TESTING LABORATORY REGISTRATION COUNCIL OF NEW ZEALAND

Transcription

1 G.31 TESTING LABORATORY REGISTRATION COUNCIL OF NEW ZEALAND ANNUAL REPORT For the year ended 30 June 2009 Presented to the House of Representatives pursuant to Section 150(3) of the Crown Entities Act 2004 and pursuant to section 44 of the Public Finance Act 1989

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3 CONTENTS Section Page 1 COUNCIL OVERVIEW ABOUT THE COUNCIL IMPACTS, OUTCOMES AND OUTPUTS STATEMENT OF SERVICE PERFORMANCE 30 June STATEMENT OF RESPONSIBILITY AUDIT REPORT STATEMENT OF ACCOUNTING POLICIES ANNUAL FINANCIAL STATEMENTS...38 APPENDIX 1 COUNCIL MEMBERS AND MANAGEMENT...49 APPENDIX 2 COUNCIL STRUCTURE AND SERVICES...50 APPENDIX 3 ACCREDITATION AND CERTIFICATION EXPLAINED...51 APPENDIX 4 GLOSSARY OF ACRONYMS

4 DIRECTORY Head Offices International Accreditation New Zealand Level 1, 626 Great South Road, Ellerslie, Auckland 1051 Private Bag 28908, Remuera, Auckland 1541, New Zealand Phone , Facsimile Telarc SAI Limited Level 3, 626 Great South Road, Ellerslie, Auckland 1051 Private Bag 28901, Remuera, Auckland 1541, New Zealand Phone , Facsimile New Zealand Quality College Level 3, 626 Great South Road, Ellerslie, Auckland 1051 Private Bag 28908, Remuera, Auckland 1541, New Zealand Phone , Facsimile Regional Offices Telarc SAI Limited Hamilton 795 Te Rapa Road, Pukette, Hamilton 3200 PO Box 10072, Te Rapa, Hamilton, 3241, New Zealand Phone , Facsimile Tauranga 1181 Cameron Road, Tauranga 3110 PO Box 9023, Tauranga 3142, New Zealand Phone , Facsimile Wellington Level 13 Willbank House, 57 Willis Street, Wellington 5011 PO Box 5088, Lambton Quay. Wellington 6145, New Zealand Phone , Facsimile Christchurch 4 Tussock Lane, 24 Settlers Crescent, Ferrymead 8023 PO Box 25065, Christchurch 8144, New Zealand Phone , Facsimile

5 Quality Health New Zealand A division of Telarc SAI Limited (from 1 July 2007) Level 13 Willbank House, 57 Willis Street, Wellington 5011 PO Box 5088, Lambton Quay. Wellington 6145, New Zealand Phone , Facsimile admin@qualityhealth.org.nz Auditor Audit New Zealand (On behalf of the Controller and Auditor-General) 155 Queen Street, Auckland 1010, New Zealand Bankers The National Bank of New Zealand Limited Great South Road, Penrose, Auckland 1061, New Zealand Westpac New Zealand Limited Great South Road, Penrose, Auckland 1061, New Zealand Solicitors Meredith Connell 55 Shortland Street, Auckland 1010, New Zealand Insurer Brokers and Consultants Hopkins Paton Limited 57 Market Road, Remuera, Auckland 1050, New Zealand 5

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7 1 COUNCIL OVERVIEW The Hon Simon Power, Minister of Commerce. We have the honour of presenting the thirty-fifth report of the Testing Laboratory Registration Council of New Zealand. 1.1 Summary The Council is established to accredit laboratories, inspection bodies and radiology practices. During the past year, a total of 1,756 accreditation assessments were successfully carried out in IANZ accredited organisations. In addition, the number of countries where accreditation authorities recognise test and/or inspection reports from IANZ accredited organisations increased from 51 to 55. IANZ has continued it s investment in international recognition of accreditation as a cost effective means of facilitating New Zealand trade. The total cost of this investment was $567,173 (2008 $572,542). The Council s training division, the New Zealand Quality College, exceeded its targets for training days. The Council s certification subsidiary, Telarc SAI Ltd, also increased the number of certification clients. Due to delays in the implementation of two regulatory accreditation programmes, and the timing cycle of a third programme, revenue was significantly less than budgeted, and the Council recorded a consolidated deficit (prior to minority interest) of $632,456 ($241,219 deficit in 2008). The Council held fees constant for a third successive year, recognising the financial pressures faced by its clients, and used reserves to implement a number of efficiency measures to achieve financial surpluses in future years. 1.2 Functions The Council s main function is to raise the quality standard of operation of laboratories, inspection bodies and radiology practices in New Zealand. It also certifies business operations for their quality and environmental management system standards. 1.3 Statutory Outputs In accordance with the Memorandum of Understanding agreed with the Minister of Commerce, and as detailed in the Statement of Intent, the Council s outputs for the year to 30 June 2009, as listed below, were achieved. Accredited testing and calibration laboratories which met the requirements of ISO/IEC Registered laboratories which met the requirements of the Organisation of Economic Cooperation and Development s Principles of Good Laboratory Practice (OECD GLP). Accredited medical testing laboratories which met the requirements of ISO Accredited radiology services which met the requirements of the New Zealand Code of Radiological Management Practice. Accredited inspection bodies which met the requirements of ISO/IEC Accredited building consent authorities which met the requirements of the Building (Accreditation of Building Consent Authorities) Regulations

