OR
D
T AN
EP
AL
LR
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ANNUA
WHITIR
EIA
NE
W
Vision
Whitireia will lead and illuminate its communities through tertiary education Ko te manu e kai i te miro, nĹ?na te ngahere, ko te manu e kai i te mÄ tauranga, nĹ?na te ao. The one who partakes of the flora and fauna that will be their domain. The one who engages in education, opportunities are boundless.
ANNUAL REPORT 2014
Values
Manaaki Encouraging cooperation in learning and resource sharing to promote individual confidence and group harmony through a positive and supportive learning environment
Identity Creating a learning environment where all people feel they belong because their uniqueness is valued and promoted
Equity Achieving more equal outcomes by providing significant learning and education success for those who have previously lacked such opportunities
Responsiveness Being flexible, creative and open to change, to better meet individual, industry and community learning needs
Success Being an effective organisation with a clear sense of purpose, striving for excellence and creating an environment where all have the right to succeed
Integrity Maintaining the highest ethical standards and permitting public scrutiny to ensure the maintenance of those standards
Accountability Monitoring and reporting on the maintenance of education quality standards and on the responsible use of public resources
04
ANNUAL REPORT 2014
Contents 06
Snapshot of 2014
08
Council Chair Report
10
Chief Executive Report
14
Combined Council
16
Executive
17
Combined Academic Board
18
Highlights
20
Profile
21
Educational Performance
22
Achievements
24
Student Services
31
Performance Commitments
41
Performance Measures Definitions
45
Financial Statements
46
Statement of Financial Performance
47
Statement of Comprehensive Income
47
Statement of Changes in Equity
48
Statement of Financial Position
49
Statement of Cash Flows
51
Notes to the Financial Statements
92
Independent Auditor’s Report
05
2014 SNAPSHOT OF THE WHITIREIA GROUP
7,752
2,750
CERTIFICATES, DIPLOMAS, DEGREES & POSTGRADUATE CERTIFICATES AWARDED
STUDENTS ENROLLED
1,594
EQUIVALENT
DIPLOMAS AWARDED
FULL-TIME STUDENTS
407 440
DEGREES AWARDED
122 PROGRAMMES OFFERED
111
4,471 47%
198
53%
CERTIFICATES AWARDED
GRADUATE CERTIFICATES/ DIPLOMAS AWARDED POSTGRADUATE CERTIFICATES AWARDED
LEVEL 8
LEV
EL 7
L6 LEVE
1,168 STUDENTS ENROLLED DIRECTLY FROM SECONDARY SCHOOL
06
4% 25%
7%
STUDENTS STUDY 64% LEVELS 1–5 LEVELS
252 ACADEMIC STAFF 147 EXECUTIVE AND SUPPORT STAFF
ANNUAL REPORT 2014
4%
14 OR MORE CREDITS AT ANY LEVEL NCEA LEVEL 1 OR SCHOOL CERTIFICATE
10%
NCEA LEVEL 2 OR SIXTH FORM CERTIFICATE
17%
NCEA LEVEL 3, BURSARY OR SCHOLARSHIP
11%
NO FORMAL SECONDARY SCHOOL QUALIFICATION
17% 2%
OTHER
27%
OVERSEAS QUALIFICATION
7%
UNIVERSITY ENTRANCE
5%
UNKNOWN
40 FOUNDATION
LOCATIONS
ENTERED THEIR STUDY WITH
AUCKLAND
CAMPUSES
7 4
HIGHEST SECONDARY SCHOOL QUALIFICATION STUDENTS
KĀPITI PORIRUA WELLINGTON
77%
23%
4 PRIVATE TRAINING
ESTABLISHMENTS
IN 6 LOCATIONS
INTERNATIONAL STUDENTS
DOMESTIC STUDENTS
YEAR 10 , 1 737
STUDENTS
PARTICIPATED IN TERTIARY EXPLORATION SESSIONS
STUDENT NUMBERS BY FACULTY ARTS
851
BUSINESS
SCHOLARSHIPS AWARDED
1,766
HEALTH
1,539
TRADES & SERVICES
OTHER
7%
IC
15%
MĀORI
15%
STUDENT ETHNICITY
41%
D LAN ZEA AN W E N ROPE EU
ASIAN
22%
9 SECONDARY SCHOOL LEAVER
FEE SCHOLARSHIPS AWARDED
WHITIREIA NEW ZEALAND LIMITED
AGE DEMOGRAPHIC OF STUDENTS
PAC IF
TE WANANGA MĀORI
2,129 515 1,034
15 OR LESS
65
1%
16-30
5,394
70%
31-45
1,520
19%
46 – 60
707
9%
61 PLUS
66
1%
1,121 STUDENTS FROM 37 SCHOOLS PARTICIPATED IN
STUDY EXPERIENCES
07
Council Chair Report
Tēnā koutou katoa I’m delighted to report on another excellent year for Whitireia Community Polytechnic (Whitireia) with great progress on many fronts. Outstanding Education Performance Indicators (EPIs), very healthy student numbers, very good financial performance as well as strong gains in the strategic partnership with Wellington Institute of Technology (WelTec), were keynote achievements. Our Council governs both Whitireia and WelTec in what is recognised as an historic strategic partnership to provide a more strategic and efficient vision of vocational tertiary education to the Wellington region. Since the inception of the Combined Council in 2012 with 12 members we have been reviewing membership annually and in 2014 settled on the current eight members. Departing councillors during 2014 were Aka Arthur, Peter Steel and Ron Wilkinson. Ron sadly passed away later in the year. Aka and Ron were steadfast supporters and friends of Whitireia who made a significant contribution to our progress and development over their many years on Council. New Councillors in 2014 included Hon Fran Wilde, Chair of the Wellington Regional Council, Dr Deborah Hume, General Manager of Passenger for KiwiRail, and Antony Royal, ICT consultant and son of the first Whitireia Chief Executive, Dr Turoa Royal. The strategic partnership between Whitireia and WelTec has been at the forefront of Council strategy in 2014 and is overtly manifested in our joint venture, Computer Power Plus, our shared services company W2 and in the shared property developments that are underway.
COUNCIL CHAIR HON ROGER SOWRY ONZM
08
These projects include a regional solution for building and construction training with the first phase due to open in early 2015 on WelTec’s site, followed by a significant
ANNUAL REPORT 2014
development in trades training on the Porirua campus of Whitireia. The largest joint project is the $80 million central Wellington campus that will support the ‘creative capital.’ This will build on the strategic acquisitions by Whitireia in the performing arts, radio training and film, augmented by the successful Whitireia music and visual arts programmes, the new campus will include creative technologies and other programmes from WelTec. The result will be a significant asset not just for Wellington but for New Zealand. The Combined Academic Board is one of the early changes Council implemented and this has continued to run successfully this year. External Chair Peter Coolbear has led this well and the Board now manages a single portfolio that includes programmes from both institutions and our Private Training Establishment (PTE) Whitireia New Zealand Limited. Whitireia exists to provide quality tertiary education and I was delighted to see student completions at Whitireia to be the highest in the sector. The teaching staff are highly respected for their supportive and inclusive approach to education and on behalf of Council I thank them for their dedication and professionalism. In 2014 Whitireia has begun delivering Masters programmes in Business and Information Technology and the Health Faculty has made significant progress in the development of a Masters in Professional Practice in partnership with WelTec. The Council was also been delighted to note the joint research symposium with researchers from both institutions sharing their applied and vocational research. Whitireia underwent the New Zealand Qualifications Authority External Evaluation and Review process in 2014, while the final reports are not yet completed, the experience has been largely positive and will further inform the continuous improvement processes that underpin the institution. This external affirmation is critical to maintaining our reputation, not just for domestic students, but also for recruitment of international students. Whitireia has strong international links with China, India and growing connections with Southeast Asia. Maintenance of ‘Category One’ status will enable Whitireia to continue to expand internationally.
Whitireia exists to provide quality tertiary education and I was delighted to see student completions at Whitireia to be the highest in the sector.
The Whitireia Strategic Plan was reviewed and the Investment Plan submitted to the Tertiary Education Commission (TEC). Continuing to maintain viability in the face of reducing government funding is proving to be a significant challenge. As a Council we are monitoring the institution closely and expect effective and efficient operation and management at all times. However, government policy continues to increase the number of no-fee places that must be offered and the ability of Whitireia to respond to the needs of our communities and assist in the economic growth of our region is increasingly challenging. Notwithstanding, Whitireia remains a highly regarded and successful institution with a very sound financial base and high quality outcomes. I wish to take this opportunity to acknowledge the leadership provided by Chief Executive, Don Campbell who will step down in June 2015 after nine years with Whitireia. Don has been very successful in growing the institution, not just in size, but in quality and reputation as well. During Don’s time, the Porirua campus has been transformed with a significant increase in new buildings and site improvements, the Kāpiti and Wellington campuses have been relocated and the Auckland campus completely refurbished. Improvements in academic achievement, staff capability and quality management have placed Whitireia in a very positive position for the future. The Council wishes Don well in his future endeavours. Nō reira, kei te mihi atu ki a koutou
09
Chief Executive Report
Kia ora, ngā mihi maioha ki a koutou katoa 2014 has been another year of significant achievement and change for Whitireia as evidenced by this Annual Report. This, my last Annual Report as Chief Executive of Whitireia, will focus on some of the highlights in a busy year which I trust you will enjoy. The achievements of our students, are of paramount importance and I’m pleased to note in the Tertiary Education Commission’s draft Education Performance Indicators for 2014 we are again leading New Zealand in course completions and in students retained in further study, and near the top of qualification completions. Also very competitive in a booming job market and strong economy is the recruitment and retention of students and this is reflected in our equivalent full-time student (EFTS) count. In the face of falling numbers elsewhere in the sector we have managed to hold ours remarkably well and I put this down to a number of factors. First we attract many students due to our outstanding reputation for quality and success as well as having top quality staff teaching, and support for them. Second we are well known in our community and beyond for approaches and methodologies which support all students and particularly those from multi-ethnic communities. And, third we have strong industry support for our graduates; we seek to provide them all with readily useable skills from their first day on the job.
CHIEF EXECUTIVE DON CAMPBELL
10
Many of these factors were noted in the draft report prepared by the New Zealand Qualifications Authority panel that undertook a regular External Evaluation and Review (EER) of Whitireia late in 2014. Many staff were
ANNUAL REPORT 2014
involved in preparation for this review and meeting with the panel. Although the final report is yet to be issued, the draft indicates strong recognition of the good work being done at Whitireia.
Our financial performance has also been strong in 2014 with a $1.3m surplus returned to allow for significant reinvestment in teaching equipment and campus developments over the next ten years.
Our financial performance has also been strong in 2014 with a $1.3m surplus returned to allow for significant reinvestment in teaching equipment and campus developments over the next ten years. Building projects completed in 2014 included an upgrade of our Wellington Dixon Street campus and enhancements to our Auckland campus including accommodating Computer Power Plus an information technology private training provider, our joint venture with WelTec. Our Auckland campus is geared for international students and continues to thrive despite the increasing presence of other Institutes of Technology and Polytechnics, supported providers and a great deal of competition around agent fees and student fees generally. We finished the year very strongly with a burgeoning third trimester intake which is expected to continue into 2015. This is related to strategic positioning both in international markets with a new office opened in Bangalore and by moving to Masters and other postgraduate qualifications for which there is an increasing international appetite. During 2014 we were accredited for a Masters in Information Technology and a Masters in Management both in the Faculty of Business and Information Technology. These programmes will continue to attract many students, particularly from India, who are looking for a postgraduate qualification. During 2015 we look forward to a new Masters in Professional Practice in the Health Faculty, developed in conjunction with WelTec as part of our strategic partnership. I was delighted to advise the appointment of Dr Margaret Southwick, QSM as our inaugural Emeritus Dean. Margaret was a long-time member of the Health Faculty and retired as Dean in 2011. The strategic partnership with WelTec has taken huge steps in 2014 with a Council decision to develop a Creative Arts Centre in Wellington’s Cuba Street, to cater for 1,000 students on 9,000m2 of floor space at a total development cost of $80m. This centre will draw
11
together Whitireia and WelTec programmes in an exciting and vibrant campus in the centre of creative Wellington. It will open in 2018.
The strategic partnership with WelTec has taken huge steps in 2014 with a Council decision to develop a Creative Arts Centre in Wellington’s Cuba Street, to cater for 1,000 students on 9,000m2 of floor space at a total development cost of $80m.
There was continued growth in teaching on each other’s campuses and in developing a comprehensive programme portfolio. We worked closely together on the Māori and Pacific Trades Training initiative as part of a consortium with industry and communities. We jointly hosted meetings of our combined industry advisory groups in creative arts and health as well as all industry advisory group chairs. Together with Victoria University, Whitireia and WelTec have collaborated to submit an ambitious proposal to establish an ICT Graduate School in Wellington which will significantly enhance both the number of ICT students and linkages with the ICT industry in the capital. The Whitireia and WelTec Shared Services Unit (known as W2) began full operations in 2014 providing both information technology and procurement services. Over one million dollars of procurement savings were achieved by the two partners in 2014 through the work of W2, while the foundations were also laid for an integrated IT system. We continued to develop partnerships with industry in particular with the McKays to Peka Peka (M2PP) roading project hosting “meet the employers” functions offering our students face-to-face opportunities to hear what employers were looking for and to recruit employees. Very good connections have been forged with the Transmission Gully project known as the Gateway Project with head contractor Leightons, and we are well placed to help provide the large workforce this project will need over the next five years. Our engagement with tangata whenua Ngāti Toa continued to strengthen in 2014 with Te Komiti Poutokomanawa meeting regularly to guide the relationship, and a meeting of the Combined Council held at Takapūwāhia Marae.
12
ANNUAL REPORT 2014
Meetings were also held with Pacific community leaders to discuss new initiatives to recruit and support Pacific students and develop more effective mechanisms for ongoing engagement with the Pacific community.
Work was also started in 2014 to review all our delivery to domestic students to ensure that teaching activity is as efficient as possible and financially viable in its own right.
The Wellington International Student project gained momentum in 2014 with a far sighted and ambitious industry led strategy developed, a steering group consisting of the leaders of Victoria University, Massey University, Chief Executives of Whitireia and WelTec, secondary school and PTE Principals convened to drive the strategy and strong support from key agencies including Education NZ. In 2015 an implementation plan will be rolled out to engage providers in tangible actions to significantly lift numbers of international students coming to Wellington. Work was also started in 2014 to review all our delivery to domestic students to ensure that teaching activity is as efficient as possible and financially viable in its own right, to avoid dependence on sometimes volatile international student markets. As Chief Executive I was greatly supported in 2014 by all staff and wish to acknowledge the significant contributions made by them. In particular the Executive Team of Pou Arahi Taku Parai, and Deputies Lawrence Arps, Chris Gosling and PA extraordinaire Valérie Bray and a very experienced and capable senior management team including Deans and Service Managers. I wish to acknowledge the Combined Council for their vision and in particular the leadership provided by the Chair Hon Roger Sowry. Departing Whitireia Councillors were Aka Arthur and Ron Wilkinson, both steadfast supporters and friends of Whitireia who made a huge contribution to our progress and development over a number of years. Āpiti hono, tātai hono Rātou kua wehe atu ki te pō Tātou e tū ana ki te ao Tēnā koutou, tēnā koutou, tēnā koutou katoa Noho ora mai
13
Combined Council
(L-R back) Hon Fran Wilde, CNZM, QSO, JP, Nancy McIntosh-Ward, Dr Kabini Sanga, Antony Royal, Peter Steel, Dr Deborah Hume (L-R front) Dr Linda Sissons, Hon Roger Sowry, ONZM (Chair), Vaughan Renner (Deputy Chair), Don Campbell
14
Hon Roger Sowry, ONZM
Vaughan Renner
Chair
Deputy Chair
Hon Roger Sowry, ONZM was a Member of Parliament from 1990 to 2005, firstly representing the Kāpiti electorate, then as a National list MP. Roger retired from Parliament in 2005 moving to become Chief Executive of Arthritis New Zealand. He is a member of the Electricity Authority. Roger is also a member of the Institute of Directors.
