemes and are recognised as an expense in the surplus or deficit when incurred.

Current portion

Group 2019 $'000

Group 2018 $'000

Parent 2019 $'000

Parent 2018 $'000

Annual leave

5,398

5,065

5,398

4,838

Accrued salaries

2,143

2,107

2,143

2,033

356

431

356

423

7,897

7,603

7,897

7,294

–

7,897

7,603

7,897

7,294

Sick leave Total current portion

Non-current portion Total non-current portion Total kaimahi entitlements

Annual leave and sick leave entitlements expected to be settled within 12 months of the balance date are measured at the current rates of pay.

Te Pūrongo 2019 |

Notes to the financial statements | For the year ended 31 December 2019

13. Provisions Accounting policy A provision is recognised for future expenditure of uncertain amount or timing when there is a present obligation (either legal or constructive) as a result of a past event; it is probable that an outflow of future economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. Lease make-good The lease make-good provision is based on an estimate of future costs to restore leased premises back to the condition when the lease period commenced.

Group 2019 $'000

Group 2018 $'000

Parent 2019 $'000

Parent 2018 $'000

Current Portion Lease make-good

440

155

440

Total current portion

440

155

440

Lease make-good

142

427

142

415

Total non-current portion

142

427

142

415

Total provisions

582

445

Group 2019 $'000

Group 2018 $'000

Parent 2019 $'000

Parent 2018 $'000

Balance at 1 January

582

418

445

336

Additional provisions

125

273

125

158

(125)

(109)

(125)

(49)

–

137

–

582

445

Non-current portion

Movements for lease make-good provisions are as follows:

Unused amounts reversed Movement in other provisions Balance at 31 December

In respect of a number of leased premises, Te Wānanga o Aotearoa is required at the expiry of the lease term to makegood any fixtures or fittings installed in the premises. In many cases, Te Wānanga o Aotearoa has the option to renew these leases, which impacts on the timing of expected cash outflows to make-good the premises. The cash flows associated with the non-current portion of the lease make-good provision are expected to occur in February 2021, December 2021, May 2022, November 2024, January 2025 and April 2026. Information about Te Wānanga o Aotearoa leasing arrangements are disclosed in note 23.

100

| Te Wānanga o Aotearoa

Notes to the financial statements | For the year ended 31 December 2019

14. Property, plant and equipment Accounting policy Property, plant and equipment asset classes consist of land and buildings, leasehold improvements, furniture and equipment, computers, motor vehicles, waka, library books and artwork. Items of property, plant and equipment are initially measured at cost, except those acquired through non-exchange transactions which are instead measured at fair value as their deemed cost at initial recognition. Items of property, plant and equipment are subsequently measured under the following: ›

Buildings are measured at cost or valuation less subsequent accumulated depreciation.

›

Land and artwork are stated at cost or valuation and are not depreciated.

(ii) Additions The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits or service potential associated with the item will flow to Te Wānanga o Aotearoa and group and the cost of the item can be measured reliably. Work in progress is recognised at cost less impairment and is not depreciated. In most instances, an item of property, plant and equipment is initially recognised at its cost. Where an asset is acquired through a non-exchange transaction, it is recognised at its fair value and as at the date of acquisition. (iii) Disposals

›

All other asset classes are stated at cost less accumulated depreciation and impairment losses.

Gains and losses on disposals are determined by comparing the proceeds with the carrying value of the asset. Gains and losses on disposals are recognised in the surplus or deficit.

›

Items of property, plant and equipment that have been acquired through non-exchange transactions are measured at fair value.

When revalued assets are sold, the amounts included in the revaluation reserve in respect of those assets are transferred to accumulated surplus/(deficit) within equity.

(i) Revaluation

(iv) Subsequent costs

Land, buildings and artwork are revalued with sufficient regularity to ensure that the carrying amount does not differ materially from fair value and at least every three years.

Costs incurred subsequent to initial acquisition are capitalised only when it is probable that future economic benefits or service potential associated with the item will flow to Te Wānanga o Aotearoa and the cost of the item can be measured reliably.

The carrying values of revalued classes are assessed annually to ensure that they do not differ materially from fair value. If there is evidence supporting a material difference, then the off cycle asset classes are revalued. Property, plant and equipment revaluation movements are accounted for on a class of asset basis. The net revaluation results are credited or debited to other comprehensive revenue and expense and are accumulated to an asset revaluation reserve in equity for that class of asset. Where this would result in a debit balance in the asset revaluation reserve this balance is not recognised in other comprehensive revenue and expense but is recognised in the surplus or deficit. Any subsequent increase on revaluation that reverses a previous decrease in value recognised in the surplus or the deficit will be recognised first in the surplus or deficit up to the amount previously expensed, and then recognised in other comprehensive revenue and expense.

The costs of day-to-day servicing of property, plant and equipment are recognised in the surplus or deficit as they are incurred. (v) Depreciation Depreciation is provided on a straight-line basis on all property, plant and equipment (excluding land and artwork) at rates that will write off the cost (or valuation) of the assets to their estimated residual values over their useful lives. The useful lives and associated depreciation rates of major classes of assets have been estimated as follows:

Annual Report 2019 |

101

Notes to the financial statements | For the year ended 31 December 2019

14. Property, plant and equipment (continued) Class of asset depreciated

Estimated useful life

Buildings

Depreciation rates

1-50 years

2%-100%

Leasehold improvements

Expiry of lease including renewal periods

Furniture and equipment

2-19 years

5%-50%

Computers

2-5 years

20%-50%

Motor vehicles

1-5 years

20%-100%

5-10 years

10% -20%

10 years

10%

Waka Library books

Leasehold improvements are depreciated over the noncancellable period for which Te WÄ nanga o Aotearoa has contracted to lease the asset together with any further terms for which Te WÄ nanga o Aotearoa has the option to continue to lease the asset. The residual value and useful life of an asset is reviewed, and adjusted if applicable, at each financial year end. (vi) Impairment Te WÄ nanga o Aotearoa does not hold any cash-generating assets. Assets are considered cash-generating where their primary objective is to generate a commercial return. Property, plant, and equipment are reviewed for impairment at each balance date and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable service amount. The recoverable service amount is the higher of an asset's fair value less costs to sell and value in use. Value in use is the present value of an asset's remaining service potential. It is determined using an approach based on either a depreciated replacement cost approach, a restoration cost approach, or a service units approach. The most appropriate approach used to measure value in use depends on the nature of the impairment and availability of information. If an asset's carrying amount exceeds its recoverable service amount, the asset is considered to be impaired and the carrying amount is written-down to the recoverable service amount. For revalued assets, the impairment loss is recognised against the revaluation reserve for that class of asset. Where that results in a debit balance in the revaluation reserve, the balance is recognised in the surplus or deficit.