8 Registered suppliers which met the requirements of quality management (ISO 9001), environmental management (ISO 14001) systems certification and other Telarc SAI Limited criteria (including QBase and the EQuIP 4 standard). Provided training courses in accreditation and certification. Maintained full membership (signatory status) of APLAC, EA and ILAC MRAs for calibration, testing and inspection. Facilitated New Zealand s trade by improving access to overseas markets. Outcomes for each of these outputs are provided in the Statement of Service Performance. 1.4 Financial Performance The Council recorded a consolidated deficit (prior to minority interest) this year of $632,456 ($241,219 deficit in 2008). A number of new regulatory programmes which had been planned to begin during this year have been deferred, or modified, and these have had a direct impact on the Council s business operations. This was the third year the Council has held fees constant. Reserves were used to restructure the business operation, to reduce operational costs and to maximise productivity. The above deficit includes $250,665 in restructuring and redundancy costs. It also includes the Council s investment in international recognition of $567,173 (2008 $572,542). The Council has reduced overhead costs, both through restructuring initiatives, and a detailed review of all services. The measures implemented by Council mean it will be in a stronger position financially, and the Council is budgeting a surplus (prior to minority interest) of $460,000 for the 2009/10 year. During this year, the Council s subsidiary, Telarc SAI Ltd, returned to a profitable operation. Overall the Council s total revenue has grown in the last two years from $10.4 million in 2007 to its current $13.5 million position. Consolidated Financial Summary Actual 2009 Budget 2009 Actual 2008 IANZ Accreditation Revenue 4,935,203 5,198,439 5,822,566 Costs 5,583,945 5,434,593 5,685,400 Net Surplus/(Deficit) (648,742) (236,154) 137,166 NZQC Revenue 887, , ,971 Costs 756, , ,765 Net Surplus 131, ,623 81,206 Telarc SAI Ltd Revenue 7,546,940 7,224,450 7,243,517 Costs 7,187,600 6,808,287 7,408,954 Net Surplus 359, ,163 (165,437) International Recognition Net Cost (567,173) (562,899) (572,542) Interest Revenue 92, , ,388 Net Operating Surplus (Deficit) (632,456) 19,733 (241,219) 8

9 1.5 Operating Performance Apart from impacts associated with delays in new regulatory accreditation programmes which affected the financial results, the Council has achieved all the operating targets set out in its Statement of Intent. Accreditation numbers for existing programmes increased slightly, with the main growth in radiology accreditation. Increase in training activities were also up 17% and total certification numbers up 4.5%. The Council continues cost effectively to further international trade, with growth in the number of economies whose accreditation bodies are signatories to the ILAC MRA. In addition, the demand by regulators for test results continues to grow not only to meet domestic needs (e.g. biosecurity), but also to meet overseas market access requirements (e.g. food, wine). 1.6 International Both IANZ and its Australian counterpart, NATA, are full signatories for recognition of laboratory and inspection body accreditation at the regional level (Asia Pacific and Europe), and are both foundation signatories of the global mutual recognition arrangement for laboratory accreditation. The global accreditation mutual recognition arrangement for laboratories (testing and calibration) means that test results from New Zealand laboratories accredited by IANZ are now able to be accepted in 55 economies around the world. Of particular note is the move by a number of regulatory authorities in the United States to now also accept test reports from such accredited laboratories. 1.7 Governance James Hill, company director, Auckland was appointed to the Council on 1 April 2009, replacing Richard Dimmock. The Council wishes to thank Mr Dimmock who has played a major role on the Council for nine years. He also served as Acting Chair at short notice, following the passing of Dr Geoff Page. The Council is also pleased to welcome Mr Hill as the new chair of the Council s Audit Committee and looks forward to his contribution in the coming years. Dr Janes (vice-chair of Council) replaced Mr Dimmock on the Board of Telarc SAI Ltd. Names of current members of the Council are listed in Appendix Tributes The Council is always indebted to the many persons from New Zealand and overseas who make themselves available to serve on the Council s various professional advisory committees and as technical expert assessors. This vital contribution to the Council s accreditation activity is provided mainly by persons who, with the support of their employers, volunteer their time freely to provide the essential peer-review. The Council recognises with gratitude this significant contribution to the effectiveness of IANZ accreditation domestically and internationally. The Council also acknowledges the dedication and intellectual support it receives from its management and staff. It is through these enthusiastic people that the Council ensures that New Zealand commerce and 9

10 industry are performing to international quality and technical management standards and practices; and ensures that New Zealand s voice is heard in the international conformity assessment fora. We have pleasure in submitting this Annual Report and the Financial Statements for the year ended 30 June Dr Robin Pratt Chair 28 August 2009 James Hill Chair Audit Committee 28 August

