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• Statement Of Responsibility
• Financial Statements For The Year Ended 30 June 1997
• Statement Of Service Performance For The Year Ended 30 June 1997
• The Law Commission’s Performance Standards
• Report Of The Audit Office

FINANCIAL STATEMENTS

Statement of responsibility

We acknowledge responsibility for the preparation of these financial statements and for the judgments used herein.

We acknowledge responsibility for establishing and maintaining a system of internal control designed to provide reasonable assurance as to the integrity and reliability of the Commission’s financial reporting.

In our opinion these annual financial statements fairly reflect the financial position and operations of the Law Commission for the year ended 30 June 1997.

Financial statements for the year ended 30 June 1997

Reporting Entity

The Law Commission is a Crown entity established by the Law Commission Act 1985.

The financial statements have been prepared pursuant to section 17 of the Law Commission Act.

Measurement base

The general accounting principles recognised as appropriate for the measurement and reporting of results and financial position on an historical basis, modified by the revaluation of library collections, have been followed.

Accounting policies

The following accounting policies, which materially affect the measurement of results and financial position, have been applied:

1 Goods and Services Tax (GST)

The financial statements have been prepared exclusive of GST, with the exception of receivables and payables which are stated with GST included.

2 Fixed assets

All fixed assets are initially recorded at cost. Additions to library collections were expensed up to 30 June 1997 (except for the initial cost of establishment of the library).

Library collections were valued for the first time, as at 30 June 1997, at depreciated replacement cost. All serial acquisitions, and other expenditure which will enhance the useful life of the collections beyond the financial year, will be capitalised from 1 July 1997.

Library collections will be revalued every 3 years. Upwards or downwards revaluation of library collections is charged to Revaluation of Library collections reserve account. When this results in a debit balance in the reserve account, that balance is expensed in the statement of financial performance.

3 Depreciation

Depreciation is provided on a straight line basis which will write off the cost (or revaluation) of the assets over their useful lives.

The useful lives and associated rates of depreciation for major classes of assets have been estimated as follows:

4 Investments

Investments are stated at the lower of cost and net realisable value.

5 Leases

Operating lease payments, where the risks and benefits of ownership are effectively retained by the lessor, are charged as expenses in the period in which they are incurred.

6 Statement of cash flows

Cash means cash balances on hand, held in bank accounts, demand deposits and other highly liquid investments, in which the Law Commission invests as part of its day to day cash management.

Operating activities include cash received from all income sources and the cash payments made for the supply of goods and services.

Investing activities are those activities relating to the acquisition and disposal of non-current assets.

Financing activities comprise the change in equity of the Commission.

7 Financial instruments

The Law Commission is a party to financial instruments as part of its normal operations. Those instruments include bank accounts, investments, debtors and creditors. They are recognised in the statement of financial position. Revenue and expenses in relation to financial instruments are recognised in the statement of financial performance.

8 Income tax

The Law Commission is exempt from income tax.

9 Receivables

Accounts receivable are stated at their estimated realisable value after providing for doubtful and uncollectable debts.

10 Employee entitlements

Provision is made in respect of the Commission’s liability for annual leave. Annual leave has been calculated on an actual entitlement basis at current rates of pay.

11 Change in accounting policies

There have been no changes in accounting policies. The policies have been applied on a basis consistent with previous years.

The revised policy with regard to library collections will be effective from 1 July 1997.

STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 1997

____________________________

The accompanying accounting policies and notes form part of these financial statements

STATEMENT OF MOVEMENTS IN EQUITY FOR THE YEAR ENDED 30 JUNE 1997

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 1997

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 1997

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 1997

RECONCILIATION OF NET DEFICIT TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1997

1 Administration costs include

2 Receivables and prepayments

3 Fixed assets

Revalued library collections are stated at depreciated replacement cost as determined by valuers, Lambert’s Library Services, as at 30 June 1997. Stephanie Lambert of Lambert’s Library Services holds a New Zealand Library Studies Certificate awarded by the School of Library Studies, Wellington Teachers College.

4 Payables and accruals

5 Commitments

Capital commitments

There were no commitments for capital expenditure at balance date (30 June 1996, $ nil).

Lease commitments

Non-cancellable operating leases for rental accommodation and office equipment:

6 Contingent liabilities

$13,863 claimed by a computer services supplier is in dispute. The Commission has denied liability for this amount.

