MANUKAU INSTITUTE OF TECHNOLOGY
Annual Report 2013
1
2
In this
year’s
report
Our Organisation
About Manukau Institute of Technology4
2013 at a glance6
Our success stories8
Chair of Council’s review15
Chief Executive’s report19
Financial overview 22
Financial performance summary
and key statistics23
Governance
Governance and accountability25
Council membership29
Equal educational opportunities30
Equal employment opportunities31
Statement of Service Performance
The Environment in which we operate33
Our Strategic Plan33
Tertiary Education Strategy 2010 – 201534
Our Investment Plan 2013 – 2015 34
How are we doing?35
Financial Statements
Statement of Responsibility43
Audit Report44
Statement of Comprehensive Income45
Statement of Changes in Equity 45
Statement of Financial Position 46
Statement of Cash Flows 47
Notes to the Financial Statements48
Compulsory Student Service Fees72
General
Statement of Resources73
Glossary of terms74
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
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NEW ZEALAND MARITIME SCHOOL
AUCKLAND CBD
MIT AUCKLAND CAMPUS
We’re
building
a successful
future.
AUCKLAND CBD
MIT NEWMARKET CAMPUS
NEWMARKET
MIT at UNITEC
MT ALBERT
FLORAMAX, FLORISTRY
MT WELLINGTON
MIT SCHOOL OF PLUMBING
MANGERE
Our purpose
To transform lives, organisations and communities
through learning.
KO AWATEA NURSING HUB
OTAHUHU
Our vision
MIT CENTRE FOR BUSINESS DEVELOPMENT
EAST TAMAKI
To be widely recognised as the leading Institute
of Technology/Polytechnic (ITP) in New Zealand.
MIT MAIN CAMPUS
OTARA
Our mission
To deliver vocationally focussed tertiary education,
research and technology transfer — giving
graduates, employers and communities the
knowledge and skills to achieve their potential,
and further grow the Auckland economy.
MANUKAU TERTIARY CAMPUS
MANUKAU (Opening 2014)
MOTOR SPORT CENTRE
PUKEKOHE
Key goals
11 sites
We will measure ourselves against five key goals
which are:
1. Increased participation
2.Improved success, retention and educational
performance
3.Improved employability and progression
4.Enhanced experience and satisfaction
5. Increased non-base income.
4
EST
1972
across Auckland
›
N
0 km
3 km
6 km
KEY
Auckland-Waiwera 1
Motorway
Rangitoto
Island
Waiheke Island
NORTH SHORE
Auckland-Kumeu 16
Motorway
Manukau Institute of Technology
Campuses
Motorways and Main Roads
Auckland International Airport
WAITAKERE
ad
Ro
th
ou
tS
ea
Gr
AUCKLAND CITY
CENTRE
STUDY AREAS
CREATIVE ARTS
ENGINEERING AND TRADES
20 South-Western
Motorway
CONSUMER SERVICES
BUSINESS AND IT
EDUCATION AND SOCIAL SERVICES
Auckland Airport
MANUKAU
NURSING AND HEALTH STUDIES
MARITIME AND LOGISTICS
1 Auckland - Hamilton
Motorway
1500+
Courses
180
programmes
1,620
courses
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
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2013 at
a glance
$
$16.2m
non-base
income
Employability
and progression
$$$
$57.3m
Government
funding
Participation
17,346
Total enrolled
students
Female Students
48%
Male Students
8
Grad 2%
emplo uates in
y
furthement or
r stud
y
52%
7,692
EFTS
(Equivalent Full-Time
Student)
50% Students under 25*
35% Pasifika students*
- students*
16% Maori
6
*Not mutally exclusive.
EFTS weighted SAC calculation.
Financial
$48m
Student fees and
department income
$105.6m
Total expenses
$258.4m
Total assets
Success and
Retention
$0.6m
Net surplus
People
Female Staff
Male Staff
Course
completion
SAC
The following were awarded
79%
560
Degrees
531
Diplomas
3,392
Certificates
and awards
Satisfaction
8.2/10
Overall student
satisfaction
36%
Gender
balance in the
workplace
NEW
LS
ARRIVA
64%
193
New staff
members
1,522
Study hours
taken by staff
Ethnic Diversity of Staff
56% NZ European
11% Maori
10% Unknown
9% Pasifika
8% Asian
6% Indian
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Our students – today’s
champions and tomorrow’s
leaders
Celebrating New Zealand
Maritime School’s top cadet
“I REALLY APPRECIATE THE SUPPORT THAT WAS GIVEN
BY THE NZ MARITIME SCHOOL AND EVERYTHING THEY
HAVE TAUGHT ME HAS RUBBED OFF VERY NICELY.”
Receiving the prestigious Captain Worth Memorial Prize
has been a ‘tremendous honour’ for O’Shea Butler, the
top year two Nautical Science cadet at our New Zealand
Maritime School.
O’Shea Butler, who is studying a Diploma of Nautical
Science, was also presented with a $1,000 scholarship
from the Auckland Branch of Master Mariners
Association for academic excellence.
As well as being presented with both awards, O’Shea
Butler was chosen as one of 10 first-year NZ Maritime
School students taken on annually by Holland America
Line, to gain experience as cadets on board the
company’s cruise ships.
The cadets work on board Holland America Line ships,
gaining the sea time needed for their qualification, and
also spend time in the classroom covering academic
aspects of their course.
“I have really enjoyed my time at sea so far and look
forward to going back in December,” O’Shea says. “I
spent four and a half months aboard the MS Oosterdam
as a cadet officer, where I did everything from fire
fighting to lifesaving and navigation.”
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Pioneering Special Education
for Pasifika
From MIT to National TV
“MY LECTURERS WERE FANTASTIC. THEY WENT ABOVE
AND BEYOND THEIR JOBS, OFTEN GIVING ME EXTRA
TUTORING OUTSIDE OF CLASS HOURS.”
“I FOUND I LOVED WHAT I WAS LEARNING AND I
WAS GETTING HUGE AMOUNTS OF FEEDBACK AND
CONSTRUCTIVE, POSITIVE CRITICISM.”
– Olivia Roberts, graduate,
Bachelor of Applied Social Work
– Saarah Gul, graduate,
Bachelor of Applied Communications
Olivia Roberts has achieved success against the odds
A COMMITMENT to excellence and a “can-do” attitude
and is sharing her experience to help others.
led to a prestigious award for young Manukau Institute
The 37-year old mother of four is one of three winners
of Technology graduate Saarah Gul.
of this year’s Award for Applied Excellence out of a
The 22-year-old was one of three recipients of the
graduating class of 4,535.
Institute’s 2013 Award for Applied Excellence.
Olivia successfully completed her Bachelor of Applied
Saarah completed a three year Bachelor of Applied
Social Work in 2012 with top marks, something she
Communication degree and is now working three
achieved while raising four children, three of whom are
different jobs at TVNZ as a news video researcher, video
on the autism spectrum.
content producer and news reference library archivist.
While studying with us, Olivia was asked by her lecturer,
Ms Gul says the industry experience she gained during
Dr Bill Hagan, to share her experience of raising children
her degree was a key factor in getting her to where she
with special needs. She became an advisor for the
is today.
Ministry of Education specialising in special education
from the perspective of Pacific families, and also
participated in a research study around this for them.
“From a Pacific Island perspective having a child with
autism is looked upon as a curse. I chose to set this
aside and was determined to help my children and find
ways of getting support for myself and others in my
position,” she says.
Olivia grew up in Mangere and went to Mangere College.
After completing high school, she studied how to care
for people with disabilities at MIT, then started a family
before commencing her studies in social work.
She worked on the marketing for Auckland Grammar
School’s annual Art Expo and on New Zealand Breast
Cancer Foundation’s awareness month campaign, which
gave her access to valuable industry contacts.
“In this industry it is about what you know but it is also
who you know, that’s just the reality of it,” she says.
While the degree also gave her hands-on skills such
as shooting, editing and animating video, Ms Gul says
the main thing she took away from her time here was
self-confidence.
“At MIT, I found I loved what I was learning”.
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Our people are
integral to our success
Inspiring students to reach
for the stars
“ELEANOR’S WIN MEANS THAT NEW ZEALAND’S VOICE IS
BEING NOTICED AND HEARD… WINNING THE MAN BOOKER
PRIZE IS AN INCREDIBLE, INSPIRATIONAL ACHIEVEMENT.”
– Kirsty Whalen, student,
Bachelor of Creative Writing
A huge roar of delight echoed through the corridors of
the Faculty of Creative Arts at 10am on Wednesday 16
October.
Eleanor Catton, creative writing lecturer and author of
The Luminaries, had just been announced as the winner
of 2013 Man Booker Prize.
Her 30 Stage One and Two creative writing students
watched a live stream of the Man Booker Awards
ceremony. All were quietly hopeful their teacher would
take home English language fiction’s most significant
literary prize.
“We were ecstatic when Eleanor was announced as the
winner,” said Kirsty Whalen, one of Catton’s creative
writing students.
“Seeing her achieve such incredible international global
exposure gives me hope for the future. We’re so proud
of what she’s achieved.” Whalen says Catton has been
much more than just a teacher to her class.
“She’s a mentor, and she’s one of us. Ellie’s win means
that New Zealand’s voice is being noticed and heard
on the global contemporary literary scene. Winning
the Man Booker Prize is an incredible, inspirational
achievement.”
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Bridging the Divides
“THE BIGGEST OPPORTUNITY FOR US LIES IN
SUPPORTING MORE YOUNG PEOPLE IN MAKING
INFORMED CHOICES ABOUT THEIR FUTURES.”
– Colleen Young, CSMP Administrator
For young people, the pathway to a better future
seems simple enough - stay in school, study
hard, go on to tertiary study and then move into
employment.
Despite this, the numbers of young people labelled
“NEETs” (Not in Employment, Education or Training)
is spiking internationally.
Our Centre for Studies in Multiple Pathways (CSMP)
was established to provide a resource hub for
educators, policy makers and researchers with
an interest in developing more flexible learning
pathways for at risk students.
This year, the CSMP hosted Bridging the Divides,
New Zealand’s third national conference on multiple
learning pathways and educational transitions
Conference delegates heard from a diverse range
of speakers representing business, government and
academic interests.
Looking to the future, conference organiser and
CSMP Administrator Colleen Young says local
initiatives are vital in helping young New Zealanders
stay engaged in education.
“The biggest opportunity for us lies in supporting
more young people in making informed choices about
their future.”
Generous bequest advances
nursing careers
“IT IS MUCH APPRECIATED BY ME AND MY FAMILY..”
– Sifahula Leavai, student,
Bachelor of Nursing Pacific
A generous bequest from the estate of a Takanini couple
will assist the Institute’s nursing students suffering
financial hardship.
The estate of Jewell Constance Neil and her husband
Alton Douglas Neil gifted the sum of $270,000 to
ourFaculty of Nursing and Health Studies in 2011.
The money has been put into the Neil Trust. The trust
will annually award two $2,000 grants to second or third
year Bachelor of Nursing students studying with us, who
are facing financial difficulties in completing their studies.
Sifahula Leavai and Fleur Malifa were the first two
nursing students to receive Neil Trust grants. They were
presented with their cheques at a special ceremony at
MIT by Neil Panther, the couple’s nephew.
Both students hope to work in district nursing in the
community, to help Pasifika and M -aori people and to
apply the skills they are learning in our Bachelor of
Nursing Pacific programme.
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Making a difference in
the community
Building her future
“THIS INITIATIVE AND THE DRIVE TO FIND
FLEXIBLE WAYS FOR STUDENTS TO COMPLETE THEIR
QUALIFICATIONS IS OUR COMMITMENT TO ENSURE
THAT PEOPLE CAN GET INTO A SKILLED JOB IN
MONTHS, NOT YEARS.”
– Paul Jeurissen, Dean, Faculty of Engineering and
Trades
Being the only woman in a class full of men didn’t
hold Sapoa Rimoni back. The 24-year-old was the only
female student in her Certificate of Carpentry course at
Manukau Institute of Technology.
“In the beginning the boys tried to offer to hammer nails
in for me and I was like, “No, I can do it, thank you very
much”, she said.
“Then I’d get higher marks than some of the guys in our
practical assignments and they realised,”this girl’s our
competition, we should stop helping her out!”
She’s the first person in her family to receive a tertiary
qualification and says her relatives are all “stoked” to see
her graduate.
Her mentor Paul Siope, a pastor at Calvary Community
Church, nominated her to study at MIT through the
Tertiary Education Commission’s Pasifika Trades Training
initiative.
A key feature of the Pasifika Trades Training programme
is the close working relationship between the Institute
and Pacific church leaders, and Mrs Rimoni says those
links were invaluable when things got tough.
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Big boost for job
opportunities
“THIS IS A SIGNIFICANT STEP FORWARD FOR THE
GROWTH OF CADETSHIPS FOR MIT STUDENTS AND
LOCAL WORKFORCE DEVELOPMENT.”
– John McEnteer, General Manager of The
Southern Initiative
A Memorandum of Understanding (MOU) has been
signed by MIT and Auckland Council’s Southern
Initiative, to provide a significant increase in cadetship
opportunities.
The Southern Initiative is a 30-year programme
focusing on developing stable homes and employment
opportunities for children and families in parts of the
south of Auckland.
The MOU will help facilitate more internships and
cadetships for our students with South Auckland
businesses, through the provision of a Cadetship
Coordinator at MIT.
Through the Southern Initiative, a successful cadetship
programme for our students at Auckland Airport
was trialled in December last year. The student’s
performance has been so strong that this programme
has recently been expanded and made permanent.
Our Chief Executive Dr Peter Brothers says the
cadetships are a win-win for students and employers.
“Our students gain practical, hands-on work
experience, while employers have a useful way of
trialing future prospective employees and assessing
their skills and fit for their organisation.”
Connecting future careers
“THE JOBS OF 2020 HAVEN’T EVEN BEEN CONCEIVED
YET AND IT IS YOUNG ICT PROFESSIONALS WHO WILL
MAKE THE CHANGE.”
– Simon Moutter, Telecom CEO
MIT is helping bring New Zealand’s business and
Information Technology leaders together with secondary
students and their parents to talk career trends.
IndustryConnect a networking event, linking students
from high schools in Auckland’s eastern corridor with
executives from leading corporations such as Telecom
New Zealand, Microsoft New Zealand, Fuji Xerox and
Orion Health.
The executives’ message was simple. They need more
students to be planning careers in technology and sales
and marketing within the technology sector.
Telecom CEO Simon Moutter said that the employment
market is undergoing monumental change, commenting
that “any job to do with technology is going to be hot.”
“The jobs of 2020 haven’t even been conceived yet and it
is young ICT professionals who will make the change.”
He called on students attending IndustryConnect to step
up, saying, “New Zealand needs you to aspire to great
things.”
MIT’s Faculty of Business and Information Technology
senior lecturer Edwina Mistry says IndustryConnect
helps MIT identify and discuss industry needs, and
supports young people in transitioning from school to
tertiary study.
We build unique
partnerships with
our community.
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14
Inspiring student success in a year of major
challenges
PETER WINDER | CHAIR OF COUNCIL REVIEW
Our focus is, and must be, on
astute management to contain our
operating costs and maximise our
revenue in order to pay down the
additional build costs.
The last year was intended to be a year of great
change for MIT. The development of the Manukau
Tertiary Campus was intended to reflect the
transformation of both our physical presence in
Manukau, and the way in which we teach and
deliver learning experiences.
The financial collapse of Mainzeal mid-construction
of the Campus has had serious, widespread and
ongoing repercussions for MIT.
Mainzeal’s collapse has meant that the completion
of the Manukau Tertiary Campus was delayed by
12 months and required an additional $25 million
of borrowing. In total, the cost of the project has
increased by $30 million. Not all of that is our cost
and we did recover a bond.
Hawkins Construction was awarded the remedial
contract to complete the MTC and we anticipate it
being operational mid-year 2014.
Unfortunately, the fallout has been felt right across
MIT.
It has had a significant impact on our 10 year
Capital Plan. We have had to put all other capital
expenditure on hold including the planned Pasifika
Centre. Outside ‘business as usual’ maintenance
allocations for Academic Operations, Facilities
Management and Information Technology have
also been put on hold and we have reduced the
allocation for the Investment Fund.
Our focus is, and must be, on astute management
to contain our operating costs and maximise our
revenue in order to pay down the additional build
costs.
Government funding and domestic student fee
revenue was below budget by $2m, due to changes
in the mix of programme delivery and increased
student participation in zero fee courses. However,
emphasis on non-base income continues to show
growth, up 0.7% on 2012. International student
enrolments have continued to grow, up 5% on
2012.
It is pleasing that despite the impact of Mainzeal’s
collapse we were able to end the year with an
operating surplus of $0.6 million.
It is equally important to note that despite the
financial turmoil that MIT had to deal with we
were able to maintain academic standards and the
success of our students is inspiring.
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
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The 2013 academic results were well deserved and
Another MOU was signed with CPIT and the Skills
testament to the staff’s commitment to student
Organisation to offer business education to industry.
success. It’s heartening to see that their dedication
is appreciated, for the second year in a row MIT
was given 8.2 out of 10 by students on the overall
student satisfaction index.
Enrolments for 2014 are on a par with last year
and the forecast is for them to soften due to an
improving economy, falling unemployment and
construction driving Auckland’s job growth.
Traditionally enrolment numbers in tertiary
education soften in this environment. The
community that MIT serves is New Zealand’s fastest
growing and most culturally diverse community.
The future prosperity of this community will depend
in part on building the skills and capability of its
work-force to equip them for higher value, higher
skilled roles relevant to the economy of the 21st
Century.
In reality, making the commitment to study at MIT
for many of our students is a balancing act between
learning and earning. Choosing to learn may require
changes to family life to support study goals. The
short-term need to earn may win over the long-term
goal of gaining a qualification despite vocational
education increasing the likelihood of a better job
and higher income down the track.
Our challenge is to deliver
vocational education
programmes that provide
students with real skills that
equip them to get real and higher
value jobs.
During 2014 our focus must be on responding to a
rapidly changing economic environment to make
sure that our programmes are seen to be relevant
and is working on multiple projects with industry
partners.
The Business Career Experience Programme and
the Faculty of Business & IT’s brainchild ‘Industry
Connect’ were also launched.
The Tertiary Education Commission funded another
78 scholarships for Pasifika students to take up
trades training last year. It’s proactive initiatives
like this that really change lives and provide a
foundation for success. One of our scholarship
recipients in 2013 was 24-year-old Sapoa Rimoni
– the only woman in her certificate of carpentry
course. Sapoa was the first person in her family
to have a tertiary education, let alone graduate.
Sapoa has re-enrolled at MIT and now plans to
become a Civil Engineer.
The Faculty of Nursing and Health Studies was
privileged to be able to offer a financial
hardship scholarship following a
generous donation of $270,000
from the estate of Takanini
couple, Jewell
Constance & Alton
Douglas Neil.
The
first two
recipients of the
The 2013 academic
results were well
deserved and
testament to the staff’s
commitment to
student success.
grant were mature
students studying the new
and much needed Bachelor of
Nursing Pacific.
to the needs of both students and employers and
An Emerging Leaders’ Scholarship was awarded
to provide valuable, real skills that command a
to 84 first year students displaying future academic
premium in the labour market.
and industry leadership ability.
To ensure that our programmes equip our students
These students will be given every opportunity
with the real skills that employers need now, and
to reach their potential. Our high achieving and
in future years, it is critical that we understand the
very caring Leadership Team and Heads of School
needs of industry.
are their mentors and we applaud them for their
Our work in this area has resulted in a number
of win-wins in 2013 including a Memorandum of
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EnterpriseMIT was officially launched mid-year
commitment to inspiring and nurturing these gifted
people.
Understanding between MIT and Auckland Council
Our educational focus firmly remains on delivering
under the Southern Initiative that provides for a
vocationally focussed tertiary education, research
significant increase in cadetship opportunities for
and technology transfer that ensures Auckland’s
MIT students.
economy, graduates, employers and communities
have the capability and skills to achieve their
potential.
MIT would not have weathered the challenges of
2013 without the dedication and professionalism of
council members our management team and staff.
We must recognise and thank
Chief Executive Peter Brothers
and his team for the way that
they have responded to the
rapidly changing and very difficult
operating environment.
The Council also went through change during 2013.
We wish to recognise and thank Ms Kaye Turner
for her service to the community as Chair of the
Council. We also acknowledge and thank Dr Stuart
Crosbie for his service as the Acting Chair through
much of the very challenging year.
We are very aware of our special obligation to
serve the people, communities and employers of
Counties Manukau and know that by doing this well
we will not only significantly improve the lives of
our graduates but their extra skills and increased
contributions are critical to our region and the future
economic and social prosperity of the nation.
Peter Winder
Chair of Council
Dr Stuart Crosbie
Deputy Chair of Council
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“Year of extremes” will be remembered for
toughest challenge and highest acknowledgement
DR PETER BROTHERS | CHIEF EXECUTIVE REPORT
2013 was a year of extremes. Within weeks of the
we had a solid year-end performance and an
New Year, we learned of Mainzeal’s collapse and
exceptional recovery in Semester 2 following softer
MIT was faced with the most significant financial
than expected enrolments in Semester 1.
setback in its 40-year history.
By year’s end the Institute
celebrated truly international
success when Creative
Writing Lecturer Eleanor
Catton was named the 2013
recipient of the prestigious
Man Booker Prize for her
novel, The Luminaries.
Despite the distractions, we kept our focus on
delivering vocational education programmes that
provide skills for employment.
I am pleased to report that 82% of our 2013
graduates are employed or in further study which
is well above our target of 70%. We also had
a 10% increase in degree graduates from the
previous year.
In 2013, we offered 180 programmes, 1620
courses, and enrolled over 17,000 students –
7,692 EFTS (Equivalent Full-Time Students).
We achieved our SAC enrolment targets. This was
in line with expectations following the significant
reduction by the Tertiary Education Commission
of our funded places at Levels 1 and 2. Overall,
By year’s end, we had 4,483 students gain
degrees, diplomas, certificates and other
qualifications.
