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E.75iii Statement of Performance Expectations 2016/2017
Published by the Tertiary Education Commission
Te Amorangi Mātauranga Matua
44 The Terrace
PO Box 27048
Wellington, New Zealand
Date: 23 June 2016
ISBN (print): 978-0-478-32060-2 ISBN (electronic): 978-0-478-32060-2
TEC reports and publications are also available online at www.tec.govt.nz/About-us/Publications
Every effort is made to provide accurate and factual content. The Tertiary Education Commission,
however, cannot accept responsibility for any inadvertent errors or omissions that may occur.
© Crown copyright New Zealand 2015
This work is licensed under the Creative Commons Attribution 3.0 New Zealand licence.
You can view the licence: http://creativecommons.org/licenses/by/3.0/nz/
You are free to copy, distribute and adapt the work, as long as you attribute the work to the
Tertiary Education Commission and abide by the other licence terms.E.75 Contents Contents 1 Statement of Responsibility 2 Statement of Performance Expectations 3 Our operational outputs 5 Funding the activities of the Tertiary Education Commission 6 Tertiary education sector outputs 11 Teaching and Learning 11 Research 23 Benefits and Unrequited Expenses 26 Non-departmental Capital Expenditure 28 Forecast Financial Statements 29
2
Statement of Responsibility
This Statement of Performance Expectations 2016/17 is produced in accordance with the
requirements of sections 149B to 149M of the Crown Entities Act 2004.
This Statement of Performance Expectations 2016/17 has been prepared as required under the
Crown Entities Act 2004. We take responsibility for the statement’s content, including the
assumptions used in preparing the forecast financial statements and the other required
disclosures. We will not update these prospective financial statements following their publication.
We use and maintain internal controls to ensure the integrity and reliability of our
performance and financial reporting.
We certify that the information contained in this Report is consistent with the appropriations
contained in the Estimates of Appropriations for the year ending 30 June 2017. These were laid
before the House of Representatives under section 9 of the Public Finance Act 1989.
Signed on behalf of the Board of the Tertiary Education Commission:
John Spencer Nigel Gould
Chair Chair
Tertiary Education Commission Audit and Risk Committee
Tertiary Education Commission
23 JUNE 2016 23 JUNE 20163 Statement of Performance Expectations The purpose of a Statement of Performance Expectations is to: • set annual performance expectations • provide a base against which actual performance can be assessed • provide an explanation of how performance will be assessed • provide forecast financial statements. Our Statement of Performance Expectations 2016/17 complements our Statement of Intent 2015/16 – 2018/19 (SOI). Our SOI describes what the Tertiary Education Commission Te Amorangi Mātauranga Matua (the TEC) intends to achieve over the four years 2015/16 to 2018/19. The Tertiary Education Strategy Our strategic direction is underpinned by the Tertiary Education Strategy 2014 – 19, which sets out the Government’s current to long-term direction priorities for tertiary education. The strategy emphasises the opportunity for New Zealand to develop a tertiary system that is more flexible, outward-facing, engaged and focused on improving outcomes for learners and employers. It presents six priorities that shape what we do: • Priority 1: Delivering skills for industry • Priority 2: Getting at-risk young people into a career • Priority 3: Boosting achievement of Māori and Pasifika • Priority 4: Improving adult literacy and numeracy • Priority 5: Strengthening research-based institutions • Priority 6: Growing international linkages. The Business Growth Agenda The Business Growth Agenda is central to the Government’s priority of building a more productive and competitive economy. Lifting productivity and competitiveness is critical to creating business opportunities, more jobs and higher wages and ultimately the higher living standards to which New Zealanders aspire. Our role is to support the Ministry of Business, Innovation and Employment to match skills training to employers’ needs by investing in tertiary knowledge and skills that meet employers’ needs. Better Public Services To sharpen the public sector’s focus on high-quality delivery, the Government has set Better Public Services targets. For tertiary education the priority is to boost skills and employment by increasing educational achievement. We contribute towards these two targets: • by 2017, 85 percent of 18-year-olds will have achieved a National Certificate of Educational Achievement level 2 or an equivalent qualification • by 2018, 60 percent of 25- to 34-year-olds will have a qualification at level 4 and above on the New Zealand Qualifications Framework.
4
Our outputs, the tertiary education sector outputs and our impacts link to the Government’s
Business Growth Agenda and Tertiary Education Strategy priorities.
THE TERTIARY EDUCATION STRATEGY
PRIORITY 1 PRIORITY 2 PRIORITY 3 PRIORITY 4 PRIORITY 5 PRIORITY 6
Delivering Getting at-risk Boosting Improving Strengthening Growing
skills for young people achievement adult literacy research-based international
industry into a career for Māori and and numeracy institutions linkages
Pasifika
THE BUSINESS GROWTH AGENDA
Building Skilled and Safe Workplaces Building Innovation
WHAT WE WANT TO ACHIEVE – OUR IMPACTS
An increased proportion of the A tertiary system that is more Higher-quality and more
population with a tertiary qualification responsive to the needs of employers relevant research
Priorities 1,2,3,4,5 and learners Priorities 1,2,3,4,5,6 Priorities 5,6
HOW WE INVEST – TERTIARY EDUCATION SECTOR OUTPUTS
(REFER TO PAGES 11-28)
TEACHING AND LEARNING RESEARCH BENEFITS AND OTHER
UNREQUITED EXPENSES
Tertiary Tuition and Access to Tertiary Tertiary Sector/Industry Centres of Support to
Training Education Collaboration Projects Research Excellence Apprentices
$2,491.002 million $25.116 million $23.847 million $49.800 million $2.190 million
Secondary-Tertiary English for NON-DEPARTMENTAL Research and Tertiary Scholarships
CAPITAL EXPENDITURE
Interface Migrants Research-Based and Awards
(Vote Education) (Vote Immigration) Literacy and Numeracy Teaching $14.447 million
$18.225 million $1.500 million Assessment Tool $301.500 million
$0.500 million
WHAT WE DO – OUR OUTPUTS
(REFER TO PAGES 6-9)
Administration of and Support for the Tertiary Sector
$48.778 million5 Our operational outputs
6
Our operational outputs
Funding the activities of the Tertiary
Education Commission
Administration of and Support for the Tertiary Sector
This appropriation is limited to giving effect to the Tertiary Education Strategy by investing in
Administration of tertiary education, monitoring and maintaining the Government’s ownership interest in
and Support for tertiary education institutions, and advice and support to Ministers.
the Tertiary Sector This appropriation is intended to achieve effective investment in tertiary education and the
protection of the Crown’s ownership in tertiary education institutions.