11 2 ABOUT THE COUNCIL 2.1 Official status The Council is an Autonomous Crown Entity under the Crown Entities Act 2004, and reports annually to Parliament through the Minister of Commerce. It is a Public Benefit Entity and receives no Crown funding for its operations. It was established under the Testing Laboratory Registration Act 1972, which was amended and reprinted in May The Council, under the name of International Accreditation New Zealand (IANZ), is the national authority for accrediting laboratories, inspection bodies and radiology services. This accreditation formally recognises the technical competence of these conformity assessment bodies to world class standards. The value of this is acknowledged by government agencies and other bodies specifying IANZ accreditation to meet regulatory requirements. 2.3 Members The Council consists of nine members. The Minister of Commerce appoints five of these, including the Chair. The remaining four are appointed by the Council itself to ensure broad industry coverage and the appropriate expertise necessary for Council s activities. A Director is appointed by the Council to manage its operations. Dr Llewellyn Richards is the present Director and Chief Executive of the operating unit International Accreditation New Zealand. (See Appendix 1 for details of Council members and management). 2.4 Functions The Council is required to act independently from Government in carrying out its functions and exercising its statutory powers. The specific functions of the Council, as provided in the Act, are: a) to promote the development and maintenance of good practice in conformity assessment; and to establish and maintain a registration scheme for conformity assessment bodies (except certification bodies) that comply with that practice; and b) to develop and maintain international recognition and acceptance of the Council s registration scheme; and to maintain appropriate international relationships consistent with the Council s functions under this section; and c) if the Council chooses, to provide certification services; and d) to perform any other functions that the Minister may direct the Council to perform in accordance with section 112 of the Crown Entities Act The Council performs functions (a), (b) and (d) operating as International Accreditation New Zealand. Telarc SAI Limited, a 75% owned subsidiary, undertakes function (c). (See Appendix 2 for details of Council structure and services). 11

12 2.5 Subsidiary The certification function of the Council is performed by its 75% owned subsidiary company, Telarc SAI Limited, which has its own Board of Directors, Chief Executive and staff that operate separately from the Council s accreditation function (IANZ). This company is a Crown Entity Subsidiary in terms of the Crown Entities Act Members of the Telarc SAI Limited board comprise three members appointed by the Council and one member appointed by SAI Global Limited, Sydney, Australia, with an independent chair. 2.6 Overall objectives The main objective of Council is to improve the overall quality of operation for the organisations it accredits. As a result of the independent assurance of competence provided by IANZ accreditation, regulators and businesses are able to ensure: Health, safety and environmental risks are managed Domestic economic development is facilitated, and International trade is facilitated. The certification provided by Telarc SAI limited also provides recognition of compliance with core management system standards. 2.7 Operational Standards International standards are a cornerstone to the credibility of accreditations and certifications provided by IANZ and Telarc SAI. Each organisation is regularly evaluated against specific standards for their type of operation. To operate as an accreditation authority, IANZ complies with the ISO/IEC Conformity Assessment General Requirements for Accreditation Bodies Accrediting Conformity Assessment Bodies standard. In addition, it meets the requirements of the International Laboratory Accreditation Cooperation (ILAC), the Asia Pacific Laboratory Accreditation Cooperation (APLAC) and of the European cooperation for Accreditation (EA). Every four years IANZ is evaluated by representatives of APLAC and EA to ensure continuing compliance with the standard and MRA signatory requirements. The most recent evaluation occurred in March 2009 and no non-compliances were found. To operate as a certification body, Telarc SAI Limited complies with ISO/IEC Conformity Assessment Requirements for Bodies Providing Audit and Certification of Management Systems. (This standard replaced ISO/IEC Guide 62, ISO/IEC Guide 65 and ISO/IEC Guide 66 during 2008). Annual assessments of Telarc SAI against this standard are undertaken by the Trans-Tasman accreditation authority, Joint Accreditation System for Australia and New Zealand (JAS-ANZ). These external evaluations are combined with twice-yearly management reviews and internal audits to provide Government, regulators and industry with confidence to adopt the outputs provided by the Council for their purposes. 12

13 2.8 Good employer policies and practices Every effort is made to ensure that no staff are disadvantaged and are equally treated regardless of their status. Firm guidelines in the recruitment process stress the need to appoint new staff on merit and their ability to perform the tasks required in their employment. Those responsible for recruiting staff were fully briefed on this aspect of the process, and overseen by the human resource consultant. Good employer practice is promulgated in the Corporate Manual under sections covering: Policies Health and safety Environmental Staffing Training and development Induction. Further explanation of good employment practices are contained in the Staff Manual and individual employment contracts, which clearly set out the procedure for personal grievances if staff are disadvantaged in their employment, discriminated against, or sexually or racially harassed. The details of these documents have been discussed individually with all staff. Workplaces are designed to accommodate disabled people, and the regular building emergency evacuation drills incorporates the practice for managing such persons in emergencies. Workplace stress is a particular concern, and is closely monitored throughout the organisation, with additional counselling support services engaged to provide staff support. 2.9 International Involvement To ensure that New Zealand products can be accepted in overseas markets without the need for further testing or inspection, IANZ has entered into mutual recognition arrangements (MRA) with accreditation bodies in other economies. Currently, 70 accreditation bodies in 55 economies, including all our major trading partners, participate in this arrangement. To provide the most efficient mechanism in evaluating accreditation bodies, a series of regional cooperation has been established, with an international body providing an umbrella over the regions. IANZ is a signatory for laboratory and inspection body accreditation in two such regions: Asia Pacific Laboratory Accreditation Cooperation (APLAC) and European Cooperation for Accreditation (EA). The latter is important as many European regulators will only accept test results and inspection reports from bodies accredited by EA signatories. Through APLAC, IANZ is also a signatory to the ILAC global MRA. In addition, IANZ operates a GLP Compliance Monitoring Programme using the OECD Principles of Good Laboratory Practice. This, together with IANZ s involvement in the OECD Working Group on Good Laboratory Practice, ensures, under the OECD s Mutual Acceptance of Data agreement, that safety testing data generated in New Zealand on chemicals intended for regulatory approval will be accepted in all other OECD Member States. 13