MIT is committed to partnering with industry to
ensure we get these graduates into rewarding
work. Those ongoing efforts are paying dividends
in terms of placing students in paying jobs and
invaluable work experience every year.
One such example is a new degree developed in
consultation with Counties Manukau Health by
the Faculty of Nursing and Health Studies. New
Zealand’s changing demographic makeup and the
health sector highlighted a need for registered
nurses with specific understanding of Pasifika
cultures and worldviews of health to better serve
Pasifika families and communities.
The first cohort of Bachelor of
Nursing Pacific (BNP) completed
the new degree at the end of
last year and we expect all of
them to be working by the time
we celebrate their achievements
at May’s graduation ceremony.
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The Faculty of Maritime & Logistics opened New
MIT’s support staff deserves recognition for their
Zealand’s only land-based marine engine room at
vital work and tireless commitment to improving
MIT’s Otara campus.
services for students and staff.
The Faculty of Business & IT introduced a
The HR Team continue ground-breaking work
Bachelor of Applied Management degree and
in People & Culture including the delivery of My
certificate, diploma and Bachelor of Information
Voice – MIT’s employee survey that achieved an
& Communication Technologies. The degrees
incredible 85.7% response rate from staff. Over
and graduate diploma for both involve students
50 action plans are now underway to support
completing a final year industry project.
improved ways of working at MIT.
A particularly noteworthy project came from
Other notable developments during the year
our Bachelor of Information Systems students
were the completion of the Student Management
who embarked on a mission that exemplifies the
System, the website upgrade that streamlined
altruism and spirit of community at MIT. For their
online enrolments and the expansion of Health &
“real-world” project they developed a website &
Counselling services for staff and students.
smartphone app to help severe stutterers. These
are the kinds of things our students do that make
a real difference.
I would like to sincerely thank every staff member
for your contribution in 2013. The financial fallout
from Mainzeal has hit hard and will continue to
We had our first intake of Bachelor of Sport &
impact on all of us to some degree; however,
Exercise Science students and worked with the
there is an impressive focus and
Counties Manukau Rugby Union and Corporate
determination to move forward.
Academy Group to develop an industry first
All can be proud of the work
diploma programme that will be delivered onsite
we did last year.
at Pukekohe Stadium this year. Who wouldn’t
be inspired to learn in a classroom that has the
Ranfurly Shield hanging on the wall?
MIT’s reputation as being a vibrant and rewarding
place to work because of its student focus got
a huge boost by Eleanor Catton, who spoke
passionately about teaching and her students in
the many media interviews she did after winning
the Man Booker Prize. We were proud of her
achievement and impressed by her humility in
equal measure. She was and continues to be a
particular
note is the
establishment of our
subsidiary EnterpriseMIT.
remarkable ambassador for MIT.
This entity has grown out of our
Eleanor’s colleague, Maualaivao Albert Wendt
Technical Institute. In addition to the PTE
ONZ, CNZM was made a member of the Order
of New Zealand in the 2013 Queen’s Birthday
Honours – the country’s highest royal honour and
a status restricted to 20 living people at any time.
Quite fittingly, Albert replaced another great Kiwi
writer, the late Margaret Mahy.
Consumer Services (catering and hospitality)
Dean, Cherie Freeman, was also recognised last
year when she became the first New Zealander to
be made an honorary member of London’s City &
Guilds.
20
Of
We were proud of
her achievement and
impressed by her humility
in equal measure. She
was and continues to be a
remarkable ambassador
for MIT.
purchase in 2012 of the Mahurangi
training that came with Mahurangi, we are
extending the functions of the subsidiary to
create professional consultancy service focused
on SMEs (Small and Medium Enterprises).
Enterprise MIT exceeded its
goals for consulting work
done in 2013, and have laid
an excellent foundation for
continued growth into the
future.
A small but symbolic step is that organisationally
we have moved our Careers Office from the
parent MIT into the subsidiary. This because, the
subsidiary is now the home of our ”business-tobusiness” relationships.The Careers Office will
evolve from offering students career counselling
services to also being a source of potential
employees for employers.
Given, that the fundamental purpose of MIT is
to get people into great jobs, we are enhancing
our understanding of employer needs and the
machinery for meeting those needs, so upgrading
the Careers Office is an important step.
2013 was a year that saw an unwanted event,
the Mainzeal collapse, which has left us with a
significant financial burden. However, our work to
serve our community continued unabated. The
results our students have achieved speak well to
the commitment of all at MIT and the support of
our stakeholders. The efforts of all are noted with
gratitude, and appreciated
Dr Peter Brothers
Chief Executive
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
21
Financial Overview
Operating performance
MIT faced significant financial adversity in 2013 as
a result of the receivership of Mainzeal Property
& Construction Ltd, building contractor for MIT’s
Manukau Tertiary Campus on 6 February 2013. This
has serious ongoing ramifications for the future
operating performance of MIT due to the need to
increase future borrowings by a further $25 million to
complete the capital project. The project now has a
revised contractual completion date of 20 May 2014.
An additional $3.8 million was incurred on remedial
works, one-off retender and legal costs as a direct
result of the receivership. Despite this significant
unexpected cost, operating expenditure is below
budget by $0.8 million due to implementing tight
fiscal cost controls along with compensating savings
in both depreciation and interest costs, given the
delayed completion of the project.
Government funding and domestic student fee
revenue was below budget by $2 million due to
changes in the mix of programme delivery and
increased student participation in zero fee courses.
However, emphasis on non-base income continues
to show growth, up 0.7% on 2012. International
student enrolments have continued to grow, up 5%
on 2012. During the year $0.74 million was incurred
in severance and redundancy payments.
MIT serves a diverse community which participates in
vocational education at a rate well below the national
average. In an effort to close the gap MIT has strong
commitment to increasing enrolment. In the past
four years enrolment has increased significantly at
MIT and this increase in provision was the beginning
of a long term strategic response by MIT to increase
the levels of participation in vocational education
in Counties Manukau. Domestic enrolment did fall
marginally in 2013, down 286 EFTS, but the overall
trend has been an increase since 2010 of 6%. MIT
remains committed, in the long term, to continuing
to achieve growth in domestic enrolments, whilst
recognising that this may take decades. MIT also
acknowledges the financial constraints of the TEC,
which will prevent new growth occurring over the
period on this plan.
Regular forecasting of revenue and expenditure
is undertaken throughout the year ensuring that
expenditure is managed in line with student numbers
and revenue. The Council received monthly operating
reports plus updated forecasts for all meetings held
during the year.
Asset base
MIT’s total asset base is $258.4 million in 2013
compared to $236.2 million in 2012. The majority
of the increase relates to an increase in property,
plant and equipment as a result of the construction
in progress of the Manukau Tertiary Campus. In 2012
MIT secured a loan facility of $35 million to fund
capital projects and a liquidity facility of $15 million
to fund current obligations. During 2013 only $12
22
million of the facility has been drawn down, given
the delay in completion of the Manukau Tertiary
Campus and the availability of cash reserves from
the prior year. Net current liabilities rose by $29.2
million to fund the major capital projects and reduce
the onset of debt financing, which was significantly
below budget at year end. The current assets to
current liabilities ratio for 2013 reduced further to
0.16:1 (2012 0.8:1) due to this decrease in cash and
cash holdings and increase in payables. The level of
borrowings at 31 December 2013 of $12.4 million was
well below the budget of $28.9 million and overall
borrowing facility.
The Manukau Tertiary Campus project continues to
be the most significant capital expenditure project
during 2013. The remaining capital expenditure for
the year has mainly focussed on the purchase of
facilities and equipment to provide the infrastructure
required to meet MIT’s goal as a major tertiary
education provider. All other non-essential capital
projects have been put on hold.
The future
MIT’s goal is to achieve a sustainable budget that
retains funds for future capital development. MIT has
received approval from the Secretary of Education to
increase borrowings by a further $25 million to $75
million as a result of increased costs and cashflow
impact required to complete the Manukau Tertiary
Campus. This facility will be in place for the 2014
financial year. The impact of external funding on
MIT over the next ten years has been assessed.
Significant ten year plan revisions and reassessments
have been carried out to ensure MIT can achieve
a sustainable budget given the liquidity and debt
servicing costs of this.
The Institute’s mission is to deliver vocationally
focussed tertiary education, research and technology
transfer that ensures Auckland’s economy, graduates,
employers and communities have the capability and
skills to achieve their potential. MIT recognises that
we have a special obligation to serve the people,
communities and employers of Counties Manukau
and that achieving significantly improved tertiary
education outcomes in this region is critical to both
our mission and to the future economic and social
prosperity of the nation. To achieve this mission the
need to maintain and develop the infrastructure is
essential.
MIT’s ten year capital plan has been reassessed and
investments such as the Pasifika Centre, Engineering
and Technology workshops and other planned
investments are on hold. MIT is confident it can meet
the obligations of external borrowing through sound
financial management, and capitalising on increased
revenue opportunities. However, MIT’s ability to
invest in appropriate capital projects within the next
ten years is significantly impacted.
Financial Performance Summary and Key Statistics
Institute Five Year
Financial Performance Summary
2013
2012
2011
2010
2009
ACTUAL
$000
ACTUAL
$000
ACTUAL
$000
ACTUAL
$000
ACTUAL
$000
FINANCIAL PERFORMANCE
Government Funding
57,298
59,100
57,777
54,679
Other Income
48,873
50,009
49,302
49,102
47,705
(105,563)
(102,949)
(103,786)
(100,646)
(92,029)
608
6,160
3,293
3,135
4,890
0
0
0
0
0
608
6,160
3,293
3,135
4,890
Cash Equivalents and Other Financial Assets
1,712
9,481
41,431
45,481
40,641
Receivables and Inventory
4,919
6,055
5,135
4,605
6,889
6,631
15,536
46,566
50,086
47,530
246,507
218,160
167,846
159,934
158,311
4,541
2,515
1,717
788
728
755
0
0
0
0
251,803
220,674
169,563
160,722
159,039
258,434
236,210
216,129
210,808
206,569
39,706
19,399
21,604
19,681
18,706
553
549
546
545
519
40,259
19,948
22,150
20,226
19,225
Provisions
443
293
290
200
184
Long-term loan
264
360
0
0
0
Total Liabilities
40,966
20,601
22,440
20,426
19,409
217,468
215,610
193,688
190,382
187,160
Capital Contributions and Retained Earnings
116,887
115,029
108,869
105,576
102,341
Revaluation Reserves
100,581
100,581
84,819
84,819
84,819
Total Equity
217,468
215,610
193,688
190,395
187,160
Net Cash Flows - Operations
20,526
13,390
11,302
13,670
10,249
Net Cash Flows - Financing Activities
11,904
456
0
100
500
(37,425)
(7,899)
(11,750)
(12,832)
(13,866)
Operating Expenditure
Surplus/(Deficit) from Operations
Non-Operating expenditure
Net Surplus/(Deficit) for the Year
49,214
FINANCIAL POSITION
Current Assets
Non-Current Assets
Property, Plant and Equipment
Intangible Assets
Investments
Total Assets
Current Liabilities
Payables, Accruals and Provisions
Trust Funds
Non-Current Liabilities
Net Assets
Equity
CASH FLOW SUMMARY
Net Cash Flows - Investing
Net (Decrease)/Increase in Cash
(4,995)
5,947
(448)
938
(3,117)
Bank and Cash at beginning of the year
6,707
760
1,208
270
3,387
Bank and Cash at end of the year
1,712
6,707
760
1,208
270
2.47:1
KEY STATISTICS
Financial
Current Assets to Current Liabilities
0.16:1
0.78:1
2.1:1
2.48:1
Total Liabilities to Total Assets
16%
9%
10%
10%
9%
Proportion of Government Grants to Total
Income Excluding Interest from Investments
54%
54%
54%
53%
51%
7,692
7,951
7,637
7,286
6,880
Students - 1
SAC, International, TOPS and Youth Training,
ITO and Self Funded
Bachelor of Visual Arts EFTS
Ratio of Students to Tutorial Staff - 2
33
55
87
164
164
7,725
8,006
7,724
7,450
7,044
21.9:1
22.3:1
19.5:1
16.76:1
16.76:1
1. S
tudents - enrolled on MIT’s student management system
and those University of Auckland students taught by MIT in the Bachelor of Visual Arts Programme
2. T
he actual FTEs as at 31 December 2013 were used in calculating this ratio. This ratio would reduce and be consistent with prior years if the
FTE consumption during the year was taken into consideration (For example those personnel made redundant in December).
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
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24
Governance and Accountability
Statutory role
Manukau Institute of Technology (MIT) is a polytechnic
established pursuant to section 162 of the Education
part of the annual strategic planning cycle.
Te Tiriti o Waitangi
•To provide the Council with advice pertaining to MIT’s
Te Tiriti o Waitangi obligations.
Act 1989 (the Act). MIT is also a Crown Entity for the
Membership of the MIT Rūnanga comprises
purposes of schedule 13A of the Act and schedule 4 of
representatives from:
the Crown Entities Act 2004.
•Tainui (one member)
Governance structure
Governance
Governance
•The Manukau Urban Māori Authority (MUMA) (one
member)
Council
•Community (four members)
The governing body of MIT is the MIT Council. It
•Organisations (Māori Women’s Welfare League,
comprises eight members appointed in accordance with
New Zealand Māori Wardens, New Zealand Māori Council
section 222AA of the Act; four members appointed by the
and Te Kōhanga Reo - one member rotated yearly over
Minister for Tertiary Education, Skills and Employment and
four years)
four members appointed by the Council.
•Schools/Education (one member)
Council Committees
•MIT (two ex officio members)
Pursuant to section 193(3) of the Education Act 1989, the
Governance philosophy
MIT Council is empowered to establish committees to
exercise such powers as are delegated to them under the
Act or conferred on them by statutes made by the Council.
The standing committees of the MIT Council are the:
•Audit and Compliance Committee
•Chief Executive Review Committee
•Executive Committee
•Student Appeal Committee
•Academic Board
Division of Responsibility between the Council and
Management
The MIT Council considers and approves the mission
and strategic direction of MIT and monitors performance
against agreed strategies and plans. Management, on the
other hand, is responsible for the management of MIT and
develops the procedures and operational plans that are
needed to implement and deliver the Council’s approved
strategy.
These committees are formally constituted with terms of
While many of the MIT Council’s functions have
reference.
been delegated, overall responsibility for maintaining
In addition to its standing committees, in 2013 the MIT
effective systems of internal control ultimately rests
Council established the following two ad hoc committees:
with the Council. To ensure that there is clarity around
•Council Appointments Committee
responsibilities and accountabilities, the Council has in
•Council Financial Governance Committee
place a detailed delegations framework.
MIT Runanga
Both the MIT Council and Management acknowledge
The role of the MIT Runanga
is as follows:
their responsibilities by certifying ‘The Statement of
Community Engagement
contained within this Annual Report.
•To consult with the wider Māori community on issues
Policy Governance
pertaining to Māori tertiary education and MIT’s role in it;
•To bring to MIT the voice of the Māori community;
•To increase engagement with the wider Māori community
with an emphasis on bringing the community into the
life of MIT to work together in the interests of increasing
Māori participation at MIT across all levels (including
higher levels of education and qualification); and
•To advise the wider Māori community of MIT strategic
aspirations pertaining to Māori.
Council Advisory
Responsibility’ (in terms of the Crown Entities Act 2004)
Section 194 of the Act enables the MIT Council to make
statutes with respect to matters including but not limited
to: good government and discipline; admission and
enrolment; courses of study and training; awards granted
by MIT; and other matters required or permitted by the
Act. The Council has approved the following statutes:
•Statute 1: T
he Council Membership, Meetings, Fees and
Committees Statute
•Statute 2: The Delegations and Authorisations Statute
•Statute 3: The Academic Statute
•To recommend policy development and strategic
directions relevant to Māori at MIT to the Council as
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
25
•Statute 4: The Student Statute
permanent position in December. Some particular highlights
In accordance with Statute 3: The Academic Statute, the
from 2013 included:
Council has also approved and annually reviews the MIT
•Getting EnterpriseMIT fully established and operational;
Student Regulations which provide MIT’s overarching rules
•The joint meeting with the Unitec Council and launch of a
on matters relating directly to students.
Section 182 of the Act sets out the requirement on the
Council in determining policy to consult with any board,
committee, or other body established within MIT that has
responsibility for giving advice on the matter or for giving
effect to the policy. In accordance with section 182(2) of
the Act, the Council has established the Academic Board to
advise the Council on matters relating to courses of study
or training, awards, and other academic matters and to
exercise powers delegated to it by the Council.
In accordance with its powers under section 222 of the
Act, the Council has delegated the authority to determine
MIT management policies to the Chief Executive and the
authority to determine MIT policies in relation to academic
matters to the Academic Board.
Legislative Compliance
The MIT Council acknowledges its responsibility to ensure
that the organisation complies with all legislation. The
Council oversees the Chief Executive’s operation of a MITwide legislative compliance programme that systematically
identifies compliance issues so that all staff are aware
of legislative requirements relevant to their role. As part
of this programme, management provides the Audit and
Compliance Committee with the results of an annual
verification of MIT’s compliance with specific legislative
requirements.
combined infrastructure and trades initiative;
•MIT Graduation celebrations held in May to recognise the
achievements of our students;
•MIT Staff Excellence Awards acknowledging outstanding
levels of achievement and dedication by staff;
•The Council Strategic Planning Day held in conjunction
with management. MIT’s future direction was discussed
and developed, and key challenges and responses were
identified;
•MIT’s comparative positioning in being among New
Zealand’s most cost-effective providers of high quality
vocational education as confirmed by external independent
benchmarking studies; and
•Lecturer Eleanor Catton’s outstanding success in winning
the 2013 Man Booker Prize for her novel The Luminaries.
Issues arising from the collapse of Mainzeal Property and
Construction Limited and its impact on the construction of
the Manukau Tertiary Campus were at the forefront of the
Council’s attentions for a large part of the year. The Mainzeal
collapse resulted in a significant increase to the cost of the
project and delay in its completion. The Council is pleased
to note the resilience shown by MIT in effectively working
through the issues and getting the project back on track.
Hawkins Construction NI Limited is on schedule to finish the
project by Semester Two 2014. Once completed, several
faculties will deliver programmes out of the purpose built,
cutting-edge campus located in the heart of Manukau’s CBD.
Risk Management
The MIT Council is committed to the management of risk
at MIT and takes part in risk workshops and has approved
procedures for the identification and management of risk in
order to deliver a balanced portfolio of risk exposures.
Council Fees
Council members were paid fees as follows:
2013 Actual
$000
Internal Audit
The internal audit work at MIT is for the most part directed
Mr P Winder (Chair)
to high risk areas; this means that the internal audit plan
appointed 17 December 2013
is responsive to major changes in the risk profile of the
Ms K Turner (Chair)
1
2012 Actual
$000
0
15
32
26
20
Mr J Hannan
16
16
significant internal audit recommendations.
Dr M Henare
16
16
2013 Highlights and Developments
Dr K Larsen
16
16
2013 was a busy and challenging year for the MIT Council.
Mrs B Pone
16
16
Ms Kaye Turner departed as the Chair of the Council in May,
Mr H Small
16
16
Mr D Wong-Tung
16
16
138
148
Institute. The Audit and Compliance Committee reviews
resigned 31 May 2013
internal audit coverage and the Annual Audit Plan and
Dr S Crosbie (Deputy
Chair)
recommends approval of the Plan and any subsequent
amendments to the MIT Council. The Audit and Compliance
Committee monitors the delivery of the Audit Plan and
management’s responses to and implementation of
and Dr Stuart Crosbie stepped in to lead the Council as the
Acting Chair until the appointment of Mr Peter Winder to the
26
Acting Chair 1 June to 17
December 2013
Total
Council and Standing Committee Attendance 2013
Audit and
Compliance
Chief Executive
Review
Executive
Student Appeal
Governance
Council
Held Attended Held Attended Held Attended Held Attended Held Attended
Mr P Winder (Chair)
-
-
-
-
-
-
-
-
-
-
14
8
-
-
4
1
1
1
-
-
acting Chair 1 June
to 17 December 2013
14
14
3
3
4
4
1
1
-
-
Mr J Hannan
14
12
3
3
-
-
-
-
-
-
Dr M Henare
14
9
-
-
-
-
-
-
-
-
Dr K Larsen
14
12
-
-
-
-
1
1
-
-
Mrs B Pone
14
13
-
-
4
3
-
-
-
-
Mr H Small
14
13
3
2
4
2
1
1
-
-
Mr D Wong-Tung
14
10
3
3
-
-
-
-
-
-
appointed 17 December 2013
Ms K Turner (Chair)
resigned 31 May 2013
Dr S Crosbie
1
The Council meets monthly from February to November and at other times as required. In 2013 there were 14 meetings of the Council
(including three extra ordinary meetings and the annual Council Strategic Planning Day) and eight meetings of the Council Standing
Committees (excluding the Academic Board which does not include Council members in its membership). The Council also met informally
on several occasions during the course of 2013 to be briefed on issues relating to the Manukau Tertiary Campus.