Investing in tertiary education links to the Tertiary Education Strategy Priorities 1-6:
• Priority 1: Delivering skills for industry
• Priority 2: Getting at-risk young people into a career
• Priority 3: Boosting achievement of Māori and Pasifika
• Priority 4: Improving adult literacy and numeracy
• Priority 5: Strengthening research-based institutions
• Priority 6: Growing international linkages.7
Forecast
Administration of and support for the tertiary sector 2016/17
$000
Revenue
Appropriation revenue
Tertiary Education Commission 47,168
Māori Education Trust 109
Contract – Immigration New Zealand funding for administration of English 173
for Migrants
Interest revenue 1,254
Other 74
Total revenue 48,778
Expenses
Tertiary Education Commission 49,781
Māori Education Trust 109
Total expenses 49,890
Surplus/(deficit) (1,112)
Our operational output class, Administration of and Support for the Tertiary Sector, has three
components: Managing the Government’s Investment in the Tertiary Education Sector, Ownership
Monitoring of Tertiary Education Institutions and Tertiary Education and Training Advice.
Managing the Government’s Investment in the Tertiary Education Sector
We do this by managing the investment system, monitoring investment in tertiary education
organisations and providing information and advice to government.
Ownership Monitoring of Tertiary Education Institutions
We protect the Crown’s ownership interest in tertiary education institutions through
monitoring risks and financial viability and providing advice on tertiary education institution
council appointments.
Tertiary Education and Training Advice
We deliver timely and high-quality advice and support to ministers on the tertiary sector and
tertiary education and training issues.8
How performance will be assessed
Performance measures Actual Target Target
Measure Dimension
2014/15 2015/16 2016/17
Managing the investment system
The overall satisfaction rating given by
the Minister for Tertiary Education, Skills
and Employment on the Tertiary New New Baseline
Quality
Education Commission (as per the measure measure year
Common Satisfaction Survey)
(Note 1)
Managing the Government’s Investment in the Tertiary Education Sector
Plans for tertiary education organisations
demonstrate evidence of alignment with Quality 100% 100% 100%
employer, community and learner needs
Plans for tertiary education organisations
include targets for improving
Quality 100% 100% 100%
achievement rates for priority groups in
the Tertiary Education Strategy
Quality
Payments are made to tertiary education
organisations as per the agreed Quantity 100% 100% 100%
contractual terms and conditions
Timeliness
Number of tertiary education
25-30 60-70
organisations audited by the Tertiary Quantity 36
audits audits
Education Commission
Percentage of audits completed within
70 days according to audit compliance Timeliness 100% 95% 95%
standards
Percentage of TEOs where an
appropriate action plan is initiated (as
per the TEC performance consequences
Quality 100% 100% 100%
framework) on the basis of an identified
material breach of TEC’s rules or
requirements
Percentage of Investment Plans that are
Quantity 100% 100% 100%
monitored
Number of tertiary education
New
organisations that are the subject of a Quantity 5-7 10-15
measure
review and/or investigation
Percentage of independently assessed
Maintain
externally focused publications that New
Quality Baseline or
meet 6 or more elements of the TEC measure
increase
Plain English Standard
Ownership Monitoring of Tertiary Education Institutions
Ownership risks are assessed and
appropriate mitigation strategies are put Quality 100% 100% 100%
in place (Note 2)9
Actual Target Target
Measure Dimension
2014/15 2015/16 2016/17
Ownership risks are reported and advice
Quality 100% 100% 100%
is provided to the Minister
Recommendations on ministerial
appointments to tertiary education
institution councils are made and the Timeliness 100% 100% 100%
appointment process is managed
effectively and in a timely way
Tertiary Education Training and Advice
Percentage of ministerial items provided
to ministers that do not require redraft Revised Revised
Quality 95%
due to avoidable factual, spelling, measure measure
grammatical or formatting errors
Percentage of ministerial items provided
Timeliness 98% 95% 95%
to ministers within agreed timeframes
Note 1 – The Common Satisfaction Survey rating measures Ministers’ satisfaction with the
quality, timeliness and value for money of advice on a scale from 1-10, where 1 means
unsatisfied and 10 means extremely satisfied.
Note 2 – Risks are assessed against the gazetted risk criteria which is available on our website:
http://www.tec.govt.nz/Tertiary-Sector/Crown-Interest/Interventions/Risk-assessment/10
Tertiary Education
Sector Outputs11
Tertiary education
sector outputs
We invest in tertiary education so that New Zealanders are equipped with the knowledge and
skills needed for lifelong success. We invest in all forms of post-secondary school education
and training. This includes foundation education, adult and community education and
research. We also fund some programmes that link schools with tertiary education.
Teaching and Learning
Tertiary Tuition and Training
(multi-category appropriation)
Tertiary Tuition and
The overarching purpose of this appropriation is to fund tertiary tuition and training that leads
to improvements in New Zealanders’ skill levels. Training (MCA)
The overarching intention is to contribute to improved lifetime outcomes of New Zealanders
through the provision of skills from tertiary education, training, foundation learning
programmes and community education.
Funding teaching and learning links to the Tertiary Education Strategy Priorities 1-5:
• Priority 1: Delivering skills for industry
• Priority 2: Getting at-risk young people into a career
• Priority 3: Boosting achievement of Māori and Pasifika
• Priority 4: Improving adult literacy and numeracy
• Priority 5: Strengthening research-based institutions.
Forecast
Tertiary Tuition and Training (MCA) 2016/17
$000
Revenue
Appropriation revenue
Community Education 73,651
Tertiary Education: Student Achievement Component 2,100,205
Training for Designated Groups 317,146
Total revenue 2,491,002
Expenses
Community Education 73,651
Tertiary Education: Student Achievement Component 2,100,205
Training for Designated Groups 317,146
Total expenses 2,491,002
Surplus/(deficit) –12
How performance will be assessed
Performance at the multi-category appropriation level will be assessed by:
Performance measure
Actual Actual Target Target Target
Measure Dimension
2014 2015 2016 2017 2018
Proportion of 25-34-year-
olds with advanced trade
qualifications, diplomas and Quantity 54.6% 54.7% 57.4% 58.7% 60%
degrees (at level 4 or above).
(Better Public Services target)
This multi-category appropriation consists of three categories:
• Community Education
• Tertiary Education: Student Achievement Component
• Training for Designated Groups.
Community Education
This category is limited to funding for adult and community education and literacy, numeracy
Community Education
and English language provision.
This category is intend to achieve improvement in literacy and numeracy skills for learners
who have low skills in these areas by funding foundational learning programmes.
Funding foundational learning links to the Tertiary Education Strategy Priorities 2 and 4:
• Priority 2: Getting at-risk young people into a career
• Priority 4: Improving adult literacy and numeracy.