14 3 IMPACTS, OUTCOMES AND OUTPUTS Government Priority Outcomes Outputs Targets 2008/2009 Achieved 2008/09 Growing globally competitive firms Easier market access for New Zealand goods Mutual Recognition Arrangements with regional and international accreditation MRAs with 51 economies MRAs with 54 economies cooperation bodies Accreditation of laboratories 134 units 134 testing meat and dairy products accredited for export Accreditation of laboratories 14 units 14 testing wool for export accredited Registration of laboratories 22 units 18 testing for CE Mark and to registered (amalgamation/ OECD GLP Guidelines closure of some sites) Provide technical assistance to Supplied on government free trade request (Korea, negotiations EU) Businesses Certification of quality 1849 units 1849 performing to best management systems to ISO certified international practices 9001 Standard and Q-Base Code World class infrastructure International recognition of test and Maintenance of accreditation body status and signatory Compliance with ISO/IEC Continued compliance inspection reports status to Mutual Recognition and Arrangements requirements of ILAC and APLAC Regulators fully Delivery of accreditation to meet New food Not utilising IANZ regulatory requirements safety implemented. 14

15 Government Priority Outcomes Outputs Targets 2008/2009 accreditation inspection body accreditation programme implemented Achieved 2008/09 Delay in legislation Involvement in the management, 100% 100% technical developments and attendance at attendance promotion of conformity Regulators assessment Forum meetings CE on ILAC Achieved Board of Management GM-AS on Achieved APLAC Board of Management GL&IA Position Manager on restructured PR CEO committees of responsible for ILAC and representation APLAC Innovative and productive workplaces Workplaces working to high standards Publication of specific and supplementary criteria of IANZ accreditation All Criteria and Technical Guides Achieved maintained up-to-date Accreditation of laboratories 86 units 88 calibrating accuracy of weights accredited and measures, temperatures and precision measuring 15

16 Government Priority Outcomes Outputs Targets 2008/2009 instruments, testing machines, pressure and vacuum measuring devices, tools and production machinery, etc Achieved 2008/09 Training in the implementation of standards for laboratory and inspection body accreditation 600 trainee days 1,018 Training in the implementation of standards for management systems 630 trainee days 631 Training in auditing skills NB. Training is undertaken by the New Zealand Quality College. 1,160 trainee days 1,166 Environmental sustainability Safer environment Accreditation of laboratories undertaking chemical testing for Included in the 475 units environmental monitoring and accredited testing air quality and gas (see below) emissions Certification of environmental 205 units 237 management systems to ISO registered Standard Assessments to CarboNZero Targets to be 6 requirements set Safe communities Public and workplace safety Accreditation of laboratories testing safety of electrical and 13 units accredited 13 electronic goods 16

17 Government Priority Safe Communities (continued) Outcomes Outputs Targets 2008/2009 Accreditation of laboratories undertaking mechanical testing of pressure equipment, flammable materials, textiles, vehicle safety belts, construction and roading materials, assemblies for construction, etc 99 units accredited Achieved 2008/ Accreditation of laboratories undertaking chemical/biological tests of foods, drinking-water, pests and diseases, waters, drugs and pharmaceuticals, etc 333 units accredited 475 Accreditation of bodies undertaking inspection of food, and drinking water delivery services Accreditation of laboratories undertaking chemical/biological tests of medical and veterinary samples, agricultural products and materials 74 units accredited Included in the 475 units accredited (see above)) 41 (the new domestic food safety operation has not yet begun, as legislation is awaited) Accreditation of laboratories undertaking chemical/biological tests of fuels and gases, petroleum, cylinders and pressure vehicles, ores and minerals, metals and alloys, inorganic materials, paints and coatings, etc Included in the 475 units accredited (see above)) Accreditation of MAF Included in 41 17

18 Government Priority Outcomes Outputs Targets 2008/2009 Biosecurity New Zealand inspection service above Achieved 2008/09 Safe Communities (continued) Accreditation of Building Consents Authorities (for the Department of Building and Housing) 80 units accredited 80 Accreditation of bodies inspecting plant and equipment, including fire sprinklers and alarms, boilers, pressure vehicles, lifts, cranes, off-shore structures, etc 61 units assessed 59 Some rationalisation of sites Accreditation of gas cylinder testing stations 45 units accredited 45 Assessing ERMA Approved Handlers of explosives 0 accredited 0 Certification of workplace health and safety management systems to national standards 50 units registered 50 Certification of roading construction contractors to Transit New Zealand quality standards 13 units certified 14 Certification of rail safety operating systems to Land Transport New Zealand requirements 41 units registered 43 18