For assets not carried at a revalued amount, the total impairment loss is recognised in the surplus or deficit. The reversal of an impairment loss on a revalued asset is credited to other comprehensive revenue and expense and increases the asset revaluation reserve for that class of asset. However, to the extent that an impairment loss for that class of asset was previously recognised in the surplus or deficit, a reversal of the impairment loss is also recognised in the surplus or deficit. For assets not carried at a revalued amount, the reversal of an impairment loss is recognised in the surplus or deficit. Value in use for non-cash generating assets Non-cash generating assets are those assets that are not held with the primary objective of generating a commercial return. For non-cash generating assets, value in use is determined using an approach based on either a depreciated replacement cost approach, a restoration cost approach, or a service units approach. The most appropriate approach used to measure value in use depends on the nature of the impairment and availability of information. Value in use for cash-generating assets Cash-generating assets are those assets that are held with the primary objective of generating a commercial return. The value in use for cash-generating assets and cashgenerating units is the present value of expected future cash flows.

102

| Te Wānanga o Aotearoa

14. Property, plant and equipment (continued)

Group 2019 Land $'000

Buildings $'000

Leasehold Improvements $'000

Furniture & Equipment $'000

32,033

54,747

8,991

5,654

Additions

–

1,170

194

936

Disposals

–

(20)

(295)

(410)

(1,910)

–

(4)

Revaluation reversal

–

Intercompany transfer

–

(275)

(256)

31,623

54,075

8,890

6,035

Balance as at 1 January 2019

–

(18)

(4,038)

(3,295)

Disposals

–

300

Reclassification

–

247

–

Depreciation charge (note 5)

–

(5,844)

(745)

(891)

Intercompany transfer

–

275

257

Balance as at 31 December 2019

–

(5,615)

(4,494)

(3,629)

Net book value as at 1 January 2019

32,033

54,729

4,953

2,359

Net book value as at 31 December 2019

31,623

48,460

4,396

2,406

Land $'000

Buildings $'000

Leasehold Improvements $'000

Furniture & Equipment $'000

32,033

54,747

8,623

5,296

Additions

–

1,170

194

930

Disposals

–

(254)

Cost Balance as at 1 January 2019

Reclassification

Balance as at 31 December 2019 Accumulated depreciation

Parent 2019 Cost Balance as at 1 January 2019

Revaluation correction

230

(230)

–

(640)

(1,680)

–

(4)

Revaluation reversal

–

Impairment charge recognised in profit and loss

–

Intercompany transfer

–

31,623

54,075

8,890

6,035

Balance as at 1 January 2019

–

(18)

(3,767)

(3,028)

Disposals

–

259

Reclassification

–

247

–

Impairment charge recognised in profit and loss

–

Depreciation charge (note 5)

–

(5,844)

(727)

(860)

Balance as at 31 December 2019

–

(5,615)

(4,494)

(3,629)

Net book value as at 1 January 2019

32,033

54,729

4,856

2,268

Net book value as at 31 December 2019

31,623

48,460

4,396

2,406

Reclassification

Balance as at 31 December 2019 Accumulated depreciation

Te Pūrongo 2019 |

103

Virtual Learning Computers $'000

Computers $'000

Motor Vehicles $'000

Artwork $'000

Library $'000

Waka $'000

Work in Progress $'000

Total $'000

–

9,639

9,116

3,675

2,962

736

445

127,998

–

522

2,202

5,121

–

(3,323)

(904)

–

(4,542)

–

(2,361)

(4,685)

–

(42)

(92)

–

(3)

–

(668)

–

6,796

8,148

3,695

2,799

745

286

123,092

–

(6,621)

(6,807)

–

(1,682)

(534)

–

(22,995)

–

3,317

773

–

4,404

–

247

–

(1,301)

(818)

–

(294)

(37)

–

(9,930)

–

667

–

(4,565)

(6,760)

–

(1,801)

(571)

–

(27,435)

–

3,018

2,309

3,675

1,280

202

445

105,003

–

2,231

1,388

3,695

998

174

286

95,657

Virtual Learning Computers $'000

Computers $'000

Motor Vehicles $'000

Artwork $'000

Library $'000

Waka $'000

Work in Progress $'000

Total $'000

–

9,402

9,024

3,675

2,957

736

445

126,938

–

471

2,202

5,064

–

(3,154)

(904)

–

(4,312)

–

(2,361)

(4,685)

–

(200)

–

(200)

–

219

–

6,796

8,148

3,695

2,799

745

286

123,092

–

(6,425)

(6,715)

–

(1,680)

(534)

–

(22,167)

–

3,148

773

–

4,180

–

247

–

172

–

172

–

(1,288)

(818)

–

(293)

(37)

–

(9,867)

–

(4,565)

(6,760)

–

(1,801)

(571)

–

(27,435)

–

2,977

2,309

3,675

1,277

202

445

104,771

–

2,231

1,388

3,695

998

174

286

95,657

104

| Te Wānanga o Aotearoa

14. Property, plant and equipment (continued)

Group 2018 Land $'000

Buildings $'000

Leasehold Improvements $'000

Furniture & Equipment $'000

27,415

55,183

7,534

4,638

4,618

(930)

–

Additions

–

1,119

1,022

Disposals

–

(26)

(186)

(33)

Reclassification

–

(599)

493

Reversal of impairment charge in equity

–

128

–

32,033

54,747

8,991

5,654

Balance as at 1 January 2018

–

(8,187)

(3,546)

(2,438)

Revaluation

–

12,073

–

Disposals

–

160

–

Depreciation charge (note 5)

–

(4,043)

(535)

(828)

Reclassification

–

134

(117)

(29)

Balance as at 31 December 2018

–

(18)

(4,038)

(3,295)

Land $'000

Buildings $'000

Leasehold Improvements $'000

Furniture & Equipment $'000

27,415

55,183

7,173

4,328

4,618

(930)

–

Additions

–

1,119

1,011

883

Disposals

–

(26)

(173)

(33)

Reclassification

–

(599)

484

118

Reversal of revaluation charge in equity

–

128

–

Impairment charge recognised in profit and loss

–

32,033

54,747

8,623

5,296

Balance as at 1 January 2018

–

(8,187)

(3,300)

(2,208)

Revaluation

–

12,073

–

Disposals

–

156

–

Impairment charge recognised in profit and loss

–

Depreciation charge (note 5)

–

(4,043)

(506)

(779)

Reclassification

–

134

(117)

(41)

Balance as at 31 December 2018

–

(18)

(3,767)

(3,028)

Cost Balance as at 1 January 2018 Revaluation surplus

Balance as at 31 December 2018 Accumulated depreciation

Parent 2018 Cost Balance as at 1 January 2018 Revaluation surplus

Balance as at 31 December 2018 Accumulated depreciation

Annual Report 2019 |

105

Virtual Learning Computers $'000

Computers $'000

Motor Vehicles $'000

Artwork $'000

Library $'000

Waka $'000

Work in Progress $'000

Total $'000

2,326

6,469

9,373

3,588

3,238

718

967

121,449

–

3,765

–

1,067

656

3,169

8,179

–

(243)

(913)

(59)

–

(1,460)

(2,326)

2,346

–

(3,691)

(3,750)

–

128

–

9,639

9,116

3,675

2,962

736

445

127,998

(2,121)

(3,452)

(6,481)

–

(1,544)

(496)

–

(28,265)

