Statement of Performance Expectations

Transcription

1 E.75iii Statement of Performance Expectations 2016/2017

2 Published by the Tertiary Education Commission Te Amorangi Mātauranga Matua 44 The Terrace PO Box Wellington, New Zealand Date: 23 June 2016 ISBN (print): ISBN (electronic): TEC reports and publications are also available online at Every effort is made to provide accurate and factual content. The Tertiary Education Commission, however, cannot accept responsibility for any inadvertent errors or omissions that may occur. Crown copyright New Zealand 2015 This work is licensed under the Creative Commons Attribution 3.0 New Zealand licence. You can view the licence: You are free to copy, distribute and adapt the work, as long as you attribute the work to the Tertiary Education Commission and abide by the other licence terms.

3 E.75 Contents Contents 1 Statement of Responsibility 2 Statement of Performance Expectations 3 Our operational outputs 5 Funding the activities of the Tertiary Education Commission 6 Tertiary education sector outputs 11 Teaching and Learning 11 Research 23 Benefits and Unrequited Expenses 26 Non-departmental Capital Expenditure 28 Financial Statements 29

4 2 Statement of Responsibility This Statement of Performance Expectations 2016/17 is produced in accordance with the requirements of sections 149B to 149M of the Crown Entities Act This Statement of Performance Expectations 2016/17 has been prepared as required under the Crown Entities Act We take responsibility for the statement s content, including the assumptions used in preparing the forecast financial statements and the other required disclosures. We will not update these prospective financial statements following their publication. We use and maintain internal controls to ensure the integrity and reliability of our performance and financial reporting. We certify that the information contained in this Report is consistent with the appropriations contained in the Estimates of Appropriations for the year ending 30 June These were laid before the House of Representatives under section 9 of the Public Finance Act Signed on behalf of the Board of the Tertiary Education Commission: John Spencer Chair Tertiary Education Commission Nigel Gould Chair Audit and Risk Committee Tertiary Education Commission 23 JUNE JUNE 2016

5 3 Statement of Performance Expectations The purpose of a Statement of Performance Expectations is to: set annual performance expectations provide a base against which actual performance can be assessed provide an explanation of how performance will be assessed provide forecast financial statements. Our Statement of Performance Expectations 2016/17 complements our Statement of Intent 2015/ /19 (SOI). Our SOI describes what the Tertiary Education Commission Te Amorangi Mātauranga Matua (the TEC) intends to achieve over the four years 2015/16 to 2018/19. The Tertiary Education Strategy Our strategic direction is underpinned by the Tertiary Education Strategy , which sets out the Government s current to long-term direction priorities for tertiary education. The strategy emphasises the opportunity for New Zealand to develop a tertiary system that is more flexible, outward-facing, engaged and focused on improving outcomes for learners and employers. It presents six priorities that shape what we do: Priority 1: Delivering skills for industry Priority 2: Getting at-risk young people into a career Priority 3: Boosting achievement of Māori and Pasifika Priority 4: Improving adult literacy and numeracy Priority 5: Strengthening research-based institutions Priority 6: Growing international linkages. The Business Growth Agenda The Business Growth Agenda is central to the Government s priority of building a more productive and competitive economy. Lifting productivity and competitiveness is critical to creating business opportunities, more jobs and higher wages and ultimately the higher living standards to which New Zealanders aspire. Our role is to support the Ministry of Business, Innovation and Employment to match skills training to employers needs by investing in tertiary knowledge and skills that meet employers needs. Better Public Services To sharpen the public sector s focus on high-quality delivery, the Government has set Better Public Services targets. For tertiary education the priority is to boost skills and employment by increasing educational achievement. We contribute towards these two targets: by 2017, 85 percent of 18-year-olds will have achieved a National Certificate of Educational Achievement level 2 or an equivalent qualification by 2018, 60 percent of 25- to 34-year-olds will have a qualification at level 4 and above on the New Zealand Qualifications Framework.

6 4 Our outputs, the tertiary education sector outputs and our impacts link to the Government s Business Growth Agenda and Tertiary Education Strategy priorities. THE TERTIARY EDUCATION STRATEGY PRIORITY 1 Delivering skills for industry PRIORITY 2 Getting at-risk young people into a career PRIORITY 3 Boosting achievement for Māori and Pasifika PRIORITY 4 Improving adult literacy and numeracy PRIORITY 5 Strengthening research-based institutions PRIORITY 6 Growing international linkages THE BUSINESS GROWTH AGENDA Building Skilled and Safe Workplaces Building Innovation WHAT WE WANT TO ACHIEVE OUR IMPACTS An increased proportion of the population with a tertiary qualification Priorities 1,2,3,4,5 A tertiary system that is more responsive to the needs of employers and learners Priorities 1,2,3,4,5,6 Higher-quality and more relevant research Priorities 5,6 HOW WE INVEST TERTIARY EDUCATION SECTOR OUTPUTS (REFER TO PAGES 11-28) TEACHING AND LEARNING RESEARCH BENEFITS AND OTHER UNREQUITED EXPENSES Tertiary Tuition and Training $2, million Access to Tertiary Education $ million Tertiary Sector/Industry Collaboration Projects $ million Centres of Research Excellence $ million Support to Apprentices $2.190 million Secondary-Tertiary Interface (Vote Education) $ million English for Migrants (Vote Immigration) $1.500 million NON-DEPARTMENTAL CAPITAL EXPENDITURE Literacy and Numeracy Assessment Tool $0.500 million Research and Research-Based Teaching $ million Tertiary Scholarships and Awards $ million WHAT WE DO OUR OUTPUTS (REFER TO PAGES 6-9) Administration of and Support for the Tertiary Sector $ million

7 Our operational outputs 5

8 6 Our operational outputs Funding the activities of the Tertiary Education Commission Administration of and Support for the Tertiary Sector Administration of and Support for the Tertiary Sector This appropriation is limited to giving effect to the Tertiary Education Strategy by investing in tertiary education, monitoring and maintaining the Government s ownership interest in tertiary education institutions, and advice and support to Ministers. This appropriation is intended to achieve effective investment in tertiary education and the protection of the Crown s ownership in tertiary education institutions. Investing in tertiary education links to the Tertiary Education Strategy Priorities 1-6: Priority 1: Delivering skills for industry Priority 2: Getting at-risk young people into a career Priority 3: Boosting achievement of Māori and Pasifika Priority 4: Improving adult literacy and numeracy Priority 5: Strengthening research-based institutions Priority 6: Growing international linkages.