19 Government Priority Outcomes Outputs Targets 2008/2009 Independent audits for ACC workplace safety programmes 300 units certified Achieved 2008/ Better health for all Reliable medical testing and radiology services Accreditation of laboratories undertaking testing of medical samples 345 units accredited 343 (amalgamation of sites) Accreditation of laboratories 413 units 434 providing radiology services accredited Reliable health Assessment of screening units 6 units Contract services (for the National Screening assessed deferred Unit, Ministry of Health) Certification of health and 380 units 330 disability service providers to certified (see ) Ministry of Health requirements Quality Health New Zealand 151 units 120 accreditation of healthcare certified (see ) providers 19

20 4 STATEMENT OF SERVICE PERFORMANCE 30 June IANZ Accreditation Programmes About Accreditation Programmes Accreditation means formal recognition that a conformity assessment body has been independently assessed by an authoritative accreditation body in the five key areas of: Competence and experience of staff Integrity and traceability of equipment and materials Technical validity of methods Validity and suitability of results Compliance with appropriate management systems standards and is found to be competent to carry out its services in a professional, reliable and efficient manner. See Appendix 2 for the list of accreditation programmes and their respective standards; and Appendix 3 for a description of accreditation. Financial Performance 2009 Actual 2009 Budget 2009 Actual 2008 Revenue $4,935,203 $5,198,439 $5,822,566 Costs $5,583,945 $5,434,593 $5,685,400 Net surplus / (Deficit) ($648,742) ($236,154) $137,166 Assessment Performance 2009 Accreditation Programme Actual 2009 Active Assessment Units Forecast 2009 Actual 2008 Testing Laboratories (excluding medical) Metrology and Calibration Laboratories Medical Testing Laboratories Radiology Services Inspection Bodies 100** Building Consent Authorities MoH National Screening Unit 37* 6 37 Certification Bodies Proficiency Testing Laboratories OECD GLP Compliant Laboratories Conformity Assessment Bodies Total 1,777 1,746 1,750 20

21 4.1.1 Performance Highlights Testing and Calibration Laboratories The small growth in the number of testing and calibration laboratories assessed during this year indicates the existing very high level of market penetration for IANZ services in these sectors, and the continuing requirement for accreditation in what is the largest IANZ programme. Very few drinking water, meat, seafood, wool and dairy testing laboratories in New Zealand are not IANZ accredited. This illustrates the importance these laboratories have in ensuring the safety of our food, water, environment, plant and animal health, and the accuracy of weights and measurements, etc; and the suitability of manufacturing processes and products Medical Testing Laboratories Rationalisation of medical testing laboratories continues to reduce the number of active assessment units in this programme. However, the number of assessment days remains constant because of the extended scopes and increased size of laboratory operations Radiology Services The trend for District Health Boards to seek accreditation for their radiology services continued this year, as did that for private radiology services wanting to be recognised by funders such as the Accident Compensation Corporation. IANZ leads the world in providing this accreditation programme, which is to the credit of the New Zealand radiology industry Inspection Bodies Full assessments against AS/NZS ISO/IEC were completed of bodies inspecting to: Department of Labour Health and Safety in Employment (Pressure Equipment, Cranes and Passenger Ropeways) Regulations Department of Labour Guidelines for a Certificate of Fitness for High Pressure Gas and Liquids Transmission Pipelines. Department of Labour Health and Safety in Employment (Petroleum Exploration and Extraction) Regulations. Ministry of Health Food Safety Auditor Assessment Programme. Ministry of Health Health (Drinking Water) Amendment Act IANZ continued to work with the New Zealand Food Safety Authority on developing technical requirements for the NZFSA Domestic Food Plan and the Wine Act ** No new food safety inspection body assessments Building Consent Authorities With completion of the assessment of all building consent authorities, predominantly local authorities, to Phase 1 of the Building Act Regulations in 2007/08, all 80 authorities demonstrated compliance and were granted accreditation by March Commencement of the second round of assessments got underway in earnest in 2009, and is scheduled to finish by July

22 Close liaison was maintained between IANZ and the Department of Building and Housing throughout the year, which ensured both organisations were able to complete this considerable task relatively smoothly and to schedule National Screening Unit The first full round of audits for, BreastScreen Aotearoa Lead Providers and, the Colposcopy Services of the National Cervical Screening Programme, have been completed. However, the contract IANZ has with the National Screening Unit of the Department of Health, to undertake provider assessments, has been deferred. * Contract with MoH NSU deferred. No provider assessments for colposcopy or breast screening carried out during the 2008/09 year OECD GLP Compliant Laboratories The number of assessments in this specialised area has remained constant. The General Manager - Accreditation Services, New Zealand s representative at the OECD Working Group, attended this year s meeting in Paris, France. He is currently the Vice Chair; he will become Chair in 2010/ Promotion The Council regularly carries out market surveys to determine awareness of IANZ accreditation by key users of accredited services. While the Council is targeting awareness at greater than 80%, the latest survey showed awareness had increased to some 66% (previously 43%). This increase is largely due to greater awareness of IANZ within the local Government sector. During 2008/09 IANZ has targeted Government regulators in the development of new accreditation programmes. IANZ staff have also fully participated in the regulators forum to ensure further engagement with regulators who specified accreditation. 22