–

12,073

–

243

832

–

1,240

–

(1,291)

(1,158)

–

(347)

(38)

–

(8,240)

2,121

(2,121)

–

(12)

–

(6,621)

(6,807)

–

(1,682)

(534)

–

(22,995)

Virtual Learning Computers $'000

Computers $'000

Motor Vehicles $'000

Artwork $'000

Library $'000

Waka $'000

Work in Progress $'000

Total $'000

2,326

6,253

9,281

3,588

3,233

718

967

120,465

–

3,765

–

1,067

656

3,169

8,029

–

(244)

(913)

(59)

–

(1,448)

(2,326)

2,326

–

(3,691)

(3,688)

–

128

–

(313)

–

9,402

9,024

3,675

2,957

736

445

126,938

(2,121)

(3,274)

(6,391)

–

(1,542)

(496)

–

(27,519)

–

12,073

–

243

832

–

1,236

–

202

–

202

–

(1,273)

(1,156)

–

(350)

(38)

–

(8,145)

2,121

(2,121)

–

(14)

–

(6,425)

(6,715)

–

(1,680)

(534)

–

(22,167)

106

| Te Wānanga o Aotearoa

Notes to the financial statements | For the year ended 31 December 2019

14. Property, plant and equipment (continued) Valuation

Artwork

The most recent valuation of land and buildings were performed by independent valuers. Bayleys Valuation Services as at 31 December 2018.

The most recent valuation of artwork was performed by an independent valuer, Erika Chamberlain of Antique and Art on 28 November 2018. The valuation was undertaken in accordance with PBE IPSAS 17 using fair value and is effective as at 31 December 2018.

Land Land is valued at fair value using market-based evidence based on its highest and best use with reference to comparable land values.

Determination of fair value has been made by: ›

Specialised buildings (for example, campuses) are valued at fair value using depreciated replacement cost as no reliable market data is available for buildings designed for education delivery purposes.

Reference to observable prices in an active market. Where the market exists for the same or similar asset the market prices are deemed to be a fair value. The values ascribed in the valuation are primarily based on observable process both in the primary retail market and secondary auction market.

›

Depreciated replacement cost is determined using a number of significant assumptions. Significant assumptions include:

If there is no active market, fair value is determined by other market based evidence adjudged by active and knowlegable participants in the market.

Impairment

Buildings

›

The replacement asset is based on the replacement with modern equivalent assets with adjustments where appropriate for obsolescence due to over design or surplus capacity.

›

The replacement cost is derived from recent construction contracts of similar assets and Property Institute of New Zealand cost information.

›

The remaining useful life of assets is estimated.

›

Straight-line depreciation has been applied in determining the depreciated replacement cost value of the asset.

Buildings were revalued at fair value using market based evidence. Market rates and capitalisation rates were applied to reflect market value.

No impairment losses (2018: nil) have been recognised for leasehold improvements due to no longer being in our current property portfolio or the improvement no longer exists. Impairment losses of $0.03m (2018: $0.1m) have been recognised for library books due to no longer being in our current library collection. The impairment loss has been recognised in the statement of comprehensive revenue and expense in the line item "Other expenses".

Te Pūrongo 2019 |

107

Notes to the financial statements | For the year ended 31 December 2019

14. Property, plant and equipment (continued) Work in progress The value of work in progress is disclosed at cost by class of asset as follows:

Group 2019 $'000

Group 2018 $'000

Parent 2019 $'000

Parent 2018 $'000

Equipment

Buildings

155

337

155

337

286

444

286

444

Class

Leasehold improvements Total

Restrictions of title Under the Education Act 1989, Te Wānanga o Aotearoa is required to obtain consent from the Ministry of Education to dispose of land and buildings. Te Wānanga o Aotearoa does not have any: ›

Restrictions on title on property, plant and equipment.

›

Property, plant and equipment pledged as security for liabilities.

›

Compensation for items of property, plant and equipment that were impaired, lost or given up.

Leasing The net carrying amount of property, plant and equipment held under finance leases is nil (2018: nil).

108

| Te Wānanga o Aotearoa

Notes to the financial statements | For the year ended 31 December 2019

15. Intangible assets Accounting policy

Amortisation

Intangible assets are initially recorded at cost except for:

A summary of policies applied to the group's intangible assets is as follows:

›

Intangible assets acquired through non-exchange transactions (measured at fair value).

All of the group's intangible assets are subsequently measured in accordance with the cost model, being cost (or fair value for items acquired through non-exchange transactions) less accumulated amortisation and impairment. Computer software Computer software is separately acquired and capitalised at its cost as at the date of acquisition. After initial recognition, separately acquired intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses. Costs associated with maintaining computer software programmes are recognised as an expense when incurred. Costs that are directly associated with the development of software for internal use are recognised as an intangible asset. Direct costs include software development employee costs and an appropriate portion of relevant overheads. Staff training costs are recognised as an expense when incurred. Programme development costs Programme development costs relate to development of educational courses and are capitalised once accreditation has been received and when it is probable that future economic benefit arising from use of the intangible asset will flow to the group. Following initial recognition of programme development costs, the cost model is applied and the asset is carried at cost less accumulated amortisation and accumulated impairment losses.

Class of intangible asset

Estimated useful life

Method used

Computer software

Finite – 5 years

Straight-line method

Programme development costs

Finite – 5 years

Straight-line method

The carrying value of an intangible asset with a finite life is amortised on a straight-line basis over its useful life. The amortisation period starts when the asset is available for use and ceases at the date that the asset is derecognised. The amortisation method for each class of intangible asset having a finite life is reviewed at the end of each financial year. If the expected useful life or expected pattern of consumption is different from the previous assessment, changes are made accordingly. The amortisation for each period is recognised in the surplus or deficit. The carrying value of each class of intangible asset is reviewed annually for indicators of impairment. Intangible assets are tested for impairment where an indicator of impairment exists. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the surplus or deficit when the asset is derecognised. All other research and development costs are recognised as expenses in the surplus or deficit in the year in which they are incurred.

Annual Report 2019 |

109

Notes to the financial statements | For the year ended 31 December 2019

15. Intangible assets (continued) Impairment of intangible asset

Value in use for non-cash-generating assets

Intangible assets that have an indefinite useful life or are not yet available for use are not subject to amortisation and are tested annually for impairment. Assets that have a finite useful life are reviewed for indicators of impairment at each balance date. When an asset is found to be impaired, a recoverable amount is estimated. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use.

Non-cash-generating assets are those assets that are not held with the primary objective of generating a commercial return. For non-cash-generating assets, value in use is determined using an approach based on either a depreciated replacement cost approach, restoration cost approach, or a service units approach. The most appropriate approach used to measure value in use depends on the nature of the impairment and availability of information. Value in use for cash-generating assets

The value in use for cash-generating assets is the present value of expected future cash flows.

Cash-generating assets are those assets that are held with the primary objective of generating a commercial return.

If an asset's carrying amount exceeds its recoverable amount, the asset is impaired and the carrying amount is written down to the recoverable amount.