Forecast
Community Education 2016/17
$000
Revenue
Appropriation revenue
Adult and Community Education 22,890
Literacy and Numeracy Provision 34,048
English for Speakers of Other Languages 14,058
Migrant Levy 426
Emergency Management Pool 2,229
Total revenue 73,651
Expenses
Adult and Community Education 22,890
Literacy and Numeracy Provision 34,048
English for Speakers of Other Languages 14,058
Migrant Levy 426
Emergency Management Pool 2,229
Total expenses 73,651
Surplus/(deficit) –13
How performance will be assessed
Actual Actual Forecast Target Target Performance measures
Measure Funded Funded 2016 2017 2018
2014 2015 (Note 1) (Note 1) (Note 1)
Adult and community education
Total number of school-based
388,000 375,300 375,300
adult and community 366,184 380,383
±5% ±5% ±5%
education hours funded
In school-based adult and community education – among the priority groups identified in the
Tertiary Education Strategy, percentage of learners identified (Note 2):
– as Māori or Pasifika 32% 41% 50% 50% 50%
– with English-language needs 32% 26% 50% 50% 50%
– as having low or no formal
57% 57% 50% 50% 50%
qualifications.
Number of funded domestic
equivalent full-time students
in Tertiary Education
2,000 2,000 2,000
Institutions-based programmes 1,688 1,731
±5% ±5% ±5%
(including Search and Rescue
and Emergency Management
short courses) per calendar year
Literacy and numeracy
Literacy and numeracy – total
15,100 14,300 14,300
number of funded learners 14,666 13,562
±5% ±5% ±5%
per calendar year
Intensive Literacy and
4,900 4,900 4,900
Numeracy – funded number 5,016 4,959
±5% ±5% ±5%
of learners
English for Speakers of Other
Languages (ESOL) – funded
3,467 3,514 3,800 4,200 4,000
number of learners per
calendar year, including:
–– ESOL funded number 2,900 3,100 3,000
2,932 2,939
of learners ±5% ±5% ±5%
900 800
–– Refugee English funded 700
535 575 ±5% ±5%
number of learners (Note 3) ±5%
(Note 4) (Note 4)
Workplace Literacy and
6,600 5,500 5,500
Numeracy Fund – funded 6,183 5,090
(Note 5) (Note 5) (Note 5)
number of learners, including:
–– Tertiary education
4,300 4,300 4,300
organisations led 3,205 4,370
±5% ±5% ±5%
(Note 6)
–– Employee targeted (Note 6) 2,069 ceased – – –
1,700
800 800
–– Employer led (Note 1) 909 720 ±20%
±20% ±20%
(Note 7)14
Note 1 – The forecast and target measures are shown at 95 percent of expected delivery, with
the exception of Workplace Literacy and Numeracy – employer led.
Note 2 – Priority group 2014 and 2015 actuals are percentages of total learners (not funded
learners).
Note 3 – The decrease for Refugee English between 2017 and 2018 is owing to the end of
additional funding provided in response to the Syrian Refugees.
Note 4 – From 2017, approximately 210 learners will be funded from the TEC’s balance sheet
and the balance will be funded from the Community Education category of the Teaching and
Learning appropriation.
Note 5 – The totals represent the aggregation of all commitments at 100% of expected delivery.
Note 6 – The decrease between 2014 and 2015 for the Workplace Literacy and Numeracy
Fund is owing to the rationalisation of this fund, including a fixed funding rate. As part of this
rationalisation, employee targeted provision was incorporated into the tertiary education
organisations led part of the Workplace Literacy and Numeracy Fund. This took effect in
January 2015.
Note 7 – In 2016, as a one-off increase, approximately 500 learners will be funded from our
balance sheet and the balance of approximately 1,600 learners will be funded from the
Workplace Literacy and Numeracy Fund appropriation.15
Tertiary Education: Student Achievement Component
This category is limited to funding for teaching and learning services for enrolled students in
Tertiary Education:
approved courses at tertiary education organisations to achieve recognised tertiary
Student Achievement
qualifications.
Component
This category is intended to achieve learners’ attainment of recognised tertiary qualifications
by funding education and training opportunities.
Funding education and training links to the Tertiary Education Strategy Priorities 1-5:
• Priority 1: Delivering skills for industry
• Priority 2: Getting at-risk young people into a career
• Priority 3: Boosting achievement of Māori and Pasifika
• Priority 4: Improving adult literacy and numeracy
• Priority 5: Strengthening research-based institutions.
Forecast
Tertiary Education: Student Achievement Component 2016/17
$000
Revenue
Appropriation revenue
Provision at levels 1 and 2 101,299
Provision at levels 3 and above 1,992,603
– Universities* 1,202,000
– Institutes of Technology and Polytechnics 478,809
– Wānanga 130,291
– Private Training Establishments 181,503
ICT Graduate Programmes 4,039
Section 321 Grants for School of Dance and School of Drama 2,264
Total revenue 2,100,205
Expenses
Provision at levels 1 and 2 101,299
Provision at levels 3 and above 1,992,603
– Universities* 1,202,000
– Institutes of Technology and Polytechnics 478,809
– Wānanga 130,291
– Private Training Establishments 181,503
ICT Graduate Programmes 4,039
Section 321 Grants for School of Dance and School of Drama 2,264
Total expenses 2,100,205
Surplus/(deficit) –
*The cost of funding International Doctor of Philosophy (PhD) students was $41.500 million in
2015/16 and is estimated to be $42.800 million in 2016/17.16
How performance will be assessed
Performance measures Actual Actual Forecast Target Target
Funded Funded 2016 2017 2018
Measure
2014 2015
(Note 1) (Note 1) (Note 2) (Note 2) (Note 2)
Number of domestic
12,500 12,500 12,500
equivalent full-time students 13,516 12,098
±3% ±3% ±3%
at levels 1 and 2 (See Note 2)
Number of domestic equivalent full-time students New Zealand Qualifications Framework level
3 and above by sub-sector (See Note 2)
110,500 108,300 108,100
–– Universities 117,438 117,528
±5% ±5% ±5%
–– Institutes of Technology 52,800 52,000 52,000
55,640 54,733
and Polytechnics ±5% ±5% ±5%
17,600 18,700 18,700
–– Wānanga 18,162 17,423
±5% ±5% ±5%
–– Private Training 21,300 21,900 21,900
22,066 20,780
Establishments ±5% ±5% ±5%
Total domestic equivalent full-
time students at New Zealand
213,306 210,465 212,900 211,500 211,300
Qualifications Framework level
3 and above (Note 3)
Total domestic equivalent full-
226,822 222,563 225,400 224,000 223,800
time students (Note 3)
Note 1 – Funded equivalent full-time students data represents a proportion of the total
equivalent full-time students delivered. Some of the equivalent full-time students are not
funded owing to funding caps.
Note 2 – The forecast and target measures are shown at 95% of expected delivery.
Note 3 – Total domestic equivalent full-time students represents the aggregation of all
Student Achievement Component commitments at 100% of expected delivery.