23 4.2 New Zealand Quality College Training About Training Courses The New Zealand Quality College provides short specialist courses covering all aspects of technical competence and good management practices essential for attaining IANZ accreditation; and good management practices essential for certification to ISO 9001 and ISO international standards. In addition, training in auditing skills is provided to organisations accredited by IANZ or certified by a certification body where internal audits are required. Financial Performance 2009 Actual 2009 Budget 2009 Actual 2008 Revenue $887,838 $961,400 $793,971 Costs $756,475 $793,777 $712,765 Net surplus $131,363 $167,623 $81,206 Training Performance 2009 Training Programme Actual 2009 Trainee Days Forecast 2009 Actual 2008 Quality Management Laboratory Management Inspection Body Management Environmental Management Food Safety Management Auditor Training 1,166 1,160 1,113 Total 2,815 2,390 2, Performance Highlights Overseas courses (Singapore and Hong Kong) contributed to the significant increases in quality management and laboratory management course attendance during the year. Local laboratory management courses were also well attended. The very large increase in inspection body management attendance was due to a Department of Building and Housing contract for the delivery of 10 workshops to building consent authorities covering the requirements of Regulation 17 (quality management) Building(Accreditation of Building Consent Authorities) Regulations

24 Both food safety management and environmental management courses attracted few participants, reflecting the relatively early stage of accreditation in these two sectors. Auditor training participation was strong in both local and overseas markets. 24

25 4.3 Telarc SAI Limited Certification Programmes About Certification Programmes Telarc SAI certification programmes provide an independent third party evaluation of a range of business management systems against established international and national standards and regulatory requirements. Certification is granted when a product, service, system, process or material conforms to specific requirements. See Appendix 2 for the list of certification programmes and their respective standards; and Appendix 3 for a description of certification. Financial Performance 2009 Actual 2009 Budget 2009 Actual 2008 Revenue $7,546,940 $7,224,450 $7,243,517 Costs $7,187,600 $6,808,287 $7,408,954 Net surplus / (Deficit) $359,340 $416,163 ($165,437) Assessment Performance 2009 Certification Programme Actual 2009 Assessment Units Forecast 2009 Actual 2008 Quality Management Systems 1,848 1,849 1,733 Environmental Management Systems Health Sector Management Systems Other (Regulatory) Other (Non-regulatory) Total 3,283 3,060 3, Performance Highlights Quality Management Systems (QMS) The budgeted number of Quality Management System (QMS) assessment units of 1849 was achieved, representing a 6.6% growth, although the majority of the growth came from assessments carried out on behalf of SAI Global Australia. The total market for ISO 9001 certifications in New Zealand continued to slowly decline although our share improved to 55%. Loss rates have stayed relatively static over the last year but the rate of new QMS customers has halved over the last year. Losses are still predominantly due to branch closures and companies relocating their head offices offshore. 25

26 Environmental Management Systems (EMS) CarboNZero The number of EMS assessments continues to grow with a 23% growth in 2008/9, albeit from a small base. The budgeted assessment units were exceeded by 16%. Interest in ISO remains strong and Telarc SAI Limited doubled the number of approved EMS auditors during the year. We have worked with the Ministry of Economic Development on the development of their EnviroStep programme and are also working with Landcare Research on a pilot scheme for Telarc SAI Limited to carry out all Enviromark audits. Two Telarc SAI limited auditors are trained to carry out CarboNZero (a division of Landcare Research Ltd) audits and we have carried out six assessments to date Health Sector Management Systems The number of Health sector assessment units dropped below expectations primarily due to the loss of one multi site provider and also the suspension of the ACC Physiotherapy audit programme. Uptake of the EQuIP 4 programme has been as expected in general although it is disappointing that three DHBs have decided to withdraw from the programme, considering 95% of Australian hospitals are active members of this internationally accepted continuous quality improvement programme Other Programmes Assessment units for other regulatory compliance programmes (ACC WSMP, Transit TQS, Rail Safety and Employer License) increased during the year. There was a small decline in the number of other non regulatory assessments in the year. 26