Vaughan Renner has an MBA, and science and engineering qualifications. He is self-employed and has strong commercial, strategic planning and IT skills. Vaughan has a background in governance (currently including Westlake Governance Limited, Business Central, BusinessNZ, and Standards New Zealand). He is a member of the Institute of Directors. He was appointed as Deputy Chair of The Open Polytechnic of New Zealand in 2014.
ANNUAL REPORT 2014
Nancy McIntosh-Ward
Peter Steel
Antony Royal
Nancy holds an MBA and is a Chartered Accountant. She is the former Chief Executive of the Karori Sanctuary Trust and has extensive financial, management, commercial, governance, tertiary education and marketing experience. She is currently a consultant specialising in strategy development to delivery. Nancy is a member of the Institute of Directors.
Peter Steel has an economic and engineering background having worked for over 30 years as a Consulting Engineer, as well as five years as a senior Engineering General Manager at KiwiRail. He has strong commercial, governance and management experience from his work activities as well as a period as President of the Wellington Regional Chamber of Commerce. Peter is currently Managing Director, New Zealand for SMEC New Zealand Limited, part of the international SMEC consultancy group.
Antony has strong community involvement and a background in the ICT industry. He holds a degree in Electrical and Electronics Engineering from Auckland University, has spent many years in the ICT industry and currently holds a number of governance positions including Director of 2 Degrees Mobile Limited, Director of Hautaki Limited, Trustee of Te Huarahi Tika Trust and Trustee on Ngāti Tamaterā Post Settlement Governance Entity.
Dr Kabini Sanga Dr Kabini Sanga is an Associate Professor of Education in the Faculty of Education at Victoria University of Wellington. He holds a Doctor of Philosophy from the University of Saskatchewan, Canada. He did his early university education at the University of South Pacific, Fiji. He has held a number of senior roles in education, including being the Director of the Institute of Education of the University of the South Pacific; the Director and Chief Executive Officer of the Solomon Islands College of Education, and the Chief Education Officer, Solomon Islands Ministry of Education. Dr Deborah Hume Dr Deborah Hume has led strategic riskmanagement consultancies that worked with public and private organisations and is now responsible for Wellington’s metro train operations (Tranz Metro) and New Zealand’s long-distance passenger train services (Scenic Journeys). She has a PhD in Biology from Queen’s University in Canada, and is a member of the Institute of Directors and Global Women.
Hon Fran Wilde, CNZM, QSO, JP Hon Fran Wilde is Chair of the Greater Wellington Regional Council and was previously an MP and Cabinet Minister, as well as Mayor of Wellington. In business she was CEO of the New Zealand Trade and Development Board and Chair and/or Director on the boards of a number of listed, state owned and privately held companies. Fran has also run her own consultancy business and has played a key role in Wellington and national philanthropic and arts organisations. She is a Chartered Fellow of the Institute of Directors and holds an honorary doctorate in Law from Victoria University of Wellington from which she earlier graduated with a BA degree.
He also chairs Te Mana o Kupe Trust which was recently established to support the cluster of 13 schools in Porirua East, whose focus is to deliver greater educational achievement by engaging Tamariki, teachers and whanau through the use of technology. Previous roles have included Global Infrastructure Manager and Web Initiatives Manager for the New Zealand Dairy Board (Fonterra), implementation of financial management systems for a number of different government departments and positions on a number of advisory boards. Antony has been involved in many projects that involve technology and better educational outcomes, and has worked on several projects funded by the Tertiary Education Commission.
15
Executive Don Campbell
Chief Executive MBS (Hons), BA (Economics), Dip Tchg, FNZIM Don Campbell has over 30 years’ experience in the ITP sector, 15 of these as Chief Executive of Whitireia Community Polytechnic from 2006, and previously Tai Poutini Polytechnic from 2000 to 2006. Don is currently a member of the Education New Zealand Stakeholder Advisory Group and a Fellow of the New Zealand Institute of Management. He has served on the Board of the Institutes of Technology and Polytechnics of New Zealand, the Business Central Board and the Board of Polytechnics International New Zealand (PINZ). Lawrence Arps
Deputy Chief Executive (Academic) MEd Admin, BEd Lawrence Arps has been in the tertiary sector since 1994 when he began tutoring audio engineering and music. In 2000 he was appointed Academic Manager of Tai Poutini Polytechnic and led quality development during the institutions period of rapid growth and diversification. Lawrence was made Deputy Chief Executive in 2008. In 2010 he came to Whitireia as Acting Deputy Chief Executive (Operations) and oversaw the refurbishment of the Auckland campus and the redevelopment of the Porirua campus including plan and design of the
16
first new buildings. In 2012 he was appointed as Deputy Chief Executive (Academic). Joining the Artena Society Board in 2011, he was given the role of Chair in 2012 and has provided leadership in the refocusing of the Artena student management system and in the recent sale of Student Management Software Solutions Limited to AdaptIT. Chris Gosling
Deputy Chief Executive (Operations) BA, CA Chris Gosling is Deputy Chief Executive (Operations) and has responsibility for the full range of corporate support functions at Whitireia including finance, human resources, international, marketing and enrolments, facilities and shared services. He has been at Whitireia for three years. For the five years previous, he worked in the Middle East setting up and operating a polytechnic in the Kingdom of Bahrain. Chris is the former Corporate Services Director at the Nelson Marlborough Institute of Technology (NMIT). This role followed several years in finance and senior management roles in local government in New Zealand. He is a Chartered Accountant with membership of Chartered Accountants Australia and New Zealand.
Taku Parai
BA (First Class Hons) Taku Parai is of Ngāti Toa, Ngāti Raukawa, Te Atiawa and Ngāti Tahu descent. He is the Māori Service Manager for Compass Health and is the Pou Arahi for Whitireia. He is the current Chairman of the Te Rūnanga O Ngāti Toa Rangatira, Chairman of Whakapuaka 1B Block and Cultural Advisor to the Porirua City Council.
ANNUAL REPORT 2014
Combined Academic Board Dr Peter Coolbear
Chairperson
Whitireia
WelTec
Don Campbell
Dr Linda Sissons
Chief Executive
Chief Executive
Lawrence Arps
Alan Cadwallader
Deputy Chief Executive (Academic)
Academic Director
Helen Gardiner
Julia Hennessy
Dean, Faculty of Trades and Services
Executive Dean
Gerry McCullough
Student Representative
Dean, Faculty of Business Willis Katene
Director, Te Manawa & Dean Te Wānanga Māori
The Combined Academic Board now manages a single portfolio that includes programmes from both institutions.
Dylan Mama
Hinemoa Priest
Kaiwhakahaere Māori Sue Mills
Faculty Academic Manager
17
Highlights WHITIREIA OPENED A SECOND OFFICE IN BANGALORE, INDIA
COMBINED GRADUATION CEREMONY HELD IN MARCH
WITH OVER 500 STUDENTS GRADUATING WITH A DIPLOMA,
DEGREE OR POSTGRADUATE QUALIFICATION
GAINED A WORLD BANK CONTRACT FOR THE TRAINING OF
LOCATION OF CREATIVE ARTS
CENTRE IN WELLINGTON
ANNOUNCED ICT GRADUATE SCHOOL PARTNERSHIP WITH VICTORIA UNIVERSITY & WELTEC
THE FACULTY
OF HEALTH
WERE A
FINALIST AT THE DOMINION POST
GOLD AWARDS,
WELLINGTON
EARLY CHILDHOOD EDUCATION
DEVELOPING STANDARDISED
IT STUDENTS DEVELOP
TE REO MĀORI LEARNING APP
IN PARTNERSHIP WITH NGĀTI TOA FOR THE TAMARIKI OF PUNA REO
SIMULATION SCENARIOS ACCREDITATION WAS GAINED
FOR THE DELIVERY OF THE MASTER OF MANAGEMENT
WHITIREIA IS RANKED
NUMBER ONE
IN COURSE COMPLETION IN THE PERFORMANCE OF
TERTIARY EDUCATION ORGANISATIONS REPORT FOR 2013
WITH PACIFIC POPULATIONS
IS RECOGNISED BY A MINISTRY OF EDUCATION CONTRACT FOR THE DEVELOPMENT OF PASIFIKA COMPETENCY FRAMEWORK
FOR TEACHERS OF PACIFIC LEARNERS NINE SECONDARY SCHOOL FEE LEAVER SCHOLARSHIPS WERE AWARDED TO STUDENTS IN THE GREATER WELLINGTON REGION
DR MARGARET SOUTHWICK
PERFORMING ARTS STUDENTS
FILM SCHOOL STUDENT FILMS
TAIWAN
ARE LEAD RESEARCHERS IN A NATIONAL PROJECT
IN INDONESIA FUNDED BY NETS
WHITIREIA EXPERTISE IN WORKING
PERFORMED AND TOURED
NURSING ACADEMIC TEAM
APPOINTED INAUGURAL
PERFORMING ARTS PROGRAMME LEADER,
TUAINE ROBATI
SELECTED AS PACIFIC DANCE
ARTIST IN RESIDENCE FOR 2014
WHITIREIA HOST MENTAL HEALTH
AND ADDICTION NURSE
EMERITUS DEAN EDUCATORS FORUM SELECTED FOR INTERNATIONAL FILM FESTIVALS & NEW ZEALAND
INTERNATIONAL FILM FESTIVAL
BACHELOR OF NURSING PACIFIC PROGRAMME CELEBRATES ITS
10TH ANNIVERSARY
KEY INDUSTRY RELATIONSHIP FORMED WITH M2PP KAPITI EXPRESSWAY ALLIANCE
18
ANNUAL REPORT 2014
Student life at Whitireia
19
Profile The Whitireia group provided quality education to a total of 4,471 equivalent full-time students (EFTS) or 7,752 individual students in 2014. Whitireia Community Polytechnic delivered 3,943 EFTS or 6,718 students in 2014. The makeup of the EFTS provision is as follows:
Whitireia group EFTS Whitireia New Zealand Limited 12%
Whitireia Community Polytechnic 88%
SAC funded EFTS including Levels 1-2, MPTT*
65
%
*Māori and Pacific Trades Training
International EFTS
27
%
Youth Guarantee EFTS
5
%
Other funded EFTS
3
%
20
Whitireia Community Polytechnic EFTS SAC Levels 3-8 54% SAC non-contestable Levels 1-2 5% SAC contestable Levels 1-2 5% Māori Pacific Trades Training 2% Youth Guarantee 5% Other funding 3%
International 27%
Student Achievement Component (SAC) funded EFTS changed in 2013 with Levels 1-2 separated into new funding pools – contestable and noncontestable. Whitireia Community Polytechnic was successful in being awarded EFTS in the 2013-2014 Levels 1-2 contestable funding pool. In 2014 this made up 5% of the total EFTS delivery by the Polytechnic. Whitireia New Zealand Limited contributed 528 EFTS or 1,034 students within four operating divisions: Computer Power Plus, New Zealand Film and Television School, New Zealand Radio Training School and a range of performing arts programmes.
ANNUAL REPORT 2014
Educational Performance The main goal of the Whitireia Strategic Plan is ‘to improve educational outcomes and success for students’. As this Annual Report shows, Whitireia successfully achieved this goal in 2014. The following commentary provides more information about important aspects of the Polytechnic’s overall performance.
Student participation In 2014 the Whitireia group provided education opportunities to 7,752 individual students and 4,471 EFTS. These students studied at campuses in Porirua, Wellington, Kāpiti, Auckland and Christchurch. The Whitireia group has a diverse student population, from many ethnic groups and nationalities. In summary:
New Zealand European
41
%
Māori
15
%
Pacific
15
%
Asian
22
%
Other students
7
%
International students The Whitireia group has a high proportion of international students. In 2014, there were 1,118 EFTS, this made up 25% of the total. These students studied at Whitireia Community Polytechnic (1,054 EFTS) and Whitireia New Zealand Limited (64 EFTS). Whitireia provides a wide range of student support, pastoral care and English Language courses for international students, contributing to high levels of success. In 2014, full fee paying international students at Whitireia Community Polytechnic achieved a successful course completion rate of 82%.
Youth Guarantee students In 2014, the Tertiary Education Commission (TEC) allocated 205 Youth Guarantee places to Whitireia. The purpose of this TEC funded provision is to enable young people, (where the school environment was unable to meet their needs), in to tertiary education to gain an entry level vocational qualification. The benefits for this targeted group are they gain work ready skills that can lead to apprenticeships without having any education debt. Youth Guarantee achieved successful course completion results of 76% and qualification completion results of 69% a great improvement on 2013.
21
Achievements Community engagement In 2014 the Combined Council ran several industry consultation events targeting the health sector and the creative industries sector. These meetings provided vital industry input into the establishment of Joint Centres of Excellence that Whitireia are establishing with WelTec. These events included industry advisory group members from Whitireia and WelTec, and allowed Council members, Whitireia management, faculty staff and industry to work directly together. In addition to a very active Schools Liaison team and Pacific Community Liaison team, Whitireia has established a strategic consultation committee, Te Komiti Poutokomanawa, with its partner iwi, Ngﾄ》i Toa Rangatira. Whitireia staff are also actively involved in professional and industry organisations, such as the New Zealand Nursing Council. We provide support to enable the Learning Shop to meet the needs of youth in the Porirua area. All these links assist Whitireia to provide tertiary education that meets the needs of students, families, employers, industry and communities.
22
Whitireia strives to meet the needs of students, community, employers, industry and government expectations. The Tertiary Education Commission publish course and qualification completion performance results with rankings of the tertiary sector. Around July / August 2015 the 2014 results will be published. The draft results for Levels 3-8 as at 2 February 2015 continue to highlight Whitireia is a high performing polytechnic.
We are highly encouraged by the provisional draft rankings and look forward to receiving the finalised results later in 2015.
ANNUAL REPORT 2014
SAC course completion
Meeting the needs of students and graduates
Course completion result
TEC ITP ranking
2014 provisional results for Levels 3-8 as at 2 February 2015
84%
1st
2013
84%
1st
2012
83%
3rd
2011
80%
7th
2010
76%
10th
Qualification completion result
TEC ITP ranking
2014 provisional results for Levels 3-8 as at 2 February 2015
76%
3rd
2013
82%
3rd
2012
78%
3rd
2011
68%
5th
2010
65%
1st
Year
SAC qualification completion Year
Whitireia annually surveys students and graduates to gain their feedback on meeting their needs while studying. In the 2014 Student Satisfaction Survey, 85% of the students surveyed expressed an overall satisfaction with their programme of study. The 2014 Graduate Survey highlighted that 96% of graduates, if given the opportunity, would study at Whitireia again.
Prior to 2013 the published rankings were on Levels 1-8 SAC provision
23
Student Services In 2014 Whitireia based the compulsory student services fee on the provision of key services that supported students success and wellbeing. The fee was set at $144 per full-time equivalent student. The fee was not charged to non-fee paying students such as Youth Guarantee or students under 25 enrolling in Level 1-2 programmes.