Actual Target Target Target Target
Measure
2014 2015 2016 2017 2018
Performance measures
Percentage of equivalent full-
time students funded through
Student Achievement 18% Increase Increase Increase Increase
Component fund that were
Māori at NZQF level 4 and above
Percentage of Student
Achievement Component funded
equivalent full-time students 9% Increase Increase Increase Increase
that were Pasifika at NZQF level
4 and above
Percentage of equivalent full-
time students under the age of
25 funded through Student 64% Increase Increase Increase Increase
Achievement Component fund at
NZQF level 4 and above
Actuals for 2015 were unavailable at time of publishing.17
Investment Plan performance commitments targets for Student Achievement
Component funding
Performance measures
2014 2014 2016
Sector performance commitment shifts linked to funding
Commitment Actual Commitment
Course All learners 84% 83% 85%
completion
Māori learners at NZQF levels 4
80% 78% 82%
and above
Pasifika learners at NZQF levels 4
77% 74% 78%
and above
Under-25-year-old learners at
85% 85% 86%
NZQF levels 4 and above
Qualification All learners 71% 78% 77%
completion
Māori learners at NZQF levels 4
65% 67% 72%
and above
Pasifika learners at NZQF levels 4
62% 62% 68%
and above
Under-25-year-old learners at
69% 73% 71%
NZQF levels 4 and above
Progression From NZQF levels 1-3 to levels 4
38% 39% 41%
and above for all learners
Retention For all learners across all NZQF all
67% 74% 77%
levels and all learners
Actuals for 2015 were unavailable at time of publishing.
We do not yet hold commitments for 2017. These will be agreed as part of the Investment Plan
process being run during 2016.18
Training for Designated Groups
This category is limited to the purchasing and arranging of training linked to the
Training for
New Zealand Qualifications Framework and the purchase of both on-job and off-job training
Designated Groups
places, including delivery of fully or partially funded training places and other
industry-training related projects.
This category is intended to achieve an increase in the number of young people and
employees with qualifications valued by employers through investing in training.
Funding qualifications valued by employers links to the Tertiary Education Strategy Priorities 1
and 2:
• Priority 1: Delivering skills for industry
• Priority 2: Getting at-risk young people into a career.
Forecast
Training for Designated Groups 2016/17
$000
Revenue
Appropriation revenue
Industry Training Fund 168,351
Industry Training Fund - Direct Access Scheme 10,000
Industry Training Fund - Ring-fenced amounts 1,600
Youth Guarantee 118,182
Gateway 19,013
Total revenue 317,146
Expenses
Industry Training Fund 168,351
Industry Training Fund - Direct Access Scheme 10,000
Industry Training Fund - Ring-fenced amounts 1,600
Youth Guarantee 118,182
Gateway 19,013
Total expenses 317,146
Surplus/(deficit) –19
How performance will be assessed
Actual Actual Forecast Target Target Performance measures
Measure Funded Funded 2016 2017 2018
2014 2015 (Note 1) (Note 1) (Note 1)
Industry Training – funded
27,100 26,400 26,100
standard training measures 26,949 27,883
±5% ±5% ±5%
(Note 2)
Apprentices – funded standard 15,500 15,700 16,200
13,301 15,375
training measures (Note 2) ±5% ±5% ±5%
Youth Guarantee – total
9,200 9,000 9,000
funded equivalent full-time 9,429 9,258
±5% ±5% ±5%
students
13,200 13,300 13,300
13,609 13,956 ±5% ±5% ±5%
Gateway – total participants
in 371 in 374 in up to in up to in up to
and number of schools
schools schools 375 375 375
schools schools schools
Note 1 – The forecast and target measures are shown at 95% of expected delivery.
Note 2 – Standard training measure is the amount of training required for a trainee to achieve
120 National Qualifications Framework credits. Funding is based on the number of standard
training measures arranged by an industry training organisation in a calendar year.20
Access to Tertiary Education
This appropriation is limited to improving access to tertiary education and training.
Access to
This appropriation is intended to improve access to tertiary education and training for Tertiary
Tertiary Education
Education Strategy priority learners.
Investing in priority learner group activities links to the Tertiary Education Strategy Priorities 2
and 3:
• Priority 2: Getting at-risk young people into a career
• Priority 3: Boosting achievement of Māori and Pasifika.
Forecast
Access to Tertiary Education 2016/17
$000
Revenue
Appropriation revenue
Equity Loading 16,716
Māori and Pasifika Trades Training (Top-ups) 8,400
Total revenue 25,116
Expenses
Equity Loading 16,716
Māori and Pasifika Trades Training (Top-ups) 8,400
Total expenses 25,116
Surplus/(deficit) –
How performance will be assessed
Performance measure Actual Actual Forecast Target Target
Measure Funded Funded 2016 2017 2018
2014 2015 (Note 1) (Note 1) (Note 1)
Māori and Pasifika Trades Training 3,200 3,200
2,300
– number of learners per calendar 1,189 1,787
±5% ±5% ±5%
year
Note 1 – The forecast and target measures are shown at 95% of expected delivery.21
Tertiary Sector/Industry Collaboration Projects
This appropriation is limited to funding activities that improve the relevance to industry of
tertiary education provision.
Tertiary Sector/
Industry
This appropriation is intended to support the development of knowledge and skills that are
required by learners and employers. Collaboration
Investing in the development of knowledge and skill links to the Tertiary Education Strategy
Projects
Priorities 1 and 3:
• Priority 1: Delivering skills for industry
• Priority 3: Boosting achievement of Māori and Pasifika.
Forecast
Tertiary Sector / Industry Collaboration Projects 2016/17
$000
Revenue
Appropriation revenue
National Centre for Tertiary Teaching Excellence 3,556
ITO Strategic Leadership Fund 1,000
ICT Graduate Schools (Development) 5,000
Engineering (Building the Pipeline) 2,000
Māori and Pasifika Trades Training (Brokerage) 3,009
Māori and Pasifika Trades Training (Consortia) 2,318
Section 321 Taranaki Futures Trust 125
International Connections for New Zealanders 3,750
Quality Teaching Agenda 3,089
Total revenue 23,847
Expenses
National Centre for Tertiary Teaching Excellence 3,556
ITO Strategic Leadership Fund 1,000
ICT Graduate Schools (Development) 5,000
Engineering (Building the Pipeline) 2,000
Māori and Pasifika Trades Training (Brokerage) 3,009
Māori and Pasifika Trades Training (Consortia) 2,318
Section 321 Taranaki Futures Trust 125
International Connections for New Zealanders 3,750
Quality Teaching Agenda 3,089
Total expenses 23,847
Surplus/(deficit) –22
How performance will be assessed
Performance measures Actual Actual Forecast Target Target
Measure Funded Funded 2016 2017 2018
2014 2015 (Note 1) (Note 1) (Note 1)
Number of domestic
equivalent full-time students
in Information and New New 170 300 400
Communications Technology measure measure ±5% ±5% ±5%
(ICT) Graduate Schools per
calendar year
Māori and Pasifika Trades
2,300 3,200 3,200
Training – number of learners 1,189 1,787
±5% ±5% ±5%
per calendar year
Note 1 – The forecast and target measures are shown at 95% of expected delivery.
Secondary-Tertiary Interface (Vote Education)
The Ministry of Education provides funding to us from this appropriation to fund Trades
Secondary-Tertiary Academies in the tertiary setting. The Ministry of Education is responsible for reporting the
Interface performance of this appropriation.