9 7 Administration of and support for the tertiary sector 2016/17 Revenue Appropriation revenue Tertiary Education Commission 47,168 Māori Education Trust 109 Contract Immigration New Zealand funding for administration of English for Migrants 173 Interest revenue 1,254 Other 74 Total revenue 48,778 Expenses Tertiary Education Commission 49,781 Māori Education Trust 109 Total expenses 49,890 Surplus/(deficit) (1,112) Our operational output class, Administration of and Support for the Tertiary Sector, has three components: Managing the Government s Investment in the Tertiary Education Sector, Ownership Monitoring of Tertiary Education Institutions and Tertiary Education and Training Advice. Managing the Government s Investment in the Tertiary Education Sector We do this by managing the investment system, monitoring investment in tertiary education organisations and providing information and advice to government. Ownership Monitoring of Tertiary Education Institutions We protect the Crown s ownership interest in tertiary education institutions through monitoring risks and financial viability and providing advice on tertiary education institution council appointments. Tertiary Education and Training Advice We deliver timely and high-quality advice and support to ministers on the tertiary sector and tertiary education and training issues.

10 8 How performance will be assessed Performance measures Measure Dimension Actual 2014/ / /17 Managing the investment system The overall satisfaction rating given by the Minister for Tertiary Education, Skills and Employment on the Tertiary Education Commission (as per the Common Satisfaction Survey) (Note 1) Quality New measure New measure Baseline year Managing the Government s Investment in the Tertiary Education Sector Plans for tertiary education organisations demonstrate evidence of alignment with employer, community and learner needs Plans for tertiary education organisations include targets for improving achievement rates for priority groups in the Tertiary Education Strategy Quality 100% 100% 100% Quality 100% 100% 100% Payments are made to tertiary education organisations as per the agreed contractual terms and conditions Quality Quantity Timeliness 100% 100% 100% Number of tertiary education organisations audited by the Tertiary Education Commission Quantity audits audits Percentage of audits completed within 70 days according to audit compliance standards Percentage of TEOs where an appropriate action plan is initiated (as per the TEC performance consequences framework) on the basis of an identified material breach of TEC s rules or requirements Percentage of Investment Plans that are monitored Timeliness 100% 95% 95% Quality 100% 100% 100% Quantity 100% 100% 100% Number of tertiary education organisations that are the subject of a review and/or investigation Quantity New measure Percentage of independently assessed externally focused publications that meet 6 or more elements of the TEC Plain English Standard Quality New measure Baseline Maintain or increase Ownership Monitoring of Tertiary Education Institutions Ownership risks are assessed and appropriate mitigation strategies are put in place (Note 2) Quality 100% 100% 100%

11 9 Measure Dimension Actual 2014/ / /17 Ownership risks are reported and advice is provided to the Minister Recommendations on ministerial appointments to tertiary education institution councils are made and the appointment process is managed effectively and in a timely way Quality 100% 100% 100% Timeliness 100% 100% 100% Tertiary Education Training and Advice Percentage of ministerial items provided to ministers that do not require redraft due to avoidable factual, spelling, grammatical or formatting errors Quality Revised measure Revised measure 95% Percentage of ministerial items provided to ministers within agreed timeframes Timeliness 98% 95% 95% Note 1 The Common Satisfaction Survey rating measures Ministers satisfaction with the quality, timeliness and value for money of advice on a scale from 1-10, where 1 means unsatisfied and 10 means extremely satisfied. Note 2 Risks are assessed against the gazetted risk criteria which is available on our website:

12 10 Tertiary Education Sector Outputs

13 11 Tertiary education sector outputs We invest in tertiary education so that New Zealanders are equipped with the knowledge and skills needed for lifelong success. We invest in all forms of post-secondary school education and training. This includes foundation education, adult and community education and research. We also fund some programmes that link schools with tertiary education. Teaching and Learning Tertiary Tuition and Training (multi-category appropriation) The overarching purpose of this appropriation is to fund tertiary tuition and training that leads to improvements in New Zealanders skill levels. Tertiary Tuition and Training (MCA) The overarching intention is to contribute to improved lifetime outcomes of New Zealanders through the provision of skills from tertiary education, training, foundation learning programmes and community education. Funding teaching and learning links to the Tertiary Education Strategy Priorities 1-5: Priority 1: Delivering skills for industry Priority 2: Getting at-risk young people into a career Priority 3: Boosting achievement of Māori and Pasifika Priority 4: Improving adult literacy and numeracy Priority 5: Strengthening research-based institutions. Tertiary Tuition and Training (MCA) 2016/17 Revenue Appropriation revenue Community Education 73,651 Tertiary Education: Student Achievement Component 2,100,205 Training for Designated Groups 317,146 Total revenue 2,491,002 Expenses Community Education 73,651 Tertiary Education: Student Achievement Component 2,100,205 Training for Designated Groups 317,146 Total expenses 2,491,002 Surplus/(deficit)