Partnership with the students Whitireia no longer has a student association as a result of voluntary student unionism so, to ensure that students have a voice in the many aspects of student learning and life at Whitireia, a system of student representatives has been developed. This system is coordinated by a Whitireia staff member who supports and develops all the activities and provides first level advocacy for the students. During 2014 a consultation paper on the proposed allocation and expenditure was developed. This paper was presented and discussed in focus group meetings with the students across all campuses. The feedback from these meetings was included in the final allocation of the funds. As requested by students, more information on the use of funds is to be reported to student meetings on a quarterly basis.
24
Whitireia no longer has a student association as a result of voluntary student unionism so, to ensure that students have a voice in the many aspects of student learning and life at Whitireia, a system of student representatives has been developed.
ANNUAL REPORT 2014
Service provision Advocacy and legal advice First level advocacy is provided to students through the Student Hub. This service provides confidential advice and support on matters of academic appeals, harassment, complaints and information on Whitireia policies. Where more independent advice is required Whitireia contracts the New Zealand Union of Student Associations to provide legal and advocacy support. Careers information and guidance Whitireia is committed to ensuring students are assisted in making career development choices from the initial enquiry to alumni. The Whitireia Career Consultant works with students through their study lifecycle with support and advice on study choice and career pathways. Counselling services As Whitireia has a number of campuses and many students studying at a distance, it was important that counselling services were available to help students with any personal or academic issues that may impact on their success. To achieve this, Whitireia has contracted a nationwide provider to provide free and confidential counselling services to all students regardless of location. In 2014 a new service was trialled to ensure that the needs of MÄ ori, Pacific and young students were being meet.
Health services Whitireia has a health service that provides primary healthcare to students through doctor and nursing services. The aim of the service is to promote wellness and provide advice on issues such as sexual health, smoking cessation and eating well. Additional services such as physiotherapy are also provided. Sports, recreation and cultural activities A range of events, activities and sports is supported through the Student Hub in partnership with students. A number of sports teams participate in competitions in the local community and weekly lunchtime sports events are run on campus. Activities are regularly scheduled that are designed to inform and support students. These include orientation events, wellness activities and fun events to connect students to their place of learning. Student common rooms and recreational equipment such as pool tables and table tennis tables, televisions and spaces to relax are provided across all campuses. Clubs and societies The Student Hub promotes and supports any social, academic and cultural clubs in partnership with students. In 2014 this included a mediation group, cultural groups and student leadership activities and meetings.
Finance advice and support Providing students with advice on how to manage their limited budgets while they are studying is a focus of the financial advice service. This service also provides assistance to students who have financial barriers that impact on their learning and ability to succeed.
25
”The Bachelor of Nursing Māori has empowered me with the skills and knowledge to make a positive contribution to the health and wellbeing of Māori/whanau.” LESLEY-MAY PAORA BACHELOR OF NURSING MĀORI
26
ANNUAL REPORT 2014
“I am absolutely loving Whitireia. I have made the right choice and chosen the right career path. The opportunities here make studying easy and enjoyable; tutors are extremely helpful. I look forward to graduating and becoming an early childhood teacher.” JESSIKA HAWTHORNE BACHELOR OF TEACHING (EARLY CHILDHOOD EDUCATION)
Colour
27
Student life at Whitireia
28
ANNUAL REPORT 2014
29
“Whitireia is allowing me to follow the ancient art form of whakairo; an art form that ties us to our culture.” JORDAN TEMARAMA CERTIFICATE IN MASTERCRAFT
30
ANNUAL REPORT 2014
Performance Commitments Educational performance Whitireia has established objectives and performance indicators to measure the Polytechnic’s performance against its strategic objectives and government priorities for tertiary education. These objectives are aligned with the Whitireia Community Polytechnic Investment Plan for 2013-2015 as agreed with the Tertiary Education Commission in 2012. 2014 is the last year for objectives and performance indicators in the Investment Plan 2013-2015.
TEC information from TEC Workspace as at 1 February 2015 has been used for student performance regardless of funding type.
31
Strategy
Improve educational outcomes and success for students 2014 success measures
Objectives
Additional information
Target
Actual
All students all Levels
83%
83%
All students Levels 1-3
77%
77%
All students Level 4 and above
84%
85%
SAC students all Levels
83%
84%
Target achieved
SAC students Levels 1-3
76%
78%
Target achieved
SAC students Level 4 and above
85%
84%
Target not achieved
SAC Māori all Levels
75%
80%
All targets achieved
SAC Māori Levels 1-3
69%
75%
SAC Māori Level 4 and above
78%
83%
SAC Pacific all Levels
79%
81%
SAC Pacific Levels 1-3
76%
81%
SAC Pacific Level 4 and above
79%
81%
SAC under 25 all Levels
73%
82%
Target achieved
SAC under 25 Levels 1-3
75%
74%
Target not achieved
SAC under 25 Level 4 and above
70%
85%
Target achieved
Course completion All students regardless of funding All targets achieved
SAC funded students
SAC Māori students
SAC Pacific students All targets achieved
SAC under 25 students
2010-2014 SAC priority course completion 2010-2014 SACgroup Priority Group Course Completion 100
2014
80
2013
60
2012 2011
40
2010
20 0
32
Māori
Pacific
Under 25
ANNUAL REPORT 2014
Strategy
Improve educational outcomes and success for students 2014 success measures
Objectives
Additional information
Target
Actual
75%
76%
Target achieved
83%
82%
International students Levels 1-3
77%
63%
International students Level 4 and above
84%
83%
The Levels 1-3 result is impacted by very low numbers (typically less than 2 EFTS per programme) causing individual student outcomes to adversely affect the statistics.
Course completion Youth Guarantee students Youth Guarantee students International students International students all Levels
This is compounded in the Certificate in English Language where it is common for students to leave after only partial completion, in order to take up places on other programmes.
2010-2014 Youth Guarantee course completion 2010-2014 Youth Guarantee Course Completion 100 80 60 40 20 0
2010
2011
2012
2013
2014
33
Strategy
Improve educational outcomes and success for students 2014 success measures
Objectives
Target
Actual
Additional information
Qualification All students regardless of funding All students all Levels
76%
77%
All students Levels 1-3
75%
72%
A strong focus on qualification completion has continued to produce positive outcomes.
All students Level 4 and above
76%
78%
SAC students all Levels
76%
76%
Target achieved
SAC students Levels 1-3
75%
74%
Target not achieved
SAC students Level 4 and above
76%
77%
Target achieved
SAC Māori all Levels
66%
66%
SAC Māori Levels 1-3
65%
73%
SAC Māori Level 4 and above
67%
62%
Continuation of the Māori strategy has produced positive outcomes. Level 4 pass rate is expected to rise as qualification completion results are in the process of being finalised.
72%
75%
SAC Pacific Level 1-3
73%
80%
SAC Pacific Level 4 and above
70%
73%
SAC under 25 all Levels
73%
66%
SAC under 25 Levels 1-3
75%
71%
SAC under 25 Level 4 and above
70%
65%
SAC funded students
SAC Māori students
SAC Pacific students SAC Pacific all Levels
Continuation of the Pacific strategy has produced positive outcomes. Level 4 pass rate is expected to rise as qualification completion results are in the process of being finalised.
SAC under 25 students Continuation of the Youth strategy has produced positive outcomes. Level 4 pass rate is expected to rise as qualification completion results are in the process of being finalised.
2010-2014 SAC priority group qualification completion 2010-2014 SAC Priority Group Qualification Completion 100
2014
80
2013
60
2012 2011
40
2010
20 0
34
Māori
Pacific
Under 25
ANNUAL REPORT 2014
Strategy
Improve educational outcomes and success for students 2014 success measures
Objectives
Additional information
Target
Actual
75%
69%
Target not achieved. This cohort includes students with significant academic challenges. The result is an improvement on 2013 (65%).
International students all Levels
84%
79%
International students Levels 1-3
91%
73%
International students Level 4 and above
81%
80%
The Levels 1-3 result is impacted by very low numbers (typically less than 2 EFTS per programme) causing individual student outcomes to adversely affect the statistics.
Qualification completion Youth Guarantee students Youth Guarantee students
International students
This is compounded in the Certificate in English Language where it is common for students to leave after only partial completion in order to take up places on other programmes.
2010-2014 Youth Youth Guarantee qualification completion 2010-2014 Guarantee Qualification Completion 100 80 60 40 20 0
2010
2011
2012
2013
2014
35
Strategy Objectives
Improve educational outcomes and success for students 2014 success measures
Additional information
Target
Actual
66%
76%
Target achieved
32%
29%
Target not achieved
SAC student retention SAC students all Levels SAC student progression SAC students Levels 1-3
Level 1 46% Level 2 35% Level 3 20% Due to graduates in Level 3 programmes moving into an apprenticeship or employment.
Strategy Objectives
Improve educational participation 2014 success measures Target
Actual
Additional information
Participation of TEC priority groups Participation within SAC funding SAC Māori EFTS SAC Māori all Levels
24%
23%
Target not achieved
SAC Māori Levels 1-3
8%
8%
Target achieved
SAC Māori Level 4 and above
16%
15%
Target not achieved
SAC Pacific all Levels
21%
18%
Target not achieved
SAC Pacific Levels 1-3
7%
5%
Target not achieved
SAC Pacific Level 4 and above
14%
13%
Target not achieved
SAC Under 25 all Levels
54%
49%
Target not achieved
SAC Under 25 Levels 1-3
15%
13%
Target not achieved
SAC Under 25 Level 4 and above
39%
36%
Target not achieved
31%
26%
Target not achieved
SAC Pacific EFTS
SAC Under 25 EFTS
International EFTS within total EFTS International EFTS all Levels
36
ANNUAL REPORT 2014
Strategy
Improve student satisfaction 2014 success measures
Objectives
Additional information
Target
Actual
Satisfaction with programme of study
88%
85%
Target not achieved
Satisfaction with services provided
81%
79%
Target not achieved The Graduand survey was conducted for the first time in 2013 as part of the application to graduate process which occurs within one to three months of completing the programme of study. This had an adverse impact on the gain employment in related field of study indicator due to most graduates having just started to seek employment when they participated in the survey.
Satisfaction Student satisfaction
Graduate Recommend programme of study
95%
98%
Willingness to study at Whitireia again
92%
96%
Gain employment in related field of study
70%
43%
2010-20142010-2014 student programme Student satisfaction Programme Satisfaction 100 80 60 40 20 0
2010
2011
2012
2013
2014
37
Strategy
TEC literacy and numeracy progress 2014 success measures
Objectives
Target
Actual
No target was set for 2014
Not applicable
Literacy and numeracy progress The proportion of EFTS assessed as requiring additional literacy and numeracy, who are enrolled in Level 1-3 provision, and make literacy and numeracy progress, as measured by the Literacy and Numeracy for Adults Assessment Tool (TEC have advised they are re-working this KPI after request for calculation methodology in order to set the target)
Strategy
Achieve financial strength and sustainability 2014 success measures
Objectives
Additional information
Target
Actual
3%
2.4%
Revenue was $1.7m below budget due to lower student numbers.
1:19
1:17
Target not achieved due to student enrolments lower than expected for 2014.
Financial strength Financial surplus % Financial sustainability Teaching FTE to EFTS ratio
2010-2014 financial surplus /(deficit) 2010-2014 Financial surplus 7% 6% 5% 4% 3% 2% 1% 0% -1%
38
2010
2011
2012
2013
2014
ANNUAL REPORT 2014
Strategy Objectives
Develop infrastructure and systems to support student achievement 2014 success measures Target
Actual
Shared services
Stage two of Shared Services strategy implemented
In progress. ICT and procurement services provided by W2 Shared Services unit. Transition of facilities and property management to shared services initiated.
Staff professional development
80% of staff engaged in new framework
Not achieved. Full roll out of framework delayed due to staffing and resource limits.
Shared pathways
Develop shared pathways with WelTec for at least four qualifications
Sub degree pathways on hold due to delays in the NZQA TROQ Process. Shared Masters programme due to commence in 2015.
Joint approach to NCEA vocational pathways
Implement joint approach to supporting the NCEA vocational pathways at Levels 1-3
Achieved. Vocational pathways identified and promoted.
Student transition between Whitireia and WelTec
Implement recommendations from review to remove barriers to students transitioning between Whitireia and WelTec
In progress. Shared policy environment completed. Procedures under review.
Support student achievement
Collaboration, pathways and transitions
39
Strategy
Develop infrastructure and systems to support student achievement 2014 success measures
Objectives
Target
Actual
Contribute to an increase in the numbers of Year 11 Pacific students engaged in NCEA Level 1 science in collaboration with secondary schools
An increase of 10 Pacific student enrolments in NCEA Level 1 science at each of the four participating schools
Pacific science project did not run in 2014.
Contribute to growing Pacific students secondary to tertiary pathways through STEM subjects
Implement recommendations over specified timeframe. Progress report
Pacific science project did not run in 2013 and 2014. No progress report.
Campus redevelopment: completion of stage one
Building 2 construction underway
Not achieved. Building two deferred due to approval of new capital works programme prioritising Wellington creative arts development.
Strategy
Develop infrastructure and systems to support student achievement
Pacific Science project
Provide modern, fit for purpose facilities
2014 success measures Objectives
Target
Actual
Recommendations from review implemented
Review on hold pending completion of Joint QMS.
Industry engagement Industry engagement with Whitireia
Disruptive business model training workshops in Wellington region
Capstone projects
5
The disruptive business models were dependant on the voucher scheme operated by Grow Wellington. No vouchers were issued by Grow Wellington for Whitireia.
25
The introduction of the postgraduate portfolio has lifted the overall engagement level of the capstone projects. A total of 28 projects were completed, comprising 12 undergraduate, 13 postgraduate diploma and 3 masters research projects.