Council Register of Interests
Interest
Date of new
disclosure
Director, McGredy Winder and Co. Limited
Director, The Sound of Music Education Limited
Commissioner, Kaipara District Council
27 March 2014
Deputy Chair, Unitec
21 September 2010
Chair Genesis Youth Trust
Trustee, East Auckland Home and Budget Service Trust
Trustee, Renaissance Centre Trust
27 October 2010
30 August 2012
30 August 2012
Mr John Hannan
Partner, DLA Philips Fox
Director, EnterpriseMIT Limited
21 September 2010
25 October 2012
Dr Manuka Henare
Associate Dean M -aori and Pacific Development,
University of Auckland Business School
Council member, Te Wananga o Aotearoa
Advisor, Glenn Family Foundation
Alternate Director, EnterpriseMIT Limited
Member, University of Auckland Business School Senior Management Team
Chair, Mana Matariki Hospitality Limited
Director, Mana Tai Tokerau Limited
21 September 2010
19 January 2011
26 July 2012
25 October 2012
28 March 2013
28 March 2013
28 March 2013
Dr Ken Larsen
Trustee, Community Mental Health Resources Trust
Director, EnterpriseMIT Limited
Research Director, Manukau Institute of Technology
28 June 2012
25 October 2012
28 February 2013
Mrs Bernadette Pone
Pacific Community Advisory Board, Manukau Institute of Technology
25 August 2011
Mr Howard Small
Board Member, Auckland Museum Trust Board
Director, EnterpriseMIT Limited
27 September 2012
25 October 2012
Councillor
Mr Peter Winder (Chair)
appointed 17 December 2013
Ms Kaye Turner (Chair)
resigned 31 May 2013
Dr Stuart Crosbie
(Deputy Chair)
acting Chair 1 June
to 17 December 2013
1.Mr H Small was appointed to the Chief Executive Review Committee from 31 May
2013 until a permanent Chair of the Council was appointed to fill the position.
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
27
Councillor
Mr David Wong-Tung
Date of new
disclosure
Interest
Honorary Independent Special Projects Advisor and Consultant to the Prime
Minister of Samoa
Trustee Best Pacific Foundation
Commissioner, NZ-Samoa Trade and Investment Commission
Trustee Youthline
Director, Puriri Nurseries Limited
Director, Pacific 28 Limited
Director, Oravida Limited
Director, Oravida NZ Limited
Director, Oravida Property Limited
Director, Oravida NZ Wine Limited
Director, Oravida Kauri Limited
Director, NZG Limited
21 September 2010
24 February 2011
2 May 2011
29 March 2012
28 March 2013
28 March 2013
28 March 2013
28 March 2013
28 March 2013
28 March 2013
28 March 2013
28 March 2013
Representatives of Council on other MIT Boards / Committees
Councillor
Interest
Date of new
disclosure
Mr J Hannan
Director, EnterpriseMIT Limited
25 October 2012
Dr M Henare
Alternate Director, EnterpriseMIT Limited
25 October 2012
Dr K Larsen
Council representative, 2012 Manukau
Institute of Technology Academic Awards Committee
Director, EnterpriseMIT Limited
25 October 2012
Mrs B Pone
Pacific Community Advisory Board, Manukau Institute of
Technology
25 August 2011
Mr H Small
Director, EnterpriseMIT Limited
25 October 2012
25 October 2012
Council Delegations
Pursuant to section 222(1) of the Education Act 1989, the MIT Council may delegate any of its functions or powers (except
the appointment of the Chief Executive) to the Chief Executive or a Committee appointed in accordance with section 193(3)
of the Act.
The following table summarises Council Delegations in effect at 31 December 2013. These delegations are to be exercised in
accordance with the provisions of the Education Act 1989, other relevant legislation and Council Approved Statutes:
Council Delegation
Summary
Chief Executive – Operational
Provision of Courses/Programmes of Study, Strategic Planning, Management,
Management Policies, Manufacture and Distribution of Goods, Provision of
Goods and Services, Urgency and Incidental.
Chief Executive – Academic
Enrolment, Refusal and Cancellation of Enrolment, Student Discipline,
Granting of Awards.
Chief Executive – Financial
Expenditure, Tenders for Capital Expenditure, Sensitive Expenditure, Disposal
of Assets, Fellowships, Scholarships, Bursaries or Prizes, Student Grants and
Loans, Gifts, Devices and Bequests, Fees, Fee Instalments and Refunds.
Academic Board
Courses/Programmes of Study, Quality Assurance, Research, SubCommittees, Academic Policies, Incidental and Assessment.
Executive Committee of Council
To act with the full powers of the Council during the extended summer
holiday period and at other times when (in either case) urgent matters arise.
Student Appeals Committee of Council
Student Appeals.
Chief Executive Review Committee of
Council
Oversight of the Chief Executive’s conditions of employment and performance
related matters.
The Audit and Compliance Committee has no formal delegation. The Audit and Compliance Committee acts under its terms of
reference to advise the MIT Council on audit and compliance requirements.
28
Governance
Council Membership
as at 31 December 2013
1
3
5
7
2
4
6
8
Chair
Members
1. Peter Winder
MA (Hons), MCILT
3. H
oward Small
BCom, CA, ACIS
Deputy Chair
2. Dr Stuart Crosbie
BSc (Hons) (1st Class),
PhD (Otago),
Dip Art & Creativity
Ministerial
4. D
r Manuka Henare
BA (Hons), PhD (Victoria)
Ministerial
5. Dr Ken Larsen
MA PhD (Camb),
PhL (Rome)
6. John Hannan
LLB (Hons) (1st Class),
BA
7. Bernadette Pone
8. David Wong-Tung
LLB, MBA, MinstD.
Ministerial
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
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Equal Educational Opportunities
The Institute strives to provide equitable educational
access, appropriate support service and barrierfree facilities for all students. Manukau Institute of
Technology (MIT), through its Equal Educational
Opportunities Policy, seeks to create an environment
in which all students have an equal opportunity access
education and to achieve their potential. The areas
of content and delivery of programmes, policies
and procedures, provision of support services, staff
training, provision of a hardship fund and scholarships,
and student representation are designed and monitored
in line with MIT’s commitment to all students.
In 2013 scholarships provided totalled $360,000 and
included 96 tertiary scholarships as well as various
other grants supporting community initiatives and
supporting the transition of students into tertiary
study. Hardship assistance totalled a further $16,301.
This confirms MIT’s strong commitment to supporting
tertiary study in the southern region of Greater
Auckland.
The Institute receives equity funding to support
tertiary students with disabilities. Disability Support
delivers integrated and specialist support services to
registered students which are individually designed
to ensure access to all aspects of tertiary life. This
funding is used to meet specific objectives set each
year and covers recruitment of new students, provision
of specialist equipment and employment of support
staff who offer one-on-one support in the classroom.
In 2013, MIT supported 369 students with disabilities
with 5.5 full-time equivalent staff. The MIT coordinator
for disability support continues to work closely
with many community agencies. Disability Support
implemented a wraparound service at MIT where we
believe that services and supports should be flexibly
arranged to meet the unique needs of the students.
This has been a success as we look at the increased
retention and success of students as they progress
towards employability or higher studies. MIT Disability
Support continues to work closely with the Ministry
of Social Development and Workbridge employment
consultants to support students with significant
disabilities into mainstream employment and internship
programmes.
30
MIT provides a range of amenities and support
services for all students. This includes a state-ofthe-art library with an information commons giving
easy access to computing facilities. The Learning
Support Centre delivers a range of learning and
language support including seminars on exam and
study techniques, group and peer tutoring sessions
and other learning assistance sessions related directly
to the student’s programme of study. The Health and
Counselling Centre provides medical and counselling
services as well as organising and participating in
activities promoting general health and well being.
The MIT Children’s Education Centre is situated on
North campus for pre-school children. This is a wellequipped, purpose-built facility where the children are
cared for using the widely recognised Reggio Emilia
early childhood philosophy and Te Whaariki curriculum.
The centre is staffed by qualified teachers and
supports a number of parents who study at MIT.
During 2013, MIT staff participated in ‘My Voice’, the
Institute’s employee survey. This process is critical
in ensuring that the diverse perspectives our people
bring to their working lives can be shared and
understood by all.
The survey response rate was exceptional, with 85.7%
of eligible staff taking part.
MIT rated strongly for its inclusive and caring
environment, and the passion people working here
have for helping learners succeed. Communication was
identified as an area for enhancement.
The main Otara campus has accessible toilets on most
levels of its buildings, mobility car parks and rooms
for resting. Differently-abled students can access
note-taking services, sign language interpreters,
dictaphones, alpha smart keyboards, and advocacy
and advice on interviews, exams and funding from the
Institute’s Student Support team.
Governance
Equal Employment Opportunities
During 2014, MIT will continue to embrace the diversity
of its people as a core means of improving the
educational outcomes of the communities it serves.
As a direct result of My Voice, 50 individual action
plans spanning all divisions of MIT have been created
by staff.
These plans address and manage key themes and
priorities emerging from the survey, and ensure that
the varied perspectives of MIT people help shape the
Institute’s culture and ways of working.
Together with sharing perspectives on working at MIT,
staff participating in the My Voice employee survey
gave their views on MIT’s current Values.
Over 270 alternative suggestions were provided and
this feedback led to a process to refresh MIT’s Values.
Staff, students and industry partners have been
extensively consulted with to understand their
individual perspectives on the Values that best
represent MIT, the opportunities it offers and the
people it serves. The process will reach its conclusion
during 2014 when a refreshed set of Values is
launched.
EEO principles were embedded into operational activity
during 2012 and as a workplace, MIT encourages its
staff to recognise the value of differences and promote
inclusiveness.
Women participate at all levels of MIT, and 60.5 per
cent of the organisation’s senior leaders are female.
MIT was extremely proud to see Nippy Paea, MIT’s
Student Support Team Leader, recognised for
outstanding service to Maori
tertiary education and Te
Ao Maori at the 2013 Te Toi Tauira Matariki Conference.
The Toi Tauira award acknowledged her work at MIT
supporting and mentoring Maori
students and staff
through their studies.
MIT has concentrated on making its campuses
more accessible, and on increasing participation
and achievement for MIT staff and students with
impairments or disabilities.
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
31
32
32
Manukau Institute of Technology’s Strategic Plan 2012–20
outlines our strategic direction for an eight-year period. It is
aligned with the Government’s Tertiary Education Strategy
2010–15 and seeks to meet the needs of the communities
we serve.
Our Strategic Plan has five key areas of focus and each area
has associated with it a number of measures.
Our Investment Plan 2013–15 emphasises two of the five key
areas of focus outlined in our Strategic Plan.
This Statement of Service Performance, when read in
conjunction with the balance of this Annual Report, provides
an assessment of our performance for the 2013 Financial Year.
The environment in which we operate
Manukau Institute of Technology was established in 1970 as
the first purpose-built polytechnic in New Zealand. We serve
three generic client communities (students, business, industry/
professions) along with the wider community of Manukau and
its surrounding areas. We are located in the Counties Manukau
sub-region, within Tainui tribal boundaries. This area:
• is
characterised by a high concentration of the country’s
Maori
and Pacific populations;
• is
the home of many new immigrant groups, especially
from Asia;
• has
an exceptionally high proportion of low decile schools
within its boundaries coupled with a large group of high
decile schools; and
• has
significant local concentrations of business and
industry.
Manukau Institute of Technology is committed to delivering
service through its exceptionally strong and committed
academic and allied staff supporting each other in integrated
roles.
Institute Performance
Statement of Service
Performance
Our Strategic Plan
Purpose
Our purpose is to transform lives and communities through
learning.
Vision
Our vision is to be widely recognised as the leading ITP in New
Zealand.
In particular, we will be known for:
• Our success in meeting Auckland’s vocational education
and training needs;
• Our success in meeting the needs of our students and
communities;
• The strength of our partnerships with community and
other providers;
• The employability and progression of our graduates; and
• Our innovation and entrepreneurship.
Mission
Our mission is to deliver vocationally focused tertiary
education, research and technology transfer that ensures
Auckland’s economy, graduates, employers and communities
have the capability and skills to achieve their potential.
We recognise that we have a special obligation to serve the
people, communities and employers of Counties Manukau
and that achieving significantly improved tertiary education
outcomes in this sub-region is critical to both our mission and
to the future economic and social prosperity of the nation.
Areas of Focus
We are focused on improved outcomes for Maori,
Pasifika and
under-25s.
Measures of Success
Success will be measured by:
• improved employability and progression;
• increased participation;
• improved success and retention;
• enhanced experience and satisfaction; and
• increased consultancy.
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
33
EnterpriseMIT Limited
Strategy.
In mid-2012, MIT purchased the business and assets
of both the Mahurangi Technical Institute Limited and
its sister research company Eel Company Limited.
The assets were initially held in two new companies,
Mahurangi Technical Institute (2012) Limited and Eelco
(2012) Limited. On 30 June 2013 Mahurangi Technical
Institute (2012) Limited and Eelco (2012) Limited were
amalgamated. On 1 July 2013, the new amalgamated
company changed its name to EnterpriseMIT Limited
and commenced trading. EnterpriseMIT Limited operates
independently of MIT.
Our Investment Plan 2013–15
Tertiary Education Strategy 2010–15
“The Government’s vision is for a world-leading education
system that equips all New Zealanders with the
knowledge, skills and values to be successful citizens in
the 21st century.”1
The Priority Outcomes for Tertiary Education for New
Zealand are:
• “Increasing the number of young people (aged under
25) achieving qualifications at levels four and above,
particularly degrees;
• Increasing the number of Maori
students enjoying
success at higher levels;
• Increasing the number of Pasifika students enjoying
success at higher levels;
• Increasing the number of young people moving
successfully from school into tertiary education;
• Improving literacy, language, and numeracy and
skills outcomes from levels one to three study;
• Improving the educational and financial performance
of providers; and
• Strengthening research outcomes.”
2
The core roles of institutes of technology and polytechnics
are:
• “ To deliver vocational education that provides skills
for employment;
• T
o undertake applied research that supports
vocational learning and technology transfer; and
• T
o assist progression to higher level of learning or to
work through foundation education.” 3
We perform our role and deliver the key outcomes from
the Tertiary Education Strategy 2010–15 by ensuring our
Strategic Plan and Investment Plan are aligned to the
1. Tertiary Education Strategy 2010–2015, pg 6 section 1.1.
2. Tertiary Education Strategy 2010–2015, pg 10 section 2.1.
3. Tertiary Education Strategy 2010–2015, pg 18 section 3.1.
34
Our Investment Plan 2013–15 confirms our strong
commitment to the Tertiary Education Strategy and
restates a number of aspects of our Strategic Plan.
Specific performance commitments are made in
the Investment Plan in relation to Participation and
Educational Performance. These two areas are a subset
of the five areas of focus in our Strategic Plan and as
a consequence the reporting against the Strategic Plan
and the Investment Plan in the following sections are
combined.
In the following five sections consistent objective criteria
are used to assess performance as; Surpassed, Achieved,
Substantially Achieved or Not Achieved. The method
considers the Actual Result against the 2013 Target
(and where more than one Result and Target an equally
weighted average) with outcomes in the following ranges
equating to the following descriptor;
• Above 103% - Surpassed;
• Between 97-103% Achieved;
• Between 95-97% Substantially Achieved; and
• Below 95% Not Achieved.
The final section, section 6, of this Statement of Service
Performance outlines some high level performance
indications for EnterpriseMIT Limited.
Institute Performance
How are we doing?
1. Increased Participation
TO INCREASE PARTICIPATION
Relevant Tertiary Education Strategy 2010–15 outcome: Improving the educational and financial performance of providers.
Key performance indicators
To increase the number of domestic EFTS to 7,166 by 2015
NOTE
TARGET
2013
ACTUAL
2013
ACTUAL
2012
ACTUAL
2011
ACTUAL
2010
1
7,114
7,118
7,404
7,115
6,710
Achieved
In 2013 domestic enrolment was in line with expectations following the significant reduction by TEC of funded places at Levels
1 and 2. 5,876 EFTS of the total allocation of 5,854 Base SAC EFTS were consumed. 361 EFTS of the total allocation of 399
Youth Guarantee EFTS were consumed. 881 EFTS of the total allocation of 837 of other domestic EFTS were also consumed. The
achievement of this goal represents a solid year end performance and an exceptional recovery in Semester Two following softer
than expected enrolments in Semester One. MIT is on track to meet its 2015 goal for the number of SAC EFTS but does note that
this is dependent on funding levels from TEC.
TO INCREASE PARTICIPATION
Relevant Tertiary Education Strategy 2010–15 outcome: Improving the educational and financial performance of providers.
Key performance indicators
To increase the number of Base SAC EFTS to 5,942 by 2015
NOTE
TARGET
2013
ACTUAL
2013
ACTUAL
2012
ACTUAL
2011
ACTUAL
2010
1
5,854
5,876
6,402
6,099
5,727
Achieved
In 2013 Base SAC enrolments was in line with expectations following the significant reduction by TEC of funded places at Levels
1 and 2. At Levels 1 and 2, 458 EFTS of the 483 EFTS allocated were consumed. In addition 135 EFTS of an additional allocation
of 178 Priority & Pasifika Trades EFTS allocated were also consumed. The achievement of this goal represents a solid year end
performance and an exceptional recovery in Semester Two following a softer than expect enrolments in Semester One.
MIT is on track to meet its 2015 goal for the number of SAC EFTS but does note that this is dependent on funding levels from TEC.
TO INCREASE THE PORTION OF SAC ELIGIBLE EFTS ENROLLED WHO ARE MAORI
Relevant Tertiary Education Strategy 2010-15 outcome: Increasing the number of Maori students enjoying success at higher
levels.
Key performance indicators
TARGET
2013
ACTUAL
2013
ACTUAL
2012
ACTUAL
2011
ACTUAL
2010
2
6%
5%
6%
5%
5%
2
11%
11%
10%
9%
9%
NOTE
To increase the proportion of Maori
SAC eligible EFTS at
Levels 1 to 3 at 7% by 2015
To increase the proportion of Maori
SAC eligible EFTS at Level
4 and above to 13% by 2015
Not Achieved
In 2013 the proportion of Māori SAC Eligible EFTS overall was marginally below expectations. At Levels 1 to 3 the proportion of
Māori SAC Eligible EFTS was below expectations due to the significant reduction by TEC of funded places at Levels 1 and 2. At
Levels 4 and above the proportion of Māori SAC Eligible EFTS was in line with expectations. The actual result at Levels 1-3 means
that 5% of MIT’s total SAC enrolment are Māori studying at Levels 1-3. The non-achievement of the goal at Levels 1-3 is due to the
33% reduction in MIT’s total allocation, and subsequent delivery, at Level 2 as a consequence of the Level 2 contestable process
conducted in 2012. MIT is on track to meet its 2015 goal for the proportion of Māori SAC Eligible EFTS overall provided it is able to
secure funding in the current RFP to support Māori and Pasifika through Trades Training and into sustainable employment.
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
35
TO INCREASE THE PORTION OF SAC ELIGIBLE EFTS ENROLLED WHO ARE PASIFIKA
Relevant Tertiary Education Strategy 2010-15 outcome: Increasing the number of Pasifika students enjoying success at higher
levels.
Key performance indicators
NOTE
TARGET
2013
ACTUAL
2013
ACTUAL
2012
ACTUAL
2011
ACTUAL
2010
To increase the proportion of Pasifika SAC eligible EFTS at
Levels 1 to 3 to 12% by 2015
2
11%
9%
11%
11%
10%
To increase the proportion of Pasifika SAC eligible EFTS at
Level 4 and above to 24% by 2015
2
23%
26%
23%
23%
21%
Achieved
In 2013 the proportion of Pasifika SAC Eligible EFTS overall was in line with expectations. At Levels 1 to 3 the proportion of Pasifika
SAC Eligible EFTS was well below expectations due to the significant reduction by TEC of funded places at Levels 1 and 2. At Levels
4 and above the proportion of Pasifika SAC Eligible EFTS was well above expectations. The actual result at Levels 1-3 means that
9% of MIT’s total SAC enrolment are Pasifika studying at Levels 1-3. The under achievement of the goal at Levels 1-3 is due to the
33% reduction in MIT’s total allocation, and subsequent delivery, at Level 2 as a consequence of the Level 2 contestable process
conducted in 2012. The over achievement at Level 4 and above represents a continuation of strong growth in participation of
Pasifika students at higher levels and reflects MIT’s strong relationship with the Pasifika community. MIT is on track to meet its
2015 goal for the proportion of Pasifika SAC Eligible EFTS overall.
TO INCREASE THE PORTION OF SAC ELIGIBLE EFTS ENROLLED WHO ARE AGED UNDER 25
Relevant Tertiary Education Strategy 2010-15 outcome: Increasing the number of young people (aged under 25) achieving
qualifications at levels four and above, particularly degrees
TARGET
2013
ACTUAL
2013
ACTUAL
2012
ACTUAL
2011
ACTUAL
2010
To increase the proportion of SAC eligible EFTS aged under 25
2
at Levels 1 to 3 to 16% by 2015
16%
13%
17%
15%
14%
To increase the proportion of SAC eligible EFTS aged under 25
2
at Level 4 and above to 38% by 2015
35%
37%
34%
33%
33%
Key performance indicators
NOTE
Not Achieved
In 2013 the proportion of SAC Eligible EFTS aged under 25 overall was below expectations. At Levels 1 to 3 the proportion of SAC
Eligible EFTS aged under 25 was well below expectations due to the significant reduction by TEC of funded places at Levels 1 and 2.
At Levels 4 and above the proportion of SAC Eligible EFTS aged under 25 was well above expectations. The actual result at Levels 1-3
means that 9% of MIT’s total SAC enrolment are aged under 25 and studying at Level’s 1-3. The under achievement of the goal at
Levels 1-3 is due to the 33% reduction in MIT’s total allocation, and subsequent delivery, at Level 2 as a consequence on the Level
2 contestable process conducted in 2012. The over achievement at Level 4 and above represents a continuation of strong growth
in participation of students aged under 25 at higher levels. MIT is on track to meet its 2015 goal for the proportion of SAC Eligible
EFTS aged under 25 overall.
TO INCREASE THE NUMBER OF INTERNATIONAL EFTS ENROLLED
Relevant Tertiary Education Strategy 2010-15 outcome: Improving the educational and financial performance of providers.
Key performance indicators
To increase the number of international EFTS to 730 by 2015
NOTE
2
TARGET
2013
ACTUAL
2013
ACTUAL
2012
ACTUAL
2011
ACTUAL
2010
535
524
497
472
533
Achieved
In 2013 the number of international EFTS was in line with expectations. This is as a consequence of a specific focus by MIT on
international students which began in earnest in 2012 with the appointment of a new International Director. The majority of the
functions relating to International Students have been brought together under their leadership. MIT is on track to meet its 2015
target of 730 international EFTS.