14 12 Performance measure How performance will be assessed Performance at the multi-category appropriation level will be assessed by: Measure Dimension Actual 2014 Actual Proportion of yearolds with advanced trade qualifications, diplomas and degrees (at level 4 or above). (Better Public Services target) Quantity 54.6% 54.7% 57.4% 58.7% 60% This multi-category appropriation consists of three categories: Community Education Tertiary Education: Student Achievement Component Training for Designated Groups. Community Education Community Education This category is limited to funding for adult and community education and literacy, numeracy and English language provision. This category is intend to achieve improvement in literacy and numeracy skills for learners who have low skills in these areas by funding foundational learning programmes. Funding foundational learning links to the Tertiary Education Strategy Priorities 2 and 4: Priority 2: Getting at-risk young people into a career Priority 4: Improving adult literacy and numeracy. Community Education 2016/17 Revenue Appropriation revenue Adult and Community Education 22,890 Literacy and Numeracy Provision 34,048 English for Speakers of Other Languages 14,058 Migrant Levy 426 Emergency Management Pool 2,229 Total revenue 73,651 Expenses Adult and Community Education 22,890 Literacy and Numeracy Provision 34,048 English for Speakers of Other Languages 14,058 Migrant Levy 426 Emergency Management Pool 2,229 Total expenses 73,651 Surplus/(deficit)

15 13 How performance will be assessed Measure Actual Funded 2014 Actual Funded (Note 1) 2017 (Note 1) 2018 (Note 1) Performance measures Adult and community education Total number of school-based adult and community education hours funded 366, , , , ,300 In school-based adult and community education among the priority groups identified in the Tertiary Education Strategy, percentage of learners identified (Note 2): as Māori or Pasifika 32% 41% 50% 50% 50% with English-language needs 32% 26% 50% 50% 50% as having low or no formal qualifications. 57% 57% 50% 50% 50% Number of funded domestic equivalent full-time students in Tertiary Education Institutions-based programmes (including Search and Rescue and Emergency Management short courses) per calendar year 1,688 1,731 2,000 2,000 2,000 Literacy and numeracy Literacy and numeracy total number of funded learners per calendar year 14,666 13,562 15,100 14,300 14,300 Intensive Literacy and Numeracy funded number of learners 5,016 4,959 4,900 4,900 4,900 English for Speakers of Other Languages (ESOL) funded number of learners per calendar year, including: 3,467 3,514 3,800 4,200 4,000 ESOL funded number of learners 2,932 2,939 2,900 3,100 3,000 Refugee English funded number of learners (Note 3) (Note 4) 800 (Note 4) Workplace Literacy and Numeracy Fund funded number of learners, including: 6,183 5,090 6,600 (Note 5) 5,500 (Note 5) 5,500 (Note 5) Tertiary education organisations led (Note 6) 3,205 4,370 4,300 4,300 4,300 Employee targeted (Note 6) 2,069 ceased Employer led (Note 1) ,700 ±20% (Note 7) 800 ±20% 800 ±20%

16 14 Note 1 The forecast and target measures are shown at 95 percent of expected delivery, with the exception of Workplace Literacy and Numeracy employer led. Note 2 Priority group 2014 and 2015 actuals are percentages of total learners (not funded learners). Note 3 The decrease for Refugee English between 2017 and 2018 is owing to the end of additional funding provided in response to the Syrian Refugees. Note 4 From 2017, approximately 210 learners will be funded from the TEC s balance sheet and the balance will be funded from the Community Education category of the Teaching and Learning appropriation. Note 5 The totals represent the aggregation of all commitments at 100% of expected delivery. Note 6 The decrease between 2014 and 2015 for the Workplace Literacy and Numeracy Fund is owing to the rationalisation of this fund, including a fixed funding rate. As part of this rationalisation, employee targeted provision was incorporated into the tertiary education organisations led part of the Workplace Literacy and Numeracy Fund. This took effect in January Note 7 In 2016, as a one-off increase, approximately 500 learners will be funded from our balance sheet and the balance of approximately 1,600 learners will be funded from the Workplace Literacy and Numeracy Fund appropriation.

17 15 Tertiary Education: Student Achievement Component This category is limited to funding for teaching and learning services for enrolled students in approved courses at tertiary education organisations to achieve recognised tertiary qualifications. This category is intended to achieve learners attainment of recognised tertiary qualifications by funding education and training opportunities. Tertiary Education: Student Achievement Component Funding education and training links to the Tertiary Education Strategy Priorities 1-5: Priority 1: Delivering skills for industry Priority 2: Getting at-risk young people into a career Priority 3: Boosting achievement of Māori and Pasifika Priority 4: Improving adult literacy and numeracy Priority 5: Strengthening research-based institutions. Tertiary Education: Student Achievement Component 2016/17 Revenue Appropriation revenue Provision at levels 1 and 2 101,299 Provision at levels 3 and above 1,992,603 Universities* 1,202,000 Institutes of Technology and Polytechnics 478,809 Wānanga 130,291 Private Training Establishments 181,503 ICT Graduate Programmes 4,039 Section 321 Grants for School of Dance and School of Drama 2,264 Total revenue 2,100,205 Expenses Provision at levels 1 and 2 101,299 Provision at levels 3 and above 1,992,603 Universities* 1,202,000 Institutes of Technology and Polytechnics 478,809 Wānanga 130,291 Private Training Establishments 181,503 ICT Graduate Programmes 4,039 Section 321 Grants for School of Dance and School of Drama 2,264 Total expenses 2,100,205 Surplus/(deficit) *The cost of funding International Doctor of Philosophy (PhD) students was $ million in 2015/16 and is estimated to be $ million in 2016/17.