Research Maintain research culture
40
2013 research report published
Report published
ANNUAL REPORT 2014
Performance Measures Definitions Performance measures that the Council considers will enable the preparation of a Statement of Service Performance for the purposed of Section 159YD.2 (a) of the Education Act 1989 are listed below. Students enrolled Usually expressed as equivalent full-time students (EFTS) for the polytechnic Students with SAC EFTS Students recorded in the SDR with funding codes 01, 25, 26, 27, 28 and 29 Māori students Students at the time of enrolment who have identified themselves as Māori Pacific students Students at the time of enrolment who have identified themselves as Pacific Students under 25 years Students who are aged 24 years or younger on 1 July 2014 Participation This measures the proportion of EFTS delivered for target groups of students in a calendar year Formula: Total EFTS delivered for a group of interest (i.e. Māori) in 2014 X 100 Total EFTS delivered in 2014 Successful course completion rate Successful course completion relates to courses, papers or modules that lead to a recognised qualification. The rate is an EFTS weighted metric that takes into account the workload of the course and EFTS delivered during the total period of the course enrolment. Formula: EFTS delivered for the total number of successfully completed course enrolments ending in 2014 X 100 EFTS delivered for the total number of course enrolments ending in 2014
41
Qualification completion rate A qualification is completed when a student successfully completes all the requirements for the award of a qualification, such as a degree, diploma or certificate. The rate is an EFTS weighted metric that takes into account the relative size of the different qualifications. The 2014 qualification completion figures given in this report were those at 31 January 2015. These figures are still provisional and are likely to increase as more awards are validated and recorded. Formula: (Sum of qualification completions in 2014 multiplied by EFTS value of the qualification) X 100 EFTS delivered for the total number of course enrolments ending in 2014 Student retention rate This measure is based on the proportion of individual students (not EFTS) enrolled in one year that either reenrol in any course in the following year or successfully complete their qualification. Formula: Students re-enrolled in 2014 or completed in 2013 or 2014 X 100 Students with some portion of an enrolment in 2013 Student progression This measures the progression of students who complete a qualification and move on within 12 months to pursue a qualification at a higher level either at Whitireia or another tertiary education provider in New Zealand. This data is supplied by TEC and not finalised until TEC receives the April 2015 SDR from the tertiary education providers in May 2015. Whitireia expects TEC to provide finalised data in July 2015. For Levels 1-3, the indicator measures student re-enrolment at Levels 4 or above e.g.: Formula: Number of students enrolled at a higher qualification level within 12 months following the qualification completion X 100 Number of students completing a qualification at Levels 1-3 in previous year Levels of study This refers to Levels 1-10 on the National Qualification Framework. For more information visit NZQA website: http://www.nzqa.govt.nz/studying-in-new-zealand/nzqf/nzqf-levels
42
ANNUAL REPORT 2014
Percentage of income from non-government sources Formula: Income from total non-government sources X 100 Total income received Surplus percentage Formula: Total revenue X 100 Total operational expenses Student Satisfaction Survey The 2014 survey delivery was online using www.questionpro.com between 15 October and 5 November 2014. Students were encouraged to participate with links on Moodle, Facebook and 3,599 received an email invite with a link to participate resulting in 1,069 students participating in the online based survey. Results were imported into a database, analysed and reported back to Faculty Deans, Programme Managers and the Executive Team. Graduate Satisfaction Survey The 2014 Graduand survey delivery was part of the Application to Graduate form which contained the three key questions. The Business Information Centre received 842 completed Graduand survey forms for 2014. Responses were entered into a database from the Application to Graduate forms, analysed and reported back to Faculty Deans, Programme Managers and the Executive Team in the first quarter of 2015. Teaching staff to student ratio Staff members that are identified as teaching staff are expressed as full-time equivalent employees (FTE) to all EFTS reported in the December 2014 SDR. EFTS FTE
43
44
ANNUAL REPORT 2014
Financial Statements The accompanying accounting policies and notes form an integral part of these financial statements
45
Financial Statements Statement of Financial Performance for the year ended 31 December 2014 Group
Note Actual 2014 $'000
Polytechnic
Budget 2014 $'000
Actual 2013 $'000
Actual 2014 $'000
Actual 2013 $'000
Revenue Government grants
2
29,714
29,879
29,677
25,969
26,228
Tuition fees
2
26,470
29,053
26,768
23,075
23,197
335
184
237
257
169
2
4,868
4,286
4,187
6,833
6,114
9
0
0
9
0
309
0
41
309
41
61,705
63,402
60,910
56,452
55,749
3
30,700
31,225
32,286
30,699
32,286
Depreciation expenses
11
3,915
4,628
4,159
3,920
4,164
Amortisation expenses
12
443
289
443
289
Interest Revenue from other operating activities Gain on sale of investments Change in fair value of investment property
13
Total revenue Operating expense Personnel costs
Course related expenses
2,658
2,787
2,689
2,658
2,674
Occupancy costs
5,198
5,149
5,093
5,198
5,093
Project expenditure
8,294
8,150
8,087
3,300
3,142
433
362
397
433
397
8,592
9,683
8,237
8,516
8,179
60,233
61,984
61,237
55,167
56,224
1,472
1,418
(327)
1,285
(475)
5
(612)
(405)
(1,582)
(612)
(1,582)
10
0
280
221
0
0
(612)
(125)
(1,361)
(612)
(1,582)
860
1,293
(1,688)
673
(2,057)
44
0
11
0
0
816
1,293
(1,699)
673
(2,057)
Trading activities Other expenses
4
Total operating expenses Surplus / (deficit) before non-operating items Non-operating items Non-operating expense items Share of net profit of jointly controlled entities Total non-operating items Surplus / (deficit) before taxation Taxation Surplus / (deficit) after taxation
46
20
The accompanying notes form part of these financial statements
ANNUAL REPORT 2014
Statement of Comprehensive Income for the year ended 31 December 2014 Group
Note
Polytechnic
Actual 2014 $'000
Budget 2014 $'000
Actual 2013 $'000
Actual 2014 $'000
Actual 2013 $'000
816
1,293
(1,699)
673
(2,057)
(Loss) on property revaluations
0
0
(382)
0
(382)
Total other comprehensive income
0
0
(382)
0
(382)
816
1,293
(2,081)
673
(2,439)
Surplus / (deficit) Other comprehensive income
Total comprehensive income
Statement of Changes in Equity for the year ended 31 December 2014 Group
Note
Balance at 1 January
Polytechnic
Actual 2014 $'000
Budget 2014 $'000
Actual 2013 $'000
Actual 2014 $'000
Actual 2013 $'000
61,035
63,435
63,116
60,602
63,041
816
1,293
(1,699)
673
(2,057)
0
0
(382)
0
(382)
816
1,293
(2,081)
673
(2,439)
61,851
64,728
61,035
61,275
60,602
Comprehensive income Surplus / (deficit) Other comprehensive income Total comprehensive income Balance at 31 December
The accompanying notes form part of these financial statements
47
Statement of Financial Position as at 31 December 2014
Group
Note
Polytechnic
Actual 2014 $'000
Budget 2014 $'000
Actual 2013 $'000
Actual 2014 $'000
Actual 2013 $'000
Assets Current assets Cash and cash equivalents
6
4,030
4,168
2,851
3,636
2,781
Debtors and other receivables
7
5,525
4,145
6,430
3,245
4,011
Inventory
8
Prepayments
271
142
179
271
179
680
0
240
680
240
Taxation receivable
20
9
0
14
0
0
Loan to controlled entities Current portion of financial assets in nature of investments Total current assets
24
0
0
0
532
0
9
2,367
357
358
2,000
0
12,882
8,812
10,072
10,364
7,211
Non-current assets Financial assets in the nature of investments
9
0
10
10
1,346
1,356
10
716
841
577
140
140
Property, plant and equipment
11
68,927
71,180
72,010
68,948
72,036
Intangible assets
12
1,726
1,263
1,616
965
855
Investment properties
13
630
280
321
630
321
Assets held for sale Total non-current assets
6 72,005
0 73,574
9 74,543
6 72,035
9 74,717
Total assets
84,887
82,386
84,615
82,399
81,928
Investment in joint controlled entity
Liabilities Current liabilities Creditors and other payables
14
3,290
3,190
4,910
3,191
3,794
Special accounts Revenue received in advance
15 16
223 13,134
94 8,842
164 11,642
223 11,320
164 9,193
Employee entitlements (CL)
17
3,084
3,029
3,258
3,085
3,247
Current provisions
18
420
237
346
420
346
Loan from controlled entity
24
0
0
0
0
1,322
20,151
15,392
20,320
18,239
18,066
155
232
180
155
180 3,080
Total current liabilities Non-current liabilities Employee entitlements (NCL)
17
Provisions
18
2,730
2,034
3,080
2,730
2,885
2,266
3,260
2,885
3,260
Total liabilities
23,036
17,658
23,580
21,124
21,326
Net assets
61,851
64,728
61,035
61,275
60,602
Total non-current liabilities
Equity General reserves
19
44,760
47,257
43,944
44,196
43,523
Property revaluation reserve
19
17,079
17,459
17,079
17,079
17,079
Restricted reserves
19
Total equity
12
12
12
0
0
61,851
64,728
61,035
61,275
60,602
48 The accompanying notes form part of these financial statements
ANNUAL REPORT 2014
Statement of Cash Flows for the year ended 31 December 2014 Group
Note Actual 2014 $'000
Polytechnic
Budget 2014 $'000
Actual 2013 $'000
Actual 2014 $'000
Actual 2013 $'000
Cash flows from operating activities Receipt of government grants
29,714
29,879
29,676
25,969
26,228
Receipt of student tuition fees
28,866
29,066
29,905
25,967
23,540
4,729
7,775
4,188
6,694
6,115
335
176
237
257
169
Receipt of other ancilliary income Interest received Net taxation received / (paid)
(38)
0
9
0
0
(234)
0
682
(232)
682
Payment to employees
(31,314)
(31,075)
(32,711)
(31,301)
(32,723)
Payments to suppliers
(27,122)
(31,251)
(27,968)
(22,752)
(19,992)
4,936
4,570
4,018
4,602
4,019
(1,225)
(2,588)
(5,038)
(1,215)
(5,080)
(551)
0
(222)
(551)
(222)
0
0
0
0
0
0
0
1,530
0
1,571
19
0
1,991
19
2,000
(2,000)
0
0
(2,000)
0
(3,757)
(2,588)
(1,739)
(3,747)
(1,731)
Net (decrease) / increase in cash and cash equivalents
1,179
1,982
2,279
855
2,288
Cash and cash equivalents at the beginning of the period
2,851
2,186
572
2,781
493
Cash and cash equivalents at the end of the period
4,030
4,168
2,851
3,636
2,781
GST
Net cash flow from operating activities Cash flow from investing activities Purchase of property, plant and equipment Purchase of intangibles Investment in jointly controlled entity Proceeds from sale of property, plant and equipment Sale of financial assets in the nature of investments Purchase of financial assets in the nature of investments Net cash flow used in investing activities
The GST (net) component of operating activities reflects the net GST paid and received with the Inland Revenue Department. The GST (net) component has been presented on a net basis, as the gross amounts do not provide meaningful information for financial statement purposes, and to be consistent with other primary financial statements.
The accompanying notes form part of these financial statements
49
Reconciliation from the net surplus / (deficit) to the net cash flow from operations Group
Polytechnic
Actual 2014 $'000
Actual 2013 $'000
Actual 2014 $'000
Actual 2013 $'000
816
(1,699)
673
(2,057)
Depreciation
4,113
4,159
4,118
4,164
Amortisation
443
289
443
289
(9)
210
(9)
210
(309)
(41)
(309)
(41)
0
(221)
0
0
Surplus / (deficit) from the statement of comprehensive income Adjustment for:
Loss / (profit) on disposal of assets Fair value increase in investments Surplus on joint venture Non-cash lease inducement amortisation Movement in bad debt provision Total non-cash items
188
(225)
188
(225)
(156)
103
(28)
(25)
4,270
4,274
4,403
4,372
Add / less movements in working capital items Increase in inventories
(93)
(38)
(92)
(38)
Decrease / (increase) in trade and other receivables
922
1,894
794
(395)
(440)
31
(440)
31
Decrease in taxation receivable
6
20
0
0
Decrease in loan from controlled entity
0
0
(1,854)
(18)
(1,562)
(2,523)
(545)
455
1,492
1,141
2,126
763
(Increase) / decrease in prepayments
(Decrease) / increase in trade and other payables Increase in revenue received in advance (Decrease) / increase in employee entitlements
(199)
47
(187)
35
(Decrease) / increase in provisions
(276)
871
(276)
871
Net movement in working capital items
(150)
1,443
(474)
1,704
4,936
4,018
4,602
4,019
Net cash flow from operating activity
50
The accompanying notes form part of these financial statements
ANNUAL REPORT 2014
Notes to the Financial Statements 1. Statement of accounting policies for the year ended 31 December 2014 Reporting entity Whitireia Community Polytechnic (the Polytechnic) is a Tertiary Education Institution (TEI) domiciled in New Zealand and is governed by the Crown Entities Act 2004 and the Education Act 1989. The Polytechnic and group consists of Whitireia Community Polytechnic and its subsidiaries, Whitireia New Zealand Limited (WNZL) (100% owned) and Whitireia Foundation (100% interest). The group also consists of non-trading subsidiaries Whitireia Enterprises Limited (100% owned), W2 Ventures Limited (50% owned), W2 Shared Services Limited (50% owned). Whitireia also has a 50% interest in two unincorporated joint ventures – Computer Power Plus and W2 Shared Services all of which are equity accounted into the group financial statements. All subsidiaries are incorporated and domiciled in New Zealand. The Polytechnic has consolidated the accounts of the Whitireia Foundation for financial reporting purposes because in substance, the Polytechnic predetermined the objectives of the foundation at establishment and benefits from the foundation’s complementary activities. The primary objective of the Polytechnic and group is to provide tertiary education services for the benefit of the community rather than making a financial return. Accordingly, the Polytechnic has designated itself and the group as public benefit entities for the purposes of New Zealand equivalents to International Financial Reporting Standards (NZ IFRS). The financial statements of the Polytechnic and group are for the year ended 31 December 2014. The financial statements were authorised for issue by the Council on 22 April 2015.
Basis of preparation Statement of compliance The financial statements of the Polytechnic 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). These financial statements have been prepared in accordance with NZ GAAP. They comply with NZ IFRS, and other applicable financial reporting standards as appropriate for public benefit entities. Measurement base The financial statements have been prepared on a historical cost basis, modified by the revaluation of investment properties, assets classified as held for sale and land and buildings. Functional and presentation accuracy The financial statements are presented in New Zealand dollars and all values are rounded to the nearest thousand dollars ($000). The functional currency of the Polytechnic and its subsidiaries is New Zealand Dollars (NZ$). Changes in accounting policies There have been no changes in accounting policies during the financial year.
51
Standards, amendments, and interpretations issued that are not yet effective and have not been early adopted Standards, amendments, and interpretations issued that are not yet effective, that have not been early adopted, and which are relevant to the Polytechnic, are set out below. NZ IFRS 9 Financial Instruments will eventually replace NZ IAS 39 Financial Instruments: Recognition and Measurement. NZ IAS 39 is being replaced through the following three main phases: Phase 1 Classification and Measurement, Phase 2 Impairment Methodology, and Phase 3 Hedge Accounting. Phase 1 has been completed and has been published in the new financial instrument standard NZ IFRS 9. NZ IFRS 9 uses a single approach to determine whether a financial asset is measured at amortised cost or fair value, replacing the many different rules in NZ IAS 39. The approach in NZ IFRS 9 is based on how an entity manages its financial assets (its business model) and the contractual cash flow characteristics of the financial assets. The financial liability requirements are the same as those of NZ IAS 39, except for when an entity elects to designate a financial liability at fair value through the surplus/deficit. The new standard is required to be adopted for the year ended 30 June 2016. However, as a new Accounting Standards Framework will apply before this date, there is no certainty when an equivalent standard to NZ IFRS 9 will be applied by public benefit entities. The Minister of Commerce has approved a new Accounting Standards Framework (incorporating a Tier Strategy) developed by the External Reporting Board (XRB). Under this framework the Polytechnic will be classified as a Tier 1 reporting entity and it will be required to apply full public sector Public Benefit Entity Accounting Standards (PAS) from 1 July 2014. This means the Polytechnic expects to transition to new standards based on current International Public Sector Accounting Standards (IPSAS) in preparing its 31 December 2015 financial statements. In the interim public benefit entities are governed by NZ IFRS but any changes to NZ IFRS do not apply. Though the impact of these new standards does not bring major changes to accounting policies, there are some potentially significant differences and also a range of smaller differences between the PBE standards and NZ IFRS. The Polytechnic is in the process of assessing the scale of the impact on the adoption of PAS.