36
2. Improved Success, Retention and Educational Performance
Key performance indicators
NOTE
To increase the average EFTS weighted successful course
completion to 82% by 2015
To increase number of graduates for qualifications at Level 4 and
above to 2,550 by 2015
3
To increase number of graduates for qualifications to 4,692 by
2015
TARGET
2013
ACTUAL
2013
ACTUAL
2012
ACTUAL
2011
ACTUAL
2010
80%
79%
79%
81%
80%
2,500
2,478
2,500
2,524
2,528
4,600
4,483
4,535
4,773
4,537
Achieved
In 2013 course completion, the number of graduates at Level 4 and above and the number of graduates overall was in line with
expectations. The number of graduates has reduced slightly in line with a slight drop in EFTS. The reason for the drop in course
completion results in comparison to 2012 is difficult to explain with absolute certainty. It is driven by lower than expected results in a
small number of schools in two Faculties. The balance of MIT has performed very well. In 2014 work will be undertaken in those schools
to establish the cause of these drops in performance and then appropriate remedial action taken. Due to the continued softening of
performance in course completion it is difficult to forecast that MIT will reach its 2015 goals for course completion. Course completion
will however remain a priority for MIT in 2014 and 2015. MIT is still on track to meet its graduate targets for 2015.
TO INCREASE COURSE COMPLETION FOR SAC ELIGIBLE STUDENTS
Relevant Tertiary Education Strategy 2010-15 outcome: Improving the educational and financial performance of providers.
Key performance indicators
NOTE
TARGET
2013
ACTUAL
2013
ACTUAL
2012
ACTUAL
2011
ACTUAL
2010
To increase the EFTS weighted successful course completion for
SAC eligible students to 84% by 2015
2,3
83%
79%
80%
81%
79%
To increase the EFTS weighted successful course completion for
SAC eligible students at Levels 1-3 to 82% by 2015
2,3
81%
78%
77%
79%
78%
To increase the EFTS weighted successful course completion for
SAC eligible students at Level 4 and above to 85% by 2015
2,3
84%
80%
81%
84%
79%
Substantially Achieved
In 2013 course completion at MIT was very similar to those levels achieved in 2012 but overall slightly below expectations, with all three
of the actual results slightly less than the targets. The reason for the drop in all three results in comparison to 2012 is difficult to explain
with absolute certainty. It is driven by lower than expected results in a small number of schools in two Faculties. The balance of MIT has
performed very well. In 2014 work will be undertaken in those schools to establish the cause of these drops in performance and then
appropriate remedial action taken. Due to the continued softening of performance in course completion it is difficult to forecast that MIT
will reach its 2015 goals for course completion. Course completion will however remain a priority for MIT in 2014 and 2015.
TO INCREASE QUALIFICATION COMPLETION FOR SAC ELIGIBLE STUDENTS
Relevant Tertiary Education Strategy 2010-15 outcome: Improving the educational and financial performance of providers.
TARGET
2013
INTERIM
2013
INTERIM
2012
INTERIM
2011
INTERIM
2010
ACTUAL
2012
2,4
63%
65%
62%
59%
36%
66%
62%
59%
To increase the qualification completion rate
for SAC eligible students at Levels 1-3 to 59%
by 2015
2,3,4
57%
55%
50%
NA
NA
54%
56%
53%
To increase the qualification completion rate
for SAC eligible students at Level 4 and above
to 69% by 2015
2,3,4
65%
68%
69%
NA
NA
72%
65%
61%
Key performance indicators
To increase the qualification completion rate
for all SAC eligible EFTS to 66% by 2015
NOTE
ACTUAL ACTUAL
2011
2010
Likely to be Achieved
In 2013 MIT it is anticipated that the 2013 Actual results for SAC qualification completion overall will be in line with expectations.
The 2012 the Interim results for qualification completion were approximately 3% less than the final results. It is anticipated that this
trend will continue, due to the use of a March instead of a February SDR, and as a consequence this commentary is based on the
assumption that the 2013 actual result will be 1% higher than the 2013 interim result. These results reflect an ongoing focus by MIT on
qualification completion. Please note that the 2011 and 2010 interim results for SAC students at Levels 1-3 and at Level 4 and above are
not available. MIT is on track to meet its 2015 SAC qualification completion targets.
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
37
Institute Performance
TO INCREASE SUCCESS, RETENTION OR EDUCATIONAL PERFORMANCE
Relevant Tertiary Education Strategy 2010-15 outcome: Improving the educational and financial performance of providers.
TO INCREASE THE RETENTION RATE FOR SAC ELIGIBLE STUDENTS
Relevant Tertiary Education Strategy 2010-15 outcome: Improving the educational and financial performance of providers.
Key performance indicators
NOTE
To increase the student retention rate for all for SAC eligible
EFTS’s to 64% by 2015
2
TARGET
2013
ACTUAL
2013
ACTUAL
2012
ACTUAL
2011
ACTUAL
2010
62%
64%
65%
61%
57%
Surpassed
In 2013 student retention for SAC eligible EFTS at MIT exceeded expectations and this is a pleasing result. These results reflect
an ongoing focus by MIT on student retention and associated pastoral care. The 2013 result is equal to the 2015 target which is
especially pleasing. MIT is on track to meet its 2015 SAC student retention targets.
-
TO INCREASE THE AVERAGE SUCCESSFUL COURSE COMPLETION FOR SAC ELIGIBLE MAORI STUDENTS
Relevant Tertiary Education Strategy 2010-15 outcome: Increasing the number of M aori
students enjoying success at higher
levels.
Key performance indicators
NOTE
TARGET
2013
ACTUAL
2013
ACTUAL
2012
ACTUAL
2011
ACTUAL
2010
To increase the average successful course completion for SAC
eligible Maori
students at Level 1-3 to 77% by 2015
2
73%
70%
68%
71%
69%
To increase the average successful course completion for SAC
eligible Maori
students at Level 4 and above to 83% by 2015
2
81%
75%
76%
79%
76%
Not Achieved
In 2013 course completion for Māori at MIT was very similar to those levels achieved in 2012 but overall below expectations. Course
completion for Māori at Levels 1-3 has increased but is still below target. Course completion for Māori at Level 4 and above has
decreased slightly and is below target. The reason for the drop in both results in comparison to 2012 is difficult to explain with
absolute certainty. It is driven by lower than expected results in a small number of schools in two Faculties. The balance of MIT
has performed very well. In 2014 work will be undertaken in those schools to establish the cause of these drops in performance
and then appropriate remedial action taken. Due to the continued softening of performance in course completion it is difficult to
forecast that MIT will reach its 2015 goals for course completion. Course completion will however remain a priority for MIT in 2014
and 2015.
TO INCREASE THE QUALIFICATION COMPLETION FOR SAC ELIGIBLE MAORI STUDENTS
Relevant Tertiary Education Strategy 2010-15 outcome: Increasing the number of M aori
students enjoying success at higher
levels.
Key performance indicators
NOTE
TARGET INTERIM
2013
2013
INTERIM
2012
INTERIM
2011
INTERIM
2010
ACTUAL
2012
ACTUAL ACTUAL
2011
2010
To increase the qualification completion for
SAC eligible Maori
students at Level 1-3 to
60% by 2015
2,4
59%
60%
54%
56%
49%
56%
59%
60%
To increase the qualification completion for
SAC eligible Maori
students at Level 4 and
above to 66% by 2015
2,4
61%
60%
61%
55%
34%
64%
58%
59%
Likely to be Achieved
In 2013 MIT it is anticipated that the 2013 actual results for SAC qualification completion overall for Māori students will be in line
with expectations.The 2011 and 2012 the interim results for qualification completion were approximate 3% less than the final
results. It is anticipated that this trend will continue, due to the use of a March instead of a February SDR, and as a consequence
this commentary is based on the assumption that the 2013 actual result will be 1% higher than the 2013 interim result. These
results reflect an ongoing focus by MIT on qualification completion. MIT is on track to meet its 2015 SAC qualification completion
targets for Māori students.
38
TARGET
2013
ACTUAL
2013
ACTUAL
2012
ACTUAL
2011
ACTUAL
2010
2
77%
74%
73%
74%
70%
To increase the average successful course completion for SAC
2
eligible Pasifika students at Level 4 and above to 84% by 2015
80%
72%
75%
77%
72%
Key performance indicators
NOTE
To increase the average successful course completion for SAC
eligible Pasifika students at Level 1-3 to 81% by 2015
Institute Performance
TO INCREASE THE AVERAGE SUCCESSFUL COURSE COMPLETION FOR SAC ELIGIBLE PASIFIKA STUDENTS
Relevant Tertiary Education Strategy 2010-15 outcome: Increasing the number of Pasifika students enjoying success at higher
levels.
Not Achieved
In 2013 course completion for Pasifika at MIT was very similar to those levels achieved in 2012 but overall below expectations.
Course completion for Pasifika at Levels 1-3 has increased but is still below target. Course completion for Pasifika at Level 4 and
above has decreased and is below target. The reason for the drop in both results in comparison to 2012 is difficult to explain with
absolute certainty. It is driven by lower than expected results in a small number of schools in two Faculties. The balance of MIT
has performed very well. In 2014 work will be undertaken in those schools to establish the cause of these drops in performance
and then appropriate remedial action taken. Due to the continued softening of performance in course completion it is difficult to
forecast that MIT will reach its 2015 goals for course completion. Course completion will however remain a priority for MIT in 2014
and 2015.
TO INCREASE THE QUALIFICATION COMPLETION FOR SAC ELIGIBLE PASIFIKA STUDENTS
Relevant Tertiary Education Strategy 2010-15 outcome: Increasing the number of Pasifika students enjoying success at higher
levels.
Key performance indicators
NOTE
TARGET INTERIM INTERIM
2013
2013
2012
INTERIM
2011
INTERIM
2010
ACTUAL
2012
ACTUAL ACTUAL
2011
2010
To increase the qualification completion for
SAC eligible Pasifika students at Level 1-3 to
63% by 2015
2,4
62%
60%
57%
61%
50%
61%
61%
64%
To increase the qualification completion for
SAC eligible Pasifika students at Level 4 and
above to 61% by 2015
2,4
55%
56%
57%
48%
22%
61%
52%
50%
Likely to be Achieved
In 2013 MIT it is anticipated that the 2013 actual results for SAC qualification completion overall for Pasifika students will be in
line with expectations. The 2011 and 2012 the interim results for qualification completion were approximate 3% less than the final
results. It is anticipated that this trend will continue, due to the use of a March instead of a February SDR, and as a consequence
this commentary is based on the assumption that the 2013 actual result will be 1% higher than the 2013 interim result. These
results reflect an ongoing focus by MIT on qualification completion. MIT is on track to meet its 2015 SAC qualification completion
targets for Pasifika students.
TO INCREASE THE AVERAGE SUCCESSFUL COURSE COMPLETION FOR SAC ELIGIBLE STUDENTS AGED
UNDER 25
Relevant Tertiary Education Strategy 2010-15 outcome: Increasing the number of young people moving successfully from school
into tertiary education.
Key performance indicators
NOTE
TARGET
2013
ACTUAL
2013
ACTUAL
2012
ACTUAL
2011
ACTUAL
2010
To increase the average successful course completion for SAC
eligible students aged under 25 at Level 1-3 to 81% by 2015
2
77%
72%
73%
74%
75%
To increase the average successful course completion for SAC
eligible students aged under 25 at Level 4 and above to 85%
by 2015
2
82%
76%
78%
79%
75%
Not Achieved
In 2013 course completion for students aged under 25 at MIT was very similar to those levels achieved in 2012 but overall below
expectations. Course completion for students aged under 25 at Levels 1-3 has decreased slightly and is below target. Course
completion for students aged under 25 at Level 4 and above has decreased and is below target. The reason for the drop in both
results in comparison to 2012 is difficult to explain with absolute certainty. It is driven by lower than expected results in a small
number of schools in two Faculties. The balance of MIT has performed very well. In 2014 work will be undertaken in those schools
to establish the cause of these drops in performance and then appropriate remedial action taken. Due to the continued softening
of performance in course completion it is difficult to forecast that MIT will reach its 2015 goals for course completion. Course
completion will however remain a priority for MIT in 2014 and 2015.
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
39
TO INCREASE THE QUALIFICATION COMPLETION FOR SAC ELIGIBLE STUDENTS AGED UNDER 25
Relevant Tertiary Education Strategy 2010-15 outcome: Increasing the number of young people moving successfully from
school into tertiary education.
Key performance indicators
NOTE
TARGET
2013
INTERIM
2013
INTERIM
2012
INTERIM
2011
INTERIM
2010
ACTUAL
2012
ACTUAL ACTUAL
2011
2010
To increase the qualification completion for
SAC eligible students aged under 25 at Level
1-3 to 64% by 2015
2,4
62%
59%
58%
59%
47%
62%
60%
62%
To increase the qualification completion for
SAC eligible students aged under 25 at Level
4 and above to 62% by 2015
2,4
55%
58%
56%
49%
26%
58%
53%
44%
Likely to be Achieved
In 2013 MIT it is anticipated that the 2013 actual results for SAC qualification completion overall for pasifika students will be in
line with expectations. The 2011 and 2012 the interim results for qualification completion were approximate 3% less than the final
results. It is anticipated that this trend will continue, due to the use of a March instead of a February SDR, and as a consequence this
commentary is based on the assumption that the 2013 actual result will be 1% higher than the 2013 interim result. These results
reflect an ongoing focus by MIT on qualification completion. MIT is on track to meet its 2015 SAC qualification completion targets for
Pasifika students.
3. Improved Employability and Progression
TO IMPROVE THE PROGRESSION OF STUDENTS
Relevant Tertiary Education Strategy 2010-15 outcome: Improving the educational and financial performance of providers.
Key performance indicators
NOTE
TARGET INTERIM INTERIM INTERIM INTERIM
2013
2013
2012
2011
2010
ACTUAL
2012
ACTUAL
2011
ACTUAL
2010
To increase the progression of SAC eligible
students at levels 1-3 to 44% by 2015
2,5
42%
54%
52%
46%
-
53%
46%
53%
To increase the progression of SAC eligible
students at all levels to 44% by 2015
5
43%
42%
43%
39%
-
44%
39%
41%
To increase the progression of SAC eligible
Ma- ori students at all levels to 43% by 2015
5
42%
42%
47%
44%
-
47%
44%
45%
To increase the progression of SAC eligible
Pasifika students at all levels to 49% by 2015
5
48%
47%
49%
41%
-
50%
42%
43%
3,5
48%
50%
53%
46%
-
54%
47%
50%
To increase the progression of SAC eligible
students aged under 25 at all levels to 49%
by 2015
Likely to be Surpassed
In 2013 it is anticipated that progression of SAC eligible students at MIT will exceed expectations. The 2011 and 2012 interim results
for progression were approximately 1% less than the final results. It is anticipated that this trend will continue and as a consequence
this commentary is based on the assumption that the 2013 actual result will be 1% higher than the 2013 interim result. These results
reflect an ongoing focus by MIT on progression. MIT is on track to meet its 2015 progression targets for SAC eligible students and in
some cases has already surpassed them.
TO INCREASE THE PERCENTAGE OF GRADUATES MOVING INTO EMPLOYMENT OR HIGHER EDUCATION
Relevant Tertiary Education Strategy 2010-15 outcome: Improving the educational and financial performance of providers.
Key performance indicators
To increase the proportion of graduates moving into
employment or higher education - within six months of
programme completion to 75% by 2015
NOTE
TARGET
2013
ACTUAL
2013
ACTUAL
2012
ACTUAL
2011
ACTUAL
2010
70%
82%
86%
53%
53%
-
Surpassed
40
In 2013 the proportion of graduates moving into employment or higher education was above expectations. The goal for 2015 is
recorded in the Investment Plan but the year-on-year targets are not. As a consequence the 2013 target was set internally by
MIT and represents an incremental step towards the 2013 goal. The proportion of graduates moving into employment or higher
education was measured for the first time in 2012 and the result gave MIT an approximate baseline to work from. The 2013
result is based on a response rate of 54% and provides MIT with a more robust baseline. Both the 2013 and 2012 results are well
above expectations. Both results reflect the commitment MIT has to ensuring its graduates either find work or move onto further
study. MIT has for the past two years surpassed its 2015 goal for the proportion of graduates moving into employment or higher
education.
4. Enhanced Experience and Satisfaction
TO INCREASE STUDENT SATISFACTION
Relevant Tertiary Education Strategy 2010-15 outcome: Improving the educational and financial performance of providers.
Key performance indicators
NOTE
To maintain student satisfaction above 8.0
TARGET
2013
ACTUAL
2013
ACTUAL
2012
ACTUAL
2011
ACTUAL
2010
8.0
8.2
8.2
8.2
8.2
Achieved
For the fourth consecutive year MIT has maintained its level of student satisfaction at 8.2. The goal for 2015 is recorded in the
Investment Plan but the year-on-year targets are not. MIT’s strong performance over a long period of time in relation to student
satisfaction reflects the great work that is undertaken on a daily basis by MIT teaching staff.
MIT has for the past four years surpassed its 2015 goal for student satisfaction.
5. Increased Non-Base Income
TO INCREASE NON BASE INCOME
Relevant Tertiary Education Strategy 2010-15 outcome: Improving the educational and financial performance of providers..
Key performance indicators
NOTE
To increase non-base income and recoveries to $22 million by
2015
TARGET
2013
$000
ACTUAL
2013
$000
ACTUAL
2012
$000
ACTUAL
2011
$000
ACTUAL
2010
$000
18,000
16,231
16,119
16,243
17,257
Not achieved
In 2013 MIT did not achieve its non-base income target. The goal for consultancy income for 2015 is recorded in the Investment
Plan. Consultancy is a developing area at MIT and specific measures for consultancy are still to be developed. The current best
proxy measure is the previously used measure of non-base income, which includes recoveries. This level of performance for 2013 is
primarily due to the softening international economy. MIT has taken steps to increase its performance and meet its 2015 target by
purchasing the business and assets of both the Mahurangi Technical Institute Limited and its sister research company Eel Company
Limited. The assets were initially held in two new companies, Mahurangi Technical Institute (2012) Limited and Eelco (2012)
Limited. On 30 June 2013 Mahurangi Technical Institute (2012) Limited and Eelco (2012) Limited were amalgamated. On 1 July
2013 the new amalgamated company changed its name to EnterpriseMIT Limited. EnterpriseMIT Limited operates independently of
MIT but does exist in part to generate consultancy income.
6. EnterpriseMIT Limited
TO INCREASE SUCCESS, RETENTION OR EDUCATIONAL PERFORMANCE
Relevant Tertiary Education Strategy 2010-15 outcome: Improving the educational and financial performance of providers
Key performance indicators
To deliver 110 EFTS of PTE education in Warkworth in 2013
To deliver 45 EFTS of maritime training including fire fighting
on behalf of MIT in 2013
To achieve average course completion rates of 86% in 2013
NOTE
TARGET
2013
ACTUAL
2013
110
95
45
45
86%
89%
Achieved
In 2013 EnterpriseMIT Limited enrolments were in line with expectations and course completion was above target. This is the first
full year that EnterpriseMIT Limited has operated as an independent subsidiary of MIT. Work is currently underway to determine
the key performance indicators for EnterpriseMIT Limited for 2014 and beyond.
Notes to the Statement of Service Performance:
1. SAC EFTS and Domestic EFTS targets are dependent on funding levels from TEC.
2. Investment Plan Indicator. Please also note that in some cases the historic results for 2010, 2011 and 2012 as published in the MIT Investment Plan 2013-15
differ slightly from the result published in this Annual Report and previous Annual Reports. This is because the historic results in the Investment Plan are
drawn from the final April SDR in each year and the Annual Reports are based on the January SDR in each year.
3. This is a new measure for 2013 and the historic results have not been subject to audit.
4. This result is based on data from a January 2014 SDR and the final result will not be until April 2014 when the final graduation results are known.
5.The interim result for 2013, 2012 and 2011 are sourced from TEC measuring progression for SAC students only. The interim result for 2010 is not available.
The 2012, 2011 and 2010 actual results are sourced from TEC measuring progression for SAC students only and are based on a final data set. M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
41
42
42
Financcial Statements
Financial Statements
Statement of Responsibility
In terms of the Crown Entities Act 2004, we certify that:
1:We have been responsible for the preparation of these group financial statements,
statement of service performance and the judgements used therein;
and
2:We have been responsible for establishing and maintaining a system of internal control
designed to provide reasonable assurance as to the integrity and reliability of financial
and performance reporting;
and
3:We are of the opinion that these financial statements and statement of service
performance fairly reflect the financial position and operations of the Institution and
Group for the year ended 31 December 2013.
Peter Winder
Chair of Council
Dr Stuart Crosbie
Deputy Chair of Council
Dr Peter Brothers
Chief Executive
Date: 27 March 2014
MANUK AU INS T I TUTE OF TEC HNOLOGY A NNUA L R EP ORT
43
Independent Auditor’s
Report
To the readers of Manukau Institute
of Technology and group’s financial
statements and non-financial
performance information for the year
ended 31 December 2013
The Auditor-General is the auditor of
Manukau Institute of technology (the
Institute) and group. The Auditor-General
has appointed me, Leon Pieterse, using
the staff and resources of Audit New
Zealand, to carry out the audit of the
financial statements and non-financial
performance information of the Institute
and group on her behalf.
We have audited:
• the financial statements of the Institute
and group on pages 45 to 71, that
comprise the statement of financial
position as at 31 December 2013, 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 Institute and group
in the statement of service performance
on pages 33 to 41.
Opinion
In our opinion:
• the financial statements of the Institute
and group on pages 45 to 71:
• comply
with generally accepted
accounting practice in New Zealand; and
• fairly reflect the Institute and group’s:
- fi
nancial position as at 31 December
2013; and
- fi
nancial performance and cash flows for
the year ended on that date;
• the non-financial performance
information of the Institute and group
on pages 33 to 41 fairly reflects
the Institute and group’s service
performance achievements measured
against the performance targets
adopted in the investment plan for the
year ended 31 December 2013.