(Vote Education)
Forecast
Secondary-Tertiary Interface (Vote Education) 2016/17
$000
Revenue
Appropriation revenue 18,225
Total revenue 18,225
Total expenses 18,225
Surplus/(deficit) –
English for Migrants (Vote Immigration)
We administer a programme under contract with Immigration New Zealand (English for
English for Migrants Migrants). Immigration New Zealand is responsible for reporting the performance of this
(Vote Immigration) appropriation.
Forecast
English for Migrants (Vote Immigration) 2016/17
$000
Revenue
Revenue from Immigration New Zealand 1,500
Total revenue 1,500
Total expenses 1,500
Surplus/(deficit) –23
Research
Centres of Research Excellence
This appropriation is limited to the purchase of cooperative and collaborative tertiary research
in areas of research strength in the tertiary education sector through the contestable Centres
Centres of
of Research Excellence Fund. Research Excellence
This appropriation is intended to achieve delivery of high quality research by purchasing
cooperative and collaborative research in areas of research strength in the tertiary
education sector.
Purchasing research is linked to the Tertiary Education Strategy Priorities 5 and 6:
• Priority 5: Strengthening research-based institutions
• Priority 6: Growing international linkages.
Forecast
Centres of Research Excellence 2016/17
$000
Revenue
Appropriation revenue 49,800
Total revenue 49,800
Total expenses 49,800
Surplus/(deficit) –
How performance will be assessed
Actual Target Target Performance measure
Measure Dimension
2014/15 2015/16 2016/17
Centres of Research Excellence Annual
Reports are reviewed against research Quality Achieved Achieved Achieved
plans and meet assessment criteria24
Tertiary Education Research and
Research-Based Teaching
Tertiary Education
This appropriation is limited to funding research and reasearch-based teaching on the basis of
Research and measured research quality in tertiary education organisations and supporting wānanga
Research-Based research capability.
Teaching This appropriation is intended to achieve an increase in, or maintian the quality of, research
and reasearch-based teaching and learning and to improve investment in research within the
tertiary sector.
Funding research and research-based teaching is linked to the Tertiary Education Strategy
Priorities 5 and 6:
• Priority 5: Strengthening research-based institutions
• Priority 6: Growing international linkages.
Forecast
Tertiary Education Research and Research-Based Teaching 2016/17
$000
Revenue
Appropriation revenue
Priorities for Focus 1,500
Performance-Based Research Fund 300,000
– Quality Evaluation element 165,000
– Research Degree Completions element 75,000
– External Research Income element 60,000
Total revenue 301,500
Expenses
Priorities for Focus 1,500
Performance-Based Research Fund 300,000
– Quality Evaluation element 165,000
– Research Degree Completions element 75,000
– External Research Income element 60,000
Total expenses 301,500
Surplus/(deficit) –25
How performance will be assessed
Actual Actual Target Target Performance measures
Measure Dimension
2014 2015 2016 2017
Research degree
completions (measured by
Performance-Based 3,900 3,900
Quantity 3,946 3,858
Research Fund (PBRF) – ±5% ±5%
eligible research degree
completions) (Note 1)
Percentage increase in
amount of external income
Quantity 3.4% 3.3% 2-4% 2-4%
for PBRF – eligible
providers (Note 2)
Note 1 – This information can only be provided by calendar year. The most recent confirmed
calendar year of data for research degree completions is 2012.
Note 2 – This information can only be provided by calendar year. The most recent
unconfirmed data (used for 2016 indicative funding) is from 2014.26
Benefits and Unrequited Expenses
Support to Apprentices
This appropriation is limited to payments to New Zealand Apprentices and other participants
Support to in work-based training, including Māori and Pasifika Trades Trainees, towards their tools and
Apprentices other training related costs.
This appropriation is intended to assist people establishing a career in industry by providing
financial assistance.
In 2016/17 this appropriation relates to funding Māori and Pasifika Trades Training tools for
employees and is linked to the Tertiary Education Strategy Priorities 1,2 and 3:
• Priority 1: Delivering skills for industry
• Priority 2: Getting at-risk young people into a career
• Priority 3: Boosting achievement of Māori and Pasifika.
Forecast
Support to Apprentices 2016/17
$000
Revenue
Appropriation revenue
Māori and Pasifika Trades Training (Tools) 2,190
Total revenue 2,190
Total expenses 2,190
Surplus/(deficit) –
An exemption was granted under section 15D(2)(b)(ii) of the Public Finance Act 1989, as
additional performance information is unlikely to be informative because this appropriation is
solely for payments to Māori and Pasifika Trades Trainees towards the cost of tools and other
training related costs under the Education Act 1989.27
Tertiary Scholarships and Awards
This appropriation is limited to providing scholarships for tertiary students and other awards
in the tertiary sector, and the provision of scholarships and bursaries to Māori and Pasifika
Tertiary
students. It includes training assistance under Queen Elizabeth II Study Awards and Scholarships
recognition of outstanding tertiary education teachers. and Awards
This appropriation is intended to provide a stipend for domestic sixth-year medical trainee
interns and other scholarships.
We are only responsible for two components of this appropriation. The Ministry of Education
is responsible for the other components. We are responsible for:
• Trainee Medical Intern Grant
• Tertiary Teaching Awards.
Forecast
Tertiary Scholarships and Awards 2016/17
$000
Revenue
Appropriation revenue
Trainee Medical Intern Grant 13,167
Tertiary Teaching Awards 200
Ministry of Education administered awards 1,080
Total revenue 14,447
Expenses
Trainee Medical Intern Grant 13,167
Tertiary Teaching Awards 200
Ministry of Education administered awards 1,080
Total expenses 14,447
Surplus/(deficit) –
An exemption was granted under section 15D(2)(b)(ii) of the Public Finance Act 1989, as
additional performance information is unlikely to be informative because this appropriation is
solely for payments of Tertiary Scholarships and Awards under the Education Act 1989.28
Non-departmental Capital Expenditure
Literacy and Numeracy Assessment Tool
This appropriation is limited to development of the online assessment tools for adult and
Literacy and youth literacy and numeracy.
Numeracy
This appropriation is intended to achieve the delivery of online assessment tools for adult and
Assessment Tool youth literacy and numeracy to improve literacy and numeracy skills.
Development of the online assessment tool links to the Tertiary Education Strategy Priority 4:
• Priority 4: Improving adult literacy and numeracy.