There are no other material contingent liabilities as at balance date (30 June 1996, $ nil).

7 Related party information

The Law Commission is a wholly owned entity of the Crown. The Commission received from the Ministry of Justice $2,975,111 as a grant for the financial year (1995/96, $2,975,111).

8 Financial instruments

Fair value

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

Credit risk

Credit risk is the risk that an outside party will not be able to meet its obligations to the Commission.

Financial assets which potentially subject the Commission to concentration of credit risk consist principally of cash, short-term deposits and receivables.

The cash and short-term deposits are placed with the Bank of New Zealand, with a Standard and Poors AA credit rating.

Concentration of credit risk with respect to receivables is limited by its small value and relatively large number of customers involved.

The Commission does not have exposure to interest rate or currency risks.

Statement of Service Performance for the year ended 30 june 1997

Output Class: Policy advice

Quality

All outputs and other work completed by the end of the year

met the quality standards set out on pages 38–40, to the extent applicable.

Quantity and timeliness

The work produced by the Commission during the course of each year is set out in an annual work programme submitted to the Minister of Justice under s 7(1) of the Law Commission Act. The work programme is subject to revision from time to time.

The statement of service performance reports the outputs produced during the financial year as compared with those established in the annual work programme agreed in a Memorandum of Understanding with the Minister of Justice.

Evidence Law Reform

Criminal Procedure

Succession project

Women’s Access to Justice

Public Law projects

Mäori Custom Law

The Law Commission is undertaking this project on behalf of its Mäori Committee, with funding provided by the New Zealand Law Foundation and administrative support provided by the Law Commission itself.

It was planned to achieve approval for publication of the report by 30 June 1997 with a view to actual publication thereafter. The timetable for the project was disrupted because of competing commitments of the consultant writers. The project is now scheduled for completion by the end of 1997.

Other projects

Advisory work

As to quantity, see appendix A.

As to timeliness, all deadlines set or agreed in respect of work for the Legislation Advisory Committee were met. For other advisory work, deadlines were set or agreed in 14 cases, and met in 13. The delay in the one outstanding case was not prejudicial.

Cost

The costs listed below for each area of project activity consist of both direct costs and indirect costs. Direct costs include staff time (recorded on the practice management system), consultants, travel, publication costs, and other incidental expenses. Indirect costs are allocated (using the formula [total indirect cost/total time recorded] x time recorded against individual project) to ensure that the total cost of the Commission is reflected in its outputs.

The Law Commission’s performance standards

Each product^[1] is measured against four performance standards: quality, quantity, timeliness and cost.

Quality

All products are measured against six quality goals:

The quality of those products described as reviews and reports is measured by:

• compliance with the Law Commission’s internal quality assurance processes;
• internal peer review and policy approval by all appointed members of the Commission;
• external review by selected experts; and
• submissions and feedback received from interested parties.

The quality of those products described as advice and accessibility advice is measured by:

• compliance with the Law Commission’s internal quality assurance processes;
• internal peer review and policy approval by some or all appointed members of the Commission;
• feedback received from recipients of the advice and interested parties; and
• continuing requests by Ministers, departments and organisations for the Law Commission’s advice on matters concerning the reform and development of the law of New Zealand.

Quantity

REVIEWS AND REPORTS

The quantity of work described as a review or a report is determined by the requirements of the projects in the Law Commission’s work programme.

Projects are included in the work programme either by reference from the Minister of Justice under s 7 of the Law Commission Act 1985, or on the Law Commission’s own initiative in consultation with the Minister of Justice. The number and nature of products from a project are determined by the Law Commission, in consultation where necessary with the Minister of Justice and other interested parties, having regard to the subject matter of the project and the available resources.

ADVICE AND ACCESSIBILITY ADVICE

The quantity of work described as advice or accessibility advice is measured with reference to:

• the number of advice requests received by the Law Commission from Ministers, departments and organisations (including the Legislation Advisory Committee), or
• any other matter or occasion arising,

on which the Law Commission considers it appropriate and necessary to offer advice.

Timeliness

REVIEWS AND REPORTS

Work described as a review or a report is published on or before the planned publication date set out in the work programme.

Publication dates are set by means of the Law Commission’s internal project planning procedures, having regard to:

• the subject matter of the project;
• its priority in relation to other projects and activities of the Commission;
• the availability of resources; and
• where applicable, the reporting date set in the terms of reference for the project, or by the Minister of Justice under s 7(3) of the Law Commission Act 1985.