Our audit was completed on 27 March
2014. This is the date at which our opinion
is expressed.
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.
44
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 non-financial performance
information, whether due to fraud or error.
In making those risk assessments, we
consider internal control relevant to the
Institute 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 Institute 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:
•c
omply with generally accepted
accounting practice in New Zealand; and
• fairly reflect the Institute 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
Institute 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 non-financial
performance information, whether in
printed or electronic form.
The Council’s responsibilities arise from
the Education Act 1989 and the Crown
Entities Act 2004.
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
Institute or any of its subsidiaries.
Leon Pieterse
Audit New Zealand
On behalf of the
Auditor-General
Auckland, New Zealand
Statement of
2013
Comprehensive
Income
INSTITUTE
2013
INSTITUTE BUDGET for
the year ended 31 December 2013
ACTUAL
NOTE$000 $000
2012
INSTITUTE
ACTUAL
$000
2013
GROUP
ACTUAL
$000
2012
GROUP
ACTUAL
$000
INCOME
Government Funding
2
57,298
58,321
59,100
58,157
59,345
Student Fees and Department Income
3
47,960
49,247
47,917
48,600
48,011
444
469
657
544
673
469
52
1,435
472
1,436
106,171
108,088
109,109
107,773
109,465
Other Income
Interest Income
Total Income
EXPENDITURE
Employee Benefit Expenses
Depreciation and Amortisation Expense
4
63,372
63,189
64,407
64,716
64,948
10, 11
9,851
10,550
9,245
9,928
9,260
48
515
0
48
0
Interest Expense
Other Expenses
4 32,292 32,150 29,29732,681 29,422
Total Expenditure
105,563
Surplus
106,405
102,949
107,373
103,630
608 1,684 6,160 4005,835
Other Comprehensive Income
Gains on property valuations
0
0
Total Other Comprehensive Income
0
0 15,762
17
Total Comprehensive Income
608
1,684
15,762
21,922
0
15,762
015,762
400
21,597
2012
INSTITUTE
ACTUAL
$000
2013
GROUP
ACTUAL
$000
2012
GROUP
ACTUAL
$000
193,688
215,285
193,688
The accompanying notes form part of these financial statements, which comprise the Institute and group.
Statement of
2013
INSTITUTE
Changes
in
Equity
ACTUAL
for
the year ended 31 December 2013
2013
INSTITUTE BUDGET NOTE$000 $000
Balance at 1 January 215,610
206,785
Comprehensive Income
Surplus
17
608
1,684
6,160
400
5,835
Other Comprehensive Income
17
0
0
15,762
0
15,762
608
1,684
21,922
400
21,597
Total Comprehensive Income
Non Comprehensive Income Items
Other Contributions from the Crown
17,11
1,250
0
0
1,250
0
Total Non-comprehensive Income
1,250
0
0
1,250
0
Balance at 31 December
217,468
208,469
215,610
216,935
215,285
Group Other Comprehensive Income includes the effect of the Amalgamation of subsidiaries (Refer Note 31)
Explanations of major variances against budget are provided in note 19.
The accompanying notes form part of these financial statements, which compromise the Institute and group.
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
45
Statement of
Financial Position
as at 31 December 2013
2013
INSTITUTE
ACTUAL
NOTE$000
2013
INSTITUTE
BUDGET
$000 2012
INSTITUTE
ACTUAL
$000
2013
GROUP
ACTUAL
$000
2012
GROUP
ACTUAL
$000
ASSETS
Current Assets
Cash and Cash Equivalents
61,712
Student Fees and Other Receivables
74,2615,0005,3154,034 4,482
Inventory 8658500739658 739
Other Financial Assets 9
Total Current Assets
0
200 6,707 1,917 6,849
6,631
02,774
5,700
15,536
0 2,774
6,609
14,845
Non Current Assets
Property, Plant and Equipment 10246,507256,106218,160247,173 218,520
Intangible Assets
11
4,5412,0002,5154,566 2,871
Investments
12
755000 0
Total Non Current Assets
251,803
258,106
220,675
251,739
221,390
Total Assets258,434263,806236,210258,348 236,235
LIABILITIES
Current Liabilities
Trade and Other Payables
1319,39014,34211,38319,684 11,477
Employee Entitlements
143,6374,7594,1413,759 4,263
Revenue Received in Advance
154,5836,4703,7794,610 3,912
Trust Funds
16553520549553 549
Borrowings
1812,096
Total Current Liabilities
40,259
0
26,091
96 12,096
19,948
40,702
96
20,297
Non Current Liabilities
Employee Entitlements
14443320293447 293
Borrowings
18
Total Non Current Liabilities
26428,926
360
264
360
707
653
711
653
29,246
Total Liabilities40,96655,33720,60141,413 20,950
Net Assets
217,468
208,469
215,610
216,935
215,285
EQUITY
Capital Contributions and Retained Earnings
17116,887118,650115,029116,354 114,704
Property Revaluation Reserve
17100,581 89,819 100,581 100,581 100,581
Total Equity217,468208,469215,610216,935 215,285
The accompanying notes form part of these financial statements, which comprise the Institute and group.
Peter Winder
Chair of Council
Date: 27 March 2014
46
Dr Stuart Crosbie
Deputy Chair of Council
Dr Peter Brothers
Chief Executive
Statement of
2013
Cash
Flows
INSTITUTE
ACTUAL
for
the year ended 31 December 2013
NOTE$000
2013
INSTITUTE
BUDGET
$000
2012
INSTITUTE
ACTUAL
$000
2013
GROUP
ACTUAL
$000
2012
GROUP
ACTUAL
$000
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from Government Funding
60,764
57,211
64,825
61,868
65,070
Receipts from Student Fees and Other Income
46,399
55,380
44,460
47,649
45,726
Interest Income Received
64
(463)
1,783
66
1,784
Goods and Services Tax (Net)
(392)
0
(1,313)
(418)
(1,323)
Payments to Employees
(63,733)
(57,131)
(63,498)
(65,067)
(64,039)
Payments to Suppliers
(29,799)
(41,166)
(32,867)
(30,906)
(32,987)
Interest Paid
(48)
(515)
0
(48)
Net Cash Inflow from Operating Activities
13,255
13,316
13,390
13,144
14,231
0
37,686
CASH FLOWS FROM INVESTING ACTIVITIES
Short Term Deposits
2,773
0
37,897
2,773
Proceeds from Sale of Property, Plant and Equipment
1
0
5
1
5
Purchase of Property, Plant and Equipment
(31,666)
(53,697)
(44,761)
(31,680)
(45,274)
Purchase of Intangible Assets
(1,262)
0
(1,040)
(1,262)
(1,015)
Net Cash Outflow used in Investing Activities
(30,154)
(53,697)
(7,899)
(30,168)
(8,598)
Proceeds from Borrowings
11,904
28,445
456
12,092
456
Net Cash Flows from Financing Activities
11,904
28,445
456
12,092
456
Net (Decrease)/Increase in Cash and Cash Equivalents
(4,995)
(11,936)
5,947
(4,932)
6,089
Cash and Cash Equivalents at Beginning of the Year
6,707
12,136
760
6,849
760
CASH FLOWS FROM FINANCING ACTIVITIES
Cash and Cash Equivalents at End of Year 61,712 200 6,7071,9176,849
The accompanying notes form part of these financial statements, which compromise the Institute and group.
2013
2012
2013
2012
INSTITUTE INSTITUTE
GROUP
GROUP
ACTUAL
ACTUAL
ACTUAL
ACTUAL
$000
$000
$000
$000
RECONCILIATION FROM NET SURPLUS/(DEFICIT) TO NET CASH FLOW FROM
OPERATING ACTIVITIES
Net Surplus for the Year
Add/(Less) Non Cash Items:
Depreciation and Amortisation Expense
Bad debt provision movement
608
6,160
400
5,835
9,851
83
9,245
0
9,928
83
9,260
0
Add/(Less) Items Classified as Investing or Financing Activities:
Net Gain on Disposal of Property, Plant and Equipment
1
0
3
0
Add/(less) Movements in Working Capital:
(Increase)/Decrease in Accounts Receivable and Other Receivables
Decrease/(Increase) in Inventories
Increase/(Decrease) in Trade and Other Payables
Increase in Provisions
Increase/(Decrease) in Fees in Advance
Increase in Trust Funds
216
81
1,961
(354)
804
4
(697)
(223)
929
(1,370)
(657)
3
115
81
2,080
(354)
804
4
Net Cash from Operating Activities
13,255
13,390
13,144
1,215
223
430
(537)
(2,224)
29
14,231
The accompanying notes form part of these financial statements, which comprise the Institute and group.
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
47
Notes to the
Financial Statements
for the year ended 31 December 2013
Page
48
1.
Statement of Accounting Policies
49
2.
Government funding
54
3.
Student fees and department income
54
4.
Expenditure
54
5.
Analysis of department costs
55
6.
Cash and cash equivalents
55
7.
Student fees and other receivables
55
8.
Inventory
56
9.
Other financial assets
56
10.
Property, plant and equipment
57
11.
Intangible assets
60
12.
Investments
61
13.
Trade and other payables
62
14.
Employee benefit liabilities
62
15.
Revenue received in advance
62
16.
Trust funds
62
17.
Equity
63
18.
Borrowings
63
19.
Major budget variations
63
20.
Capital expenditure project performance to budget
64
21.
Operating leases
65
22.
Commitments and contingencies
65
23.
Severance payments
65
24.
Related party transactions and key management personnel
66
25.
Early childhood education centre
67
26.
Financial instruments
68
27.
Capital management
70
28.
Events after balance date
70
29.
Comparative figures
71
30.
Income Tax
71
31.
Amalgamation of subsidiaries
71
NOTE 1 : STATEMENT OF ACCOUNTING
POLICIES
Reporting Entity
Manukau Institute of Technology (the Institute) is a TEI domiciled
in New Zealand and is governed by the Crown Entities Act 2004
and the Education Act 1989.
The Institute and group consists of Manukau Institute of
Technology and its subsidiary, EnterpriseMIT Limited (100%
Owned). The Institute has contributed assets to the jointly
controlled venture of Ko Awatea Education Facility; these are
included in the parent financial statements as jointly controlled
assets. All subsidiaries, and joint ventures are incorporated and
domiciled in New Zealand.
The primary objective of the Institute and group is to provide
tertiary education services for the benefit of the community rather
than making a financial return. Accordingly, the Institute 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 Institute and group are for the
year ended 31 December 2013. The financial statements were
authorised for issue by the Council on 27 March 2014.
Basis of Preparation
Statement of compliance
The financial statements of the Institute and group have been
prepared in accordance with the requirements of the Crown
Entities Act 2004 and the Education Act 1989, which include the
requirement to comply with New Zealand generally accepted
accounting practice (NZ GAAP).
These financial statements have been prepared in accordance
with NZ GAAP as appropriate for public benefit entities and they
comply with NZ IFRS.
Measurement base
The financial statements have been prepared on a historical cost
basis, except where modified by the revaluation of land, buildings,
and certain financial instruments (including derivative instruments)
to fair value.
Functional and presentation currency
The financial statements are presented in New Zealand dollars
and all values are rounded to the nearest thousand dollars ($000).
The functional currency of the Institute and its subsidiary is New
Zealand dollars (NZ$).
Changes in accounting policies
There have been no changes in accounting policies during the
financial year.
The Institute has adopted the following revisions to accounting
standards during the financial year, which have had only a
presentational or disclosure effect:
FRS-44 New Zealand Additional Disclosures and Amendments
to NZ IFRS to harmonise with IFRS and Australian Accounting
Standards (Harmonisation Amendments) – The purpose of the new
standard and amendments is to harmonise Australian and New
Zealand accounting standards with source IFRS and to eliminate
many of the differences between the accounting standards in each
jurisdiction. The main effect of the amendments on the Institute
is that donations are no longer required to be separately disclosed
and certain information about property valuations is no longer
required to be disclosed.
Standards, amendments, and interpretations issued that are
not yet effective and have not been early adopted
Standards, amendments, and interpretations issued but not yet
effective that have not been early adopted, and are relevant to
the Institute and group, are:
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 or 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 Accounting
Standards Framework, the Institute is classified as a Tier 1
reporting entity and it will be required to apply full public sector
Public Benefit Entity Accounting Standards. The effective date
for the new standards for public sector entities is for reporting
periods beginning on or after 1 July 2014. This means the
Institute expects to transition to the new standards in preparing
its 31 December 2015 financial statements. The Institute has
not assessed the implications of the new Accounting Standards
Framework at this time.
Due to the change in the Accounting Standards Framework for
public benefit entities, it is expected that all new NZ IFRS and
amendments to existing NZ IFRS will not be applicable to public
benefit entities. Therefore, the XRB has effectively frozen the
financial reporting requirements for public benefit entities up until
the new Accounting Standard Framework is effective. Accordingly,
no disclosure has been made about new or amended NZ IFRS that
exclude public benefit entities from their scope.
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 in full on
consolidation.
Subsidiaries
The Institute consolidates in the group financial statements
all entities where the Institute 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 Institute controls the majority voting power on the governing
body or where such policies have been irreversibly predetermined
by the Institute 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.
Subsidiaries are fully consolidated from the date on which control
is transferred to the group. They are deconsolidated from the date
that control ceases.
The Institute will recognise goodwill where there is an excess
of the consideration transferred over the net identifiable assets
acquired and liabilities assumed. This difference reflects the
goodwill to be recognised by the Institute. If the consideration
transferred is lower than the net fair value of the Institute’s
interest in the identifiable assets acquired and liabilities assumed,
the difference will be recognised immediately in the surplus or
deficit.
Investments in subsidiaries are carried at cost in the Institute’s
parent entity financial statements. Investments in subsidiaries are
reviewed at each reporting date to determine whether there are
any indicators that the carrying amount may not be recoverable.
Joint venture
A joint venture is a contractual arrangement whereby the
venturers undertake an economic activity which is subject to joint
control.
Jointly controlled assets
The proportionate interests in the assets, liabilities, income and
expenses of a jointly controlled asset have been incorporated in
the financial statements under the appropriate headings.
Revenue
Revenue is measured at the fair value of the consideration
received or receivable.
Government grants
Government grants are recognised as revenue upon entitlement.
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 the total course days.
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
49
Notes to the
Financial Statements
for the year ended 31 December 2013
NOTE 1 : STATEMENT OF ACCOUNTING POLICIES
(CONTINUED)
Research income
Debtors and other receivables
Funding received for research that will provide reciprocal benefits
to the research funding provider is recognised as revenue on a
percentage completion basis. The percentage of completion is
measured by reference to the research expenditure incurred as a
proportion to total expenditure expected to be incurred.
Short-term debtors and other short-term receivables are recorded
at their face value, less any provision for impairment.
Funding received that provides no reciprocal benefit to the
research funding provider is recognised as revenue when the
funding is received.
Donations, bequests, and pledges
Donations and bequests are recognised as income when the right
to receive the fund or asset has been established.
Pledges are not recognised as assets or revenue until the pledged
item is received.
Other Income
Other Income is recognised when earned. For the sale of
materials this is when the significant risks and rewards of
ownership have passed to the customer and can be measured
reliably.
Interest
Financial assets are initially recognised at fair value plus
transaction costs unless they are carried at fair value through
surplus or deficit in which case the transaction costs are
recognised in the surplus or deficit.
Purchases and sales of financial assets are recognised on tradedate, the date on which the Institute and group commits to
purchase or sell the asset. Financial assets are derecognised when
the rights to receive cash flows from the financial assets have
expired or have been transferred and the Institute and group has
transferred substantially all the risks and rewards of ownership.
Financial assets are classified into the following categories for the
purposes of measurement:
• fair value through surplus or deficit;
• loans and receivables; and
• fair value through other comprehensive income.
Interest income is recognised using the effective interest method.
Classification of the financial asset depends on the purpose for
which the instruments were acquired.
Borrowing costs
Financial assets at fair value through surplus or deficit
The Institute and group has elected to defer the adoption of the
revised NZ IAS 23 Borrowing Costs (Revised 2007) in accordance
with the transitional provisions of NZ IAS 23 that are applicable to
public benefit entities.
Currently the Institute does not hold any financial assets in this
category.
Consequently, all borrowing costs are recognised as an expense in
the period in which they are incurred.
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.
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 Institute 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 leases
An operating lease is a lease that does not transfer substantially
all the risks and rewards incidental to ownership of an asset.
Lease payments under an operating lease are recognised as an
expense on a straight-line basis over the lease term.
Lease incentives received are recognised in the surplus or deficit
over the lease term as an integral part of the total lease expense.
Foreign currency transactions
Foreign currency transactions (including those for which forward
foreign exchange contracts are held) 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 exchange
rates of monetary assets and liabilities denominated in foreign
currencies are recognised in the surplus or deficit.
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, and bank overdrafts.
Bank overdrafts are shown within borrowings in current liabilities in
the statement of financial position.
50
Other financial assets
Loans and receivables (including cash and cash equivalents and
debtors and other receivables)
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.
Financial assets at fair value through other comprehensive income
Currently the Institute does not hold any financial assets in this
category.
Impairment of financial assets
At each balance date, the Institute and group assesses whether
there is any objective evidence that a financial asset or group of
financial assets is impaired. Any impairment losses are recognised
in the surplus or deficit.
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 Institute and group will not be able
to collect amounts due according to the original terms of the
loan or receivable. Significant financial difficulties of the debtor,
probability that the debtor will enter into bankruptcy, receivership,
or liquidation, and 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 (that is, not past
due). For other financial assets, impairment losses are recognised
directly against the instrument’s carrying amount.
Inventories
Inventories held for distribution or consumption in the provision
of services that are not supplied on a commercial basis are
measured at cost (using the FIFO method), adjusted, when
applicable, for any loss of service potential.
The loss in service potential of inventories held for distribution is
determined on the basis of obsolescence. Where inventories are
acquired at no cost or for nominal consideration, the cost is the
NOTE 1 : STATEMENT OF ACCOUNTING
POLICIES (CONTINUED)
current replacement cost at the date of acquisition.
Inventories held for use in the production of goods and services
on a commercial basis are valued at the lower of cost (using the
FIFO method) and net realisable value.
The amount of any write-down for the loss of service potential or
from cost to net realisable value is recognised in the surplus or
deficit in the year of the write-down.
Property, plant, and equipment
Property, plant, and equipment consists of the following asset
classes: land, buildings, land improvements, plant and equipment,
computer hardware, furniture and fittings, motor vehicles, library
collection.
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 cost, less accumulated
depreciation and impairment losses.
Revaluation
Land and buildings are revalued with sufficient regularity to ensure
that their carrying amount does not differ materially from fair
value and at least every three years. The most recent valuation of
land and buildings was performed by P Todd (BPA MRICS SPINZ),
independent registered property, plant and machinery valuer, of
Darroch Limited. The effective date of the revaluation was 31
December 2012.The next revaluation is due 31 December 2015.
The carrying values of revalued assets are assessed annually to
ensure that they do not differ materially from fair value. If there is
evidence supporting a material difference, then the off-cycle asset
classes are revalued.
Property, plant, and equipment revaluation movements are
accounted for on a class-of-asset basis.
The net revaluation results are credited or debited to other
comprehensive income and are accumulated to an asset
revaluation reserve in equity for that class of asset. Where this
would result in a debit balance in the asset revaluation reserve,
this balance is not recognised in other comprehensive 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 Institute and group and the cost of the item can be
measured reliably.
The costs of day-to-day servicing of property, plant, and
equipment are recognised in the surplus or deficit as they are
incurred.
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.
The useful lives and associated depreciation rates of major classes
of assets have been estimated as follows:
Class of Asset
Rate
Buildings
- Structure
11 – 72 years
(1.4% - 9.1%)
- Fit Out
6 – 29 years
(3.5% - 16.7%)
(3% - 11.1%)
- Services
9 – 33 years
Land Improvements
7 – 40 years
(3% - 14%)
Plant and Equipment
3 – 20 years
(5% - 33.3%)
(8.3% - 20%)
Furniture and Fittings
5 – 12 years
Motor Vehicles
4 – 10 years
Computer Hardware
4 – 7 years
Library Collection
3 – 10 years
Office Equipment
10 years
(10% - 25%)
(14.3% - 25%)
(10% - 33%)
(10%)
The residual value and useful life of an asset is reviewed, and
adjusted if applicable, at each financial year end.
Library Collection
The library collection that had been revalued to fair value prior
to 31 December 2006, the date of the transition to NZ IFRS,
is measured on the basis of deemed cost, being the revalued
amount at the date of the revaluation. All purchases after this
date are recorded at cost.
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 the 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 related
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
Costs that are directly associated with the development of new
educational courses are recognised as an intangible asset to
the extent that such costs are expected to be recovered. The
development costs primarily consist of employee costs.
Intellectual property development
Research costs are expensed as incurred in the surplus or deficit.
Development costs that are directly attributable to the design,
construction, and testing of pre-production or pre-use prototypes
and models associated with intellectual property development
are recognised as an intangible asset if all the following can be
demonstrated:
• it is technical feasible to complete the product so that it will be
available for use or sale;
• management intends to complete the product and use or sell it;
Disposals
• there is an ability to use or sell the product;
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 assets are sold, the amounts included in property
revaluation reserves in respect of those assets are transferred to
general funds.
• it can be demonstrated how the product will generate probable
future economic benefits;
Depreciation
Depreciation is provided on a straight-line basis on all property,
plant, and equipment other than land at rates that will write off
the cost (or valuation) of the assets to their estimated residual
values over their useful lives.
•a
dequate technical, financial, and other resources to complete
the development and to use or sell the product are available;
and
• the expenditure attributable to the product during its
development can be reliably measured.
Other development expenses that do not meet these criteria are
recognised as an expense as incurred in the surplus or deficit.