18 16 How performance will be assessed Performance measures Measure Actual Funded 2014 (Note 1) Actual Funded 2015 (Note 1) 2016 (Note 2) 2017 (Note 2) 2018 (Note 2) Number of domestic equivalent full-time students at levels 1 and 2 (See Note 2) 13,516 12,098 12,500 ±3% 12,500 ±3% 12,500 ±3% Number of domestic equivalent full-time students New Zealand Qualifications Framework level 3 and above by sub-sector (See Note 2) Universities 117, ,528 Institutes of Technology and Polytechnics 55,640 54,733 Wānanga 18,162 17,423 Private Training Establishments Total domestic equivalent fulltime students at New Zealand Qualifications Framework level 3 and above (Note 3) Total domestic equivalent fulltime students (Note 3) 22,066 20, ,500 52,800 17,600 21, ,300 52,000 18,700 21, ,100 52,000 18,700 21, , , , , , , , , , ,800 Note 1 Funded equivalent full-time students data represents a proportion of the total equivalent full-time students delivered. Some of the equivalent full-time students are not funded owing to funding caps. Note 2 The forecast and target measures are shown at 95% of expected delivery. Note 3 Total domestic equivalent full-time students represents the aggregation of all Student Achievement Component commitments at 100% of expected delivery. Performance measures Measure Percentage of equivalent fulltime students funded through Student Achievement Component fund that were Māori at NZQF level 4 and above Percentage of Student Achievement Component funded equivalent full-time students that were Pasifika at NZQF level 4 and above Percentage of equivalent fulltime students under the age of 25 funded through Student Achievement Component fund at NZQF level 4 and above Actual % Increase Increase Increase Increase 9% Increase Increase Increase Increase 64% Increase Increase Increase Increase Actuals for 2015 were unavailable at time of publishing.

19 17 Investment Plan performance commitments targets for Student Achievement Component funding Performance measures Sector performance commitment shifts linked to funding 2014 Commitment 2014 Actual 2016 Commitment Course completion All learners 84% 83% 85% Māori learners at NZQF levels 4 and above 80% 78% 82% Pasifika learners at NZQF levels 4 and above Under-25-year-old learners at NZQF levels 4 and above 77% 74% 78% 85% 85% 86% Qualification completion All learners 71% 78% 77% Māori learners at NZQF levels 4 and above 65% 67% 72% Pasifika learners at NZQF levels 4 and above Under-25-year-old learners at NZQF levels 4 and above Progression From NZQF levels 1-3 to levels 4 and above for all learners 62% 62% 68% 69% 73% 71% 38% 39% 41% Retention For all learners across all NZQF all levels and all learners 67% 74% 77% Actuals for 2015 were unavailable at time of publishing. We do not yet hold commitments for These will be agreed as part of the Investment Plan process being run during 2016.

20 18 Training for Designated Groups Training for Designated Groups This category is limited to the purchasing and arranging of training linked to the New Zealand Qualifications Framework and the purchase of both on-job and off-job training places, including delivery of fully or partially funded training places and other industry-training related projects. This category is intended to achieve an increase in the number of young people and employees with qualifications valued by employers through investing in training. Funding qualifications valued by employers links to the Tertiary Education Strategy Priorities 1 and 2: Priority 1: Delivering skills for industry Priority 2: Getting at-risk young people into a career. Training for Designated Groups 2016/17 Revenue Appropriation revenue Industry Training Fund 168,351 Industry Training Fund - Direct Access Scheme 10,000 Industry Training Fund - Ring-fenced amounts 1,600 Youth Guarantee 118,182 Gateway 19,013 Total revenue 317,146 Expenses Industry Training Fund 168,351 Industry Training Fund - Direct Access Scheme 10,000 Industry Training Fund - Ring-fenced amounts 1,600 Youth Guarantee 118,182 Gateway 19,013 Total expenses 317,146 Surplus/(deficit)

21 19 How performance will be assessed Measure Actual Funded 2014 Actual Funded (Note 1) 2017 (Note 1) 2018 (Note 1) Performance measures Industry Training funded standard training measures (Note 2) 26,949 27,883 27,100 26,400 26,100 Apprentices funded standard training measures (Note 2) 13,301 15,375 15,500 15,700 16,200 Youth Guarantee total funded equivalent full-time students 9,429 9,258 9,200 9,000 9,000 Gateway total participants and number of schools 13,609 in 371 schools 13,956 in 374 schools 13,200 in up to 375 schools 13,300 in up to 375 schools 13,300 in up to 375 schools Note 1 The forecast and target measures are shown at 95% of expected delivery. Note 2 Standard training measure is the amount of training required for a trainee to achieve 120 National Qualifications Framework credits. Funding is based on the number of standard training measures arranged by an industry training organisation in a calendar year.

22 20 Access to Tertiary Education Access to Tertiary Education This appropriation is limited to improving access to tertiary education and training. This appropriation is intended to improve access to tertiary education and training for Tertiary Education Strategy priority learners. Investing in priority learner group activities links to the Tertiary Education Strategy Priorities 2 and 3: Priority 2: Getting at-risk young people into a career Priority 3: Boosting achievement of Māori and Pasifika. Access to Tertiary Education 2016/17 Revenue Appropriation revenue Equity Loading 16,716 Māori and Pasifika Trades Training (Top-ups) 8,400 Total revenue 25,116 Expenses Equity Loading 16,716 Māori and Pasifika Trades Training (Top-ups) 8,400 Total expenses 25,116 Surplus/(deficit) How performance will be assessed Performance measure Measure Actual Funded 2014 Actual Funded (Note 1) 2017 (Note 1) 2018 (Note 1) Māori and Pasifika Trades Training number of learners per calendar year 1,189 1,787 2,300 3,200 3,200 Note 1 The forecast and target measures are shown at 95% of expected delivery.