27 4.4 Facilitating New Zealand Trade International Cooperation Accreditation bodies in Pakistan, The Russian Federation and Luxembourg were accepted as ILAC mutual recognition arrangement signatories this year, as was another in the USA. The accreditation body in the Philippines, which had its signatory status suspended, was reinstated as a signatory to both the APLAC and ILAC MRA s. As at 30 June, MRA signatory numbers were: Economies Accreditation Bodies Financial Performance 2009 Actual 2009 Budget 2009 Actual 2008 Net Cost (567,173) (562,899) (572,542) Trade Negotiations This year, IANZ continued to assist the Ministry of Economic Development and the Ministry of Foreign Affairs and Trade in their trade negotiation activities. All travel costs associated with assistance for MED in trade negotiation activities are fully funded by MED. During the 2008/09 year all advice was provided internally and no overseas travel was involved. Regulations in many economies require products to be tested in accredited laboratories. As acceptance of conformity assessment results (especially from laboratories and inspection bodies) now plays such an important part in trade facilitation, IANZ is able to use the relationship developed with accreditation bodies in other economies to advance these negotiations Trans Tasman MRA Assistance continues to be provided by IANZ with the development and relations with Australia. IANZ continues to work cooperatively with its counterpart organisation in Australia, NATA, to provide seamless recognition of laboratory results and inspection reports for regulators on both sides of the Tasman. NATA and IANZ are also developing a cooperative MoU with JAS-ANZ. 27

28 4.5 Promoting Conformity Assessment Publications A number of IANZ criteria, technical and information publications were updated during the year. These publications are maintained up to date on and copies forwarded to the Legal Deposit Office, National Library of New Zealand. Two brochures explaining IANZ accreditation were produced this year. One was for general distribution and the other specifically written to better inform policy makers Websites The Council maintains four websites: Each website contains details of all Council s activities, and includes full product information, how the assessment process operates, the register of accredited organisations, and how to become IANZ accredited or Telarc SAI certified; news, articles of interest and contact details are also provided. 28

29 4.6 Equal Employment Opportunities Policies and Practises Gender balance has been maintained over the last 12 months. Currently, 42% of the management team are women. All staff continue to be paid on merit and without bias. No employee requested flexible working hours outside those normally practiced. The disability of one employee (hearing difficulty) was accounted for. There were no grievances or discrimination reported during After the March 2008 Investors in People survey, a shorter survey was run by the human resources consultant in November % of employees felt that communication had improved with the Inside IANZ newsletter and meetings being better structured. Team work and recognition was also rated as having improved by 45% and 50% of employees. This survey will be expanded into the Business Excellence survey in the second half of Performance Appraisals All Council staff underwent performance appraisals in July 2008 and will have annual reviews again in July/August These are based on reviewing performance against key performance indicators and identifying opportunities for personal development and training. Mini reviews were also held in January for the Accreditation Services team. Billable hours, a significant KPI, were introduced in April Staff Training Specific courses held during the financial year to improve staff performance included: Laboratory Quality Management (NZQC) Implementing and Auditing of Quality Management Systems (NZQC) Time management workshop Management of meetings workshop Assertive communications workshop Leadership Foundations workshop Managing stress workshop Standards of Integrity workshop Excel workshop In house training sessions run by employees for other employees on CABIS, Word and trade enquiries. 29

30 4.7 Human Resource Statistics As at 30 June Gender IANZ Telarc SAI Total 2009 Total 2008 Male Female Total Ethnicity/Nationality IANZ Telarc SAI Total 2009 NZ Pakeha European Maori Pacific Island 2-2 South African Indian Other 2 2 Total Age IANZ Telarc SAI Total 2009 Under Not stated Total

31 5 STATEMENT OF RESPONSIBILITY In the financial year ended 30 June 2009, the Council and management of IANZ accept responsibility for the preparation of the financial statements, statements of service performance and the judgements used therein. The Council and management of IANZ accepts responsibility for establishing and maintaining a system of internal control designed to provide reasonable assurance as to the integrity and reliability of financial reporting. In the opinion of the Council and management of IANZ, the financial statements and the statements of service performance for the financial year fairly reflect the financial position and operations of Council for the financial year ended 30 June Dr R Pratt J Hill Dr W L Richards M. Ferguson Chairperson Chairperson Chief Executive Officer Commercial Manager Audit Committee 28 August August August August

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34 7 STATEMENT OF ACCOUNTING POLICIES For The Year Ended 30 June Reporting Entity These are the financial statements of Testing Laboratory Registration Council of New Zealand, a Crown entity in terms of the Crown Entities Act Accordingly, the Council has designated itself as a Public Benefit Entity for the purposes of the New Zealand equivalent to international financial reporting standards (NZ IFRS). These financial statements have been prepared pursuant to the Public Finance Act 1989 and the Crown Entities Act The financial statements are for the year ended 30 June 2009, and were approved by the Council on 28 August 2009 and nobody has the power to amend the financial statements after issue. 7.2 Statement of compliance The financial statements have been prepared in accordance with the requirements of the Crown Entities Act 2004, which includes the requirements to comply with the New Zealand generally accepted accounting practice ( NZ GAAP ). The financial statements comply with the New Zealand equivalent to international financial reporting standards (NZ IFRS), and other applicable Financial Reporting Standards, as appropriate for public benefit entities. 7.3 Measurement Base The financial statements have been prepared on an historical cost basis and in compliance with NZ IFRS. 7.4 Functional and presentation currency The financial statements are presented in New Zealand dollars. The functional currency of Testing Laboratory Registration Council of New Zealand is New Zealand dollars. 7.5 Accounting Policies The following particular accounting policies, which materially affect the measurement of financial performance and financial position, have been applied. 7.6 Basis of Consolidation purchase method The consolidated financial statements include the parent Council and its subsidiary. The subsidiary is accounted for using the purchase method, which involves adding together corresponding assets, liabilities, revenues and expenses on a line-by-line basis. All significant inter-entity transactions are eliminated on consolidation. The investment in subsidiary is carried at cost in the Council records and the Council confirms this does not exceed the net asset value. 7.7 Budget figures The budget figures are those approved by the Council at the beginning of the financial year. 34