Development costs previously recognised as an expense cannot be
subsequently recognised as an asset.
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
51
Notes to the
Financial Statements
for the year ended 31 December 2013
NOTE 1 : STATEMENT OF ACCOUNTING POLICIES
(CONTINUED)
License to Occupy Land
Employee entitlements
Where the Institute has a license to occupy land at a nominal
rent, the Institute recognises the intagible asset based on an
independent valuation of the estimated market ground rent over
the license term.
Short-term employee entitlements
Land with a license to occupy is amortised over the unexpired
period of the license.
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 Asset
Rate
Computer Software
2 – 10 years
(10% - 50%)
Capitalised intellectual property development costs are still work in
progress. The useful life of completed projects will be established
at project completion.
Impairment of property, plant, and equipment and intangible
assets
Intangible assets that have an indefinite useful life, or are not
yet available for use, are not subject to amortisation and are
tested annually for impairment. Assets that have a finite useful
life are reviewed for indicators of impairment at each balance
date and whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. 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 or service potential of the asset are
not primarily dependent on the asset’s ability to generate net cash
inflows and where the Institute 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 against the revaluation reserve for that class of asset.
Where that results in a debit balance in the revaluation reserve,
the balance is recognised in the surplus or deficit.
For assets not carried at a revalued amount, the impairment loss
is recognised in the surplus or deficit.
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.
Creditors and other payables
Short-term creditors and other short-term payables are recorded
at their face value.
Borrowings
Borrowings are initially recognised at their fair value net of
transaction costs incurred. After initial recognition, all borrowings
are measured at amortised cost using the effective interest
method.
Borrowings are classified as current liabilities unless the Institute
has an unconditional right to defer settlement of the
liability for at least 12 months after the balance date.
52
Employee benefits that are due to be 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 accrued up to balance date,
annual leave earned to 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.
A liability and an expense are recognised for bonuses where there
is a contractual obligation or where there is a past practice that
has created a constructive obligation.
Long-term employee entitlements
Employee benefits that are due to be settled beyond 12 months
after the end of the 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
New Zealand 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 nonvested long service leave and retirement gratuities expected to
be settled within 12 months of balance date, are classified as a
current liability. All other employee entitlements are classified as a
non-current liability.
Superannuation schemes
Defined contribution schemes
Employer contributions to KiwiSaver, the Government
Superannuation Fund, and other defined contribution
superannuation schemes are accounted for as defined contribution
schemes and are recognised as an expense in the surplus or
deficit when incurred.
Trust Funds
Manukau Institute of Technology receives bequests plus other
funding to be held in trusts, which are required to be used for
specific activities such as scholarships and awards. As the
Institute administers these funds which have restricted use,
they are treated as current liabilities and are not included in the
Statement of Comprehensive Income.
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 an
outflow of future economic benefits will be required to settle the
obligation, and a reliable estimate can be made of the amount of
the obligation.
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 in “finance costs”.
NOTE 1 : STATEMENT OF ACCOUNTING
POLICIES (CONTINUED)
Equity
Crown-owned land and buildings
Equity is measured as the difference between total assets and
total liabilities. Equity is disaggregated and
Property in the legal name of the Crown that is occupied by the
Institute and group is recognised as an asset in the statement of
financial position. The Institute 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.
classified into the following components:
• general funds;
• capital contributions; and
• property revaluation reserve.
Property revaluation reserve
This reserve relates to the revaluation of land and buildings to fair
value.
Goods and services tax
All items in the financial statements are stated exclusive of goods
and services tax (GST), except for debtors and other receivables
and creditors and other payables, which are presented on a GSTinclusive 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 the GST
relating to investing and financing activities, is classified as a net
operating cash flow in the statement of cash flows.
Commitments and contingencies are disclosed exclusive of GST.
Income tax
The Institute and group is exempt from income tax. Accordingly,
no provision has been made for income tax.
The Institute and group has secured the use of the property by
means of a license to occupy land from the Ministry of Education
for a period of 30 years from 13 March 2010 at nominal rent. This
has been recognised as an intangible asset (Note 11) and included
in Equity (Note 17).
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 Institute and group accounts for the funding as
a capital contribution directly in equity. Information about capital
contributions recognised in equity is disclosed in note 17.
Research leave
Teaching staff are entitled to research leave in certain
circumstances. The substance of this leave is that it is leave
from teaching duties to undertake research activity with staff
continuing to earn their salary and other employee entitlements.
The Institute is of the view that research leave is not the type of
leave contemplated in NZ IAS 19 Employee Benefits. Accordingly,
a liability has not been recognised for such leave.
Budget figures
The budget figures are those 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 preparing these
financial statements.
Cost allocation
The cost of service for each significant activity of the Institute and
group has been derived using the cost allocation system outlined
below.
Direct costs are those costs directly attributable to a significant
activity. Indirect costs are those costs that cannot be identified in
an economically feasible manner with a specific significant activity.
Direct costs are charged directly to significant activities. Indirect
costs are allocated to academic departments only based on the
floor space used for teaching purposes and administration costs
based on the proportion of the salary costs expensed to the
academic departments.
Critical accounting estimates and assumptions
In preparing these financial statements, the Institute 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 or 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 10 provides information about the estimates and assumptions
exercised in the measurement of revalued land and buildings.
Long Service Leave
Note 14 provides information about the estimates and assumptions
exercised in the measurement of long service leave.
Critical judgements in applying accounting policies
Management has exercised the following critical judgements in
applying accounting policies for the year ended 31 December
2013:
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
53
Notes to the
Financial Statements
for
the year ended 31 December 2013
2013
2012
2013
2012
INSTITUTE
INSTITUTE
GROUP
GROUP
ACTUAL
ACTUAL
ACTUAL
ACTUAL
NOTE
$000$000
$000
$000
NOTE 2 : GOVERNMENT FUNDING
Student Achievement Component (SAC) Funding
Ma-ori and Pacific Islands Grant
Student Disability Grant
49,370 51,81449,98852,059
249 207249207
209 175 209 175
Literacy Funding
1,537 1,8031,5371,803
Youth Guarantee
Priority Trades Funding 634
Other Government Grants
208 517319517
Performance Based Research Fund
Total Government Funding Excluding Department Funding 4,443 3,8004,5733,800
0634
0
648 784648784
57,298 59,10058,15759,345
The Student Achievement Component (SAC) operational bulk grant is based on equivalent full time student (EFTS) levels and the funding
category levels for those EFTS and specific service grants. There are no unfulfilled contingencies for Government funding recognised as
revenue.
Other Government funding is included as department income as the funding has been subject to a competitive tender process for training
contracts. The funding is provided by the Tertiary Education Commission and Industry Training Organisations
NOTE 3 : STUDENT FEES AND DEPARTMENT INCOME
Student Fees - Domestic Students
Student Fees - International Students
Departmental Income (Non-Base Income and Recoveries)
Total Student Fees and Department Income
24,240 24,88224,87924,976
7,488 6,9167,4896,916
16,232
16,119
16,232
16,119
47,960 47,91748,60048,011
NOTE 4 : EXPENDITURE
Employee Benefits Expense
Salaries and Wages
61,526 64,63762,85765,168
Defined Contribution Plan Employer Contributions
Councillors and Board fees
24 1,313
180 146180146
9921,3261,002
Increase/(Decrease) in Employee Benefit Liabilities
14
353 (1,368)
Total Employee Benefits Expense
353(1,368)
63,372 64,407 64,716 64,948
Other Expenditure
Auditors’ Remuneration
Fees to Principal Auditor for Financial Statement Audit
Other Services
Total Auditors’ Remuneration
General Costs
Operating Lease Payments
174
0
116
174
0
0
0
174 116174116
21
3,014 2,8423,2912,987
Bad and Doubtful Debts - Written Off
7
330 408330408
Net Increase/(Decrease) Bad and Doubtful Debts Provision
7
83
200
137
200
One-off Costs related to Mainzeal receivership
3,790
0
3,790
0
Administrative, Materials and Consumables Expenses
24,901 25,73124,95925,711
Total General Costs
32,118 29,18132,50729,306
Total Other Expenditure
32,292 29,29732,68129,422
Employer contributions to defined contribution plans include contributions to Kiwisaver and the Government Superannuation Fund.
Audit fees include the parent and subsidiary audit fee for 2013 and an underprovision for 2012.
54
116
2013
2013
2013
INSTITUTE
INSTITUTE
INSTITUTE
ACTUAL
ACTUAL
ACTUAL
EXPENDITURE
NET COST
REVENUE
$000$000 $000
2012
2013
INSTITUTE INSTITUTE
ACTUAL
BUDGET
NET COST
NET COST
$000
$000
NOTE 5 : ANALYSIS OF DEPARTMENT COSTS INSTITUTE
Faculty of Consumer Services
7,144
780
6,364
6,476
5,100
17,973
1,172
16,801
16,673
16,869
Faculty of Engineering and Trades
26,550
3,008
23,542
24,483
22,282
Faculty of Education and Social Sciences
30,832
4,677
26,155
26,228
24,966
Faculty of Visual Arts
4,772
107
4,665
4,554
6,867
New Zealand Maritime School
8,7371,2047,5337,8907,224
Faculty of Business
Nursing and Health Studies
Total
9,555
232
9,323
9,442
8,400
105,563
11,180
94,383
95,746
91,708
Included in the department net cost are the following overheads:
Property
16,79917,61516,956
Administration
36,87336,91134,784
Total Overheads Allocated53,67254,52651,740
Overheads are allocated in accordance with notes to the financial statements, summary of significant accounting policies, allocation of
overheads.
Department recoveries for services provided during 2013 have been netted off against overhead expenditure allocation. Total recoveries of
$1,157,810 (2012 $2,045,000). 20132012
INSTITUTEINSTITUTE
ACTUALACTUAL
NOTE$000$000
2013
GROUP
ACTUAL
$000
2012
GROUP
ACTUAL
$000
NOTE 6 : CASH AND CASH EQUIVALENTS
Cash at Bank and on Hand
Call Deposits
9
Total Cash and Cash Equivalents
54
(87)
259
55
1,658
6,794
1,658
6,794
1,712
6,707
1,917
6,849
Cash at bank includes funds on call deposit that earn interest at floating rates based on the daily bank deposit rates.
Short term deposits are made for varying periods up to three months and earn interest at the respective short-term deposit rates.
The carrying value of cash at bank and on hand, and call deposits approximate their fair value.
NOTE 7 : STUDENT FEES AND OTHER RECEIVABLES
Student Fees and Sundry Receivables
3,651
3,564
3,763
3,564
Prepayments744567789617
Advance to Subsidiaries
330
Other Receivables
1,085
0
0480
(0)
0682
4,7255,6964,5524,863
Less Provision of Impairment for Receivables
(464)
(381)
(518)
(381)
Total Student Fees and Other Receivables
4,2615,3154,0344,482
Student fees receivables are non-interest bearing and generally should be paid on enrolment and no later than at graduation.
The carrying value of Student Fees and Other Receivables approximates their fair value.
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
55
Notes to the
Financial Statements
for the year ended 31 December 2013
2013201320132012
20122012
GROSSIMPAIRMENT
NET
GROSSIMPAIRMENT
NET
$000$000$000$000$000$000
NOTE 7 : STUDENT FEES AND OTHER RECEIVABLES (CONTINUED)
INSTITUTE
Impairment
Ageing profile for student fees receivable at year end
Not Past Due
1,683 (16)1,6671,317 (21)1,296
Past Due 1 - 30 Days
1,203
(7)
1,196
714
(55)
659
Past Due 31 - 60 Days
68
(10)
58
120
(15)
105
Past Due 61 - 90 Days
75
(3)
72
84
(9)
75
Past Due over 90 Days
622
(428)
194
1,329
(281)
1,048
Total
3,651 (464)3,1873,564 (381)3,183
20132012
2013
2012
ACTUALACTUAL
ACTUAL
ACTUAL
INSTITUTE INSTITUTEGROUPGROUP
$000$000
$000
$000
Movements in the provision for impairment of student receivables
At 1 January
381181381181
Additional Provisions made during the Year
413
408
467
408
Provisions Reversed during the Year
0
200
0
200
Receivables Written-off during the Year
(330)
(408)
(330)
(408)
At 31 December464381518381
All receivables greater than 30 days in age are considered to be past due. The impairment assessment is performed on an individual basis,
based on analysis of past collection history and debt write-offs.
NOTE 8 : INVENTORY
Building Stock473502473502
Hospitality Stock13661366
Staff Services Stock64776477
Cafeteria Stock108 94108 94
Total Inventory658739658739
Inventories are valued at the lower of cost or net realisable value. Nil was written down of inventories held for distribution (2012- nil).
No inventories are pledged as security.
NOTE 9 : OTHER FINANCIAL ASSETS
Current Portion
Short Term Deposits (with Maturities of 4 - 12 months)
0
2,774
0
2,774 Maturity Analysis and Effective Interest Rates as at 31 December
Short Term Deposits (with maturities of less than 3 months)
1,658
6,794
1,658
6,794
Weighted Average Effective Interest Rate
Short Term Deposits (with maturities of 4 - 12 months; average maturity 98 days,
2012: 322 days)
3.00%
3.00%
3.00%
3.00%
0
2,774
0
2,774
Weighted Average Effective Interest Rate
4.20%
4.20%
The carrying value approximates the fair value. None designated at fair value.
56
NOTE 10 : PROPERTY, PLANT AND EQUIPMENT (YEAR ENDED 31 DECEMBER 2013)
Movements for each class of Property, Plant and Equipment for the Institute are as follows:
1 JAN 2013
1 JAN 2013
COST OR ACCUMULATED
FAIR VALUE DEPRECIATION
$000
$000
INSTITUTE 2013
Land - Crown
Land - Institute
Land Improvements
Buildings - Crown
Buildings - Institute
Library Collection
Computer Hardware
Plant and Equipment
Motor Vehicles
Furniture and Fittings
Total Property, Plant and Equipment
1 JAN 2013
NET
CARRYING NET BOOK VALUE
VALUE ADDITIONS
OF DISPOSALSDEPRECIATION
$000
$000
$000
$000
18,820
8,443
8,082
45,991
118,103
3,934
20,369
15,210
1,486
0
0
10
33
1,409
2,449
11,326
8,380
887
18,820
8,443
8,072
45,958
116,694
1,485
9,043
6,830
599
3,556
1,341
2,215
0
0
4
(38)
461
28,323
577
5,872
2,155
(2)
44
(1)
316
243,99425,834 218,160 37,752
0
0
348
1,784
2,679
402 2,448 1,245 143 (1)
315 (42)
9,364
$156K accumulated depreciation write-back is included in the net book value of disposals.
31 DEC 2013
31 DEC 2013 31 DEC 2013
NET
COST OR
ACCUMULATED
CARRYING
FAIR VALUE DEPRECIATION
VALUE
$000 $000$000
TABLE CONTINUED
INSTITUTE 2013
Land - Crown
Land - Institute
Land Improvements
Buildings - Crown
Buildings - Institute
Library Collection
Computer Hardware
Plant and Equipment
Motor Vehicles
18,820
8,443
8,049
46,134
146,444
4,522
26,421
18,854
1,487
0
0
358
1,817
4,088
2,861
13,930
10,841
986
Furniture and Fittings
4,168
1,952
Total Property, Plant and Equipment
18,820 8,443 7,691 44,317 142,356 1,661 12,490
8,013 501 2,216
283,34136,834 246,507
1 JAN 2012
1 JAN 2012
1 JAN 2012
NET
COST OR
ACCUMULATED
CARRYING
FAIR VALUE DEPRECIATION
VALUE
ADDITIONS
DISPOSALSDEPRECIATION REVALUATION
$000 $000 $000$000 $000$000$000
NOTE 10 : PROPERTY, PLANT AND EQUIPMENT (YEAR ENDED 31 DECEMBER 2012)
INSTITUTE 2012
Land - Crown
Land - Institute
Land Improvements
Buildings - Crown
Buildings - Institute
Library Collection
Computer Hardware
Plant and Equipment
Motor Vehicles
Furniture and Fittings
Total Property, Plant and Equipment
19,145
0
19,145
0
0
0
7,334
0
7,334
1,426
0
0
7,781
559
7,222
1,519
(409)
374
41,032
3,486
37,546
895
76
1,891
79,788
4,973
74,815
36,186
1,522
2,786
3,537
2,047
1,490
397
0
401
17,210
9,5007,7103,229 (70)1,826
17,360
8,351
9,009
317
(1,124)
1,372
1,259
820
439
227
0
67
4,192
1,054
3,136
198,63830,790 167,846
(641)
43,555
5
0
(325)
(317)
114
9,332
6,957
0
0
0
0
286 0
9,003 15,762
$13.892m accumulated depreciation write-back was included in the Revaluation movement.
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
57
Notes to the
Financial Statements
for the year ended 31 December 2013
31 DEC 2012
31 DEC 2012 31 DEC 2012
NET
COST OR
ACCUMULATED
CARRYING
FAIR VALUE DEPRECIATION
VALUE
$000 $000$000
TABLE CONTINUED
INSTITUTE 2012
Land - Crown
Land - Institute
Land Improvements
Buildings - Crown
Buildings - Institute
Library Collection
Computer Hardware
Plant and Equipment
Motor Vehicles
18,820
8,443
8,082
45,991
118,103
3,934
20,369
15,210
1,486
0
0
10
33
1,409
2,449
11,326
8,380
887
18,820 8,443 8,072 45,958 116,694 1,485 9,043
6,830
599 Furniture and Fittings
3,556
1,341
2,215 Total Property, Plant and Equipment
243,99425,834 218,160
1 JAN 2013
1 JAN 2013
COST OR ACCUMULATED
FAIR VALUE DEPRECIATION
$000
$000
1 JAN 2013
NET
NET BOOK
CARRYING
VALUE OF
VALUE ADDITIONS
DISPOSALSDEPRECIATION
$000
$000
$000
$000
NOTE 10 : PROPERTY, PLANT AND EQUIPMENT (YEAR ENDED 31 DECEMBER 2013)
Movements for each class of Property, Plant and Equipment for the Group are as follows:
GROUP 2013
Land - Crown
Land - Institute
Land Improvements
Buildings - Crown
Buildings - Institute
Library Collection
Computer Hardware
Plant and Equipment
Motor Vehicles
Furniture and Fittings
Total Property, Plant and Equipment
18,820
8,443
8,082
45,991
118,103
3,934
20,369
15,464
1,519
0
0
10
33
1,409
2,449
11,326
8,388
890
18,820
8,443
8,072
45,958
116,694
1,486
9,043
7,076
629
0
0
4
461
28,323
577
5,872
2,167
52
0
0
(38)
0
0
0
0
326
72
3,633
1,338
2,295
316
(43)
244,35825,842 218,520 37,771
318
0
0
348
1,784 2,679 402
2,448
1,298 157 326 9,442 $156K accumulated depreciation write-back is included in the net book value of disposals.
31 DEC 2013
31 DEC 2013 31 DEC 2013
NET
COST OR
ACCUMULATED
CARRYING
FAIR VALUE DEPRECIATION
VALUE
$000 $000$000
TABLE CONTINUED
58
GROUP 2013
Land - Crown
Land - Institute
Land Improvements
Buildings - Crown
Buildings - Institute
Library Collection
Computer Hardware
Plant and Equipment
Motor Vehicles
18,820
8,443
8,049
46,134
146,444
4,522
26,421
19,471
1,597
0
0
358
1,817
4,088
2,861
13,930
10,923
1,005
18,820 8,443 7,691
44,317 142,356 1,661 12,490
8,548 592 Furniture and Fittings
4,215
1,959
2,256 Total Property, Plant and Equipment
284,11436,941 247,173
NOTE
10 : PROPERTY, PLANT AND EQUIPMENT (YEAR ENDED 31 DECEMBER 2012)
GROUP 2012
Land - Crown
Land - Institute
Land Improvements
Buildings - Crown
Buildings - Institute
Library Collection
Computer Hardware
Plant and Equipment
Motor Vehicles
Furniture and Fittings
Total Property, Plant and Equipment
1 JAN 2012
1 JAN 2012
1 JAN 2012
NET
COST OR
ACCUMULATED
CARRYING
FAIR VALUE DEPRECIATION
VALUE
ADDITIONS
DISPOSALSDEPRECIATION REVALUATION
$000 $000 $000$000 $000$000$000
19,145
0
19,145000
(325)
7,334
0
7,334
1,426
0
0
(317)
7,781
559
7,222
1,519
(409)
374
114
41,032
3,486
37,546
895
76
1,891 9,332
79,788
4,973
74,815
36,186
1,522
2,786 6,957
3,537
2,047
1,490
397
0
401 0
17,210
9,5007,7103,229 (70)1,826 0
17,360
8,351
9,009
571
(1,124)
1,387 0
1,259
820
439
260
0
67 0
4,192
1,054
3,136
198,63830,790 167,846
(564)
43,919
5
0
286 0
9,018 15,762
31 DEC 2012
31 DEC 2012 31 DEC 2012
NET
COST OR
ACCUMULATED
CARRYING
FAIR VALUE DEPRECIATION
VALUE
$000 $000$000
TABLE CONTINUED
GROUP 2012
Land - Crown
Land - Institute
Land Improvements
Buildings - Crown
Buildings - Institute
Library Collection
Computer Hardware
Plant and Equipment
Motor Vehicles
18,820
8,443
8,082
45,991
118,103
3,934
20,369
15,464
1,519
0
0
10
33
1,409
2,449
11,326
8,388
890
Furniture and Fittings
3,633
1,338
Total Property, Plant and Equipment
18,820 8,443 8,072 45,958 116,694 1,486
9,043
7,076 629 2,295
244,35825,842 218,520
Revaluations
An independent valuation was obtained to determine the fair value of land and buildings. Fair value is determined by reference to an open
market basis, being the amount for which assets could be exchanged between a knowledgeable willing buyer and a knowledgeable willing
seller in an arm’s length transaction at the valuation date for land and buildings of a non-education specific nature. Where buildings have
been designed specifically for educational purposes they are valued at optimise depreciated replacement cost which is considered to reflect
fair value for such assets.