Significant accounting policies Basis of consolidation The group financial statements are prepared by adding together like items of assets, liabilities, equity, income, expenses, and cash flows on a line-by-line basis. All significant intragroup balances, transactions, income, and expenses are eliminated on consolidation. Subsidiaries The Polytechnic consolidates in the group financial statements all entities where the Polytechnic has the capacity to control the financing and operating policies of an entity so as to obtain benefits from the activities of the entity. This power exists where the Polytechnic controls the majority voting power on the governing body or where such policies have been irreversibly predetermined by the Polytechnic 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. Inter-company transactions, balances and unrealised gains on transactions between group entities are eliminated. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Investments in subsidiaries are carried at cost in the Polytechnic’s parent entity financial statements. Jointly controlled entity The Polytechnic and group’s jointly controlled entity interest is accounted for using the equity method. Investments in jointly controlled entities are initially recognised at cost and the carrying amount is increased or decreased to recognise the appropriate share of the profit or loss of the jointly controlled entity after the date of acquisition. The Polytechnic and group’s share of the profit or loss is recognised in the group profit or loss. Distributions received from a jointly controlled entity reduce the carrying amount of the investment in the group financial statements.
52
ANNUAL REPORT 2014
If the share of losses of a jointly controlled entity equals or exceeds the interest in the jointly controlled entity, the group discontinues recognising its share of further losses. After the group’s interest is reduced to zero, additional losses are provided for, and a liability is recognised, only to the extent that the group has incurred legal or constructive obligations or made payments on behalf of the jointly controlled entity. If the jointly controlled entity subsequently reports profits, the group will resume recognising its share of those profits only after its share of the profits equals the share of losses not recognised. Where the group transacts with a jointly controlled entity, profit or losses are eliminated to the extent of the group’s interest in the relevant jointly controlled entity. Investments in a jointly controlled entity are carried at cost in the Polytechnic parent entity financial statements. Revenue Revenue is measured at the fair value of consideration received or receivable. Government grants and research income Government grants and research income are recognised as revenue upon entitlement unless there is an obligation 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 recognised as revenue when conditions of the grants are satisfied. Student tuition fees Student tuition fees are recognised as revenue on a course percentage of completion basis. The percentage of completion is measured by reference to the days of the course completed as a proportion of total course days. The balance is recognised as revenue in advance. Sale of goods Revenue from sale of goods is recognised when the product is sold to the customer. Interest and dividends Interest income is recognised using the effective interest method. Dividends are recognised when the right to receive payment has been established. Leases Finance leases A finance lease is a lease that transfers to the lessee substantially all the risks and rewards incidental to ownership of an asset, whether or not title is eventually transferred. At the commencement of the lease term, finance leases are recognised as assets and liabilities in the statement of financial position at the lower of the fair value of the leased item or the present value of the minimum lease payments. The finance charge is charged to the surplus or deficit over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability. The amount recognised as an asset is depreciated over its useful life. If there is no certainty as to whether the Polytechnic and group will obtain ownership at the end of the lease term, the asset is fully depreciated over the shorter of the lease term and its useful life. Operating lease An operating lease is a lease that does not transfer substantially all the risks and rewards incidental to ownership of an asset. Lease payments net of lease inducements under an operating lease are recognised as an expense on a straight-line basis over the lease term.
53
Cash and cash equivalents Cash and cash equivalents includes cash on hand, deposits held at call with banks other short-term highly liquid investments with original maturities of three months or less. Debtors and other receivables Short-term debtors and other short-term receivables are recorded at amortised cost less any provision for impairment. Foreign currency transactions Foreign currency transactions are translated into NZ$ (the functional currency) using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end of monetary assets and liabilities denominated in foreign currencies are recognised in the surplus or deficit. Other financial assets (including investment in other entities) 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. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Polytechnic and group has transferred substantially all the risks and rewards of ownership. There are four categories of financial assets under NZ IAS39. The Polytechnic holds financial assets classified as loans and other receivables. Classification of the financial asset depends on the purpose for which the instruments were acquired. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the balance date, which are included in non-current assets. Related party receivables that are repayable on demand are classified as a non-current asset because repayment of the receivable is not expected within 12 months of the balance date. After initial recognition loans and receivables are measured at amortised cost using the effective interest method less any provision for impairment. Gains and losses when the asset is impaired or derecognised are recognised in the surplus or deficit. Impairment of financial assets At each balance date, the Polytechnic and group assesses whether there is any objective evidence that a financial asset or group of assets is impaired. Any impairment losses are recognised in the surplus or deficit. Loans and receivables (including cash and cash equivalents and debtors and other receivables) Impairment of a loan or a receivable is established when there is objective evidence that the Polytechnic and group will not be able to collect amounts due according to the original terms of the debt. Significant financial difficulties of the debtor, probability that the debtor will enter into bankruptcy and the default in payments are considered indicators that the asset is impaired. The amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted using the original effective interest rate. For debtors and other receivables, the carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the surplus or deficit. When the receivable is uncollectible, it is written-off against the allowance account. Overdue receivables that have been renegotiated are reclassified as current (i.e. not past due). For other financial assets, impairment losses are recognised directly against the instruments carrying amount.
54
ANNUAL REPORT 2014
Inventories Inventories held for distribution or consumption in the provision of services that are not supplied in a commercial basis are measured at cost (using the FIFO method), adjusted when applicable, for any loss of service potential. Where inventories are acquired at no cost or for nominal consideration, the cost is the current replacement cost at the date of acquisition. 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. Property, plant and equipment Property, plant and equipment consists of the following asset classes: land and buildings, plant and machinery, motor vehicles, computer hardware, furniture and fittings and artwork, library collection, office equipment, teaching equipment, leasehold improvements, communication systems, and signage. Land is measured at fair value, and buildings are measured at fair value less accumulated depreciation and impairment losses. All other asset classes are measured at deemed cost on acquisition less any accumulated depreciation and impairment losses. Revaluations Land and buildings are revalued with sufficient regularity to ensure that the carrying amount does not differ materially from fair value at least every two years. The carrying values of revalued assets are assessed biannually by independent valuers 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. Land and buildings revaluation movements are accounted for on a class of asset basis. The net revaluation results are credited or debited to other comprehensive income and is 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 income 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 deficit will be recognised first in the surplus or deficit up to the amount previously expensed, and then recognised in other comprehensive income. 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 the Polytechnic 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 at no cost, or for a nominal cost, it is recognised at fair value as at the date of acquisition. Disposals Gains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount of the asset. Gains and losses on disposals are reported net in the surplus or deficit. When revalued land and building assets are sold, the amounts included in property revaluation reserves in respect of those land and building assets are transferred to general funds.
55
Depreciation Depreciation is provided on a straight-line basis on all property, plant and equipment other than land and work in progress at rates that will write off the cost, (or valuation) of the assets to their residual values over their useful lives. The useful lives and associated depreciation rates of major classes of assets have been estimated as follows: Class of assets
Life
Rate
Buildings
10-50 years
2%-10% per annum
Plant and machinery
8-10 years
10%-12.5% per annum
Motor vehicles
5 years
20% per annum
Computer hardware
5 years
20% per annum
Furniture and fittings
10 years
10% per annum
Library collection
5-8 years
12.5% per annum
Office equipment
5 years
20% per annum
Teaching equipment
5 years
20% per annum
Leasehold improvements
1-12 years
8%-100% per annum
Communication systems
4 years
25% per annum
Signage
4 years
25% per annum
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful lives of the improvements, whichever is the shorter. The unexpired period of the lease includes any rights of renewal where management considers it reasonably certain that these rights be exercised. The residual value and useful life of an asset is reviewed, and adjusted if applicable, at each financial year end. Intangible assets Software acquisition and development Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use to specific software. Costs that are directly associated with the development of software for internal use, are recognised as an intangible asset. Direct costs include the software development employee costs and an appropriate portion of relevant overheads. Staff training costs are recognised as an expense when incurred. Costs associated with maintaining computer software are recognised as an expense when incurred. Course development costs Course development costs relate to development of educational courses and are capitalised if purchased wholly from other institutes of learning.
56
ANNUAL REPORT 2014
Amortisation The carrying value of an intangible asset with a finite life is amortised on a straight-line basis over its useful life. Amortisation begins when the asset is available for use and ceases at the date that the asset is derecognised. The amortisation charge for each period is recognised in the surplus or deficit. The useful lives and associated amortisation rates of major classes of intangible assets have been estimated as follows: Class of assets
Life
Rate
Computer software
3 years
33% per annum
Course development costs
3 years
33% per annum
The amortisation period and amortisation method for each class of intangible asset having a finite life is reviewed at each financial year end. If the expected useful life or expected pattern of consumption is different from the previous assessment, changes are made accordingly. 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. Impairment of property, plant, equipment and intangible assets Intangible assets that have an indefinite useful life, or not yet available for use, and goodwill, 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 there is an indicator of impairment the asset’s 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. Value in use is depreciated replacement cost for an asset where the future economic benefits and service potential are not primarily dependent on the asset’s ability to generate net cash inflows and where the Polytechnic and group would, if deprived of the asset, replace its remaining future economic benefits or service potential. The value in use for cash-generating assets is the present value of expected future cash flows. 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. For revalued assets the impairment loss is recognised in other comprehensive income to the extent the impairment loss does not exceed the amount in the revaluation reserve in equity for that same 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. Impairment related to goodwill cannot be reversed. The reversal of an impairment loss on a revalued asset is credited to other comprehensive income 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.
57
Investment properties and assets held for sale Properties held for sale or leased to third parties under operating leases are classified as investment property unless the property is held to meet service delivery objectives, rather than to earn rentals or for capital appreciation. Property held to meet service delivery objectives is classified as property, plant and equipment. Investment property is measured initially at its cost, including transaction cost. Subsequent to initial recognition investment properties are measured at fair value as determined annually by an independent valuer. Gains and losses arising from a change in the fair value of investment properties are recognised in the surplus or deficit. Creditors and other payables Creditors and other payables are initially measured at fair value and subsequently measured at amortised cost using the effective interest method. Employee entitlements Short-term employee entitlements Employee benefits that are due and settled within 12 months after the end of the period in which the employee renders the related service are measured at nominal values based on accrued entitlements at current rates of pay. These include salaries and wages and annual leave earned but not yet taken at balance date, and sick leave. A liability for sick leave is recognised to the extent that 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 it will be used by staff to cover those future absences. Long-term employee entitlements Employee benefits that are due to be settled beyond 12 months after the end of period in which the employee renders the related service, such as long service leave and retirement gratuities, have been calculated on an actuarial basis. The calculations are based on: • Likely future entitlements accruing to staff, based on years of service, years to entitlement, the likelihood that staff will reach the point of entitlement, and contractual entitlement information, and • The present value of the estimated future cash flows Expected future payments are discounted using market yields on government bonds at balance date with terms to maturity that match, as closely as possible, the estimated future cash outflows for entitlements. The inflation factor is based on the expected long-term increase in remuneration for employees. Presentation of employee entitlements Sick leave, annual leave, vested long service leave, and non-vested long service leave and retirement gratuities expected to be settled within 12 months of the balance date, are classified as a current liability. All other employee entitlements are classified as a non-current liability. Superannuation schemes Defined contribution schemes Obligations for contributions to KiwiSaver and the Government Superannuation Fund are accounted for as defined contribution schemes recognised as an expense in the surplus or deficit as incurred.
58
ANNUAL REPORT 2014
Provisions 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 expenditures will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised as an interest expense and is included as ‘finance costs’. Equity Equity is measured as the difference between total assets and total liabilities. Equity is disaggregated and classified into a number of components. The components of equity are: • General funds • Property revaluation reserves • Fair value through comprehensive income reserves and • Restricted reserves Restricted reserves Restricted reserves are a component of equity generally representing a particular use to which various parts of equity have been assigned. Reserves may be legally restricted or created by the Polytechnic. Transfers from these reserves may be made only for certain specified purposes or when certain specified conditions are met. Property revaluation reserves This reserve relates to the revaluation of property to fair value. Goods and Services Tax (GST) All items in the financial statements are stated exclusive of GST, except for debtors and other receivables and creditors and other payables, which are presented on a GST inclusive basis. Where GST is not recoverable as input tax then it is recognised as part of the related asset or expense. The net amount of GST recoverable from, or payable to, the Inland Revenue Department (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 GST relating to investing and financing activities, is classified as net operating cash flow in the Statement of Cash Flows. Commitments and contingencies are disclosed exclusive of GST. Income Tax Whitireia Community Polytechnic is exempt from income tax, pursuant to section 55BA of the Income Tax Act 2007. Whitireia Foundation is exempt from income tax, pursuant to sections CW 41 and 42 of the Income Tax Act 2007. However, Whitireia New Zealand Limited does not qualify for any exemption from income tax. The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance date where operations result in generating taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
59
Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Budget figures The budget figures are those that are approved by the Council at the start of the financial year. The budget figures have been prepared in accordance with NZ GAAP, using accounting policies that are consistent with those adopted by the Council in the preparation of the financial statements. Critical accounting estimates and assumptions In preparing these financial statements the Polytechnic and group has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below: Property revaluations Note 11 provides information about the estimates and assumptions exercised in the measurement of revalued land and buildings. Estimated impairment of goodwill The group tests annually whether goodwill has suffered any impairment, in accordance with the stated accounting policy. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of estimates (refer note 12). Employee entitlements Refer to accounting policy for critical estimates and judgements for employee entitlements. Critical judgements in applying accounting policies Management have exercised the following critical judgements in applying accounting policies for the year ended 31 December 2014: Crown owned land and buildings Property in the legal name of the Crown that is occupied by the Polytechnic and group is recognised as an asset in the Statement of Financial Position. The Polytechnic and group consider it has assumed all the normal risks and rewards of ownership of this property despite legal ownership not being transferred and accordingly it would be misleading to exclude these assets from the financial statements. Distinction between revenue and capital contributions Most Crown funding received is operational in nature and 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, the Polytechnic and group accounts for the funding as a capital contribution directly in equity. Information about capital contributions recognised in equity is disclosed in note 19.
60
ANNUAL REPORT 2014
2.
i.
Income
Actual 2013 $’000
Actual 2014 $’000
Actual 2013 $’000
29,259
29,249
25,514
25,800
175
168
175
168
Other government grants
280
260
280
260
29,714
29,677
25,969
26,228
Tuition fees
Group
Polytechnic
Actual 2014 $’000
Actual 2013 $’000
Domestic fees
11,772
12,437
8,918
9,463
International fees
14,698
14,331
14,157
13,734
Total tuition fees
26,470
26,768
23,075
23,197
Other income
Donations and koha Rental revenue
Group
Actual 2014 $’000
Actual 2013 $’000
Polytechnic
Actual 2014 $’000
Actual 2013 $’000
Actual 2014 $’000
Actual 2013 $’000
98
80
0
0
392
215
392
215
2,109
1,900
4,184
3,917
Bookshop income
374
293
374
294
Dividends received
139
0
139
0
1,756
1,699
1,744
1,688
4,868
4,187
6,833
6,114
Education service contracts
Other income Total other income
3.
Actual 2014 $’000
Performance-based research funding Total government grants
iii.
Polytechnic
Government grants Student Achievement Component (SAC) funding
ii.
Group
Personnel Costs
Group
Polytechnic
Actual 2014 $’000
Actual 2013 $’000
Actual 2014 $’000
Actual 2013 $’000
Academic salaries
16,249
17,429
16,249
17,429
General salaries and wages
14,003
14,272
13,990
14,272
647
600
647
600
Defined contribution plan employer contributions Increase / (decrease) in employee entitlements Total personnel costs
(199)
(15)
(187)
(15)
30,700
32,286
30,699
32,286
Employer contributions to defined contribution plans include contributions to KiwiSaver and the Government Superannuation Fund.
61
4.