Movements in the carrying value for each class of intangible asset are as follows:

The total impairment loss is recognised in the surplus or deficit.

Group 2018 Software $'000

Programme Development $'000

Work in Progress $'000

Total $'000

2,401

4,043

4,991

11,435

Additions

597

4,343

3,728

8,668

Disposals

(60)

–

(60)

Reclassification

(54)

(7,144)

(7,150)

–

(138)

–

(138)

(973)

(2,023)

–

(2,996)

1,911

6,273

1,575

9,759

5,880

14,088

1,575

21,543

(3,969)

(7,815)

–

(11,784)

1,911

6,273

1,575

9,759

Year ended 31 December 2018 Opening net book value

Impairment (net) Amortisation Closing net book value

At 31 December 2018 Cost Accumulated amortisation and impairment Net book value

110

| Te Wānanga o Aotearoa

Notes to the financial statements | For the year ended 31 December 2019

15. Intangible assets (continued)

Group 2019 Software $'000

Programme Development $'000

Work in Progress $'000

Total $'000

1,911

6,273

1,575

9,759

Additions

1,595

2,212

3,864

Disposals

(6)

–

(6)

–

(2,572)

(70)

(685)

–

(755)

(396)

(1,924)

–

(2,320)

1,496

5,259

1,215

7,970

4,487

11,398

1,215

17,100

(2,991)

(6,139)

–

(9,130)

1,496

5,259

1,215

7,970

Software $'000

Programme Development $'000

Work in Progress $'000

Total $'000

2,343

3,932

4,816

11,091

Additions

474

4,332

3,694

8,500

Disposals

(60)

–

(60)

Reclassification

(57)

–

(6,952)

(7,009)

–

(138)

–

(138)

Amortisation

(922)

(1,955)

–

(2,877)

Closing net book value

1,778

6,171

1,558

9,507

5,607

13,731

1,558

20,896

(3,829)

(7,560)

–

(11,389)

1,778

6,171

1,558

9,507

Year ended 31 December 2019 Opening net book value

Reclassification Impairment (net) Amortisation Closing net book value

At 31 December 2019 Cost Accumulated amortisation and impairment Net book value

Parent 2018

Year ended 31 December 2018 Opening net book value

Impairment (net)

At 31 December 2018 Cost Accumulated amortisation and impairment Net book value

Te Pūrongo 2019 |

111

Notes to the financial statements | For the year ended 31 December 2019

15. Intangible assets (continued)

Parent 2019 Software $'000

Programme Development $'000

Work in Progress $'000

Total $'000

1,778

6,171

1,558

9,507

1,596

2,229

3,873

–

(2,572)

(70)

(685)

–

(755)

(364)

(1,876)

–

(2,240)

104

1,496

5,259

1,215

7,970

4,487

11,398

1,215

17,100

(2,991)

(6,139)

–

(9,130)

1,496

5,259

1,215

7,970

Year ended 31 December 2019 Opening net book value Additions Reclassification Impairment (net) Amortisation Intercompany transfer Closing net book value

157

At 31 December 2019 Cost Accumulated amortisation and impairment Net book value

There are no restrictions over the title of Te Wānanga o Aotearoa intangible assets, nor are any intangible assets pledged as security for liabilities. Te Wānanga o Aotearoa impaired intangible assets of $0.75m in 2019 for the group and parent (2018: $0.25m for group and parent). Programme development has been impaired due to programmes either being redeveloped to align with NZQA Targeted Review of Qualification (TRoQ) changes or programmes no longer being delivered. Software has been impaired as applications are no longer used. There were no contractual commitments for the acquisitions of intangible assets for Te Wānanga o Aotearoa and group (2018: nil).

112

| Te Wānanga o Aotearoa

Notes to the financial statements | For the year ended 31 December 2019

16. Equity Accounting policy Net assets/equity is measured as the difference between total assets and total liabilities. Net assets/equity is disaggregated and classified into a number of reserves. The components of net assets/equity are:

Property revaluation reserves This reserve relates to the revaluation of property, plant, and equipment to fair value.

› accumulated funds › property revaluation reserves

Group 2019 $'000

Group 2018 $'000

Parent 2019 $'000

Parent 2018 $'000

155,036

159,957

152,962

157,990

–

(306)

–

(1)

(4,921)

170

(5,028)

155,035

155,036

152,826

152,962

Balance at 1 January

34,574

18,684

34,574

18,684

Net revaluation gains

–

15,761

–

15,761

129

34,642

34,574

34,642

34,574

Land

21,537

21,647

21,537

21,647

Buildings

13,105

12,927

13,105

12,927

Total

34,642

34,574

34,642

34,574

Accumulated funds Balance at 1 January Transfers from DynaSpeak Limited Surplus/(deficit) Balance at 31 December Property, plant and equipment revaluation reserve

Reversal of revaluation charge in equity Balance at 31 December Property revaluation reserves for each asset class consist of:

Annual Report 2019 |

113

Notes to the financial statements | For the year ended 31 December 2019

16. Equity (continued) Capital management The capital of Te Wānanga o Aotearoa is its net assets/equity, which comprises of accumulated funds and the property revaluation reserve. Equity is represented by net assets. Te Wānanga o Aotearoa is subject to the financial management and accountability provisions of the Education Act 1989, which includes restrictions in relation to disposing of assets or interests in assets, ability to mortgage or otherwise charge assets or interests in assets, granting leases of land or buildings or parts of buildings and borrowings. Te Wānanga o Aotearoa acknowledges it has complied with the financial management and accountability provisions of the Education Act 1989 for the year ended 31 December 2019. Te Wānanga o Aotearoa manages its revenues, expenses, assets, liabilities, investments, and general financial dealings prudently and in a manner that promotes the current and future interests of the community. The equity of Te Wānanga o Aotearoa is largely managed as a by product of managing revenues, expenses, assets, liabilities and general financial dealings. The objective of managing the equity of Te Wānanga o Aotearoa is to ensure that it effectively and efficiently achieves the goals and objectives for which it has been established, while remaining a going concern.

17. Shares in subsidiaries

Group 2019 $'000

Group 2018 $'000

Parent 2019 $'000

Parent 2018 $'000

Shares in DynaSpeak Limited (cost)

–

475

Total investment in subsidiaries

–

475

Country of Incorporation

DynaSpeak Limited Total investment in subsidiaries

New Zealand

Equity Interest

Investment

2019 %

2018 %

2019 $'000

2018 $'000

–

100

–

475

–

475

Te Wānanga o Aotearoa has 100% control over Aotearoa Scholarship Trust (2018: 100%)

114

| Te Wānanga o Aotearoa

Notes to the financial statements | For the year ended 31 December 2019

18. Early learning centres During 2019, Te Wānanga o Aotearoa received total grants of $2.4m from the Ministry of Education for early learning purposes (2018: $2.6m). These grants have been classified as non-exchange revenue.