Forecast
Literacy and Numeracy Assessment Tool 2016/17
$000
Revenue
Appropriation revenue
Literacy and Numeracy Assessment Tool 500
Total revenue 500
Expenses
Literacy and Numeracy Assessment Tool 533
Total expenses 533
Surplus/(deficit) (33)
How performance will be assessed
Performance measure Actual Target Target
Measure Dimension
2014/15 2015/16 2016/17
Online assessment tools for literacy
Quality
and numeracy are developed on Achieved Achieved Achieved
Timeliness
time and are fit for purpose29 Forecast Financial Statements
30
Forecast Statement of Comprehensive Revenue and Expenses
For the years ended 30 June
Budget Budget Forecast Forecast Forecast
2016 2017 2018 2019 2020
$000 $000 $000 $000 $000
REVENUE
Operating revenue:
Vote Tertiary Education – Ministry of Education
(MoE) 46,359 47,168 47,589 46,324 46,199
Contract Revenue – Immigration New Zealand
(INZ) 74 173 173 173 173
Other revenue 8 74 16 16 16
Total operating revenue 46,441 47,415 47,778 46,513 46,388
Grants revenue:
Vote Education/Tertiary Education – MoE 2,879,913 2,921,958 2,901,210 2,903,073 2,906,039
Contract revenue – INZ 807 1,500 1,500 1,500 1,500
Prior year recoveries – 4,000 3,549 – –
Total grants revenue 2,880,720 2,927,458 2,906,259 2,904,573 2,907,539
Finance revenue:
Interest income on bank deposits – operating 1,802 1,254 1,254 1,254 1,254
Interest income on bank deposits – grants 500 250 250 250 250
Total finance revenue 2,302 1,504 1,504 1,504 1,504
Total revenue 2,929,463 2,976,377 2,955,541 2,952,590 2,955,431
EXPENSE
Operating expense:
Personnel costs 26,892 27,850 27,687 27,994 28,661
Other expenses 16,786 14,818 14,082 12,664 11,776
Capital charge 1,982 2,260 2,150 2,000 2,000
Depreciation 777 820 643 504 373
Amortisation 4,142 4,033 4,470 4,605 4,832
Total operating expense 50,579 49,781 49,032 47,767 47,642
Grants expense:
Grants expenses – MoE 2,879,913 2,921,958 2,901,210 2,903,073 2,906,039
Contract expenses – INZ 807 1,500 1,500 1,500 1,500
Total grants expense 2,880,720 2,923,458 2,902,710 2,904,573 2,907,539
Total expense 2,931,299 2,973,239 2,951,742 2,952,340 2,955,181
OPERATING SURPLUS/(DEFICIT)
Operating surplus/(deficit) (2,336) (1,112) – – –
Grants surplus/(deficit) 500 4,250 3,799 250 250
Total comprehensive revenue and expenses (1,836) 3,138 3,799 250 25031
Forecast Statement of Changes in Equity
For the years ended 30 June
Budget Budget Forecast Forecast Forecast
2016 2017 2018 2019 2020
$000 $000 $000 $000 $000
Balance at 1 July 26,792 *26,720 26,108 26,108 26,108
Capital contribution 825 500 – – –
Total comprehensive revenue and expense for the year (1,836) 3,138 3,799 250 250
Provision for repayment of grant surplus (500) (4,250) (3,799) (250) (250)
Balance at 30 June *25,281 26,108 26,108 26,108 26,108
* The 2016 closing Equity balance of $25,281 differs to the 2017 opening Equity balance of $26,720 owing to Budget
2017 using closing forecast not closing budget figures.32
Forecast Statement of Financial Position
As at 30 June
Budget Budget Forecast Forecast Forecast
2016 2017 2018 2019 2020
$000 $000 $000 $000 $000
CURRENT ASSETS
Cash and cash equivalents 40,683 47,568 48,990 47,032 49,000
Prepayments 336 187 187 187 187
Debtors and other receivables 1,196 1,053 978 978 978
Total current assets 42,215 48,808 50,155 48,197 50,165
NON-CURRENT ASSETS
Property, plant and equipment 4,666 4,761 5,028 5,434 5,971
Intangible assets 7,914 7,506 7,186 6,481 5,649
Work in progress 3,100 5,050 5,050 5,050 5,050
Total non-current assets 15,680 17,317 17,264 16,965 16,670
Total assets 57,895 66,125 67,419 65,162 66,835
CURRENT LIABILITIES
Creditors and other payables 9,762 6,846 7,318 7,235 7,257
GST payable 133 1,593 1,286 1,079 1,077
Employee entitlements 1,536 1,822 1,879 1,935 2,053
English for migrants – revenue in advance 7,690 2,941 2,367 1,919 1,852
Provisions for lease 206 1,221 1,108 996 884
Repayment of grants surplus 500 4,250 3,799 250 250
Total current liabilities 19,827 18,673 17,757 13,414 13,373
NON-CURRENT LIABILITIES
English for migrants – revenue in advance 12,303 21,022 23,223 25,298 26,992
Employee entitlements 484 322 331 342 362
Total non-current liabilities 12,787 21,344 23,554 25,640 27,354
Total liabilities 32,614 40,017 41,311 39,054 40,727
Net assets 25,281 26,108 26,108 26,108 26,108
EQUITY
General funds 25,281 26,108 26,108 26,108 26,108
Total equity 25,281 26,108 26,108 26,108 26,10833
Forecast Statement of Cash Flows
For the years ended 30 June
Budget Budget Forecast Forecast Forecast
2016 2017 2018 2019 2020
$000 $000 $000 $000 $000
Cash flows from operating activities
Cash was provided from:
Operating MoE 46,359 47,168 47,589 46,324 46,199
Operating INZ 74 300 300 300 300
Operating other 8 74 16 16 16
Grants MoE 2,879,913 2,921,958 2,901,210 2,903,073 2,906,039
Grants INZ 807 3,000 3,000 3,000 3,000
Grant recoveries-prior year – 4,000 3,549 – –
2,927,161 2,976,500 2,955,664 2,952,713 2,955,554
Cash was applied to:
Grants payments (2,880,486) (2,923,458) (2,902,710) (2,904,573) (2,907,539)
Payments to employees (25,405) (26,866) (26,665) (26,828) (27,855)
Other operating payments (18,446) (16,550) (14,604) (13,956) (12,535)
Capital charge (1,982) (2,260) (2,150) (2,000) (2,000)
GST – net (13) 276 (307) (209) (1)
(2,926,332) (2,968,858) (2,946,436) (2,947,566) (2,949,930)
Net cash flows from operating activities 829 7,642 9,228 5,147 5,624
Cash flows from investing activities
Cash was provided from:
Interest income on bank deposits – operating 1,802 1,254 1,254 1,254 1,254
Interest income on bank deposits – grants 500 250 250 250 250
2,302 1,504 1,504 1,504 1,504
Cash was applied to:
Purchase of property, plant and equipment (4,805) (345) (910) (910) (910)
Purchase of intangible assets (5,608) (4,834) (4,150) (3,900) (4,000)
(10,413) (5,179) (5,060) (4,810) (4,910)
Net cash flows from investing activities (8,111) (3,675) (3,556) (3,306) (3,406)
Cash flows from financing activities
Cash was provided from:
Capital contribution MoE 825 500 – – –
Cash was applied to:
Repayment of grants surplus (net) – MoE – (3,521) (4,250) (3,799) (250)
Net cash flows from financing activities 825 (3,021) (4,250) (3,799) (250)
Net increase/(decrease) in cash and cash equivalents (6,457) 946 1,422 (1,958) 1,968
Cash and cash equivalents at the start of the year 47,140 46,622 47,568 48,990 47,032
Cash and cash equivalents at the end of the year 40,683* 47,568 48,990 47,032 49,000
*The 2016 closing Cash and cash equivalents balance of $40,683 differs to the 2017 opening Cash and cash equivalents
balance of $46,622 owing to Budget 2017 using closing forecast not closing budget figures.34
Reconciliation of Total Comprehensive Revenue and Expenses