Other Expenses
Audit fees - current year Audit fees - prior years Advertising and public relations Bad debts expensed Bank charges
Polytechnic
Actual 2014 $'000
Actual 2013 $'000
Actual 2014 $'000
Actual 2013 $'000
154
151
116
114
0
(1)
0
5
501
583
501
583
35
105
34
102
95
75
95
75
193
202
193
202
2,249
2,118
2,249
2,118
219
425
186
408
Consumables
20
65
20
65
Councillor fees
92
88
92
88
Directors fees
2
2
0
0
Catering Commissions paid Consultants and legal
Equipment lease
615
530
615
530
Export education levy
63
60
63
60
Fees and subscriptions
212
276
212
276
Graduation costs
116
131
116
131
Grants and scholarships
0
0
0
0
49
51
49
50
2,296
1,289
2,296
1,289
547
558
547
558
International contacts activities
44
33
44
33
Motor vehicle expenses
74
78
74
78
Office costs
261
363
261
363
Other operating
(18)
131
(20)
128
60
61
60
60
Professional development fees
61
107
61
107
Repairs and maintenance information technology
35
32
35
32
Immigration Visa fees Information technology Insurance
Postage
Sundry expenses Travel and accommodation Whitireia scholarships Total other expenses
62
Group
69
78
69
78
512
601
512
601
36
45
36
45
8,592
8,237
8,516
8,179
ANNUAL REPORT 2014
5.
Non-operating Expense
Group Actual 2014 $’000
Polytechnic Actual 2013 $’000
Actual 2014 $’000
Actual 2013 $’000
Restructuring
0
210
0
210
Redundancies
414
472
414
472
Loss on disposal of fixed assets
0
210
0
210
Contract settlement
0
690
0
690
Impairment of leasehold improvements
198
0
198
0
Total non-operating expenses
612
1,582
612
1,582
Contract settlement During November 2013 Whitireia negotiated a contract with a new provider of multi-function devices as a result of the strategic partnership with WelTec. This amount represents the cost of exiting the current contract with the incumbent supplier.
6.
Cash and Cash Equivalents
Group
Polytechnic
Actual 2014 $’000
Actual 2013 $’000
Actual 2014 $’000
Actual 2013 $’000
Cash at bank and in hand
1,991
2,822
1,636
2,781
Term deposits with maturities less than three months
2,039
29
2,000
0
Total cash and cash equivalents
4,030
2,851
3,636
2,781
The carrying value of cash at bank, call deposits, and term deposits with original maturities less than three months approximates their fair value.
63
7.
Debtors and Other Receivables
Group
Polytechnic
Actual 2014 $’000
Actual 2013 $’000
Actual 2014 $’000
Actual 2013 $’000
3,562
4,568
2,605
3,568
Student receivables Student fees receivables Provision for impairment Net student fee receivables
(22)
(178)
(22)
(50)
3,540
4,390
2,583
3,518
Other receivables Other debtors and receivables
1,985
2,040
662
493
Total debtors and other receivables
5,525
6,430
3,245
4,011
Fair value Student fees are due before a course commences or are due on enrolment if the course has already begun. Student fee receivables are non-interest bearing and are payable in full by course commencement date. Therefore, their carrying value approximates their fair value. Other receivables are non-interest bearing and are generally settled on 30-day terms. Therefore, the carrying value of other receivables approximates their fair value. Impairment The ageing profile of student fee receivables at year end is detailed below: Group
Polytechnic
Gross $'000
Impairment $'000
Net $'000
Gross $'000
Impairment $'000
Net $'000
2014 Not past due
2,894
0
2,894
2,009
0
2,009
Past due 31 - 60 days
398
0
398
388
0
388
Past due 61 - 90 days
194
0
194
164
0
164
Past due over 90 days
76
(22)
54
44
(22)
22
3,562
(22)
3,540
2,605
(22)
2,583
3,009
0
3,009
2,635
0
2,635
Past due 31 - 60 days
996
0
996
709
0
709
Past due 61 - 90 days
137
0
137
113
0
113
Total 2013 Not past due
Past due over 90 days Total
426
(178)
248
111
(50)
61
4,568
(178)
4,390
3,568
(50)
3,518
Due to the large number of student fee receivables, the impairment assessment is performed on a collective basis, based upon an analysis of past collection history and debt write-offs.
64
ANNUAL REPORT 2014
Movements in the provision for impairment of student fee receivables are as follows: Group
At 1 January Additional provisions made during the year Receivables written off during the year At 31 December
8.
Polytechnic
Actual 2014 $’000
Actual 2013 $’000
Actual 2014 $’000
Actual 2013 $’000
178
74
50
74
44
215
44
87
(200)
(111)
(72)
(111)
22
178
22
50
Inventories
Group
Inventories held for resale
Polytechnic
Actual 2014 $’000
Actual 2013 $’000
Actual 2014 $’000
Actual 2013 $’000
137
84
137
84
Materials and consumables
5
5
5
5
Inventory work in progress
129
90
129
90
Total inventories
271
179
271
179
During the year inventories with a cost value of $377,000 (2013:$344,000) has been included in trading activity expenditure on the Statement of Financial Performance.
9.
Financial Assets in the Nature of Investments
Effective interest rate %
Group
Polytechnic
Actual 2014 $’000
Actual 2013 $’000
Actual 2014 $’000
Actual 2013 $’000
Maturity
Current Deposits with bank ASB - Foundation
4.50%
2 Oct 2015
238
229
0
0
ASB - Foundation
4.50%
2 Dec 2015
129
129
0
0
Westpac Bank
4.62%
27 Feb 2015
2,000
0
2,000
0
2,367
358
2,000
0
0
0
1,346
1,346
Non-current Investments in controlled entity (at cost) Shares in unlisted entities (at cost)
0
10
0
10
0
10
1,346
1,356
65
The deposit with banks classified as current assets are those with original maturing periods of greater than three months and less than twelve months. The investment in unlisted entity was 1,000 ordinary shares in Polytechnic’s International (NZ) Ltd. The shares were sold in May 2014 for $18,975.33. The Polytechnic holds a 8.33% shareholding in Skills for NZ Ltd. No consideration was made for this shareholding. The investment in controlled entity is for WNZL (100% owned).
10. Investment in Jointly Controlled Entities The Polytechnic and WelTec have a 50% interest in two joint ventures, Computer Power Plus (CPP) and W2 Shared Services. CPP undertakes academic and support services on contract to WNZL. W2 provides shared services to Whitireia and WelTec. The following amounts represent the group’s share of the assets, liabilities, income and expenses of the joint venture: Group Actual 2014 $’000
Actual 2013 $’000
Parent Investment in joint venture
140
140
Group Investment in joint venture
716
577
Assets Current assets
780
632
Computer Power Plus
Non-current assets
227
73
Total assets
1,007
705
Liabilities Current liabilities
(423)
(128)
Total liabilities
(423)
(128)
Income Expenses Profit / loss Share of joint venture's contingent liabilities Share of joint venture's commitments
66
2,484
2,443
(2,345)
(2,222)
139
221
0
0
1,100
763
ANNUAL REPORT 2014
Group Actual 2014 $’000
Actual 2013 $’000
Parent Investment in joint venture
0
0
Group Investment in joint venture
0
0
W2 Shared Services
Assets Current assets Non-current assets Total assets
360
0
3
0
363
0
Liabilities Current liabilities
(363)
0
Total liabilities
(363)
0
Income
1,418
0
Expenses
(1,418)
0
Profit / loss
0
0
Share of joint venture's contingent liabilities
0
0
Share of joint venture's commitments
0
0
67
(1,412) 57,422
Net book value
0
Accumulated depreciation at 31 December 2014
Revaluations / impairment
40
0
704
(5,704)
0
0
0
0
0
(516)
(5,228)
6,408
0
(1,412)
0
58,834
135
0
0
0 1
0
(40)
86
6,362
0
Recognition of leasehold inducement reversal
Current year depreciation Recognition of accumulated depreciation on assets acquired from subsidiary Disposals during the year
Accumulated depreciation at 1 January 2014
Accumulated depreciation
Cost / valuation at 31 December 2014
Transfers
Transfer to property held for sale
Revaluations Impairment charged during the year
127 (114)
Disposals during the year
58,685
$'000
$'000
Additions during the year
Cost / valuation at 1 January 2014
Cost / valuation
Group
Computer hardware
Land & buildings
11. Property, Plant and Equipment
68 1,106
(1,911)
0
0
0
0
(193)
(1,718)
3,017
0
0
0
0
0
20
2,997
$'000
Furniture, fittings & artwork
750
(2,217)
0
0
0
0
(178)
(2,039)
2,967
0
0
0
0
(5)
153
2,819
$'000
Library collection
219
(778)
0
0
0
0
(62)
(716)
997
0
0
0
0
0
3
994
$'000
Plant & machinery
80
(671)
0
0
5
0
(41)
(635)
751
0
0
0
0
(7)
0
758
$'000
Motor vehicles
22
(418)
0
0
0
0
(12)
(406)
440
0
0
0
0
0
0
440
$'000
Office equipment
872
(2,988)
0
0
28
0
(356)
(2,660)
3,860
10
0
0
0
(28)
342
3,536
$'000
Teaching equipment
7,390
(4,734)
(197)
0
0
0
(1,211)
(3,326)
12,124
432
0
0
0
0
13
11,679
$'000
Leasehold improvements
219
(953)
0
0
0
0
(119)
(834)
1,172
0
0
0
0
0
0
1,172
$'000
Communication systems
67
(142)
0
0
0
0
(1)
(141)
209
0
0
0
0
0
5
204
$'000
Signage
76
0
0
0
0
0
0
0
76
(577)
0
0
0
0
586
67
$'000
Construction in progress
68,927
(21,928)
(197)
0
73
0
(4,101)
(17,703)
90,855
0
1
0
0
(194)
1,335
89,713
$'000
Total group
58,685
0
Recognition of leasehold inducement reversal
58,685
0
Accumulated depreciation at 31 December 2013
Net book value
0
Transfers
2,546
0
Disposals during the year
Revaluations
0
(1,550)
Current year depreciation
Recognition of accumulated depreciation on assets acquired from subsidiary
(996)
Accumulated depreciation at 1 January 2013
Accumulated depreciation
52
15,615
Transfers
Cost / valuation at 31 December 2013
1,134
(5,228)
0
0
0
0
1
(639)
(4,590)
6,362
0
0
Transfer to property held for sale
0
0
0
(6)
59
6,257
Impairment charged during the year
(2,926)
0
Revaluations
70
Disposals during the year
45,926
$’000
$’000
Additions during the year
Cost / valuation at 1 January 2013
Cost / valuation
Group
Computer hardware
Land & buildings
Property, Plant and Equipment
1,279
(1,718)
0
0
0
0
0
(206)
(1,512)
2,997
455
(6)
0
0
0
13
2,535
$’000
Furniture, fittings & artwork
780
(2,039)
0
0
0
0
0
(203)
(1,836)
2,819
0
0
0
0
(1)
179
2,641
$’000
Library collection
278
(716)
0
0
0
0
0
(71)
(645)
994
4
0
0
0
(1)
19
972
$’000
Plant & machinery
123
(635)
0
0
0
0
10
(51)
(594)
758
0
0
0
0
(19)
92
685
$’000
Motor vehicles
34
(406)
0
0
0
0
0
(16)
(390)
440
2
0
0
0
0
11
427
$’000
Office equipment
876
(2,660)
0
0
0
0
0
(393)
(2,267)
3,536
1
(4)
0
0
0
150
3,389
$’000
Teaching equipment
8,353
(3,326)
0
0
0
(103)
74
(1,087)
(2,210)
11,679
241
26
0
0
(224)
436
11,200
$’000
Leasehold improvements
338
(834)
0
0
0
0
1
(136)
(699)
1,172
0
0
0
0
(1)
15
1,158
$’000
Communication systems
63
(141)
0
0
0
0
0
(1)
(140)
204
24
0
0
0
0
0
180
$’000
Signage
67
0
0
0
0
0
0
0
0
67
(16,394)
0
0
0
0
4,271
12,190
$’000
Construction in progress
72,010
(17,703)
0
2,546
0
(103)
86
(4,353)
(15,879)
89,713
0
16
0
(2,926)
(252)
5,315
87,560
$’000
Total group
ANNUAL REPORT 2014
69
70 (1,412) 57,422
Net book value
0
(1,412)
0
58,834
135
Accumulated depreciation at 31 December 2014
Revaluations / impairment Transfer from leasehold impairment
Recognition of leasehold inducement reversal
Current year depreciation Recognition of accumulated depreciation on assets acquired from subsidiary Disposals during the year
Accumulated depreciation at 1 January 2014
Accumulated depreciation
Cost / valuation at 31 December 2014
Transfers
709
(5,707)
0
40
(516)
(5,231)
6,416
1,099
(1,910)
0
(193)
(1,717)
3,009
750
(2,218)
0
(178)
(2,040)
2,968
248
(801)
0
(67)
(734)
1,049
80
(671)
0
5
(41)
(635)
751
19
(417)
0
(12)
(405)
436
0
0
436
868
(2,984)
0
28
(356)
(2,656)
3,852
10
(28)
342
3,528
$’000
Teaching equipment
7,391
(4,734)
0
(197)
(1,211)
(3,326)
12,125
432
0
13
11,680
$’000
Leasehold improvements
219
(954)
0
(119)
(835)
1,173
0
0
1,173
$’000
Communication systems
67
(142)
0
(1)
(141)
209
0
5
204
$’000
Signage
76
0
0
0
76
(577)
0
586
67
$’000
Construction in progress
(194)
1,335
89,756
$’000
Total polytechnic
68,948
(21,950)
0
(197)
0
73
0
(4,106)
(17,720)
90,898
0
1
1
(7)
0
758
$’000
Office equipment
Transfer from property held for sale
0
3
1,046
$’000
Motor vehicles
0
(5)
153
2,820
$’000
Plant & machinery
0
0
20
2,989
$’000
Library collection
Impairment charged during the year
(40)
86
6,370
$’000
Furniture, fittings & artwork
Revaluations
127 (114)
Disposals during the year
58,685
$’000
$’000
Additions during the year
Cost / valuation at 1 January 2014
Cost / valuation
Polytechnic
Computer hardware
Land & buildings
Property, Plant and Equipment
58,685
0
Recognition of leasehold inducement reversal
Net book value
Accumulated depreciation at 31 December 2013
Transfers
58,685
0
2,546
0
Disposals during the year
Revaluations / impairment
0
(1,550)
Current year depreciation
Recognition of accumulated depreciation on assets acquired from subsidiary
(996)
Accumulated depreciation at 1 January 2013
Accumulated depreciation
52
15,615
Transfers
Cost / valuation at 31 December 2013
1,139
(5,231)
0
0
1
0
(639)
(4,593)
6,370
0
0
Transfer to property held for sale
0
0
0
(6)
59
6,265
Transfer from leasehold impairment
(2,926)
0
Revaluations
70
Disposals during the year
45,926
$’000
$’000
Additions during the year
Cost / valuation at 1 January 2013
Cost / valuation
Polytechnic
Computer hardware
Land & buildings
Property, Plant and Equipment
1,272
(1,717)
0
0
0
0
(206)
(1,511)
2,989
455
0
(6)
0
0
13
2,527
$’000
Furniture, fittings & artwork
780
(2,040)
0
0
0
0
(203)
(1,837)
2,820
0
0
0
0
(1)
179
2,642
$’000
Library collection
312
(734)
0
0
0
0
(76)
(658)
1,046
4
0
0
0
(1)
19
1,024
$’000
Plant & machinery
123
(635)
0
0
10
0
(51)
(594)
758
0
0
0
0
(19)
92
685
$’000
Motor vehicles
31
(405)
0
0
0
0
(16)
(389)
436
2
0
0
0
0
11
423
$’000
Office equipment
872
(2,656)
0
0
0
0
(393)
(2,263)
3,528
1
0
(4)
0
0
150
3,381
$’000
Teaching equipment
8,354
(3,326)
0
(103)
74
0
(1,087)
(2,210)
11,680
241
0
27
0
(224)
436
11,200
$’000
Leasehold improvements
338
(835)
0
0
1
0
(136)
(700)
1,173
0
0
0
0
(1)
15
1,159
$’000
Communication systems
63
(141)
0
0
0
0
(1)
(140)
204
24
0
0
0
0
0
180
$’000
Signage
67
0
0
0
0
0
0
0
67
(16,394)
0
0
0
0
4,271
12,190
$’000
Construction in progress
72,036
(17,720)
0
2,546
(103)
86
0
(4,358)
(15,891)
89,756
0
0
17
(2,926)
(252)
5,315
87,602
$’000
Total polytechnic
ANNUAL REPORT 2014
71
Reconciliation of Depreciation Charges Group
Polytechnic
Actual 2014 $’000
Actual 2013 $’000
Actual 2014 $’000
Actual 2013 $’000
Depreciation charge per fixed assets note
4,101
4,353
4,106
4,358
Adjustment for reduction in provision for inducement
(186)
(194)
(186)
(194)
Depreciation charge per Statement of Financial Performance
3,915
4,159
3,920
4,164
Valuation Land Land is valued at fair value using market based evidence based on its highest and best use with reference to comparable land values. Adjustments have been made to the ‘unencumbered’ land value for campus land where there is a designation against the land or the use of the land is restricted because of reserve or endowment status. These adjustments are intended to reflect the negative impact on the value of land where the owner is unable to use the land more intensely. Restrictions on the Polytechnic and group’s ability to sell land would normally not impair the value of the land because the Polytechnic and group has operational use of the land for the foreseeable future and will substantially receive the full benefits of outright ownership. The most recent valuation of land was performed by a registered independent valuer, Bayleys Valuations Limited, and the valuation is effective as at 31 December 2013. Buildings Specialised buildings (e.g. campuses) are valued at fair value using optimised depreciated replacement cost because no reliable data is available for buildings designed for education delivery purposes. Optimised depreciated replacement cost is determined using a number of significant assumptions. Significant assumptions include: • The replacement asset is based on the reproduction cost of the specific 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 • Estimating the remaining useful life of assets • Straight-line depreciation has been applied in determining the depreciated replacement cost value of the asset. The most recent valuation of buildings was performed by a registered independent valuer, Bayleys Valuations Limited, and the valuation is effective as at 31 December 2013. The total fair value of property, including assets held for sale and investment property, valued by Bayleys Valuations Limited at 31 December 2013 totalled $59,006,000.