2019 $'000

2018 $'000

Apakura Te Kākano Bulk funding Language and kaupapa Total Ministry of Eduction funding received

473

545

477

549

Funds applied to: 477

491

Faculty Support

–

Provision of meals for tamariki

–

Property occupancy costs

–

Resources

–

477

549

379

432

Special needs

Language and kaupapa

408

465

408

417

Faculty Support

–

Provision of meals for tamariki

–

Property occupancy costs

–

Resources

–

408

465

323

517

Special needs

Language and kaupapa

351

556

Salaries

Total funds applied Nga Kākano o te Manukau Bulk funding Low socio-economic

Total Ministry of Education funding received Funds applied to: Salaries

Total funds applied Te Rau Oriwa Bulk funding Low socio-economic

Total Ministry of Education funding received

Te Pūrongo 2019 |

115

Notes to the financial statements | For the year ended 31 December 2019

18. Early learning centres (continued)

2019 $'000

2018 $'000

Funds applied to: 351

497

Faculty support

–

Resources

–

Property occupancy costs

–

Provision of meals for tamariki

–

351

556

616

594

Low socio-economic

Special needs

644

622

582

569

Faculty support

Property occupancy costs

Resources

644

622

456

389

Low socio-economic

Special needs

485

413

421

413

Faculty Support

–

Provision of meals for tamariki

–

Property occupancy costs

–

485

413

Salaries

Total funds applied Raroera Te Puawai Bulk funding

Language and kaupapa Total Ministry of Education funding received Funds applied to: Salaries

Provision of meals for tamariki Total funds applied Whare Amai Bulk funding

Total Ministry of Education funding received Funds applied to: Salaries

Resources Total funds applied

116

| Te Wānanga o Aotearoa

Notes to the financial statements | For the year ended 31 December 2019

19. Financial instruments The group's activities expose it to a variety of financial risks (market risk, liquidity risk and credit risk). The group's risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the group. The group uses derivative financial instruments such as interest rate swaps and forward foreign exchange contracts to hedge certain risk exposures. (a) Financial instrument categories The estimated carrying amount and fair values of Te Wānanga o Aoteaora and its group's financial assets and liabilities are presented as follows:

Financial assets at amortised cost (2018: Loans and receivables) Cash and cash equivalents

Group 2019 $'000

Group 2018 $'000

Parent 2019 $'000

Parent 2018 $'000

7,096

10,089

7,071

9,770

Tauira and other receivables

11,640

10,666

11,637

10,655

Term deposits

38,195

67,165

36,000

65,000

Total financial assets at amortised cost

56,931

87,920

54,708

85,425

Managed funds

40,687

–

40,687

–

Total held for trading

40,687

–

40,687

–

Creditors and other payables

8,228

7,897

8,210

7,884

Total financial liabilities at amortised cost

8,228

7,897

8,210

7,884

Financial assets mandatorily measured at fair value through surplus or deficit (2018: Held for trading)

Financial liabilities at amortised cost

(b) Fair value hierarchy For those instruments recognised at fair value in the statements of financial position, fair values are determined according to the following hierarchy: ›

Quoted market price (level 1) – Financial instruments with quoted prices for identical instruments in active markets.

›

Valuation technique using observable inputs (level 2) – Financial instruments with quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in inactive markets and financial instruments valued using models where all significant inputs are observable.

›

Valuation techniques with significant non-observable inputs (level 3) – Financial instruments valued using models where one or more significant inputs are not observable.

The following table analyses the basis of the valuation of classes of financial instruments measured at fair value in the statements of financial position:

Annual Report 2019 |

117

Notes to the financial statements | For the year ended 31 December 2019

19. Financial instruments (continued)

Total $'000

Quoted market price $'000

Observable inputs $'000

Significant non observable inputs $'000

31 December 2019 - Group financial assets Managed fund

40,686

–

Total financial assets

40,686

–

Total $'000

Quoted market price $'000

Observable inputs $'000

Significant non observable inputs $'000

31 December 2019 - Parent financial assets Managed fund

40,686

–

Total financial assets

40,686

–

There were no transfers between the different levels of the fair value hierarchy. (c) Financial instrument risks Te Wānanga o Aotearoa has policies to manage risks associated with financial instruments. Te Wānanga o Aotearoa is risk averse and seeks to minimise exposure from its treasury activities. The policies do not allow any transactions that are speculative in nature to be entered into. Market risk Currency risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. Te Wānanga o Aotearoa has only limited exposure to foreign currency risk. Te Wānanga o Aotearoa purchases library items from overseas and also attends overseas conferences which exposes it to currency risk. Fair value interest rate risk Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates.

Credit risk Credit risk is the risk that a third party will default on its obligation to Te Wānanga o Aotearoa causing Te Wānanga o Aotearoa to incur a loss. Due to the timing of its cash inflows and outflows, Te Wānanga o Aotearoa invests surplus cash into term deposits which gives rise to credit risk. In the normal course of business, Te Wānanga o Aotearoa is exposed to credit risk from cash and term deposits with banks, debtors and other receivables. For each of these, the maximum credit exposure is best represented by the carrying amount in the statement of financial position. Te Wānanga o Aotearoa manages cashflow interest rate risk by ensuring that no more than 35% of total liquid funds are held with any one approved counter party. With the exception of tauira fees, the group trades only with recognised and creditworthy third parties. Receivable balances are monitored on an on-going basis with the result that the group's exposure to bad debts is not significant as a result of the ability to withhold graduation from tauira who do not pay their fees.

Investments issued at fixed rates of interest create exposure to fair value interest rate risk. Te Wānanga o Aotearoa does not actively manage its exposure to fair value interest rate risk.

Te Wānanga o Aotearoa holds no collateral or other credit enhancements for financial instruments that give rise to credit risk.

Cash flow interest rate risk

The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to Standard and Poor's credit ratings (if available) or to historical information about counterparty default rates. All instruments in this table have a loss allowance based on lifetime expected credit losses.

Cash flow interest rate risk is the risk that the cash flows from a financial instrument will fluctuate because of changes in market interest rates. Investments issued at variable interest rates create exposure to cash flow interest rate risk.

Credit quality of financial assets

118

| Te Wānanga o Aotearoa

Notes to the financial statements | For the year ended 31 December 2019

19. Financial instruments (continued) Group 2019 $'000

Group 2018 $'000

Parent 2019 $'000

Parent 2018 $'000

AA-

45,291

77,254

43,071

74,770

Total financial instrument assets

45,291

77,254

43,071

74,770

Cash at bank and term deposits

Liquidity risk Management of liquidity risk Liquidity risk is the risk that Te Wānanga o Aotearoa will encounter difficulty raising liquid funds to meet commitments as they fall due. Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilties and the ability to close out market positions. Te Wānanga o Aotearoa aims to maintain flexibility in funding by keeping committed credit lines available. Te Wānanga o Aotearoa manages liquidity risk by continuously monitoring forecast and actual cash flow requirements. Contractual maturity analysis of financial liabilities The table below shows an analysis of Te Wānanga o Aotearoa financial liabilities grouped according to maturity, based on the remaining period at the balance date to the contractual maturity date. The amounts disclosed are the contractual undiscounted cash flows.