23 21 Tertiary Sector/Industry Collaboration Projects This appropriation is limited to funding activities that improve the relevance to industry of tertiary education provision. This appropriation is intended to support the development of knowledge and skills that are required by learners and employers. Investing in the development of knowledge and skill links to the Tertiary Education Strategy Priorities 1 and 3: Tertiary Sector/ Industry Collaboration Projects Priority 1: Delivering skills for industry Priority 3: Boosting achievement of Māori and Pasifika. Tertiary Sector / Industry Collaboration Projects 2016/17 Revenue Appropriation revenue National Centre for Tertiary Teaching Excellence 3,556 ITO Strategic Leadership Fund 1,000 ICT Graduate Schools (Development) 5,000 Engineering (Building the Pipeline) 2,000 Māori and Pasifika Trades Training (Brokerage) 3,009 Māori and Pasifika Trades Training (Consortia) 2,318 Section 321 Taranaki Futures Trust 125 International Connections for New Zealanders 3,750 Quality Teaching Agenda 3,089 Total revenue 23,847 Expenses National Centre for Tertiary Teaching Excellence 3,556 ITO Strategic Leadership Fund 1,000 ICT Graduate Schools (Development) 5,000 Engineering (Building the Pipeline) 2,000 Māori and Pasifika Trades Training (Brokerage) 3,009 Māori and Pasifika Trades Training (Consortia) 2,318 Section 321 Taranaki Futures Trust 125 International Connections for New Zealanders 3,750 Quality Teaching Agenda 3,089 Total expenses 23,847 Surplus/(deficit)

24 22 How performance will be assessed Performance measures Measure Actual Funded 2014 Actual Funded (Note 1) 2017 (Note 1) 2018 (Note 1) Number of domestic equivalent full-time students in Information and Communications Technology (ICT) Graduate Schools per calendar year New measure New measure Māori and Pasifika Trades Training number of learners per calendar year 1,189 1,787 2,300 3,200 3,200 Note 1 The forecast and target measures are shown at 95% of expected delivery. Secondary-Tertiary Interface (Vote Education) Secondary-Tertiary Interface (Vote Education) The Ministry of Education provides funding to us from this appropriation to fund Trades Academies in the tertiary setting. The Ministry of Education is responsible for reporting the performance of this appropriation. Secondary-Tertiary Interface (Vote Education) 2016/17 Revenue Appropriation revenue 18,225 Total revenue 18,225 Total expenses 18,225 Surplus/(deficit) English for Migrants (Vote Immigration) English for Migrants (Vote Immigration) We administer a programme under contract with Immigration New Zealand (English for Migrants). Immigration New Zealand is responsible for reporting the performance of this appropriation. English for Migrants (Vote Immigration) 2016/17 Revenue Revenue from Immigration New Zealand 1,500 Total revenue 1,500 Total expenses 1,500 Surplus/(deficit)

25 23 Research Centres of Research Excellence This appropriation is limited to the purchase of cooperative and collaborative tertiary research in areas of research strength in the tertiary education sector through the contestable Centres of Research Excellence Fund. Centres of Research Excellence This appropriation is intended to achieve delivery of high quality research by purchasing cooperative and collaborative research in areas of research strength in the tertiary education sector. Purchasing research is linked to the Tertiary Education Strategy Priorities 5 and 6: Priority 5: Strengthening research-based institutions Priority 6: Growing international linkages. Centres of Research Excellence 2016/17 Revenue Appropriation revenue 49,800 Total revenue 49,800 Total expenses 49,800 Surplus/(deficit) How performance will be assessed Measure Dimension Actual 2014/ / /17 Performance measure Centres of Research Excellence Annual Reports are reviewed against research plans and meet assessment criteria Quality Achieved Achieved Achieved

26 24 Tertiary Education Research and Research-Based Teaching Tertiary Education Research and Research-Based Teaching This appropriation is limited to funding research and reasearch-based teaching on the basis of measured research quality in tertiary education organisations and supporting wānanga research capability. This appropriation is intended to achieve an increase in, or maintian the quality of, research and reasearch-based teaching and learning and to improve investment in research within the tertiary sector. Funding research and research-based teaching is linked to the Tertiary Education Strategy Priorities 5 and 6: Priority 5: Strengthening research-based institutions Priority 6: Growing international linkages. Tertiary Education Research and Research-Based Teaching 2016/17 Revenue Appropriation revenue Priorities for Focus 1,500 Performance-Based Research Fund 300,000 Quality Evaluation element 165,000 Research Degree Completions element 75,000 External Research Income element 60,000 Total revenue 301,500 Expenses Priorities for Focus 1,500 Performance-Based Research Fund 300,000 Quality Evaluation element 165,000 Research Degree Completions element 75,000 External Research Income element 60,000 Total expenses 301,500 Surplus/(deficit)

27 25 How performance will be assessed Measure Dimension Actual 2014 Actual Performance measures Research degree completions (measured by Performance-Based Research Fund (PBRF) eligible research degree completions) (Note 1) Quantity 3,946 3,858 3,900 3,900 Percentage increase in amount of external income for PBRF eligible providers (Note 2) Quantity 3.4% 3.3% 2-4% 2-4% Note 1 This information can only be provided by calendar year. The most recent confirmed calendar year of data for research degree completions is Note 2 This information can only be provided by calendar year. The most recent unconfirmed data (used for 2016 indicative funding) is from 2014.

28 26 Benefits and Unrequited Expenses Support to Apprentices Support to Apprentices This appropriation is limited to payments to New Zealand Apprentices and other participants in work-based training, including Māori and Pasifika Trades Trainees, towards their tools and other training related costs. This appropriation is intended to assist people establishing a career in industry by providing financial assistance. In 2016/17 this appropriation relates to funding Māori and Pasifika Trades Training tools for employees and is linked to the Tertiary Education Strategy Priorities 1,2 and 3: Priority 1: Delivering skills for industry Priority 2: Getting at-risk young people into a career Priority 3: Boosting achievement of Māori and Pasifika. Support to Apprentices 2016/17 Revenue Appropriation revenue Māori and Pasifika Trades Training (Tools) 2,190 Total revenue 2,190 Total expenses 2,190 Surplus/(deficit) An exemption was granted under section 15D(2)(b)(ii) of the Public Finance Act 1989, as additional performance information is unlikely to be informative because this appropriation is solely for payments to Māori and Pasifika Trades Trainees towards the cost of tools and other training related costs under the Education Act 1989.

