4.1 Financial overview

4.101
The purpose of this article is to provide an overview of the financial performance of cemetery trustees since we last reported on the sector in 1998.¹ It continues our practice of reporting, on a rotational basis, the financial performance of the smaller sectors that fall within the Auditor-General’s mandate in our “results of the audits” reports.²

4.102
The cemetery sector is defined as those entities that meet the definition of “trustees” of a cemetery under section 2 of the Burial and Cremation Act 1964 (the Burial Act).

4.103
The Auditor-General is the auditor of 97 cemetery trustees under section 29(3) of the Burial Act and section 15 of the Public Audit Act 2001.

4.104
The Burial Act requires only cash accounts to be prepared. Cash accounts do not comply with generally accepted accounting practice (GAAP). The standard audit report issued for a cemetery trustee’s statement of accounts that has been prepared in accordance with the Burial Act has been modified so that reference is made to non-compliance with GAAP, but this does not result in qualification of the audit opinion.

Overview of financial performance

4.105
The information in Figure 4.1 is based on figures extracted from the most recently audited statement of accounts.

4.106
In our 1998 report, we drew attention to the fact that many cemetery trustees were in arrears in preparing their annual statements of accounts. We noted that 390 sets of accounts were in arrears for a period of up to 18 years for the then 131 cemetery trustees. The situation has substantially improved since that article was written.

4.107
As can be seen from Figure 4.1, some trustees are still having difficulty. The most recent statements of accounts that have been received and audited for some trustees are for the year ended 31 March 2003. However, there are now only 52 sets of accounts in arrears, with only 17 of these being in arrears for more than one year.

4.108
The consequence of having a significant number of statements of accounts in arrears is that there is no assurance that funds held for managing cemeteries are being correctly accounted for. There is also the risk that important historical burial records may become lost.

4.109
In our 1998 report, we raised concern about the high degree of effort put into encouraging trustees to prepare the accounts, for very little return. This concern related to both the high level of arrears and the prohibition in the Burial Act on charging fees for the audits. Since our 1998 report, Part 1 of Schedule 4 of the Public Audit Act repealed the previous section 29(3) of the Burial Act, which prevented fees being charged for auditing the accounts of any cemetery trustees. Accordingly, fees may now be charged under section 42 of the Public Audit Act if it is considered reasonable to do so. At present, fees are charged for audits of only those cemetery trustees that have revenue of more than $50,000 a year.

4.110
We now receive some Crown funding to enable us to contribute to the costs incurred by auditors of cemetery trustees under the $50,000 threshold.

Figure 4.1
Summary of cemetery trustees’ most recent audited financial information

* Accounts prepared on an accrual accounting basis – equity as at 31 March 2006 $213,985.

** Accounts prepared on an accrual accounting basis – equity as at 31 March 2006 $3,608,553.

4.111
Despite the legislative changes made since our last report in 1998 and the lower number of entities (because of cemetery trustees vesting their operations in local authorities), the progress on audit arrears is mostly a result of significant time commitment and persistence on the part of auditors. Given the very low volume and dollar value³ of transactions, we would, as previously, support the view that responsibility for cemeteries be passed to local authorities.

4.112
Many local authorities already administer and manage a large number of cemeteries, and in practice manage a number of cemeteries that are still legally the responsibility of the separate cemetery trustees. We can see no obvious reason for the majority of the remaining 97 cemetery trusts to continue. However, we understand that many local authorities would not be amenable to assuming the additional responsibility.

4.113
We will continue to work with all the parties involved to achieve a mutually agreeable and efficient resolution.

1: Our First Report for 1998, parliamentary paper B.29[98a], pages 137-142, reported on issues associated with the audit of Cemetery Trustees and Reserve Boards.

2: Local Government: Results of the 2004-05 Audits, parliamentary paper B.29[06b], provided an update on the financial performance of the Reserves Board sector.

3: Of these entities, 73% have cash holdings of less than $10,000, 92% have annual receipts of less than $10,000, and 95% have annual payments of less than $10,000.