Carrying Amount $'000

Contractual Cash Flows $'000

Less than 1 Year $'000

Payables

8,228

–

Total

8,228

–

Payables

7,897

–

Total

7,897

–

Carrying Amount $'000

Contractual Cash Flows $'000

Less than 1 Year $'000

Payables

8,210

–

Total

8,210

–

Payables

7,884

–

Total

7,884

–

1-2 Years $'000

2-5 Years $'000

More than 5 Years $'000

Group 2019

Group 2018

1-2 Years $'000

2-5 Years $'000

More than 5 Years $'000

Parent 2019

Parent 2018

Te Pūrongo 2019 |

119

Notes to the financial statements | For the year ended 31 December 2019

19. Financial instruments (continued) Contractual maturity analysis of financial assets The table below shows an analysis of Te Wānanga o Aotearoa financial assets grouped according to maturity, based on the remaining period at the balance date to the contractual maturity date. Carrying Amount $'000

Contractual Cash Flows $'000

Less than 1 Year $'000

7,096

–

11,640

–

1-2 Years $'000

2-5 Years $'000

More than 5 Years $'000

Group 2019 Cash and cash equivalents Tauira and other receivables Other financial assets: 38,195

Term deposits

–

Managed funds

38,195 –

56,931

–

Cash and cash equivalents

10,089

–

Tauira and other receivables

10,666

–

67,165

–

87,920

–

Carrying Amount $'000

Contractual Cash Flows $'000

Less than 1 Year $'000

7,071

–

11,637

–

36,000

–

54,708

–

9,770

–

Total Group 2018

Other financial assets: Term deposits

Total

1-2 Years $'000

2-5 Years $'000

More than 5 Years $'000

Parent 2019 Cash and cash equivalents Tauira and other receivables Other financial assets: Term deposits Managed funds Total Parent 2018 Cash and cash equivalents

9,770

10,655

–

Term deposits

65,000

–

Total

85,425

–

Tauira and other receivables Other financial assets:

120

| Te Wānanga o Aotearoa

Notes to the financial statements | For the year ended 31 December 2019

19. Financial instruments (continued) Sensitivity analysis The tables below illustrate the potential impact to the surplus or deficit and equity (excluding retained earnings) for reasonably possible market movements with all variables held constant based on the financial instrument exposures of Te Wānanga o Aotearoa at balance date. 2019 -100bps Surplus $'000

-100bps Other Equity $'000

2019 +100bps Surplus $'000

+100bps Other Equity $'000

2018 -100bps Surplus $'000

-100bps Other Equity $'000

2018 +100bps Surplus $'000

+100bps Other Equity $'000

Group Interest rate risk – financial assets (71)

–

(101)

–

101

–

Other financial assets

(789)

–

789

–

(672)

–

672

–

Total sensitivity

(860)

–

860

–

(773)

–

773

–

(71)

–

(98)

–

Other financial assets

(767)

–

767

–

(650)

–

650

–

Total sensitivity

(838)

–

838

–

(748)

–

748

–

Cash and cash equivalents

Parent Interest rate risk – financial assets Cash and cash equivalents

Explanation of interest rate risk sensitivity The interest rate sensitivity is based on a reasonable possible movement in interest rates, with all other variables held constant, measured as a basis points (bps) movement. For example a decrease in 100 bps is equivalent to a decrease in interest rates of 1.0%. 20. Related party disclosures Related party disclosures have not been made for transactions with related parties that are within a normal supplier or client/recipient relationship on terms and conditions no more or less favourable than those that it is reasonable to expect Te Wānanga o Aotearoa and group would have adopted in dealing with the party at arm's length in the same circumstances. Related party disclosures have also not been made for transactions with entities within Te Wānanga o Aotearoa group (such as funding and financing flows), where the transactions are consistent with the normal operating relationships between the entities and are on normal terms and conditions for such group transactions. In conducting its activities, DynaSpeak Limited received subcontracting revenue from Te Wānanga o Aotearoa to provide education services for the year ended 31 December 2019. DynaSpeak Limited invoices Te Wānanga o Aotearoa for this revenue on a monthly EFTS consumption basis. The subcontracting revenue paid by Te Wānanga o Aotearoa is disclosed in note 5, Intercompany expenses.

Annual Report 2019 |

121

Notes to the financial statements | For the year ended 31 December 2019

20. Related party disclosures (continued) Balances arising from sales/purchases of goods and services Group 2019 $'000

Group 2018 $'000

118

4,416

6,238

Sale of services DynaSpeak Limited (100% owned subsidiary) Aotearoa Scholarship Trust (100% controlled subsidiary) Purchase of services DynaSpeak Limited (100% owned subsidiary) Payables at year end Dynaspeak Limited (100% owned subsidiary)

–

284

21. Key kaimahi remuneration

Appointment Date

Retirement Date

Group & Parent 2019 $'000

Group & Parent 2018 $'000

Current council Katie Bhreatnach

Council/HR_Remuneration Board

Jul-15

–

Vanessa Eparaima

Council Deputy Chair/HR_Remuneration Board

Jul-15

–

Robert Gabel Bryan Hemi

Council/Audit & Risk/Investment Board Council Chair/HR_Remuneration Board/Health & Safety

Jul-15

–

Jul-15

–

Steve Ruru

Council/Audit & Risk/Health & Safety

Dec-16

–

Jon Stokes

Council/HR_Remuneration Board

Dec-16

–

Josh Wharehinga

Council/Academic Board

Jul-15

–

Bella Takiari-Brame

Council/Academic Board/Investment Board

May-19

–

Dec-15

–

Jul-08

–

Independent members of other committees Ainsleigh Cribb-Su'a

Academic Board

Wayne McLean

Audit & Risk Chair

Claudia Vidal

Audit & Risk

Sep-17

–

Christopher Tooley

Academic Board

Dec-15

–

Anaru Baynes

Academic Board

Sep-17

–

Jaydene Kana

Audit & Risk

Apr-19

–

Colin Magee

Audit & Risk

Apr-19

–

Previous council and committee members Sam Inglis

Investment Board

May-17

Oct-19

Gary Dyall

Audit & Risk

Aug-11

Aug-18

–

204

190

122

| Te Wānanga o Aotearoa

Notes to the financial statements | For the year ended 31 December 2019

21. Key kaimahi remuneration (continued) Key management kaimahi and governance remuneration: Group 2019 $'000

Ngā Tumu/ senior management Te Mana Whakahaere and sub-committees Total key management personnel remuneration

Other long-term benefits – KiwiSaver Total key management personnel remuneration

Parent 2019 $'000

Parent 2018 $'000

2,558

2,431

2,856

2,431

204

198

204

190

2,635

3,054

2,635

2,748

Group 2018 $'000

Parent 2019 $'000

Parent 2018 $'000

Group 2019 $'000

Short-term and kaimahi welfare benefits

Group 2018 $'000

2,569

2,971

2,569

2,673

2,635

3,054

2,635

2,748

Total remuneration includes any non-financial benefits provided to kaimahi, including motor vehicle, medical insurance, life insurance and income protection insurance. Number of key management kaimahi and governance members: Group 2019

Group 2018

Parent 2019

Parent 2018

Ngā Tumu/ senior management

Te Mana Whakahaere and sub-committees

Total

To detemine management kaimahi numbers for Ngā Tumu/Senior leadership, full time equivalents (FTE) is used. An FTE is based on kaimahi working a 37.5 hour week. To determine the number of governance members with respect to Te Mana Whakahaere and sub-committees, a member is recognised only once if they hold more than one position. The FTE concept is not practical to apply to governance roles.