with the Net Cash Inflows from Operating Activities
For the years ended 30 June
Budget Budget Forecast Forecast Forecast
2016 2017 2018 2019 2020
$000 $000 $000 $000 $000
Total comprehensive revenue and expenses (1,836) 3,138 3,799 250 250
Add non-cash items:
Depreciation of property, plant and equipment 777 820 643 504 373
Amortisation of intangibles 4,142 4,033 4,470 4,605 4,832
Total non-cash items 4,919 4,853 5,113 5,109 5,205
Add/(deduct) net movements in working capital 48 1,155 1,820 1,292 1,673
Add/(less) items classified as investing activities
Interest income (2,302) (1,504) (1,504) (1,504) (1,504)
Total investing activities (2,302) (1,504) (1,504) (1,504) (1,504)
Net cash flows from operating activities 829 7,642 9,228 5,147 5,62435
Movement of Forecast Property, Plant and Equipment
Leasehold Computer Office Furniture Motor
Improvements Equipment Equipment and Fittings Vehicles Total
$000 $000 $000 $000 $000 $000
Cost
2016 Budget
Balance at 1 July 2015 2,525 9,051 712 1,624 21 13,933
Additions 3,500 500 – – – 4,000
Balance at 30 June 2016 6,025 9,551 712 1,624 21 17,933
Balance at 1 July 2016 5,903 9,185 539 1,343 – 16,970
Additions 1,111 345 – – – 1,456
Balance at 30 June 2017 7,014 9,530 539 1,343 – 18,426
Balance at 1 July 2017 7,014 9,530 539 1,343 – 18,426
Additions – 910 – – – 910
Balance at 30 June 2018 7,014 10,440 539 1,343 – 19,336
Balance at 1 July 2018 7,014 10,440 539 1,343 – 19,336
Additions – 910 – – – 910
Balance at 30 June 2019 7,014 11,350 539 1,343 – 20,246
Balance at 1 July 2019 7,014 11,350 539 1,343 – 20,246
Additions – 910 – – – 910
Balance at 30 June 2020 7,014 12,260 539 1,343 – 21,15636
Movement of Forecast Property, Plant and Equipment
(continued)
Furniture
Leasehold Computer Office and Motor
Improvements Equipment Equipment Fittings Vehicles Total
$000 $000 $000 $000 $000 $000
Accumulated Depreciation
2016 Budget
Balance at 1 July 2015 2,525 7,750 705 1,489 21 12,490
Depreciation expenses 181 532 3 61 – 777
Balance at 30 June 2016 2,706 8,282 708 1,550 21 13,267
Balance at 1 July 2016 2,649 8,386 535 1,275 – 12,845
Depreciation expenses 358 402 3 57 – 820
Balance at 30 June 2017 3,007 8,788 538 1,332 – 13,665
Balance at 1 July 2017 3,007 8,788 538 1,332 – 13,665
Depreciation expenses 358 273 1 11 – 643
Balance at 30 June 2018 3,365 9,061 539 1,343 – 14,308
Balance at 1 July 2018 3,365 9,061 539 1,343 – 14,308
Depreciation expenses 359 145 – – – 504
Balance at 30 June 2019 3,724 9,206 539 1,343 – 14,812
Balance at 1 July 2019 3,724 9,206 539 1,343 – 14,812
Depreciation expenses 360 13 – – – 373
Balance at 30 June 2020 4,084 9,219 539 1,343 – 15,185
Furniture
Leasehold Computer Office and Motor
Improvements Equipment Equipment Fittings Vehicles Total
$000 $000 $000 $000 $000 $000
Carrying amounts
At 1 July 2015 – 1,301 7 135 – 1,443
At 30 June and 1 July 2016 3,319 1,269 4 74 – 4,666
At 30 June and 1 July 2017 4,007 742 1 11 – 4,761
At 30 June and 1 July 2018 3,649 1,379 – – – 5,028
At 30 June and 1 July 2019 3,290 2,144 – – – 5,434
As at 30 June 2020 2,930 3,041 – – – 5,97137
Movement of Forecast Intangible Assets
Internally
Generated
Software
$000
Cost
2016 Budget
Balance at 1 July 2015 34,304
Additions 4,998
Balance at 30 June 2016 39,302
Balance at 1 July 2016 37,836
Additions 4,835
Balance at 30 June 2017 42,671
Balance at 1 July 2017 42,671
Additions 4,150
Balance at 30 June 2018 46,821
Balance at 1 July 2018 46,821
Additions 3,900
Balance at 30 June 2019 50,721
Balance at 1 July 2019 50,721
Additions 4,000
Balance at 30 June 2020 54,72138
Movement of Forecast Intangible Assets
(continued)
Accumulated Depreciation
2016 Budget
Balance at 1 July 2015 27,246
Depreciation expenses 4,142
Balance at 30 June 2016 31,388
Balance at 1 July 2016 31,132
Depreciation expenses 4,033
Balance at 30 June 2017 35,165
Balance at 1 July 2017 35,165
Depreciation expenses 4,470
Balance at 30 June 2018 39,635
Balance at 1 July 2018 39,635
Depreciation expenses 4,605
Balance at 30 June 2019 44,240
Balance at 1 July 2019 44,240
Depreciation expenses 4,832
Balance at 30 June 2020 49,072
Internally
Generated
Software
$000
Carrying amounts
At 1 July 2015 7,058
At 30 June and 1 July 2016 7,914
At 30 June and 1 July 2017 7,506
At 30 June and 1 July 2018 7,186
At 30 June and 1 July 2019 6,481
As at 30 June 2020 5,64939
Work in Progress
Internally Property,
Generated Plant and
Software Equipment Total
$000 $000 $000
Cost
2016 Budget
Balance at 1 July 2015 1,705 – 1,705
Additions 5,593 4,800 10,393
Transfer to software/property, plant and equipment (4,998) (4,000) (8,998)
Balance at 30 June 2016 2,300 800 3,100
Balance at 1 July 2016 4,489 1,672 6,161
Additions 4,834 345 5,179
Transfer to software/property, plant and equipment (5,945) (345) (6,290)
Balance at 30 June 2017 3,378 1,672 5,050
Balance at 1 July 2017 3,378 1,672 5,050
Additions 4,150 910 5,060
Transfer to software/property, plant and equipment (4,150) (910) (5,060)
Balance at 30 June 2018 3,378 1,672 5,050
Balance at 1 July 2018 3,378 1,672 5,050
Additions 3,900 910 4,810
Transfer to software/property, plant and equipment (3,900) (910) (4,810)
Balance at 30 June 2019 3,378 1,672 5,050
Balance at 1 July 2019 3,378 1,672 5,050
Additions 4,000 910 4,910
Transfer to software/property, plant and equipment (4,000) (910) (4,910)
Balance at 30 June 2020 3,378 1,672 5,05040
Forecast Revenue from the Crown and
Planned Expenditure
For the year ended 30 June 2017
Revenue Expenditure
$000 $000
GRANTS AND CONTRACT REVENUE
Vote Tertiary Education:
Non-Departmental Output Expenses
Tertiary Tuition and Training 2,491,002 2,491,002
Access to Tertiary Education 25,116 25,116
Tertiary Sector/Industry Collaboration Projects 23,847 23,847
Centres of Research Excellence 49,800 49,800
Research and Research-Based Teaching 301,500 301,500
Total Non-Departmental Output Expenses 2,891,265 2,891,265
Benefits and Other Unrequited Expenses
Tertiary Scholarships and Awards 14,447 14,447
Support to Apprentices 2,190 2,190
Total Benefits and Other Unrequited Expenses 16,637 16,637
Vote Education:
Non-Departmental Output Expenses
Secondary Tertiary Interface 18,225 18,225
Total Non-Departmental Output Expenses 18,225 18,225
Grants Revenue – Vote Education/Tertiary Education 2,926,127 2,926,127
Contract Revenue
Contract – Immigration New Zealand English for Migrants 1,500 1,500
Total Grants and Contract Revenue 2,927,627 2,927,627
Administered by Ministry of Education
Quality Teaching Agenda 3,089 3,089
Scholarships and Awards 1,080 1,080
Administered by Tertiary Education Commission 2,923,458 2,923,458
Total Grants and Contract Revenue 2,927,627 2,927,62741
Revenue to Fund the Tertiary Education