The most recent valuation of land and buildings was performed by P Todd (BPA MRICS SPINZ), independent registered property and plant
and machinery valuer, of Darroch Limited at a fair value of $152,423,000. The effective date of the revaluation was 31 December 2012.
The next revaluation is due 31 December 2015.
Land
Land is valued at market value.
Restrictions on the Institute and group’s ability to sell land would normally not impair the value of the land because the Institute and group
has operational use of the land for the foreseeable future and will substantially receive the full benefits of outright ownership.
Buildings
Specialised buildings (e.g. buildings on campuses) are valued at fair value using optimised depreciated replacement cost because no
reliable market data is available for buildings designed for education delivery purposes.
Depreciated replacement cost is determined using a number of significant assumptions. Significant assumptions include:
• The replacement cost of an asset has been determined by comparison with actual current replacement costs of the same or similar
assets. If this information is unavailable the replacement costs is calculated using appropriate guidelines such as the Rawlinsons New
Zealand Construction Handbook. Adjustments are made, where appropriate for obsolescence due to over design or surplus capacity.
• All buildings are assumed to have sufficient seismic strength to not materially affect their fair value.
• The remaining useful life of assets is estimated by deducting the asset age from the base life. The base lives are determined after
consideration of a number of factors including the actual timing of the replacement of assets, the type of assets and the durability of
the materials from which it is constructed.
• Straight-line depreciation has been applied in determining the depreciated replacement cost value of the asset.
Non-specialised buildings (for example, residential buildings) are valued at fair value using market-based evidence. Market rents and
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
59
Notes to the
Financial Statements
for the year ended 31 December 2013
capitalisation rates were applied to reflect market value. These valuations include adjustments for estimated building strengthening costs
for earthquake prone buildings and the associated lost rental during the time to undertake the strengthening work.
Excluded assets include:
• Loose plant and equipment and similar assets such as furniture, workbenches, computers and workshop tools.
• Underground services
• Carvings and all artwork including wall linings.
Refer to Note 17 for revaluation reserves and explanations of revaluation movements.
Work in Progress
At the end of the period the total amount of property, plant and equipment work in progress is $83,511,897 (2012 $49,210,000). The
majority of this balance is for Manukau Tertiary Campus.
Restrictions on title
Under the Education Act 1989, the Institute is required to obtain the consent from the Ministry of Education to dispose or sell of 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
institute does not consider it practical to disclose in detail the value of land subject to these restrictions.
Ko Awatea
The Institute has a 31% share of Ko Awatea assets as jointly controlled assets. The details of the assets by categories are as below:
Furniture and Fittings
$148k(2012 $148k)
Plant and Equipment
$191k(2012 $191k)
Computer Hardware
$325k(2012 $325k)
Computer Software$9k (2012 $9k)
Total Property, Plant and Equipment
$673k( 2012 $673k)
The accumlated depreciation for 2013 is $300k (2012 $200k), which brings the asset book value to $373k (2012 $473k).
$478,509 were incurred as the MIT share of the operating costs of the joint venture (2012 $382,000). This included an accrual of $243,000
for the December quarter (2012 $117,000).
NOTE 11 : INTANGIBLE ASSETS (YEAR ENDED 31 DECEMBER 2013)
Movements for each class of Intangible Assets for the Institute are as follows:
1 JAN 2013
1 JAN 2013
1 JAN 2013
NET
NET BOOK
COST OR
ACCUMULATED CARRYING VALUE OF FAIR VALUEAMORTISATION
VALUE ADDITIONSDISPOSALSAMORTISATION
$000
$000
$000
$000
$000
$000
INSTITUTE 2013
Computer Software
Other Intangible Assets
Total Intangible Assets
5,751
3,236
2,515
1,280
(18)
330
0
0
0
1,250
0
156
5,751 3,236 2,5152,530 (18) 486
31 DEC 2013
31 DEC 2013
31 DEC 2013
NET
TABLE CONTINUED
COST OR
ACCUMULATED
CARRYING
FAIR VALUE AMORTISATION
VALUE
$000
$000 $000
INSTITUTE 2013
Computer Software
4,562
1,115
Other Intangible Assets
1,250
156
Total Intangible Assets
3,447
1,094
5,812 1,2714,541
$2.5m accumulated depreciation write-back is included in the net book value of disposals.
1 JAN 2012
1 JAN 2012
1 JAN 2012
NET
COST OR
ACCUMULATED CARRYING
FAIR VALUEAMORTISATION
VALUE ADDITIONSDISPOSALSAMORTISATION
REVALUATION
$000
$000$000 $000$000
$000 $000
NOTE 11 : INTANGIBLE ASSETS (YEAR ENDED 31 DECEMBER 2012)
INSTITUTE 2012
Computer Software
4,711
2,994
1,717
1,040
0
Total Intangible Assets
4,711 2,994 1,7171,040
242
0
0 242 0
31 DEC 2012
31 DEC 2012
31 DEC 2012
NET
TABLE CONTINUED
COST OR
ACCUMULATED
CARRYING
FAIR VALUE AMORTISATION
VALUE
$000
$000$000
INSTITUTE 2012
60
Computer Software
5,751
3,236
2,515 Total Intangible Assets
5,751 3,2362,515
NOTE 11 : INTANGIBLE ASSETS (YEAR ENDED 31 DECEMBER 2013)
Movements for each class of Intangible Assets for the Group are as follows:
1 JAN 2013
1 JAN 2013
1 JAN 2013
NET
NET BOOK
COST OR
ACCUMULATED CARRYING
VALUE OF
FAIR VALUE AMORTISATION
VALUE ADDITIONS DISPOSALS AMORTISATION
$000
$000
$000
$000
$000
$000
GROUP 2013
Computer Software
5,751
3,236
2,515
1,305
(18)
Other Intangible Assets
0
0
0
1,250
0
330 156
Goodwill
356 0
3560
(356)0
Total Intangible Assets
6,107 3,236 2,8712,555 (374) 486 31 DEC 2013
31 DEC 2013
31 DEC 2013
NET
TABLE CONTINUED
COST OR
ACCUMULATED
CARRYING
FAIR VALUE AMORTISATION
VALUE
$000
$000$000
GROUP 2013
Computer Software
4,587
1,115
3,472
Other Intangible Assets
1,250
156
1,094
Goodwill
0
0
Total Intangible Assets
0
5,837 1,2714,566
NOTE 11 : INTANGIBLE ASSETS (YEAR ENDED 31 DECEMBER 2012)
1 JAN 2012
1 JAN 2012
1 JAN 2012
NET
COST OR
ACCUMULATED
CARRYING
FAIR VALUEAMORTISATION
VALUE ADDITIONS DISPOSALSAMORTISATIONREVALUATION
$000
$000
$000
$000
$000
$000
$000
GROUP 2012
Computer Software
4,711
2,994
1,717
1,040
0
242 Goodwill
0
0
0
356
0
0
Total Intangible Assets
4,711 2,994 1,7171,396
0
0
0 2420
Net carrying value, cost or fair value less depreciation at beginning and end of year.
31 DEC 2012
31 DEC 2012
31 DEC 2012
NET
COST OR
ACCUMULATED CARRYING
TABLE CONTINUED
FAIR VALUE AMORTISATION
VALUE
$000
$000$000
GROUP 2012
Computer Software
Goodwill
Total Intangible Assets
5,751
3,236
356
0
2,515
356 6,107 3,2362,871
Work in Progress
At the end of the period the total amount of intangible assets work in progress is $1,343,900 (2012 $1,024,000), included where mainly the
work in progress for the TechnologyOne upgrade and MIT website rebuild.
Other Intangible Assets
Other intangible assets include the license to occupy land at 52 Otara Rd from the Ministry of Education for a period of 30 years at a
nominal rent. The amount recognised as an intangible asset is based on an independent valuation. The valuation methodology adopted by
the independent valuer, Darroch Ltd, is based on an estimated land value of $2m and an adopted ground rental percentage of 5.5%. The
resultant estimated market ground rent has a land value growth rate of 2% per annum applied and a discount rate of 10% to determine
the
present value of the rental benefit, over the license term.
NOTE 12 : INVESTMENTS
20132012
INSTITUTEINSTITUTE
ACTUALACTUAL
NOTE$000$000
2013
GROUP
ACTUAL
$000
2012
GROUP
ACTUAL
$000
Investment
75500
0
Total Investments
75500
0
In December 2011 the Institute aquired $100 of shares at $1.00 per ordinary share in its subsidary EnterpriseMIT Limited.
In July 2013 the Institute acquired an additional $754,900 of shares at $1.00 per ordinary share in it’s subsidary EnterpriseMIT Limited. The
share acquistion was used to offset the loan due by EnterpriseMIT Limited to the Institute. Refer to Note 24 (c).
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
61
Notes to the
Financial Statements
for the year ended 31 December 2013
20132012
INSTITUTEINSTITUTE
ACTUALACTUAL
$000$000
2013
GROUP
ACTUAL
$000
2012
GROUP
ACTUAL
$000
NOTE 13 : TRADE AND OTHER PAYABLES
Trade Payables2,1602,7962,1672,894
Accrued Expenses13,474 3,83913,474 3,825
Subsidiary Payables
56 0
0
0
Other Payables1,2212,1821,5402,182
Deposits held on behalf of Others
3,232
2,928
3,232
2,928
Net GST Payable/ (Receivable)(753)(362)(729)(352)
Total Trade and Other Payables 19,390
11,383
19,684
11,477
Total creditors are non-interest bearing and are normally settled on 30 day terms. Therefore, the carrying value approximates fair value.
Included in Trade Payables above are retentions of $1.5m (2012 $0.8) related to the Manukau Tertiary Campus construction project.
NOTE 14 : EMPLOYEE BENEFIT LIABILITIES
Employee Entitlements
Accrued Pay1,103 9091,103 909
Annual Leave1,8522,3581,9742,480
Sick Leave289265290265
Long Service Leave 240
233
243
233
Retirement Leave203 60203 60
Restructuring Provision393609393609
Total Employee Benefit Liabilities
4,080
4,433
4,206
4,555
Current Portion3,6374,1413,7594,263
Non-Current Portion443293447293
Total Employee Benefit Liabilities4,0804,4334,2064,555
The present value of the long service obligations depends on factors that are determined on an actuarial basis using a number of a
assumptions. Two key assumptions used in calculating this liability include the discount rate and the salary inflation factor. Any changes in
these assumptions will impact on the carrying amount of the liability.
Expected future payments are discounted using forward discount rates derived from the yield curve of New Zealand government bonds.
The discount rate used match, as closely as possible, the estimated future cash outflows. The salary inflation factor has been determined
after considering historical salary inflation patterns.
If the salary inflation factor were to increase or decrease by 1% from that used, with all other factors held constant, the carrying amount of
the long service leave liability would be an estimated $19,973 higher / lower (2012 $20,000)
If the discount rates used were to increase or decrease by 1% from that used, with all other factors held constant, the carrying amount of
the long service liability would be an estimated $20,805 higher / lower (2012 $20,000)
NOTE 15 : REVENUE RECEIVED IN ADVANCE
Students’ Fees3,7782,5973,7782,730
Research Funding 0237 0237
Other Revenue Received in Advance
805
946
832
946
Total4,5833,7794,6103,912
Current Portion4,5833,7794,6103,912
Non-Current Portion
0
0
0
0
Total4,5833,7794,6103,912
NOTE 16 : TRUST FUNDS
Opening Balance549546549546
Interest Received 414 414
Less Grants Awarded
0
(11)
0
(11)
Total Trust Funds553549553549
Represented by:
G F Dawson Memorial Fund
10
10
10
10
J M Grant Memorial Fund
8
8
8
8
MIT Students’ Trust Fund445442445442
Young Memorial Fund90899089
Total Trust Funds553549553549
Restrictions on use
62
Manukau Institute of Technology holds these funds in trust for the purposes of providing out of the income derived an award for students.
20132012
INSTITUTEINSTITUTE
ACTUALACTUAL
$000$000
2013
GROUP
ACTUAL
$000
2012
GROUP
ACTUAL
$000
NOTE 17 : EQUITY
General Funds
At 1 January115,029108,869114,704108,869
Surplus for the Year
608
6,160
400
5,835
Other Contributions from the Crown
1,250
0
1,250
0
Balance as at 31 December
116,887
115,029
116,354
114,704
Property Revaluation Reserves
Balance as at 1 January
100,581
84,819
100,581
84,819
Land Net Revaluations Gain
0
(528)
0
(528)
Buildings Net Revaluation Gains
0
16,290
0
16,290
Balance as at 31 December
100,581
100,581
100,581
100,581
Total Equity217,468215,610216,935215,285
Other Contributions from the Crown includes the effect of the recognition of other intangible assets (Refer Note 11)
Capital Contributions – Capital contributions received in 2013 was nil (2012: $0).
Property Revaluation Reserves
Property Revaluation Reserves consist of:
Land25,52125,52125,52125,521
Buildings75,06075,06075,06075,060
Total Property Revaluation Reserves
100,581
100,581
100,581
100,581
NOTE 18 : BORROWINGS
Current Portion12,096
9612,096
96
Non Current Portion264360264360
Total12,360
Weighted Average Effective Interest Rate
45612,360
3.49%
456
3.49%
Borrowings
The Institute has a term lending facility of $35m (2012 $30m) and a liquidity facility of $15m (2012 $15m) with ANZ Bank to provide funding
for capital projects, specifically the Manukau Tertiary Campus and liquidity. Certain covenants are required to be met in relation to the
facilities. The maturity date is 31 December 2014, with an option to extend for a further 12 months, subject to the agreement of the lender.
ACTUAL
REQUIREMENT HEADROOM
Bank Covenants
Maximum Total Debt to Total Debt plus Equity Ratio
5%
25%
20%
Minimum Interest Cover Ratio
216:1
2:1
214:1
Minimum Guaranteeing Group Cover
100%
90%
10%
NOTE 19 : MAJOR BUDGET VARIATIONS
Explanations for major variations from the 2013 Institute budget are as follows:
2013
VARIANCE
$000
Statement of Comprehensive Income
Budget Surplus
1,684
Revenue Variances
Government Funding
(1,023)
Student Fees & Departmental Revenue
(1,287)
Other Income and Interest Revenue
393
Expenditure Variances
Employee Benefit Expenses
(190)
Depreciation and Amortisation
699
Other Operating Expenditure
332
Net Surplus for the Year 608 The unfavourable Government Funding variance was primarily the result of lower Pacific Trades and Priority Trades EFTS, whilst the
unfavourable variance in Student Fees was driven by a change in the mix of provision and delivery particularly for Domestic Student fees.
Interest revenue was favourable as the Institute went into a debt position much later than Budgeted, given delays in the completion of the
Manukau Tertiary Campus project. Depreciation is also favourable as a result of the delayed completion of the MTC project. Savings in other
operating expenditure include interest payable given the delayed on set of debt funding.
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
63
Notes to the
Financial Statements
for the year ended 31 December 2013
2013
VARIANCE
$000
Statement of Financial Position
Cash and Cash Equivalents and Other Financial Assets
1,512
roperty, Plant and Equipment and Intangible Assets
P
(7,058)
This variance results largely from the delays to the MTC Project
Borrowing
(16,566)
The delays to the MTC Project resulted in a lower borrowing requirement
Trade and Other Payables
5,048
These variances are mainly due to changes in phasing of major projects in particular the Manukau Tertiary
Campus.
Revenue Received in Advance
(1,887)
This is mainly due to there being less students enrolled for courses prior to the study year than budgeted.
Employee Entitlements
(999)
This is mainly due to greater reductions in leave than budgeted.
Property Revaluation Reserve
10,762
This is mainly due to simpler assumptions in asset profiles having been used in budgets.
2013
2013
ACTUAL
BUDGET
$000
$000
NOTE 20 : INSTITUTE CAPITAL EXPENDITURE PROJECT PERFORMANCE TO BUDGET
Annual Allocations (Renewals)
Facilities Annual Replacements
2,539
2,000
Furniture Annual Allocation
118
120
Information Technology Allocation
2,371
2,000
Vehicle Replacement
34 100
Library Annual Allocation
438 450
Academic Departments
424
550
Service Departments
69
200
5,993
5,420
Total Annual Allocation Investment Committee Projects
IT Infrastructure
275
533
M Block Kitchen Upgrade
172
190
Equipment for the Bachelor of Sport and Exercise Science
143
137
Rebuild MIT Website
117
110
Projects under $100,000 254
1,530
Total Investment Committee Projects
961
2,500
Major Projects
Manukau Tertiary Campus Project
31,001
38,930
MIT Pasifika Centre
480
3,780
IT Infrastructure (Wireless & Hardware)
400
500
New Student Management System
95
100
Total Major Projects
31,976
43,310
Total Capital Expenditure
38,930
51,230
Total Capital Expenditure $38.93m (2012 $44.35m )
Major Capital Variances
The Manukau Tertiary Campus project was significantly delayed as a direct result of the receivership of the main contractors in February
2013. This impacted on both the overall project costs as well as project completion timeframes. Construction work recommenced in April
2013 with the project expected to be completed and available for use in Semester 2 of 2014. The overall costs are expected to be $25m
above the pre-receivership Budget amount, including $3.8m in one-off costs. The MIT Pasifika Centre project was put on hold during the
year.
64
20132012
2013
2012
INSTITUTE INSTITUTEGROUPGROUP
ACTUAL
ACTUAL
ACTUAL
ACTUAL
$000
$000
$000
$000
NOTE 21 : OPERATING LEASES
Leases as Lessee
Non-cancellable operating lease rentals are payable as follows:
Not later than one year
2,149
2,358
2,400
2,597
Later than one year and not later than five years
8,031
8,081
9,272
9,035
Later than five years 6,325
5,501
6,564
6,217
16,50515,94018,23617,849
The institute leases a number of premises for teaching purposes. The leases run for periods ranging from one to ten years with an
option to renew the lease after that date. The institute also leases office equipment where it is not in the best interests of the institute to
purchase these assets.
Lease payments are renegotiated at the time of renewal.
The leased properties have not been sublet.
During the year $3,014,472 (2012 $2,842,000) was recognised as an expense in the Statement of Comprehensive Income in respect of
operating leases.
The exemption available to public benefit entities set out in NZ IAS 40 Investment Property 9.1 property held for strategic purposes has
been applied to this property which is recorded as an asset in property, plant and equipment.
During the year $81,196 (2012 $78,900) was recognised as income in the Statement of Comprehensive Income in respect of operating
leases.
During the year $3,014,472 (2012 $2,842,000) and $3,291,000 (2012 $2,987,000) was recognised as an expense in the Institute and
Group Statement of Comprehensive Income in respect of operating leases respectively.
No contingent rents have been recognised in the Statement of Comprehensive Income during the year.
Leases as Lessor
The institute leases its property purchased for strategic purpose pending future use by the institute under operating leases. The future
minimum lease payments under non-cancellable leases are as follows:
Not later than one year
40
26
40
26
Later than one year and not later than five years
0
0
0
0
Later than five years 0
0
0
0
40264026
NOTE 22 : COMMITMENTS AND CONTINGENCIES
Capital Commitments
Capital commitments denote approved capital expenditure contracted for at year-end but not yet incurred.
Approved and Committed
Property, plant and equipment
Intangible assets
Total Capital Commitments
35,849
29,510
35,849
29,510
21305 21305
35,87029,81535,87029,815
The Institute and group accepted the tender for the construction work of the Manukau City Campus and Transport Interchange in December
2011. During 2013 the Institute issued a revised tender for completion of the Manukau Tertiary Campus project following the receivership
of Mainzeal Property and Construction Limited. The revised contract price was $67,032,017. The cost share agreement between MIT and
Auckland Transport specified the contract price of both parties. The value of the work completed by Hawkins Construction NI Ltd as at 31
Dec 2013 was $32,261,529.
There are no contingent liabilities (2012 Nil).
Contingent Assets
At balance date, Management is unable to quantify the proceeds of an insurance claim for the damage to property, plant and equipment
that occured during the period between the collapse of Mainzeal Property & Construction Ltd, and the establishment, onsite, of Hawkins
Construction NI Ltd. Whilst the claim is supported by technical assessments and professional advice, there is no certainly as to the level of
success of the claim.
NOTE 23 : SEVERANCE AND REDUNDANCY PAYMENTS
The total value of compensation paid or payable in respect of redundancies and severance to employees during the financial year was $740k
(2012 $2.07m) as a result of restructuring in 2013.
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
65
Notes to the
Financial Statements
for the year ended 31 December 2013
NOTE 24 : RELATED PARTY TRANSACTIONS AND KEY MANAGEMENT PERSONNEL
The Institute is a Crown entity and enters into transactions with other Crown entities. These transactions are subject to common control or
significant influence by the Crown and are exempt from related party disclosure in terms of the public benefit entity exemption provided in NZ
IAS 24 Related Party Disclosures.
Significant transactions with government-related entities
MIT has been provided with funding from the Crown of $61.1m (2012 $59.1m) for specific purposes as set out in its funding legislation and
the scope of the relevant government appropriations.
Collectively, but not individually, significant, transactions with government-related entities.
In conducting its activities, MIT 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, other than income tax, is based on the standard terms and conditions that
apply to all tax and levy payers. MIT is exempt from paying income tax.
MIT also purchases goods and services from entities controlled, significantly influenced, or jointly controlled by the Crown. Purchases from
these government-related entities for the year ended 31 December 2013 totalled $3.4m (2012 $4.0m). These purchases included the purchase
of services from Counties Manukau District Health Board, New Zealand Qualifications Authority and water from Watercare Services.
Transactions which have been entered into with related parties are:
a) There are close family members of key management personnel employed by the institute. The terms and conditions of those arrangements
are no more favourable than the institute would have adopted if there were no relationship to key management personnel.
b) Members of the Council are employed by the institute. The terms and conditions of those arrangements are no more favourable than the
institute would have adopted if they were not a member of the Council.
c) The Institute has advanced $0.33m working capital to its subsidiary EnterpriseMIT Limited (EnterpriseMIT) during 2013 (2012 $1.085m).