Te Pūrongo 2019 |

123

Notes to the financial statements | For the year ended 31 December 2019

22. Contingencies Contingent liabilities Litigation Te Wānanga o Aotearoa has three legal claims outstanding as at the balance date (2018: one). The claims relate to disputes with internal and external parties. Te Wānanga o Aotearoa has not disclosed the details of these claims as it may seriously prejudice the position of Te Wānanga o Aotearoa with respect to dispute with the other internal and external parties. Tertiary Education Commission Investigation In 2018 the Tertiary Education Commission (TEC) commenced an investigation into five programmes delivered by Te Wānanga o Aotearoa in 2016 and 2017. At the time of executing these financial statements discussions between the parties to reach agreement is ongoing. To date, TEC has not provided to Te Wānanga a specific amount which they claim Te Wānanga may be liable for and as such the Council is unable to practically quantify any potential outcome of the investigation. Financial guarantee Te Wānanga o Aotearoa has no financial guarantees in place as at balance date (2018: nil). Contingent assets Te Wānanga o Aotearoa has no contingent assets as at balance date (2018: nil). 23. Capital commitments and operating leases Accounting policy (i) Operating leases Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as the lease revenue. Operating lease payments are recognised as an expense in the surplus or deficit on a straight line basis over the lease term. Lease incentives received are recognised in the surplus or deficit as a reduction of rental expense over the lease term. Capital commitments Capital commitments represent capital expenditure contracted for at balance date, but not yet incurred.

Capital commitments

Group 2019 $'000

Group 2018 $'000

Parent 2019 $'000

Parent 2018 $'000

Buildings

–

Total capital commitments

–

124

| Te WÄ nanga o Aotearoa

Notes to the financial statements | For the year ended 31 December 2019

23. Capital commitments and operating leases (continued) Operating leases as lessee The group has entered commercial leases on certain buildings where it is not in the best interest of the group to purchase these assets. These leases have a life of between 1 and 8 years with renewal terms included in the contracts. Renewals are at the option of the group. There are no restrictions placed upon the lessee by entering into these leases. Future minimum rentals payable under non-cancellable operating leases as at 31 December are as follows:

Group 2019 $'000

Group 2018 $'000

Parent 2019 $'000

Parent 2018 $'000

Within one year

3,983

4,569

3,983

3,834

After one year and not later than five years

5,995

7,155

5,995

6,936

391

1,476

391

1,476

10,369

13,200

10,369

12,246

Later than five years Total non-cancellable operating leases

Operating leases as lessor The group owns a number of buildings and has entered commercial leases where it is not in the best interest of the group to use these buildings for their operations. These leases have an average life of between one and two years with renewal terms included in the contracts. Renewals are at the option of the lessee. There are no restrictions placed upon the lessee by entering into these leases. Future minimum rentals receivable under non-cancellable operating leases as at 31 December are as follows:

Within one year

Group 2019 $'000

Group 2018 $'000

Parent 2019 $'000

Parent 2018 $'000

100

222

100

222

After one year and not later than five years

Total non-cancellable operating leases

129

276

129

276

No contingent rents have been recognised in the statement of comprehensive revenue and expense during the period.

Annual Report 2019 |

125

Notes to the financial statements | For the year ended 31 December 2019

24. Events after the balance date On March 11, 2020, the World Health Organization declared the outbreak of a coronavirus (COVID-19) a pandemic and two weeks later the New Zealand Government declared a State of National Emergency. As from 11.59pm Wednesday 25 March 2020 the country was placed at Alert Level 4, and in lockdown. As a result, economic uncertainties have arisen which are likely to negatively affect our operations and services. We describe below the possible effects that we have identified on Te Wānanga o Aotearoa as a result of the COVID-19 pandemic: The Tertiary Education Commission (TEC) has confirmed that Te Wānanga o Aotearoa will continue to receive monthly funding allocation as per the agreed 2020 payment schedule for Investment Plan funding and Fees-free, which is approximately $13.0m per month, allowing Te Wānanga o Aotearoa to continue operating business as normal. The Minister of Education also confirmed TEC will not be required to recover any Investment Plan funding because of either, poor Education Performance Indicators (EPIs), or under-delivery during the 2020 year, however all other standard funding conditions still apply. The health and safety of kaimahi, tauira and the wider whānau are paramount to Te Wānanga o Aotearoa, and as part of taking all necessary precautions to prevent the spread of COVID-19 all academic delivery was suspended from 23rd March 2020 until further notice. Plans are being developed for alternative academic delivery methods, including online learning and remote delivery. Additional costs will be incurred in pursuing and providing alternative academic delivery methods. The disruption and/or changes created by COVID-19 on our tauira may result in increased withdrawals from courses. This will decrease current and prospective income received from tauira fees and charges.

Te Wānanga o Aotearoa does not expect any impact on Government research funding as kaimahi are available to work from home and a plan has been submitted to TEC in regards to this funding. Te Wānanga o Aotearoa kaimahi are being fully paid throughout the initial 4-week lockdown period, and are available to work. An assessment of kaimahi needs to enable work from home, is being undertaken and may incur additional equipment and connectivity costs. There has been a material negative impact on our managed funds investment due to the decrease in value of marketable securities. Te Wānanga o Aotearoa has a long-term investment strategy, and expects the market to recovered over the duration of the investment. There is no immediate need to access the invested funds. Non-financial reporting should not be affected as kaimahi are able to work from home and information should be available as per normal. Te Wānanga o Aotearoa does not expect there to be any impact on borrowings. Due to TEC confirming continued 2020 Investment Plan funding, Te Wānanga o Aotearoa will be able to meet repayment commitments as and when they fall due. At this time it is difficult to determine the full effect of the COVID-19 pandemic, and there could be other matters that affect Te Wānanga o Aotearoa.