ADVICE AND ACCESSIBILITY ADVICE

Work described as advice or accessibility advice is produced:

• on or before the date specified by, or agreed with, the person requesting the advice; or
• when no date is specified, within a timeframe which ensures that the advice will be relevant and usable by the recipient.

Cost

REVIEWS AND REPORTS

Work described as a review or a report is produced at or under the budgeted cost of the project in question. Project budgets are set by means of the Law Commission’s internal project planning procedures, having regard to:

• the subject matter of the project (including any consultation requirements); and
• the availability of resources.

ADVICE AND ACCESSIBILITY ADVICE

Work described as advice or accessibility advice is produced within the total budget for advice work, fixed annually by the Law Commission having regard to the availability of resources and the competing demands of other projects.

All costs are measured using the Law Commission’s financial and project management systems and by the recording of staff time.

Report of the Audit Office

TO THE READERS OF THE FINANCIAL STATEMENTS OF THE LAW COMMISSION FOR THE YEAR ENDED 30 JUNE 1997

We have audited the financial statements on pages 20 to 40. The financial statements provide information about the past financial and service performance of the Law Commission and its financial position as at 30 June 1997. This information is stated in accordance with the accounting policies set out on pages 20 to 22.

Responsibilities of the members of the Law Commission

The Public Finance Act 1989 requires the members of the Law Commission (the members) to prepare financial state-ments in accordance with generally accepted accounting practice which fairly reflect the financial position of the Law Commission as at 30 June 1997, the results of its operations and cash flows and the service performance achievements for the year ended 30 June 1997.

Auditor’s responsibilities

Section 43(1) of the Public Finance Act 1989 requires the Audit Office to audit the financial statements presented by the members. It is the responsibility of the Audit Office to express an independent opinion on the financial statements and report its opinion to you.

The Controller and Auditor-General has appointed HC Lim, of Audit New Zealand, to undertake the audit.

Basis of opinion

An audit includes examining, on a test basis, evidence relevant to the amounts and disclosures in the financial statements. It also includes assessing:

• the significant estimates and judgments made by members in the preparation of the financial statements and
• whether the accounting policies are appropriate to the Law Commission’s circumstances, consistently applied and adequately disclosed.

We conducted our audit in accordance with generally accepted auditing standards in New Zealand. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatements, whether caused by fraud or error. In forming our opinion, we also evaluated the overall adequacy of the presentation of information in the financial statements and the Law Commission’s compliance with significant legislative requirements.

Other than in our capacity as auditor acting on behalf of the Controller and Auditor-General, we have no relationship with or interests in the Law Commission.

Unqualified opinion

We have obtained all the information and explanations we have required.

In our opinion, the financial statements of the Law Commission on pages 20 to 40:

• comply with generally accepted accounting practice and
• fairly reflect:

– the financial position as at 30 June 1997
– the results of its operations and cash flows for the year ended on that date and
– the service performance achievements in relation to the performance targets and other measures adopted for the year ended on that date.

Our audit was completed on 24 October 1997 and our unqualified opinion is expressed as at that date.

HC Lim

Audit New Zealand

On behalf of the Controller and Auditor-General

Wellington, New Zealand

^[1] The Law Commission has four types of product (or output), based on s 5 of the Law Commission Act 1985. They all fall within the output class: Policy Advice. The types are:

• Review of an aspect of the law of New Zealand (s 5(1)(a)). The review is usually contained in a paper published for consultation purposes. This type of product is described as a “Review”;
• Recommendations for reform and development of the law (s 5(1)(b)). These recommendations are usually contained in a Report to the Minister of Justice. They are described as “Reports”;
• Advice on the review or development of the law of New Zealand conducted by a department or other organisation, or on proposals made as a result of the review, under s 5(1)(c) (described simply as “Advice”); this type of product includes work done in relation to the Legislation Advisory Committee and concerning the implementation of Law Commission recommendations; and
• Advice to the Minister of Justice on ways in which the law of New Zealand can be made as understandable and accessible as is practicable (s 5(1)(d)). This type of product is described as “Accessibility Advice”. Advice under s 5(1)(d) often forms part of other products. A product will be described as “Accessibility Advice” when this is the predominant characteristic.