29 27 Tertiary Scholarships and Awards This appropriation is limited to providing scholarships for tertiary students and other awards in the tertiary sector, and the provision of scholarships and bursaries to Māori and Pasifika students. It includes training assistance under Queen Elizabeth II Study Awards and recognition of outstanding tertiary education teachers. This appropriation is intended to provide a stipend for domestic sixth-year medical trainee interns and other scholarships. Tertiary Scholarships and Awards We are only responsible for two components of this appropriation. The Ministry of Education is responsible for the other components. We are responsible for: Trainee Medical Intern Grant Tertiary Teaching Awards. Tertiary Scholarships and Awards 2016/17 Revenue Appropriation revenue Trainee Medical Intern Grant 13,167 Tertiary Teaching Awards 200 Ministry of Education administered awards 1,080 Total revenue 14,447 Expenses Trainee Medical Intern Grant 13,167 Tertiary Teaching Awards 200 Ministry of Education administered awards 1,080 Total expenses 14,447 Surplus/(deficit) An exemption was granted under section 15D(2)(b)(ii) of the Public Finance Act 1989, as additional performance information is unlikely to be informative because this appropriation is solely for payments of Tertiary Scholarships and Awards under the Education Act 1989.

30 28 Non-departmental Capital Expenditure Literacy and Numeracy Assessment Tool Literacy and Numeracy Assessment Tool This appropriation is limited to development of the online assessment tools for adult and youth literacy and numeracy. This appropriation is intended to achieve the delivery of online assessment tools for adult and youth literacy and numeracy to improve literacy and numeracy skills. Development of the online assessment tool links to the Tertiary Education Strategy Priority 4: Priority 4: Improving adult literacy and numeracy. Literacy and Numeracy Assessment Tool 2016/17 Revenue Appropriation revenue Literacy and Numeracy Assessment Tool 500 Total revenue 500 Expenses Literacy and Numeracy Assessment Tool 533 Total expenses 533 Surplus/(deficit) (33) How performance will be assessed Performance measure Measure Dimension Actual 2014/ / /17 Online assessment tools for literacy and numeracy are developed on time and are fit for purpose Quality Timeliness Achieved Achieved Achieved

31 Financial Statements 29

32 30 Statement of Comprehensive Revenue and Expenses For the years ended 30 June Budget 2016 Budget REVENUE Operating revenue: Vote Tertiary Education Ministry of Education (MoE) 46,359 47,168 47,589 46,324 46,199 Contract Revenue Immigration New Zealand (INZ) Other revenue Total operating revenue 46,441 47,415 47,778 46,513 46,388 Grants revenue: Vote Education/Tertiary Education MoE 2,879,913 2,921,958 2,901,210 2,903,073 2,906,039 Contract revenue INZ 807 1,500 1,500 1,500 1,500 Prior year recoveries 4,000 3,549 Total grants revenue 2,880,720 2,927,458 2,906,259 2,904,573 2,907,539 Finance revenue: Interest income on bank deposits operating 1,802 1,254 1,254 1,254 1,254 Interest income on bank deposits grants Total finance revenue 2,302 1,504 1,504 1,504 1,504 Total revenue 2,929,463 2,976,377 2,955,541 2,952,590 2,955,431 EXPENSE Operating expense: Personnel costs 26,892 27,850 27,687 27,994 28,661 Other expenses 16,786 14,818 14,082 12,664 11,776 Capital charge 1,982 2,260 2,150 2,000 2,000 Depreciation Amortisation 4,142 4,033 4,470 4,605 4,832 Total operating expense 50,579 49,781 49,032 47,767 47,642 Grants expense: Grants expenses MoE 2,879,913 2,921,958 2,901,210 2,903,073 2,906,039 Contract expenses INZ 807 1,500 1,500 1,500 1,500 Total grants expense 2,880,720 2,923,458 2,902,710 2,904,573 2,907,539 Total expense 2,931,299 2,973,239 2,951,742 2,952,340 2,955,181 OPERATING SURPLUS/(DEFICIT) Operating surplus/(deficit) (2,336) (1,112) Grants surplus/(deficit) 500 4,250 3, Total comprehensive revenue and expenses (1,836) 3,138 3,

33 31 Statement of Changes in Equity For the years ended 30 June Budget 2016 Budget Balance at 1 July 26,792 *26,720 26,108 26,108 26,108 Capital contribution Total comprehensive revenue and expense for the year (1,836) 3,138 3, Provision for repayment of grant surplus (500) (4,250) (3,799) (250) (250) Balance at 30 June *25,281 26,108 26,108 26,108 26,108 * The 2016 closing Equity balance of $25,281 differs to the 2017 opening Equity balance of $26,720 owing to Budget 2017 using closing forecast not closing budget figures.

34 32 Statement of Financial Position As at 30 June Budget 2016 Budget CURRENT ASSETS Cash and cash equivalents 40,683 47,568 48,990 47,032 49,000 Prepayments Debtors and other receivables 1,196 1, Total current assets 42,215 48,808 50,155 48,197 50,165 NON-CURRENT ASSETS Property, plant and equipment 4,666 4,761 5,028 5,434 5,971 Intangible assets 7,914 7,506 7,186 6,481 5,649 Work in progress 3,100 5,050 5,050 5,050 5,050 Total non-current assets 15,680 17,317 17,264 16,965 16,670 Total assets 57,895 66,125 67,419 65,162 66,835 CURRENT LIABILITIES Creditors and other payables 9,762 6,846 7,318 7,235 7,257 GST payable 133 1,593 1,286 1,079 1,077 Employee entitlements 1,536 1,822 1,879 1,935 2,053 English for migrants revenue in advance 7,690 2,941 2,367 1,919 1,852 Provisions for lease 206 1,221 1, Repayment of grants surplus 500 4,250 3, Total current liabilities 19,827 18,673 17,757 13,414 13,373 NON-CURRENT LIABILITIES English for migrants revenue in advance 12,303 21,022 23,223 25,298 26,992 Employee entitlements Total non-current liabilities 12,787 21,344 23,554 25,640 27,354 Total liabilities 32,614 40,017 41,311 39,054 40,727 Net assets 25,281 26,108 26,108 26,108 26,108 EQUITY General funds 25,281 26,108 26,108 26,108 26,108 Total equity 25,281 26,108 26,108 26,108 26,108