126

| Te WÄ nanga o Aotearoa

Notes to the financial statements | For the year ended 31 December 2019

25. Explanation of major variances against budget Accounting policy It should be noted the group and parent 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 WÄ nanga o Aotearoa group budget figures are as follows: Statement of comprehensive revenue and expense The group result was a deficit of ($0.0m) (0% of total revenue) which is $2.0m above budget. Government funding was $3.9m below budget. EFTS consumption was 764 below target due to low enrolments. SAC funding also included a favourable balance date adjustment of $1.0m to recognise revenue based on start of year enrolments rather than consumption. Tauira fees were $0.6m below budget due to tauira choosing to enrol in non-fee paying programmes combined with lower than budget EFTS consumption. Interest revenue was $1.1m above budget due to later than planned investment into funds management resulting in more interest revenue from term deposits. Other revenue was $0.5m below budget from lower than planned revenue from funds management due to investment delays offset by higher subcontracting revenue and miscellaneous income.

due to delays in information technology projects. Further savings were made in property rent and leases $0.4m, marketing $0.4m, printing and stationery $0.4m, travel $0.3m, exam fees $0.3m and small capital $0.2m. There were further $3.0m savings across most cost categories. Statement of financial position Tauira and other receivables were $3.4m higher 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 $14.2m higher than budget due to lower capital expenditure than planned ($7.3m less than cash flow budget). The budget also assumed a different timing of maturity of term deposits than actual. Non-current assets held for sale of $2.0m were not budgeted. Managed funds were $1.6m lower than budget due to later than planned investment into funds management. Property, plant and equipment is $9.7m higher than budget due to the impact of the revaluation on land and buildings, carried out at 31 December 2018. There was a revaluation uplift of $15.7m offset by lower capital expenditure. Intangible assets are $9.7m lower than budget due to deferment of information technology projects at the end of 2018 and in 2019 and resource capacity constraints to meet programme development budgets. Payables were $4.5m higher than budget as the budget assumed a higher accrued expenses balance at the end of 2018 that was carried forward through 2019 assumptions $1.5m. The budget also assumed no GST or other government funding would be payable at year-end, $2.7m and $0.4m respectively.

Kaimahi costs were $7.3m below budget because budget assumptions classified contract tutorial costs as kaimahi cost, whereas actual costs are classified as other expenses.

Kaimahi entitlements were $1.7m above budget as the later shutdown period resulted in less annual leave being taken.

Depreciation and amortisation was $0.8m above budget due to the impact of the 2018 property revaluation being higher than planned.

Government funding receipts were $5.3m below budget mainly due to EFTS consumption being 764 EFTS below target.

Other expenses were $0.6m above budget. Two major variances of $7.3m and $1.2m respectively from contract tutorial cost budget being classified as kaimahi costs and unplanned impairment costs. However, they are offset by favourable variances in most categories. Direct resource costs were $2.5m below budget due to lower EFTS consumption and less fee-paying tauira than planned. Consulting and licence fees were $1.1m below budget

Tauira fees receipts are $0.4m below budget from tauira choosing to enrol non-fee paying programmes combined with lower than plan EFTS consumption.

Statement of cash flows

Interest revenue received was $1.4m above budget due to later than planned investment into funds management resulting in more interest revenue from term deposits.

Te Pūrongo 2019 |

Notes to the financial statements | For the year ended 31 December 2019

Payments to kaimahi were $1.8m below budget due largely lower EFTS consumption than planned and delays in filling planned vacancies. Payments to suppliers are $2.9m below budget as cost savings were achieved across many cost categories. 25. Explanation of major variances against budget (continued) The acquisition of property, plant & equipment was $2.9m less than budget due to various property projects being cancelled or delayed. Software development was $1.7m less than budget due to several projects being cancelled or delayed or recclassified as operational. Programme development was $2.7m less than budget due to resource capacity constraints. Spend for the year was mainly on the Blended Learning Project. Purchases of managed fund investments of $40.0m and net reduction of cash investments of $29.0m were assumed to offset each in the budget. 26. Adoption of PBE IFRS 9 Financial Instruments In accordance with the transitional provisions of PBE IFRS 9, Te Wānanga o Aotearoa has elected not to restate the information for previous years to comply with PBE IFRS 9. Adjustments arising from the adoption of PBE IFRS 9 are recognised in opening equity at 1 January 2019. Accounting policies have been updated to comply with PBE IFRS 9. The main updates are: ›

Note 7 Receivables: This policy has been updated to reflect that the impairment of short-term receivables is now determined by applying an expected credit loss model.

›

Note 10 Other financial assets: The term deposits policy has been updated to explain that a loss allowance for expected credit losses is recognised only if the estimated loss allowance is not trivial.

On the date of initial application of PBE IFRS 9, being 1 January 2019, the classification of financial instruments under PBE IPSAS 29 and PBE IFRS 9 is as follows:

127

128

| Te WÄ nanga o Aotearoa

Notes to the financial statements | For the year ended 31 December 2019

26. Adoption of PBE IFRS 9 Financial Instruments (continued)

Measurement category

Original PBE IPSAS 29 category

New PBE IFRS 9 category

Carrying amount Closing balance 31 December 2018 (PBE IPSAS 29) $'000

Adoption of PBE IFRS 9 adjustment $'000

Opening balance 1 January 2019 (PBE IFRS 9) $'000

Parent Cash and cash equivalents

Loans and receivables

Amortised cost

9,770

Tauira and other receivables

Loans and receivables

Amortised cost

10,655

Term deposits

Loans and receivables

Amortised cost

65,000

FVTSD Held for trading

FVTSD Mandatory

85,425

Managed funds Total financial assets

Measurement category

Original PBE IPSAS 29 category

New PBE IFRS 9 category

Carrying amount Closing balance 31 December 2018 (PBE IPSAS 29) $'000

Adoption of PBE IFRS 9 adjustment $'000

Opening balance 1 January 2019 (PBE IFRS 9) $'000

Group Cash and cash equivalents

Loans and receivables

Amortised cost

10,089

Tauira and other receivables

Loans and receivables

Amortised cost

10,666

Term deposits

Loans and receivables

Amortised cost

67,165

FVTSD Held for trading

FVTSD Mandatory

87,920

Managed funds Total financial assets

FVTSD = Fair Value through Surplus or Deficit. The measurement categories and carrying amounts for financial liabilities have not changed between the closing 31 December 2018 and opening 1 January 2019 dates as a result of the transition to PBE IFRS 9.

Annual Report 2019 |

Notes to the financial statements | For the year ended 31 December 2019

27. Adoption of PBE IPSAS 34 PBE IPSAS 38

Te WÄ nanga o Aotearoa and group has adopted the new group financial statements standards, PBE IPSAS 34 to PBE IPSAS 38. Te WÄ nanga o Aotearoa and Group has adopted these standards by restating the comparative year information in accordance with their transitional provisions. There has been no financial effect from the adoption of the new standards as the group does not have any investments in joint ventures, therefore there are no adjustments to the financial statements to report.

129

130

| Te Wānanga o Aotearoa

ei Whakamaumahara In rememberance

E te iwi nui tonu tēnei ka tangi mō koutou kua ngaro ki te Hono-i-wairua. Mahue mai ko mātou te hunga ora ki muri nei auē atu ai, mōteatea atu ai, mapu atu ai. Nō reira moe mai rā kei aku rau kahurangi kei aku kuru tongarerewa. Waiho mai ko mātou hei pīkau ī ā koutou ōhākī hei oranga mō ngā whakatupuranga. E moe, okioki atu. To the multitudes who have departed this world, we mourn for you as you take your place where the spirits gather. In the world of the living – those of us who have been left behind – we wail in sorrow, we weep as we think of you, we heave a sigh of grief. But, sleep cherished ones, treasured ones. Leave for us your works that we may continue to fulfil your aspiration to help our future generations. Forever be at rest.

Te PÅ«rongo 2019 |

131