72
ANNUAL REPORT 2014
Restrictions on title Under the Education Act 1989, the Polytechnic and group are required to obtain the consent from the Ministry of Education to dispose of or sell off property where the value of the property exceeds an amount determined by the Minister. There are also various restrictions in the form of historic designations, reserve, and endowment encumbrances attached to land. The Polytechnic and group does not consider it practical to disclose in detail the value of land subject to these restrictions. The Polytechnic is in the process of applying to have the title of Crown owned land and buildings transferred to the Polytechnic. This process is expected to be completed during 2015.
73
12. Intangible Assets Group
Polytechnic
Software developCourse ment in development Goodwill progress Software $’000 $'000 $’000 $’000
Software Course developdevelop- ment in ment progress Total Software $’000 $’000 $’000 $’000
Total $’000
Balance at 1 January 2014 Cost Accumulated amortisation and impairment Opening carrying amount
3,370
21
761
0
4,152
3,370
21
0
3,391
(2,536)
0
0
0
(2,536)
(2,536)
0
0
(2,536)
834
21
761
0
1,616
834
21
0
855
Year ended 31 December 2014 Additions at cost Amortisation
553
0
0
0
553
553
0
0
553
(443)
0
0
0
(443)
(443)
0
0
(443)
110
0
0
0
110
110
0
0
110
Balance at 31 December 2014 Cost Accumulated amortisation and impairment Closing carrying amount
3,923
21
761
0
4,705
3,923
21
0
3,944
(2,979)
0
0
0
(2,979)
(2,979)
0
0
(2,979)
944
21
761
0
1,726
944
21
0
965
2,406
21
761
460
3,648
2,406
21
460
2,887
Balance at 1 January 2013 Cost Accumulated amortisation and impairment Opening carrying amount
(1,965)
0
0
0
(1,965)
(1,965)
0
0
(1,965)
441
21
761
460
1,683
441
21
460
922
504
0
0
0
504
504
0
0
504
(282)
0
0
0
(282)
(282)
0
0
(282)
Year ended 31 December 2013 Additions Accumulated depreciation in additions Disposals Amortisation
460
0
0
(460)
0
460
0
(460)
0
(289)
0
0
0
(289)
(289)
0
0
(289)
393
0
0
(460)
(67)
393
0
(460)
(67)
Balance at 31 December 2013 Cost Accumulated amortisation and impairment Closing carrying amount
3,370
21
761
0
4,152
3,370
21
0
3,391
(2,536)
0
0
0
(2,536)
(2,536)
0
0
(2,536)
834
21
761
0
1,616
834
21
0
855
There are no restrictions over the title of intangible assets. No intangible assets are pledged as security for liabilities.
74
ANNUAL REPORT 2014
Goodwill Goodwill of $761,000 (2013: $761,000) has been allocated to the cash generating unit (CGU) of WNZL. The synergies of the business combination in which the goodwill arose are expected to be realised only by the assets of WNZL. The recoverable amount of the CGU has been determined based on value in use calculations. These calculations use cash flow projections based on financial budgets approved by the Council and cover a five year period. Cash flows beyond the five year period have been extrapolated using an estimated growth rate. Key assumptions used for the goodwill value in use calculation: • Funding received from the government relating to the level of EFTS funded will remain unchanged for the foreseeable future • Weighted average growth rate 3.58% • Pre-tax discount rate 8% These assumptions have been used for the analysis of the CGU of WNZL. The Polytechnic has determined budgeted gross margin based on past performance and its expectations for the market. The weighted average growth rate used is consistent with the forecasts included in industry reports. The discount rate used is pretax and reflects specific risks relevant to the CGU. The Polytechnic and group believes that a reasonable possible change in any of the key assumptions would not cause the carrying amount of goodwill to exceed the recoverable amount.
13. Investment Properties
Group
Polytechnic
Actual 2014 $’000
Actual 2013 $’000
Actual 2014 $’000
Actual 2013 $’000
Opening balance as at 1 January (fair value)
321
Net gain from fair value adjustment
309
280
321
280
41
309
41
Closing balance as at 31 December
630
321
630
321
The Polytechnic was advised during 2014 that Porirua City Council will be acquiring the land at Commerce Crescent under the Public Works Act. The land has been revalued based on the agreed acquisition price.
75
14. Creditors and Other Payables
Group
Polytechnic
Actual 2014 $’000
Actual 2013 $’000
Actual 2014 $’000
Actual 2013 $’000
Trade payables
685
1,066
685
1,066
GST
948
1,184
951
1,184
Amounts owing to related parties Accruals Total creditors and other payables
75
0
54
0
1,582
2,660
1,501
1,544
3,290
4,910
3,191
3,794
Creditors and other payables are non-interest bearing and are normally settled on 30-day terms, therefore the carrying value of creditors and other payables approximates their fair value.
15. Special Accounts Special accounts represents funds held by the Polytechnic on behalf of others and funds provided to the Polytechnic by various organisations for specific projects. Group Actual 2014 $’000
Actual 2013 $’000
Actual 2014 $’000
Actual 2013 $’000
Whitireia International Homestay Trust
34
98
34
98
Activities account
14
15
14
15
Other accounts
175
51
175
51
Total special accounts
223
164
223
164
16. Revenue Received in Advance
Student fees received in advance Other revenue in advance Total revenue received in advance
76
Polytechnic
Group
Polytechnic
Actual 2014 $’000
Actual 2013 $’000
Actual 2014 $’000
Actual 2013 $’000
13,077
9,837
11,279
9,176
57
1,805
41
17
13,134
11,642
11,320
9,193
ANNUAL REPORT 2014
17. Employee Entitlements Group
Polytechnic
Actual 2014 $’000
Actual 2013 $’000
Actual 2014 $’000
Actual 2013 $’000
Accrued pay
621
581
621
581
Annual leave
2,276
2,514
2,277
2,503
115
99
115
99
40
34
40
34
Current portion
Sick leave Long service leave Retirement gratuities
32
30
32
30
Total current portion
3,084
3,258
3,085
3,247
Non-current portion Long service leave Retirement gratuities Total non-current portion Total employee entitlements
35
55
35
55
120
125
120
125
155
180
155
180
3,239
3,438
3,240
3,427
Employees are entitled to annual leave pay, long service leave pay and retirement gratuities. Annual leave entitlements expected to be settled within 12 months of the balance sheet date are measured at the current rates of pay and classified as current liabilities. Entitlements related to long service leave and retirement gratuities have been calculated on an actuarial basis. The provision is affected by number of assumptions including expected length of service, attrition rate, and salary increase.
18. Provisions
Group
Polytechnic
Actual 2014 $’000
Actual 2013 $’000
Actual 2014 $’000
Actual 2013 $’000
329
255
329
255
Current portion Lease inducements Contract settlement provision
91
91
91
91
420
346
420
346
1,937
2,196
1,937
2,196
793
884
793
884
2,730
3,080
2,730
3,080
3,150
3,426
3,150
3,426
Non-current portion Lease inducements Contract settlement provision Total provisions
77
Balance at start of year $’000
Provisions made $’000
Provision realised $’000
Balance at end of year $’000
2,451
150
(335)
2,266
975
0
(91)
884
3,426
150
(426)
3,150
Polytechnic and group 2014 Lease inducement provision Contract settlement provision Total 2013 Lease make-good provision
104
0
(104)
0
Lease inducement provision
2,676
0
(225)
2,451
Contract management provision Total
0
975
0
975
2,780
975
(329)
3,426
Lease inducements In respect of leased property, the Polytechnic and group entered into a number of agreements to lease properties where an initial inducement was made by the lessor. These inducements included rent free holidays, contributions to fitout and cash incentives. These amounts have been recognised as a provision in the financial statements to be amortised over the lease term (refer note 23). Contract settlement During 2013, the Polytechnic and group entered into a contract for the supply of copying services. In terms of this contract a payment was received from the supplier in order to enable the Polytechnic and group to exit its current supply agreement. This amount has been accounted for as a provision to be amortised over the period of the agreement.
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ANNUAL REPORT 2014
19. Equity
Group
Polytechnic
Actual 2014 $’000
Actual 2013 $’000
Actual 2014 $’000
Actual 2013 $’000
43,944
45,643
43,523
45,580
General funds Balance at 1 January Surplus / (deficit) for the year
816
(1,699)
673
(2,057)
44,760
43,944
44,196
43,523
17,079
17,461
17,079
17,461
0
(382)
0
(382)
17,079
17,079
17,079
17,079
Balance at 1 January
12
12
0
0
Balance at 31 December
12
12
0
0
Balance at 31 December Property revaluation reserve Balance at 1 January Land and buildings net revaluation (loss) / gain Balance at 31 December Restricted reserves
Property revaluation reserves The property revaluation reserves for land and buildings as at 31 December 2013 is $17,079,000.
79
20. Taxation Group
Polytechnic
Actual 2014 $’000
Actual 2013 $’000
Actual 2014 $’000
Actual 2013 $’000
Current tax expense
44
14
0
0
Adjustments in current tax in prior years
(3)
0
0
0
3
(3)
0
0
44
11
0
0
Net surplus / (deficit) before tax
860
(1,688)
673
(2,057)
Tax at 28%
241
(473)
188
(576)
(191)
515
(188)
576
Prior year adjustment
(3)
0
0
0
Timing adjustments
(3)
3
0
0
Tax losses recognised
0
(31)
0
0
Deferred tax adjustments
0
(3)
0
0
44
11
0
0
Property, plant & equipment
Employee entitlements
Other provisions
Tax losses
Total
Balance at 31 December 2012
0
0
0
0
0
Charged to surplus or deficit
0
3
0
0
3
Charged to other comprehensive income
0
0
0
0
0
Balance at 31 December 2013
0
3
0
0
3
Charged to surplus or deficit
0
(3)
0
0
(3)
Charged to other comprehensive income
0
0
0
0
0
Balance at 31 December 2014
0
0
0
0
0
Component of tax expense
Deferred tax expense / (benefit)
Relationship between tax and accounting profit
Plus / (less) tax effect of: Non-deductable expenditure
Tax expense Deferred tax asset / (liability)
The group has a deferred tax asset of $nil (2013:$2,855) in relation to deductible temporary differences. The group has tax losses of $nil (2013: $nil) available to be carried forward and offset against future taxable income.
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ANNUAL REPORT 2014
21. Financial Risk Management Objectives and Policies The group’s principal financial instruments comprise bank deposits, cash and short-term deposits. The group has various other financial instruments such as trade debtors and trade creditors, which arise directly from its operations. Credit risk With the exception of student fees the group trades only with recognised, creditworthy third parties. Receivable balances are monitored on an ongoing basis with the result that the group’s exposure to bad debts is not significant. With respect to the credit risk arising from the other financial assets of the group, which comprise cash and cash equivalents and available-for-sale financial assets, the group’s exposure to credit risk arises from default of the counter party, with a maximum exposure equal to the carrying amount of these instruments. There are no significant concentrations of credit risk within the group. Interest rate risk The tables below illustrate the potential effect on the surplus or deficit and equity (excluding general funds) for reasonably possible market movements, with all other variables held constant, based on financial instrument exposures at balance date. 2014
2013
$’000
$’000
-50 bps
+150 bps
-50 bps
+150 bps
surplus and other equity
surplus and other equity
surplus and other equity
surplus and other equity
(20)
60
(14)
43
Group Financial assets Cash and cash equivalents Financial assets in the nature of investments
(12)
36
(2)
5
Total sensitivity
(32)
96
(16)
48
(18)
55
(14)
42
Polytechnic Financial assets Cash and cash equivalents Financial assets in the nature of investments
(10)
30
0
0
Total sensitivity
(28)
85
(14)
42
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 50 bps is equivalent to a decrease in interest rates of 0.5%.
81
Credit quality of financial assets 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. Group Actual 2014 $’000
Polytechnic Actual 2013 $’000
Actual 2014 $’000
Actual 2013 $’000
Counterparties with credit ratings Cash at bank and term deposits AA -
6,397
3,209
5,636
2,781
Total cash at bank and term deposits
6,397
3,209
5,636
2,781
Debtors and other receivables Existing counterparty without defaults in the past
5,525
6,430
3,245
4,011
Total debtors and other receivables
5,525
6,430
3,245
4,011
Liquidity risk Liquidity risk is the risk that the Polytechnic and group 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 facilities and the ability to close out market positions. The Polytechnic and group aims to maintain flexibility in funding by arranging committed credit lines when required. In December 2012 the Polytechnic and group received Secretary of Education approval for a credit line for up to $4 million that was put in place during 2013. In meeting its liquidity requirements, the Polytechnic and group maintains a target level of investments that must mature within specified timeframes. Categories of financial assets and liabilities Group Actual 2014 $’000
Polytechnic Actual 2013 $’000
Actual 2014 $’000
Actual 2013 $’000
Loans and receivables Cash and cash equivalents (note 6)
4,030
2,851
3,636
2,781
Student fees and other receivables (note 7)
5,525
6,430
3,245
4,011
Financial assets in the nature of investments (note 9) Total loans and receivables Financial liabilities measured at amortised cost Trade and other payables (note 14) Total financial liabilities measured at amortised cost
2,367
368
3,346
1,356
11,922
9,649
10,227
8,148
(3,290)
(4,910)
(3,191)
(3,794)
(3,290)
(4,910)
(3,191)
(3,794)
Trade and other payables (note 14) are all due and payable within six months of the balance date. There are no financial instruments held at fair value.