35 33 Statement of Cash Flows For the years ended 30 June Budget 2016 Budget Cash flows from operating activities Cash was provided from: Operating MoE 46,359 47,168 47,589 46,324 46,199 Operating INZ Operating other Grants MoE 2,879,913 2,921,958 2,901,210 2,903,073 2,906,039 Grants INZ 807 3,000 3,000 3,000 3,000 Grant recoveries-prior year 4,000 3,549 Cash was applied to: 2,927,161 2,976,500 2,955,664 2,952,713 2,955,554 Grants payments (2,880,486) (2,923,458) (2,902,710) (2,904,573) (2,907,539) Payments to employees (25,405) (26,866) (26,665) (26,828) (27,855) Other operating payments (18,446) (16,550) (14,604) (13,956) (12,535) Capital charge (1,982) (2,260) (2,150) (2,000) (2,000) GST net (13) 276 (307) (209) (1) (2,926,332) (2,968,858) (2,946,436) (2,947,566) (2,949,930) Net cash flows from operating activities 829 7,642 9,228 5,147 5,624 Cash flows from investing activities Cash was provided from: Interest income on bank deposits operating 1,802 1,254 1,254 1,254 1,254 Interest income on bank deposits grants Cash was applied to: 2,302 1,504 1,504 1,504 1,504 Purchase of property, plant and equipment (4,805) (345) (910) (910) (910) Purchase of intangible assets (5,608) (4,834) (4,150) (3,900) (4,000) (10,413) (5,179) (5,060) (4,810) (4,910) Net cash flows from investing activities (8,111) (3,675) (3,556) (3,306) (3,406) Cash flows from financing activities Cash was provided from: Capital contribution MoE Cash was applied to: Repayment of grants surplus (net) MoE (3,521) (4,250) (3,799) (250) Net cash flows from financing activities 825 (3,021) (4,250) (3,799) (250) Net increase/(decrease) in cash and cash equivalents (6,457) 946 1,422 (1,958) 1,968 Cash and cash equivalents at the start of the year 47,140 46,622 47,568 48,990 47,032 Cash and cash equivalents at the end of the year 40,683* 47,568 48,990 47,032 49,000 *The 2016 closing Cash and cash equivalents balance of $40,683 differs to the 2017 opening Cash and cash equivalents balance of $46,622 owing to Budget 2017 using closing forecast not closing budget figures.

36 34 Reconciliation of Total Comprehensive Revenue and Expenses with the Net Cash Inflows from Operating Activities For the years ended 30 June Budget 2016 Budget Total comprehensive revenue and expenses (1,836) 3,138 3, Add non-cash items: Depreciation of property, plant and equipment Amortisation of intangibles 4,142 4,033 4,470 4,605 4,832 Total non-cash items 4,919 4,853 5,113 5,109 5,205 Add/(deduct) net movements in working capital 48 1,155 1,820 1,292 1,673 Add/(less) items classified as investing activities Interest income (2,302) (1,504) (1,504) (1,504) (1,504) Total investing activities (2,302) (1,504) (1,504) (1,504) (1,504) Net cash flows from operating activities 829 7,642 9,228 5,147 5,624

37 35 Movement of Property, Plant and Equipment Leasehold Improvements Computer Equipment Office Equipment Furniture and Fittings Motor Vehicles Total Cost 2016 Budget Balance at 1 July ,525 9, , ,933 Additions 3, ,000 Balance at 30 June ,025 9, , ,933 Balance at 1 July ,903 9, ,343 16,970 Additions 1, ,456 Balance at 30 June ,014 9, ,343 18,426 Balance at 1 July ,014 9, ,343 18,426 Additions Balance at 30 June ,014 10, ,343 19,336 Balance at 1 July ,014 10, ,343 19,336 Additions Balance at 30 June ,014 11, ,343 20,246 Balance at 1 July ,014 11, ,343 20,246 Additions Balance at 30 June ,014 12, ,343 21,156

38 36 Movement of Property, Plant and Equipment (continued) Leasehold Improvements Computer Equipment Office Equipment Furniture and Fittings Motor Vehicles Total Accumulated Depreciation 2016 Budget Balance at 1 July ,525 7, , ,490 Depreciation expenses Balance at 30 June ,706 8, , ,267 Balance at 1 July ,649 8, ,275 12,845 Depreciation expenses Balance at 30 June ,007 8, ,332 13,665 Balance at 1 July ,007 8, ,332 13,665 Depreciation expenses Balance at 30 June ,365 9, ,343 14,308 Balance at 1 July ,365 9, ,343 14,308 Depreciation expenses Balance at 30 June ,724 9, ,343 14,812 Balance at 1 July ,724 9, ,343 14,812 Depreciation expenses Balance at 30 June ,084 9, ,343 15,185 Carrying amounts Leasehold Improvements Computer Equipment Office Equipment Furniture and Fittings Motor Vehicles At 1 July , ,443 At 30 June and 1 July ,319 1, ,666 At 30 June and 1 July , ,761 At 30 June and 1 July ,649 1,379 5,028 At 30 June and 1 July ,290 2,144 5,434 As at 30 June ,930 3,041 5,971 Total

39 37 Movement of Intangible Assets Cost 2016 Budget Internally Generated Software Balance at 1 July ,304 Additions 4,998 Balance at 30 June ,302 Balance at 1 July ,836 Additions 4,835 Balance at 30 June ,671 Balance at 1 July ,671 Additions 4,150 Balance at 30 June ,821 Balance at 1 July ,821 Additions 3,900 Balance at 30 June ,721 Balance at 1 July ,721 Additions 4,000 Balance at 30 June ,721