Commission’s Operations
For the year ended 30 June 2017
Revenue
$000
Revenue to Fund the Tertiary Education Commission’s Operations
Vote Tertiary Education:
Non-Departmental Output Expenses
Administration of and Support for the Tertiary Sector 47,168
Vote Tertiary Education: Operating Appropriations 47,168
Other Revenue
Māori Education Trust 109
Contract – Immigration New Zealand – Funding for Administration of English for Migrants 173
Interest income 1,254
Other revenue 74
Total Operating Revenue 48,778
Administered by the Tertiary Education Commission 47,415
Administered by the Māori Education Trust 109
Interest income 1,254
Total Operating Revenue 48,778
Non-Departmental Capital Expenditure
Literacy and Numeracy Assessment Tool 500
Total Non-Departmental Capital Expenditure 50042
Notes to the Forecast Financial Statements
Statement of Accounting Policies
Reporting Entity
The TEC is a Crown entity as defined by the Crown Entities Act 2004 and was established on 1 January 2003 pursuant
to section 159C of the Education Act 1989. It is domiciled in New Zealand. The TEC’s ultimate parent is the
New Zealand Crown.
The TEC’s primary objective is to provide services to the New Zealand public, as opposed to that of making a financial
return. Accordingly, the TEC has designated itself as a public benefit entity (PBE) for financial reporting purposes.
Basis of Preparation
Statement of compliance
The forecast financial statements have been prepared in accordance with the Education Act 1989 and Crown
Entities Act 2004, which include the requirement to comply with Generally Accepted Accounting Practice in
New Zealand (NZ GAAP), except as outlined below in regards to grants expenditure relating to the funding of tertiary
education organisations.
The forecast financial statements have been prepared in accordance with NZ GAAP as appropriate for public benefit
entities and they comply with Tier 1 PBE standards, except as outlined below in regards to grants expenditure
relating to the funding of tertiary education organisations.
While there is no material adjustment on transition to the new PBE accounting standards, we have been unable to
determine a reliable estimate of the impact of PBE accounting standards in relation to grants expenditure
recognised in these forecast financial statements. This is due to the complexity of the application of the new PBE
accounting standards in relation to grants expenditure and the need for additional levels of technical review
associated with the application of those standards.
The financial impact of its application is unknown at this stage. However, it is expected that the TEC will apply the
new accounting standards for grant expenditure as the basis for preparation for the 30 June 2016 financial
statements and forecast outyears.
The forecast financial statements have been prepared on a going concern basis and the accounting policies have
been applied consistently throughout the period.
The purpose of these forecast financial statements is to provide information on the TEC’s future operating
intentions against which it must report, and be audited against, at the end of the fiscal year. Use of this information
for any other purpose may not be appropriate.
Please note that these financial statements contain no actual results. Actual results achieved are likely to vary from
the forecast information and the variation may be material.
Basis of measurement
The forecast financial statements have been prepared on a historical cost basis.43 Functional and presentation currency The forecast financial statements are presented in New Zealand dollars and all values are rounded to the nearest thousand dollars ($000). The functional currency for the TEC is New Zealand dollars. Changes in accounting policies There have been no changes from the accounting policies adopted in the last audited financial statements. Summary of Significant Accounting Policies Revenue Revenue is measured at fair value of consideration received or receivable. Revenue from Crown The TEC is primarily funded from the Crown. This funding is restricted in its use for the purpose of the TEC meeting its performance measures as specified in this Statement of Performance Expectations 2016/17. Revenue from the Crown is recognised as revenue when earned and is reported in the financial period it relates. The fair value of revenue from the Crown has been determined to be equivalent to the amounts due in the funding arrangements. Grants received Grants are recognised as revenue when they become receivable unless there is an obligation in substance to return the funds if conditions of the grant are not met. If there is such an obligation, the grants are initially recorded as grants received in advance and recognised as revenue when conditions of the grant are satisfied. Contract revenue Immigration New Zealand. As a part of their residency requirements, some migrants are required to pay English language tuition fees. These fees are paid to Immigration New Zealand as an agent for the TEC. The fees are then passed to the TEC to administer. The TEC retains an administration fee of 10%. A migrant can then enrol in an English language course at an approved course provider. The TEC pays the student fees direct to that organisation. If not used within five years the balance is returned to Immigration New Zealand. Interest income on bank deposits – operating Interest income is recognised using the effective interest method. Interest income on an impaired financial asset is recognised using the original effective interest rate. The interest earned is used in the TEC’s operations. Interest income on bank deposits – grants Interest income is recognised using the effective interest method. Interest income on an impaired financial asset is recognised using the original effective interest rate. The interest earned on grants funds is paid to the Crown. Capital charge The capital charge is recognised as an expense in the financial year to which the charge relates. Grants expenditure Grants expenditure relates to payments to tertiary education organisations for post-secondary school education and training, including foundation education, adult and community education, and research. Grants expenditure is recognised as an expense in the statement of comprehensive revenue and expenses as post- secondary school education and training, including foundation education, adult and community education, and research is provided. As outlined above, the TEC has not adopted PBE standards in relation to grants expenditure.
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