The loan is payable on demand and interest free.
d) The Institute has a payable balance of $56,242 with EnterpriseMIT at 31 December 2013 for subcontracting revenue and a receivable
balance of $6,347 (inclusive) for delivery of courses by EnterpriseMIT’s - Consult Division.
e) D
uring the year, the Institute had course delivery contracts with its subsidiary EnterpriseMIT Limited, for the value of $668,063 (2012
$331,000).
f) A total of $11,519 of income was received by the Institute from EnterpriseMIT for the delivery of Maritime GMDSS course ($5,519) and
courses to businesses by EnterpriseMIT - Consult Division ($6,000).
No provision has been required, or any expense recognised for impairment of receivables for any loans or other receivables to related parties
(2012 $Nil).
Key management personnel includes Chief Executive and the members of the senior leadership team. Councillors fees are disclosed
separately.
20132012
2013
2012
INSTITUTE INSTITUTEGROUPGROUP
ACTUAL
ACTUAL
ACTUAL
ACTUAL
$000
$000
$000
$000
Key Management Personnel Compensation
Salaries and other short term employee benefits
Post employment benefits
Other long term benefits
Termination benefits
Shared based payments
1,724
0
0
106
0
1,830
1,489
0
0
0
0
1,489
1,724
0
0
106
1,489
0
0
0
0
1,830
0
1,489
Councillors Fees
The following fees have been included in the key
management compensation but are disclosed in
201320132012
MEETINGACTUALACTUAL
compliance with the Crown Entities Act 2004.
ATTENDANCE$000$000
Peter Winder (Chair - Appointed 17/12/2013)
Kaye Turner (Chair - Resigned 31/05/2013)
Dr Stuart Crosbie (Deputy Chair)
John Hannan
Dr Manuka Henare
Dr Ken Larsen
Bernadette Pone
Howard Small
David Wong-Tung
0
10
22
15
9
13
16
18
13
1
15
26
16
16
16
16
16
16
0
32
20
16
16
16
16
16
16
Total Council Members’ Remuneration
138
148
There were 22 MIT Council and Committee meetings held during the year and of these, 3 were extra ordinary meetings (2012 – 15
MIT Council and Committee meetings held), excluding meetings of the Academic Board which does not include Council Members in its
membership.
No Councillors received compensation or other benefits in relation to cessation (2012 $Nil).
The Institute has effected Directors and Officers Liability insurance and Directors and Officers Liability Defence costs insurance only for
the period 1 June 2013 to 30 June 2014 with an aggregate limit of liability of $10 million.
Councillor Ken Larsen is employed on a fixed term part time basis as Research Director. Total salaries received in addition of his
Councillor fees, was $57,882 (2012 $125,485).
66
EnterpriseMIT had a board which was in operation during the year. 11 meetings took place. Directors’ fees of $42,000 were paid by MIT,
of which $15,000 was paid to Mr Robert Kirkpatrick (Chair of the Board).
2013
2013
ACTUALBUDGET
NOTE
$000
$000
2012
ACTUAL
$000
NOTE 25 : EARLY CHILDHOOD EDUCATION CENTRE
Statement of Comprehensive Income
Income
Government Funding
Equity Funding
834717717
a432224
Payment Fees (including WINZ)
525
Total Income
431
420
1,4021,1701,161
Expenses
Employee Benefit Expenses
1,0091,0581,071
Other Expenses393112 90
Total Expenses
1,4021,1701,161
Total Comprehensive Income
000
Equity Funding Statement
Income
a. Equity Funding
43 024
Expenditure
Centre Resources
Text Books
0
3
14
9
Staff Training
7
10
Contract Staff
22
2
Total Expenditure
43 024
Centre Resources are general resource products for staff training.
Contract Staff costs are to enable centre staff to attend courses and have non contact time. Teaching Support Grant
There was no Teaching Support Grant for the year ended 31 December 2013 (2012 $0)
Statement of Service Performance
bjective 1 - Quantity: To achieve target output for children enrolment
O
& performance
Number of enrolled hours for children over 2 years in Children’s
Education Centre One
108,501 84,150 85,753
Number of enrolled hours for children under 2 years in Children’s
Education Centre Two
51,279
42,075
44,737
Objective 2 - Quality: To recognise, support and achieve excellence
in teaching
Standard requirements for licensing:
Percentage of quality funding
80% 80%100%
Number of teachers supported to achieve minimum qualification
i.e. Diploma or Bachelor of Education
11 1
Objective 3 - Timeline: To maintain & strengthen the relationship
in the community
Number of days the Children’s Education Centre is open
225
220
225 (The Government’s minimum requirement: Children’s Education Centre open for 220 days)
Objective 4 - Cost: To obtain sufficient funding for current & future
Early Childhood Education needs
The cost per child place (excluding administration and rental fees)
14,23418,040 18,275
Ministry of Education Statistics
MoE Hours Funded Under 2’s
24,70227,812
MoE Hours Funded Over 2’s
38,339
MoE Hours Free ECE
0
19,963
0
MoE Hours Free Subsidised
0
0
MoE 20 Hours 30,647
27,235
MoE Plus 10 Hours
0
10,454
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
67
Notes to the
Financial Statements
for the year ended 31 December 2013
20132012
2013
2012
INSTITUTE INSTITUTEGROUPGROUP
ACTUAL
ACTUAL
ACTUAL
ACTUAL
$000
$000
$000
$000
NOTE 26 : FINANCIAL INSTRUMENTS
Financial instrument categories
The accounting policies for financial instruments have been applied to the line items below:
Financial Assets
Loans and Receivables
Cash and Cash Equivalents 1,712
6,707
1,917
6,849
Student Fees and Other Receivables 4,261
5,315
4,034
4,482
0
2,774
0
2,774
5,973
14,796
5,951
14,105
Other Financial Assets Total Loans and Receivables
Financial Liabilities
Financial Liabilities Measured at Amortised Costs
Creditors and other payables
19,390
Borrowings
12,360
11,383
Total Financial Liabilities Measured at Amortised Cost
31,750
19,684
11,477
45612,360
11,839
32,044
456
11,933
Borrowings
The institute has a term lending facility of $35m (2012 $30m) and a liquidity facility of $15m (2012 $15m) with ANZ Bank to provide funding
for capital works projects, specifically the Manukau Tertiary Campus and liquidity. Certain covenants are required to be met in relation to
the facilities. The maturity date is 31 December 2014, with an option to extend for a further 12 months, subject to agreement of the lender.
As a result it has been classified as a Current Liability.
Financial Instruments Risks
Manukau Institute of Technology’s activities expose it to a variety of financial risks including market risk (interest rate risk and currency
risk), credit risk and liquidity risk. The Institute and group manages its financial instruments risk in accordance with relevant legislation and
is risk adverse and seeks to minimise exposure from its treasury activities. These policies do not allow any transactions that are speculative
in nature to be entered into.
Contractual maturity analysis of financial liabilities
The table below analyses financial liabilities into relevant maturity groupings based on the remaining period at balance date to the
contractual maturity date. Future interest payments on floating rate debt are based on the floating rate on the instrument at balance date.
The amounts disclosed are contractual undiscounted cash flows.
Institute 2013
CARRYING CONTRACTUAL
AMOUNT
CASH FLOW
$000
$000
20,142
LESS THAN
6 MONTHS
$000
20,142 6-12
MONTHS
$000
MORE
2-3
THAN
YEARS 3 YEARS
$000
$000
1-2
YEARS
$000
Trade and other payables
20,142
Borrowings
12,360 12,360
0 0 0
0
Total Financial Liabilities at Amortised Cost
32,502 32,50220,190
12,048969672
48
12,048969672
Group 2013
Trade and other payables
20,412
Borrowings
12,360 12,360
20,412
20,412 0
0
0
0
Total Financial Liabilities at Amortised Cost
32,502 32,50220,460
12,048969672
48
12,048969672
Institute 2012
Trade and other payables
Borrowings
Total Financial Liabilities at Amortised Cost
11,745
456
11,745
11,745 456
0
0
0
0
48 489696
168
12,201
12,201
11,793
48
96
96
168
11,829
11,829
11,829
0
0
0
0
Group 2012
Trade and other payables
Borrowings
Total Financial Liabilities at Amortised Cost
456
12,285
456
12,285
48 489696
168
11,877
48
96
96
168
Market Risk
Currency and Interest Rate Risk
The Institute and group is exposed to changes in interest rates on short term investments, bank deposits and term lending facilities. There
is no significant exposure to currency and interest rate risk on the Institute’s financial assets.
The interest rate on the Institute and group’s investments is disclosed in Note 9. The Institute is exposed to interest rate risk on borrowings
as disclosed in Note 18.
68
NOTE 26 : FINANCIAL INSTRUMENTS (CONTINUED)
Cash Flow Interest Rate Risk
Cash flow interest rate risk is the risk that cash flows from a financial instrument will fluctuate because of changes in market interest
rates. Investments issued at variable interest rates create exposure to cash flow interest rate risk. Borrowings at variable interest rates
create exposure to cash flow interest rate risk.
Credit Risk
Credit risk is the risk a third party will default on its obligation to the Institute, thereby causing the Institute and group to incur a loss.
Due to the timing of its cash inflows and outflows, surplus cash is invested into the term deposits which give rise to credit risk. The
Institute and group places its investments with institutions which have a high credit rating such as registered banks that have a Standard
and Poor’s credit rating of at least A-.
The institute has no collateral or other credit enhancements for financial instruments that give rise to credit risk.
20132012
2013
2012
INSTITUTE INSTITUTEGROUPGROUP
ACTUAL
ACTUAL
ACTUAL
ACTUAL
$000
$000
$000
$000
The maximum credit exposure for each class of financial instrument is as follows:
Cash and Cash Equivalents 1,712
6,707
1,917
6,849
Trade and Other Receivables 4,261
5,315
4,034
4,482
0
2,774
0
2,774
5,973
14,796
5,951
14,105
Short Term Deposits Total Credit Risk On Loans and Receivables
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:
Counterparties with Credit Ratings
Cash and Cash Equivalents:
AA- 1,712
6,707
1,917
6,849
Short Term Deposits:
AA- 0
2,774
0
2,774
Counterparties without Credit Ratings
Loans to subsidiary
Existing counterparty with no defaults in the past Existing counterparty with defaults in the past
Total loans to related parties 3301,085
0
0
00 00
0
0
3301,085
0
0
0
0
Debtors and other receivables
Existing counterparty with no defaults in the past Existing counterparty with defaults in the past
Total debtors and other receivables
Trade and Other Receivables 3,931
4,230
4,034
4,482
0
0
0
0
3,931 4,230
4,0344,482
4,261 5,315
4,0344,482
Trade and Other Receivables
Trade and receivables mainly arise from the Institute’s operation functions, therefore there are no procedures in place to monitor or report
the credit quality of trade and other receivables with reference to internal or external credit ratings. The Institute is not exposed to any
material concentrations of credit risk. Trade and other receivables balances are monitored on an ongoing basis to ensure that the exposure
to bad debts is not significant.
Liquidity Risk
Management of Liquidity Risk
Liquidity risk is the risk Manukau Institute of Technology 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 Institute and group aims to maintain flexibility in funding by
keeping committed credit lines open.
In meeting its liquidity requirements, Manukau Institute of Technology maintains investments that must mature within the next 12
months.
The institute manages liquidity risk by continuously monitoring forecast and actual cash flow requirements and matching the maturity
profiles of financial assets and liabilities.
The maturity profiles of Manukau Institute of Technology’s interest bearing investments are disclosed in Note 9.
Sensitivity Analysis
The tables below illustrate the potential profit and loss and equity (excluding retained surplus) impact for possible market movements in
interest rates, with all other variables held constant, based on the institute’s financial instrument exposures at balance date.
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
69
Notes to the
Financial Statements
for the year ended 31 December 2013
+100BPS
PROFIT/(LOSS) OTHER EQUITY
$000
$000
-100BPS
PROFIT/(LOSS)
OTHER EQUITY
$000
$000
INSTITUTE
Interest Rate Risk 2013
Financial Assets
Cash and Cash Equivalents
Short Term Deposits Financial Liabilities
Borrowings 70
100
(7) 0
(10) 0
(120)0
120 0
Total Sensitivity to Interest Rate Risk
(103)0
103 0
Interest Rate Risk 2012
Financial Assets
Cash and Cash Equivalents
Short Term Deposits 1
94
Total Sensitivity to Interest Rate Risk
950
(95) 0
0
0
(1)
(94)
0
0
GROUP
Interest Rate Risk 2013
Financial Assets
Cash and Cash Equivalents
Short Term Deposits Financial Liabilities
Borrowings 90
100
(9) 0
(10) 0
(120)0
120 0
Total Sensitivity to Interest Rate Risk
(101)0
101 0
Interest Rate Risk 2012
Financial Assets
Cash and Cash Equivalents
Short Term Deposits 2
94
Total Sensitivity to Interest Rate Risk
960
0
0
(2)
(94)
0
0
(96) 0
Explanation of Interest Rate Risk Sensitivity
The interest rate sensitivity is based on a reasonable possible movement in interest rates, with all other variables held constant,
measured as a basis points (bps) movement. For example a decrease in 100 bps is equivalent to a decrease in interest rates of 1.0%.
Fair Value Estimation and Fair Value Hierarchy
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement for disclosure purposes. Fair
value is the amount for which an item could be exchanged, or a liability settled, between knowledgeable and willing parties in an arm’slength transaction. The fair values of all financial instruments equate to carrying values.
NOTE 27 : CAPITAL MANAGEMENT
The Institute and group’s capital is its equity, which comprises general funds, and property valuation and fair value through comprehensive
income reserves. Equity is represented by net assets.
The Institute and group is subject to the financial management and accountability provisions of the Education Act 1989, which assets and
liabilities. 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 Institute and group manages its revenues, expenses, assets, liabilities, investments, and general financial dealings prudently, and
in a manner that promotes the current and future interests of the community. The Institute and group’s equity is largely managed as a
by-product of managing revenues, expenses, assets, liabilities, investments, and general financial dealings.
The objective of managing the institute’s equity is to ensure the institute effectively achieves the goals and objectives for which it has been
established, while remaining a going concern.
NOTE 28 : EVENTS AFTER BALANCE DATE
On the 12 March 2014 the Institute signed a Deed of Amendment to the existing term lending facility with the ANZ bank. The amendment
allows for an additional $25m revolving facility. Refer to Note 18 for the 31 December 2013 Weighted Average Effective Interest Rate on
the current facility. There is no change to the repayment term.
70
NOTE 29 : COMPARATIVE FIGURES
Comparative figures included in the financial statements relate to the financial year 31 December 2012.
Where necessary these figures have been reclassified on a basis consistent with current disclosure for 2013.
The Institute and group’s capital is its equity, which comprises general funds, and property valuation and fair value through comprehensive
income reserves. Equity is represented by net assets.
NOTE 30 : INCOME TAX
As at balance date the Group and its subsidary had been granted charitable status and as a result are exempt from company tax.
NOTE 31 : AMALGAMATION OF SUBSIDIARIES
On 30 June 2013, Eelco (2012) Limited (a subsidiary of the parent entity Manukau Institute of Technology) amalgamated with Mahurangi
Technical Institute (2012) Limited (also a subsidiary of MIT). This was followed by a name change on 1 July 2013 to EnterpriseMIT
Limited. Post amalgamation, and name change the assets and liabilities of Eelco (2012) Limited were brought into EnterpriseMIT Ltd at
their carrying value and the balance of net assets was taken to retained earnings.
All money payable to or by Eelco (2012) Limited became payable to or by EnterpriseMIT Limited.
All financial processing for EnterpriseMIT Limited transferred to Manukau Institute of Technology (the parent).
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
71
Compulsory Student Service Fees
for the year ended 31 December 2013
ACTUAL
2013
$000
Student Services Fees Income
Service Category Costs
Advocacy & legal advice
Careers information, advice and guidance
Employment Information
Pastoral care
Financial Support and advice
Health and Counselling Services
ACTUAL
2012
$000
797
826
57 109
63
129
77
54
189
220
16
16
556
557
Clubs and societies
68
128
Sports, recreation and cultural activities
79
81
1,151
1,248
354
422
Total
Net Cost
Advocacy & legal advice
Advocacy support is provided to students who need help to resolve student issues. These can range from difficulties with their courses or attendance to
misunderstandings with lecturers. This extends to legal advice and providing support and advocacy for meetings where students go through a misconduct
hearing.
Careers information, advice and guidance
Careers information, individual CV support and workshops, interview practice, internship preparation and careers counselling are all provided to the
students. This year we will also provide psychometric testing.
Employment Information
We have links with employers and are a central point for industry vacancies. The careers and employment team also prepare the students for interviews
by offering advice on speaking, clothing and department.
Pastoral care
Pastoral acre is provided for students and involves support with WINZ and Studylink, accommodation, facilitating meetings with external providers,
absenteeism, family and relationship issues and bullying. The chaplaincy team also provide some pastoral care.
Financial Support and advice
A student financial assistance fund is available to assist students overcome financial barriers that are directly related to and adversely affect their current
course of study.
Health and Counselling Services
The Health and Counselling centre is available for students to access as needed. Doctors, nurses and counsellors offer a variety of services from medical
assistance to guidance.
Clubs and societies, Sports, recreation and cultural activities
We support students to organise clubs, find venues and organise events. We also organise training facilities and coordinate teams to participate in
competitions and events.
72
Statement of Resources
as at 31 December 2013
CAMPUS
ADDRESS
ACTIVITY
Newbury St and, Otara Road
Consumer Services (Baking and Patisserie, Hair), Education and Social
Sciences (Employment Programmes, Foundation Studies, Literacy,
School of English), Engineering and Trades (Automotive and Vehicle
Technology, Civil Engineering, Electrical Engineering, Fabrication,
Welding and Refrigeration, Mechanical Engineering and associated
trades), Nursing and Health Studies.
INSTITUTE
PROPERTY
South
Otara, Manukau
North
Alexander Crescent and Otara Road, Otara,
Manukau
Business and Information Technology (Business Services,
Communications and Marketing, Accounting and Management),
Consumer Services (Catering, Beauty and Hospitality), Education and
Social Sciences (Education, School of Sport), Engineering and Trades
(Building and Construction, Horticulture), Te Tari Mātauranga Māori.
Lovegrove
Lovegrove Crescent, Otara, Manukau
Visual and Performing Arts and Creative Writing
SSTS
Otara Road
School of Secondary-Tertiary Studies
School of Sport
Otara Road
School of Sport
Union House, 2 Commerce Street and 132
Quay Street
Maritime and Logistics
OTHER PREMISES
Auckland City
246 Queen Street (L3, L7)
Maritime and Logistics, Early Childhood Education
Highbrook
Collier House, 52 Highbrook Drive
Centre for Business Development and
Centre for the Assessment of Prior Learning
Howick
Seymour House, Wellington St
Distributed Learning
Mangere
Unit 9B Mahunga Drive
Plumbing
Pukekohe
159 Manukau Road
Motor Sport
Three Kings
532 Mt Albert Road
Distributed Learning
Newmarket
Westfield, 277 Broadway
Business & ESOL
Floramax
Mt Wellington
Floristry
Unitec
Carrington Road, Mt Albert
Horticulture
Otara Recreational
Centre
Newbury Street
High Performance Lab
Ko Awatea
Middlemore Hospital, Hospital Road
Nursing and Health Studies
LIBRARY COLLECTION
Number of Titles in the Library Collection:
Books
2013
2012
2011
2010
20092008
68,49162,27663,52664,74471,770
75,039
Serials
4,4024,5315,4635,3977,865
8,985
Videos
3,4863,4413,4343,3553,366
2,712
Total Number of Titles
76,379
70,248
2013
2012
72,423
73,496
83,001
86,736
STAFFING
Staff Employed for year:
Tutorial
Administration
Total Equivalent Full-time Staff
2011
2010
20092008
353359396368420
402
422428442401367
355
775787838769787
757
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
73
Glossary of Terms
Course
Research outputs
A self-contained block of study which may comprise
one or more units of learning
Research outputs include books and sections in
books, journal articles both refereed and nonrefereed, consultancies, conference publications,
art exhibitions and catalogues. Other scholarly
activities, conference presentations (unless in
proceedings) and material produced primarily for
teaching purposes are not included.
EFTS
Equivalent full time student
- SC Funded: student component funded (Ministry funded)
- Non-SC Funded: Non-Ministry funded, including overseas, TOPs, STAR and self-funded students
Ethnic students
Student Achievement Component
Students who identify on enrolment forms that they
are Chinese, Indian or another ethnic group
SDR
ITO
Teaching area
Industry Training Organisation
Net area of all teaching space including
laboratories, workshops, workrooms and classrooms
ITP
Institutes of Technology and Polytechnics
ITPNZ
Institutes of Technology and Polytechnics of New
Zealand
Maori
Students
Students who identify on enrolment forms that they
are M-aori
NZQA
New Zealand Qualifications Authority
Pasifika students
Students who identify on enrolment forms that they
are Pacific Islanders
PBRF
Performance Based Research Fund
Programme
The combination of courses or units of learning
with which a student is required to be credited in
order to be awarded a specified qualification by the
institute, school or department.
This includes courses that stand alone.
74
SAC
Single Data Return
TEC
Tertiary Education Commission
TEI
Tertiary Education Institute
THS
Tertiary High School
WINZ
Work and Income New Zealand
M A N U K A U I N S T I T U T E O F T E C H N O L O G Y A N N U A L R E P O R T 2 01 3
75
MANUKAU INSTITUTE OF TECHNOLOGY
Gate 1, Newbury Street, Otara, Manukau, Auckland
Private Bag 94006, Manukau 2241, Auckland, New Zealand
manukau.ac.nz
[email protected]
0800 52 52 62
OTH068

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