40 38 Movement of Intangible Assets (continued) Accumulated Depreciation 2016 Budget Balance at 1 July ,246 Depreciation expenses 4,142 Balance at 30 June ,388 Balance at 1 July ,132 Depreciation expenses 4,033 Balance at 30 June ,165 Balance at 1 July ,165 Depreciation expenses 4,470 Balance at 30 June ,635 Balance at 1 July ,635 Depreciation expenses 4,605 Balance at 30 June ,240 Balance at 1 July ,240 Depreciation expenses 4,832 Balance at 30 June ,072 Carrying amounts Internally Generated Software At 1 July ,058 At 30 June and 1 July ,914 At 30 June and 1 July ,506 At 30 June and 1 July ,186 At 30 June and 1 July ,481 As at 30 June ,649

41 39 Work in Progress Internally Generated Software Property, Plant and Equipment Total Cost 2016 Budget Balance at 1 July ,705 1,705 Additions 5,593 4,800 10,393 Transfer to software/property, plant and equipment (4,998) (4,000) (8,998) Balance at 30 June , ,100 Balance at 1 July ,489 1,672 6,161 Additions 4, ,179 Transfer to software/property, plant and equipment (5,945) (345) (6,290) Balance at 30 June ,378 1,672 5,050 Balance at 1 July ,378 1,672 5,050 Additions 4, ,060 Transfer to software/property, plant and equipment (4,150) (910) (5,060) Balance at 30 June ,378 1,672 5,050 Balance at 1 July ,378 1,672 5,050 Additions 3, ,810 Transfer to software/property, plant and equipment (3,900) (910) (4,810) Balance at 30 June ,378 1,672 5,050 Balance at 1 July ,378 1,672 5,050 Additions 4, ,910 Transfer to software/property, plant and equipment (4,000) (910) (4,910) Balance at 30 June ,378 1,672 5,050

42 40 Revenue from the Crown and Planned Expenditure For the year ended 30 June 2017 Revenue Expenditure GRANTS AND CONTRACT REVENUE Vote Tertiary Education: Non-Departmental Output Expenses Tertiary Tuition and Training 2,491,002 2,491,002 Access to Tertiary Education 25,116 25,116 Tertiary Sector/Industry Collaboration Projects 23,847 23,847 Centres of Research Excellence 49,800 49,800 Research and Research-Based Teaching 301, ,500 Total Non-Departmental Output Expenses 2,891,265 2,891,265 Benefits and Other Unrequited Expenses Tertiary Scholarships and Awards 14,447 14,447 Support to Apprentices 2,190 2,190 Total Benefits and Other Unrequited Expenses 16,637 16,637 Vote Education: Non-Departmental Output Expenses Secondary Tertiary Interface 18,225 18,225 Total Non-Departmental Output Expenses 18,225 18,225 Grants Revenue Vote Education/Tertiary Education 2,926,127 2,926,127 Contract Revenue Contract Immigration New Zealand English for Migrants 1,500 1,500 Total Grants and Contract Revenue 2,927,627 2,927,627 Administered by Ministry of Education Quality Teaching Agenda 3,089 3,089 Scholarships and Awards 1,080 1,080 Administered by Tertiary Education Commission 2,923,458 2,923,458 Total Grants and Contract Revenue 2,927,627 2,927,627

43 41 Revenue to Fund the Tertiary Education Commission s Operations For the year ended 30 June 2017 Revenue to Fund the Tertiary Education Commission s Operations Vote Tertiary Education: Non-Departmental Output Expenses Revenue Administration of and Support for the Tertiary Sector 47,168 Vote Tertiary Education: Operating Appropriations 47,168 Other Revenue Māori Education Trust 109 Contract Immigration New Zealand Funding for Administration of English for Migrants 173 Interest income 1,254 Other revenue 74 Total Operating Revenue 48,778 Administered by the Tertiary Education Commission 47,415 Administered by the Māori Education Trust 109 Interest income 1,254 Total Operating Revenue 48,778 Non-Departmental Capital Expenditure Literacy and Numeracy Assessment Tool 500 Total Non-Departmental Capital Expenditure 500

44 42 Notes to the Financial Statements Statement of Accounting Policies Reporting Entity The TEC is a Crown entity as defined by the Crown Entities Act 2004 and was established on 1 January 2003 pursuant to section 159C of the Education Act It is domiciled in New Zealand. The TEC s ultimate parent is the New Zealand Crown. The TEC s primary objective is to provide services to the New Zealand public, as opposed to that of making a financial return. Accordingly, the TEC has designated itself as a public benefit entity (PBE) for financial reporting purposes. Basis of Preparation Statement of compliance The forecast financial statements have been prepared in accordance with the Education Act 1989 and Crown Entities Act 2004, which include the requirement to comply with Generally Accepted Accounting Practice in New Zealand (NZ GAAP), except as outlined below in regards to grants expenditure relating to the funding of tertiary education organisations. The forecast financial statements have been prepared in accordance with NZ GAAP as appropriate for public benefit entities and they comply with Tier 1 PBE standards, except as outlined below in regards to grants expenditure relating to the funding of tertiary education organisations. While there is no material adjustment on transition to the new PBE accounting standards, we have been unable to determine a reliable estimate of the impact of PBE accounting standards in relation to grants expenditure recognised in these forecast financial statements. This is due to the complexity of the application of the new PBE accounting standards in relation to grants expenditure and the need for additional levels of technical review associated with the application of those standards. The financial impact of its application is unknown at this stage. However, it is expected that the TEC will apply the new accounting standards for grant expenditure as the basis for preparation for the 30 June 2016 financial statements and forecast outyears. The forecast financial statements have been prepared on a going concern basis and the accounting policies have been applied consistently throughout the period. The purpose of these forecast financial statements is to provide information on the TEC s future operating intentions against which it must report, and be audited against, at the end of the fiscal year. Use of this information for any other purpose may not be appropriate. Please note that these financial statements contain no actual results. Actual results achieved are likely to vary from the forecast information and the variation may be material. Basis of measurement The forecast financial statements have been prepared on a historical cost basis.