35 The budget figures have been prepared in accordance with generally accepted accounting practice and are consistent with the accounting policies adopted by the Council for the preparation of financial statements. 7.8 Revenue The Council derives revenue through the provision of outputs to the Crown, for services to third parties and income from its investments. Such revenue is recognised when earned and is reported in the financial period to which it relates. 7.9 Goods and Services Tax All items in the financial statements are exclusive of GST, with the exception of accounts receivable and accounts payable, which are stated with GST included. Where GST is irrecoverable as an input tax, it is recognised as part of the related asset or expense Taxation The Council is exempt from income tax in accordance with section 21, Testing Laboratory Registration Act Telarc SAI Ltd is exempt from income tax in accordance with Part CW 31 Public authorities, of the Income Tax Act Trade and other Receivables Trade and other receivables are stated at their expected realisable value after providing for doubtful and uncollectible debts Investments in Subsidiary, Telarc SAI Limited Investment in Subsidiary is carried at cost in the Council s records and the Council confirms this does not exceed the net asset value Investments: Short Term Deposits Investments short term deposits are stated at the lower of cost and net realisable value. Any decreases are recognised in the statement of financial performance Property, Plant and Equipment Property Plant and Equipment are recorded at historical cost Depreciation Property Plant and Equipment are depreciated at rates that will write off the cost, on a straight-line basis, of the assets to their estimated residual value over their useful life. The useful lives and associated depreciation rates of major classes of assets used in the preparation of these statements are reviewed annually and are as follows: Computer hardware 3-5 years 20%-33% straight line Leasehold improvements 6 Years (max) 16.67% straight line Office furniture and equipment 5-10 years 10%-20% straight line Motor vehicles 5 years 20% straight line 35

36 7.16 Intangible Assets Computer software is recorded at historical cost. Client lists purchased are recorded at historical cost. The useful economic life of client lists are amortised over a period of 3-5 years on a 20 33% straight line Amortisation Computer software is amortised, at rates that will write off the cost, on a straight line basis, to the estimated residual value over the useful life of the software. The useful lives and associated amortisation rates used in the preparation of these statements are reviewed annually and are as follows: Computer software 3-5 years 20%-33% straight line Client lists purchased are amortised over their expected useful life Employee entitlements Provision is made in respect of the Council and group s liability for annual leave and retirement leave. Annual leave and retirement leave has been calculated on an actual entitlement basis at current rates of pay. Employees who have completed 20 years continuous service may be granted once only four weeks long service leave. Provision has been made for any liability that may arise in the future and has been calculated on an actuarial basis Leases Leases where the leasor effectively retains substantially all the risks and benefits of ownership, the leased items are classified as operating leases. Payments under these leases are recognised as expenses in the periods in which they are incurred Financial instruments The Council and group are party to financial instruments as part of normal operations. These financial instruments include bank accounts, short-term deposits, debtors, and creditors. All financial instruments are recognised in the statement of financial position and all revenues and expenses in relation to financial instruments are recognised in the statement of financial performance. Except for those items covered by a separate accounting policy, all financial instruments are shown at their estimated fair value Statement of cash flows Cash means cash balances on hand, held in bank accounts, demand deposits and other highly liquid investments in which Council and group invest as part of day-to-day cash management. Operating activities include cash received from all income sources of the Council and group and records the cash payments made for the supply of goods and services. Investing activities are those activities relating to the acquisition and disposal of non-current assets. Financing activities comprise the change in equity and debt capital structure of the Council and group. 36

37 7.22 Changes in accounting policies There have been no changes in accounting policies since the date of the last audited financial statements. The policies have been applied on a basis consistent with previous years. The updated NZ IAS1 is the only relevant standard, amendment and interpretation which is issued but not yet effective. It has not been early adopted in these accounts Critical accounting estimates and assumptions In preparing these financial statements the Council 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 of 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, plant and equipment useful lives and residual values. At each balance date the Council reviews the useful lives and residual values of its property, plant and equipment. Assessing the appropriateness of useful life and residual value estimates of property, plant and equipment requires the Council to consider a number of factors such as physical condition of the asset, expected period of use of the asset by the Council, and expected disposal proceeds from the future sale of the asset. An incorrect estimate of the useful life or residual value will impact on the depreciable amount of an asset, therefore impacting on the depreciation expense recognised in the statement of financial performance, and carrying amount of the asset in the statement of financial position. The Council minimises the risk of this estimation uncertainty by; physical inspection of assets; asset replacement programmes; review of second hand market prices for similar assets; and analysis of prior asset sales. The Council has not made significant changes to past assumptions concerning useful lives and residual values. The carrying amounts of property, plant and equipment are disclosed in Note 5. 37