82
ANNUAL REPORT 2014
22. Capital Management The Polytechnic and group’s capital is its equity, which comprises accumulated funds and other reserves. Equity is represented by net assets. The Polytechnic and group are 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 borrowing. The Polytechnic and group manages its equity as a by-product of prudently managing revenues, expenses, assets, liabilities, investments, and general financial dealings to ensure the Polytechnic and group effectively achieves its objectives and purpose, whilst remaining a going concern.
23. Commitments and Contingencies Operating lease commitments – Polytechnic and group as lessee The Polytechnic and group has entered into commercial leases on buildings where it is not in the best interest of the Polytechnic and group to purchase these assets. These leases have an average life of between one and eleven years with renewal terms included in the contracts. Renewal terms are included in the commitments where management considers it probable that these will be exercised. There are no restrictions placed upon the leasee by entering into these leases. Future minimum rentals payable under non-cancellable operating leases as at 31 December are as follows: Group Actual 2014 $’000
Due within one year Due after one year and less than five years Due after five years
Polytechnic Actual 2013 $’000
Actual 2014 $’000
Actual 2013 $’000
3,723
3,651
3,723
3,651
11,628
11,984
11,628
11,968
6,703
7,360
6,703
7,360
22,054
22,995
22,054
22,979
During 2014 the Polytechnic and WelTec entered into an agreement to lease premises to be constructed at 82-92 Cuba Street and 65 Dixon Street, Wellington for a period of 21 years commencing on 1 November 2017 for an annual rental of $2.8 million.
83
Capital commitments At 31 December the Polytechnic had the following commitments: Polytechnic Actual 2014 $’000
Actual 2013 $’000
0
250
Porirua campus redevelopment Wellington campus redevelopment Auckland campus redevelopment
0
230
0
480
Legal claims A former staff member of the now defunct Whitireia Independent Students’ Association has sought to include the Polytechnic in a personal grievance claim taken against the Association. The view of the Polytechnic is that the claim against it has no merit and is being defended. The amount being claimed is in the vicinity of $53,013.70 plus costs (circa $10,000). The matter will be subject to a decision of the Employment Relations Authority following the completion of evidence in mid-March 2015. Accordingly whilst the Polytechnic is confident in its legal position (no liability) the matter should be noted as a contingent liability (2013: nil). Other contingent liabilities The Polytechnic and group has no other contingent liabilities (2013: nil). Contingent assets The Polytechnic and group has no contingent assets (2013: nil).
84
ANNUAL REPORT 2014
24. Related Party Disclosure Terms and conditions of transactions with related parties Providing of ancillary services to and purchases from related parties is made in arm’s length transactions at both normal market prices and normal commercial terms. Outstanding balances at 31 December 2014 and 2013 are unsecured and settlement occurs in cash. Polytechnic Actual 2014 $’000
Actual 2013 $’000
Services provided by the Polytechnic
2,075
2,017
Services provided to the Polytechnic
0
0
Whitireia New Zealand Limited
Unsecured loans payable to the Polytechnic
0
0
Unsecured loans payable by the Polytechnic
103
1,322
Computer Power Plus joint venture Services provided by the Polytechnic
0
0
Services provided to the Polytechnic
4,989
4,945
Dividends payable to the Polytechnic
139
0
Unsecured loans payable by Whitireia New Zealand Limited
516
1,121
Services provided by the Polytechnic
0
0
Services provided to the Polytechnic
1,418
0
Unsecured loans payable to the Polytechnic
496
0
Unsecured loans payable by the Polytechnic
0
0
W2 Shared Services joint venture
Transactions between the Polytechnic and its subsidiary include loans and advances to subsidiary. These loans and advances are unsecured, interest free with no fixed terms of repayment. For the year ended 31 December 2014, the group has not raised any provisions for doubtful debts relating to amounts owed by related parties as the payment history has been excellent (2013: $nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates in. When assessed as required the group raises such a provision.
85
Crown / Government The government influences the roles of the Polytechnic as well as significant source of revenue, as disclosed in note 2. In conducting its activities, the Polytechnic is required to pay various taxes and levies (such as GST, PAYE, and ACC levies) to the Crown and entities related to the Crown. The payment of these taxes and levies is based on the standard terms and conditions that apply to all tax and levy payers. The Polytechnic is exempt from paying income tax and FBT. The Polytechnic purchases goods and services from entities related to the Crown and it also provides services to entities related to the Crown. The purchase and provision of goods and services to governmentrelated entities for the year ended 31 December 2014 are immaterial compared to the Polytechnic’s total revenue and expenditure and have all been conducted on an arms’ length basis. These purchases included the purchase of electricity from Meridian, air travel from Air New Zealand, and procurement services from the Ministry of Economic Development. Related party transactions During the year the Polytechnic purchased services from various organisations that are related to members of Council. These services cost $27,022 (2013: $10,744) and were supplied on normal commercial terms. The amounts paid to individual organisations are immaterial to the Polytechnic’s total revenue and expenditure. Key management personnel compensation Group
Salaries and other short-term employment benefits Post employment benefits Total key management personnel compensation
Polytechnic
Actual 2014 $’000
Actual 2013 $’000
Actual 2014 $’000
Actual 2013 $’000
723
693
723
693
0
0
0
0
723
693
723
693
Key management personnel includes the Chief Executive and two executive personnel.
86
ANNUAL REPORT 2014
25. Councillors Fees
Crown Entities Act 2004 Actual 2014 $
Actual 2013 $
Arthur T
5,546
15,975
Fortuin G
3,697
15,975
32,000
32,000
0
0
Sowry R (Chair) Sharman D R
*
Snively S
*
Wilkinson R K Sanga K Sanga K (2013) Steel P
*
McIntosh-Ward N
*
Royal A Wilde F Hume D
*
Renner V
*
0
0
3,697
15,975
16,000
7,200
5,600
0
0
0
0
0
12,000
0
13,029
0
0
0
0
0
91,569
87,125
From 1 January 2013 the Councils’ of Whitireia and WelTec combined. *Fees paid by WelTec
26. Employee Remuneration Group $
Actual 2014
Polytechnic Actual 2013
Actual 2014
Actual 2013
100,000 - 109,999
3
3
3
3
110,000 - 119,999
2
4
2
4
120,000 - 129,999
3
6
3
5
130,000 - 139,999
2
0
2
0
140,000 - 149,999
2
1
1
0
150,000 - 159,999
1
0
0
0
160,000 - 169,999
0
1
0
0
170,000 - 179,999
1
2
1
2
180,000 - 189,999
1
0
0
0
200,000 - 209,999
1
0
1
0
270,000 - 279,999
0
1
0
1
340,000 - 349,999
1
0
1
0
17
18
14
15
87
27. Events After Balance Date Except as already disclosed, there were no other events that have occurred between 31 December 2014 and the date of this report. (2013: none).
28. Childcare Centre
Polytechnic Actual 2014 $’000
Actual 2013 $’000
190 36 52
227 49 48
278
324
348 33 381
337 39 376
(103)
(52)
Income Operating grants - Ministry of Education (MOE) Fees - staff, students, public Family assistance - Work and Income New Zealand (WINZ)
Expenses Personnel Other Net deficit
Note 1
Statistics MoE hours funded
under 2's
3,180
6,526
MoE hours funded
over 2's
5,992
10,451
MoE 20 hours ECE
3,871
7,554
MoE plus 10 hours ECE
1,782
2,881
Comments The Childcare Centre is run as a separate trading entity within the Polytechnic. It operates under one licence (full/all day – Ministry of Education) to provide childcare for up to 30 children primarily for staff and students at the Polytechnic. Note 1 The accounts presented above are required to be presented separately for Ministry of Education purposes to support the funding provided. There is no reflection of the portion of occupancy costs or depreciation on buildings and equipment used by the childcare centre, which are included in the main accounts of the Polytechnic.
88
ANNUAL REPORT 2014
29. Student Services Levy
Revenue Compulsory student services fees International
Health services
Sports, recreation & cultural activities
2014 total
2013 total
44,933
102,067
39,875
297,571
231,752
19,317
43,879
17,142
127,928
91,532
21,872
17,588
Counselling services
Financial advice & support
51,777
44,933
22,260
19,317
Advocacy & legal advice
Careers support & advice
13,986 6,013
Other Total revenue
21,872 19,999
74,037
64,250
64,250
167,818
57,017
447,371
340,872
Expenses
17,365
123,717
69,538
105,255
148,756
51,286
515,917
379,301
Total expenses
17,365
123,717
69,538
105,255
148,756
51,286
515,917
379,301
2,634
(49,680)
(5,288)
(41,005)
19,062
5,731
(68,546)
(38,429)
Deficit
In 2014 the domestic student services levy for the Whitireia group, including the Polytechnic’s subsidiary Whitireia NZ Limited, was $144 per EFTS (2013: $98). For international students the student services levy is included in the tuition fee. No fee is charged to students enrolled in Youth Guarantee and Level 1-2 programmes in accordance with TEC funding rules. Refer to page 24 of the annual report for details on the services provided to students and consultation with students. Income and expenditure for these services is separately accounted for by Whitireia. For 2014 the format for reporting on the student services levy has been changed to better align with best practice and the Ministerial Directive on Compulsory Student Services Fees for 2014. The format has also been changed to include income and expenditure relating to international students which was excluded from the disclosure in previous years. All figures above include GST.
89
30. Explanations of Major Variances Against Budget Statement of Financial Performance Total revenue for the group was $61.7m against a budget of $63.4m, $1.7m below budget and $0.8m higher than 2013. The reduction in revenue was largely due to lower student numbers. There were encouraging signs late in the year with a significant increase in international student numbers in the September trimester, mainly at the Auckland campus. Due to the timing of these enrolments they will have a more significant financial benefit for 2015. Reduced revenue was largely offset by tight controls on expenditure which was below budget by $1.8m and $1.0m lower than 2013. The overall result was an operating surplus for the group of $1.5m against a budget of $1.4m. The financial result was a significant improvement on 2013 ($0.4m deficit) due to increased revenue and tighter controls on expenditure. Statement of Financial Position The net cash position improved from $3.2m in 2013 to $6.4m, $1.9m ahead of budget. The better cash position is due to tight controls on capital expenditure and the higher number of student enrolments straddling into the next financial year.
90
ANNUAL REPORT 2014
Statement of Responsibility The Council and management are responsible for the preparation of Whitireia Community Polytechnic and group’s financial statements and statement of service performance, and for the judgements made in them. The Council and management of Whitireia Community Polytechnic have the responsibility for establishing and maintaining a system of internal control designed to provide reasonable assurance as to the integrity and reliability of financial reporting. In the Council and management’s opinion, these financial statements and statement of service performance fairly reflect the financial position and operations of Whitireia Community Polytechnic and group for the year ended 31 December 2014.
Signed by
Chairperson of Council 22 April 2015
Chief Executive 22 April 2015
91
Independent Auditor’s Report To the readers of Whitireia Community Polytechnic and group’s financial statements and non-financial performance information for the year ended 31 December 2014 The Auditor-General is the auditor of Whitireia Community Polytechnic (the Polytechnic) and group. The AuditorGeneral has appointed me, David Morrow, using the staff and resources of Ernst & Young, to carry out the audit of the financial statements and non-financial performance information of the Polytechnic and group on her behalf.
We have audited: • the financial statements of the Polytechnic and group on pages 46 to 90, that comprise the statement of financial position as at 31 December 2014, the statement of financial performance, the statement of comprehensive income, statement of changes in 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 non-financial performance information of the Polytechnic and group in the statement of service performance on pages 32 to 40. Opinion In our opinion: • the financial statements of the Polytechnic and group on pages 46 to 90: • comply with generally accepted accounting practice in New Zealand; and • fairly reflect the Polytechnic and group’s: • financial position as at 31 December 2014; and • financial performance and cash flows for the year ended on that date; • the non-financial performance information of the Polytechnic and group on pages 32 to 40 fairly reflects the Polytechnic and group’s service performance achievements measured against the performance targets adopted in the investment plan for the year ended 31 December 2014. Our audit was completed on 22 April 2015. This is the date at which our opinion is expressed.
92
ANNUAL REPORT 2014
The basis of our opinion is explained below. In addition, we outline the responsibilities of the Council and our responsibilities, and we explain our independence. Basis of opinion We carried out our audit in accordance with the Auditor-General’s Auditing Standards, which incorporate the International Standards on Auditing (New Zealand). Those standards require that we comply with ethical requirements and plan and carry out our audit to obtain reasonable assurance about whether the financial statements and non-financial performance information are free from material misstatement. Material misstatements are differences or omissions of amounts and disclosures that, in our judgement, are likely to influence readers’ overall understanding of the financial statements and non-financial performance information. If we had found material misstatements that were not corrected, we would have referred to them in our opinion. An audit involves carrying out procedures to obtain audit evidence about the amounts and disclosures in the financial statements and non-financial performance information. The procedures selected depend on our judgement, including our assessment of risks of material misstatement of the financial statements and nonfinancial performance information, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Polytechnic and group’s preparation of the financial statements and non-financial performance information that fairly reflect the matters to which they relate. We consider internal control in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Polytechnic and group’s internal control. An audit also involves evaluating: • the appropriateness of accounting policies used and whether they have been consistently applied; • the reasonableness of the significant accounting estimates and judgements made by the Council; • the adequacy of all disclosures in the financial statements and non-financial performance information; and • the overall presentation of the financial statements and non-financial performance information. We did not examine every transaction, nor do we guarantee complete accuracy of the financial statements and non-financial performance information. Also we did not evaluate the security and controls over the electronic publication of the financial statements and non-financial performance information. We have obtained all the information and explanations we have required and we believe we have obtained sufficient and appropriate audit evidence to provide a basis for our audit opinion. Responsibilities of the Council The Council is responsible for preparing financial statements that: • comply with generally accepted accounting practice in New Zealand; and • fairly reflect the Polytechnic and group’s financial position, financial performance and cash flows. The Council is also responsible for preparing non-financial performance information that fairly reflects the Polytechnic and group’s service performance achievements measured against the performance targets adopted in the investment plan. The Council is responsible for such internal control as it determines is necessary to enable the preparation of financial statements and non-financial performance information that are free from material misstatement, whether due to fraud or error. The Council is also responsible for the publication of the financial statements and nonfinancial performance information, whether in printed or electronic form. The Council’s responsibilities arise from the Education Act 1989 and the Crown Entities Act 2004.
93
Responsibilities of the Auditor We are responsible for expressing an independent opinion on the financial statements and non-financial performance information and reporting that opinion to you based on our audit. Our responsibility arises from section 15 of the Public Audit Act 2001 and the Crown Entities Act 2004. Independence When carrying out the audit, we followed the independence requirements of the Auditor-General, which incorporate the independence requirements of the External Reporting Board. Other than the audit, we have no relationship with or interests in the Polytechnic or any of its subsidiaries.
David Morrow Ernst & Young On behalf of the Auditor-General Wellington, New Zealand
94
ANNUAL REPORT 2014
95
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